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EXHIBIT 10.16.2
[MERCANTILE LOGO] MERCANTILE-SAFE DEPOSIT & TRUST COMPANY
REVOLVING NOTE
(Commercial)
$2,000,000.00 , 19
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In this Note, the Bank named above is hereinafter referred to as
"Bank." The Undersigned means each and all parties who sign below, whether one
or more than one, and their obligations hereunder are joint and several.
On or before December 31, 1996, the Undersigned promises to pay to the
order of Bank $2,000,000.00 (Two million and no/100 U.S. Dollars), or so
much thereof as Bank in its discretion has advanced or readvanced and is
outstanding hereunder (being herein called "Principal Sum"), with interest as
stated below on the Principal Sum. Bank has established a revolving line of
credit for Undersigned from which Undersigned, subject to Bank's consent, may
obtain one or more loans from time to time, with the aggregate unpaid Principal
Sum of such loans actually advanced and remaining unpaid not to exceed the face
amount of this Note. Advances and readvances hereunder remaining unpaid from
time to time shall bear interest each day until paid at a daily periodic rate
corresponding to an annual percentage rate equal to 3 percent above Mercantile
Prime Rate (being herein called the "Index"). The daily periodic interest rate
will increase or decrease as the Index increases or decreases. Where Bank's
Prime Rate is used as the Index, the "Prime Rate" is one of several rates set
by Bank from time to time as an interest rate base for borrowings. Bank may
lend at rates above and below the Prime Rate. Interest shall be due and
payable Monthly on the first.
If Maker fails to pay any amount within 15 days after the date on
which it is due, Maker agrees to pay a late charge of the greater of $2 or 5%
of the delinquent amount. All payments will be applied in any manner we chose
except as otherwise required by applicable law. Generally, payments are
applied first to interest due; second to principal due; third to late charges;
fourth to any remaining interest and finally to the remaining principal.
Maker covenants to provide Bank such financial information as Bank may
request from time to time and authorizes Bank to make all inquiries it deems
necessary to verify the accuracy of the information provided, to protect and
maintain its assets in good condition and repair, free of all liens and
encumbrances, to keep its assets insured against loss by fire, theft and other
casualties as required by Bank in such amounts and by carriers satisfactory to
Bank, not to dispose of any assets except in the ordinary course of business,
and to pay all taxes and assessments when due.
Advances and readvances hereunder may be prepaid in whole or in part.
The fact that the balance hereunder may be reduced to zero from time to time
will not affect the continuing validity of this Note, and the balance may be
increased to the face amount of the Note after such reductions to zero. Bank
in its discretion may make an advance which causes the principal balance to
exceed the face amount of the Note and such excess shall be paid by the
Undersigned upon demand with interest as provided above.
Each of the following events shall constitute a default hereunder; (a)
the breach of any representation in or the failure of any Obligor (which term
shall include each Maker, endorser, surety and guarantor of any of the
Liabilities) to perform any covenant or agreement under any of the Liabilities
(which term shall include all obligations under this Note, and any renewals,
extensions or modifications thereof, and all other obligations of any kind of
Maker to Bank and to any other party to the extent of Bank's interest therein,
now or hereafter existing, including liabilities to Bank of Maker as a member
of any partnership or other group and whether incurred by Maker as principal or
otherwise); (b) the death of any Obligor; (c) the filing of any petition under
the Federal Bankruptcy Code or any similar Federal or state statute, by or
against any Obligor; (d) an application or the appointment of a receiver for,
the making of a general assignment for the benefit of creditors by, or the
insolvency of any Obligor; (e) commencement of any proceeding under any Federal
or state statute or rule providing for the relief of debtors, composition of
creditors, arrangement, reorganization, receivership liquidation or any similar
event by or against any Obligor; (f) the entry of a judgment against any
Obligor; (g) the issuing of any attachment or garnishment, or the filing of any
lien, against any property of any Obligor; (h) the suspension by any Obligor of
the transaction of such Obligor's usual business; (i) the merger or
consolidation of any corporate Obligor with any other corporation or the
transfer, disposition or encumbrance of all or a substantial part of the assets
of any Obligor; (j) if any Obligor misinformed or failed to inform Bank as to
any matter which the Bank deems material to a Liability; (k) the determination
by an officer of Bank that an adverse change has occurred in the financial
condition of any Obligor from the condition of such Obligor as heretofore most
recently disclosed to Bank by a financial statement or in any other manner. If
this Note is payable upon demand, demand may be made whether or not an event
has occurred.
To secure payment of the Liabilities, Bank is hereby granted a lien
and security interest in all property of any Obligor held now or hereafter by
Bank in any capacity and upon the occurrence of any default hereunder Bank
shall have the right, immediately and without further action by it, to set-off
against any of the Liabilities, all such property, and Bank shall be deemed to
have exercised such right of set-off and to have made a charge against such
property immediately upon the occurrence of such default even though such
charge is made or entered subsequently on the books of Bank.
A delay by Bank in exercising any right or remedy shall not constitute
a waiver. A waiver of a default, right or remedy shall not constitute a waiver
of a subsequent default, right or remedy. A single or partial exercise of a
right or remedy shall not preclude or constitute a waiver of any unexercised
right or remedy. Bank will not waive a default by accepting partial payment of
any amount due. All rights and remedies hereunder and under applicable laws
shall be cumulative. Every obligation of each Obligor is joint and several.
Bank may exercise its rights against Collateral or an Obligor without first
having recourse against any other collateral or Obligor.
Whenever any Obligor shall be in default hereunder, Bank at its option
(1) may cure the default at Maker's expense; (2) may refuse to make further
advances; (3) may declare any of the Liabilities immediately due and payable;
and (4) may exercise any or all rights and remedies available to it under the
Liabilities and applicable law.
Maker convenants to pay on demand, with interest until paid in full at
the rate imposed upon principal herein, all expenses incurred by Bank,
including legal fees, to cure any default herein, to enforce any provision of
the Liabilities or to exercise any right or remedy.
Each Obligor waives presentment, notice of dishonor, protest and all
other demands and notices in connection with any of the Liabilities and with
respect to any collateral and waives any right to trial by jury and further
agrees that the courts of the State of Maryland shall have personal
jurisdiction over it in any legal proceedings with respect to any of the
Liabilities. Each Obligor without further notice assents to all extensions of
the time of payment of any Liability or any other indulgence or modification of
a Liability, to any substitution, exchange or release of collateral and to the
addition or release of any Obligor, whether or not done for consideration, all
without in any way affecting its obligation. Bank may unjustifiably and
without reservation of rights impair any Obligor's recourse against another
obligor or collateral. Except when invalid or unenforceable by statute or
otherwise, each and every Obligor authorizes any attorney designated by Bank to
confess judgment in any Court of Record and authorizes Bank to instruct the
clerk of any Court of Record to confess judgment against such Obligor at any
time after this Note is due by its terms or upon default, for the unpaid
balance of this Note and interest payable thereon, together with court costs
and all other amounts payable to Bank pursuant hereto, including an attorney's
fees of 15% of the total sum due, provided, however, that any lien arising from
such confession of judgment shall not without further proceedings, apply or
attach to any real property as described in section 12-401(i) of the Maryland
Secondary Mortgage Loan Law as the same may be amended from time to time unless
this is a loan to a corporation or a commercial loan in excess of $75,000.00.
The Undersigned hereby authorizes the Bank to accept instructions by
telephone from any of the Undersigned or a duly authorized representative of
the Undersigned to make advances or receive a repayment hereunder. All
advances made hereunder shall be credited to the Undersigned's deposit account
with the Bank. The Undersigned agrees that the actual crediting of the sum of
money so borrowed to the Undersigned's deposit account shall constitute
conclusive evidence that the advance was made, and the failure of the Bank to
forward to the Undersigned an advice of credit shall not affect the obligation
of the Borrower to repay such advance.
436356-001 3/91
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This Note contains the full agreement of the parties and may be
modified only by a writing executed by the party to be charged.
This Note is executed and delivered the date above written as an
instrument under Seal, specifically intending it to be a specialty and shall be
governed by the Laws of the State of Maryland.
CORPORATIONS OR PARTNERSHIPS SIGN BELOW INDIVIDUALS SIGN BELOW
Trusted Information Systems, Inc. (SEAL) (SEAL)
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By /s/ XXXXXXX X. XXXXXX (SEAL) (SEAL)
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Xxxxxxx X. Xxxxxx, President
By (SEAL) (SEAL)
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GUARANTY
In consideration of the loan or forbearance evidenced by the foregoing
Note, the undersigned (jointly and severally) absolutely and unconditionally
guarantees to Bank and every subsequent holder of the Note (irrespective of its
genuineness, validity, regularity or enforceability or any other circumstance)
the prompt payment of the Note when due, according to its terms, which are
incorporated herein, and as they may be modified subsequently by any extension
or renewal, in whole or in part, any change in the interest rate or other term,
or the exchange, assignment, extension, waiver, modification or surrender of any
related right or security; and Bank and every subsequent holder of the Note at
its option may proceed in the first instance against the undersigned to collect
any obligation covered by this Guaranty, without first proceeding against any
Collateral or other Obligor.
Any debt of Borrower to the Undersigned, now or hereafter existing, is
and shall be subordinated to the indebtedness and liability herein guaranteed.
The Undersigned agrees not to assert any right, directly or by subrogation,
against the Borrower or any assets securing payment of the indebtedness or
liability herein guaranteed, so long as this Guaranty is outstanding.
Executed and delivered on the date of the foregoing Note under Seal
and specifically intending this to be a specialty, governed by the laws of the
State of Maryland.
CORPORATIONS OR PARTNERSHIPS SIGN BELOW INDIVIDUALS SIGN BELOW
/s/ XXXXXXX X. XXXXXX (SEAL)
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Name of Corporation or Partnership Xxxxxxx X. Xxxxxx
By (SEAL) (SEAL)
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By (SEAL) (SEAL)
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