EXHIBIT 10.38
LOAN AGREEMENT
Wachovia Bank, National Association
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(Hereinafter referred to as the "Bank")
Steelcloud, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
(Individually and collectively "Borrower")
This Loan Agreement ("Agreement") is entered into January 22, 2004, by and
between Bank and Borrower.
This Agreement applies to the loan or loans (individually and collectively, the
"Loan") evidenced by one or more promissory notes of even date herewith or other
notes subject hereto, as modified from time to time (whether one or more, the
"Note") and all Loan Documents. The terms "Loan Documents" and "Obligations," as
used in this Agreement, are defined in the Note.
Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:
AVAILABILITY. With respect to the line of credit Promissory Note in the amount
of $3,500,000.00, of even date herewith, notwithstanding anything to the
contrary contained herein, the aggregate outstanding principal balance of
Advances (as defined in the Note) (the "Total Outstandings") at any one time
shall not exceed the lesser of $3,500,000.00 or the Borrowing Base (as
hereinafter defined). In the event that the Total Outstandings at any time
exceeds the Borrowing Base, Borrower shall pay to Bank the amount of such excess
immediately upon receipt by Borrower of written notice that the Borrowing Base
has been exceeded.
REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: ACCURATE INFORMATION. All
information now and hereafter furnished to Bank is and will be true, correct and
complete. Any such information relating to Borrower's financial condition will
accurately reflect Borrower's financial condition as of the date(s) thereof,
(including all contingent liabilities of every type), and Borrower further
represents that its financial condition has not changed materially or adversely
since the date(s) of such documents. AUTHORIZATION; NON-CONTRAVENTION. The
execution, delivery and performance by Borrower and any guarantor, as
applicable, of this Agreement and other Loan Documents to which it is a party
are within its power, have been duly authorized as may be required and, if
necessary, by making appropriate filings with any governmental agency or unit
and are the legal, binding, valid and enforceable obligations of Borrower and
any guarantors; and do not (i) contravene, or constitute (with or without the
giving of notice or lapse of time or both) a violation of any provision of
applicable law, a violation of the organizational documents of Borrower or any
guarantor, or a default under any agreement, judgment, injunction, order, decree
or other instrument binding upon or affecting Borrower or any guarantor, (ii)
result in the creation or imposition of any lien (other than the lien(s) created
by the Loan Documents) on any of Borrower's or any guarantor's assets, or (iii)
give cause for the acceleration of any obligations of Borrower or any guarantor
to any other creditor. ASSET OWNERSHIP. Borrower has good and marketable title
to all of the properties and assets reflected on the balance sheets and
financial statements supplied Bank by Borrower, and all such properties and
assets are free and clear of mortgages, security deeds, pledges, liens, charges,
and ail other encumbrances, except as otherwise disclosed to Bank by Borrower in
writing and approved by Bank ("Permitted Liens"). To Borrower's knowledge, no
default has occurred under any Permitted Liens and no claims or interests
adverse to Borrower's present rights in its properties and assets have arisen.
DISCHARGE OF LIENS AND TAXES: Borrower has duly filed, paid and/or discharged
all taxes or other claims that may become a lien
on any of its property or assets, except to the extent that such items are being
appropriately contested in good faith and an adequate reserve for the payment
thereof is being maintained. SUFFICIENCY OF CAPITAL. Borrower is not, and after
consummation of this Agreement and after giving effect to all indebtedness
incurred and liens created by Borrower in connection with the Note and any other
Loan Documents, will not be, insolvent within the meaning of 11 U.S.C. Section
101(32). COMPLIANCE WITH LAWS. Borrower is in compliance in all respects with
all federal, state and local laws, rules and regulations applicable to its
properties, operations, business, and finances, including, without limitation,
any federal or state laws relating to liquor (including 18 U.S.C. Section 3617,
et seq.) or narcotics (including 21 U.S.C. Section 801, et seq.) and/or any
commercial crimes; all applicable federal, state and local laws and regulations
intended to protect the environment; and the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), if applicable, ORGANIZATION AND AUTHORITY.
Each corporation, partnership or limited liability company Borrower and/or
guarantor, as applicable, is duly created, validly existing and in good standing
under the laws of the state of its organization, and has all powers,
governmental licenses, authorizations, consents and approvals required to
operate its business as now conducted. Each corporation, partnership or limited
liability company Borrower and/or guarantor, as applicable, is duly qualified,
licensed and in good standing in each jurisdiction where qualification or
licensing is required by the nature of its business or the character and
location of its property, business or customers, and in which the failure to so
qualify or be licensed, as the case may be, in the aggregate, could have a
material adverse effect on the business, financial position, results of
operations, properties or prospects of Borrower or any such guarantor. NO
LITIGATION. There are no pending or threatened suits, claims or demands against
Borrower or any guarantor that have not been disclosed to Bank by Borrower in
writing, and approved by Bank.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: ACCESS TO BOOKS AND RECORDS. Allow Bank, or its agents,
during normal business hours, access to the books, records and such other
documents of Borrower as Bank shall reasonably require, and allow Bank, at
Borrower's expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof. BUSINESS CONTINUITY. Conduct its business
in substantially the same manner and locations as such business is now and has
previously been conducted. CERTIFICATE OF FULL COMPLIANCE FROM ACCOUNTANT.
Deliver to Bank, with the financial statements required herein, a certification
by Borrower's independent certified public accountant that Borrower is in full
compliance with the Loan Documents. COMPLIANCE WITH OTHER AGREEMENTS. Comply
with all terms and conditions contained in this Agreement, and any other Loan
Documents, and swap agreements, if applicable, as defined in the 11 U.S.C
Section 101. ESTOPPEL CERTIFICATE. Furnish, within 15 days after request by
Bank, a written statement duly acknowledged of the amount due under the Loan and
whether offsets or defenses exist against the Obligations. INSURANCE. Maintain
adequate insurance coverage with respect to its properties and business against
loss or damage of the kinds and in the amounts customarily insured against by
companies of established reputation engaged in the same or similar businesses
including, without limitation, commercial general liability insurance, workers
compensation insurance, and business interruption insurance; all acquired in
such amounts and from such companies as Bank may reasonably require. MAINTAIN
PROPERTIES. Maintain, preserve and keep its property in good repair, working
order and condition, making all replacements, additions and improvements thereto
necessary for the proper conduct of its business, unless prohibited by the Loan
Documents. NOTICE OF DEFAULT AND OTHER NOTICES, (a) NOTICE OF DEFAULT. Furnish
to Bank immediately upon becoming aware of the existence of any condition or
event which constitutes a Default (as defined in the Loan Documents) or any
event which, upon the giving of notice or lapse of time or both, may become a
Default, written notice specifying the nature and period of existence thereof
and the action which Borrower is taking or proposes to take with respect
thereto. (b) OTHER NOTICES. Promptly notify Bank in writing of (i) any material
adverse change in its financial condition or its business; (ii) any default
under any material agreement, contract or other instrument to which it is a
party or by which any of its properties are bound, or any acceleration of the
maturity of any indebtedness owing by Borrower; (iii) any material adverse claim
against or affecting Borrower or any part of its properties; (iv) the
commencement of, and any material determination in, any litigation with any
third party or any proceeding before any governmental agency or unit affecting
Borrower; and (v) at least 30 days prior thereto, any change in Borrower's name
or address as shown above, and/or any change in Borrower's structure. OTHER
FINANCIAL INFORMATION. Deliver promptly such
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other information regarding the operation, business affairs, and financial
condition of Borrower which Bank may reasonably request. PAYMENT OF DEBTS. Pay
and discharge when due, and before subject to penalty or further charge, and
otherwise satisfy before maturity or delinquency, all obligations, debts, taxes,
and liabilities of whatever nature or amount, except those which Borrower in
good faith disputes. REPORTS AND PROXIES. Deliver to Bank, promptly, a copy of
all financial statements, reports, notices, and proxy statements, sent by
Borrower to stockholders, and all regular or periodic reports required to be
filed by Borrower with any governmental agency or authority.
NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will not: DEFAULT ON OTHER CONTRACTS OR OBLIGATIONS. Default
on any material contract with or obligation when due to a third party or default
in the performance of any obligation to a third party incurred for money
borrowed. GOVERNMENT INTERVENTION. Permit the assertion or making of any
seizure, vesting or intervention by or under authority of any governmental
entity, as a result of which the management of Borrower or any guarantor is
displaced of its authority in the conduct of its respective business or such
business is curtailed or materially impaired. JUDGMENT ENTERED. Permit the entry
of any monetary judgment or the assessment against, the filing of any tax lien
against, or the issuance of any writ of garnishment or attachment against any
property of or debts due. RETIRE OR REPURCHASE CAPITAL STOCK. Retire or
otherwise acquire any of its capital stock.
ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 120 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year, including, without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the
preceding year. If audited statements are required, all such statements shall be
examined by an independent certified public accountant acceptable to Bank. The
opinion of such independent certified public accountant shall not be acceptable
to Bank if qualified due to any limitations in scope imposed by Borrower or any
other person or entity. Any other qualification of the opinion by the accountant
shall render the acceptability of the financial statements subject to Bank's
approval.
BORROWING BASE. "Borrowing Base" means the deposit balance in account number
2000021006599, At no time shall the loan balance outstanding exceed the deposit
balance in account number 2000021006599. At no time shall the account numbered
2000021006599 have a balance of less than $1000.00.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances
pursuant to this Agreement are subject to the following conditions precedent:
ADDITIONAL DOCUMENTS. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request.
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IN WITNESS WHEREOF, Borrower and Bank, on the day and first year written above,
have caused this Agreement to be executed under seal.
Steelcloud. Inc.
BY: /s/ Xxxxx Xxxxxx (SEAL)
-------------------------------------
Xxxxx Xxxxxx,Chief Financial Officer
By: /s/ Xxxxxx Xxxxx (SEAL)
-------------------------------------
Xxxxxx Xxxxx, Chief Executive Officer
Wachovia Bank, National Association
By: /s/ Motissa X. Xxxxxx (SEAL)
------------------------------------
Motissa X. Xxxxxx, Vice President
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PROMISSORY NOTE
$3,500,000.00 March 21, 2005
Steelcloud, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
(Individually and collectively "Borrower")
Wachovia Bank, National Association
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(Hereinafter referred to as "Bank")
IMPORTANT NOTICE
THIS NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER
OF IMPORTANT RIGHTS YOU MAY HAVE AS A BORROWER AND ALLOWS BANK TO OBTAIN A
JUDGMENT AGAINST YOU WITHOUT FURTHER NOTICE.
Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Three Million, Five Hundred Thousand and No/100 Dollars
($3,500,000.00) or such sum as may be advanced and outstanding from time to
time, with interest on the unpaid principal balance at the rate and on the terms
provided in this Promissory Note (including all renewals, extensions or
modifications hereof, this "Note").
RENEWAL/MODIFICATION. This Promissory Note renews, extends and/or modifies that
certain Promissory Note dated January 22, 2004 (the "Original Promissory Note"),
evidencing an original principal amount of $3,500,000.00. This Promissory Note
is not a novation.
LOAN AGREEMENT. This Note is subject to the provisions of that certain Loan
Agreement between Bank and Borrower dated January 22, 2004, as modified from
time to time.
LINE OF CREDIT, Borrower may borrow, repay and reborrow, and, upon the request
of Borrower, Bank shall advance and readvance under this Note from time to time
until the maturity hereof (each an "Advance" and together the "Advances"), so
long as the total principal balance outstanding under this Note at any one time
does not exceed the principal amount stated on the face of this Note, subject to
the limitations described in any loan agreement to which this Note is subject.
Bank's obligation to make Advances under this Note shall terminate if Borrower
is in Default. As of the date of each proposed Advance, Borrower shall be deemed
to represent that each representation made in the Loan Documents is true as of
such date.
If Borrower subscribes to Bank's cash management services and such services are
applicable to this line of credit, the terms of such service shall control the
manner in which funds are transferred between the applicable demand deposit
account and the line of credit for credit or debit to the line of credit.
USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by
this Note for the commercial purposes of Borrower, as follows: for working
capital.
SECURITY. Borrower has granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, personal
property collateral described in that certain Security Agreement dated January
22, 2004.
INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note from the date hereof at the LIBOR Market index Rate plus 1.25%, as that
rate may change from day to day in accordance with changes in the LIBOR Market
index Rate ("Interest Rate"), "LIBOR Market index Rate", for any day, means the
rate for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of
11:00 a.m., London time, on such day, or if such day is not a London business
day, then the immediately preceding London business day (or if not so reported,
then as determined by Bank from another recognized source or interbank
quotation).
DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations, other than Obligations under any swap agreements (as
defined in 11 U.S.C., Section 101, as in effect from time to time) between
Borrower and Bank or its affiliates, shall bear interest at the interest Rate
plus 3% ("Default Rate"). The Default Rate shall also apply from acceleration
until the Obligations or any judgment thereon is paid in full.
INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period ("Actual/360 Computation"). The Actual/360 Computation
determines the annual effective interest yield by taking the stated (nominal)
rate for a year's period and then dividing said rate by 360 to determine the
daily periodic rate to be applied for each day in the applicable period.
Application of the Actual/360 Computation produces an annualized effective rate
exceeding the nominal rate.
REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on February 28, 2005, and
continuing on the last day of each month thereafter until fully paid. In any
event, all principal and accrued interest shall be due and payable on March 31,
2006.
AUTOMATIC DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT. Borrower authorizes Bank
to debit demand deposit account number 2065204298279 or any other account with
Bank (routing number 000000000) designated in writing by Borrower, beginning
February 28, 2005 for any payments due under this Note. Borrower further
certifies that Borrower holds legitimate ownership of this account and
preauthorizes this periodic debit as part of its right under said ownership.
AVAILABILITY FEE. Borrower shall pay to Bank quarterly an availability fee equal
to 0.25% per annum on the difference between (i) the face amount of this Note
and (ii) the outstanding principal balance of this Note, for each day during the
preceding calendar quarter or portion thereof, commencing on March 31, 2005 and
continuing on the last day of each quarter thereafter, with a final payment due
and payable on the date that all principal and accrued interest is paid in full.
APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.
If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.
DEFINITIONS. LOAN DOCUMENTS. The term "Loan Documents", as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C Section 101, as in effect from time to time). OBLIGATIONS.
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The term "Obligations", as used in this Note and the other Loan Documents,
refers to any and all indebtedness and other obligations under this Note, all
other obligations under any other Loan Document(s), and all obligations under
any swap agreements (as defined in 11 U.S.C Section 101, as in effect from time
to time) between Borrower and Bank, or its affiliates, whenever executed,
CERTAIN OTHER TERMS. All terms that are used but not otherwise defined in any of
the Loan Documents shalI have the definitions provided in the Uniform Commercial
Code.
LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 8 or more days. This
late charge shall not apply to payments due at maturity or by acceleration
hereof, unless such late payment is in an amount not greater than the highest
periodic payment due hereunder.
Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.
ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.
USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.
DEFAULT. if any of the following occurs, a default ("Default") under this Note
shall exist: NONPAYMENT; NONPERFORMANCE. The failure of timely payment or
performance of the Obligations or Default under this Note or any other Loan
Documents. FALSE WARRANTY. A warranty or representation made or deemed made in
the Loan Documents or furnished Bank in connection with the loan evidenced by
this Note proves materially false, or if of a continuing nature, becomes
materially false. CROSS DEFAULT. At Bank's option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or the
holder(s) of the majority ownership interests of Borrower with Bank or its
affiliates ("Affiliate" shall have the meaning as defined in 11 U.S.C, Section
101, as in effect from time to time, except that the term "Borrower" shall be
substituted for the term "Debtor" therein; "Subsidiary" shall mean any business
in which Borrower holds, directly or indirectly, a controlling interest).
CESSATION; BANKRUPTCY. The death of, appointment of a guardian for, dissolution
of, termination of existence of, loss of good standing status by, appointment of
a receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower, its Subsidiaries
or Affiliates, if any, or any general partner of or the holder(s) of the
majority ownership interests of Borrower, or any party to the Loan Documents.
MATERIAL CAPITAL STRUCTURE OR BUSINESS ALTERATION. Without prior written consent
of Bank, (i) a material alteration in the kind or type of Borrower's business or
that of Borrower's Subsidiaries or Affiliates, if any; (ii) the sale of
substantially all of the business or assets of Borrower, any of Borrower's
Subsidiaries or Affiliates or any guarantor, or a material portion (10% or more)
of such business or assets if such a sale is outside the ordinary course of
business of Borrower, or any of Borrower's Subsidiaries or Affiliates or any
guarantor, or more than 50% of the outstanding stock or voting power of or in
any such entity in a single transaction or a series of transactions; (iii) the
acquisition of substantially all of the business or assets or more than 50% of
the outstanding stock or voting power of any other entity; or (iv) should any
Borrower or any of Borrower's Subsidiaries or Affiliates or any guarantor enter
into any merger or consolidation. MATERIAL ADVERSE CHANGE. Bank determines in
good faith, in its sole discretion, that the prospects for payment or
performance of the Obligations are impaired or there has occurred a material
adverse change in the business or prospects of Borrower, financial or otherwise.
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REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: BANK
LIEN. Foreclose its security interest or lien against Borrower's accounts
without notice. ACCELERATION UPON DEFAULT. Accelerate the maturity of this Note
and, at Bank's option, any or all other Obligations, other than Obligations
under any swap agreements (as defined in 11 U.S.C. Section 101, as in effect
from time to time) between Borrower and Bank, or its affiliates, which shall be
due in accordance with and governed by the provisions of said swap agreements;
whereupon this Note and the accelerated Obligations shall be immediately due and
payable; provided, however, if the Default is based upon a bankruptcy or
insolvency proceeding commenced by or against Borrower or any guarantor or
endorser of this Note, all Obligations (other than Obligations under any swap
agreement as referenced above) shall automatically and immediately be due and
payable. CUMULATIVE, Exercise any rights and remedies as provided under the Note
and other Loan Documents, or as provided by law or equity.
FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.
CONFESSION OF JUDGMENT. Each Borrower hereby constitutes and appoints Xxxx X.
Xxx, Xxxxxxx X. Xxxxxx (each of whom is an officer of Bank), and Bank through an
officer duly authorized by Bank (any of the foregoing may act), as the true and
lawful attorneys-in-fact for them, in any or all of their names, place and
stead, and upon the occurrence of a Default in the payment of the Obligations
due under this Note, at maturity, or upon acceleration, to confess judgment
against them or any of them, in favor of Bank, before the Clerk of the Circuit
Court for City of Richmond, Virginia, in accordance with 1950 Code of Virginia,
Section 8.01-431 et seq., and any successor statute, for all amounts owed with
respect to the Obligations under and pursuant to this Note including, without
limitation, all costs of collection and attorneys' fees in an amount equal to
15% of the Obligations then outstanding (which shall be deemed reasonable
attorneys' fees for the purposes of this paragraph), and court costs, hereby
ratifying and confirming the acts of said attorney-in-fact as if done by
themselves. Upon request of Bank, each Borrower will execute an amendment or
other agreement substituting attorneys-in-fact appointed to act for each
Borrower hereunder.
WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
Except to the extent otherwise provided by the Loan Documents or prohibited by
law, each Borrower and each other person liable under this Note waives
presentment, protest, notice of dishonor, demand for payment, notice of
intention to accelerate maturity, notice of acceleration of maturity, notice of
sale and all other notices of any kind. Further, each agrees that Bank may (i)
extend, modify or renew this Note or make a novation of the loan evidenced by
this Note, and/or (ii) grant releases, compromises or indulgences with respect
to any collateral securing this Note, or with respect to any Borrower or other
person liable under this Note or any other Loan Documents, all without notice to
or consent of each Borrower and other such person, and without affecting the
liability of each Borrower and other such person; provided, Bank may not extend,
modify or renew this Note or make a novation of the loan evidenced by this Note
without the consent of the Borrower, or if there is more than one Borrower,
without the consent of at least one Borrower; and further provided, if there is
more than one Borrower, Bank may not enter into a modification of this Note
which increases the burdens of a Borrower without the consent of that Borrower.
MISCELLANEOUS PROVISIONS. ASSIGNMENT. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal representatives, successors and assigns. Bank's
interests in and rights under this Note and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other
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Loan Documents shall prohibit Bank from pledging or assigning this Note or any
of the other Loan Documents or any interest therein to any Federal Reserve Bank.
Borrower shall not assign its rights and interest hereunder without the prior
written consent of Bank, and any attempt by Borrower to assign without Bank's
prior written consent is null and void. Any assignment shall not release
Borrower from the Obligations. APPLICABLE LAW; CONFLICT BETWEEN DOCUMENTS. this
Note and, unless otherwise provided in any other Loan Document, the other Loan
Documents shall be governed by and construed under the laws of the state named
in Bank's address on the first page hereof without regard to that state's
conflict of laws principles. If the terms of this Note should conflict with the
terms of any loan agreement or any commitment letter that survives closing, the
terms of this Note shall control. BORROWER'S ACCOUNTS. Except as prohibited by
law, Borrower grants Bank a security interest in all of Borrower's accounts with
Bank and any of its affiliates. SWAP AGREEMENTS. All swap agreements (as
defined in 11 U.S.C. Section 101, as in effect from time to time), if any,
between Borrower and Bank or its affiliates are independent agreements governed
by the written provisions of said swap agreements, which will remain in full
force and effect, unaffected by any repayment, prepayment, acceleration,
reduction, increase or change in the terms of this Note, except as otherwise
expressly provided in said written swap agreements, and any payoff statement
from Bank relating to this Note shall not apply to said swap agreements unless
expressly referred to in such payoff statement. JURISDICTION. Borrower
irrevocably agrees to non-exclusive personal jurisdiction in the state named in
Bank's address on the first page hereof SEVERABILITY. if any provision of this
Note or of the other Loan Documents shall be prohibited or invalid under
applicable law, such provision shall be ineffective but only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note or other such document.
NOTICES. Any notices to Borrower shall be sufficiently given, if in writing and
mailed or delivered to the Borrower's address shown above or such other address
as provided hereunder, and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, Mail Code VA7628, P. O. Xxx 00000, Xxxxxxx,
XX 00000 or Wachovia Bank, National Association, Mail Code VA7628, 00 Xxxxx
Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 or such other address as Bank may specify in
writing from time to time. Notices to Bank must include the mail code. In the
event that Borrower changes Borrower's address at any time prior to the date the
Obligations are paid in full, Borrower agrees to promptly give written notice of
said change of address by registered or certified mail, return receipt
requested, all charges prepaid. PLURAL; CAPTIONS. All references in the Loan
Documents to Borrower, guarantor, person, document or other nouns of reference
mean both the singular and plural form, as the case may be, and the term
"person" shall mean any individual, person or entity. The captions contained in
the Loan Documents are inserted for convenience only and shall not affect the
meaning or interpretation of the Loan Documents. ADVANCES. Bank may, in its sole
discretion, make other advances which shall be deemed to be advances under this
Note, even though the stated principal amount of this Note may be exceeded as a
result thereof. POSTING OF PAYMENTS. All payments received during normal banking
hours after 2:00 p.m. local time at the office of Bank first shown above shall
be deemed received at the opening of the next banking day, JOINT AND SEVERAL
OBLIGATIONS. If there is more than one Borrower, each is jointly and severally
obligated. FEES AND TAXES. Borrower shall promptly pay all documentary,
intangible recordation and/or similar taxes on this transaction whether assessed
at closing or arising from time to time. LIMITATION ON LIABILITY; WAIVER OF
PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE
HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY
CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY
WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR
DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED
HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER
FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY
DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO
PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN
CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS
RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. PATRIOT ACT NOTICE.
To help fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account. For purposes of
this section, account shall be understood to include loan accounts, FINAL
AGREEMENT. This Note and the other Loan Documents represent the final agreement
between the
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parties and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.
WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
BORROWER BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT
HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO ACCEPT THIS NOTE.
EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY
PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED
IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN
CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR
MODIFIED BY, THIS NOTE.
IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.
Steelcloud, Inc.
BY: /s/ Xxxxx Xxxxxx (SEAL)
-------------------------------------
Xxxxx Xxxxxx,Chief Financial Officer
By: /s/ Xxxxxx Xxxxx (SEAL)
-------------------------------------
Xxxxxx Xxxxx, Chief Executive Officer
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