EXHIBIT 4.1
March 28, 2002
Xxxxxxx Communications, Inc.
00000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
RE: FOURTH AMENDMENT (REVISED)
Gentlemen:
XXXXXXX COMMUNICATIONS, INC., a Georgia corporation ("Borrower") and
LaSalle National Bank, a national banking association ("Bank") have entered into
that certain Loan and Security Agreement dated June 5, 1996 (the "Security
Agreement"). From time to time thereafter, Xxxxxxxx and Bank may have executed
various amendments (each an "Amendment" and collectively the "Amendments") to
the Security Agreement (the Security Agreement and the Amendments hereinafter
are referred to, collectively, as the "Agreement"). Borrower and Bank now desire
to further amend the Agreement as provided herein, subject to the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(a) Paragraph 1(a) of the Agreement is hereby amended and restated in
its entirety, as follows:
(a) "ACCOUNT", "ACCOUNT DEBTOR", "CHATTEL PAPER", "COMMERCIAL
TORT CLAIMS", "DEPOSIT ACCOUNTS", "DOCUMENTS", "ELECTRONIC
CHATTEL PAPER", "EQUIPMENT", "FIXTURES", "GENERAL
INTANGIBLES", "GOODS", "INSTRUMENTS", "INVENTORY",
"INVESTMENT PROPERTY", "LETTER-OF-CREDIT RIGHT", "Proceeds"
and "TANGIBLE CHATTEL PAPER" shall have the respective
meanings assigned to such terms in the Illinois Uniform
Commercial Code, as the same may be in effect from time to
time.
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 2
(b) Paragraph 4 of the Agreement is hereby amended and restated in
its entirety, as follows:
4. GRANT OF SECURITY INTEREST TO BANK.
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As security for the payment of all Loans now or in the
future made by Bank to Borrower hereunder and for the
payment or other satisfaction of all other Liabilities,
Borrower hereby assigns to Bank and grants to Bank a
continuing security interest in the following property of
Borrower, whether now or hereafter owned, existing, acquired
or arising and wherever now or hereafter located: (a) all
Accounts (whether or not Eligible Accounts) and all Goods
whose sale, lease or other disposition by Xxxxxxxx has given
rise to Accounts and have been returned to, or repossessed
or stopped in transit by, Borrower; (b) all Chattel Paper,
Instruments, Documents and General Intangibles (including,
without limitation, all patents, patent applications,
trademarks, trademark applications, tradenames, trade
secrets, goodwill, copyrights, copyright applications,
registrations, licenses, software, franchises, customer
lists, tax refund claims, claims against carriers and
shippers, guarantee claims, contract rights, payment
intangibles, security interests, security deposits and
rights to indemnification); (c) all Inventory (whether or
not Eligible Inventory); (d) all Goods (other than
Inventory), including, without limitation, Equipment,
vehicles and Fixtures; (e) all Investment Property; (f) all
Deposit Accounts, bank accounts, deposits and cash; (g) all
Letter-of-Credit Rights; (h) Commercial Tort Claims listed
on Exhibit D hereto; (i) any other property of Borrower now
or hereafter in the possession, custody or control of Bank
or any agent or any parent, affiliate or subsidiary of Bank
or any participant with Bank in the Loans, for any purpose
(whether for safekeeping, deposit, collection, custody,
pledge, transmission or otherwise); and (j) all additions
and accessions to, substitutions for, and replacements,
products and Proceeds of the foregoing property, including,
without limitation, proceeds of all insurance
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 3
policies insuring the foregoing property, and all of
Xxxxxxxx's books and records relating to any of the
foregoing and to Xxxxxxxx's business.
(c) Paragraph 5 of the Agreement is hereby amended and restated in
its entirety, as follows:
5. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY
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INTEREST THEREIN.
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Borrower shall, at Bank's request, at any time and from time
to time, authenticate, execute and deliver to Bank such
financing statements, documents and other agreements and
instruments (and pay the cost of filing or recording the
same in all public offices deemed necessary or desirable by
Bank) and do such other acts and things or cause third
parties to do such other acts and things as Bank may deem
necessary or desirable in its sole discretion in order to
establish and maintain a valid, attached and perfected
security interest in the Collateral in favor of Bank (free
and clear of all other liens, claims, encumbrances and
rights of third parties whatsoever, whether voluntarily or
involuntarily created, except Permitted Liens) to secure
payment of the Liabilities, and in order to facilitate the
collection of the Collateral. Borrower irrevocably hereby
makes, constitutes and appoints Bank (and all Persons
designated by Bank for that purpose) as Borrower's true and
lawful attorney and agent-in-fact to execute and file such
financing statements, documents and other agreements and
instruments and do such other acts and things as may be
necessary to preserve and perfect Bank's security interest
in the Collateral. Xxxxxxxx further agrees that a carbon,
photographic, photostatic or other reproduction of this
Agreement or of a financing statement shall be sufficient as
a financing statement. Xxxxxxxx further notifies and
confirms the prior filing by Bank of any and all financing
statements which identify the Borrower as debtor, Bank as
secured party and any or all Collateral as collateral.
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 4
(d) Paragraph 7(e) of the Agreement is hereby amended and restated in
its entirety, as follows:
(e) Immediately upon Xxxxxxxx's receipt of any portion of the
Collateral evidenced by an agreement, Instrument or
Document, including without limitation, any Tangible Chattel
Paper (exclusive of sales orders that provide for a purchase
money security interest in items being sold to customers)
and any Investment Property consisting of certificated
securities, Borrower shall deliver the original thereof to
Bank together with an appropriate endorsement or other
specific evidence of assignment thereof to Bank (in form and
substance acceptable to Bank). If an endorsement or
assignment of any such items shall not be made for any
reason, Bank is hereby irrevocably authorized, as Xxxxxxxx's
attorney and agent-in-fact to endorse or assign the same on
Xxxxxxxx's behalf.
(e) The first grammatical sentence of Paragraph 9 of the Agreement is
deleted in its entirety and the following is substituted in its place:
9. TERMINATION: This Agreement shall be in effect from the date
hereof until June 30, 2003 (the "Original Term") and shall
automatically renew itself from year to year thereafter
(each such one-year renewal being referred to herein as a
"Renewal Term") unless (a) Bank makes demand for repayment
prior to the end of the Original Term or the then current
Renewal Term; provided, however, absent an Event of Default,
Bank shall give Borrower at least one hundred twenty (120)
days notice of its intention to demand the Loans or
terminate this Agreement prior to the end of the Original
Term or the then current Renewal Term; (b) the due date of
the Liabilities is accelerated pursuant to paragraph 13
hereof; or (c) Borrower prepays all of the Liabilities prior
to the end of the Original Term or the then current Renewal
Term and by paying all of the Liabilities in full on the
last day of such term.
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 5
(f) Paragraph 10(i) of the Agreement is hereby amended and restated
in its entirety, as follows:
(i) (x) except as previously disclosed to Bank in writing, there
are no actions or proceedings which are pending or, to the
best of Borrower's knowledge, threatened against Borrower
which might result in any material adverse change in its
business, property, assets, operations or condition,
financial or otherwise and Borrower shall, promptly upon
becoming aware of any such pending or threatened action or
proceeding, give written notice thereof to Bank and (y)
Borrower has no Commercial Tort Claims pending other than
Tort Claims of Borrower which may arise, which notice shall
constitute Borrower's authorization to amend Exhibit D to
add such Commercial Tort Claim;
(g) Paragraph 10(t) of the Agreement is hereby amended and restated
in its entirety, as follows:
(t) if Borrower is a corporation, limited liability company or
partnership, Borrower is duly organized, validly existing
and in good standing in the State of Georgia, its
organizational identification number is H803342 and Borrower
is duly qualified and in good standing in all states where
the nature and extent of the business transacted by it or
the ownership of its assets makes such qualification
necessary or if Borrower is not so qualified, Borrower may
cure any such failure without losing any of its rights or
affecting Bank's rights;
(h) Paragraph 11(k) of the Agreement is hereby amended and restated
in its entirety, as follows:
(k) Borrower shall not (i) enter into any merger or
consolidation; (ii) change the state of Borrower's
organization or enter into any transaction which has the
effect of changing Borrower's state of organization; (iii)
sell, lease or otherwise dispose of any of its assets other
than in the ordinary course of business; (iv) purchase the
stock or all or substantially all of the assets of any
Person or division of such Person; or (v) enter into any
other transaction outside the ordinary course of
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 6
Borrower's business, including, without limitation, any
purchase, redemption or retirement of any shares of any
class of its stock or any other equity interest, and any
issuance of any shares of, or warrants or other rights to
receive or purchase any shares of, any class of its stock or
any other equity interest;
(i) Paragraph 11 of the Agreement is hereby amended to add a new
subparagraph (q) as follows:
(q) To the extent that Xxxxxxxx obtains or maintains any
Electronic Chattel Paper, Borrower shall create, store and
assign the record or records comprising the Electronic
Chattel Paper in such a manner that (i) a single
authoritative copy of the record or records exists which is
unique, identifiable and except as otherwise provided in
clauses (iv), (v) and (vi) below, unalterable, (ii) the
authoritative copy identifies Bank as the assignee of the
record or records, (iii) the authoritative copy is
communicated to and maintained by the Bank or its designated
custodian, (iv) copies or revisions that add or change an
identified assignee of the authoritative copy can only be
made with the participation of Bank, (v) each copy of the
authoritative copy and any copy of a copy is readily
identifiable as a copy that is not the authoritative copy
and (vi) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized revision.
(j) Paragraph 13(b) of the Agreement is hereby amended and restated
in its entirety, as follows:
(b) Upon the occurrence of an Event of Default, Bank may
exercise from time to time any rights and remedies available
to it under the Uniform Commercial Code and any other
applicable law in addition to, and not in lieu of, any
rights and remedies expressly granted in this Agreement or
in any of the Other Agreements and all of Bank's rights and
remedies shall be cumulative and non-exclusive to the extent
permitted by law. In particular, but not by way of
limitation of the foregoing, Bank may, without notice,
demand or
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 7
legal process of any kind, take possession of any or all of
the Collateral (in addition to Collateral of which it
already has possession), wherever it may be found, and for
that purpose may pursue the same wherever it may be found,
and may enter onto any of Borrower's premises where any of
the Collateral may be, and search for, take possession of,
remove, keep and store any of the Collateral until the same
shall be sold or otherwise disposed of, and Bank shall have
the right to store the same at any of Borrower's premises
without cost to Bank. At Bank's request, Borrower shall, at
Borrower's expense, assemble the Collateral and make it
available to Bank at one or more places to be designated by
Bank and reasonably convenient to Bank and Borrower.
Borrower recognizes that if Xxxxxxxx fails to perform,
observe or discharge any of its Liabilities under this
Agreement or the Other Agreements, no remedy at law will
provide adequate relief to Bank, and agrees that Bank shall
be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual
damages. Any notification of intended disposition of any of
the Collateral required by law will be deemed to be a
reasonable authenticated notification of disposition if
given at least ten (10) days prior to such disposition and
such notice shall (i) describe Bank and Borrower, (ii)
describe the Collateral that is the subject of the intended
disposition, (iii) state the method of the intended
disposition, (iv) state that Borrower is entitled to an
accounting of the Liabilities and state the charge, if any,
for an accounting and (v) state the time and place of any
public disposition or the time after which any private sale
is to be made. Bank may disclaim any warranties that might
arise in connection with the sale, lease or other
disposition of the Collateral and has no obligation to
provide any warranties at such time. Any Proceeds of any
disposition by Bank of any of the Collateral may be applied
by Bank to the payment of expenses in connection with the
Collateral, including, without limitation, legal expenses
and reasonable attorneys' fees, and any balance of such
Proceeds may be applied by Bank toward the payment of such
of the Liabilities, and in such
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 8
order of application, as Bank may from time to time elect.
(k) All references to "fixtures" in the Agreement shall be amended to
read "Fixtures".
(l) The Agreement is hereby amended to add a new Exhibit C-Commercial
Tort Claims, as set forth on Exhibit C hereto.
(m) Paragraph (1) of Exhibit A of the Agreement is deleted in its
entirety and the following is substituted in its place:
(1) LOAN LIMITS: Bank may, in its sole discretion, advance an
amount up to the sum of the following sublimits (the "Loan
Limit"):
(a) Subject to subparagraph (4)(a) of this Exhibit A, up to
eighty percent (80%) of the face amount (less maximum
discounts, credits and allowances which may be taken by or
granted to Account Debtors in connection therewith) of
Xxxxxxxx's Eligible Accounts; plus
(b) Subject to subparagraph (4)(b) of this Exhibit A, up to
eighty percent (80%) of the face amount (less maximum
discounts, credits and allowances which may be taken by or
granted to Account Debtors in connection therewith) of
Borrower's Eligible Accounts or Five Hundred Thousand and
No/100 Dollars ($500,000.00), whichever is less; plus
(c) Subject to subparagraph (5)(a) of this Exhibit A, up to
twenty percent (20%) of the lower of the cost or market
value of Borrower's Eligible Inventory; PLUS
(d) Subject to subparagraph (5)(b) of this Exhibit A, up to
twenty percent (20%) of the lower of the cost or market
value of Borrower's Eligible Inventory; PLUS
(e) Subject to subparagraph (5)(c) of this Exhibit A, up to
forty percent (40%) of the lower of the cost or market value
of Borrower's Eligible Inventory; PLUS
(f) Subject to subparagraph (5)(d) of this Exhibit A, up to
fifty percent (50%) of the lower of the cost or market value
of Borrower's Eligible Inventory; PLUS
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 9
(g) Subject to subparagraph (2)(a) of this Exhibit A, up to
eighty percent (80%) of the purchase price of the Equipment
purchased with such advances (exclusive of sales taxes,
delivery charges and other "soft" costs related to such
purchases), to be used by Borrower from time to time to
purchase new Equipment, or One Million and No/100 Dollars
($1,000,000.00), whichever is less; provided, that prior to
any advance under this subparagraph, Borrower shall furnish
to Bank an invoice and acceptance letter for the Equipment
being purchased and shall have executed such documents and
taken such other actions as Bank shall require to assure
that Bank has a first perfected security interest in such
Equipment; and further provided, that each advance under
this subparagraph shall equal or exceed One Hundred Thousand
and No/100 Dollars ($100,000.00) and may be made not more
frequently than quarterly; PLUS
(h) "INTENTIONALLY OMITTED"; MINUS
(i) Such reserve as Bank elects, in its sole discretion, to
establish from time to time;
provided, that the aggregate Loan Limit shall in no event
exceed FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00),
except as such amount may be increased or decreased by Bank,
in its sole discretion, from time to time.
(n) Paragraph (7)(a) of Exhibit A of the Agreement is deleted in its
entirety and the following is substituted in its place:
(a) FACILITIES FEES: Borrower shall pay to Bank annual
facilities fees equal to (i) $5,624.98, which fee shall be
fully earned by Bank on the date of this Amendment and
payable on March 29, 2002 and (ii) one percent (1%) of the
aggregate Loan Limit, which fee shall be fully earned by
Bank and payable on June 30, 2002 and on the same day of
each year thereafter during the Original Term and any
Renewal Term.
(o) Paragraph (9) of Exhibit A of the Agreement is deleted in its
entirety and the following is substituted in its place:
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 10
(9) Notwithstanding the provision of subparagraph 11(o) of the
Agreement. Borrower shall at all times maintain a Tangible
Net Worth equal to the Minimum Tangible Net Worth as
hereafter defined. At all times from November 30, 2001
through August 30, 2002 "Minimum Tangible Net Worth" shall
equal $3,500,000.00. Thereafter, from August 31st of each
year through August 30th of the following year, Minimum
Tangible Net Worth shall be equal to the greater of (1)
Borrower's Tangible Net Worth as shown on Borrower's
reviewed year-end financial statement for the immediately
preceding fiscal year (which shall be delivered to Bank in
form and substance satisfactory to Bank no later than
November 30th of each year), or (2) the Minimum Tangible Net
Worth as of the last day of the immediately preceding fiscal
year, plus Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00). "TANGIBLE NET WORTH" being defined for
purposes of this paragraph as Xxxxxxxx's shareholders'
equity (including retained earnings) less the book value of
all intangible assets (as determined solely by Bank on a
consistent basis) plus the amount of any LIFO reserve plus
the amount of any debt subordinated to Bank, all as
determined under generally accepted accounting principles
applied on a basis consistent with the financial statement
dated November 30, 2001 except as set forth herein. The
measurement for Minimum Tangible Net Worth shall be
determined solely by Bank at the end of each of Xxxxxxxx's
fiscal years.
(p) Paragraph (9) of Exhibit A of the Agreement is amended to add the
following provisions:
(9).(1) FIXED CHARGE COVERAGE RATIO COVENANT: Borrower hereby
covenants and agrees not to permit the Ratio of EBITDA to
Fixed Charges for each period set forth below to be less
than the amount set forth below for such period:
PERIOD AMOUNT
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Twelve (12) month period ending on 2.0 to 1.0
November 30, 2001 and each twelve (12)
month period thereafter ending on the
last day of each of Borrower's fiscal
quarters.
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 11
For purposes of this paragraph (9).(1) of this Exhibit A,
"RATIO OF EBITDA TO FIXED Charges" means the ratio of (x)
net income (or loss) for the applicable period of
measurement determined in accordance with generally accepted
accounting principles, plus any provision for (or less any
benefit from) income and franchise taxes included in the
determination of net income, plus interest expense deducted
in the determination of net income, plus amortization and
depreciation deducted in the determination of net income,
plus extraordinary losses (or less gains), as defined under
generally accepted accounting principles to (y) without
duplication, scheduled payments of principal during the
applicable period of measurement with respect to all
indebtedness of Borrower for borrowed money, plus scheduled
payments of principal during the applicable period of
measurement with respect to all capital lease obligations,
plus scheduled payments of interest during the applicable
period of measurement with respect to all indebtedness of
Borrower for borrowed money and with respect to all capital
lease obligations, plus unfinanced capital expenditures
during the applicable period of measurement for the purchase
or other acquisition of fixed assets, plus payments during
the applicable period of measurement in respect of income or
franchise taxes.
2. This Amendment shall not become effective until fully executed by all
parties hereto.
3. Except as expressly amended hereby and by any other supplemental
documents or instruments executed by either party hereto in order to effectuate
the transactions contemplated hereby, the Agreement and Exhibit A thereto hereby
are ratified and confirmed by the parties hereto and remain in full force and
effect in accordance with the terms thereof.
LASALLE NATIONAL BANK,
A NATIONAL BANKING ASSOCIATION
By: /s/ Xxxx Xxxxx
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Title: Vice President
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 12
Accepted and agreed to this
1st day of April, 2002.
XXXXXXX COMMUNICATIONS, INC.
By: /s/ X.Xxxx Xxxxxxxx, Xx.
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XXXX XXXXXXXX, XX.
Title: Treasurer and CFO
Consented and agreed to by the following
guarantor of the obligations of XXXXXXX
COMMUNICATIONS, INC. to LaSalle National
Bank.
XXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
Title: President and CEO
Date: April 1, 2002
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Xxxxxxx Communications, Inc.
June 28, 2002
Page 13
EXHIBIT C-COMMERCIAL TORT CLAIMS
BORROWER TO PROVIDE INFORMATION
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