Exhibit 4.7
LOAN AGREEMENT
Wachovia Bank, National Association
190 River Road
Summit, New Jersey 07901
(Hereinafter referred to as the "Bank")
I. D. Systems, Inc.
One University Plaza
Hackensack, New Jersey 07601
(Individually and collectively "Borrower")
This Loan Agreement (Agreement) is entered into May 4, 2005, by and between Bank
and Borrower.
This Agreement amends and restates in its entirety that certain Loan Agreement
dated May 23, 2002 and applies to the loan or loans (individually and
collectively, the "Loan") evidenced by one or more promissory notes of even date
herewith or other notes subject hereto, as modified from time to time (whether
one or more, the "Note") and all Loan Documents. The terms "Loan Documents" and
"Obligations," as used in this Agreement, are defined in the Note.
Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:
REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: ACCURATE INFORMATION. All
information now and hereafter furnished to Bank is and will be true, correct and
complete. Any such information relating to Borrower's financial condition will
accurately reflect Borrower's financial condition as of the date(s) thereof,
(including all contingent liabilities of every type), and Borrower further
represents that its financial condition has not changed materially or adversely
since the date(s) of such documents. AUTHORIZATION; NON-CONTRAVENTION. The
execution, delivery and performance by Borrower and any guarantor, as
applicable, of this Agreement and other Loan Documents to which it is a party
are within its power, have been duly authorized as may be required and, if
necessary, by making appropriate filings with any governmental agency or unit
and are the legal, binding, valid and enforceable obligations of Borrower and
any guarantors; and do not (i) contravene, or constitute (with or without the
giving of notice or lapse of time or both) a violation of any provision of
applicable law, a violation of the organizational documents of Borrower or any
guarantor, or a default under any agreement, judgment, injunction, order, decree
or other instrument binding upon or affecting Borrower or any guarantor, (ii)
result in the creation or imposition of any lien (other than the lien(s) created
by the Loan Documents) on any of Borrower's or any guarantor's assets, or (iii)
give cause for the acceleration of any obligations of Borrower or any guarantor
to any other creditor. ASSET OWNERSHIP. Borrower has good and marketable title
to all of the properties and assets reflected on the balance sheets and
financial statements supplied Bank by Borrower, and all such properties and
assets are free and clear of mortgages, security deeds, pledges, liens, charges,
and all other encumbrances, except as otherwise disclosed to Bank by Borrower in
writing and approved by Bank ("Permitted Liens"). To Borrower's knowledge, no
default has occurred under any Permitted Liens and no claims or interests
adverse to Borrower's present rights in its properties and assets have arisen.
DISCHARGE OF LIENS AND TAXES. Borrower has duly filed, paid and/or discharged
all taxes or other claims that may become a lien on any of its property or
assets, except to the extent that such items are being appropriately contested
in good faith and an adequate reserve for the payment thereof is being
maintained. SUFFICIENCY OF CAPITAL. Borrower is not, and after consummation of
this Agreement and after giving effect to all indebtedness incurred and liens
created by Borrower in connection with the Note and any other Loan Documents,
will not be, insolvent within the meaning of 11 U.S.C. ss 101, as in effect from
time to time. COMPLIANCE WITH LAWS. Borrower is in compliance in all respects
with all federal, state and local laws, rules and
regulations applicable to its properties, operations, business, and finances,
including, without limitation, any federal or state laws relating to liquor
(including 18 U.S.C. ss. 3617, et seq.) or narcotics (including 21 U.S.C. ss.
801, et seq.) and/or any commercial crimes; all applicable federal, state and
local laws and regulations intended to protect the environment; and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), if applicable.
ORGANIZATION AND AUTHORITY. Each corporation, partnership or limited liability
company Borrower and/or guarantor, as applicable, is duly created, validly
existing and in good standing under the laws of the state of its organization,
and has all powers, governmental licenses, authorizations, consents and
approvals required to operate its business as now conducted. Each corporation,
partnership or limited liability company Borrower and/or guarantor, as
applicable, is duly qualified, licensed and in good standing in each
jurisdiction where qualification or licensing is required by the nature of its
business or the character and location of its property, business or customers,
and in which the failure to so qualify or be licensed, as the case may be, in
the aggregate, could have a material adverse effect on the business, financial
position, results of operations, properties or prospects of Borrower or any such
guarantor. NO LITIGATION. There are no pending or threatened suits, claims or
demands against Borrower or any guarantor that have not been disclosed to Bank
by Borrower in writing, and approved by Bank.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: ACCESS TO BOOKS AND RECORDS. Allow Bank, or its agents,
during normal business hours, access to the books, records and such other
documents of Borrower as Bank shall reasonably require, and allow Bank, at
Borrower's expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof. ACCOUNTS PAYABLE AGING. Deliver to Bank,
from time to time hereafter but not less than annually within 120 days of the
end of each such period, a detailed payables report including aging of payables
by total, vendor names and addresses, a reconciliation statement, and the
original date of each invoice. ACCOUNTS RECEIVABLE AGING. Deliver to Bank, from
time to time hereafter but not less than annually within 120 days of the end of
each such period, a detailed receivables report including totals, customer names
and addresses, a reconciliation statement, and the original date of each
invoice. BUSINESS CONTINUITY. Conduct its business in substantially the same
manner and locations as such business is now and has previously been conducted.
CERTIFICATE OF FULL COMPLIANCE FROM ACCOUNTANT. Deliver to Bank, with the
financial statements required herein, a certification by Borrower's independent
certified public accountant that Borrower is in full compliance with the Loan
Documents. COMPLIANCE WITH OTHER AGREEMENTS. Comply with all terms and
conditions contained in this Agreement, and any other Loan Documents, and swap
agreements, if applicable, as defined in the 11 U.S.C. ss. 101, as in effect
from time to time. ESTOPPEL CERTIFICATE. Furnish, within 15 days after request
by Bank, a written statement duly acknowledged of the amount due under the Loan
and whether offsets or defenses exist against the Obligations. INSURANCE.
Maintain adequate insurance coverage with respect to its properties and business
against loss or damage of the kinds and in the amounts customarily insured
against by companies of established reputation engaged in the same or similar
businesses including, without limitation, commercial general liability
insurance, workers compensation insurance, and business interruption insurance;
all acquired in such amounts and from such companies as Bank may reasonably
require. MAINTAIN PROPERTIES. Maintain, preserve and keep its property in good
repair, working order and condition, making all replacements, additions and
improvements thereto necessary for the proper conduct of its business, unless
prohibited by the Loan Documents. NOTICE OF DEFAULT AND OTHER NOTICES. (a)
NOTICE OF DEFAULT. Furnish to Bank immediately upon becoming aware of the
existence of any condition or event which constitutes a Default (as defined in
the Loan Documents) or any event which, upon the giving of notice or lapse of
time or both, may become a Default, written notice specifying the nature and
period of existence thereof and the action which Borrower is taking or proposes
to take with respect thereto. (b) OTHER NOTICES. Promptly notify Bank in writing
of (i) any material adverse change in its financial condition or its business;
(ii) any default under any material agreement, contract or other instrument to
which it is a party or by which any of its properties are bound, or any
acceleration of the maturity of any indebtedness owing by Borrower; (iii) any
material adverse claim against or affecting Borrower or any part of its
properties; (iv) the commencement of, and any material determination in, any
litigation with any third party or any proceeding before any governmental agency
or unit affecting Borrower; and (v) at least 30 days prior thereto, any change
in Borrower's name or address as shown above, and/or any change in Borrower's
structure. OTHER FINANCIAL INFORMATION. Deliver
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promptly such other information regarding the operation, business affairs, and
financial condition of Borrower which Bank may reasonably request. PAYMENT OF
DEBTS. Pay and discharge when due, and before subject to penalty or further
charge, and otherwise satisfy before maturity or delinquency, all obligations,
debts, taxes, and liabilities of whatever nature or amount, except those which
Borrower in good faith disputes. REPORTS AND PROXIES. Deliver to Bank, promptly,
a copy of all financial statements, reports, notices, and proxy statements, sent
by Borrower to stockholders, and all regular or periodic reports required to be
filed by Borrower with any governmental agency or authority.
NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will not: CHANGE IN FISCAL YEAR. Change its fiscal year.
CHANGE OF CONTROL. Make or suffer a change of ownership that effectively changes
control of Borrower from current ownership. ENCUMBRANCES. Create, assume, or
permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge
or other encumbrance on any of its assets, whether now owned or hereafter
acquired, other than: (i) security interests required by the Loan Documents;
(ii) liens for taxes contested in good faith; or (iii) Permitted Liens. DEFAULT
ON OTHER CONTRACTS OR OBLIGATIONS. Default on any material contract with or
obligation when due to a third party or default in the performance of any
obligation to a third party incurred for money borrowed. GOVERNMENT
INTERVENTION. Permit the assertion or making of any seizure, vesting or
intervention by or under authority of any governmental entity, as a result of
which the management of Borrower or any guarantor is displaced of its authority
in the conduct of its respective business or such business is curtailed or
materially impaired. JUDGMENT ENTERED. Permit the entry of any monetary judgment
or the assessment against, the filing of any tax lien against, or the issuance
of any writ of garnishment or attachment against any property of or debts due.
RETIRE OR REPURCHASE CAPITAL STOCK. Retire or otherwise acquire any of its
capital stock.
ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 120 days
after the close of each fiscal year, audited financial statements reflecting its
operations during such fiscal year, including, without limitation, a balance
sheet, profit and loss statement and statement of cash flows, with supporting
schedules and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the
preceding year. If audited statements are required, all such statements shall be
examined by an independent certified public accountant acceptable to Bank. The
opinion of such independent certified public accountant shall not be acceptable
to Bank if qualified due to any limitations in scope imposed by Borrower or any
other person or entity. Any other qualification of the opinion by the accountant
shall render the acceptability of the financial statements subject to Bank's
approval. If audited statements are required, Borrower's accountant shall
provide Bank with a written acknowledgment of the Bank's reliance upon the
statements in accordance with N.J.S. 2A: 53A-25.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing, using the financial information for Borrower, its
subsidiaries, affiliates and its holding or parent company, as applicable:
DEPOSIT RELATIONSHIP. Borrower shall maintain its primary depository account
with Bank. LIMITATION ON DEBT. Borrower shall not, directly or indirectly,
create, incur, assume or become liable for any additional indebtedness, whether
contingent or direct, if, giving effect to such additional debt on a pro forma
basis causes the aggregate amount of Borrower's debt, including obligations to
Bank. LIQUIDITY REQUIREMENT. Borrower shall, at all times, maintain Liquid
Assets of not less than $3,000,000.00. "Liquid Assets" shall mean the sum of all
cash, time deposits and marketable securities.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances
pursuant to this Agreement are subject to the following conditions precedent:
ADDITIONAL DOCUMENTS. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request.
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IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.
I.D. Systems, Inc.
By: /s/ Ned Mavrommatis (SEAL)
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Ned Mavrommatis, Chief Financial Officer
Wachovia Bank, National Association
By: /s/ Thomas Caputo (SEAL)
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Thomas Caputo, Senior Vice President
Tracking #: 67194 PHL 20/4226578522/18
CAT - Deal # 502363 Facility ID 352242
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