EXHIBIT 10.16
UMB
BANK
March 27, 1998
Mr. Gary Abernathy, President
Saztec International, Inc.
43 Manning Road
Billerica, Massachusetts 01821
Dear Mr. Abernathy:
The Discount Committee of UMB Bank, n.a. has reviewed the Authority to
Loan (the "Authority to Loan") for Saztec International, Inc. and all
of its subsidiaries ("Saztec") on the terms and conditions set forth in
this letter.
1. UMB Bank, n.a. hereby extends to Saztec an Authority to Loan in
the initial amount of $210,000. Furthermore, the Authority to Loan
will decrease $10,000 on the first of each month beginning May 1,
1998.
Any remaining outstanding balance is payable in full on October 1,
1998. The above listed amount will be available provided that the
outstanding principal amount of all advances under such Authority
to Loan at no time exceeds an amount equal to 70% of Saztec's
qualified accounts receivable. Qualified accounts receivable shall
have the meaning as set forth in a Security Agreement to be
executed by Saztec.
2. All advances under the Authority to Loan will be evidenced by a
Master Revolving Note on this bank's standard form. Such Note
shall be payable not later than October 1, 1998. Accrued interest
will be due and payable monthly.
3. All advances under the Authority to Loan are subject to Saztec
being in full and complete compliance with all terms and
conditions stated in this letter at the time of each such advance
and the continuation of extensions of credit are subject to Saztec
being in full compliance with all terms hereof at all times.
4. All advances under the Authority to Loan will be secured by all
accounts receivables of Saztec, now owned or hereafter existing,
notwithstanding the 70% of qualified accounts receivable basis for
making advances, and by all inventory, machinery, equipment,
furniture, fixtures and all common stock of all subsidiaries of
Saztec now owned or hereafter acquired or created.
PO. Box 419226.
Kansas City, Missouri
64141-6226
(816)860-7000
Internet:
http://www.umb.com
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UMB
5. Saztec will continue to maintain a lockbox for the receipt of all
accounts receivable payments over which this bank has sole access
and also a cash collateral account with this bank into which all
accounts receivable payments will be deposited.
6. All advances under the Authority to Loan shall bear interest per
annum at 4% over this bank's prime rate of interest adjusted
daily. For purposes hereof, this bank's prime rate of interest
shall be that rate of interest which it states from time to time,
to be its prime rate of interest.
7. Each extension of credit under the Authority to Loan shall be
subject in the sole discretion of this bank, to the occurrence of
no adverse material change in (i). the financial condition of
Saztec or (ii) the aging or collectability of its accounts
receivables.
8. This bank must at all times have a first priority perfected
security interest in all personal property of Saztec and all
proceeds of all the foregoing and all common stock of all
subsidiaries of Saztec.
9. At all times, the consolidated net worth of Saztec must be at
least equal to $500,000, the calculation of such to be performed
in accordance with generally accepted accounting principals,
consistently applied.
10. At all times, the ratio of consolidated total indebtedness to
consolidated net worth shall not exceed 8.00:1, the calculation of
such to be performed in accordance with generally accepted
accounting principals, consistently applied.
11. Saztec must provide this bank with monthly financial statements
and accounts receivable listing and agings and a borrowing base
certificate in form and substance acceptable to this bank not
later than twenty (20) days following the end of each month
certified by borrower. Such financial statements to include, at a
minimum, a balance sheet and an income statement. Year end
statements are to be prepared by a certified public accounting
firm acceptable to the Bank and be of an audit quality.
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12. Should the terms of this letter and any terms of any Promissory
Note or Security Agreement executed or continued in conjunction
herewith be in conflict, then the terms of any such Note or
Security Agreement shall prevail.
13. All documentation evidencing the Authority to Loan and any
collateral therefore shall be on this bank's standard forms and
must be satisfactory in all respects to this bank and its
attorneys.
14. All costs incurred by this bank in extending credit under the
Authority to Loan must be paid by Saztec.
15. This letter supersedes any and all prior agreements, whether
written or verbal, between Saztec and this bank relating to the
subject matter hereof except existing Promissory Notes, Security
Agreements and financing statements. By signing below, you and
this bank agree that there are no unwritten agreements between us
relating to the transactions proposed hereunder.
16. STATUTORY STATEMENT MADE PURSUANT TO MO. REV. STAT. 432.045.
Oral agreements or commitments to loan money, extend credit or to
forebear from enforcing payment of a debt, including promises to
extend or renew such debt, are not enforceable. To protect Saztec
International, Inc. and to protect UMB Bank, n.a. from
misunderstanding or disappointment, any agreements we reach
concerning such matters are contained in this letter and the
documents referred to herein, which are the complete and exclusive
statements of the agreement between us, except as we may later
agree in writing to modify it.
If you agree to the above terms and conditions, kindly acknowledge the
same by signing in the space provided for that purpose below and return
the original of this letter to the undersigned.
Sincerely,
UMB Bank, n.a.
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By: /s/ TRAVIS J. BURNS
-------------------
Travis J. Burns, Assistant Vice President
The undersigned hereby acknowledges and agrees to all the
terms and conditions stated in the foregoing letter.
SAZTEC INTERNATIONAL, INC.
By: /s/ GARY N. ABERNATHY
---------------------
Gary N. Abernathy, President
Dated: 4/1/98
ADVANCED AUTOMATION ASSOCIATES, INC.
By: /S/ GARY N. ABERNATHY
---------------------
Gary N. Abernathy, President
Dated: 4/1/98
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BORROWER UMB 2020300 (R 6191) All States
SAZTEC INTERNATIONAL, INC., ADVANCED UMB
AUTOMATION ASSOCIATES, INC. MASTER.
43 MANNING RD NOTE
BILLERICA, MA 01821 **See attached addendum
OFFICER INTEREST PRINCIPAL FUNDING MATURITY CUSTOMER LOAN NUMBER
INITIALS RATE AMOUNT/CREDIT LIMIT DATE DATE NUMBER
TJB 12.500% $210,000.00 04/01/98 10/01/98 3904321 82658
RENEWAL #82658
FOR VALUE RECEIVED, the undersigned Borrower (the "Undersigned" means each maker
and each endorser, and if more than one, each shall be jointly and severally
liable hereunder) promises to pay to the order of Lender, at the offices set
forth above or at such other place as the holder hereof may from time to time
designate In writing, ON DEMAND, but If no Demand, on OCTOBER 1, 1998 the
principal amount of TWO HUNDRED TEN THOUSAND AND N01100 DOLLARS ($ 210,000.00),
or such other lesser amount as shall be noted as the Unpaid Principal Balance on
the Schedule of Disbursements and Payments of Principal Included herein or
attached hereto pursuant to the authority set forth herein, together with
interest on the unpaid principal balance hereof from time to time outstanding
from date(s) of disbursement(s) until Maturity (as herein defined) at the rate
(the "Loan Interest Rate") indicated below:
Daily Variable Rate. From the date hereof until the first Adjustment Date
(as herein defined) the Loan Interest Rate shall be TWELVE AND 500/1000 percent
(12.500 %) per annum. The Loan Interest Rate shall be adjusted each day to a
rate equal to FOUR AND NOI 1000 percentage points ( 4,000 %) Above the Index
Rate (as herein defined) in effect as of that day. The Lender's Index Rate for
this Note shall be defined as: UMB BANK, n. a . PRIME RATE
Accrued interest shall be payable Monthly. The term "Maturity" shall mean
OCTOBER 1, 1998, or any earlier date on which payment hereunder is due pursuant
to any demand or acceleration rights provided in this Note. The term "Index
Rate", if applicable to this Note, shall mean that rate of interest per annum
determined from time to time by Lender as Its base or index rate for loans to
commercial borrowers. Such base or index rate does not necessarily reflect the
rate that Lender charges Its best or most creditworthy customers. It the Lender
is precluded by law or otherwise from using the above base or Index rate, the
term "Index Rate" shall mean that substitute Index rate selected by Lender in
place of its base or index rate, which substitute Index rate shall be comparable
to Lender's base or index rate provided for herein. Interest hereunder shall be
computed on the basis of days elapsed and assuming a 360-day year. Each payment
received shall be applied first to accrued interest, and then to a reduction of
the principal sum and any expense or other sums owed under this Note, or in any
other order as determined by Lender in Lender's sole discretion and as permitted
by law. Any sum remaining unpaid after Maturity shall thereafter bear interest
at a rate (the "Default Interest Rate") which shall be at all times TWO AND
NO/1000 percentage points ( _2,000 ___________ %) in excess of the Loan
Interest Rate (adjusted, if applicable, as provided abov6) that would have been
applicable-but for such Maturity. If not paid at Maturity, Interest thereafter
shall be compounded monthly. The privilege Is hereby reserved to prepay without
penalty all or any part of the outstanding amount due hereunder at any time
prior to Maturity. If at any time prior to Maturity the outstanding principal
balance due hereunder is less than the face amount of this Note, the
undersigned, or any of them, may from time to time until Maturity request, and
Lender may in Its sole discretion, make further disbursements hereunder which
shall be evidenced by this Note; provided, however, the aggregate amount of all
principal amounts outstanding hereunder shall at no time exceed the face amount
of this Note; and provided further, that each and every disbursement made under
this Note shall be at the Lender's sole discretion, Lender having made no
commitment to make any such disbursements, The principal amount due hereunder
shall be the last amount stated to be the Unpaid Principal Balance on the
Schedule of Disbursements and Payments of Principal, and the undersigned hereby
authorizes any officer of the Lender to make notations on the Schedule of
Disbursements and Payments of Principal from time to time to evidence payments
and disbursements hereunder. The Lender Is hereby directed by the undersigned to
credit all future disbursements, if any, under this Note to account number(s)
carried on the books of Lender in the name(s) of SAZTEC INTERNATIONAL, INC.,
ADVANCED AUTOMATION ASSOCIATES, INC, and the undersigned agrees that the Lender
or holder hereof may make disbursements, at Its discretion, upon oral or written
Instructions of any of the undersigned, or any other person(s) authorized by any
of the undersigned.
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Notwithstanding anything contained herein to the contrary, In no event shall
Interest accrue under this Note, before or after Maturity, at a rate In excess
of the highest rate permitted by applicable law, and If Interest (including any
charge or fee held to be interest by a court of competent jurisdiction) In
excess thereof shall be paid, then the excess shall constitute a payment of, and
be applied to, the principal balance hereof, or at Lender's option, shall be
repaid to the undersigned.
The undersigned warrants and represents that all proceeds of the loan evidenced
by this Note are to be used solely for business or agricultural purposes, and
not for personal. family or household purposes. The undersigned agrees that If
the proceeds are to be used for agricultural purposes, such proceeds will be
used only for the specific operating purposes described to Lender by the
undersigned, and not for the acquisition of fixed assets or capital
expenditures. No collateral security securing this Note will be sold unless
Lender Is first notified and approves in writing of such sale.
As security for payment of all amounts due under this Note and all renewals and
extensions hereof, and for the payment of all other present or future
indebtedness and obligations to the Lender of any party liable hereon, however
and whenever created, arising or evidenced, direct or indirect, contingent,
secured, unsecured, matured or not yet due, the undersigned pledges and grants
to Lender a lien and security Interest In all indebtedness of Lender to any of
the undersigned, including (without limitation) any moneys, credit balances or
deposits (general or special) due from or standing on deposit with the Lender,
which belongs to, is in the name of, or is subject to withdrawal by, any party
liable hereon, whether( now existing or hereafter arising or deposited, and in
all items, moneys, Instruments, certificates of deposit, securities and other
personal property of or In the name of any of the undersigned now or hereafter
in the possession or control of, or in transit to, the Lender for any purpose
and in any capacity (but excluding however from the foregoing any accounts or
deposits held in or by any trust qualified under sections 401 (a) or 408 of the
Internal Revenue Code of 1986), Including all proceeds and products thereof and
all accessions and accruals thereto and all dividends, rights, payments, shares
and property received in respect thereto, the undersigned further agreeing that
the aforesaid Indebtedness (if any) of Lender to any of the undersigned may, at
any time that all or any part of this Note remains unpaid (whether before or
after Maturity), be held or applied to the payment of this Note by the holder
hereof. Nothing herein shall in any way limit any of Lender's rights of setoff.
This Note may also be secured by other collateral in which the undersigned or
others may have granted a security interest or lien to Lender, including,
without limitation, the following: ALL ACCOUNTS RECEIVABLE & INVENTORY AS
FURTHER DESCRIBED IN SECURITY AGREEMENT DATED 10-7-97, EQUIPMENT, FURNITURE &
FIXTURES AS FURTHER DESCRIBED IN SECURITY AGREEMENTS DATED 4-7-92, 9-25-92, &
2-15-93. ALL STOCK CERTIFICATES, BONDS, RECEIPTS, CONFIRMATIONS AND SIMILAR
DOCUMENTS AS FURTHER DESCRIBED IN SECURITY AGREEMENTS DATED 9-25-92 & 12-15-94.
ALL COMMISSION RECEIVABLES AS FURTHER DESCRIBED IN SECURITY AGREEMENT
DATED,10-8-93.
All security Interests and liens granted to the Lender by the undersigned,
together with all other provisions relating thereto, shall be deemed a
continuing agreement and shall continue In full force and effect (and Lender may
retain any and all of the aforesaid collateral security and proceeds thereof,
irrespective of the payment In full of the Indebtedness evidenced by this Note)
until all Indebtedness secured thereby has been repaid and performed in full. It
is intended that the above security Interests and liens secure all of each of
the undersigned's existing and future indebtedness to Lender of all types and
nature, including indebtedness unrelated or dissimilar to the Indebtedness
evidenced by this Note. If this Note Is secured by mortgages) or deed(s) of
trust, such mortgages) or deed(s) of trust is dated and is a lien on real
property described therein, located in the State of _____ and, If previously
recorded, recorded as Document Number In ________ with the _____________ of
Deeds of County, ____________________________________ . The undersigned agrees
to give to Lender upon Lender's request, from time to time, such other and
further security as Lender, In its sole discretion, may deem necessary or
appropriate, such additional security to become collateral security for this
Note under the provisions hereof.
Presentment, demand, notice of nonpayment, dishonor, protest, notice of protest,
notice of dishonor or default, and any and all lack of diligence and suit are
hereby waived by all parties liable hereon. The undersigned and each endorser,
guarantor, surety or other person who may now or hereafter be liable for the
payment of this Note, by executing, endorsing, guaranteeing or assuming this
Note, jointly and severally consent and agree to all of the terms and conditions
herein, and without limitation of the foregoing and without affecting their
liabilities hereunder or under any other document or Instrument, agree and
consent without further notice to (I) all renewals, deferrals, extensions and
modifications hereof, (II) the Impairment, alteration, compromise, acceleration,
extension of change In the time or manner of the payment of any of the
undersigned's Indebtedness to Lender, (III) the Impairment, substitution,
exchange or release at any time of all or any part of any collateral security or
any guaranty for this Note, (IV) the release of. or Impairment of, the right of
recourse against, any of the undersigned or any endorser, guarantor, surety or
any other person now or hereafter liable herein, (V) the substitution of
extension or renewal notes for this Note, and (VI) the modification of
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any terms hereof or of any mortgage, deed of trust or other agreement now or
hereafter given In connection with or as security for this Note. To the full
extent (if any) permitted by applicable law, the undersigned agrees to pay, and
to indemnify the Lender from and against, all costs, charges, expenses,
judgments, fines, penalties, collection agency fees and reasonable attorneys
fees Incurred by the holder in: (a) collecting this Note; b) enforcing rights
with respect to or realizing upon any collateral security therefor; (c)
defending any action brought against the Lender with respect to this Note, any
matter relating thereto or to any relationship or transaction between Lender and
any of the undersigned; or (d) complying with, or failing to comply with, any
Environmental Regulations (as herein defined) including abatement and cleanup
costs, Any sums paid by the holder for any such expenses shall be immediately
due and payable by the undersigned and shall bear interest at the rate then
applicable to any outstanding principal hereunder from the date advanced until
paid. The occurrence of any of the following shall constitute an "Event of
Default": (i) default In the payment of any sum due hereunder, or in the payment
or performance of any other obligation of any of the undersigned to Lender or
the occurrence of any default by any of the undersigned pursuant to any
obligation or undertaking under any security agreement, assignment, pledge
agreement, deed of trust, mortgage or other Instrument or document governing or
relating to the Indebtedness evidenced hereby or granting or providing for a
security Interest, pledge or other lien as security for any obligations of any
of the undersigned to Lender (including, but not limited to, the Indebtedness
evidenced by this Note); (ii) the occurrence of any adverse development with
respect to the financial condition of any of the undersigned or any other person
or entity ("Guarantor") who Is directly or Indirectly liable for any of
Indebtedness evidenced by this Note, which materially affects the ability of any
of the undersigned or such Guarantor to perform their respective obligations to
Lender; (iii) any material representation or warranty made by any of the
undersigned or any Guarantor to Lender being untrue, inaccurate or Incomplete as
of the day it was made or given; (iv) the death, dissolution or termination of
existence of any of the undersigned or any Guarantor or the failure of any of
the undersigned or any Guarantor to pay debts as they mature, the appointment of
a receiver for any part of the property of any of the undersigned or any
Guarantor, an assignment for the benefit of creditors by any of the undersigned
or any Guarantor, or the commencement of any proceedings under bankruptcy or
Insolvency laws by or against any of the undersigned or any Guarantor; (v) a
levy, attachment, restraint or other legal process filed against any of the
undersigned or any Guarantor or any collateral security securing this Note; (vi)
as a result of Its reasonable determination that any collateral security given
for this Note is impaired or has a value Insufficient to adequately secure the
obligations of the undersigned secured thereby, Lender has requested additional
collateral and such additional collateral has not been promptly provided by the
undersigned or a Guarantor, of a type and In the manner satisfactory to Lender;
(vii) that subsequent to the date of this Note (or any predecessor note(s) for
which this Note constitutes a renewal, extension or refinancing) there has
occurred a 'Change of Control' In any of the undersigned that is a Corporation
or Partnership (for purposes of this Note, a "Change of Control" is deemed to
have occurred upon the transfer, directly or Indirectly, in one or more
transactions, of any general partnership interest or of TEN AND NO@1000
percentage points ( 10. 000 %) or more of any class of voting stock of a
corporation or the right to vote or control such stock or partnership Interest,
or if the percentage of a corporation's issued and outstanding shares that are
held by any one shareholder changes (for any reason) by more than TEN AND
N0/1000 percentage points ( 10.000 %) or (viii) Lender has deemed itself
insecure with respect to the undersigned's indebtedness under this Note or with
respect to any of the undersigned's other obligations to Lender. Upon the
occurrence of any Event of Default, Lender may, at Its sole option and without
limitation on the demand feature of this Note and without notice or demand: (A)
declare the entire principal sum owed hereunder and all other Indebtedness of
the undersigned to Lender, Immediately due and payable; (B) appropriate and
apply toward the payment of the undersigned's obligations to Lender (including,
but not limited to, the Indebtedness evidenced by this Note), In such order of
application as it elects, any or all balances, credits, deposits, accounts or
moneys of or In the name of any of the undersigned then or thereafter with
Lender In any capacity; and (C) exercise, In addition to all other rights
hereunder or under any other applicable agreements and Instruments, its rights
under applicable law, Including those of a secured party under the Uniform
Commercial Code of the state in which Lender's office Identified above is
located. Upon the occurrence of an Event of Default described In clause (iv) of
the Immediately preceding paragraph, this Note shall automatically and
immediately become due and payable without notice or demand. The failure of the
Lender to exercise any option or right or remedy shall not preclude the Lender
from exercising any other right or remedy Lender may be entitled to exercise
upon the occurrence of any Event of Default hereunder, and shall not constitute
a waiver of such option or any other right at any time thereafter. Lender's
acceptance of a partial payment of any sum due hereunder after any Event of
Default or after Maturity, shall not rescind, waive or otherwise affect any such
Event of Default or Maturity or any acceleration or any other exercise by Lender
of any of Its rights hereunder or under any other documents or applicable law.
The undersigned agrees that time is of the essence. If any provision of this
Note violates the law or Is unenforceable, the other provisions of this Note
shall remain valid.
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The undersigned shall furnish to Lender such Information and reports regarding
any collateral security, the undersigned's financial condition and operations,
and such other matters as Lender may from time to time reasonably request.
Specifically, and without limitation on the foregoing, the undersigned shall
provide to Lender upon reasonable request, current financial statements for each
of the undersigned and each Guarantor Including, but not limited to, balance
sheets and profit and loss statements.
The undersigned shall comply with all federal, state and local laws, statutes,
rules, regulations, standards, ordinances and orders pertaining to the
environment, hazardous substances, pollutants or contaminants ("Environmental
Regulations") and shall Immediately deliver to Lender copies of any notice or
other communication received by any of the undersigned alleging a violation of,
or a failure to maintain any permit or license required by, any Environmental
Regulations. The undersigned covenants, represents and warrants to Lender that
any property now or hereafter or previously owned or operated by any of the
undersigned, has not been, and will not be, used by any of the undersigned, or
to the best knowledge and belief of each of the undersigned, by any prior owner
or operator, to refine, produce, store, handle, process or transport any
hazardous substance, pollutant or contaminant except in full compliance with all
applicable Environmental Regulations, and that any substance disposed of
off-site by any of the undersigned have been, and will be, disposed of in
accordance with all applicable Environmental Regulations.
The loan evidenced hereby has been made, and this Note has been delivered, at
Lender's office at the address indicated above, and such loan, this Note and the
rights, obligations and remedies of Lender and the undersigned shall be governed
by and construed in accordance with the laws of the state in which Lender's
office identified above Is located. All obligations of the undersigned, an the
rights, powers and remedies of Lender, expressed herein shall be in addition to,
and not In limitation of, those provided by law or in any written agreements or
Instruments (other than this Note) relating to any obligation of any of the
undersigned to Lender, the loan evidenced by this Note or any collateral
security. Borrower shall not a) voluntarily transfer any assets Into trust or,
b) if already owned In trust, shall not voluntarily transfer title to such trust
assets to any other person or entity, without giving Lender at least 30 days
prior written notice thereof.
It is the Intent hereof that each of the undersigned (if more than one) remain
liable as principal until the full amount of all indebtedness evidenced by this
Note has been paid, notwithstanding any act, omission or event that might
otherwise operate as a legal or equitable discharge or defense with respect to
any of the undersigned.
No setoff of counterclaim of any kind claimed by any person liable under this
Note shall stand as a defense to the enforcement such person. It being agreed
that any such setoff or counterclaim must be maintained by separate suit.
The undersigned and Lender hereby agree to trial by court and Irrevocably waive
jury trial In any action or proceeding (Including but not limited to, any
counterclaim) arising out of or In any way relating to or connected to this
Note, any relationship or transaction between any of the undersigned and Lender,
the origination, administration or enforcement of the Indebtedness evidenced or
secured by this Note, or any other matter.
Additional Terms:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM
ENFORCING REPAYMENTS OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER(S)) AND US (LENDER) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
Borrower: SAZTEC INTERNATIONAL, INC. Borrower: Advanced Automation
Associates, Inc.
By: /s/ GARY N. ABERNATHY By: /s/ GARY N. ABERNATHY
--------------------- ---------------------
Title: President Title: President
Address: 43 MANNING RD.
BILLERICA, MA 01821
ADDENDUM
It is hereby agreed by UMB Bank, n.a. and Saztec International, Inc. and
Advanced Automation Associates, Inc. that the dollar availability of this Master
Note shall decrease Ten Thousand dollars on the first business day of each month
beginning May 1, 1998 until maturity at October 1, 1998.
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UMB Bank, n.a. Saztec International, Inc.
By /s/ TRAVIS J. BURNS /s/ GARY ABERNATHY
------------------------ ------------------
Travis J. Burns, Gary Abernathy,
Assistant Vice President President
Advanced Automation Associates, Inc.
By /s/ GARY N. ABERNATHY
-------------------------
Gary N. Abernathy, President
31