EXHIBIT 10.22
October 9, 1998
Manatron, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
This letter (herein called the "Agreement") constitutes an agreement
by and between COMERICA BANK, a Michigan banking corporation (herein called
"Bank"), and MANATRON, INC., a Michigan corporation, (herein called
"Company"), pertaining to certain loans and other credit which Bank has
made and/or may from time to time hereafter make available to Company.
This Agreement supersedes and replaces that certain Revolving Credit Loan
Agreement dated as of November 11, 1994, by and between Company and Bank,
as amended.
In consideration of all present and future loans, advances and other
credit from time to time made available by Bank to or in favor of Company,
including, without limitation, all loans and advances made or to be made,
by Bank to or in favor of Company under a Three Million Dollar
($3,000,000.00) line of credit made available by Bank in favor of Company
and in consideration of all present and future Liabilities of Company to
Bank, Company represents, warrants, covenants and agrees as follows:
1. For purposes of this Agreement, the following terms shall have
the following respective meanings:
"Affiliate" shall mean, when used with respect to any Person, any
other Person which, directly or indirectly, controls, is controlled
by, or is under common control with such Person. For purposes of this
definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), with respect to any
Person, shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by
contract or otherwise.
"Collateral" shall mean all property, rights and interests in
which a security interest, lien, mortgage or other encumbrance has
been granted or has arisen, or is hereafter granted or arises, to or
in favor of Bank under or in connection with any of the Loan
Documents, to secure the payment and performance of the Liabilities,
together with all property and assets of Company and/or any of its
Subsidiaries now or hereafter in possession of Bank or any Affiliate
of Bank, and all amounts in any and all deposit or other accounts
(including, without limit, any account evidenced by a certificate of
deposit) of Company and/or any of its Subsidiaries now or hereafter
with Bank or any Affiliate of Bank.
"Consolidated" shall mean, when used with reference to any
financial statements or financial or accounting terms in this
Agreement, the aggregate for two or more persons determined on a
consolidated basis in accordance with GAAP. Unless otherwise
specified herein, references to "consolidated" financial statements or
data of Company includes consolidation with all Subsidiaries of
Company in accordance with GAAP.
"Debt" shall mean, for any applicable Person(s) and as of any
applicable time of determination thereof, the total liabilities of
such Person(s) at such time, as determined in accordance with GAAP.
"Debt-to-Tangible Net Worth Ratio" shall mean, for any applicable
Person(s) and as of any applicable time of determination thereof, the
ratio of (i) the total Debt of such Person(s) at such time, as
determined in accordance with GAAP, to (ii) the Tangible Net Worth of
such Person(s) at such time.
"Default" shall mean any condition or event which, with the
giving of notice or the passage of time, or both, would constitute an
Event of Default.
"Environmental Laws" shall mean all laws, codes, ordinances,
rules, regulations, orders, decrees and directives issued by any
federal, state, local, foreign or other governmental or quasi-
governmental authority or body (or any agency, instrumentality or
political subdivision thereof) pertaining to hazardous or toxic
materials, including, without limitation, any hazardous materials or
wastes, toxic substances, flammable, explosive or radioactive
materials, asbestos, and/or other similar materials; any so-called
"superfund" or "superlien" law pertaining to hazardous or toxic
materials on or about any property at any time owned, leased or
otherwise used by Company and/or any of its Subsidiaries, or any
portion thereof, including, without limitation, those relating to
soil, surface, subsurface groundwater conditions and the condition of
the ambient air; and any other federal, state, foreign or local
statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic, radioactive, flammable or dangerous
waste, substance or material, as now or at any time hereafter in
effect.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor act or code.
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"Event of Default" shall mean the occurrence or existence of any
of the conditions or events set forth in Section 6 of this Agreement.
"GAAP" shall mean generally accepted accounting principles
consistently applied.
"Liabilities" shall mean all present and future liabilities,
obligations and indebtedness of Company to Bank, howsoever created,
evidenced, existing or arising, whether direct or indirect, absolute
or contingent, joint or several, now or hereafter existing or arising,
or due or to become due, and any and all extensions, renewals,
amendments, modifications and/or restatements thereof.
"Loan Documents" shall mean this Agreement and any and all notes,
instruments, guaranties, documents and agreements at any time
evidencing, governing, securing or otherwise relating to any of the
Liabilities or the Collateral.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permitted Encumbrances" is defined in Section 5(d) of this
Agreement.
"Person" or "person" shall mean any individual, corporation,
partnership, limited liability company, trust, incorporated or
unincorporated organization, joint venture, joint stock company,
government, or any agency or political subdivision thereof, or any
other entity of any kind.
"Subordinated Debt" shall mean, for any applicable Person(s) and
as of any applicable time of determination thereof, any Debt of such
Person(s) which is subordinated in priority of payment to any of the
Liabilities of any such Person(s) to Bank, in each case, pursuant to
an agreement executed and delivered unto and in form and detail
satisfactory to Bank.
"Subsidiary" of a Person shall mean any corporation, association,
limited liability company, partnership or other business entity of
which more than fifty percent (50%) of the outstanding voting stock or
other equity interests is owned or controlled either directly or
indirectly by such Person or one or more of its other Subsidiaries, or
any combination thereof, or the management of which is controlled,
either directly or indirectly by such Person or one or more of its
other Subsidiaries, or any combination thereof. Without limiting the
generality of the foregoing definition of the term "Subsidiary", such
term shall include, without limitation, Atek Information Services,
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Inc., an Indiana corporation, and Specialized Data Systems, Inc., a
North Carolina corporation.
"Tangible Net Worth" shall mean, for any applicable Person(s) and
as of any applicable time of determination thereof, the excess of
(i) the net book value of the assets of such Person(s) at such time
(EXCLUDING patents, patent rights, trademarks, trade names,
franchises, copyrights, licenses, goodwill and all other intangible
assets of such Person(s) at such time, amounts due to such Person(s)
from employees and shareholders, and prepaid expenses), after all
appropriate deductions in accordance with GAAP (including, without
limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization), over (ii) the total Debt of such
Person(s) at such time, all as determined in accordance with GAAP.
2. Each loan, advance or other extension of credit made by Bank to
or otherwise in favor of Company shall be evidenced by and subject to a
promissory note or other agreement or evidence of indebtedness acceptable
to Bank, in each case, executed and delivered by Company unto Bank. The
funding and disbursement of any loan or advance, and the extension of any
other credit, to or in favor of Company, shall be subject to the execution
and/or delivery unto Bank of such documents, instruments, agreements,
opinions and certificates as Bank may reasonably require, and shall be
further subject to the satisfaction of such other conditions and
requirements as Bank, and its counsel, may from time to time require.
3. Company hereby represents and warrants, and such representations
and warranties shall be deemed to be continuing representations and
warranties during the entire life of this Agreement, so long as Bank shall
have any commitment or obligation, if any, to make loans or otherwise
extend credit to or in favor of Company, and thereafter, so long as any
Liabilities remain unpaid and outstanding:
(a) Company, and each of its Subsidiaries, if any, is a corporation
duly organized, validly existing and in good standing under the
laws of the State of its incorporation, is duly qualified and
authorized to do business in each jurisdiction where the
character of its assets or the nature of its activities makes
such qualification necessary, and has the legal power and
authority to own its properties and assets and to carry out its
business as now being conducted in each such jurisdiction wherein
such qualification is necessary; execution, delivery and
performance of this Agreement, and any and all other Loan
Documents to which Company and/or any of its Subsidiaries is a
party or by which it is otherwise bound, are within Company's and
each such Subsidiary's corporate powers and authorities, have
been duly authorized by all requisite corporate or other
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necessary or appropriate action, and are not in contravention or
violation of law or the terms of Company's or any such
Subsidiary's Articles of Incorporation or Bylaws, and do not
require the consent or approval of any governmental body, agency
or authority; and this Agreement, and any other Loan Documents
contemplated hereby, when executed, issued and/or delivered by
Company and/or any such Subsidiary, or by which Company or any
such Subsidiary is otherwise bound, will be valid and binding and
legally enforceable against Company and/or any such Subsidiary,
as the case may be, in accordance with their terms.
(b) The execution, delivery and performance of this Agreement, and
any other Loan Documents required under or contemplated by this
Agreement to which Company and/or any of its Subsidiaries is a
party or by which it is otherwise bound, and the issuance of this
Agreement and any such other Loan Documents by Company and/or any
such Subsidiary, and the borrowings and other transactions
contemplated hereby and thereby are not in contravention or
violation of the unwaived terms of any indenture, agreement or
undertaking to which Company or any such Subsidiary is a party or
by which it or any of its property or assets is bound, and will
not result in the creation or imposition of any lien or
encumbrance of any nature whatsoever upon any of the property or
assets of Company or any such Subsidiary, except to or in favor
of Bank.
(c) No litigation or other proceeding before any court or
administrative or governmental agency is pending, or, to the
knowledge of Company or any of its officers, is threatened
against Company or any of its Subsidiaries, the outcome of which
could materially impair Company's or any such Subsidiary's
financial condition or its ability to carry on its business or
its/their ability to pay and perform its/their liabilities and
obligations hereunder or otherwise in respect of the Liabilities.
(d) There are no security interests in, liens, mortgages, or other
encumbrances on any of Company's or any of its Subsidiary's
property or assets, except Permitted Encumbrances.
(e) No Default or Event of Default has occurred and is continuing or
exists under any of the Liabilities or Loan Documents.
(f) The most recent financial statements with respect to Company and
its Subsidiaries delivered to Bank fairly present the financial
condition of Company and its Subsidiaries and the results of
their operations as of the date thereof and for the period(s)
covered thereby in accordance with GAAP; and since July 31, 1998,
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there has been no material adverse change in the condition
(financial or otherwise) or operations of Company or any of its
Subsidiaries, and there are no material debts, liabilities or
obligations (absolute or contingent) of Company or any of its
Subsidiaries, except as disclosed in such financial statements
(or in the notes thereto).
4. So long as Bank shall have any commitment or obligation, if any,
to make any loans or extend credit to or in favor of Company, and so long
as any Liabilities remain unpaid and outstanding, Company covenants and
agrees that it shall:
(a) Furnish to Bank, or cause to be furnished to Bank, in each case,
in form and detail and on a reporting basis satisfactory to Bank,
the following:
(i) as soon as available, and in any event not later than ninety
(90) days after and as of the end of each fiscal year of
Company, beginning with the fiscal year ending April 30,
1999, audited consolidated financial statements of Company
and its Subsidiaries, containing the consolidated balance
sheet of Company and its Subsidiaries as of the close of
each such fiscal year, consolidated statements of income and
retained earnings and a statement of cash flows of Company
and its Subsidiaries for each such fiscal year, and such
other comments and financial details as are usually included
in similar reports. Such financial statements shall be
audited by independent certified public accountants of
recognized standing selected by Company and acceptable to
Bank, shall be prepared in accordance with GAAP, and shall
be in such detail as Bank may reasonably require;
(ii) as soon as available, and in any event not later than forty
five (45) days after and as of the end of each fiscal
quarter of Company, beginning with the fiscal quarter ending
October 31, 1998, consolidated financial statements of
Company and its Subsidiaries, containing the consolidated
balance sheets of Company and its Subsidiaries as of the
close of each such fiscal quarter, consolidated statements
of income and retained earning and a statement of cash flows
for Company and its Subsidiaries for each such fiscal
quarter and for the portion of the fiscal year of Company
and its Subsidiaries through the end of the fiscal quarter
then ending, and such other comments and financial details
as are usually included in similar reports. Such financial
statements shall be prepared by Company in accordance with
GAAP, and on a basis consistent with the annual statements
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to be furnished to Bank pursuant to sub-section (i) above,
shall be in such detail as Bank may reasonably require, and
shall be certified as to accuracy and fairness by the chief
executive officer or chief financial officer of Company;
(iii) simultaneous with the delivery to Bank of the respective
financial statements required in sub-sections (i) and (ii)
above, a compliance certificate in form and detail
satisfactory to Bank, certified by the chief executive
officer or chief financial officer of Company, certifying
that, as of the date thereof, to the best of such officer's
knowledge, no Default or Event of Default shall have
occurred and be continuing or exist, or if any Default or
Event of Default shall have occurred and be continuing or
exist, specifying, in detail, the nature and period of
existence thereof and any action taken or proposed to be
taken by Company in respect thereto, and also certifying as
to whether Company is in compliance with the financial
covenants contained in Sections 4(g) and (h) of this
Agreement (which certificate shall set forth, in reasonable
detail, Company's calculations and the resultant ratios or
financial tests determined thereunder);
(iv) as soon as possible, and in any event within three (3)
business days after becoming aware of the occurrence or
existence of any Default or Event of Default, or of any
other condition or occurrence which has had or could
reasonably be expected to have a materially adverse effect
upon Company's or any of its Subsidiary's business,
properties, or financial condition or upon Company's or any
such Subsidiary's ability to comply with its obligations
hereunder or otherwise in respect of any of the Liabilities
or Loan Documents, a written statement of an authorized
officer of Company setting forth the details of such Default
or Event of Default, or such other condition or occurrence,
and the action which Company has taken or caused to be
taken, or proposes to take or cause to be taken, with
respect thereto; and
(v) promptly, at such times as Bank may reasonably require, in
form and detail satisfactory to Bank, such other information
and reports as may be required under the terms of any Loan
Documents or as Bank may reasonably request from time to
time.
(b) Keep, and cause each of its Subsidiaries to keep, proper books of
record and account in which full and correct entries shall be
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made of all of its financial transactions and its assets and
businesses so as to permit the presentation of financial
statements (including, without limitation, those financial
statements to be delivered to Bank pursuant to Section 4(a)
above) prepared in accordance with GAAP; and permit Bank, or its
representatives, at reasonable times and intervals to visit all
of Company's and each of its Subsidiary's offices and to make
inquiries as to Company's and each such Subsidiary's respective
financial matters with its respective directors, officers,
employees, and independent certified public accountants.
(c) Permit Bank, and cause each of its Subsidiaries to permit Bank,
through Bank's authorized employees, officers, attorneys,
accountants and representatives, to inspect, audit and examine
Company's and each of its Subsidiary's books, accounts, records,
ledgers and assets and properties of every kind and description,
wherever located, at all reasonable times during normal business
hours, upon oral or written request of Bank.
(d) Keep, and cause each of its Subsidiaries to keep, its insurable
properties (including, without limitation, any Collateral at any
time securing all or any part of the Liabilities) adequately
insured, and maintain (i) insurance against fire and other risks
customarily insured against under an "all-risk" policy and such
additional risks customarily insured against by companies engaged
in the same or a similar business to that of Company or such
Subsidiary, as the case may be, (ii) necessary workers'
compensation insurance, (iii) public liability and product
liability insurance, and (iv) such other insurance as may be
required by law or as may be reasonably required by Bank, all of
which insurance shall be in such amounts, contain such terms, be
in such form, be for such purposes, prepaid for such time
periods, and written by such companies as may be satisfactory to
Bank. All such policies shall contain a provision whereby they
may not be canceled or materially amended except upon thirty (30)
days' prior written notice to Bank. Company will promptly
deliver to Bank, or caused to be delivered to Bank, at Bank's
request, evidence satisfactory to Bank that such insurance has
been so procured and, with respect to casualty insurance, made
payable to Bank.
(e) Pay, and cause each of its Subsidiaries to pay, promptly and
within the time that they can be paid without late charge,
penalty or interest, all taxes, assessments and similar imposts
and charges of every kind and nature lawfully levied, assessed or
imposed upon Company or any such Subsidiary and/or its/their
property, except to the extent being contested in good faith and,
8
if requested by Bank, bonded in an amount and manner satisfactory
to Bank. If Company or any such Subsidiary fails to pay such
taxes and assessments within the time they can be paid without
penalty, late charge or interest, Bank shall have the option (but
not the obligation) to do so, and Company agrees to repay Bank,
upon demand, with interest at the highest rate of interest
applicable to any of the Liabilities, all amounts so expended by
Bank.
(f) Do, or cause to be done, all things necessary to preserve and
keep in full force and effect Company's and each of its
Subsidiary's corporate existence, rights and franchises and
comply with all applicable laws; continue to conduct and operate,
and cause each of its Subsidiaries to continue to conduct and
operate, its respective business substantially as conducted and
operated during the present and preceding calendar year; at all
times maintain, preserve and protect, and cause each of its
Subsidiaries to so maintain, preserve and protect, all franchises
and trade names and preserve all the remainder of its property
and keep the same in good repair, working order and condition;
and from time to time make, or cause to be made, all needed and
proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in
connection therewith may be properly and advantageously conducted
at all times.
(g) Maintain, on a Consolidated statement basis, a Tangible Net Worth
of not less than the following amounts during each of the
following respective specified periods:
PERIOD AMOUNT
(i) From the date of this Agreement through April 29, 1999 $1,900,000
(ii) From April 30, 1999, through April 29, 2000 2,000,000
(iii) From April 30, 2000, through April 29, 2001 2,100,000
(iv) From and after April 30, 2001 2,200,000
(h) Maintain, on a Consolidated statement basis, a Debt-to-Tangible
Net Worth Ratio of not more than the following amounts during
each of the following respective specified periods:
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PERIOD RATIO
(i) From the date of this Agreement through April 29, 1999 6.50:1.00
(ii) From April 30, 1999, through April 29, 2000 6.35:1.00
(iii) From April 30, 2000, through April 29, 2001 6.10:1.00
(iv) From and after April 30, 2001 5.65:1.00
(i) At all times meet, and cause each of its Subsidiaries to meet,
the minimum funding requirements of ERISA with respect to
Company's and each Subsidiary's employee benefit plans subject to
ERISA; promptly after Company knows or has reason to know of the
occurrence of any event, which would constitute a reportable
event or prohibited transaction under ERISA, or that the PBGC or
Company or any of its Subsidiaries has instituted or will
institute proceedings to terminate an employee pension plan,
deliver to Bank a certificate of an authorized officer of Company
setting forth details as to such event or proceedings and the
action which Company and/or such Subsidiary(ies) propose(s) to
take with respect thereto, together with a copy of any notice of
such event which may be required to be filed with the PBGC; and
upon the request of Bank, furnish to Bank (or cause the plan
administrator to furnish Bank) a copy of the annual return
(including all schedules and attachments) for each plan covered
by ERISA, and filed with the Internal Revenue Service by Company
and/or any of its Subsidiaries not later than ten (10) days after
such report has been so filed. Company and its Subsidiaries
shall be permitted to voluntarily terminate employee pension or
benefit plans, so long as any such voluntary termination is done
in accordance with ERISA and does not result in a material
liability or obligation to Company or any of its Subsidiaries.
(j) Comply, and cause each of its Subsidiaries to comply, in all
material respects with all applicable Environmental Laws, and
maintain all material permits, licenses and approvals required
under applicable Environmental Laws, where the failure to do so
could have a material adverse effect upon the business,
operations, condition (financial or otherwise) performance or
properties of Company or any of its Subsidiaries, or could have a
material adverse effect upon the ability of Company to perform
its obligations under this Agreement or any of the other Loan
Documents or otherwise in respect of any of the Liabilities, or
could materially adversely affect the enforceability of this
Agreement or any of the other Loan Documents; and promptly
provide to Bank, immediately upon receipt thereof, copies of any
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material correspondence, notice, pleading, citation, indictment,
complaint, order, decree, or other document from any source
asserting or alleging a violation of any Environmental Laws by
Company or any of its Subsidiaries, or of any circumstance or
condition which requires or may require a financial contribution
by Company or any of its Subsidiaries, or a clean-up, removal,
remedial action or other response by or on behalf of Company or
any of its Subsidiaries under applicable Environmental Law(s), or
which seeks damages or civil, criminal, or punitive penalties
from Company or any of its Subsidiaries for any violation or
alleged violation of any Environmental Law(s) by Company or any
of its Subsidiaries. Company hereby indemnifies, saves and holds
Bank, and any of Bank's past, present and future officers,
directors, shareholders, employees, representatives and
consultants, harmless from any and all losses, damages, suites,
penalties, costs, liabilities and expenses (including, without
limitation, reasonable legal expenses and attorneys' fees)
incurred or arising out of any claim, loss or damage of any
property, injuries to or death of any persons, contamination of
or adverse effects on the environment, or other violation of any
applicable Environmental Law(s), in any case, caused by Company
or any of its Subsidiaries, or in any way related to any property
owned or operated by Company or any of its Subsidiaries, or due
to any acts of Company or any of its Subsidiaries, or any of
their respective officers, directors, shareholders, employees,
consultants and/or representations; PROVIDED, HOWEVER, that the
foregoing indemnification shall not be applicable, and Company
shall not be liable for any such losses, damages, suits,
penalties, costs, liabilities or expenses, to the extent (but
only to the extent) the same arise or result from any gross
negligence or willful misconduct of Bank or any of its agents or
employees.
5. So long as Bank shall have any commitment or obligation, if any,
to make any loans or extend credit to or in favor of Company, and so long
as any Liabilities remain unpaid and outstanding, Company covenants and
agrees that it shall not, and, to the extent applicable, shall cause each
of its Subsidiaries to not, without the prior written consent of Bank:
a) Create, incur, assume or suffer to exist any mortgage,
pledge, encumbrance, security interest, lien or charge of
any kind upon any of its property or assets (including,
without limit, any charge upon property purchased or
acquired under a conditional sales or other title retaining
agreement or lease required to be capitalized under GAAP),
whether now owned or hereafter acquired, other than the
following (collectively, "Permitted Encumbrances"):
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(i) liens, mortgages, security interests and encumbrances to or
in favor of Bank;
(ii) liens for taxes, assessments or other governmental charges
incurred in the ordinary course of business and for which no
interest, late charge or penalty is attaching or which is
being contested in good faith by appropriate proceedings
diligently pursued and, if requested by Bank, bonded in an
amount and manner satisfactory to Bank;
(iii) liens, not delinquent, created by statute in connection with
workers' compensation, unemployment insurance, social
security, old age pensions (subject to the applicable
provisions of this Agreement) and similar statutory
obligations;
(iv) Liens in favor of mechanics, materialmen, carriers,
warehousemen or other like statutory or common law liens
securing obligations incurred in good faith in the ordinary
course of business that are not yet due and payable;
(v) minor encumbrances or imperfections of title consisting of
existing or future zoning restrictions, existing recorded
rights-of-way, existing recorded easements, existing
recorded private restriction or existing or future public
restrictions on the use of real property, one of which
(individually or in the aggregate) materially impairs, or
would materially impair, the present or future use of such
property in the operation of the business for which it is
used, or would be violated in any material respect by any
existing or proposed structure or land use or would have a
material adverse effect on the sale or lease of such
property, or render title thereto unmarketable;
(vi) purchase money security interests and liens arising out of
"capitalized leases" securing obligations (including,
without limit, all loan and lease installment payments) not
to exceed One Hundred Thousand Dollars ($100,000.00), in
aggregate, at any time, so long as such security interests
and liens arise substantially contemporaneously with the
incurrence of the purchase money indebtedness or capitalized
lease obligation to which it relates, secures only the
respective purchase money indebtedness or capitalized lease
obligation to which it relates, and no other Debt, and
covers and extends only to the respective property and
assets to which it relates, and no other property or assets;
and
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(b) Sell, lease (as lessor), transfer or otherwise dispose of
properties and assets having an aggregate book value of more than
Two Hundred Fifty Thousand Dollars ($250,000.00) (whether in one
transaction or in a series of transactions), except as to the
sale of inventory in the ordinary course of business; change its
name; enter into a share exchange with or consolidate with or
merge into any other corporation or other business entity, or
permit any other corporation or other business entity to merge
into it (except for mergers of Subsidiaries into Company and
mergers or consolidations of Subsidiaries of Company into other
Subsidiaries of Company); acquire all or substantially all of
the capital stock, properties or assets of any other Person to
the extent that the aggregate amount(s) payable by Company and
its Subsidiaries in respect of all such transactions shall exceed
Two Hundred Fifty Thousand Dollars ($250,000.00) in any fiscal
year of Company; enter into any reorganization or
recapitalization, or reclassify its capital stock; or enter into
any sale-leaseback transaction.
(c) Acquire or expend for, or commit itself to acquire or expend for,
fixed assets, whether by lease, purchase or otherwise, in an
aggregate amount that exceeds Seven Hundred and Fifty Thousand
Dollars ($750,000.00) in any fiscal year of Company.
6. The occurrence and/or existence of any of the following
conditions or events shall constitute an "Event of Default":
(a) Company shall fail to pay the principal of or interest on or
shall otherwise fail to pay any other amount owing by Company to
Bank, when due, under any of the Liabilities, and such default in
payment shall continue unremedied or uncured beyond any
applicable period of grace provided with respect thereto, if any,
in the relevant Loan Document(s);
(b) any representation, warranty, certification or statement made or
deemed to have been made by Company herein, or by any Person(s)
(including, without limit, Company) in any certificate, financial
statement or other document or agreement delivered by or on
behalf of Company in connection with the Liabilities or any of
the Loan Documents, shall prove to be untrue in any material
respect;
(c) Company shall fail to observe or perform any condition, covenant
or agreement of Company set forth herein;
(d) Company, any Subsidiary(ies), or any other Person(s) party
thereto, shall fail to observe or perform any condition, covenant
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or agreement set forth in any other Loan Document (other than as
provided in subparagraphs (a) and (c) above), and such default
shall remain unremedied or uncured beyond any applicable period
of grace or cure, if any, provided with respect thereto;
(e) If there shall be rendered against Company and/or any of its
Subsidiaries one or more judgments or decrees involving an
aggregate liability of One Hundred Thousand Dollars
($100,000.00), or more, which has or have become non-appealable
and shall remain undischarged, unsatisfied by insurance and
unstayed for more than thirty (30) days, whether or not
consecutive; or if a writ of attachment or garnishment against
the property of Company or any of its Subsidiaries shall be
issued and levied in an action claiming One Hundred Thousand
Dollars ($100,000.00), or more, and not released or appealed and
bonded in a manner satisfactory to Bank;
(f) if Company or any of its Subsidiaries shall voluntarily suspend
transaction of its business or make a general assignment for the
benefit of creditors; or if Company or any of its Subsidiaries
shall be adjudicated a bankrupt; or if Company or any of its
Subsidiaries shall file a voluntary petition in bankruptcy or for
a reorganization or to effect a plan or other arrangement with
its creditors; or if Company or any of its Subsidiaries shall
file an answer to a creditor's petition or other petition against
it (admitting the material allegations thereof) for any
adjudication in bankruptcy or for a reorganization; or if Company
or any of its Subsidiaries shall apply for or permit the
appointment of a receiver, trustee, or custodian for any
substantial portion of its properties or assets; or if any order
shall be entered by any court approving an involuntary petition
seeking reorganization of Company or any such Subsidiary, or if a
receiver, trustee, or custodian shall be appointed for Company or
any of its Subsidiaries or for any substantial portion of its
properties or assets; or if any order shall be entered by any
court approving an involuntary petition seeking reorganization of
Company or any of its Subsidiaries; or if a receiver, trustee, or
custodian shall be appointed for Company or any of its
Subsidiaries or for any substantial portion of its/their property
or assets; or if bankruptcy, reorganizational or liquidation
proceedings are instituted against Company or any of its
Subsidiaries and remain undismissed for thirty (30) days; or if
Company or any of its Subsidiaries becomes unable to meet its
obligations as they mature; or if Company or any of its
Subsidiaries commits an act of bankruptcy;
(g) if Company or any of its Subsidiaries shall fail to meet its
minimum funding requirements under ERISA with respect to any
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employee benefit plan established or maintained by it, or if any
such plan shall be the subject of termination proceedings
(whether voluntary or involuntary) and there shall result form
such termination proceedings a liability of Company or any of its
Subsidiaries to the PBGC which, in the opinion of Bank, will have
a material adverse effect upon the operations, business,
property, assets, financial condition or credit of Company or any
of its Subsidiaries, as the case may be;
(h) if there shall occur, with respect to any pension plan maintained
by Company or any of its Subsidiaries, any reportable event
(within the meaning of Section 4043(b) of ERISA) which Bank shall
determine constitutes a ground for the termination of any such
plan, and if such event continues for thirty (30) days after Bank
gives written notice to Company, provided that termination of
such plan or appointment of such trustee would, in the opinion of
Bank, have a material adverse effect upon the operations,
business, property, assets, financial condition or credit of
Company or any of its Subsidiaries, as the case may be;
(i) any action, suit or proceeding is initiated against Company or
any of its Subsidiaries under any federal or state controlled
substance, gambling or racketeering statute (including, without
limit, the Racketeer Influenced and Corrupt Organization Act of
1970), which action, suit or proceeding could result in the
confiscation or forfeiture of any portion of the assets of
Company or any of its Subsidiaries;
(j) upon the occurrence or existence of any "Default" or "Event of
Default", as the case may be, set forth in any other Loan
Document.
7. Upon the occurrence and at any time during the continuance or
existence of any Event of Default, Bank may give notice to Company
declaring all outstanding Liabilities to be due and payable, whereupon all
such Liabilities then outstanding shall immediately become due and payable,
without further notice or demand, and any commitment or obligation, if
any, on the part of Bank to make loans or otherwise extend credit to or in
favor of Company shall immediately terminate; PROVIDED, HOWEVER, upon the
occurrence of any Event of Default set forth in sub-Section 6(f) hereof,
the Liabilities shall immediately and automatically become due and payable
and any commitment or obligation of Bank to make loans or extend credit to
or in favor of Company shall immediately and automatically terminate, in
each case, without any necessity of notice or demand, each of which is
hereby expressly waived by Company. Further, upon the occurrence or at any
time during the continuance or existence of any Event of Default hereunder,
Bank may collect, deal with and dispose of all or any part of any
15
Collateral in any manner permitted or authorized by the Michigan Uniform
Commercial Code or other applicable law (including public or private sale),
and after deducting expenses (including, without limitation, reasonable
attorneys' fees and expenses), Bank may apply the proceeds thereof in part
or full payment of any of the Liabilities, whether due or not, in any
manner or order Bank elects. In addition to the foregoing, upon the
occurrence and at any time during the continuance or existence of any Event
of Default hereunder, Bank may exercise any and all rights and remedies
available to it as a result thereof, whether by agreement, by law, or
otherwise.
8. No forbearance on the part of the Bank in enforcing any of its
rights or remedies under this Agreement or any other Loan Document, nor any
renewal, extension or rearrangement of any payment or covenant to be made
or performed by Company hereunder or any such other Loan Document, shall
constitute a waiver of any of the terms of this Agreement or such Loan
Document or of any such right or remedy.
9. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan.
10. All covenants, agreements, representations and warranties by or
on behalf of Company made in connection with this Agreement and any other
Loan Documents shall survive the borrowing hereunder or thereunder and
shall be deemed to have been relied upon by Bank. All statements contained
in any certificate or other document delivered to Bank at any time by or on
behalf of Company pursuant hereto shall constitute representations and
warranties by Company.
11. This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective successors and assigns;
PROVIDED, HOWEVER, that Company shall not assign or transfer any of its
rights or obligations hereunder or otherwise in respect of any of the
Liabilities without the prior written consent of Bank.
12. COMPANY AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE
OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
LIABILITIES.
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If the foregoing is acceptable to Company, please indicate such with the
authorized signature(s) of Company as provided below.
Very truly yours,
COMERICA BANK
By: /S/ XXXXXX X. XXXXXXXXX
Xxxxxx X. Xxxxxxxxx
Its: Vice President
ACCEPTED AND AGREED:
MANATRON, INC.
By: /S/ XXXX X. XXXXXXXXX
Xxxx X. Xxxxxxxxx
Its: President
Dated: October 9, 1998
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