EXHIBIT 10.3
Xxxxxxx Xxxxx NO. 862-07N67
--------------------------------------------------------------------------------
WCMA* NOTE, LOAN AND SECURITY AGREEMENT
WCMA NOTE, LOAN AND SECURITY AGREEMENT ("Loan Agreement") dated as of July 5,
1995, between X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION LABORATORY, a
corporation organized and existing under the laws of the State of New York
having its principal office at 184-13 Xxxxxx Xxxxxxx Expressway, Xxxxx Xxxxxxx,
XX 00000 ("Customer"), and XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC., a
corporation organized and existing under the laws of the State of Delaware
having its principal office at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, XX 00000
("MLBFS").
In accordance with that certain WORKING CAPITAL MANAGEMENT(R) ACCOUNT AGREEMENT
NO. 862-07N67 ("WCMA Agreement") between Customer and MLBFS' affiliate, XXXXXXX
LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED ("MLPF&S"), Customer has subscribed
to the WCMA Program described In the WCMA Agreement. The WCMA Agreement is by
this reference incorporated as a part hereof, In conjunction therewith and as
part of the WCMA Program, Customer has requested that MLBFS provide, and subject
to the terms and conditions herein set forth MLBFS has agreed to provide, a
commercial line of credit for Customer (the "WCMA Line of Credit").
Accordingly, and in consideration of the premises and of the mutual covenants of
the parties hereto, Customer and MLBFS hereby agree as follows:
1. DEFINITIONS
(a) Specific Terms. In addition to terms defined elsewhere. In this Loan
Agreement, when used herein the following terms shall have the following
meanings;
(i) "Account Debtor" shall mean any party who is or may become obligated with
respect to an Account or Chattel Paper.
(ii) "Activation Date" shall mean the date upon which MLBFS shall cause the WCMA
Line of Credit to be fully activated under MLBFS' computer system as part of
the WCMA Program.
(iii) "Additional Agreements" shad mean all agreements, Instruments, documents
and opinions other than this Loan Agreement which are contemplated hereby or
otherwise reasonably required by MLBFS, and relate to this Loan Agreement or
evidence the creation, guaranty or collateralization of any of the Obligations
or the granting or perfection of security interests upon the Collateral or any
other collateral for the Obligations.
(iv) "Business Day" shall mean any day other than a Saturday, Sunday, federal
holiday or other day on which the New York Stock Exchange is regularly closed.
(v) "Collateral" shall mean all Accounts, Chattel Paper, Contract Rights,
Inventory, Equipment, Fixtures, General intangibles, Deposit Accounts, Documents
and instruments of Customer, howsoever arising, whether now owned or existing or
hereafter acquired or arising, and wherever located; together with all parts
thereof (including spare parts), all accessories and accessions thereto, all
books and records (including computer records) directly related thereto, all
proceeds thereof (including, without limitation, proceeds in the form of
Accounts and insurance proceeds), and the additional collateral described in
Section 9 (b) hereof.
(vi) "Commitment Expiration Date" shall mean August 5,1995.
(vii) "General Funding Conditions" shall mean each of the following conditions
to any WCMA Loan by MLBFS hereunder, (A) no Event of Default, or event which
with the giving of notice, passage of time, or both, would constitute an Event
of Default, shall have occurred and be continuing or would result from the
making of any WCMA Loan hereunder by MLBFS; (B) there shall not have occurred
any material adverse change In the business or financial condition of Customer
or any Guarantor; (C) all representations and warranties of Customer or any
Guarantor herein or in any Additional Agreements shall then be true and correct
in all material respects; (D) no other event shall then have occurred and be
continuing which shall have reasonably caused MLBFS to in good faith believe
that the prospect of payment or performance) by Customer or any Guarantor has
been materially impaired; (E) MLBFS shall have received this Loan Agreement and
all Additional Agreements, duly executed and filed or recorded where applicable,
all of which shall be in form and substance reasonably satisfactory to MLBFS;
(F) MLBFB shall have received evidence reasonably satisfactory to it as to the
ownership of the Collateral and the perfection and priority of MLBFS1 liens and
security interests thereon, as wall as the ownership of and the perfection and
priority of MLBFS' liens and security Interests on any other collateral for the
Obligations furnished pursuant to any of the Additional Agreements; (G) MLBFS
shall have received evidence reasonably satisfactory to it of the insurance
required hereby or by any of the Additional Agreements; and (H) arty additional
conditions specified in an Approval Letter or Commitment Letter executed by
MLBFS with respect to the transactions contemplated hereby shall have been met
to the reasonable satisfaction of MLBFS.
(viii) "Guarantor" shall mean a person or entity who has either guaranteed or
provided collateral for any or all of the Obligations.
(ix) "Interest Rate" shall mean a fluctuating per annum rate of interest equal
to the sum of 1.0% and the Prime Rate. "Prime Rate" shall mean, as of the date
of any determination, the interest rate then most recently published in the
"Money Rates" section of The Wall Street Journal as the Prime Rate (or if more
than one rate Is published as the Prime Rate, then the highest of such rates).
The Interest Rate will change as of the date of publication in The Wall Street
Journal of a Prime Rate that is different from that published on the preceding
Business Day. In the event that The Wall Street Journal shall, for any reason,
fall or cease to publish the Prime Rate. MLBFS will choose a reasonably
comparable index or source to use as the basis for the Interest Rate.
(x) "Line Fee" shall mean a fee of $1,500.00 due to MLBFS in connection with the
WCMA Line of Credit for the period prior to the current Maturity Date.
(xi) "Location of Tangible Collateral" shall mean the address of Customer set
forth at the beginning of this Loan Agreement, together with any other address
or addresses set forth on an exhibit hereto as being a Location of Tangible
Collateral.
(xii) "Maturity Date" shall mean July 31, 1996, or such later date as may be
consented to in writing by MLBFS.
(xiii) "Maximum WCMA Line of Credit" shall mean an amount equal to $300.000.00.
(xiv) "Obligations" shall mean all liabilities, indebtedness and other
obligations of Customer to MLBFS, howsoever created, arising or evidenced,
whether now existing or hereafter arising, whether direct or indirect, absolute
or contingent, due or to become due, primary or secondary or joint or several,
and, without limiting the foregoing, shall include all present and future
liabilities, indebtedness and obligations of Customer under this Loan Agreement.
(xv) "Permitted Liens" shall mean (A) liens for current taxes not delinquent,
other liens arising in the ordinary course of business for sums not due, and, if
MLBFS' rights to and interest in the Collateral are not materially and adversely
affected thereby, any such liens for taxes or other sums arising In the ordinary
course of business being contested in good faith by appropriate proceedings; (B)
liens in favor of MLBFS; (C) liens which will be discharged with the proceeds of
the initial WCMA Loan; and (D) any other liens expressly permitted in writing by
MLBFS.
(xvi) "WCMA Account" shall mean and refer to the Working Capital Management
Account of Customer with MLPF&S identified as Account NO. 862-07N67.
(xvii) "WCMA Loan" shall mean each advance made by MLBFS pursuant to this Loan
Agreement.
(b) Other Terms. Except as otherwise defined herein: (i) all terms used in this
Loan Agreement which are defined In the Uniform commercial Code of Illinois
("UCC") shall have the meanings set forth in the UCC, and (ii) capitalized terms
used herein which are defined in the WCMA Agreement shall have the meaning set
forth In the WCMA Agreement.
2. WCMA PROMISSORY NOTE
FOR VALUE RECEIVED, Customer hereby promises to pay to the order of MLBFS, at
the times and in the manner set forth in this Loan Agreement or in such other
manner and at such place as MLBFS may hereafter designate in writing, the
following: (a) on the Maturity Date, the aggregate unpaid principal amount of
all WCMA Loans (the "WCMA Loan Balance"); (b) interest at the Interest Rate on
the outstanding WCMA Loan Balance, from and including the date on which the
initial WCMA Loan is made until the date of payment of all WCMA Loans in full;
and (o) on demand, all other sums payable pursuant to this Loan Agreement,
including, but not limited to, the Line Fee and any late charges. Except as
otherwise expressly set forth herein, Customer hereby waives presentment, demand
for payment, protest and notice of protest, notice of dishonor, notice of
acceleration, notice of intent to accelerate and all other notices and
formalities in connection with this WCMA Promissory Note and this Loan
Agreement.
3. WCMA LOANS
(a) Activation Date. Provided that: (i) the Commitment Expiration Date shall not
then have occurred, and (ii) Customer shall have subscribed to the WCMA Program
and its subscription to the WCMA Program snail then be in effect, the Activation
Date shall occur on or promptly after the date, following the acceptance of this
Loan Agreement by MLBFS at its office in Chicago, Illinois, upon which each of
the General Funding Conditions shall have been met or satisfied to the
reasonable satisfaction of MLBFS. No activation by MLBFS of the WCMA Line of
Credit for a nominal amount shall be deemed evidence of the satisfaction of any
of the conditions herein set forth, or a waiver of any of the terms or
conditions hereof. Customer hereby authorizes MLBFS to pay out of and charge to
Customer's WCMA Account on the Activation Date all amounts necessary to fully
pay off any bank or other financial institution having a lien upon any of the
Collateral other than a Permitted Lien.
(b) WCMA Loans. Subject to the terms and conditions hereof, during the period
from and after the Activation Date to the Maturity Date: (i) MLBFS will make
WCMA Loans to Customer in such amounts as Customer may from time to time request
in accordance with the terms hereof, up to an aggregate outstanding amount not
to exceed the Maximum WCMA Line of Credit, and (ii) Customer may repay any WCMA
Loans in whole or in part at any time without premium or penalty, and request a
re-borrowing of amounts repaid on a revolving basis. Customer may request WCMA
Loans by use of WCMA Checks, FTS, Visa(R) charges, wire transfers, or such other
means of access to the WCMA Line of Credit as may be permitted by MLBFS from
time to time; it being understood that so long as the WCMA Line of Credit shall
be in effect, any charge or debit to the WCMA Account which but for the WCMA
Line of Credit would under the terms of the WCMA Agreement result In an
overdraft, shall be deemed a request by Customer for a WCMA Loan.
(c) Conditions of WCMA Loans. Notwithstanding the foregoing, MLBFS shall not be
obligated to make any WCMA Loan, and may without notice refuse to honor any such
request by Customer, if at the time of receipt by MLBFS of Customer's request:
0) the making of such WCMA Loan would cause the Maximum WCMA Line of Credit to
be exceeded; or (ii) the Maturity Date shall have occurred, or the WCMA Line of
Credit shall have otherwise been terminated in accordance with the terms hereof;
or (iii) an event shall have occurred and is continuing which shall have caused
any of the General Funding Conditions to not then tie met or satisfied to the
reasonable satisfaction of MLBFS. The making by MLBFS of any WCMA Loan at a time
when any one or more of said conditions shall not have been met shall not in any
event be construed as a waiver of said condition or conditions or of any Event
of Default, and shall not prevent MLBFS at any time thereafter while any
condition shall not have been met from refusing to honor any request by Customer
for a WCMA Loan.
(d) Force Majeure. MLBFS shall not be responsible, and shall have no liability
to Customer or any other party, for any delay or failure of MLBFS to honor any
request of Customer for a WCMA Loan or any other act or omission of MLBFS,
MLPF&S or any of their affiliates due to or resulting from any system failure,
error or delay in posting or other clerical error, loss of power, fire, Act of
God or other cause beyond the reasonable control of MLBFS, MLPF&S or any of
their affiliates unless directly arising out of the willful wrongful act or
active gross negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential damages arising from any
act or omission by MLBFS, MLBFS or any of their affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.
(e) Interest. The WCMA Loan Balance shall bear interest at the Interest Rate.
Interest shall be computed for the actual number of days elapsed on the basis of
a year consisting of 360 days. Notwithstanding any other provision in this Loan
Agreement or any Additional Agreements to the contrary, in no event shall the
Interest Rate exceed the highest rate permissible under any applicable law. in
the event that any court having jurisdiction determines that MLBFS has received
excess interest hereunder, MLBFS will promptly refund such excess interest to
Customer, without charge or penalty. Except as otherwise provided herein,
accrued and unpaid Interest on the WCMA Loan Balance shall be payable monthly on
the last Business Day of each calendar month, commencing with the last Business
Day of the calendar month in which the Activation Date shall occur. Customer
hereby irrevocably authorizes and directs MLPF&S to pay MLBFS such accrued
interest from any available free credit balances In the WCMA Account and if such
available free credit balances are insufficient to satisfy any interest payment
due, to liquidate any investments in the Money Accounts (other than any
investments constituting any Minimum Money Accounts Balance) in an amount up to
the balance of such accrued Interest, and pay to MLBFS the available proceeds on
account thereof. If available free credit balances in the WCMA Account and
available proceeds of the Money Accounts are insufficient to pay the entire
balance of accrued interest, and Customer otherwise fails to make such payment
when due, MLBFS may, in its sole discretion, make a WCMA Loan in an amount equal
to the balance of such accrued Interest and pay the proceeds of such WCMA Loan
to itself on account of such Interest. The amount of any such WCMA Loan will be
added to the WCMA Loan Balance, if MLBFS declines to extend a WCMA Loan to
Customer under these circumstances. Customer hereby authorizes and directs
MLPF&S to make all such interest payments to MLBFS from any Minimum Money
Accounts Balance. If there is no Minimum Money Accounts Balance, or it is
insufficient to pay all such Interest, MLBFS will invoice Customer for payment
of the balance of the accrued Interest, and Customer shall pay such interest as
directed by MLBFS within 5 Business Days of receipt of such invoice.
(f) Payments. All payments required or permitted to be made pursuant to this
Loan Agreement shall tie made in lawful money of the United States. Unless
otherwise directed by MLBFS, payments on account of the WCMA Loan Balance may be
made by the delivery of checks (other than WCMA Checks), or by means of FTS or
wire transfer of funds (other than funds from the WCMA Line of Credit) to MLPF&S
for credit 10 Customer's WCMA Account. Notwithstanding anything in the WCMA
Agreement to the contrary. Customer hereby irrevocably authorizes and directs
MLPF&S to apply available free credit balances in the WCMA Account to the
repayment of the WCMA Loan Balance prior to application for any other purpose.
Payments to MLBFS from funds in the WCMA Account shall be deemed to be made by
Customer upon the same basis and schedule as funds are made available for
Investment in the Money Accounts in accordance with the terms of the WCMA
Agreement, All funds received by MLBFS from MLBFS pursuant to the aforesaid
authorization shall be applied by MLBFS to repayment of the WCMA Loan Balance.
The acceptance by or on behalf of MLBFS of a check or other payment for a lesser
amount than shall be due from Customer, regardless of any endorsement or
statement thereon or transmitted therewith, shall not be deemed an accord and
satisfaction or anything other than a payment on account, and MLBFS or anyone
acting on behalf of MLBFS may accept such check or other payment without
prejudice to the rights of MLBFS to recover the balance actually due or to
pursue any other remedy under this Loan Agreement or applicable law for such
balance. All checks accepted by or on behalf of MLBFS in connection with the
WCMA Line of Credit are subject to final collection.
(g) Exceeding the Maximum WCMA Line of Credit. In the event that the WCMA Loan
Balance shall at any time exceed the Maximum WCMA Line of Credit, Customer shall
within 1 Business Day of the first to occur of (i) any request or demand of
MLBFS, or (ii) receipt by Customer of a statement from MLPF&S showing a WCMA
Loan Balance In excess of the Maximum WCMA Line of Credit, deposit sufficient
funds into the WCMA Account to reduce the WCMA Loan Balance below the Maximum
WCMA Line of Credit.
(h) Line Fee; Extensions. In consideration of the extension of the WCMA Line of
Credit by MLBFS to Customer during the period prior to the current Maturity
Date, Customer has paid or shall pay the Line Fee to MLBFS, If such fee has not
heretofore been paid by Customer, Customer hereby authorizes MLBFS, at Its
option, to either cause said fee (and any renewal Line Fee) to be paid with a
WCMA Loan which Is added to the WCMA Loan Balance, or Invoice Customer for said
fee On which event Customer shall pay said fee within 5 Business Days after
receipt of such invoice). No delay in the Activation Date, howsoever caused,
shall entitle Customer to any rebate or reduction In the Line Fee or extension
of the Maturity Date. In the event MLBFS and Customer, in their respective sole
discretion, agree to renew the WCMA Line of Credit beyond the current Maturity
Date, Customer agrees to pay a renewal Line Fee In the amount then set forth In
the writing signed by MLBFS which extends the Maturity Date; it being understood
that any request by Customer for a WCMA Loan or failure of Customer to pay any
WCMA Loan Balance outstanding on the immediately prior Maturity Date, after the
receipt by Customer of a writing signed by MLBFS extending the Maturity Date,
shall be deemed a consent by Customer to both the renewal Line Fee and the new
Maturity Date. If no renewal Line Fee is set forth In the writing signed by
MLBFS extending the Maturity Data, the renewal Line Fee shall be deemed to be
the same as the immediately preceding Line Fee.
(I) Statements. MLBF&S will include in each monthly statement it issues under
the WCMA Program information with respect to WCMA Loans and the WCMA Loan
Balance. Any questions that Customer may have with respect to such information
should be directed to MLBFS; and any questions with respect to any other matter
in such statements or about or affecting the WCMA Program should be directed to
MLPF&S.
(j) Use of Loan Proceeds; Securities Transactions. On the Activation Date, a
WCMA Loan will be made to pay any Indebtedness of Customer to a third party
secured by all or any part of the Collateral. The proceeds of each subsequent
WCMA Loan shall be used by Customer solely for working capital in the ordinary
course of its business, or, with the prior written consent of MLBFS, for other
lawful business purposes of Customer not prohibited hereby. Customer agrees that
under no circumstances will funds borrowed from MLBFS through the WCMA Line of
Credit be used: (i) for personal, family or household purposes of any person
whatsoever, (ii) to purchase, carry or trade In securities, including shares of
the Money Accounts, or (Hi) to repay debt incurred to purchase, carry or trade
in securities; nor will any such funds be remitted, directly or indirectly, to
MLPF&S or any other broker or dealer in securities, by WCMA Check, check, FTS,
wire transfer, or otherwise.
4. REPRESENTATIONS AND WARRANTIES
Customer represents and warrants to MLBFS that:
(a) Due Organization, etc. Customer is a corporation, duly organized, validly
existing and in good standing under the laws of the State of New York.
(b) Execution, Delivery and Performance. The execution, delivery and performance
by Customer of this Loan Agreement and by Customer and each Guarantor of such of
the Additional Agreements to which it is a party: (i) have been duly authorized
by all requisite action, (B) do not and will not violate or conflict with any
law or other governmental requirement, or any of the agreements, instruments or
documents which formed or govern Customer or any such Guarantor, and (iii) do
not and will not breach or violate any of the provisions of, and will not result
in a default by Customer or any such Guarantor under, any other agreement,
instrument or document to which it is a party or by which it is bound.
(c) Notices and Approvals. Except as may have been given or obtained, no notice
to or consent or approval of any governmental body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by Customer or any
Guarantor of such of this Loan Agreement and the Additional Agreements to which
it is a party.
(d) Enforceability. This Loan Agreement and such of the Additional Agreements to
which it Is a party are the legal, valid and binding obligations of Customer and
each Guarantor, enforceable against it or them, as the case may be, in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy and other similar laws affecting the rights of creditors generally
or by general principles of equity.
(e) Collateral. Subject to any Permitted Liens: (i) Customer has good and
marketable title to the Collateral. (ii) none of the Collateral is subject to
any lien, encumbrance or security interest other than the liens and security
interests of MLBFS, and (iii) upon the filing of ail Uniform Commercial Code
financing statements executed by Customer with respect to the Collateral in the
appropriate jurisdictions) and/or the completion of any other action required by
applicable law to perfect its liens and security interests, MLBFS will have
valid and perfected first liens and security Interests upon all of the
Collateral.
(f) Financial Statements. Except as expressly set forth in Customer's financial
statements, all financial statements of Customer furnished to MLBFS have been
prepared In conformity with generally accepted accounting principles,
consistently applied, are true and correct, and fairly present the financial
condition of it as at such dates and the results of its operations for the
periods then ended: and since the most recent date covered by such financial
statements, there has been no material adverse change in any such financial
condition or operation. All financial statements furnished to MLBFS of any
Guarantor are true and correct and fairly represent such Guarantor's financial
condition as of the date of such financial statements, and since the most recent
date of such financial statements, there has been no material adverse change in
such financial condition.
(g) Litigation. No litigation, arbitration, administrative or governmental
proceedings are pending or, to the knowledge of Customer, threatened against
Customer or any Guarantor, which would, if adversely determined, materially and
adversely affect the financial condition of Customer or any such Guarantor or
the continued operations of Customer.
(h) Tax Returns. All federal, state and local tax returns, reports and
statements required to be filed by Customer and each Guarantor have been filed
with the appropriate governmental agencies and all taxes due and payable by
Customer and each Guarantor xxxx been timely paid (except to the extent that any
such failure to file or pay will not materially and adversely affect either the
liens and security interests of MLBFS hereunder or under any of the Additional
Agreements, the financial condition of Customer or any Guarantor, or the
continued operations of Customer).
(i) Collateral Location. All of the tangible Collateral is located at a Location
of Tangible Collateral.
Each of the foregoing representations and warranties are continuing and shall be
deemed remade by Customer concurrently with each request for a WCMA Loan.
5. FINANCIAL AND OTHER INFORMATION
Customer shall furnish or cause to be furnished to MLBFS during the term of this
Loan Agreement all of the following:
(a) Annual Financial Statements. Within 120 days after the dose of each fiscal
year of Customer. Customer shall furnish or cause to be furnished to MLBFS a
copy of the annual reviewed financial statements of Customer consisting of at
least a balance sheet as at the close of such fiscal year and related statements
of income, retained earnings and cash flows, reviewed by Hs current independent
accountants or other independent accountants reasonably acceptable to MLBFS and
certified by Its chief financial officer.
(b) Interim Financial Statements. Within 45 days after the dose of each fiscal
quarter of Customer. Customer shall furnish or cause to be furnished to MLBFS:
(i) a statement of profit and loss for the fiscal quarter then ended, and (ii) a
balance sheet as at the close of such fiscal quarter; all in reasonable detail
and certified by its chief financial officer.
(c) Other Information. Customer shall furnish or cause to be furnished to MLBFS
such other information as MLBFS may from time to time reasonably request
relating to Customer, any Guarantor or the Collateral.
Customer acknowledges that timely receipt of all such information is critical to
the ability of MLBFS to prudently offer the WCMA Line of Credit, and that the
failure to provide any such information within the time required will constitute
a material breach by Customer of this Loan Agreement.
6.OTHER COVENANTS
Customer further agrees during the term of this Loan Agreement that:
(a) Financial Records; Inspection. Customer will: (i) maintain complete and
accurate books and records, and maintain all of its financial records in a
manner consistent with the financial statements heretofore furnished to MLBFS,
or prepared on such other basis as may be approved in writing by MLBFS; and (ii)
permit MLBFS, upon reasonable notice and at reasonable times, to inspect its
properties (both real or personal), operations, books and records.
(b) Taxes. Customer and each Guarantor will pay when due all taxes, assessments
and other governmental charges, howsoever designated, and alt other liabilities
and obligations, except to the extent that any such failure to pay will not
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements, the financial condition of
Customer or any Guarantor or the continued operations of Customer.
(c) Compliance With Laws and Agreements. Neither Customer nor any Guarantor xxxx
violate any law, regulation or other governmental requirement, any judgment or
order of any court or governmental agency or authority, or any agreement,
instrument or document to which it is a party or by which it Is bound, If any
such violation will materially and adversely affect either the liens and
security interests of MLBFS hereunder or under any of the Additional Agreements,
the financial condition of Customer or any Guarantor, or the continued
operations of Customer.
(d) Continuity. Except upon the prior written consent of MLBFS, which consent
will not be unreasonably withheld: (i) customer will not be a party to any
merger or consolidation with, or purchase or otherwise acquire all or
substantially all of the assets or stock of, or any material partnership or
joint venture interest in, any person or entity, or sell, transfer or lease all
or any substantial part of its assets if any such action causes a material
change in its control or principal business, or a material adverse change In its
financial condition or operations; (ii) Customer will preserve its existence and
good standing in the jurisdictions of establishment and operation, and will not
operate in any material business other than a business substantially the same as
its business as of the date of application by Customer for credit from MLBFS;
and (iii) Customer win not cause or permit any material change in Its
controlling ownership, controlling senior management or, except upon not less
than 30 days prior written notice to MLBFS, its name or principal place of
business.
7.COLLATERAL
(a) Pledge of Collateral. To secure payment and performance of the Obligations,
customer hereby pledges, assigns, transfers and sets over to MLBFS, and grants
to MLBFS first liens and security interests in and upon all of the Collateral,
subject only to Permitted Liens.
(b) Liens. Customer shall not create or permit to exist any lien, encumbrance or
security interest upon or with respect to any Collateral now owned or hereafter
acquired, except for any Permitted Liens. Customer shall further perform any and
all acts reasonably requested by MLBFS to establish, perfect, maintain and
continue MLBFS' security interests and liens upon the Collateral, including, but
not limited to: (i) Executing financing statements and any and all other
instruments and documents when and as reasonably requested by MLBFS. and (ii) If
in the reasonable judgment of MLBFS it is required by local law, causing the
owners and/or mortgages of the real property on which any Collateral may be
located to execute and deliver to MLBFS waivers or subordinations reasonably
satisfactory to MLBFS with respect to any rights in such Collateral.
(c) Performance of Obligations. Customer shall perform all of its obligations
owing on account of or with respect to the Collateral; it being understood that
nothing herein, and no action or inaction by MLBFS, under this Loan Agreement or
otherwise, shall be deemed an assumption by MLBFS of any of Customer's said
obligations.
(d) Sales and Collections. So long as no Event of Default shall have occurred
and is continuing. Customer may in the ordinary course of its business: (i) sell
any Inventory normally held by Customer for sale. (ii) use or consume any
materials and supplies normally held by Customer for use or consumption, and
(iii) collect all of its Accounts. Customer shall take such action with respect
to protection of its Inventory and the other Collateral and the collection of
its Accounts as MLBFS may from time to time reasonably request.
(e) Account Schedules. Upon the request of MLBFS, made now or at any reasonable
time or times hereafter, Customer shall deliver to MLBFS, in addition to the
other information required hereunder, a schedule identifying, for each Account
and all Chattel Paper subject to MLBFS' security interests hereunder, each
Account Debtor by name and address and amount, invoice or contract number and
date of each invoice or contract Customer shall furnish to MLBFS such additional
information with respect to the Collateral, and amounts received by Customer as
proceeds of any of the Collateral, as MLBFS may from time to time reasonably
request.
(f) Alterations and Maintenance. Except upon the prior written consent of MLBFS.
Customer shall not make or permit any material alterations to any tangible
Collateral which might materially reduce or impair its market value or utility.
Customer shall at all times keep the tangible Collateral in good condition and
repair and shall pay or cause to be paid all obligations arising from the repair
and maintenance of such Collateral, as well as all obligations with respect to
the premises where any Collateral is or may be located, except for any such
obligations, being contested by Customer in good faith by appropriate
proceedings.
(g) Location. Except for movements required in the ordinary course of Customer's
business, Customer shall give MLBFS 30 days' prior written notice of the placing
at or movement of any tangible Collateral to any location other than a Location
of Tangible Collateral. In no event shall Customer cause or penult any material
tangible collateral to be removed from the United States without the express
prior written consent of MLBFS.
(h) Insurance. Customer shall insure all of the tangible Collateral under a
policy or policies of physical damage insurance providing that losses will be
payable to MLBFS as its interests may appear pursuant to a Lender's Loss Payable
Endorsement and containing such other provisions as may be reasonably required
by MLBFS. Customer shall further provide and maintain a policy or policies of
comprehensive public liability Insurance naming MLBFS as an additional party
insured. Customer shall maintain such other insurance as may be required by law
or is customarily maintained by companies in a similar business or otherwise
reasonably required by MLBFS, All such Insurance shall provide that MLBFS will
receive not less than 10 days prior written notice of any cancellation, and
shall otherwise be in form and amount and with an insurer or insurers reasonably
acceptable to MLBFS. Customer shall furnish MLBFS with a copy or certificate of
each such policy or policies and, prior to any expiration or cancellation, each
renewal or replacement thereof.
(i) Event of Loss. Customer shall at its expense promptly repair all repairable
damage to any tangible Collateral. In the event that any tangible Collateral is
damaged beyond repair, lost, totally destroyed or confiscated (an "Event of
Loss") and such Collateral had a value prior to such Event of Loss of $25.000.00
or more, then, on or before the first to occur of (i) 90 days after the
occurrence of such Event of Loss, or (ii) 10 Business Days after the date on
which either Customer or MLBFS shall receive any proceeds of insurance on
account of such Event of Loss, or any underwriter of insurance on such
Collateral shall advise either Customer or MLBFS that it disclaims liability in
respect of such Event of Loss, Customer shall, at Customer's option, either
replace the Collateral subject to such Event of Loss with comparable Collateral
free of all liens other than Permitted Liens (In which event Customer shall be
entitled to utilize the proceeds of insurance on account of such Event of Loss
for such purpose, and may retain any excess proceeds of such insurance), or
consent to a reduction In the WCMA Line of Credit in an amount equal to the
actual cash value of such Collateral as determined by either the applicable
insurance company's payment (plus any applicable deductible) or, in absence of
insurance company payment, as reasonably determined by MLBFS. Notwithstanding
the foregoing, if at the time of occurrence of such Event of Loss or any time
thereafter prior to replacement or line reduction, as aforesaid, an Event of
Default shall occur hereunder, then MLBFS may at its sole option, exercisable at
any time while such Event of Default shall be continuing, require Customer to
either replace such Collateral or, on its own volition and without the consent
of Customer, reduce the WCMA Line of Credit, as aforesaid.
(j) Notice of Certain Event. Customer shall give MLBFS immediate notice of any
attachment, lien, judicial process, encumbrance or claim affecting or involving
$25,000.00 or more of the Collateral.
(k) Indemnification. Customer shall indemnify, defend and save MLBFS harmless
from and against any and all claims, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) of any
nature whatsoever which may be asserted against or incurred by MLBFS arising out
of or in any manner occasioned by (i) the ownership, collection, possession, use
or operation of any Collateral, or (ii) any failure by Customer to perform any
of its obligations hereunder; excluding, however, from said indemnity any such
claims, liabilities, etc. arising directly out of the willful wrongful act or
active gross negligence of MLBFS. This indemnity shall survive the expiration or
termination of this Loan Agreement as to all matters arising or accruing prior
to such expiration or termination.
8. EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an "Event of
Default" under this Loan Agreement:
(a) Failure to Pay. Customer shall fail to pay to MLBFS or deposit Into the WCMA
Account when due any amount owing or required to be deposited by Customer under
this Loan Agreement, and such failure shall continue for more than 5 Business
Days after written notice thereof shall have been given by MLBFS to Customer.
(b) Failure to Perform. Customer or any Guarantor shall default in the
performance or observance of any covenant or agreement on its part to be
performed or observed under this Loan Agreement or any of the Additional
Agreements (not constituting an Event of Default under any other clause of this
Section), and such default shall continue unremedied for 10 Business Days after
written notice thereof shall have been given by MLBFS to Customer.
(c) Breach of Warranty. Any representation or warranty made by Customer or any
Guarantor contained in this Loan Agreement or any of the Additional Agreements
shall at any time prove to have been incorrect iIn any material respect when
made.
(d) Default Under Other Agreement. A default or Event of Default by Customer or
any Guarantor shall occur under the terms of any other agreement, instrument or
document with or intended for the benefit of MLBFS, MLPF&S or any of their
affiliates, and any required notice shall have been given and required passage
of time shall have elapsed.
(e) Bankruptcy, Etc. A proceeding under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt or receivership law or statute
shall be filed by Customer or any Guarantor, or any such proceeding shall be
filed against Customer or any Guarantor and shall not be dismissed or withdrawn
within 60 days after filing, or Customer or any Guarantor shall make an
assignment for the benefit of creditors, or Customer or any Guarantor shall
become Insolvent or generally fail to pay, or admit in writing Its inability to
pay, its debts as they become due.
(f) Material Impairment. Any event shall occur which shall reasonably cause
MLBFS to in good faith believe that the prospect of payment or performance by
Customer or any Guarantor has been materially Impaired.
(g) Acceleration of Debt to Other Creditor. Any event shall occur which results
in the acceleration of the maturity of any indebtedness of $100,000.00 or more
of Customer or any Guarantor to another creditor under any indenture, agreement,
undertaking, or otherwise.
(h) Seizure or Abuse of Collateral. The Collateral, or any material part
thereof, shall be or become subject to any material abuse or misuse, or any
levy, attachment, seizure or confiscation which is not released within 10
Business Days.
9. REMEDIES
(a) Remedies Upon Default. Upon the occurrence and during the continuance of any
Event of Default, MLBFS may at its sole option do any one or more or all of the
following, at such time and in such order as MLBFS may in its sole discretion
choose:
(i) Termination. MLBFS may without notice terminate the WCMA Line of Credit and
all obligations to provide the WCMA Line of Credit or otherwise extend any
credit to or for the benefit of Customer and upon any such termination MLBFS
shall be relieved of all such obligations.
(ii) Acceleration. MLBFS may declare the principal of and interest on the WCMA
Loan Balance, and all other Obligations to be forthwith due and payable,
whereupon all such amounts shall be immediately due and payable, without
presentment, demand for payment, protest and notice of protest, notice of
dishonor, notice of acceleration, notice of intent to accelerate or other notice
or formality of any kind, all of which are hereby expressly waived.
(iii) Exercise Rights of Secured Party. MLBFS may exercise any or all of the
remedies of a secured party under applicable law, Including, but not limited to,
the UCC. and any or all of its other rights and remedies under this Loan
Agreement and the Additional Agreements.
(iv) Possession. MLBFS may require Customer to make the Collateral and the
records pertaining to the Collateral available to MLBFS at a place designated by
MLBFS which is reasonably convenient, or may take possession of the Collateral
and the records pertaining to the Collateral without the use of any judicial
process and without any prior notice to Customer.
(v) Sale. MLBFS may sell any or all of the Collateral at public or private sale
upon such terms and conditions as MLBFS may reasonably deem proper. MLBFS may
purchase any Collateral at any such public sale. The net proceeds of any such
public or private sale and all other amounts actually collected or received by
MLBFS pursuant hereto, after deducting all costs and expenses incurred at any
time in the collection of the Obligations and In the protection, collection and
sale of the Collateral, will be applied to the payment of the Obligations, with
any remaining proceeds paid to Customer or whoever else may be entitled thereto,
and with Customer and the Guarantors remaining jointly and severally liable for
any amount remaining unpaid after such application.
(vi) Delivery of Cash, Checks, Etc. MLBFS may require Customer to forthwith upon
receipt, transmit and deliver to MLBFS in the form received, all cash, checks,
drafts and other instruments for the payment of money (property endorsed, where
required, so that such items may be collected by MLBFS} which may be received by
Customer at any time in full or partial payment of any Collateral, and require
that Customer not commingle any such Items which may be so received by Customer
with any other of Its funds or property but instead hold them separate and apart
and In trust for MLBFS until delivery Is made to MLBFS.
(vii) Notification of Account Debtors. MLBFS may notify any Account Debtor that
its Account or Chattel Paper has been assigned to MLBFS and direct such Account
Debtor to males payment directly to MLBFS of all amounts due or becoming due
with respect to such Account or Chattel Paper, and MLBFS may enforce payment and
collect, by legal proceedings or otherwise, such Account or Chattel Paper.
(viii) Control of Collateral. MLBFS may otherwise take control in any lawful
manner of any cash or non-cash items of payment or proceeds of Collateral and of
any rejected, returned, stopped in transit or repossessed goods included in the
Collateral and endorse Customer's name on any Item of payment on or proceeds of
the Collateral.
(b) Set-Off. MLBFS shall have the further right upon the occurrence and during
the continuance of an Event of Default to set-off, appropriate and apply toward
payment of any of the Obligations, in such order of application as MLBFS may
from time to time and at any time elect, any cash, credit, deposits, accounts,
securities and any other property of Customer which is in transit to or in the
possession, custody or control of MLBFS, MLBFS or any agent, xxxxxx, or
affiliate of MLBFS or MLPP&S. Including, without limitation, the WCMA Account
and any Money Accounts, and all cash and securities therein or controlled
thereby, and all proceeds thereof. Customer hereby collaterally assigns and
grants to MLBFS a security interest in alt such property as additional
Collateral.
(c) Remedies are Severable and Cumulative. All rights and remedies of MLBFS
herein are severable and cumulative and in addition to all other rights and
remedies available in the Additional Agreements, at law or in equity, and any
one or more of such rights and remedies may be exercised simultaneously or
successively.
(d) Notices. To the fullest extent permitted by applicable law. Customer hereby
irrevocably waives and releases MLBFS of and from any and all liabilities and
penalties for failure of MLBFS to comply with any statutory or other requirement
imposed upon MLBFS relating to notices of sale, holding of sale or reporting of
any sale, and Customer waives all rights of redemption from any such sale. Any
notices required under applicable law shall be reasonably and properly given to
Customer if given by any of the methods provided herein at least 5 Business Days
prior to taking action. MLBFS shall have the right to postpone or adjourn any
sale or other disposition of Collateral at any time without giving notice of any
such postponed or adjourned date. In the event MLBFS seeks to take possession of
any or all of the Collateral by court process, Customer further irrevocably
waives to the fullest extent permitted by law any bonds and any surety or
security relating thereto required by any statute, court rule or otherwise as an
incident to such possession, and any demand for possession prior to the
commencement of any suit or action.
10. MISCELLANEOUS
(a) Non-Waiver. No failure or delay on the part of MLBFS in exercising any
right, power or remedy pursuant to this Loan Agreement or any of the Additional
Agreements shad operate as a waiver thereof, and no single or partial exercise
of any such right, power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. Neither any
amendment, modification, supplement, termination or waiver of any provision of
this Loan Agreement or any of the Additional Agreements, nor any consent to any
departure by Customer there from, shall be effective unless the same shall be in
writing and signed by MLBFS. Any waiver of any provision of this Loan Agreement
or any of the Additional Agreements and any consent to any departure by Customer
from the terms of this Loan Agreement or any of the Additional Agreements shall
be effective only In the specific instance and for the specific purpose for
which given. Except as otherwise expressly provided herein, no notice to or
demand on Customer shall in any case entitle Customer to any other or further
notice or demand in similar or other circumstances.
(b) Disclosure. Customer and each Guarantor hereby irrevocably authorizes MLBFS
and each of its affiliates, including without limitation MLBFS, to at any time
(whether or not an Event of Default shall have occurred) obtain from and
disclose to each other any and all financial and other information about
Customer or any Guarantor.
(c) Communications. All notices and other communications required or permitted
hereunder shall be (n writing, and shall be either delivered personally, mailed
by postage prepaid certified mail or sent by express overnight courier or by
facsimile. Such notices and communications shall be deemed to be given on the
date of personal delivery, facsimile transmission or actual delivery of
certified mall, or one Business Day after delivery to an express overnight
courier. Unless otherwise specified in a notice sent or delivered in accordance
with the terms hereof, notices and other communications in writing shall be
given to the parties hereto at their respective addresses set forth at the
beginning of this Loan Agreement, or, in the case of facsimile transmission, to
the parties at their respective regular facsimile telephone number.
(d) Costs, Expanses and Taxes. Customer shall upon demand pay or reimburse MLBFS
for (i) all Uniform Commercial Code filing and search fees and expenses incurred
by MLBFS in connection with the verification, perfection or preservation of
MLBFS1 rights hereunder or In the Collateral or any other collateral for the
Obligations: (ii) any and all stamp, transfer and other taxes and fees payable
or determined to be payable In connection with the execution, delivery and/or
recording of this Loan Agreement or any of the Additional Agreements; and (iii)
all reasonable fees and out-of-pocket expenses (including, but not limited to,
reasonable fees end expenses of outside counsel) incurred by MLBFS in connection
with the enforcement of this Loan Agreement or any of the Additional Agreements
or the protection of MLBFS rights hereunder or thereafter, excluding, however,
salaries and expenses of MLBFS' employees. The obligations of Customer under
this paragraph shall survive the expiration or termination of this Loan
Agreement and the discharge of the other Obligations.
(e) Right to Perform Obligations. If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any representation or
warranty on the part of Customer contained In this Loan Agreement shall be
breached, MLBFS may, in its sole discretion, after 5 days written notice Is sent
to Customer, do the same or cause it to be done or remedy any such breach, and
may expend its funds for such purpose. Any and all reasonable amounts so
expended by MLBFS shall be repayable to MLBFS by Customer upon demand, with
interest at the Interest Rate during the period from and including the date
funds are so expended by MLBFS to the date of repayment, and all such amounts
shall be additional Obligations.
(f) Late Charge. Any payment required to be made by Customer pursuant to this
Loan Agreement not paid within 5 Business Days of the applicable due date shall
be subject to a late charge in an amount equal to the lesser of: (i) 5% of the
overdue amount, or (ii) the maximum amount permitted by applicable law. Such
late charge shall be payable on demand, or, without demand, may in the sole
discretion of MLBFS be paid by a WCMA Loan and added to the WCMA Loan Balance in
the same manner as provided herein for accrued interest.
(g) Further Assurances. Customer shall do such further acts and things and
execute and deliver to MLBFS such additional agreements, instruments and
documents as MLBFS may reasonably require or deem advisable to effectuate the
purposes of this Loan Agreement, or to confirm unto MLBFS its rights, powers and
remedies under this Loan Agreement and the Additional Agreements.
(h) Binding Effect; Assignment. This Loan Agreement and the Additional
Agreements shall be binding upon, and shall inure to the benefit of MLBFS,
Customer and their respective successors and assigns. Customer shall not assign
any of its rights or delegate any of its obligations under this Loan Agreement
or any of the Additional Agreements without the prior written consent of MLBFS.
Unless otherwise expressly agreed to in a writing signed by MLBFS. no such
consent shall In any event relieve Customer of any of its obligations under this
Loan Agreement or the Additional Agreements.
(i) Headings. Captions and section and paragraph headings in this Loan Agreement
and the Additional Agreements are inserted only as a matter of convenience, and
shall not affect the interpretation hereof.
(j) Governing Law. This Loan Agreement, and, unless otherwise expressly provided
therein, each of the Additional Agreements, shall be governed in all respects by
the laws of the State of Illinois.
(k) Severability of Provisions. Whenever possible, each provision of this Loan
Agreement and the Additional Agreements shall be interpreted in such manner as
to be effective and valid under applicable law. Any provision of this Loan
Agreement or any of the Additional Agreements which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without Invalidating
the remaining provisions of this Loan Agreement and the Additional Agreements or
affecting the validity or enforceabiltty of such provision in any other
jurisdiction.
(l) Term. This Loan Agreement shall become effective on the date accepted by
MLBFS at its office in Chicago, Illinois, and, subject to the terms hereof,
shall continue in effect so long thereafter as the WCMA Line of Credit shall be
in effect or there shall be any Obligations outstanding.
(m) Integration. THIS LOAN AGREEMENT, TOGETHER WITH THE ADDITIONAL AGREEMENTS,
CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN AGREEMENTS OR PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS OF THE PARTIES. Without limiting the foregoing, Customer acknowledges
that: (i) no promise or commitment has been made to it by MLBFS, MLPF&S or any
of their respective employees, agents or representatives to extend the
availability of the WCMA Line of Credit or the due date of the WCMA Loan Balance
beyond the current Maturity Date, or to increase the Maximum WCMA Line of
Credit, or otherwise extend any other credit to Customer or any other party;
(ii) no purported extension of the Maturity Date, increase in the Maximum WCMA
Line of Credit or other extension or agreement to extend credit shall be valid
or binding unless expressly set forth in a written instrument signed by MLBFS;
and (iii) except as otherwise expressly provided herein, this Loan Agreement
supercedes and replaces any and all proposals, letters of intent and approval
and commitment letters from MLBFS to Customer, none of which shall be considered
an Additional Agreement.
(n) Jurisdiction; Waiver. CUSTOMER ACKNOWLEDGES THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL CONSIDERATION OP MLBFS' RIGHT AND OPTION, IN
ITS SOLE DISCRETION, TO ENFORCE THIS LOAN AGREEMENT AND THE ADDITIONAL
AGREEMENTS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER JURISDICTION WHERE
CUSTOMER OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE LOCATED. CUSTOMER CONSENTS
TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT
IN THE COUNTY OF XXXX FOR SUCH PURPOSES, AND CUSTOMER WAIVES ANY AND ALL RIGHTS
TO CONTEST SAID JURISDICTION AND VENUE CUSTOMER FURTHER WAIVES ANY RIGHTS TO
COMMENCE ANY ACTION AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF
XXXX AND STATE OF ILLINOIS. MLBFS AND CUSTOMER HEREBY EACH EXPRESSLY WAIVE ANY
AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY
MATTER RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE WCMA UNE OF
CREDIT, THIS LOAN AGREEMENT. ANY ADDITIONAL AGREEMENTS AND/OR ANY OF THE
TRANSACTIONS WHICH ARE THE SUBJECT MATTER OF THIS LOAN AGREEMENT.
IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and
year first above written.
X.X. XXXXX & COMPANY, INC. D/B/A DATA CONVERSION LABORATORY
By: /s/ Xxxx Xxxxx /s/ Xxxx Xxxxx
------------------------------------------------
Signature (1) Signature (2)
By: /s/ Xxxx Xxxxx /s/ Xxxx Xxxxx
------------------------------------------------
Printed Name Printed Name
By: President V.P.
------------------------------------------------
Title Title
Accepted at Chicago, Illinois:
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC.
By: /s/ B. Ferrsou, AVP
------------------------------
Private Client Group
[XXXXXXX XXXXX LOGO] Xxxxxxx Xxxxx Business Financial Services Inc.
00 Xxxx Xxxxxx Xxxxxx 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
312/845-1020
FAX 312/000-0000
April 10, 1997
X. X. Xxxxx & Company, Inc. d/b/a Data Conversion Laboratory
184-13 Xxxxxx Xxxxxxx Expressway
Xxxxx Xxxxxxx, XX 00000
Re: WCMA Line of Credit Increase and Extension
Ladies And Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Xxxxxxx Xxxxx
Business Financial Services Inc. ("MLBFS") and X. X. Xxxxx & Company, Inc. d/b/a
Data Conversion Laboratory ("Customer") with respect to: (i) that certain WCMA
NOTE, LOAN AND SECURITY AGREEMENT NO. 862-07N67 between MLBFS and Customer
(including any previous amendments and extensions thereof), and (ii) all other
agreements between MLBFS and Customer or any party who has guaranteed or
provided collateral for Customer's obligations to MLBFS (a "Guarantor") in
connection therewith (collectively, the "Loan Documents"). Capitalized terms
used herein and not defined herein shall have the meaning set forth in the Loan
Documents.
Subject to the terms hereof, effective as of the "Effective Date" the Loan
Documents are hereby amended as follows:
1. The term "Maturity Date" shall mean July 31,1998.
2. The "Line Fee" for the period ending July 31,1998, shall be $2,125.00. In
addition, Customer agrees to pay a $500.00 increase fee in connection herewith.
Customer hereby authorizes and directs MLBFS to charge said amounts (aggregating
2,625.00) to WCMA Account No. 862-07N67 on or at any time after the Effective
Date.
3. The term "Maximum WCMA Line of Credit" shall mean $425,000.00.
Except as expressly modified hereby, the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby
consent to the foregoing modifications to the Loan Documents, and hereby agree
that the "Obligations" under their Unconditional Guaranty shall extend to and
include the Obligations of Customer under the Loan Documents, as amended hereby.
Customer and said Guarantors acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (i) no default or Event
of Default has occurred and is continuing under the Loan Documents; (ii) each of
the warranties of Customer in the Loan
X. X. Xxxxx & Company, inc. d/b/a Data Conversion Laboratory
April 10, 1997
Page No. 2
Documents are true and correct as of the date hereof and shall be deemed remade
as of the date hereof; (iii) neither Customer nor any of said Guarantors have
any claim against MLBFS or any of its affiliates arising out of or in connection
with the Loan Documents or any other matter whatsoever; and (iv) neither
Customer nor any of said Guarantors have any defense to payment of any amounts
owing, or any right of counterclaim for any reason under, the Loan Documents.
The amendments and agreements in this Letter Agreement will become effective on
the date {the "Effective Date") upon which: (i) Customer and the Guarantors
shall have executed and returned the duplicate copy of this Letter Agreement
enclosed herewith; (ii) an officer of MLBFS shall have reviewed and approved
this Letter Agreement as being consistent in all respects with the original
internal authorization hereof; and (ill) to the extent applicable, MLBFS shall
have entered such amendments and agreements in its computer system (which MLBFS
agrees to do promptly after the receipt of such executed duplicate copy).
Notwithstanding the foregoing, if for any reason other than the sole fault of
MLBFS the Effective Date shall not occur within 14 days from the date of this
Letter Agreement then all of said amendments and agreements herein will, at the
sole option of MLBFS, be void.
Very truly yours,
Xxxxxxx Xxxxx Business Financial Services Inc.
By: /s/ Xxxxxxxxxxx Xxxxx
-------------------------------------
Xxxxxxxxxxx Xxxxx
Credit Analyst
Accepted:
X. X. Xxxxx & Company, Inc. d/b/a/ Data Conversion Laboratory
By: /s/ Xxxx Xxxxx
-------------------------------------
Printed Name: Xxxx Xxxxx
--------------------------
Title: Vice President
---------------------------------
Approved:
/s/ Xxxx Xxxxx
----------------------------------------
Xxxx Xxxxx
/s/ Xxxx Xxxxx
----------------------------------------
Xxxx Xxxxx
Private Client Group
[XXXXXXX XXXXX LOGO] Xxxxxxx Xxxxx Business
Financial Services Inc.
000 Xxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000)000-0000
FAX: (000) 000-0000
March 29.2000
M X. Xxxxx & Company, Inc. d/b/a Data Conversion Laboratory
184-13 Xxxxxx Xxxxxxx Expressway
Xxxxx Xxxxxxx, XX 00000
Re: WCMA Line of Credit Increase
Ladies & Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Xxxxxxx Xxxxx
Business Financial Services Inc. ("MLBFS") and X.X. Xxxxx & Company, Inc. d/b/a
Data Conversion Laboratory ("Customer`) with respect to: (i) that certain WCMA
NOTE, LOAN AND SECURITY AGREEMENT NO. 862-07NB7 between MLBFS and Customer
(including any previous amendments and extensions thereof), and (ii) all other
agreements between MLBFS and Customer or any party who has guaranteed or
provided collateral for Customer's obligations to MLBFS (a "Guarantor") in
connection therewith (collectively, the "Loan Documents"). Capitalized terms
used herein and not defined herein shall have the meaning set forth in the Loan
Documents.
Subject to the terms hereof, effective as of the "Effective Date" (as defined
below), the Loan Documents are hereby amended as follows:
(a) The term "Maximum WCMA Line of Credit" shall mean $575,000.00.
(b) The annual "Line Fee" is hereby increased to $2,875.00. In connection with
the increase in the Maximum WCMA Line of Credit pursuant hereto, a portion of
such new Line Fee in the amount of $250.00 (the "Increase Fee") is now due and
owing. Customer hereby authorizes and directs MLBFS to charge the increase Fee
to WCMA Account No. 862-07N67 on or at any time after the Effective Date. Once
charged, the Increase Fee is non-refundable.
Except as expressly amended hereby, the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby
consent to the foregoing modifications to the Loan Documents, and hereby agree
that the "Obligations" under their Unconditional Guaranty shall extend to and
include the Obligations of Customer under the Loan Documents, as amended hereby.
Customer and said Guarantors acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (a) no Default or Event
of Default has occurred and is continuing under the Loan Documents; (b) each of
the warranties of Customer in the Loan Documents are true and correct as of the
date hereof and shall be deemed remade as of the date hereof; (c) neither
Customer nor any of said Guarantors have any claim against MLBFS or any of its
affiliates arising out of or in connection with the Loan Documents or any other
matter
XXXXXXX XXXXX BUSINESS FUNANCIAL SERVICES INC.
M X. Xxxxx & Company, Inc. d/b/a Data Conversion Laboratory
March 29, 2000
Page No. 2
whatsoever, and (d) neither Customer nor any of said Guarantors have any defense
to payment of any amounts owing, or any right of counterclaim for any reason
under, the Loan Documents.
The obligations of MLBFS under this Letter Agreement are subject to Its receipt
(where applicable) and satisfaction with the following:
Current, signed and dated personal financial statement for Xxxx and Xxxx Xxxxx.
Provided that no Event of Default, or event which with the giving of notice,
passage of time, or both, would constitute an Event of Default, shall then have
occurred and be continuing under the terms of the Loan Documents, the amendments
and agreements in this Letter Agreement will become effective on the date (the
"Effective Date") upon which: (a) Customer and the Guarantors shall have
executed and returned the duplicate copy of this Letter Agreement and the other
documents enclosed herewith; and (b) an officer of MLBFS shall have reviewed and
approved this Letter Agreement and such other documents as being consistent in
all respects with the original internal authorization hereof.
Notwithstanding the foregoing, if Customer and the Guarantors do not execute and
return the duplicate copy of this Letter Agreement and said other documents
within 14 days from the date hereof, or if for any other reason (other than the
sole fault of MLBFS) the Effective Date shall not occur within said 14-day
period, then all of said amendments and agreements will, at the sole option of
MLBFS, be void.
Very truly yours,
Xxxxxxx Xxxxx Business Financial Services Inc.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx
Relationship Manager
Accepted:
X.X. Xxxxx & Company, Inc. d/b/a Data Conversion Laboratory
By: /s/ Xxxx Xxxxx
-------------------------------------
Printed Name: Xxxx Xxxxx
---------------------------
Title: Vice President
---------------------------------
XXXXXXX XXXXX BUSINESS FUNANCIAL SERVICES INC.
M X. Xxxxx & Company, Inc. d/b/a Data Conversion Laboratory
March 29, 2000
Page No. 3
Approved:
/s/ Xxxx Xxxxx
----------------------------------------
/s/ Xxxx Xxxxx
----------------------------------------
Private Client Group
[XXXXXXX XXXXX LOGO]
Xxxxxxx Xxxxx Business
Financial Services Inc.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000)000.0000
FAX: (000) 000-0000
April 25, 2002
X.X. Xxxxx & Company, Inc.
000-00 Xxxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxxx, XX 00000
Re: WCMA Line of Credit Increase and Extension
Ladies & Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Xxxxxxx Xxxxx
Business Financial Services Inc. ("MLBFS") and X.X. Xxxxx & Company, Inc.
("Customer") with respect to: (I) that certain WCMA NOTE, LOAN AND SECURITY
AGREEMENT NO. 862-07N67 between MLBFS and Customer (including any previous
amendments and extensions thereof), and (ii) all other agreements between MLBFS
and Customer or any party who has guaranteed or provided collateral for
Customer's obligations to MLBFS (a "Guarantor") in connection therewith
(collectively, the "Loan Documents"). Capitalized terms used herein and not
defined herein shall have the meaning set forth in the Loan Documents.
Subject to the terms hereof, effective as of the "Effective Date" (as defined
below) the Loan Documents are hereby amended as follows:
(a) The "Maturity Date" of the WCMA Line of Credit is hereby extended to April
30, 2003.
(b) The "Maximum WCMA Line of Credit" is hereby increased to $675,000.00.
(c) The "Line Fee" for the period ending April 30, 2003, shall be $3,375.00.
Customer hereby authorizes and directs MLBFS to charge said amount to WCMA
Account No. 862-07N67 on or at any time after the Effective Date.
(d) Customer's "Tangible Net Worth", defined and calculated as set forth on
Exhibit B attached hereto, shall at all times exceed $600,000.00.
(e) "Quarterly Certificate of Compliance" shall mean a duly executed
certificate, substantially the same form as Exhibit B attached hereto, of the
president, chief financial officer or chief executive officer of Customer
certifying as to the matters set forth in such Exhibit B. Exhibit B is by this
reference incorporated as a part hereof.
(f) Interim Financial Statements. Within 45 days after the close of each fiscal
semi-annual period of Customer, a copy of the interim financial statements of
Customer for such fiscal semi annual period (including in reasonable detail both
a balance sheet as of the close of such fiscal period, and statement of profit
and loss for the applicable fiscal period).
X.X. XXXXX & COMPANY, INC.
April 25, 2002
Page No. 2
(g) In addition to existing requirements, Customer shall provide to MLBFS: (i)
within 45 days after the close of each fiscal semi-annual period of Customer, a
copy of the Accounts Receivable Aging of Customer as of the end of such fiscal
semi-annual period; and (ii) within 45 days after the close of each fiscal
quarter of Customer, a Quarterly Certificate of Compliance, duly executed by the
president, chief financial officer or chief executive officer of the Customer.
Except as expressly amended hereby, the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby
consent to the foregoing modifications to the Loan Documents, and hereby agree
that the "Obligations" under their respective Unconditional Guaranty and/or
agreements providing collateral shall extend to and include the Obligations of
Customer under the Loan Documents, as amended hereby.
Customer and said Guarantors acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (a) no Default or Event
of Default has occurred and is continuing under the Loan Documents; (b) each of
the warranties of Customer in the Loan Documents are true and correct as of the
date hereof and shall be deemed remade as of the date hereof; (c) neither
Customer nor any of said Guarantors have any claim against MLBFS or any of its
affiliates arising out of or in connection with the Loan Documents or any other
matter whatsoever; and (d) neither Customer nor any of said Guarantors have any
defense to payment of any amounts owing, or any right of counterclaim for any
reason under, the Loan Documents.
The obligations of MLBFS under this Letter Agreement are subject to its receipt
(where applicable) and satisfaction with the following:
CPA reviewed FYE 2001 financial statements.
Provided that no Event of Default, or event which with the giving of notice,
passage of time, or both, would constitute an Event of Default, shall then have
occurred and be continuing under the terms of the Loan Documents, and the
condition specified above shall have been met to our satisfaction, the
amendments and agreements in this Letter Agreement will become effective on the
date (the "Effective Date") upon which: (a) Customer and the Guarantors shall
have executed and returned the duplicate copy of this Letter Agreement enclosed
herewith; and (b) an officer of MLBFS shall have reviewed and approved this
Letter Agreement as being consistent in all respects with the original internal
authorization hereof.
Notwithstanding the foregoing, if Customer and the Guarantors do not execute and
return the duplicate copy of this Letter Agreement within 14 days from the date
hereof, or if for any other reason (other than the sole fault of MLBFS) the
Effective Date shall not occur within said 14-day period, then all of said
amendments and agreements will, at the sole option of MLBFS, be void.
Private Client Group
[LOGO] Xxxxxxx Xxxxx Business
Financial Services Inc.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
FAX: (000) 000-0000
June 27, 2002
Data Conversion Laboratory, Inc.
000-00 Xxxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxxxx, XX 00000
Re: WCMA Line of Credit Increase
----------------------------
Ladies & Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Xxxxxxx Xxxxx
Business Financial Services Inc. ("MLBFS") and X. X. Xxxxx & Company, Inc.
("Customer") with respect to: (i) that certain WCMA NOTE, LOAN AND SECURITY
AGREEMENT NO. 862-07N67 between MLBFS and Customer (including any previous
amendments and extensions thereof), and (ii) all other agreements between MLBFS
and Customer or any party who has guaranteed or provided collateral for
Customer's obligations to MLBFS (a "Guarantor") in connection therewith
(collectively, the "Loan Documents"). Capitalized terms used herein and not
defined herein shall have the meaning set forth in the Loan Documents.
Subject to the terms hereof, effective as of the "Effective Date" (as defined
below), the Loan Documents are hereby amended as follows:
(a) For all purposes of the Loan Documents, Customer shall now mean and refer to
Data Conversion Laboratory, Inc..
(b) The term "Maximum WCMA Line of Credit" shall mean $1,000,000.00.
(c) The annual "Line Fee" is hereby increased to $7,500.00. In connection with
the increase in the Maximum WCMA Line of Credit pursuant hereto, a portion of
such new Line Fee in the amount of $2,438.00 (the "Increase Fee") is now due and
owing. Customer hereby authorizes and directs MLBFS to charge the Increase Fee
to WCMA Account No. 862-07N67 on or at any time after the Effective Date. Once
charged, the Increase Fee is non-refundable.
(d) The term "Interest Rate" shall mean a variable per annum rate of interest
equal to the sum of 3.40% and the One-Month LIBOR. "One-Month LIBOR" shall mean,
as of the date of any determination, the interest rate then most recently
published in the "Money Rates" section of The Wall Street Journal as the
one-month London Interbank Offered Rate. The Interest Rate will change as of the
date of publication in The Wall Street Journal of a One-Month LIBOR that is
different from that published on the preceding Business Day. In the event that
The Wall Street Journal shall, for any reason, fail or cease to publish the
One-Month LIBOR, MLBFS will choose a reasonably comparable index or source to
use as the basis for the Interest Rate.
(e) Prior to each Maturity Date, Customer shall cause the WCMA Loan Balance to
be $500,000.00 for at least one consecutive 20-day period within one year.
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
Data Conversion Laboratory, Inc.
June 27, 2002
Page No. 2
(f) As of Customer's fiscal year end 2001, Customer's "tangible net worth" shall
exceed $1,000,000.00. As of the close of Customer's fiscal year end 2002, the
Customer's "tangible net worth" shall exceed $1,500,000.00. For the purposes
hereof, the term "tangible net worth" shall mean Customer's net worth as shown
on Customer's regular financial statements prepared in a manner consistent with
the terms hereof, but excluding an amount equal to: (i) any assets which are
ordinarily classified as "intangible" in accordance with getally accepted
accounting priciples, and (ii) any amounts now or hereafter directly or
indirectly owing to Customer and by officers, shareholders or affiliates of
Customer.
(g) Interim Financial Statements. Within 45 days after the close of each fiscal
quarter of Customer, a copy of the interim financial statements of Customer for
such fiscal quarter (including in reasonable detail both a balance sheet as of
the close of such fiscal period, and statement of profit and loss for the
applicable fiscal period).
(h) A/R Agings. Within 45 days after the close of each fiscal quarter of
Customer, a copy of the Accounts Receivable Aging of Customer as of the end of
such fiscal quarter.
Except as expressly amended hereby, the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby
consent to the foregoing modifications to the Loan Documents, and hereby agree
that the "Obligations" under their respective Unconditional Guaranty and/or
agreements providing collateral shall extend to and include the Obligations of
Customer under the Loan Documents, as amended hereby.
Customer and said Guarantors acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (a) no Default or Event
of Default has occurred and is continuing under the Loan Documents; (b) each of
the warranties of Customer in the Loan Documents are true and correct as of the
date hereof and shall be deemed remade as of the date hereof; (c) neither
Customer nor any of said Guarantors have any claim against MLBFS or any of its
affiliates arising out of or in connection with the Loan Documents or any other
matter whatsoever; and (d) neither Customer nor any of said Guarantors have any
defense to payment of any amounts owing, or any right of counterclaim for any
reason under, the Loan Documents.
Provided that no Event of Default, or event which with the giving of notice,
passage of time, or both, would constitute an Event of Default, shall then have
occurred and be continuing under the terms of the Loan Documents, and the
condition specified above shall have been met to our satisfaction, the
amendments and agreements in this Letter Agreement will become effective on the
date (the "Effective Date") upon which: (a) Customer and the Guarantors shall
have executed and returned the duplicate copy of this Letter Agreement enclosed
herewith; and (b) an officer of MLBFS shall have reviewed and approved this
Letter Agreement as being consistent in all respects with the original internal
authorization hereof.
Notwithstanding the foregoing, if Customer and the Guarantors do not execute and
return the duplicate copy of this Letter Agreement within 14 days from the date
hereof, or if for any other reason (other than the sole fault of MLBFS) the
Effective Date shall not occur within said 14-day period, then all of said
amendments and agreements will, at the sole option of MLBFS, be void.
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
Data Conversion Laboratory, Inc.
June 27, 2002
Page No. 3
Very truly yours,
Xxxxxxx Xxxxx Business Financial Services Inc.
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxxx Xxxxxxxx
Credit Manager
Accepted:
Data Conversion Laboratory, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------------------
Printed Name: Xxxx Xxxxx
---------------------------------
Title:
---------------------------------------
Approved:
/s/ Xxxx Xxxxx
-----------------------------------------------
Xxxx Xxxxx
Vice President
-----------------------------------------------
