Document:

ex10-1

 

EXHIBIT 10.1

AMENDMENT NO. 1

TO THE MARKETING AND DISTRIBUTION AGREEMENT

             This Amendment No. 1 (this “Amendment”) is made as of the 28th day of
January, 2002, by and between Abbott Laboratories, an Illinois corporation
having its principal place of business at 100 Abbott Park Road, Abbott Park,
Illinois 60064-6400 (“Abbott”), and Digene Corporation, a Delaware corporation
having its principal place of business at 1201 Clopper Road, Gaithersburg,
Maryland 20878 (“Digene”), and amends the Marketing and Distribution Agreement,
dated as of May 7, 1999 between Abbott and Digene (the “Agreement”). All
capitalized terms used in this Amendment without definition shall have the
meanings given to such terms in the Agreement.

RECITALS

             Digene and Abbott are Parties to the Agreement pursuant to which Digene
appointed Abbott as Digene’s: (a) exclusive distributor of CT/GC in the CT/GC
Territory for use in the Field; (b) exclusive distributor of HBV in the HBV
Territory for use in the Field; (c) exclusive distributor of HPV in the HPV
Territory for use in the Field; (d) non-exclusive distributor of Equipment in
the Territory for use with respect to Products in the CMV Territory with
respect to CMV in the Field; (e) non-exclusive distributor of CMV in the CMV
Territory for use in the Field; and (f) non-exclusive distributor of SHARP in
the SHARP Territory for use in the Field.

             On April 30, 2001, Digene (a) terminated the terms and provisions of the
Agreement as applied to Digene’s HPV Products, Product Accessories and
Equipment, and (b) converted Abbott’s distribution rights under the Agreement
for Digene’s HBV Products to non-exclusive for the remainder of the Term with
respect to HBV.

             Digene and Abbott have agreed that Digene will purchase Abbott’s exclusive
rights under the Agreement to CT/GC in the CT/GC Territory, (the “CT/GC
Business”), subject to the creation of a limited, non-exclusive wind-down
period for the sales of CT/GC Products and Product Accessories by Abbott in
Europe, the Middle East and Africa ending on April 30, 2002 (the “Wind-Down
Termination Date”).

             Digene and Abbott have further agreed to settle and satisfy all
obligations of both Digene and Abbott related to the reconciliation of AUPs (as
defined in Section 6.4 of the Agreement) for the Products.

             Abbott and Digene desire to enter into this Amendment to modify the
Agreement to reflect termination of the Term with respect to CT/GC and to amend
the obligations of the Parties to reconcile AUPs for the Products.

AGREEMENT

             NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and upon the terms and subject to conditions set forth below,
Abbott and Digene hereby agree as follows:

 

 

1.          Definitions. All capitalized terms used in this Amendment without
definition shall have the meanings set forth in the Agreement.

2.          Amended and Restated Definition of Net Sales. The definition of “Net Sales”
is hereby deleted in its entirety from the Agreement and hereby replaced with
the following:

		
	 	“1.56 “Net Sales” shall mean the total of the gross amount billed
or invoiced to Third Parties for the sale of a Product in the
Field (“Gross Sales”), less:

			
	 	(a)	rebates granted and allowances, trade,
quantity or cash discounts actually allowed and taken;
	 
	 	(b)	retroactive price reductions imposed by
government authorities;
	 
	 	(c)	fees, commissions or rebates lawfully paid
pursuant to contracts with group purchasing
organizations;
	 
	 	(d)	amounts actually repaid a Third Party by
reason of rejection or return of defective Product; and
	 
	 	(e)	a fixed amount representing upcharges paid
by Third Parties as part of a reagent agreement plan or
similar arrangement equal to five and one-half percent
(5.5%) times the excess of (i) Gross Sales over (ii)
deductions made under subsections (a) through (d)
above;

		
	 	provided, however, that if any Product is sold by Abbott or its
Affiliates in combination with other components which have
commercial utility other than use in combination with such Product
(together, a “Combination Product”), Net Sales of such Product
shall be the gross invoiced price of such Combination Product
billed to customers by Abbott or its Affiliates, less the
allowances and adjustment referred to above, multiplied by the
fraction A/(A+B), where A is the gross selling price of the
Product sold separately during the period in question, and B is
the gross selling price of such other components sold separately
during the period in question; provided, further, that if any
Combination Product is sold by Abbott or its Affiliates and the
gross selling price for the Product or such other components is
not determinable, then the gross amount billed or invoiced to
Third Parties for the sale of such Product shall be deemed to be
an amount equal to the percentage of the gross sales price, less
the allowances and adjustments referred to above, for the
Combination Product which is equal to the percentage of the fair
market value of the Product and such other components in the
Combination Product represented by the fair market value of the
Product.”

3.          Termination of CT/GC and Wind-down Activities. The Agreement is hereby
amended to include a new Section 4.7, which shall be and read in full as
follows:

		
	 	     “4.7 Termination of CT/GC and Wind-down Activities. Digene
and Abbott hereby terminate the Term for CT/GC and establish the
following wind-down period. Beginning on the date hereof and
ending on April 30, 2002, Abbott

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	 	and Digene shall engage in a wind-down period related to the CT/GC
Business in Europe, Africa and the Middle East (the “EMA
Territory”). As of the date hereof, Abbott shall have no further
rights or obligations under this Agreement with respect to CT/GC
outside the EMA Territory, and, notwithstanding any other
provisions of this Agreement, Abbott shall have no rights or
interests to any Improvement with regard to CT/GC. During such
wind-down period, Abbott’s rights shall convert to non-exclusive
for CT/GC in the EMA Territory, and Digene and Abbott shall
continue to perform their respective duties and be bound to their
respective obligations hereunder with respect to manufacturing,
supplying, selling and distributing CT/GC. During such wind-down
period, Abbott and its Affiliates shall only solicit Trade that
were customers of Abbott or its Affiliates in the EMA Territory
for CT/GC as of the date hereof, and shall be precluded from
selling CT/GC to Third Parties that were not customers of Abbott
or its Affiliates as of the date hereof. If new customers contact
Abbott or its Affiliates on their own regarding CT/GC, Abbott
shall refer such customers directly to Digene or its designee.”

4.            Effect of Amendment. Except as expressly modified by this Amendment, the
terms and provisions of the Agreement shall remain in full force and effect.
The intent of the Parties is to terminate all rights and obligations of the
Parties under the Agreement with respect to the CT/GC Business as of and after
the Wind-Down Termination Date, and to limit the rights and obligations of the
Parties under the Agreement with respect to CT/GC and the CT/GC Business during
the wind-down period as set forth in Section 3 of this Amendment. In the event
of any conflict between the terms of this Amendment and the terms of the
Agreement, the terms of this Amendment shall control.

5.            Miscellaneous. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be reasonably
necessary or appropriate in order to carry out the purposes and intent of this
Amendment.

                              IN WITNESS WHEREOF, each Party has caused this Amendment No. 1 to the
Agreement to be executed on its behalf by its duly authorized officer as of the
date first above written.

	 	 	 
	ABBOTT LABORATORIES	 	
DIGENE CORPORATION

	 	 	 	 	 	 	 
	By:

Name:

Title:	 	
/s/  Edward L. Michael

Edward L. Michael

Vice President

Diagnostic Assays & Systems
	 	By:

Name:

Title:
	 	/s/  Evan Jones

Evan Jones

Chairman & CEO

3ex4-9

 

EXHIBIT 4.9

MODIFICATION AGREEMENT

     THIS MODIFICATION AGREEMENT (“AGREEMENT”) is made as of this 11th day of
February, 2002 by and among Bank of America, N.A., a national banking
association (the “LENDER”) and Halifax Corporation, a corporation organized
under the laws of the Commonwealth of Virginia (the “BORROWER”).

RECITALS

     WHEREAS, on December 8, 2000, the LENDER extended to the BORROWER a loan
in the maximum principal amount of Eight Million Dollars ($8,000,000.00)(the
“LOAN”), which was evidenced by that certain Revolving Credit Promissory Note
(“NOTE”) of same date executed by the BORROWER and delivered to the LENDER in
the maximum principal amount of the LOAN;

     WHEREAS, repayment of the LOAN is secured by certain assets of the
BORROWER, including, but not limited to, all accounts and intangibles, pursuant
to the terms of a Financing and Security Agreement dated December 8, 2000, as
amended pursuant to the terms of a First Amendment to Financing and Security
Agreement dated September 30, 2001 (collectively, the “LOAN AGREEMENT”);

     WHEREAS, the LOAN is in default in that, among other things, the BORROWER
is in violation of a number of the financial covenants contained in the LOAN
AGREEMENT;

     WHEREAS, the BORROWER has requested the LENDER to waive all defaults
existing as of December 31, 2001 and to extend the maturity date of the LOAN,
and the LENDER has agreed to such provided that the BORROWER agrees to the
below terms and conditions; and

     WHEREAS, the NOTE, LOAN AGREEMENT and this AGREEMENT, together with all
other documents or writings evidencing or securing the LOAN, are collectively
referred to hereinafter as the “LOAN DOCUMENTS.” Unless otherwise defined
herein, capitalized terms used in this AGREEMENT shall have the definitions
ascribed to such terms in the LOAN DOCUMENTS.

     NOW, THEREFORE, in consideration of the foregoing premises, the terms and
conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

     1.     Acknowledgment Of Obligations. The BORROWER acknowledges that: (a) all
of the above Recitals are true and correct; (b) the LOAN DOCUMENTS are the
valid and binding obligations of the
BORROWER, and are fully enforceable in accordance with their stated terms;
(c) the LENDER has the right to exercise all of its default

 

rights and remedies
and (d) the obligations of the BORROWER under the LOAN DOCUMENTS are not
subject to any set-off, defense or counterclaim or right of recoupment.

     2.     Acknowledgment Of Amounts Due Under LOAN DOCUMENTS. The BORROWER
acknowledges and agrees that the amounts which are outstanding under the LOAN
as of February 8, 2002 are as follows:

	 	 	 	 	 
	Principal
	 	$	5,622,438.00	 
	Interest
	 	 	6,881.84	 
	 
	 	 	
	 
	Total
	 	$	5,629,319.84	 

Furthermore, the BORROWER is also obligated to reimburse the LENDER for all
attorneys’ fees and expenses it has incurred and will incur in the future,
including, but not limited to, all attorneys’ fees and expenses incurred in
preparing this AGREEMENT and in enforcing the LENDER’S rights under the LOAN
DOCUMENTS.

     3.     Representations And Warranties Of BORROWER. To induce the LENDER to
enter into this AGREEMENT and to provide the BORROWER with the accommodations
described herein, the BORROWER makes the representations and warranties set
forth below and acknowledges the LENDER’S justifiable right to rely upon these
representations and warranties.

          a.     No Material Adverse Changes. As of the date hereof, there have been no
material adverse changes in the finances or operations of the BORROWER since
the date of the most recent financial statement submitted by the BORROWER to
the LENDER.

          b.     No Litigation. Except as disclosed on Schedule 3(b) or as set forth in
financial statements previously provided to the LENDER or public filings made
with the United States Securities and Exchange Commission, there is no action,
suit, investigation, or proceeding pending or, in the knowledge of the
BORROWER, threatened against the BORROWER, any collateral for the LOAN or any
other assets of the BORROWER. In the event that, subsequent to the execution
and delivery of this AGREEMENT, the BORROWER receives notice of, or otherwise
acquires knowledge of, any such suit, investigation, or proceeding, it shall
immediately disclose the same to the LENDER in writing.

          c.     Organization; Good Standing; Authorization. The BORROWER: (1) has the
power to enter into this AGREEMENT and all other loan documents required to be
executed by the BORROWER and has the power to perform all of their obligations
hereunder and thereunder; (2) has duly authorized the entry into and
performance of this AGREEMENT and all other loan documents required to be executed by
the BORROWER; and (3) is in good standing in the state

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of its organization, and
is in good standing and qualified in all other states in which such
qualification is required. Attached hereto as Exhibit “A” is a resolution of
the BORROWER authorizing the execution of this AGREEMENT.

          d.     Valid, Binding And Enforceable. This AGREEMENT and all of the other
LOAN DOCUMENTS to which the BORROWER is a party constitute the valid and
binding obligations of the BORROWER and are fully enforceable in accordance
with their terms.

          e.     No Violation. The BORROWER’S entry into this AGREEMENT will not
violate any agreements to which it is a party or by which any of its property
is bound.

          f.     Confirmation of Previous Representations. The BORROWER affirms all of
the representations previously made in the LOAN AGREEMENT as if made on the
date hereof.

          g.     Corporate Documents. The BORROWER confirms that, except as provided in
Schedule 3(g), there have been no changes or amendments to the organizational
documents of the BORROWER provided to the LENDER at the closing on December 8,
2000.

     4.     Maturity. The LOAN shall be fully due and payable on January 2, 2003.

     5.     Reduction in Availability. The maximum availability under the NOTE
shall be reduced to Six Million Three Hundred Thousand Dollars ($6,300,000.00).
All references in the LOAN DOCUMENTS to Eight Million Dollars ($8,000,000.00)
as signifying the maximum availability under any of the LOAN DOCUMENTS shall be
reduced to Six Million Three Hundred Thousand Dollars ($6,300,000.00).

     6.     Payment of Interest. The BORROWER shall make all payments of interest
as agreed under the LOAN DOCUMENTS.

     7.     Interest Rate. Interest shall continue to accrue on the unpaid
principal amount of the debt outstanding from the date hereof until May 1, 2002
at the Prime Rate plus two percent (2%) per annum.
Interest shall continue to accrue on the unpaid principal amount of the debt
outstanding from May 2, 2002 until the LOAN is paid in full at the Prime Rate
plus three percent (3%) per annum. The Post-Default Rate of interest shall be
increased to the Prime Rate plus six percent (6%).

     8.     Advances. Absent an EVENT OF DEFAULT (as defined below), the LENDER
shall continue to make advances pursuant to the terms of the LOAN AGREEMENT as
amended herein.

3

 

     9.     Waiver. The BORROWER represents and warrants that attached hereto as
Exhibit “B” is a list of all of the defaults existing under the LOAN DOCUMENTS
to its knowledge as of December 31, 2001. The LENDER waives all defaults
listed on Exhibit “B.” However, this waiver shall not obligate the LENDER to
grant any similar waivers in the future, and the LENDER has no intention to
grant any future waivers. Furthermore, no defaults existing subsequent to
December 31, 2001 are waived, and LENDER reserves all of its rights and
remedies under the LOAN DOCUMENTS with respect thereto.

     10.     Amendment to LOAN AGREEMENT.

          (a)  Section 3.2 of the LOAN AGREEMENT is amended by deleting all of the
words following “(a)” on line 2 thereof until immediately prior to “(b)”, and
inserting in its place the following: “all of the personal property of the
Borrower, wherever located, and now or hereafter acquired, including, but not
limited to: Accounts, Chattel Paper, Inventory, Equipment, Instruments
(including Promissory Notes), Investment Property, Documents, Deposit Accounts,
Letter-of-Credit Rights, General Intangibles and Supporting Obligations, as
such terms are defined under the Uniform Commercial Code of the Commonwealth of
Virginia as of the date hereof”;

          (b)  Section 2.1.4 of the LOAN AGREEMENT is amended by deleting the words
“monthly” on line one (1) thereof and inserting in its place the words “twice
each month, (once on the first(1st) day of the month and once on the fifteenth
(15th) day of the month),”; and

          (c)  Section 2.2 of the LOAN AGREEMENT is deleted. The intent is that the
BORROWER shall have no right to have letters of credit issued by the LENDER
after the date hereof.

     11.     Government Contracts. Within fifteen (15) days of the date of closing,
and at all times thereafter, the BORROWER shall submit to the LENDER copies of
all federal government contracts with a contract value in excess of Two Hundred
Thousand Dollars ($200,000.00), together with copies of all documents novating,
amending, modifying or supplementing in any way any such federal government
contract of the BORROWER, and shall immediately execute and deliver to the
LENDER such documents and agreements as the LENDER may request in order to
ensure that all such contracts have been assigned to the LENDER in compliance
with the provisions of the Assignment of Claims Act of 1940, as amended (31
U.S.C. Section 203 et seq.).

     12.     Receivables. The BORROWER shall provide to the LENDER within ten
(10) days of the date of closing a list of all current receivables with names
of debtors, addresses and amounts.

4

 

     13.     Collateral Disclosure List. The BORROWER shall deliver to the LENDER
a Collateral Disclosure List, as provided for in Section 3.3 of the LOAN
AGREEMENT, showing the specific location of the collateral, within ten (10)
days of the date of closing.

     14.     Fee. In consideration of the LENDER’S agreement to waive defaults
and extend the LOAN, as set forth herein, the BORROWER shall pay to the LENDER
a loan fee in the amount of Sixty Thousand Dollars ($60,000.00) (“FEE”), which
FEE shall be deemed earned upon the signing of this AGREEMENT. The FEE shall
be paid by the BORROWER to the LENDER as follows: (a) Twenty Thousand Dollars
($20,000.00) at the closing on this AGREEMENT; and (b) Forty Thousand Dollars
($40,000.00) on May 1, 2002, unless by such date, the LOAN has been paid in
full, in which case this portion of the FEE shall be waived.

     15.     Events of Default. The following shall constitute an EVENT OF DEFAULT
under this AGREEMENT and under the LOAN DOCUMENTS, entitling the LENDER to
exercise all of its default rights and remedies, including, but not limited to,
imposing the Post-Default Rate:

          (a)  any event of default under any of the LOAN DOCUMENTS;

          (b)  the failure of the BORROWER to comply with, or the breach by the
BORROWER of, any of the provisions hereof;

          (c)  if any representation or warranty made herein is not true and accurate
when made;

          (d)  the entry of a judgment exceeding Fifty Thousand Dollars ($50,000.00)
(and not disclosed on Schedule 3(b))against the BORROWER or the attachment of
any of its assets;

          (e)  the recordation of any federal, state or local tax lien against the
BORROWER;

          (f)  if the BORROWER is not actively operating the business.

All cure periods provided for in the LOAN DOCUMENTS, if any, are hereby
deleted.

     16.     Taxes. The BORROWER represents and warrants to the LENDER that: (a)
as of the date of this AGREEMENT, the BORROWER is current in its tax payments
to the Internal Revenue Service, the Commonwealth of Virginia, and all other
taxing authorities (“TAXING AUTHORITIES”) with respect to all forms
and taxes including, without
limitation, federal and state income taxes, federal and state withholding
taxes, state personal property taxes and county real

5

 

estate taxes; and (b) that
during the pendency of this AGREEMENT, the BORROWER shall make all payments
which the BORROWER is required to make to the TAXING AUTHORITIES with respect
to all forms of taxes, when and as said payments are due.

     17.     No Further Extension. The BORROWER acknowledges and agrees that the
LENDER has not made any promise, written or oral, to forbear from the exercise
of its rights, or to provide any financing other than as set forth in the LOAN
DOCUMENTS.

     18.     Authorization to Execute Financing Statements. The LENDER is hereby
authorized to execute any and all financing statements deemed necessary by the
LENDER to implement the provisions of this AGREEMENT.

     19.     No Novation; No Refinance; No Adverse Effect On Liens. The parties
hereto do not intend that a novation of the LOAN or any of the LOAN DOCUMENTS
shall be created or effected by the modification of any of the LOAN DOCUMENTS,
as described herein. The parties hereto do not intend that the execution of
this AGREEMENT, or the amendments, modifications and/or restatements to be made
to the LOAN DOCUMENTS, as described herein, shall: (a) constitute a refinance
of the LOANS; or (b) affect or impair the validity, enforceability, or priority
of any of the liens or security interests imposed by or granted in the LOAN
DOCUMENTS.

     20.     Landlord Subordinations. The BORROWER shall use its best efforts to
have executed and returned to the LENDER the Lessor’s Acknowledgement and
Agreement forms which were mailed by the BORROWER to the BORROWER’S various
lessors in or about November 2000.

     21.     Other Terms; Confirmation Of Obligations. Other than the foregoing,
all other terms and conditions of the LOAN DOCUMENTS shall remain in full force
and effect and are incorporated herein by reference. The BORROWER acknowledges,
ratifies and confirms its obligations under the LOAN DOCUMENTS. The BORROWER
further acknowledges, ratifies and confirms that it shall remain absolutely and
unconditionally obligated to pay the LENDER all present and future indebtedness
that is owed to the LENDER under the LOAN DOCUMENTS in the manner provided
therein, notwithstanding the LENDER’S execution of this AGREEMENT and any
documents to be executed pursuant to this AGREEMENT, and notwithstanding the
various agreements the LENDER has set forth herein and therein. The BORROWER
acknowledges and agrees that the collateral is and shall remain in all respects
subject to the liens and security interests created by, and the legal operation
and effect of, the LOAN
AGREEMENT and the other LOAN DOCUMENTS, and nothing contained herein, and
nothing done pursuant hereto, shall affect or be construed to affect the liens
and security interests created by, or

6

 

the legal operation and effect of, the
LOAN AGREEMENT and the other LOAN DOCUMENTS, or the priority thereof over other
liens, charges, encumbrances or conveyances, or to release or affect the
liability of any party or parties who may now or hereafter be liable under the
other LOAN DOCUMENTS.

     22.     Inconsistencies. To the extent that any of the provisions of this
AGREEMENT are inconsistent with any of the provisions of the other LOAN
DOCUMENTS, the provisions of this AGREEMENT shall control.

     23.     Notices. Any notice required or permitted by or in connection with
this AGREEMENT or any other LOAN DOCUMENT, without implying any obligation to
provide any such notice, shall be made in writing to the appropriate addresses
set forth below or to such other addresses as may be hereafter specified by
written notice by the LENDER or the BORROWER. Any such notice shall be deemed
to be effective one (1) day after dispatch if sent by telegram, mailgram,
Purolator delivery, Airborne, Express Mail or Federal Express. Notwithstanding
the foregoing, all notices shall be considered to be effective immediately if
accomplished by hand delivery or facsimile.

	 	If to the LENDER:

	 	Bank of America Strategic Solutions, Inc.

NC1-001-13-15

101 North Tryon street

Charlotte, NC 28255

Attn: Alice Byrd, Portfolio Officer

Fax: (704)386-3938

	 	With a copy to:

	 	Louis J Ebert, Esquire

Gebhardt & Smith LLP

9 World Trade Center

401 East Pratt Street

Baltimore, Maryland 21202

Fax: (410) 385-5119

	 	If to the BORROWER:

	 	Halifax Corporation

5250 Cherokee Avenue

Alexandria, Virginia 22302

Attn.: Chief Financial Officer

Fax: (703)658-2478

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     24 Miscellaneous.

          a) Incorporation. The terms and conditions of the other LOAN DOCUMENTS to
which the BORROWER is a party are incorporated herein by reference and made a
part hereof as if fully set forth herein. All references in the LOAN DOCUMENTS
to any other LOAN DOCUMENT shall mean that LOAN DOCUMENT, as modified herein.
In the event of any inconsistency between this AGREEMENT and any other LOAN
DOCUMENT, the provisions of this AGREEMENT shall prevail.

          b) Integration. This AGREEMENT and the other LOAN DOCUMENTS constitute
the entire agreement between the LENDER and the BORROWER with respect to the
subject matter hereof, and any term or condition not expressed in this
AGREEMENT or the other LOAN DOCUMENTS does not constitute a part of the
agreement of the LENDER and the BORROWER with respect to such subject matter.

          c) Severability. If any provision or part of any provision of this
AGREEMENT shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this AGREEMENT and this AGREEMENT shall be construed as if
such invalid, illegal or unenforceable provision or part thereof had never been
contained herein, but only to the extent of its invalidity, illegality, or
unenforceability.

          d) Number, Gender, And Captions. As used herein, the singular shall
include the plural and the plural may refer to only the singular. The use of
any gender shall be applicable to all genders. The captions contained herein
are for purposes of convenience only and are not a part of this AGREEMENT.

          e) Further Assurances. As part of this AGREEMENT, and in consideration
for the agreements of the LENDER as set forth therein, the BORROWER agrees to
execute and deliver to the LENDER such other and further documents as may, from
time to time, in the sole opinion of the LENDER and the LENDER’S counsel, be
necessary or appropriate to carry out the terms and conditions of this
AGREEMENT and the LOAN DOCUMENTS.

          f) Waivers. No failure or delay by the LENDER in the exercise or
enforcement of any of its rights under any LOAN DOCUMENT shall be a waiver of
such right or remedy nor shall a single or partial exercise or enforcement
thereof preclude any other or further exercise or enforcement thereof or the
exercise or
enforcement of an other right or remedy. The LENDER may at any time or
from time to time waive all or any rights under this AGREEMENT or the other
LOAN DOCUMENTS, but any such waiver must be specific and in writing and no such
waiver shall constitute, unless specifically so expressed by the LENDER in
writing, a future waiver of

8

 

performance or exact performance by the BORROWER.
No notice to or demand upon the BORROWER in any instance shall entitle the
BORROWER to any other or further notice or demand in the same, similar or other
circumstance.

          g) Choice Of Law. The laws of the Commonwealth of Virginia (excluding,
however, conflict of law principles) shall govern and be applied to determine
all issues relating to this AGREEMENT and the rights and obligations of the
parties hereto, including the validity, construction, interpretation, and
enforceability of this AGREEMENT and its various provisions and the
consequences and legal effect of all transactions and events which resulted in
the execution of this AGREEMENT or which occurred or were to occur as a direct
or indirect result of this AGREEMENT having been executed. Furthermore, the
laws of the Commonwealth of Virginia (excluding, however, conflict of law
principles) shall govern and be applied to determine all issues relating to all
of the LOAN DOCUMENTS and the rights and obligations of the parties thereto,
including the validity, construction, interpretation, and enforceability of the
LOAN DOCUMENTS.

          h) Consent To Jurisdiction; Agreement As To Venue. The BORROWER
irrevocably consents to the non-exclusive jurisdiction of the courts of the
Commonwealth of Virginia and of the United States District Court for the
District of Virginia (Eastern District), if a basis for federal jurisdiction
exists. The BORROWER agrees that venue shall be proper in any circuit court of
the Commonwealth of Virginia selected by the LENDER or in the United States
District Court for the District of Virginia (Eastern District)if a basis for
federal jurisdiction exists and waives any right to object to the maintenance
of a suit in any of the state or federal courts of the Commonwealth of Virginia
on the basis of improper venue or of inconvenience of forum.

          i) Actions Against Lender. Except as provided below, any action brought
by the BORROWER against the LENDER which is based, directly or indirectly, on
this AGREEMENT or any matter in or related to this AGREEMENT, including but not
limited to the making and/or extension and modification of the LOAN DOCUMENTS,
the LOAN or the administration or collection of the LOAN, shall be brought only
in the courts of the Commonwealth of Virginia. The BORROWER may not file a
counterclaim against the LENDER in a suit brought by the LENDER against the
BORROWER in a state other than the Commonwealth of Virginia unless, under the
rules of procedure of the court in which the LENDER brought the action, the
counterclaim is mandatory,
and not merely permissive, and will be considered waived unless filed as a
counterclaim in the action instituted by the LENDER. The BORROWER agrees that
any forum other than the Commonwealth of Virginia is an inconvenient forum and
that a suit brought by the BORROWER against the LENDER in a court of any state
other than the

9

 

Commonwealth of Virginia should be forthwith dismissed or
transferred to a court located in the Commonwealth of Virginia by that court.

          j) Binding Effect; No Oral Modification. This AGREEMENT shall be binding
upon and shall inure to the benefit of the parties and their respective
personal representatives, successors and assigns. This AGREEMENT may not be
altered, modified or amended unless such alteration, modification or amendment
is in writing and executed by the LENDER.

          k) Time. Time is of the essence with respect to all of the obligations of
the BORROWER under this AGREEMENT and the other LOAN DOCUMENTS.

          l) Costs Of Transaction. All costs of the transactions contemplated by
this AGREEMENT, including, without limitation all attorneys’ fees and expenses
incurred by the LENDER, shall be the obligation of the BORROWER, regardless of
whether such costs are incurred before or after the execution and delivery of
this AGREEMENT. All such costs shall be paid on demand.

     25 General Release; Waiver. As part of the agreement set forth herein,
and in consideration of the same, the BORROWER hereby releases the LENDER and
all of the LENDER’S past, present and future directors, officers, employees,
agents and attorneys, subsidiaries and other affiliated entities and their
respective successors and assigns (“LENDER RELEASEES”) from any and all claims,
causes of action, demands, obligations, suits and damages (including claims for
attorneys’ fees), arising at law or in equity, whether in contract or tort,
whether accrued or not accrued, whether known or unknown, which the BORROWER
ever had or now has against the LENDER RELEASEES arising up to and including
the date hereof. This is a full and final general release of all claims of
every nature and kind whatsoever arising from or connected in any way to any
event, act, occurrence or omission prior to the effective date of this release.

     26 Waiver Of Jury Trial. The parties hereto agree that any suit, action,
or proceeding, whether claim or counterclaim, brought or instituted by any
party to this AGREEMENT, or any of their successors or assigns, on or with
respect to this AGREEMENT or any other LOAN DOCUMENT or which in any way
relates, directly or indirectly, to the obligations of the BORROWER to the
LENDER under
the LOAN DOCUMENTS, or the dealings of the parties with respect thereto,
shall be tried only by a court and not by a jury. THE PARTIES EXPRESSLY WAIVE
ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDINGS. The parties
acknowledge and agree that this provision is a specific and material aspect of
the agreement between

10

 

the parties and that the parties would not enter into
this AGREEMENT if this provision, or any other provision of this AGREEMENT,
were not contained herein.

     27 Counterparts. This AGREEMENT may be executed in counterparts, each of
which, when executed, shall be deemed an original, but all of which shall
constitute one and the same agreement.

     IN WITNESS WHEREOF, the parties have executed this AGREEMENT as of the
date first above written with the specific intention of creating a document
under seal.

	 	 	 	 	 
	WITNESS/ATTEST: 	 	THE BORROWER:
	 
	 	 	HALIFAX CORPORATION
	 
	____________________________________	
By:
	 	_____________________________ (SEAL)

Name: ________________________

Title: _________________________

	 	 	 	 	 
	 	 	THE LENDER:
	 
	 	 	BANK OF AMERICA, N.A.,

a national banking association
	 
	____________________________________	
By:
	 	_____________________________ (SEAL)

Name: ________________________

Title: _________________________

11

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