EXHIBIT 10.10
REVOLVING LOAN AGREEMENT
THIS REVOLVING LOAN AGREEMENT is made and entered into as of the 3RD
day of January, 1997, by and between COMPSCRIPT, INC., a Florida corporation,
whose address is 0000 Xxxxxx Xxxxx Xxxxxxx, X.X., Xxxxx X, Xxxx Xxxxx, Xxxxxxx
00000 (hereinafter referred to as "Borrower"), and SUNTRUST BANK, SOUTH FLORIDA,
N.A., a national banking association, whose address is 000 Xxxx Xxx Xxxx
Xxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx (hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Borrower is a Florida corporation and desires to obtain
extensions of credit of up to Five Million and No/100 Dollars ($5,000,000.00)
from Lender in order to provide working capital for Borrower's operations; and
WHEREAS, Lender is willing to extend such credit to Borrower of up to
such amount upon the terms and conditions set forth herein (the "Loan"); and
NOW, THEREFORE, for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of the loans
or extensions of credit heretofore now or hereafter made or to be made for the
benefit of Borrower by Lender, the parties do hereby agree as follows:
ARTICLE 1
RECITALS AND DEFINITIONS
1.1 RECITALS. The foregoing recitals are acknowledged by the parties to
be true and correct, and are incorporated herein by reference.
1.2 DEFINITIONS. As used in this Agreement, the terms listed below
shall have the following meanings:
(a) "ACCOUNT DEBTOR": A party obligated to pay an account
receivable to Borrower.
(b) "ADVANCE": A disbursement by Lender of a portion of the
Loan proceeds to provide working capital for the operations of Borrower or for
general corporate purposes in accordance with the terms and provisions of this
Agreement.
(c) "AGREEMENT" or "LOAN AGREEMENT": This Revolving Loan
Agreement.
(d) "BORROWER": COMPSCRIPT, INC., a Florida corporation, whose
address is 0000 Xxxxxx Xxxxx Xxxxxxx, X.X., Xxxxx X, Xxxx Xxxxx, Xxxxxxx 00000.
(e) "BORROWER'S COUNSEL OPINION LETTER": A letter from
Borrower's Counsel, in form and substance reasonably satisfactory to Lender and
Lender's Counsel, opining as to certain matters concerning the Loan.
(f) "BUSINESS DAYS": Days upon which Lender is open for normal
business.
(g) "CLOSING": The time of the execution and delivery of this
Agreement and all other Loan Documents by Borrower, Co-Borrower, Guarantors and
Lender.
(h) "CODE": The Internal Revenue Code of 1986, as amended from
time to time, and applicable Department of Treasury regulations thereunder.
(i) "ELIGIBLE ACCOUNTS RECEIVABLE": Accounts receivable of
Borrower and which are less than ninety (90) days past due, less retainages and
excluding Medicaid Pending, Medicaid Over the Cap, retail, employee, private
insurance (from nursing homes, assisted care living facilities and home health
agencies) and related company receivables; provided, however, that: (i) if ten
percent (10%) or more of the accounts receivable for an Account Debtor shall be
more than ninety (90) days past due, then all accounts receivable for such
Account Debtor shall be excluded from Eligible Accounts Receivable; and (ii)
eligible Medicaid receivables will be discounted by twenty-five percent (25%)
before applying the formula stated above.
(j) "ELIGIBLE INVENTORY": Inventory of Borrower purchased from
Bergen Xxxxxxxx Drug Company ("Bergen"), subject to the continuing commitment by
Bergen to accept returns on merchandise as stated in that certain letter dated
September 10, 1996, from Xxxx Xxxxxx, Division Manager of Bergen, to Xxxx
Xxxxxx, Comptroller of Borrower. Lender reserves the right to have the inventory
of Borrower examined at the expense of Borrower at reasonable intervals in order
to determine the amount of Bergen inventory which meets return specifications.
(k) "EVENT OF DEFAULT": The occurrence of any one or more of
the Events of Default described in Article 9 hereof.
(l) "FINANCING STATEMENTS": Financing Statements from Borrower
and Co-Borrower to Lender to perfect Lender's security interest in the property
described in the Security Agreements.
(m) "GOVERNMENTAL AUTHORITY": Any federal, state, county,
municipal or other governmental department, commission,
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board, bureau, court, agency, or any instrumentality of any other
governmental entity.
(n) "GOVERNMENTAL REQUIREMENTS": Any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, writ, injunction,
franchise, permit, certificate, license, authorization, or other direction or
requirement of any Governmental Authority now existing or hereafter enacted,
adopted, promulgated, entered or issued applicable to the Loan or to Borrower,
Co-Borrower or Guarantors.
(o) "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" OR "GAAP":
Those principles of accounting set forth in opinions of the Financial Accounting
Standards Board of the American Institute of Public Accounts or which have other
substantial authoritative support and are applicable in the circumstances as of
the date of any report required herein or as of the date of an application of
such principles as required herein.
(p) "GUARANTOR": Any subsidiary, holding company or corporate
affiliate of Borrower which may hereafter be formed which shall, upon formation,
guarantee repayment of the Loan.
(q) "INDEBTEDNESS": Collectively, all of Borrower's presently
existing or hereafter created or assumed obligations for borrowed money, notes
payable and drafts accepted representing extensions of credit (whether or not
representing obligations for borrowed money), obligations representing the Loan,
indebtedness, whether or not assumed, secured or unsecured, or payable out of
the proceeds or production from property now or hereafter owned or acquired by
Borrower and all other Indebtedness now or hereafter owed by Borrower to Lender.
(r) "INITIAL ADVANCE": The first Advance of the Loan proceeds.
(s) "LANDLORD'S SUBORDINATION OF LIEN AGREEMENTS":
Subordination Agreements from landlords where Borrower leases business
properties subordinating the Landlord's lien at that location to the lien and
effect of the Loan.
(t) "LEASES: Leases for all locations where Borrower leases
property in connection with its business operations.
(u) "MATURITY DATE": The Loan shall be due April 30, 1998,
with the provision that Lender shall have the right to accelerate the maturity
of the Loan, in Lender's sole and absolute discretion, after Lender's review of
Borrower's financial statements for fiscal year 1996 (which must be received not
later than April 30, 1997). Lender shall exercise this right by delivering
written notice to Borrower within thirty (30) days after Lender's receipt of
Borrower's financial statements for fiscal year
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1996. Acceleration shall be effective forty five (45) days after delivery of
notice as aforesaid.
(v) "NOTE": A Revolving Credit Promissory Note in the amount
of Five Million and No/100 Dollars ($5,000,000.00) from Borrower to Lender of
even date herewith evidencing the Loan.
(w) "PERSON": As the case may be, any corporation, natural
person, firm, joint venture, partnership, trust, unincorporated organization and
government, or any department or agency of any government.
(x) "SECURITY AGREEMENT": The Security Agreement of even date
herewith from Borrower to Lender securing the Note and all other indebtedness of
Borrower to Lender, and granting a valid first lien on the personal property
identified in the Security Agreement.
(y) "SUBORDINATION AGREEMENTS": Collectively, those
Subordination Agreements of even date herewith, if any, whereunder all related
and shareholder debt obligations of Borrower, if any, are subordinated in full
to the Indebtedness.
1.3 OTHER DEFINITIONAL PROVISIONS. (a) The terms "material" and
"materially" shall have the meanings ascribed to such terms under Generally
Accepted Accounting Principles as such would be applied to the business of
Borrower, except as the context shall clearly otherwise set forth; (b) all of
the terms defined in this Agreement shall have such defined meanings when used
in other documents issued under, or delivered pursuant to, this Agreement,
unless the context shall otherwise require; (c) all terms defined in this
Agreement in the singular shall have comparable meanings when used in the
plural, and vice versa; (d) accounting terms to the extent not otherwise defined
shall have the respective meanings given them under, and shall be construed in
accordance with Generally Accepted Accounting Principles; (e) the words
"hereby", "hereto", "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; (f) the masculine and neuter genders
are used herein and whenever used shall include the masculine, feminine and
neuter a well; and (g) whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include their heirs, personal
representatives, successors and assigns of such parties unless the context shall
expressly provide otherwise.
ARTICLE 2
THE LOAN
2.1 Provided there does not exist an Event of Default and subject to
the terms and provisions of this Agreement, Lender will lend or advance for the
account of Borrower from time to time, and Borrower may borrow and re-borrow
under the Note such amounts as
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may be required to provide working capital for Borrower's operations. The
aggregate amounts advanced under the Note at any one time for working capital
shall not, however, exceed the lesser of (a) Five Million and No/100 Dollars
($5,000,000.00), or (b) an amount equal to seventy-five percent (75%) of
Borrower's Eligible Accounts Receivable PLUS an amount equal to fifty percent
(50%) of Borrower's Eligible Inventory.
2.2 Borrower's obligation to repay the Loan is evidenced by the Note of
even date herewith which sets forth the method for payment, rates of interest,
and such further terms as are therein set forth.
2.3 The repayment of the Note and the Indebtedness is to be secured by
the following documentation, which documents Borrower shall deliver, or cause to
be delivered, to Lender simultaneously with the delivery of the Note:
(a) The Security Agreement, in form and substance satisfactory
to Lender and Lender's counsel, granting Lender a first security interest in all
of Borrower's accounts, inventory, chattel papers, general intangibles,
fixtures, furniture, instruments, equipment and personal property now owned or
hereafter acquired by Borrower and all proceeds of the foregoing.
(b) Financing statements filed in such public offices as
Lender and Lender's counsel may deem necessary to perfect a security interest in
any of the items referred to in Section 2.3(a).
(c) The Subordination Agreements, in form and substance
acceptable to Lender and Lender's counsel, subordinating all related and
shareholder debt obligations of Borrower to the Indebtedness, to the extent that
related or shareholder debt exists.
2.4 Borrower shall also deliver, or cause to be delivered to Lender
simultaneously with the delivery of the Note, the following documents:
(a) Borrower's Counsel Opinion Letter, in form and substance
reasonably satisfactory to Lender and Lender's Counsel, opining as to certain
matters concerning the Loan.
(b) Such original policies of liability insurance, worker's
compensation insurance and hazard insurance (with fire extended coverage,
vandalism and mischief protection) as Lender may reasonably request (or
certificates thereof, if acceptable to Lender), naming Lender as certificate
holder under the policies of liability insurance and as loss payee under the
policies of hazard insurance.
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(c) Incumbency Certificate and Corporate Borrowing Resolutions
of the directors of Borrower authorizing the Loan.
(d) Certificate of Good Standing evidencing that Borrower is
in good standing under the laws of the State of Florida.
(e) Certified copy of Articles of Incorporation and By- Laws
of Borrower.
(f) Certified copies of the Leases in connection with all
leased premises of Borrower.
(g) Landlord's Subordination of Lien Agreement(s) executed by
all landlords at business locations of Borrower subordinating the landlord's
lien to the lien and effect of the Loan (except as waived in writing by Lender).
(h) Such other documentation as may be required by Lender or
Lender's Counsel.
2.5 The documents set forth in Sections 2.2, 2.3 and 2.4 above, this
Agreement and all other documents relating hereto, shall collectively referred
to as the "Loan Documents".
ARTICLE 3
MANNER OF MAKING LOAN ADVANCES
3.1 Each Advance to Borrower for working capital shall be made by
Lender not later than the next business day following delivery to Lender of
proper written request of Borrower stating the principal amount of the Advance
requested and all required supporting documentation. Any notice delivered under
this section shall be irrevocable and bind Borrower to consummate the Advance.
3.2 The proceeds of any Advance to Borrower shall, on the date of such
Advance, be deposited in immediately available funds in Borrower's demand
deposit account with Lender or in such other account with Lender as Borrower
may, from time to time, designate in writing to Lender.
ARTICLE 4
INTEREST
All interest under the Loan shall be computed on the basis of a year
containing three hundred sixty (360) days for the actual number of days elapsed.
Interest shall be due and payable in accordance with the terms and provisions of
the Note, and interest shall accrue at the rate of interest provided in the Note
for each Advance thereunder.
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ARTICLE 5
CONDITIONS PRECEDENT TO ADVANCE
5.1 The obligations of Lender to make the Initial Advance and all
additional Advances under the Loan are subject to the following conditions
precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations,
covenants and warranties made by Borrower in this Agreement shall be true and
correct on and as of the date of such Advance.
(b) NO DEFAULT. There shall be no default, and no event which
with notice or lapse of time or both would become such an Event of Default,
under this Agreement, the Note, the Security Agreement, or any other Loan
Document.
(c) DELIVERY OF LOAN DOCUMENTS. All of the Loan Documents
shall have been duly executed and delivered to Lender, and the Financing
Statements shall have been recorded in the appropriate public offices.
(d) DELIVERY OF OTHER DOCUMENTS. Borrower shall have
delivered, or caused to be delivered to Lender all other certification or
documentation to be executed by Borrower as may be required hereunder or under
the Loan Documents or reasonably required by Lender or Lender's counsel pursuant
to Lender's rights hereunder or under the other Loan Documents.
ARTICLE 6
USE OF LOAN PROCEEDS; MARGIN STOCK
The proceeds of the Loan shall be used for Borrower's general corporate
purposes. Borrower does not own any margin securities and no portion of any
Advance will be used for the purpose of reducing or retiring any indebtedness
which was originally incurred by Borrower to purchase any margin securities, and
neither the making of any and all loans and Advances nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulations G or
U of the Board of Governors of the Federal Reserve Systems of the United States.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Borrower represents and warrants to Lender that, so long as credit
remains available to Borrower or there is any outstanding balance due under the
Note as secured by the Loan Documents:
(a) Borrower has the power to engage in all the transactions
contemplated by this Agreement and have full corporate power, authority and
legal right to execute and deliver, and to comply with its obligations under the
Loan Documents, which
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documents constitute the legally binding obligations of Borrower enforceable
against Borrower in accordance with its terms.
(b) To the best of Borrower's knowledge and belief, there are
no suits, actions, or proceedings pending or threatened against or affecting
Borrower before or by any court, administrative agency or other Governmental
Authority which bring into question the validity of the transactions
contemplated hereby or would interfere with the ability of Borrower to comply
with the terms hereof.
(c) Each of Borrower and Guarantors is in good standing within
the State in which it is incorporated and is fully qualified and authorized to
do business in such other states as it does business, except where the failure
to so qualify would not have a material, adverse effect on the business of
Borrower or such Guarantor.
(d) Neither the execution nor delivery of any of the Loan
Documents, nor any other document relating hereto, will conflict with or result
in a breach of any of the provisions of the Articles of Incorporation or By-Laws
of Borrower or of any applicable law, judgment, order, writ, injunction, decree,
rule or regulation of any court, administrative agency or other Governmental
Authority, or of any material agreement or other material instrument to which
Borrower is a party or by which Borrower is bound or constitute a default under
any thereof, or result in the creation or imposition of any lien, charge or
encumbrance upon any property of Borrower other than those created under this
transaction in favor of Lender.
(e) No consent, approval or other authorization of or by any
Governmental Authority is required in connection with the execution or delivery
by Borrower of the Loan Documents, or compliance with the provisions hereof or
thereof.
(f) Subject to any limitation stated thereon, all balance
sheets, earnings statements and other financial data which have been or shall
hereafter be furnished to Lender to induce it to enter into this Agreement or
otherwise in connection herewith, do or will fairly represent the financial
condition of Borrower as of the dates thereof, and the results of its operations
for the period for which the same are furnished to Lender, and have been or will
be prepared in accordance with Lender's reasonable requirements, and that all
other information, reports and other papers and data furnished to Lender are or
will be, at the time the same are so furnished, accurate and correct in all
material respects and complete insofar as completeness may be necessary to give
Lender a true and accurate knowledge of the subject matter. There are no
material liabilities of any kind of Borrower as of the date of the most recent
financial statements which are not reflected therein. There have been no
materially adverse changes in the financial
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condition or operation of Borrower since the date of such financial
statements.
(g) There exists no default on the part of Borrower
under this Agreement, the Note, the Security Agreement, or any of the Loan
Documents.
(h) Borrower has not dealt with any broker or finder in
connection with the Loan, and Borrower hereby agrees to indemnify Lender and to
hold Lender harmless of and from any and all claims for broker's or finder's
fees or commissions in connection with this Loan, and agree to pay all expenses
(including but not limited to attorney's fees and expenses) incurred by Lender
in connection with the defense of any action or proceeding brought to collect
any such fees and commissions, or otherwise relating to any such broker's claims
resulting from or arising out of any claim that Borrower consulted, dealt or
negotiated with the person or entity making such brokerage claim.
(i) Borrower has filed or caused to be filed all tax returns,
which to the knowledge of Borrower such entity is required to file, and has
fully paid all taxes shown to be due and payable on said returns or any
assessments made against it or its property, and all other taxes, fees, or other
charges imposed on it or any of its property by any Governmental Authority. No
tax liens have been filed and, to the knowledge of Borrower no claims are being
made or may hereafter be asserted with respect to any such taxes, fees or other
charges except for (i) those, the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Borrower;
and (ii) such failures to file or pay such tax liens or claims as could not, in
the aggregate, reasonably be expected to have a material adverse effect on the
business operations, property or financial or other condition of Borrower, and
cannot reasonably be expected to have an adverse effect on the ability of
Borrower to perform any of its respective obligations in any material respect
under this Agreement, the other Loan Documents, or under any other contractual
obligation.
(j) All copies of all documents and reports heretofore
furnished by or on behalf of Borrower in connection with this Agreement to
Lender, are, and those delivered subsequent to the date hereof will be, true and
correct copies of the originals of such documents and reports. All matters
stated or certified in any written statement, certificate, report or other
writing heretofore furnished pursuant to this Agreement by or on behalf of
Borrower to Lender are, and all matters stated or certified subsequent to the
date hereof will be, true and correct in all material respects as of the date
stated or certified. All such documents, reports, statements, writings and
certifications shall be in form and detail satisfactory to Lender.
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ARTICLE 8
COVENANTS OF BORROWER
8.1 Borrower shall do, or cause to be done, all of the things necessary
to preserve, renew and keep in full force and effect, its corporate existence
and its rights, material licenses and material permits shall comply with all
laws applicable to it, operate its business in a proper and efficient manner,
and substantially as presently operated or proposed to be operated, and at all
times shall maintain, preserve and protect all franchises and trade names and
preserve all property used or useful in the conduct of its business, and keep
the same in good repair, working order and condition, and from time to time make
or cause to be made such needed and proper repairs, renewals, replacements,
betterments and improvements thereto so that the business carried on in
connection therewith may be properly conducted at all times. Nothing herein
shall be construed as prohibiting the disposal or replacement by Borrower of
property used or useful in the conduct of its business where such disposal or
replacement is dictated by sound business judgment exercised in the ordinary
course of business.
8.2 Borrower shall maintain true and correct books and records and
shall keep its books and records in accordance with GAAP, and shall furnish, and
shall have each Guarantor furnish Lender, with such financial statements and
records as may be required by Lender on a yearly and interim basis as set forth
in this Article and other parts of this Agreement.
8.3 Borrower shall properly pay and discharge (a) all taxes,
assessments and governmental charges upon or against Borrower or its assets,
prior to the date on which penalties are attached thereto, unless, and to the
extent, such taxes are being diligently contested in good faith by appropriate
proceedings and appropriate reserves therefor have been established; and (b) all
lawful claims for labor, materials, supplies, services or anything else which
might or could, if unpaid, become a lien or charge upon the properties or assets
of Borrower, unless and to the extent only that the same are transferred to
bond, being diligently contested in good faith, and by appropriate proceedings
and appropriate reserves therefor have been established.
8.4 Borrower shall, at its expense, comply with all of the insurance
requirements set forth in this Agreement and the Security Agreements throughout
the term of the Loan.
8.5 Borrower shall indemnify and hold harmless Lender from any and all
loss or damage of whatsoever kind and from any suits, claims, or demands,
including, without limitation, Lender's reasonable legal fees and expenses, at
all trial and appellate levels, on account of any matter or thing arising out of
this Agreement or in connection herewith, or on account of any act or omission
to act by Borrower in connection with this Agreement or the Loan. Such indemnity
shall not extend to claims or demands
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resulting from the improper action or inaction of Lender. Borrower agrees to pay
any and all taxes (other than taxes on or measured by net income of Lender)
incurred or payable in connection with the execution and delivery of this
Agreement and the Loan, as well as all costs and expenses (including such
attorneys' fees as the court deems reasonable and just) incurred by Lender in
enforcing this Agreement. Such obligation shall survive repayment of the Loan.
8.6 Borrower, prior to closing, will deliver to Lender: (i) resolutions
certified as true by the Secretary of Borrower authorizing Borrower's
participation in connection with the transaction contemplated herein and
execution and performance of the Note, (ii) an incumbency certificate of
Borrower, (iii) a certificate as to the shareholder interests held in Borrower;
(iv) a certified copy of the Articles of Incorporation and Bylaws of Borrower,
and (v) Corporate Certificate of Good Standing of Borrower.
8.7 Borrower shall: (i) make full and timely payments of the principal
and interest due and owing under the Note and the Indebtedness of Borrower to
Lender, whether now existing or hereafter arising; (ii) duly comply with all of
the terms and covenants contained in each of the Loan Documents; and (iii) at
all times maintain the liens and security interest provided for under or
pursuant to this Agreement as valid and perfected liens and security interests
on the property intended to be covered thereby.
8.8 Borrower shall promptly notify Lender upon the commencement of any
action, suit or claim or counter-claim or proceeding against, or investigation
of, Borrower or any Guarantor. Where such action, suit, claim, counterclaim,
proceeding or investigation could reasonably be anticipated to have a material
adverse effect on the business of Borrower or such Guarantor.
8.9 Borrower shall promptly notify Lender in writing of (i) any
material assessments by any taxing authorities for unpaid taxes as soon as
Borrower has knowledge thereof; and, (ii) any alleged default by Borrower in the
performance of, or any modification of, any of the terms and conditions
contained in any material agreement, mortgage or indenture or instrument to
which Borrower is a party, or which is binding upon Borrower and upon any
default by Borrower in the payment of any of its indebtedness.
8.10 Borrower shall provide to Lender monthly aging schedules for
Borrower's accounts receivable. Such aging schedules shall be in form and
substance acceptable to Lender and shall be provided within twenty (20) days
following the month for which they are prepared. The following accounts
receivable shall be broken out separately: (i) all receivables for which payment
is the responsibility of a long term care facility or home healthcare; (ii) all
Medicaid related receivables (excluding Medicaid Pending and Medicaid Over the
Cap); (iii) all private patient receivables for which payment is the
responsibility of the individual private
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patients; (iv) all receivables related to mail order operations which are due
from third party administrators or insurance companies; and (v) all ineligible
accounts receivable (including Medicaid Pending and Medicaid Over the Cap).
8.11 Borrower shall provide to Lender aging schedules for Borrower's
accounts payable as Lender may reasonably request from time to time.
8.12 Borrower shall provide to Lender monthly inventory certifications
for Borrower's inventory. Such certifications shall be in form and substance
reasonably acceptable to Lender, shall break out month end inventory purchased
from Bergen and shall be provided within twenty (20) days following the month
for which they are prepared. Borrower shall promptly provide to Lender such
other schedules of inventory as Lender may reasonably request from time to time.
8.13 Borrower shall provide to Lender quarterly 10Q Reports and
quarterly financial statements of Borrower during the term of the Loan. The
quarterly financial statements shall be prepared on an internal basis in
accordance with GAAP. The quarterly 10Q Reports and financial statements shall
be provided to Lender simultaneously with the filing of the 10Q Reports with the
Securities and Exchange Commission, but in no event more than fifty-five (55)
days following the end of each fiscal quarter of Borrower.
8.14 Borrower shall provide to Lender annual 10K Reports and audited
annual financial statements of Borrower during the term of the Loan. Such
financial statements shall be prepared in accordance with GAAP by a certified
public accountant(s) acceptable to Lender. The annual 10K Reports and Financial
statements shall be provided to Lender within four (4) months following the end
of each fiscal year of Borrower. Borrower acknowledges that Borrower's fiscal
year ends December 31. Borrower shall also provide supporting schedules to the
audited financial statements as requested by Lender. Lender acknowledges that
Ernst & Young, the firm of certified public accountants which currently prepares
Borrower's financial statements, is acceptable to Lender.
8.15 Borrower shall provide or cause to be provided to Lender such
proforma financial statements and other financial information requested by
Lender from time to time during the term of the Loan.
8.16 Borrower shall cause those schedules, financial statements and
other financial information to be supplied pursuant to Sections 8.11 through
8.15 to be certified by the Chief Executive Officer, the Chief Financial Officer
or the Secretary/Treasurer of the Borrower as being true and correct.
8.17 Borrower shall allow Lender, or Lender's designated agent, to
enter upon Borrower's premises and inspect Borrower's
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property at reasonable intervals and times. Lender shall provide Borrower with
twenty-four (24) hours written notice, except where Borrower is in default under
the Loan. All such inspections shall be at Borrower's sole cost and expense.
8.18 Borrower shall maintain demand deposit operating account(s) with
Lender during the term of the Loan, into which funds advanced under the Loan
will be deposited.
8.19 Borrower shall maintain all of its business, company and
depository accounts with Lender during the term of the Loan.
8.20 The ratio of Borrower's debt to tangible net worth shall not
exceed 1.50 to 1.00 at any time during the term of the Loan. The ratio of
Borrower's debt to tangible net worth shall be calculated by dividing Borrower's
total debt by Borrower's net worth less all intangible assets, all calculated in
accordance with GAAP.
8.21 Borrower shall maintain a minimum working capital of not less than
Two Million and No/100 ($2,000,000.00) at all times during the term of the Loan.
Borrower's working capital shall be calculated by subtracting Borrower's current
liabilities from Borrower's current assets, all calculated in accordance with
GAAP.
8.22 The Borrower shall maintain a current ratio of not less than 1.25
to 1.00 at all times during the term of the Loan. Borrower's current ratio shall
be calculated by dividing Borrower's current assets by Borrower's current
liabilities, all calculated in accordance with GAAP.
8.23 Borrower shall achieve a debt service coverage ratio of not less
than 1.00 to 1.00 by December 31, 1996, and shall thereafter maintain a debt
service coverage ratio of not less than 1.35 to 1.00 at all times during the
term of the Loan. Borrower's debt service coverage ratio shall be calculated by
dividing the sum of Borrower's net income, non-cash charges (including, but not
limited to depreciation and amortization), non recurring and reasonable one time
acquisition costs, and interest expense by the sum of interest expense, the
current portion of long-term debt and the current portion of capital lease
obligations, all as calculated in accordance with GAAP.
8.24 Borrower shall not sell or convey any of its assets, except in the
normal and ordinary course of business, including any merger, consolidation or
reorganization unless consented to in writing by Lender.
8.25 Borrower shall not incur any additional indebtedness (other than
trade indebtedness incurred in the ordinary course of business and capital
leases permitted under the following section) in excess of One Hundred Thousand
and No/100 Dollars ($100,000.00) in the aggregate on an annual basis or have
more than One Hundred
13
Thousand and No/100 Dollars ($100,000.00) of additional debt outstanding at any
one time during the term of the Loan, or guaranty the obligations of others,
except indebtedness to Lender, unless agreed to in writing by Lender.
8.26 Borrower shall not enter into capital leases aggregating in excess
of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) annually without
the prior written consent of Lender. No portion of the stated aggregate annual
maximum may be carried over from one year to the following year.
8.27 Borrower acknowledges that the ratios and balances set forth in
Sections 8.20 through 8.23, inclusive, and Sections 8.25 and 8.26, shall be
tested quarter annually, commencing December 31, 1996.
8.28 There shall be no loans from Borrower to any shareholders,
officers or directors, affiliates, subsidiaries or holding companies of Borrower
during the term of the Loan unless agreed to in writing by Lender. Any such
loans to which Lender may agree shall be subordinate in full to Borrower's
obligations to Lender under the Note and other Loan Documents.
8.29 Borrower will, within ten (10) days after written request from
Lender, furnish a written statement in form satisfactory to Lender, duly
acknowledged: (i) setting forth the unpaid principal balance of, and the
interest and other sums due on, the indebtedness evidenced by the Note and/or
secured by any of the other Loan Documents; (ii) stating whether or not any
offsets or defenses exist against the payments due under the Note or any of the
other Loan Documents; and (iii) setting forth such other information as Lender
may request from time to time.
8.30 Borrower will notify Lender immediately of any change in the name
of Borrower, the principal place of business of Borrower, the office where the
books and records of Borrower are kept, or any change in the registered agent of
Borrower for the purpose of service of process.
8.31 Borrower shall use the funds borrowed by Borrower under this
Agreement solely for Borrower's general corporate purposes.
8.32 Borrower shall cause any subsidiary, holding company or affiliate
of Borrower which may hereafter be formed to guarantee the payment and
performance of the obligations of the Borrower under the Note and the other Loan
Documents by causing such entity to execute and deliver to Lender a continuing
and unconditional guaranty ("Guaranty") in form and substance acceptable to
Lender, upon formation of such entity.
14
ARTICLE 9
HAZARDOUS WASTES
Borrower expressly represents to Lender that, to the best of Borrower's
knowledge, the real property upon which Borrower's business is located, and the
improvements thereon, have not in the past been used, are not presently being
used, and will not in the future be used for the handling, storage,
transportation, or disposal of hazardous or toxic materials. Borrower agrees to
indemnify, defend, and hold Lender harmless from and against any loss to Lender,
including without limitation, reasonable attorneys' fees incurred by Lender as a
result of such past, present or future use, handling, storage, transportation,
or disposal of hazardous or toxic materials. Lender, at Lender's sole option,
may obtain, at Borrower's expense, a report from a reputable environmental
consultant of Lender's choice as to whether the real property and the
improvements have been or are presently being used for the handling, storage,
transportation, or disposal of hazardous or toxic materials. If the report
indicates such past or present use, handling, storage, transportation, or
disposal, Lender may require that all violations of law with respect to
hazardous or toxic materials be corrected and/or that Borrower obtain all
necessary environmental permits before Lender shall fund any Advance under the
Loan.
ARTICLE 10
EVENTS OF DEFAULT
Each of the following is an Event of Default:
(a) Failure by Borrower to pay any installment of interest or
principal under the Note or any other obligation, liability or claim secured by
the Security Agreement, as and when the same shall become due;
(b) The occurrence of any default under any other term
of this Agreement, the Note, the Security Agreement, or any of the other Loan
Documents relating hereto or thereto;
(c) If any representation or warranty of Borrower hereunder
shall prove to be incorrect in any material respect and Borrower knew or should
have known such representation or warranty was incorrect at the time it was
made;
(d) The commencement of levy, execution or attachment
proceedings against Borrower or any Guarantor, or the application for or
appointment of a liquidator, receiver, custodian, sequester, conservator,
trustee, or other similar judicial officer (and such appointment continues for a
period of thirty (30) days), or the insolvency, in the bankruptcy or equity
sense, of Borrower or any Guarantor;
15
(e) The assignment for the benefit of creditors, or the
admission in writing of any inability to pay any debts generally as they become
due, or ordering the winding up or liquidation of its affairs, by Borrower or
any Guarantor, or the commencement of a case by or against Borrower or any
Guarantor, under any insolvency, bankruptcy, creditor adjustment, debtor
rehabilitation or similar law, state or federal;
(f) The determination by Borrower or any Guarantor to request
relief under any insolvency, bankruptcy, creditor adjustment, debtor
rehabilitation or similar proceeding, state or federal, including without
limitation the consent by any of them to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official for it or for any of its respective property or assets;
(g) The entry against Borrower or any Guarantor of one or more
final non-appealable judgments or decrees aggregating more than One Hundred
Thousand and No/100 Dollars ($100,000.00), in amount;
(h) The occurrence of a default by Borrower or any
Guarantor in the performance of its obligations under any other loan with
Lender and/or any other lender.
(i) The occurrence of any change or event which, in Lender's
reasonable judgment, impairs any security for the Loan, increases Lender's risk
in connection with the Loan or indicates that Borrower or any Guarantor of the
Loan may be unable to perform his, her or its material obligations under any
Loan Document.
(j) The dissolution (either voluntary or involuntary),
termination, or liquidation of Borrower or any Guarantor or the merger or
consolidation of Borrower or any Guarantor into any other entity without the
prior written consent of Lender. The foregoing shall not prohibit a transaction
whereunder Compscript-Boca, Inc. shall become a wholly-owned subsidiary of
Borrower (as opposed to a majority owned subsidiary), when such transaction
could not reasonably be anticipated as having a material adverse effect on the
business of Borrower.
(k) If Xxxxx X. Xxxxx should cease to be actively involved in
the operations of Borrower as the Chief Executive Officer and Chairman of
Borrower without the prior written consent of Lender.
ARTICLE 11
SET-OFFS
In addition to any other rights Lender may have at law or in equity, if
Borrower becomes insolvent, howsoever evidenced, or any Event of Default occurs
and is continuing, any Indebtedness from Lender to Borrower and any other
accounts or property of Borrower
16
held by Lender, may be set-off and applied towards the payment of the
Indebtedness of Borrower under this Agreement (including, but not limited to all
Indebtedness evidenced by the Note) to Lender, including, without limitation,
any note payable to Lender, whether or not such Indebtedness of Borrower to
Lender or any part thereof shall then be due.
ARTICLE 12
LENDER'S REMEDIES IN EVENT OF DEFAULT
12.1 Upon any Event of Default, subject only to any notice requirement
and grace period expressly provided in the Note or Security Agreement, Lender
shall be entitled to all of its rights or remedies hereunder, at law or in
equity and under the Note, the Security Agreement and any other Loan Document,
including, without limitation, the right to declare the outstanding principal
balance of the Note, the accrued interest thereon, and all other obligations of
Borrower to Lender under this Agreement to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything in this Agreement or in the Note to the
contrary notwithstanding, and Lender's obligation to make any additional
Advances hereunder shall be permanently terminated.
12.2 Lender may proceed directly against any Guarantor, with or without
exercising its rights against Borrower and obtain judgment against any such
Guarantor, which liability shall be joint and several if there be more than one
Guarantor.
12.3 All of the remedies herein given to Lender or otherwise available
to it shall be cumulative and may be exercised concurrently. Failure to exercise
any of the remedies herein provided shall not constitute a waiver thereof by
Lender, nor shall use of any such remedies prevent the subsequent or concurrent
resort to any other remedy or remedies which shall be vested in Lender by this
Agreement or at law or in equity. To be effective, any waiver by Lender must be
in writing and such waiver shall be limited in its effect to the condition or
default specified therein; but no such waiver shall extend to any subsequent
condition or default or impair any right consequent thereon.
ARTICLE 13
MISCELLANEOUS
13.1 Any condition of this Agreement which requires the submission of
evidence of the existence or non-existence of a specified fact or facts implies
as a condition the existence or non-existence, as the case may be, of such fact
or facts, and Lender shall, at all times, be free independently to establish to
its satisfaction and in its absolute discretion such existence or non-existence.
17
13.2 No part of the Loan will be, at any time, subject or liable to
attachment or levy at the suit of any creditor of Borrower or of any other
interested party, or at the suit of any contractor, subcontractor,
sub-subcontractors or materialman, or any of their creditors.
13.3 If performance of any provision hereof or any transaction related
hereto is limited by law, then the obligation to be performed shall be reduced
accordingly, and if any clause or provision herein contained operates or would
operate to invalidate this Agreement in part, then the invalid part of said
clause or provisions only shall be held for naught as though not contained
herein, and the remainder of this Agreement shall remain operative and in full
force and effect.
13.4 If Lender shall waive any provisions of the Loan Documents, or
shall fail to enforce any of the conditions or provisions of this Agreement,
such waiver shall not be deemed to be a continuing waiver, and shall never be
construed as such, and Lender shall thereafter have the right to insist upon the
enforcement of such conditions or provisions. Furthermore, no provision of this
Agreement shall be amended, waived, modified, discharged or terminated except by
instrument in writing, signed by the parties hereto.
13.5 This Agreement and the documents expressly referred to herein
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to the subject matter. This Agreement may be changed,
waived, discharged, or terminated only by an instrument in writing duly executed
by the party against which enforcement of such change, waiver, discharge, or
termination is sought.
13.6 All notices given hereunder shall be in writing and
addressed as follows:
(a) Lender: SUNTRUST BANK, SOUTH FLORIDA,
N.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
with copy to: Xxxxxxxx X. Xxxxxxxx, III, Esq.
XXXXXX & XXXXX, P.A.
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
(b) Borrower: COMPSCRIPT, INC.
0000 Xxxxxx Xxxxx Xxxxxxx, X.X.
Xxxxx X
Xxxx Xxxxx, Xxxxxxx 00000
18
with copy to: Xxxx X. Xxxxxxxxx, Esq.
Atlas, Xxxxxxxx, Trop &
Borkson, P.A.
New River Center, Suite 1900
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
13.7 This Agreement, the Loan Documents and all other documents
relating hereto or thereto may be reproduced by Lender, and, Lender may destroy
any original documents so reproduced. Borrower agrees and stipulates that any
such reproduction shall be admissible in evidence as the original itself in any
jurisdiction or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by Lender in the regular
course of business) and that any enlargement, facsimile, or further reproduction
of said document shall likewise be admissible in evidence.
13.8 In no event, shall Lender's rights hereunder or under any of the
Loan Documents, grant Lender the right to or be deemed to indicate that Lender
is in control of the business, management or properties of Borrower, or has
power over the daily management functions and operating decisions made by
Borrower. Lender is the lender only and shall not be considered a shareholder,
joint venturer or partner of Borrower.
13.9 The headings preceding the text of the sections of this Agreement
are used solely for convenience of reference and shall not affect the meaning,
construction, or effect of this Agreement.
13.10 Lender shall have the right at any time to convey or assign the
Loan or any portion thereof, and, additionally, shall have the right to sell a
participation in the Loan to another lending institution at any time that the
Loan is outstanding, in any amount as solely determined by Lender.
13.11 Borrower shall not assign this Agreement without the prior
written consent of Lender, and any assignment in violation hereof shall be of no
force and effect and shall constitute an Event of Default herein. Any assignment
of this Agreement shall be in Lender's sole discretion. Subject to the previous
sentence, this Agreement shall extend to and bind the parties hereto, and their
respective successors and assigns.
13.12 The Loan and the Five Hundred Thousand and No/100 Dollar
($500,000.00) term loan (the "Term Loan") of even date herewith extended by
Lender to Borrower are "all inclusive," meaning that, unless Lender should agree
to the contrary (a) the acceptance of the Term Loan shall require the acceptance
of the Loan and (b) the payment in full of the Loan shall require the payment in
full of the Term Loan.
19
13.13 This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida.
LENDER AND BORROWER HEREBY KNOWINGLY VOLUNTARILY AND INTENTIONALLY
WAIVE ALL RIGHT TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED
HEREON OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT
AND ANY AGREEMENT CONTEMPLATED OR TO BE EXECUTED IN CONJUNCTION
HEREWITH, UNDER ANY OF THE LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF
EITHER PARTY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
Signed, sealed and delivered in
the presence of: BORROWER:
COMPSCRIPT, INC., a Florida
corporation
By: /S/ XXXXX X. XXXXX
----------------------------
Name: XXXXX X. XXXXX
--------------------------
Title: PRESIDENT/CEO
-------------------------
[CORPORATE SEAL]
LENDER:
SUNTRUST BANK, SOUTH FLORIDA,
N.A., a national banking
association
By: /S/ XXXXX XXXX
----------------------------
Name: XXXXX XXXX
--------------------------
Title: ASSISTANT VP
-------------------------
[CORPORATE SEAL]
20
__________ OF _________ )
) SS:
__________ OF ________ )
The foregoing instrument was acknowledged before me this
________ day of ____________, 1997, by , the
of COMPSCRIPT, INC., a Florida corporation,
on behalf of the corporation, who is personally known to me or who
has produced as identification.
NOTARY PUBLIC
Sign:
Print:
My Commission Expires: (SEAL)
_________ OF _________ )
) SS:
_________ OF _________ )
The foregoing instrument was acknowledged before me this
________ day of ____________, 1997, by , the
of SUNTRUST BANK, SOUTH FLORIDA, N.A., a
national banking association, on behalf of the corporation, who is
personally known to me or who has produced
as identification.
NOTARY PUBLIC
Sign:
Print:
My Commission Expires: (SEAL)
R\FE276920.RLA
4/11/97
97/4787.100/78115
21
REVOLVING CREDIT PROMISSORY NOTE
$5,000,000.00 January 3, 1997
FOR VALUE RECEIVED, the undersigned, COMPSCRIPT, INC., a Florida
corporation (hereafter called "Borrower") with its permanent post office address
at 0000 Xxxxxx Xxxxx Xxxxxxx, X.X., Xxxxx X, Xxxx Xxxxx, Xxxxxxx 00000, promises
to pay to the order of SUNTRUST BANK, SOUTH FLORIDA, N.A., a national banking
association organized and existing under the laws of the United States of
America, having its principal place of business at 000 Xxxx Xxx Xxxx Xxxxxxxxx,
Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (hereafter called "Lender"), at the office of
Lender set forth above, or such other place as Lender may direct in writing, the
principal sum of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), or such part
thereof as shall have been advanced or disbursed to the undersigned and remain
unpaid, together with interest as hereinafter provided.
Interest shall accrue on the outstanding principal balance from the
date of each advance hereunder until this Note is paid in full. Unless changed
by election hereinafter described, interest shall be a percentage of outstanding
principal at an annual rate equal to the "Prime Rate" as announced from time to
time by SUNTRUST BANKS OF FLORIDA, INC. Each change in the interest rate shall
be effective as of the date upon which the "Prime Rate" is changed. Borrower
acknowledges that the Prime Rate is not necessarily the best or lowest rate
charged by Lender, but is a reference rate used by Lender in its sole discretion
in calculating interest rates to be charged to its customers. Unless changed by
election hereinafter described, the rate of interest at the inception hereof
shall be eight and one quarter percent (8.25%) per annum. After default,
interest shall accrue at the highest rate permitted by law.
Borrower may, from time to time, elect to change the interest rate
accruing under this Note from the Prime Rate to the Adjusted LIBOR Rate (as
hereinafter defined). Written notice of such election by Borrower must be
delivered to Lender stating date on which interest should begin to accrue at the
Adjusted LIBOR Rate (which may not be earlier than the next banking day
following the delivery to Lender of Borrower's notice of election). Banking days
are Monday through Friday, not including holidays. The date on which interest
shall begin to accrue at the Adjusted LIBOR Rate pursuant to Borrower's notice
of election is hereinafter referred to as a "Change Date". The change in
interest rate shall be effective for the ensuing Interest Period (hereinafter
defined) and shall be effective for each succeeding Interest Period unless and
until Borrower shall deliver written notice to Lender, at least one
(1) banking day prior to the expiration of an Interest Period, that, upon the
expiration of the Interest Period, the interest rate accruing under this Note
should be the Prime Rate. If Borrower should give Lender such notice, then, upon
expiration of the Interest Period, interest shall again accrue at an annual rate
of interest equal to the Prime Rate as announced from time to time by SUNTRUST
BANKS OF FLORIDA, INC.
"Interest Period", as used in the Note, shall mean each period of
ninety (90) consecutive calendar days following a Change Date, with the first
Interest Period commencing on the Change Date.
"Adjusted LIBOR Rate", as used in this Note, shall mean, for a
particular Interest Period, the applicable LIBOR Rate (as hereinafter defined)
plus Two Hundred Fifty (250) basis points.
"LIBOR Rate", as used in the Note, shall mean the rate of interest per
annum equal to the three (3) month London Interbank Offered Rate as published in
the "Money Rates" section of The Wall Street Journal. The LIBOR Rate used in
determining the Adjusted LIBOR Rate for a particular Interest Period shall be
the first three (3) month London Interbank Offered Rate so published during the
Interest Period.
Throughout the term of this Note: (a) interest shall be computed on the
basis of a three hundred sixty (360) day year and be paid on the basis of the
actual number of days elapsed, as a daily rate, on the principal balance from
time to time outstanding; (b) each determination of the interest rate shall be
made by the Lender and shall be conclusive, absent manifest error; and (c) the
interest rate shall never exceed the Maximum Rate (hereinafter defined).
The outstanding principal balance as of any day shall be the
outstanding principal balance as of the beginning of the day, plus any advances
made pursuant to the loan charged to the account on that day (exclusive of
interest) and less any payments of principal credited to the account on that
day.
All payments, whether of principal or interest or other sums, received
at or prior to 2:00 p.m. on any banking day shall be credited as of that day.
All payments, whether of principal or interest or other sums, received after
2:00 p.m. on any banking day, or at any time on any non-banking day, shall be
credited as of the next banking day. All payments must be identified by loan
number.
Items deposited with Lender, regardless of whether drawn on Lender or
anyone else, do not constitute available funds until the banking day after
either final settlement is actually received by the Lender or the time allowed
for revocation of any provisional settlement for the item has expired. Failure
to have sufficient
2
funds available to cover such payment shall be deemed to be a failure to make a
payment when due.
Interest payments shall be due on the first (1st) day of each
consecutive calendar month so long as there is any unpaid indebtedness under
this Note, commencing on the first (1st) day of the first (1st) month following
the month in which this Note is executed. The total unpaid balance (principal,
interest and charges) shall be due April 30, 1998, with the provision that
Lender shall have the right to accelerate the maturity of the Loan, in Lender's
sole and absolute discretion, after Lender's review of Borrower's financial
statements for fiscal year 1996 (which must be received not later than April 30,
1997). Lender may exercise this right by delivering written notice to Borrower
within thirty (30) days after Lender's receipt of Borrower's financial status
for fiscal year 1996. Acceleration of maturity shall be effective forty five
(45) days after delivery of notice to Borrower as aforesaid.
Provided there exists no default under the Note, or the Revolving Loan
Agreement between Borrower and Lender of even date herewith, the Security
Agreement between Borrower and Lender of even date herewith, or any of the other
Loan Documents (as defined in the Revolving Loan Agreement), and subject to the
terms and provisions of the Revolving Loan Agreement, Lender will lend or
advance for the account of Borrower from time to time, and Borrower may borrow
and reborrow under the Note, and in accordance with the terms of the Revolving
Loan Agreement, such amounts as may be required for Borrower's general corporate
purposes. The aggregate amounts advanced and outstanding at any one time under
the Note shall not, however, exceed the lesser of (a) FIVE MILLION and NO/100
DOLLARS ($5,000,000.00); or (b) an amount equal to seventy five percent (75%) of
Borrower's Eligible Accounts Receivable (as defined in the Revolving Loan
Agreement) plus an amount equal to fifty percent (50%) of Borrower's Eligible
Inventory (as defined in the Revolving Loan Agreement).
The payment and performance of this Note is secured by a first security
interest in all assets of Borrower, as more particularly set forth in Exhibit
"A" to this Note, granted pursuant to the Security Agreement between Borrower
and Lender of even date herewith.
Any payments of principal shall be applied to the reduction of
principal, unless the indebtedness evidenced by this Note shall be in default,
in which event, all payments received, of whatever nature, shall be first
applied to incurred and unpaid charges and fees, then to accrued and unpaid
interest, and then to the payment of unpaid principal in such manner as Lender
shall elect.
Borrower shall pay to Lender quarterly, in arrears, at the time and
place for payment of interest, a loan fee calculated at one eighth of one
percent (.125%) per annum on the unused portion
3
of the loan evidenced by the Note, as such unused portion shall change from time
to time. Such loan fee shall be calculated on a 360 day year for the accrued
number of days elapsed.
Anything herein to the contrary notwithstanding, the maximum amount of
charges, fees or other payments which may be deemed to be interest to be paid by
Borrower shall not exceed the maximum rate permitted by the laws of the State of
Florida, as amended from time to time, or by applicable federal law or
regulation governing Lender, as amended from time to time, whichever may be
greater for any interest payment period (the "Maximum Rate"). All sums in excess
of the Maximum Rate shall be applied to the reduction of principal without
further agreement or notice. Lender and Borrower have agreed that such sums
shall be accepted as a penalty-free prepayment of principal, unless Lender at
any time elects by notice in writing to waive or limit collection of any sums in
excess of the Maximum Rate, rather than accept those sums as prepayment of
principal. Upon demand for payment, any unlawful interest on the payment shall
be eliminated.
This note or any portion thereof may be paid at any time without
penalty.
Time is of the essence hereof. If any payment of principal or of
interest on this Note or any other sum due hereunder is not paid as and when the
same becomes due, or if any other default shall occur hereunder and such default
shall remain uncured after ten (10) days written notice to Borrower (provided
that if the default may not reasonably be cured within ten (10) days, and
Borrower has promptly commenced cure after notice and diligently pursued such
cure, Borrower shall have a greater period of time after notice, not to exceed
thirty (30) days, within which to effect cure), or if any default should occur
under the Revolving Loan Agreement or any of the other Loan Documents (as
defined in the Revolving Loan Agreement), and such default shall continue beyond
any applicable cure period provided therein, then the Lender, at its option and
without further notice, demand or presentment for payment to the undersigned or
others, may declare immediately due and payable the outstanding principal
balance of this Note together with all accrued and unpaid interest thereon to
the date of default and together with interest thereafter at the Maximum Rate,
provided that the default interest rate shall not exceed twenty-five percent
(25%) per annum, together with all costs and fees, including reasonable attorney
fees and court costs (through and including any and all collection, trial,
appellate and administrative procedures) incurred by the Lender in collecting or
enforcing payment thereof, and all other sums due hereunder or under the Loan
Documents, anything herein or in the Loan Documents to the contrary
notwithstanding, all without any relief whatever from any valuation or
appraisement laws (to the full extent permitted by law), and payment thereof may
be enforced and recovered in whole or in part at any time by one or more of the
remedies provided to the Lender in this Note or in the Loan Documents.
4
Borrower shall pay to the Lender a late charge of five percent (5%) of
any installment or portion thereof (principal, interest or otherwise) not
received in full by the Lender within ten (10) days after the same shall be due
to cover the extra expense involved in handling delinquent payments.
Any notice that must be given Borrower under this Note will be given by
hand delivery, nationally recognized overnight courier service, or by mailing
same to the Borrower by certified mail, return receipt requested, postage
prepaid. All notices will be addressed to Borrower at the addresses set forth in
the introductory paragraph of this Note unless Lender is given written notice of
a different address given as herein provided.
Any notice that must be given to the Lender under this Note will be
given by hand delivery, nationally recognized overnight courier service, or by
mailing it by certified mail, return receipt requested, postage prepaid. All
notices will be addressed to the Lender at the address set forth in the
introductory paragraph of this Note, unless Borrower is given written notice of
a different address as herein provided.
Borrower and all endorsers, sureties or guarantors hereof (hereafter
called "Obligors") waive presentment for payment, demand, notice of dishonor,
nonpayment or other default, notice of protest and protest of this note, and do
hereby consent to any number of extensions of time, renewals, waivers,
modifications, substitutions or releases of collateral, or releases of
endorsers, sureties or guarantors hereof, that may be made or granted by Lender
with respect to the payment or performance of the provisions of this Note, and
consents to the inclusion of additional guarantors, sureties or accommodation
parties as Obligors hereunder.
In the event of default, Borrower and all Obligors agree to pay all
costs of collection, including all court costs, other legal expenses, and
reasonable attorneys' fees and paralegals' fees, incurred by Lender in
consultation or in conjunction with judicial, administrative or arbitration
proceedings, through and including any and all collection, trial, appellate and
administrative proceedings.
No delay or omission by Lender in exercising any right shall operate as
a waiver of such right or any other right hereunder.
This note shall be construed under and controlled and governed by the
laws of the State of Florida and/or by any laws or regulations of the United
States which may be applicable to Lender, if any.
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
(INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS,
5
CROSS-CLAIMS AND THIRD-PARTY CLAIMS) ARISING IN CONNECTION WITH THIS NOTE, THE
OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREIN, AND ALL AND ANY
COMBINATION OF THE FOREGOING. BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE
OR AGENT OF THE LENDER NOR THE LENDER'S COUNSEL HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. BORROWER ACKNOWLEDGES THAT
THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS LOAN, INCLUDING THIS NOTE, BY,
INTER ALIA, THE PROVISIONS OF THIS PARAGRAPH.
IN WITNESS WHEREOF, this note has been duly executed and delivered on
the date first above written.
COMPSCRIPT, INC., a Florida
corporation
By: /S/ XXXXX X. XXXXX
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Name: XXXXX X. XXXXX
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Title: PRESIDENT/CEO
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