BUSINESS LOAN AGREEMENT Borrower: Proginet Corporation
Exhibit
10.19
Borrower:
Proginet
Corporation
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Reference
Number: 20NY0479113-2
Lender:
JPMorgan
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This
agreement is made as of the date set forth below between JPMorgan
Chase Bank, NA, its successors and assigns ("Lender"), and Proginet Corporation
(jointly and severally, the "Borrower").
SCOPE
OF THIS AGREEMENT. This
agreement governs the Indebtedness, which is used in its broadest sense to
include any and all extensions of credit from the Lender to the Borrower,
unless
otherwise agreed to in writing by the Lender and the Borrower, or prohibited
by
applicable law, whether now existing or hereafter arising, including but
not
limited to those extended contemporaneously with this agreement. Provided
however, any such Indebtedness which is evidenced by a promissory note payable
to Lender and subject of a United States Small Business Administration guaranty,
is a construction loan governed by a construction loan agreement, or is related
to a bond transaction shall be governed by such agreements to the extent
there
is any conflict between the terms thereof and this agreement.
Borrower
agrees the term "Indebtedness" means and includes any and all liabilities,
obligations and debts, plus interest thereon, of Borrower, or any one of
them,
to Lender, now existing or hereinafter incurred or created, whether any such
Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined; whether
Borrower may be liable individually or jointly with others, or primarily
or
secondarily, or as guarantor or surety; whether recovery on the Indebtedness
may
be or may become barred or unenforceable against Borrower for any reason
whatsoever; and whether the Indebtedness arises from transactions which may
be
voidable on account of infancy, insanity, ultra ▇▇▇▇▇, or otherwise. As
examples, and not as limitation, the Indebtedness of Borrower includes: (a)
any
overdraft in any deposit account of Borrower, accruing for any reason, (b)
any
obligations, including any overdraft in any deposit account of Borrower,
related
to Automated Clearing House ("ACH") services or products, deposit account
services or products, or treasury management services or products, including
any
agreement with respect thereto; (c) any transaction (including any agreement
with respect thereto) between Borrower and the Lender or JPMorgan Chase &
Co., or any of its subsidiaries or affiliates or their successors, which
is a
rate swap, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond
option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions)
or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures (each
a
"Rate Management Transaction"); (d) any obligation related to any loan or
credit
transaction (including any agreement with respect thereto), whether evidenced
by
a promissory note, credit agreement, letter of credit application, or any
other
agreement; (e) any obligation related to commercial credit card transactions
(including an agreement with respect thereto); (f) any obligation related
to any
lease (including an agreement with respect thereto); (g) any obligation related
to any guaranty of the obligations of others by Borrower; (h) any obligation
under a Related Document; and (i) all other obligations of Borrower to Lender.
Exhibit
10.19
Borrower
further agrees that in the event Borrower now or in the future has a credit
extension or lease from Lender's affiliate Chase Equipment Leasing Inc.,
its
successors and assigns (the "Lender Affiliate"), then Borrower shall comply
with
every representation, warranty and covenant in this agreement as long as
any
obligation is owed to the Lender Affiliate, even in the event the Indebtedness
shall be paid in full, and any failure to so comply will be a default under
such
credit extension or lease from the Lender Affiliate.
CONTINUING
REPRESENTATIONS. As
of the
date of this agreement, as of the date of each advance, as of the date of
any
renewal, extension or modification, and at all times any Indebtedness exists,
the existence of such Indebtedness shall constitute a representation and
warranty by the Borrower that all of the representations and warranties set
forth in this agreement shall be true and correct and that Borrower is in
compliance with each covenant herein as though made on such date. The Borrower
understands and agrees that in extending the Credit Facilities, the Lender
is
relying on all representations, warranties, and covenants made by the Borrower
in this agreement or in any certificate or other instrument delivered by
the
Borrower to the Lender under this agreement. The Borrower further agrees
that
regardless of any investigation made by the Lender, all such representations,
warranties and covenants will survive the making of the Credit Facilities
and
delivery to the Lender of this agreement, shall be continuing in nature,
and
shall remain in full force and effect until such time as the Indebtedness
shall
be paid in full.
REPRESENTATIONS
AND WARRANTIES. Borrower
represents and warrants to, and covenants and agrees with, Lender
that:
Organization.
Borrower's
principal residence or chief executive office is at the address shown on
this
agreement; its name as it appears in this agreement, if Borrower is a natural
person, is his or her exact legal name or, if the Borrower is other than
a
natural person, is the exact name as it appears in its organizational documents,
as amended and as filed with the appropriate governmental entity (if required),
including any trust documents; if the Borrower is other than a natural person
and organizational documents are required to be filed with the appropriate
governmental entity, then such organizational documents have been filed in
the
state where its chief executive office is located unless evidence of a different
state of organization has been provided to Lender in writing; and provided
further, Borrower will not change any of the foregoing without giving Lender
prior written notice.
Authorization
and Legal Effect. The
execution and delivery of this agreement and the Notes, and the performance
of
the obligations they impose, do not violate any law, conflict with any agreement
by which Borrower is bound, or require the consent or approval of any
governmental authority or other third party; this agreement and the Notes
are
valid and binding agreements, enforceable according to their terms; the
execution and delivery of this agreement and the Notes and the performance
of
the obligations they impose, if the Borrower is other than a natural person,
(i)
are within its powers, (ii) have been duly authorized by all necessary action
of
its governing body, (iii) do not contravene the terms of its articles of
incorporation or organization, its by-laws, or any partnership, operating
or
other agreement governing its affairs, and (iv) any person executing this
agreement or the Notes individually and on behalf of the Borrower certifies
such
person is authorized to do so and such authorization is continuing , shall
remain in full force and effect, and Lender may rely on this certification
until
written notice of its revocation has been delivered to Lender.
Exhibit
10.19
AFFIRMATIVE
COVENANTS. Borrower
covenants and agrees with Lender that while this Agreement is in effect,
Borrower will:
Notices
of Claims, Litigation, Defaults, etc. Promptly
inform the Lender in writing of any of the following events, now known or
occurring at any time this agreement remains in effect: (1) all existing
and all
threatened litigation, claims, investigations, administrative proceedings
and
similar actions affecting the Borrower which could materially affect its
business, property, affairs, prospects or financial condition; provided further,
Borrower covenants that as of the date of this agreement, unless previously
disclosed and acknowledged by Lender in writing, no litigation, claim,
investigation, administrative proceeding or similar action (including those
for
unpaid taxes) against the Borrower is pending or threatened, and no other
event
has occurred which may in any one case or in the aggregate materially adversely
affect the Borrower's financial condition and properties; (2) the occurrence
of
any event which gives rise to the Lender's option to terminate any Note;
(3) the
institution of steps by the Borrower to withdraw from, the institution of
any
steps to terminate, the occurrence of any reportable event, or the occurrence
of
any prohibited transaction in connection with any employee benefit plan to
which
the Borrower may have liability; (4) any additions to or changes in the
locations of the Borrower's or any of the Borrower's or Subsidiary's businesses;
and (5) any alleged breach of any provision of this agreement or of any other
agreement related to any Indebtedness by the Lender.
Business
Operations. Maintain
its business operations including (1) maintain the current senior executive
or
management personnel of the Borrower; (2) maintain its business operations
as
presently in effect in accordance with all applicable laws and regulations;
(3)
pay its debts and obligations when due under normal terms and pay on or before
their due date, all taxes, assessments, fees and other governmental monetary
obligations, except as they may be contested in good faith if they have been
properly reflected on its books and, at the Lender's request, adequate funds
or
security has been pledged to insure payment, and Borrower represents that
at the
date of this agreement Borrower is current in all such filings and payments
have
been paid in full, except those disclosed to Lender in writing; and (4) if
Borrower is not a natural person, maintain its existence as presently in
effect
in accordance with all applicable laws and regulations.
Inspection.
Permit
the Lender, its assigns or agents, at such times and at such intervals as
the
Lender may reasonably require: (1) to inspect, examine, audit and copy the
Borrower's business records, and to discuss the Borrower's business, operations,
and financial condition with the Borrower's officers and accountants, (2)
to
inspect the Borrower's business operations and sites; and (3) to perform
audits
or other inspections of any Collateral securing any of the Indebtedness,
including records and other documents relating to that Collateral and at
the
Borrower's expense, to confirm with any person obligated on an account
receivable, contract or right to payment the accuracy of such obligation.
If a
credit facility includes a Borrowing Base, then the Borrower shall promptly
compensate the Lender for all costs and expenses associated with any such
inspection or audit (including in-house costs and expenses charged within
the
Lender for such inspection or audit) after receiving the Lender's invoice(s)
therefore.
Exhibit
10.19
Maintenance
of Financial Records. Maintain
proper books and records of account, in accordance with Generally Accepted
Accounting Principles, and/or consistent with financial statements previously
submitted to the Lender.
Financial
Statements. Furnish
to the Lender whatever information, books and records the Lender may reasonably
request, including at a minimum:
Borrower
Annual Statements. As
soon
as available, but within 120 days after and as of the end of each fiscal
year,
Borrower's detailed, consolidated, if applicable, financial statement including
a balance sheet and income statement for the year ended, audited by certified
public accountants reasonably acceptable to Lender.
Borrower
Interim Statements. As
soon
as available, but within 90 days after the end of each fiscal half year,
Borrower's balance sheet, consolidated, if applicable, as of the end of that
period and statements of income, cash flow and retained earnings from the
beginning of the fiscal year to the end of that period, compiled by certified
public accountants reasonably acceptable to Lender.
Insurance.
Maintain
insurance acceptable to the Lender with financially sound and reputable insurers
acceptable to the Lender covering its properties and business against those
casualties and contingencies and in the types and amounts as are in accordance
with sound business and industry practices; furnish to the Lender, upon request
of the Lender, reports on each existing insurance policy showing such
information as the Lender may reasonably request; and make Lender loss payee
or
additional insured on such policies, upon request of Lender.
Guaranties.
Cause
each guarantor of the Indebtedness to maintain any guaranty executed related
to
any, or all, of the Indebtedness to remain in full force and effect at all
times
the Indebtedness is owing.
Other
Agreements. Comply
with all terms and conditions of all other agreements, whether now or hereafter
existing, between the Borrower and any other party.
Title
to Assets and Property. Maintain
good and marketable title to all of the Borrower's assets and properties,
and
defend such assets and properties against all claims and demands of all persons
at any time claiming any interest in them, except to the extent liens are
other
wise permitted by this agreement.
Additional
Assurances. Promptly
make, execute and deliver any and all agreements, documents, instruments
and
other records that the Lender may request to evidence any of the Indebtedness,
cure any defect in the execution and delivery of any of the Related Documents,
perfect any lien, comply with legal requirements applicable to the Lender
or the
Indebtedness or more fully to describe particular aspects of the agreements
set
forth or intended to be set forth in any of the Related Documents.
NEGATIVE
COVENANTS. Borrower
covenants and agrees with Lender that while this Agreement is in effect,
Borrower shall not, without the prior written consent of Lender:
Liens
and Indebtedness. Create
or
permit to exist any lien on any of its property, real or personal, except:
existing liens known to the Lender, liens to the Lender, liens incurred in
the
ordinary course of business securing current non-delinquent liabilities for
taxes and similar assessments, and purchase money security interests in the
ordinary course of business; provided further, nor shall Borrower incur,
assume,
or permit to remain outstanding, liability for borrowed money, installment
obligations, or obligations under capital leases or operating leases, other
than
unsecured trade debt incurred in the ordinary course of business, Indebtedness
owing to the Lender, or liabilities outstanding as of the date hereof that
have
been disclosed to the Lender in writing which is not to be paid with proceeds
of
borrowings under the Credit Facilities. For purposes of this covenant, the
sale
of any account receivable is the incurring of liability.
Exhibit
10.19
Continuity
of Operations. (1)
Engage in any business activities substantially different from those in which
the Borrower is presently engaged; (2) cease operations, liquidate, merge,
transfer, acquire or consolidate with any other entity, change its name,
dissolve, or sell any assets out of the ordinary course of business; (3)
enter
into any arrangement with any person providing for the leasing by the Borrower
or any subsidiary of real or personal property which has been sold or
transferred by the Borrower or subsidiary to such person; or (4) change its
business organization, the jurisdiction under which its business organization
is
formed or organized, or its chief executive office, or any places of its
businesses.
Dividends.
Acquire
or retire any of its shares of capital stock, or, other than dividends in
its
capital stock, declare or pay dividends or make any other distributions upon
any
of its shares of capital stock; provided, however, that following any fiscal
year with respect to which the Borrower maintained status as an "S" corporation
under the Internal Revenue Code, if there is no existing default under this
agreement or any agreement related to the Indebtedness and to do so will
not
cause a default under any of such agreements, the Borrower may pay dividends
to
its shareholders sufficient in amount to pay their income tax obligation
attributable to the Borrower's taxable income.
Primary
Deposit Relationship. Fail
to
establish and maintain its primary deposit and disbursement relationship
with
Lender.
Use
of Loan Proceeds. Use,
or
permit any proceeds of the Indebtedness to be used, directly or indirectly,
for:
(1) any personal, family or household purpose; or (2) the purpose of "purchasing
or carrying any margin stock" within the meaning of Federal Reserve Board
Regulation U. At the Lender's request, the Borrower will furnish a completed
Federal Reserve Board Form U-1.
Transfer
of Ownership. Permit
any pledge of any ownership interest in the Borrower, or any sale or other
transfer of any ownership interest in the Borrower in excess of twenty-five
percent (25%) in the aggregate.
Conflicting
Agreements. Enter
into any agreement containing any provision which would be violated or breached
by the performance of the Borrower's obligations under this agreement or
any of
the other Related Documents.
DEFAULT.
This
agreement is executed in conjunction with one or more extensions of credit
included in the Indebtedness and evidenced by one or more Notes to which
reference is hereby made for a more complete statement of the terms and
conditions under which each is to be repaid. The terms and conditions providing
for events that constitute a default under each Note are incorporated herein
by
this reference with the same effect as if set forth at length and any breach
thereof is a default under this agreement ("Event of Default").
Exhibit
10.19
REMEDIES.
At
any
time after the occurrence of an Event of Default, the Lender may do one or
more
of the following:(a) cease permitting the Borrower to incur any Indebtedness;
(b) terminate any commitment of the Lender evidenced by any of the Notes;
(c)
declare any of the Notes to be immediately due and payable, without notice
of
acceleration, intention to accelerate, presentment and demand or protest
or
notice of any kind, all of which are hereby expressly waived; (d) exercise
all
rights of setoff that the Lender may have contractually, by law, in equity
or
otherwise; and (e) exercise any and all other rights pursuant to any of the
Related Documents, at law, in equity or otherwise. The rights of the Lender
under this agreement and the other Related Documents are in addition to other
rights the Lender may have contractually, by law, in equity or otherwise,
all of
which are cumulative and hereby retained by the Lender.
JURY
WAIVER. THE
UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE
IN
RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN
OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN ANY WAY RELATED
TO THIS
DOCUMENT, THE RELATED DOCUMENTS, OR ANY RELATIONSHIP BETWEEN OR AMONG THE
UNDERSIGNED AND LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER
TO
PROVIDE THE FINANCING EVIDENCED BY THIS DOCUMENT AND THE RELATED
DOCUMENTS.
MISCELLANEOUS
PROVISIONS.
Additional
Definitions. In
this
agreement words in singular shall include the plural. Capitalized terms not
otherwise defined in this agreement shall have their generally accepted meaning
in commercial transactions, provided the following words shall have the
following meanings: (1) "Collateral" means any real or personal property
described in any Related Document securing the Indebtedness; (2) "Note" means
all agreements, promissory notes, instruments and/or contracts evidencing
the
terms and conditions of any Indebtedness, including as example, not as
limitation, any agreement (including any deposit account agreement) related
to
deposit or treasury management products (including services for Automated
Clearinghouse transactions), a Rate Management Transaction agreement, promissory
note, credit agreement, lease agreement, letter of credit application, credit
card agreement, guaranty or any other evidence of the Indebtedness of the
Borrower, and includes any renewal, modification, refinancing, consolidation,
or
substitution of any Note; and (3) "Related Documents" means the Notes, all
loan
agreements, credit agreements, reimbursement agreements, security agreements,
mortgages, deeds of trust, pledge agreements, assignments, guaranties, and
any
other instrument or document executed in connection with this agreement or
in
connection with any of the Indebtedness and may be executed only by persons
or
entities other than the Borrower.
Governing
Law and Venue. Borrower
agrees that (i) this agreement shall be governed by and construed in accordance
with the laws of any state or states identified in any governing law provision
of the Notes, as the Lender in its sole discretion may elect; (ii) any legal
action or proceeding with respect to any of the obligations of Borrower under
this agreement may be brought in any state or federal court located in the
state
indicated in Lender's address stated herein, as the Lender in its sole
discretion may elect; and (iii) any claim that the state selected by Lender
is
not a convenient forum or the proper venue for any such suit, action or
proceeding is waived by Borrower.
Exhibit
10.19
Attorneys'
Fees; Expenses. To
the
extent not prohibited by applicable law and whether or not the transactions
contemplated by this agreement are consummated, the Borrower is liable to
the
Lender and agrees to pay on demand all reasonable costs and expenses of every
kind incurred (or charged by internal allocation) in connection with the
negotiation, preparation, execution, filing, recording, modification,
supplementing and waiver of the Related Documents, the making, servicing
and
collection of any of the Notes and the realization on any Collateral and
any
other amounts owed under the Related Documents, both before and after judgment,
including without limitation reasonable attorneys' fees (including counsel
for
the Lender that are employees of the Lender or its affiliates) and court
costs.
These costs and expenses include without limitation any costs or expenses
incurred by the Lender in any bankruptcy, reorganization, insolvency or other
similar proceeding. All amounts payable under the terms of this agreement
shall
be paid without relief from valuation and appraisement laws. The obligations
of
the Borrower under this section shall survive the termination of this
agreement.
Assignments.
The
Borrower agrees that the Lender may provide any information or knowledge
the
Lender may have about the Borrower or about any matter relating to the Notes
or
the Related Documents to JPMorgan Chase & Co., or any of its subsidiaries or
affiliates or their successors, or to any one or more purchasers or potential
purchasers of the Notes or the Related Documents. The Borrower agrees that
the
Lender may at any time sell, assign or transfer one or more interests or
participations in all or any part of its rights and obligations in the Notes
to
one or more purchasers whether or not related to the Lender.
Indemnification
of the Lender. The
Borrower agrees to indemnify, defend and hold the Lender, its parent companies,
subsidiaries, affiliates, their respective successors and assigns and each
of
their respective shareholders, directors, officers, employees and agents
(collectively, the "Indemnified Persons") harmless from any and against any
and
all loss, liability, obligation, damage, penalty, judgment, claim, deficiency,
expense, interest, penalties, attorneys' fees (including the fees and expenses
of attorneys engaged by the Indemnified Person at the Indemnified Person's
reasonable discretion) and amounts paid in settlement ("Claims") to which
any
Indemnified Person may become subject both before and after judgment, arising
out of or relating to this agreement or the Collateral, including any Claims
resulting from any Indemnified Person's own negligence, except to the limited
extent that the Claims are proximately caused by the Indemnified Person's
gross
negligence or willful misconduct. The indemnification provided for in this
paragraph shall survive the termination of this agreement and shall not be
affected by the presence, absence or amount of or the payment or nonpayment
of
any claim under, any insurance.
No
Waiver. No
delay
on the part of the Lender in the exercise of any right or remedy waives that
right or remedy. No single or partial exercise by the Lender of any right
or
remedy precludes any other future exercise of it or the exercise of any other
right or remedy. No waiver or indulgence by the Lender of any default is
effective unless it is in writing and signed by the Lender, nor shall a waiver
on one occasion bar or waive that right on any future occasion.
Amendments.
No
amendment to this agreement shall be binding on Lender unless agreed to by
Lender in writing.
Notice.
Any
notices related to this agreement shall be in writing and delivered to the
intended party at its address stated herein, delivered either: (a) by hand,
(b)
by a nationally recognized overnight courier service, or (c) by certified
mail,
postage prepaid, with return receipt requested and shall be deemed given:
(a)
upon receipt if delivered by hand, (b) on the day after deposit with a
nationally recognized courier service, or (c) on the third day after the
notice
is deposited in the mail. Any party may change its address for purposes of
the
receipt of notices by giving notice of such change in the manner provided
in
this provision or in any Note.
Exhibit
10.19
Interpretation.
If
this
agreement is inconsistent with any provision in any Related Document, the
Lender
shall determine, in the Lender's sole and absolute discretion, which of the
provisions shall control any such inconsistency. If any provision of this
agreement cannot be enforced, the remaining portions of this agreement shall
continue in effect. This agreement, the Notes, and any Related Document embody
the entire agreement and understanding between the Borrower and the Lender
and
supersede all prior agreements and understandings relating to their subject
matter. If any one or more of the obligations of the Borrower under this
agreement or the Notes is invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining obligations of
the
Borrower shall not in any way be affected or impaired, and the invalidity,
illegality or unenforceability in one jurisdiction shall not affect the
validity, legality or enforceability of the obligations of the Borrower under
this agreement or the Notes in any other jurisdiction.
Captions.
Section
headings are for convenience of reference only and do not affect the
interpretation of this agreement.
Successors
and Assigns. This
agreement is binding on and inures to the benefit of the Borrower and the
Lender
and their respective successors and assigns, except Borrower shall have no
right
to transfer or assign any of its rights or interests without the prior written
consent of the Lender.
THIS
AGREEMENT AND THE OTHER WRITTEN RELATED DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Exhibit
10.19
The
Borrower acknowledges that it has had the opportunity to read all the provisions
of this agreement and to be advised by counsel regarding the terms of this
agreement and agrees to its terms.
THIS
BUSINESS LOAN AGREEMENT IS EFFECTIVE October 4, 2006.
BORROWER:
Proginet
Corporation
By:
/s/
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Print
Title: CFO
Date:
October 4, 2006
LENDER:
JPMorgan
Chase Bank, NA
By:
/s/ ▇▇▇▇▇▇
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Authorized
Signer
Exhibit
10.19
PROMISSORY
NOTE
Borrower:
Proginet
Corporation
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Reference
Number: 20NY0479113-2
Lender:
JPMorgan
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Principal
Amount: $1,000,000.00
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Date
of Note: 10/04/2006
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PROMISE
TO PAY: Proginet Corporation ("Borrower") promises to pay to JPMorgan Chase
Bank, NA, its successors and assigns ("Lender") or order, in lawful money
of the
United States of America, the total principal amount of $1,000,000.00 or
so much
as may be outstanding, together with interest on the unpaid outstanding
principal balance from the date advanced until paid in full at the rate or
rates
referenced in this Note.
RENEWAL
NOTE: This Note is a renewal of an earlier loan or credit extension to Borrower
from Lender, or from a JPMorgan Chase & Co. affiliate which transferred the
loan to Lender, and is identified in Lender or the affiliate's internal records
as account number ACBS80344052. This Note shall not release or affect the
liability of any guarantor, surety or endorser of the loan, or release any
security interest granted by any owner of any collateral securing the loan.
This
Note shall be considered a modification only, and not a novation.
LOAN
TYPE. This Note evidences a Commercial Line of Credit.
PAYMENT
TERMS. Borrower will pay this loan in accordance with the following payment
schedule(s):
Accrued
interest and fees shall be payable monthly, beginning October 24, 2006, and
on
the same calendar day monthly thereafter, and the principal balance, together
with all accrued unpaid interest and any other unpaid amounts due under this
Note, shall be paid on September 24, 2007, the maturity date of this
Note.
Payments
and any other credits shall be allocated among principal, interest, late
charges, collection costs, fees and other charges at the discretion of Lender,
unless otherwise required by applicable law. Interest on this Note is computed
on a 365/360 basis; that is, by applying the ratio of the annual interest
rate
over a year of 360 days; multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is
outstanding.
Exhibit
10.19
INTEREST
RATE.
The
interest rate on this Note is Prime plus 0.00%. If the rate is based on the
Prime Rate, it is a fluctuating rate as further described in this
Note.
PREPAYMENT
PREMIUM. Borrower may pay without fee all or any portion of the loan evidenced
by this Note at any time. All prepayments shall be applied in such order
and
manner as Lender may from time to time determine in its sole
discretion.
LATE
CHARGE. If a payment is 10 days or more late, Borrower will be charged a
late
charge of 5.00% of the payment due or $25.00, whichever is greater, up to
the
maximum amount of $250.00 per late charge.
DEFAULT
RATE. If permitted by applicable law, upon the occurrence of any default
under
this Note, whether or not Lender elects to accelerate the maturity of this
Note,
at its option, Lender may add any unpaid interest to principal and such sum
shall bear interest therefrom until paid and may increase the interest rate
an
additional 3.00% over the interest rate then in effect.
FEE(S):
In addition to all other obligations under this Note, Borrower shall pay
the
following fees together with all other fees described in this Note:
|
Commitment
Fee Paid At Closing
|
$5,000.00
|
|
Total:
|
$5,000.00
|
SECURITY
AGREEMENT. Borrower hereby grants, pledges and assigns to Lender, as security
for repayment of the Indebtedness, a security interest in the following
property, together with any substitutions and replacements therefor, and
all
products and proceeds thereof: all business assets, inventory, equipment,
accounts, general intangibles, chattel paper, documents, instruments, and
letter
of credit rights Such property, together with any property described in any
Related Document, is referred to in this Note as the "Collateral".
LINE
OF
CREDIT CLEARANCE. Borrower shall, at least once during the term of this Note,
reduce and maintain the outstanding principal balance of this Note to a zero
balance for a period of at least thirty consecutive calendar days.
LENDER'S
DISCRETIONARY MATURITY EXTENSION. Lender, in its sole discretion, shall have
the
right, from time to time, to renew and extend the maturity date of this Note
(each a "Maturity Extension"). Borrower agrees Lender has no obligation to
extend the original or any subsequent maturity date and may elect not to
make a
Maturity Extension at any time, even if one or more Maturity Extensions has
previously been made. Lender will inform Borrower of any such Maturity Extension
by written notice, executed by an officer of Lender, addressed to Borrower
at
its then current billing address. Notwithstanding the provision of this Note
requiring that any alteration or amendment to this Note shall require the
signature of Borrower, Borrower accepts and agrees to be bound by the Maturity
Extension in the event this Note is not paid in full on the maturity date,
or
after the date of the Maturity Extension notice Borrower requests any advance
or
otherwise relies upon or utilizes the extension of credit evidenced by this
Note
for any purpose.
Exhibit
10.19
PERIODIC
FEES. Not more often than one time in each calendar year, Lender may elect
to
charge a fee in an amount determined by Lender, in its sole discretion, for
the
extension of credit evidenced by this Note. The fee may be charged, payable
in
advance, for each year, or portion of a year, that there remains any unpaid
amounts
due
on
this Note or that advances remain available under the line of credit evidenced
by this Note, including as a result of any Maturity Extension. The fee may
be
charged to the line of credit. No refund of any portion of the fee shall
be made
in the event of cancellation of the line of credit for any reason.
ADDITIONAL
LOAN TERMS. Certain definitions and other additional terms and conditions
of the
Note, are attached to this Note and are incorporated herein by reference
(the
"Additional Terms"). This Note represents the final agreement between Lender
and
Borrower and may not be contradicted by evidence of prior, contemporaneous
or
subsequent oral agreement of the parties. There are no unwritten agreements
between Lender and Borrower or Guarantors. Borrower agrees to be bound by
all
terms of this Note, including but not limited to the jury waiver provisions
(where not prohibited by applicable law). Borrower agrees that Lender may
record
or file this Note if Lender deems it necessary to protect its interest. Borrower
acknowledges receipt of the important Additional Terms which are part of
this
Note and the Security Agreement included in this Note. BORROWER AGREES THIS
SECURITY AGREEMENT SECURES ALL INDEBTEDNESS OF BORROWER AND IS NOT LIMITED
TO A
SPECIFIC LOAN. "Indebtedness" is more fully defined in the Additional Terms,
is
used in its most comprehensive sense to mean any and all obligations of every
kind and character of Borrower, or any one or more of them, to Lender, now
existing or hereinafter incurred, and includes obligations owing after payment
in full of the specific term loan or line of credit described in this
Note.
Borrower
agrees that a facsimile of the signature(s) of the signer(s) of this Note,
in
any capacity, may be used to evidence the Borrower's acceptance of the terms
of
this Note. Any use of the principal amount or any other feature of this Note
may
be used as evidence of the foregoing authorizations, acceptances and
agreements.
CONDITIONS
FOR FUNDING. IN
ADDITION TO THE OTHER REMEDIES UNDER THIS NOTE, WITHOUT THE CONSENT OF BORROWER
OR NOTICE TO ANYONE, LENDER HAS NO OBLIGATION TO MAKE THE INITIAL ADVANCE
OR ANY
ADVANCE UNDER THIS NOTE IF LENDER DETERMINES, IN ITS SOLE DISCRETION, THAT
(A)
BORROWER'S NAME ON THIS NOTE OR ANY GUARANTOR'S NAME ON THE GUARANTY IS
INCORRECT OR INCOMPLETE; (B) LENDER'S LIEN ON THE COLLATERAL WILL NOT BE
THE
FIRST LIEN, FREE AND CLEAR OF ALL OTHER LIENS, SECURITY INTERESTS OR
ENCUMBRANCES; OR (C) ANY OTHER EVENT OF DEFAULT PROVIDED FOR IN THIS NOTE
HAS
OCCURRED. ADVANCING FUNDS ON THIS LOAN DOES NOT WAIVE ANY OF LENDER'S RIGHTS
AND
REMEDIES UNDER THIS NOTE.
Proginet
Corporation
By: /s/
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Print
Title: CFO
Date:
October 4, 2006