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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
Date of Report (Date of earliest event reported) March 26, 1997
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VISUAL EDGE SYSTEMS INC.
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(Exact name of registrant as specified in its charter
Delaware 0-11770 13-377-8895
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(State of other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
2424 North Federal Highway, Suite 100, Boca Raton, FL 33431
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(Address of principal executive offices) (Zip Code)
(561) 750-7559
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(Registrant's telephone number, including area code)
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Item 5. Other Events
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On March 26, 1997, Visual Edge Systems Inc. (the "Company") consummated
a bridge financing (the "Bridge Financing") pursuant to which it issued to 13
investors (the "Bridge Investors"), including Status-One Investments Inc., a
company controlled by Earl T. Takefman, the Chief Executive Officer of the
Company, an aggregate of (i) 100,000 shares (the "Shares") of Common Stock, par
value $.01 per share (the "Common Stock"), and (ii) 100,000 warrants (the
"Warrants") to purchase 100,000 shares of Common Stock at a price of $10.00 per
share, subject to adjustment in certain circumstances. The Shares and Warrants
were sold pursuant to those certain Share and Warrant Purchase Agreements, each
dated as of February 27, 1997, entered into between the Company and each of the
Bridge Investors.
As consideration for the Shares and the Warrants, the investors in the
Bridge Financing pledged an aggregate of $3,500,000 in cash and other marketable
securities as cash collateral (the "Cash Collateral") to Republic Bank of New
York (Canada) Ltd. ("Republic") and Bank Hapoalim (Switzerland) Ltd. ("Bank
Hapoalim"). Republic and Bank Hapoalim have each issued a stand-by letter of
credit (the "Letters of Credit") in favor of Barnett Bank, N.A. ("Barnett"), in
the amount of $3,250,000 and $250,000, respectively. The Letters of Credit
expire on December 31, 1997.
The Letters of Credit were issued to secure a $3,500,000 line of credit
(the "Line of Credit") pursuant to a Credit Agreement, dated as of March 26,
1997 (the "Credit Agreement"), between the Company and Barnett. Pursuant to the
Credit Agreement, the Company may borrow up to $3,500,000 on a revolving basis
at an interest rate of 6.90625% per annum, subject to adjustment based upon the
LIBOR rate as posted in the London Interbank Market. The Credit Agreement
contains customary representations and warranties and affirmative and negative
covenants of the Company. The Line of Credit expires on December 31, 1997.
In the event that the Company draws upon the Line of Credit and is
subsequently unable to repay amounts owed to Barnett under the Line of Credit
prior to December 31, 1997, Barnett will present the Letters of Credit to
Republic and/or Bank Hapoalim, either or both of which (depending on the amount
drawn upon the Line of Credit) will pay Barnett its share of the aggregate
amount owed to Barnett using the Cash Collateral. If some or all of the Cash
Collateral is thus not returned to the Bridge Investors on December 31, 1997,
the expiration date of the Letters of Credit and the Line of Credit, the Company
is obligated to promptly issue to each Bridge Investor a number of shares of
Common Stock equal to (x) the amount of such Bridge Investor's unreturned Cash
Collateral divided by (y) $7.50, provided that the average of the closing bid
prices of the Common Stock on the Nasdaq SmallCap Market on each of the twenty
consecutive trading days immediately prior to December 31, 1997 is greater than
$11.00. Alternatively, if the average of the closing bid prices of the Common
Stock on the Nasdaq SmallCap Market on each of the twenty consecutive days
immediately prior to December 31, 1997 is less than $11.00, the price by which a
Bridge Investor's unreturned Cash Collateral is to
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be divided shall be one-half of the average of the closing bid prices of the
Common Stock on the Nasdaq SmallCap Market on each of the twenty consecutive
trading days prior to December 31, 1997. In the event that the Company issues
shares of Common Stock in accordance with the foregoing, the Company is
contractually obligated to promptly use its best efforts to effect the
registration of such shares of Common Stock under the Securities Act of 1933, as
amended.
(c) Exhibits
99.1 Form of Share and Warrant Purchase Agreement, dated as of
February 27, 1997, between the Company and each investor in
the Bridge Financing (incorporated by reference to Exhibit
10.11 to the Registration Statement on Form SB-2 (Reg.
No. 333-24675) of the Company
99.2 Credit Agreement, dated as of March 26, 1997, between the
Company and Barnett Bank, N.A.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of
l934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
VISUAL EDGE SYSTEMS INC.
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(Registrant)
By: /s/ Earl T. Takefman
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Earl T. Takefman
Chief Executive Officer
Date: April 14, 1997
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EXHIBIT INDEX
No.
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99.1 Form of Share and Warrant Purchase Agreement, dated as of
February 27, 1997, between the Company and each investor in
the Bridge Financing (incorporated by reference to Exhibit
10.11 to the Registration Statement on Form SB-2 (Reg.
No. 333-24675) of the Company
99.2 Credit Agreement, dated as of March 26, 1997, between the
Company and Barnett Bank, N.A.
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Exhibit 99.2
CREDIT AGREEMENT
This Credit Agreement is made and entered into as of this 26th day of
March, 1997, between VISUAL EDGE SYSTEMS INC., a Delaware corporation
(hereinafter referred to as Borrower), and BARNETT BANK, N.A. (hereinafter
referred to as Bank).
BACKGROUND
Borrower has applied to Bank for a revolving credit facility in the
maximum principal amount of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS
($3,500,000.00). Bank is willing to establish on its books, such revolving
credit facility for Borrower upon the terms and conditions described in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants, and conditions herein, Borrower and Bank agree as
follows:
SECTION 1: DEFINITIONS
1.1 DEFINED TERMS. Except as otherwise expressly provided in
this Agreement, the following capitalized terms shall have the respective
meanings ascribed to them for all purposes of this Agreement:
"Adjusted LIBOR Rate" means, for each Interest Period, a daily rate
that is one hundred twenty five basis points (1.25%) over the applicable LIBOR
Rate.
"Agreement" means this Credit Agreement, as the same may be amended,
supplemented, restated, replaced, or otherwise modified from time to time in
accordance with the provisions hereof.
"Bank" has the meaning specified in the first sentence hereof.
"Borrower" and "Borrowers" have the meaning specified in the first
sentence hereof.
"Business Banking Day" means each day other than a Saturday, a Sunday,
or any holiday on which Commercial Banks in Jacksonville, Florida are closed for
business.
"Collateral" means those items more particularly described on Exhibit
"A" attached hereto.
"Consistent Basis" means, in reference to the application of Generally
Accepted Accounting Principles, that the accounting principles observed in the
current period are comparable in all material respects to those applied in the
preceding period.
"Default Rate" has the meaning specified in Subsection 2.5(b) hereof.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be supplemented or amended from time to time.
"Event of Default" means any of the events specified in Section 8
hereof.
"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 any report required herein or as of the date of an application of
such principles as required herein.
"Interest Period" means each period commencing on each Interest Rate
Adjustment Date and ending on the next Interest Rate Adjustment Date.
"Interest Rate Adjustment Date" means the 26th day of April, 1997 and
the 26th day of each consecutive month thereafter.
"Late Fee" has the meaning specified in Subsection 2.6(b) hereof.
"LIBOR Rate" means for each Interest Period the offered rate for
deposits in United States Dollars in the London Interbanc Market for a one (1)
month period which appears on the Reuters Screen LIBO page as of 11:00 a.m.
(London time) on the day that is two London banking days preceding the first
banking day of the Interest Period. If at least two such offered rates appear on
the Reuters Screen LIBO page, the rate will be the arithmetic mean of such
offered rates. The Lender may, in its discretion, use any other publicly
available index or reference rates showing rates offered for United States
dollar deposits in the London Interbank Market as of the applicable date. In
addition, the Lender may, in its discretion, use rate quotations for daily or
annual periods in lieu of quotations for substantially equivalent monthly
periods.
"Loan Documents" mean this Agreement, the Revolving Credit Note, the
Pledge Agreement, and any other documents executed in connection with this
Agreement.
"Person" means any corporation, business entity, natural person, firm,
joint venture, partnership, trust, unincorporated organization, association,
government, or any department or agency of any government.
"London Banking Day" means each day other than a Saturday, a Sunday or
any holiday on which Commercial Banks in London, England are closed for
business.
"Pledge Agreement" has the meaning specified in Subsection 3.1 hereof.
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"Prime Rate" shall mean the annual rate of interest announced from time
to time by Barnett Bank, N.A. The Prime Rate is a reference rate of the
information and use of the Bank in establishing the actual rates to be charged
its Borrowers.
"Revolving Credit" has the meaning specified in Subsection 2.1(a)
hereof.
"Revolving Credit Committed Amount" has the meaning specified in
Subsection 2.1(a) hereof.
"Revolving Credit Note" has the meaning specified in Subsection 2.4
hereof.
"Solvent" means, with respect to any Person, that as of the date of
determination, both (a) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities including contingent
obligations of such Person and (z) greater than the amount that will be required
to pay the probable liabilities of such Person's then existing debts as they
become absolute and matured considering all financing alternatives and potential
asset sales reasonably available to such Person; (ii) such Person's capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (iii) such Person does not intend to incur, or
believe or reasonably should believe that it will incur, debts beyond its
ability to pay such debts as they become due and (b) such Person is solvent
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers.
"Subsidiary" means, for any Person, any corporation, partnership, or
other entity of which fifty percent (50%) or more of the securities or other
ownership interests having ordinary voting power to elect the board of directors
or having direct power to perform functions similar to that of a board of
directors is at the time directly or indirectly owned or controlled by such
Person.
"Termination Date" has the meaning specified in Subsection 2.1(b)
hereof.
1.2 OTHER DEFINITION PROVISIONS.
(a) The terms "material" and "materially" shall have the
meanings ascribed to such terms under Generally Accepted Accounting Principles
as such would be applied to the business of Borrower or others, except as the
context shall clearly otherwise require; (b) all of the terms defined in this
Agreement shall have such defined meanings when used in other documents issued
under, or delivered pursuant to, this Agreement unless the context shall
otherwise require; (c) words in singular shall include the plural and words in
plural shall include the singular, unless the context clearly requires
otherwise; (d) accounting terms to the extent not otherwise defined shall have
the respective meanings given them under, and shall be construed in accordance
with, Generally Accepted Accounting Principles; (e) terms defined in, or by
reference to, Article 9 of the Uniform Commercial Code as adopted in Florida to
the extent not otherwise defined herein shall have the respective meanings given
to them in Article 9 with the exception of the word "document" unless the
context clearly requires such meaning; (f) the words "hereby," "hereto,"
"hereof,"
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"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provisions of this
Agreement; (g) words of any gender shall include all other genders; and (h)
whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such parties
unless the context shall expressly provide otherwise.
SECTION 2. LOAN AMOUNT AND TERMS.
2.1 THE REVOLVING CREDIT.
(a) Subject to the terms and conditions of this Agreement,
Bank agrees to establish on its books a revolving credit facility in favor of
Borrower (the "Revolving Credit") in the maximum principal amount of THREE
MILLION FIVE HUNDRED DOLLARS ($3,500,000.00) (the "Revolving Credit Committed
Amount").
(b) Prior to the 31st day of December, 1997, (the "Termination
Date") and so long as there exists no Event of Default or circumstance which
with the giving of notice or passage of time would become an Event of Default,
Bank shall upon the request of Borrower make advances under the Revolving Credit
in accordance with the provisions hereof. During such period, Borrower may
borrow, repay, and re-borrow, under the Revolving Credit in accordance with the
terms hereof.
(c) Payment of all interest and principal under the Revolving
Credit shall be due and payable on the 31st day of December, 1997.
2.2 ADVANCES UNDER REVOLVING CREDIT. Any advance made by Bank
under the Revolving Credit shall be made upon notice from Borrower to Bank by
twelve noon (12:00 p.m.) on the day of the proposed advance. Each such notice
shall be by telephone or telecopier, confirmed immediately in writing. Advances
shall be made no more frequently than weekly and each advance shall be in the
minimum amount of $50,000.00. Each advance shall be made by crediting the amount
of the advance to the general deposit account of Borrower maintained with Bank,
except as otherwise specified in writing by Borrower. Bank shall not incur any
liability to Borrower in acting upon any telephonic notice referred to above
that Bank believes in good faith to have been given by a duly authorized officer
or other person authorized to Borrower on behalf of Borrower or for otherwise
acting in good faith under this Subsection, and, upon funding of advances by
Bank in accordance with this Agreement pursuant to any telephonic notice,
Borrower shall be deemed to have received advances hereunder.
2.3 USE OF PROCEEDS OF REVOLVING CREDIT. Loans or advances made by
Bank pursuant to the Revolving Credit shall be used by Borrower to finance
start-up costs of Borrower and to provide availability for the issuance of
standby letters of credit.
2.4 NOTE. The Revolving Credit shall be evidenced by a master
revolving credit promissory note of Borrower payable to order of Bank in
substantially the form of Exhibit "A"
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hereto, as may be amended, renewed, increased, restated, replaced, or otherwise
modified from time to time (the "Revolving Credit Note").
2.5 INTEREST RATE.
(a) Interest shall initially accrue on the outstanding
principal balance at the rate of 6.90625 percent per annum. The rate of interest
shall be adjusted on each Interest Rate Adjustment Date so that interest shall
accrue at the Adjusted LIBOR Rate for the Interest Period commencing on such
Interest Rate Adjustment Date.
(b) After the maturity or due date of the Revolving Credit,
whether at the stated maturity, by acceleration, or otherwise, interest shall
accrue on the principal amount remaining unpaid at a rate equivalent to the
highest lawful rate or twenty five percent (25%) per annum, whichever is less,
until paid (the "Default Rate").
2.6 REPAYMENT.
(a) Principal under the Revolving Credit shall be due and
payable in a single payment on the 31st day of December, 1997, (the "Maturity
Date"). Interest shall be payable monthly in arrears beginning on the 26th day
of April, 1997, and continuing on the like day of each month thereafter, as long
as any principal amount remains outstanding under the Revolving Credit, and at
maturity.
(b) If any payment of principal or interest or both under the
Revolving Credit is more than ten (10) days late, Borrower shall pay Bank a late
charge equal to five percent (5%) of the payment (the "Late Fee"). The
provisions herein for a Late Fee shall not be deemed to extend the time for any
payment or to constitute a "grace period" giving Borrower a right to cure such
default.
2.7 PREPAYMENTS.
Borrower shall be entitled to prepay the Revolving Credit Note
and any other notes subject hereto in whole or in part, on any Interest Rate
Adjustment Date, without premium or penalty, upon at least two (2) Business
Banking Days' notice to Bank, each notice stating the proposed date and
principal amount of the prepayment. Each partial prepayment under the Revolving
Credit Note shall be applied by Bank first to cure any overadvances then to
interest and lawful charges then due and unpaid and then to all other interest
and lawful charges accrued.
2.8 PAYMENTS AND COMPUTATIONS.
(a) Each payment and prepayment by Borrower of principal or
interest shall be made in such coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debt. If any installment of principal or interest becomes due and payable on a
day other than a Business Day, the due date thereof shall be extended to the
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next succeeding Business Day, and, in the case of principal, interest shall be
payable during the extension at the annual rate specified for the payment of
interest before maturity.
(b) Unless otherwise specified herein, scheduled payments and
other payments, other than prepayments, shall be applied by Bank first to
interest and lawful charges then accrued, then to principal, unless otherwise
determined by Bank in its sole discretion.
(c) Borrower hereby authorizes Bank, if and to the extent that
payment owed to Bank hereunder is not made when due, to charge from time to time
against any or al of the accounts of Borrower, with Bank, in which event Bank
will give prompt notice to Borrower of such charge; provided, however, that the
failure to give such notice shall not affect the validity of such charge.
(d) Interest and any fees hereunder shall be computed on the
basis of a year of 360 days but charged for the actual number of days elapsed.
Each determination by Bank of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(e) Notwithstanding anything contained herein to the contrary,
in no event shall any interest rate provided for herein exceed the maximum rate
of interest allowed by applicable law, as amended from time to time. Bank does
not intend to charge any amount of interest or other fees or charges in the
nature of interest that exceeds the maximum amount allowed by applicable law. If
any payment of interest or in the nature of interest would cause the foregoing
interest rate limitation to be exceeded, then such excess payment shall be
credited as a payment of principal, unless the Borrower notifies Bank in writing
to return the excess payment to Borrower, together with interest at the rate
specified in Section 687.04(2), Florida Statutes, or any successor statute.
2.9 INCREASE COSTS, ILLEGALITY, ETC.
(a) If either (i) the introduction of or any change in any law
or regulation or in the interpretation or administration of any law or
regulation by any court or administrative or governmental authority charged with
the interpretation of administration thereof from the date hereof or (ii) the
compliance with any guideline or request from any such governmental authority,
including, without limitation, any central bank (whether or not having the force
of law), (x) subject Bank or any corporation controlling Bank to any tax of any
kind whatsoever with respect to this Agreement of the Revolving Credit, or
changes the basis of taxation of payments to Bank or corporation of principal,
commissions, fees, interest, or any other amount payable hereunder (except for
(A) taxes on or measured by the overall net income of Bank or branch, office, or
agency through which Bank is acting for purposes of this Agreement of (B)
changes in the rate of such taxes); (y) imposes, modifies, or holds applicable
any reserve, special deposit, compulsory loan, or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit or commitment therefor extended by, or any
other acquisition of funds by, any office of Bank which are not otherwise
included in any determination of the LIBOR Rate or other interest payable
hereunder; or (z) imposes on Bank or the corporation controlling Bank any other
condition, and as a result there shall be any increase in the cost to Bank or
the corporation of
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agreeing to make or making, funding, or maintaining the Revolving Credit by an
amount deemed by Bank to be material, then Borrower shall from time to time,
upon demand by Bank, pay directly to Bank additional amounts sufficient to
compensate Bank for such increased cost. A certificate as to the amount of such
increased cost, submitted to Borrower by Bank, shall be conclusive and binding
for all purposes, absent manifest error; provided, however, such increase cost
shall not be greater than a fluctuating interest rate equal to Barnett Bank,
N.A. Prime Rate minus one (1%) percent.
(b) If Bank determines that compliance with any law or
regulation or with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) concerning
capital adequacy or otherwise has or would have the effect of reducing the rate
of return on the capital of Bank of the corporation controlling Bank, as a
consequence of, or with reference to, the facilities hereunder, or its making or
funding or maintaining the Revolving Credit below the rate which the Bank or
such other corporation could have achieved but for such compliance (taking into
account the policies of Bank of such corporation with regard to capital) by an
amount deemed by Bank to be material. Borrower shall from time to time, upon
demand by Bank, pay to Bank additional amounts sufficient to compensate Bank or
such other corporation for such reduction. A certificate as to such amount,
submitted to Borrower by Bank, shall be conclusive and binding for all purposes,
absent manifest error.
(c) If Bank determines that the LIBOR Rate will not adequately
reflect the cost to Bank of making, funding, or maintaining the Revolving
Credit, Bank shall forthwith so notify Borrower whereupon the interest rate
applicable to the Revolving Credit will automatically convert to a fluctuating
interest rate equal to Barnett Bank, N.A. Prime Rate minus one (1%) percent,
until Bank determines that the circumstances causing such conversion no longer
exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful or any central bank or other governmental
authority shall assert that it is unlawful for Bank to make, fund, or maintain
the Revolving Credit with an interest rate based on the LIBOR Rate, then, on
notice thereof and demand therefor by Bank the interest rate applicable to the
Revolving Credit will automatically convert to a fluctuating interest rate equal
to Barnett Bank, N.A. Prime Rate minus one (1%) percent, until Bank has
determined the circumstances causing such conversion no longer exist.
SECTION 3 SECURITY.
Payment of the loan or loans hereunder shall be secured as provided in
this Section 3.
3.1 PLEDGE AGREEMENT. Payment of the Revolving Credit Note, and
any other obligations under the Loan Documents, presently existing or hereafter
arising, shall be secured by a pledge of that certain Letter of Credit issued by
Republic National Bank of New York (Canada), a subsidiary of Republic National
Bank of New York. Borrower shall execute and deliver to Bank
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a pledge agreement in form and substance satisfactory to Bank (as amended or
modified from time to time, the "Pledge Agreement"). The Pledge Agreement shall
be sufficient to grant to Bank a first perfected security interest in the
aforementioned collateral, subject to no prior liens or encumbrances except in
favor of Bank or as Bank permits in writing. Borrower agrees to provide any and
all other amendments, financing statements, notices, agreements, or consents
required by Bank in connection therewith.
SECTION 4 REPRESENTATIONS AND WARRANTIES.
To induce Bank to enter into this Agreement and to make the loan or
loans hereunder, the Borrower represents and warrants to Bank, insofar as any of
the provisions are applicable to it (which representation and warranties shall
survive the delivery of the documents mentioned herein and the making of the
loan or loans contemplated hereby) as follows:
4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW; NAME HISTORY. The
Borrower is a corporation duly incorporated and organized, validly existing, and
in good standing under the laws of the jurisdiction of its incorporation.
Borrower has all requisite power (corporate and otherwise) to own and operate
its properties and to carry on its business as now being conducted, is duly
qualified as a domestic corporation to do business in every jurisdiction in
which the nature of its business or the ownership of its properties makes such
qualification necessary and is in good standing in such jurisdictions, has all
licenses and permits necessary to carry on and conduct its business in all
states and localities wherein it now operates, and is in material compliance
with all other requirements of law, rule, or regulation applicable to it and to
its business. Without limiting the generality of the foregoing, the Borrower is
duly authorized as a domestic corporation to do business in the State of
Florida, has paid all fees and penalties due to the Florida Secretary of State
in connection with such corporation status and its status is active. Borrower
has not merged, changed its name, or done business under a fictitious name
during the past five years, except as described herein.
4.2 CORPORATE POWER AND AUTHORIZATION TO EXECUTE LOAN DOCUMENTS;
NO CONFLICT; NO CONSENT. The Borrower has the corporate power and authority and
the legal right to execute and deliver the loan Documents to be executed by it
and to perform its obligations thereunder and has taken all corporate action
necessary to authorize the execution, delivery, and performance of such Loan
Documents and to authorize the transactions contemplated thereby. The execution,
delivery and performance by the Borrower of the Loan Documents to be executed by
it will not: (a) contravene, conflict with, result in the breach of, or
constitute a violation of or default under (i) the articles of incorporation or
bylaws of the Borrower; (ii) any applicable law, rule, regulation, judgment,
order, writ, injunction, or decree or any court or governmental authority, or
(iii) any agreement or instrument to which Borrower is a party or by which
Borrower or its property may be bound or affected; or (b) result in the creation
of any lien, charge, or encumbrance upon any property or assets of Borrower
pursuant to any of the foregoing, except the liens created by the Loan
Documents. No consent, license, or authorization of, or filing with, or notice
to, any Person or entity (including, without limitation, any governmental
authority), is necessary or required in connection
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with the execution, delivery, performance, validity, or enforceability of the
Loan Documents and the transactions as contemplated thereunder, except for
consents, licenses, authorizations, filings, and notices already obtained or
performed and of which Bank has been provided written notice, or referred to or
disclosed in the Loan Documents. Any such consents, licenses, authorizations,
filings, or notices remain in full force and effect.
4.3 ENFORCEABLE OBLIGATIONS. The Loan Documents constitute legal,
valid, and binding agreements enforceable against the respective parties thereto
and any property described therein in accordance with their respective terms.
Without limiting the foregoing, the Loan Documents grant Bank a valid and
enforceable first perfected security interest in the person property described
in the Pledge Agreement.
4.4 FINANCIAL CONDITION.
(a) All the financial statements provided to Bank have been
prepared in accordance with Generally Accepted Accounting Principles applied on
a Consistent Basis maintained throughout the period involved. There has been no
material adverse change in the business, properties, or condition, financial or
otherwise, of Borrower since the date of such financial statements.
(b) Borrower does not have any material direct or contingent
liabilities, liabilities for taxes, long-term leases, or unusual forward or
long-term commitments as of the date of this Agreement which are not disclosed
by, provided for, or reserved against in the foregoing financial statements or
referred to in notes thereto, and at the date of this Agreement there are no
material unrealized or anticipated losses from any unfavorable commitments of
Borrower.
4.5 NO LITIGATION. There is no suit or proceeding at law or in
equity or other proceeding or investigation (including proceedings by or before
any court, arbitrator, governmental or administrative commission, board, bureau,
or other administrative agency) pending, or to the best knowledge of the
Borrower threatened, by or against or involving Borrower or against any of its
properties, existence, or revenues which, individually or in the aggregate, if
adversely determined is reasonably likely to have a material adverse effect on
the properties, assets or business or on the condition, financial or otherwise,
of Borrower or impair the right or ability of Borrower to carry on its
operations substantially as now conducted or as anticipated to be conducted in
the future, which would impair the priority of the Loan Documents or the ability
of Borrower to perform its obligations under the Loan Documents, or regardless
of outcome, which questions the validity of the transactions contemplated by the
Loan Documents, or, regardless of outcome, which would be required to be
disclosed in notes to any balance sheet as of the date hereof of Borrower
prepared in reasonable detail in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis.
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4.6 INVESTMENT COMPANY ACT; REGULATION.
(a) Borrower is not an investment company, an "affiliated
person" of, or "promoters or principal underwriter" for any "investment
company," or a company "controlled" by an "investment company" and the Borrower
is not an "investment advisors or an affiliate person" of an "investment
advisor" (as each of the quoted terms is defined or used in the investment
Company Act of 1940, as amended). Neither the making of the loans, nor the
establishment of the credits hereunder, nor the application of the proceeds or
repayment thereof by Borrower, nor the consummation of the other transactions
contemplated hereby, will violate the provisions of the foregoing Act or any
rule, regulation, or order promulgated thereunder.
(b) Borrower is not subject to regulation under any state or
local public utilities code or federal, state, or local statute or regulation
limiting the ability of Borrower to incur indebtedness for money borrowed or to
pledge assets of the type contemplated hereunder.
4.7 DISCLOSURE AND NO UNTRUE STATEMENTS. No representation or
warranty made by the Borrower in the Loan Documents or which will be made by
Borrower from time to time in connection with the Loan Documents (a) contains or
will contain any misrepresentation or untrue statement of any material fact, or
(b) omits or will omit to state any material fact necessary to make the
statements therein not misleading. There is no fact (excluding information
relating to world or national economic, social, or political conditions
generally) known to the Borrower, which materially adversely affects, or which
might in the future materially adversely affect, the business, assets,
properties or condition, financial or otherwise, of Borrower, or the ability of
Borrower to perform its obligations under the Loan Documents, except as set
forth or referred to in the Loan Documents or otherwise disclosed in writing to
Bank.
4.8 PAYMENT OF TAXES. Borrower has filed or caused to be filed all
federal, state, and local tax returns which are returned to be filed by it and
has paid or caused to be paid all taxes as shown on said returns or on any
assessment received by it, to the extent that such taxes have become due, other
than taxes being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been established in accordance
with Generally Accepted Accounting Principles, and no controversy in respect of
additional taxes of Borrower is pending, or, to the knowledge of Borrower,
threatened.
4.9 AGREEMENT OR CONTRACT RESTRICTIONS; NO DEFAULT. Borrower is
not a party to, or is bound by, any agreement, contract, or instrument or
subject to any charter or other corporate restriction which materially or
adversely affects the business, properties, assets, operations, or condition,
financial or otherwise, of Borrower. Borrower is in compliance with and is not
in default in the performance, observance, or fulfillment of any obligations,
covenants, or conditions contained in any agreement or instrument to which it is
a party.
4.10 PATENTS, TRADEMARKS LICENSES, ETC. Borrower owns, possesses,
or has the right to use, and holds free from burdensome restrictions or known
conflicts with the rights of others, all
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patents, patent rights, licenses, trademarks and service marks, trademark and
service mark rights, trade names, trade name rights, and copyrights, and all
rights with respect to the foregoing necessary to conduct its business as now
conducted, and is in full compliance with the terms and conditions, if any, of
all such patents, patent rights, licenses, trademarks, and service marks,
trademark and service mark rights, trade names, trade name rights, or copyrights
and the terms and conditions of any agreements relating thereto.
4.11 ERISA REQUIREMENT. Except as previously disclosed to Bank in
writing, Borrower has no written or oral bonus plan, stock option plan, employee
benefit arrangement or understanding. In addition, Borrower, nor any of
Borrower's predecessors are now or were formerly, during the five year period
immediately preceding the effective date of this Agreement, a participating
employer in any multi-employer or "multiple employer" plans with the meaning of
Sections 4001(1)(a)(3), 4063 and 4064, of ERISA. Each employee benefit plan
subject to the requirements of ERISA complies with all of the requirements of
ERISA and those plans which are subject to being "qualified" under Section
401(a) and 501(a) of the Internal Revenue Code of 1986, as amended from time to
time, have since their adoption been "qualified" and have received favorable
determination letters from the Internal Revenue Service so holding. There is no
matter which would adversely affect the qualified tax exempt status of any such
trust or plan. No employee benefit plan sponsored by Borrower has engaged in a
non-exempt "prohibited transaction" as defined in ERISA.
4.12 SOLVENCY. Borrower is, and on and after the consummation of
the transactions contemplated herein will be Solvent.
4.13 RACKETEER INFLUENCED AND CORRUPT ORGANIZATION(S) ACT. Borrower
has never been nor is now engaged, nor will engage, directly or indirectly, in
any pattern of "racketeering activity" or in any "collection of any unlawful
debt," as each of the quoted terms or phrases is defined or used by the
Racketeer Influenced and Corrupt Organization(s) Act of either the United States
or the State of Florida, Title 18, United States Code, Section 1961 et seq;
Chapter 895, Florida Statutes, respectively, as each act now exists or is
hereafter amended (the "RICO Lien Acts"). None of the real property of Borrower,
nor of the interest or interests of any kind of Borrower, including any
beneficial interest, or interests, mortgages, and leases, in or on real
property, and none of the personal property of Borrower, including money, has
ever been, is now, or iS in any way reasonably anticipated by Borrower to
become, subject to any lien, notice, civil investigative demand, action, suit,
or other proceeding pursuant to the RICO Lien Acts.
4.14 LOCATION OF OFFICES. The chief executive offices, the
principal places of business and the offices where all books and records of
Borrower are kept is 2424 North Federal Highway, Boca Raton, Florida 33431.
There are not other offices of Borrower.
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SECTION 5 CONDITIONS OF LENDING.
The obligation of Bank to make the loan or loans or to permit any
borrowings hereunder is conditioned upon the performance of all agreements by
Borrower; contained herein, as well as satisfaction of the following conditions
precedent:
5.1 CONTINUING ACCURACY OF REPRESENTATIONS AND WARRANTIES. At the
time of each borrowing hereunder, the representations and warranties set forth
in Section 4 hereof, as supplemented by written disclosures given by Borrower to
Bank (including subsequent financial statements provided to Bank) of changes
affecting such representations and warranties (but which changes would not
create an Event of Default under this Agreement except as may have been waived
in writing or for which Consent has been given by Bank in writing in its sole
discretion) shall be true, correct, and complete in all material respect on and
as of the date of the borrowing with the same effect as though the
representations and warranties had been made on and as of the date of the
borrowing, except to the extent that such representations and warranties may
expressly relate to an earlier date, in which case they shall continue to be
true as of such date.
5.2 NO DEFAULT. At the time of each borrowing hereunder, the
Borrower shall be in compliance with all terms and conditions set forth herein,
and no Event of Default, nor any event which upon notice or lapse of time or
both would Constitute an Event of Default, shall have occurred and be continuing
at the time of such borrowing.
5.3 LOAN DOCUMENTS. On or prior to the date of this Agreement,
Bank shall have received, duly executed, this Agreement and the other Loan
Documents, all in form and substance satisfactory to Bank and counsel for Bank.
5.4 SUPPORTING DOCUMENTS. On or prior to the date of this
Agreement, Bank shall have received all other documents and instruments required
hereunder or otherwise reasonably required by Bank to be executed and delivered
or otherwise provided to Bank in form and substance satisfactory to Bank and
counsel for Bank.
SECTION 6 AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, insofar as any of the provisions
are applicable to it, from the date of this Agreement until payment in full of
all present or future indebtedness hereunder and termination of all present or
future credit facilities established hereunder, unless Bank shall otherwise
consent in writing, Borrower will fully comply with the following provisions:
6.1 FINANCIAL REPORTS AND OTHER INFORMATION. Borrower will
deliver or cause to be delivered to Bank the following:
(a) As soon as practicable and in any event within forty-five
(45) days after the end of each fiscal quarter, a balance sheet as of the last
day of such quarter and the related statement
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of income for such quarter and cumulative year-to-date for Borrower, setting
forth in each case in comparative form figures for the corresponding period in
the preceding fiscal year, all in reasonable detail and satisfactory in scope to
Bank and certified by the chief financial officer of Borrower as to the fairness
of such financial statements and that the same have been prepared in accordance
with Generally Accepted Accounting Principles applied on a Consistent Basis,
subject to changes resulting from normal, recurring year-end adjustments;
(b) As soon as practicable and in any event within ninety (90)
days after the end of each fiscal year, the audited balance sheet of Borrower as
of the end of such fiscal year, and related statements of income, and changes in
financial position for such fiscal year, setting forth in each case in
comparative form figures for the corresponding period in the preceding fiscal
year, all in reasonable detail and satisfactory in scope to Bank.
(c) Within ten (10) days after receipt thereof, copies of any
management audit letters provided to Borrower by the independent certified
public accountant who prepared Borrower's financial statements.
(d) With reasonable promptness, such additional financial or
other data as Bank may from time to time reasonably request.
Bank is hereby authorized to deliver a copy of any financial statements
or any other information relating to the business, operations, or financial
condition of Borrower which may be furnished to it or come to its attention
pursuant to the Loan Documents or otherwise, to any regulatory body or agency
having jurisdiction over Bank or to any Person which shall, or shall have the
right or obligation to, succeed to all or any part of Bank's interest in the
Loan Documents.
6.2 PAYMENT OF INDEBTEDNESS TO BANK; PERFORMANCE OF OTHER
COVENANTS; PAYMENT OF OTHER OBLIGATIONS. (a) Borrower will make full and timely
payment of the principal of and interest on the indebtedness owed hereunder; (b)
Borrower will duly comply with all the terms and covenants contained in the Loan
Documents; and (c) Borrower will make full and timely payment of all other
indebtedness of Borrower to Bank, whether now existing or hereafter arising.
6.3 CONDUCT OF BUSINESS, MAINTENANCE OF EXISTENCE AND RIGHTS.
Borrower will do or cause to be done all things necessary to preserve and to
keep in full force and effect its corporate existence and rights and privileges
as a corporation and its franchises, licenses, trade names, patents, trademarks,
and permits which are necessary for the continuance of its business, and
continue to engage principally in the business currently operated by Borrower.
6.4 RIGHT OF INSPECTION; DISCUSSIONS. Borrower will permit any
Person designated by Bank to visit and inspect any of the properties, corporate
books, records, papers, and financial reports of Borrower, including the making
of any copies thereof and abstracts therefrom, and to discuss its affairs,
finances, and accounts with its principal officers, all at such reasonable times
and as often as Bank may reasonably request. Borrower will also permit Bank, or
its designated representative,
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to audit or appraise any of its assets or financial and business records. Bank
shall comply with all applicable laws, rules and regulations governing the
confidentiality of Borrower's financial records and information.
6.5 NOTICES. borrower will promptly give notice to Bank of:
(a) The occurrence of any default or Event (or event which
would constitute a default or Event of Default but for the requirement that
notice be given or time elapse or both) hereunder or under any other obligation
of Borrower, in which case such notice shall specify the nature thereof, the
period of existence thereof, and the action that Borrower proposes to take with
respect thereto; and
(b) the commencement or any material change in the nature or
status of any litigation, dispute, or proceeding that may involve a claim for
damages, injunctive relief, enforcement, or other relief pending, being
instituted, or threatened by, against or involving Borrower, or any attachment,
levy, execution, or other process being instituted by or against any assets of
Borrower, which might impair the conduct of Borrower business or might adversely
affect financially or otherwise its business, operations, assets, properties,
prospects, or condition.
6.6 PAYMENT OF TAXES; LIENS. Borrower will promptly pay, or cause
to be paid, all taxes, assessments, and other governmental charges which may
lawfully be levied or assessed (a) upon the income or profits of Borrower; (b)
upon any property, real, personal or mixed, belonging to Borrower, or upon any
part thereof; or (c) by reason of employee benefit plans sponsored by Borrower,
and will also pay or promptly pay, or cause to be paid, any lawful claims for
labor, material, or supplies which, if unpaid, might become a lien or charge
against any property 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 appropriate
proceedings and Borrower shall have set aside on its books adequate reserves
(determined in accordance with Generally Accepted Accounting Principles) with
respect to any such tax, assessment, charge, levy, or claim so contested; but
provided further that any such tax, assessment, charge, levy, or claim shall be
paid forthwith upon the commencement of proceedings to foreclose any lien
securing the same.
6.7 INSURANCE OF PROPERTIES. Borrower will keep its business and
properties insured at all times by insurance companies acceptable to Bank
against the risks for which provision for such insurance is usually made by
other Persons engaged in a similar business similarly situated (including
without limitation insurance for fire and other hazards and insurance against
liability on account of damage to persons or property and insurance under all
applicable workman's compensation) laws and to the same extent thereto and carry
such other types and amounts of insurance as are usually carried by Persons
engaged in the same or a similar business similarly situated, and upon request
deliver to Bank a certificate from the insurer setting forth the nature of the
risks covered by such insurance, the amount carried with respect to each risk,
and the name of the insurer.
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6.8 TRUE BOOKS. Borrower will keep proper and true books of
record and account, satisfactory to Bank, in which full, true, and correct
entries will be made of all of its dealings and transactions, and establish on
its books such reserves as may be required by Generally Accepted Accounting
Principles with respect to all taxes, assessments, charges, levies, and claims,
and with respect to its business in general, and will include such reserves in
any interim as well as year-end financial statements.
6.9 OBSERVANCE OF LAWS. Borrower will conform to and duly observe
all laws, regulations, and other valid requirements of any governmental
authority with respect to the conduct of its business.
6.10 FURTHER ASSURANCES. At its cost and expense, upon request of
Bank, Borrower will duly execute and deliver or cause to be duly executed and
delivered to Bank such further instruments or documents and do and cause to be
done such further acts as may be reasonably necessary or proper in the opinion
of Bank to carry out more effectively the provisions and purposes of this
Agreement.
6.11 ERISA BENEFIT PLANS. Borrower will comply with all
requirements of ERISA applicable to it and will not materially increase its
liabilities under or violate the terms of any present or future benefit plans
maintained by it without the prior approval of Bank. Borrower will furnish to
Bank as soon as possible and in any event within ten (10) days after Borrower or
a duly appointed administrator of a plan (as defined in ERISA) knows or has
reason to know that any reportable event, funding deficiency or prohibited
transaction (as defined in ERISA) with respect to any plan has occurred, a
statement of the chief financial officer of Borrower describing in reasonable
detail such reportable event, funding deficiency, or prohibited transaction and
any action which Borrower proposes to take with respect thereto, together with a
copy of the notice of such event given to the Pension Benefit Guaranty
Corporation or the Internal Revenue Service or a statement that said notice will
be filed with the annual report of the United States Department of Labor with
respect to such plan if such filing had been authorized.
6.12 WITHHOLDING TAXES. Borrower will pay, as and when due, all
employee withholding, FICA, and other tax payments required by federal, state,
and local governments with respect to wages paid to employees.
6.13 CHANGE OF NAME, PRINCIPAL PLACE OF BUSINESS, OFFICE, OR AGENT.
Borrower will notify Bank of any change in the name of Borrower, the principal
place of business of Borrower, the office where the books and records of
Borrower are kept, or any change in the registered agent of Borrower for the
purposes of service of process.
SECTION 7 NEGATIVE COVENANTS.
Borrower covenants and agrees that, insofar as any of the provisions
are applicable to it, from the date of this Agreement until payment in full of
all present or future indebtedness hereunder and
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termination of all present or future credit facilities established hereunder,
unless Bank shall otherwise consent in writing, Borrower willfully comply with
the following provisions:
7.1 MERGER, SALE OF ASSETS, DISSOLUTION, ETC. Borrower will not,
directly or indirectly; (a) enter into any transaction of merger or
consolidation in which it is not the surviving entity; (b) transfer, sell,
assign, lease, or otherwise dispose of all or a substantial part of its
properties or assets; (c) change the nature of its business; (d) enter into any
arrangement, directly or indirectly, with any Person whereby Borrower shall sell
or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property which Borrower intends to use for substantially the same purpose or
purposes as the property being sold or transferred; (e) wind up, liquidate, or
dissolve itself or its business; or (f) agree to any of the foregoing.
SECTION 8. EVENTS OF DEFAULT.
The following events shall constitute "Events of Defaults" hereunder.
8.1 PAYMENT OF OBLIGATIONS UNDER LOAN DOCUMENTS. Borrower's
failure to make payment of any principal, interest, or other amount due on any
indebtedness owed Bank under the Loan Documents, or failure to make any other
payment to Bank as contemplated thereunder either by the terms hereof or
otherwise.
8.2 REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by Borrower herein or in any writing furnished in connection
with or pursuant to the Loan Documents, or any report, certificate, financial
statement, or other information provided by others and furnished by Borrower to
Bank in connection with or pursuant to the Loan Documents, shall be false or
misleading in any material respect on the date when made or when deemed made.
8.3 COVENANTS UNDER THE LOAN DOCUMENTS. Borrower or any other
Person fails to fully and promptly perform, when due any agreement, covenant,
term, or condition binding on it contained in this Agreement or any other Loan
Document, or otherwise a part of the transactions covered hereby. In the event
of nonmonetary default Bank shall provide Borrower with notice of said default
in which event Borrower shall have ten (10) business days from receipt of said
notice within which to cure said default.
8.4 OTHER DEFAULTS UNDER THE LOAN DOCUMENTS. The occurrence of a
default or event of default under any other Loan Document, other than with
respect to any matters described in Subsection 8.1, 8.2, or 8.3 above.
8.5 PAYMENT, PERFORMANCE, OR DEFAULT OF OTHER MONETARY
OBLIGATIONS. If Borrower fails to make payment on any contract obligation or of
principal or interest on any indebtedness other than that created under the Loan
Documents or otherwise owed to Bank, beyond any period of grace provided with
respect thereto, or fails to fully and promptly perform any other obligation,
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agreement, term, or condition contained in any agreement under which any such
other indebtedness is created beyond any period of grace provided with respect
thereto, or there is otherwise a default or event of default thereunder, if the
effect of any such failure or default is to cause, or permit the holder or
holders of such indebtedness (or a trustee or other person or entity acting in
behalf of such holder or holders) to cause, such indebtedness to become due
prior to its stated maturity.
8.6 COVENANTS OR DEFAULTS TO BANK OR OTHERS. If Borrower fails to
fully and promptly perform when due any agreement, covenant, term or condition
binding on it contained in any lease, contract, or other agreement to which it
is a party or in respect of which it is obligated, other than the Loan Document;
and other than those containing monetary obligations (as described in
Subsections 8.5 and 8.6 above), beyond any period of grace provided with respect
thereto, or there is otherwise a default or event of default thereunder, if such
failure or default would, either individually or in the aggregate, materially
and adversely affect the business, properties, or condition (financial or
otherwise) of Borrower.
8.7 LIQUIDATION; DISSOLUTION; BANKRUPTCY; ETC. Liquidation,
dissolution, death or incompetency of Borrower, suspension of the business of
Borrower, or the filing or commencement by Borrower of a voluntary petition,
case, proceeding or other action seeking reorganization, arrangement,
readjustment of its debts, or any other relief under any existing or future law
of any jurisdiction, domestic or foreign, state or federal, relating to
bankruptcy, insolvency, reorganization or relief of debtors, or any other action
of Borrower indicating its consent to, approval of, or acquiescence in, any such
petition, case, proceeding, or other action seeking to have an order for relief
entered with respect to it or its debts; the application by Borrower for, or the
appointment, by consent or acquiescence of, a receiver, trustee, custodian, or
other similar official for Borrower or for all or a substantial part of its
property; the making by Borrower of an assignment for the benefit or creditors;
or the inability of Borrower or the admission by Borrower in writing of its
inability to pay its debts as they mature.
8.8 INVOLUNTARY BANKRUPTCY, ETC. Commencement of an involuntary
petition, case, proceeding, or other action against Borrower under the
Bankruptcy Code or seeking reorganization, arrangement, readjustment of its
debts, or any other relief under any existing or future law of any jurisdiction,
domestic or foreign, state or federal, relating to bankruptcy, insolvency,
reorganization, or relief of debtors; or the involuntary appointment of a
receiver, trustee, custodian, or other similar official for Borrower or for all
or a substantial part of Borrower's property or assets or there shall be
commenced against Borrower any case, proceeding, or other action seeking
issuance of a warrant of attachment, execution, distraint, or similar process
against all or any substantial part of Borrower's assets or property which
results in the entry of an order for such relief, and the continuance of any of
such for thirty (30) days without being vacated, discharged, stayed, bonded, or
dismissed.
8.9 JUDGMENTS. The rendition of a judgment against Borrower for
the payment of damage or money in excess of $250,000.00, if twenty (20) days
have elapsed and the judgment has not been vacated, satisfied or dismissed, and
the enforcement of the judgment has not been stayed pending appeal.
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8.10 ATTACHMENT, GARNISHMENT, LIENS IMPOSED BY LAW. The issuance of
a writ of attachment or garnishment against, or the imposition of a lien by
operation of law on, any property of Borrower if twenty (20) days have elapsed
and the proceeding or lien has not been vacated, satisfied, dismissed, or stayed
pending appeal.
8.11 CORPORATE EXISTENCE, TRANSFER OF PROPERTY. Any act or omission
(formal or informal) of Borrower or its officer, directors, or shareholders
leading to, or resulting in, the termination, invalidation (partial or total),
revocation, suspension, interruption, or unenforceability of its corporate
existence, rights, licenses, franchises, or permits, or the transfer or
disposition (whether by sale, lease, or otherwise) to any Person of all or a
substantial part of its property.
8.12 ADVERSE CHANGE. Bank shall determine that a material adverse
change has occurred in the financial condition of Borrower from the condition in
existence on the date hereof.
8.13 INVALIDITY OF SECURITY INTEREST AND LIENS TRANSFER OF
COLLATERAL. For any reason after the execution and delivery thereof, any
document delivered pursuant hereto that created or was intended to create a
security interest or to provide collateral security for indebtedness created
hereunder ceases to be in full force and effect, or the liens intended to be
created thereby cease to be or are not valid and perfected first liens subject
to no other liens except as expressly permitted herein, or the party executing
such document contests the validity or enforceability thereof or the lien
created thereby, or any collateral covered thereby is transferred to another
Person without the prior written consent of Bank.
SECTION 9. REMEDIES OF BANK.
If any one or more of the above Events of Default shall occur, Bank may
from time to time exercise any one or more of the following remedies:
9.1 TERMINATION OF COMMITMENTS; ACCELERATION. Bank may, at Bank's
option, declare the indebtedness owed to Bank by Borrower hereunder and all
other obligations and indebtedness owed by Borrower, to Bank, whether direct or
indirect, contingent or certain, to be forthwith due and payable, whereupon the
indebtedness owed to Bank by Borrower hereunder and all other obligations owed
by Borrower to Bank with accrued interest thereon, shall forthwith become due
and payable, all without presentment, demand, protest, or other notice of any
kind from Bank, all of which are hereby expressly waived, anything contained in
the Loan Documents to the contrary notwithstanding and automatically all
commitments to extend credit or to make advances subsequent to the occurrence of
the Event of Default shall immediately terminate.
9.2 REMEDIES AVAILABLE UNDER LOAN DOCUMENTS OR OTHERWISE. Bank
may at Bank's option, exercise any of the remedies Bank may have under the Loan
Documents, or at law or in equity, individually or in any combination. No right,
power, or remedy conferred upon Bank by the Loan Documents shall be exclusive of
any other right, power, or remedy referred to therein or now or hereafter
available at law or in equity.
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SECTION 10. MISCELLANEOUS.
10.1 COURSE OF DEALING; AMENDMENT; SUPPLEMENTAL AGREEMENTS. No
course of dealing between the parties hereto shall be effective to amend,
modify, or change any provision of this Agreement. This Agreement may not be
amended, modified, or changed in any respect except in an agreement in writing
signed by the party against whom such change is to be enforced. The parties
hereto may, subject to the provisions of this Subsection, from time to time,
enter into written agreements supplemental hereto for the purpose of adding any
provisions to this Agreement or changing in any manner the rights and
obligations of the parties hereunder. Any such Supplemental agreement in writing
shall be binding upon the parties thereto.
10.2 WAIVER BY BANK OF REQUIREMENTS. Bank may sign and deliver to
Borrower a written statement waiving any of the requirements of this Agreement
and in such event the waiver shall be effective only int he specific instance
and for the specific purpose for which given.
10.3 WAIVER OF DEFAULT. Bank may, by written notice to Borrower,
at any time and from time to time, waive any Event of Default and its
consequences, or any default in the performance or observance of any condition,
covenant, or other term hereof and its consequences. Any such waiver shall be
for such period and subject to such conditions as shall be specified in any such
notice. In the case of any such waiver, Borrower and Bank shall be restored to
their former positions prior to such Event of Default or default and shall have
the same rights as they had thereto and any Event of Default or default so
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Event of Default or default, or impair any
right consequent thereto.
10.4 NOTICES. Notwithstanding any provisions to the contrary
contained in the other Loan Documents, all notices, requests and demands to or
upon the parties to this Agreement pursuant to any Loan Document shall be deemed
to have been given or made when delivered by hand, or when deposited in the
mail, postage prepaid by registered or certified mail, return receipt requested,
addressed as follows or to such other address as may be hereafter designated in
writing to one party to the other:
Borrower: 2424 North Federal Highway, Suite 100, Boca Raton,
Florida 33431 Attn.: Earl T. Takefman, CEO or Edward R. Smith,
CFO
Bank: 888 NW 62nd Street, Fort Lauderdale, Florida 33309-2094
Attn.: Douglas E. Roberts
except in cases where it is expressly herein provided that such notice, request,
or demand is not effective until received by the party to whom it is addressed.
10.5 NO WAIVER; CUMULATIVE REMEDIES. No omission or failure of Bank
to exercise and no delay in exercising by Bank of any right, power, or privilege
hereunder, shall impair such right,
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power or privilege shall operate as a waiver thereof or be construed to be a
waiver thereof nor shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The rights and remedies
provided in the Loan Documents are cumulative and not exclusive of any rights or
remedies provided by law, and the warranties, representations, covenants and
agreements made therein shall be cumulative, except in the case of
irreconcilable inconsistency, in which case the provisions of this Agreement
shall control.
10.6 RELIANCE UPON, SURVIVAL OF AND MATERIALITY OF REPRESENTATIONS
AND WARRANTIES, AGREEMENTS AND COVENANTS. All representations and warranties,
agreements and covenants made by Borrower in the Loan Documents are material and
shall be deemed to have been relied upon by Bank, notwithstanding any
investigation heretofore or hereafter made by Bank, and shall survive the
execution and delivery of the Loan Documents and the making of the loan or loans
herein contemplated, and shall continue in full force and effect so long as nay
indebtedness is owned to Bank by Borrower pursuant hereto or so long as there
shall be any commitment by Bank to make loans to Borrower hereunder. All
statements contained in any certificate or other paper delivered to Bank at any
time by or on behalf of Borrower pursuant hereto shall constitute
representations and warranties by Borrower hereunder.
10.7 LIENS, SET-OFF. Borrower hereby grants to Bank a Continuing
lien to secure all indebtedness of Borrower to Bank whether created hereunder,
pursuant hereto, or otherwise, and whether joint or otherwise, upon any and all
monies, securities and other property of Borrower and the proceeds thereof, now
or hereafter held or received by or in transit to, Bank from or for Borrower,
and also upon any and all deposits (general or special, joint or otherwise) and
credits of Borrower, if any, at Bank at any time existing. Upon the occurrence
of any Event of Default, Bank is hereby authorized at any time and from time to
time without notice to Borrower, to set off, appropriate, and apply any or all
items hereinabove referred to against all indebtedness of Borrower owned to
Bank, whether under the Loan Documents or otherwise whether now existing or
hereafter arising, and whether joint or otherwise Bank shall be deemed to have
exercised such right of set-off and to have made a charge against such items
immediately upon the occurrence of such Event of Default although made or
entered on its books subsequent thereof.
10.8 SEVERABILITY AND ENFORCEABILITY OF PROVISIONS. In the event
that any one or more of the provisions of the Loan Documents is determined to be
invalid, illegal, or unenforceable in any respect as to one or more of the
partied all remaining provisions nevertheless shall remain effective and binding
on the parties thereto and the validity, legality and enforceability thereof
shall not be affected or impaired thereby. If any such provision is held to be
illegal, invalid or unenforceable, there will be deemed added in lieu thereof a
provision as similar in terms to such provision as is possible, that is legal,
valid and enforceable. To the extent permitted by applicable law, the parties
hereby waive any law that renders any such provision invalid, illegal, or
unenforceable in any respect.
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10.9 PAYMENT OF EXPENSES, INCLUDING ATTORNEYS' FEES AND TAXES.
Borrower agrees to pay: (a) loan processing fee at closing plus any fees
associated with the issuance of Letters of Credit; (b) to pay or reimburse Bank
for all of its reasonable costs and expenses incurred in connection with the
administration, supervision, collection or enforcement of, or the preservation
of any rights under the Loan Documents, including, without limitation, the fees
and disbursements of counsel for Bank, including attorneys' fees out of Court,
in trial, on appeal, in bankruptcy proceedings or otherwise; (c) without
limiting the generality of provision (d) hereof, to pay or reimburse Bank for,
and indemnify and hold Bank harmless against liability for, any and all document
stamp taxes, non-recurring intangible taxes or other taxes, together with any
interest, penalties or other liabilities in connection therewith, that Bank no
or hereafter determines are payable with respect to the Loan Documents the
obligations evidence by the Loan Documents any advances under the Loan
Documents, and any guaranties or mortgages or other security instruments; and
(e) to pay, indemnify and hold Bank harmless from and against any and all other
liabilities, obligations, losses, damages, penalties actions, judgments, suits,
costs, expenses, or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of the
Loan Documents. The agreements in this Subsection shall survive repayment of all
other amounts payable hereunder or pursuant hereto, nor or in the future, and
shall be secured by all collateral that secures the loan or loans described
herein.
10.10 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and thereto and their
respective successors and assigns, and shall inure to the benefit of the parties
hereto and thereto, and, to the extent permitted herein, their respective
successors and assigns. The terms and provisions of this Agreement shall inure
to the benefit of any assignee or transferee of the Note or Notes hereunder, and
in the event of any such assignment or transfer by Bank, the rights and
privileges therein conferred upon Bank shall automatically extend to and be
vested in such assignee or transferee, and Bank shall be relieved of all
liability thereunder. Borrower may assign any of its rights or obligations under
the Loan Documents without prior written consent of Bank.
10.11 COUNTERPART; FACSIMILE SIGNATURES; EFFECTIVE DATE. This
Agreement and any amendments, waivers, consents, or supplements hereto may be
executed in any number of separate counterparts, each of which shall be deemed
an original, no one of which need contain all of the signatures of the parties
and as many of such counterparts as shall together contain all of the signatures
of the parties shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Agreement signed by all parties hereto shall be
lodged with Bank. This Agreement shall become effective upon the receipt of Bank
of original signed counterparts or facsimile confirmation of signed counterparts
of this Agreement, each of which shall be deemed an original from each of the
parties hereto.
10.12 GOVERNING LAW. The validity, interpretation and enforcement of
this Agreement of this Agreement of the and obligations of the parties hereto,
and of the other Loan Documents shall be governed by and construed and
interpreted in accordance with the laws of the State of Florida excluding those
laws relating to the resolution of conflicts between laws of different
jurisdiction.
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10.13 VENUE; PERSONAL JURISDICTION. In any litigation in connection
with or to enforce this Agreement or any of the other Loan Documents, Borrower
irrevocably consents to and confers personal jurisdiction on the courts of the
State of Florida or the United States courts located within the State of
Florida, expressly waives any objections as to venue in any of such courts, and
agrees that service of process may be made on such Borrower by mailing a copy of
the summons and complaint by registered or certified mail, return receipt
requested, to the address set forth herein (or otherwise expressly provided in
writing). Nothing contained herein shall, however, prevent Bank from bringing
any action or exercising any rights within any other state or jurisdiction or
from obtaining personal jurisdiction by any other means available by applicable
law.
10.14 COMPLETE AGREEMENT; NO OTHER CONSIDERATION. The Loan Documents
contain the final, complete, and exclusive expression of the understanding of
Borrower and Bank with respect to the transactions contemplated by the Loan
Documents and supersede any written, by or between the parties related to the
subject matter hereof. Without limiting the generality of the foregoing, there
does not exist any consideration or inducement other than as stated herein for
the execution, delivery and performance by Borrower of the Loan Documents.
10.15 LEGAL OR GOVERNMENTAL LIMITATIONS. Anything contained in this
Agreement to the contrary notwithstanding, Bank shall not be obligated to extend
credit or make loans to Borrower in an amount in violation of any limitations or
prohibitions provided by any applicable statute or regulation.
10.16 WAIVER OF TRIAL BY JURY. Borrower and Bank hereby knowingly,
irrevocably, voluntarily and intentionally waive any right to a trial by jury in
respect of any litigation based on this Agreement or the other Loan Documents,
arising out of, under, or in connection with this Agreement, the other Loan
Documents, or any other document executed in conjunction with the transactions
contemplated thereunder, or any course of conduct, course of dealing, statement
(whether oral or written) or action of any party. This provision is a material
inducement for Bank to enter into the transaction evidence hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
Witnesses:
VISUAL EDGE SYSTEMS INC., a Delaware
______________________________ corporation
______________________________ By: /s/ Edward Smith
----------------------
Edward R. Smith,
Chief Financial Officer
BARNETT BANK, N.A.
______________________________
______________________________ By: /s/ Douglas Roberts
------------------------
Douglas E. Roberts,
Vice President
STATE OF
COUNTY OF
The foregoing instrument was acknowledged before me this 26th day of
March, 1997 by Edward R. Smith, as ________________________ of VISUAL EDGE
SYSTEMS INC., a Delaware corporation, who is personally known to me or who has
produced Passport 154079162 as identification.
-------------------------------
Notary Public
My Commission Expires:
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Freeport, Grand Bahama
The Bahamas
The foregoing instrument was acknowledged before me this 26th day of
March, 1997 by Douglas E. Roberts, as Vice President of BARNETT BANK N.A., who
is personally known to me or who has produced Drivers License 2163-165-59-266-0
as identification.
-------------------------------
Notary Public
My Commission Expires:
24
