Exhibit 10.32
AMENDED AND RE-STATED LOAN AGREEMENT
THIS AGREEMENT made and entered into this first day of March,
2000, by and between EXIGENT INTERNATIONAL, INC., a Delaware corporation
("Exigent"), eXGNT, INC., a Delaware corporation ("eXGNT"), FOTOTAG, INC., a
Delaware corporation ("Fototag"), GEC ACQUISITION CORPORATION, a Nevada
corporation ("Acquisition"), GEC NORTH AMERICA CORPORATION, a Nevada corporation
("GEC"), MIDDLEWARE SOLUTIONS, INC., a Nevada corporation ("Middleware"),
SOFTWARE TECHNOLOGY, INC., a Florida corporation ("Borrower") and THE HUNTINGTON
NATIONAL BANK, whose address is 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx 00000
(the "Lender"). eXGNT, Fototag, Acquisition, GEC, and Middleware, are sometimes
referred to collectively as the "Other Subsidiaries". Exigent and the Other
Subsidiaries are sometimes referred to collectively as the "Guarantors".
W I T N E S S E T H:
WHEREAS, on December 31, 1998 Borrower completed a loan
transaction with Lender for a revolving line of credit loan in the principal
amount of THREE MILLION DOLLARS ($3,000,000.00) (the "Revolving Loan") and a
term loan in the principal amount of FIVE HUNDRED ELEVEN THOUSAND ONE HUNDRED
ELEVEN and 22/100 DOLLARS ($511,111.22) (the "Term Loan"). (The Revolving Loan
and the Term Loan are collectively referred to as the "Loan").
WHEREAS, Borrower, Guarantors and Lender wish to enter into
this Agreement in order to amend and re-state the terms and conditions of the
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. Assignment of Loan Documents, Allonge Endorsements to Notes
and UCC-3 Assignments to be executed by SunTrust, N.A. to Lender.
1. For Line of Credit in the amount of $l,800,000.00.
2. For Term Loan with a current principal balance of
$66,666.74.
3. For Term Loan with current principal balance of
$444,444.48.
B. Notes.
1. Interim Promissory Note for Line of Credit of even
date herewith payable to the order of Lender executed by Borrower, in the
principal amount of ONE MILLION TWO HUNDRED THOUSAND AND 00/100 ($1,200,000.00)
DOLLARS.
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2. Consolidation Note for Line of Credit of even date
herewith payable to the order of the
Lender executed by Borrower, in the principal amount of THREE MILLION AND 00/100
($3,000,000.00) DOLLARS.
3. Consolidation Note for Term Loans of even date
herewith payable to the order of the
Lender executed by Borrower, in the principal amount of FIVE HUNDRED ELEVEN
THOUSAND ONE HUNDRED ELEVEN AND 22/100 ($511,111.22) DOLLARS.
(Each of these notes are collectively referred to as
"Notes".)
C. 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.
D. Opinion of Borrower's Counsel. An opinion of counsel for
Borrower and Guarantor (as hereinbelow defined) licensed in the State of Florida
shall be furnished to Lender prior to closing to the effect that: (a) all of the
Loan Documents are valid and enforceable and legally convey to and vest in
Lender all of the rights therein stated and purported to be conveyed; (b)
Borrower and any Guarantor are corporations in good standing and all
requirements of the corporate documents governing Borrower and any Guarantor
have been complied with to authorize and complete the Loan; (c) Borrower and any
Guarantor have the full right and legal authority to carry out the terms of this
Agreement and any documentation to be executed pursuant to this Agreement; and
(d) Such opinion letter shall address such other matters included in Lender's
Request for Opinion Letter.
E. Guaranties. The unqualified and unconditional guaranty of
Exigent, eXGNT, Acquisition, Fototag, Middleware, and GEC.
F. Security Agreement. As security for payment of the
indebtedness evidenced by the Notes, 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 first 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 E. above.
G. Other Documents. Such other documents as may be required by
Lender in accordance with the terms of the Loan Commitment dated December 9,
1998 executed by Lender and Borrower in connection with the Loan ("Loan
Commitment").
H. Definitions. Certain definitions of terms utilized in this
Agreement are included in Exhibit 1, Definitions, commencing on page 20 hereof.
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. Exigent,
eXGNT and Fototag are corporations duly organized, existing and in good standing
under the laws of the State of Delaware. Middleware, Acquisition, and GEC are
corporations duly organized, existing and in good standing under the laws of the
State of Nevada. Borrower, Fototag, eXGNT, Middleware and Acquisition are
wholly-owned subsidiaries of Exigent. GEC is a wholly-owned subsidiary of
Acquisition.
B. Borrower is duly authorized under all applicable provisions
of law to execute and deliver the Notes 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 Notes, 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 nor the creation or
issuance of the Notes, 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 Notes.
D. Except as previously disclosed to Lender in writing, 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 September 30, 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 ("GAAP") consistently
applied and since September 30, 1999, no material adverse change in Borrower's
and Guarantors' financial condition or business operation has occurred.
Provided, however, that Lender acknowledges that Acquisition was not in
existence until after September 30, 1999 and that GEC's financial statements
previously have not been prepared in accordance with GAAP.
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 or Guarantors to enter into or perform the
Loan Agreement, the Notes 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 and Guarantors as a consolidated entity are now
solvent and able to pay their debts as they mature and Borrower and Guarantors
collectively now own property whose fair salable value is greater than the
amount required to pay their 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
contain 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 except as included on the balance sheet or otherwise disclosed to
Lender in writing.
L. Borrower have 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 except as included on the balance sheet or otherwise
disclosed to Lender in writing.
M. Except as disclosed to Lender in writing, neither Borrower
nor Guarantors are parties to nor are they bound by any contract or agreement or
subject to any charter or other corporate restrictions which adversely affect
the business, properties or condition, financial or otherwise, of Borrower or
Guarantors except as disclosed in the financial statements referenced above and
notes thereto.
N. Borrower and Guarantors own, possess or have 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. 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 and Guarantors shall have delivered to the Lender
the fully executed Security Agreement, Notes, 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 and Guarantors
certified by the Secretary of State or other appropriate governmental authority
accompanied by a certificate from the appropriate officer of Borrower and
Guarantors 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 and Guarantors in effect on the date of the Loan
Agreement accompanied by a certificate from an appropriate officer of Borrower
and Guarantors 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 and Guarantors
authorized to sign the Loan Agreement, the Security Agreement, the Notes and any
Other Agreements to be executed and delivered hereunder.
B. The Borrower and Guarantors shall provide the Lender with a
list(s) of all Indebtedness at the time of closing.
C. All instruments and documents incident to the issuance and
delivery of the Notes 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
and Guarantors 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.
ARTICLE IV
AFFIRMATIVE COVENANTS
The Borrower and each Guarantor 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 Notes 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, the Lender shall be
delivered 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 and Guarantors hereby direct 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 or Guarantors obtaining
knowledge of a Default or Event of Default hereunder or under any other
obligation of Borrower or Guarantors, 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 or Guarantors obtaining
knowledge of a material litigation, dispute or proceedings being instituted or
threatened against Borrower or Guarantors, or any attachment, levy, execution or
other process being instituted against any assets of Borrower or Guarantors,
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,
except that the principal place of business of GEC may be in Charlotte,
Mecklenburg County, North Carolina.
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 3.50:l.00 at December 31, 1999, and quarterly thereafter.
2. Maximum Total Liabilities divided by Tangible Net
Worth of 3.10:l.00 at June 30, 2000, and
quarterly thereafter.
3. Maximum Total Liabilities divided by Tangible Net
Worth of 2.75:l.00 at December 31, 2000,
and quarterly thereafter.
4. Minimum Working Capital of $2,000,000.00 at
September 30, 1999 and each quarter thereafter.
5. Minimum Current Ratio of l.30:l.0 at September 30,
1999 and each quarter thereafter.
6. Minimum Debt Service Coverage l.20 times at fiscal
year end December 31, 1999, and annually
thereafter.
ARTICLE V
NEGATIVE COVENANTS
Borrower and the Other Subsidiaries covenant and further agree
that from the date hereof until payment in full the principal and interest under
the Notes, unless the Lender otherwise consents in writing, they 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 (except the
$1,000,000.00 subordinated promissory note issued by Acquisition and guaranteed
by Exigent for the benefit of former GEC shareholders on or about December 9,
1999).
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 $100,000,000.00 (except those
mortgages, liens and security interests granted in favor of the Lender and
except the $1,000,000.00 subordinated promissory note issued by Acquisition and
guaranteed by Exigent for the benefit of former GEC shareholders on or about
December 9, 1999).
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, except Borrower or any of the
Other Subsidiaries may merge or consolidate with any other of them.
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 Three Million Dollars
($3,000,000.00). On or before the first business day of each calendar month,
Borrower and the Other Subsidiaries 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 and Term Loan Interest Rate. Except upon a
Default, the interest rate for the Revolving Loan and Term Loan may be adjusted
from time to time as follows:
1. If Exigent'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 (but not the Term Loan)
shall be reduced by 0.50% for the subsequent calendar quarter.
2. If Exigent'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 (but not the Term 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
both the Revolving Loan and Term 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 Notes) 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.
C. Borrower shall provide to Lender the following:
(1) Quarterly, 10Q reports of Exigent and
management reports including balance sheet,
income statement and statement of cash
flows, conforming to GAAP and prepared on a
consolidated basis.
(2) Quarterly, contract status report detailing
government and non-government contracts,
contract value, estimated profit, estimated
costs, costs to date, cost to complete,
percent complete, actual earnings, and
amount billed.
(3) Annually, projected financial statements for
the next fiscal year prepared on not less
than a quarterly basis.
(4) All borrowing base reports as normally reported
for other debt.
ARTICLE VII
DEFAULT
If any one or more of the following events (hereinafter
referred to as "Events of Default") shall occur:
A. Borrower defaults in the payment of the Liabilities
when due and payable or declared due and payable; or
B. 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. Borrower or any Guarantor defaults in the performance or
observance of any agreement or covenant contained herein or contained in any of
the Other Agreements; or
D. Any representation or warranty made by Borrower or any
Guarantor 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. 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. 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. 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. 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. 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 Notes and all other Liabilities owing
by the Borrower to the Lender to be forthwith due and payable, whereupon the
Notes 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
and apply 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 Notes 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 Notes, 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 Notes 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 Notes
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 to Lender that, on and after the date of
this Agreement, so long as any of the indebtedness under the Notes remains
unpaid, Borrower and any material subsidiaries of Borrower (hereinafter referred
to as the "Organization") are 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 the failure of which would have a material
adverse effect on the Organization or the key supplier, vendor or customer, 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. Borrower shall deliver to
Lender, upon Lender's reasonable request, all periodic internally and externally
prepared evaluations and progress reports concerning the Organization's Year
2000 plan and Year 2000 readiness and 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.
IN WITNESS WHEREOF, Borrower and Lender have hereunto caused
these presents to be executed on the date first above written.
EXIGENT INTERNATIONAL, INC.,
a Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
Assistant Secretary
(CORPORATE SEAL)
eXGNT, INC., a
Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
President and
Assistant Secretary
(CORPORATE SEAL)
FOTOTAG, INC., a
Delaware corporation
By:/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
Assistant Secretary
(CORPORATE SEAL)
GEC ACQUISITION CORPORATION, a
Nevada corporation
By:/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
President
(CORPORATE SEAL)
GEC NORTH AMERICA CORPORATION,
a Nevada corporation
By:/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
President
(CORPORATE SEAL)
MIDDLEWARE SOLUTIONS, INC., a
Nevada corporation
By:/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
Assistant Secretary
(CORPORATE SEAL)
SOFTWARE TECHNOLOGY, INC., a Florida corporation
By:/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx,
Assistant Secretary
(CORPORATE SEAL)
THE HUNTINGTON NATIONAL BANK
By:/s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx Xxxxx
Title: Vice President
STATE OF FLORIDA
COUNTY OF BREVARD
The foregoing instrument was acknowledged before me this 1st
day of March, 2000, by Xxxxxxx X. Xxxxxxxx, as Assistant Secretary of EXIGENT
INTERNATIONAL, INC., a Delaware corporation, on behalf of said corporation. Said
person (check one) |x| is personally known to me, |_| produced a driver's
license (issued by a state of the United States within the last five (5) years)
as identification, or |_| produced other identification, to
wit:_______________________.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
STATE OF FLORIDA
COUNTY OF BREVARD
The foregoing instrument was acknowledged before me this 1st
day of March, 2000, by Xxxxxxx X. Xxxxxxxx, as President and Assistant Secretary
of eXGNT, INC., a Delaware corporation, on behalf of said corporation. Said
person (check one) |x| is personally known to me, |_| produced a driver's
license (issued by a state of the United States within the last five (5) years)
as identification, or |_| produced other identification, to
wit:_______________________.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
STATE OF FLORIDA
COUNTY OF BREVARD
The foregoing instrument was acknowledged before me this 1st
day of March, 2000, by Xxxxxxx X. Xxxxxxxx, as Assistant Secretary of FOTOTAG,
INC., a Delaware corporation, on behalf of said corporation. Said person (check
one) |x| is personally known to me, |_| produced a driver's license (issued by a
state of the United States within the last five (5) years) as identification, or
|_| produced other identification, to wit:_______________________.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
STATE OF FLORIDA
COUNTY OF BREVARD
The foregoing instrument was acknowledged before me this 1st
day of March, 2000 by Xxxxxxx X. Xxxxxxxx, as President of GEC ACQUISITION
CORPORATION, a Nevada corporation, on behalf of said corporation. Said person
(check one) |x| is personally known to me, |_| produced a driver's license
(issued by a state of the United States within the last five (5) years) as
identification, or |_| produced other identification, to
wit:_______________________.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
STATE OF FLORIDA
COUNTY OF BREVARD
The foregoing instrument was acknowledged before me this 1st
day of March_, 2000 by Xxxxxxx X. Xxxxxxxx, as President of GEC NORTH AMERICA
CORPORATION, a Nevada corporation, on behalf of said corporation. Said person
(check one) |x| is personally known to me, |_| produced a driver's license
(issued by a state of the United States within the last five (5) years) as
identification, or |_| produced other identification, to
wit:_______________________.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
STATE OF FLORIDA
COUNTY OF BREVARD
The foregoing instrument was acknowledged before me this 1st
day of March, 2000, by Xxxxxxx X. Xxxxxxxx, as Assistant Secretary of MIDDLEWARE
SOLUTIONS, INC., a Nevada corporation, on behalf of said corporation. Said
person (check one) |x| is personally known to me, |_| produced a driver's
license (issued by a state of the United States within the last five (5) years)
as identification, or |_| produced other identification, to
wit:_______________________.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
STATE OF FLORIDA
COUNTY OF BREVARD
The foregoing instrument was acknowledged before me this 1st
day of March, 2000 by Xxxxxxx X. Xxxxxxxx, as Assistant Secretary of SOFTWARE
TECHNOLOGY, INC., a Florida corporation, on behalf of said corporation. Said
person (check one) |x| is personally known to me, |_| produced a driver's
license (issued by a state of the United States within the last five (5) years)
as identification, or |_| produced other identification, to
wit:_______________________.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
STATE OF FLORIDA :
COUNTY OF BREVARD:
The foregoing instrument was acknowledged before me this 1st
day of March, 2000, by Xxxxxxx Xxxxx, as Vice President of The Huntington
National Bank, a national banking corporation, on behalf of said state banking
corporation. |x| He/She is personally known or |_| has produced
______________________________ as identification.
Print Name:
Notary Public /s/ Xxxxxxxx X. Xxxxx
Commission No.:
My Commission Expires:
EXHIBIT 1
Definitions
"Borrowing Base" will consist of up to 80% of "eligible"
accounts receivable plus up to 50% of "eligible" contract receivables plus the
lesser of $l,500,000.00 or up to 50% of "eligible" Costs in Excess of Xxxxxxxx
of Borrower and the Other Subsidiaries.
"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. Provided, however, assets of GEC shall not be deemed Eligible until that
certain promissory note payable by GEC to Lender in the amount of $1,000,000.00
and dated as of December 9, 1999 is satisfied. 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 (excluding the $1,000,000.00 subordinated
debt to the former GEC shareholders).
"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 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 Notes
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 Notes, the Guaranty Agreement,
the Security Agreement, and all agreements, instruments and documents,
including, without limitation, notes, 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 or any
Guarantor 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.
