Exhibit 10.3
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made and entered into as of August
29, 2002, by and among PALADYNE CORP., a Delaware corporation ("PALADYNE"),
E-COMMERCE SUPPORT CENTERS, INC., a North Carolina corporation and a
wholly-owned subsidiary of Paladyne ("ECSC"), and MARKET CENTRAL, INC., a
Delaware corporation ("LENDER"). Paldyne and ECSC are referred to herein
collectively as the "BORROWERS" and each individually as a "BORROWER."
W I T N E S S E T H:
WHEREAS, the Borrowers desire to borrow from Lender, repay and
reborrow, from time to time, up to the principal sum of One Hundred Twenty Five
Thousand Dollars (US $125,000.00), upon terms and conditions more fully set
forth herein; and
WHEREAS, Lender is willing to lend, from time to time, up to said sum
to the Borrowers upon terms and conditions more fully set forth herein;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by all the
parties hereto, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
1.01 DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings, unless the context otherwise requires (all other
terms contained in this Agreement, including without limitation the terms
contained in paragraph 5.01 hereof, unless the context indicates otherwise, have
the meanings provided for by the Code to the extent the same are used or defined
therein):
"AGREEMENT" means this Loan and Security Agreement, together
with any amendments or supplements hereto and schedules or exhibits hereto.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State of
Georgia or the State of North Carolina.
"CODE" means the Uniform Commercial Code as enacted in the
State of North Carolina.
"COLLATERAL" shall have the meaning provided in paragraph 5.01
hereof.
"DEFAULT" means any of the events or conditions described in
Article X.
"FACILITY AMOUNT" means One Hundred Twenty Five Dollars (US
$125,000.00).
"GAAP" means United States generally accepted accounting
principles applied in a consistent manner from period to period.
"LIABILITIES" means any and all indebtedness, liabilities and
obligations of either Borrower to Lender whatsoever, including without limiting
the generality of the foregoing: all Lender's fees, charges and expenses of or
incidental to the enforcement of this Agreement; all indebtedness, liabilities
and obligations of either Borrower to Lender, under any loan made by Lender on
or about the date hereof and any and all extensions or renewals thereof in whole
or in part; any indebtedness, liability or obligation of either Borrower to
Lender under any later or future advances or loans made by Lender to such
Borrower, and any and all extensions or renewals thereof in whole or in part;
and any future or additional indebtedness, liability or obligation of either
Borrower to Lender whatsoever, joint or several, and in any event whether
existing as of the date hereof or hereafter arising and whether direct,
indirect, absolute or contingent, as maker, endorser, guarantor, surety or
otherwise.
"MATURITY DATE" means November 27, 2002.
"NOTE" means the promissory note made by the Borrowers in
favor of Lender and evidencing the Revolving Loans, in form and substance
satisfactory to Lender.
"OBLIGOR" means, with respect to any Account, the Person or
Persons obligated to pay the monetary obligation thereunder, whether as a
primary obligor, secondary obligor, signer, cosigner, guarantor, surety or
otherwise.
"PERSON" means an individual, a corporation, a partnership, a
limited liability company, an unincorporated association, a trust, an estate or
any other person or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"REVOLVING LOAN" means an advance of loan proceeds made by
Lender to either Borrower pursuant to this Agreement.
1.02 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all terms of an accounting character used herein shall be interpreted,
all accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared, in accordance
with GAAP.
1.03 REFERENCES. Unless otherwise indicated, references in this
Agreement to "Articles," "Exhibits," "Schedules," "paragraphs" and other
subdivisions are references to articles, exhibits, schedules, paragraphs and
other subdivisions hereof.
1.04 HEADINGS. Titles of Articles, paragraphs and subparagraphs in
this Agreement are for convenience only and neither limit nor amplify the
provisions of this Agreement.
1.05 CONSTRUCTION. When anything is described or referred to in this
Agreement in general terms and one or more examples or components of what has
been described or referred to generally is associated with that description
(whether or not following the word "including"), the examples or components
shall be deemed illustrative only and shall not be construed as limiting the
generality of the description or reference in any way. All personal pronouns
used in this Agreement, whether used in the masculine, feminine or neuter
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gender, shall include all other genders; the singular shall include the plural,
and the plural shall include the singular.
ARTICLE II
THE REVOLVING LOAN FACILITY
2.01 REVOLVING LOANS. Upon the execution of this Agreement and
provided that the Borrowers are each in compliance with its terms and
conditions, Lender may, in its sole discretion, and specifically subject to the
satisfaction of the conditions precedent set forth in Articles III and IV, make
Revolving Loans from time to time to either Borrower in the amount of up to the
aggregate principal sum outstanding of the Facility Amount, which may be
borrowed, repaid, and reborrowed, from time to time in one or more borrowings
prior to the Maturity Date. The Revolving Loans shall be evidenced by the Note,
and each Revolving Loan, regardless of which Borrower receives the proceeds
thereof, shall be a joint and several obligation of the Borrowers.
2.02 INTEREST RATE. The unpaid principal balance of the Note shall
bear interest at an annual simple interest rate equal to the most recently
announced prime rate published in the "Money Rates" section of the Wall Street
Journal, from time to time, plus four percent (4%) per annum. Such interest rate
shall be determined as of the date hereof and shall be redetermined as of the
first Business Day of each calendar month thereafter. Interest shall be
calculated based on the actual number of days elapsed over a year of 360 days.
Upon the occurrence of a Default, and so long as the Default shall continue,
interest shall accrue on the entire unpaid principal amount of the Note at a
rate of interest equal to the sum of the rate otherwise applicable to the Note
plus an additional two percent (2%) per annum. Nothing contained herein shall be
deemed to confer on Borrower any right to cure or to reinstate the maturity of
the Note in the event of an acceleration pursuant to the terms and conditions of
the Note or this Agreement.
2.03 INTEREST PAYMENTS. All interest on the unpaid principal balance
of the Note shall be due and payable on the first Business Day of each calendar
month. The interest on the unpaid principal balance of the Note shall be due and
payable on the Maturity Date.
2.04 PRINCIPAL PAYMENT. The entire unpaid principal balance of the
Note shall be due and payable on the Maturity Date.
2.05 PREPAYMENTS. The Borrowers may prepay the Note at any time and
from time to time in whole or in part without premium or penalty.
2.06 USE OF PROCEEDS. Proceeds of the Revolving Loans will be used by
the Borrowers solely for their respective working capital needs.
ARTICLE III
CONDITIONS TO INITIAL REVOLVING LOAN
Lender shall have no obligation to make the initial Revolving Loan,
unless:
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3.01 GENERAL CONDITIONS. Each of the conditions set forth in Article
IV shall have been satisfied;
3.02 LOAN DOCUMENTATION. Lender shall have received such loan
documentation as deemed reasonably necessary or desirable by Lender or its
counsel, satisfactory in form and substance to Lender, providing for the
Revolving Loans to be extended, secured, and guaranteed;
3.03 INSURANCE. Lender shall have received originals or duplicates of
all insurance policies required to be maintained by the Borrowers pursuant to
the terms and conditions hereof and requested by Lender;
3.04 FEES AND EXPENSES. Lender shall have received payment or
reimbursement of all fees and expenses due from the Borrowers in accordance with
the terms of this Agreement.
ARTICLE IV
CONDITIONS TO ALL REVOLVING LOANS
Lender shall have no obligation to make any Revolving Loan, unless at
the time of the request for the Revolving Loan:
4.01 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by or on behalf of each Borrower in connection with the
Revolving Loan and the representations and warranties contained in this
Agreement are true and correct;
4.02 AVAILABILITY. The amount requested, when aggregated with the
unpaid principal balance of all Revolving Loans, does not exceed the Facility
Amount;
4.03 NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in either Borrower's financial condition from the financial
condition of such Borrower as shown in the latest financial statements of such
Borrower furnished to Lender prior to the date of this Agreement;
4.04 COMPLIANCE. Each Borrower shall be in full compliance with all
the terms and provisions of this Agreement; and
4.05 NO DEFAULT. No Default or an event that upon notice or lapse of
time or both would constitute a Default shall have occurred, and there will be
no claim, action, suit or proceeding pending or threatened against either
Borrower that would in Lender's sole opinion materially affect any of either
Borrower's respective assets or result in a material change in the business
condition, affairs, or operations of either Borrower.
ARTICLE V
SECURITY
5.01 GRANT OF SECURITY INTEREST. As security for the full payment and
performance of the Liabilities, each Borrower hereby grants, assigns, conveys,
mortgages, pledges, hypothecates and transfers to Lender a security interest in
all of its right, title and interest in and to the following personal property
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(all of which being hereinafter collectively referred to as the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all General Intangibles (including Payment Intangibles and
Software);
(e) all Goods (including Inventory, Equipment and Fixtures);
(f) all Instruments;
(g) all Investment Property;
(h) all Deposit Accounts of such Borrower;
(i) all money, cash or cash equivalents of such Borrower;
(j) all Supporting Obligations and Letter-of-Credit Rights of such
Borrower; and
(k) to the extent not otherwise included, all Proceeds, tort claims,
insurance claims and other rights to payments not otherwise included in the
foregoing and products of the foregoing and all accessions to, substitutions and
replacements for, and rents and profits of, each of the foregoing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make
Revolving Loans as contemplated hereby, each Borrower represents and warrants to
Lender, each of which representations and warranties is deemed to be material,
that, as of the date hereof and immediately prior to the funding of each
Revolving Loan by Lender:
6.01 GOOD STANDING. Paladyne is a corporation duly organized and
validly existing and in good standing under the laws of the state of Delaware
and has full right, power and authority to conduct its business as currently
conducted. ECSC is a corporation duly organized and validly existing and in good
standing under the laws of the state of North Carolina and has full right, power
and authority to conduct its business as currently conducted.
6.02 POWER AND AUTHORITY. Each Borrower has full right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. Each Borrower has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the documents
contemplated to be executed and delivered hereby.
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6.03 BINDING AGREEMENTS. This Agreement constitutes, and the Note and
other documents executed in consummating the transactions contemplated hereby
will constitute, valid obligations of each Borrower legally binding upon, and
enforceable in accordance with their respective terms against, such Borrower. No
consent, license, or approval of any governmental authority, bureau or agency is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or the documents to be executed in connection
with the consummation of the transactions contemplated hereby, in each case by
or with respect to either Borrower.
6.04 NO CONFLICT. The execution, delivery and performance of this
Agreement, the Note and other documents to be executed in consummating the
transactions contemplated hereby will not violate the provisions of the
certificate of incorporation or articles of incorporation, as the case may be,
or bylaws or other organizational documents of either Borrower. The execution,
delivery and performance of this Agreement, the Note and other documents to be
executed in consummating the transactions contemplated hereby will not violate
the provisions of any mortgage, indenture, security agreement, contract,
undertaking or other agreement to which either Borrower is a party, or which
purports to be binding upon either Borrower, or any of their respective
properties or assets.
6.05 TITLE. Each Borrower has full and absolute title to the
Collateral in which it has granted a security interest to Lender pursuant to
Article V and all of its other property and assets, except as set forth
specifically in the financial statements furnished to Lender or otherwise
disclosed to Lender prior to the date of this Agreement.
6.06 FINANCIAL CONDITION. The financial statements furnished to Lender
by the Borrowers (or that in appear in filings of Paladyne with the Securities
and Exchange Commission, which filings are available on EDGAR) are complete and
correct and fairly present the financial condition of each Borrower as of the
dates thereof and the results of operations of each Borrower for the periods to
which such statements relate.
6.07 LITIGATION. There is no litigation, proceeding, or investigation
pending or, to the knowledge of either Borrower, threatened, that might result
in any materially adverse change in the business, properties or conditions,
financial or otherwise, of either Borrower or that question the validity of any
action taken or to be taken by either Borrower pursuant to or in connection with
the transactions contemplated by this Agreement; nor does either Borrower know
or have any reasonable grounds to know the basis for the institution of any such
litigation, proceeding or investigation.
6.08 QUALIFICATION TO DO BUSINESS. Each Borrower is qualified to do
business and in good standing in each state where it is required to be so
qualified by applicable law.
6.09 TAXES. Neither Borrower has any knowledge of any tax return
required to be filed by either Borrower that has not been filed with the
appropriate governmental agency or for which the relevant Borrower has not
received an extension that has not yet expired; nor will either Borrower be, as
of the date hereof, in default with respect to such filings. Each Borrower has
paid or will have paid as of the date hereof all taxes now or then claimed to be
due from such Borrower by any federal, state or local taxing authority. Neither
the Internal Revenue Service nor any other taxing authority is now asserting, or
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to the knowledge of either Borrower, has threatened to assert, any deficiency
claim for additional taxes against either Borrower; and no waivers of the
Statute of Limitations have been granted to the Commissioner of Internal Revenue
or any other taxing authority by either Borrower.
6.10 PRIORITY OF SECURITY INTEREST. The Collateral is free and clear of
all liens, encumbrances, security interests and claims, except those in favor of
Lender and except those listed on Exhibit A hereto.
6.11 ACCURACY OF REPRESENTATIONS. No representation or warranty by
either Borrower or any statement or certificate to be furnished to Lender
pursuant hereto in connection with the transactions contemplated hereby contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained therein not
misleading.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until the later of the Maturity Date or the full and complete
satisfaction of the Liabilities:
7.01 REPORTING. Each Borrower shall furnish to Lender, such data,
information, and reports as Lender may reasonably request from time to time.
7.02 INSPECTION. Each Borrower shall permit Lender or any Persons duly
designated by it to call at the places of business of such Borrower at any
reasonable time and from time to time, and without hindrance or delay, to
inspect, audit, check and make extracts from its books, records and journals
relating to the Collateral and all other books, records and journals, orders,
receipts and any correspondence or other data relating to its business or any
other transactions between or among the parties hereto.
7.03 INSURANCE. The Borrowers shall insure the Collateral against all
foreseeable risks to which it is exposed, including loss, damage, fire, theft
and all other such risks, in such amounts, with such companies, under such
policies and in such form as shall be satisfactory to Lender, which policies
shall provide that loss thereunder shall be payable to Lender as its interest
may appear, and Lender may apply any proceeds of such insurance which may be
received by it for payment of the Liabilities, whether or not due, in such order
of application as Lender may determine, and such policies or certificates
thereof or duplicates thereof shall be immediately deposited with Lender.
7.04 TAXES. Each Borrower shall promptly pay and discharge all taxes,
assessments, and governmental charges or levies imposed upon such Borrower's
operations, profits, or property, including, without limitation, any of the
Collateral.
7.05 COMPLIANCE. Each Borrower shall conduct its business, obtain all
necessary permits and licenses, and maintain its operations and property in
compliance with all applicable federal, state, and local laws, regulations and
ordinances governing such operations, property, and business and shall comply
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with all agreements, indentures, and mortgages to which it is a party or by
which it or its properties is bound.
7.06 LITIGATION. Each Borrower shall give notice to Lender of any
actions, suits, or proceedings instituted by any entities or persons whomsoever
against such Borrower affecting any of its operations or assets.
7.07 NOTICE OF DEFAULTS. Each Borrower shall give notice to Lender of
the occurrence of any Default hereunder or a default under the terms of any
other agreement at any time in force between such Borrower and Lender.
7.08 PRESERVATION OF BUSINESS. Each Borrower shall take all
appropriate action necessary to protect its business and assets consistent with
normal practices; conduct its business in a sound businesslike manner; and do or
cause to be done all things necessary to preserve and keep in full force and
effect such Borrower's corporate existence and all Borrower's rights and
franchises.
7.09 PAYMENT OF DEBTS. Each Borrower shall pay or cause to be paid the
principal of, and, if any, the interest and premium on all indebtedness
heretofore or hereafter incurred or assumed by such Borrower when and as the
same shall become due and payable, unless such indebtedness be renewed or
extended; and faithfully observe, perform and discharge all the covenants,
conditions and obligations that are imposed upon it by any and all indentures
and other agreements securing or evidencing such indebtedness or pursuant to
which such indebtedness is issued, and not permit the continuance of any act or
omission that is, or may be declared to be, a default pursuant to the provisions
thereof, unless such default has been waived; provided, however, that neither
Borrower shall be required to make any payment or to take any other action
pursuant to this subparagraph at any time while it shall be currently contesting
in good faith by appropriate proceedings its obligations to make such a payment
or to take such action, if it shall have either: (i) set aside on its books,
reserves with respect thereto deemed adequate by Lender (segregated to the
extent required by sound accounting practices), or (ii) if requested in writing
by Lender, established a deposit with Lender sufficient to pay any such amount
if such proceedings are adversely determined.
ARTICLE VIII
NEGATIVE COVENANTS
Until the later of the Maturity Date or the full and complete
satisfaction of the Liabilities, neither Borrower shall, without the prior
written consent of Lender:
8.01 GUARANTEES. Guarantee or become contingently liable for, in any
manner, whether directly or indirectly, any obligations or indebtedness of any
Person, except by the endorsement of checks for collection in the ordinary
course of business.
8.02 LOANS. Make any loans, advances or extensions of credit to any
shareholder, director, partner, employee or officer of either Borrower.
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8.03 MERGERS OR CONSOLIDATIONS. Merge or consolidate with any other
corporation or entity, or sell, lease, transfer, or otherwise dispose of all or
any substantial portion of the assets of such Borrower.
8.04 LIENS. Grant or permit to exist any security interest, mortgage,
deed to secure debt, lien, security interest or other voluntary or involuntary
collateral or judgment interest on or against any of its properties or assets,
including the Collateral, other than security interests in favor of Lender and
other than those security interests disclosed on Exhibit A attached hereto.
8.05 DISPOSITION OF COLLATERAL. Directly or indirectly, convey, sell,
transfer, lease, abandon, or otherwise dispose of (whether in one transaction or
a series of transactions) any of the Collateral.
8.06 INVESTMENTS. Purchase or otherwise acquire any of the assets or
securities of other persons or entities, except in the ordinary course of
business.
8.07 DISTRIBUTIONS. Make any distribution or declare any dividends (in
cash or in stock) on, or purchase, acquire, redeem or retire any of such
Borrower's capital stock, of any class, whether now or hereafter outstanding.
ARTICLE IX
[INTENTIONALLY RESERVED]
ARTICLE X
DEFAULTS
Any one or more of the following events shall constitute a "DEFAULT"
under this Agreement:
10.01. FAILURE TO PAY. Borrower fails to pay when due any portion of
principal or interest under any of the Liabilities; or
10.02. DEFAULT UNDER LOAN DOCUMENT COVENANTS. Default in the observance
or performance of any covenant, obligation, term or condition in this Agreement
or in any of the documents executed in connection with the Revolving Loans,
provided that such default is not cured within five (5) Business Days after
Lender sends either Borrower written notice of such default; or
10.03. DEFAULT UNDER OTHER AGREEMENTS WITH LENDER. Default in the
observance or performance of any covenant, obligation, term or condition in any
other agreement or document between Lender and either Borrower or any other
person or entity obligated on all or any portion of the Revolving Loans; or
10.04. INSOLVENCY. Borrower shall (a) make an assignment for the
benefit of its creditors, or (b) admit in writing its inability to pay its debts
when they become due, or (c) file or have filed against it a petition under any
bankruptcy, insolvency, reorganization, arrangement, or other debtor relief law,
or (d) appoint or consent to the appointment of a receiver, conservator,
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liquidating agent, or committee, or (e) take any action for the purpose of
effecting any of the foregoing; or
10.05. BREACH OF REPRESENTATIONS. Any representation, warranty or
information that is made or given by or on behalf of Borrower to Lender is
materially false when made or given.
ARTICLE XI
RIGHTS AND REMEDIES
11.01 PRIOR TO DEFAULT. Before or after the occurrence of a Default:
Lender, or its agent, may, examine, audit or inspect each Borrower's books and
records constituting, evidencing or otherwise relating to the Collateral,
wherever located, at any reasonable time or times, and may enter upon either
Borrower's premises for such purposes. Each Borrower shall assist Lender, or its
agent, in whatever way reasonably necessary to make each such examination, audit
and inspection. Lender, or its agent, from time to time, at its option, may
perform any agreement of either Borrower hereunder which such Borrower shall
fail to perform and take any other action which Lender, or its agent, deems
necessary for the maintenance or preservation of any of the Collateral or its
interest therein, and such Borrower agrees to reimburse forthwith Lender, or its
agent, for all reasonable expenses of Lender, or its agent, in connection with
the foregoing, together with interest thereon, calculated in accordance with the
provisions of paragraph 2.02 from the date incurred until reimbursed, at the
rate of interest then applicable to the Note.
11.02 UPON DEFAULT. Upon the occurrence and during the continuation of
any one or more Defaults which is or are not cured within any applicable cure
period, without demand or notice of any kind: (a) Lender may declare the
Liabilities, notwithstanding any provisions thereof, immediately due and
payable, whereupon the Liabilities shall become immediately due and payable and
may be collected forthwith; (b) Lender may exercise from time to time any rights
and remedies available to it under this Agreement, the other documents
evidencing, securing or otherwise relating to the Revolving Loans, the Code and
other applicable law (c) each Borrower will refrain from collecting or otherwise
disposing of any Collateral without Lender's consent; (d) Lender shall have the
right to notify the Obligors on any Accounts to pay Lender directly.
11.03 POWER OF ATTORNEY. Upon the occurrence and during the
continuation of any one or more Defaults which is or are not cured within any
applicable cure period, without demand or notice of any kind, each Borrower
hereby constitutes Lender or its designee as such Borrower's attorney-in-fact:
(1) to endorse such Borrower's name upon any notes, acceptances, checks, drafts,
money orders or other evidences of payment that may come into Lender's
possession, (2) to sign such Borrower's name on any invoice or bill of lading
relating to the Collateral, and drafts against Obligors, and (3) to do all other
acts and things necessary to carry out this Agreement. Each Borrower waives
notice of presentment, protest and dishonor of any instrument so endorsed by
Lender. All acts of said attorney-in-fact or designee are hereby authorized and
ratified and said attorney-in-fact or designee shall not be liable for any acts
of omission or commission, nor for any error in judgment or mistake of fact or
law. The foregoing power is coupled with an interest and is irrevocable while
any of the Liabilities remain unpaid. Each Borrower agrees to pay all costs of
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Lender, or its agent, of collection of the Liabilities and enforcement of rights
hereunder, including reasonable attorneys' fees and also other legal and court
expenses actually incurred by Lender.
ARTICLE XII
MISCELLANEOUS
12.01 TIME OF THE ESSENCE. Time is of the essence in the performance of
this Agreement and all documents, agreements, and instruments executed in
connection with the Revolving Loans.
12.02 GOVERNING LAW. This Agreement and all documents, agreements, and
instruments executed in connection with the Revolving Loans shall be construed
in accordance with the laws of the State of North Carolina.
12.03 ENTIRE AGREEMENT. This Agreement, together with the documents
referred to or contemplated herein, constitutes the entire understanding between
the Borrowers and Lender with respect to the subject matter hereof, and no
agreement, understanding, or representation, whether prior or contemporaneous,
written or oral, shall be binding unless contained in this Agreement or the
documents referred to or contemplated herein.
12.04 NON-WAIVER. No delay or failure on the part of Lender in the
exercise of any power or right under this Agreement or under any of the other
documents, agreements, or instruments with respect to the Revolving Loans shall
operate as a waiver thereof.
12.05 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same agreement.
12.06 AMENDMENTS. This Agreement may be amended only by a writing
signed by all parties hereto.
12.07 ASSIGNMENT. Neither this Agreement nor the rights of the
Borrowers hereunder may be assigned by either Borrower.
12.08 INVALIDITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If, however, any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
12.09 NOTICE. Except as otherwise expressly provided herein, notices
required or permitted hereunder shall be deemed given when made in writing and
deposited in the U.S. mail, with first class postage prepaid and properly
addressed, to the addresses set forth below, or to such other address as one
party hereto shall have notified the other parties pursuant hereto:
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If to Lender, to: Market Central, Inc.
1150 Hammond Drive
Suite A 1200
Atlanta, GA 30328
Attn: President
If to the Borrowers, to: Paladyne Corp.
E-Commerce Support Centers, Inc.
1650A Gum Branch Road
Jacksonville, NC 28540
Attn: Mr. Terrence Leifheit
12.10 DISPOSITION OF COLLATERAL. If any notification of intended
disposition of Collateral or of any other act by Lender is required by law and a
specific time period is not stated therein, such notification, if mailed by
first class postage prepaid, at least ten (10) days before such disposition or
act, and properly addressed to the applicable Borrower either at the address
shown above or at any other address of such Borrower provided to Lender by such
Borrower or appearing on the records of Lender, shall be deemed reasonably and
properly given.
[Signatures appear on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under hand and seal as of the date first written above.
BORROWERS:
PALADYNE CORP.
By: s/ Terrence J. Leifheit
-------------------------------------
Name: Terrence J. Leifheit
Title: President and Chief Executive
Officer
[CORPORATE SEAL]
E-COMMERCE SUPPORT CENTERS, INC.
By: /s/ Terrence J. Leifheit
-------------------------------------
Name: Terrence J. Leifheit
Title: President and Chief Executive
Officer
[CORPORATE SEAL]
LENDER:
MARKET CENTRAL, INC.
By: /s/ William A. Goldstein
-------------------------------------
Name: William A. Goldstein
Title: Vice President
[CORPORATE SEAL]
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Exhibit A
Prior Security Interests
Paladyne: Prior blanket security interest in favor of The Huntington
National Bank
ECSC: None
[PLEASE HAVE EACH BORROWER UPDATE FOR ADDITIONAL SECURITY INTERESTS]