Exhibit 10.1
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT, dated as of December 27, 2004 made by
and between CIMNET, INC., a Delaware corporation ("Borrower"), and Xxxx X.
Xxxxxxxxxx (the "Lender").
W I T N E S S E T H
WHEREAS, the Borrower wishes to borrow, and the Lender is willing to
lend to the Borrower, one hundred thirty thousand dollars ($130,000) (the
"Loan"); and
WHEREAS, as a condition to making the Loan the Borrower has agreed to
pledge the Collateral (as hereinafter defined) to the Lender, pursuant to the
terms and conditions hereof.
NOW THEREFORE, in consideration of the foregoing and the mutual
promises and covenants contained herein, the parties hereto agree as follows:
SECTION 1. Definitions of Terms Used Herein.
"Accounts Receivable" means any and all rights of the Borrower to
payment of accounts, whether due or to become due, whether or not earned by
performance, and whether now owned or hereafter acquired or arising in the
future, together with all rights, titles, securities and guarantees with respect
thereto and all related security interest, liens and pledges, whether voluntary
or involuntary. .
"Collateral" means all Accounts Receivable, Inventory, General
Intangibles, Instruments, Equipment and Proceeds.
"Equipment" means with respect to the Borrower existing, future-created
and future-acquired equipment, machines, trade fixtures, fixtures, tools, molds,
dies, stamps, appliances, office equipment, computer software, furniture, motor
vehicles and all proceeds and products of the above as well as all related
warranties, documents and insurance policies.
"General Intangible(s)" means with respect to the Borrower existing,
future-acquired and future created trade secrets, know-how,. inventions,
good-will, patents, applications for patents, renewals and continuation of
patents, reissues, trademarks, service marks, customer lists, copyrights,
software programs, manufacturing processes, inventions, patents rights of
payments from, or performance of, obligations by any Person, all intangible
property of any kind, all "general intangibles" of any kind as defined in the
Pennsylvania Uniform Commercial Code, and all rights, agreements, records and
documents relating to any of the property described in this provision.
"Instruments" mean all of the Borrower's existing, future created and
future-acquired "instruments" as that term is defined in the Pennsylvania
Uniform Commercial Code.
"Inventory" means any and all now owned or hereafter acquired
inventory, merchandise, raw materials, parts, supplies, work in process and
finished products Intended for sale, of every kind and description, including
extracted minerals, in the custody or possession, actual or constructive, of the
Borrower, including such inventory as is temporarily out of the custody or
possession of the Borrower and items in transit and including any returns upon
any accounts or other proceeds, including insurance proceeds, resulting from the
sale and disposition of any of the foregoing.
"Note" means that certain Secured Demand Note dated as of the date
hereof made by Borrower in favor of Lender on the aggregate principal amount of
$130,000, a form of which is attached hereto as Exhibit A.
"Proceeds" means any and all consideration received from the sale,
exchange, lease or other disposition of any asset or property which constitutes
Collateral, any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other person as a result
of the destruction, loss, theft or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral.
"Software" means all software programs owned, used or licensed by the
Company., including all user documentation associated therewith.
SECTION 1. Loan. Subject to the terms and conditions of this Agreement
and the Note, the Lender hereby lends to the Borrower the aggregate principal
amount of $130,000, in immediately available funds. Concurrent with the delivery
of the Loan to Borrower, Borrower shall execute and deliver the Note to Lender.
SECTION 2. Security Interest. To secure the prompt and complete payment
and performance of the obligations of the Borrower (the "Obligations") to the
Lender under this Agreement and the Note, the Borrower hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto the Lender and
hereby grants to the Lender its successors and assigns a continuing a security
interest in the Collateral and a first priority security interest in the
Software (collectively, the "Security Interest"), subject to the terms,
covenants and conditions herein set forth. Without limiting the foregoing, the
Lender is hereby authorized, to the extent permitted by applicable law, to file
one or more financing statements, continuation statements or other documents,
without the signature of the Borrower, for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest, naming
the Borrower as debtor and the Lender as secured party. The Borrower agrees at
all times to keep accurate and complete accounting records with respect to the
Collateral, including a record of all payments and Proceeds received. Lender
understands and acknowledges that Borrower's senior lender Sterling Financial
Bank has a first priority security interest in the Collateral, other than the
Software.
SECTION 3. Further Assurances. The Borrower agrees, at its expense, to
execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Lender may from time
to time reasonably request for the better assuring and preserving of the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
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delivery of this Agreement, the granting of the Security Interest created hereby
and the filing of any financing statements or other documents in connection
herewith. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be immediately pledged and delivered
to the Lender, duly endorsed in a manner satisfactory to the Lender. The
Borrower agrees to notify promptly the Lender of any change in its corporate
name or in the location of its chief executive office, its chief place of
business or the office where it keeps its records relating to the Accounts
Receivable owned by it. The Borrower agrees to notify promptly the Lender if any
material portion of the Collateral or Software is damaged or destroyed.
SECTION 4. Inspection and Verification. The Lender and such persons as
he may reasonably designate in a written notice provided to the Borrower shall
have the right, upon prior notice, at any reasonable time or times during the
Borrower's usual business hours, to inspect the Collateral and all records
related thereto (and to make extracts and copies from such records) and the
premises upon which any of the Collateral is located, to discuss the Borrower's
affairs with the officers of the Borrower and its independent accountants and to
verify under reasonable procedures the validity, amount, quality, value and
condition of, or any other matter relating to, the Collateral.
SECTION 5. Records of Accounts Receivable. The Borrower shall keep or
cause to be kept records of Accounts Receivable which are accurate in all
material respects.
SECTION 6. Use and Disposition of Collateral. The Borrower agrees that
it ill not sell, transfer or otherwise dispose of any of the Collateral outside
the ordinary course of business.
SECTION 7. Remedies on Default. In the event that the obligations of
the Borrower shall remain unpaid after the principal amount of and interest on
the Loan shall have been declared due whether at maturity or otherwise, in
accordance with the terms of the Note (an "Event of Default"), the Lender may
seize the Collateral and exercise any or all of its rights as a secured lender
including, without limitation, the rights granted to a secured lender under the
Pennsylvania Uniform Commercial Code. If any notification of intending
disposition of the Collateral is required by law, such notification, if mailed,
shall be deemed reasonably and properly given if mailed at least ten (10) days
before such disposition prepaid, addressed to the Borrower at the address of the
Borrower shown below.
SECTION 8. Application of Proceeds. The proceeds of the sale of the
Collateral in accordance with Section 7 hereof, if any, shall be applied: first,
to the payment of all costs and expenses of the collection of such moneys,
including all reasonable expenses, including reasonable legal fees, incurred by
the Lender; second, to the payment or reduction of the obligations owing by the
Borrower to the Lender under the Note; and third, to the Borrower, unless
otherwise directed by a court of competent jurisdiction.
SECTION 9. Continuing Security Interest. This Security Agreement shall
create a continuing security interest in the Collateral and shall remain in full
force and effect until payment in full of the Obligations.
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SECTION 10. Termination. This Security Agreement shall terminate as to
the Borrower when all of the Borrower's obligations secured hereby have been
fully paid and performed at which time the Lender shall release the Collateral
and deliver to the Borrower appropriate instruments of release.
SECTION 11. Entire Agreement. This Agreement (including the Exhibits
hereto) and the Note and other documents delivered pursuant to the this
Agreement contain the entire agreement among the parties with respect to the
transactions described herein, and supersede all prior agreements, written or
oral, with respect thereto.
SECTION 12. Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties hereto or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
SECTION 13. Binding, Effect, No Assignments. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors, assigns and legal representatives except that the Borrower shall
not, except in the ordinary course of business, be permitted to assign this
Agreement or any interest herein or in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect to the Collateral or
any part thereof, except as contemplated by this Agreement.
SECTION 14. Variations in Pronouns. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
context may require.
SECTION 15. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
SECTION 16. Exhibits and Schedules. All references herein to Sections,
subsections, clauses, Exhibits and Schedules shall be deemed references to such
parts of this Agreement, unless the context shall otherwise require.
SECTION 17. Severability of Provisions. If any provision or any portion
of any provision of this Agreement or the application of such provision or any
portion thereof to any Person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement, or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby.
SECTION 18. Governing Law. This Security Agreement, and the authority,
liabilities, duties and obligations of the Lender hereunder, shall be determined
in accordance with and governed by the laws of the Commonwealth of Pennsylvania,
without regard to the principles of conflict of laws.
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SECTION 19. Section Headings. The Section headings in this Security
Agreement are for convenience only and shall not affect the construction hereof.
SECTION 20. Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be given personally, telegraphed, telefaxed, sent by facsimile
transmission or sent by prepaid air courier or certified, registered or express
mail, postage prepaid. Any such notice shall be deemed to have been given (a)
when received, if delivered in person, telegraphed, telexed, sent by facsimile
transmission and confirmed in writing within three (3) Business Days thereafter
or sent by prepaid air courier or (b) three (3) Business Days following the
mailing thereof, if mailed by certified first class mail, postage prepaid,
return receipt requested, in any such case as follows (or to such other address
or addresses as a party may have advised the other in the manner provided in
this Section 20):
If to the Lender, to:
Xxxx X. Xxxxxxxxxx
00 Xxxxx Xx.
Xxxxxxxxx XX
Telephone Number: 000-000-0000
Telecopier Number:
If to the Borrower, to:
CIMNET, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, XX
Telephone Number: (000) 000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Loan and
Security Agreement to be fully executed and delivered as of the day and year
first above written.
CIMNET, INC.
By: /s/ XXXX XXXXX
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Xxxx Xxxxx
Vice President Integration Services
/s/ XXXX X. XXXXXXXXXX
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Xxxx X. Xxxxxxxxxx
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