EXHIBIT 10.11
AMENDMENT #1
TO
LOAN AND SECURITY AGREEMENT AND RELATED FINANCING DOCUMENTS
DATED FEBRUARY 18, 1997 BETWEEN EMERGENT FINANCIAL CORP. (HEREIN REFERRED TO AS
"SECURED PARTY") AND DELSOFT CONSULTING, INC. (HEREIN REFERRED TO AS "DEBTOR")
DATED: APRIL _____, 1997
For and in consideration of the premises, the mutual agreements, warranties and
representations herein made, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Debtor and Secured
Party agree to as follows; that the Loan and Security Agreement, Shareholders
Consent, Certificate of Board Resolutions and Incumbency, Disclosure Statement
Regarding Interest and Other Charges, Demand Promissory Note executed February
18, 1997, and other related Transaction Documents as defined in that certain
Loan and Security Agreement between Debtor and Secured Party dated February 18,
1997 are amended as follows:
1. As evidenced by the Loan and Security Agreement dated February 18, 1997
between Debtor and Secured Party, the Schedule to the Loan and Security
Agreement dated February 18, 1997 as amended and restated in accordance to
the amended and Restated Schedule #1 to the Loan and Security Agreement
executed in conjunction with this amendment #1 dated this ____ day of April
and made a part of this document as Exhibit "A".
2. As evidenced by the Demand Promissory Note dated February 18, 1997 between
Secured Party and Debtor, the principal sum of the Demand Promissory Note
is amend from $300,000. to $500,000.
DEBTOR ACKNOWLEDGES THAT IT HAS READ THIS AMENDMENT DATED TO THE LOAN AND
SECURITY AGREEMENT ALONG WITH THE AMENDED AND RESTATED SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT ATTACHED AS EXHIBIT "A" HERETO AND IS AWARE OF ALL OF THE
TERMS THEREOF, THAT THEY MERELY CONSTITUTE AN OFFER BY DEBTOR TO SECURED PARTY
UNTIL OR UNLESS ACCEPTED BY SECURED PARTY IN WRITING AT ITS PRINCIPAL PLACE OF
BUSINESS.
1
ACCEPTED THIS _____ DAY OF APRIL, 1997
ATTEST: DEBTOR: DELSOFT CONSULTING, INC.
______________________ __________________________
The undersigned Guarantor(s) of the Indebtedness at any time owing by Delsoft
Consulting, Inc. to Emergent Financial Corp., hereby acknowledges and consents
to the forgoing and affirms that nothing contained therein shall modify in any
respect such guaranty.
Witness:
__________________________________ __________________________________
Xxxxx Xxxxxxxxx, Guarantor
__________________________________ __________________________________
Xxxxxxx X. Xxxxx, Guarantor
__________________________________ __________________________________
Xxxxxxxx X. Xxxxxxxxx, Guarantor
Accepted and agreed to this _____ day of April, 1997.
Emergent Financial Corp.
__________________________________ _____________________________
Witness Xxxxxx X. Xxxxxx
2
EXHIBIT "A"
#1 AMENDMENT AND RESTATED SCHEDULE
TO THE LOAN AND SECURITY AGREEMENT DATED FEBRUARY 18, 1997
This Amended and Restated Schedule is a part of a Loan and Security
Agreement, dated February 18, 1997, between Delsoft Consulting, Inc. and
Emergent Financial Corp. and succeeds the Original Schedule dated February 18,
1997. The amended Schedule items covered under this Amended and Restated
Schedule pertain to Items 1(A) and 19.
1. Borrowing Capacity (SS 1.1(c))
Borrowing Capacity at any time shall be the net amount determined by
taking the lesser of the following amounts:
(A) $500,000.00
or
(B) the amount equal to the sum of:
(i) 86 % to the Receivable Borrowing Base:
----
(ii) n/a % of the Inventory Borrowing Base;
-----
and subtracting from the lessor of (A) or (B) above, the sum of (a)
banker's acceptances, plus (b) letters of guaranty, plus (c) standby letter
of credit.
2. Inventory Borrowing Base Percentages (SS 1.1(r))
The following percentages of dollar value (calculated at the lower of
actual cost or market value) are applicable to the following categories of
Eligible Inventory:
( n/a ) finished goods, to the extent of 0 %;
---
( n/a ) raw materials, to the extent of 0 %:
---
( n/a ) work in process to the extent to 0 %,
---
3. Cash Discount (SS 1.1(g) & 10.3)
Maximum Cash Discount to 2.00%, 10 days.
4. Receivable--Age (SS 1.1(o)(i))
90 days after ( x ) Invoice date
--
3
( ) due date (not to exceed __ days after invoice date)
shown on the Invoice evidencing the applicable
Receivable.
5. Receivable Disqualification Percentage (SS 1.1(o) (vi))
25 % or more.
----
6. Permissible Foreign Account Debtors (SS 1.1(o)(vii))
None
7. Inventory Accounting (SS 1.1(r))
( n/a ) First-in, first-out (FIFO)
( n/a ) Last-in, first-out (LIFO)
( n/a ) Other as specified below
Actual cost of identified items.
8. Payment Account (SS 1.1 (t))
There is ( X ) a Payment Account
is not ( )
Name and address of depository bank:
NationsBank of Georgia, N.A.
9. State of Incorporation (SS 4.2(b), 5.1)
Debtor: Georgia
Consolidated Subsidiary None
10. Location(s) of Inventory and Equipment (SS 5.4(c), 5.7, 5.8(a) & 11.1)
Inventory Locations:
Same as the address on the front page to the Loan and Security Agreement
Equipment Locations (including names and addresses of owners or real
property and mortgages):
4
Same as the address on the front page to the Loan and Security Agreement
11. Permitted Encumbrances (SS 5.5(a), 5.5(c) & 11.3) None, other than current
obligations.
12. Business Records Location (SS 5.7(a), 5.7(c) & 11.1)
Same as the address on the front page to the Loan and Security Agreement
13. Trademarks and Patents (SS 5.17)
Debtor: None
Consolidated Subsidiary: None
14. Margin Stock: (SS 5.22)
None
15. Labor Contracts (SS 5.24)
Debtor: None
Consolidated Subsidiary: None
16. Authorized Shares (SS 5.27)
No. of authorized common shares: 20,000,000
Par Value of common shares: $ 1.00
No. of issued and outstanding shares:_____________________
17. Required Documents (SS 6.1, 6.4, 6.7, 9.2(b)
Check if Required Frequency Due
----------------- -------------
Receivable Schedule (Aging) ( X ) Monthly, for the end of
the month, due by the
10th of the following
month.
Inventory Reports
(a) Value Reports ( X ) Upon Request
(b) Periodic Summary Reports ( X ) Upon Request
5
(c) Dispute Report ( X ) Upon Request
Credits & Extension Reports ( X ) Same as Receivable Aging
Copies of billing documents relating to ( X ) At each billing cycle
the Receivables
List of names and addresses of Account ( X ) At closing and upon
Debtors request
Reconciliation report, in form ( X ) Monthly, for the end of
satisfactory to Secured Party, showing the month, due by the
all Receivables, collections, payments, 10th of the following
Credits, & Extensions since the month.
proceeding report
Payable aging report, showing the amounts ( X ) Monthly, for the end of
due and owing on all of Debtor's payable the month, due by the
according to Debtor's records as of the 10th of the following
close of such periods as shall be month.
specified by Secured Party.
Payroll tax returns ( X ) Quarterly
Payroll tax calculations and deposit ( X ) Monthly
information
Invoice and Credit registers ( X ) Daily or with each
Advance Request
18. Interest Rate (SS 8.2)
Two and percent ( 2.00% ) plus the greater of (i)) the Prime Rate or (i))
Seven percent (7.00%)
19. Fees and Due Dates (SS 8.3)
Type Amount Due Date(s)
---- ------ -----------
Monthly Service Fee 1.00% of the average daily Due and payable on the first
balance of the outstanding day of each month for the
loan balance, subject to a preceding month.
$1,000.00 minimum per month.
6
Facility Fee 1.00% ($3,000.00) of the At closing and at the
Borrowing Capacity as defined anniversary date of the Loan
in Schedule Item 1(A) and Security Agreement, in the
event of renewal. Should any
amended increases in the
Borrowing capacity as defined
in Schedule Item 1 (A) occur
prior to the anniversary date,
than a pro-rata portion of the
1.00% fee will be assessed for
the balance of the annual
period.
Overline Fee 0.50% per daily occurrence of Due and payable on the first
the excess of indebtedness days of each month for the
over the borrowing capacity preceding month.
defined in Schedule Item 1(A).
Overcollateral Fee 0.50% per daily occurrence of Due and payable on the first
the excess of indebtedness days of each month for the
over the borrowing capacity preceding month.
defined in Schedule Item 1(A).
Audit Fee $400.00 per quarter plus out Due on the first day of the
of pocket expenses. month following the audit work.
20. Uncollected Funds Adjustment (SS 8.6)
( ) __ calendar days; or
(xx) Three (3) Business Days: or
( ) for each Item, the number of days estimated by Secured Party as
necessary for collection of funds from the particular institution on
which such Item is drawn.
21. Additional Covenants (SS 10 & 1)
22. Annual Financial Statements -- Timing (SS 10.1(a))
- Within 90 days following the end of the fiscal year.
23. Annual Financial Statements -- Form (SS 10.1(a))
7
The following prepared by independent certified public accountants
satisfactory to Secured Party
( ) a compilation
( ) a review
( X ) audited
24. Interim Financial Statements (SS 10.1(b)
- Within 20 days after the end of the month.
25. Terms of Sale (SS 10.3)
Due dates to no more than 30 calendar days from date of Invoice, except in
regard to transactions specified below under "Datings."
Datings: None
26. Net Working Capital: Consolidated Tangible Net Worth (SS 10.13)
Minimum net working capital $ 100,000.00
Minimum consolidated tangible net worth: $ 100,000.00
27. Permitted Borrowing (SS 11.2)
Debtor: None, other than Emergent Financial Corp.
Consolidated Subsidiary: None
28. Permitted Investments and Advances (SS 11.9(d))
Debtor: None
Consolidated Subsidiary: None
8
29. Permitted Guaranties (SS 5.18, 11.10)
Debtor: None, other than obligations relating to company
automobiles.
Consolidated Subsidiary: None
30. Maximum Annual Lease Rentals (SS 11.11)
Debtor: Currant lease obligations at the time to this agreement plus any
new lease obligations tied to permissible capital expenditures.
31. Permitted Capital Expenditures (SS 11.12)
Debtor: $100,000.00 annually.
Consolidated Subsidiary: None
32. Maximum Aggregate Compensation (SS 11.13(a))
Debtor: $ n/a.
Consolidated Subsidiary: $ n/a.
33. Maximum Annual Compensation for Certain Individuals (SS 11.1 3(b))
Name Amount
---- ------
Debtor: Xxxxx Xxxxxxxxx $175,000.00
Xxxxxxxx X. Xxxxxxxxx $175,000.00
Xxxxxxx X. Xxxxx $175,000.00
Consolidated Subsidiary:
34. State (SS 1.1(ff))
9
Georgia
35. Initial Term and Renewal Term (SS 14.13)
Initial Term: One (1) Year
Renewal Term: Annually
36. Percentage of Stock Ownership of Consolidated Subsidiaries (SS 5.25, SS
10.24))
Consolidated Subsidiary Debtor's Percentage of Ownership
----------------------- --------------------------------
None None
37. Prepayment Premium (SS 14.13)
1.00% of the total credit facility.
38. Other Provisions (SS 14.9)
Borrower will pay all legal fees incurred by EFC relative to the close to
this transaction.
39. Bank or Financial Institution (SS 1.1(w))
NationsBank of Georgia, N.A.
10
The undersigned have executed this Schedule on the ____ day of _______. 1997.
Lender: Emergent Financial Corp. Borrower: Delsoft Consulting, Inc.
By:______________________________ By:___________________________________
Xxxxxx Xxxxx, President Xxxxx Xxxxxxxxx, President
Attest:__________________________ Attest:_______________________________
Xxxxxxxx X. Xxxxxxxxx, Secretary
(Corporate Seal) (Corporate Seal)
11
AMENDMENT #2
TO
LOAN AND SECURITY AGREEMENT AND RELATED FINANCING DOCUMENTS DATED FEBRUARY 18,
1997 BETWEEN EMERGENT FINANCIAL CORP. (HEREIN REFERRED TO AS "SECURED PARTY")
AND DELSOFT CONSULTING, INC. (HEREAFTER REFERRED TO AS "DEBTOR")
DATED: JULY 8, 1997
For and in consideration of the premises, the mutual agreements, warranties and
representations herein made, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Debtor and Secured
Party agree to as follows; that the Loan and Security Agreement, Shareholders
Consent, Certificate of Board Resolutions and Incumbency, Disclosure Statement
Regarding Interest and Other Charges, Demand Promissory Note executed February
18, 1997, and other related Transaction Documents as defined in that certain
Loan and Security Agreement between Debtor and Secured Party dated February 18,
1997 and amended on April 22,1997 are further amended as follows:
1. As evidenced by the Loan and Security Agreement dated February 18, 1997 (as
amended on April 22, 1997) between Debtor and Secured Party, the Schedule
to the Loan and Security Agreement dated February 18, 1997 is further
amended and restated in accordance to the "#2" Amended and Restated
Schedule to the Loan and Security Agreement executed in conjunction with
this amendment #2 dated this ___ day of July, 1997 and made a part of this
document as Exhibit "A".
2. As evidenced by the Demand Promissory Note dated February 18,1997 (as
amended on April 22, 1997) between Secured Party and Debtor, the principal
sum of the Demand Promissory Note is amended from $500,000. to $750,000.
DEBTOR ACKNOWLEDGES THAT IT HAS READ THIS AMENDMENT DATED TO THE LOAN AND
SECURITY AGREEMENT ALONG WITH THE AMENDED AND RESTATED SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT ATTACHED AS EXHIBIT "A" HERETO AND IS AWARE OF ALL OF THE
TERMS THEREOF, THAT THEY MERELY CONSTITUTE AN OFFER BY DEBTOR TO SECURED PARTY
UNTIL OR UNLESS ACCEPTED BY SECURED PARTY IN WRITING AT ITS PRINCIPAL PLACE OF
BUSINESS.
12
ACCEPTED THIS 8th DAY OF JULY, 1997
ATTEST: DEBTOR: DELSOFT CONSULTING, INC.
______________________ ___________________________
The undersigned Guarantor(s) of the Indebtedness at any time owing by Delsoft
Consulting, Inc. to Emergent Financial Corp., hereby acknowledges and consents
to the forgoing and affirms that nothing contained therein shall modify in any
respect such guaranty.
Witness:
______________________ _________________________________
Xxxxx Xxxxxxxxx, Guarantor
______________________ _________________________________
Xxxxxxx X. Xxxxx, Guarantor
______________________ _________________________________
Xxxxxxxx X. Xxxxxxxxx, Guarantor
Accepted and agreed to this 8th day of July, 1997.
Emergent Financial Corp.
______________________ -------------------------------
Witness Xxx Xxxxxxx, Vice President
13
EXHIBIT "A"
#1 AMENDED AND RESTATED SCHEDULE
TO THE LOAN AND SECURITY AGREEMENT DATED FEBRUARY 18, 1997
This Amended and Restated Schedule is a part of a Loan and Security
Agreement, dated February 18, 1997, between Delsoft Consulting, Inc. and
Emergent Financial Corp. and succeeds the Original Schedule dated February 18,
1997. The amended Schedule items covered under this Amended and Restated
Schedule pertain to Items 1(A), 10, 12, 38.
1. Borrowing Capacity (SS 1.1(c))
Borrowing Capacity at any time shall be the net amount determined by
taking the lesser of the following amounts:
(A) $750,000.00
or
(B) the amount equal to the sum of:
(i) 85.00 % of the Receivable Borrowing Base:
-------
and
(ii) the lessor of -0- or the amount of the Inventory Borrowing
Base;
2. Inventory Borrowing Base Percentages (SS 1.1(r))
The following percentages of dollar value (calculated at the lower of
actual cost or market value) are applicable to the following categories of
Eligible Inventory:
( n/a ) finished goods, to the extent of ___;
( n/a ) raw materials, to the extent of ___.
( n/a ) work in process to the extent to ____
3. Cash Discount (SS 1.1(g) & 10.3)
Maximum Cash Discount to 2.00%, 10 days.
4. Receivable--Age (SS 1.1(o)(i))
90 days after ( XX ) Invoice date
--
14
( ) due date (not to exceed __ days after invoice date)
shown on the Invoice evidencing the applicable
Receivable.
5. Receivable Disqualification Percentage (SS 1.1(o) (vi))
25 % or more.
----
6. Permissible Foreign Account Debtors (SS 1.1(o)(vii))
None
7. Inventory Accounting (SS 1.1(r))
( n/a ) First-in, first-out (FIFO)
( n/a ) Last-in, first-out (LIFO)
( n/a ) Other as specified below
8. Payment Account (SS 1.1 (t))
There is ( X ) a Payment Account
is not ( )
Name and address of depository bank:
NationsBank of Georgia, N.A.
9. State of Incorporation (SS 4.2(b), 5.1)
Debtor: Georgia
Consolidated Subsidiary None
10. Location(s) of Inventory and Equipment (SS 5.4(c), 5.7, 5.8(a) & 11.1)
Inventory Locations: 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
Equipment Locations (including names and addresses of owners or real
property and mortgages):
000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
11. Permitted Encumbrances (SS 5.5(a), 5.5(c) & 11.3)
None, other than current obligations
15
12. Business Records Location (SS 5.7(a), 5.7(c) & 11.1)
000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
13. Trademarks and Patents (SS 5.17)
Debtor: None
Consolidated Subsidiary: None
14. Margin Stock: (SS 5.22)
None
15. Labor Contracts (SS 5.24)
Debtor: None
Consolidated Subsidiary: None
16. Authorized Shares (SS 5.27)
No. of authorized common shares: 20,000,000
Par Value of common shares: $1.00
No. of issued and outstanding shares:_______________________
17. Required Documents (SS 6.1, 6.4, 6.7, 9.2(b)
Check if Required Frequency Due
----------------- --------------------
Receivable Schedule (Aging) ( X ) Monthly, for the end of
the month, due by the
10th of the following
month.
Inventory Reports
(a) Value Reports ( X ) Upon Request
(b) Periodic Summary Reports ( X ) Upon Request
(c) Dispute Report ( X ) Upon Request
Credits & Extension Reports ( X ) Upon Occurrence
16
Copies of billing documents relating to ( X ) At each billing cycle
the Receivables
List of names and addresses of Account ( X ) At closing and upon
Debtors request
Reconciliation report, in form ( X ) Same and Receivable Aging
satisfactory to Secured Party, showing
all Receivables, collections, payments,
Credits, & Extensions since the
proceeding report
Payable aging report, showing the amounts ( X ) Monthly, for the end of
due and owing on all of Debtor's the month, due by the
payables according to Debtor's records 10th of the following
as of the close of such periods as shall month.
be specified by Secured Party.
Other as indicated below:
Payroll tax returns ( X ) On filing due date
Payroll tax calculations and deposit ( X ) On filing due date
information
Invoice and Credit registers ( X ) Daily or with each
Advance Request
18. Interest Rate (SS 8.2)
(a) Two percent ( 2.00% ) plus the greater of (i) the Prime Rate or (ii)
Seven percent (7.00%)
19. Fees and Due Dates (SS 8.3)
Type Amount Due Date(s)
---- ------- -----------
Monthly Service Fee 1.00% of the average daily Due and payable on the first
balance of the outstanding day of each month for the
loan balance, subject to a preceding month.
$1,000.00 minimum per month.
Facility Fee 1.00% ($3,000.00) of the At the anniversary date of
Borrowing Capacity as defined closing of the Loan and
in Schedule Item 1(A) Security Agreement, in the
event of renewal. Should any
17
amended increases in the
Borrowing Capacity as defined
in Schedule Item 1 (A) occur
prior to the anniversary date,
than a pro-rated portion of
the 1.00% fee will be assessed
for the balance of the annual
period.
Audit Fee $400.00 per day plus expenses, Due on the first day of the
plus out of pocket expenses. month following the audit work.
Overline Fee 0.50% per daily occurrence of Due and payable on the first
the excess of indebtedness of day of each month for the
Debtor over and above the preceding month.
Borrowing Capacity defined in
Schedule Item 1(A).
Overcollateral Fee 0.50% per daily occurrence of Due and payable on the first
the excess of indebtedness of day of each month for the
Debtor over the borrowing preceding month.
capacity defined in Schedule
Item 1(A).
20. Uncollected Funds Adjustment (SS 8.6)
( ) ____________ calendar days; or
(xx) Three (3) Business Days: or
( ) for each Item, the number of days estimated by Secured Party
as necessary for collection of funds from the particular
institution on which such Item is drawn.
21. Additional Covenants (SS 10 & 1)
22. Annual Financial Statements -- Timing (SS 10.1(a))
- Within 90 days following the end of the fiscal year.
23. Annual Financial Statements -- Form (SS 10.1(a))
18
The following prepared by independent certified public accountants
satisfactory to Secured Party
( ) a compilation
( ) a review
( X ) audited
24. Interim Financial Statements (SS 10.1(b)
- Within 20 days after the end of the month.
25. Terms of Sale (SS 10.3)
Due dates to no more than 30 calendar days from date of Invoice, except in
regard to transactions specified below under "Datings."
Datings: None
26. Net Working Capital: Consolidated Tangible Net Worth (SS 10.13)
Minimum net working capital $ 100,000.00
Minimum consolidated tangible net worth: $ 100,000.00
27. Permitted Borrowing (SS 11.2)
Debtor: None, other than Emergent Financial Corp.
Consolidated Subsidiary: None
28. Permitted Investments and Advances (SS 11.9(d))
Debtor: None
Consolidated Subsidiary: None
19
29. Permitted Guaranties (SS 5.18, 11.10)
Debtor: None, other than obligations relating to company
automobiles.
Consolidated Subsidiary: None
30. Maximum Annual Lease Rentals (SS 11.11)
Debtor: Currant lease obligations at the time to this agreement plus any
new lease obligations tied to permissible capital expenditures.
Consolidated Subsidiary: N/A
31. Permitted Capital Expenditures (SS 11.12)
Debtor: $100,000.00 annually.
Consolidated Subsidiary: N/A
32. Maximum Aggregate Compensation (SS 11.13(a))
Debtor: $ n/a.
Consolidated Subsidiary: $ n/a.
33. Maximum Annual Compensation for Certain Individuals (SS 11.1 3(b))
Name Amount
---- ------
Debtor: Xxxxx Xxxxxxxxx $175,000.00
Xxxxxxxx X. Xxxxxxxxx $175,000.00
Xxxxxxx X. Xxxxx $175,000.00
Consolidated Subsidiary:
20
34. State (SS 1.1(ff)) Georgia
35. Initial Term and Renewal Term (SS 14.13)
Initial Term: One (1) Year
Renewal Term: Annually
36. Percentage of Stock Ownership of Consolidated Subsidiaries (SS 5.25, SS
10.24))
Consolidated Subsidiary Debtor's Percentage of Ownership
----------------------- --------------------------------
_______________________ ________________________________
37. Prepayment Premium (SS 14.13)
1.00% of the total credit facility.
38. Other Provisions (SS 14.9)
(SS 1.1.1 (cc)) Secured Party is defined as and notices will be sent to:
Emergent Financial Corp.
0 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, X.X. 00000
39. Bank or Financial Institution (SS 1.1(w))
NationsBank of Georgia, N.A.
21
The undersigned have executed this Schedule on the ____ day of _______, 1997.
Lender: Emergent Financial Corp. Borrower: Delsoft Consulting, Inc.
By:_____________________________ By:____________________________
Xxx Xxxxxxx, Vice President Xxxxx Xxxxxxxxx, President
Attest:__________________________ Attest:________________________
Xxxxxxxx X. Xxxxxxxxx, Secretary
(Corporate Seal) (Corporate Seal)
22
AMENDMENT #3
TO
LOAN AND SECURITY AGREEMENT AND RELATED FINANCING DOCUMENTS DATED FEBRUARY 18,
1997 BETWEEN EMERGENT FINANCIAL CORP. (HEREIN REFERRED TO AS "SECURED PARTY")
AND DELSOFT CONSULTING, INC. (HEREAFTER REFERRED TO AS "DEBTOR")
DATED: August 29, 1997
For and in consideration of the premises, the mutual agreements, warranties and
representations herein made, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Debtor and Secured
Party agree to as follows; that the Loan and Security Agreement, Shareholders
Consent, Certificate of Board Resolutions and Incumbency, Disclosure Statement
Regarding Interest and Other Charges, Demand Promissory Note executed February
18, 1997, and other related Transaction Documents as defined in that certain
Loan and Security Agreement between Debtor and Secured Party dated February 18,
1997 and amended on April 22,1997 and July 8, 1997, are further amended as
follows:
1. As evidenced by the Loan and Security Agreement dated February 18, 1997 (as
amended on April 22, 1997 and July 8, 1997) between Debtor and Secured
Party, the Schedule to the Loan and Security Agreement dated February 18,
1997, is further amended and restated in accordance to the "#3" Amended and
Restated Schedule to the Loan and Security Agreement executed in
conjunction with this Amendment #3 and made a part of this document as
Exhibit "A".
2. As evidenced by the Demand Promissory Note dated February 18, 1997 (as
amended on April 22, 1997 and July 8, 1997), between Debtor and Secured
Party, the Principal sum of the Demand Promissory Note is amended from
$750,000. to $1,000,000.
DEBTOR ACKNOWLEDGES THAT IT HAS READ THIS AMENDMENT TO THE LOAN AND SECURITY
AGREEMENT ALONG WITH THE AMENDED AND RESTATED SCHEDULE #3 ATTACHED HERETO AS
EXHIBIT "A", AND IS AWARE OF ALL OF THE TERMS THEREOF, THAT THEY MERELY
CONSTITUTE AN OFFER BY DEBTOR TO SECURED PARTY UNTIL OR UNLESS ACCEPTED BY
SECURED PARTY IN WRITING AT ITS PRINCIPAL PLACE OF BUSINESS.
23
ACCEPTED THIS 29th DAY OF AUGUST, 1997
ATTEST: DEBTOR: DELSOFT CONSULTING, INC.
_____________________ _______________________________
The undersigned Guarantor(s) of the Indebtedness at any time owing by Delsoft
Consulting, Inc. to Emergent Financial Corp., hereby acknowledges and consents
to the forgoing and affirms that nothing contained therein shall modify in any
respect such guaranty.
Witness:
_____________________ __________________________________
Xxxxx Xxxxxxxxx, Guarantor
_____________________ __________________________________
Xxxxxxx X. Xxxxx, Guarantor
_____________________ __________________________________
Xxxxxxxx X. Xxxxxxxxx, Guarantor
Accepted and agreed to this 29th day of August, 1997.
Emergent Financial Corp.
_____________________ ______________________________
Witness Xxx Xxxxxxx, Vice President
24
EXHIBIT "A"
#3 AMENDED AND RESTATED SCHEDULE
TO THE LOAN AND SECURITY AGREEMENT DATED FEBRUARY 18, 1997
This Amended and Restated Schedule is a part of a Loan and Security
Agreement, dated February 18, 1997, between Delsoft Consulting, Inc. and
Emergent Financial Corp. and succeeds the Original Schedule dated February 18,
1997, as amended. The amended Schedule items covered under this Amended and
Restated Schedule pertain to Items 1(A), 10, 12, 38.
1. Borrowing Capacity (SS 1.1(c))
Borrowing Capacity at any time shall be the net amount determined by
taking the lesser of the following amounts:
(A) $1,000,000.00
or
(B) the amount equal to the sum of:
(i) 85.00 % of the Receivable Borrowing Base:
-------
and
(ii) the lessor of -0- or the amount of the Inventory Borrowing
Base;
2. Inventory Borrowing Base Percentages (SS 1.1(r))
The following percentages of dollar value (calculated at the lower of
actual cost or market value) are applicable to the following categories of
Eligible Inventory:
( n/a ) finished goods, to the extent of ___;
( n/a ) raw materials, to the extent of ___.
( n/a ) work in process to the extent to ____
3. Cash Discount (SS 1.1(g) & 10.3)
Maximum Cash Discount to 2.00%, 10 days.
4. Receivable--Age (SS 1.1(o)(i))
90 days after ( XX ) Invoice date
--
25
( ) due date (not to exceed __ days after invoice date)
shown on the Invoice evidencing the applicable
Receivable.
5. Receivable Disqualification Percentage (SS 1.1(o) (vi))
25 % or more.
----
6. Permissible Foreign Account Debtors (SS 1.1(o)(vii))
None
7. Inventory Accounting (SS 1.1(r))
( n/a ) First-in, first-out (FIFO)
( n/a ) Last-in, first-out (LIFO)
( n/a ) Other as specified below
8. Payment Account (SS 1.1 (t))
There is ( X ) a Payment Account
is not ( )
Name and address of depository bank:
NationsBank, N.A.
9. State of Incorporation (SS 4.2(b), 5.1)
Debtor: Georgia
Consolidated Subsidiary None
10. Location(s) of Inventory and Equipment (SS 5.4(c), 5.7, 5.8(a) & 11.1)
Inventory Locations: 000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
Equipment Locations (including names and addresses of owners or real
property and mortgages):
000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
11. Permitted Encumbrances (SS 5.5(a), 5.5(c) & 11.3)
None, other than current obligations
26
12. Business Records Location (SS 5.7(a), 5.7(c) & 11.1)
000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
13. Trademarks and Patents (SS 5.17)
Debtor: None
Consolidated Subsidiary: None
14. Margin Stock: (SS 5.22)
None
15. Labor Contracts (SS 5.24)
Debtor: None
Consolidated Subsidiary: None
16. Authorized Shares (SS 5.27)
No. of authorized common shares: 20,000,000
Par Value of common shares: $1.00
No. of issued and outstanding shares: ____________________
17. Required Documents (SS 6.1, 6.4, 6.7, 9.2(b)
Check if Required Frequency Due
--------------------- --------------------------
Receivable Schedule (Aging) ( X ) Monthly, for the end of
the month, due by the
10th of the following
month.
Inventory Reports
(a) Value Reports ( X ) Upon Request
(b) Periodic Summary Reports ( X ) Upon Request
(c) Dispute Report ( X ) Upon Request
Credits & Extension Reports ( X ) Upon Occurrence
27
Copies of shipping documents relating to ( X ) At each billing cycle
the Receivables
List of names and addresses of Account ( X ) Upon request
Debtors
Reconciliation report, in form ( X ) Same and Receivable Aging
satisfactory to Secured Party, showing
all Receivables, collections, payments,
Credits, & Extensions since the
proceeding report
Payable aging report, showing the amounts ( X ) Monthly, for the end of
due and owing on all of Debtor's the month, due by the
payables according to Debtor's records 10th of the following
as of the close of such periods as shall month.
be specified by Secured Party.
Other as indicated below:
Payroll tax returns ( X ) On filing due date
Payroll tax calculations and deposit ( X ) On filing due date
information
Invoice and Credit registers ( X ) Daily or with each
Advance Request
18. Interest Rate (SS 8.2)
(a) Two percent ( 2.00% ) plus the greater of (i) the Prime Rate or (ii)
Seven percent (7.00%)
19. Fees and Due Dates (SS 8.3)
Type Amount Due Date(s)
---- ------ ----------
Monthly Service Fee 1.00% of the average daily Due and payable on the first
balance of the outstanding day of each month for the
loan balance, subject to a preceding month.
$1,000.00 minimum per month.
Facility Fee 1.00% of the Borrowing At the anniversary date of
Capacity as defined in closing of the Loan and
Schedule Item 1(A) Security Agreement, in the
event of renewal. Should any
28
amended increases in the
Borrowing Capacity as defined
in Schedule Item 1 (A) occur
prior to the anniversary date,
than a pro-rated portion of
the 1.00% fee will be assessed
for the balance of the annual
period.
Audit Fee $400.00 per day plus expenses, Due on the first day of the
plus out of pocket expenses. month following the audit work.
Overline Fee 0.50% per daily occurrence of Due and payable on the first
the excess of indebtedness of day of each month for the
Debtor over and above the preceding month.
Borrowing Capacity defined in
Schedule Item 1(A).
Overcollateral Fee 0.50% per daily occurrence of Due and payable on the first
the excess of indebtedness of day of each month for the
Debtor over the borrowing preceding month.
capacity defined in Schedule
Item 1(A).
20. Uncollected Funds Adjustment (SS 8.6)
() ____________ calendar days; or
(xx) Three (3) Business Days: or
( ) for each Item, the number of days estimated by Secured Party as
necessary for collection of funds from the particular institution on which
such Item is drawn.
21. Additional Covenants (SS 10 & 1)
22. Annual Financial Statements -- Timing (SS 10.1(a))
- Within 90 days following the end of the fiscal year.
23. Annual Financial Statements -- Form (SS 10.1(a))
29
The following prepared by independent certified public accountants
satisfactory to Secured Party
( ) a compilation
( ) a review
( X ) audited
24. Interim Financial Statements (SS 10.1(b)
- Within 20 days after the end of the month.
25. Terms of Sale (SS 10.3)
Due dates to no more than 30 calendar days from date of Invoice, except in
regard to transactions specified below under "Datings."
Datings: None
26. Net Working Capital: Consolidated Tangible Net Worth (SS 10.13)
Minimum net working capital $ 100,000.00
Minimum consolidated tangible net worth: $ 100,000.00
27. Permitted Borrowings (SS 11.2)
Debtor: None, other than that of Emergent Financial Corp.
Consolidated Subsidiary: None
28. Permitted Investments and Advances (SS 11.9(d))
Debtor: None
Consolidated Subsidiary: None
30
29. Permitted Guaranties (SS 5.18, 11.10)
Debtor: None, other than obligations relating to company
automobiles.
Consolidated Subsidiary: None
30. Maximum Annual Lease Rentals (SS 11.11)
Debtor: Current lease obligations at the time of this Agreement plus any
new lease obligations tied to permissible capital expenditures.
Consolidated Subsidiary: N/A
31. Permitted Capital Expenditures (SS 11.12)
Debtor: $100,000.00 annually.
Consolidated Subsidiary: N/A
32. Maximum Aggregate Compensation (SS 11.13(a))
Debtor: $ n/a.
Consolidated Subsidiary: $ n/a.
33. Maximum Annual Compensation for Certain Individuals (SS 11.1 3(b))
Name Amount
---- ------
Debtor: Xxxxx Xxxxxxxxx $175,000.00
Xxxxxxxx X. Xxxxxxxxx $175,000.00
Xxxxxxx X. Xxxxx $175,000.00
Consolidated Subsidiary:
31
34. State (SS 1.1(ff)) Georgia
35. Initial Term and Renewal Term (SS 14.13)
Initial Term: One (1) Year
Renewal Term: Annually
36. Percentage of Stock Ownership of Consolidated Subsidiaries (SS 5.25, SS
10.24))
Consolidated Subsidiary Debtor's Percentage of Ownership
----------------------- --------------------------------
_______________________ ________________________________
37. Prepayment Premium (SS 14.13)
1.00% of the total credit facility.
38. Other Provisions (SS 14.9)
(SS 1.1.1 (cc)) Secured Party is defined as and notices will be sent to:
Emergent Financial Corp.
0 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, X.X. 00000
39. Bank or Financial Institution (SS 1.1(w))
NationsBank of Georgia, N.A.
32
The undersigned have executed this Schedule on the 29th day of August,
1997.
Lender: Emergent Financial Corp. Borrower: Delsoft Consulting, Inc.
By:_____________________________ By:___________________________________
Xxx Xxxxxxx, Vice President Xxxxx Xxxxxxxxx, President
Attest:_________________________ Attest:________________________________
Xxxxxxxx X. Xxxxxxxxx, Secretary
(Corporate Seal) (Corporate Seal)
33
