Exhibit 4.3
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement (this "Agreement") is made and entered
into effective as of August 30, 2005 (the "Effective Date") by and between the
Lender, GCOM Consultants, Inc., a Florida corporation ("Lender"), and Security
Intelligence Technologies, Inc., a Florida corporation ("Borrower").
RECITALS
WHEREAS, the Lender agrees to loan certain sums to Borrower from time to
time, and Borrower wishes to borrow certain sums from the Lender, on and subject
to the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Lenders and Borrower hereby, intending to be legally bound by
the terms hereof, agree as follows:
1. Certain Definitions. As used herein:
1.1 The term "Business Day" means any day other than a Saturday,
Sunday, or other day on which commercial banks in New York, New York are
authorized or required by law to close.
1.2 The term "Credit Period" means that period of time beginning on
the Effective Date and ending on September 1, 2015.
1.3 The term "Loan Documents" means, collectively, this Agreement,
the Note (as defined below) executed and delivered pursuant hereto, and any
other documents executed or delivered by Borrower pursuant to this Agreement or
in connection with any Loan.
1.4 The term "Maturity Date" means that date on which the Lender
declares the entire unpaid principal amount and all accrued interest on each
outstanding Note immediately due and payable in full under Section 10.
1.5 The term "Monthly Payment" means the monthly amount of $4,410.47
Borrower has agreed to pay Lender during the term of this agreement.
2. Amount and Terms of Credit.
2.1 Commitment to Lend. (a) Subject to the terms and conditions of
this Agreement, and in reliance on the representations, warranties and covenants
of Borrower set forth in this Agreement, Lender agrees to make loans of funds to
Borrower during the Credit Period on a revolving basis (such loans being
collectively hereinafter referred to as "Loans" and each individually as a
"Loan"), in an aggregate cumulative total principal amount not to exceed six
hundred eighty thousand (US $680,000.00) dollars (the "Commitment").
2.2 Note. Borrower's indebtedness to Lender under each Loan advanced
by Lender under this Agreement will be evidenced by a separate Promissory Note
of Borrower in the form attached hereto as Exhibit "A" (the "Note"). The Note
will provide that interest on unpaid principal will accrue at a rate equal to
7.025% per annum (calculated on the basis of a 365/66-day year) compounded
annually (but in no event higher than the highest lawful rates).
2.3 Maturity. Loans made pursuant to this Revolving Credit Agreement
shall be payable on demand.
2.4 Prepayment. Borrower may at any time and from time to time on
any Business Day prepay any Loan in whole or in part. Each prepayment will be
applied as follows: (a) first, to the payment of interest accrued on all Loans
outstanding, and (b) second, to the extent that the amount of such prepayment
exceeds the amount of all such accrued interest, to the payment of principal on
such Loan or Loans as Borrower may designate.
2.5 Monthly Payment. Borrower has agreed to make Monthly Payments to
Lender of $4,410.47 during the term of this agreement. The monthly payment will
first be applied to outstanding interest, then to outstanding principal and the
balance is to be considered a fee for providing this Revolving Credit Agreement.
3. Representations and Warranties of Borrower. Borrower hereby represents
and warrants to Lender that:
3.1 Organization and Standing; Charter Documents. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, and has all requisite corporate power and authority to
own, lease and operate its properties and to conduct its business as such is
presently conducted and as proposed to be conducted. Borrower is duly qualified
to do business as a foreign corporation in good standing in any state or
jurisdiction in the United States in which it is required to be qualified to do
intrastate business as the Company's business is currently conducted, except for
jurisdictions in which failure to so qualify could not reasonably be expected to
have a material adverse effect on the business and operations of the Company
taken as a whole. True and accurate copies of the Certificate of Incorporation
(the "Charter") and Bylaws of Borrower, each as amended and currently in effect,
have been delivered to Lender and Lender's counsel.
3.2 Authorization. All corporate action on the part of Borrower and
its officers, directors and stockholders that is necessary for the
authorization, execution, delivery and performance of each of the Loan Documents
by Borrower has been taken; and each of the Loan Documents, when executed and
delivered by Borrower, will constitute valid and legally binding obligations of
Borrower, enforceable in accordance with their terms.
4. Conditions Precedent to Initial and All Loans. The obligation of Lender
to make each Loan will be subject to the satisfaction of all the following
additional conditions precedent:
4.1 No Event of Default. No event will have occurred and be
continuing, and no event would result from the making of such Loan, that would
constitute an Event of Default as defined herein.
4.2 Note. Lender will have received the Note representing such Loan,
executed by a duly authorized officer of Borrower.
4.3 Representations True. All representations and warranties of
Borrower contained in this Agreement or in any other Loan Documents will be
true, correct and complete in all respects with the same effect as though such
representations and warranties had been made on and as of the date such Loan is
actually advanced (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they will be true,
accurate and complete in all material respects as of such earlier date).
4.4 All Agreements Performed. All agreements, obligations,
conditions and covenants set forth in this Agreement and all other Loan
Documents to be performed by Borrower through the date such Loan is advanced
will have been duly performed and complied with in all respects.
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4.5 No Sale Transaction. No Sale Transaction shall have occurred. A
"Sale Transaction" shall be deemed to have occurred upon the happening of any of
the following events: (i) a merger or consolidation of the Borrower with or into
another issuer; or (ii) the exchange or sale of all or a portion of the
outstanding shares of the Borrower for securities of another issuer, or other
consideration provided by such issuer or another party to such transaction; and
in the case of either (i) or (ii), the Borrower's shareholders prior to the
transaction, do not possess, immediately after such transaction, more than 50%
of the voting power of the securities issued and outstanding of any one or more
of the following: (x) the Borrower; (y) such other issuer; or (z) such other
constituent party to the transaction; or a sale (other than in the ordinary
course of business) of more than 90% of the Borrower's assets to a third party
not an affiliate of the Borrower immediately prior to such transaction.
4.6 As of the Closing Date, the Borrower is a fully reporting
company with the class of securities registered pursuant to Section 12 (g) of
the Securities and Exchange Act of 1934.
4.7 No material adverse change in the Borrower's business or
business prospects shall have occurred after the date of the most recent
financial statements.
5. Other Covenants of Borrower. Borrower hereby covenants and agrees with
Lender as follows.
5.1 Financial and Other Information and Inspection. During the
Credit Period, Borrower will provide to Lender all the reports and rights
described below in this Section 9.1:
(a) Annual Financial Information. As soon as practicable after
the end of each fiscal year of Borrower, but no later than one hundred twenty
(120) days thereafter, an audited consolidated balance sheet of Borrower and its
subsidiaries as at the end of such fiscal year, and consolidated statements of
income and cash flows of Borrower and its subsidiaries for such year, prepared
in accordance with generally accepted accounting principles and setting forth in
each case in comparative form the financial statements for the previous fiscal
year, all in reasonable detail and audited and certified by independent public
accountants acceptable to Lender.
(b) Quarterly Financial Information. As soon as practicable
after the end of each fiscal quarter of Borrower, and in any event within
forty-five (45) days thereafter, an unaudited consolidated balance sheet of
Borrower and its subsidiaries as at the end of such quarter and consolidated
statements of income and cash flows of Borrower and its subsidiaries for each
such quarter and for the fiscal year to date, prepared in accordance with
generally accepted accounting principles, all in reasonable detail.
(c) Inspection Rights. The right to visit and inspect any of
the properties of Borrower or any of its subsidiaries, and to discuss its and
their affairs and finances with its and their officers, all at such reasonable
times and as often as may reasonably be requested by Lender.
(d) Other Information. With reasonable promptness, such other
information and data, including, without limitation, lists of property and
accounts, budgets, agreements with insurers, forecasts, tax returns and reports,
with respect to Borrower and its subsidiaries as may from time to time may be
reasonably requested by Lender, and all such other information and
communications (including, without limitation, notices of meetings of Borrower's
shareholders) as Borrower will have supplied to its holders of any shares of its
capital stock.
6. Events of Default of Borrower.
6.1 The occurrence of any of the following events will constitute an
"Event of Default ":
(a) Borrower fails to pay any principal or any accrued
interest under any Note or any Loan when the same is due and payable, or fails
to pay any amount of principal or accrued interest due under any Note or any
Loan on demand, and such failure to pay is not cured by Borrower within five (5)
calendar days after Lender gives written notice of such failure to pay to
Borrower;
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(b) any material representation or warranty made by or on
behalf of Borrower in this Agreement or in any other Loan Document, or any
statement or certificate that Borrower may at any time give in writing pursuant
thereto or in connection therewith is false, misleading or incomplete in any
material respect when made (or deemed to have been made);
(c) Borrower fails or neglects to perform, keep or observe any
covenant set forth in this Agreement or in any of the other Loan Documents, and
the same has not been cured within ten (10) calendar days after Borrower becomes
aware thereof;
(d) Borrower or any of its subsidiaries becomes insolvent, or
makes an assignment for the benefit of creditors, or applies for or consents to
the appointment of a receiver, liquidator, custodian or trustee for it or for a
substantial part of its property or business, or such a receiver, liquidator,
custodian or trustee otherwise is appointed and is not discharged within thirty
(30) calendar days after such appointment; or
(e) bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors are instituted by or against Borrower or any of its
subsidiaries, or any order, judgment or decree is entered against Borrower or
any such subsidiary decreeing its dissolution or liquidation; provided, however,
with respect to an involuntary petition in bankruptcy, such petition is not have
been dismissed within thirty (30) days after the filing of such petition.
6.2 Remedies of Lender. Upon and after the occurrence of any Event
of Default or Sale Transaction, Lender will have no further obligation to make
any Loan or Loans to Borrower, and in addition, at Lender's sole option by
written notice to Borrower, Lender take any one or more of the following
actions:
(a) Lender may immediately terminate the Commitment and all
liabilities and obligations of Lender under this Agreement, without affecting
Lender's rights under this Agreement and the Note(s);
(b) Lender may declare the entire principal amount of and all
accrued interest on the Note(s) and all Loans to immediately be due and payable
in full, whereupon such amounts will immediately become due and payable in full,
provided that in the case of an Event of Default listed in paragraph (d) or (e)
of Section 6.1, the principal and interest will immediately become due and
payable without the requirement of any notice or other action by Lender; and
(c) Exercise all rights and remedies granted under the Loan
Documents or otherwise available to Lender at law or in equity.
7. Security Interest
7.1 Security Interest. Borrower hereby grants to Lender a security
interest in all of its assets ("Collateral") including, but not limited to the
following: All inventory, accounts receivable, intellectual property rights
(patents, copyrights, and trademarks), general intangibles, contract rights, and
all products or proceeds of all the foregoing. The security interest provided
for in this paragraph "7.1" is to secure the performance of all of Borrower's
obligations under this Agreement. Notwithstanding the foregoing, the parties
acknowledge that there currently exists a lien on some or all of the Collateral
relating to Borrower's indebtedness to Xxx Xxxxx. As a condition of this
Revolving Credit Agreement Borrower will enter into a new loan agreement with
Xxx Xxxxx which subordinates Borrower's indebtedness to Jamil to this Revolving
Credit Agreement.
8. Miscellaneous.
8.1 Survival. The representations and warranties of Borrower
contained in or made pursuant to this Agreement and all the other Loan Documents
will survive the execution and delivery of the Loan Documents.
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8.2 Entire Agreement. This Agreement, the Note, and the exhibits and
schedules attached hereto constitute the entire agreement and understanding
among the parties with respect to the subject matter thereof and supersede any
prior understandings or agreements of the parties with respect to such subject
matter.
8.3 Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and assigns of the parties; provided, however, that neither party may
assign or delegate any of its rights or obligations hereunder or under any other
Loan Document or any interest herein or therein without the other party's prior
written consent.
8.4 No Third Party Beneficiaries; Construction. Nothing in this
Agreement, express or implied, is intended to confer upon any third party any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. This Agreement and
its exhibits are the result of negotiations between the parties and has been
reviewed by each party hereto; accordingly, this Agreement will be deemed to be
the product of the parties hereto, and no ambiguity will be construed in favor
of or against any party.
8.5 Governing Law. This Agreement will be governed by and construed
in accordance with the internal laws of the State of New York as applied to
agreements entered into solely between residents of, and to be performed
entirely in, such State, without reference to that body of law relating to
conflicts of law or choice of law.
8.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed in original, but all of which
together will constitute one and the same instrument.
8.7 Notices. Any notice required or permitted under this Agreement
will be given in writing and will be deemed effectively given upon personal
delivery; upon confirmed transmission by telecopy or telex; or three (3) days
following deposit with the United States Post Office, by certified or registered
mail, postage prepaid, addressed:
To Borrower:
Security Intelligence Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Fax: 000-000-0000
Attention: Chief Executive Officer
To Lender:
GCOM Consultants, Inc.
X/X Xxxxxx Xxxxx
00 Xxxxxxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
To The Address Set Forth In The Signature Page Hereto or at such other address
as such party may specify by written notice given in accordance with this
Section.
8.8 Modification; Waiver. This Agreement may be modified or amended
only by a writing signed by both parties hereto. No waiver or consent with
respect to this Agreement will be binding unless it is set forth in writing and
signed by the party against whom such waiver is asserted. No course of dealing
between Borrower and Lender will operate as a waiver or modification of any
party's rights under this Agreement or any other Loan Document. No delay or
failure on the part of either party in exercising any right or remedy under this
Agreement or any other Loan Document will operate as a waiver of such right or
any other right. A waiver given on one occasion will not be construed as a bar
to, or as a waiver of, any right or remedy on any future occasion.
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8.9 Rights and Remedies Cumulative. The rights and remedies of
Lender herein provided will be cumulative and not exclusive of any other rights
or remedies provided by law or otherwise.
8.10 Severability. Any invalidity, illegality or unenforceability of
any provision of this Agreement in any jurisdiction will not invalidate or
render illegal or unenforceable the remaining provisions hereof in such
jurisdiction and will not invalidate or render illegal or unenforceable such
provision in any other jurisdiction.
8.11 Attorneys' Fees. If any party hereto commences or maintains any
action at law or in equity (including counterclaims or cross-complaints) against
the other party hereto by reason of the breach or claimed breach of any term or
provision of this Agreement or any other Loan Document, then the prevailing
party in said action will be entitled to recover its reasonable attorney's fees
and court costs incurred therein.
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement
as of the Effective Date.
GCom Consultants, Inc. Security Intelligence Technologies, Inc.
/s/ Xxxxxx Xxxxx /s/ Xxxxx X. Xxxxxx
By: Xxxxxx Xxxxx By: Xxxxx X. Xxxxxx
Title: President Title: Chief Financial Officer
REVOLVING PROMISSORY NOTE
This Revolving Promissory Note (this "Note") is made and delivered
pursuant to that certain Revolving Credit Agreement dated as of August 30, 2005
between Borrower and Lender (as such terms are defined below), as such may be
amended from time to time (the "Credit Agreement"). Unless otherwise defined
herein, all capitalized terms used in this Note shall have the same meanings
that are given to such terms in the Credit Agreement, the terms of which are
incorporated into this Note by reference.
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1. Obligation. FOR VALUE RECEIVED, the undersigned, Security Intelligence
Technologies, Inc., a Florida corporation ("Borrower") hereby promises to pay to
the order of GCOM Consulting, Inc., a Florida corporation ("Lender" or "Holder")
on or demand (the "Maturity Date"), at Lender's principal place of business at
c/o Xxxxxx Xxxxx, 00 Xxxxxxxxx Xxxx, Xxxxx Xxxxxx, XX 00000, or at such other
place as Holder may direct, the principal sum of Six Hundred Eighty Thousand
($680,000.00) Dollars or so much thereof as may be advanced and outstanding,
together with all interest accrued on unpaid principal, to be computed on each
advance of a Loan from the date of its disbursement to Borrower, at a rate equal
to 7.025% per annum (calculated on the basis of a 365/66-day year), compounded
annually. As used herein, the term "Holder" shall initially mean Lender, and
shall subsequently mean each person or entity to whom this Note is duly
assigned. The outstanding unpaid principal balance of this Note at any time
shall be the total principal amounts advanced hereunder by Holder less the
amounts of payments of principal made hereon by Borrower, which balance may be
endorsed hereon from time to time by Holder in accordance with Section 2.
Payments of interest on this Note shall be payable on a quarterly basis, on the
last business day of each calendar quarter.
2. Recording of Loans and Payments. Holder is authorized to record on
Schedule A hereto, and on any continuation(s) of such Schedule that may be
attached to this Note: (a) the date and principal amount of each Loan advanced
by Lender under the Credit Agreement; and (b) the date and amount of each
payment or prepayment of principal and/or accrued interest of any Loan; which
recordation will constitute prima facie evidence of the accuracy of the
information so endorsed on Schedule A; provided however, that any failure to
record such information on such Schedule or continuation thereof will not in any
manner affect the obligations of Borrower to make payments of principal and
interest in accordance with the terms of this Note. Holder will promptly provide
Borrower with a copy of each recordation made by Holder on Schedule A attached
hereto.
3. Prepayment. Subject Prepayment of unpaid principal and/or interest due
under this Note may be made at any time without penalty as specified in the
Credit Agreement. Unless otherwise agreed in writing by Holder, all payments
will be made in lawful tender of the United States and will be applied (a)
first, to the payment of accrued interest, and (b) second, (to the extent that
the amount of such prepayment exceeds the amount of all such accrued interest),
to the payment of principal.
4. Waiver and Amendment. Any provision of this Note may be amended or
modified only by a writing signed by both Borrower and Holder. Except as
provided below with respect to waivers by Borrower, no waiver or consent with
respect to this Note will be binding or effective unless it is set forth in
writing and signed by the party against whom such waiver is asserted. No course
of dealing between Borrower and Holder will operate as a waiver or modification
of any party's rights or obligations under this Note. No delay or failure on the
part of either party in exercising any right or remedy under this Note will
operate as a waiver of such right or any other right. A waiver given on one
occasion will not be construed as a bar to, or as a waiver of, any right or
remedy on any future occasion.
5. Waivers of Borrower. Borrower hereby waives presentment, notice of
non-payment, notice of dishonor, protest, demand and diligence. This Note may be
amended only by a writing executed by Borrower and Holder.
6. Governing Law. This Note will be governed by and construed in
accordance with the internal laws of the State of New York as applied to
agreements between residents thereof to be performed entirely within such State,
without reference to that body of law relating to conflict of laws or choice of
law.
7. Severability; Headings. The invalidity or unenforceability of any term
or provision of this Note will not affect the validity or enforceability of any
other term or provision hereof. The headings in this Note are for convenience of
reference only and will not alter or otherwise affect the meaning of this Note.
8. Jurisdiction; Venue. Borrower, by its execution of this Note, hereby
irrevocably submits to the in personam jurisdiction of the state courts of the
State of New York and of the United States District Court for the Southern
District of New York that are located in New York, New York, for the purpose of
any suit, action or other proceeding arising out of or based upon this Note.
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9. Attorneys' Fees. If suit is brought for collection of this Note,
Borrower agrees to pay all reasonable expenses, including attorneys' fees,
incurred by Holder in connection therewith whether or not such suit is
prosecuted to judgment.
10. Assignment. This Note is not assignable by Holder without the written
consent of Borrower. This Note may not be assigned or delegated by Borrower,
whether by voluntary assignment or transfer, operation of law, merger or
otherwise.
11. Credit Agreement. This Note incorporates by reference all the
provisions of the Credit Agreement, including but not limited to all provisions
contained therein with respect to Events of Default, waivers, remedies and
covenants, Conversion Rights, and the description of the benefits, rights and
obligations of each of Borrower and Holder under the Credit Agreement.
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and
year first above written.
BORROWER
SECURITY INTELLIGENCE TECHNOLOGIES, INC.
/s/ Xxxxx X. Xxxxxx
----------------------------------------
By: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
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