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TBCC
AMENDMENT AGREEMENT
BORROWER: V-ONE CORPORATION,
A DELAWARE CORPORATION
ADDRESS: 00000 XXXXXXX XXXXXXXXX, XXXXX 000
XXXXXXXXXX, XXXXXXXX 00000
DATE: JUNE 30, 1999
THIS AMENDMENT AGREEMENT (this "Amendment") is entered into as of the above
date, between the above borrower (the "Borrower"), having its chief executive
office and principal place of business at the address shown above, and
TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware corporation ("TBCC"),
having its principal office at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxx 00000 and having an office at 00 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxx 00000-0000.
TBCC and the Borrower agree to amend and supplement the Loan and Security
Agreement between them, dated February 24, 1999, as amended (as amended, the
"Loan Agreement"), as follows. (This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by TBCC and the Borrower, and
all other written documents and agreements between TBCC and the Borrower, are
referred to herein collectively as the "Loan Documents." Capitalized terms used
but not defined in this Amendment shall have the meanings set forth in the Loan
Agreement.)
1. AMENDMENTS. Effective the Closing Date (as defined below), the
Schedule is amended as follows:
(a) The Term Loan Maturity Date (Section 4 of the Schedule) shall be
February 28, 2000.
(b) The second and third sentences of the second paragraph of Section 1(A)
of the Schedule are deleted in their entirety and replaced by the
following:
On the Term Loan Maturity Date, TBCC shall have the option (but not
the obligation) to convert the Term Loan to a Revolving Loan. If TBCC
agrees to convert the Term Loan to a Revolving Loan and if , on the
Term Loan Maturity Date, the principal amount of the outstanding Term
Loan exceeds the Revolving Loan Credit Limit, Borrower shall repay
the Term Loan in an amount equal to such excess.
2. WAIVERS.
(a) Effective the Closing Date, TBCC waives compliance with Section 5.15
of the Loan Agreement for the fiscal quarter ending June 30, 1999.
(b) Effective the Closing Date, TBCC waives compliance with Section 6.8
of the Loan Agreement in order to permit the issuance by Borrower of
Series C Convertible Preferred Stock, PROVIDED, HOWEVER, that such waiver
does not extend to, and shall not be deemed to include, payment of any
cash dividends thereon.
3. OTHER PROVISIONS.
(a) The Acquisition Fee (Section 3 of the Schedule) is hereby deleted.
Effective the Closing Date, any and all references in the Loan Documents
to such Acquisition Fee shall be of no further force or effect.
TBCC Amendment Agreement
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(b) The Term Note dated February 24, 1999, in the amount of $3,000,000,
executed by the Borrower in favor of TBCC, is amended in its entirety by a
Term Note in the form of EXHIBIT A hereto, to be delivered by Borrower on
or prior to the Closing Date. In consideration therefor, the Borrower
agrees to pay TBCC a Term Note re-negotiation fee of $150,000 on February
28, 2000. Effective the Closing Date, the Term Note dated February 24,
1999 will be deemed replaced by such new Term Note.
(c) With respect to any Borrower's delinquent payments of principal or
interest due (pursuant to the Amended Term Note dated June 30, 1999) (each
such delinquent payment a "Late Payment"), Borrower agrees to pay to TBCC,
with respect to each Late Payment, for each day following the contractual
due date of such Late Payment through and including the day such Late
Payment is rendered to TBCC (the "Forbearance Period"), additional
interest on the unpaid principal amount outstanding during the Forbearance
Period at a rate equal to 2.0% per annum, pro-rated on a daily basis for
each day of such Forbearance Period. Such additional interest shall be due
and payable to TBCC immediately upon Borrower's receipt from TBCC of a
written statement of the amount due TBCC in accordance with this
subsection 3(c).
(d) In connection with TBCC's security interest in that certain
Non-Negotiable Promissory Note dated June 11, 1999, in the amount of
$2,000,000, executed by Hai Xxx Xxxxx and Wen Xxx Xx (collectively, the
"Note Parties") in favor of Borrower (the "Note"), Borrower shall deliver
the following to TBCC on or prior to the Closing Date: (i) the Note; and
(ii) an indorsement (allonge) with respect to such Note.
(e) Subsequent to closing of the current equity round pursuant to the
Letter of Intent from Xxxxxx Xxxxxxxxxx Xxxxx dated June 30, 1999,
Borrower shall apply 30% of any future equity contributions (regardless of
amount, but excluding the exercise of employee stock options and warrants
existing as of the date hereof) to reduce the principal balance of the
Loans, such payment is not considered a prepayment for purposes of the
Prepayment Fee per the Term Note.
4. CONDITIONS PRECEDENT. The effectiveness of the foregoing amendments
shall be subject to the conditions precedent that:
(a) TBCC shall have received seven-year warrants to purchase 50,000 shares
of common stock of the Borrower, on the terms to be set forth in a Stock
Subscription Warrant (the "Warrant"), in form and substance satisfactory
to TBCC, at an exercise price equal to $3.75 per share. Said warrants
shall be deemed fully earned on the date of issuance thereof, shall be in
addition to all interest and other fees, and shall be non-refundable;
(b) Borrower shall have delivered the new Term Note pursuant to subsection
3(b) hereof; and
(c) Pursuant to subsection 3(d) hereof, Borrower shall have delivered to
TBCC the following: (i) the Note, and; (ii) an indorsement (allonge),
executed in blank, with respect to such Note.
The date of satisfaction of the foregoing conditions precedent is the "Closing
Date".
5. REPRESENTATIONS TRUE. To induce TBCC to enter into this Amendment, the
Borrower hereby confirms and restates, as of the date hereof, the
representations and warranties made by it in Section 4 of the Loan Agreement.
For the purposes of this Section 5 each reference in Section 4 of the Loan
Agreement to "this Agreement," and the words "hereof," "herein," "hereunder," or
words of like import in such Section, shall mean and be a reference to the Loan
Agreement as amended by this Amendment.
6. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, WHETHER
SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE
INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS.
7. GENERAL PROVISIONS. TBCC's execution and delivery of, or acceptance
of, this Amendment and any other documents and instruments in connection
herewith shall not be deemed to create a course of dealing or otherwise create
any express or implied duty by it to provide any other or further amendments,
consents or waivers in the future. This Amendment, the Loan Agreement, and the
other Loan Documents set forth in full all of the representations and agreements
of the parties with respect to the subject matter hereof and supersede all prior
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TBCC Amendment Agreement
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discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly amended and
supplemented, all of the terms and provisions of the Loan Agreement and the
other Loan Documents shall continue in full force and effect and the same are
hereby ratified and confirmed. This Amendment forms part of the Loan Agreement
and the terms of the Loan Agreement are incorporated herein by reference.
BORROWER: TBCC:
V-ONE CORPORATION TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Title: CEO Title: Xxxxxx X. Xxxxxxx, Xx.
Executive Vice President
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TERM NOTE
$3,000,000 CHICAGO, ILLINOIS JUNE 30, 1999
FOR VALUE RECEIVED, V-ONE CORPORATION, a Delaware corporation having its
chief executive office and principal place of business at 00000 Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 (the "Borrower"), hereby
unconditionally and absolutely promises to pay to the order of TRANSAMERICA
BUSINESS CREDIT CORPORATION, a Delaware corporation ("TBCC"), at TBCC's office
at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000, or at such other
location as TBCC may from time to time designate, in lawful money of the United
States of America and in immediately available funds, the principal amount equal
to $3,000,000, as follows: (i) six consecutive monthly principal installments of
$100,000 each, beginning on September 1, 1999 and continuing on the first day of
each succeeding month, through and including February 1, 2000; and (ii) one
payment of the entire unpaid principal balance of this Note, plus any and all
accrued and unpaid interest, on February 28, 2000 (the "Term Loan Maturity
Date"). The Borrower further promises to pay interest in like money and funds at
TBCC's office specified above (or at such other location as TBCC may from time
to time designate) on the unpaid principal amount hereof from time to time
outstanding from and including the date hereof until paid in full (both before
and after judgment), on the first Business Day of each month, and on the Term
Loan Maturity Date, at a rate equal to 12.53% per annum, PROVIDED, HOWEVER, that
if Borrower fails to pay any principal payment required hereby on the date such
principal payment is due and payable, the interest rate hereunder shall be
increased by two percent per annum, prorated on a daily basis for each day that
such principal payment remains due and payable, through and including the day
such principal payment is paid (at which time, unless any other Event of Default
has occurred and is continuing, the original interest rate hereunder shall again
take effect); and PROVIDED FURTHER that (without duplication of the foregoing
interest rate increase) following the occurrence and during the continuance of
any Event of Default, the interest rate hereunder shall be increased by two
percent per annum. Interest shall be calculated on the basis of a 360-day year
for the actual number of days elapsed. All capitalized terms used herein which
are not defined herein shall have the meanings ascribed to such terms in the
Loan and Security Agreement between TBCC and Borrower dated February 24, 1999,
as amended (as amended, the "Loan Agreement").
Whenever any payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, the payment may be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the amount of interest due hereunder.
This Note is entitled to the benefit of all terms and conditions of, and
the security of all security interests, liens, mortgages, deeds of trust and
rights granted pursuant to, the Loan Agreement and the other Loan Documents, and
is subject to optional and mandatory prepayment as provided therein. The
principal of this Note may be prepaid, in whole or in part, at the option of the
Borrower, upon 3 days' prior notice to TBCC. Partial prepayments hereof shall be
applied to the installments of principal hereof in the inverse order of
maturity. Accrued interest on any principal amount hereof prepaid shall be due
on the prepayment date as to the principal amount hereof prepaid. Any prepayment
hereof shall be subject to payment of an additional payment (the "Prepayment
Fee") equal to the net present value of all interest that would have accrued
through the scheduled maturity date on the principal amount being prepaid
(assuming a rate of interest per annum equal to the rate of interest then in
effect hereunder on the date of the prepayment) discounted, on a simple interest
basis, at the rate of 6% per annum. The Prepayment Fee shall also be due and
payable upon any acceleration hereof pursuant to the Loan Agreement.
Upon the occurrence of any one or more Events of Default, all amounts then
remaining unpaid on this Note may be declared to be or may automatically become
immediately due and payable as provided in the Loan Agreement.
The Borrower acknowledges that the holder of this Note may assign,
transfer or sell all or a portion of its rights and interests to and under this
Note to one or more Persons as provided in the Loan Agreement and that such
Persons shall thereupon become vested with all of the rights and benefits of
TBCC in respect hereof as to all or that portion of this Note which is so
assigned, transferred or sold.
In the event of any conflict between the terms hereof and the terms and
provisions of the Loan Agreement, the terms and provisions of the Loan Agreement
shall control.
The Borrower and all other parties that at any time may be liable hereupon
in any capacity, jointly or severally, waive presentment, demand for payment,
protest and notice of dishonor of this Note and authorize the holder hereof,
without notice, to increase or decrease the rate of interest on any amount owing
under this Note in accordance with the Loan Agreement. The Borrower further
waives promptness, diligence, notice of acceptance and any other notice with
respect to any of the Obligations and any requirement that TBCC exhaust any
rights or take any action against any other Person or any Collateral. The
Borrower further hereby waives notice of or proof of reliance by TBCC upon this
Note, and the Obligations shall conclusively be deemed to have been created,
contracted, incurred, renewed, extended, amended or waived in reliance upon this
Note. The Borrower shall make all payments hereunder and under the Loan
Agreement without defense, offset or counterclaim. No failure to exercise and no
delay in exercising any rights hereunder on the part of the holder hereof shall
operate as a waiver of such rights. This Note may not be changed orally, but
only by an agreement in writing, which is signed by the party or parties against
whom enforcement of any waiver, change, modification or discharge is sought.
EXHIBIT A TO AMENDMENT AGREEMENT
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS NOTE AND THE OTHER
LOAN DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS NOTE,
WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY
THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) AND DECISIONS
OF THE STATE OF ILLINOIS.
ALL DISPUTES ARISING UNDER OR IN CONNECTION WITH THIS NOTE AND ANY OTHER
LOAN DOCUMENT BETWEEN THE BORROWER AND TBCC, WHETHER SOUNDING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED
IN CHICAGO, ILLINOIS, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN;
PROVIDED, HOWEVER, THAT TBCC SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN ANY LOCATION
REASONABLY SELECTED BY TBCC IN GOOD FAITH TO ENABLE TBCC TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF TBCC. THE
BORROWER WAIVES ANY OBJECTION THAT THE BORROWER MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH TBCC HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
THE BORROWER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM, 0000
XXXXXX XXXXXX, XXXXXXXXXX, XXXXXXXX 00000, AS THE DESIGNEE AND AGENT OF THE
BORROWER TO RECEIVE, FOR AND ON BEHALF OF THE BORROWER, SERVICE OF PROCESS IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE OR ANY OTHER LOAN
DOCUMENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON SUCH AGENT AT
ITS ADDRESS WILL BE PROMPTLY FORWARDED BY MAIL TO THE BORROWER AND ITS LEGAL
COUNSEL DESIGNATED IN THE SCHEDULE, BUT THE FAILURE OF THE BORROWER OR SUCH
LEGAL COUNSEL TO RECEIVE SUCH COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF
SUCH PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF TBCC TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
THE BORROWER AND, BY ITS ACCEPTANCE HEREOF, TBCC EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO: (I) THIS NOTE; OR (II) ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN TBCC AND BORROWER; OR (III) ANY CONDUCT, ACTS OR
OMISSIONS OF TBCC OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH TBCC OR BORROWER; IN EACH
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
V-ONE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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