EXHIBIT 99.1
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
BORROWER: VERSO TECHNOLOGIES, INC.
NACT TELECOMMUNICATIONS, INC.
XXXXXXXX.XXX SOFTWARE, INC.
DATE: FEBRUARY 12, 2003
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between Silicon Valley
Bank ("Silicon") and the borrower named above ("Borrower").
Reference is made to that certain Asset Purchase Agreement dated as of
December 13, 2002, as amended by the First Amendment thereto dated as of
February 4, 2003 (the "Purchase Agreement"), among Verso Technologies, Inc.
("Verso") and Clarent Corporation (the "Seller"), pursuant to which Verso will
purchase from Seller the Assets (as defined in the Purchase Agreement), other
than the Excluded Assets (as defined in the Purchase Agreement). Such Assets,
exclusive of the Excluded Assets, are hereinafter referred to the "Acquired
Assets." Borrower has also informed Silicon that provided the necessary
conditions precedent as set forth in the Purchase Agreement are satisfied, Verso
intends to enter into the Ancillary Documents (as defined in the Purchase
Agreement) with Seller, including a Loan Agreement (the "Seller Loan Agreement")
pursuant to which, among other things, Verso will issue promissory notes in
favor of Seller and, if applicable, will grant Seller a security interest in the
Acquired Assets as security for the promissory notes. The Purchase Agreement and
the Ancillary Documents, including the Seller Loan Agreement, are hereinafter
collectively referred to as the "Purchase Transaction."
For the purposes of this Amendment, the term "Effective Date" shall
mean the date on which the last of the following occurs: (i) the conditions
precedent (for Verso and Seller) set forth in the Purchase Agreement are
satisfied; and (ii) the Acquired Assets are free and clear of all liens,
encumbrances and security interests (other than any security interests in favor
of Seller subordinated in favor of Silicon as described below); and (iii) the
Bankruptcy Court (as defined in the Purchase Agreement) has issued the Sale
Order (as defined in the Purchase Agreement), which Sale Order shall be final
and not subject to appeal nor shall it have been reversed, rescinded, stayed,
modified or amended; and (iv) Silicon has a first priority perfected security
interest in the Acquired Assets; and (v) Seller shall have executed Silicon's
standard form of subordination agreement (in the form previously agreed upon
between Silicon and Seller) in favor of Silicon, pursuant to which Seller will
subordinate in favor of Silicon the lien(s), if any,
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granted by Verso to Seller and the obligations of Verso to Seller incurred under
the Purchase Transaction.
The Parties agree to amend the Loan and Security Agreement between
them, dated December 14, 2001 (as otherwise amended, if at all, the "Loan
Agreement"), as follows, effective as of the Effective Date (as defined above).
(Capitalized terms used but not defined in this Amendment shall have the
meanings set forth in the Loan Agreement.)
1. ADDITIONAL LOCATIONS. In accordance with Section 3.3 of the
Loan Agreement, Borrower has advised Silicon that upon the Effective Date,
Borrower will have additional locations in Littleton, Colorado and Montreal,
Quebec. Additionally, Borrower has advised Silicon that Borrower may transfer
some Inventory, from time to time, to Borrower's Montreal facility.
2. MODIFIED AMOUNT RE INVENTORY STORED AT WAREHOUSEMEN OR BAILEE
AND APTO SOLUTIONS. The four asterisked (****) insert in Section 5.5 of the Loan
Agreement which currently reads as follows:
****, except for such warehousemen or third parties
for which a notice of security interest to bailee,
or similar agreement, in form satisfactory to
Silicon, has been executed by such warehouseman or
bailee and provided further that the amount of
Inventory or other Collateral stored in such
locations does not exceed $350,000 in the aggregate,
and except for Inventory that Borrower, in the
ordinary course of its business, has loaned to its
customers or is held by its customers pending the
exchange of such Inventory, provided that the
aggregate value of such Inventory does not exceed
$1,000,000 at anytime while this Agreement is in
effect
is hereby amended to read as follows:
****, except for such warehousemen or third parties
for which a notice of security interest to bailee,
or similar agreement, in form satisfactory to
Silicon, has been executed by such warehouseman or
bailee and provided further that the amount of
Inventory or other Collateral stored in such
locations does not exceed $850,000 in the aggregate,
and except for Inventory that Borrower, in the
ordinary course of its business, has loaned to its
customers or is held by its customers pending the
exchange of such Inventory, provided that the
aggregate value of such Inventory does not exceed
$1,000,000 at anytime while this Agreement is in
effect, and except for the Collateral stored or
maintained at Apto Solutions for purposes of
liquidation provided the amount of such Collateral
does not at any time exceed $1,000,000 in the aggregate
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3. MODIFIED DEFINITION OF ELIGIBLE RECEIVABLES REGARDING DEFERRED
REVENUE. The following sentence at the end of the definition of "Eligible
Receivables" set forth in Section 8 of the Loan Agreement that currently reads
as follows:
Without limiting the generality of the foregoing,
deferred revenue shall be reviewed by Silicon
monthly and associated potential offsets by Account
Debtors will be deducted from the Receivables owing
from such Account Debtors; provided, however, such
deductions will be limited to an aggregate of
$250,000 with respect to the Receivables of Verso
Technologies, Inc. and Xxxxxxxx.xxx Software, Inc.
on a combined basis (provided, further, that the
foregoing will not limit Silicon's rights to
establish reserves with respect to such deferred
revenue offsets in the amounts deemed necessary by
Silicon in its discretion).
is hereby amended to read as follows:
Without limiting the generality of the foregoing,
deferred revenue shall be reviewed by Silicon
monthly and associated potential offsets by Account
Debtors will be deducted from the Receivables owing
from such Account Debtors.
4. MODIFIED CREDIT LIMIT. Section 1 of the Schedule to the Loan
Agreement is hereby amended in its entirety to read as follows:
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser
of: (i) $7,500,000 at any one time
outstanding (the "Maximum Credit
Limit"); or (ii) 75% (the "Advance
Rate") of the amount of Borrower's
Eligible Receivables (as defined
in Section 8 above). The foregoing
Advance Rate is typically based
upon the quality of the Borrower's
Receivables and attendant
dilution. The quality of
Borrower's Receivables (and other
Collateral) is determined by the
results of Silicon's initial field
examination and on-going periodic
examinations and audits. The
foregoing Advance Rate will be
reviewed and modified by Silicon,
in its good faith business
judgment, after its receipt and
review of the the results of the
most recently conducted audit
(including that of the Acquired
Assets) by Silicon, or its agents.
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Notwithstanding the foregoing, the
total outstanding Obligations
under this Loan Agreement and
under the Exim Agreement (as
defined below) shall not at any
time exceed $10,000,000 (the
"Overall Credit Limit").
Loans will be made to each
Borrower based on the Eligible
Receivables of each Borrower,
subject to the Maximum Credit
Limit set forth above for all
Loans to all Borrowers combined.
LETTER OF CREDIT SUBLIMIT
(Section 1.5): $1,000,000; provided, however,
that the total Letter of Credit
Sublimit and the Foreign Exchange
Contract Sublimit shall not, at
any time, exceed $1,000,000 in the
aggregate under this Agreement and
the Exim Agreement.
FOREIGN EXCHANGE
CONTRACT
SUBLIMIT: $1,000,000; provided, however,
that the total Letter of Credit
Sublimit and Foreign Exchange
Contract Sublimit shall not, at
any time, exceed $1,000,000 in the
aggregate under this Agreement and
the Exim Agreement.
Borrower may enter into foreign
exchange forward contracts with
Silicon, on its standard forms,
under which Borrower commits to
purchase from or sell to Silicon a
set amount of foreign currency
more than one business day after
the contract date (the "FX Forward
Contracts"); provided that (1) at
the time the FX Forward Contract
is entered into Borrower has Loans
available to it under this
Agreement in an amount at least
equal to 10% of the amount of the
FX Forward Contract; and (2) the
total FX Forward Contracts at any
one time outstanding may not
exceed 10 times the amount of the
Foreign Exchange Contract
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Sublimit set forth above; and (3)
the total Letter of Credit
Sublimit and the Foreign Exchange
Contract Sublimit shall not, at
any time, exceed $1,000,000.
Silicon shall have the right to
withhold, from the Loans otherwise
available to Borrower under this
Agreement, a reserve (which shall
be in addition to all other
reserves) in an amount equal to
10% of the total FX Forward
Contracts from time to time
outstanding, and in the event at
any time there are insufficient
Loans available to Borrower for
such reserve, Borrower shall
deposit and maintain with Silicon
cash collateral in an amount at
all times equal to such
deficiency, which shall be held as
Collateral for all purposes of
this Agreement. Silicon may, in
its discretion, terminate the FX
Forward Contracts at any time that
an Event of Default occurs and is
continuing. Borrower shall execute
all standard form applications and
agreements of Silicon in
connection with the FX Forward
Contracts, and without limiting
any of the terms of such
applications and agreements,
Borrower shall pay all standard
fees and charges of Silicon in
connection with the FX Forward
Contracts.
CASH MANAGEMENT
SERVICES AND
RESERVES: Borrower may use up to $50,000 of
Loans available hereunder for
Silicon's Cash Management Services
(as defined below), including,
merchant services, business credit
card, ACH and other services
identified in the cash management
services agreement related to such
service (the "Cash Management
Services"). Silicon may, in its
sole discretion, reserve against
Loans which would otherwise be
available hereunder such sums as
Silicon shall determine in its
good faith business judgment in
connection with the Cash
Management Services, and Silicon
may charge to Borrower's Loan
account, any
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amounts that may become due or
owing to Silicon in connection
with the Cash Management Services.
Borrower agrees to execute and
deliver to Silicon all standard
form applications and agreements
of Silicon in connection with the
Cash Management Services, and,
without limiting any of the terms
of such applications and
agreements, Borrower will pay all
standard fees and charges of
Silicon in connection with the
Cash Management Services. The Cash
Management Services shall
terminate on the Maturity Date."
EXIM AGREEMENT;
CROSS-COLLATERALIZATION;
CROSS-DEFAULT: Silicon and the Borrower are
parties to that certain Loan and
Security Agreement (Exim Program)
dated approximately February 12,
2003 (the "Exim Agreement"). Both
this Agreement and the Exim
Agreement shall continue in full
force and effect, and all rights
and remedies under this Agreement
and the Exim Agreement are
cumulative. The term "Obligations"
as used in this Agreement and in
the Exim Agreement shall include,
without limitation, the obligation
to pay when due all Loans made
pursuant to this Agreement (the
"Non-Exim Loans") and all interest
thereon and the obligation to pay
when due all Loans made pursuant
to the Exim Agreement (the "Exim
Loans") and all interest thereon.
Without limiting the generality of
the foregoing, all "Collateral" as
defined in this Agreement and as
defined in the Exim Agreement
shall secure all Exim Loans and
all Non-Exim Loans and all
interest thereon, and all other
Obligations. Any Event of Default
under this Agreement shall also
constitute an Event of Default
under the Exim Agreement, and any
Event of Default under the Exim
Agreement shall also constitute an
Event of Default under this
Agreement. In the event Silicon
assigns
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its rights under the Exim
Agreement and/or under any Note
evidencing Exim Loans and/or its
rights under this Agreement and/or
under any Note evidencing Non-Exim
Loans, to any third party,
including, without limitation, the
Export-Import Bank of the United
States ("Exim Bank"), whether
before or after the occurrence of
any Event of Default, Silicon
shall have the right (but not any
obligation), in its sole
discretion, to allocate and
apportion Collateral to the
Agreement and/or Note assigned and
to specify the priorities of the
respective security interests in
such Collateral between itself and
the assignee, all without notice
to or consent of the Borrower.
5. MODIFIED DEFINITION OF PRIME RATE. The definition of "Prime
Rate" set forth in Section 2 of the Schedule to Loan Agreement that currently
reads as follows:
Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
"Prime Rate" means the rate announced from time to
time by Silicon as its "prime rate;" it is a base
rate upon which other rates charged by Silicon are
based, and it is not necessarily the best rate
available at Silicon. The interest rate applicable
to the Obligations shall change on each date there
is a change in the Prime Rate.
is hereby amended to read as follows:
Interest shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
"Prime Rate" means the rate announced from time to
time by Silicon as its "prime rate;" provided that
the "Prime Rate" in effect on any day shall not be
less than 4.25% per annum; it is a base rate upon
which other rates charged by Silicon are based, and
it is not necessarily the best rate available at
Silicon. The interest rate applicable to the
Obligations shall change on each date there is a
change in the Prime Rate.
6. MODIFIED UNUSED LINE FEE. The Unused Line Fee set forth in
Section 3 of the Schedule to the Loan Agreement is hereby amended in its
entirety to read as follows:
Unused Line
Fee: In the event, in any calendar
month (or portion thereof at the
beginning and end of the term
hereof), the average daily
principal balance of the Non-Exim
Loans and Exim
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Loans, in the aggregate,
outstanding during the month is
less than the amount of the
Overall Credit Limit, Borrower
shall pay Silicon an unused line
fee in an amount equal to 0.375%
per annum on the difference
between the amount of the Overall
Credit Limit and the average daily
principal balance of the Non-Exim
Loans and Exim Loans, in the
aggregate, outstanding during the
month, which unused line fee shall
be computed and paid monthly, in
arrears, on the first day of the
following month.
7. MODIFIED MATURITY DATE. Section 4 of the Schedule to the Loan
Agreement is hereby amended in its entirety to read as follows:
4. MATURITY DATE
(Section 6.1): August 12, 2004.
8. MODIFIED FINANCIAL COVENANTS. Section 5 of the Schedule to
Loan Agreement is hereby amended to read as follows:
5. FINANCIAL COVENANTS
(Section 5.1): Borrower shall, on a consolidated
basis except as otherwise
specified below, comply with each
of the following covenant(s).
Compliance shall be determined as
of the end of each month, except
as otherwise specifically provided
below:
MINIMUM CASH
ON HAND/MINIMUM
EXCESS
AVAILABILITY: Borrower shall at all times
maintain a combination of a
minimum of unrestricted cash (and
cash equivalents) in accounts
maintained at Silicon, and Minimum
Excess Availability, in an amount
of not less than $1,000,000.
Notwithstanding the foregoing,
upon Borrower achieving, and only
so long as Borrower continues to
achieve, a minimum net profit of
$1.00 for each fiscal month,
Borrower shall at all times be
required to
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maintain a combination of a
minimum of unrestricted cash (and
cash equivalents) in accounts
maintained at Silicon, and Minimum
Excess Availability, in an amount
of not less than $500,000.
EBITDA: Borrower shall maintain EBITDA (as
defined below), including the
Acquired Assets (except as
otherwise provided below), as
follows:
MONTHLY (Based on the average of
the three months immediately
preceding the month being
reported, including the month
being reported. As an example, to
determine Borrower's compliance
with EBITDA for the month ending
January 31, 2003, one must
calculate the average EBITDA for
the months of November 2002,
December 2002 and January 2003;
for the month ending February 28,
2003, the average EBITDA for the
months of December 2002, January
2003 and February 2003 must be
calculated).
For the month ending January 31,
2003, Borrower shall, on a
consolidated basis, maintain
EBITDA of not less than
($180,000);
For the month ending February 28,
2003, Borrower shall, on a
consolidated basis, maintain
EBITDA of not less than
($380,000);
For the month ending March 31,
2003, Borrower shall, on a
consolidated basis, maintain
EBITDA of not less than $220,000;
and
For the month ending April 30,
2003 and each month ending
thereafter, Borrower shall, on a
consolidated basis, maintain
EBITDA of not less than $50,000;
and
QUARTERLY
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For the fiscal quarter ending
December 31, 2002, Borrower shall,
on a consolidated basis (not
including the Acquired Assets),
maintain EBITDA of not less than
$100,000;
For the fiscal quarter ending
March 31, 2003, Borrower shall, on
a consolidated basis, maintain
EBITDA of not less than $150,000;
For the fiscal quarter ending June
30, 2003, Borrower shall, on a
consolidated basis, maintain
EBITDA of not less than
$1,000,000;
For the fiscal quarter ending
September 30, 2003, Borrower
shall, on a consolidated basis,
maintain EBITDA of not less than
$1,300,000;
For the fiscal quarter ending
December 31, 2003, Borrower shall,
on a consolidated basis, maintain
EBITDA of not less than
$1,800,000;
For the fiscal quarter ending
March 31, 2004, Borrower shall, on
a consolidated basis, maintain
EBITDA of not less than
$1,950,000; and
For the fiscal quarter ending June
30, 2004, Borrower shall, on a
consolidated basis, maintain
EBITDA of not less than
$2,100,000.
SRT: Borrower shall not, on a
consolidated basis, incur SRT (as
defined below) costs in excess of
the following:
For the fiscal quarter ending
December 31, 2002: $250,000; and
For the fiscal quarters ending
March 31, 2003 and June 30, 2003:
$500,000 in the aggregate for both
fiscal quarters combined.
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DEFINITIONS. For purposes of the foregoing
financial covenants, the following
term shall have the following
meaning:
"( )" shall mean a negative figure
or loss, as applicable.
"Current assets", "current
liabilities" and "liabilities"
shall have the meaning ascribed
thereto by generally accepted
accounting principles.
"EBITDA" means, on a consolidated
basis, Borrower's earnings before
interest, taxes, depreciation and
other non-cash amortization
expenses and other non-cash
expenses of Borrower, determined
in accordance with generally
accepted accounting principles,
consistently applied; provided,
however, EBITDA will not include
any gain or loss of Borrower
attributable to Borrower's joint
venture interest in Shanghai
Betrue InfoTech Co., Ltd. or
Borrower's SRT (as defined below).
"Minimum Excess Availability"
shall mean the amount equal to the
Overall Credit Limit less the
aggregate principal amount of
outstanding Non-Exim Loans and
Exim Loans.
"SRT" means the
Severance/Restructuring/
Transition costs set forth in the
Borrower's Income Statement, a
copy of which has been provided to
Silicon.
"Tangible Net Worth" shall mean
the excess of total assets over
total liabilities, determined in
accordance with generally accepted
accounting principles, with the
following adjustments:
(A) there shall be excluded from
assets: (i) notes, accounts
receivable and other obligations
owing to Borrower from its
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officers or other Affiliates, and
(ii) all assets which would be
classified as intangible assets
under generally accepted
accounting principles, including
without limitation goodwill,
licenses, patents, trademarks,
trade names, copyrights,
capitalized software and
organizational costs, licenses and
franchises
(B) there shall be excluded from
liabilities: all indebtedness
which is subordinated to the
Obligations under a subordination
agreement in form specified by
Silicon or by language in the
instrument evidencing the
indebtedness which is acceptable
to Silicon in its discretion
("Subordinated Debt").
9. LITIGATION DISCLOSURE. That portion of Section 8 of the
Schedule to Loan and Security Agreement regarding Material Adverse Litigation is
hereby amended to include the information set forth on Exhibit 1 attached
hereto.
10. CONDITIONS PRECEDENT RE CANADIAN INVENTORY. Prior to any Loans
being made with respect to any Inventory maintained in Canada, the following
must occur: (i) Silicon must receive evidence, satisfactory to Silicon in its
good faith business judgment, of its first priority, perfected security interest
in such Inventory, (ii) the Inventory must constitute Eligible Export Related
Inventory (as defined in the Exim Agreement), (iii) Borrower shall have executed
all such documents that Silicon deems necessary, in its good faith business
judgment, to grant Silicon a security interest therein and to perfect the same,
(iv) Silicon shall have received a legal opinion, satisfactory to Silicon in its
good faith business judgment, from Canadian counsel with regard to the
enforceability of Silicon's first priority security interest and (v) Silicon
shall have received a landlord agreement, in form and substance satisfactory to
Silicon in its good faith business judgment, executed by the lessor of the
facility(ies) in Canada at which the Inventory is maintained.
11. WARRANTS. Concurrently herewith, Verso shall provide Silicon
with five-year warrants to purchase 350,000 shares of common stock of the Verso,
at a price per share equal to the closing price per share of the common stock of
the Verso for the trading day immediately preceding the Issue Date of the
Warrant to Purchase Stock, on terms acceptable to Silicon, as set forth in the
Warrant to Purchase Stock and related documents. Said warrants shall be deemed
fully earned on the date hereof, shall be in addition to all interest and other
fees, and shall be non-refundable.
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12. ADDITIONAL EQUITY INFUSION/SUBORDINATED DEBT COVENANT.
Borrower hereby covenants and agrees that prior to, or concurrent with, the
execution of this Amendment by Borrower, Borrower shall have received net cash
consideration of at least $3,000,000 for the issuance, after January 1, 2003, of
equity securities and/or subordinated debt of Borrower, and Borrower shall have
provided Silicon with evidence, satisfactory to Silicon in its sole discretion,
of the receipt of such consideration.
13. FEE. In consideration for Silicon entering into this
Amendment, Borrower shall pay Silicon a fee in the amount of $40,000, which
shall be non-refundable and in addition to all interest and other fees payable
to Silicon under the Loan Documents. Silicon is authorized to charge said fee to
Borrower's loan account.
14. REPRESENTATIONS TRUE. Borrower represents and warrants to
Silicon that all representations and warranties set forth in the Loan Agreement,
as amended hereby, are true and correct.
15. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any
prior written amendments to the Loan Agreement signed by Silicon and Borrower,
and the other written documents and agreements between Silicon and Borrower set
forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and understandings between the parties with respect
to the subject hereof. Except as herein expressly amended, all of the terms and
provisions of the Loan Agreement, and all other documents and agreements between
Silicon and Borrower shall continue in full force and effect and the same are
hereby ratified and confirmed.
BORROWER: SILICON:
VERSO TECHNOLOGIES, INC. SILICON VALLEY BANK
BY /s/ Xxxxx X. Xxxxxxx BY /s/ Xxxxx X. Xxxxxxxx
------------------------------ ---------------------------------------
PRESIDENT OR VICE PRESIDENT TITLE Vice President
------------------------------------
BY /s/ Xxxxxx Xxxxxxx
------------------------------
SECRETARY OR ASS'T SECRETARY
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BORROWER: BORROWER:
NACT TELECOMMUNICATIONS, INC. XXXXXXXX.XXX SOFTWARE, INC.
BY /s/ Xxxxxx Xxxxxxx BY /s/ Xxxxx X. Xxxxxxx
------------------------------- ---------------------------------------
PRESIDENT OR VICE PRESIDENT PRESIDENT OR VICE PRESIDENT
BY /s/ Xxxxx Xxxx BY /s/ Xxxxxx Xxxxxxx
------------------------------- ---------------------------------------
SECRETARY OR ASS'T SECRETARY SECRETARY OR ASS'T SECRETARY
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EXHIBIT 1
DISCLOSURE SCHEDULE - SECTION 3.10
On or about April 29, 2002, Omni Systems of Georgia, Inc. ("Omni") and
Xxxxxx X. Xxxx ("Xxxx") filed with the AAA a demand for arbitration against
Verso Technologies, Inc. (the "Company"). Omni and Xxxx claim that the Company
breached the Assignment dated as of August 31, 1998, by and among a subsidiary
of the Company, Xxxx, and Omni (the "Assignment"), pursuant to which Omni and
Xxxx assigned and transferred to a subsidiary of the Company all of their
alleged right, title and interest in and to a certain computer software property
management system in exchange for a lump sum royalty payment and certain monthly
royalty payments equal to a percentage of the maintenance and licensing net
revenues received by the Company from certain customers. Omni and Xxxx claim
that the Company has not paid to them the monthly royalty payments owed to them
pursuant to the Assignment beginning in June 2002. Omni and Xxxx seek recovery
of over $400,000 for monthly royalties allegedly owed for the period May 15,
2002 through January 2003, plus monthly royalties in like amounts going forward,
together with interest thereon, attorneys' fees, and expenses. The Company
denies that it is obligated to pay any such royalties. The matter was heard for
six days by a three-arbitrator panel of the American Arbitration Association in
January 2003. The hearing has been concluded but no award has yet been rendered
by the arbitration panel.
In February 2001, Xxxx X. Good, a former employee of the Company, filed
a lawsuit in the Court of Common Pleas, Cuyahoga County, Ohio, against the
Company claiming, among other things, fraud, negligence, breach of fiduciary
duty, breach of contract and damages resulting from and related to the Company's
failure to deliver 50,000 shares of Common Stock upon Mr. Good's exercise of an
option to purchase such shares on or about January 3, 2000. The Company and Mr.
Good have agreed to settle this matter, and, in connection, therewith, the
Company will pay Mr. Good a total of $525,000 on February 10, 2003 and the
remaining $100,000 in monthly installments of $10,000 beginning March 10, 2003.
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