1
EXHIBIT 10.10
BUSINESS LOAN AGREEMENT
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$500,000.00 06-01-1995 rjh
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Borrower: Credit Management Solutions, Inc. Lender: The Columbia Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
THIS BUSINESS LOAN AGREEMENT between Credit Management Solutions, Inc.
("BORROWER") AND THE COLUMBIA BANK ("LENDER") IS MADE ON THE FOLLOWING TERMS
AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS FROM LENDER OR HAS
APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER FINANCIAL
ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT OR
SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE
"LOAN" AND COLLECTIVELY AS THE "LOANS". ▇▇▇▇▇▇▇▇ UNDERSTANDS AND AGREES THAT:
(A) IN GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON
BORROWER'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS
AGREEMENT; (B) THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT
ALL TIMES SHALL BE SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C)
ALL SUCH lOANS SHALL BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND
CONDITIONS OF THIS AGREEMENT.
TERM. This Agreement shall be effective as of June 1, 1994, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Business Loan
Agreement from time to time.
BORROWER. The word "Borrower" means Credit Management Solutions, Inc. and
its successors and assigns. The word "Borrower" also includes, as
applicable, all subsidiaries and affiliates of Borrower as provided below
in the paragraph titled "Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
COLLATERAL. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for a Loan, whether real
or personal property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the form of a security
interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Security Act of 1974,
as amended.
EVENT OF DEFAULT. The words "Event of Default" mean and include any of the
Events of Default set forth below in the section titled "EVENTS OF
DEFAULT."
GRANTOR. The word "Grantor" means and includes each and all of the persons
or entities granting a Security Interest in any Collateral for the
indebtedness, and their personal representatives, successors and assigns.
GUARANTOR. The word "Guarantor" means and includes without limitation, each
and all of the guarantors, sureties, and accommodation parties in
connection with any indebtedness and their personal representatives,
successors and assigns.
INDEBTEDNESS. The word "Indebtedness" means and includes without limitation
all Loans, including all principal, interest and other fees, costs and
charges, if any, together with all other present and future liabilities and
obligations of Borrower, or any one or more of them, to Lender, whether
direct or indirect, matured or unmatured, and whether absolute or
contingent, joint, several, or joint and several, and no matter how the
same may be evidenced or shall arise.
LENDER. The word "Lender" means The Columbia Bank, its successors and
assigns.
LOAN. The word "Loan" or "Loans" means and includes any and all commercial
loans and financial accommodations from Lender to Borrower, whether now or
hereafter existing, and however evidenced, including without limitation
those loans and financial accommodations described herein or described on
any exhibit or schedule attached to this Agreement from time to time.
NOTE. The word "Note" means Borrower's promissory note or notes, if any,
evidencing Borrower's Loan obligations in favor of ▇▇▇▇▇▇, as well as any
substitute, replacement or refinancing note or notes therefor.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
guaranties, security agreements, mortgages, deeds of trust, and all other
instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
interest.
SECURITY INTEREST. The words "Security Interest" mean and include without
limitation any and all types of liens and encumbrances, whether created by
law, contract, or otherwise.
▇▇▇▇. The word "▇▇▇▇" means the Superfund Amendments and Reauthorization
Act of 1986 as now or hereafter amended.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender as
of the date of this Agreement and as of the date of each disbursement of Loan
proceeds:
ORGANIZATION. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Maryland.
Borrower has the full power and authority to own its properties and to
transact the businesses in which it is presently engaged or presently
proposes to engage. Borrower also is duly qualified as a foreign
corporation and is in good standing in all states in which the failure to
so qualify would have a material adverse effect on its businesses or
financial condition.
AUTHORIZATION. The execution, delivery, and performance of this Agreement
and all Related Documents by ▇▇▇▇▇▇▇▇, to the extent to be executed
delivered or performed by Borrower, have been duly authorized by all
necessary action by Borrower; do not require the consent or approval of any
other person, regulatory authority or governmental body; and do not
conflict with, result in a violation of, or constitute a default under (a)
any provision of its articles of incorporation or organization, or bylaws,
or any agreement or other instrument binding upon Borrower or (b) any law,
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BUSINESS LOAN AGREEMENT Page 2
(Continued)
governmental regulation, court decree, or order applicable to Borrower.
FINANCIAL INFORMATION. Each financial statement of ▇▇▇▇▇▇▇▇ supplied to
Lender truly and completely disclosed ▇▇▇▇▇▇▇▇'s financial condition as of the
date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by ▇▇▇▇▇▇▇▇ when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against Borrower
in accordance with their respective terms.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in ▇▇▇▇▇▇▇▇'s financial statements or in writing to Lender and as
accepted by ▇▇▇▇▇▇, and except for property tax liens for taxes not presently
due and payable, Borrower owns and has good title to all of Borrower's
properties free and clear of all Security Interests, and has not executed any
security documents or financing statements relating to such properties. All of
▇▇▇▇▇▇▇▇'s properties are titled in Borrower's legal name, and ▇▇▇▇▇▇▇▇ has
not used, or filed a financing statement under, any other name for at least
the last five (5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "▇▇▇▇," the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 49 U.S.C. Section 6901, et. seq., or
other applicable state or Federal laws, rules, or regulations adopted
pursuant to any of the foregoing. Except as disclosed to and acknowledged by
▇▇▇▇▇▇ in writing, ▇▇▇▇▇▇▇▇ represents and warrants that: (a) During the
period of Borrower's ownership of the properties, there has been no use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any hazardous waste or substance by any person on, under, or about
any of the properties. (b) Borrower has no knowledge of, or reason to believe
that there has been (i) any use, generation, manufacture, storage, treatment,
disposal, release, or threatened release of any hazardous waste or substance
by any prior owners or occupants of any of the properties, or (ii) any actual
or threatened litigation or claims of any kind by any person relating to such
matters. (c) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the properties shall use, generate, manufacture,
store, treat, dispose of, or release any hazardous waste or substance on,
under, or about any of the properties; and any such activity shall be
conducted in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation those laws,
regulations and ordinances described above. Borrower authorizes Lender and
its agents to enter upon the properties to make such inspections and tests as
Lender may deem appropriate to determine compliance of the properties with
this section of the Agreement. Any inspections or tests made by Lender shall
be at Borrower's expense and for Lender's purposes only and shall not be
construed to create any responsibility or liability on the part of Lender to
Borrower or to any other person. The representations and warranties contained
herein are based on Borrower's due diligence in investigating the properties
for hazardous waste. Borrower hereby (a) releases and waives any future
claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (b) agrees
to indemnify and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release occurring prior to Borrower's
ownership or interest in the properties, whether or not the same was or
should have been known to Borrower. The provisions of this section of the
Agreement, including the obligation to indemnify, shall survive the payment
of the Indebtedness and the termination or expiration of this Agreement and
shall not be affected by Lender's acquisition of any interest in any of the
properties, whether by foreclosure or otherwise.
LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may
materially adversely affect Borrower's financial condition or properties,
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by ▇▇▇▇▇▇ in writing.
TAXES. To the best of ▇▇▇▇▇▇▇▇'s knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith in
the ordinary course of business and for which adequate reserves have been
provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
▇▇▇▇▇▇▇▇ has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the
Collateral directly or indirectly securing repayment of Borrower's Loan and
Note, that would be prior or that may in any way be superior to ▇▇▇▇▇▇'s
Security Interests and rights in and to such Collateral.
BINDING EFFECT. This Agreement, the Note and all Security Agreements directly
or indirectly securing repayment of Borrower's Loan and Note are binding upon
Borrower as well as upon ▇▇▇▇▇▇▇▇'s successors, representatives and assigns,
and are legally enforceable in accordance with their respective terms.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined in ERISA) has occurred with respect to any
such plan, (ii) Borrower has not withdrawn from any such plan or initiated
steps to do so, and (iii) no steps have been taken to terminate any such plan.
LOCATION OF BORROWER'S OFFICES AND RECORDS. The chief place of business of
Borrower and the office or offices where ▇▇▇▇▇▇▇▇ keeps its records concerning
the Collateral is located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all information
hereafter furnished by or on behalf of Borrower to Lender will be, true and
accurate in every material respect on the date as of which such information is
dated or certified; and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading.
SURVIVAL OF REPRESENTATION AND WARRANTIES. ▇▇▇▇▇▇▇▇ understands and agrees
that ▇▇▇▇▇▇ is relying upon the above representations and warranties in
extending Loan Advances to Borrower. ▇▇▇▇▇▇▇▇ further agrees that the
foregoing representations and warranties shall be continuing in nature and
shall remain in full force and effect until such time as Borrower's Loan and
Note shall be paid in full, or until this Agreement shall be terminated in the
manner provided above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with ▇▇▇▇▇▇ that, while
this Agreement is in effect, Borrower will:
LITIGATION. Promptly inform ▇▇▇▇▇▇ in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all litigation and claims
and all threatened litigation and claims affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or the
financial condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis, and
permit ▇▇▇▇▇▇ to examine and audit ▇▇▇▇▇▇▇▇'s books and records at all
reasonable times.
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BUSINESS LOAN AGREEMENT
(Continued)
ADDITIONAL INFORMATION. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables, inventory
schedules, budgets, forecasts, tax returns, and other reports with respect to
▇▇▇▇▇▇▇▇'s financial condition and business operations as Lender may request
from time to time.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may from time to time reasonably
require with respect to Borrower's properties and operations, in form,
amounts, coverages and with insurance companies acceptable to Lender.
Borrower, upon request of ▇▇▇▇▇▇, will deliver to Lender from time to time
the policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or diminished
without at least ten (10) days' prior written notice to Lender. In
connection with all policies covering assets in which Lender holds or is
offered a security interest for the Loans, Borrower will provide Lender with
such loss payable or other endorsements as Lender may require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the name
of the insurer; (b) the risks insured; (c) the amount of the policy; (d) the
properties insured; (e) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those values; and
(f) the expiration date of the policy. In addition, upon request of Lender
(however not more often than annually), Borrower will have an independent
appraiser satisfactory to Lender determine, as applicable, the actual cash
value or replacement cost of any Collateral.
GUARANTIES. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of ▇▇▇▇▇▇, on ▇▇▇▇▇▇'s forms, and in the
amounts and by the guarantors named below:
GUARANTORS AMOUNTS
---------- -------
▇▇▇▇▇ ▇▇▇▇▇▇▇ $500,000.00*
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $500,000.00*
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ $500,000.00*
*subject to the provisions of the Guaranty.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection
with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for ▇▇▇▇▇▇▇▇'s business
operations, unless specifically consented to the contrary by ▇▇▇▇▇▇ in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its indebtedness
and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon
Borrower or its properties, income, or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might become a
lien or charge upon any of Borrower's properties, income, or profits. Provided
however, ▇▇▇▇▇▇▇▇ will not be required to pay and discharge any such
assessment, tax, charge, ▇▇▇▇, ▇▇▇▇ or claim so long as (a) the legality of
the same shall be contested in good faith by appropriate proceedings, and (b)
Borrower shall have established on its books adequate reserves with respect to
such contested assessment, tax, charge, levy, lien, or claim in accordance
with generally accepted accounting practices. ▇▇▇▇▇▇▇▇, upon demand of
Lender, will furnish to Lender evidence of payment of the assessments, taxes,
charges, levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender at any time a written statement
of any assessments, taxes, charges, levies, liens and claims against
▇▇▇▇▇▇▇▇'s properties, income, or profits.
PERFORMANCE. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in all other instruments and agreements
between Borrower and Lender in a timely manner, and promptly notify Lender
if ▇▇▇▇▇▇▇▇ learns of the occurrence of any event which constitutes an Event
of Default under this Agreement.
OPERATIONS. Substantially maintain its present executive and management
personnel; conduct its business affairs in a reasonable and prudent manner and
in compliance with all applicable federal, state and municipal laws,
ordinances, rules and regulations respecting its properties, charters,
businesses and operations, including without limitation, compliance with the
Americans With Disabilities Act and with all minimum funding standards and
other requirements of ERISA and other laws applicable to Borrower's employee
benefit plans.
INSPECTION. Permit employees or agents of Lender at any reasonable time to
inspect any and all collateral for the Loan or Loans and ▇▇▇▇▇▇▇▇'s other
properties and to examine or audit Borrower's books, accounts, and records and
to make copies and memoranda of ▇▇▇▇▇▇▇▇'s books, accounts, and records. If
Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon
request of ▇▇▇▇▇▇, shall notify such party to permit Lender free access to
such records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower's expense.
COMPLIANCE CERTIFICATE. Unless waived in writing by ▇▇▇▇▇▇, provide Lender
at least annually and at the time of each disbursement of Loan proceeds with a
certificate executed by ▇▇▇▇▇▇▇▇'s chief financial officer, or other officer
or person acceptable to Lender, certifying that the representations and
warranties set forth in this Agreement are true and correct as of the date
of the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing statements,
instruments, documents and other agreements as Lender or its attorneys may
reasonably request to evidence and secure the Loans and to perfect all
Security Interests.
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:
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness for borrowed money, including capital
leases, (b) sell, transfer, mortgage, assign, pledge, lease, grant a security
interest in, or encumber any of Borrower's assets, or (c) sell with recourse
any of Borrower's accounts, except to Lender.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently engaged, (b)
cease operations, liquidate, merge, transfer, acquire or consolidate with any
other entity, change ownership, dissolve or transfer or sell Collateral out of
the ordinary course of business, or (c) pay any dividends on Borrower's stock
(other than dividends payable in its stock and except as may be statutorily
required for Subchapter S corporations) or purchase or retire any of
Borrower's outstanding shares or alter or amend Borrower's capital structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any interest in any other enterprise
or entity, or (c) incur any obligation as surety or guarantor other than in
the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under
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BUSINESS LOAN AGREEMENT PAGE 4
(Continued)
the terms of this Agreement or any of the Related Documents or any other
agreement that Borrower of any Guarantor has with Lender; (b) Borrower becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is
adjudged a bankrupt; (c) there occurs a material adverse change in Borrower's
financial condition, in the financial condition of any Guarantor, or in the
value of any Collateral securing any Loan; (d) any Guarantor seeks, claims or
otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the
Loan or any other loan with Lender; or (e) Lender in good ▇▇▇▇▇ ▇▇▇▇▇ itself
insecure even though no Event of Default shall have occurred.
FINANCIAL REPORTING. The Borrower shall submit to the Lender (i) within ninety
(90) days after the close of the Borrowers's fiscal year, annual CPA reviewed
financial statements; (ii) with ten (10) days after the end of each month,
internally prepared accounts receivable aging reports; and (iii) within thirty
(30) days after the end of each quarter, CPA prepared financial statements.
ADDITIONAL COVENANTS. (a) Liabilities due from the Borrower to any guarantor
after June 1, 1994 shall be fully and totally subordinated to the Lender. If
Borrower's debt-to-tangible net worth is equal to or less than 5.25:1, payments
may occur to the extent that the debt-to-tangible net worth ratio does not rise
above 5.25:1. (b) The Borrower shall maintain all of its corporate accounts
with the Lender.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, ▇▇▇▇▇▇▇▇'s accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA, ▇▇▇▇▇, and trust
accounts. Borrower authorizes ▇▇▇▇▇▇, to the extent permitted by applicable
law, to charge or setoff all sums owing on the indebtedness against any and all
such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
due on the Indebtedness.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of the
Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in
any material respect, either now or at the time made or furnished.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Borrower's existence as a
going business, or a trustee or receiver is appointed for Borrower or
for all or a substantial portion of the assets of Borrower, or ▇▇▇▇▇▇▇▇
makes a general assignment for the benefit of ▇▇▇▇▇▇▇▇'s creditors, or
Borrower files for bankruptcy, or an involuntary bankruptcy petition is
filed against Borrower and such involuntary petition remains
undismissed for sixty (60) days.
CREDITOR OF FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency. This includes a
garnishment, attachment, or levy on or of any of Borrower's deposit
accounts with Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or such Guarantor
dies or becomes incompetent or any Guarantor revokes any guaranty of
the Indebtedness.
CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
INSECURITY. Lender, in good faith, deems itself insecure.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make Loan Advances or disbursements), and, at ▇▇▇▇▇▇'s option, all
sums owing in connection with the Loans, including all principal, interest, and
all other fees, costs and charges, if any, will become immediately due and
payable, all without notice of any kind to Borrower, except that in the case
of an Event of Default of the type described in the "Insolvency" subsection
above, such acceleration shall be automatic and not optional.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by the
alteration or amendment.
APPLICABLE LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Maryland. LENDER
AND BORROWER EACH HEREBY WAIVE TRAIL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH LENDER OR BORROWER MAY BE PARTIES, ARISING OUT
OF, OR IN ANY WAY PERTAINING TO, THIS AGREEMENT. IT IS AGREED THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY ▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇, AND ▇▇▇▇▇▇ AND
BORROWER EACH HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR
OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. ▇▇▇▇▇▇▇▇ FURTHER
REPRESENTS THAT ▇▇▇▇▇▇▇▇ HAS BEEN REPRESENTED IN THE SIGNING OF THIS
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, SELECTED OF ▇▇▇▇▇▇▇▇'S OWN FREE WILL, AND THAT ▇▇▇▇▇▇▇▇ HAS
HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.
CONSENT TO JURISDICTION. Borrower irrevocably submits to the
jurisdiction of any state or federal court sitting in the State of
Maryland over any suit, action, or proceeding arising out of or relating
to this Agreement. Borrower irrevocably waives, to the fullest extent
permitted by law, any objection that Borrower may now or hereafter have
to the laying of venue of any such suit, action, or proceeding brought
in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an inconvenient
forum. Final judgment in any such suit, action, or proceeding brought in
any such court shall be conclusive and binding upon Borrower and may be
enforced in any court in which Borrower is subject to jurisdiction by a
suit upon such judgment provided that service of process is effected
upon Borrower as provided in this Agreement or as otherwise permitted by
applicable law.
5
BUSINESS LOAN AGREEMENT
(CONTINUED) PAGE 5
================================================================================
CONSENT TO LOAN PARTICIPATION. ▇▇▇▇▇▇▇▇ agrees and consents to ▇▇▇▇▇▇'s
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or
knowledge Lender may have about Borrower or about any other matter relating
to the Loan, and Borrower hereby waives any rights to privacy it may have
with respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. ▇▇▇▇▇▇▇▇ also agrees that the
purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the sale
of such participation interests. Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce ▇▇▇▇▇▇▇▇'s
obligation under the Loans irrespective of the failure or insolvency of any
holder of any interest in the Loans. ▇▇▇▇▇▇▇▇ further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have
against ▇▇▇▇▇▇.
COSTS AND EXPENSES. ▇▇▇▇▇▇▇▇ agrees to pay upon demand all of ▇▇▇▇▇▇'s
out-of-pocket expenses incurred in connection with this Agreement or in
connection with the Loans made pursuant to this Agreement. Subject to any
limits under applicable law, if ▇▇▇▇▇▇ hires an attorney to help enforce
this Agreement or to collect any indebtedness, ▇▇▇▇▇▇▇▇ agrees to pay
▇▇▇▇▇▇'s attorney's fees, and all of ▇▇▇▇▇▇'s other collection
expenses, whether or not there is a lawsuit and including legal expenses
for bankruptcy proceedings.
NOTICES. All notices required to be given under this Agreement shall be
given in writing and shall be effective when actually delivered if hand
delivered or when deposited with a nationally recognized overnight courier
or deposited as certified or registered mail in the Untied States mail,
first class, postage prepaid, addressed to the party to whom the notice is
to be given at the address shown above. Any party may change its address
for notices under this Agreement by giving formal written notice to the
other parties, specifying that the purpose of the notice is to change the
party's address. To the extent permitted by applicable law, if there is
more than one Borrower, notice to any Borrower will constitute notice to
all Borrowers. For notice purposes, ▇▇▇▇▇▇▇▇ agrees to keep lender
informed at all times of ▇▇▇▇▇▇▇▇'s current address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word "Borrower"
as used herein shall include all subsidiaries and affiliates of Borrower.
Notwithstanding the foregoing however, under no circumstances shall this
Agreement be construed to require Lender to make any Loan or other
financial accommodation to any subsidiary or affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
SURVIVAL. All warranties, representations, and agreements of Borrower in
this Agreement shall survive the making of the Loan or Loans contemplated
hereby, and shall be deemed made and redated by ▇▇▇▇▇▇▇▇ at the time of the
making of each disbursement of Loan proceeds.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Agreement.
WAIVER. Indulgence by ▇▇▇▇▇▇ with respect to any of the terms and
conditions of this Agreement or the failure of Lender to exercise any of
its rights under this Agreement shall not constitute a waiver thereof, and
Borrower shall remain liable for the strict performance of such terms and
conditions until this Agreement shall be terminated. No provision of this
Agreement may be waived or modified orally, but all such waivers or
modifications shall be in writing. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in
one instance shall not constitute Lender's continuing consent in subsequent
instances, and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
THIS BUSINESS LOAN AGREEMENT IS SIGNED, SEALED AND DELIVERED EFFECTIVE IN ALL
RESPECTS AS OF 6/10/94.
BORROWER:
CREDIT MANAGEMENT SOLUTIONS, INC.
-----------------------------------
BY: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------(SEAL) --------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
LENDER:
THE COLUMBIA BANK
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Authorized Officer
================================================================================
6
[THE COLUMBIA BANK LETTERHEAD]
August 2, 1996
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
President
Credit Management Solutions, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Promissory Note in the Principal Amount of
$500,000.00 from Credit Management Solutions, Inc.
to the order of The Columbia Bank (the "Note").
Dear ▇▇▇:
On behalf of The Columbia Bank ("Bank"), we are pleased to advise you
that the Bank has approved the modification of certain provisions of the Note
as set forth below:
Maturity - Subject to the current provisions of the Note for payment on
demand or otherwise upon maturity of the Note, the Bank hereby agrees to extend
the outside date of maturity for payment of the entire unpaid balance of the
Principal Amount and all unpaid interest accrued thereon to July 1, 1997.
Except as hereinabove provided, the provisions of the Note and the
other Loan Documents referred to in the letter have not been altered, and the
modifications set forth herein shall not be deemed to constitute a novation of
any of the obligations of the Borrower to the Bank. Unless otherwise provided
in this letter, all terms described herein shall have the meaning set forth in
the Note or the other Loan Documents.
This letter, which I have signed below on behalf of the Bank, shall
become effective only upon your signature and return of this letter to me. The
fully executed letter will then be included in your loan file with the Bank. A
copy of this letter should be retained for your records.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
7
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
August 2, 1996
Page 2
AGREED TO AND ACCEPTED this 6 day
of August, 1996.
BORROWER:
Credit Management Solutions, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, President
GUARANTORS:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, as guarantor
▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, as guarantor
