SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
March 11, 1997
Date of Report (Date of earliest event reported)
..................................................................
NDC AUTOMATION, INC.
.........................................................................
(Exact name of registrant as specified in its charter)
DELAWARE 0-18253 56-1460497
..............................................................................
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No)
of incorporation)
3101 LATROBE DRIVE CHARLOTTE NC 28211
...............................................................................
(Address of principal executive offices) (Zip Code)
(704) 362-1115
Registrant's telephone number, including area code ............................
...............................................................................
(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant.
None.
Item 2. Acquisition or Disposition of Assets.
None.
Item 3. Bankruptcy or Receivership.
None.
Item 4. Changes in the Registrant's Certifying Accountant.
None.
Item 5. Other Events.
1. COMPANY OBTAINS FINANCING FROM BANK OF CANADA
(a) Please see the Press Release attached hereto as
Exhibit A, page 3.
(b) Inventory and Accounts Receivable Loan and Security
Agreement attached hereto as Exhibit B, page 4.
(c) Secured Note for $1,250,000 attached hereto as
Exhibit C, page 17.
(d) Inventory Repurchase Agreement attached hereto as
exhibit D, page 19.
(e) Irrevocable Letter of Credit from Nordbanken provided
by Netzler & Dahlgren Co. AB attached hereto as
Exhibit E, page 25.
Item 6. Resignations of Registrant's Directors.
Item 7. Financial Statements and Exhibits.
Item 8. Change in Fiscal Year.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1923, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NDC AUTOMATION, INC.
Date: March 11, 1997 By:___/s/ Claude Imbleau__________
Claude Imbleau
Vice President of Finance and CFO
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EXHIBIT "A"
FOR IMMEDIATE RELEASE
MARCH 10, 1997
NDC AUTOMATION, INC.
ANNOUNCES A NEW BANKING RELATIONSHIP
CHARLOTTE, NC, MARCH 10, 1997, NDC AUTOMATION, INC. ( OTC BULLETIN
BOARD "AGVS") entered into a new Inventory and Accounts Receivable Loan and
Security Agreement ("Loan Agreement") February 28, 1997 with the
National Bank of Canada and National Canada Business Corp (herein collectively
called the "Lenders"). The Loan Agreement allows the Company to borrow up to a
maximum of $1,250,000. The new agreement provides for a 66 2/3% increase in
potential available credit compared to the maximum potential available
of $750,000 under the prior credit arrangement with NationsBank.
Loans made under the new Loan Agreement are evidenced by a demand
Promissory Note. The Loan Agreement allows the Company to
borrow pursuant to a borrowing formula which is secured by Company's personal
property as collateral. The Company's loan outstanding at any one
time shall not exceed the lesser of (a) U.S $1,250,000 or (b) 80% of qualified
accounts receivable (as defined in the Loan Agreement) plus 50% of
all eligible inventory (as defined in the Loan Agreement) with a $400,000
cap on loans based on "eligible inventory". The borrowed funds will
bear interest at the Lender's prime rate plus 1.5% per annum for
the first $450,000 outstanding and prime plus 2.75%
per annum for amounts outstanding in excess of
$450,000. The Loan Agreement is further secured by 1) an irrevocable Letter of
Credit from NordBanken provided by Netzler & Dahlgren Co. AB (NDCab) and 2) an
Inventory Repurchase Agreement. The Repurchase Agreement guarantees that NDCab
will repurchase from the Company on certain conditions up to $400,000
worth of inventory thereby providing funds to pay the Lenders should
the Company default on its Loan obligations.
NDC Automation, Inc. sells hardware, software, and engineering services
incorporated into and used to control laser and other Automatic Guided Vehicle
Systems (AGVS). The Company sales are targeted to OEM's and system
integrators, which buy technology solutions from the Company and
incorporate them into their material handling systems for the industries
in which they specialize.
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For further information contact:
Claude Imbleau Ralph Dollander
VP Finance & Adm. President
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EXHIBIT "B"
NATIONAL BANK OF CANADA AND
NATIONAL CANADA BUSINESS CORP.
INVENTORY AND ACCOUNTS RECEIVABLE LOAN AND
SECURITY AGREEMENT
February 28 , 1997
NDC AUTOMATION, INC., a Delaware corporation, the debtor hereunder
(hereinafter called the "Borrower") for valuable consideration, receipt whereof
from NATIONAL BANK OF CANADA ("Bank"), a commercial banking institution
organized and existing under the laws of Canada with a United States branch
office located in New York, New York, and from NATIONAL CANADA BUSINESS CORP.
("NCBC"), a Delaware corporation having its principal place of business in New
York, New York, (the Bank and NCBC being herein collectively called the
"Lender") is hereby acknowledged, hereby grants to NCBC (individually and as
agent for Bank) the secured party hereunder, a continuing security interest in
the following (the "Collateral"):
(a) All of the Borrower's accounts, accounts receivable,
chattel paper, instruments and other obligations of any kind, whether or
not evidenced by an instrument or chattel paper, and whether or not it
has been earned by performance (collectively hereinafter referred to as
"Accounts" or "Accounts Receivable") whether now or hereafter existing,
arising out of or in connection with the sale or lease of goods or the
rendering of services or otherwise, and all rights now or hereafter
existing in and to all security agreements, leases and other contracts
securing or otherwise relating to any such Accounts;
(b) All of the Borrower's inventory and goods in all of its
forms, wherever located and whether now or hereafter existing, and all
accessions thereto and products thereof, including raw materials,
materials awaiting manufacture, work-in-process, finished products, and
materials used or consumed in Debtor's business (collectively
hereinafter "Inventory");
(c) All warehouse receipts, bills of lading and other
documents of title of every kind and character, now or at any time
hereafter evidencing or representing all or any part of goods sold in
the ordinary course to Borrower's customers;
(d) All claims for tax refund, whether now existing or
hereafter arising, of the Borrower against any city, county, state or
federal government or any agency or authority or other subdivision
thereof, and the proceeds thereof;
(e) All contract rights and general intangibles ("General
Intangibles") of every kind, character and description, both now owned
and hereafter acquired, including, without limitation, goodwill,
trademarks, trade styles, trade names, patents, patent applications and
deposit accounts;
(f) All books and records (including customer lists, ledger
and account cards, computer tapes, discs and printouts, and other
computer materials and records), together with all file cabinets and
other containers, equipment or furnishings in or on which such books and
records are located, whether now in existence or hereafter created;
(g) All proceeds ("Proceeds") of any and all of the foregoing
Collateral and, to the extent not otherwise included, all payments under
insurance (whether or not secured party is the loss payee thereof), any
indemnity, warranty, or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Collateral, and
including, without limitation, all monies due or to become due in
connection with any of the Collateral, guaranties and security for the
payment of such monies, the right of stoppage in transit, and all
returned or repossessed goods arising from a sale or lease thereof.
(Although proceeds are covered, Lender does not authorize the sale or
other transfer of any of the Collateral or the transfer of any interest
in the Collateral);
in each case, whether now owned or hereafter acquired by the Borrower and
howsoever its interest therein may arise or appear (whether by ownership, lease,
security interest, claim, or otherwise) and in the products and proceeds
thereof.
The security interest granted hereby is to secure payment and
performance of all debts, liabilities and obligations of Borrower to the Lender
hereunder and also any and all other debts, liabilities and obligations of
Borrower to Lender of every kind and description, direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising,
including without limiting the generality of the
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foregoing, any debt, liability or obligation of Borrower to others, which Lender
may have obtained by assignment or otherwise, and further, including, without
limitation, all interest upon any of the foregoing and all fees, charges, and
expenses actually incurred including reasonable attorney's fees, incurred by
Lender in connection with the foregoing (all hereinafter sometimes collectively
called "Obligations"). For purpose of this Agreement, reasonable attorney's fees
shall mean attorney's fees based on the actual amount of time expended on a
matter at the usual hourly rate of such attorneys or paralegals, notwithstanding
the provisions of any applicable statute regarding attorney's fees.
1. BORROWER'S NAME AND PLACES OF BUSINESS. Borrower warrants that
Borrower has no places of business other than that shown at the end of this
Agreement, unless other places of business are listed immediately below, in
which event Borrower represents that it has additional places of business at the
following locations and none other:
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and if Borrower has an office in more than one state, the office where Borrower
keeps its records concerning its Accounts, General Intangibles, contract rights
and other property, and the Borrower's chief executive office is located at:
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or if left blank, is located at that address shown at the end of the Agreement.
All Inventory presently owned by Borrower is or will be stored at the following
locations:
3101 Latrobe Drive Burnham Service Corporation
Charlotte, North Carolina 28211-4849 6100-M Harris Technology Boulevard
Charlotte, North Carolina 28269
Borrower will promptly notify Lender in writing of any change in the location of
any place of business or the location of any Inventory or the establishment of
any new place of business or location of Inventory or chief executive office or
office where its aforesaid records are kept which would be shown in this
Agreement if it were executed after such change.
Borrower further warrants that its full name is as set forth above and
that it does not do business under any tradename other than ___________________
________________________________. Except as set forth below, Borrower did not
at any time during the immediately preceding five years have any name other than
its current name or do business under any tradename other than as set forth
above. Borrower's prior name(s) or tradename(s) during the immediately preceding
five years were as follows:
NDC Technologies, Inc., Southeastern Software Developers, Inc., Automation
Technology, Inc., NDC Automation Australia, Pty, Ltd.
Borrower will give Lender prompt written notice upon Borrower changing
its name or doing business under any tradename(s) other than those currently
used by it and set forth above.
2. BORROWER'S ADDITIONAL REPRESENTATIONS AND WARRANTIES. Borrower
represents and warrants to Lender that:
(a) Borrower is a corporation organized and existing under the
laws of the State of Delaware is duly qualified and in good standing in every
other state in which it is doing business.
(b) The execution, delivery and performance hereof are within
the Borrower's corporate (or other) powers and authority, have been duly
authorized, are not in contravention of law or the terms of the Borrower's
charter, by-laws or other incorporation papers (or other instruments of
organization), or of any indenture, agreement or undertaking to which the
Borrower is a party or by which it or any of its properties may be bound.
(c) Borrower's Charter (or other instruments of organization)
and all amendments thereto have been duly filed and are in proper order. All
capital stock (or other equity interests) issued by Borrower and outstanding was
and is properly issued and all books and records of Borrower, including but not
limited to its minute books, by-laws and books of account, are accurate and up
to date and will be so maintained.
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(d) No litigation is either threatened, contemplated or
pending which if adversely determined, could result in a material and adverse
change in the Borrower's business, properties, assets, goodwill or condition,
financial or otherwise.
(e) All Collateral is owned by Borrower free and clear of all
liens other than liens in favor of Lender.
(f) Borrower has duly complied with, and its properties,
business operations and leaseholds are in compliance in all material respects
with, the provisions of all federal, state and local laws, rules and regulations
applicable to Borrower, its properties or the conduct of its business,
including, without limitation all environmental laws, and there have been no
citations, notices or orders of noncompliance issued to Borrower under any such
law, rule or regulation.
3. LOANS. Subject to the terms and provisions of this Agreement, Lender
will make such loans to Borrower as from time to time Lender elects to make
which are secured by Borrower's Collateral and the proceeds thereof. The
aggregate unpaid principal of all such loans outstanding at any one time shall
not exceed the lesser of (a) One Million Two Hundred Fifty Thousand (U.S.
$1,250,000.00) or (b) eighty percent (80%) of the unpaid face amount of
Qualified Accounts, as defined below, (or such other percentages thereof as may
from time to time be fixed by the Lender upon notice to Borrower), plus fifty
percent (50%) of the cost or market value, whichever is lower, of all Eligible
Inventory, as defined below, (hereinafter called the "Inventory Value"), but in
no event shall Inventory Value be in excess of Four Hundred Thousand Dollars
(U.S. $400,000.00). The sum produced by applying at any given time the then
prevailing percentages to the Inventory Value and to the total of Qualified
Accounts is herein called the "Borrowing Base". All such loans shall bear
interest, and where appropriate under the Lender's prevailing policy shall bear
a service charge at the rate agreed on from time to time by the parties, and at
the option of Lender shall be evidenced by notes in form satisfactory to Lender,
but in the absence of notes shall be conclusively evidenced by the Lender's
record of disbursements and repayments. The Borrower's loans are presently
evidenced by that certain Secured Note ("Secured Note") bearing even date
herewith. The unpaid principal balances of the Borrower's loans shall bear
interest from the date hereof upon disbursed and unpaid principal balances
(calculated on the basis of a year of 360 days) at a rate per annum which shall,
from day to day, be equal to one and one-half of one percent (1.50%) per annum
for the first $450,000.00 outstanding under the Note and two and three quarters
of one percent (2.75%) per annum for amounts outstanding under the Note in
excess of $450,000.00, plus the rate for commercial loans announced from time to
time in the United States as its prime rate ("Prime Rate") by Bank, each change
in the rate to be charged hereon to become effective, without notice to the
Borrower, on the effective date of each change in the Prime Rate, and interest
shall be payable monthly in arrears on the 1st day of each month, commencing on
the 1st day of March, 1997. The Prime Rate is a reference rate and is not
necessarily the lowest rate charged by Lender or Bank for extensions of credit.
The Bank's Prime Rate is, as of the date hereof, eight and one-quarter of one
percent (8.25%) per annum. All such loans shall be payable on demand or, if no
demand then, on the Termination Date as that term is defined in the Secured
Note.
4. DEFINITION OF QUALIFIED ACCOUNT; ELIGIBLE INVENTORY. The term
"Qualified Account", as used herein, means an Account owing to Borrower which
met the following specifications at the time it came into existence and
continues to meet the same until it is collected in full:
(a) Not more than ninety (90) days have elapsed since the
invoice date of such Account or, in the case of "dated invoices" [i.e. invoices
which, by their terms are due and payable more than 30 days following the date
thereof], specifies a due date for the payment thereof and does not remain
unpaid at the end of the month in which such due date falls ["dated invoices" on
dating terms in excess of ninety (90) days being totally ineligible].
(b) The Account arose from the performance of services or an
outright sale of goods by Borrower, such goods have been shipped to the Account
debtor, and Borrower has possession of, or has delivered to Lender shipping and
delivery receipts evidencing such shipment.
(c) The Account is not subject to any prior assignment, claim,
lien, or security interest, and Borrower will not make any further assignment
thereof or create any further security interest therein, nor permit Borrower's
rights therein to be reached by attachment, levy, garnishment or other judicial
process.
(d) The Account is not subject to set-off, credit, allowance
or adjustment by the account debtor, except for a discount allowed for prompt
payment, and the account debtor has not complained as to his liability thereon
and has not returned any of the goods from the sale of which the Account arose.
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(e) The Account arose in the ordinary course of Borrower's
business and did not arise from the performance of services or a sale of goods
to a Related Person (a "Related Person" being defined as an officer, director,
shareholder, employee, agent, subsidiary, parent or supplier of the Borrower) or
any officer, director, employee or agent of a Related Person.
(f) No notice of bankruptcy, insolvency or financial
embarrassment of the account debtor has been received by or is known to the
Borrower.
(g) Lender has not notified Borrower that the Account or
account debtor is unsatisfactory to Lender in Lender's exclusive discretion.
(h) The Account is an Account in which Lender holds a valid,
perfected first security interest.
The term "Eligible Inventory", as used herein, means Borrower's
Inventory, first quality consisting of raw material or finished goods held for
manufacture, sale or resale in the ordinary course of Borrower's business which
is located at Borrower's premises and acceptable to Lender in all respects.
General criteria for Eligible Inventory may be established and revised from time
to time by Lender in Lender's exclusive discretion. In determining such
acceptability, Lender may, but need not, rely on reports and schedules of
Inventory furnished to Lender by Borrower, but reliance thereon by Lender from
time to time shall not be deemed to limit Lender's right to revise standards of
eligibility at any time. In general, except in Lender's sole discretion,
Eligible Inventory shall not include work in process, components which are not
part of finished goods, spare parts, packaging and shipping materials, supplies
used or consumed in Borrower's business, and further Eligible Inventory shall
not include Inventory at the premises of third parties or subject to a security
interest or lien in favor of any third party, bill and hold goods, Inventory
which is not subject to Lender's perfected security interest, returned and/or
defective goods, "seconds" and Inventory purchased on consignment.
5. COLLECTIONS; NOTICE OF ASSIGNMENT; EXPENSES.
(a) Borrower will immediately upon receipt of all checks,
drafts, cash and other remittances (collectively "Remittances") in payment of
any Inventory sold or in payment or on account of Borrower's Accounts,
contracts, contract rights, notes, bills, drafts, acceptances, General
Intangibles, choses in action and all other forms of obligations, deliver the
same to the Lender in the same form received, except for endorsement of Borrower
where necessary to permit collection of items, which endorsement Borrower agrees
to make. All Remittances shall be delivered to Lender for deposit to Borrower's
cash collateral account, an account maintained by Borrower with First-Citizens
Bank & Trust Company or successor pursuant to a cash collateral deposit account
agreement in form and substance satisfactory to Lender. The funds in the cash
collateral account, over which Lender alone shall have power of application or
withdrawal, will be at the location designated in the Obligations, be applied in
whole or in part against the principal or interest of any loans secured hereby.
The order and method of such application shall be in the sole discretion of
Lender, and any portion of such funds which the Lender elects not so to apply
and deems not required as Collateral shall be paid over from time to time by
Lender to Borrower.
(b) Any and all deposits or other sums at any time credited by
or due from Lender to Borrower, whether in Borrower's disbursement account or
other accounts, shall at all times constitute additional security for
Obligations and may be set-off against any Obligations at any time whether or
not they are then due, or other security held by Lender is considered by Lender
to be adequate. Any and all instruments, documents, policies and certificates of
insurance, securities, goods, accounts, choses in action, general intangibles,
chattel paper, cash, property and the proceeds thereof (whether or not the same
are Collateral or proceeds thereof hereunder) owned by Borrower or in which
Borrower has an interest, which now or hereafter are at any time in possession
or control of Lender or in transit by mail or carrier to or from Lender or in
the possession of any third party acting in Lender's behalf, without regard to
whether Lender received the same in pledge, for safekeeping, as agent for
collection or transmission or otherwise or whether Lender has conditionally
released the same, shall constitute additional security for the Obligations and
may be applied at any time to Obligations which are then owing, whether due or
not due.
(c) At any time following a default under this Agreement or
demand for payment by Lender, the Lender may at any time notify account debtors
that Collateral has been assigned to Lender and that payments shall be made
directly to Lender. Upon request of Lender at any time, Borrower will so notify
such account debtors and will indicate on all billings to such account debtors
that their accounts must be paid to Lender. The Lender shall have full power to
collect, compromise, endorse, sell or otherwise deal with the Collateral or
proceeds thereof in its own name or in the name of the Borrower. Borrower shall
pay to Lender on demand any and all reasonable counsel fees and other expenses
incurred
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by the Lender in connection with the preparation or enforcement of this
Agreement, documents relating thereto or modifications thereof, and any and all
expenses, including, but not limited to, a collection charge on all accounts
collected, all attorneys' fees and expenses, and all other expenses of like or
unlike nature which may be expended by the Lender to obtain or enforce payment
of any account either as against the account debtor, Borrower or any guarantor
or surety of Borrower or in the prosecution or defense of any action or
concerning any matter growing out of or connected with the subject matter of
this Agreement, the Obligations or the Collateral or any of Lender's rights or
interests therein or thereto, including, without limiting the generality of the
foregoing, any counsel fees or expenses incurred in any bankruptcy or insolvency
proceedings.
(d) Borrower does hereby make, constitute and appoint any
officer or agent of Lender as Borrower's true and lawful attorney-in-fact, with
power to endorse the name of Borrower or any of Borrower's officers or agents
upon any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under any policy of insurance on the Collateral) or
Collateral that may come into possession of the Lender in full or part payment
of any amounts owing to Lender, to sign and endorse the name of Borrower or any
of Borrower's officers or agents upon any invoice, freight or express bill, bill
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and any instrument or
document relating thereto or to Borrower's rights therein; to give written
notice to such office and offices of the United States Post Office to effect
such change or changes of address so that all mail addressed to Borrower may be
delivered directly to Lender; hereby granting to Borrower's said attorney full
power to do any and all things necessary to be done in and about the premises as
fully and effectually as Borrower might or could do, and hereby ratifying all
that said attorney shall lawfully do or cause to be done by virtue hereof. This
power of attorney shall be irrevocable for the term of this Agreement and all
transactions hereunder and thereafter for as long as Borrower may be indebted or
obligated to Lender.
6. FINANCING STATEMENTS. At the request of Lender, Borrower will
execute one or more Financing Statements pursuant to the Uniform Commercial Code
or other notices appropriate under applicable law in form satisfactory to Lender
and will pay the cost of filing the same in all public offices wherever filing
is deemed by Lender to be necessary or desirable. Borrower authorizes Lender to
file financing statements with respect to the Collateral naming the Borrower as
debtor and to sign the Borrower's name thereto.
7. BORROWER'S REPORTS.
(a) At the time of each borrowing hereunder, Borrower will
execute and deliver to Lender a Borrowing Base Certificate, on a form supplied
by Lender.
(b) In addition, Borrower shall, from time to time, deliver to
Lender a report of Accounts on a form supplied by Lender containing a summary of
Accounts created since the last report, with copies of invoices relating to said
Accounts attached thereto. Further, on a form supplied by Lender, Borrower shall
deliver to Lender a report of Borrower's collections which contains a summary of
reductions to Borrower's Accounts since the last report.
(c) In addition, Borrower shall, from time to time, deliver to
Lender a report of Inventory on a form supplied by Lender containing an
identification of Borrower's Inventory as of such date.
(d) On or before the fifteenth (15th) business day after the
close of each calendar month, Borrower shall deliver to Lender a Recapitulation
Report on a form supplied by Lender, setting forth total Inventory Value and the
balance of all Accounts as of the close of such calendar month, showing a total
amount due from each account debtor, the month in which each such Account was
created, and such other information as Lender shall request.
(e) Borrower will furnish Lender, within twenty (20) days
after the close of each monthly period of Borrower's fiscal year, a balance
sheet and statement of profit and loss reflecting the financial condition of
Borrower at the end of such period and the results of its operations during such
period and for the year to date, such balance sheet and statement of profit and
loss to be certified by Borrower's President or Treasurer to fairly present the
financial condition at the end of such period and the results of its operations
during such period.
(f) Borrower will furnish Lender, within forty-five (45) days
after the close of each quarterly period of Borrower's fiscal year, a balance
sheet and statement of profit and loss reflecting the financial condition of
Borrower at the end of such period and the results of its operations during such
period and for the year to date, such balance sheets and statement of profit and
loss to be certified by
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Borrower's President or Treasurer to fairly present the financial condition at
the end of such period and the results of its operations during such period in
accordance with generally accepted accounting principals, consistently applied.
(g) Borrower will furnish Lender annually, within ninety (90)
days after the close of Borrower's fiscal year, a full and complete signed copy
of a report or reports, issued by certified public accountants acceptable to
Lender, which report or reports shall include balance sheets of Borrower as at
the end of such year and a statement of profit and loss of Borrower reflecting
its operations during such year, such report or reports to be prepared in
accordance with generally accepted accounting principles, consistently applied,
and to bear the certificate of such certified public accountants.
8. GENERAL AGREEMENTS OF BORROWER.
(a) Borrower agrees to maintain general liability insurance,
to keep all the Inventory and other Collateral insured, with coverages and
amounts not less than that usually carried by one engaged in a like business and
in any event not less than that required by Lender with Lender named as
additional insured and with loss payable to the Lender and Borrower, as their
interests may appear, hereby appointing Lender as attorney for Borrower in
obtaining, adjusting, settling and canceling such insurance and endorsing any
drafts. As further assurance for the payment and performance of the Obligations,
Borrower hereby assigns to Lender all sums, including return or unreturned
premiums, which may become payable under any policy of insurance on the
Collateral and Borrower hereby directs each insurance company issuing any such
policy to make payment of such sums directly to Lender. The Lender or its agents
have the right to inspect the Inventory and all records pertaining thereto at
intervals to be determined by Lender and without hindrance or delay. Although,
as above set forth, Lender has a continuing security interest in all of
Borrower's Inventory and existing and future Accounts and other Collateral and
in the proceeds thereof, Borrower will at all times maintain as the minimum
security hereunder a Borrowing Base not less than the aggregate unpaid principal
of all loans made hereunder; and if Borrower fails to do so, Borrower will
immediately make the necessary reduction in the unpaid principal amount of said
loans.
(b) Borrower will at all times keep accurate and complete
records of Borrower's Inventory, Accounts and other Collateral, and Lender, or
any of its agents, shall have the right to call at Borrower's place or places of
business at intervals to be determined by Lender, and without hindrance or
delay, to inspect, audit, check and make extracts from any copies of the books,
records, journals, orders, receipts, correspondence which relate to Borrower's
Accounts, and other Collateral or other transactions, between the parties
thereto and the general financial condition of Borrower and Lender may remove
any of such records temporarily for the purpose of having copies made thereof.
(c) Borrower, during the term of this Agreement, will not
assign any Accounts or other Collateral to any other party, nor create or permit
to be created any lien, encumbrance or security interest of any kind against any
Collateral, including any of its Accounts and Inventory other than for the
benefit of the Lender.
(d) Borrower will comply with, and its properties, business
operations and leaseholds will be in compliance in all material respects with,
the provisions of all federal, state and local laws, rules and regulations
applicable to Borrower, its properties or the conduct of its business,
including, without limitation all environmental laws.
(e) Borrower will pay all real and personal property taxes,
assessments and charges and all franchise, income, unemployment, old age
benefits, withholding, sales and other taxes assessed against it, or payable by
it at such times and in such manner as to prevent any penalty from accruing or
any lien or charge from attaching to its property.
(f) Without the prior written consent of Lender, Borrower will
pay no dividends either in cash or kind on any class of its capital stock nor
make any distribution on account of its stock, nor redeem, purchase or otherwise
acquire directly or indirectly any of its stock.
(g) Without the prior written consent of Lender, Borrower will
not make any loan or advance to any individual, firm or corporation, including
without limitation any Related Person; provided, however, that Borrower may make
advances to its employees, including its officers, with respect to expenses
incurred by such employees which expenses are reimbursable by Borrower.
(h) Without the prior written consent of Lender, Borrower will
not invest in or purchase any stock or securities of any individual, firm,
corporation or other person.
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(i) Without the prior written consent of Lender, Borrower will
not merge or consolidate with or be merged or consolidated with or into any
other corporation or other person.
(j) Without the prior written consent of Lender, Borrower will
not sell or dispose of any of its assets except in the ordinary and usual course
of its business, nor will it acquire substantially all of the assets of another.
(k) Without the prior written consent of Lender, Borrower will
not enter into any agreements of guaranty of the obligations of any individual,
partnership, trust, limited liability company, other corporation or other
person, including any affiliate or subsidiary corporations.
(l) The Lender may in its own name or in the name of others
communicate with account debtors in order to verify with them to Lender's
satisfaction the existence, amount and terms of any Accounts or contract rights.
(m) This Agreement may but need not be supplemented by
separate assignment of accounts and if such assignments are given the rights and
security interests given thereby shall be in addition to and not in limitation
of the rights and security interests given by this Agreement.
(n) If any of Borrower's accounts arise out of contracts with
the United States or any department, agency, or instrumentality thereof,
Borrower will immediately notify Lender thereof in writing and execute any
instruments and take any action required by Lender in order that all monies due
and to become due under such contracts shall be assigned to Lender and notice
thereof given to the appropriate governmental agency or authority under the
Federal Assignment of Claims Act.
(o) If any of Borrower's Accounts should be evidenced by
promissory notes, trade acceptances, or other instruments for the payment of
money, Borrower will immediately deliver same to Lender, appropriately endorsed
to Lender's order and, regardless of the form of such endorsement, Borrower
hereby waives presentment, demand, notice of dishonor, protest and notice of
protest and all other notices with respect thereto.
(p) Borrower will promptly pay when due all taxes and
assessments upon the Collateral or for its use or operation or upon this
Security Agreement, or upon any note or notes evidencing the Obligations, and
will, at the request of Lender, promptly furnish Lender the receipted bills
therefor. At its option, Lender may discharge taxes, liens or security interests
or other encumbrances at any time levied or placed on the Collateral, may pay
for insurance on the Collateral and may pay for the maintenance and preservation
of the Collateral. Borrower agrees to reimburse Lender on demand for any
payments made, or any expenses incurred, by Lender pursuant to the foregoing
authorization, any such sums paid or advanced by Lender shall be deemed secured
by the Collateral and constitute part of the Obligations.
9. DEFAULT; REMEDIES UPON DEFAULT; ETC.
(a) In addition to and not in derogation of the right of
Lender (or either of them) to demand payment of all Obligations payable on
demand, if Borrower shall fail to pay, when due, any of the Obligations or shall
fail to observe or perform any of the provisions of this Agreement or any other
agreement now or hereafter entered into between Lender and Borrower, or if
Netzler & Dahlgren terminates that certain Inventory Buy-Back Agreement dated as
of February 28, 1997 or Nordbanken terminates the $450,000.00 letter of credit
dated February 27, 1997 issued in favor of Lender, Borrower shall be in default
hereunder. In the event of such default or if the Lender (or either of them)
shall deem itself insecure, all Obligations of Borrower to Lender shall become
immediately due and payable at the option of Lender without notice to Borrower,
and Lender may proceed to enforce payment of the same and to exercise any and
all of the rights and remedies afforded to Lender by the Uniform Commercial Code
or under the terms of this Agreement or otherwise.
(b) If Lender takes possession of the Collateral without prior
notice of Borrower, Lender will within five days deliver notice to Borrower
personally, or send to Borrower by certified mail to Borrower's last known
address notice of such taking of possession as may be required by law. Lender
will allow Borrower access to any books and records of Borrower in possession of
Lender for the purpose of making copies. Not less than ten days prior to any
sale or other intended disposition of the Collateral, Lender will deliver or
mail to Borrower notice of the time and place of any public sale or of the time
after which any private sale or other intended disposition of the Collateral or
any portion thereof, is to be made and such notice shall be deemed reasonable.
Such notices may at Lender's option be combined. NCBC and/or Bank may be the
purchaser at any sale of the Collateral.
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(c) The Collateral and all proceeds and products thereof shall
be security for all Obligations. Until all Obligations have been fully
satisfied, Lender's security interest in the Collateral and all proceeds and
products thereof shall continue in full force and effect and Lender will at all
times have the right to take physical possession of the Collateral and to
maintain such possession on Borrower's premises or to remove the Collateral or
any part thereof to such other places as Lender may desire. If Lender exercises
Lender's right to take possession of the Collateral, Borrower shall, upon
Lender's demand, assemble the Collateral and make it available to Lender at a
place reasonably convenient to Lender.
(d) Borrower shall perform any and all steps requested by
Lender to perfect Lender's security interest in the Collateral, such as leasing
warehouses to Lender or its designee, placing and maintaining signs, appointing
custodians, executing and filing financing or continuation statements in form
and substance satisfactory to Lender. If any Collateral is in the possession or
control of any of Borrower's agents or processors, Borrower shall notify such
agents or processors of Lender's interest therein, and upon request instruct
them to hold all such Collateral for Lender's account and subject to Lender's
instructions. A physical listing of all Collateral, wherever located, shall be
taken by Borrower at least every month and whenever requested by Lender, and a
copy of each such physical listing shall be supplied to Lender. Lender may
examine and inspect the Collateral at any time.
(e) If in the event of the sale of the Collateral the proceeds
thereof are insufficient to pay all amounts to which Lender is legally entitled,
Borrower will be liable for the deficiency, together with interest thereon and
the reasonable fees of any attorney employed by Lender to collect such
deficiency.
(f) This Agreement shall not be construed to be in limitation
of or in substitution for any other grant of security interest from Borrower to
Lender made prior to, subsequent to or contemporaneously herewith, and no such
other grant of a security interest shall be construed to be in limitation of or
in substitution of this Agreement unless expressly and specifically provided
therein.
(g) At the option of the Lender, Borrower will furnish to
Lender, from time to time, within five (5) days after the accrual in accordance
with applicable law of Borrower's obligation to make deposits for FICA and
withholding taxes, proof satisfactory to Lender that such deposits have been
made as required.
Should Borrower fail to make any of such deposits or furnish
such proof then Lender may, in its sole and absolute discretion, (a) make any of
such deposits or any part thereof, (b) pay such taxes, or any part thereof, or
(c) set-up such reserves as Lender, in its judgment, shall deem necessary to
satisfy the liability for such taxes. Each amount so deposited or paid shall
constitute an advance under the terms hereof, repayable on demand with interest,
as provided herein, and secured by all Collateral at any time pledged by
Borrower with Lender. Nothing herein shall be deemed to obligate Lender to make
any such deposit or payment or set-up such reserve and the making of one or more
of such deposits or payments or the setting-up of such reserve shall not
constitute (i) an agreement on Lender's part to take any further or similar
action, or (ii) a waiver of any default by Borrower under the terms hereof.
(h) All advances by Lender to Borrower under this Agreement
and under any other agreement constitute one general revolving fluctuating loan,
and all indebtedness of Borrower to Lender under this and under any other
agreement shall constitute one general Obligation. Each advance to Borrower
hereunder or otherwise shall be made upon the security of all of the Collateral
held and to be held by Lender. It is distinctly understood and agreed that all
of the rights of Lender contained in this Agreement shall likewise apply,
insofar as applicable, to any modification of or supplement to this Agreement
and to any other agreements between Lender and Borrower. Any default of this
Agreement by Borrower shall constitute, likewise, a default by Borrower under
any other agreement with Lender, and any default by Borrower of any other
agreement with Lender shall constitute a default under this Agreement. The
entire Obligations of Borrower to Lender shall become due and payable when
payments become due and payable hereunder, or otherwise upon default by
Borrower, or upon demand by notice or otherwise.
(i) Borrower hereby grants to Lender for a term to commence on
the date of this Agreement and continuing thereafter until all debts and
Obligations of any kind or character owing from Borrower to Lender are fully
paid and discharged, the right to use of all premises or places of business
which Borrower presently has or may hereafter have and where any of said
Collateral may be located, at a total rental for the entire period of $1.00.
Lender agrees not to exercise the rights granted in this paragraph unless and
until Lender determines to exercise its rights against the Collateral herein
described.
10. PROCESSING AND SALES OF INVENTORY. So long as Borrower is not in
default hereunder, Borrower shall have the right, in the regular course of
business, to process and sell Borrower's Inventory. A sale in the ordinary
course of business shall not include a transfer in total or partial satisfaction
of a debt.
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11. OBLIGATIONS CONTINUING. The obligations of Borrower under this
Agreement shall commence with the date hereof and continue in full force and
effect and be binding upon the Borrower until all Obligations of Borrower to
Lender shall have been fully paid and satisfied, and until so paid and
satisfied, Borrower shall continue to make all reports required hereby and to
remit all collections to Lender, as herein provided, and Lender shall be
entitled to retain its security interest in all existing and future accounts,
inventory and other Collateral.
12. INDEMNITY. Borrower hereby agrees to indemnify Lender and hold
Lender harmless from and against any liability, loss, damage, suit, action or
proceeding ever suffered or incurred by Lender as the result of Borrower's
failure to observe, perform or discharge Borrower's duties hereunder. Without
limiting the generality of the foregoing, this indemnity shall extend to any
claims asserted against Lender by any person under any environmental laws or
similar laws by reason of Borrower's or any other person's failure to comply
with laws applicable to solid or hazardous waste materials or other toxic
substances. Notwithstanding any contrary provision of this Agreement, the
obligation of Borrower under this Section 12 shall survive the payment in full
of the Obligations and the termination of this Agreement.
13. OTHER PROVISIONS.
(a) No delay or omission on the part of Lender in exercising
any rights shall operate as a waiver of such right or any other right. Waiver on
any one occasion shall not be construed as a bar to or waiver of any right or
remedy on any future occasion. All Lender's rights and remedies, whether
evidenced hereby or by any other agreement, instrument or paper, shall be
cumulative and may be exercised consecutively or concurrently. This Agreement
may not be amended or modified, except by an instrument or modification executed
by Lender.
(b) Lender is authorized to make loans under the terms of this
Agreement to Borrower upon the request, either written or oral, of any of the
following named persons, or persons, from time to time, holding the following
offices of Borrower:
Ralph Dollander - President/CEO
Claude Imbleau - Vice President of Finance/CFO
(c) Borrower agrees that any and all loans made by Lender to
Borrower or for its account under this Agreement shall be conclusively deemed to
have been authorized by Borrower and to have been made pursuant to duly
authorized requests therefor on its behalf.
(d) Additional Provisions. Borrower furthermore agrees to the
following additional provisions:
See Addendum attached hereto and incorporated herein by
reference.
(e) BORROWER WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR OTHER ACTION
OF LENDER.
(f) It is the intention of the Lender and the Borrower to
comply strictly with all applicable usury laws; and, accordingly, in no event
and upon no contingency shall the holder hereof ever be entitled to receive,
collect, or apply as interest any interest, fees, charges or other payments
equivalent to interest, in excess of the maximum rate which the Lender may
lawfully charge under applicable statutes and laws from time to time in effect;
and, in the event that the holder hereof ever receives, collects, or applies as
interest, any such excess, such amount which, but for this provision, would be
excessive interest, shall be applied to the reduction of the principal amount of
the indebtedness evidenced hereby; and, if the principal amount of the
indebtedness evidenced hereby, and all lawful interest thereon, is paid in full,
any remaining excess shall forthwith be paid to the Borrower, or other party
lawfully entitled thereto. All interest paid or agreed to be paid by the
Borrower shall, to the maximum extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal, so that the interest hereon for such full period shall not
exceed the maximum amount permitted by applicable law. Any provision hereof, or
of any other agreement between the Lender and the Borrower, that operates to
bind, obligate or compel the Borrower to pay interest in excess of such maximum
lawful contract rate shall be construed to require the payment or the maximum
rate only. The provisions of this paragraph shall be given precedence over any
other provision contained herein or in any other agreement between the Lender
and the Borrower that is in conflict with the provisions of this paragraph.
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(g) Borrower acknowledges that the primary reason for naming
NCBC individually and as Agent for the Bank, as secured party, rather than
naming NCBC alone as Lender, is, inter alia, to assure that the liabilities and
obligations of Borrower with respect to letters of credit issued by the Bank
and/or banker's acceptances and/or any financial accommodation extended to or
created by the Bank for the benefit of Borrower are fully secured by the
security interests granted and created hereby. It is expressly understood and
agreed that all actions taken by NCBC and all instruments and documents executed
by NCBC (whether pursuant to the provisions of this Agreement or otherwise)
shall be conclusively deemed to have been taken or executed (as the case may be)
by NCBC either solely on its own behalf, or solely as Agent on the behalf of the
Bank, or on its own behalf and as Agent for the Bank, as the circumstances may
require, NCBC being duly authorized to act as Agent for the Bank when and as
appropriate.
(h) The Borrower acknowledges that NCBC has an absolute
obligation to reimburse the Bank and hold it harmless from and against any and
all payments made upon drafts drawn under letters of credit issued by the Bank
at the request of the Borrower and with respect to payments made upon banker's
acceptance issued for the benefit of the Borrower. Borrower agrees that any and
all payments made by NCBC to the Bank in respect of NCBC's reimbursement
obligation to the Bank shall be (i) conclusively deemed to constitute loan
advances from NCBC to the Borrower with respect to the Borrower's loan, and (ii)
automatically added to the unpaid principal of the Secured Note.
(i) All notices and other communications which are required to
be in writing, shall be mailed, certified mail, return receipt requested, sent
by recognized national overnight courier service, telecopied by facsimile
machine, or delivered, if to the Borrower to the Borrower at the address
reflected below; or Lender, to it at One Commerce Square, Suite 2275, Memphis,
Tennessee, 38103, Attention: Manager (Telecopy No.: (901) 525-3876); or as to
any such person at such other address as shall be designated by such person in a
written notice to the other parties hereto complying as to delivery with the
terms of this Section 13(i). All such notices and other communications shall be
effective (i) if mailed, when received or three (3) business days after mailing,
whichever is earlier; or (ii) if sent by overnight courier service, on the first
business day after sending, or (iii) if telecopied, upon confirmation of correct
sending on a business day, and (iv) if delivered, upon delivery.
(j) (i) The specific Termination Date mentioned above may, in
the sole and unrestricted discretion of the Lender, by written notice to the
Borrower, be extended one or more times to a subsequent date or dates unless,
not later than sixty (60) days prior to the specific Termination Date, or , in
the event of the extensions of such Termination Date, not later than sixty (60)
days prior to any such then effective extended Termination Date, the Borrower
shall notify the Lender in writing that this Agreement shall not be further
extended. The Lender shall be under no obligation whatsoever to extend the
initial Termination Date, or to further extend any subsequent Termination Date
to which the Lender has previously agreed in writing, any extensions of the
initial or any subsequent Termination Date being in the sole and unrestricted
judgment and discretion of the Lender. FURTHER, BORROWER ACKNOWLEDGES THAT THE
OBLIGATIONS OF BORROWER ARE SUBJECT TO REPAYMENT UPON DEMAND OF LENDER AT ANY
TIME, AND THAT THE RIGHT TO MAKE DEMAND FOR IMMEDIATE REPAYMENT REPRESENTS A
BARGAINED FOR CONSIDERATION TO LENDER WHICH BORROWER ACCEPTS AS A CONDITION FOR
LENDER'S AGREEMENTS HEREIN; and (ii) upon the specific Termination Date, or in
the event of the extension of this Agreement to a subsequent Termination Date
(when no effective extension is in force), the loan and all other extensions of
credit (unless sooner declared to be due and payable by the Lender pursuant to
the provisions hereof) shall become due and payable for all purposes. Until all
such indebtednesses, liabilities and obligations secured by this Agreement and
other security agreements of Borrower are satisfied in full, such termination
shall not affect the security interest granted to Lender pursuant to this
Agreement, nor the liens, assignments, and security interest pursuant to this
Agreement, nor the liens, assignments, and security interest granted and created
by other security agreements of Borrower, nor the duties, covenants and
obligations of Borrower therein and in this Agreement; and all of such liens,
assignments, security interest, duties, covenants and obligations shall remain
in full force and effect until all of the loans and all other indebtednesses,
liabilities and obligations of the Borrower to the Lender shall have been fully
paid and satisfied in all respects.
(k) In no event shall the Lender's rights hereunder be deemed
to indicate that, the Lender is in control of the business, management or
properties of the Borrower or has power over the daily management functions and
operating decisions made by the Borrower, all such rights and powers being
hereby expressly reserved to the Borrower.
(l) Time is of the essence of the Borrower's obligations under
this Agreement, the Secured Note, and the other instruments and documents
executed and delivered in connection herewith.
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<PAGE>
(m) Should any one or more of the provisions of this Agreement
be determined to be illegal or unenforceable, all other provisions,
nevertheless, shall remain effective and binding on the parties hereto. In the
event of any conflict between the provisions hereof and the provisions of any
other loan agreement or document between Borrower, Guarantor and Lender, during
the continuance of this Agreement, the provisions of this Agreement shall
control.
(n) This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
(o) This Agreement shall take effect as a sealed instrument
upon its acceptance and execution by NCBC and Bank in New York, New York, and
shall be governed by and construed in accordance with the internal statutes and
laws of the State of New York, without regard to principles of conflicts of law,
except as required by mandatory provisions of law, and except to the extent that
the validity or perfection of the security interests granted and created hereby,
or remedies hereunder with respect to any particular Collateral, are governed by
the laws of a jurisdiction other than the State of New York.
(p) Borrower hereby irrevocably and unconditionally submits to
the non-exclusive jurisdiction of all State and Federal courts sitting in New
York County, New York and agrees that all summons and other court process issued
by said courts may be served upon Borrower, within or outside said courts'
territorial jurisdiction, by mailing the same, by registered or certified mail,
or by personal service, to Borrower at its address specified herein: provided
that nothing contained herein shall limit Lender's right to sue Borrower in any
other court having jurisdiction over Borrower or its assets and to serve summons
or other court process upon Borrower in any manner permitted by applicable law.
(q) This Agreement shall be binding upon Borrower and its
successors, assigns, heirs and legal representatives and shall inure to the
benefit of Lender and its successors and assigns.
(r) All personal pronouns used in this Agreement whether used
in the masculine, feminine, or neuter gender, shall include all other genders;
the singular shall include the plural, and vice versa. Section headings are for
convenience only and neither limit nor amplify the provisions of this Agreement.
(s) DEBTOR ACKNOWLEDGES THAT THIS AGREEMENT IS SUBJECT TO
ACCEPTANCE BY LENDER AT ITS OFFICES IN NEW YORK, NEW YORK AND THAT UNTIL SO
ACCEPTED THE PROVISIONS HEREOF SHALL NOT BE BINDING UPON LENDER.
NDC AUTOMATION, INC.
ATTEST:
By: __/s/ Ralph Dollander__ By: _/s/ Claude Imbleau_____
Name: _Ralph Dollander_______ Name: __Claude Imbleau________
Title: __President & CEO______ Title: __VP Finance & Adm______
Borrower's Address:
3101 Latrobe Drive
Charlotte, North Carolina 28211-4849
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<PAGE>
Accepted in New York, New York, this 28th day of February, 1997.
NATIONAL BANK OF CANADA
By: ___/s/ Gaetan R. Frosina____
Name: __Gaetan R. Frosina_________
Title: __Vice President____________
NATIONAL CANADA BUSINESS CORP.
By: __/s/ J. Michael Smith______
Name: _J. Michael Smith___________
Title: __Vice President____________
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<PAGE>
ADDENDUM
13(D) ADDITIONAL PROVISIONS:
In additions to other terms and conditions contained herein, the following will
apply:
1) In addition to the specifications detailed in items (a) through (h) of
Paragraph 4 (DEFINITION OF QUALIFIED ACCOUNT; ELIGIBLE INVENTORY), a Qualified
Account will be further specified as being one in which not more than fifty
percent (50%) of the total amount due from the account debtor is aged older than
ninety (90) days old from invoice date. Should more than fifty percent (50%) of
the total amount due from an account debtor be aged over ninety (90) days old
from invoice date, then the entire balance due from that account debtor will be
deemed to be ineligible.
2) "Eligible Inventory" shall mean Borrower's raw materials and finished goods,
(a) in which Lender has a valid, perfected first security interest and (b)
which, in the reasonable judgment of Lender at the time an extension of credit
is requested based upon such Inventory and at all times thereafter while an
extension of credit remains outstanding, is in good, undamaged condition and is
not obsolete or otherwise unmarketable in the ordinary course of business as a
result of age, type, category, quality and/or quantity. Borrower will report
changes in the finished products and raw materials balances on a weekly basis,
with all such changes being supported by appropriate documentation.
3) Borrower will immediately notify its account debtors to mail all checks,
drafts, cash and other remittances in payment of any inventory sold or in
payment or on account of Borrower's accounts, contract rights, notes, bills,
drafts, acceptances, general intangibles, choices in action and all other forms
of obligations to Borrower at First-Citizens Bank & Trust Company.
4) In consideration for providing the credit facility described herein, an
Annual Facility Fee calculated as one percent (1%) of the line of credit amount
will be due and payable at closing and annually, thereafter; provided, however,
the Annual Facility Fee will be reduced to one-half of one percent (0.50%) of
the line of credit amount for all years in which the audited year-end results of
the prior year reports profitable operations. To offset a portion of the
administrative cost associated with this loan, a monthly Servicing Fee of
$500.00 will become due on the first day of each month following execution of
these documents. To offset a portion of the costs of scheduled field
examinations, a charge calculated as $500.00 for each day required to complete
the "on premise" portion of the field examination, plus expenses, will become
due upon completion of the field examination.
5) In the event the Borrower terminates this Agreement the Borrower shall pay
Lender a fee equal to (a) two percent (2.0%) of the face amount of the Secured
Note if such termination occurs within the first year of the date of this
Agreement; and (b) one percent (1.0%) of the face amount of the Secured Note if
such termination occurs within the second or third year of the date of this
Agreement. For terminations by Borrower in accordance with the terms hereof
following the third anniversary of the date of this Agreement there shall be no
fee. The Borrower may terminate this Agreement at any time subject to any
applicable prepayment fee.
6) Upon payment in full of the Obligations Lender will return or release all
collateral securing the Obligations.
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EXHIBIT "C"
SECURED NOTE
U.S. $1,250,000.00 New York, New York
February 28, 1997
ON DEMAND, AND IF NO DEMAND MADE, ON OR BEFORE April 1, 1998
("Termination Date"), for value received, the undersigned, which term wherever
used herein shall mean all and each of the signers of this note, promises to pay
to the order of NATIONAL BANK OF CANADA ("Bank"), a commercial banking
institution organized and existing under the laws of Canada with a United States
branch office located in New York, New York, and NATIONAL CANADA BUSINESS CORP.
("NCBC"), a Delaware corporation having its principal place of business in New
York, New York (the Bank and NCBC being herein collectively called the
"Lenders"), or order, the principal sum of One Million Two Hundred Fifty
Thousand Dollars (U.S. $1,250,000.00), with interest from the date hereof upon
disbursed and unpaid principal balances from time to time outstanding at a rate
per annum which shall, from day to day, be equal to one and one-half of one
percent (1.50%) per annum for the first $450,000.00 outstanding under this Note
and two and three-quarters of one percent (2.75%) per annum for amounts
outstanding under this Note in excess of $450,000.00, plus the rate for
commercial loans announced from time to time in the United States as its prime
rate ("Prime Rate") by Bank, each change in the rate to be charged hereon to
become effective, without notice to the undersigned, on the effective date of
each change in the Prime Rate, such interest to be computed based on a 360 day
year and payable months in arrears on the 1st day of each month, commencing on
the 1st day of March, 1997. The Prime Rate is a reference rate and is not
necessarily the lowest rate charged by NCBC or Bank for extensions of credit.
The Bank's Prime Rate, as of the date hereof, is eight and one-quarter of one
percent (8.25%) per annum.
This Note is secured by a certain Inventory And Accounts Receivable
Loan And Security Agreement dated February 28, 1997 (the "Loan Agreement"), and
may now or hereafter be secured by other mortgages, trust deeds, assignments,
security agreements, or other instruments of pledge or hypothecation.
The Termination Date may be extended pursuant to the provisions of the
Loan Agreement; and if so extended, such extended date shall thereupon
constitute the Termination Date.
This Note is payable at the offices of NCBC, at 125 West 55th Street,
23rd Floor, New York, New York 10019, or at such other place as the holder may
designate in writing, in lawful money of the United States of America, which
shall be legal tender in payment of all debts and dues, public and private, at
the time of payment.
Upon demand of Lenders (or either of them), or if no demand, upon the
Termination Date, or at the option of the Lenders (or either of them), (a) if
the undersigned shall fail to make payment of any installment of interest, as
above provided, or (b) upon any default in the terms and provisions of any of
the Loan Agreement, or any security agreement, trust deed, mortgage, or other
instrument of pledge or hypothecation which now or hereafter secures the payment
of the indebtedness evidenced hereby, or (c) upon default in the prompt payment
when due (whether by reason of demand, acceleration, maturity or otherwise) of
any other indebtednesses, liabilities, or obligations of the undersigned to the
Lenders, whether now existing or hereafter created or arising (or if there is
any cure period applicable thereto, upon the lapse of such cure period), the
entire unpaid balance of the indebtedness hereby evidenced, together with all
interest then accrued, shall at once become due and payable for all purposes.
If this Note is placed in the hands of an attorney for collection, by
suit or otherwise, or to protect the security for its payment, or to enforce its
collection, the undersigned will pay all costs of collection and litigation,
together with a reasonable attorney's fee.
The proceeds of the loan represented by this note may be paid to any
one or more of the undersigned.
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No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right of such
holder, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Every
one of the undersigned and every endorser or guarantor of this note regardless
of the time, order or place of signing waives presentment, demand, protest and
notices of every kind (including notice of dishonor) and agrees that this Note
may be extended, in whole or in part, without limit as to the number of such
extensions or the period or periods thereof, and without notice to them and
without affecting their liability hereon and each such party assents to any
other indulgences, to any substitutions, exchanges or releases of collateral,
and to the additions or releases of any other parties or persons primarily or
secondarily liable for the payment of the indebtedness hereby evidenced.
All rights and obligations hereunder shall be governed and construed
according to the internal statutes and laws of the State of New York (without
regard to principles of conflicts of law), in which state it is delivered,
accepted and is payable.
THE UNDERSIGNED HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ALL STATE AND FEDERAL COURTS SITTING IN NEW YORK
COUNTY, NEW YORK AND AGREES THAT ALL SUMMONS AND OTHER COURT PROCESS ISSUED BY
SAID COURTS MAY BE SERVED UPON THE UNDERSIGNED, WITHIN OR OUTSIDE SAID COURTS'
TERRITORIAL JURISDICTION, BY MAILING THE SAME, BY REGISTERED OR CERTIFIED MAIL,
OR BY PERSONAL SERVICE, TO THE UNDERSIGNED AT ITS ADDRESS SPECIFIED IN THE LOAN
AGREEMENT; PROVIDED THAT NOTHING CONTAINED HEREIN SHALL LIMIT LENDER(S) RIGHT TO
SUE THE UNDERSIGNED IN ANY OTHER COURT HAVING JURISDICTION OVER THE UNDERSIGNED
OR ITS ASSETS AND TO SERVE SUMMONS OR OTHER COURT PROCESS UPON THE UNDERSIGNED
IN ANY MANNER PERMITTED BY APPLICABLE LAWS.
It is the intention of the Lenders and the undersigned to comply
strictly with all applicable usury laws; and, accordingly, in no event and upon
no contingency shall the holder hereof ever be entitled to receive, collect, or
apply as interest any interest, fees, charges or other payments equivalent to
interest, in excess of the maximum rate which the Lender may lawfully charge
under applicable statutes and laws from time to time in effect; and, in the
event that the holder hereof ever receives, collects, or applies as interest,
any such excess, such amount which, but for this provision, would be excessive
interest, shall be applied to the reduction of the principal amount of the
indebtedness evidenced hereby; and, if the principal amount of the indebtedness
evidenced hereby, and all lawful interest thereon, is paid in full, any
remaining excess shall forthwith be paid to the undersigned, or other party
lawfully entitled thereto. All interest paid or agreed to be paid by the
undersigned shall, to the maximum extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal, so that the interest hereon for such full
period shall not exceed the maximum amount permitted by applicable law. Any
provision hereof, or of any other agreement between the Lenders and the
undersigned, that operates to bind, obligate or compel the undersigned to pay
interest in excess of such maximum lawful contract rate shall be construed to
require the payment of the maximum rate only. The provisions of this paragraph
shall be given precedence over any other provision contained herein or in any
other agreement between the Lenders and the undersigned that is in conflict with
the provisions of this paragraph.
This Note is effective only upon delivery to and acceptance by the
Lenders in New York, New York. The undersigned hereby waives notice of
acceptance of this Note.
This Note shall be binding upon each of the undersigned and upon each
undersigneds' successors, assigns, heirs and legal representatives and shall
inure to the benefit of Lenders and their successors and assigns.
BORROWER:
NDC AUTOMATION, INC.
ATTEST:
By: _/s/ Ralph Dollander______ By: ___/s/ Claude Imbleau________
___Ralph Dollander__________________ ___Claude Imbleau____________________
(Print or type name) (Print or type name)
Title: ___President & CEO__________ Title: __VP Finance & Administration_
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EXHIBIT "D"
INVENTORY REPURCHASE AGREEMENT
THIS INVENTORY REPURCHASE AGREEMENT, dated as of February 28, 1997 (the
"Agreement") is among NETZLER & DAHLGREN CO. AB, a Swedish corporation (the
"Seller"), NDC AUTOMATION, INC., a Delaware corporation (the "Borrower"),
NATIONAL BANK OF CANADA, a Canadian chartered bank ("NBC") and NATIONAL CANADA
BUSINESS CORP., a Delaware corporation ("NCBC" - hereinafter NBC and NCBC may be
referred to collectively as the "Lenders").
RECITALS:
A. The Lenders have agreed to extend a line of credit to the Borrower
in the amount of $1,250,000.00 (the "Loan") pursuant to the terms of an
Inventory and Accounts Receivable Loan and Security Agreement dated as of the
date hereof (the "Loan and Security Agreement").
B. As collateral for the Loan the Borrower has agreed to grant to the
Lenders a security interest in all raw materials and finished goods inventory of
Borrower.
C. As a condition to making the Loan to the Borrower the Lenders have
required that the Seller enter into this Agreement regarding the repurchase by
Seller of inventory sold to Borrower by Seller (the "Seller Inventory").
D. The Seller is a shareholder of the Borrower.
AGREEMENT:
In consideration of the foregoing premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Lenders' Right to Put Inventory. Lenders shall have the right upon a
default by Borrower under the Loan and Security Agreement or upon demand for
payment by the Lenders under the Loan and Security Agreement and upon the terms
and conditions hereinafter set forth, to require the Borrower to convey to the
Seller and the Seller to repurchase from the Borrower the Seller Inventory at
the Repurchase Price hereinafter referred to.
2. Repurchase Price. The repurchase price (the "Repurchase Price") for
the Seller Inventory shall be seventy percent (70%) of the U.S. Dollar value of
the Seller Inventory per Borrower's inventory valuation listing provided to
NCBC. In no event shall Seller be obligated to repurchase Seller Inventory for
an amount exceeding $400,000.00.
3. Exercise of Rights. The Lenders agree that they shall not exercise
their rights under this Agreement until such time as the Lenders have made a
good faith effort to initiate communication with the Borrower and the Seller to
determine the best way to satisfy the obligations of the Borrower to the Lenders
given the Borrower's financial condition, the
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outstanding balance of the Loan and the status, nature and value of the
collateral securing the Loan. The parties agree that if they fail to reach an
agreement on how to proceed then the Lenders have the right to exercise their
rights hereunder to cause the transfer of the Seller Inventory by the Borrower
to the Seller by giving written notice to the Borrower and the Seller of such
exercise.
4. Closing; Payment of Repurchase Price. The transfer of the Seller
Inventory pursuant to the terms of this Agreement shall take place on the thirty
(30) days following delivery of the notice referred to in paragraph 3 at such
place as the Borrower and the Seller may agree or on any earlier date the
parties may agree to. At the closing the Seller shall pay the Repurchase Price
to Lenders, as holders of a security interest in the Seller Inventory, by
immediately available funds (in United States dollars). The Lenders shall apply
the Repurchase Price to the balance outstanding under the Loan. At the closing,
the Borrower shall delivery to the Seller possession of the Seller Inventory and
will execute any documentation required so that Seller, upon payment of the
Repurchase Price, will obtain good title to the Seller Inventory, free and clear
of all liens and encumbrances.
5. Waivers. The Seller expressly waives any right to assert against the
Lenders, as a defense, counterclaim, set-off, or cross-claim any defense (legal
or equitable) set-off, counterclaim or claim which the Seller may now or
hereafter have against the Lenders or the Borrower, but such waiver shall not
prevent the Seller from asserting against the Lenders in a separate action, any
claim, action, cause of action, or demand that the Seller may have, whether or
not arising out of this Agreement.
6. Resolution of Disputes. (a) The event of a default by any party of
its obligations hereunder, the other parties shall be entitled, in addition to
any other available remedies, to specific performance of the defaulting party's
obligations hereunder.
(b) The parties agree that at any party's election any controversy or
claim arising out of or relating to this Agreement, or to the breach or
nonperformance thereof, may be settled immediately by submitting the same to
binding arbitration in the City of Charlotte, North Carolina (or such other
place as the parties may agree) in accordance with the Commercial Arbitration
Rules then obtaining of the American Arbitration Association. Upon the request
and submission of any controversy or claim for arbitration hereunder, the
submitting party shall give the other parties not less than thirty (30) days
written notice of the request for arbitration, the nature of the controversy or
claim, and the time and place set for arbitration. The parties agree that such
notice is reasonable to enable the parties sufficient time to prepare and
present their case before the arbitration panel. Judgment on the award rendered
by the arbitration panel may be entered in any court in which any action could
have been brought or maintained pursuant to this Section, including without
limitation any court of the State of North Carolina or any federal court sitting
in North Carolina or the courts of any other jurisdiction where the parties or
their assets may be found. The expenses of arbitration shall be paid as provided
in the arbitration award.
(c) The provisions of Section 6(b) are intended to comply with the
requirements of the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (the "Convention").
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To the extent that any provision of Section 6(b) is not consistent with or fails
to conform to the requirements set out in the Convention, Section 6(b) shall be
deemed amended to conform to the requirements of the Convention.
(d) Each party hereby specifically consents and submits to the
jurisdiction and venue of the courts in North Carolina and courts of the United
States located in North Carolina for purposes of entry of a judgment or
arbitration award entered by the arbitration panel.
(e) Each party hereby irrevocably:
(i) agrees that any suit, action or other legal
proceeding against it arising out of this Agreement may be
brought in the courts of the State of North Carolina or the
courts of the United States within the State of North Carolina
or in the courts of Sweden or of any other jurisdiction where
such party or its assets may be found, as the other parties in
their sole discretion may from time to time elect;
(ii) submits to the non-exclusive jurisdiction over
its person of each such court of the State of North Carolina,
the United States and Sweden in any such suit, action or
proceedings;
(iii) appoints Charles B. Lee, Jr. with an address on
the date hereof at Parker, Poe, Adams & Bernstein L.L.P., 2500
Charlotte Plaza, Charlotte, North Carolina 28244 (the "North
Carolina Process Agent"), as true and lawful attorney-in-fact
in its name, place and stead to accept service of any and all
writs, summonses and other legal process in any such suit,
action or proceeding brought in the State of North Carolina,
agrees that such service in any suit, action or proceeding may
be made upon the North Carolina Process Agent and agrees to
take all such action as may be necessary to continue said
appointment in full force and effect or to appoint another
agent so that each party will at all times have an agent in
North Carolina for service of process for the above purposes;
(iv) without limiting any party's rights pursuant to
the immediately foregoing subparagraph (iii), consents to the
service of any and all writs, summonses and other legal
process by a party's mailing the same by registered mail,
postage prepaid, to such party at its address pursuant to
Section 8 hereof;
(v) agrees that, to the extent permitted by law,
final judgment (a certified copy of which shall be conclusive
evidence of the fact and the amount of any indebtedness of
either party to the other party) against the other party in
any such legal action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on an
unsatisfied judgment; and
(vi) waives any and all objections it might otherwise
now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any of the
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courts referred to in the immediately foregoing subsection
(ii) or to service of any writ, summons or other legal process
in accordance with any of the provisions therefor in this
Section 6(e) set forth or referred to. No party has immunity
from jurisdiction of any of the above-named legal proceedings
or courts or from any Swedish court or from any legal process
therein or has a defense of sovereign immunity.
7. Judgment Currency. This Agreement is (in part) an international
transaction in which payment of United States dollars in Charlotte, North
Carolina is of the essence, and United States dollars shall be the currency of
account in all events. The payment obligation of the Seller shall not be
discharged by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
prompt conversion to United States dollars and transfer to Charlotte, North
Carolina, under normal banking procedures does not yield the amount of United
States dollars in Charlotte, North Carolina due hereunder. In the event that any
payment by the Seller, whether pursuant to a judgment or otherwise, upon
conversion and transfer does not result in payment of such amount of United
States dollars in Charlotte, North Carolina, the Lenders shall have a separate
cause of action against the Seller for the additional amount necessary to yield
the amount due and owing to the Lenders.
8. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party at the address set forth below or such other address as such party
shall specify to the other parties in writing, or if sent prepaid by certified
or registered mail on the third day after the day on which mailed, addressed to
such party at such address:
(a) if to the Seller:
Netzler & Dahlgren Co. AB
____________________________
____________________________
____________________________
(b) if to the Borrower:
NDC Automation, Inc.
3101 Latrobe Drive
Charlotte, North Carolina 28211-4849
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(c) if to the Lenders:
National Canada Business Corp.
One Commerce Square, Suite 2275
Memphis, Tennessee 38103
Attn: Manager
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first set forth herein.
NETZLER & DAHLGREN CO. AG
By: __/s/ Goran Netzler____________
Title: ___CEO______________________
NDC AUTOMATION, INC.
By: __/s/ Claude Imbleau___________
Title: __VP Finance & Adminstration
NATIONAL BANK OF CANADA
By: ____/s/ Signature on file______
Title: ______VP____________________
NATIONAL CANADA BUSINESS CORP.
By: ___/s/ Signature on file_______
Title: __VP________________________
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EXHIBIT "E"
SWIFT MT 700
FROM: NORDBANKEN
GOTEBORG
TO: BNDCUS33
NATIONAL BANK OF CANADA
NEW YORK BRANCH
27: SEQUENCE OF TOTAL
1/1
40A: FORM OF DOCUMENTARY CREDIT
IRREVOCABLE TRANSFERABLE
20: DOCUMENTARY CREDIT NUMBER
_____________________
31C: DATE OF ISSUE
FEBRUARY 27, 1997 TO BE EFFECTIVE AT CLOSING OF THE "INVENTORY
AND ACCOUNTS RECEIVABLE LOAN AND SECURITY AGREEMENT" BETWEEN
NATIONAL CANADA BUSINESS CORP. AND NDC AUTOMATION, INC.
31D: DATE AND PLACE OF EXPIRY
MAY 01, 1998 AT THE COUNTERS OF
BNDCUS33
NATIONAL BANK OF CANADA
NEW YORK BRANCH
50: APPLICANT
NDC NETZLER & DAHLGREN CO. AB
429 80 SARO, SWEDEN
59: BENEFICIARY
NATIONAL CANADA BUSINESS CORP., MEMPHIS, TN.
C/O NATIONAL BANK OF CANADA
125 WEST 55TH STREET
NEW YORK, NY 10019
ATTN: L/C DEPT.
32B: CURRENCY CODE, AMOUNT
USD $450,000.00
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41D: AVAILABLE WITH
BNDCUS33
NATIONAL BANK OF CANADA\
NEW YORK BRANCH
42C: DRAFTS AT
SIGHT
42A: DRAWEE
BNDCUS33
NATIONAL BANK OF CANADA
NEW YORK BRANCH
46A: DOCUMENTS REQUIRED
BENEFICIARY'S DATED AND SIGNED CERTIFICATE STATING THAT NDC
AUTOMATION, INC., 3101 LATROBE DRIVE, CHARLOTTE, NC 28211 IS
IN DEFAULT OF, AND THAT THE AMOUNT DRAWN REPRESENTS OUTSTANDING
INDEBTEDNESS AND/OR LIABILITIES UNDER, THAT CERTAIN LOAN AGREEMENT
("INVENTORY AND ACCOUNTS RECEIVABLE LOAN AND SECURITY AGREEMENT")
DATED FEBRUARY 27, 1997 BETWEEN NATIONAL CANADA BUSINESS CORP.
AND NDC AUTOMATION, INC.
47A: ADDITIONAL CONDITIONS
PARTIAL DRAWINGS ARE ALLOWED
71B: CHARGES
ALL BANK CHARGES ARE FOR ACCOUNT OF APPLICANT
49: CONFIRMATION INSTRUCTIONS
DO NOT CONFIRM
53: REIMBURSEMENT BANK
NEW YORK CORRESPONDENT OF NORDBANKEN
78: INSTRUCTIONS TO THE PAYING/ACCEPTING/NEGOTIATING
BANK UPON RECEIPT OF DOCUMENTS DRAWN AND PRESENTED
IN COMPLIANCE WITH THE TERMS HEREIN YOU MAY CLAIM
REIMBURSEMENT TELEGRAPHICALLY.
72: BANK-TO-BANK INFORMATION
THIS LETTER OF CREDIT IS SUBJECT TO UCP, ICC
PUBLICATION NO. 500
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