Exhibit 10.5
FOURTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT
This Fourth Amendment to Loan and Security Agreement (this
"Amendment") is entered into as of November 18, 2004, by and between COMERICA
BANK, successor by merger to COMERICA BANK-CALIFORNIA ("Bank") and TCI
SOLUTIONS, INC. ("Borrower").
RECITALS
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Borrower and Bank are parties to that certain Loan and Security
Agreement dated as of August 6, 2002t as amended from time to time, including by
that certain First Amendment to Loan and Security Agreement dated as of August
5, 2003, that certain Second Amendment to Loan and Security Agreement dated as
of January 28, 2004 and that certain Third Amendment to Loan and Security
Agreement dated as of February 27, 2004 (the "Agreement"). The parties desire to
amend the Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. The following defined terms in Section 1.1 of the Agreement
hereby are amended or restated as follows:
"Consolidated Net Income (or Deficit)" means the consolidated net
income (or deficit) of any Person and its Subsidiaries, before deduction of all
expenses, taxes and other proper charges, determined in accordance with GAAP,
before eliminating therefrom all extraordinary nonrecurring items of income.
"Consolidated Total Interest Expense" means with respect to any
Person for any period, the aggregate amount of interest required to be paid or
accrued by a Person and its Subsidiaries during such period on all Indebtedness
of such Person and its Subsidiaries outstanding during all or any part of such
period, whether such interest was or is required to be reflected as an item of
expense or capitalized, including payments consisting of interest in respect of
any capitalized lease or any synthetic lease, and including commitment fees,
agency fees, facility fees, balance deficiency fees and similar fees or expenses
in connection with the borrowing of money.
"Eligible Accounts" means those Accounts that arise in the
ordinary course of Borrower's business that comply with all of Borrower's
representations and warranties to Bank set forth in Section 5.4; provided, that
standards of eligibility may be fixed and revised from time to time by Bank in
Bank's reasonable judgment and upon notification thereof to Borrower in
accordance with the provisions hereof. Unless otherwise agreed to by Bank,
Eligible Accounts shall not include the following:
(a) Accounts that the account debtor has failed to pay within
ninety (90) days of invoice date;
(b) Accounts with respect to an account debtor, twenty-five
percent (25%) of whose Accounts the account debtor has failed to pay within
ninety (90) days of invoice date;
(c) Accounts with respect to which the account debtor is an
officer, employee, or agent of Borrower;
(d) Accounts with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on approval, xxxx and hold,
or other terms by reason of which the payment by the account debtor may be
conditional;
(e) Accounts with respect to which the account debtor is an
Affiliate of Borrower;
(f) Accounts with respect to which the account debtor does not
have its principal place of business in the United States, except for Eligible
Foreign Accounts;
(g) Accounts with respect to which the account debtor is the
United States or any department, agency, or instrumentality of the United
States;
(h) Accounts with respect to which Borrower is liable to the
account debtor for goods sold or services rendered by the account debtor to
Borrower or for deposits or other property of the account debtor held by
Borrower, but only to the extent of any amounts owing to the account debtor
against amounts owed to Borrower;
(i) Accounts with respect to an account debtor, including
Subsidiaries and Affiliates, whose total obligations to Borrower exceed
twenty-five percent (25%) of all Accounts, to the extent such obligations exceed
the aforementioned percentage, except as approved in writing by Bank;
(j) Accounts with respect to which the account debtor disputes
liability or makes any claim with respect thereto as to which Bank believes, in
its sole discretion, that there may be a basis for dispute (but only to the
extent of the amount subject to such dispute or claim), or is subject to any
Insolvency Proceeding, or becomes insolvent, or goes out of business; and
(k) Accounts the collection of which Bank reasonably determines
to be doubtful.
"Eligible Maintenance Accounts" means those Maintenance Accounts
that arise in the ordinary course of Borrower's business that comply with all of
Borrower's representations and warranties to Bank set forth in Section 5.4
except that Eligible Maintenance Accounts shall include annual pre-billed
invoices up to sixty (60) days in advance of when payment is due thereon;
provided, that standards of eligibility may be fixed and revised from time to
time by Bank in Bank's reasonable judgment and upon notification thereof to
Borrower in accordance with the provisions hereof.
"EBITDA" means with respect to any fiscal period an amount equal
to the sum of (a) Consolidated Net Income of the Borrower and its Subsidiaries
for such fiscal period, plus (i) depreciation and amortization for such period,
plus (ii) Consolidated Total Interest Expense paid or accrued during such
period, all as determined in accordance with GAAP.
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"Maintenance Accounts" means Accounts arising under software
maintenance agreements between Borrower and its customers for maintenance
services and upgrades to be performed in the future.
"Maintenance Accounts Borrowing Base" means an amount equal to
fifty percent (50%) of the gross amount of Eligible Maintenance Accounts, as
determined by Bank with reference to the most recent Maintenance Accounts
Borrowing Base Certificate, provided however, that the Maintenance Accounts
Borrowing Base shall not exceed (i) One Million Five Hundred Thousand Dollars
($1,500,000) from November 18, 2004 through February 28, 2005, (ii) One Million
Dollars ($1,000,000) from March 1, 2005 through March 31, 2005 and (iii) Five
Hundred Thousand Dollars ($500,000) from April 1, 2005 through the Revolving
Maturity Date.
"Revolving Line" means a credit extension of up to Four Million
Dollars ($4,000,000). "Revolving Maturity Date" means May 31, 2005.
2. Section 2.1(a)(i) of the Agreement hereby is amended and restated
in its entirety to read as follows:
"(i) Subject to and upon the terms and conditions of this Agreement, Borrower
may request Advances in an aggregate outstanding amount not to exceed the lesser
of (i) the Revolving Line or (ii) the Borrowing Base plus the Maintenance
Accounts Borrowing Base, minus, in each case, the aggregate face amount of all
outstanding Letters of Credit. Subject to the terms and conditions of this
Agreement, amounts borrowed pursuant to this Section 2.1 (a) may be repaid and
reborrowed at any time prior to the Revolving Maturity Date, at which time all
Advances under this Section 2.1(a) shall be immediately due and payable.
Borrower may prepay any Advances without penalty or premium.
(a)
Maintenance Accounts;
W02-SD:8MS 1\00000000.2
111704 032A-109655
3. Section 6.8 of the Agreement hereby is amended and restated in
its entirety to read as follows:
"6.8 Quick Ratio. Borrower shall at all times maintain, measured as of the last
day of each month, a ratio of cash (which shall be no less than Seven Hundred
Fifty Thousand Dollars ($750,000) at all times maintained with Bank), cash
equivalents and accounts receivable, to Current Liabilities plus, to the extent
not already included therein, all Indebtedness owing by Borrower to Bank
(including without limitation all Contingent Obligations) less deferred
maintenance revenue and deferred license revenue, of at least 1.25:1.00. As used
herein, "deferred license revenue" means revenue derived from any element of a
software license which is not delivered when such license is signed."
4. Sections 6.9, 6.10 and 6.11 as in effect prior to the date of
this Amendment hereby are renumbered to read "Section 6.10", "Section 6.11" and
"Section 6.12", respectively, and references to Sections 6.9, 6.10 and 6.11
throughout the Agreement as in effect prior to the
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date of this Amendment shall mean and refer to "Section 6.10", "Section 6.11"
and "Section 6.12", respectively. New Section 6.9 of the Agreement hereby is
added as follows:
"6.9 Minimum EBITDA. Borrower shall maintain, measured as of the last day of
each calendar month on a trailing three (3) month basis, EBITDA of (i) at least
One Hundred Fifty Thousand Dollars ($150,000) from December 31, 2004 through
March 31, 2005 and (ii) at least Three Hundred Thousand Dollars ($300,000) from
April 30, 2005 through the Revolving Maturity Date.
5. All references in the Loan Documents (except the Warrant) to
Bank's address at 0000 X. Xx Xxxxxxx Xxxx., Xxxxx 0000, Xxxxxxxxx, XX 00000,
shall mean and refer to 0000 Xxxxxxxxx Xxx., Xxxxx 0000, Xx Xxxxxxx, XX 00000.
The reference in all Warrants to Bank's address(es) shall mean and refer to 000
Xxxxxxxx Xxxxxx, 00xx Xxxxx, XX 0000, Xxxxxxx, XX 00000.
6. Section 12 of the Agreement as in effect prior to the date of
this Amendment hereby is renumbered to read "Section 13," and references to
Section 12 throughout the Agreement as in effect prior to the date of this
Amendment shall mean and refer to "Section 13." New Section 12 hereby is added
to the Agreement to read as follows:
7. REFERENCE PROVISION.
The parties prefer that any dispute between them be resolved in
litigation subject to a Jury Trial Waiver as set forth in Section 11 of this
Agreement, but the availability of that process is in doubt because of the
opinion of the California Court of Appeal in Grafton Partners LP v. Superior
Court, 9 Cal.Rptr.3d 511. This Reference Provision will be applicable until the
California Supreme Court completes its review of that case, and will continue to
be applicable if either that court or a California Court of Appeal publishes a
decision holding that a pre-dispute Jury Trial Waiver provision similar to that
contained in the Loan Documents is invalid or unenforceable. Delay in requesting
appointment of a referee pending review of any such decision, or participation
in litigation pending review, will not be deemed a waiver of this Reference
Provision.
12.1 Mechanics.
(a) Other than (i) nonjudicial foreclosure of security interests
in real or personal property, (ii) the appointment of a receiver or (iii) the
exercise of other provisional remedies (any of which may be initiated pursuant
to applicable law), any controversy, dispute or claim (each, a "Claim") between
the parties arising out of or relating to this Agreement or any other document,
instrument or agreement between the Bank and the undersigned (collectively in
this Section, the "Loan Documents"), will be resolved by a reference proceeding
in California in accordance with the provisions of Section 638 et seq. of the
California Code of Civil Procedure ("CCP"), or their successor sections, which
shall constitute the exclusive remedy for the resolution of any Claim, including
whether the Claim is subject to the reference proceeding. Except as otherwise
provided in the Loan Documents, venue for the reference proceeding will be in
the Superior Court or Federal District Court in the County or District where
venue is otherwise appropriate under applicable law (the "Court").
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(b) The referee shall be a retired Judge or Justice selected by
mutual written agreement of the parties. If the parties do not agree, the
referee shall be selected by the Presiding Judge of the Court (or his or her
representative). A request for appointment of a referee may be heard on an ex
parte or expedited basis, and the parties agree that irreparable harm would
result if ex parte relief is not granted. The referee shall be appointed to sit
with all the powers provided by law. Each party shall have one peremptory
challenge pursuant to CCP Section 170.6. Pending appointment of the referee, the
Court has power to issue temporary or provisional remedies.
(c) The parties agree that time is of the essence in conducting
the reference proceedings. Accordingly, the referee shall be requested to (a)
set the matter for a status and trial-setting conference within fifteen (15)
days after the date of selection of the referee, (b) if practicable, try all
issues of law or fact within ninety (90) days after the date of the conference
and (c) report a statement of decision within twenty (20) days after the matter
has been submitted for decision. Any decision rendered by the referee will be
final, binding and conclusive, and judgment shall be entered pursuant to CCP
Section 644.
(d) The referee will have power to expand or limit the amount and
duration of discovery. The referee may set or extend discovery deadlines or
cutoffs for good cause, including a party's failure to provide requested
discovery for any reason whatsoever. Unless otherwise ordered, no party shall be
entitled to "priority" in conducting discovery, depositions may be taken by
either party upon seven (7) days written notice, and all other discovery shall
be responded to within fifteen (15) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the
referee whose decision shall be final and binding.
12.2 Procedures. Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of hearings, the order of presentation of evidence,
and all other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter, except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee, and the referee will be provided a courtesy copy of the transcript.
The party making such a request shall have the obligation to arrange for and pay
the court reporter. Subject to the referee's power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.
12.3 Application of Law. The referee shall be required to determine all
issues in accordance with existing case law and the statutory laws of the State
of California. The rules of evidence applicable to proceedings at law in the
State of California will be applicable to the reference proceeding. The referee
shall be empowered to enter equitable as well as legal relief, provide all
temporary or provisional remedies, enter equitable orders that will be binding
on the parties and rule on any motion which would be authorized in a trial,
including without limitation motions for summary judgment or summary
adjudication . The referee shall issue a decision at the close of the reference
proceeding which disposes of all claims of the parties that are the subject of
the reference. The referee's decision shall be entered by the Court as a
judgment or an order in the same manner as if the action had been tried by the
Court. The parties reserve the right to appeal from the final judgment or order
or from any appealable decision or order entered by the referee. The parties
reserve the right to findings of fact, conclusions of laws, a written statement
of
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decision, and the right to move for a new trial or a different judgment, which
new trial, if granted, is also to be a reference proceeding under this
provision.
2.4 Repeal. If the enabling legislation which provides for appointment of a
referee is repealed (and no successor statute is enacted), any dispute between
the parties that would otherwise be determined by reference procedure will be
resolved and determined by arbitration. The arbitration will be conducted by a
retired judge or Justice, in accordance with the California Arbitration Act
Section 1280 through Section 1294.2 of the CCP as amended from time to time. The
limitations with respect to discovery set forth above shall apply to any such
arbitration proceeding.
12.5 THE PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED
UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY,
AND THAT THEY ARE IN EFFECT WAIVING THEIR RIGHT TO TRIAL BY JURY IN AGREEING TO
THIS REFERENCE PROVISION. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO
CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY
AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO
ANY DISPUTE BETWEEN THEM WHICH ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR
THE LOAN DOCUMENTS.
8. Exhibit C-1 attached hereto is hereby added to the Agreement.
9. Exhibit D to the Agreement is replaced with Exhibit D attached
hereto.
10. No course of dealing on the part of Bank or its officers, nor any
failure or delay in the exercise of any right by Bank, shall operate as a waiver
thereof, and any single or partial exercise of any such right shall not preclude
any later exercise of any such right. Bank's failure at any time to require
strict performance by a Borrower of any provision shall not affect any right of
Bank thereafter to demand strict compliance and performance. Any suspension or
waiver of a right must be in writing signed by an officer of Bank.
11. Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof.
12. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
13. As a condition to the effectiveness of this Amendment, Bank shall
have received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by Borrower;
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(b) a warrant to purchase 80,000 shares of Borrower's Series B
Preferred Stock;
(c) a Certificate of the Secretary of Borrower with respect to
incumbency and resolutions authorizing the execution and delivery of this
Amendment;
(d) a facility fee in the amount of $5,000, which may be debited
from any of Borrower's accounts;
(e) all reasonable Bank Expenses incurred through the date of
this Amendment, which may be debited from any of Borrower's accounts; and
(f) such other documents, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.
14. This Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one instrument.
15. written.
IN WITNESS WHEREOF, the undersigned have executed this Amendment
as of the first date above
TCI SOLUTIONS, INC.
By:_____________________________________
Title:__________________________________
COMERICA BANK, successor by merger to
COMERICA BANK-CALIFORNIA
By:_____________________________________
Title:__________________________________
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EXHIBIT C-1
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MAINTENANCE ACCOUNTS BORROWING BASE CERTIFICATE
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Borrower: TCI SOLUTIONS, INC. Lender: Comerica Bank
Commitment Amount: $1,500,000*
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MAINTENANCE ACCOUNTS RECEIVABLE
1. Maintenance Accounts Receivable Book Value as of __ $______
2. Additions (please explain on reverse) $______
3. TOTAL MAINTENANCE ACCOUNTS RECEIVABLE $______
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4. Pre-xxxxxxxx more than 60 days prior to due date $______
5. Eligible Maintenance Accounts (#3 minus #4) $______
6. LOAN VALUE OF MAINTENANCE ACCOUNTS (50% of #5) $______
* Advances on Maintenance Accounts Receivable not to
exceed (i) One Million Five Hundred Thousand Dollars
($1,500,000) from November 18, 2004 through February
28, 2005, (ii) One Million Dollars ($1,000,000) from
March 1, 2005 through March 31, 2005 and (iii) Five
Hundred Thousand Dollars ($500,000) from April 1,
2005 through the Revolving Maturity Date.
The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Comerica Bank, successor by
merger to Comerica Bank-California.
TCI SOLUTIONS, INC.
By:
------------------------------------------------
Authorized Signer
EXHIBIT D
---------
COMPLIANCE CERTIFICATE
TO: COMERICA BANK
FROM: TCI SOLUTIONS, INC.
The undersigned authorized officer of TCI SOLUTIONS, INC. hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is
in complete compliance for the period ending _______________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct as of the date hereof,
except to the extent such relate solely to an earlier date. Attached herewith
are the required documents supporting the above certification. The Officer
further certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies"
column.
Reporting Covenant Required Complies
------------------ -------- --------
Monthly financial statements Monthly within 30 days Yes No
Annual (CPA Audited) FYE within 120 days Yes No
Annual business plan/operating budget FYE within 30 days Yes No
10K and 10Q (as applicable) Yes No
A/R and A/P Agings, Borrowing Base Certs. Monthly within 30 days Yes No
A/R Audit Initial and Semi-Annual Yes No
IP Report Quarterly within 30 days Yes No
Total amount of Borrower's cash and investments Amount: $_________ Yes No
Total amount of Borrower's cash and investments Amount: $_________ Yes No
with Bank
Financial Covenant Required Actual Complies
------------------ -------- ------ --------
Maintain on a Monthly Basis:
Minimum Quick Ratio 1.25:1.00 _____:1.00 Yes No
Minimum EBITDA
From 12/31/04 through 3/31/05 $150,000 $________ Yes No
From 4/30/05 through Revolving $300,000 $________ Yes No
Maturity Date
Maintain on a Daily Basis
Minimum Cash at Bank $750,000 $________ Yes No
Comments Regarding Exceptions: See Attached. BANK USE ONLY
Sincerely, Received by:_____________________________
AUTHORIZED SIGNER
__________________________________ Date: _________________________________
SIGNATURE
_________________________________ Verified:________________________________
TITLE AUTHORIZED SIGNED
Date: _________________________________
_________________________________
DATE Compliance Status Yes No
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Corporation Resolutions and Incumbency Certification
Authority to Procure Loans
--------------------------------------------------------------------------------
I certify that I am the duly elected and qualified Secretary of TCI SOLUTIONS,
INC.; that the following is a true and correct copy of resolutions duly adopted
by the Board of Directors of the Corporation in accordance with its bylaws and
applicable statutes.
Copy of Resolutions:
Be it Resolved, That:
1. Any one (1) of the following _____________________ (insert titles only)
of the Corporation are/is authorized, for, on behalf of, and in the name
of the Corporation to:
(a) Negotiate and procure loans, letters of credit and other credit
or financial accommodations from Comerica Bank ("Bank"), a
Michigan banking corporation, including, without limitation,
pursuant to that certain Loan and Security Agreement dated as of
August 6, 2002, as amended from time to time, including by that
certain First Amendment to Loan and Security Agreement dated as
of August 5, 2003, that certain Second Amendment to Loan and
Security Agreement dated as of January 28, 2004. that certain
Third Amendment to Loan and Security Agreement dated as of
February 27, 2004 and that certain Fourth Amendment to Loan and
Security Agreement dated as of November 18, 2004, as may
subsequently be amended from time to time.
(b) Discount with the Bank, commercial or other business paper
belonging to the Corporation made or drawn by or upon third
parties, without limit as to amount;
(c) Purchase, sell, exchange, assign, endorse for transfer and/or
deliver certificates and/or instruments representing stocks,
bonds, evidences of Indebtedness or other securities owned by
the Corporation, whether or not registered in the name of the
Corporation;
(d) Give security for any liabilities of the Corporation to the Bank
by grant, security interest, assignment, lien, deed of trust or
mortgage upon any real or personal property, tangible or
intangible of the Corporation;
(e) Issue a warrant or warrants to purchase the Corporation's
capital stock; and
(f) Execute and deliver in form and content as may be required by
the Bank any and all notes, evidences of Indebtedness,
applications for letters of credit, guaranties, subordination
agreements, loan and security agreements, financing statements,
assignments, liens, deeds of trust, mortgages, trust receipts
and other agreements, instruments or documents to carry out the
purposes of these Resolutions, any or all of which may relate to
all or to substantially all of the Corporation's property and
assets.
2. Said Bank be and it is authorized and directed to pay the proceeds of
any such loans or discounts as directed by the persons so authorized to
sign, whether so payable to the order of any of said persons in their
individual capacities or not, and whether such proceeds are deposited to
the individual credit of any of said persons or not;
3. Any and all agreements, instruments and documents previously executed
and acts and things previously done to carry out the purposes of these
Resolutions are ratified, confirmed and approved as the act or acts of
the Corporation.
4. These Resolutions shall continue in force, and the Bank may consider the
holders of said offices and their signatures to be and continue to be as
set forth in a certified copy of these Resolutions delivered to the
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Bank, until notice to the contrary in writing is duly served on the Bank
(such notice to have no effect on any action previously taken by the
Bank in reliance on these Resolutions).
5. Any person, corporation or other legal entity dealing with the Bank may
rely upon a certificate signed by an officer of the Bank to effect that
these Resolutions and any agreement, instrument or document executed
pursuant to them are still in full force and effect and binding upon the
Corporation.
6. The Bank may consider the holders of the offices of the Corporation and
their signatures, respectively, to be and continue to be as set forth in
the Certificate of the Secretary of the Corporation until notice to the
contrary in writing is duly served on the Bank.
I further certify that the above Resolutions are in full force and effect as of
the date of this Certificate; that these Resolutions and any borrowings or
financial accommodations under these Resolutions have been properly noted in the
corporate books and records, and have not been rescinded, annulled, revoked or
modified; that neither the foregoing Resolutions nor any actions to be taken
pursuant to them are or will be in contravention of any provision of the
articles of incorporation or bylaws of the Corporation or of any agreement,
indenture or other instrument to which the Corporation is a party or by which it
is bound; and that neither the articles of incorporation nor bylaws of the
Corporation nor any agreement, indenture or other instrument to which the
Corporation is a party or by which it is bound require the vote or consent of
shareholders of the Corporation to authorize any act, matter or thing described
in the foregoing Resolutions.
I further certify that the following named persons have been duly elected to the
offices set opposite their respective names, that they continue to hold these
offices at the present time, and that the signatures which appear below are the
genuine, original signatures of each respectively:
(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)
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NAME (Type or Print) TITLE SIGNATURE
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_________________________ ________________________ ________________________
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_________________________ ________________________ ________________________
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_________________________ ________________________ ________________________
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_________________________ ________________________ ________________________
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In Witness Whereof, I have affixed my name as Secretary and have caused the
corporate seal (where available) of said Corporation to be affixed on November
18, 2004.
____________________________________________
Secretary
The Above Statements are Correct. ____________________________________________
SIGNATURE OF OFFICER OR DIRECTOR OR, IF
NONE. A SHAREHOLDER OTHER THAN SECRETARY
WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE.
Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.
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COMERICA BANK
Member FDIC
ITEMIZATION OF AMOUNT FINANCED
DISBURSEMENT INSTRUCTIONS
(Revolver)
Name(s): TCI SOLUTIONS, INC. Date: November 18, 2004
$ credited to deposit account No. __________________ when Advances
are requested by Borrower
Amounts paid to others on your behalf:
$5,000 to Comerica Bank for Facility Fee
$ to Comerica Bank for Document Fee
$ to Comerica Bank for accounts receivable audit (estimate)
$ to Bank counsel fees and expenses
$ To
$ TOTAL (AMOUNT FINANCED)
Upon consummation of this transaction, this document will also serve as the
authorization for Comerica Bank to disburse the loan proceeds as stated above.
______________________________________ ______________________________________
Signature Signature
AGREEMENT TO PROVIDE INSURANCE
TO: COMERICA BANK Date: November 18, 2004
Attn: Collateral Operations, N/C 4604
0000 Xxxxx Xx Xxxxxxx Xxxx., 00xx Xxxxx
Xxxxxxxxx, XX 00000 Borrower: TCI SOLUTIONS, INC.
In consideration of a loan in the amount of $4,577m611, secured by all
tangible personal property including inventory and equipment.
I/We agree to obtain adequate insurance coverage to remain in force
during the term of the loan.
I/We also agree to advise the below named agent to add Comerica Bank as
lender's loss payable on the new or existing insurance policy, and to furnish
Bank at above address with a copy of said policy/endorsements and any subsequent
renewal policies.
I/We understand that the policy must contain:
1. Fire and extended coverage in an amount sufficient to cover:
The amount of the loan, OR
l existing encumbrances, whichever is greater,
But not in excess of the replacement value of the improvements on the
real property
2. Lender's "Loss Payable" Endorsement Form 438 BFU in favor of Comerica
Bank, or any other form acceptable to Bank.
INSURANCE INFORMATION
Insurance Co./Agent Telephone No.:
Agent's Address:
Signature of Obligor:__________________________
Signature of Obligor:__________________________
------------------------------------------------------------
FOR BANK USE ONLY
INSURANCE VERIFICATION: Date:___________________________
Person Spoken to:_______________________________________
Policy Number:__________________________________________
Effective From:______________To:________________________
Verified by:____________________________________________
------------------------------------------------------------
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COMERICA BANK
Member FDIC AUTOMATIC DEBIT AUTHORIZATION
--------------------------------------------------------------------------------
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To: Comerica Bank
Re: Loan #___________________________________
You are hereby authorized and instructed to charge account No. 1891-663609 in
the name of TCI SOLUTIONS, INC.
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For principal and interest payments due on above referenced loan as set forth
below and credit the loan referenced above.
|X| Debit each interest payment as it becomes due according to
the terms of the note and any renewals or amendments
thereof.
|X| Debit each principal payment as it becomes due according to
the terms of the note and any renewals or amendments
thereof.
|X| Debit each payment for Bank Expenses as it becomes due
according to the terms of the Loan and Security Agreement
and any renewals or amendments thereof.
This Authorization is to remain in full force and effect until revoked in
writing.
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Borrower Signature Date
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November 18, 2004
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November 18, 2004
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