Loan and Security Agreement
Category: 270 Legal Recent Posts, Loan, Security
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) is dated as of November , 2006 by and between XYBERNAUT CORPORATION, a Delaware corporation (the “Borrower”), and EAST RIVER CAPITAL LLC, a Delaware limited liability company (the “Lender”).
RECITALS
A. The Borrower and Xybernaut Solutions, Inc., a Virginia corporation (“XSI”, and collectively with the Borrower, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) before the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (the “Bankruptcy Court”).
B. The Lender has provided a secured revolving credit facility to the Debtors pursuant to the Existing Loan Documents (as hereinafter defined) in their jointly administered bankruptcy case, Case No. 05-12801 (the “Bankruptcy Case”).
C. The Plan of Reorganization (as hereinafter defined) has been confirmed in the Bankruptcy Case pursuant to the Confirmation Order (as hereinafter defined) and concurrently with the effectiveness of this Agreement, the Effective Date (as hereinafter defined) has occurred and pursuant to the Merger Documents (as hereinafter defined), XSI has merged into the Borrower with the Borrower being the surviving corporation.
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2.2.3 Revolving Loan Procedures
The Borrower may borrow under the Revolving Loan on any Business Day upon written request by the Borrower. The Borrower shall provide such written request (a “Loan Request”), together with telephonic notice thereof, to Lender on or before 12:00 noon at least three (3) Business Days prior to the requested date of such borrowing stating the amount requested and containing a certification of an authorized officer of the Borrower stating that no Default or Event of Default has then occurred and is continuing. Lender will advance the amount requested provided that (a) no Default or Event of Default has occurred and is continuing at the time the Loan Request is received and at the time the advance is made, (b) the aggregate principal amount outstanding under the Revolving Loan after giving effect to the requested advance does not exceed $375,000, and (c) all of the conditions precedent for advances set forth in this Agreement have been satisfied. Amounts repaid hereunder may be reborrowed on a revolving basis, subject to the terms and conditions of this Agreement. Each Loan Request must in a minimum amount of Fifty Thousand Dollars ($50,000).
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