Exhibit 4
LOAN AND SECURITY AGREEMENT
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THIS LOAN AND SECURITY AGREEMENT, dated as of October 1, 1998, by and
between Allin Communications Corporation, a Delaware corporation, Allin
Interactive Corporation, a Delaware corporation, Allin Digital Imaging Corp., a
Delaware corporation, Kent Consulting Group, Inc., a California corporation,
Netright, Inc., a California corporation, Allin Holdings
Corporation, a Delaware corporation, and KCS Computer Services, Inc., a
Pennsylvania corporation, all with their current mailing address being c/o Allin
Communications Corporation, 000 Xxxxxxxxx Xxxxxxx, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 (collectively, jointly and severally,
hereinafter called the "Borrower")
A
N
D
S&T BANK, a Pennsylvania banking association, with its principal office located
at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, (the "Bank");
RECITALS:
The Borrower has requested that the Bank extend credit to the Borrower as
described in this Agreement. The Bank is willing to extend such credit to the
Borrower on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained in this Agreement, and intending to be legally bound, the
parties agree as follows (all capitalized terms used herein, to the extent not
defined in the section of the Agreement wherein first used, are defined in
Article IX "Definitions", herein):
ARTICLE I
THE LOAN FACILITY
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1.1 Revolving Credit Loans. Subject to the terms and conditions and
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relying upon the representations and warranties set forth in this Agreement,
including the Borrower's Data Report and the other Loan Documents, the Bank
agrees to make loans (the "Revolving Credit Loans") to the Borrower at any time
or from time to time on or after the date of this Agreement and to and including
the day immediately preceding the Expiration Date in an aggregate principal
amount not exceeding at any one time outstanding the Borrowing Base (as
described in Section 1.2 of this Agreement). If at any time the sum of all
Revolving Credit Loans outstanding exceeds the Borrowing Base, the Borrower
shall immediately repay to the Bank, in funds immediately available, the amount
of such excess together with all accrued interest on the amount of such
repayment. The obligations of the Borrower to repay the unpaid principal amount
of the Revolving Credit Loans and to pay interest on the unpaid principal amount
will be evidenced in part by a revolving credit note of the Borrower in
substantially the form attached as Exhibit A to this Agreement, or by any
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extension, renewal, refinancing, or refunding in whole or in part, of such
revolving credit note. The Borrower shall use the proceeds of the Revolving
Credit Loans to satisfy a portion of that certain seller's note to Xxxxx X.
Xxxxx, Xx. in the original principal amount of $6,200,000.00 and for general
working capital purposes.
1.2 Borrowing Base.
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(a) Borrowing Base Calculation. The maximum borrowing availability
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under this Agreement applicable to the Revolving Credit Loans shall be equal on
any day during the term of this Agreement to the lesser of (i) Five Million
Dollars ($5,000,000.00), or (ii) eighty-five percent (85%) of the aggregate
gross amount of Qualified Accounts (the lesser of the amounts described in
clauses (i) and (ii) of this sentence is sometimes referred to in this Agreement
as the "Borrowing Base").
(b) "Qualified Accounts" means an account receivable, net of any
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prepayments, progress payments, deposits and retentions, owing to the Borrower
which met the specifications established from time to time by the Bank, in its
sole and absolute discretion, at the time it came into existence and continues
to meet such specifications until it is collected in full. As of the date of
this Agreement, an account receivable, to be a Qualified Account, must meet the
following specifications at the time it comes into existence and continue to
meet such specifications until it is collected in full:
(i) The account is not more than sixty (60) days from the date of the
invoice on net thirty (30) days or similar commercially reasonable terms or more
than ninety (90) days from the date of invoice for Allin Interactive Corporation
invoices;
(ii) The account arose from the performance of services or an outright
sale of goods by the Borrower in the ordinary course of the Borrower's business
and such goods have been shipped, or services provided, to the account debtor
and the Borrower has possession of, or, if requested by Bank, has delivered to
the Bank, in the case of goods, shipping and delivery receipts evidencing such
shipment and, in the case of services, receipts or other evidence satisfactory
to the Bank that such services have been provided;
(iii) The account is not subject to any prior assignment, claim, lien,
or security interest, and the Borrower will not make any further assignment of
the account or create any further security interest in the account, nor permit
its rights in the account to be reached by attachment, levy, garnishment or
other judicial process.
(iv) The account is not subject to setoff, credit, allowance or
adjustment by the account debtor, except discounts allowed for prompt payment,
and the account debtor has not complained as to his liability on the account and
has not returned, or retained the right to return, any of the goods from the
sale of which the account arose;
(v) The account does not arise from a sale of goods that are delivered
or to be delivered outside the United States of America, unless the account
debtor of Allin Interactive Corporation is domiciled in the United States of
America; or from a sale of goods to an account debtor domiciled outside of the
United States of America unless the Borrower has arranged letter of credit
facilities satisfactory to the Bank in its discretion;
(vi) The account arose in the ordinary course of the Borrower's
business and did not arise from the performance of services or a sale of goods
to a supplier, an employee or an Affiliate of the Borrower;
(vii) The account does not arise with respect to an account debtor
from whom fifty percent (50%) or more of the accounts are more than sixty (60)
days from the date of the invoice on net thirty (30) days or similar
commercially reasonable terms;
(viii) The account does not arise out of contracts with the United
States or any State or political subdivision thereof, any department, agency, or
instrumentality of the United States, any State or any political subdivision,
unless the Borrower has executed any instruments and taken any steps required by
the Bank in order that all monies due and to become due under such contracts
shall be assigned to the Bank and notice thereof given to the government to the
extent required under the Federal Assignment of Claims Act or under any similar
State or local law;
(ix) The account does not arise with respect to an account debtor
located in New Jersey or Minnesota (or any other state which enacts a similar
filing requirement) if the Borrower has not filed a
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Notice of Business Activities Report with the New Jersey Division of Taxation or
made the requisite filings with the appropriate authorities in Minnesota (or any
such other state), for the current year;
(x) The account does not constitute a finance charge or lease
receivable;
(xi) No notice of bankruptcy, insolvency or material adverse change of
the account debtor has been received by or is known to the Borrower;
(xii) The Account does not relate to or arise from a service or
maintenance contract for future services or an obligation to supply goods or
materials which has a term for performance of more than thirty (30) days, except
that Accounts for goods and services to be provided by Allin Interactive
Corporation may extend a term for performance not to exceed ninety (90) days;
and
(xiii) The Bank has not notified the Borrower that the Bank has
determined that in its discretion the account or account debtor is
unsatisfactory. The Bank may require that certain reserves be established
against certain accounts receivable from time to time.
(c) Account Warranties. With respect to all accounts from time to time
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scheduled, listed or referred to in any certificate, statement or report
delivered to the Bank as "Qualified Accounts", the Borrower warrants and
represents to the Bank that (i) the accounts satisfy all specifications at that
time established by the Bank for Qualified Accounts; (ii) the accounts are
genuine, are in all respects what they purport to be, and are not evidenced by a
note, instrument or judgment; (iii) no payments have been or will be made on the
accounts except payments delivered to the Bank pursuant to this Agreement; and
(iv) there are no facts, events or occurrences which in any way impair the
validity or enforcement of any account or tend to reduce the amount payable
under any account as shown on statements delivered to the Bank with respect to
any account. The Borrower shall immediately notify the Bank in the event that
any such account ceases to satisfy the above representations and warranties.
1.3 Making of Revolving Credit Loans. On any Business Day when the
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Borrower desires that the Bank make a Revolving Credit Loan, the Borrower shall
provide notice to the Bank by completing, executing and delivering to the Bank,
by 11:00 a.m. Eastern Standard Time, a completed Borrowing Base Certificate, on
the Bank's then standard form (the "Borrowing Base Certificate"), setting forth
the borrowing base calculations for the Borrower (the "Borrowing Base
Calculations"), together with the appropriate backup documentation and evidence
and, if necessary to revise or update information provided in the Borrower's
Data Report. Subject to the terms and conditions of this Agreement, upon the
Bank's review, approval and processing of the Borrowing Base Certificate and any
other information requested by the Bank, Bank shall make the proceeds of the
Revolving Credit Loan available to the Borrower at the Bank's office. The Bank
shall have no obligation to make any Revolving Credit Loan for so long as any
Event of Default (as defined in Article VII hereof) or any Potential Default
shall have occurred and shall be continuing.
1.4 Interest Rate
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(a) Interest Rate on Revolving Credit Loans. The unpaid principal
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amount of the Revolving Credit Loans shall bear interest for each day until due
at a rate per year equal to the Prime Rate for such day plus one percent (1.0%),
such interest rate to change automatically from time to time effective as of the
effective date of each change in the Prime Rate, without notice to Borrower (the
"Applicable Interest Rate").
If the Prime Rate is no longer available, Bank shall choose a new rate
which is based on comparable information, in its reasonable discretion.
(b) Interest After Default. After the principal amount of any part of
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the Loans shall have become due (at maturity, by acceleration or otherwise) or
upon the occurrence of one or more of the Events of Default (and for so long as
any such Event of Default shall continue), as compensation to the Bank for the
increased cost of administering the Loans, the Loans will bear interest for each
day until paid (before and after judgment) at a
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rate per year which will be two percent (2.0%) above the then effective
Applicable Interest Rate, but not to exceed the highest rate permitted by law.
(c) Usury. In the event the rates of interest provided for in this
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Agreement (including any Supplement) are finally determined by an Official Body
to exceed the maximum rate of interest permitted by applicable usury or similar
Laws, their or its application will be suspended and there will be charged
instead the maximum rate of interest permitted by such Laws.
(d) Computation of Interest. Interest on the Loans shall be computed
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on the basis of a 365 day year and the actual number of days elapsed in a period
during which it accrues. In computing interest on any Loan, the date of the
making of the Loan shall be included and the date of payment shall be excluded
if payment is received on or before the time specified in the following section.
The Borrower shall, however, be charged for one day's interest for any Loan made
and repaid in the same day.
1.5 Payments. Borrower shall pay monthly installments of interest only on
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the principal amount outstanding under the Loan, commencing on the later of (i)
November 1, 1998 or (ii) the first day of the first month following any advance
of the proceeds of the Loan, and continuing until the Expiration Date, as
hereinafter defined. If not sooner paid, the entire unpaid principal balance of
the Loan, together with all accrued but unpaid interest thereon and all other
sums and costs advanced, incurred or otherwise outstanding hereunder, shall be
immediately due and payable on the Expiration Date. All payments to be made in
respect of principal, interest, fees or other amounts due from the Borrower
under this Agreement or under the Notes are payable at 12:00 noon, Eastern
Standard Time, on the day when due, without presentment, demand, protest or
notice of any kind, all of which are expressly waived, and an action for the
payments will accrue immediately. All such payments must be made to the Bank at
its Office in U.S. dollars and in funds immediately available at such Office,
without setoff, counterclaim or other deduction of any nature. Interest on the
Loans will be due and payable on the first day of each month in arrears,
commencing on November 1, 1998. All such payments shall be applied to accrued
and unpaid interest, outstanding principal and other sums due under this
Agreement in such order as the Bank, in its sole discretion, shall elect. On or
after the fifteenth day after any such payment shall be due, the Bank may, but
shall not be obligated to deduct the amount of such payment from any
disbursement account maintained by the Borrower with the Bank.
1.6 Indemnity. The Borrower will indemnify the Bank against any loss or
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expense which the Bank sustains or incurs as a consequence of an Event of
Default, including, without limitation, any failure of the Borrower to pay when
due (by demand or otherwise) any principal, interest, commitment fee or any
other amount due under this Agreement or the other Loan Documents. If the Bank
sustains or incurs any such loss or expense it will from time to time notify the
Borrower in writing of the amount determined in good faith by the Bank (which
determination will be presumptively deemed correct absent manifest error), to be
necessary to indemnify the Bank for the loss or expense. Any amount payable to
the Bank under this Section will bear interest at the Prime Rate plus three
percent (3.0%) per year until paid (before and after judgment).
1.7 Commitment Fee. Bank acknowledges that Borrower has paid to it a
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Commitment Fee equal to Thirty Five Thousand Dollars ($35,000.00).
ARTICLE II
SECURITY AGREEMENT
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2.1 Security Interest.
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(a) As security for the full and timely payment of the Bank Debt (as
hereinafter defined in Section 2.1(c)) in accordance with the terms of the Notes
and of this Agreement and the performance of the obligations of the Borrower
under this Agreement and the other Loan Documents, the Borrower agrees that the
Bank shall have, and the Borrower grants to and creates in favor of the Bank, a
security interest under the Code in and to such of the Collateral (as
hereinafter defined in Section 2.1(d)) as is now or in the future owned or
acquired by the Borrower.
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(b) The security interest in the Collateral granted to the Bank in
this Agreement shall be a perfected first priority security interest in the
Collateral, prior and superior to the rights of all third parties in the
Collateral existing on the date of this Agreement or arising after the date of
this Agreement, except as otherwise provided in this Agreement. The Borrower
has not and shall not grant any other security interest to any other party other
than Bank in the Collateral currently located or to be located on cruise ships,
but no representation is made as to the perfection of said security interest.
(c) "Bank Debt" means (i) all indebtedness, both principal and
interest, of the Borrower to the Bank now or after the date of this Agreement
evidenced by any Notes executed and delivered by the Borrower in connection with
this Agreement (including any Supplement), (ii) all other debts, liabilities,
duties and obligations of the Borrower to the Bank now existing, and as the same
shall be modified or amended, whether arising under or in connection with the
Loan Documents or arising under any other agreement, instrument or undertaking
made by or for the benefit of the Borrower to or for the benefit of the Bank
including, without limitation, all reimbursement and other obligations arising
under or with respect to the Letters of Credit, (iii) all costs and expenses
incurred by the Bank in the collection of any of the indebtedness described in
this paragraph or in connection with the enforcement of any of the duties and
obligations of the Borrower to the Bank described in this paragraph, including
reasonable attorneys' fees and legal expenses, and (iv) all future advances made
by the Bank for the maintenance, protection, preservation or enforcement of, or
realization upon, the Collateral or any portion of the Collateral, including
advances for storage, transportation charges, taxes, insurance, repairs and the
like.
(d) "Collateral" shall mean collectively the Accounts, Chattel Paper,
Documents, Equipment, General Intangibles, Instruments, Inventory, and Proceeds
of each of them. "Accounts" shall have the meaning given to that term in the
Code and shall include without limitation all rights of the Borrower, whenever
acquired, to payment for goods sold or leased or for services rendered, whether
or not earned by performance. "Chattel Paper" shall have the meaning given to
that term in the Code and shall include without limitation all writings owned by
the Borrower, whenever acquired, which evidence both a monetary obligation and a
security interest in or a lease of specific goods. "Documents" shall have the
meaning given to that term in the Code and shall include without limitation all
warehouse receipts (as defined by the Code) and other documents of title (as
defined by the Code) owned by the Borrower, whenever acquired. "Equipment"
shall have the meaning given to that term in the Code and shall include without
limitation all machinery, equipment, motor vehicles, furniture and fixtures now
owned or hereafter acquired by the Borrower and used or acquired for use in the
business of the Borrower, together with all accessions thereto and all
substitutions and replacements thereof and parts therefor, and includes, but is
not limited to, all such property listed in Schedule 2 of this Agreement.
"General Intangibles" shall have the meaning given to that term in the Code and
shall include without limitation all leases under which the Borrower now or in
the future leases and or obtains a right to occupy or use real or personal
property, or both, and all of the Borrower's other contract rights, whenever
acquired, and customer lists, choses in action, claims (including claims for
indemnification), books, records, patents and patent applications, copyrights
and copyright applications, trademarks, trade names, trade styles, trademark
applications, blueprints, drawings, designs and plans, trade secrets, methods,
processes, contracts, licenses, license agreements, formulae, tax and any other
types of refunds, returned and unearned insurance premiums, rights and claims
under insurance policies, and computer information, software, records and data,
whenever acquired. "Instrument" shall have the meaning given to that term in the
Code and shall include without limitation all negotiable instruments (as defined
in the Code), all certificated securities (as defined in the Code) and all other
writings which evidence a right to the payment of money, now or after the date
of this Agreement owned by the Borrower, whenever acquired. "Inventory" shall
have the meaning given to that term in the Code and shall include without
limitation all goods and equipment owned by the Borrower, whenever acquired and
wherever located, held for sale, rental, or lease or furnished or to be
furnished under contracts of service, and all raw materials, work in process and
materials owned by the Borrower and used or consumed in the Borrower's business
whenever acquired and wherever located. "Proceeds" shall have the meaning given
to that term in the Code and shall include without limitation whatever is
received when Collateral or Proceeds is sold, exchanged, collected or otherwise
disposed of, whether cash or non--cash, and includes without limitation proceeds
of insurance payable by reason of loss of or damage to Collateral.
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2.2 Provisions Applicable to the Collateral. The Bank and the Borrower
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agree that the following provisions shall be applicable to the Collateral:
(a) The Borrower currently maintains its chief executive offices at
the address set forth in the Borrower's Data Report, and shall not move the
location of its chief executive offices without prior written notification to
the Bank. The Borrower covenants and agrees that at all times during the term
of this Agreement it shall keep accurate and complete books and records
concerning the Collateral that is now or in the future owned or acquired by the
Borrower, in accordance with GAAP, at such chief executive office, and at no
other location without the prior written consent of the Bank.
(b) The Borrower shall at all times during the term of this Agreement
keep the Inventory that is now owned or acquired after the date of this
Agreement by the Borrower at its various locations described in the Borrower's
Data Report or, upon written notice to the Bank, at such other locations for
which the Bank has filed financing statements, and at no other location without
the prior written consent of the Bank, except that the Borrower shall have the
right, until one or more Events of Default shall occur and after the expiration
of the applicable notice or grace period, if any, to sell or otherwise dispose
of Inventory in the ordinary course of business.
(c) The Borrower will not change its name without prior written notice
to the Bank. The Borrower's Data Report sets forth all of the trade names used
by the Borrower. Without prior written notification to the Bank, the Borrower
will not commence any use of any other trade name.
(d) Promptly upon request of the Bank from time to time, the Borrower
shall furnish Bank with all documents, contracts, chattel paper, instruments and
other writings pertaining to the Borrower's contracts or the performance of the
Borrower's contracts, at such times and in such form and detail as Bank may
request.
(e) Promptly upon request of the Bank from time to time, the Borrower
shall deliver to the Bank possession of all Chattel Paper, Documents and
Instruments together with any endorsement or assignment deemed necessary or
advisable by the Bank.
(f) Until such time as the Bank exercises its right to effect direct
collection of the Accounts and the Chattel Paper and to effect the enforcement
of the Borrower's contract rights, the Borrower assumes full responsibility for
taking any and all steps to preserve rights in respect of its Accounts, its
Chattel Paper and its contracts against other parties.
2.3 Actions with Respect to Accounts. The Borrower irrevocably makes,
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constitutes and appoints the Bank (and any of the Bank's designated officers,
employees or agents) as the Borrower's true and lawful attorney-in--fact with
power to sign the Borrower's name and to take any of the following actions, in
its name or the name of the Bank, as the Bank may determine, at any time upon
the occurrence and during the continuance of an Event of Default, (except as
expressly limited in this Section) without notice to the Borrower and at the
Borrower's expense: (a) verify the validity and amount of, or any other matter
relating to, the Collateral by mail, telephone, telegraph or otherwise; (b)
notify all account debtors that the Accounts have been assigned to the Bank and
that the Bank has a security interest in the Accounts; (c) direct all account
debtors to make payment of all Accounts directly to the Bank; (d) take control
in any manner of any cash or non--cash items of payments or proceeds of
Accounts; (e) notify the United States Postal Service to change the address for
delivery of mail addressed to the Borrower to such address as the Bank may
designate; (f) receive, open and dispose of all mail addressed to the Borrower
(any sums received pursuant to the exercise of the rights provided in this
Section shall be deposited in the cash collateral account described in the
following section); (g) take control in any manner of any rejected, returned,
stopped in transit or repossessed goods relating to Accounts; and (h) upon the
occurrence of an Event of Default, enforce payment of and collect any Accounts,
by legal proceedings or otherwise, and for such purpose the Bank may (i)
exercise all of the Borrower's rights and remedies with respect to the
collection of Accounts; (ii) settle, adjust, compromise, extend, renew,
discharge or release Accounts; and (iii) take all other actions necessary or
desirable to protect the Borrower's interest in the Accounts. The Borrower
ratifies and approves all acts of said attorneys and agrees that said attorneys
shall not be liable for any acts of commission or omission, nor for any error of
judgment or mistake of fact or law, except for gross negligence or willful
misconduct of such attorney. This power, being coupled with an interest, is
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irrevocable until the Bank Debt is paid in full and the Borrower shall have
performed all of its obligations under this Agreement. The Borrower further
agrees to use its best efforts to assist the Bank in the collection and
enforcement of the Accounts and will not hinder, delay or impede the Bank in any
manner in its collection and enforcement of the Accounts.
2.4 Cash Collateral Account. The Borrower shall cause to be opened and
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maintained with Bank a noninterest bearing deposit account or accounts
(collectively, the "Cash Collateral Account"), and Borrower shall deposit, in
such account all cash proceeds of the Collateral, including, without limitation,
collections on the Accounts received at each of the lockboxes and blocked
accounts maintained by the Bank. Funds deposited in the Cash Collateral Account
shall be deemed collected only when actually accepted by Bank. All cash
proceeds of the Collateral received directly by the Borrower shall be held by
the Borrower in trust for the benefit of the Bank, shall be segregated from all
other funds of the Borrower and shall, within one business day after receipt, be
paid over to the Bank in the same form as so received (with any necessary
endorsement or assignment) for deposit into the Cash Collateral Account. The
Bank shall have sole dominion and control over all items and funds in the Cash
Collateral Account and such items and funds may be withdrawn only by the Bank
and the Borrower shall have no control over or withdrawal rights in respect of
the Cash Collateral Account. The Bank may, in its discretion, release to the
Borrower from time to time, all or any part of the collected funds deposited in
the Cash Collateral Account, but the Bank shall otherwise apply all or any part
of the collected funds on deposit in the Cash Collateral Account to the payment
of the Bank Debt whether on account of principal or interest or otherwise as the
Bank in its discretion may elect, until the Bank Debt is fully paid.
So long as no Event of Default has occurred and is continuing, cash
proceeds of the Collateral located in California shall not be received at the
lockbox account maintained by the Bank, but shall be collected by Borrower and
maintained in Borrower's own account.
2.5 Preservation and Protection of Security Interest. The Borrower
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covenants and agrees that at all times during the term of this Agreement it will
have good and marketable title to the Collateral from time to time owned or
acquired by the Borrower, free and clear of all Liens, except those permitted
under this Agreement. The Borrower covenants and agrees that it shall not
permit any levy or attachment to be made against the Collateral or any portion
of the Collateral. The Borrower shall faithfully preserve and protect the
Bank's security interest in the Collateral. The Borrower shall, at its own cost
and expense, do all such acts and things and shall execute and deliver all such
other instruments and documents, including further security agreements,
continuation statements, pledges, endorsements, assignments and notices, as the
Bank in its discretion, may deem necessary or advisable from time to time in
order to perfect and preserve the priority of such security interest. Upon the
occurrence and during the continuance of an Event of Default, the Borrower
irrevocably appoints the Bank (and any of the Bank's designated officers,
employees or agents) as the attorney-in-fact of the Borrower to do all acts and
things which the Bank may deem necessary or advisable from time to time to
preserve, perfect and continue perfected the Bank's security interest in the
Collateral in accordance with the requirements of this Agreement.
2.6 Maintenance and Repair. The Borrower shall maintain the Fixtures,
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Equipment and Inventory, and every portion thereof, in good condition, repair
and working order, reasonable wear and tear alone excepted.
2.7 Preservation of Collateral in the Bank's Possession. Unless the Bank
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has acted with gross negligence or willful misconduct, the Bank shall be deemed
to have exercised reasonable care in the custody and preservation of such of the
Collateral as may come into its possession from time to time. This Agreement is
not intended and shall not be construed to obligate the Bank to take any action
whatsoever with respect to the Collateral or to incur expenses or perform or
discharge any obligation, duty or liability of the Borrower.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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The Borrower represents and warrants to the Bank, that except as may
otherwise be disclosed on the Borrower's Data Report delivered to the Bank in
connection with this Agreement, on and as of the date of this Agreement and the
date of each Loan:
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3.1 Corporate Organization and Authority: Approvals. Each entity
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comprising the Borrower (a) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation; (b) is
duly qualified or licensed to do business as a foreign corporation and is in
good standing in all jurisdictions in which the ownership of its properties or
the nature of its activities or both makes such qualification or licensing
necessary; (c) has all requisite power, authority, licenses and permits to own
and operate its properties and to carry on its business as now conducted; and
(d) has corporate power and authority to execute, deliver and perform this
Agreement and the other Loan Documents executed by the Borrower. The execution,
delivery and performance of this Agreement and the other Loan Documents has been
duly and validly authorized by all necessary corporate proceedings on the part
of the Borrower and is not subject to any authorizations, consents, approvals,
licenses or filings with any Official Body.
3.2 Execution and Binding Effect. This Agreement and the other Loan
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Documents to which the Borrower is a party have been duly and validly executed
and delivered by the Borrower and each such document or agreement constitutes a
legal, valid and binding obligation of the Borrower enforceable in accordance
with its terms.
3.3 Absence of Conflicts. The execution, delivery and performance of this
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Agreement and the other Loan Documents will not (a) violate any Law or any order
or injunction of any Official Body, or (b) result in a breach of or a default
under the certificate or articles of incorporation or by-laws of the Borrower or
any agreement or instrument to which the Borrower is a party or by which the
Borrower or any of its properties (now owned or acquired in the future) may be
subject.
3.4 Ownership and Control. The outstanding shares of the Borrower's
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capital stock have been duly authorized and validly issued and are fully paid
and nonassessable. The Borrower, other than Allin Communications Corporation,
which is a publicly traded company, is 100% owned by Allin Communications
Corporation. Except as publicly disclosed or as disclosed of the Borrower's Data
Report with respect to Allin Communications Corporation, and except for options
issued to employees or consultants pursuant to an employee stock option plan,
there are no outstanding options, rights and warrants issued by the Borrower for
the acquisition of shares of the capital stock of the Borrower. There are no
options, sale agreements, pledges, proxies, voting trusts, powers of attorney or
other agreements or instruments binding upon any of the Borrower's shareholders
with respect to ownership of or voting rights with respect to shares of the
capital stock of the Borrower, except as set forth on Schedule 1 hereto and in
the first sentence of this Section 3.4.
3.5 Subsidiaries. The Borrower has disclosed to Lender the existence of
------------
all Subsidiaries or Affiliates of Borrower.
3.6 Financial Statements. All financial statements of the Borrower
--------------------
(including the notes) delivered to the Bank present fairly the financial
condition of the Borrower as of the end of the specified fiscal periods and the
results of its operations and the changes in financial position for the fiscal
periods then ended, all in conformity with GAAP applied on a basis consistent
with that of the preceding fiscal periods.
3.7 Taxes. All taxes, assessments, fees and other governmental charges
-----
upon the Borrower or upon any of its properties, incomes, sales or franchises
which are due and payable have been paid and all tax returns for such taxes have
been properly prepared, executed and filed. The reserves and provisions for
taxes on the books of the Borrower are adequate for all open years and for its
current fiscal period.
3.8 Contracts. The Borrower is not a party to or subject to any agreement,
---------
lease or instrument of any kind other than agreements, leases or instruments
which are not, singly or in the aggregate, material to the assets, business,
operations or financial condition of the Borrower. The Borrower is not in
default of or in breach of any agreement, lease or instrument to which the
Borrower is a party or by which it or any of its properties (now owned or
acquired in the future) may be subject or bound.
3.9 Litigation. There is no pending, contemplated or threatened action,
----------
suit or proceeding by or before any Official Body against or affecting the
Borrower, at law or equity.
8
3.10 Compliance with Laws. The Borrower is not in violation of or subject
--------------------
to any material contingent liability on account of any Law.
3.11 Pension Plans. (a) Each Plan has been and will be maintained and
-------------
funded in accordance with its terms and with all provisions of ERISA and other
applicable laws; (b) no termination or other event exists or has occurred with
respect to the Plan which has resulted, or may result, in any liability to the
Pension Benefit Guaranty Corporation (the "PBGC") or any other Official Body;
and (c) no withdrawal, either complete or partial, has occurred or commenced
with respect to any multi--employer Plan, and there exists no intent to withdraw
either completely or partially from any multi--employer Plan.
3.12 Patents, Licenses, Franchises. No patent, trademark, service xxxx,
-----------------------------
trade name, copyright, license, franchise or permit or right with respect to the
foregoing is of material importance to the business of Borrower, and there is no
reason known to Borrower to anticipate any material liability of the Borrower in
respect of any claim of infringement of any kind.
3.13 Environmental Matters. (a) Neither the Borrower nor any of its
---------------------
Affiliates is in violation of any Law concerning or relating to the environment
or the existence, generation, storage, transportation or disposal of any
material or substance regulated by any such Law (collectively referred to in
this Section as the "Environmental Laws"); (b) neither the Borrower nor any of
its Affiliates, directors, officers, employees, agents or independent
contractors, nor, to the best knowledge of the Borrower after due inquiry, any
predecessor person or entity, at such location has arranged, by contract,
agreement or otherwise, (i) for the disposal or treatment of, or (ii) with a
transporter for the transport for disposal or treatment of, any substance or
material regulated by an Environmental Law at or to any location identified
under an Environmental Law concerning cleanup of waste disposal sites; (c)
neither the Borrower nor any of its Affiliates is an "owner" or "operator" of a
"facility", as defined under any Environmental Law; and (d) neither the Borrower
nor any of its Affiliates "owned" or "operated" any "facility" at the time any
hazardous substances were disposed of within the meaning of any Environmental
Law.
3.14 Margin Stock. The Borrower will not make any borrowing under this
------------
Agreement for the purpose of buying or carrying any "margin stock", as such term
is used in Regulation U and related regulations of the Board of Governors of the
Federal Reserve System, as amended from time to time. The Borrower does not own
any "margin stock". The Borrower is not engaged in the business of extending
credit to others for such purpose, and no part of the proceeds of any borrowing
under this Agreement will be used to purchase or carry any "margin stock" or to
extend credit to others for the purpose of purchasing or carrying any "margin
stock".
3.15 No Event of Default: No Material Adverse Change. No event has
-----------------------------------------------
occurred and is continuing and no condition exists which constitutes an Event of
Default or Potential Default. Since the date of the Borrower's last fiscal year
end financial statement delivered to the Bank, there has been no material
adverse change in the assets, business, operations or financial condition of the
Borrower.
3.16 Accurate and Complete Disclosure. No representation or warranty made
--------------------------------
by the Borrower under this Agreement, the Borrower's Data Report or the other
Loan Documents and no statement made by the Borrower in any financial statement
(furnished pursuant to this Agreement or otherwise), certificate, report,
exhibit or document furnished by the Borrower to the Bank pursuant to or in
connection with this Agreement is false or misleading in any material respect
(including by omission of material information necessary to make such
representation, warranty or statement not misleading). The Borrower has
disclosed to the Bank in writing every fact known to the Borrower which
materially and adversely affects, and would reasonably be expected to materially
and adversely affect, the assets, business, operations or financial condition of
the Borrower or the ability of the Borrower to perform its obligations under
this Agreement and the other Loan Documents.
3.17 Title to Property. The Borrower has good and marketable title in fee
-----------------
simple to all real and personal property purported to be owned by it and good
and marketable title to all other property purported to be owned by it,
including that reflected in the most recent balance sheet referred to in
subsection 3.6 or submitted pursuant to Article
9
IV hereof (except as sold or otherwise disposed of in the ordinary course of
business), subject only to Permitted Liens, if any.
3.18 Liens. Encumbrances and Judgments. There are no security interests,
---------------------------------
liens, mortgages or encumbrances upon or against the property of or any
unsatisfied judgments entered against the Borrower except Permitted Liens.
3.19 Tax Returns and Taxes. The Borrower has filed all federal, state and
---------------------
local tax returns and other reports it was required by law to file prior to the
date hereof and which were material to the conduct its respective businesses,
has paid or caused to be paid all taxes, assessments and other governmental
charges that were due and payable prior to the date hereof, and has made
adequate provision in its financial statements for the payment of such taxes,
assessments and other charges accruing but not yet payable; the Borrower has no
knowledge of any deficiency or additional assessment in a materially important
amount in connection with any taxes, assessments or charges which is not
provided for on its books.
3.20 Year 2000: To the best of Borrower's knowledge, all software utilized
---------
in the conduct of the Borrower's business will have appropriate capabilities and
compatibility for operation to handle calendar dates falling on or after January
1, 2000, and all information pertaining to such calendar dates, in the same
manner and with the same functionality as the software does respecting calendar
dates falling on or before December 31, 1999. Further, the Borrower warrants
and represents that, to the best of Borrower's knowledge, the data-related user
interface functions, data-fields, and data-related program instructions and
functions of the software include the indication of the century.
ARTICLE IV
FINANCIAL REPORTING AND INFORMATION REQUIREMENTS.
-------------------------------------------------
4.1 (a) Annual Financial Reports. As soon as practicable, and in any event
------------------------
within one hundred twenty (120) days after the close of each fiscal year of the
Borrower, the Borrower will furnish to the Bank statements of income, retained
earnings and cash flow of the Borrower for such fiscal year and a balance sheet
of the Borrower as of the close of such fiscal year, and notes to each, all in
reasonable detail, setting forth in comparative form the corresponding figures
for the preceding fiscal year, with such statements and balance sheet to be
audited by independent certified public accountants of recognized standing
selected by the Borrower and satisfactory to the Bank. The certificate or
report of such accountants shall be free of any exception or qualifications not
acceptable to the Bank and shall in any event contain a written statement of
such accountants substantially to the effect that such accountants prepared such
statements and balance sheet in accordance with generally accepted accounting
principles applied on a basis consistent with that of the preceding fiscal year
(except for changes in application in which such accountants concur).
4.2 Monthly Reports. As soon as practicable, and in any event within
---------------
thirty (30) days after the close of each calendar month during the term of this
Agreement, the Borrower will furnish to the Bank consolidated statements of
income and cash flow for the Borrower for such month and for the portion of the
fiscal year to the end of such month, and a balance sheet of the Borrower as of
the close of such month, all in reasonable detail and in conformity with
generally accepted accounting principles applied in a manner consistent with
that of the most recent reviewed financial statements furnished to the Bank.
4.3 Accounts Receivable and Accounts Payable Statements. Within thirty
---------------------------------------------------
(30) days after the end of each calendar month, the Borrower will deliver to the
Bank a schedule of the accounts receivable and accounts payable of the Borrower,
including the aging thereof by open invoice and by invoice date. The Borrower
shall also provide the Bank with all information requested by the Bank with
respect to any account debtor, including, without limitation, all invoices and
customer statements rendered to such account debtor.
4.4 Intentionally omitted.
----------------------
10
4.5 Borrowing Base Certificates. As often as the Bank shall from time to
---------------------------
time request and in any event at least once each week, the Borrower will deliver
to the Bank a Borrowing Base Certificate, on the Bank's standard form, as may be
changed from time to time by Bank, as delivered to the Borrower, with all blanks
completed, and such other reports of sales, collections, credit adjustments and
other information pertaining to Accounts as the Bank shall from time to time
request.
4.6 Audit Reports. Promptly upon receipt thereof, the Borrower will
-------------
deliver to the Bank one copy of each audit report submitted to the Borrower by
independent accountants, including "comment" or management letters, in
connection with any annual, interim or special audit report made by them of the
books of the Borrower.
4.7 Notice of Certain Events. Promptly upon becoming aware of the
------------------------
occurrence or existence of any such event or circumstance, the Borrower will
give the Bank telephonic or telegraphic notice (with written confirmation sent
on the same or next Business Day) of (a) any Event of Default or Potential
Default; (b) any material adverse change in the assets, business, operations or
financial condition of the Borrower or any development or occurrence which would
materially and adversely affect the ability of the Borrower to perform its
obligations under this Agreement; and (c) the existence or threat of any
proceedings by or before any Official Body against or affecting the Borrower.
4.8 Further Information. The Borrower will promptly furnish to the Bank
-------------------
such other information, and in such form, as the Bank may reasonably request
from time to time.
ARTICLE V
CONDITIONS OF LENDING
---------------------
The obligations of the Bank to make Loans hereunder are subject to the
performance by the Borrower of its obligations to be performed hereunder at or
prior to the making of any such Loans and to the satisfaction of the following
further conditions:
5.1 Conditions as of the Closing Date. As of the Closing Date:
---------------------------------
(a) The representations and warranties of the Borrower contained in
Article III hereof shall be true and accurate on and as of the date of such Loan
hereunder with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
relate solely to an earlier date); no Event of Default and no condition, event
or action which, with the giving of notice or the lapse of time or both, would
constitute an Event of Default shall have occurred and be continuing or shall
exist.
(b) There shall be delivered to the Bank a certificate dated as of the
Closing Date and signed by the Secretary or an Assistant Secretary of the
Borrower certifying as to:
(i) all corporate action taken by the Borrower relative to the
Agreement, the Notes and any other Loan Documents;
(ii) the names of the officer or officers of the Borrower authorized
to sign the Agreement, the Notes and any other Loan Documents and the true
signatures of such officer or officers on which the Bank may conclusively rely;
(iii) copies of the articles of incorporation (recently certified by
the Secretary of State) and bylaws of the Borrower as in effect on the date of
such first Loan; and
11
(iv) a tax lien certificate (recently certified by the Department
of Revenue), reflecting no past due taxes;
(c) the Borrower shall have delivered to Bank a duly executed
Landlord's Waiver in the form of Exhibit "B" hereto with respect to its
premises.
(d) the Borrower shall have delivered to Bank financial statements for
the preceding two months of Borrower's operations evidencing operating
conditions satisfactory to the Bank in its discretion.
(e) The Bank must be named as loss payee on personal property
insurance as its interest appears and a copy naming Bank as loss payee and
additional insured thereunder must be delivered to Bank. In addition, Bank
shall have received evidence of products liability and other general
liability/hazard insurance in an amount deemed sufficient by the Bank.
(f) Except as publicly disclosed for Allin Communications Corporation,
Bank shall have received a copy of the employment contracts, bonus plans and
royalty agreements, between Borrower and any of the executive officers of the
Borrower, which must contain terms and conditions acceptable to the Bank and
shall be identified on Schedule 1 hereto.
(g) Allin Communications Corporation, Xxxxx Xxxxx and any other
shareholder of Borrower who now or in the future makes a loan to Borrower shall
execute and deliver to the Bank a subordination agreement (in form of Exhibit
"C"), pursuant to which any loan or loans at any time made by such shareholder
to the Borrower shall be subordinated to the prior payment in full of the
Borrower's obligations to the Bank (subject to the right of such shareholder to
receive current payments of interest as long as no Event of Default has occurred
and is continuing).
(h) Execution and delivery of Lockbox, Cash Transfer and Advice
Agreement in the Form of Exhibit "D";
(i) Delivery of a current financial statement and federal tax returns
for each entity comprising the Borrower.
(j) All legal details and proceedings in connection with the
transactions contemplated by the Agreement and all Loan Documents delivered to
the Bank pursuant to this Article V shall be in form and substance satisfactory
to the Bank and to Papernick & Gefsky, P.C., counsel for the Bank and the Bank
shall have received all such other counterpart originals or certified or other
copies of such documents and proceedings in connection with such transactions,
in form and substance satisfactory to the Bank and said counsel, as the Bank or
said counsel may reasonably request.
5.2 Each Additional Loan. At the time of making each additional Loan
--------------------
hereunder:
(a) The representations and warranties contained in Article III hereof
shall be true on and as of the specific dates or times referred to therein, and
the other representations and warranties contained herein shall be true on and
as of the date of such additional Loan, with the same effect as though such
representations and warranties had been made on and as of such date; no Event of
Default and no condition, event, act or omission which, with the giving of
notice or the lapse of time or both, would constitute an Event of Default, shall
have occurred and be continuing or shall exist; and, if requested by Bank, there
shall be delivered to the Bank a certificate, in form and substance satisfactory
to the Bank and its counsel, dated the date of such additional Loan and signed
by the Chief Executive Officer or the chief financial officer of the Borrower to
both such effects.
ARTICLE VI
COVENANTS
---------
12
The Borrower covenants to the Bank, so long as it may borrow hereunder and
until payment in full of the Notes and interest thereon, as follows:
6.1 Preservation of Existence; Franchise and Licenses. The Borrower will
-------------------------------------------------
maintain its corporate existence, rights, franchises, licenses and permits in
full force and effect. The Borrower will remain in good standing in its
jurisdiction of incorporation and will qualify and remain qualified as a foreign
corporation in each jurisdiction in which failure to receive or retain
qualification would have a material adverse effect on the assets, business,
operations or financial condition of the Borrower taken as a whole.
6.2 Insurance. The Borrower will maintain with financially sound and
---------
reputable insurers insurance with respect to its properties and business and
against such liabilities, casualties and contingencies and of such types and in
such amounts as is satisfactory to the Bank and as is customary in the case of
corporations or other entities engaged in the same or similar business or having
similar properties similarly situated. Risk of loss of, damage to or
destruction of the Collateral is on the Borrower. Each of the Borrower's
policies of insurance shall contain lender's loss payable clauses in favor of
the Borrower and the Bank as their respective interests may appear, shall insure
the Bank regardless of the conduct or neglect of the Borrower and shall contain
provision for written notification of the Bank thirty (30) days prior to
termination of such policy. All such policies, or certificates evidencing the
same, shall be deposited with the Bank. If the Borrower fails to effect and
keep in full force and effect such insurance or fails to pay the premiums when
due, the Bank may (but shall not be obligated to) do so for the account of the
Borrower and add the cost thereof to the Bank Debt. The Borrower assigns and
sets over to the Bank all monies which may become payable on account of such
insurance and directs the insurers to pay the Bank any amount so due. The Bank
is irrevocably appointed attorney--in--fact of the Borrower to endorse any draft
or check which may be payable to the Borrower in order to collect the proceeds
of such insurance. Unless an Event of Default under this Agreement has occurred
and is continuing and upon the Borrower's satisfaction of such conditions and
requirements regarding the use of the proceeds as the Bank may in its sole
discretion impose, the Bank will turn over to the Borrower the proceeds of any
such insurance collected by the Bank. Any balance of insurance proceeds
remaining in the possession of the Bank after payment in full of the Bank Debt
shall be paid over to the Borrower or its order.
6.3 Financial Accounting Practices. The Borrower will make and keep books,
------------------------------
records and accounts which, in reasonable detail, accurately and fairly reflect
its transactions and dispositions of its assets and maintain an adequate system
of internal accounting controls.
6.4 Intentionally Omitted.
----------------------
6.5 Accounts Payable. The Borrower will pay or discharge all accounts
----------------
payable, accrued expenses and other current liabilities so that none is
outstanding more than one hundred twenty (120) days after the due date for each
liability, except current liabilities which are subject to good faith dispute
and as to which the Borrower has created adequate reserves on its books.
6.6 Visitation; Audits. The Borrower will permit such persons as the Bank
------------------
may designate to visit and inspect any of the properties of the Borrower to
conduct field examinations of the Collateral, to examine, and to make copies and
extracts from, the books and records of the Borrower and to discuss its affairs
with its officers, key or executive employees and independent accountants at
such times and as often as the Bank may request. The Borrower authorizes its
officers, employees and independent accountants to discuss with the Bank the
affairs of the Borrower.
6.7 Compliance with Laws. The Borrower shall comply with all applicable
--------------------
Laws.
6.8 Pension Plans. The Borrower shall (a) keep in full force and effect
-------------
any and all Plans which are presently in existence or may, from time to time,
come into existence under ERISA, unless such Plans can be terminated without
material liability to the Borrower or any subsidiary in connection with such
termination; and (b) make contributions to all of the Borrower Plans in a timely
manner and comply with all material requirements of ERISA which relate to such
Plans.
13
6.9 Continuation with no Change in Business. The Borrower will continue to
---------------------------------------
engage in the business and activities as currently conducted by the Borrower and
the Borrower will not engage in any other businesses or industries without prior
written consent of the Bank.
6.10 Lockbox; Blocked Account. The Borrower shall maintain one or more
------------------------
lockbox accounts or blocked accounts with the Bank whereby all checks, drafts,
cash and other remittances to the Borrower in payment of the Borrower's Accounts
are deposited pursuant to the terms of the Lockbox, Cash Transfer and Advice
Agreement in the form of Exhibit "D" into such lockbox account or accounts or
blocked account or accounts and applied to the Loans.
6.11 Management. The Borrower shall maintain the senior executive
----------
management of the Borrower, which shall include the chief executive officer, the
chief financial officer and the president of each entity comprising the
Borrower, substantially as constituted on the date of this Agreement.
6.12 Prohibited Corporate Transactions. Except as may otherwise be
-----------------------------------
permitted herein or in any Supplement, the Borrower shall not at any time (a)
create, incur, assume or suffer to exist any Lien on any of its property or
assets, tangible or intangible, except Liens existing on the date of this
Agreement, described in the Borrower's Data Report and permitted by the Bank in
writing, and Liens in favor of the Bank; (b) create, incur, assume or suffer to
exist any Debt, except Bank Debt, Debt existing on the date of this Agreement,
described in the Borrower's Data Report and permitted by the Bank in writing,
accounts payable and other current items arising out of transactions (other than
borrowings) in the ordinary course of business, and loan transactions between
entities which comprise the Borrower; (c) directly or indirectly assume,
guarantee, endorse or otherwise agree, become or remain directly or contingently
liable upon or with respect to any obligation or liability of any other person,
firm or entity, except for guaranties between the entities which comprise the
Borrower; (d) make or suffer to remain outstanding any loan or advance to, or
purchase, acquire or own any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) in, or any other interest in,
or make any capital contribution to, any other person, including any Subsidiary;
(e) declare, make, pay, or agree, become or remain liable to make or pay, any
dividend or other distribution of any nature (whether in cash, property,
securities or otherwise) on account of or in respect of any shares of the
capital stock of the Borrower or on account of the purchase, redemption,
retirement or acquisition of any shares of the capital stock (or warrants,
options or rights for any shares of the capital stock) of the Borrower, except
for current dividends payable in the ordinary course of business on Series B
Preferred shares of Allin Communications Corporation; (f) enter into or suffer
to remain in effect any agreement to lease, as lessee, any real or personal
property except leases existing on the date of this Agreement and described in
the Borrower's Data Report, and except as permitted pursuant to paragraph
6.15(f) herein; (g) merge or agree to merge with or into or consolidate with any
other person, corporation, firm or other entity or acquire any material portion
of the stock or assets or business of any other person, corporation, firm or
other entity; (h) sell, convey, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily (any of the foregoing being referred to
in this Section as a "transaction" and any series of related transactions
constituting but a single transaction), any of its or their properties or
assets, tangible or intangible (including stock of subsidiaries), except for
sales of inventory in the ordinary course of business; (i) enter into or carry
out any loan, advance or other transaction (including, without limitation,
purchasing property or services or selling property or services) with any
Affiliate, except transactions between entities which comprise the Borrower, and
except transactions with Affiliates if in the ordinary course of business upon
terms no less favorable to the Borrower than would be obtained in a comparable
arm's--length transaction; or (j) directly or indirectly issue, transfer, sell,
pledge or otherwise dispose of any interest in the Borrower.
6.13 Shareholder Debt. The Borrower shall not make any payments, directly
----------------
or indirectly, in cash or in other property or by set--off, counterclaim,
recoupment or in any other manner, on or with respect to any of the notes
payable to the shareholders of the Borrower relating to notes currently
reflected on the balance sheet of the Borrower and notes relating to
indebtedness of the Borrower to any of its shareholders arising after the date
of this Agreement, provided, that, for so long as no Event of Default shall have
occurred and be continuing or shall exist, the Borrower may make payments of
interest accrued on such notes at the interest rate reflected on the face of
such notes.
14
6.14 Maintenance of Patents, Trademarks. etc. Maintain in full force and
---------------------------------------
effect all patents, trademarks, trade names, copyrights, licenses, franchises,
permits and other authorizations necessary for the ownership and operation of
its properties and business if the failure so to maintain the same would
substantially interfere with the normal operations of the Borrower or adversely
affect to a material extent the financial condition, business or operations of
the Borrower.
6.15 Negative Covenants. The Borrower covenants that so long as it may
------------------
borrow hereunder and until payment in full of the Notes and interest thereon, it
will not, unless otherwise consented to in writing by the Bank:
(a) Indebtedness. Create, incur, assume or suffer to exist any
------------
Indebtedness except (i) Indebtedness evidenced by the Note or any other note of
the Borrower payable to the order of the Bank; (ii) trade accounts payable,
rentals payable under leases other than Capital Leases, which shall be subject
to paragraph 6.15(f) hereof, and other Indebtedness incurred in the ordinary
course of business and (iii) Indebtedness secured by Permitted Liens; and (iv)
Indebtedness, identified, acknowledged and permitted by Articles IV and V
hereof.
(b) Liens. Create, incur, assume or suffer to exist, or permit, incur,
-----
assume or suffer to exist, any mortgage, security interest, lien or encumbrance
whatsoever on any of its properties or assets, tangible or intangible, whether
now owned or hereafter acquired, except Permitted Liens.
(c) Liquidation, Merger, etc. (i) Liquidate or merge or consolidate
------------------------
with or into any other Person or take any action in furtherance thereof; (ii)
permit any other Person to consolidate with or merge into it; (iii) sell,
convey, assign, lease or otherwise transfer or dispose of, in a single
transaction or a series of related transactions, any part of its assets other
than in the ordinary course of business; provided that in any given fiscal year,
the Borrower may sell or cause to be sold any Fixed Assets having, in the
aggregate, a net book value not in excess of ten percent (10%) of Fixed Assets
and provided further that sales made by Allin Interactive Corporation, which
otherwise comply with the provisions of this Agreement, shall not be subject to
this ten percent (10%) limitation; or (iv) enter into any joint venture with any
Person.
(d) Contingent Indebtedness. Endorse, assume, guarantee, become surety
-----------------------
for, or otherwise become or remain directly or contingently liable in connection
with the Indebtedness of any other Person (except the Bank and as identified and
acknowledged in Articles IV and V above), to do any of the foregoing, except the
endorsement of negotiable or other instruments for deposit or collection or
similar transactions in each case in the ordinary course of business, and except
for guaranties between entities comprising the Borrower.
(e) Dividends and Purchase of Stock. Directly or indirectly declare or
-------------------------------
pay any dividend, as determined in accordance with GAAP, (except dividends
payable solely in shares of the Borrower's own stock) on, or order or make any
other distribution on account of, any shares of any class of its stock now or
hereafter outstanding, or redeem, purchase or otherwise acquire (except for a
consideration consisting solely of shares of its stock), any shares of any class
of its stock now or hereafter outstanding, except for current dividends payable
in the ordinary course of business on Series B Preferred shares of Allin
Communications Corporation, or set aside any sum or property for any such
purpose; provided, however, so long as no Event of Default exists or will exist
thereafter with the mere passage of time, notice or both, Borrower may make a
distribution in an amount and at such times as is reasonably appropriate to
compensate Borrower's shareholders for income taxes attributed to them with
respect to Borrower's financial performance.
(f) Leases. Make or enter into any agreement to rent or lease real or
------
personal property of any other Person, except where amounts due under the terms
of all such leases shall not at any time exceed $500,000.00 for the term(s) of
such lease(s) and such lease(s) shall include usual and customary terms and
shall be entered into in the ordinary course of Borrower's business.
(g) Loans and Extensions of Credit. Make or have outstanding any loans
------------------------------
or advances or extensions of credit to any other Person, except loans, advances
or extensions of credit between the entities which
15
comprise the Borrower or which are extended under usual and customary terms in
the ordinary course of its business.
(h) Sale and Lease--Back. Sell, convey, assign or otherwise transfer
--------------------
or dispose of any property, real or personal, whether now owned or hereafter
acquired, with a view directly or indirectly to the leasing back of the same or
of any similar property.
(i) Investments. Purchase, invest in or otherwise acquire any interest
-----------
in or any equity or debt security of any Person except; (i) debt securities
issued by the United States Government or by an agency or instrumentality
thereof; (ii) negotiable certificates of deposit issued by any bank organized
under the laws of the United States of America, or any bank organized under the
laws of any State thereof whose deposits are insured by the Federal Deposit
Insurance Corporation; (iii) commercial paper issued by any corporation whose
commercial paper is rated not less than Prime-l by Xxxxx'x, or A-l by Standard
and Poor's; (iv) general obligation bonds of the Commonwealth of Pennsylvania;
(v) any investment or interest of the Borrower which exists on the date of this
Agreement; and (vi) any investment or deposit in or with Bank.
(j) Capital Expenditures. Make any payment on account of the purchase
--------------------
or lease of any assets which if purchased would constitute Fixed Assets during
any fiscal year commencing with the fiscal year beginning October 1, 1998, in
excess of $1,000,000.00 per year in the aggregate for the payment of all Fixed
Assets acquired or leased.
(k) Intentionally omitted.
---------------------
6.16 Cash Flow Coverage Ratio. The Borrower shall maintain, at all times
------------------------
during the Loan Term, a Cash Flow Coverage of no less than 1.0 to l.0. "Cash
Flow Coverage" for these purposes means, for any six-month period during
Borrower's fiscal year, (i) the Cash Flow, plus the aggregate interest expense
incurred and paid by the Borrower during the period (determined in accordance
with GAAP), divided by (ii) the aggregate interest expense incurred and paid by
the Borrower during the period (determined in accordance with GAAP).
"Cash Flow" for these purposes means the total operating revenues received from
the operation of Borrower's business(es) prior to any withdrawal by principals
and deductions for interest, depreciation and amortization, less all deductions
from income such as administrative and general expenses and repayment of the
Loan.
ARTICLE VII
DEFAULTS
--------
7.1 Events of Default. An Event of Default means the occurrence or
-----------------
existence of one or more of the following events or conditions (whatever the
reason for such Event of Default and whether voluntary, involuntary or effected
by operation of Law):
(a) The Borrower shall fail to pay principal or interest on any Note
when due or shall fail to pay any other fee, or other amount payable pursuant to
this Agreement, any of the other Loan Documents and any other agreement,
instrument, document or undertaking arising under or in connection with any of
the Bank Debt, when due, and the default continues for fifteen (15) days after
the day on which the payment is due; or
(b) Any representation or warranty made by the Borrower or any
guarantor under this Agreement, the Borrower's Data Report, the other Loan
Documents or any statement made by the Borrower or any guarantor in any
financial statement, certificate, report, exhibit or document furnished by the
Borrower or any guarantor, as the case may be, to the Bank pursuant to this
Agreement or the other Loan Documents shall prove to have been false or
misleading as of the time when made; or
16
(c) The Bank's security interest in the assets of the Borrower under
this Agreement or any of the other Loan Documents is or shall become
unperfected; except for the assets of Borrower currently located on cruise ships
for which no representation of perfection has been made by Borrower; or
(d) The Borrower or any guarantor shall be in default in the
performance or observance of any other covenant, agreement or duty under this
Agreement, or any of the other Loan Documents or any of the other agreements,
instruments, documents or undertaking arising under or in connection with any of
the Bank Debt, and such default shall not be remedied for a period of thirty
(30) days after written notice thereof by the Bank; or
(e) The Borrower shall (i) default (as principal or guarantor or other
surety) in any payment of any obligation (or set of related obligations) for
borrowed money in excess of Two Hundred Fifty Thousand Dollars ($250,000.00)
beyond any period of grace with respect to the payment, or (ii) default in the
observance of any other covenant, term or condition contained in any agreement,
document or instrument, whether formerly, now or after the date of this
Agreement existing between the Borrower and any other person, firm or entity if
such breach would have a material adverse affect on the business, profits,
assets or condition (financial or other) of the Borrower; or
(f) A judgment for the payment of money or a writ or warrant of
attachment, garnishment, execution, distraint or similar process shall have been
entered or issued against the Borrower or any of its properties and shall remain
undischarged or unstayed for a period in excess of sixty (60) days; or
(g) The indictment of the Borrower or any guarantor under any criminal
statute, or commencement of criminal or civil proceedings against the Borrower
or any guarantor pursuant to which statute or proceedings the penalties or
remedies sought or available include forfeiture of any of the property of the
Borrower or any guarantor;
(h) A material adverse change shall have occurred in the assets,
business, operations or financial condition of the Borrower or the Bank shall
have determined that the prospect of payment or performance of any material
covenant, agreement or duty under this Agreement, any of the Loan Documents or
any of the other agreements, instruments, documents or undertakings arising
under or in connection with any of the Bank Debt is impaired in any material
respect; or
(i) The Borrower shall become insolvent, shall become generally unable
to pay its debts as they become due, shall voluntarily suspend transaction of
its business, shall make a general assignment for the benefit of creditors, or
shall dissolve, wind--up or liquidate itself or any substantial part of its
property, or shall take any action in furtherance of any of the foregoing; or
(j) A proceeding shall be instituted by or against the Borrower: (i)
seeking to have an order for relief entered in respect of the Borrower or
seeking a declaration or entailing a finding that the Borrower is insolvent or a
similar declaration or finding, or seeking dissolution, winding--up, charter
revocation or forfeiture, liquidation, reorganization, arrangement, adjustment,
composition or other similar relief with respect to the Borrower or its assets
or its debts under any law relating to bankruptcy, insolvency, relief of debtors
or protection of creditors, termination of legal entities or any other similar
law now or in the future in effect; or (ii) seeking appointment of a receiver,
trustee, custodian, liquidator, assignee, sequestrator or other similar official
for the Borrower or for all or any substantial part of its or their property.
7.2 Consequences of an Event of Default.
-----------------------------------
(a) If an Event of Default specified in subsections (a) through (j) of
Section 7.1 of this Agreement occurs and continues or exists, the Bank will be
under no further obligation to make Loans and may demand all amounts owing by
the Borrower under this Agreement and the other Loan Documents to be immediately
due and payable without presentment, demand, protest or further notice of any
kind, all of which are expressly waived, and an action for any amounts due shall
accrue immediately.
17
(b) If an Event of Default occurs or exists, the Bank may, in its sole
discretion, reduce the Borrowing Base by adjusting the advance rates or by
creating such additional reserves as the Bank shall, in its sole discretion,
deem appropriate.
(c) If an Event of Default occurs and continues or exists, the Bank
may exercise each and every right and remedy granted to the Bank under the Loan
Documents and under the Code and under any other applicable Law. All such
rights and remedies are cumulative and not exclusive of any rights or remedies
which the Bank would otherwise have.
7.3 Remedies with Respect to the Collateral. If any one or more of the
---------------------------------------
Events of Default shall occur or shall exist, the Bank may then, or at any time
thereafter: (a) foreclose its lien or security interest in the Collateral in any
way permitted by law, or upon ten (10) days prior written notice to the
Borrower, sell any or all Collateral at private sale at any time or place in one
or more sales, at such price or prices and upon such terms, either for cash or
on credit, as the Bank, in its sole discretion, may elect, or sell any or all
Collateral at public auction, either for cash or on credit, as the Bank, in its
sole discretion, may elect, and at any such sale, the Bank may bid for and
become the purchaser of any or all such Collateral (pending any such action the
Bank may liquidate the Collateral); (b) grant extensions to, or adjust claims
of, or make compromises or settlements, with, debtors, guarantors or any other
parties with respect to Collateral or any securities, guarantees or insurance
applying thereon, without notice to or the consent of the Borrower, without
affecting the Borrower's liability under this Agreement or the Notes (the
Borrower waives notice of acceptance, of nonpayment, protest or notice of
protest for any Accounts, Chattel Paper or any of its contract rights and any
other notices to which the Borrower may be entitled); (c) enter any premises
where Fixtures, Equipment and/or Inventory are located and take possession and
control of such collateral without demand or notice and without prior judicial
hearing or legal proceedings, which the Borrower expressly waives; (d) require
the Borrower promptly to assemble the Fixtures, Equipment, and Inventory, and
make them available to the Bank at a place or places to be designated by the
Bank (the right of the Bank under this paragraph to have the Fixtures,
Equipment, and Inventory assembled and made available to the Bank is of the
essence of this Agreement and the Bank may, at its election, enforce such right
by a xxxx in equity for injunctive relief or specific performance); (e) use and
operate under all trade names under which the Borrower does business; and (f)
apply the Proceeds of any sale or liquidation of the Collateral, and, subject to
Section 6.2 of this Agreement, any Proceeds received by the Bank from insurance,
first to the payment of the reasonable costs and expenses incurred by the Bank
in connection with such sale or collection, including without limitation
reasonable attorneys' fees and legal expenses, second to the payment of the Bank
Debt, whether on account of principal or interest or otherwise as the Bank in
its sole discretion may elect, and then to pay the balance, if any, to the
Borrower or as otherwise required by law. If such Proceeds are insufficient to
pay the amounts required by law, the Borrower shall be liable for any
deficiency.
7.4 Set-off. If the unpaid principal and or other amount owing by the
-------
Borrower under this Agreement or the other Loan Documents or the Bank Debt shall
have become due and payable (at maturity, by demand, by acceleration or
otherwise), the Bank will have the right, in addition to all other rights and
remedies available to it, without notice to the Borrower, to set--off against
and to appropriate and apply to such due and payable amounts any debt owing to,
and any other funds held in any manner for the account of, the Borrower by the
Bank.
ARTICLE VIII
TERMINATION
-----------
8.1 Termination of Credit Facilities. The credit facilities made available
--------------------------------
to the Borrower under this Agreement (including any Supplement) (the "Credit
Facilities") are terminable by the Bank at its discretion on the Expiration Date
or upon the occurrence of an Event of Default under this Agreement.
8.2 Effect of Termination. In the event the Credit Facilities are
---------------------
terminated for any reason, the outstanding balance of the Revolving Credit Loans
and of any other Loan or Loans made pursuant to a Supplement together with any
accrued and unpaid interest thereon, any fee payable pursuant to this Agreement,
and any other sums then due pursuant to the terms of this Agreement, the other
Loan Documents or any other agreement, instrument, or document or undertaking
arising under or in connection with the Bank Debt shall be due and payable
18
immediately. Notwithstanding termination of this Agreement or an Event of
Default, all covenants and agreements of the Borrower will continue in full
force and effect from and after the date of this Agreement until payment in full
of all obligations of the Borrower under this Agreement and with respect to the
Bank Debt. All obligations of the Borrower to indemnify the Bank expressly
provided for in any one or more of the Loan Documents will survive the payment
in full of all obligations of the Borrower under this Agreement and the other
Loan Documents.
ARTICLE IX
DEFINITIONS
-----------
9.1 In addition to other words and terms defined elsewhere in this
Agreement, the following words and terms have the following meanings,
respectively, unless the context otherwise clearly requires:
"Affiliate" means any person or entity which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower.
For each individual who is an Affiliate within the meaning of the foregoing, the
term "Affiliate" shall include any other individual related to such Affiliate by
consanguinity within the third degree or in a step or adoptive relationship
within such third degree. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a person or entity, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" means this Loan and Security Agreement as amended, modified or
supplemented from time to time.
"Borrower's Data Report" means the Borrower's Data Report, attached hereto
as Schedule 2, together with all amendments, supplements and attachments
thereto.
"Business Day" means any day other than a Saturday, Sunday, public holiday
under the laws of the Commonwealth of Pennsylvania or other day on which the
Bank is not open for business in Indiana, Pennsylvania.
"Capital Lease" or "Capital Leases" means any lease(s) which is, or is
required under GAAP to be, capitalized on the balance sheet of Borrower at such
time.
"Closing Date" means the date hereof.
"Code" means the Uniform Commercial Code as in effect on the date of this
Agreement and as amended from time to time, of the state or states having
jurisdiction with respect to all or any portion of the Collateral from time to
time.
"Debt" means (i) indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services (including trade obligations)
whether such indebtedness or liability is matured or unmatured, liquidated or
unliquidated, direct or contingent, and joint or several; (ii) capitalized lease
obligations; (iii) current liabilities in respect of unfunded vested
benefits under any Plan; (iv) obligations under letters of credit; (v) all
guaranties, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any person or entity, or
otherwise to assure a creditor against loss; and (vi) obligations secured by any
lien on property owned by such person or entity, whether or not the obligations
have been assumed.
"Eligible Locations" means each location owned or leased by the Borrower
which is described on the Borrower's Data Report and as to which the Bank has
received a landlord's waiver or a mortgagee's waiver, as the case may be,
satisfactory to the Bank.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974 as
in effect as of the date of this Agreement and as amended from time to time in
the future.
19
"Event of Default" means an Event of Default as defined in Article VII
hereof.
"Expiration Date" means September 30, 1999 unless extended in writing by
the Bank.
"Fixed Assets" means fixed assets as defined under GAAP.
"GAAP" means generally accepted accounting principles (as such principles
may change from time to time) applied on a consistent basis (except for changes
in application in which the Borrower's independent certified public accountants
concur).
"Law" means any law (including common law), constitution statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Official Body.
"Letters of Credit" means any one or more documentary or standby letters of
credit from time to time issued by the Bank for the account of the Borrower and
subject to such terms and conditions as the Bank shall require.
"Lien" means any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature, including,
but not limited to, any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security.
"Loan Document" or "Loan Documents" mean singularly or collectively, as the
context may require, (i) this Agreement, (ii) the Note, (iii) the UCC-l
financing statements filed in accordance with this Agreement and the other Loan
Documents, and (iv) any and all mortgages, deeds of trust, guaranty and
suretyship agreements, support agreements, patent security agreements, trademark
security agreements, environmental and other indemnity agreements, pledge
agreements, collateral assignments and other documents, instruments,
certificates, assignments, and agreements executed and delivered in connection
with this Agreement, as any of them may be amended, modified, extended or
supplemented from time to time.
"Loan", "Loans" or "Revolving Credit Loans" mean the loan or loans made by
the Bank to the Borrower under this Agreement (including any Supplement) from
time to time.
"Loan Term" means the period of time commencing on the date hereof and
continuing through the Expiration Date.
"Note" or "Notes", means the Revolving Credit Note of the Borrower executed
and delivered pursuant to this Agreement and any other note or notes executed
and delivered pursuant to this Agreement (including any Supplement), together
with all extensions, renewals, refinancing or refundings in whole or in part.
"Office", when used in connection with the Bank, means its office located
at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, Attention: Commercial
Lending Department, or such other office of the Bank as the Bank may designate
in writing from time to time.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal grand jury or arbitrator, in
each case whether foreign or domestic.
"Permitted Liens" means only those certain liens, permitted in writing by
Bank and disclosed by Borrower to Bank on Schedule 2 "Borrower's Data Report",
attached hereto and made a part hereof.
"Person" means an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
20
"Plan" means any deferred compensation program, including both single and
multi-employer plans, subject to Title IV of ERISA and established and
maintained for employees of the Borrower or any Subsidiary or any controlled
group of trades or businesses under common control as defined respectively in
Section 1563 and 414(c) of the Internal Revenue Code of 1986, as amended, of
which the Borrower or any Subsidiary is or becomes a part.
"Potential Default" means any event or condition which with notice or the
passage of time would constitute an Event of Default other than an Event of
Default under Subsection 6.1(h) of this Agreement.
"Prime Rate" means the interest rate per annum publicly announced from time
to time by the Bank as its prime rate. The Prime Rate may be greater or less
than other interest rates charged by the Bank to other borrowers and is not
solely based or dependent upon the interest rate which the Bank may charge any
particular borrower or class of borrowers.
"Subsidiary" of any entity comprising the Borrower at any time means any
corporation of which a majority of the outstanding capital stock entitled to
vote for the election of directors is at such time owned by any entity
comprising the Borrower and/or one or more Subsidiaries.
"Supplement" means any one or more of the Supplements to Loan and Security
Agreement, executed and delivered by and between the Bank and the Borrower to
supplement, modify or amend the provisions of this Agreement now or at any time
after the date of this Agreement, as each such supplement may be further
supplemented, modified or amended.
ARTICLE X
MISCELLANEOUS
-------------
10.1 Holidays. Whenever any payment or action to be made or taken under
--------
this Agreement or under any of the other Loan Documents is stated to be due on a
day which is not a Business Day, such payment or action will be made or taken on
the next following Business Day and such extension of time will be included in
computing interest or fees, if any, in connection with such payment or action.
10.2 Loan Account. The Bank will open and maintain on its books a loan
------------
account (the "Loan Account") with respect to Loans made, repayments,
prepayments, the computation and payment of interest and fees and the
computation and final payment of all other amounts due and sums paid to the Bank
under this Agreement or the other Loan Documents. Except in the case of manifest
error in computation, the Loan Account will be presumptively deemed correct
(absent manifest error) as to the amount at any time due to the Bank from the
Borrower under this Agreement or the other Loan Documents.
10.3 Amendments and Waivers; No Implied Waiver. The Bank and the Borrower
-----------------------------------------
may from time to time enter into agreements amending, modifying or supplementing
this Agreement or any other Loan Document or changing the rights of the Bank or
of the Borrower under this Agreement or under any other Loan Document and the
Bank may from time to time grant waivers or consents to a departure from the due
performance of the obligations of the Borrower under this Agreement or under any
other Loan Document. Any such agreement, waiver or consent must be in writing
and will be effective only to the extent specifically set forth in such writing
and no such waiver or consent will extend to any other or subsequent Event of
Default or Potential Default or impair any right consequent to any other or
subsequent Event of Default or Potential Default. No course of dealing and no
delay or failure of the Bank in exercising any right, power or privilege under
this Agreement or any other Loan Document, or single or partial exercise of any
such right, power or privilege, will affect any other or future exercise of any
such right, power or privilege or exercise of any other right, power or
privilege.
10.4 Notices. All notices, requests, demands, directions and other
-------
communications (collectively "notices") under the provisions of this Agreement
must be in writing (including telecopied communication) unless otherwise
expressly permitted under this Agreement and must be sent by first-class
certified or first--class express mail, private overnight or next Business Day
courier or by telecopy with confirmation in writing mailed first class, in all
cases with charges prepaid, and any such properly given notice will be effective
when received. All notices
21
will be sent to the applicable party at the addresses stated in the heading of
this Agreement or in accordance with the last unrevoked written direction from
such party to the other parties.
10.5 Expenses; Taxes; Attorneys' Fees. The Borrower agrees to pay or cause
--------------------------------
to be paid and to save the Bank harmless against liability for the payment of
all reasonable out-of-pocket expenses, including, but not limited to fees and
expenses of counsel and paralegals for the Bank, incurred by the Bank from time
to time (i) arising in connection with the preparation, execution, delivery and
performance of this Agreement and the other Loan Documents, whether or not the
Revolving Credit Loans are advanced (ii) relating to any requested Supplements,
amendments, waivers or consents to this Agreement or any of the other Loan
Documents and (iii) arising in connection with the Bank's enforcement or
preservation of rights under this Agreement or any of the other Loan Documents
or the Bank Debt, including but not limited to such expenses as may be incurred
by the Bank in the collection of the outstanding principal amount of the Bank
Debt in any proceedings of the type described in the last subsection of Section
7.1 of this Agreement. The Borrower agrees to pay the cost of all lien searches
and all stamp, document, transfer, recording or filing taxes or fees and similar
impositions now or in the future determined by the Bank to be payable in
connection with this Agreement, any other Loan Document or the Bank Debt.
10.6 Severability. The provisions of this Agreement are intended to be
------------
severable. If any provision of this Agreement is held invalid or unenforceable
in whole or in part in any jurisdiction, the provision will, as to such
jurisdiction, be ineffective to the extent of such invalidity for
unenforceability without in any manner affecting the validity or enforceability
of the provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
10.7 Governing Law. This Agreement will be deemed to be a contract under
-------------
the laws of the Commonwealth of Pennsylvania and for all purposes will be
governed by and construed and enforced in accordance with the laws of said
Commonwealth, except that the Code (including the conflict of law provisions of
the Code) shall govern the effect of perfection of the Bank's security interest
in the Collateral.
10.8 Consent to Jurisdiction. The Borrower consents to the exclusive
-----------------------
jurisdiction and venue of the federal and state courts located in Indiana
County, Pennsylvania, in any action on, relating to or mentioning this
Agreement, the other Loan Documents, or any one or more of them.
10.9 Participations. The Bank may from time to time sell, assign or grant
--------------
one or more participations in all or any part of the Loan made by the Bank or
which may be made by the Bank, or its right, title and interest in the Loans or
in or to this Agreement, to another lender or financial institution. Bank shall
at all times remain lead bank in any participations of the Loan, and Bank shall
maintain ownership of at least fifty percent (50%) of the Loan. Except to the
extent otherwise required by the context of this Agreement, the word "Bank"
where used in this Agreement means and includes any holder of a Note originally
issued to the Bank and each such holder of a Note will be bound by and have the
benefits of this Agreement, the same as if such holder had been a signatory of
this Agreement. In connection with any such sale, assignment or grant of
participation, the Bank may make available to any prospective purchaser,
assignee or participant any information relative to the Borrower in the Bank's
possession, subject to a confidentiality agreement to be approved by Bank.
10.10 Successors and Assigns: The words "Bank" and "Borrower" include
----------------------
singular or plural, individual or corporate, and their respective heirs,
successors and assigns, as the case may be. In the event Borrower consists of
two or more individuals or two or more entities, all its obligations and
liabilities hereunder shall be joint and several. Notwithstanding the
foregoing, Borrower may not assign this Agreement, the Loan Documents, or the
Loan, in whole or in part.
10.11 Miscellaneous. This Agreement and the other Loan Documents supersede
-------------
all prior understandings and agreements, whether written or oral, among the
parties relating to the transactions provided for in this Agreement and the
other Loan Documents. Each Supplement now or at any time in the future attached
to this Agreement is incorporated into and made a part of this Agreement,
effective as of the date of such Supplement. The section headings contained in
this Agreement are for convenience only and do not limit or define or affect the
22
construction or interpretation of this Agreement in any respect. This Agreement
may be executed in separate counterparts each of which, when so executed, will
be deemed an original, but each such counterpart will constitute but one and the
same instrument. This Agreement will be binding upon and inure to the benefit of
the Bank, the Borrower and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of the Bank. The rights and benefits of this
Agreement and the other Loan Documents are not intended to, and shall not, inure
to the benefit of any third party.
10.12 WAIVER OF TRIAL BY JURY.
-----------------------
THE BORROWER AND THE BANK EXPRESSLY, INITIAL:
KNOWINGLY AND VOLUNTARILY WAIVE
ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A
TRIAL BY JURY, AND AGREE THAT THEY WILL NOT
AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY
MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR
ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION
ARISING IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE LOAN DOCUMENTS.
23
IN WITNESS WHEREOF, and intending to be legally bound, the parties, by
their duly authorized officers, have executed and delivered this Agreement as of
the date set forth at the beginning of this Agreement.
ATTEST: ALLIN COMMUNICATIONS CORPORATION
/s/ Xxxxx Xxxxxxxx By:/s/ Xxxx X. Xxxxxxxx
---------------------------- ---------------------
Witness Title: Vice President - Finance
ALLIN INTERACTIVE CORPORATION
/s/ Xxxxx Xxxxxxxx By:: /s/ Xxxx X. Xxxxxxxx
---------------------------- --------------------
Witness Title: Vice President - Finance
ALLIN DIGITAL IMAGING CORP.
/s/ Xxxxx Xxxxxxxx By:: /s/ Xxxx X. Xxxxxxxx
---------------------------- --------------------
Witness Title: Vice President - Finance
KENT CONSULTING GROUP, INC.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
---------------------------- ---------------------
Witness Title: Vice President - Finance
NETRIGHT, INC.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
---------------------------- --------------------
Witness Title: Vice President - Finance
ALLIN HOLDINGS CORPORATION
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
---------------------------- --------------------
Witness Title: Vice President - Finance
24
KCS COMPUTER SERVICES, INC.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
---------------------------- ---------------------
Witness Title: Vice President - Finance
ATTEST: S & T BANK
/s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
---------------------------- --------------------
Title: Vice President,
Commercial Loan Officer
(Pursuant to Regulation S-K, Item 601(b)(2), Registrant agrees to furnish
supplementally a copy of the exhibits and schedules to this agreement to the
Securities Exchange Commission upon request.)
25
