EXHIBIT 10.12
SECOND AMENDED AND RESTATED
REVOLVING CREDIT LOAN AGREEMENT
This Second Amended and Restated Revolving Credit Loan Agreement (the "LOAN
AGREEMENT") dated as of the 12th day of April, 1997, is entered into by and
between Optical Data Systems, Inc., a Texas corporation (the "BORROWER") and
NationsBank of Texas, N.A., formerly known as NCNB Texas National Bank (the
"BANK").
W I T N E S S E T H:
WHEREAS, Borrower and Bank have entered into that certain Amended and
Restated Revolving Credit Loan Agreement dated as of April 30, 1995 (the "PRIOR
LOAN AGREEMENT"), pursuant to which Bank agreed to loan Borrower up to
$5,000,000 to fund working capital needs (the "PRIOR LOAN"), which Prior Loan
matures April 14, 1997; and
WHEREAS, Borrower has requested that Bank renew, extend and increase the
Prior Loan; and
WHEREAS, Bank is willing to renew, extend and increase the Prior Loan
pursuant to the terms and conditions set forth herein; and
WHEREAS, Borrower and Bank wish to restate in its entirety the Prior Loan
Agreement and set forth the terms and conditions of the renewal, extension and
increase of the Prior Loan;
NOW, THEREFORE, in consideration of the mutual promises herein contained
and for other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Prior Loan Agreement is hereby restated in its entirety
and the parties hereto do hereby agree as follows:
SECTION 1.
DEFINITIONS
1.1. DEFINED TERMS. As used in this Loan Agreement, and in any note,
certificate, report or other document made or delivered pursuant to this Loan
Agreement, the following terms shall have the following meanings;
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under common control with, another Person.
"BOARD OF GOVERNORS" means the Board of Governors of the Federal
Reserve System.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day
on which national banks are authorized to be closed under the laws of the
State of Texas.
"CONSOLIDATED NET WORTH" shall mean, as of any date, the total
shareholders' equity (including capital stock, additional paid in capital,
retained earnings after deducting treasury stock, accumulated foreign
currency translation adjustments, and deferred income tax calculation
adjustments) which would appear on a consolidated balance sheet of Borrower
and its Consolidated Subsidiaries.
"CONSOLIDATED SUBSIDIARIES" shall mean, as of any date, Optical Data
Systems, Texas, Inc., Optical Data Systems, GmbH, Optical Data Systems
Ltd., Optical Data Systems SARL, Optical Data Systems Ltda., ODS Ltd. and
Optical Data Systems (Barbados) Ltd., and any other Subsidiary included as
of such date in the consolidated financial statements of Borrower.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, as of any date,
Consolidated Net Worth less the aggregate book value of Intangible Assets
shown on such balance sheet.
"CONSOLIDATED TOTAL LIABILITIES" shall mean, as of any date, all
liabilities which would be reflected on a consolidated balance sheet of
Borrower and its Consolidated Subsidiaries.
"EURODOLLAR ADVANCE" means that portion of any Advance which bears
interest at a rate of interest determined by reference to the Eurodollar
Rate.
"EURODOLLAR ADVANCE FAILURE" shall have the meaning set forth in the
definition of Eurodollar Consequential Loss.
"EURODOLLAR BUSINESS DAY" means a Business Day on which dealings in
United States Dollars are carried out in the London interbank market.
"EURODOLLAR CONSEQUENTIAL LOSS" means such amount or amounts as shall
compensate Bank for any loss, cost or expense incurred by Bank as a result
of (a) any payment or prepayment of any portion of any Eurodollar Advance
on a date other than the last day of the Interest Period applicable thereto
(a "EURODOLLAR PREPAYMENT"), (b) the conversion of the rate of interest on
any Eurodollar Advance from the Eurodollar Rate to another rate of interest
available hereunder (subject to the provisions of this Loan Agreement
applicable to the selection of any such interest rate) with respect to any
portion of the Eurodollar Advance on a date other than the last day of the
Interest Period applicable thereto (a "EURODOLLAR CONVERSION"), (c) the
rescinding of a Rollover Notice to another Interest Period or notice of a
conversion from another interest rate to the Eurodollar Rate prior to the
commencement of the Interest Period (a "EURODOLLAR RESCISSION"), or (d) the
failure of all or any portion of a Eurodollar Advance to be made under this
Agreement (a "EURODOLLAR ADVANCE FAILURE") due to the action or inaction of
Borrower, including Borrower's failure to satisfy any condition to any
Advance that would otherwise have been a Eurodollar Advance. Compensation
owing to Bank as a result of any such loss, cost
or expense shall include, without limitation, an amount equal to the
excess, if any, of (i) the amount of the interest that would have accrued
at the Eurodollar Rate on the amount which was the subject of the
Eurodollar Prepayment, the Eurodollar Conversion, the Eurodollar
Rescission or the Eurodollar Advance Failure, as the case may be, for the
period from the date of occurrence to the last day of the applicable
Interest Period over (ii) the amount of interest (as determined by Bank)
that Bank could have bid on a Eurodollar deposit, for an amount
comparable to the amount which was the subject of the Eurodollar
Prepayment, the Eurodollar Conversion, the Eurodollar Rescission or the
Eurodollar Advance Failure, as the case may be, for the period from the
date of occurrence to the last day of the applicable Interest Period,
placed by Bank with prime banks in the London interbank market.
"EURODOLLAR CONVERSION" shall have the meaning set forth in the
definition of the term "EURODOLLAR CONSEQUENTIAL LOSS."
"EURODOLLAR PREPAYMENT" shall have the meaning set forth in the
definition of the term "EURODOLLAR CONSEQUENTIAL LOSS."
"EURODOLLAR RATE" means, with respect to each Eurodollar Advance for
each Interest Period, a rate per annum equal to (a) the Interbank Offered
Rate, divided by (b) 1.00 minus the Eurodollar Reserve Requirement.
"EURODOLLAR RESCISSION" shall have the meaning set forth in the
definition of the term "EURODOLLAR CONSEQUENTIAL LOSS."
"EURODOLLAR RESERVE REQUIREMENT" means, on any day, that percentage
(expressed as a decimal fraction) which is in effect on such day, as
prescribed by the Board of Governors (or any successor), for determining
the maximum reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to "eurocurrency
liabilities" as currently defined in Regulation D or under any other then
applicable similar or successor regulation which prescribes reserve
requirements applicable to eurocurrency liabilities or eurocurrency
fundings. Each determination by Bank of the Eurodollar Reserve Requirement
shall be conclusive in the absence of manifest error.
"EVENT OF DEFAULT" shall mean the occurrence and continuation of any
of the events specified in SECTION 8.1.
"FINAL INTEREST PAYMENT DATE" means, with respect to any Eurodollar
Advance, the last day of the Interest Period of such Advance.
"FIXED CHARGES COVERAGE" shall mean, for any period, the ratio of (i)
(x) the consolidated net profit before taxes of Borrower and its
Consolidated Subsidiaries, PLUS (y) the consolidated cash interest expense
and operating lease expense (including rent and all other reimbursements
and expenses required to be paid under all leases other than those that are
required to be capitalized in conformity with Generally Accepted Accounting
Principles) during such period of Borrower and its Consolidated
Subsidiaries to (ii) the sum determined in clause (i)(y) above.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean those generally
accepted accounting principles and practices which are recognized as such
by the American Institute of Certified Public
Accountants acting through its Accounting Principles Board or by the
Financial Accounting Standards Board or through other appropriate boards
of committees thereof and which are consistently applied for all periods
after the date hereof so as to properly reflect the financial condition,
and the results of operations and changes in financial position, of
Borrower and its Consolidated Subsidiaries.
"GOVERNMENTAL AUTHORITY" shall mean any government (or any political
division or jurisdiction thereof), court, bureau, agency or other
governmental authority having jurisdiction over Borrower or a Subsidiary or
any of its or their business, operations or properties.
"INDEBTEDNESS" shall mean with respect to any Person, all
indebtedness, obligations and liabilities, contingent or otherwise of such
Person which are (i) liabilities which would be reflected on a balance
sheet of such Person, prepared in accordance with Generally Accepted
Accounting Principles, (ii) obligations of such Person in respect of any
guaranty or letter of credit, or (iii) obligations of such Person in
respect of any capital lease.
"INTERBANK OFFERED RATE" means, with respect to each Interest Period,
the rate of interest per annum at which deposits in immediately available
freely transferable funds in Dollars are offered by Bank (at approximately
1:00 p.m. Dallas, Texas time, two (2) Eurodollar Business Days prior to the
first day of such Interest Period) to first class banks in the London
interbank market for delivery on the first day of such Interest Period,
such deposits being for a period of time equal or comparable to such
Interest Period and in an amount equal or comparable to the principal
amount of the Eurodollar Advance to which such Interest Period relates.
Each determination of the Interbank Offered Rate by Bank shall be
conclusive in the absence of manifest error.
"INTEREST PAYMENT DATE" means (a) with respect to any Prime Rate
Advance, the first day of each calendar quarter commencing on the first of
such days to occur after such Advance is made or any Eurodollar Advance is
converted to a Prime Rate Advance, and (b) with respect to any Eurodollar
Advance, (i) the last day of each ninety (90) day period following the date
on which such Advance is made or converted, commencing on the first of such
days to occur after such Advance is made or any Prime Rate Advance is
converted to a Eurodollar Advance, and (ii) the last day of such Interest
Period.
"INTEREST PERIOD" means, with respect to a Eurodollar Advance, a
period commencing: (a) on the borrowing date of such Eurodollar Advance; or
(b) on the conversion date pertaining to such Eurodollar Advance, if such
Eurodollar Advance is made pursuant to a conversion as described in SECTION
2.6(A) hereof; or (c) on the day following the last day of the Interest
Period during which Borrower gives a Rollover Notice in the case of a
rollover to a successive Interest Period as described in SECTION 2.6(C)
hereof; and in the case of (a), (b) and (c) preceding, ending on the
numerically corresponding day of the calendar month that is one (1), two
(2), three (3) or six (6) months after the commencement date of the
Interest Period, as Borrower shall elect in accordance with SECTION 2.3 or
SECTION 2.6(C) of this Loan Agreement; PROVIDED that (i) any Interest
Period which would otherwise end on a day which is not a Eurodollar
Business Day shall be extended to the next succeeding Eurodollar Business
Day UNLESS such Eurodollar Business Day falls in another calendar month, in
which case such Interest Period shall end on
the next preceding Eurodollar Business Day; (ii) any Interest Period that
begins on the last Eurodollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to clause (i)
above, end on the last Eurodollar Business Day of the calendar month in
which the Interest Period terminates; and (iii) if the Interest Period
for any Eurodollar Advance would otherwise end after the final maturity
of all Advances (whether by the lapse of time or acceleration of the
maturity or otherwise), as the case may be, under which such Eurodollar
Advance is outstanding, such Interest Period shall end on the final
maturity date of such Advance.
"INTANGIBLE ASSETS" of any Person shall mean those assets of such
Person which are (i) deferred assets, other than prepaid insurance and
prepaid taxes; (ii) patents, copyrights, trademarks, tradenames,
franchises, goodwill, non-compete agreements, experimental expenses and
other similar assets which would be classified as intangible assets on a
balance sheet of such Person, prepared in accordance with Generally
Accepted Accounting Principles.
"INVESTMENT" in any Person shall mean any investment, whether by means
of share purchase, loan, advance, extension of credit, capital contribution
or otherwise, in or to such Person, the guarantee of any Indebtedness of
such Person, or the subordination of any claim against such Person to other
Indebtedness of such Person; excluding, however, the amount of any
Receivables owing from such Person and incurred in the ordinary course of
such Person's business.
"LIEN" shall mean any mortgage, deed of trust, pledge, security
interest, encumbrance, lien, option, easement or charge of any kind
(including any conditional sale or other title retention agreement, or any
financing lease having substantially the same economic effect as any of the
foregoing) upon or with respect to any assets or properties of a Person,
arising by agreement or under any statute or law, or otherwise.
"LOAN" shall mean the revolving credit loan made or to be made
hereunder to Borrower by Bank pursuant to SECTION 2.1.
"LOAN AGREEMENT" shall mean this Second Amended and Restated Revolving
Credit Loan Agreement, as same may from time to time be amended,
supplemented, renewed and/or restated.
"LOAN PAPERS" shall mean (i) this Loan Agreement, (ii) the Note, (iii)
any Letters of Credit or Letter of Credit Applications, and (iv) any and
all other agreements or instruments now existing or hereafter executed and
delivered by Borrower or any Subsidiary or any other Person in connection
with, or as security for the payment or performance of any or all of the
Note, the Obligation, the Letters of Credit or this Loan Agreement, as such
agreements and instruments may be amended, supplemented, renewed, extended
and/or restated from time to time.
"NOTE" shall have the meaning assigned to that term in SECTION 2.2
hereof.
"OBLIGATION" shall mean all present and future indebtedness,
obligations, and liabilities of Borrower to Bank, and all renewals and
extensions thereof, or any part thereof, arising pursuant to this Loan
Agreement, any Letter of Credit, any Letter of Credit Application, or
represented by the Note, and all interest accruing thereon, and attorneys'
fees incurred in the enforcement or collection thereof, regardless of
whether such indebtedness, obligations and liabilities are direct,
indirect, fixed, contingent, joint, several or joint and several; together
with all indebtedness, obligations and liabilities of Borrower evidenced or
arising pursuant to any of the other Loan Papers, and all renewals and
extensions thereof, or a part thereof.
"OFFICER'S CERTIFICATE" shall mean a certificate in the form of
EXHIBIT "B" attached hereto, signed by the President or principal financial
officer of Borrower and each Subsidiary which certificate shall: (A) state
that, at the time such certificate is executed and as of the end of the
fiscal period for which such certificate is delivered, to the best of his
knowledge, Borrower (i) has fulfilled each and every covenant and condition
contained in the Note and the other Loan Papers including this Loan
Agreement and (ii) is not in default in the performance, observance or
fulfillment of any of the covenants and conditions of the Note or the Loan
Papers, including , without limitation, this Loan Agreement or, if Borrower
shall be in default, specifying all such defaults and the nature and status
thereof and (B) contain a computation of and showing compliance with each
of the financial ratios specified in SECTION 7 of this Loan Agreement.
"PERSON" shall mean and include an individual, partnership,
corporation, trust, incorporated association, joint venture, union,
business association or firm, trustee, or a government or any agency or
political subdivision thereof, or any other form of entity.
"POTENTIAL DEFAULT" shall mean any event which, with the giving of
notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" shall mean the variable rate of interest per annum then
most recently announced or published by Bank as its Base Rate or Prime
Interest Rate (which rate may not be the lowest rate charged by Bank on
similar loans).
"RECEIVABLES" shall mean all present and future (i) accounts,
receivables, contract rights, chattel paper, documents, tax refunds, or
payments of, or owned by, Borrower or any Subsidiary; (ii) insurance
proceeds, patent rights, license rights, rights to refunds or
indemnification, and other general intangibles of every kind or nature of,
or owned by, Borrower or any Subsidiary; and (iii) all forms of obligations
whatsoever owing to Borrower or any Subsidiary together with all
instruments and all documents of title representing any of the foregoing
and all right, title, and interest in, and all securities and guaranties
with respect to, each Receivable.
"SHAREHOLDERS" shall mean, at any specific date, the owners of any of
the capital stock of Borrower at such date.
"SUBSIDIARY" shall mean, with respect to any Person (herein referred
to as the "PARENT"), any corporation, association or other business entity
of which more than 50% of the securities or other ownership interests
having ordinary voting power is, at the time as of which any determination
is being made, owned or controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"TERMINATION DATE" shall mean the earlier of: (i) April 12, 1999, or
(ii) the date the Revolving Credit Commitment is terminated in accordance
with SECTION 8.2 hereof.
1.2. ACCOUNTING TERMS. As used in this Loan Agreement, the Note, and in
any certificate, report or other document made or delivered pursuant to this
Loan Agreement, accounting terms not defined in SECTION 1.1 hereof, and
accounting terms partly defined in SECTION 1.1 hereof to the extent not defined,
shall have the respective meanings given to them under Generally Accepted
Accounting Principles and all references to balance sheets or other financial
statements shall mean such statements, prepared in accordance with Generally
Accepted Accounting Principles.
SECTION 2.
REVOLVING CREDIT COMMITMENT; AMOUNT
AND TERMS OF REVOLVING CREDIT LOAN
2.1. THE REVOLVING CREDIT LOAN AND REVOLVING CREDIT COMMITMENT. Subject to
the terms and conditions of this Loan Agreement, Bank agrees to extend to
Borrower, from the date hereof through the Termination Date (the "AVAILABILITY
PERIOD") a revolving line of credit which shall not exceed at any one time
outstanding $15,000,000.00 (the "REVOLVING CREDIT COMMITMENT"). Within the
limits of this SECTION 2.1, during the Availability Period, Borrower may borrow,
prepay and reborrow under this SECTION 2.1. Each advance hereunder is called an
"ADVANCE" and all advances hereunder are collectively referred to as the "LOAN."
2.2. NOTE. From and after the date hereof, the Loan shall be evidenced by
a renewal promissory note made by Borrower, in the form attached hereto as
EXHIBIT "A" (together with any and all renewals, extensions for any period,
rearrangements or increases thereof, and notes given in substitution therefor,
the "NOTE") representing the obligation of Borrower to pay the lesser of: (i)
the Revolving Credit Commitment or (ii) the aggregate unpaid principal amount of
the Loan, with interest thereon as prescribed in the Note, which note is given
in renewal and extension of a promissory note, dated April 13, 1995, in the
original principal amount of $5,000,000 executed by Borrower and payable to the
order of Bank. The unpaid principal of the Note shall bear interest at a rate
per annum which shall be equal to the lesser of (a) at the election of Borrower
as specified in the request for an Advance given in accordance with SECTION 2.3
below, (i) the Prime Rate as in effect from day to day, or (ii) the Eurodollar
Rate plus one and one half percent (1.5%), or (b) the maximum lawful rate which
may be charged by Bank under state or federal laws applicable to the Loan (the
"MAXIMUM RATE"). All past due principal of, and to the extent permitted by
applicable law, interest on, the Note shall bear interest until paid at an
annual rate equal to the lesser of (i) (a) for Prime Rate Advances, the Prime
Rate from time to time in effect, plus two percent, (b) for Eurodollar Advances,
the Eurodollar Rate applicable to such Advances plus four percent (4%), or (ii)
the Maximum Rate (such rate being referred to hereinafter as the "DEFAULT
RATE"). The date and amount of each Advance made by Bank, and each payment of
principal and interest, shall be maintained by Bank in its records, and the
aggregate unpaid principal amount shown on such records shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on the Note. The
failure to record any such amount on such records shall not, however, limit or
otherwise affect the obligations of Borrower hereunder or under the Note to
repay the principal amount of the Advance together with all interest accruing
thereon.
2.3. PROCEDURE FOR ADVANCES. Borrower shall give Bank prior verbal notice
on or before 12:00 noon (Dallas, Texas time) on any day a Prime Rate Advance is
requested. Not later than 2:00 p.m., Dallas, Texas time, on the date specified,
subject to the terms and conditions of this Loan Agreement, Bank shall make
available to Borrower at Bank's offices in Dallas, Texas, the amount of such
requested Prime Rate Advance in immediately available funds. Borrower shall
give Bank prior written notice on or before 12:00 noon (Dallas, Texas time) at
least two Eurodollar Business Days prior to the day a Eurodollar Advance is
requested. The notice shall specify the requested amount of the Advance, the
duration of the Interest Period applicable to the Advance, and the requested
date of the Advance, which shall be a Eurodollar Business Day. Not later than
2:00 p.m., Dallas, Texas time, on the date specified, subject to the terms and
conditions of this Loan Agreement, Bank shall make available to Borrower at
Bank's offices in Dallas, Texas, the amount of such requested Eurodollar Advance
in immediately available funds. Notice of a requested Eurodollar Advance shall
be irrevocable upon receipt thereof by Bank.
2.4. COMMITMENT FEES. Borrower agrees to pay Bank a commitment fee of
two-tenths of one percent (0.20%) per annum on the daily unused portion of
the Revolving Credit Commitment. Such commitment fee shall be payable
quarterly in arrears on the last day of each June, September, December and
March, commencing June 30, 1997 (which payment shall cover the period from
April 1, 1997 through June 30, 1997), and continuing regularly thereafter so
long as the Revolving Credit Commitment is in effect, and shall also be
payable at the maturity of the Note and upon the date of prepayment in full
of the Note if the Revolving Credit Commitment is thereupon terminated.
Borrower acknowledges and agrees that the commitment fees payable hereunder
are bona fide commitment fees and are intended as reasonable compensation to
Bank for committing to make funds available to Borrower as described herein
and for no other purpose.
2.5. LETTERS OF CREDIT. At the request of Borrower, and upon execution of
letter of credit documentation satisfactory to Bank (including, without
limitation, an Application and Agreement for Commercial Letter of Credit [for
documentary letters of credit] or Standby Letter of Credit Application and
Agreement [for standby letters of credit] for each such letter of credit in the
form attached hereto as EXHIBIT "D") (the "APPLICATION"), Bank shall issue
documentary or standby letters of credit ("LETTERS OF CREDIT") from time to time
for the account of Borrower in a face amount not exceeding in the aggregate at
any time outstanding the lesser of (a) $5,000,000, or (b) $15,000,000 MINUS the
aggregate outstanding principal balance of all Advances. The Revolving Credit
Commitment shall at all times be reduced by the aggregate face amount of
outstanding Letters of Credit. The Letters of Credit shall be on terms mutually
acceptable to Bank and Borrower and no Letter of Credit shall have an expiration
date later than one hundred eighty days after the Termination Date. Any amount
paid by Bank on any Letter of Credit which is not immediately reimbursed by
Borrower shall be treated as an Advance without the necessity for any request by
Borrower. Borrower shall pay to Bank, at the time of issuance of each
documentary Letter of Credit, a fee equal to one and one-quarter of one percent
(1.25%) per annum times the face amount of the Letter of Credit for the period
the Letter of Credit is to be outstanding. Borrower shall pay to Bank, at the
time of issuance of each standby Letter of Credit, a fee equal to two percent
(2%) per annum times the face amount of the Letter of Credit for the period the
Letter of Credit is to be outstanding. In connection with the issuance of any
Letters of Credit, Borrower shall pay to Bank its standard fees and charges,
including the standard fees and charges provided for in the Application. The
obligations
and indebtedness of Borrower to Bank under this SECTION 2.5, the Letters of
Credit, and the Applications, shall be part of the Obligations.
2.6. EURODOLLAR ADVANCES: CONVERSION, ROLLOVER, MINIMUM AMOUNTS, ETC.
(a) CONVERSION FROM PRIME RATE ADVANCES. Provided that no
Event of Default shall have occurred and be continuing, upon three (3)
Eurodollar Business Days' prior written notice from Borrower to Bank
specifying the commencement date and length of the applicable Interest
Period selected by Borrower, Borrower may convert an amount equal to
$500,000 or an integral multiple of $50,000 in excess thereof, of any
outstanding Prime Rate Advance into a Eurodollar Advance.
(b) CONVERSION FROM EURODOLLAR ADVANCES. Unless Bank shall
have actually received written notice from Borrower requesting
otherwise, delivered in accordance with SECTION 2.6(C) below, at least
three (3) Eurodollar Business Days prior to the Final Interest Payment
Date with respect to a Eurodollar Advance, then on such Final Interest
Payment Date the outstanding Eurodollar Advance shall be converted to
a Prime Rate Advance.
(c) ROLLOVER. Provided that no Event of Default shall have
occurred and be continuing, at least three (3) Eurodollar Business
Days prior to the Final Interest Payment Date of each Eurodollar
Advance, Borrower may give to Bank written notice that all or any
portion of such Eurodollar Advance shall continue as a Eurodollar
Advance upon the expiration of the then-current Interest Period (the
"ROLLOVER NOTICE"). Such Rollover Notice shall also specify the
length of the succeeding Interest Period selected by Borrower with
respect thereto. Each Rollover Notice shall be effective and
irrevocable upon receipt thereof by Bank. If the required Rollover
Notice shall not have been timely received by Bank, then Borrower
shall be deemed to have elected to have such Eurodollar Advance be a
Prime Rate Advance as provided in SECTION 2.6(B).
(d) MINIMUM AMOUNTS AND NUMBER OF EURODOLLAR ADVANCES.
Notwithstanding any provision to the contrary contained herein, (i)
each Eurodollar Advance shall be in an amount equal to $500,000, or an
integral multiple of $50,000 in excess thereof, and (ii) there shall
not exist or be outstanding at any time more than an aggregate of five
(5) Eurodollar Advances.
(e) LENDING OFFICE. Bank may cause any Eurodollar Advance to be made
by its principal office or by a foreign or domestic subsidiary, affiliate,
branch or correspondent. Notwithstanding the right of Bank to fund all or any
portion of a Eurodollar Advance in any manner that it deems appropriate, Bank
shall, regardless of the actual means of funding, be deemed to have funded the
Eurodollar Advance in accordance with the interest option from time to time
selected by Borrower.
2.7. PROTECTION OF YIELD.
(a) INCREASED COSTS, ETC. Subject to SECTION 9.8, if at
any time, and from time to time, Bank determines that the adoption,
modification or implementation of, or compliance with, any applicable
law, rule or regulation regarding taxation, required levels of
reserves, deposits, insurance or capital (including any allocation of
capital requirements or conditions), or similar requirements
applicable to Bank, or any interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged
with the interpretation, administration or compliance of or with any
of such requirements, has or would have the effect of (i) increasing
Bank's costs relating to the Loan, the Revolving Credit Commitment, or
any part thereof or (ii) reducing the yield or rate of return of Bank
on the Loan, the Revolving Credit Commitment, or any part thereof, to
a level below that which Bank could have achieved but for the
adoption, modification or implementation of, or compliance with, any
such requirements, Borrower shall, within ten (10) days after any
request by Bank, pay to Bank such additional amounts as (in Bank's
sole judgment, after good faith and reasonable computation) will
compensate Bank for such increase in costs or reduction in yield or
rate of return of Bank. No failure by Bank to demand immediately
payment of any additional amounts payable under this SECTION 2.7(A)
shall constitute a waiver of Bank's right to demand payment of such
amounts at any subsequent time. If Bank requests that Borrower pay
additional amounts pursuant to this SECTION 2.7(A), Bank shall submit
to Borrower a certificate, executed by Bank, as to such additional
amounts, which certificate shall be conclusive in the absence of
manifest error. Such certificate shall set forth the nature of the
occurrence giving rise to such claim for additional amounts, the
additional amounts to be paid to Bank hereunder, and the method by
which such amounts were determined. In determining such amounts, Bank
may use any reasonable averaging and attribution methods. Any portion
of the additional amounts required to be paid under this SECTION
2.7(A) remaining unpaid ten (10) days after the due date thereof shall
bear interest at the Default Rate.
(b) SUBSTITUTE INTEREST RATE. If, on or before any date on
which a Eurodollar Rate is to be determined hereunder, Bank determines
that deposits of United States Dollars in the appropriate amount for
the appropriate period are not being offered in the interbank
Eurodollar market for United States Dollars, or that by reason of
circumstances affecting such market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate, then Bank shall
promptly give notice of such determination to Borrower and such
determination shall be conclusive and binding. During the ten (10)
days next following the giving of such notice, Borrower and Bank shall
negotiate in good faith in order to arrive at a mutually satisfactory
alternative interest rate (the "SUBSTITUTE RATE") to replace the rate
otherwise applicable to the pertinent Eurodollar Advances of Borrower
during the applicable Interest Period. If, within such ten (10) day
period, Borrower and Bank agree in writing upon a Substitute Rate,
such rate shall be effective from the first day of such Interest
Period. If Bank and Borrower fail to agree upon a Substitute Rate
within such ten (10) day period, the Substitute
Rate applicable to the pertinent Eurodollar Advance during such
Interest Period shall be the interest rate applicable to a Prime
Rate Advance under SECTION 2.2. Bank shall inform Borrower of such
rate as promptly as practicable, and, if requested by Borrower, Bank
shall deliver to Borrower a statement reflecting the computations
made in determining such Substitute Rate.
(c) CHANGES IN LAW RENDERING LOAN UNLAWFUL. In the event
that (i) any change in applicable law, treaty or regulation or the
interpretation thereof (whether or not having the force of law) shall
make it unlawful or impossible for Bank to make or continue to
maintain all or any portion of a Eurodollar Advance contemplated
hereunder, or (ii) any central bank or other fiscal, monetary or other
authority having jurisdiction over Bank or all or any portion of a
Eurodollar Advance shall request Bank in writing to comply with
restrictions (whether or not having the force of law) which seek to
prohibit Bank from making or continuing to maintain such a Eurodollar
Advance, then Bank shall so notify Borrower, and Borrower shall, upon
demand by Bank, either, at the option of Borrower, prepay such
Eurodollar Advance or convert such Eurodollar Advance to a Prime Rate
Advance in accordance with SECTION 2.6(B) hereof, except that, subject
to the provisions of SECTION 2.7 hereof, such prepayment or conversion
need not be effected on a Final Interest Payment Date, and upon such
demand or upon notice by Bank, the obligation of Bank to make such
Eurodollar Advance hereunder shall terminate. Failure to prepay any
such portion of a Eurodollar Advance shall be deemed an election to
convert to a Prime Rate Advance. Such demand or notice shall be
accompanied by a certificate of Bank provided to Borrower as to the
reasons why it is no longer feasible for Bank to make or continue to
maintain such Eurodollar Advance hereunder and such certificate shall,
in the absence of manifest error in calculation, be conclusive and
binding.
(d) EURODOLLAR CONSEQUENTIAL LOSS. Borrower agrees to indemnify and
hold harmless Bank from and against any Eurodollar Consequential Loss. Borrower
shall pay, within five (5) Business Days following demand therefor, the amount
of any Eurodollar Consequential Loss incurred by Bank.
(e) REASONABLE EFFORTS. Borrower and Bank will use all
reasonable efforts to avoid or to minimize the obligation of Borrower
to pay any amounts under this SECTION 2.7 or the subjecting of any
payment by Borrower to any withholding tax, and Borrower will, as
promptly as practical, notify Bank, and Bank will, as promptly as
practicable, notify Borrower, of the existence of any event which will
require the payment by Borrower of any such amounts or the subjecting
of any payment by Borrower to any withholding tax; PROVIDED, HOWEVER,
that any failure to give such prompt notification shall not in any way
affect the rights of Bank or the obligations of Borrower hereunder.
SECTION 3.
PAYMENTS; COMPUTATIONS; USE OF PROCEEDS
3.1. OPTIONAL PREPAYMENTS. Borrower shall have the right, from time to
time, to prepay the Note, in whole or in part, without premium or penalty, upon
the payment of accrued interest on the amount prepaid to and including the date
of payment. Prepayments of the Note shall not reduce the Revolving Credit
Commitment.
3.2. PAYMENTS. Principal and interest shall be due and payable as provided
in the Note and this Loan Agreement. All payments (including prepayments) by
Borrower on account of principal, interest, and fees hereunder shall be made in
immediately available funds. All such payments shall be made to Bank at its
principal office in Dallas, not later than 12:00 noon, Dallas, Texas time, on
the date due and funds received after that hour shall be deemed to have been
received by Bank on the next following Business Day. If any payment is
scheduled to become due and payable on a day which is not a Business Day, such
payment shall instead become due and payable on the immediately following
Business Day and interest thereon shall be payable at the then applicable rate
during such extension.
3.3. COMPUTATION OF INTEREST AND FEES. Interest on the Note and the fees
shall be calculated on the basis of a year of 360 days, as the case may be, for
the actual number of days (including the first but excluding the last) elapsed.
Any change in the interest rate on the Note resulting from a change in the Prime
Rate shall become effective as of the opening of business on the day on which
such change in the Prime Rate becomes effective.
3.4. USE OF PROCEEDS. Borrower represents, warrants and covenants that it
is not engaged and shall not engage in the business of extending credit for the
purposes of "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulations G, T, U or X of the Board
of Governors of the Federal Reserve System, and no part of the proceeds of the
Loan shall be used to purchase or carry any such margin stock or to reduce or
retire any indebtedness incurred for any such purposes. If requested by Bank,
Borrower will furnish to Bank a statement in conformity with the requirements of
the Federal Reserve Form U-1 referred to in said Regulation U to the foregoing
effect. No part of the proceeds of the Loan will be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation X of said
Board of Governors. Portions of the Loan will be advanced from time to time by
Borrower to one or more of its Subsidiaries.
SECTION 4.
CONDITIONS PRECEDENT TO FUNDING LOANS
4.1. CONDITIONS PRECEDENT TO FUNDING INITIAL ADVANCE. The obligation of
Bank to fund the initial Advance or issue the initial Letter of Credit shall be
subject to the fulfillment of the following conditions precedent in a manner
satisfactory to the Bank on or before date of such Advance:
4.1.1. Bank shall have received the following:
4.1.1.1.The duly executed Note;
4.1.1.2. A certificate signed by a duly authorized officer of
Borrower, stating that, to the best knowledge and belief of such
officer, after reasonable and due investigation and review of matters
pertinent to the subject matter of such certificate):
4.1.1.2.1. All of the representations and warranties
contained in SECTION 5 hereof, and the other Loan Papers are true
and correct as of the date of the Advance; and
4.1.1.2.2. No event has occurred and is continuing which
constitutes an Event of Default or Potential Default.
4.1.1.3. A signed certificate of the Secretary of Borrower which
shall certify the names of the officers of Borrower authorized to sign
each of the Loan Papers and the other documents or certificates to be
delivered pursuant to the Loan Papers by Borrower, together with the
true signatures of each such officers. Bank may conclusively rely on
such certificate until it shall receive a further certificate of the
Secretary of Borrower canceling or amending the prior certificate and
submitting the signatures of the officers named in such further
certificate;
4.1.1.3.1. Resolutions of Borrower approving the execution,
delivery and performance of this Loan Agreement, the Note, and the
other Loan Papers, as appropriate, and the transactions contemplated
herein and therein, duly adopted by Borrower's Board of Directors and
accompanied by a certificate of the Secretary of Borrower stating that
such resolutions are true and correct, have not been altered or
repealed and are in full force and effect;
4.1.1.4. A duly executed Officer's Certificate; and
4.1.1.5. Such other information and documents as may be
reasonably required by Bank.
4.1.2. All corporate and legal proceedings and all documents
required to be completed and executed by the provisions of, and all
instruments to be executed in connection with the transactions contemplated
by, this Loan Agreement shall be in form and substance satisfactory to Bank
and its counsel.
4.1.3. The representations and warranties of Borrower contained in
this Loan Agreement shall be true and correct in all material respects when
made; Borrower shall have complied with all of the terms and conditions of
this Loan Agreement to be performed or observed by it and no Event of
Default or Potential Default shall be in existence on the date the Advance
is made or after giving effect to the Advance, and Bank shall have received
a certificate of Borrower, dated the date the Advance is made, to the
foregoing effect.
4.2. CONDITIONS TO ANY SUBSEQUENT ADVANCES. In addition to the conditions
precedent specified in SECTION 4.1 of this Loan Agreement, the obligation of
Bank to make any subsequent Advance shall also be subject to the fulfillment of
the following conditions precedent on or before the date of such Advance in a
manner satisfactory to Bank: (i) the representations and warranties of Borrower
contained in this Loan Agreement shall be true and correct in all material
respects when made and as of the date of such Advance with the same effect as if
made on and as of such date, (ii) Borrower shall
have complied with all of the terms and conditions of this Loan Agreement to
be performed or observed by it, and (iii) no Event of Default or Potential
Default shall be in existence on such date or after giving effect to the
Advance to be made on such date.
4.3. EFFECT OF REQUEST FOR ANY SUBSEQUENT ADVANCE. Any request by Borrower
for a subsequent Advance shall be deemed to be a representation and warranty
that the matters set forth in SECTION 4.2 hereof are true and correct as of the
date of such request and the date of such Advance.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Bank to enter into this Loan Agreement and to make the
Loan and issue the Letters of Credit, Borrower hereby represents and warrants to
and agrees with Bank that:
5.1. ORGANIZATION AND GOOD STANDING. Borrower and each Subsidiary is a
corporation duly organized and validly existing in good standing under the laws
of its jurisdiction of incorporation, with full corporate power and authority to
carry on its business as presently conducted and to own or hold under lease its
properties; Borrower and each Subsidiary is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which the failure
to so qualify would have an adverse material effect on either the Borrower or
such Subsidiary; and Borrower has full corporate power and authority to execute
and deliver the Loan Papers to which it is a party, and to perform its
obligations thereunder.
5.2. AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Note and the other Loan
Papers to which Borrower is a party have been duly authorized and have been or
will be duly executed and delivered by Borrower and each such Subsidiary, as
applicable, and constitute or will constitute, when executed and delivered, the
legal, valid and binding obligations of Borrower and such Subsidiary, as
applicable, enforceable against Borrower and such Subsidiary in accordance with
their respective terms (except to the extent that enforcement thereof may be
limited by any applicable bankruptcy, reorganization, moratorium or similar laws
affecting creditors' rights generally or general equitable principles),
5.3. NO CONFLICTS. The execution, delivery and performance by Borrower of
the Note and the other Loan Papers to which it is a party are not and will not
be in violation of the certificate of incorporation or by-laws of Borrower, are
not and will not be in violation of or conflict with any material law or
governmental rule or regulation, judgment, writ, order, injunction, award or
decree of any court, arbitrator, administrative agency or other governmental
authority applicable to Borrower; are not and will not conflict or be
inconsistent with, or result in any breach of, any of the terms, covenants,
conditions or provisions of or constitute a material default under any
indenture, mortgage, contract, deed of trust, debenture, agreement or other
undertaking or instrument to which Borrower or any Subsidiary is a party or by
which any of its or their material assets may be bound or affected; and do not
and will not result in the creation or imposition of (or obligation to create or
impose) any Lien on any of its or their material assets pursuant to the
provisions of any such indenture, mortgage, contract, deed of trust, debenture,
agreement or other undertaking or instrument.
5.4. NO CONSENTS. The execution, delivery and performance by Borrower
of the Note and other Loan Papers to which it is a party do not and will not
require any consent of any other Person or any consent, license, permit,
authorization or other approval of, any giving of notice to, any exemption by,
any registration, recording, publication, declaration or filing with, or any
taking of any other action in respect of, any court, arbitrator, administrative
agency or other Governmental Authority.
5.5. PAYMENT OF TAXES. Borrower and each Subsidiary have filed all
material federal, state and other tax returns and reports required to be filed,
and have paid all taxes as shown on said returns and reports and all assessments
received by it to the extent that such taxes and assessments have become due
(except to the extent that the same are being contested in good faith by
appropriate proceedings diligently prosecuted and as to which adequate reserves
have been set aside in conformity with Generally Accepted Accounting
Principles).
5.6. LITIGATION. There is no action, suit, investigation or proceeding by
or before any court, arbitrator, administrative agency or other governmental
authority pending or threatened (a) which involves any of the transactions
contemplated presently by this Loan Agreement which, if adversely determined,
would materially and adversely affect the present financial condition, business,
or operations of Borrower or any Subsidiary, or (b) against or affecting
Borrower or any Subsidiary which, if adversely determined, would materially
adversely affect the present financial condition, business, or operations of
Borrower or any Subsidiary.
5.7. NO DEFAULT. Neither the Borrower nor any Subsidiary is in default
under any material order, writ, injunction, award or decree of any court,
arbitrator, administrative agency or other governmental authority binding upon
or affecting it or by which any of its assets may be bound or affected, or under
any agreement or other undertaking or instrument to which it is a party or by
which it is bound (including, without limitation, this Loan Agreement), and
nothing has occurred which would materially and adversely affect the ability of
Borrower or any Subsidiary to carry on its business or perform its obligations
under any such order, writ, injunction, award, decree, agreement or other
undertaking or instrument.
5.8. PROPERTIES. The Borrower has good and defensible title to all of the
assets reflected as owned in the financial statements referred to in SECTION 5.9
hereof. There are no Liens on any of the Collateral, except for the Liens
otherwise permitted pursuant to SECTION 7.3 hereof.
5.9. FINANCIAL STATEMENTS AND CONDITION. Borrower has delivered to Bank
copies of the consolidated balance sheet of Borrower and its Consolidated
Subsidiaries as of December 31, 1996, and the related consolidated statements of
income, stockholders equity and changes in financial position for the year
ending such date, certified by Ernst & Young L.L.P., independent certified
public accountants; such financial statements are true and correct, fairly
present the financial condition of Borrower and its Consolidated Subsidiaries as
of such date and there has been no material change in Borrower's financial
condition since such date.
5.9.1. SUBSIDIARY. Borrower presently has no Subsidiaries other than
Optical Data Systems, Texas, Inc., Optical Data Systems, GmbH, Optical Data
Systems Ltd., Optical Data Systems SARL, Optical Data Systems Ltda., ODS Ltd.,
Optical Data Systems (Barbados) Ltd. and Optical Data Systems sdn.bhd.
5.10. EVENT OF DEFAULT. No Event of Default or Potential Default has
occurred and is continuing.
5.11. LOCATION OF ASSETS. All assets of Borrower and each Subsidiary
are located at the addresses listed on EXHIBIT "C" attached hereto and made a
part hereof and at other locations disclosed in Borrower's annual reports,
copies of which have been delivered to the Bank prior to the date hereof, and
without the prior written consent of Bank, no asset of Borrower or any
Subsidiary will be kept at any other address.
5.12. COMPLIANCE WITH LAWS. Borrower and its Subsidiaries are in
compliance with all material laws, rules, regulations, orders and decrees which
are applicable to Borrower or any Subsidiary, or its or their properties.
5.13. LEASES. Neither Borrower nor any Subsidiary is the lessee of any
material real or personal property except as has been disclosed in writing to
Bank.
5.14. SURVIVAL OF REPRESENTATIONS. All representations and warranties
by Borrower herein shall survive delivery of the Note and the making of the
Loan, and any investigation at any time made by or on behalf of Bank shall not
diminish Bank's right to rely thereon.
SECTION 6.
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that (unless Bank otherwise consents in
writing) so long as any part of the Revolving Credit Commitment shall be in
effect or any Letter of Credit or any portion of the Obligation shall be
outstanding, Borrower will, and where applicable will cause each of its
Subsidiaries to:
6.1. EXISTENCE; COMPLIANCE WITH LAWS; ETC. (a) Preserve and keep in full
force and effect its existence, and all material licenses, privileges,
franchises, permits and other rights of any kind which are necessary to the
proper conduct of its business, (b) comply with all applicable, material laws
and duly observe all valid requirements of Governmental Authorities, (c)
continue to conduct and operate its business, substantially as currently
conducted and operated, and (d) maintain, preserve and protect such of its
material properties, whether owned or leased, which are necessary or useful in
its business, and keep the same in satisfactory operating condition and from
time to time make, or cause to be made, all needed repairs, renewals,
replacements and improvements thereto so that the business carried on in
connection therewith may be properly and advantageously conducted at all times
and will comply with the material provisions of all leases to which it is a
party or under which it occupies property so as to prevent any material loss or
forfeiture thereunder.
6.2. PAYMENT OF CHARGES. File all material federal, state and other tax
returns and reports which are required by law to be filed, and pay and discharge
promptly all taxes as shown on said returns and reports and all assessments
received by it and all governmental charges and other indebtedness to third
parties imposed upon its income and its properties to the extent that such
taxes, assessments, and other charges and indebtedness become due, except to the
extent the validity or amount of such are being contested in good faith by
appropriate proceedings diligently prosecuted and as to which adequate reserves
have been set aside in conformity with Generally Accepted Accounting
Principles.
6.3. INSURANCE. Keep all insurable property, real and personal, adequately
insured at all times in such amounts and against such risks as are customary for
Persons in similar businesses operating in the same vicinity, specifically to
include a policy of hazard, casualty, fire and extended coverage insurance
covering all assets, business interruption insurance, liability insurance and
worker's compensation insurance, in every case under a policy with a financially
sound and reputable insurance company and only with such deductibles as are
customary.
6.4. RIGHTS OF INSPECTION. Permit any representative of Bank, upon
reasonable notice, to visit and inspect any of its properties, books and records
and to take copies thereof and to discuss its affairs with its officers and
accountants, all at such times during normal business hours, in such detail, and
as often as Bank may reasonably request and Borrower will pay the reasonable
fees and disbursements of any accountants or other agents of Bank for the
foregoing purposes.
6.5. FINANCIAL STATEMENTS, REPORTS AND INFORMATION. Furnish to Bank:
6.5.1. As soon as practicable and in any event within one hundred
twenty (120) days after the end of each fiscal year of Borrower,
consolidated and consolidating balance sheets of Borrower and its
Consolidated Subsidiaries as at such date, and the statements of operations
and retained earnings and of changes in financial position for the year
then ended, all in reasonable detail, prepared in conformity with Generally
Accepted Accounting Principles, the statements to be accompanied by an
unqualified opinion of independent certified public accountants acceptable
to Bank, which opinion shall be to the effect that such statements have
been prepared in accordance with Generally Accepted Accounting Principles
consistently followed throughout the period indicated, except for such
changes in such principles with which the independent public accountants
shall have concurred, and which shall also state that no Event of Default
or Potential Default has come to the knowledge of such accountants, or if
such is not the case, the details of such Event of Default or Potential
Default, and the statements to be certified by the President or principal
financial officer of Borrower.
6.5.2. As soon as practicable and in any event within thirty (30)
days after the last day of each fiscal quarter of Borrower the consolidated
and consolidating balance sheets of Borrower and its Consolidated
Subsidiaries as at such date and the related statements of operations and
retained earnings, and a statement of changes in financial position
(including statement of sources and uses of funds) for the elapsed portion
of the fiscal year of Borrower ended with the last day of such month, all
in reasonable detail prepared in conformity with Generally Accepted
Accounting Principles (subject to routine audit and normal year-end
adjustments) and certified by the President or principal financial officer
of Borrower.
6.5.3. Concurrently with the delivery of each of the financial
statements of Borrower and its Consolidated Subsidiaries pursuant to
paragraphs (a) and (b) above, an Officer's Certificate, signed by the
President or principal financial officer of Borrower and each Subsidiary
which certificate shall: (A) state that to the best of his knowledge,
Borrower has fulfilled each and every covenant and
condition contained in the Note and the Loan Papers including this Loan
Agreement, and at the end of such fiscal period is not in default in the
performance, observance or fulfillment of any of the covenants and
conditions of the Note or the Loan Papers, including this Loan Agreement,
or, if Borrower shall be in default, specifying all such defaults and the
nature and status thereof; and (B) containing a computation of and
showing compliance with each of the financial ratios specified in
SECTION 7 of this Loan Agreement.
6.5.4. Promptly, after knowledge thereof, written notice of (i) the
occurrence of any Event of Default or Potential Default or (ii) any action,
suit, investigation or proceeding against Borrower or any Subsidiary,
which, if adversely determined, would have a material adverse effect upon
Borrower or (iii) the existence of any actual or potential liability of
Borrower or any Subsidiary (direct or contingent) in excess of $500,000.
6.5.5. Promptly, such additional, reasonable financial and other
information concerning the operation, financial condition, business,
operations or property of Borrower as Bank may from time to time reasonably
request.
6.6. PAYMENT OF EXPENSES AND TAXES. Borrower agrees to pay or reimburse
Bank for all of its reasonable costs and expenses incurred in connection with
the preparation, execution, consummation, amendment, modification or enforcement
of the Note and the Loan Papers, including this Loan Agreement, including the
reasonable fees and expenses of its counsel.
SECTION 7.
NEGATIVE COVENANTS
Borrower covenants and agrees from and after the date of this Loan
Agreement, that so long as any part of the Revolving Credit Commitment shall be
in effect or any Letter of Credit or any portion of the Obligation shall be
outstanding, without the prior written consent of Bank:
7.1. DISTRIBUTIONS. Borrower will not and will not permit any Subsidiary
to make any distribution (other than dividends) to Shareholders.
7.2. INDEBTEDNESS. Borrower will not and will not permit any Subsidiary
to, incur or permit to exist, Indebtedness in an aggregate amount greater than
$1,000,000, excluding, however, (i) the Loan hereunder, (ii) loans from any
Subsidiary to Borrower, (iii) loans from Borrower to any Subsidiary which would
not violate the $5,000,000 limit set forth in SECTION 7.4, (iv) current accounts
payable arising in the ordinary course of business, and (v) Indebtedness for
current taxes not delinquent or for taxes being contested in good faith and by
appropriate proceedings.
7.3. LIENS. Borrower will not and will not permit any Subsidiary to,
create or permit to exist any Lien with respect to any of its properties or
assets now owned or hereafter acquired, except (i) for current taxes not
delinquent or for taxes being contested in good faith by appropriate
proceedings, and (ii) Liens arising in the ordinary course of business for sums
not due or sums being contested in good faith and by appropriate proceedings and
not involving any deposits or advances or borrowed money or the deferred
purchase price of property or services.
7.4. LOANS OR ADVANCES. Borrower will not and will not permit any
Subsidiary to make or permit to exist any loans or advances to any other Person,
except (i) the enforcement, in the ordinary course of collection, of instruments
payable to it or to its order, (ii) in connection with Indebtedness owing to
Bank, (iii) loans from any Subsidiary to Borrower, and (iv) loans from Borrower
to any Subsidiary; provided, however, that all intercompany loans, advances,
distributions or transfers or dispositions of assets from Borrower to its
Subsidiaries shall not exceed $5,000,000 in aggregate amount during any calendar
year, regardless of whether any of such loans, advances, distributions,
transfers or dispositions have been repaid.
7.5. CONSOLIDATED TOTAL LIABILITIES TO CONSOLIDATED TANGIBLE NET WORTH.
Borrower will not, on any date, permit the ratio of Total Liabilities to
Consolidated Tangible Net Worth to exceed 0.75 to 1.0.
7.6. FIXED CHARGE COVERAGE. Borrower will not permit, as of the last day
of any calendar quarter, the Fixed Charge Coverage for the immediately preceding
four (4) calendar quarters to be less than 2.75 to 1.0.
7.7. MERGERS, CONSOLIDATIONS, SALES. Borrower will not, and will not
permit any Subsidiary to, be a party to any merger or consolidation, or purchase
or otherwise acquire all or substantially all of the assets or securities of any
class of, or any partnership or joint venture interest in, any other Person or,
except in the ordinary course of its business, sell, transfer, convey or lease
its properties, rights, assets, or business or sell or assign (except to the
Bank), with or without recourse, any receivables.
7.8. INVESTMENTS. Borrower will not, and will not permit any Subsidiary
to, make or suffer to exist any Investment, except (i) Borrower's ownership of
stock of Subsidiaries, (ii) Investments outstanding on the date hereof and
disclosed to Bank, (iii) loans or advances permitted by SECTION 7.4 hereof, (iv)
Investments in U.S. Government obligations or (iv) Investments in commercial
paper and other short-term obligations having a credit quality rating equal to
Aa or A1/P1 or better.
7.9. LINES OF BUSINESS. Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly engage in any business other than those
in which it is presently engaged, or discontinue any of its existing lines of
business or substantially alter its method of doing business.
7.10. AFFILIATE TRANSACTIONS. Borrower will not, and will not permit
any of its Subsidiaries to, enter into any transaction with, or pay any
management fees to, any Affiliate; provided, however, that Borrower and its
Subsidiaries may enter into transactions with Affiliates upon terms not less
favorable to Borrower and its Subsidiaries than would be obtainable at the time
in comparable transactions of Borrower and its Subsidiaries in arms-length
dealings with Persons other than Affiliates.
7.11. ISSUANCE OF SHARES. Borrower will not, and will not permit any
of its Subsidiaries to, issue, sell or otherwise dispose of, any shares of its
capital stock or other securities, or rights, warrants or options to purchase or
acquire any shares of securities, except for any capital stock or other
securities or rights, warrants or options to purchase or acquire any shares of
securities granted in connection with the 1983 ODS Incentive Stock Option Plan,
the 1987 ODS Incentive Stock Option Plan, the 1995 ODS Stock Option Plan, the
1995 ODS Non-Employee Directors Stock Option Plan, the 1997 ODS Employee Stock
Purchase Plan or an employee stock option plan approved by the Bank in writing.
7.12. EXECUTIVE PERSONNEL. Borrower will not, and will not permit any
Subsidiary to, substantially change its present executive or management
personnel.
7.13. CHANGE IN OWNERSHIP. There will be no change in the existing
control of either Borrower or any of its Subsidiaries (as used herein, "control"
means ownership or control sufficient to control election or designation of
executive management functions or the personnel performing such functions).
Promptly upon receiving knowledge thereof (and in any event within three (3)
days of first receiving such knowledge), Borrower shall notify Bank in writing
of any change, or pending change, in the control of Borrower or any Subsidiary.
At Bank's request at any time following receipt of such notice, Borrower agrees
to prepay to Bank all of the Obligations in full. Such prepayment shall be made
at or prior to the effective time of any such change, or upon demand by Bank in
the event any such change has already become effective at the time of such
notice.
SECTION 8.
EVENTS OF DEFAULT
8.1. NATURE OF EVENT. An Event of Default shall exist hereunder if any one
or more of the following occurs and is continuing:
8.1.1. Borrower fails to make, when due, any payment or prepayment
of (i) principal or interest on the Note or (ii) any fee or other
Obligation;
8.1.2. Default is made in the due observance or performance by
Borrower or any Subsidiary of any of the covenants or agreements contained
in this Loan Agreement or in any other Security Instrument (other than
those set forth in SECTIONS 7.5 and 7.6 hereof);
8.1.3. Default is made in the observance or performance by Borrower
of any of the covenants set forth in SECTIONS 7.5 or 7.6 hereof and such
default shall continue for thirty days;
8.1.4. Any Loan Paper shall in any way whatsoever cease to give
Bank the rights, interests, remedies, powers or privileges intended to be
created thereby;
8.1.5. Any statement, warranty or representation by or on behalf of
Borrower or any Subsidiary contained in this Loan Agreement or in any other
Loan Paper or any certificate furnished in connection with this Loan
Agreement, proves to have been incorrect in any material respect as of the
date made or deemed made;
8.1.6. Borrower or any Subsidiary shall generally not pay its debts
as they become due or shall admit in writing its inability to pay its
debts, or shall make a general assignment for the benefit of creditors;
8.1.7. Borrower or any Subsidiary shall commence any case,
proceeding or other action seeking reorganization, rearrangement,
adjustment, liquidation, dissolution or composition of it or him or its or
his debts under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, or seeking appointment of a
receiver, trustee, custodian or other similar official of it or him or of
all or any substantial part of its or his property;
8.1.8. Any case, proceeding or other action against Borrower or any
Subsidiary shall be commenced seeking to have an order for relief entered
against it as debtor, seeking reorganization, rearrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or similar official
for it or for all or any substantial part of its property, and such case,
proceeding or other action (i) results in the entry of an order for relief
against it or him which is not fully stayed within seven (7) Business Days
after the entry thereof or (ii) remains undismissed for a period of sixty
(60) days;
8.1.9. Any judgment against Borrower or any attachment or other
levy against the property of Borrower with respect to a claim remains
unpaid, unstayed on appeal, undischarged, not bonded or not dismissed for a
period of thirty days;
8.1.10. The occurrence of a "default" or an "event of default"
pursuant to the provisions of any Loan Paper; or
8.1.11. Default in the payment when due (subject to any applicable
grace period), whether by acceleration or otherwise, of any other
Indebtedness (which in the aggregate is in excess of the principal amount
of $500,000) for borrowed money of Borrower and such default shall continue
for a period of thirty (30) days or Borrower fails to perform or observe in
any material manner any material provision contained in any such
Indebtedness for borrowed money or any agreement securing or relating to
such Indebtedness (or any other material breach or material default under
such indebtedness or agreement occurs) if the effect of such failure to
perform or observe such provision (or breach or default) is to permit such
Indebtedness to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment and such failure continues for a
period of thirty (30) days.
8.2. DEFAULT REMEDIES. If an Event of Default shall have occurred, Bank
may, at its option, take one or more of the following actions: (a) declare the
entire principal and all interest accrued on the Note to be due and payable, and
such Note shall thereupon become, forthwith due and payable, without any
presentment, demand, protest, notice of protest and nonpayment, notice of
intention to accelerate, notice of acceleration, notice of default or other
notice of any kind, all of which hereby are expressly waived, (b) terminate the
Revolving Credit Commitment, (c) reduce any claim to judgment and/or (iv)
without notice of default or demand, pursue and enforce any of Bank's rights and
remedies under the Loan Papers, or otherwise provided under or pursuant to any
applicable law or agreement; provided, however, that if an Event of Default
specified in SECTION 8.1(G) or (H) above occurs, the Revolving Credit Commitment
shall be immediately terminated and the Note shall become immediately due and
payable, both as to principal and interest, without any action by Bank and
without presentment, demand, protest, notice of protest and nonpayment, notice
of intention to accelerate, notice of acceleration, notice of default or any
other notice of any kind or character, all of which are hereby expressly waived;
anything contained herein or in the Note to the contrary notwithstanding. If
Borrower fails to pay when due the principal of, or interest on, the Note,
Borrower shall pay to the holder of such Note, to the extent permitted by
applicable law, such further amount as shall be
sufficient to cover the cost and expense of collection, including (but not
limited to) reasonable attorneys' fees. Bank shall be entitled to exercise
any and all rights and remedies granted to it herein and in any of the other
Loan Papers and under applicable law.
SECTION 9.
GENERAL PROVISIONS
9.1. AMENDMENT AND WAIVER. The provisions of the Note and the other Loan
Papers, including this Loan Agreement, may not be amended, and the observance of
any term thereof may not be waived, without the express written consent of Bank
and Borrower and/or the other Person which is a party thereto.
9.2. DELAY NOT A WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of Bank in exercising any right, power or privilege under the Note or the
Loan Papers, including this Loan Agreement, shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided in the Note
and the Loan Papers, including this Loan Agreement, are cumulative and not
exclusive of any rights or remedies provided by law, and shall include the right
to set off against the Note and all of the other obligations of Borrower to
Bank, all money or property in Bank's possession, held for, or owed to,
Borrower.
9.3. NOTICES. Any notice hereunder to Borrower shall be in writing and, if
mailed, shall be deemed to be given when sent by mail, return receipt requested,
postage prepaid, and addressed to Borrower or any Subsidiary, as appropriate, at
the following address:
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxx
or at such other address as Borrower may designate by written notice.
Any notice hereunder to Bank shall be in writing and, if mailed, shall be
deemed to be given when sent by mail, return receipt requested, postage prepaid,
and addressed to Bank at the address set forth opposite Bank's signature line or
at such other address as Bank may designate by written notice to Borrower.
9.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in the Note and in the other Loan Papers, including this Loan
Agreement, and in any certificates delivered pursuant hereto and thereto shall
survive the execution and delivery of this Loan Agreement and the Notes and the
making of the Loans.
9.5. SUCCESSORS AND ASSIGNS. This Loan Agreement shall be binding upon and
inure to the benefit of Borrower and Bank and their respective successors and
assigns, except that Borrower may not assign or transfer any of its rights under
this Loan Agreement without the prior written consent of Bank.
9.6. COUNTERPARTS. This Loan Agreement may be executed in any number of
separate counterparts and all of the said counterparts taken together shall be
deemed to constitute one and the same instrument.
9.7. GOVERNING LAW. THE NOTE AND THE OTHER LOAN PAPERS, INCLUDING THIS
LOAN AGREEMENT, SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS, AND
SHALL BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS.
9.8. USURY. It is the intention of the parties hereto to conform strictly
to usury laws applicable to Bank. Accordingly, if the transactions contemplated
hereby would be usurious under applicable law (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable, notwithstanding the other provisions of this Loan
Agreement), then, in that event, notwithstanding anything to the contrary in the
Note, this Loan Agreement or in any other Loan Paper or agreement entered into
in connection with or as security for the Note, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to Bank that is contracted for, taken, reserved, charged or received under the
Note, this Loan Agreement or under any of the other aforesaid Loan Papers or
agreements or otherwise in connection with the Note, shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be credited by Bank on the principal amount of the Obligation (or,
if the principal amount of the Obligation shall have been paid in full, refunded
to Borrower); and (ii) in the event that the maturity of any or all Note is
accelerated by reason of an election of Bank resulting from any Event of Default
under this Loan Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to Bank may never include more than the maximum amount allowed by
such applicable law, and excess interest, if any, provided for in this Loan
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by Bank
on the principal amount of the Obligation (or, if the principal amount of the
Indebtedness shall have been paid in full, refunded by Bank to Borrower). To
the extent that Article 5069-1.04, as amended, of the Texas Revised Civil
Statutes is relevant to Bank for the purpose of determining the maximum lawful
rate, Bank hereby elects to determine the applicable rate ceiling under such
Article by the indicated (weekly) rate ceiling from time to time in effect,
subject to Bank's right subsequently to change such method in accordance with
applicable law.
9.9. NON-APPLICABILITY OF TEX. REV. STAT. XXX. ART. 0000 XX. 15. Tex.
Rev. Stat. Xxx. art. 5069 ch. 15 (which regulates certain revolving loan
accounts and revolving triparty accounts) shall not apply to the Loan.
9.10. DESCRIPTIVE HEADINGS. The captions in this Loan Agreement are
for convenience of reference only and shall not define or limit the provisions
hereof.
9.11. TERM OF LOAN AGREEMENT. This Loan Agreement shall continue until
the Note shall have been paid in full and until all other liabilities and
obligations of Borrower under this Loan Agreement shall have been fully
satisfied and the Revolving Credit Commitment and all Letters of Credit
terminated in full.
9.12. CAPITAL ADEQUACY. If, after the date hereof, Bank shall have
determined that either (i) the adoption of any applicable law, rule, regulation
or guideline regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, of (ii) compliance by Bank (or any lending office
of Bank) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on Bank's capital as a consequence of its obligations hereunder to a
level below that which bank could have achieved but for such adoption, change
or compliance (taking into consideration Bank's policies with respect to
capital adequacy) by an amount deemed by Bank to be material, then from time
to time, within ten (10) days after demand by Bank Borrower shall pay to Bank
such additional amount of amounts as will compensate Bank for such reduction.
Bank will promptly notify Borrower of any event of which it has actual
knowledge, occurring after the date thereof, which will entitle Bank to
compensation pursuant to this SECTION 9.12. A certificate of Bank claiming
compensation under this SECTION 9.12 and setting forth the additional amount
of amounts to be paid to it hereunder, together with the description of the
manner in which such amounts have been calculated, shall be conclusive in the
absence of manifest error. In determining such amount, Bank may use any
reasonable averaging and attribution methods.
9.13. RENEWAL, EXTENSION, AMENDMENT AND RESTATEMENT. This Loan
Agreement is entered into for purposes of renewing and extending the Loan and
other credit accommodations made pursuant to the Prior Loan Agreement and for
the purpose of amending and restating the Prior Loan Agreement. This Agreement
shall not constitute a novation of all or any portion of the Borrower's
indebtedness or obligations evidenced by or arising under or otherwise existing
with respect to the Prior Loan Agreement or any instrument, agreement or other
documents executed or delivered in connection therewith (herein collectively
referred to as the "ORIGINAL LOAN PAPERS"). All Indebtedness and Obligations
that are owed to the Bank under the Prior Loan Agreement or under any Original
Loan Paper shall continue to exist in full force and effect.
9.14. NO ORAL AGREEMENTS. THIS AGREEMENT AND THE OTHER LOAN PAPERS AS
WRITTEN REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed and delivered as of the day and year first above written.
BORROWER:
OPTICAL DATA SYSTEMS, INC.
By: /S/ X. XXXX XXXXXX
-----------------------------------
X. Xxxx Xxxxxx, President
BANK:
Address: NATIONSBANK OF TEXAS, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx By: /S/ XXXXX XXXXXX
P. O. Box 831000 ------------------------------
Xxxxxx, Xxxxx 00000-0000 Xxxxx Xxxxxx, Vice President
LIST OF EXHIBITS
EXHIBIT "A" Form of Note
EXHIBIT "B" Officer's Certificate
EXHIBIT "C" Location of Assets
EXHIBIT "D" Forms of Application
EXHIBIT "A"
EIGHTH RENEWAL PROMISSORY NOTE
$15,000,000.00 Dallas, Texas April 12, 1997
FOR VALUE RECEIVED, the undersigned, OPTICAL DATA SYSTEMS, INC., a Texas
corporation ("Maker") hereby unconditionally promises to pay to the order of
NATIONSBANK OF TEXAS, N.A., formerly known as NCNB Texas National Bank
("Payee"), at 000 Xxxx Xxxxxx, Xxxxxx Xxxxx, or at such other address given to
Maker by Payee, the principal sum of Fifteen Million and No/100 Dollars
($15,000,000.00), or so much thereof as may be advanced prior to maturity, in
lawful money of the United States of America, together with interest (calculated
on the basis of a 360 day year), on the unpaid principal balance from day-to-day
remaining, computed from the date of advance until maturity at the rate per
annum which shall from day-to-day be equal to the lesser of (a) the Maximum
Rate, or (b) at the election of the Maker as provided in the Loan Agreement, as
amended (as hereinafter defined), (i) the Prime Rate (hereinafter defined) in
effect from day-to-day, or (ii) the Eurodollar Rate (as defined in the Loan
Agreement, as amended) plus one and one-half percent (1.5%). If at any time and
from time to time the rate of interest calculated pursuant to item (b) above
would exceed the Maximum Rate, thereby causing the interest payable hereon to be
limited to the Maximum Rate, then any subsequent reduction in the rate specified
in item (b) above shall not reduce the rate of interest hereon below the Maximum
Rate until the total amount of interest accrued hereon from and after the date
of the first advance hereunder equals the amount of interest which would have
accrued hereon if the rate specified in item (b) above had at all times been in
effect.
The term "Maximum Rate," as used herein, shall mean, with respect to the
holder hereof, the maximum nonusurious interest rate, if any, that at any time,
or from time to time, may be contracted for, taken, reserved, charged, or
received on the indebtedness evidenced by this Note. To the extent that Article
5069-1.04, Title 79, Texas Revised Civil Statutes, as amended, is relevant to
any holder of this Note for the purposes of determining the Maximum Rate, the
Payee hereby notifies Maker that the "applicable rate ceiling" shall be the
"indicated rate ceiling" referred to in Article 5069-1.04(a)(1) from time to
time in effect, as limited by Article 5069-1.04(b); provided, however, that to
the extent permitted by applicable law, Payee reserves the right to change the
"applicable rate ceiling" from time to time by further notice and disclosure to
Maker; and, provided further, that the "Maximum Rate" for purposes of this Note
shall not be limited to the applicable rate ceiling under Article 5069-1.04 if
federal laws or other state laws now or hereafter in effect and applicable to
this Note (and the interest contracted for, charged and collected hereunder)
shall permit a higher rate of interest.
As used herein, the term "Prime Rate" means the variable rate of interest
established from time to time by Payee as its Prime Interest Rate or Base Rate,
each change in the rate charged hereunder to become effective, without notice to
Maker, on the effective date of each change in the Prime Rate. Maker
acknowledges that Payee may, from time to time, extend credit to other borrowers
at rates of interest varying from, and having no relationship to, such Prime
Interest Rate or Base Rate.
This Note has been executed and delivered pursuant to, and is subject to
certain terms and conditions set forth in, that certain Second Amended and
Restated Revolving Credit Loan Agreement (the "LOAN AGREEMENT") between Maker
and Payee, dated as of April 12, 1997, and is the "Note" referred to in the Loan
Agreement. The Holder of this Note shall be entitled to the benefits provided
in the Loan Agreement. Reference is made to the Loan Agreement for a statement
of (i) the obligation of Payee to advance funds hereunder, (ii) the events upon
which the maturity of this Note may be accelerated, and (iii) Maker's right to
cure certain events of default, if any, as more fully set forth therein.
The entire unpaid principal balance of this Note shall be due and payable
in full on April 12, 1999. Accrued and unpaid interest on this Note shall be
due and payable on each Interest Payment Date (as defined in the Loan Agreement,
as amended) and on the Termination Date (as defined in the Loan Agreement).
All past due principal and, to the extent permitted by applicable law,
interest upon this Note shall bear interest at the Default Rate (as defined in
the Loan Agreement).
Maker and each surety, endorser, guarantor and other party ever liable for
payment of any sums of money payable on this Note, jointly and severally waive
presentment, protest, notice of protest and non-payment, or other notice of
default, notice of acceleration and intention to accelerate, and agree that
their liability under this Note shall not be affected by any renewal or
extension in the time of payment hereof, or any indulgences, or by any release
or change in any security for the payment of this Note, and hereby consent to
any and all renewals, extensions, indulgences, releases or changes, regardless
of the number of such renewals, extensions, indulgences, releases or changes.
No waiver by Payee of any of its rights or remedies hereunder or under any
other document evidencing or securing this Note or otherwise shall be considered
a waiver of any other subsequent right or remedy of Payee; no delay or omission
in the exercise or enforcement by Payee of any rights or remedies shall ever be
construed as a waiver of any right or remedy of Payee; and no exercise or
enforcement of any such rights or remedies shall ever be held to exhaust any
right or remedy of Payee.
Maker reserves the right to prepay the outstanding principal balance of
this Note, in whole or in part, at any time and from time to time (subject to
the provisions of the Loan Agreement, as amended, relating to the prepayment of
Eurodollar Advances), without premium or penalty. Any such prepayment shall be
made together with payment of interest accrued on the amount of principal being
prepaid through the date of such prepayment, and shall be applied to the
installments of principal due hereunder in the inverse order of maturity. Any
prepayment of a Eurodollar Advance may be made only on the terms contained in
the Loan Agreement (as amended).
Regardless of any provision contained in this Note, the Loan Agreement or
any other document executed or delivered in connection therewith, Payee shall
never be deemed to have contracted for or be entitled to receive, collect or
apply as interest on this Note, any amount in excess of the Maximum Rate, and,
in the event that Payee ever receives, collects or applies as interest any such
excess, such amount which would be excessive interest shall be applied to the
reduction of the unpaid principal balance of this Note, and, if the principal
balance of this Note is paid in full, any remaining excess shall forthwith be
paid to Maker. In determining whether or not the interest paid or payable under
any specific contingency exceeds the Maximum Rate, Maker and Payee shall, to the
maximum extent permitted under applicable law, (i) characterize any
non-principal payment (other than payments which are
expressly designated as interest payments hereunder) as an expense or fee
rather than as interest, (ii) exclude voluntary prepayments and the effect
thereof, and (iii) spread the total amount of interest throughout the entire
contemplated term of this Note so that the interest rate is uniform
throughout such term; provided, that if this Note is paid and performed in
full prior to the end of the full contemplated term hereof, and if the
interest received for the actual period of existence thereof exceeds the
Maximum Rate, if any, Payee or any holder hereof shall refund to Maker the
amount of such excess, or credit the amount of such excess against the
aggregate unpaid principal balance of all advances made by the Payee or any
holder hereof under this Note at the time in question.
This Note is being executed and delivered, and is intended to be performed
in the State of Texas. Except to the extent that the laws of the United States
may apply to the terms hereof, the substantive laws of the State of Texas shall
govern the validity, construction, enforcement and interpretation of this Note.
In the event of a dispute involving this Note or any other instruments executed
in connection herewith, the undersigned irrevocably agrees that venue for such
dispute shall lie in any court of competent jurisdiction in Dallas County,
Texas.
This Note modifies in its entirety that certain Seventh Renewal Promissory
Note dated April 13, 1995, executed by Maker and payable to the order of Payee
in the original principal amount of $5,000,000.00, but does not extinguish the
indebtedness evidenced thereby. The indebtedness evidenced hereby was
originally evidenced by that certain Promissory Note dated April 30, 1990,
executed by Maker and payable to the order of Payee in the original principal
amount of $10,000,000.00.
OPTICAL DATA SYSTEMS, INC.
By: /S/ X. XXXX XXXXXX
------------------------------
X. Xxxx Xxxxxx, President
EXHIBIT "B"
OPTICAL DATA SYSTEMS, INC.
Officer's Certificate
In accordance with the terms and provisions of that certain Second Amended and
Restated Revolving Credit Loan Agreement (the "LOAN AGREEMENT") dated as of
April 12, 1997, between Optical Data Systems, Inc. ("BORROWER") and NationsBank
of Texas, N.A. ("BANK"), pursuant to which Lender has agreed to extend to
Borrower a $15 million revolving line of credit, Borrower is in compliance as
indicated below:
A. Fixed Charge Coverage of: ______
Not less than 2.75 to 1.0 ______
B. Total loans, advances, distributions, ______
transfers or dispositions from ______
Borrower to its Subsidiaries shall not
exceed $5,000,000 in aggregate amount
during any calendar year
C. Total liabilities divided by tangible net ______
worth shall not exceed 0.75 to 1.0 ______
Pursuant to the Loan Agreement, the undersigned certifies that Borrower:
1. Has not formed any Subsidiaries without the approval of Bank.
2. Has not incurred any federal tax liens.
3. Has provided Lender with quarterly financial statements within 30 days
of quarter-end and annual audited financial statements within 120 days
of each fiscal year-end.
4. Has not had a significant change in ownership or control.
I certify that Borrower's financial statements as of and for the period ended
__________ were prepared in accordance with GAAP and present fairly the
financial condition and the results of operations of Borrower for the period
then ended.
To the best of my knowledge, during the subject quarter Borrower has fulfilled
each and every covenant and condition contained in the Loan Papers, and no Event
of Default or Potential Default (as such terms are defined in the Loan
Agreement) has occurred or is continuing except as noted below:
BY:_____________________________
TITLE:__________________________
DATE:___________________________
FOR THE QUARTER/YEAR OF:________
EXHIBIT "C"
Location of Assets
U.S. OFFICES
Irvine (Los Angeles), CA
714/476-7677
San Xxxxx (San Francisco), CA
510/831-4780
Denver, CO
303/220-5666
Tampa, FL
813/287-5063
Norcross (Atlanta), GA
770/279-5470
Ewa Beach (Honolulu), HI
808/833-8829
Arlington Heights (Chicago), IL
847/818-1868
Burlington (Boston), MA
617/270-0649
Xxxx (Detroit), MI
810/524-4046
Minnetonka (Minneapolis), MN
612/449-3008
Xxxxx Xxxxx, XX
000/000-0000
Xxx Xxxx, XX
212/432-9261
Cleveland, OH
216/449-8001
Malvern (Philadelphia), PA
610/640-3149
Houston, TX
713/964-2770
Vienna (Washington; DC), VA
703/506-1167
Bellevue (Seattle), WA
206/451-4074
INTERNATIONAL OFFICES
ASIA
Kuala Lumpur, Malaysia - 011.60.3.206.6888
Yongdeungpo-ku, Seoul Korea - 011.82.2.783.9715
Ngee Xxx City, Singapore - 000.00.000.0000
Taipei, Xxxxxx X.X.X. - 000.000.0.000.0000 xxx. 000
Xxxxx, Xxxxx - 011.81.3.5322.2053
CANADA
Markham (Toronto), Ontario - 905/415-0384
EUROPE
Fleet Hants (London), England - 011.44.1.252.812030
Saint-Mande (Paris), France - 011.33.148.087820
Eching (Munich), Germany - 011.49.89.327.1400
LATIN AMERICA
Sao Paulo, Brazil - 011.55.11.532.2858
CORPORATE HEADQUARTERS
Optical Data Systems, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
Tel: 972/000-0000
Fax: 972/000-0000
Technology Center
0000 Xxxx Xxxxxxx xxxx
Xxxxxxxxxx, Xxxxx 00000
Warehouse
0000 X. Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Subcontractors/Assembly Sites:
ODS inventory is located at and processed by various subcontractors who assemble
products for ODS.
Customers/Potential Customers:
ODS inventory is located at various customers' sites and potential customers'
sites for demonstration and evaluation purposes.
EXHIBIT "D"
