Exhibit 10.1
FORBEARANCE
AGREEMENT
THIS FORBEARANCE
AGREEMENT (the
“Agreement”) is made this 21st day of February, 2006,
to be effective February 15, 2006 (the “Effective
Date”), by JAGGED PEAK, INC. , a Nevada corporation,
successor by merger to Jagged Peak, Inc., a Florida corporation
(“Borrower”) and PAUL DEMIRDJIAN, VINCENT J.
FABRIZZI and DANIEL R. FURLONG (collectively, the
“Guarantors”), in favor of MERCANTILE BANK
(“Bank”), successor by merger to Florida Bank, N.A.
(“Florida Bank”).
RECITALS
A) The Line of Credit
Loan:
1) On May 6, 2003,
Borrower’s predecessor in interest, Jagged Peak, Inc., a
Florida corporation (“JP Florida”) executed and
delivered to Florida Bank that certain commercial Promissory Note
in the original maximum principal amount of $500,000.00 (the
“Line of Credit Note”).
2) The Line of Credit Note is
secured by the following: (a) that certain Commercial Security
Agreement (the “Line of Credit Security Agreement”)
executed by JP Florida and delivered to Florida Bank dated
May 6, 2003, (b) that certain UCC-1 Financing Statement
executed by JP Florida and delivered to Florida Bank and filed for
record on June 4, 2001 with the Florida Secretary of State as
Document No. 2001-00121151-1 (the “UCC”),
(c) that certain Business Loan Agreement (the “Line of
Credit Loan Agreement”) executed by JP Florida and delivered
to Florida Bank dated May 6, 2003, (d) those certain
Commercial Guaranties (collectively, the “First
Guaranties”) executed by each of the Guarantors and delivered
to Florida Bank dated May 6, 2003, and (e) the Second
Guaranties, as defined herein below.
The Line of Credit Note, Line of
Credit Security Agreement, UCC, Line of Credit Loan Agreement,
First Guaranties and Second Guaranties shall hereinafter be
collectively referred to as the “Line of Credit Loan
Documents”.
B) The Term Loan:
3) On September 30, 2003, JP
Florida executed and delivered to Florida Bank that certain
commercial Promissory Note in the original principal amount of
$450,000.00 (the “Original Term Note”), as subsequently
modified by that certain Change in Terms Agreement executed by JP
Florida and delivered to Florida Bank dated May 19, 2004. The
Original Term Note, as modified by the Changes in Term Agreement
shall hereinafter be referred to as the “Term
Note”.
4) The Term Note is secured by the
following: (a) that certain Commercial Security Agreement (the
“Term Security Agreement”) executed by JP Florida and
delivered to Florida Bank dated September 30, 2003,
(b) the UCC, (c) that certain Business Loan Agreement
(the “Term Loan Agreement”) executed by JP Florida and
delivered to Florida Bank dated September 30, 2003, and
(d) the First and Second Guaranties.
The Term Note, Term Security
Agreement, UCC, Term Loan Agreement, First Guaranties and Second
Guaranties shall hereinafter be collectively referred to as the
“Term Loan Documents”.
C) The Single Payment Loan:
5) On December 2, 2004, JP
Florida executed and delivered to Bank that certain commercial
Promissory Note and Security Agreement in the original principal
amount of $350,000.00 (the “Single Payment
Note”).
6) The Single Payment Note is
secured by the following: (a) the UCC, (b) the First
Guaranties, and (c) those certain commercial Guaranties
(collectively, the “Second Guaranties”) executed by
each of the Guarantors and delivered to Bank dated December 2,
2004.
The Single Payment Note, UCC, First
Guaranties and Second Guaranties shall hereinafter be collectively
referred to as the “Term Loan Documents”.
7) The Line of Credit Security
Agreement, Term Security Agreement, Single Payment Note and UCC
encumber the following personal property of JP Florida located in
Pinellas County, Florida (the “Collateral”):
All Business Assets [of JP
Florida], including but not limited to, Inventory, Accounts,
Equipment, Contracts and General Intangibles; whether any of the
foregoing is owned now or acquired later; all accessions,
attachments, accessories, tools, parts, supplies, additions,
replacements, and substitutions relating to any of the foregoing;
all products and produce of the foregoing; all accounts, general
intangibles, instruments, rents, monies, payments, and all other
rights, arising out of a sale, lease or other disposition of and of
the foregoing; all proceeds (including insurance proceeds) from the
sale, destruction, loss, or other disposition of any of the
foregoing, and sums due from a third party who has damaged or
destroyed any of the foregoing or from that party’s insurer,
whether due to judgment, settlement or other process; all records
and data of any kind related to the foregoing, whether in the form
of a writing, photograph, microfilm, microfiche, or electronic
media, together with all of [JP Florida]’s right, title and
interest in and to all computer software required to utilize,
create, maintain and process any such records or data on electronic
media.
8) The Borrower and Guarantors and
each of them hereby affirmatively represent to Bank, as material
inducements to this Agreement the following:
a) The Line of Credit Loan
Documents, Term Loan Documents and Single Payment Loan Documents
are each valid and enforceable on their terms;
b) The Line of Credit Loan Documents
secure the Line of Credit Note and fully and validly operate as an
encumbrance upon the Collateral;
c) The Term Loan Documents secure
the Term Note and fully and validly operate as an encumbrance upon
the Collateral;
d) The Single Payment Loan Documents
secure the Single Payment Note and fully and validly operate as an
encumbrance upon the Collateral;
2
e) The Borrower, as successor by
merger to JP Florida, is the sole fee simple title owner and holder
of the Collateral and all aspects thereof and all rights associated
therewith;
9) The Borrower, as successor by
merger to JP Florida, has breached the terms and conditions of the
Line of Credit Loan Documents, Term Loan Documents and Single
Payment Loan Documents by (a) failing and refusing to pay the
entire principal balance, accrued interest and related charges due
upon maturity of the Single Payment Note on December 2, 2005,
(b) failing and refusing to pay the entire principal balance,
accrued interest and related charges due upon maturity of the Line
of Credit Note on December 15, 2005, and (c) failing to
comply with certain material financial covenants contained in the
Line of Credit Loan Agreement and Term Loan Agreement.
10) Based upon the Borrower’s
breach of the Line of Credit Loan Documents, Term Loan Documents
and Single Payment Loan Documents, Bank has declared the same to be
in default.
11) The Borrower, Guarantors, and
each of them, hereby acknowledge the existence of the
above-referenced default, and that Bank has rightfully and validly
declared a default under the Line of Credit Loan Documents, Term
Loan Documents and Single Payment Loan Documents.
12) The Borrower, Guarantors, and
each of them agree that, as of the Effective Date hereof, they owe
to Bank, jointly and severally, the principal amount due under Line
of Credit Note in the amount of $75,000.00, plus additional amounts
such as accrued interest, late charges, attorneys fees and costs as
provided therein. The Borrower, Guarantors, and each of them agree
that, as of the Effective Date hereof, they owe to Bank, jointly
and severally, the principal amount due under Term Note in the
amount of $324,971.40, plus additional amounts such as accrued
interest, late charges, attorneys fees and costs as provided
therein. The Borrower, Guarantors, and each of them agree that, as
of the Effective Date hereof, they owe to Bank, jointly and
severally, the principal amount due under Single Payment Note in
the amount of $350,000.00, plus additional amounts such as accrued
interest, late charges, attorneys fees and costs as provided
therein. Borrower, Guarantors, and each of them, further expressly
acknowledge and agree that Borrower and Guarantors jointly and
severally owe each of the above amounts free from any defenses,
counterclaims, setoffs or rights of action of any nature whatsoever
against Bank. However, to the extent such defenses, counterclaims,
setoffs or rights of action may exist, they are hereby specifically
and expressly waived by Borrower, Guarantors, and each of
them.
13) This Agreement is entered into
based on the valuable consideration of the mutual covenants herein
contained, and for other good and valuable consideration as set
forth below, including the forbearance of Bank from exercising
rights and remedies otherwise available to it under the Line of
Credit Loan Documents, Term Loan Documents and Single Payment Loan
Documents and Florida law for a period from the date of this
Agreement up to and through January 31, 2007.
14) The Borrower, Guarantors, and
each of them, acknowledge that (a) Bank was not and is not
under any duty or obligation to make any accommodations to them,
(b) any accommodations previously made or to be made by Bank
to the Borrower, the Guarantors or any of them, have not breached
or violated any provision of the Line of Credit Loan Documents,
Term Loan Documents, Single Payment Loan Documents or doctrine of
law or equity, and (c) Bank has never had, does not now have,
and shall never hereafter incur any obligation or duty whatsoever
to (i) grant, renegotiate or modify the loan or this Agreement
or (ii) extend or renew the Line of Credit Loan Documents,
Term Loan Documents, Single Payment Loan Documents or this
Agreement. The Borrower, Guarantors, and each of them, hereby
further acknowledge that Bank has not made any promises or
commitments whatsoe
