Exhibit 10
LOAN AGREEMENT
THIS AGREEMENT made and entered into as of this 12th day of
August, 1999, by and between SOFTWARE TECHNOLOGY, INC., a Florida corporation,
whose address is 0000 Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxx 00000 (the "Borrower"),
EXIGENT INTERNATIONAL, INC., a Delaware corporation, and FOTOTAG, INC., a
Delaware corporation, (the "Guarantors"), and THE HUNTINGTON NATIONAL BANK,
whose address is 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx 00000 (the "Lender").
W I T N E S S E T H:
WHEREAS, Borrower has negotiated with Lender for a revolving
line of credit loan in the principal amount of TWO MILLION DOLLARS
($2,000,000.00) (the "Loan" or "Revolving Loan") to be used by Borrower to
refinance and obtain additional credit to be secured by collateral as described
in Exhibit "A", attached hereto and made a part hereof by reference. The Loan
will be guaranteed by the Guarantors.
WHEREAS, Borrower, Guarantors and Lender wish to enter into
this Agreement in order to set forth the terms and conditions of the
disbursement of said Loan.
NOW, THEREFORE, in consideration of the premises set forth
above and the sum of TEN DOLLARS ($10.00) each to the other in hand paid, the
receipt and sufficiency of which is hereby acknowledged, Borrower, Guarantors
and Lender do hereby agree as follows:
ARTICLE I
LOAN DOCUMENTS
Prior to any disbursements, Borrower shall execute and
deliver, or cause to be executed and delivered, to Lender the following
documents (hereinafter collectively and together with this Agreement referred to
as "Loan Documents"), all in a form satisfactory to Lender:
A. Note. Promissory Note for Line of Credit of even date
herewith payable to the order of the Lender executed by Borrower, in the
principal amount of TWO MILLION AND 00/100 DOLLARS ($2,000,000.00) (referred to
as "Note").
B. Uniform Commercial Code-Financing Statements (Local and
State). Uniform Commercial Code-Financing Statements (local and state) covering
all of Borrower's assets including, but not limited to: accounts, inventory,
deposit accounts, general intangibles, contract rights, leasehold improvements,
machinery, equipment, intellectual property, instruments, documents, chattel
paper, trade names, trademarks and patents.
C. Guaranties. The unqualified and unconditional guaranty of
EXIGENT INTERNATIONAL, INC., a Delaware corporation, and FOTOTAG, INC., a
Delaware corporation.
D. Security Agreement. As security for payment of the
indebtedness evidenced by the Note, the Borrower shall execute and deliver to
the Lender a Security Agreement of even date herewith (the "Security Agreement")
pursuant to which the Borrower shall grant the Lender a second security interest
in all of the assets of the Borrower described in the Security Agreement.
Borrower agrees that all of the Liabilities of Borrower arising under the Loan
Agreement shall be secured by the Collateral. Borrower further agrees that the
Lender shall have sole discretion as to the manner of application of the sale or
the disposition of the Collateral and shall be entitled to conduct one or more
sales of the Collateral in addition to all other rights and remedies contained
herein. As additional security for payment of the indebtedness evidenced by this
Loan, the Guarantors shall execute an unconditional guarantee in favor of the
Lender described in Paragraph C. above.
E. Other Documents. Such other documents as may be required by
Lender in accordance with the terms of the Loan Commitment dated August 6, 1999
executed by Lender and Borrower in connection with the Loan ("Loan Commitment").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to make the Loan, the Borrower
and Guarantors make the following representations and warranties:
A. Borrower is a corporation duly organized, existing and in
good standing under the laws of the State of Florida, and has the corporate
power to own property and to carry out its businesses now being conducted, and
is duly qualified as a foreign corporation to do business in every jurisdiction
in the United States of America in which the nature of its business makes such
qualification necessary and is in good standing in such jurisdictions.
Guarantors are corporations duly organized, existing and in good standing under
the laws of the State of Delaware. Borrower and Fototag,Inc. are wholly-owned
subsidiaries of Exigent International, Inc.
B. Borrower is duly authorized under all applicable provisions
of law to execute and deliver the Note and to execute, deliver and perform the
Loan Agreement and the Security Agreement, all corporate action on its part
required for the lawful execution, delivery and performance thereof has been
duly taken and the Loan Agreement, the Security Agreement and the Note, upon the
due execution and delivery thereof, will be the valid and enforceable
instruments and obligations of Borrower in accordance with their terms. Neither
the execution of the Loan Agreement, the Security Agreement not the creation or
issuance of the Note, nor the fulfillment of or compliance with their provisions
and terms will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a violation of or default under any applicable law,
regulation, order, writ or decree of the charter or bylaws of the Borrower or
any agreement or instrument to which Borrower is now a party or create any lien,
charge or encumbrance upon any of the property or assets of Borrower pursuant to
the terms of any agreement or instrument to which Borrower is a party or by
which it is bound other than the security interest contemplated hereby.
C. No written approval of any federal, state or local
governmental authority is necessary to carry out the terms of the Loan
Agreement, the Security Agreement or the Note and no consents or approvals are
required in the making or performance of the Loan Agreement, the Security
Agreement or the Note.
D. The audited consolidated balance sheet of the Borrower and
Guarantors, as of December 31, 1998, is true and correct and the consolidated
balance sheet of Borrower and Guarantors, dated as of July 2, 1999, and related
statement of income for the quarter then ended, a copy of which has been
provided to the Lender, is true and correct, subject to normal, year end
adjustments and fairly presents the financial condition of the Borrower and
Guarantors, all in accordance with Generally Accepted Accounting Principles
consistently applied and since July 2, 1999, no material adverse change in
Borrower's and Guarantors' financial condition or business operation has
occurred.
E. Except as previously disclosed to Lender in writing, there
are no pending or threatened actions or proceedings before any court, arbitrator
or governmental or administrative body or agency which may materially adversely
affect the properties, business or condition, financial or otherwise, of
Borrower or Guarantors or in any way adversely affect or call into question the
power and the authority of Borrower to enter into or perform the Loan Agreement,
the Note or the Security Agreement.
F. No part of the proceeds of advances made pursuant to the
Loan Agreement will be or have been used to purchase or carry, or to reduce or
retire any loan incurred to purchase or carry, any margin stocks (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System)
or to extend credit to others for the purpose of purchasing or carrying any such
margin stocks. Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying such margin stocks. If requested by the
Lender, Borrower shall furnish to the Lender, in connection with the loan made
hereunder, a statement in conformance with the requirements of Federal Reserve
Form U-l referred to in said Regulation. In addition, no part of the proceeds of
the loan made hereunder will be used for the purchase of commodity future
contracts (or margins therefor for short sales) for any commodity not required
for the normal raw material inventory of the Borrower.
G. Borrower is now solvent and able to pay its debts as they
mature and Borrower now owns property whose fair salable value is greater than
the amount required to pay its Indebtedness.
H. Borrower has not incurred any material or accumulated
funding deficiency within the meaning of the Employee Retirement Income Security
Act of 1974 or any liability to the Pension Benefit Guarantee Corporation
established under such Act (or any successor thereto under such Act) in
connection with any employee benefit plan established or maintained by the
Borrower.
I. Each of the representations and warranties of the Borrower
contained in the Security Agreement are hereby reaffirmed in all respects as of
the date hereof.
J. Neither this Loan Agreement nor any other Agreements
contains any misrepresentation or untrue statement of fact or omits to state any
material fact necessary to make any of such agreements, reports, schedules,
certificates or instruments not misleading.
K. Borrower has good, indefeasible and merchantable title to
the Collateral, free and clear of all liens, claims, security interests and
encumbrances.
L. Borrower has good and marketable title to its properties
and assets, including the properties and assets reflected in the balance sheet
described above, except for such assets as have been disposed of since the date
of said financial statements as no longer used or useful in the conduct of its
business or as have been disposed of in the ordinary course of business, and all
such properties and assets are free and clear of all liens, mortgages, pledges,
encumbrances or charges.
M. Borrower is not a party to nor is it bound by any contract
or agreement or subject to any charter or other corporate restrictions which
adversely affects the business, properties or condition, financial or otherwise,
of Borrower except as disclosed in the financial statements referenced above and
note thereto.
N. Borrower owns, possesses or has the right to use all
necessary patents, licenses, trademarks, trademark rights, trade names, trade
name rights and copyrights material to the conduct of its businesses now
conducted, without known conflict with any patent, license, trademark, trade
name or copyright of any other Person.
The effectiveness of this Loan Agreement shall be subject to
the continuing accuracy of all representations and warranties of the Borrower
and Guarantors contained herein. Each advance made to Borrower pursuant to the
Loan Agreement shall constitute an automatic warranty and representation by
Borrower and Guarantors to the Lender that there does not exist a Default or any
Event of Default or any event or condition which, with notice, lapse of time
and/or the making of such advance, would constitute a Default or any Event of
Default and a reaffirmation as of the date of said request of all the
representations and warranties of Borrower and Guarantors contained in the Loan
Agreement. Borrower and Guarantors covenant, warrant and represent to the Lender
that all representations and warranties of Borrower and Guarantors contained in
this Loan Agreement shall be true at the time of execution of the Loan Agreement
and the Other Agreements and shall survive the execution, delivery and
acceptance thereof by the parties thereto and the closing of the transactions
described therein or related thereto.
ARTICLE III
CONDITIONS OF CLOSING
The effectiveness of the Loan Agreement shall be subject to
the fulfillment of the following conditions precedent to the first advance under
the Loan:
A. Borrower shall have delivered to the Lender the fully
executed Security Agreement, Note, financing statements and other letters,
instruments and documents as Lender shall require, including, but not limited
to, a Certificate of good standing of the Borrower certified by the Secretary of
State or other appropriate governmental authority accompanied by a certificate
from the appropriate officer of Borrower certifying that the copy attached to
such certificate of the Articles of Incorporation is complete and that the
Articles of Incorporation have not been amended, annulled, rescinded or revoked
since the date they were certified by the Secretary of State or other
appropriate governmental authority, a copy of the bylaws of the Borrower in
effect on the date of the Loan Agreement accompanied by a certificate from an
appropriate officer of Borrower that the copy is true and complete and that the
Bylaws have not been amended, annulled, rescinded or revoked since the date of
the Bylaws or the last amendment reflected in the copy, if any, and a
certificate of the Secretary certifying the names and true signatures of the
Borrower authorized to sign the Loan Agreement, the Security Agreement, the Note
and any Other Agreements to be executed and delivered hereunder.
B. The Borrower shall provide the Lender with a list of all
Indebtedness at the time of closing.
C. All instruments and documents incident to the issuance and
delivery of the Note shall be reasonably satisfactory in form and substance to
the Lender and Lender's counsel and the Lender shall have received the executed
Loan Agreement, the Security Agreement and all other documents which it may
reasonably request in connection therewith and copies of resolutions of Borrower
authorizing the transactions contemplated by the Loan Agreement, such
resolutions and other documents, when appropriate, to be certified by
appropriate corporate or governmental authorities.
D. The Lender shall have received the Guaranty Agreements
executed by the Guarantors.
The effectiveness of the Loan Agreement shall be further
subject to the fulfillment of the following conditions precedent to any
subsequent advance to Borrower under this Loan:
1. The Lender shall have received at the time of any
subsequent advance such other approvals, opinions or documents as the Lender may
reasonably request.
2. No event has occurred or is continuing or would result from
such advance that would constitute a Default or Event of Default as set forth
below.
3. The continuing accuracy of all representations and
warranties of the Borrower contained herein.
ARTICLE IV
AFFIRMATIVE COVENANTS
The Borrower further agrees that, so long as any Liabilities
remain unpaid to Lender, it will comply with the following requirements:
A. As soon as practicable, in any event within forty-five (45)
days after the end of each calendar quarter of each calendar year, deliver or
cause to be delivered to the Lender a consolidated balance sheet of Borrower and
Guarantors as at the last day of such quarter and related consolidated statement
of income for such quarter and cumulative year to date for Borrower and
Guarantors, setting forth in each case comparative form figures for the
corresponding period in the preceding calendar Year, all in reasonable detail
certified by an authorized officer of Borrower to have been prepared in
accordance with Generally Accepted Accounting Principles applied on a consistent
basis, subject to changes resulting from normal year-end adjustments.
B. As soon as practicable and in any event within ninety (90)
days after the end of each Fiscal Year, deliver to the Lender (i) a consolidated
balance sheet of Borrower and Guarantors as at the end of such Fiscal Year, and
related consolidated statements of income and retained earnings and changes in
financial position for such Fiscal Year, setting forth in each case comparative
form figures for the corresponding period in the preceding Fiscal Year, all in
reasonable detail and satisfactory in scope to the Lender and certified by and
containing an unqualified opinion of a nationally recognized firm of independent
certified public accountants, and (ii) management letters, if any, delivered to
the Borrower by such independent certified public accountants, in connection
with their examination of such financial statements.
C. Together with each delivery of those items required by
Paragraphs A. and B., above, Borrower shall deliver to the Lender an officer's
certificate setting forth: (i) to the best of his knowledge, Borrower has kept,
observed, performed and fulfilled each and every agreement binding on and
contained in this Loan Agreement and is not at the time in default of the
keeping, observance, performance or fulfillment of any of the terms, provisions
and conditions hereof, and (ii) that no Default or Event of Default, as has been
specified below, has occurred or specifying all such Defaults or Events of
Default which they may have knowledge.
D. With reasonable promptness, deliver such additional
financial or other date as the Lender may reasonably request. The Lender is
hereby authorized to deliver a copy of any financial statements or any other
information relating to the business operations or financial condition of the
Borrower and Guarantors which may be furnished to it or come to its attention
pursuant to this Loan Agreement or otherwise, to any regulatory body or agency
having jurisdiction over the Lender or to any Person which shall, or shall have
the right or obligation, to succeed to all or any part of the Lender's interest
in the Note or Other Agreements.
E. Promptly pay or cause to be paid all taxes, assessments and
other governmental charges that may lawfully be levied or assessed upon the
income or profits of Borrower; provided, however, Borrower shall not be required
to pay any such tax, assessment, charge, levy or claim so long as the validity
thereof shall be actively contested in good faith by proper proceedings; but
provided further that any such tax, assessment, charge, levy or claim shall be
paid, stayed or bonded forthwith upon the commencement of proceedings to
foreclose any lien securing the same.
F. Do or cause to be done all things necessary to preserve
and to keep in full force and effect its corporate existence and rights.
G. At its sole cost and expense, keep and maintain the
Collateral insured for its full insurable value against loss or damage, fire,
theft, explosion and all other hazards and risk ordinarily insured against by
other owners or users of such properties in similar businesses, and maintain
adequate workers' compensation insurance, and notify the Lender promptly of any
event or occurrence causing a material loss or decline in the value of the
Collateral and the estimated (or actual, if available) amount of such loss or
decline. All policies of insurance shall be in form and with insurers recognized
as adequate by prudent business persons and all such policies shall be in such
amounts as may be satisfactory to the Lender. Upon request, Borrower shall
deliver to the Lender the original (or certified copy) of each policy of
insurance and evidence of payment of all premiums therefor. Such policies of
insurance shall contain an endorsement, in form and substance acceptable to the
Lender, showing loss payable to the Lender. Such endorsement, or an independent
instrument furnished to the Lender, shall provide that the insurance companies
will give the Lender at least thirty (30) days prior written notice before any
such policy or policies of insurance shall be altered or canceled and that no
act or default of Borrower or any other person shall affect the right of the
Borrower to loss or damage. Borrower hereby directs all insurers under such
policies of insurance where loss or damage exceeds $25,000 under any such policy
of insurance to pay all proceeds payable hereunder directly to the Lender. So
long as no Default or Event of Default exists hereunder, at the option of the
Borrower, in the case of insurance proceeds arising from the loss or damage of
building and equipment, the proceeds may be used to replace or restore same.
Should the Borrower elect not to replace or restore the lost property, any
insurance proceeds shall be applied first to any accrued interest due to the
Lender, then to the principal balance of the liabilities in such order as the
Borrower may direct. Borrower irrevocably makes, constitutes and appoints the
Lender (and all officers, employees or agents designated by the Lender) as such
Borrower's true and lawful attorney (and agent-in-fact), effective from and
after the occurrence of a Default or Event of Default, for the purpose of
making, settling and adjusting such claim under the policies of insurance
(providing that the Lender shall consult with Borrower prior to finally making,
settling or adjusting claims under such policies of insurance), endorsing the
name of Borrower on any check, draft or instrument or other item or payment for
the proceeds of such policies of insurance and for making all determinations and
decisions with respect to such policies of insurance. In the event Borrower, at
any time or times hereafter, shall fail to maintain any of the policies of
insurance required above or to pay any premium in whole or in part related
thereto, then the Lender, without waiving or releasing any obligation or default
by Borrower hereunder, may (but shall be under no obligation to do so) at any
time or times hereafter obtain and take any other action with respect thereto
which the Bank deems advisable. All sums so disbursed by the Lender, including
reasonably attorneys' fees, court costs, expenses and other charges relating
thereto, shall be payable, on demand by Borrower and shall be additional
Liabilities hereunder secured by the Collateral. The Lender agrees to give
Borrower notice of payment of each and every premium paid by Borrower to
insurers as required hereunder.
H. Maintain its property in good order and repair and from
time to time make all needful and proper repairs, renewals, replacements,
additions and improvements thereto.
I. Keep true books of record and account in which full, true
and correct entries will be made of all of its dealings and transactions and set
up on its books such reserves as may be required by Generally Accepted
Accounting Principles.
J. Conform to and duly observe all laws, regulations and other
valid requirements of any regulatory authority with respect to the conduct of
its business.
K. Upon any officer of the Borrower obtaining knowledge of a
Default or Event of Default hereunder or under any other obligation of Borrower,
cause such officer or individual, as the case may be, to properly deliver to the
Lender a certificate certifying the nature thereof, the period of existence
thereof, and whatever action the Borrower proposes to take with respect thereto.
L. Upon any officer of the Borrower obtaining knowledge of a
material litigation, dispute or proceedings being instituted or threatened
against Borrower, or any attachment, levy, execution or other process being
instituted against any assets of Borrower, cause such officer or individual, as
the case may be, to promptly give the Bank written notice of such litigation,
dispute, proceeding, levy, execution or other process.
M. Use it best efforts to comply with all of the requirements
of the Employee Retirement Income Security Act of 1974 (ERISA) applicable to it
and furnished to the Lender a statement of the principal financial officer of
Borrower describing in reasonable detail any Reportable Event (as defined in
ERISA).
N. Continue at all times to maintain its chief executive
offices and principal place of business at Melbourne, Brevard County, Florida.
O. Maintain its primary operating banking accounts with the
Lender.
P. With respect to the consolidated financial statements of
Borrower and the Guarantors, maintain the following financial ratios in the
amounts indicated below:
1. Maximum Total Liabilities divided by Tangible Net
Worth of 2.25:l.0 at fiscal year end December 3l, l999
and quarterly thereafter.
2. Minimum Working Capital of $2,000,000.00 at
September 30, 1999 and each quarter thereafter.
3. Minimum Current Ratio of l.30:l.0 at September 30,
1999 and each quarter thereafter.
4. Minimum Debt Service Coverage l.20 times at fiscal
year end December 31, 2000, and annually thereafter.
ARTICLE V
NEGATIVE COVENANTS
Except for any currently existing matter which has previously
been disclosed to Lender or unless Lender otherwise consents in writing,
Borrower covenants and further agrees that from the date hereof until payment in
full of the principal and interest under the Note, unless the Lender otherwise
consents in writing, it will not;
A. Incur, create, assume or permit to exist any Indebtedness
in excess of $100,000.00 other than the Indebtedness to the Lender.
B. Incur, create, assume or permit to exist any mortgage,
pledge, security interest, encumbrance, lien or other charge of any kind upon
any of its properties or assets of any character under conditional sales or
other title retention agreements in excess of $100,000.00 except those
mortgages, liens and security interests granted in favor of the Lender.
C. Lend or advance money, credit or property in excess of
$50,000.00 to any employee, officer, director, stockholder, or affiliate except
in the ordinary course of the Borrower's business.
D. Guarantee, assume, endorse or otherwise become or remain
liable in connection with the obligations (including the accounts payable) of
any other Person, in excess of $50,000.00, other than the endorsements of
negotiable instruments in the ordinary course of business for deposit or
collection.
E. Enter into any transaction that materially and adversely
affects the Collateral or Borrower's ability to repay the Liabilities or permit,
other than in the ordinary course of business, or agree to any extension,
compromise or settlement or make any change or modification of any kind or
nature with respect to any account including any terms relating thereto.
F. Merge or consolidate with any other corporation or sell,
lease, transfer or otherwise dispose of all or a substantial portion of its
assets, outside of the normal course of business.
ARTICLE VI
SPECIFIC PROVISIONS
A. Revolving Loan Amount. The maximum principal amount
outstanding under the Revolving Loan at any time shall not exceed the lesser of
the Borrowing Base (as defined in Exhibit 1 below) or Two Million Dollars
($2,000,000.00). On or before the first business day of each calendar month,
Borrower shall furnish to the Lender, in a form satisfactory to the Lender, a
current Borrowing Base Certificate with all calculations and documentation
necessary to determine the current Borrowing Base and the Borrowing Base set
forth therein shall be deemed the Borrowing Base until receipt and approval by
Lender of a new Borrowing Base Certificate.
B. Revolving Loan Rate. Except upon a Default, the interest
rate for the Revolving Loan may be adjusted from time to time as follows:
1. If Borrower's most recent Form 10Q report
furnished to Lender indicates the following ratios:
Total Liabilities to Total Net Worth less than 1.50:1.0 and Working Capital in
excess of $2,500,000.00, then the interest rate otherwise stated for the
Revolving Loan shall be reduced by 0.50% for the subsequent calendar quarter.
2. If Borrower's most recent Form 10Q report
furnished to Lender indicates the following ratios:
Total Liabilities to Total Net Worth less than 1.00:1.0 and Working Capital in
excess of $3,500,000.00, then the interest rate otherwise stated for the
Revolving Loan shall be reduced by 0.75% for the subsequent calendar quarter.
3. For any calendar quarter, Borrower may elect that
the applicable interest rate under the Revolving
Loan for such calendar quarter will be the Prime Rate or the Daily Fluctuating
LIBO Rate plus 2.50% (as such terms are defined in the Note) by providing
written notice of such election to Lender at least fifteen (l5) days prior to
the end of the preceding calendar quarter; otherwise, the applicable interest
rate for the preceding calendar quarter shall continue to be the applicable
interest rate for the subsequent calendar quarter.
ARTICLE VII
DEFAULT
If any one or more of the following events (hereinafter
referred to as "Events of Default") shall occur:
A. If Borrower defaults in the payment of the Liabilities
when due and payable or declared due and payable; or
B. If Borrower defaults in the payment of principal or
interest on any other Liability, including any guarantee of indebtedness of
another Person, beyond any period of grace provided with respect thereto or in
the performance of any other agreement, term or condition contained in any
agreement under which any such Indebtedness is created, if the effect of such
default is to cause or permit the holder or holders of such Indebtedness (or a
trustee on behalf of such holder or holders) to cause such Indebtedness to
become due prior to its stated maturity; or
C. If Borrower defaults in the performance or observance of
any agreement or covenant contained herein or contained in any of the Other
Agreements; or
D. If any representation or warranty made by Borrower herein
or in any writing furnished in connection with or pursuant to this Loan
Agreement or any Other Agreements shall be false or misleading in any material
respect on the date as of which made; or
E. In the event of the liquidation or dissolution of Borrower,
or suspension of the business of Borrower or filing by Borrower of a voluntary
petition or an answer seeking reorganization, arrangement or readjustment of its
debts or for any other relief under the Bankruptcy Code, as amended or under any
other insolvency act or law, state or federal, now or hereafter existing, or any
other action of Borrower indicating its consent to, approval of, or acquiescence
in any such petition or proceeding the application by Borrower for, or the
appointment by consent or acquiescence of, a receiver, trustee or custodian of
Borrower, for all or substantial part of its property; the making by Borrower of
an assignment for the benefit of creditors; the inability of Borrower or the
admission by Borrower in writing of its ability to pay its debts as they mature;
or
F. In the event of the filing of an involuntary petition
against Borrower in bankruptcy seeking reorganization, arrangement, readjustment
of its debts or for any other relief under the Bankruptcy Code, as amended, or
under any other insolvency act or law, state or federal, now or hereafter
existing; or the involuntary appointment of a receiver, a trustee or a custodian
of Borrower for all or a substantial part of its property; the issuance of a
warrant of attachment, execution or a similar process against any substantial
part of the property of Borrower and the continuance of any such foregoing
events for sixty (60) days undismissed or undischarged; or
G. If any order is entered in any proceeding against Borrower
decreeing the dissolution or split up of Borrower and such order remains in
effect more than sixty (60) days; or
H. If any report, certificate, financial statement or other
instrument delivered to the Lender by or in behalf of Borrower is false or
misleading in any material respect at the time given; or
I. If an uninsured final judgment, which with other
outstanding uninsured final judgments against Borrower exceeds an aggregate of
$100,000 shall be rendered against Borrower and within thirty (30) days after
entry thereof such judgment shall not have been discharged or executed thereof
stayed pending appeal, or if within thirty (30) days after the expiration of any
such stay such judgment shall not have been discharged; then, at any time
thereafter, the Lender may, at its option, declare the Note and all other
Liabilities owing by the Borrower to the Lender to be forthwith due and payable,
whereupon the Note and any other such Liabilities shall forthwith become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are expressly waived, anything contained herein or in the Other
Agreements to the contrary notwithstanding, and in addition the Lender may
immediately proceed to foreclose all or part of its liens on or security
interest in the Collateral in the proceeds of such foreclosure against the
Liabilities secured thereby in such manner as it shall elect and exercise its
rights under the Other Agreements and to do all other things provided for by law
or by this Agreement or by the Other Agreements.
ARTICLE VIII
GENERAL PROVISIONS
A. The Borrower further agrees to reimburse the Lender for all
costs and out-of-pocket expenses, including fees of the Lender's special
counsel, incurred in connection with the preparation, execution, delivery,
modification, waiver and amendments of this Loan Agreement, the Note and the
related documentation, and also all reasonable expenses incurred by the Lender
(including reasonable attorneys' fees) in the collection of any Indebtedness
incurred hereunder in the event of default by Borrower.
B. Borrower agrees to pay any and all documentary, intangible
stamp or excise taxes now or after payable in respect of the Loan, this Loan
Agreement or Other Agreements or any modifications thereof and hold the Lender
harmless with respect thereto. The Borrower further agrees that the Lender may
deduct from any advance the amount of any such documentary or intangible stamp
tax payable with respect to such advance, the decision of the Lender as to the
amount thereof to be conclusive, absent manifest error. Borrower gives the
Lender the authority to debit its accounts maintained with the Lender for any
principal, interest, fees or other Liabilities becoming due hereunder.
C. This Loan Agreement sets forth the entire understanding and
agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relative to
such subject matter. No promise, condition, representation or warranty, express
or implied, not herein set forth shall bind any party hereto, and none of them
has relied on any such promise, condition, representation or warranty. Each of
the parties hereto acknowledges that, except as in this Loan Agreement otherwise
expressly stated, no representations, warranties or commitments, express or
implied, have been made by any other party to the other. None of the terms or
conditions of this Loan Agreement may be changed, modified, waived or canceled
orally or otherwise, except by writing, signed by all the parties hereto,
specifying such change, modification, waiver or cancellation of such terms or
conditions, or of any preceding or succeeding breach thereof.
D. Notwithstanding any other provision herein, the aggregate
interest rate charged under the Note, including all charges or fees in
connection therewith deemed in the nature of interest under Florida law, shall
not exceed the maximum rate allowed by law. In the event the stated interest
rate on the Note together with any other charge or fee deemed in the nature of
interest exceeds the maximum legal rate, then the Lender shall have the right to
make such adjustments as are necessary to reduce the aggregate interest rate to
the maximum legal rate. The Borrower waives any right to prior notice of such
adjustment and further agrees that such adjustment may be made by the Lender
subsequent to notification from Borrower that the aggregate interest charged
exceeds the maximum legal rate.
E. This Loan Agreement, the Security Agreement and the Note
issued hereunder shall be governed in all respects by the laws of Florida.
F. Should any one or more of the provisions of this Loan
Agreement be determined to be illegal or unenforceable as to one or more of the
parties, all other provisions nevertheless shall remain effective and binding on
the parties hereto.
G. Borrower and Lender hereby consent and agree that, in any
actions predicated upon this Agreement, venue is properly laid in Brevard
County, Florida, and that the Circuit Court for Brevard County, Florida shall
have full jurisdiction to determine all issues arising out of or in connection
with the execution and enforcement of this Agreement. Borrower waives to the
fullest extent permitted under the laws of the State of Florida, any right,
power or privilege to demand a jury trial with respect to any and all issues
arising out of or in connection with the execution and/or enforcement of this
Agreement.
H. Borrower warrants and represents to and covenants with
Lender that, on and after the date of the Note, so long as any of the
indebtedness provided for herein remains unpaid:
(1) Borrower, on behalf of Borrower and any material
subsidiaries of Borrower (hereinafter referred to as the "Organization"), has:
(a) undertaken a detailed inventory, review, and assessment of all areas within
and affecting the Organization's business and operations that could be
materially and adversely affected by the failure of the Organization to be Year
2000 Compliant (as hereinafter defined) on a timely basis; (b) developed a plan
and time line for becoming Year 2000 Compliant on a timely basis; and (c) to
date, implemented that plan in accordance with the specified timetable in all
material respects; and
(2) The Organization reasonably anticipates that the Organi-
zation will be Year 2000 Compliant on a timely basis.
(3) Borrower shall deliver to Lender: (a) immediately upon
becoming aware of the existence of any condition or event which constitutes or
will constitute, but for the passage of time or giving of notice or both, an
event of default, a written notice specifying the nature and period of existence
thereof and what action the Organization is taking or proposes to take with
respect thereto; and (b) at the request of Lender, such information,
documentation and materials as Lender may from time to time reasonably require
including, but not limited to, (i) the Organization's Year 2000 plan and time
line, (ii) any management or other letters from the Organization's accountants
addressing or mentioning the Organization's Year 2000 Compliance, and (iii) such
other information, documentation and materials as Lender may reasonably request
from time to time in order to confirm that the Organization is Year 2000
Compliant and the method(s) used by the Organization to become Year 2000
Compliant.
As used herein, "Year 2000 Compliant" shall mean that all
software, embedded microchips and other processing capabilities utilized by the
Organization or the Organization's key suppliers, vendors and customers will
correctly process, sequence, and calculate, without interruption, all date and
date related data for all dates to, through and after January 1, 2000, including
leap year calculations, and shall recognize, store and transmit date data in a
format which clearly indicates the correct century.
IN WITNESS WHEREOF, Borrower and Lender have hereunto caused
these presents to be executed on the date first above written.
Signed, sealed and delivered "BORROWER"
in the presence of:
SOFTWARE TECHNOLOGY, INC., a
Florida corporation
/s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxx
----------------------------- --------------------------------
Xxxxx X. Xxxx, Treasurer
/s/ Xxxxxx Zugh
-----------------------------
Two witnesses as to Borrower
(CORPORATE SEAL)
Signed, sealed and delivered "GUARANTORS"
in the presence of:
EXIGENT INTERNATIONAL, INC., a
Delaware corporation
/s/Xxxx Xxxxx By:/s/ Xxxxxxx X. Xxxxxxxx
----------------------------- --------------------------------
Xxxxxxx X. Xxxxxxxx,
/s/ Xxxxx X. Xxxx Xx. Vice President andTreasurer
-----------------------------
Two witnesses as to Exigent
International, Inc.
(CORPORATE SEAL)
FOTOTAG, INC., a
Delaware corporation
/s/ Xxxx Xxxxx By: /s/ Xxxxx X. Xxxx
----------------------------- --------------------------------
Xxxxx X. Xxxx, Treasurer
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Two witnesses as to Fototag, Inc.
(CORPORATE SEAL)
"LENDER"
THE HUNTINGTON NATIONAL BANK
/s/ Xxxxx X. Xxxx By: /s/ Xxxx Xxxxx
----------------------------- --------------------------------
Name: Xxxx Xxxxx
/s/ Xxxxxxx X. Xxxxxxxx Title: AVP
-----------------------------
Two witnesses as to Lender
EXHIBIT "A"
All of the Debtor's right, title and interest in and to each of the
following, however arising and whether now existing or hereafter acquired or
arising (the "Collateral"):
(A) "Accounts"of Borrower, which means and includes accounts, general
intangibles, chattel paper, instruments and documents, whether now owned or
hereafter acquired by Borrower. "General Intangibles" shall mean all intangible
personal property of Borrower of every kind and nature (other than accounts,
chattel paper, documents and instruments) including, without limitation, choses
in action, causes of action, corporate or other business records, inventions,
designs, patents, patent applications, trademarks, trade names, trade secrets,
good will, copyrights, registrations, licenses, franchises, deposit accounts,
contract rights, leasehold improvements, tax refund claims, computer programs,
and any guarantee claims, security interests or other security held by or
granted to Borrower to secure payment by an Account Debtor of any of the
Accounts. "Account Debtor" means any person who is or who may become obligated
to Borrower under or on account of an Account.
(B) "Inventory" of Borrower, which means and includes any and all
goods, merchandise and other personal property, including, without limitation,
goods in transit, wheresoever located and whether now owned or hereafter
acquired by Borrower which is or may at any time be held for sale or lease,
furnished under any contract or service or held as raw materials,
work-in-process, or supplies or materials used or consumed in a Borrower's
business, including, without limitation, all such property the sale or other
disposition of which has given rise to Accounts and which has been returned to
or repossessed or stopped in transit by Borrower.
(C) "Equipment" of Borrower, which means and includes all fixtures and
equipment, including without limitation, furniture, vehicles and trade fixtures;
(D) All monies, residues and property of any kind, now or at any time
or times hereafter, in the possession or under the control of the Bank or a
bailee of Bank;
(E) All accessions to, substitutions for and all replacements, products
and proceeds of the foregoing, including, without limitation, proceeds of
insurance policies insuring the Collateral; and
(F) All books and records (including without limitation, customer
lists, credit files, computer programs, print-outs, and other computer materials
and records) of Borrower pertaining to any of the foregoing.
All of the property and interests in property described in subsections
(A) through (F) and all other property and interests in personal property which
shall, from time to time, secure the Liabilities are herein collectively
referred to as the "Collateral".
EXHIBIT 1
Definitions
"Borrowing Base" will consist of up to 80% of "eligible"
accounts receivable plus the lessor of either $750,000.00 or up to 50% of
"eligible" contract receivables plus the lesser of either $l,500,000.00 or up to
50% of "eligible" Costs in Excess of Xxxxxxxx minus the existing balance on the
$3,000,000.00 line of credit and the term debt which has a current balance of
approximately $408,000.00.
"Eligible" is defined as: (l) Accounts receivable: amounts
that are less than 90 days from invoice date; (2) Contracts receivable: amounts
that are fully recoverable according to contract terms within one year.
Contracts shall be submitted to Lender prior to funding request being made.
Eligibility shall be determined by Lender in its sole discretion; (3) Costs in
excess of xxxxxxxx: amounts that are to be billed as of the end of the current
month. No advance will be made on accounts whose balance that is over 90 days
from invoice date is over 25% of the total account balance.
"Collateral" means all of the accounts, inventory, equipment
and other personal property of the Borrower described in the Security Agreement.
"Current Assets" means cash and all other assets or resources
of the Borrower and the Guarantors that are expected to be realized in cash,
sold in the ordinary course of business, or consumed within one year, all
determined in accordance with Generally Accepted Accounting Principles,
including, but not limited to, inventory supported by outstanding import letters
of credit.
"Current Liabilities" means the amount of all liabilities of
the Borrower and the Guarantors that by their terms are payable within one year
(including all indebtedness payable on demand or maturing not more than one year
from the date of computation and the current portion of Indebtedness having a
maturity date in excess of one year), all determined in accordance with
Generally Accepted Accounting Principles, including, but not limited to,
outstanding letters of credit.
"Tangible Net Worth" means the depreciated book value of all
assets of Borrower and Guarantors less:
(i) intangible assets, such as (without limitation)
goodwill (whether representing the excess of cost over book value of
assets acquired or otherwise), capitalized expenses, patents,
trademarks, trade names, copyrights, franchises, licenses and deferred
charges, such as (without limitation) unamortized costs and costs of
research and development.
(ii) Total Liabilities,
(iii) treasury stock, and
(iv) advances to stockholders or affiliates of the
Borrower.
"Total Liabilities" means the aggregate amount of all
liabilities (i.e., claims of creditors of Borrower and Guarantors that are to be
satisfied by the disbursement or utilization of corporate resources), including,
but not limited to, all outstanding import letters of credit and negative
goodwill of Borrower and Guarantors.
"Current Ratio" means the ratio of Current Assets to Current
Liabilities.
"Default" means any event that, with the giving of notice,
lapse of time, or both, would become an Event of Default.
"Fiscal Year" means the 12-month period of the Borrower ending
on December 3l of each Calendar year and commencing on January lst of each
calendar year.
"Generally Accepted Accounting Principles" means those
principles of accounting set forth in Opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants or
which have other substantial authoritative support and are applicable in the
circumstances as of the date of a report, as such principles are from time to
time supplemented and amended.
"Indebtedness" means with respect to any Person, all
indebtedness of such Person for borrowed money, all indebtedness of such Person
for the acquisition of property other than purchases of products and merchandise
in the ordinary course of business, indebtedness secured by any lien, pledge or
other encumbrance on the property of such Person whether or not such
indebtedness is assumed, all liability of such Person by way of endorsements
(other than for collection or deposit in the ordinary course of business); all
guarantees of Indebtedness of any other Person by such Person (including any
agreement, contingent or otherwise, to purchase any obligation representing such
indebtedness or property constituting security therefor, or to advance or supply
funds for such purpose or to maintain working capital or other balance sheet or
income statement condition, or any other arrangement in substance effecting any
of the foregoing); all leases and other items which in accordance with Generally
Accepted Accounting Principles are classified as liabilities on a balance sheet;
provided that in no event shall the term Indebtedness include capital stock,
surplus and retained earnings, minority interest in the common stock of
Subsidiaries, reserves for deferred income taxes and investment credits, other
deferred credits and reserves, and deferred compensation obligations.
"Liabilities" mean all liabilities, obligations and
indebtedness of any and every kind and nature (including, without limitation,
interest, charges, expenses, attorneys' fees and other sums chargeable to
Borrower by the Lender and future advances made to or for the benefit of
Borrower), whether arising under this Loan Agreement, or arising under the Note
or arising under any of the Other Agreements or acquired by the Lender and from
any other source, whether heretofore, now or hereafter owing, arising, due or
payable from Borrower to the Lender and howsoever evidenced, created, incurred,
acquired or owing, whether primary, secondary, direct, contingent, fixed or
otherwise, including obligations of performance.
"Other Agreements" means the Note, the Guaranty Agreement, the
Security Agreement and all agreements, instruments and documents, including,
without limitation, note, guaranties, mortgages, deeds to secure debt, deeds of
trust, chattel mortgages, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, financing statements, certificates of
title, trust account agreements and all other Written matters whether
heretofore, now or hereafter executed by or on behalf of Borrower and delivered
to the Bank, with respect to this Loan Agreement, or with respect to the
transactions contemplated by this Loan Agreement.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government agency
or political subdivision thereof.
All accounting terms not specifically defined herein shall be
construed in accordance with Generally Accepted Accounting Principles.
All of the terms defined in this Loan Agreement shall have
such defined meanings when used in the Other Agreements.
