EXHIBIT 4.2
EXECUTION COPY
REVOLVING CREDIT AGREEMENT
Dated as of December 15, 1995
By and Between
LXE INC.
AND
SUNTRUST BANK, ATLANTA
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of December
15, 1995, by and between LXE INC., a corporation organized and
existing under the laws of the State of Georgia (the "Borrower"),
and SUNTRUST BANK, ATLANTA, a Georgia banking corporation, and
its successors and assigns (the "Bank").
W I T N E S S E T H :
WHEREAS, the Borrower has requested the Bank to
establish a $10,000,000 revolving credit facility to finance
working capital, acquisitions, the purchase of its common stock
to retire or hold as "treasury stock" and other general corporate
purposes of the Borrower; and
WHEREAS, the Bank is willing to establish the revolving
credit facility in the aforesaid amount, subject to the terms and
conditions as hereinafter set forth;
NOW THEREFORE, for and in consideration of the sum of
$10.00 in hand paid by the Bank to the Borrower, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. In addition to the other terms
defined herein, the following terms used herein shall have the
meanings herein specified (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Accounts" shall have the meaning given to such term in
UCC Section 9-106.
"Advance" shall mean any advance of funds by the Bank
to the Borrower under this Agreement, which shall be either a
Base Rate Advance or a LIBOR Advance.
"Affiliate" shall mean, with respect to any Person (the
"Specified Person"), a Person other than the Specified Person
directly or indirectly controlling or controlled by, or under
direct or indirect common control with, the Specified Person,
other than a Subsidiary of the Specified Person. For purposes of
this definition, the term "control" when used with respect to any
Specified Person means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of the Specified Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agreement" shall mean this Revolving Credit Agreement,
either as originally executed or as it may be from time to time
supplemented, amended, renewed or extended.
"Applicable Margin" shall mean, with respect to a LIBOR
Advance or a Base Rate Advance, the percentage per annum
determined by reference to the ratio of Consolidated Funded Debt
to Consolidated EBITDA in effect at such time, as set forth
below:
Consolidated Funded
Debt/Consolidated EBITDA LIBOR Base
Ratio Advances Rate Advances
greater than or equal to 2.5 to 1.0 2.50% 0.00%
greater than 1.0 to 1.0 but
less than 2.5 to 1.0 2.00% 0.00%
less than or equal to 1.0 to 1.0 1.50% -0.50%
The Bank shall determine the "Applicable Margin" on a quarterly
basis by calculating the ratio of Consolidated Funded Debt to
Consolidated EBITDA promptly after receipt of the financial
statements required to be delivered by the Borrower pursuant to
Section 5.02(a) or (b) hereof, as applicable. Any adjustment to
the Applicable Margin shall be effective as of the first day of
the fiscal quarter immediately following the fiscal quarter
during which the quarterly (or annual) financial statements are
required to be delivered to the Bank; provided, that for the
purpose of determining the effective date of any change in the
Applicable Margin and notwithstanding the provisions of Section
5.02(a) hereof, the annual financial statements shall be deemed
to be delivered on the last day of the fiscal quarter immediately
following any fiscal year-end. Notwithstanding the foregoing,
for the period from the date of this Agreement to December 31,
1995, the Applicable Margin for LIBOR Advances shall equal 1.50%
and the Applicable Margin for Base Rate Advances shall equal -0.50%.
Thereafter, the Applicable Margin shall be adjusted from
time to time as set forth above.
"Bankruptcy Code" shall mean the Bankruptcy Code of
1978, as amended, 11 U.S.C. 101 et. seq.
"Base Rate" shall mean the higher of (i) the Prime Rate
and (ii) the Federal Funds Rate plus 0.50% per annum.
"Base Rate Advance" shall mean any Advance hereunder
that bears interest at the Base Rate.
"Business Day" shall mean, with respect to a LIBOR
Advance, any day other than a Saturday, Sunday or a day on which
commercial banks are required or authorized to close for domestic
or international business, including dealings in Dollar deposits,
in Atlanta, Georgia or London, England and with respect to all
other matters, any day other than a Saturday, Sunday or a day on
which commercial banks are required or authorized to close in
Atlanta, Georgia.
"Capital Lease Obligation", shall mean, with respect to
any Person, all payments and other obligations of such Person as
lessee under any leases which are required or permitted to be
capitalized on a balance sheet of such Person in accordance with
GAAP.
"Closing Date" shall mean the date that all conditions
pursuant to Sections 3.01 and 3.02 hereof have been satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and
the rulings issued thereunder.
"Commitment" shall have the meaning set forth in
Section 2.01 (a) hereof, as such amount may be reduced pursuant
to Section 2.07 hereof.
"Commitment Fee" shall have the meaning set forth in
Section 2.09 hereof.
"Commitment Termination Date" shall mean the earlier
of: (a) the later of that date on which (i)the Initial Term or
(ii) any Renewal Term has terminated pursuant to Section 2.01(c)
hereof or (b) the date on which the Commitment has been fully
terminated pursuant to Section 8.02 hereof.
"Consolidated Capitalization" shall mean, for the
Borrower and its Subsidiaries as of any date of determination,
the sum of (i) Consolidated Funded Debt and (ii) Consolidated
Net Worth.
"Consolidated EBIT" shall mean for any period an amount
equal to the sum of (a) Consolidated Net Income plus (b) to the
extent deducted in determining Consolidated Net Income, (i)
Consolidated Tax Expense and (ii) Consolidated Interest Expense.
"Consolidated EBITDA" shall mean for any fiscal quarter
an amount equal to the sum for such fiscal quarter and the
immediately preceding three fiscal quarters of (a) Consolidated
Net Income, plus (b) to the extent deducted in determining
Consolidated Net Income, (i) Consolidated Tax Expense, (ii)
Consolidated Interest Expense and (iii) depreciation,
amortization and other non-cash charges determined on a
consolidated basis in accordance with GAAP.
"Consolidated Funded Debt" shall mean for any period
the Funded Debt of the Borrower and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean for any
period all interest expense (including all amortization of debt
discount and expenses and reported interest) on all Indebtedness
of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" shall mean for any period the
net income (or loss), after deducting all operating expenses,
provisions for taxes and reserves (including reserves for
deferred income taxes) and all other proper deductions, of the
Borrower and its Subsidiaries determined on a consolidated basis
in accordance with GAAP, excluding (i) extraordinary items, (ii)
any equity interest of the Borrower in the unremitted earnings of
any corporation not a Subsidiary and (iii) the income (or loss)
of any Person accrued prior to the date such Person becomes a
Subsidiary or is merged with the Borrower or any of its
Subsidiaries or such Person's assets are acquired by the Borrower
or any of its Subsidiaries.
"Consolidated Net Worth" shall mean for any period the
sum of capital stock (including any preferred stock but excluding
treasury stock and capital stock subscribed but unissued) and
surplus (including earned surplus, capital surplus and the
balance of the current profit and loss account not transferred to
surplus) accounts of the Borrower and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"Consolidated Tax Expense" shall mean for any period
the income tax expense deducted in calculating Consolidated Net
Income of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Default" shall mean any event that, with notice or
lapse of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in
Section 2.16 hereof.
" Dollar" and the sign "$" shall mean lawful money
of the United States of America.
"ELMG" shall mean Electromagnetic Sciences, Inc., a
Georgia corporation and the parent company of the Borrower.
"ELMG Agreement" shall mean the Amended and Restated
Loan Agreement dated as of the date hereof between ELMG and the
Bank.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" shall mean, as of any date, any trade
or business (whether or not incorporated) which together with the
Borrower is treated as a single employer under Section 414(b),
(c), (m) or (o) of the Code.
"Event of Default" shall have the meaning set forth in
Section 8.01 hereof.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upward, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if such day is
not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day
as so published on the next succeeding Business Day, and (ii) if
no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average
rate quoted to the Bank on such day on such transactions.
"Funded Debt" shall mean, with respect to any Person,
all Indebtedness of such Person of the types listed in clauses
(i), (ii), and (iv) of the definition of Indebtedness.
"GAAP" shall mean Generally Accepted Accounting
Principles consistently applied and maintained throughout the
period indicated and consistent with the prior financial practice
of the Borrower and any predecessor, as reflected in the
financial statements previously furnished to the Bank pursuant to
Section 4.07 hereof and the financial statements to be provided
to the Bank pursuant to Section 5.02 hereof; provided, that if
the Borrower notifies the Bank that the Borrower wishes to amend
any of the covenants set forth in Article VI hereof to eliminate
the effect of any change in GAAP mandated by the Financial
Accounting Standards Board or similar accounting authority of
comparable standing or shall be recommended by the Borrower's
independent public accountants on the operation of such
covenant(s), then the Borrower's compliance with such covenant(s)
shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until such
covenant(s) are amended in a manner satisfactory to the Borrower
and the Bank.
"Indebtedness" shall mean, with respect to any Person
as of any date of determination and without duplication, (i) all
obligations for money borrowed (whether on a senior or
subordinated basis) or evidenced by bonds, debentures, notes or
other similar instruments of such Person; (ii) all obligations of
such Person for the deferred purchase price of property or
services other than trade payables incurred in the ordinary
course of business and not overdue by more than ninety (90) days;
(iii) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the
event of a default are limited to repossession or sale of such
property); (iv) all Capital Lease Obligations of such Person; (v)
all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital
stock of or other ownership or profit interest in such Person or
any other Person or any warrants, rights or options to acquire
such capital stock; (vi) all obligations of other Persons (other
than a Subsidiary of such Person) which such Person has
guaranteed, directly or indirectly, contingent or otherwise
(including by the issuance of a letter of credit or similar
instrument for the account of such Person) and the obligation of
such Person to purchase or otherwise acquire, or otherwise insure
any creditor against loss in respect of, indebtedness of any
other Person referred to in clauses (i) through (v) above, or
with respect to all obligations of such Person consisting of
recourse liability with respect to accounts receivable sold or
otherwise disposed of by such Person; (vii) Indebtedness of
others secured by any Lien upon Property owned by such Person,
whether or not assumed; (viii) all obligations of such Person
under letters of credit on which it is the account party; (ix)
all obligations of such Person under "synthetic leases" or
similar types of transactions; and (x)all obligations of such
Person under interest rate protection agreements, foreign
currency exchange agreements or other interest rate or foreign
exchange hedging arrangements.
"Initial Term" shall have the meaning set forth in
Section 2.01(c) hereof.
"Interest Period" shall mean, with respect to any LIBOR
Advance, a period of 1, 2, 3 or 6 months, as the Borrower may
elect as provided in this Agreement; provided, that (i) the first
day of an Interest Period must be a Business Day, (ii) any
Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business
Day, unless such Business Day falls in the next calendar month,
in which case the Interest Period shall end on the next preceding
Business Day, (iii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of an Interest Period) shall end on the last Business Day of a
calendar month and (iv) no Interest Period with respect to any
LIBOR Advance shall extend beyond the Commitment Termination
Date.
"Inventory" shall have the meaning given to such term
in UCC Section 9-109(4).
"Investment" shall mean, when used with respect to any
Person, any direct or indirect advance, loan or other extension
of credit (other than the creation of receivables in the ordinary
course of business) or capital contribution by such Person (by
means of transfers of property to others or payments for property
or services for the account or use of others or otherwise) to any
Person, or any direct or indirect purchase or other acquisition
by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures warrants, options
or other securities issued by any other Person.
"LIBOR" shall mean with respect to any Interest Period
for any LIBOR Advance the rate per annum equal to the quotient
of (i) the offered rate for deposits in Dollars of amounts equal
or comparable to the principal amount of such LIBOR Advance
offered for a term comparable to such Interest Period, which rate
appears on the Telerate Page 3750 as of 11:00 A.M. (London,
England) time, two (2) Business Days prior to the first day of
such Interest Period; provided, that if no such offered rates
appear on such page, the rate used for such Interest Period will
be the arithmetic average (rounded upward, if necessary, to the
next higher l/16th of 1%) of rates offered to the Bank by not
less than two major banks in London, England at approximately
10:00 A.M. (Atlanta, Georgia time), two (2) Business Days prior
to the first day of such Interest Period for deposits in Dollars
in the London interbank market for a period comparable to such
Interest Period in an amount comparable to the principal amount
of such LIBOR Advance, divided by a number equal to 1.00 minus
the Reserve Percentage. The rate so determined in accordance
herewith shall be rounded upwards to the nearest multiple of
l/l00th of 1%. "Telerate Page 3750" shall mean the display
designated as "Page 3750" on the Telerate Service (or such other
page as may replace Page 3750 on that service or another service
as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rate for Dollars).
"LIBOR Advance" shall mean any Advance hereunder which
bears interest based on LIBOR.
"Lien" shall mean any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including any
written 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.)
"Loan Documents" shall mean and include, as the context
requires, this Agreement, the Revolving Credit Note, the Security
Agreement (when executed and delivered by the Borrower pursuant
to Section 5.14 hereof), the Subordination Agreement, the
Subsidiary Guaranty (when executed and delivered by any
Subsidiary Guarantor pursuant to Section 7.04 hereof) and any and
all other instruments, agreements, documents and writings
contemplated hereby or executed in connection herewith.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the properties, operations, business, condition
(financial or otherwise) or prospects of the Borrower or (b) the
validity of this Agreement or any other Loan Document or the
Borrower's ability to pay the Revolving Credit Note or to perform
its obligations under this Agreement and the other Loan
Documents.
"Material Subsidiary" shall mean any Subsidiary of the
Borrower in which the Borrower's Investment equals on any date of
determination at least 10% of the Borrower's Consolidated Net
Worth.
"Multiemployer Plan" shall mean a "multiemployer plan"
as defined in section 4001(a)(3) of ERISA.
"Officer's Certificate" shall mean a certificate,
signed by an authorized executive officer of the Borrower, in
form reasonably satisfactory to the Bank for the purpose(s)
thereof.
"Notice of Borrowing" shall have the meaning set forth
in Section 2.03 hereof.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation and any successor thereto.
"Person" shall mean an individual, partnership,
corporation (including a business trust), joint stock company,
limited liability company, trust, unincorporated association,
joint venture or other entity, or a government or political
subdivision or agency thereof.
"Plan" shall mean any "employee benefit plan" as
defined in Section 3(3) of ERISA maintained by or on behalf of
the Borrower or any ERISA Affiliate, including, but not limited
to, any defined benefit pension plan, profit sharing plan, money
purchase pension plan, savings or thrift plan, stock bonus plan,
employee stock ownership plan, Multiemployer Plan, or any plan,
fund, program, arrangement or practice providing for medical
(including post-retirement medical), hospitalization, accident,
sickness, disability, or life insurance benefits.
"Prime Rate" shall mean the per annum rate of interest
designated from time to time by the Bank to be its prime rate,
with any change in the rate of interest resulting from a change
in the Prime Rate to be effective as of the opening of business
of the Bank on the day of such change. The Prime Rate is a
reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. The Bank may make
commercial loans and any other loans at rates of interest at,
above or below the Prime Rate.
"Proceeds" shall have the meaning given to such term in
UCC Section 9-306(1).
"Property" shall mean any interest in any kind of
property or asset, whether real, personal or mixed, or tangible
or intangible.
"Renewal Term" shall have the meaning set forth in
Section 2.01(c) hereof.
"Reserve Percentage" shall mean, for any day, the
stated maximum rate (expressed as a decimal) of all reserves
required to be maintained with respect to liabilities or assets
consisting of or including "eurocurrency liabilities", as
prescribed by Regulation D of the Board of Governors of the
Federal Reserve System (or by any other governmental body having
jurisdiction with respect thereto), including without limitation
any basic, marginal, emergency, supplemental, special,
transitional or other reserves, the rate so determined to be
rounded upward to the nearest whole multiple of 1/100 of 1%.
"Revolving Credit Note" shall mean a promissory note of
the Borrower payable to the order of the Bank, in substantially
the form of Exhibit A attached hereto, evidencing the original
principal amount of the Commitment, either as originally executed
or as it may be from time to time supplemented, modified,
amended, renewed or extended.
"Security Agreement" shall mean that certain security
agreement between the Borrower and the Bank which grants a first
priority perfected Lien in all Accounts and Inventory of the
Borrower, whether now owned or hereafter created, and all
Proceeds thereof, substantially in the form of Exhibit B attached
hereto.
"Solvent" shall mean, as to any Person, such Person (i)
owns Property whose fair saleable value is greater than the
amount required to pay all of such Person's liabilities
(including contingent liabilities), (ii) is able to pay all of
its liabilities as such liabilities mature and (iii) has capital
sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage.
"Subordination Agreement" shall mean the agreement
dated the date hereof among the Borrower, the Bank and ELMG,
which subordinates the Indebtedness of the Borrower owed to ELMG
to the Indebtedness of the Borrower under this Agreement in form
and content satisfactory to the Bank.
"Subsidiary" shall mean, with respect to the Borrower,
any Person of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of
directors or other Persons performing similar functions are at
the time directly or indirectly owned by the Borrower.
"Subsidiary Guarantor" shall mean each Material
Subsidiary of the Borrower which executes the Subsidiary Guaranty
or an Additional Subsidiary Guarantor Supplement; and
"Subsidiary Guarantors" shall mean collectively all Subsidiary
Guarantors, as the context requires.
"Subsidiary Guaranty" shall mean the joint and several
guaranty of the Subsidiary Guarantors in the form of Exhibit C
attached hereto, including without limitation each duly executed
supplement to the Subsidiary Guaranty in the form of Exhibit D
attached hereto.
"UCC" shall mean the "Uniform Commercial Code - Secured
Transactions" in effect in the State of Georgia.
SECTION 1.02. Use of Defined Terms; Accounting Terms;
Interpretation. All terms defined in this Agreement shall have
the same defined meanings when used in any other Loan Documents,
unless the context shall require otherwise. All accounting terms
not specifically defined herein shall be construed as having the
respective meanings customary under GAAP. All personal pronouns
used in this Agreement, whether used in the masculine, feminine
or neuter gender, shall include all genders; the singular shall
include the plural, and the plural shall include the singular;
"hereunder", "hereof", "hereto" and words of similar import shall
be deemed references to this Agreement and not to any particular
Article, Section or other provision hereof; "or" is not
exclusive; and relative to any determination of any period of
time, "from" means "from and including", "to" means "to but not
including" and "through" means "through and including". All
Exhibits and Schedules attached hereto are by reference made a
part hereof.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
SECTION 2.01. Advances and Revolving Credit Note.
(a) Subject to and upon the terms and conditions set forth
in this Agreement, the Bank agrees to make available to the
Borrower from time to time to the Commitment Termination Date
Advances in aggregate principal amount at any one time
outstanding equal to $10,000,000 (the "Commitment"). Within the
limits of the Commitment, the Borrower may borrow, repay and
reborrow under the terms of this Agreement; provided, that the
Borrower may neither borrow nor reborrow should there exist a
Default or an Event of Default.
(b) The Borrower's obligations to pay the principal of, and
interest on, the Advances made pursuant to the Commitment shall
be evidenced by the records of the Bank and by the Revolving
Credit Note completed in conformity with this Agreement. The
aggregate principal amount of each LIBOR Advance shall be
$500,000 or a greater integral multiple of $100,000, and each
Base Rate Advance shall be $50,000 or a greater integral multiple
of $10,000. In addition, no more than five (5) LIBOR Advances
shall be outstanding at any time.
(c) Unless sooner accelerated in accordance with Article
VIII hereof, the Commitment shall terminate on December 15, 1998
(the "Initial Term"); provided, that the Bank may decide in its
sole discretion to grant an extension of the Commitment for an
additional one-year period if the Bank receives a request for
such extension from the Borrower not earlier than 60 days and not
later than 30 days prior to each anniversary of the Closing Date
(the "Renewal Term"). The Bank shall use its best efforts to
notify the Borrower not later than 60 days after receipt of such
request whether it will grant any such extension; provided, that
the failure of the Bank to give such notice shall not mean or
imply that the Bank has granted any such extension.
SECTION 2.02. Interest on Notes. Interest shall
accrue on the unpaid principal amount of each Advance under the
Commitment at the following per annum rates, which may be
selected by the Borrower subject to and in accordance with the
terms of this Agreement:
(i) the Base Rate, plus the Applicable Margin
applicable thereto; or
(ii) LIBOR for the Interest Period selected by the
Borrower, plus the Applicable Margin applicable thereto.
SECTION 2.03. Method of Borrowing Under the
Commitment. The Borrower shall give the Bank written (including
by telecopy) or telephonic notice (promptly confirmed in writing)
of any requested Advance under the Commitment (a "Notice of
Borrowing") specifying (a) the principal amount of such Advance,
(b) the date such Advance is to be made (which shall be a
Business Day), (c) whether such Advance shall be a Base Rate
Advance or a LIBOR Advance, and (d) in the case of a LIBOR
Advance, the duration of the initial Interest Period applicable
thereto. Each Notice of Borrowing shall be given to the Bank (i)
with respect to any LIBOR Advance, not later than 1:00 P.M.
(Atlanta, Georgia time) on the second Business Day preceding the
date of such requested Advance, and (ii) with respect to any Base
Rate Advance, not later than 11:00 A.M. (Atlanta, Georgia time)
on the day of such requested Advance. The Bank shall be entitled
to rely on any telephonic Notice of Borrowing which it believes
in good faith to have been given by a duly authorized officer or
employee of the Borrower and any Advances made by the Bank based
on such telephonic notice, when credited to the Borrower in
accordance with the Borrower's instructions, shall be Advances
for all purposes hereunder.
SECTION 2.04. Selection of Successive Interest Rates
and Interest Periods. The Borrower may, on the last day of the
Interest Period relating thereto, convert any LIBOR Advance into
a Base Rate Advance or continue a LIBOR Advance in the same
aggregate principal amount. The Borrower may at any time convert
a Base Rate Advance into a LIBOR Advance (unless a Default or
Event of Default shall then exist). The Borrower shall give the
Bank telephonic notice (promptly confirmed in writing) at least
two (2) Business Days prior to a conversion or continuation of
any such Advance (other than the continuation of a Base Rate
Advance), such notice to specify whether such Advance is to be
continued as a LIBOR Advance or converted to a LIBOR Advance or a
Base Rate Advance, as the case may be, and, if applicable, the
Interest Period selected by the Borrower for such Advance. If
the Bank does not receive timely notice with respect to any LIBOR
Advance of any succeeding interest rate and/or Interest Period
selected by the Borrower as provided for herein or if the
Borrower selects an interest rate for an Interest Period which is
not available under Section 2.02, or if a Default or Event of
Default shall exist at the end of an Interest Period applicable
thereto, any such outstanding LIBOR Advance shall be converted to
a Base Rate Advance.
SECTION 2.05. Interest Payment Dates. Interest on the
Revolving Credit Note shall be payable (a) on the last day of the
relevant Interest Period for LIBOR Advances (except if any
Interest Period is longer than three (3) months, interest will
be payable every three (3) months); (b) on the last day of each
calendar quarter, in arrears, for each Base Rate Advance; and
(c)on the Commitment Termination Date.
SECTION 2.06. Prepayment of Advances Under the
Commitment. The Borrower shall have the right to prepay LIBOR
Advances and Base Rate Advances under the Commitment, in whole at
any time or in part from time to time, without premium or penalty
but with accrued interest on the principal amount prepaid to the
date of such prepayment; provided, that (a) the Borrower gives
the Bank at least two Business Days' prior written notice of such
prepayment, specifying the date such prepayment will occur and
the Advance to be prepaid, (b) each partial prepayment of a LIBOR
Advance shall be in an amount of $500,000 or a greater integral
multiple of $100,000 and each partial prepayment of a Base Rate
Advance shall be $50,000 or a greater integral multiple of
$10,000, and (c) a LIBOR Advance may only be prepaid on the last
day of the then current Interest Period with respect thereto.
SECTION 2.07. Optional Reduction of Commitment. The
Borrower shall have the right to reduce permanently the amount of
the unutilized Commitment from time to time, without premium or
penalty; provided, that (a) the Borrower gives the Bank at least
five (5) Business Days' prior written notice of such reduction,
specifying the date that such reduction will be effective, and
(b) each reduction shall be in an amount of $500,000 or a greater
integral multiple of $100,000.
SECTION 2.08. Use of Proceeds. The proceeds of each
Advance under the Commitment will be used by the Borrower solely
to finance working capital, acquisitions, the purchase of its own
common stock to retire or hold as "treasury stock" and other
general corporate purposes.
SECTION 2.09. Commitment Fee. From and after the date
hereof up to and including the Commitment Termination Date, the
Borrower shall pay to the Bank a commitment fee equal to 0.20%
per annum on the average daily amount of the unused Commitment
(the "Commitment Fee"). The Commitment Fee shall be payable by
the Borrower quarterly in arrears, commencing on last day of the
first calendar quarter ending after the Closing Date and on the
Commitment Termination Date.
SECTION 2.10. Illegality. Notwithstanding any other
provisions of this Agreement, if the introduction of, or any
change in or in the interpretation or application of, any
applicable law, regulation or directive shall make it unlawful or
impossible for the Bank to make, maintain or fund any LIBOR
Advance, the obligation of the Bank hereunder to make, maintain
or fund LIBOR Advances shall forthwith be cancelled, and the
Borrower shall, at its option, if any LIBOR Advances are then
outstanding, prepay all such LIBOR Advances or convert such LIBOR
Advances to Base Rate Advances, in either case without penalty
notwithstanding Section 2.12 hereof.
SECTION 2.11. Increased Costs. In the event that the
introduction of, or any change in or in the interpretation of or
application of, any applicable law, treaty or governmental
regulation, or the compliance by the Bank with any guideline,
request or directive (whether or not having the force of law)
from any central bank or other U.S. or foreign financial,
monetary or other governmental authority, shall: (a) subject the
Bank to any tax of any kind whatsoever with respect to this
Agreement or any Advance or change the basis of taxation of
payments to the Bank of principal, interest, fees or any other
amount payable hereunder (except for changes in the rate of tax
in the overall net income of the Bank); (b) impose, modify, or
hold applicable any reserve, special deposit, assessment or
similar requirement against assets held by, or deposits in or
for the account of, advances or loans by, or other credit
extended by or committed to be extended by any office of the Bank
(other than any change by way of imposition or increase of
reserve requirements under Regulation D of the Board of Governors
of the Federal Reserve System, in the case of LIBOR Advances,
included in the Reserve Percentage); or (c) impose on the Bank or
on the London interbank market any other condition with respect
to this Agreement, the Revolving Credit Note or any LIBOR Advance
thereunder; and the result of any of the foregoing is to increase
the cost to the Bank of making or committing to make, renewing or
maintaining any LIBOR Advance or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect
of any LIBOR Advance, THEN, IN ANY SUCH CASE, the Borrower shall
promptly pay from time to time, upon demand of the Bank, such
additional amounts as will compensate the Bank for such
additional cost or such reduction, as the case may be. The Bank
shall certify the amount of such additional cost or reduced
amount to the Borrower, including a description of the
calculation thereof in reasonable detail, and such certification
shall be conclusive absent manifest error; provided, that unless
such certificate is delivered to the Borrower no later than
ninety (90) days after the Bank receives actual notice of, or
obtains actual knowledge of, the promulgation of any such law,
rule or regulation, or any such change therein, or any such
change in the interpretation or administration thereof, the
Borrower shall not have any obligation to pay any such additional
compensation to the Bank accruing prior to the ninetieth (90th)
day preceding the delivery of such certificate; and provided
further, that the Borrower shall not have any obligation to pay
any such additional compensation to the Bank accruing prior to
one (1) year of the Bank receiving actual notice of, or obtaining
actual knowledge of, any such promulgation.
SECTION 2.12. Indemnity. The Borrower hereby agrees
to indemnify the Bank and hold the Bank harmless from any loss,
cost or expense it may sustain or incur as a consequence of (a)
the failure by the Borrower to complete any LIBOR Advance or the
failure of the Borrower to convert any outstanding Prime Rate
Advance into a LIBOR Advance pursuant to Section 2.04 hereof
after notice thereof has been given to the Bank or (b) the
payment or conversion of a LIBOR Advance on a day other than the
last day of the Interest Period applicable thereto, including,
without limitation, any loss, cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds
acquired or deemed acquired by the Bank to fund such Advance or
the Term Loan, as the case may be, when such Advance, as result
of such failure, is not made on such date. The Bank shall
certify the amount of its loss or expense to the Borrower, and
such certification shall be conclusive absent manifest error.
SECTION 2.13. Capital Adequacy. If, after the date of
this Agreement, the Bank shall have determined that the adoption
of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the
Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect
of reducing the rate of return on the Bank's capital (whether on
this Commitment or otherwise) as a consequence of its obligations
hereunder to a level below that which the Bank could have
achieved but for such adoption, change or compliance (taking into
consideration the Bank's policies with respect to capital
adequacy) by an amount deemed by the Bank to be material, then
from time to time, promptly upon demand by the Bank, the Borrower
shall pay the Bank such additional amount or amounts as will
compensate the Bank for such reduction. A certificate of the
Bank setting forth the additional amount or amounts to be paid to
it hereunder, providing a description of the calculation thereof
in reasonable detail, shall be conclusive absent manifest error;
provided, that unless such certificate is delivered to the
Borrower no later than ninety (90) days after the Bank receives
actual notice of, or obtains actual knowledge of, the
promulgation of any such law, rule or regulation, or any such
change therein, or any such change in the interpretation or
administration thereof, the Borrower shall not have any
obligation to pay any such additional compensation to the Bank
accruing prior to the ninetieth (90th) day preceding the delivery
of such certificate; and provided further, that the Borrower
shall not have any obligation to pay any such additional
compensation to the Bank accruing prior to one (1) year of the
Bank receiving actual notice of, or obtaining actual knowledge
of, any such promulgation. In determining any such amount, the
Bank may use any reasonable averaging and attribution methods.
SECTION 2.14. Survival. The obligations of the
Borrower under Sections 2.11, 2.12 and 2.13 shall survive the
termination of this Agreement and the payment of the Revolving
Credit Note.
SECTION 2.15. Making of Payments. The Commitment Fee
and all payments of principal of, or interest on, the Revolving
Credit Note shall be made in immediately available funds to the
Bank at its principal office in Atlanta, Georgia. All such
payments shall be made not later than 11:00 A.M. (Atlanta,
Georgia time) and funds received after that hour shall be deemed
to have been received by the Bank on the next following Business
Day.
SECTION 2.16. Default Rate of Interest. If the
Borrower shall fail to pay on the due date therefor, whether by
acceleration or otherwise, any principal owing under the
Revolving Credit Note, then interest shall accrue on such unpaid
principal, and to the extent allowed by law, other amounts due,
at the option of the Bank, from the due date until and including
the date on which such principal or other amount is paid in full
at (i) the then applicable interest rate with respect to LIBOR
Advances until the end of the Interest Period applicable thereto
plus an additional two per cent (2%) per annum and (ii)
thereafter and with respect to Base Rate Advances and Prime Rate
Loans, a rate of interest equal to the Base Rate plus an
additional two percent (2.0) per annum (the "Default Rate").
SECTION 2.17. Calculation of Interest. Interest
payable on the Revolving Credit Note and the Commitment Fee shall
be calculated on the basis of a year of 360 days and paid for the
actual number of days elapsed.
ARTICLE III
CONDITIONS TO ADVANCES
The obligation of the Bank to make Advances hereunder
and under the Revolving Credit Note is subject to the
satisfaction of the following conditions:
SECTION 3.01. Conditions Precedent to the Initial
Advance. At the time of the making by the Bank of its initial
Advance hereunder, the Bank shall have received the following,
each dated as of the date of the initial Advance, in form and
substance satisfactory to the Bank:
(a) A duly executed Agreement.
(b) A duly executed Revolving Credit Note.
(c) A duly executed Subordination Agreement.
(d) Copies of the articles of incorporation of the
Borrower, certified as true and correct by the Secretary of State
of the State of Georgia, and a certificate from the Secretary of
State of the State of Georgia, certifying the Borrower's
existence as a corporation in such State.
(e) Certified copies of the by-laws of the Borrower,
of the resolutions of the Board of Directors of the Borrower
approving this Agreement, the Revolving Credit Note and the other
Loan Documents to which the Borrower is a party, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement,
the Revolving Credit Note and the other Loan Documents to which
the Borrower is a party.
(f) A certificate of the Secretary or Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to execute
this Agreement, the Revolving Credit Note and the other Loan
Documents to which the Borrower is a party.
(g) A favorable written opinion of William S. Jacobs,
General Counsel of the Borrower, in form and content reasonably
satisfactory to the Bank and addressed to the Bank.
(h) All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and
all Loan Documents and other documents incident thereto, or
delivered in connection therewith, shall be satisfactory in form
and substance to the Bank.
SECTION 3.02. Conditions Precedent to Each Advance.
At the time of the making by the Bank of each Advance hereunder
(including the Initial Advance), (a) the following statements
shall be true (and each of the giving by the Borrower of a Notice
of Borrowing in accordance with Section 2.03 hereof and the
acceptance by the Borrower of the proceeds of each Advance shall
constitute a representation and warranty by the Borrower that on
the date of such Advance, before and after giving effect thereto
and to the application of the proceeds therefrom, such statements
are true):
(i) The representations and warranties contained
in Article IV hereof are true and correct on and as of the date
of such Advance as though made on and as of such date, other than
those representations and warranties that, by their terms, refer
to a date other than the date of such Advance, and
(ii) No Default or Event of Default exists or
would result from such Advance or from the application of the
proceeds therefrom; and
(b) the Bank shall have received such other approvals,
opinions or documents as it may reasonably request (including,
without limitation, a Federal Reserve Form U-1 duly completed to
the Bank's satisfaction and those documents and opinions which
comply with Sections 5.08 and 5.14 hereof).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
SECTION 4.01. Corporate Existence. The Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Georgia, and each Material
Subsidiary is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation.
Each of the Borrower and each Material Subsidiary is duly
qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction (other than the
jurisdiction of its incorporation) in which the nature of its
activities or the character of the properties it owns or leases
makes such qualification necessary, except where the failure to
so qualify would not have Material Adverse Effect.
SECTION 4.02. Corporate Power and Authority;
Contravention. The execution, delivery and performance by the
Borrower of this Agreement, the Revolving Credit Note and any
other Loan Documents to which it is a party are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action (including any necessary shareholder
action), and do not and will not (a) violate any provision of any
law, rule or regulation, any judgment, order or ruling of any
court or governmental agency, the articles of incorporation or
by-laws of the Borrower, or any material indenture, agreement or
other instrument to which the Borrower is a party or by which the
Borrower or any of any of its properties is bound, (b) be in
conflict with, result in a breach of, or constitute with notice
or lapse of time or both, a default under any such indenture,
agreement or other instrument or (c) result in or require the
creation of any Lien (other than pursuant to a Loan Document)
upon or with respect to any of its Properties.
SECTION 4.03. Enforceability. This Agreement, the
Revolving Credit Note and all other Loan Documents to which the
Borrower is a party are the valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with
their respective terms, except as the enforceability of any of
them may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights and
remedies generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
SECTION 4.04. Governmental Consent. Neither the
nature of the Borrower nor any of its Material Subsidiaries nor
any of their respective businesses or properties, nor any
relationship between the Borrower or any Material Subsidiary and
any other Person, nor any circumstance in connection with the
execution and delivery of the Loan Documents and the consummation
of the transactions contemplated thereby is such as to require
any authorization, consent, approval, order, license, execution
or other action by or notice to or filing with any court or
administrative or governmental body (other than routine filings,
if any, after the date of closing with the Securities and
Exchange Commission and/or state Blue Sky authorities) in
connection with the execution, delivery and performance of this
Agreement, the Revolving Credit Note and the other Loan Documents
to which the Borrower is a party thereto.
SECTION 4.05. Material Subsidiaries. The Borrower has
no Material Subsidiaries other than the Material Subsidiaries
listed on Schedule 4.05 attached hereto or as hereafter amended.
All the outstanding shares of the capital stock of each such
Material Subsidiary have been validly issued and are fully paid
and nonassessable, and all such outstanding shares are owned of
record and beneficially by the Borrower free of any Lien or
claim.
SECTION 4.06. Insurance. Each Property owned by the
Borrower and each of its Material Subsidiaries is insured for the
benefit of the Borrower or such Material Subsidiary in amounts
deemed adequate by the Borrower's management against risks
customarily insured against by Persons operating businesses
similar to those of the Borrower and its Material Subsidiaries in
the localities where such Properties are located.
SECTION 4.07. Financial Statements. The Borrower has
furnished the Bank with the following financial statements,
identified by the chief financial officer of the Borrower: the
consolidated balance sheets of the Borrower and its Subsidiaries
as at December 31, 1994 and 1993 and the related consolidated
statements of income, stockholders' equity and cash flows of the
Borrower and its Subsidiaries for such years, all certified by
KPMG Peat Marwick. All such financial statements (including any
related schedules and/or notes) are true and correct in all
material respects, have been prepared in accordance with GAAP
consistently applied throughout the periods involved and show all
liabilities, direct and contingent, of the Borrower and its
Subsidiaries required to be shown in accordance with GAAP. The
balance sheets fairly present the financial position of the
Borrower and its Subsidiaries as at the dates thereof, and the
statements of income, stockholders' equity and cash flows fairly
present the results of their operations and their cash flows for
the periods indicated. There has been no material adverse change
in the business, operations, condition (financial or otherwise),
or prospects of the Borrower, or of the Borrower and its
Subsidiaries taken as a whole, since December 31, 1994.
SECTION 4.08. Taxes. The Borrower and each of its
Material Subsidiaries have filed all federal, state and other
income tax returns which are required to be filed, and each such
Person has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have
become due, except such as are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP.
SECTION 4.09. Actions Pending. There is no action,
suit, investigation, or proceeding pending, or to the best
knowledge of the Borrower, threatened, against the Borrower or
any of its Material Subsidiaries or any Properties or rights of
the Borrower or any of its Material Subsidiaries by or before any
court, arbitrator or administrative or governmental body, which
seeks damages or other remedies, not otherwise reserved for in
determining Consolidated Net Worth, that, if awarded at the
highest amount believed (after consultation with independent
counsel reasonably satisfactory to the Bank) to be a reasonable
possibility, would, individually or in the aggregate, reduce the
Borrower's Consolidated Net Worth below the amount required by
Section 6.01 of this Agreement.
SECTION 4.10. Title to Properties. Each of the
Borrower and its Material Subsidiaries has good and marketable
title to its respective real properties (other than real
properties that it leases) and good title to all of its other
respective material properties and assets, including the
properties and assets reflected in the balance sheet as at
December 31, 1994 hereinabove described (other than properties
and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by Section
7.01 hereof. Each of the Borrower and its Material Subsidiaries
enjoys peaceful and undisturbed possession under all leases
necessary in any material respect for the operation of its
respective properties and assets, none of which contains any
unusual or burdensome provisions which might materially affect or
impair the operations of such properties and assets in the manner
intended to be operated by the Borrower or such Material
Subsidiaries. All such leases are valid and subsisting and in
full force and effect.
SECTION 4.11. Federal Reserve Regulations. Neither
the Borrower nor any Material Subsidiary is in the business of
extending credit for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U (12 C.F.R. Part 221) of
the Board of Governors of the Federal Reserve System (hereinafter
called "margin stock"). Neither the Borrower nor any agent of
the Borrower acting on its behalf has taken or will take any
action which might cause this Agreement or the Revolving Credit
Note to violate Regulation G, T, U, or X or (to the best
knowledge of the Borrower) any other regulation of the Board of
Governors of the Federal Reserve System or to violate the
Securities Exchange Act of 1934, as amended, in each case as now
in effect or as the same may hereafter be in effect.
SECTION 4.12. ERISA. Except as disclosed on Schedule
4.12 attached hereto or as hereafter amended:
(a) Identification of Plans. Neither the Borrower nor
any ERISA Affiliate maintains or contributes to, or has
maintained or contributed to, any "employee pension benefit plan"
as defined in Section 3(2) of ERISA.
(b) Liabilities. Neither the Borrower nor any
Subsidiary is currently or will become subject to any liability
(other than routine Plan expenses or contributions, if timely
paid), tax or penalty whatsoever to any Person whomsoever, which
liability, tax or penalty is directly or indirectly related to
any Plan including, but not limited to, any penalty or liability
arising under Title I or Title IV of ERISA, any tax or penalty
resulting from a loss of deduction under Section 404 or 419 of
the Code, or any tax or penalty under Chapter 43 of the Code,
except such liabilities, taxes or penalties (when taken as a
whole) as would not have a Material Adverse Effect; and
(c) Funding. The Borrower and each ERISA Affiliate
have made full and timely payment of all amounts (i) required to
be contributed under the terms of each Plan and applicable law
and (ii) required to be paid as expenses of each Plan. No Plan
would have an "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA) if such Plan were
terminated as of the date on which this representation and
warranty is made.
SECTION 4.13. Outstanding Indebtedness. There exists
no default or any condition or event which, with the lapse of
time or giving of notice or both, would constitute a default
under the provisions of any instrument evidencing or securing any
Indebtedness in an amount greater than $1,000,000 or of any
agreement otherwise relating thereto.
SECTION 4.14. Pollution and Environmental Control.
Each of the Borrower and its Material Subsidiaries has obtained
all material permits, licenses and other authorizations which are
required under, and is in material compliance with, all federal,
state and local laws and regulations (including any laws and
regulations of foreign countries comparable thereto) relating to
pollution, reclamation, or protection of the environment,
including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or hazardous or
toxic materials 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, chemical or industrial, hazardous or
toxic materials or wastes, and any and all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand
letters issued, entered, promulgated or approved thereunder,
except to the extent that any failure to obtain such permits,
licenses and other authorizations or any such non-compliance
would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 4.15. Employee Relations. Each of the
Borrower and its Material Subsidiaries has a stable work force in
place and is not a party to any collective bargaining agreement,
and no labor union has been recognized as a representative of the
Borrower's or any such Material Subsidiary's employees. As of the
Closing Date, neither the Borrower nor any Material Subsidiary
knows of any pending, threatened or contemplated strikes, work
stoppage or any other labor dispute involving its employees which
would have a Material Adverse Effect.
SECTION 4.16. Investment Company Act. The Borrower is
not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended.
SECTION 4.17. Public Utility Holding Company. The
Borrower is not a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or
a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.18. Solvency. After giving effect to the
execution and delivery of the Loan Documents and the making of
the Advances under the Commitment, the Borrower will be Solvent.
SECTION 4.19. Possession of Franchises, Licenses, Etc.
Except as disclosed on Schedule 4.19 attached hereto or as
hereafter amended, each of the Borrower and its Material
Subsidiaries possesses all franchises, certificates, licenses,
permits and other authorizations from governmental subdivisions
or regulatory authorities, and all patents, trademarks, service
marks, trade names, copyrights, licenses and other rights that
are used in, and are material to, the operations of the Borrower
or such Material Subsidiaries as currently conducted, free from
burdensome restrictions, that are necessary for the ownership,
maintenance and operation of any of their respective material
Properties, and neither the Borrower nor any of its Material
Subsidiaries is in violation of any thereof.
SECTION 4.20. Disclosure. Neither this Agreement nor
any other document, certificate or statement furnished to the
Bank (or to the Securities and Exchange Commission in connection
with the Borrower's 10-Q, upon which the Bank may expressly rely)
by or on behalf of the Borrower in connection herewith contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained
herein and therein not misleading at the time such document,
certificate or statement was furnished to the Bank. There is no
fact peculiar to the Borrower or any of its Material Subsidiaries
which has had, or could have, a Material Adverse Effect which has
not been set forth or appropriately reflected in this Agreement
or in the other Loan Documents, certificates and statements
furnished to the Bank by or on behalf of the Borrower prior to
the date hereof in connection with the transactions contemplated
hereby.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as the Revolving Credit Note remains unpaid or
the Commitment remains outstanding hereunder, the Borrower will,
unless the Bank otherwise consents in writing:
SECTION 5.01. Notice of Default. Furnish to the Bank,
as soon as possible and in any event within ten (10) Business
Days after discovery by any authorized officer of the Borrower of
any Default or Event of Default or any event of default or event
which with the passage of time or the giving of notice or both
would become an event of default under any agreement evidencing
any other Indebtedness, an Officer's Certificate setting forth
the details of such Default, Event of Default or event or
condition.
SECTION 5.02. Financial Statements. Deliver to the
Bank: (a) as soon as practicable and in any event within ninety
(90) days after the end of each fiscal year of the Borrower, an
audited consolidated and an unaudited consolidating balance sheet
of the Borrower and its Subsidiaries as of the end of such fiscal
year and the related audited consolidated and unaudited
consolidating statements of income, stockholders' equity and cash
flows for such fiscal year and setting forth in each case in
comparative form corresponding figures for the preceding fiscal
year, all in reasonable detail and reasonably satisfactory in
scope to the Bank and with respect to the audited consolidated
financial statements only, certified as correct by the Borrower's
chief financial officer and accompanied by an unqualified opinion
from KPMG Peat Marwick or such other independent certified public
accountants of recognized standing selected by the Borrower and
acceptable to the Bank; (b) as soon as practicable and in any
event within forty-five (45) days after the end of each of the
first three quarters of each fiscal year of the Borrower, an
unaudited consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal
quarter and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows for
such quarter and for the portion of the Borrower's fiscal year
ended at the end of such quarter, setting forth in the case of
such statements in comparative form the figures for the
Borrower's corresponding periods in the Borrower's previous
fiscal year; (c) as they are delivered, copies of all statements
and reports, if any, filed with the Securities and Exchange
Commission; and (d) such other financial data and information as
the Bank may reasonably request. The Bank is hereby authorized
to deliver a copy of any financial statement delivered to it
pursuant to this Section 5.02 to any regulatory body having
jurisdiction over it and having the governmental authority to
require delivery of the same.
SECTION 5.03. Certificate of No Default. Together
with the financial statements delivered pursuant to Section 5.02
(a) and Section 5.02 (b) hereof, deliver to the Bank an Officer's
Certificate, executed by the chief financial officer of the
Borrower, evidencing the calculations necessary to establish
compliance with the financial covenants set forth in Article VI
hereof and with respect to the financial statements delivered
pursuant to Section 5.02(a) only, stating that, to the best
knowledge of the Borrower, there exists no Default or Event of
Default, or if any Default or Event of Default exists, stating
the nature thereof, the period of existence thereof and what
action the Borrower proposes to take with respect thereto,
provided no such proposal shall affect the Bank's recourse to any
and all available remedies.
SECTION 5.04. ERISA. Promptly after the occurrence
thereof with respect to any Plan, or any trust established
thereunder, deliver to the Bank notice of (a) a "reportable
event" described in Section 4043 of ERISA and the regulations
issued from time to time thereunder (other than a "reportable
event" not subject to the provisions for 30-day notice to the
PBGC under such regulations), (b) any other event which could
subject the Borrower or any ERISA Affiliate to any tax, penalty
or liability under Title I or Title IV of ERISA or Chapter 43 of
the Code which would have a Material Adverse Effect, and (c) at
the same time and in the same manner as such notice must be
provided to the PBGC, or to a Plan participant, beneficiary or
alternative payee, any notice required under Section 101(d),
302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or
under Section 401(a)(29) or 412 of the Code with respect to any
Plan.
SECTION 5.05. Visits and Inspections. Permit, and
cause each Subsidiary to permit, the Bank or any Person
designated by the Bank upon advance notice in writing (except
after the occurrence and continuation of an Event of Default, in
which case no advance notice will be required) to visit and
inspect any of the Properties of the Borrower and its
Subsidiaries, to examine the books and financial records of the
Borrower and its Subsidiaries, and make reasonable requests for
copies thereof or extracts therefrom, and to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries with
their executive officers, all at such reasonable times and as
often as the Bank may reasonably request.
SECTION 5.06. Compliance with Laws; Payment of Taxes.
(a) Comply, and cause each Material Subsidiary to comply, with
all applicable laws, rules, regulations and orders (including
without limitation all federal, state and local laws relating to
pollution, reclamation or protection of the environment), except
where the failure to comply would not have a Material Adverse
Effect.
(b) Pay, and cause each Material Subsidiary to pay, all
taxes, assessments and governmental charges imposed upon it or
upon its Properties with respect thereto, except to the extent
contested in good faith and for which appropriate reserves have
been established in accordance with GAAP.
SECTION 5.07. Corporate Existence. Preserve and keep,
and cause each of its Material Subsidiaries to preserve and keep,
its corporate existence (except as permitted in Section 7.02
hereof) and good standing in its jurisdiction of incorporation
and its qualification and good standing as a foreign corporation
in all jurisdictions where not so qualifying would have a
Material Adverse Effect, and shall conduct its business in the
manner in which it is now conducted subject only to changes in
the ordinary course of business (which for the purposes of this
Section shall mean and include the right to enter into
businesses, operations and/or markets which are functionally
related to the existing businesses, expertise, operations and/or
markets of the Borrower or such Material Subsidiaries).
SECTION 5.08. Insurance. Maintain, and cause each
Material Subsidiary to maintain, casualty insurance coverage on
its Property and other insurance against other risks, including
public liability, in such amounts and such types as are
ordinarily carried by similar corporations with a company or
companies reasonably satisfactory to the Bank. If and when the
Security Agreement is executed and delivered pursuant to Section
5.14 hereof, all policies of insurance covering Inventory of the
Borrower shall name the Bank as a loss payee and shall provide
for thirty days' prior written notice to the Bank in the event of
cancellation, change, alteration or modification, and the
Borrower shall deliver to the Bank on the date of such execution
a certificate of insurance to such effect.
SECTION 5.09. Books and Records. Keep, and cause each
Subsidiary to keep, complete and accurate books and records with
respect to business and its Property, consistent with good
business practices and as may be necessary to permit the
preparation of the Borrower's annual financial statements in
accordance with GAAP.
SECTION 5.10. Maintenance of Property. Preserve,
protect, keep and maintain, and cause each of its Material
Subsidiaries to preserve, protect, keep and maintain, its
respective Property in good operating condition, repair and
working order in all material respects, with reasonable allowance
for wear and tear for tangible Property, so that the value and
operating efficiency thereof shall at all times be maintained and
preserved for its intended use.
SECTION 5.11. Compliance with Other Agreements.
Comply, and cause each Material Subsidiary to comply, with all
agreements, indentures and mortgages to which it is a party or by
which it or any of its Property is bound, where the effect of
noncompliance would have a Material Adverse Effect.
SECTION 5.12. Notice of Litigation. Within ten (10)
days after (a) the occurrence thereof, deliver to the Bank notice
of the institution by any Person of any action, suit or
proceeding or any governmental investigation or any arbitration
seeking money damages in excess of $1,000,000 and seeking relief
that, if granted, would have a Material Adverse Effect, before
any court or arbitrator or any governmental or administrative
body, agency, or official, against the Borrower, any Subsidiary,
or any material Property of any of them, or (b) the receipt of
actual knowledge thereof, deliver to the Bank notice of the
threat of any such action, suit, proceeding, investigation or
arbitration, each such notice under this subsection to specify,
if known, the amount of damages being claimed or other relief
being sought, the nature of the claim, the Person instituting the
action, suit, proceeding, investigation or arbitration, and any
other significant features of the claim.
SECTION 5.13. Environmental Notices. Promptly notify
the Bank of the Borrower's or any Material Subsidiary's receipt
of any governmental notice of a violation of any federal, state
or local environmental law, standard or regulation (including any
such law, standard or regulation of any foreign country, whether
at the national or local level, applicable to the Borrower or any
of its Material Subsidiaries), which violation would have a
Material Adverse Effect.
SECTION 5.14. Springing Lien. (a) Upon the occurrence
and during the continuance of a Default or an Event of Default or
(b) if at the end of any fiscal quarter the Borrower's
Consolidated EBIT for such fiscal quarter and the immediately
preceding three fiscal quarters (excluding the fiscal quarter
ending September 30, 1995) is less than 2.0 times Consolidated
Interest Expense for such fiscal quarter and the immediately
preceding three fiscal quarters (excluding the fiscal quarter
ending September 30, 1995), the Borrower shall promptly execute
and deliver to the Bank the Security Agreement, together with
such UCC-1 financing statements as the Bank may request to
perfect its security interest in the Borrower's Accounts and
Inventory (and Proceeds thereof), and an opinion of counsel
reasonably satisfactory to the Bank regarding the enforceability
of the Security Agreement, the perfection of the Lien granted
pursuant thereto and such other matters as the Bank may
reasonably request.
ARTICLE VI
SPECIFIC FINANCIAL COVENANTS
The Borrower hereby covenants and agrees with the Bank
that it will, during the term of this Agreement or for so long as
the Revolving Credit Note remains unpaid or the Commitment
remains outstanding:
SECTION 6.01. Consolidated Net Worth. Have at the end
of each fiscal year Consolidated Net Worth of not less than the
sum of (i) $25,000,000 (as such amount may be reduced by the
amount of its common stock purchased and retired or held by the
Borrower as "treasury stock") plus (ii) fifty percent (50%) of
positive Consolidated Net Income for such fiscal year, commencing
with the fiscal year ending December 31, 1994; provided, that in
no event shall the Consolidated Net Worth required pursuant to
this Section 6.01 be less than that required on any previous date
of determination.
SECTION 6.02. Leverage. Maintain at all times
Consolidated Funded Debt of less than 45% of Consolidated
Capitalization.
SECTION 6.03. Interest Coverage. Have at the end of
each fiscal quarter Consolidated EBIT for any four of the
immediately preceding six fiscal quarters (which have been
identified by the Borrower to the Bank in its Officer's
Certificate delivered pursuant to Section 5.03 hereof) of greater
than 2.0 times Consolidated Interest Expense for such fiscal
quarter and the immediately preceding three fiscal quarters.
ARTICLE VII
NEGATIVE COVENANTS
So long as the Revolving Credit Note remains unpaid or
the Commitment remains outstanding hereunder, the Borrower will
not, and will not permit any Material Subsidiary to, without the
prior written consent of the Bank:
SECTION 7.01. Liens, Etc. Create, assume or suffer to
exist any Lien upon any of its Property whether now owned or
hereafter acquired except:
(a) Liens created in favor of the Bank pursuant to the
Security Agreement (if and when executed and delivered pursuant
to Section 5.14 hereof;
(b) Liens existing on the date hereof as set forth on
Schedule 7.01 attached hereto (other than Liens permitted
pursuant to subsection (a) and subsections (c) through (k)
below);
(c) purchase money Liens upon any Property
constituting fixed assets acquired or held by the Borrower or any
Material Subsidiary in the ordinary course of business to secure
the purchase price of such Property or to secure Indebtedness
incurred solely for the purpose of financing the acquisition of
such Property, provided that such Lien does not extend to any
other Property;
(d) Liens existing on any Property held by the
Borrower or any Material Subsidiary in the ordinary course of
business at the time of its acquisition (other than any such Lien
created in contemplation of such acquisition);
(e) Liens existing on Property of any Person acquired
by the Borrower or any Material Subsidiary at the time of
acquisition of such Person (other than any such Lien created in
contemplation of such acquisition);
(f) Liens securing the Indebtedness of any Material
Subsidiary to the Borrower or of any Material Subsidiary to any
other Subsidiary;
(g) Liens for taxes or assessments or other
governmental charges or levies not yet due or which are being
actively contested in good faith by appropriate proceedings if
adequate reserves with respect thereto are maintained on the
books of the Borrower or any Material Subsidiary in accordance
with GAAP;
(h) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other Liens
imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate
reserves are being maintained on the books of the Borrower or any
Material Subsidiary in accordance with GAAP;
(i) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business in
connection with workmen's compensation, unemployment insurance
and other types of social security, or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-of-money
bonds and other similar obligations (other than obligations for
the payment of borrowed money);
(j) easements, rights-of-way, restrictions and other
similar charges or encumbrances not interfering with the ordinary
conduct of the business of the Borrower or any of its Material
Subsidiaries or any of their respective properties;
(k) Liens on any common stock of the Borrower purchased
and held by the Borrower as "treasury stock"; and
(l) extensions, renewals or replacements of any Lien
referred to in clauses (a) through (k) of this Section 7.01;
provided, that the principal amount of the Indebtedness or
obligation secured thereby is not increased (other than the
Indebtedness on the real property and improvements of the
Borrower listed on Schedule 7.01 which may be increased in any
refinancing thereof) and that any such extension, renewal or
replacement is limited to the property originally encumbered by
the Lien.
SECTION 7.02. Consolidations and Mergers. Merge or
consolidate with or into any Person or sell all or substantially
all of its assets, except (a) a merger (i) in which the Borrower
is the surviving corporation, so long as, both immediately prior
to and after giving effect to such merger, no Default or Event of
Default exists or would exist after giving effect thereto and
(ii) in which the Borrower is merged into ELMG, so long as the
ELMG Agreement remains in effect and both immediately prior to
and after giving effect to such merger, no default or event of
default exists or would exist under the ELMG Agreement; and (b) a
merger of any Material Subsidiary with the Borrower (provided
that the Borrower shall be the surviving corporation) or with any
one or more other Subsidiaries (provided that any Subsidiary
Guarantor involved in such merger shall be the surviving
corporation).
SECTION 7.03. Compliance with ERISA. Take or fail to
take, nor permit any ERISA Affiliate to take or fail to take, any
action with respect to a Plan including but not limited to (a)
establishing any Plan, (b) amending any Plan, (c) terminating or
withdrawing from any Plan, or (d) incurring an amount of unfunded
benefit liabilities, as defined in Section 4001(a)(18) of ERISA,
or any withdrawal liability under Title IV of ERISA, where such
action or failure could have a Material Adverse Effect.
SECTION 7.04. Issuance of Stock by Material
Subsidiaries. (a) Permit any Material Subsidiary (either
directly or indirectly by the issuance of rights or options for,
or securities convertible into such shares) to issue, sell or
dispose of any shares of its stock of any class (other than
directors' qualifying shares, if any), except to the Borrower, to
ELMG or to any other Person or Persons which would result in the
Borrower owning less than a majority of the voting stock of such
Material Subsidiary.
(b) Create any new Material Subsidiaries, whether by
incorporation, merger or acquisition, unless (i) if such Material
Subsidiary is wholly-owned by the Borrower, such Material
Subsidiary promptly executes a Subsidiary Guaranty or a
supplement to the Subsidiary Guaranty substantially in the form
of Exhibit D attached hereto ( a "Supplement") or (ii) if such
Material Subsidiary is not wholly-owned by the Borrower and (A)
if the Borrower's Investment in such Material Subsidiary
constitutes solely a purchase from a third Person of the capital
stock of, or the partnership or members' interest in, such
Material Subsidiary, the Borrower will use its best efforts to
cause such Material Subsidiary to promptly execute a Subsidiary
Guaranty or a Supplement in an amount limited to such Investment
outstanding as of the date on which such Subsidiary Guaranty is
enforced or (B) if the Borrower's Investment constitutes any
other type of transaction referenced in the definition of
Investment, the Borrower will cause such Material Subsidiary to
execute a Subsidiary Guaranty or a Supplement in an amount
limited to such Investment outstanding as of the date on which
such Subsidiary Guaranty is enforced. In any such case in which a
new Material Subsidiary is not wholly-owned by the Borrower, the
Borrower will execute a pledge agreement in form and content
satisfactory to the Bank pledging the stock or other ownership
interest held by the Borrower in such Material Subsidiary and any
other documents which the Bank reasonably deems necessary, but
only if such pledge would not cause any Advance used to make such
Investment to be a "purpose" credit under, or to otherwise
violate, Regulation U of the Federal Reserve Board. In addition,
each new Material Subsidiary becoming a Subsidiary Guarantor
hereunder shall deliver to the Bank the same documents required
under Section 2.1(e)(ii) of the ELMG Agreement and if requested
by the Bank, an opinion of counsel in form and content reasonably
satisfactory to the Bank.
SECTION 7.05. Affiliate Transactions. At any time
engage in, or permit any Material Subsidiary to engage in, any
material transaction requiring disclosure pursuant to the rules
and regulations of the Securities and Exchange Commission with an
Affiliate of the Borrower or of any Material Subsidiary (other
than transactions with their directors or officers in the nature
of compensation for their services as such) , unless such
transaction is determined by those members of the board of
directors of the Borrower or such Material Subsidiary (or a
committee of such members) who have no material interest (whether
through ownership of stock, employment or otherwise) in such
Affiliate to be beneficial to the Borrower or such Material
Subsidiary and is unanimously approved by such members or
committee, such determination and approval to occur not later
than the next meeting of such members or committee at which
transactions between the Borrower and ELMG or any Subsidiary of
ELMG are scheduled for review and consideration in the ordinary
course of the discharge by the Borrower's board of directors of
its responsibilities, but not less frequently than annually.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01. Events of Default. Any one or more of
the following shall constitute an Event of Default hereunder:
(a) The Borrower shall fail to pay when due any
payment of (i) principal on the Revolving Credit Note or (ii)
interest due on the Revolving Credit Note or any other amount
payable hereunder or under any of the other Loan Documents and
such failure continues for more than five (5) calendar days; or
(b) Any representation or warranty contained herein or
deemed to have been made hereunder or made by or furnished on
behalf of the Borrower in connection herewith or in any other
Loan Document shall be false or misleading in any material
respect as of the date made or deemed to have been made; or
(c) The Borrower shall fail to perform or observe any
covenant, term or condition contained in Article VI or Article
VII of this Agreement; or
(d) The Borrower shall fail to perform or observe any
covenant, term or condition contained in Article V or any other
covenant, term or condition of this Agreement not specifically
referred to elsewhere in this Section 8.01 or any covenant or
agreement contained in any other Loan Document and such failure
shall continue for more than thirty 30 calendar days from receipt
of written notice from the Bank; or
(e) The Borrower or any Material Subsidiary (i) shall
default in any payment of any amount on any other Indebtedness
which individually or in the aggregate exceeds $1,000,000 beyond
any period of grace provided with respect thereto, or (ii) shall
fail to perform or observe any other agreement, term or condition
contained in any agreement under which any such Indebtedness is
created (or if any other event shall occur and be continuing
thereunder) and the effect of such failure or other event is to
cause or to permit the holder or holders of such Indebtedness (or
a trustee on behalf of such holder or holders) to cause such
Indebtedness to become due prior to any stated maturity; or
(f) The Borrower or any Material Subsidiary shall fail
to pay its debts generally as they become due or shall admit in
writing its inability to pay its debts generally; or
(g) The Borrower or any Material Subsidiary shall make
or take any action to make an assignment for the benefit of
creditors, petition or take any action to petition any tribunal
for the appointment of a custodian, receiver or any trustee for
it or a substantial part of its assets, or shall commence or take
any action to commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution,
liquidation or debtor relief law or statute of any jurisdiction,
whether now or hereafter in effect including, without limitation,
the Bankruptcy Code; or, if there shall have been filed any such
petition or application, or any such proceeding shall have been
commenced against it, in which an order for relief is entered or
which remains unstayed and in effect for more than 60 days; or
the Borrower or any Material Subsidiary by any act or omission
shall indicate its consent to, approval of or acquiescence in any
such petition, application or proceeding or order for relief or
the appointment of a custodian, receiver or any trustee for it or
any substantial part of any of its properties, or shall suffer to
exist any such custodianship, receivership or trusteeship; or any
corporate action is taken by the Borrower or any such Material
Subsidiary for the purpose of effecting any of the foregoing; or
(h) The Borrower or any Material Subsidiary shall have
concealed, removed, or permitted to be concealed or removed, any
part of its Property, with intent to hinder, delay or defraud its
creditors or any of them, or made or suffered a transfer of any
of its Property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or shall have made any
transfer of its Property to or for the benefit of a creditor at a
time when other creditors similarly situated have not been paid
while the Borrower or such Material Subsidiary is insolvent; or
shall have suffered or permitted, while insolvent, any creditor
to obtain a Lien upon any of its Property through legal
proceedings or distraint; or
(i) Any order, judgment or decree is entered in any
proceedings against the Borrower or any Material Subsidiary
decreeing the dissolution or split-up of the Borrower or such
Material Subsidiary and such order, judgment or decree remains
unstayed and in effect for more than 30 days; or
(j) A judgment or order for the payment of money in an
amount in excess of $1,000,000 and which would have a Material
Adverse Effect shall have been rendered against the Borrower or
any Material Subsidiary and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
or
(k) ELMG shall at any time own less than a majority of
the outstanding shares of voting stock of the Borrower; or
Persons who are directors of the Borrower on the Closing Date (or
who have been nominated for election by a board of directors of
which a majority of the members are such current directors or
were so nominated) shall at any time cease to constitute a
majority of the board of directors of the Borrower; or
(l) The occurrence of an "event of default" (which has
not been cured by the Borrower or waived by the Bank) under the
ELMG Agreement.
SECTION 8.02. Remedies on Default.
(a) Upon the occurrence and during the continuance of
an Event of Default (other than an Event of Default described in
Section 8.01 (g), the Bank may (i) terminate its obligations to
the Borrower, including, without limitation, all obligations to
make Advances under the Commitment, (ii) declare the Revolving
Credit Note, including, without limitation, principal, accrued
interest and costs of collection (including, without limitation,
reasonable attorneys' fees actually incurred if collected by or
through an attorney at law or in bankruptcy, receivership or
other judicial proceedings) immediately due and payable, without
presentment, demand, protest or an other notice of any kind, all
of which are expressly waived.
(b) Upon the occurrence of an Event of Default under
Section 8.01 (g), (i) all obligations of the Bank to the
Borrower, including, without limitation, all obligations to make
Advances under the Commitment, shall terminate automatically and
(ii) the Revolving Credit Note, including, without limitation,
principal, accrued interest and costs of collection (including,
without limitation, reasonable attorneys' fees actually incurred
if collected by or through an attorney at law or in bankruptcy,
receivership or other judicial proceedings) shall be immediately
due and payable, without presentment, demand, protest, or any
other notice of any kind, all of which are expressly waived.
(c) Upon the occurrence of an Event of Default and
acceleration of the Revolving Credit Note as provided in (a) or
(b) above, the Bank may pursue any remedy available under this
Agreement, the Revolving Credit Note, the Security Agreement or
any other Loan Document, or available at law or in equity, all of
which shall be cumulative. The order and manner in which the
rights and remedies of the Bank under the Loan Documents and
otherwise may be exercised shall be determined by the Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. No Waiver. No delay or failure on the
part of the Bank or any holder of the Revolving Credit Note in
the exercise of any right, power or privilege granted under this
Agreement or any other Loan Document, or available at law or in
equity, shall impair any such right, power or privilege or be
construed as a waiver of any Event of Default or any acquiescence
therein. No single or partial exercise of any such right, power
or privilege shall preclude the further exercise of such right,
power or privilege. No waiver shall be valid against the Bank
unless made in writing and signed by the Bank, and then only to
the extent expressly specified therein.
SECTION 9.02. Notices. Unless otherwise provided
herein, all notices, requests and other communications provided
for hereunder shall be in writing (including telecopy or similar
teletransmission or writing) and shall be given at the following
addresses:
(1) If to the Bank: SunTrust Bank, Atlanta
25 Park Place/Center Code 127
Atlanta, Georgia 30303
Attention: Mr. Kevin S. MacDonald
Assistant Vice President
Telephone: (404) 588-8560
Telecopy: (404) 588-8833
(2) If to Borrower: LXE Inc.
660 Engineering Drive
Norcross, Georgia 30092-9200
Attention: Treasurer
Telephone: (770) 263-9200
Telecopy: (770) 447-4397
Any such notice, request or other communication shall be
effective (a) if given by mail, upon the earlier of receipt or
the third Business Day after such communication is deposited in
the United States mails, registered or certified, with first
class postage prepaid, addressed as aforesaid, (b) if given by
telecopy, upon receipt during regular business hours on a
Business Day or if received at any other time, on the next
succeeding Business Day, or (c) if given by any other means
(including, without limitation, by air courier), when delivered
at the address specified herein during regular business hours on
a Business Day. The Borrower and the Bank may change its address
for notice purposes by notice to the other parties in the manner
provided herein.
SECTION 9.03. Survival of Representations and
Warranties. All representations and warranties contained herein
or made by or furnished on behalf of the Borrower in connection
herewith shall survive the execution and delivery of this
Agreement and all other Loan Documents.
SECTION 9.04. Descriptive Headings. The descriptive
headings of the several sections of this Agreement are inserted
for convenience only and do not constitute a part of this
Agreement.
SECTION 9.05. Severability. If any part of any
provision contained in this Agreement or in any other Loan
Document shall be invalid or unenforceable under applicable law,
said part shall be ineffective to the extent of such invalidity
only, without in any way affecting the remaining parts of said
provision or the remaining provisions.
SECTION 9.06. Time is of the Essence. Time is of the
essence in interpreting and performing this Agreement and all
other Loan Documents.
SECTION 9.07. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original and all of which, taken together, shall
constitute one and the same instrument.
SECTION 9.08. Payment of Costs. The Borrower shall
pay all costs, expenses, taxes and fees (i) incurred by the Bank
in connection with the preparation, execution and delivery of
this Agreement and all other Loan Documents including, without
limitation, the reasonable costs and expenses of counsel
(including in-house counsel) to the Bank, and any and all stamp,
intangible or other taxes that may be payable or determined in
the future to be payable in connection therewith; (ii) incurred
by the Bank in connection with administration of the Advances and
the Loan Documents in accordance with the provisions thereof
which would not be considered in the ordinary course of business
and the preparation, execution and delivery of any waiver,
amendment or consent by the Bank relating to the Loan Documents,
including, without limitation, the reasonable costs and expenses
of counsel (including in-house counsel) for the Bank; and (iii)
incurred by the Bank in enforcing the Loan Documents, including,
without limitation, reasonable costs and expenses of counsel
(including in-house counsel) for the Bank.
SECTION 9.09. Successors and Assigns. This Agreement
shall bind and inure to the benefit of the Borrower and the Bank,
and their respective successors and assigns; provided, that the
Borrower shall have no right to assign its rights or obligations
hereunder to any Person. The Bank may assign its rights and
delegate its obligations under this Agreement and the other Loan
Documents and further may assign all or any part of its
Commitment, any Advances under the Revolving Credit Note or the
Revolving Credit Note or any other interest herein or in any
other Loan Document. Any assignee shall have, to the extent of
such assignment unless otherwise provided therein, the same
rights, obligations and benefits as it would have if it were the
Bank hereunder and under the other Loan Documents. The Bank may
sell participations in the Commitment and/or any Advances under
the Revolving Credit Note to other banks, financial institutions
and qualified investors without the consent of the Borrower;
provided, that no participant shall have any right to deal
directly with the Borrower and no participant shall have any
voting rights under this Agreement except with respect to any
proposed increase in the Commitment, any extension of the
Commitment Termination Date, any decrease in the interest rate
margin or any release of any guarantor or any collateral.
SECTION 9.10. Amendments; Consents. No amendment,
modification, supplement, termination, or waiver of any provision
of this Agreement or any other Loan Document, and no consent to
any departure by the Borrower therefrom, may in any event be
effective unless in writing signed by the Bank, and then only in
the specific instance and for the specific purpose given.
SECTION 9.11. Set-Off. Upon the occurrence and during
the continuation of an Event of Default, the Borrower authorizes
the Bank or any other holder of the Revolving Credit Note,
without notice or demand, to apply all deposits of the Borrower
(general or special, time or demand, provisional or final) held
by the Bank or such holder and any other Indebtedness due or to
become due to the Borrower from the Bank or such holder in
satisfaction of any of the liabilities or obligations of the
Borrower under this Agreement or under any other Loan Document.
The Bank or such holder shall promptly notify the Borrower of any
set off hereunder.
SECTION 9.12. Indemnity. The Borrower agrees to
protect, indemnify and save harmless the Bank and its affiliates,
shareholders, directors, officers, employees and agents, from and
against any and all (i) claims, demands and causes of action of
any nature whatsoever brought by any Person not a party to this
Agreement and arising from or related or incident to this
Agreement or any other Loan Document, (ii) costs and expenses
incident to the defense of such claims, demands and causes of
action, including, without limitation, reasonable attorneys'
fees, and (iii) liabilities, judgments, settlements, penalties
and assessments arising from such claims, demands and causes of
action, except in each case such claims, costs and liabilities
caused by the Bank's gross negligence or willful misconduct. The
indemnity contained in this Section shall survive the termination
of this Agreement.
SECTION 9.13. Usury. It is the intent of the parties
hereto not to violate any Federal or state law, rule or
regulation pertaining either to usury or to the contracting for
or charging or collecting of interest, and the Borrower and the
Bank agree that, should any provision of this Agreement or the
Revolving Credit Note, or any act performed hereunder or
thereunder, violate any such law, rule or regulation, then the
excess of interest contracted for or charged or collected over
the maximum lawful rate of interest shall be applied to the
outstanding principal Indebtedness due to the Bank by the
Borrower under this Agreement and the Revolving Credit Note.
SECTION 9.14. Governing Law and Submission to
Jurisdiction.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND UNDER THE REVOLVING CREDIT NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE
STATE OF GEORGIA (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF) AND THE LAWS OF THE UNITED STATES.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE REVOLVING CREDIT NOTE OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA,
OR ANY OTHER COURT OF COMPETENT JURISDICTION IN THE STATE OF
GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN
DISTRICT OF GEORGIA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY
JURY TO THE EXTENT PERMITTED BY APPLICABLE LAW.
(d) Nothing herein shall affect the right of the Bank or
any holder of the Revolving Credit Note to commence legal
proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
SECTION 9.15. Construction. Should any provision of
this Agreement require judicial interpretation, the parties
hereto agree that the court interpreting or construing the same
shall not apply a presumption that the terms hereof shall be more
strictly construed against one party by reason of the rule of
construction that a document is to be more strictly construed
against the party that itself or through its agents prepared the
same, it being agreed that the Borrower and the Bank and their
respective agents have participated equally in the preparation
hereof.
SECTION 9.16. Entire Agreement. This Agreement and
the other Loan Documents executed and delivered contemporaneously
herewith, together with the exhibits and schedules attached
hereto and thereto, constitute the entire understanding of the
parties with respect to the subject matter hereof, and any other
prior or contemporaneous agreements, whether in writing or oral,
with respect thereto including, without limitation, any loan
commitment from the Bank to the Borrower, are expressly
superseded hereby. The execution of this Agreement and the other
Loan Documents by the Borrower was not based upon any facts or
materials provided by the Bank, nor was the Borrower induced to
execute this Agreement or any other Loan Document by any
representation, statement or analysis made by the Bank.
WITNESS the hand and seal of the parties hereto through
their duly authorized officers, as of the date first above
written.
LXE INC.
By /s/
Name: Don T. Scartz
Title: Treasurer
Attest /s/
Name: William S. Jacobs
Title: Secretary
[CORPORATE SEAL]
SUNTRUST BANK, ATLANTA
By /s/
Name: Kevin S. MacDonald
Title: Assistant Vice President
Schedule 4.05
Material Subsidiaries
Jurisdiction Amount of %
Name of Incorporation Investment Ownership
- None -
Schedule 4.12
ERISA
1. Electromagnetic Sciences, Inc. Retirement Program
2. Electromagnetic Sciences, Inc. Retirement Income Plan
(terminated December 15, 1993)
Schedule 4.19
Franchises, Licenses, etc.
License Agreement between LXE Inc. and Symbol Technologies, Inc.,
dated March 4, 1991, licensing LXE Inc. to use certain patented
bar-code scanning technology in handheld computer terminals,
requires royalty payments equal to 71/2% of the net sales value
to LXE of terminals using such technology.
Schedule 7.01
Outstanding Liens
1. Lien created under Deed to Secure Debt and Security
Agreement from LXE Inc. to Electromagnetic Sciences, Inc., dated
December 31, 1991, recorded in Deed Book 7015, Page 1, Gwinnett
County, Georgia.
2. Lien created under Deed to Secure Debt and Security
Agreement dated August 1, 1981, by and between Electromagnetic
Sciences, Inc., a Nevada Corporation (EMS Nevada), and Trust
Company Bank (the Bank) in connection with the issuance of
$2,100,000 Development Authority of Gwinnett County Bond (the
Issuer), Series 1981, recorded in Deed Book 2283, Page 280,
Gwinnett County, Georgia, and which was assigned to
Electromagnetic Sciences, Inc. (EMS), a Georgia Corporation and
successor of EMS Nevada, recorded in Deed Book 2283, Page 318,
Gwinnett County, Georgia, and which was further assigned to LXE
Inc. (LXE) under an Assignment and Assumption Agreement date
December 31, 1991 by and between EMS, LXE, the Issuer, and the
Bank and recorded in Deed Book 7014, Page 233, Gwinnett County,
Georgia.
EXHIBIT A
REVOLVING CREDIT NOTE
December 15, 1995 $10,000,000.00
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, LXE INC., a
Georgia corporation (the "Borrower"), promises to pay to the
order of SUNTRUST BANK, ATLANTA, a Georgia banking corporation
(the "Bank"), at the principal office of the Bank at One Park
Place, Atlanta, Georgia 30303 or at such other place as the
holder hereof may designate, in immediately available funds in
lawful money of the United States, the principal sum of (i)TEN
MILLION AND NO/100 DOLLARS ($10,000,000.00) or (ii) so much as
shall have been advanced hereunder as LIBOR Advances and Base
Rate Advances and remaining outstanding as shown on the records
of the Bank, plus all accrued and unpaid interest hereon as set
forth in that certain Revolving Credit Agreement dated as of even
date herewith between the Borrower and the Bank (as the same may
hereafter be amended, modified, extended or supplemented from
time to time, the "Agreement"). Interest shall accrue from the
date hereof up to and through the date on which all principal and
interest hereunder is paid in full, shall be computed on the
basis of actual days elapsed in a 360-day year, and shall be
calculated on the outstanding principal balance hereunder at the
interest rates specified in Section 2.02 of the Agreement.
Principal and interest hereunder shall be paid on the
dates specified in the Agreement and shall be due and payable in
full on the Commitment Termination Date. Any principal amount
and, to the extent permitted by law, interest due under this Note
that is not paid on the due date therefor whether on the maturity
date, or resulting from the acceleration of maturity upon the
occurrence of an Event of Default, shall bear interest from the
date due until payment in full at the default rate specified in
Section 2.16 of the Agreement.
This Note evidences the Advances made pursuant to the
terms and conditions of the Agreement, to which Agreement
reference is hereby made for a full and complete description of
such terms and conditions, including, without limitation,
provisions for the acceleration of the maturity hereof upon the
existence or occurrence of certain conditions or events, and the
terms of any permitted prepayments hereof. All capitalized terms
used in this Note shall have the same meanings as set forth in
the Agreement.
Upon the occurrence and during the continuance of any
Event of Default, the principal and all accrued interest hereof
shall automatically become, or may be declared, due and payable
in the manner and with the effect provided in the Agreement.
The payment of any indebtedness evidenced by this Note
shall not affect the enforceability of this Note as to any
future, different or other indebtedness evidenced hereby. In the
event the indebtedness evidenced by this Note is collected by
legal action or through an attorney-at-law, or in bankruptcy or
other judicial proceedings, the Bank shall be entitled to recover
from the Borrower all costs of collection, including, without
limitation, reasonable attorneys' fees actually incurred.
FAILURE OR FORBEARANCE OF THE BANK TO EXERCISE ANY
RIGHT HEREUNDER, OR OTHERWISE GRANTED BY THE AGREEMENT OR BY
LAW, SHALL NOT AFFECT OR RELEASE THE LIABILITY OF THE BORROWER
HEREUNDER AND SHALL NOT CONSTITUTE A WAIVER OF SUCH RIGHT UNLESS
SO STATED BY THE BANK IN WRITING.
DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF DISHONOR AND
PROTEST ARE HEREBY WAIVED.
TIME IS OF THE ESSENCE HEREUNDER.
THIS NOTE SHALL BE DEEMED TO BE MADE UNDER, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY, THE LAWS OF
THE STATE OF GEORGIA (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF) AND THE LAWS OF THE UNITED STATES.
EXECUTED AND DELIVERED under seal of the Borrower by
its duly authorized officers as of the day and year first above
written.
LXE INC.
By /s/
Name: Don T. Scartz
Title: Treasurer
Attest /s/
Name: William S. Jacobs
Title: Secretary
[CORPORATE SEAL]
EXHIBIT C
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY, dated as of ,
1995, of [ ], a [ ] corporation (the "Guarantor"), and each
Subsidiary Guarantor which executes and delivers an Additional
Subsidiary Guarantor Supplement pursuant to Section 7.04(b) of
the Credit Agreement (as hereinafter defined) (the "Additional
Guarantors"; and together with the Guarantor, the "Guarantors"),
in favor of SUNTRUST BANK, ATLANTA f/k/a Trust Company Bank, a
Georgia banking corporation ("Bank").
W I T N E S S E T H:
WHEREAS, Bank has entered into a $10,000,000 Revolving
Credit Agreement dated as of December , 1995 (the "Credit
Agreement") between LXE Inc. ("Borrower") and Bank, to provide a
revolving credit facility to finance working capital, the
purchase of its own stock to retire or hold as "treasury stock",
acquisitions and other general corporate purposes of Borrower and
the Guarantors;
WHEREAS, the Guarantors and Borrower are members of the
same consolidated group of companies and are engaged in similar
or related businesses, and the Guarantors will receive direct
and indirect economic benefits from the Advances under the
Commitment pursuant to the Credit Agreement;
WHEREAS, Bank has required that, as a condition to
entering into the Credit Agreement and making Advances
thereunder, the Guarantors shall have executed and delivered this
Guaranty;
NOW, THEREFORE, in consideration of the premises and
the covenants hereinafter contained, and to induce Bank to
provide the Advances under the Commitment, it is agreed as
follows:
1. DEFINITIONS. Capitalized terms used herein shall
have the meanings assigned to them in the Loan Agreement, unless
the context otherwise requires or unless otherwise defined
herein.
References to this "Guaranty" shall mean this Guaranty,
including all amendments, modifications and supplements and any
exhibits or schedules to any of the foregoing, and shall refer to
this Guaranty as the same may be in effect at the time such
reference becomes operative.
2. THE GUARANTY. The guaranty of the Guarantors
hereunder is as follows:
2.01. Guaranty of Obligations of Borrower. (a)
Each of the Guarantors hereby jointly and severally fully and
unconditionally guarantees to Bank, and its successors,
endorsees, transferees and assigns, the prompt payment (whether
at stated maturity, by acceleration or otherwise) and performance
of all present and future obligations of Borrower under the
Credit Agreement and any other Loan Document (including without
limitation all principal and accrued interest on the Advances
and the Commitment Fee), whether due or to become due, matured or
unmatured, liquidated or unliquidated, or contingent or non-contingent,
including obligations of performance as well as payment and including
to the extent permitted by the Bankruptcy Code, interest that accrues
after the commencement of any proceeding against Borrower under the
Bankruptcy Code or other debtor relief laws (the "Obligations");
provided, that the
maximum liability of each Guarantor herein as of any date shall
in no event exceed the Maximum Guaranty Liability (as hereinafter
defined) of such Guarantor as of such date. It is the intention
of the parties hereto that in no event shall any Guarantor's
obligations under this Guaranty constitute or result in a
violation of any applicable fraudulent conveyance or similar law
of any relevant jurisdiction. Therefore, in the event that this
Guaranty would, but for the preceding sentence, constitute or
result in such violation, then the liability of a Guarantor under
this Guaranty shall be reduced to the maximum amount permissible
under the applicable fraudulent conveyance or similar laws. Any
and all payments by the Guarantors hereunder shall be made free
and clear of and without deduction for any set-off or
counterclaim.
(b) "Maximum Guaranty Liability" of a Guarantor as of
any date shall mean the greater of the following amounts as of
such date: (i) the sum of the following amounts as of such date:
(A) the outstanding amount of all loans, advances, capital
contributions or other investments made by Borrower to or in such
Guarantor with the proceeds of Advances under the Loan Agreement
(such proceeds being referred to herein as "Senior Financing
Proceeds"), plus (without duplication ) (B) the fair market value
of all property acquired with Senior Financing Proceeds
transferred to such Guarantor, plus (C) with respect to each
transfer of Senior Financing Proceeds referred to in the
foregoing clauses (A) and (B), an amount equal to the amount of
interest under the Loan Agreement allocable to such Senior
Financing Proceeds until the same is repaid to Borrower; and (ii)
the greatest of the Fair Value Net Worth (as hereinafter defined)
of such Guarantor as of the Closing Date, each fiscal quarter-end
of such person thereafter occurring on or prior to any date of
determination of the Maximum Guaranty Liability, the date on
which enforcement of this Guaranty is sought, and the date on
which a case under the Bankruptcy Code is commenced with respect
to Borrower or such Guarantor. "Fair Value Net Worth" of a
Guarantor as of any date shall mean (i) the fair value or fair
saleable value (as the case may be, determined in accordance with
the Bankruptcy Code and applicable state laws affecting
creditors' rights and governing determinations of insolvency of
debtors (collectively, "Insolvency Laws")) of such Guarantor's
assets as of such date, minus (ii) the amount of all liabilities
of such Guarantor (determined in accordance with the Insolvency
Laws) as of such date, excluding this Guaranty and (y)
liabilities under the Loan Agreement effectively assumed by such
Guarantor by hypothecation of such Guarantor's assets, minus
(iii) $1.00.
(c) Each Guarantor agrees that the Obligations may at
any time and from time to time exceed the Maximum Guaranty
Liability of such Guarantor, and may exceed the aggregate Maximum
Guaranty Liability of all Guarantors, without impairing this
Guaranty or affecting the rights and remedies of Bank hereunder.
2.02. Guaranty Absolute. The Guarantors agree that
this Guaranty is a guaranty of payment and performance and not of
collection, and that their obligations under this Guaranty shall
be primary, absolute and unconditional, joint and several,
irrespective of, and unaffected by:
(a) the genuineness, validity, regularity,
enforceability or any future amendment of, or change in this
Guaranty, any other Loan Document or any other agreement,
document or instrument to which Borrower and/or the Guarantors is
or are or may become a party;
(b) the absence of any action to enforce this
Guaranty or any other Loan Document or the waiver or consent by
Bank with respect to any of the provisions thereof;
(c) the existence, value or condition of, or
failure to perfect its Lien against, any security for the
Obligations or any action, or the absence of any action, by Bank
in respect thereof (including, without limitation, the release of
any such security); or
(d) any other action or circumstances which might
otherwise constitute a legal or equitable discharge or defense of
a surety or guarantor;
it being agreed by each of the Guarantors that its obligations
under this Guaranty shall not be discharged until the payment and
performance, in full, of the Obligations. Each of the Guarantors
shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations. Each of the
Guarantors expressly waives all rights it may now or in the
future have under any statute, or at common law, or at law or in
equity, or otherwise, to compel Bank to proceed in respect of the
Obligations against Borrower or any other party or against any
security for the payment and performance of the Obligations
before proceeding against, or as a condition to proceeding
against, any of the Guarantors. Each of the Guarantors further
expressly waives and agrees not to assert or take advantage of
any defense based upon the failure of Bank to commence an action
in respect of the Obligations against Borrower or any other party
or any security for the payment and performance of the
Obligations, including, without limitation, the provisions of
O.C.G.A. Subsection 10-7-24. Each of the Guarantors agrees that
any notice or directive given at any time to Bank which is
inconsistent with the waivers in the preceding two sentences
shall be null and void and may be ignored by Bank, and, in
addition, may not be pleaded or introduced as evidence in any
litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written
terms of this Guaranty, unless Bank has specifically agreed
otherwise in writing. It is agreed between each of the
Guarantors and Bank that the foregoing waivers are of the essence
of the transaction contemplated by the Loan Documents and that,
but for this Guaranty and such waivers, Bank would decline to
make the Advances under the Loan Agreement.
Notwithstanding any of the foregoing, and in addition
thereto, and in no manner composing any limitation thereon, each
of the Guarantors expressly understands and agrees that, if the
then outstanding principal amount of the Obligations (together
with accrued interest thereon) is declared to be immediately due
and payable, then the Guarantors shall, on a joint and several
basis, upon demand in writing from Bank, pay to Bank or any other
holder of the Revolving Credit Note, the entire outstanding
Obligations due and owing to Bank or such holder.
2.03. Enforcement of Guaranty. In no event shall
Bank have any obligation (although it is entitled, at its option)
to proceed against Borrower or any other person or any real or
personal property pledged to secure the Obligations before
proceeding against the Guarantors or any of them and may proceed,
prior or subsequent to, or simultaneously with, the enforcement
of Bank's rights hereunder, to exercise any right or remedy which
it may have against the property, real or personal, as a result
of any Lien it may have as security for all or any portion of the
Obligations.
2.04. Waivers. In addition to the waivers
contained in Section 2.01 hereof, each of the Guarantors waives,
and agrees that it shall not at any time insist upon, plead or in
any manner whatever claim or take the benefit or advantage of,
any appraisal, valuation, stay, extension, marshalling of assets
or redemption laws, or exemption, whether now or at any time
hereafter in force, which may delay, prevent or otherwise affect
the performance by the Guarantors of their obligations under, or
the enforcement by Bank of, this Guaranty. Each of the
Guarantors further hereby waives diligence, presentment, notice
and demand (whether for non-payment or protest or of acceptance,
maturity, extension of time, change in nature or form of the
Obligations, acceptance of further security, release of further
security, composition or agreement arrived at as to the amount
of, or the terms of, the Obligations, notice of adverse change in
Borrower's financial condition or any other fact which might
materially increase the risk to such Guarantor) with respect to
any of the Obligations or all other demands whatsoever and waives
the benefit of all provisions of law which are or might be in
conflict with the terms of this Guaranty. Each of the Guarantors
represents, warrants and agrees that, as of the date of this
Guaranty, its obligations under this Guaranty are not subject to
any offset or defense against Bank or Borrower of any kind. Each
of the Guarantors further agrees that its obligations under this
Guaranty shall not be subject to any counterclaims, offsets or
defenses against Bank or Borrower of any kind which may arise in
the future.
2.05. Benefits of Guaranty. The provisions of this
Guaranty are for the benefit of Bank and its respective
successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between Borrower and Bank, the
obligations of Borrower under the Loan Documents. In the event
all or any part of the Obligations are transferred, endorsed or
assigned by Bank to any Person, any reference to "Bank" herein
shall be deemed to refer equally to such Person.
2.06. Modification of Obligations, etc. If Bank or
any other Person shall at any time or from time to time, with or
without the consent of, or notice to, the Guarantors or any of
them:
(a) change or extend the manner, place or terms
of payment of, or renew or alter all or any portion of, the
Obligations;
(b) take any action under or in respect of the
Loan Documents in the exercise of any remedy, power or privilege
contained therein or available to it at law, equity or otherwise,
or waive or refrain from exercising any such remedies, powers or
privileges;
(c) amend or modify, in any manner whatsoever,
the Loan Documents;
(d) extend or waive the time for any of
Guarantors', Borrower's or other Person's performance of, or
compliance with, any term, covenant or agreement on its part to
be performed or observed under the Loan Documents, or waive such
performance or compliance or consent to a failure of, or
departure from, such performance or compliance;
(e) take and hold security or collateral for the
payment of the Obligations guaranteed hereby or sell, exchange,
release, dispose of, or otherwise deal with, any property
pledged, mortgaged or conveyed, or in which Bank has been granted
a Lien, to secure any indebtedness of the Guarantors or Borrower
to Bank;
(f) release any Person (including another
Guarantor) which may be liable in any manner for the payment of
any amounts owed by the Guarantors or Borrower to Bank;
(g) modify or terminate the terms of any
intercreditor or subordination agreement pursuant to which claims
of other creditors of the Guarantors or Borrower are subordinated
to the claims of Bank; and/or
(h) apply any sums by whomever paid or however
realized to any amounts owing by the Guarantors or Borrower to
Bank in such manner as Bank shall determine in its discretion;
then Bank shall not incur any liability to the Guarantors
pursuant hereto as a result thereof, and no such action shall
impair or release the obligations of the Guarantors or any of
them under this Guaranty.
2.07. Reinstatement. This Guaranty shall remain in
full force and effect and continue to be effective in the event
any petition be filed by or against Borrower or any Guarantor for
liquidation or reorganization, in the event Borrower or any such
Guarantor becomes insolvent or makes an assignment for the
benefit of creditors or in the event a receiver or trustee be
appointed for all or any significant part of assets of Borrower
or any such Guarantor, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by Bank, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
2.08. Election of Remedies, etc. Any election of
remedies which results in the denial or impairment of the right
of Bank to seek a deficiency judgment against Borrower shall not
impair each Guarantor's obligation to pay the full amount of the
Obligations. In the event Bank shall bid at any foreclosure or
trustee's sale or at any private sale permitted by law or the
Loan Documents, Bank may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Bank
but shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether Bank or any other party
is the successful bidder, shall be conclusively deemed to be the
fair market value of the collateral and the difference between
such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations
guaranteed under this Guaranty, notwithstanding that any present
or future law or court decision or ruling may have the effect of
reducing the amount of any deficiency claim to which Bank might
otherwise been entitled but for such bidding at any such sale.
2.09. Continuing Guaranty. The Guarantors agree
that this Guaranty is a continuing guaranty and shall remain in
full force and effect until the payment and performance in full
of the Obligations.
3. DELIVERIES. In a form satisfactory to Bank, the
Guarantors shall deliver to Bank such of the Loan Documents and
other instruments, certificates and documents as are required to
be delivered by the Guarantors to Bank under the Loan Agreement.
4. REPRESENTATIONS AND WARRANTIES. To induce Bank to
make the Advances under the Revolving Credit Note and the Loan
Agreement, each Guarantor hereby reaffirms each representation
and warranty in the Loan Agreement applicable to it.
5. PERMITTED ASSIGNMENT BY BANK. Bank may freely
assign its rights and delegate its duties under this Guaranty to
the extent permitted under the Loan Agreement, but no such
assignment or delegation shall increase or diminish any
Guarantor's obligations hereunder.
6. FURTHER ASSURANCES. Each Guarantor agrees, upon
the written request of Bank, to execute and deliver to Bank, from
time to time, any additional instruments or documents reasonably
considered necessary by Bank to cause this Guaranty to be, become
or remain valid and effective in accordance with its terms.
7. MISCELLANEOUS.
7.01. Entire Agreement; Amendments. This Guaranty
constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements
relating to a guaranty of the Obligations and may not be amended
or supplemented except by a writing signed by the Guarantors and
Bank.
7.02. Severability. In the event that any one or
more of the provisions contained in this Guaranty shall be
determined to be invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any
such provision or provisions in every other respect and the
remaining provisions of this Guaranty shall not be in any way
impaired.
7.03. Notices. Whenever it is provided herein that
any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon any
of the parties by another, or whenever any of the parties desires
to give or serve upon another any such communication with respect
to this Guaranty, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing
and shall be delivered in accordance with Section 9.02 of the
Loan Agreement, addressed as follows:
(a) If to Bank:
SunTrust Bank, Atlanta
25 Park Place/Mail Code 127
Atlanta, Georgia 30303
Attention: Kevin S. MacDonald
Assistant Vice President
Telephone: (404) 588-8560
Telecopy: (404) 588-8833
(b) If to Guarantors:
c/o LXE, Inc.
660 Engineering Drive
Norcross, Georgia 30092-9200
Attention: Treasurer
Telephone: (770) 263-9200
Telecopy: (770) 447-4397
or at such other address as may be substituted by notice given as
herein provided. The giving of any notice required hereunder may
be waived in writing by the party entitled to receive such
notice.
7.04. Binding Effect. This Guaranty shall bind
each Guarantor and shall inure to the benefit of Bank and its
successors and assigns. The Guarantors may not assign this
Guaranty.
7.05. Non-Waiver. The failure of Bank to enforce
any right or remedy hereunder, or promptly to enforce any such
right or remedy hereunder, or promptly to enforce any such right
or remedy, shall not constitute a waiver thereof, nor give rise
to any estoppel against Bank, nor excuse the Guarantors or any of
them from their obligations hereunder.
7.06. Governing Law and Submission to Jurisdiction.
(a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF GEORGIA (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) AND THE LAWS OF
THE UNITED STATES.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS GUARANTY MAY BE BROUGHT IN THE SUPERIOR COURT OF FULTON
COUNTY, GEORGIA, OR ANY OTHER COURT OF COMPETENT JURISDICTION IN
THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE
NORTHERN DISTRICT OF GEORGIA, AND BY EXECUTION AND DELIVERY OF
THIS GUARANTY, EACH
GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE GUARANTORS HEREBY IRREVOCABLY WAIVE TRIAL
BY JURY TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND THE
GUARANTORS HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS.
7.07. Expenses. The Guarantors, jointly and
severally, agree that, with or without notice or demand, they
will reimburse Bank for all costs and expenses (including
reasonable attorney's fees) incurred by Bank in connection with
the Obligations of Borrower to Bank under the Loan Agreement or
any of the Loan Documents and all costs and expenses (including
reasonable attorney's fees) incurred by Bank in connection with
the enforcement of this Guaranty.
7.08. Counterparts. This Guaranty may be executed
in any number of counterparts which shall individually and
collectively constitute one agreement.
IN WITNESS WHEREOF, the Guarantors have executed and
delivered this Guaranty under seal through their duly authorized
officers as of the date first above written.
"GUARANTORS"
[ ].
By
Name:
Title:
Attest
Name:
Title:
[CORPORATE SEAL]
EXHIBIT D
ADDITIONAL SUBSIDIARY GUARANTOR SUPPLEMENT
SunTrust Bank, Atlanta
25 Park Place, Mail Code 127
Atlanta, Georgia 30303
Attention: Mr. Kevin S. MacDonald
Assistant Vice President
Dear Sirs:
Reference is made to the Revolving Credit Agreement dated as
of December 15, 1995 between LXE, Inc. (the "Borrower") and
SunTrust Bank, Atlanta (the "Agreement"). Terms not defined
herein which are defined in the Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [name of Subsidiary Guarantor], a
[jurisdiction of incorporation] corporation, hereby elects to
become an "Additional Guarantor" under the Subsidiary Guaranty
and to become a "Subsidiary Guarantor" for all purposes under the
Agreement, effective from the date hereof. The undersigned
confirms that the representations and warranties set forth in
Article IV of the Agreement applicable to it as a Material
Subsidiary of the Borrower and/or a Subsidiary Guarantor are true
and correct as to the undersigned as of the date hereof.
Without limiting the generality of the foregoing, the
undersigned hereby agrees to perform all of the obligations of a
Guarantor under, and to be bound in all respects by the terms of,
the Subsidiary Guaranty to the same extent and with the same
force and effect as if the undersigned were a signatory party
thereto. [additional language applicable to non wholly-owned
Material Subsidiary: ;provided, that the guaranty of the
undersigned Subsidiary Guarantor shall be limited to the amount
of the Investment of the Borrower in the undersigned Subsidiary
Guarantor as of the date on which the Subsidiary Guaranty shall
be enforced by the Bank.]
This Agreement shall be construed in accordance with and
governed by the internal laws of the State of Georgia and the
laws of the United States.
Very truly yours,
[NAME OF SUBSIDIARY GUARANTOR]
By
Name:
Title:
Dated: