Exhibit 10.36
-------------
LOAN AGREEMENT
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
(Hereinafter referred to as the "Bank")
Paragon Technologies, Inc.
000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
(Individually and collectively "Borrower")
This Loan Agreement ("Agreement") is entered into June 20, 2006, by and between
Bank and Borrower.
This Agreement amends and restates in its entirety that certain Loan Agreement
dated June 20, 2005 and applies to the loan or loans (individually and
collectively, the "Loan") evidenced by one or more promissory notes of even date
herewith or other notes subject hereto, as modified from time to time (whether
one or more, the "Note"), the commercial letters of credit and standby letters
of credit issued hereunder (each, a "Letter of Credit" and collectively, the
"Letters of Credit") and all Loan Documents. The terms "Loan Documents" and
"Obligations," as used in this Agreement, are defined in the Note.
Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:
LETTERS OF CREDIT. Upon the request of Borrower, Bank shall issue commercial
Letters of Credit and standby Letters of Credit provided, the aggregate amount
available to be drawn under all commercial Letters of Credit plus the aggregate
amount of unreimbursed drawings under all commercial Letters of Credit at any
one time does not exceed $5,000,000.00, and the aggregate amount available to be
drawn under all standby Letters of Credit plus the aggregate amount of
unreimbursed drawings under all standby Letters of Credit at any one time does
not exceed $5,000,000.00, and further provided, no commercial Letter of Credit
shall expire more than 365 days after the date it is issued and no standby
Letter of Credit shall expire more than 365 days after the date it is issued.
Notwithstanding anything to the contrary contained herein, the aggregate
outstanding principal balance of Advances (as defined in the line of credit
Promissory Note in the amount of $5,000,000.00, dated June 20, 2006) plus the
aggregate amount available to be drawn under all Letters of Credit plus the
aggregate amount of unreimbursed drawings under all Letters of Credit at any one
time shall not exceed $5,000,000.00. The Letters of Credit are to be used by
Borrower for any purpose. Bank's obligation to issue Letters of Credit shall
terminate if Borrower is in default (however denominated) under the Note or the
other Loan Documents, or in any case, if not sooner terminated, on June 30,
2007.
LETTER OF CREDIT FEES. Borrower shall pay to Bank, at such times as Bank shall
require, Bank's standard fees in connection with Letters of Credit, as in effect
from time to time, and with respect to standby Letters of Credit, an additional
fee equal to 1.00% per annum on the face amount of each standby Letter of
Credit, payable annually, in advance, for so long as such Letter of Credit is
outstanding.
REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: Accurate Information. All
information now and hereafter furnished to Bank is and will be true, correct and
complete. Any such information relating to Borrower's financial condition will
accurately reflect Borrower's financial condition as of the date(s) thereof,
(including all contingent liabilities of every type), and Borrower further
represents that its financial condition has not changed materially or adversely
since the date(s) of such documents. Authorization; Non-Contravention. The
execution,
delivery and performance by Borrower and any guarantor, as applicable, of this
Agreement and other Loan Documents to which it is a party are within its power,
have been duly authorized as may be required and, if necessary, by making
appropriate filings with any governmental agency or unit and are the legal,
binding, valid and enforceable obligations of Borrower and any guarantors; and
do not (i) contravene, or constitute (with or without the giving of notice or
lapse of time or both) a violation of any provision of applicable law, a
violation of the organizational documents of Borrower or any guarantor, or a
default under any agreement, judgment, injunction, order, decree or other
instrument binding upon or affecting Borrower or any guarantor, (ii) result in
the creation or imposition of any lien (other than the lien(s) created by the
Loan Documents) on any of Borrower's or any guarantor's assets, or (iii) give
cause for the acceleration of any obligations of Borrower or any guarantor to
any other creditor. Asset Ownership. Borrower has good and marketable title to
all of the properties and assets reflected on the balance sheets and financial
statements supplied Bank by Borrower, and all such properties and assets are
free and clear of mortgages, security deeds, pledges, liens, charges, and all
other encumbrances, except as otherwise disclosed to Bank by Borrower in writing
and approved by Bank ("Permitted Liens"). To Borrower's knowledge, no default
has occurred under any Permitted Liens and no claims or interests adverse to
Borrower's present rights in its properties and assets have arisen. Discharge of
Liens and Taxes. Borrower has duly filed, paid and/or discharged all taxes or
other claims that may become a lien on any of its property or assets, except to
the extent that such items are being appropriately contested in good faith and
an adequate reserve for the payment thereof is being maintained. Sufficiency of
Capital. Borrower is not, and after consummation of this Agreement and after
giving effect to all indebtedness incurred and liens created by Borrower in
connection with the Note and any other Loan Documents, will not be, insolvent
within the meaning of 11 U.S.C. ss. 101, as in effect from time to time.
Compliance with Laws. Borrower is in compliance in all respects with all
federal, state and local laws, rules and regulations applicable to its
properties, operations, business, and finances, including, without limitation,
any federal or state laws relating to liquor (including 18 U.S.C. ss. 3617, et
seq.) or narcotics (including 21 U.S.C. ss. 801, et seq.) and/or any commercial
crimes; all applicable federal, state and local laws and regulations intended to
protect the environment; and the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), if applicable. Organization and Authority. Each
corporation, partnership or limited liability company Borrower and/or guarantor,
as applicable, is duly created, validly existing and in good standing under the
laws of the state of its organization, and has all powers, governmental
licenses, authorizations, consents and approvals required to operate its
business as now conducted. Each corporation, partnership or limited liability
company Borrower and/or guarantor, as applicable, is duly qualified, licensed
and in good standing in each jurisdiction where qualification or licensing is
required by the nature of its business or the character and location of its
property, business or customers, and in which the failure to so qualify or be
licensed, as the case may be, in the aggregate, could have a material adverse
effect on the business, financial position, results of operations, properties or
prospects of Borrower or any such guarantor. No Litigation. There are no pending
or threatened suits, claims or demands against Borrower or any guarantor that
have not been disclosed to Bank by Borrower in writing, and approved by Bank.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: Access to Books and Records. Allow Bank, or its agents,
during normal business hours, access to the books, records and such other
documents of Borrower as Bank shall reasonably require, and allow Bank, at
Bank's expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof. Business Continuity. Conduct its business
in substantially the same manner and locations as such business is now and has
previously been conducted. Certificate of Full Compliance From Accountant.
Deliver to Bank, with the financial statements required herein, a certification
that Borrower is in full compliance with the Loan Documents. Compliance with
Other Agreements. Comply with all terms and conditions contained in this
Agreement, and any other Loan Documents, and swap agreements, if applicable, as
defined in the 11 U.S.C. ss. 101, as in effect from time to time. Estoppel
Certificate. Furnish, within 15 days after request by Bank, a written statement
duly acknowledged of the amount due under the Loan and identifying each
outstanding Letter of Credit, if any, and whether offsets or defenses exist
against the Obligations. Insurance. Maintain adequate insurance coverage with
respect to its properties and business against loss or damage of the kinds and
in the amounts customarily insured against by companies of established
reputation engaged in the same or similar businesses
Page 2
including, without limitation, commercial general liability insurance, workers
compensation insurance, and business interruption insurance; all acquired in
such amounts and from such companies as Bank may reasonably require. Maintain
Properties. Maintain, preserve and keep its property in good repair, working
order and condition, making all replacements, additions and improvements thereto
necessary for the proper conduct of its business, unless prohibited by the Loan
Documents. Notice of Default and Other Notices. (a) Notice of Default. Furnish
to Bank immediately upon becoming aware of the existence of any condition or
event which constitutes a Default (as defined in the Loan Documents) or any
event which, upon the giving of notice or lapse of time or both, may become a
Default, written notice specifying the nature and period of existence thereof
and the action which Borrower is taking or proposes to take with respect
thereto. (b) Other Notices. Promptly notify Bank in writing of (i) any material
adverse change in its financial condition or its business; (ii) any default
under any material agreement, contract or other instrument to which it is a
party or by which any of its properties are bound, or any acceleration of the
maturity of any indebtedness owing by Borrower; (iii) any material adverse claim
against or affecting Borrower or any part of its properties; (iv) the
commencement of, and any material determination in, any litigation with any
third party or any proceeding before any governmental agency or unit affecting
Borrower; and (v) at least 30 days prior thereto, any change in Borrower's name
or address as shown above, and/or any change in Borrower's structure. Other
Financial Information. Deliver promptly such other information regarding the
operation, business affairs, and financial condition of Borrower which Bank may
reasonably request. Payment of Debts. Pay and discharge when due, and before
subject to penalty or further charge, and otherwise satisfy before maturity or
delinquency, all obligations, debts, taxes, and liabilities of whatever nature
or amount, except those which Borrower in good faith disputes. Reports and
Proxies. Deliver to Bank, promptly, a copy of all financial statements, reports,
notices, and proxy statements, sent by Borrower to stockholders, and all regular
or periodic reports required to be filed by Borrower with any governmental
agency or authority.
NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will not: Default on Other Contracts or Obligations. Default
on any material contract with or obligation when due to a third party or default
in the performance of any obligation to a third party incurred for money
borrowed. Government Intervention. Permit the assertion or making of any
seizure, vesting or intervention by or under authority of any governmental
entity, as a result of which the management of Borrower or any guarantor is
displaced of its authority in the conduct of its respective business or such
business is curtailed or materially impaired. Judgment Entered. Permit the entry
of any monetary judgment or the assessment against, the filing of any tax lien
against, or the issuance of any writ of garnishment or attachment against any
property of or debts due.
ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 120 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year, including, without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the
preceding year. If audited statements are required, all such statements shall be
examined by an independent certified public accountant acceptable to Bank. The
opinion of such independent certified public accountant shall not be acceptable
to Bank if qualified due to any limitations in scope imposed by Borrower or any
other person or entity. Any other qualification of the opinion by the accountant
shall render the acceptability of the financial statements subject to Bank's
approval.
PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 75 days
after the end of each fiscal quarter, unaudited management-prepared quarterly
financial statements including, without limitation, a balance sheet, profit and
loss statement and statement of cash flows, with supporting schedules; all in
reasonable detail and prepared in conformity with generally accepted accounting
principles, applied on a basis consistent with that of the preceding year. such
statements shall be certified as to their correctness by a principal financial
officer of Borrower and in each case, if audited statements are required,
subject to audit and year-end adjustments.
Page 3
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances
and to issue any Letters of Credit pursuant to this Agreement are subject to the
following conditions precedent: Letter of Credit Documents. Receipt by Bank of
all documents required by Bank in connection with Letters of Credit, including
without limitation, applications therefor, all in form satisfactory to Bank.
Additional Documents. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request.
IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
Paragon Technologies, Inc.
By: /s/ Xxxx X. Xxxxxxx (SEAL)
------------------------------------------------
Xxxx X. Xxxxxxx, President/CEO
Wachovia Bank, National Association
By: /s/ Xxxxxxx Xxxxx (SEAL)
-----------------------------------------------
Xxxxxxx Xxxxx, Vice President
Page 4
