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EXHIBIT 99.8
[LNB INVESTMENT CORP LOGO]
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FINANCE AGREEMENT
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FA-DGSI/LNB 101
page one of four
This Agreement, entered into the date last executed, by and between LNB
Investment Corporation (hereinafter known as "Administrator") with offices at
Woodland Falls Corporate Park, 000 Xxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx, Xxx
Xxxxxx 00000 and Digital Solutions Inc. (hereinafter known as "Borrower") with
offices at 0000-X Xxxxxx Xxxx, Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000.
WITNESSETH
Whereas, the Borrower is legally entitled to pledge and/or use as collateral
five million three hundred fifty thousand (5,350,000) shares of
free-trading common Digital Solutions, Inc. stock. The approximate
market value of the collateral shares is twelve million ($12,000,000.00)
U.S. Dollars (hereinafter collectively the "Stock"), and
Whereas, the Borrower and the Administrator (hereinafter jointly known as
"Parties") are interested in collateralizing the Stock for the purpose
of obtaining financing, through third party banking sources, and
Whereas, the Parties are desirous in entering into this Agreement in
connection with said third party financing,
Whereas, the Agreement shall be in force for a period of fifteen (15) months:
Now, therefore, in consideration of the mutual covenants and representations
contained herein and intending to be legally bound the Parties hereto agree
as follows:
Article I - Purpose
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1.1 The Borrower will simultaneously execute the stock powers and Powers of
Attorney granting Xxxxx X. Xxxxxxx the ability to deposit the Stock
along with the execution of this Agreement.
1.2 The Administrator shall use the Stock expressly as collateral for the
funding. The Stock will be deposited with Xxxxxx & Co., or a bank of
equivalent stature (hereinafter known as the Broker"). The Stock shall
remain on deposit with the Broker for the life of this Agreement. The
Administrator shall acquire a margin loan utilizing its existing stock
portfolio. The Broker shall bank wire the funds to the Administrator.
At the end of fifteen (15) months the Administrator shall return the
Stock free and clear of any liens and encumbrances, unless renewed.
1.3 Prior to the deposit of the Stock the Borrower shall submit certified
copies of the Stock, intended to be deposited, to the Administrator,
who will then forward the certified copies and any other required
documentation to the Broker for their review. The Borrower will be given
all necessary information to perform a verbal verification of the
transaction with the Broker.
Article II- Loan
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2.1 The Borrower shall receive a total loan in the amount of three million
($3,000,000.00) U.S. Dollars over the term of this Agreement, in three
(3) equal portions. For each one million ($1,000,000.00) USD the
Borrower shall deposit one million seven hundred eighty three thousand
three hundred thirty four (1,783,334) shares of collateral stock. The
Borrower must wait a minimum thirty (30) days before requesting the next
portion of the funding. The Borrower must make a written request fifteen
(15) business days prior to the date at which funding is desired. The
Borrower may only obtain funding during the first twelve (12) months of
this Agreement. The Borrower prior to funding will execute a Promissory
Note, for each portion of the total loan borrowed, to the Administrator.
As part of the terms of the Promissory Note the Borrower agrees to the
following terms:
a) The term shall be for a period of fifteen months - renewable.
Borrower /s/ GJE Administrator /s/ BRG
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10/24/95
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[LNB INVESTMENT CORP LOGO]
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FINANCE AGREEMENT
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FA DGSI/LNB 101
page two of four
Article II - 2.1 cont'd.
b) If the Borrower elects to renew the loan there will be a renewal fee
of two percent (2%) to be paid at the time of renewal.
c) The initial interest rate will be a minimum 9.875% annum, adjusted
every five (5) months, based on the Prime Index plus one percent
(1%) as listed in the daily Wall Street Journal. The interest will
be paid monthly in arrears.
d) A thirty (30) day restriction on loan prepayment. The Borrower may
prepay the loan at the end of the 30 day restriction with the
following conditions:
(i) All applicable terms and conditions are satisfied.
(ii) The Borrower must notify the Administrator with its
intentions and details of remuneration within five (5)
days prior to prepayment.
2.2 The Borrower shall be responsible for the principal repayment, of three
million ($3,000,000.00) USD, and interest and fees (see
Article II - 2.1.b, c,2.4), if the Borrower has exercised the entire
funding capacity of this Agreement. The Borrower shall only be
responsible for the actual principal amount borrowed, plus fees and
interest respectively (see Article II - 2.1.b,c,2.4)
2.3 The funding will be held within five (5) business days of the receipt
of Stock by the Broker.
2.4 The Borrower shall be responsible for all fees associated with the
funding. The fees based on percentages will be deducted directly from
the gross loan and distributed by the Administrator at the loan
closing. The fees will be deducted respectively from each portion of
the funding at the time of each funding. The fee schedule is as follows:
Xxxxxxx X. Xxxxx (hereinafter "Agent") - receives one percent (1%) of
the gross loan
Administrator - receives a fee of three percent (3%) of the gross loan
- at the end of 12 months one-half percent (1/2%) of the
outstanding balance
- 25,000 warrants at the initial funding, based on the
current bid price on the day of funding
2.5 The Borrower may request a renewal of the term thirty (30) days prior
to maturity. The renewal shall cause the terms of this Agreement to
remain in full force for an additional period of fifteen (15) months.
The Borrower shall pay to the Administrator a two percent (2%) renewal
fee.
Article III - Warranties & Guarantees
3.1 The Administrator will instruct the Broker, in the event the loan is
not funded, the Broker will voluntarily return the securities to the
Borrower and additionally instruct the Broker that the Stock can not
be sold and/or traded, except in the event of a default on the loan
and/or failure to maintain the margin (as prescribed in Article
III - 2.3, 3.3). The Administrator will provide written
acknowledgement from the Broker on the above instructions.
3.2 In the event of a default on the loan the Borrower will remunerate the
entire balance of the loan, inclusive of interest and any costs
incurred by the Administrator to cure the loan default.
a) The loan will be considered in default by any number and/or
combination, but not limited to the following:
(i) principal and/or interest payments are not made in a
timely manner
(ii) failure to fund a margin call
b) In the event of default the Stock will be sold, the proceeds from
the sale of the Stock shall be applied to the outstanding amount of the loan. A
five percent (5%) penalty will be charged against the outstanding balance and
deducted from any remaining proceeds after the loan has been satisfied. After
the loan and penalties are satisfied any remaining proceeds and/or stock will
be given to the Borrower within five business days of said satisfaction.
Borrower /s/ GJE Administrator /s/ BRG
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[LNB Investment Corp LOGO]
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FINANCE AGREEMENT
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FA-DGSI/LNB,101
page three of four
3.3 In the event the market value of the Stock should drop twenty-five
percent (25%), the margin is based on the market value of the Stock at
the time of funding, per share the Borrower will be notified of a
margin call. The Borrower will be required by the Broker to fund the
margin by depositing enough shares of free-trading stock as to maintain
the 25% margin maintenance level. Upon written notification the Borrower
will have five (5) business days to cover the margin call. If the
Borrower does not cover the margin in the time allotted the loan will be
considered in default, and a demand for immediate remuneration of the
full balance of the loan will be made.
3.4 The Administrator will not at any time sell or trade the Stock on
deposit, except in the event of default.
3.5 The Stock will be returned to the Borrower within five (5) business
days of the full balance of the loans repayment, inclusive of interest
and fees. The Administrator shall return the Stock free and clear of
all liens and encumberances.
3.6 The Borrower shall indemnify the Administrator against a bankruptcy
filing. The Borrower agrees this entire Agreement is bankruptcy exempt.
3.7 In the event the Administrator changes the Broker venue, the Borrower
will be notified in writing fifteen (15) days in advance.
Article IV -- Non-Circumvention -- Non-Disclosure
4.1 The Parties acknowledge in the course of the activities of this
Agreement the Parties may receive from the other party hereto certain
confidential business and technical information, without limitations.
Each party further acknowledges the information to be furnished by the
other party hereto is valuable property belonging to the disclosing
party and the improper disclosure of such information would irrevocably
damage the business and property of the circumvented party. All
Parties hereto agree to abide by the rules of non-circumvention and
non-disclosure during the period of this Finance Agreement and for
five (5) years from the termination date hereof. This covenant and
Agreement shall survive termination of this Agreement for any reason
whatsoever. That in the event of circumvention by either party, directly
or indirectly, the circumvented party shall be entitled to a legal
monetary penalty equal to the maximum service it should realize from
such transaction(s) plus all expenses, including legal, that would
involve the recovery of these funds.
Article V -- Miscellaneous
5.1 Confidentiality is an expressed term of this Agreement and all dealings
between the Parties to this Agreement. The Parties agree to keep
confidential all aspects of this Agreement, except as required by law.
5.2 The Agreement together with all Attachments and Powers of Attorney
constitutes the entire Agreement between the Parties and except as may
be expressly set forth in this Agreement, any representations,
warranties, agreements, covenants whether written or verbal, not
contained herein are null and void.
5.3 A copy of this Agreement, or any other documents executed and/or signed
by any of the Parties hereto and sent to another party hereto by
facsimile transmission (fax) carries the full force and effect as if it
were the hand delivered originals.
5.4 All questions arising thereunder and the rights of the Parties shall be
construed in accordance with the laws of the United States of America.
Borrower /s/ GJE Administrator /s/ BRG
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10/24/95
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[LNB Investment Corp LOGO]
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FINANCE AGREEMENT
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FA-DGSI/LNB.101
page four of four
5.5 In the event any provision of this Agreement is deemed unenforceable
such determination shall not affect any of the other provisions herein.
Any disputes between the Parties which remain unresolved, a resolution
will be determined by the American Arbitration Association. This
determination will be binding on all Parties.
5.6 This Agreement may not be terminated or changed orally, but only by an
instrument in writing signed by the Parties. The Parties may terminate
this Agreement if either party fails to perform in accordance with the
terms set forth in this Agreement. The party desirous in terminating
this Agreement must give notice in writing. Such notice shall state the
default and require that said party must remedy the default within five
(5) business days or this Agreement shall be terminated without
prejudice.
5.7 Each Party acknowledges that they have had adequate time and opportunity
to consult with legal and financial counsel of their choosing prior to
the execution hereof, that they fully understand the facts, commitments,
and requirements hereof, and that they, having been so advised and
informed, have executed this Agreement freely and without reservation.
In Witness Whereof, this Agreement has been executed by the Parties hereto
the last date executed below.
DIGITAL SOLUTIONS INCORPORATED
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by: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President 10/24/95
STATE OF New Jersey)
) ss.:
COUNTY OF Middlesex)
On the 24th day of October, 1995, before me personally came Xxxxxx X. Xxxxxx, to
be known, who, being by me duly sworn, did depose and say that the corporation
described in and which executed the foregoing instrument; and the s(he) signed
his/her name thereto by order of the board of directors of said corporation.
/s/ Xxxxxxx Xxxxxx Xxxxx
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Notary Public of New Jersey
My commission expires Aug. 3, 1999
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LNB INVESTMENT CORPORATION
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by: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
The foregoing document was executed before me this 26th day of October 1995.
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx GLOUCESTER COUNTY
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Notary Public Print Name NOTARY PUBLIC
My Commission Expires: 12-4-97
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[LNB Investment Corp Logo]
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RENEWAL AGREEMENT
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RA-DGSI/LNB, 101
page one of one
I/We____________________ do hereby formally request LNB Investment Corp. to
renew Finance Agreement documents (FA/PA-DGSI/LNB 101), account number
__________, which was originated on _______________, in the amount of
$_________.
I/We do hereby agree to the renewal fee of ___% of the gross loan amount.
I/We do hereby agree to accept the terms and conditions of the original loan
documents as one in the same for this renewal.
The interest rate will be based on the Prime Index at the time of renewal, plus
one percent, and adjusted semi annually.
IN WITNESS WHEREOF, this agreement has been executed on the dates set forth
next to the signatures below.
By: ________________________________
Xxxxxx X. Xxxxxx, President
STATE OF )
) ss.:
COUNTY OF )
On the _____th day of _____________, 19 ____, before me personally came,
____________________ to me known, who, being by me duly sworn, did depose and
say that the corporation described in and which executed the foregoing
instrument; and the s(he) signed his/her name thereto by order of the board of
directors of said corporation.
_____________________________________ ____________________________________
Notary Public Print Name
My Commission Expires:
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[LNB Investment Corp]
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POWERS OF ATTORNEY
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PA-DGSI/LNB,101
page one of one
I, the undersigned, Xxxxxx X. Xxxxxx, on behalf of Digital Solutions, Inc. with
full legal responsibility, confirms and declares that LNB Investment Corp.
represented by Xx. Xxxxx X. Xxxxxxx is fully authorized by me and on my behalf
to negotiate the necessary arrangements for the opening and managing of a stock
account with Xxxxxx & Co., or another bank of equivalent stature, for the
deposit of 5,350,000 shares of free-trading stock. This Powers of Attorney
allows Xx. Xxxxx X. Xxxxxxx to manage the stock account. This Powers of
Attorney is specifically for the handling and compliance of the Finance
Agreement, between LNB Investment Corp. and Digital Solutions, Inc. concerning
the deposit of Digital Solutions, Inc. stock shares, excluding any other events
affair or transactions and goods which belong to or refer to Xxxxxx X. Xxxxxx
and Digital Solutions, Inc.
This Power of Attorney does not allow the attached listed assets to be sold
and/or be traded.
This document is an operable instrument and will remain in force and effect for
one (1) year and one (1) month from the issuing date.
By: /s/Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
The foregoing instrument was acknowledged before me this 24th day of October,
1995.
/s/ Xxxxxxx Xxxxxx Xxxxx
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Notary Public XXXXXXX XXXXXX XXXXX
NOTARY PUBLIC OF NEW JERSEY
MY COMMISSION EXPIRES AUG. 3, 1999
Xxxxxxx Xxxxxx Xxxxx
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Notary Name
My Commission Expires: 8/3/99
