Attached files
| file | filename |
|---|---|
| EX-10.2 - MASTER LEASE AGREEMENT, DATED JANUARY 9, 2019 - PARK CITY GROUP INC | ex10-2.htm |
| 8-K - CURRENT REPORT - PARK CITY GROUP INC | pcyg8k_jan92019.htm |
|
|
Exhibit 10.1
|
|
For Bank Use Only
Due: December 31, 2019
Obligor 0028586166
Obligation 406
|
AMENDMENT TO NOTE
This amendment (the "Amendment") is made between the undersigned borrower (the
"Borrower") and U.S. Bank National Association (the
"Bank") and shall be effective as of the date set forth
on the last page of the Amendment, except as otherwise provided
below.
RECITALS
A.
Borrower (or predecessor) executed a note
originally dated or amended or restated as of February 12, 2018,
payable to Bank (or predecessor) (as further amended and/or
restated, the "Note"). The Note and all collateral and/or other
documents, which may or may not be identified in the Note, which
supplement, secure or otherwise relate to the credit facility
evidenced by the Note are collectively referred to as the
"Loan
Documents". The Loan Documents
set forth the terms and conditions upon which Borrower has obtained
or may obtain a loan or loans from Bank in the original or amended
or restated principal amount of $5,000,000.00, as such amount may
have been or may from time to time be increased or decreased
according to the terms of the Loan Documents.
B.
Borrower
has requested that Bank permit certain modifications to the Note as
described below.
C.
Bank
has agreed to such modifications, but only upon the terms and
conditions outlined in the Amendment.
In
consideration of the mutual covenants contained herein, and for
other good and valuable consideration, Borrower and Bank agree as
follows:
ADDITIONS, DELETIONS OR CHANGES IN TERMS
The
following provisions are hereby added to the Note or, if so
indicated below, specified provisions of the Note are modified, in
part, or deleted or performance thereof is waived to the extent
provided below. If any provision or partial provision added below
already exists in the Note, such provision is restated in its
entirety. Capitalized terms used in the Amendment not otherwise
defined herein shall have the meanings ascribed to them in the
Note.
Modification of Maturity
Date. Any references in the
Note to the maturity date or date of final payment are hereby
deleted and replaced with "December 31, 2019".
Maximum Loan
Amount. All references in the
Note (whether or not numerical) to the maximum amount that may be
outstanding at any time are hereby deleted and replaced with
$6,000,000.00 (the "Loan Amount").
Interest Rate.
The interest rate under the Note
(including any provisions of the Note relating to periodic
adjustments to the applicable rate, maximum rate adjustments, floor
rates, ceiling rates and rate conversions) shall be amended as
follows:
Interest on each advance hereunder shall accrue at
an annual rate equal to 1.75% plus the one-month LIBOR rate quoted
by Bank from Reuters Screen LIBOROI Page or any successor thereto
which may be designated by Bank as provided below, which shall be
that one-month LIBOR rate in effect two New York Banking Days prior
to the Reprice Date, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation,
such rate to be reset monthly on each Reprice Date. The term
"New York
Banking Day" means any date
(other than a Saturday or Sunday) on which commercial banks are
open for business in New York, New York. The term
"Reprice
Date" means the 1st day of each
month. If the initial advance under this Note occurs other than on
the Reprice Date, the initial one-month LIBOR rate shall be that
one-month LIBOR rate in effect two New York Banking Days prior to
the date of the initial advance, which rate plus the percentage
described above shall be in effect until the next Reprice Date.
Bank's internal records of applicable interest rates (including
without limitation Bank's designation of any successor interest
rate index if the rate index described above shall become
temporarily unavailable or shall cease to exist) shall be
determinative in the absence of manifest error.
Notwithstanding
anything to the contrary in the Note or the Amendment, for purposes
of determining any rate of interest which is based upon a stated
formula, neither the interest rate nor the index or other
referenced rate upon which the interest rate is based shall at any
time be less than 0%.
Payment Schedule.
The payment schedule for the Note
shall be amended as follows:
Interest
is payable beginning January 31, 2019, and on the last day of each
consecutive month thereafter, plus a final interest payment with
the final payment of principal.
Principal
is payable on December 31, 2019, the maturity date.
-1-
Deletion of Additional
Terms. The following named or
described additional terms are hereby deleted:
o
Paid-ln-Full
Period: the term which provides that all revolving loans under the
Agreement and Note must be paid in full for a specified number of
consecutive days during each fiscal year.
Default Interest Rate.
Notwithstanding any provision of the
Note to the contrary, upon any default or at any time during the
continuation thereof (including failure to pay upon maturity), Bank
may, at its option and subject to applicable law, (a) increase the
interest rate on the Note to a rate of 5% per annum plus the
interest rate otherwise payable under the Note and (b) until Bank
elects to accelerate payment of the Note according to the default
section, increase the required periodic payments under the Note
accordingly, Notwithstanding the foregoing and subject to
applicable law, upon the occurrence of a default by Borrower or any
guarantor involving bankruptcy, insolvency, receivership
proceedings or an assignment for the benefit of creditors, the
interest rate on the Note shall automatically increase to a rate of
5% per annum plus the rate otherwise payable under the
Note.
MISCELLANEOUS TERMS
Modification Fee.
Subject to applicable law, Borrower
will pay Bank a modification fee of S (apart from any prior closing
fee) contemporaneously with the execution of the Amendment. This
fee is in addition to all other fees, expenses and other amounts
due hereunder or under any other Loan
Documents.
Effectiveness of Prior
Documents. Except as
specifically amended hereby, the Note and the other Loan Documents
shall remain in full force and effect in accordance with their
respective terms. All warranties and representations contained in
the Note and the other Loan Documents are hereby reconfirmed as of
the date hereof. All collateral previously provided to secure the
Note continues as security, and all guaranties guaranteeing
obligations under the Loan Documents remain in full force and
effect. This is an amendment, not a novation.
Preconditions to
Effectiveness. The Amendment
shall only become effective upon execution by Borrower and Bank,
and approval by any other third party required by
Bank.
No Waiver of Defaults;
Warranties. The Amendment shall
not be construed as or be deemed to be a waiver by Bank of existing
defaults by Borrower, whether known or undiscovered. All
agreements, representations and warranties made herein shall
survive the execution of the Amendment.
Counterparts.
The Amendment may be signed in any
number of counterparts, each of which shall be considered an
original, but when taken together shall constitute one
document.
Authorization.
Borrower represents and warrants that
the execution, delivery and performance of the Amendment and the
documents referenced herein are within the authority of Borrower
and have been duly authorized by all necessary
action.
USA PATRIOT Act; Anti-Corruption Laws, Sanctions and Anti-Terrorism
Laws.
(a) IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to
obtain, verify, and record information that identifies each person
who opens an account, Bank will ask each person in a financial
transaction their name, address and other information that will
allow Bank to identify such person. Bank may also ask to see other
documents that substantiate a person's identity.
(b) Borrower
represents, warrants, covenants and agrees as follows:
(i)
Borrower; each and all entities 50% or more owned,
directly or indirectly, by Borrower ("Subsidiaries"), and their respective officers, employees,
directors and agents are and at all times will remain in compliance
with the following: (A) all laws, rules, and regulations of any
jurisdiction applicable to Borrower or its Subsidiaries from time
to time concerning or relating to bribery or corruption
("Anti-corruption
Laws"), (B) economic or
financial sanctions or trade embargoes imposed, administered or
enforced from time to time by the U.S. government, including those
administered by the U.S. Department of Treasury's Office of Foreign
Assets Control or successor ("OFAC") or the U.S. Department of State or successor
("Sanctions"), and (C) the USA PATRIOT Act (Title Ill of Pub.
L. 107-56 (signed into law October 26, 2001 )), the Trading with
the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 C.F.R.,
Subtitle B, Chapter V) and any enabling legislation or executive
order relating thereto or successor statute thereto
("Anti-terrorism
Laws"), all as may be amended
from time to time,
(ii)
The
loans made hereunder comply with, and neither the loans made
hereunder nor the use of the proceeds thereof will violate, any
Anti-corruption Laws, Sanctions or Anti-terrorism
Laws.
(iii)
None of Borrower, any Subsidiary or any of their
respective directors, officers or employees is (A) listed in any
Sanctionsrelated list of designated persons maintained by OFAC or
the U.S. Department of State, (B) operating, organized or resident
in a country or territory which is itself the subject or target of
any comprehensive Sanctions ("Sanctioned
Country"), (C) an agency,
political subdivision or instrumentality of the government of a
Sanctioned Country, or (D) 50% or more owned, directly or
indirectly, by any of the above.
-2-
(iv) Borrower shall, and shall cause each Subsidiary
to, provide such information and take such actions as are
reasonably requested by Bank to assist Bank in maintaining
compliance with Anti-corruption Laws, Sanctions, Anti-terrorism
Laws and applicable anti-money laundering laws and regulations
("AML
Laws"). Without limitation of
the foregoing, Borrower represents and warrants that the most
recent certification of beneficial ownership of any Borrower which
is a "legal entity" within the scope of the ownership certification
requirements of the AML Laws is true and correct as of the date of
the Amendment; and Borrower agrees to immediately (A) notify Bank
in writing of any event that results in any individual becoming or
ceasing to be the beneficial owner, directly or indirectly, of 25%
or more of any such "legal entity" Borrower; (B) notify Bank Of any
Change in the individual previously identified by Borrower's
representative(s) ("Account
Opener/Certifier") as the
individual who holds a significant responsibility to control,
manage or direct any such "legal entity" Borrower; and (C) upon
request of Bank, provide in a form acceptable to Bank an updated
certification, signed by a representative of any such "legal
entity" Borrower acting as an Account Opener/Certifier under
regulations implemented under the AML Laws, of the beneficial
ownership and control of such Borrower.
Copies; Electronic
Records. Borrower hereby
acknowledges the receipt of a copy of the Amendment, the Note and
all other Loan Documents. Bank may, on behalf Of Borrower, create a
microfilm or optical disk or other electronic image Of the
Amendment and any or all of the Loan Documents, including the Note.
Bank may store the electronic image of such Amendment and Loan
Documents in its electronic form and then destroy the paper
original as part of Bank's normal business practices, with the
electronic image deemed to be an original. To the extent permitted
by law, Borrower and Bank agree that Bank may convert the Note into
a "transferable record" or the equivalent thereof as defined in
applicable law and that such transferable record shall be the
authoritative copy of the Note. Bank, on its own behalf, may
control and transfer such authoritative copy as permitted by such
law.
Attachments. All documents attached hereto, including any
appendices, schedules, riders, and exhibits to the Amendment, are
hereby expressly incorporated herein by reference.
Dated
as of January 4, 2019.
BORROWER:
PARK CITY GROUP, INC.
a/an Nevada
Corporation
By: /s/ John R.
Merrill
Name and Title: John R. Merrill, SVP
Finance
BANK:
Agreed
to:
US.
Bank National Association
By:
/s/ Katie
Michalek
Name
and Title: Katie Michalek, Community Bank President
-3-
AMENDED AND RESTATED ADDENDUM TO STAND-ALONE REVOLVING
NOTE
This
Amended and Restated Addendum to Stand-Alone Revolving Note (this
"Addendum") is entered into by and between PARK CITY GROUP, INC., a
Nevada corporation ("Borrower"), and U.S. BANK NATIONAL ASSOCIATION
("Bank"). This Addendum (i) amends, restates and replaces that
certain Addendum to Stand-Alone Revolving Note between Borrower and
Bank dated as of February 12, 2018, and (ii) is incorporated into
and made a part of that certain Stand-Alone Revolving Note dated as
of February 12, 2018 in the original principal amount of
$5,000,000, as the same is being amended by that certain Amendment
to Note of even date herewith, which, among other things, increases
the principal amount from $5,000,000 to $6,000,000, each executed
by Borrower in favor of Bank (as amended, the "Note").
Capitalized
terms used herein and not otherwise defined herein shall have the
meaning set forth in the Note.
l .Section 3 of the Note is hereby amended and restated to read
in its entirety as follows:
“3 Paid-In-FulI
Period. All advances under this Note must be paid in full for two
(2) separate periods of at least thirty (30) consecutive days each
during each fiscal year."
2. Section 10 of the Note is hereby amended by replacing the
words "Not applicable." with the following paragraphs to read in
their entirety as follows:
"For
Borrower, together with Park City Group, Inc., a Delaware
corporation (TIN: 73-1247666):
Annual Financial
Statements: Not later than 120
days after the end of each fiscal year, annual financial
statements, audited by a certified public accounting firm
acceptable to Bank."
Quarterly Financial
Statements: Not later than 45
days after the end of each of the first three fiscal quarters of
each fiscal year, quarterly financial statements, compiled by a
certified public accounting firm acceptable to Bank; provided, that
Borrower will be granted a 10-day extension to provide to Bank such
quarterly financial statements in the event that Borrower has
requested that the US. Securities and Exchange Commission grant
Borrower an extension to file an amended quarterly
report."
3. Section 12 of the Note is hereby amended and restated to read
in its entirety as follows:
“12. Conditions
to Borrowing; Advances and Paying Procedure. Bank will not be obligated to
make (or continue to make) advances hereunder unless (i) Bank has
received executed originals of the Note and all other documents or
agreements applicable to any loans described herein, including but
not limited to the Loan Documents, in form and content satisfactory
to Bank; (ii) if the Note and loans thereunder arc secured, Bank
has received confirmation satisfactory to it that Bank has a
properly perfected security interest, mortgage or lien, with the
proper priority; (iii) Bank has received certified copies of
Borrower's governance documents and certification of entity status
satisfactory to Bank and all other relevant documents; (iv) Bank
has received a certified copy of a resolution or authorization in
form and content satisfactory to Bank authorizing the Note and
loans and all acts contemplated by the Loan Documents, and
confirmation of proper authorization of all guaranties and other
acts of third parties contemplated hereunder; (v) if required by
Bank, Bank has been provided with an Opinion of Borrower's counsel in form and
content satisfactory to Bank; (vi) no default exists under the Note
or under any other Loan Documents, or under any other agreements by
and between Borrower and Bank; and (vii) all proceedings taken in
connection with the transactions contemplated by the Note
(including any required environmental assessments), and all
instruments, authorizations and other documents applicable thereto,
are satisfactory to Bank and its counsel."
4. Subsections (d) and (e) of
Section 13 of the Note are
hereby amended and restated to read in their entirety as
follows:
"(d) Default
on Other Obligations. Borrower
or any Guarantor shall be in default under the terms of any loan
agreement, promissory note, lease, conditional sale contract or
other agreement, document or instrument evidencing, governing or
securing any indebtedness owing by Borrower or any Guarantor to
Bank or any indebtedness in excess of $ 100,000 owing
by
Borrower
or any Guarantor to any third party, and the period of grace, if
any, to cure said default shall have passed.
(e) Judgments.
Any judgment shall be obtained against
Borrower or any Guarantor which, together with all other
outstanding unsatisfied judgments against Borrower (or such
Guarantor), shall exceed the sum of $100,000 and shall remain
unvacated, unbonded or unstayed for a period of 30 days following
the date of entry thereof."
-4-
5. Section 16 of the Note is hereby amended and restated to read
in its entirety as follows:
"16.
Collateral. Not applicable."
6. Section 17 of the Note is hereby amended and restated to read
in its entirety as follows:
" 17. [Reserved.]"
7.Section
26 of the Note is hereby amended and restated to read in its
entirety as follows:
"26. Additional Terms.
The warranties, covenants, conditions
and other terms described in this Section are incorporated into the
Note.
(a) Liquid Assets.
Borrower will maintain Liquid Assets
at all times having a value at least equal to the Loan
Amount.
"Liquid
Assets" shall mean the following assets owned by Borrower free and
clear of all claims, liens, encumbrances and security interests
except any security interest in favor of Bank, and such of the
following types of encumbered assets owned by
Borrower,
less any additional amounts Bank deems appropriate in its sole
discretion:
●
savings
accounts, money market accounts or certificates of deposit with
Bank;
●
cash
deposited with Bank and pledged to secure Bank loans;
and
●
savings accounts, money market accounts or certificates of
deposit with financial institutions other than Bank which are
chartered and located within the United States.
"Liquid
Assets" shall not include any such assets which are deemed by Bank,
in its sole discretion, to be unsatisfactory.
(b) Senior
Funded Debt to EBITDA. Borrower will maintain a Senior Funded Debt
to EBITDA Ratio as of the end of each fiscal quarter, for the four
(4) fiscal quarters then ended, of not more than
2.00:1:00.
"EBITDA"
shall mean net income, plus interest expense, plus income tax
expense, plus depreciation expense plus amortization
expense.
"Senior Funded
Debt" shall mean indebtedness
for borrowed money, for the deferred purchase price of property not
purchased on ordinary trade terms, for capitalized leases and for
other liabilities evidenced by promissory notes or other
instruments, but not including any indebtedness that has been
subordinated to the indebtedness evidenced by the Note pursuant to
a writing that has been accepted by Bank.
"Senior
Funded Debt to EBITDA Ratio" shall mean the ratio of Senior Funded
Debt to EBITDA."
Dated as of January ____, 2019.
PARK
CITY GROUP, INC. a Nevada corporation
By: /s/ John R.
Merrill
Name: John R. Merrill
Title: SVP, Finance
U.S. BANK NATIONAL ASSOCIATION
By:
/s/ Katie Michalek
Name: Katie Michalek
Title: Community Bank President
-5-