1
EXHIBIT 10.22
EXPORT LOAN AGREEMENT
THIS EXPORT LOAN AGREEMENT among The Chase Manhattan Bank ("Lender"),
United States Data Corporation, a Delaware corporation ("US Data"), and eMake
Corporation, a Delaware corporation ("eMake," and together with US Data, herein
called "Borrowers"), is made and executed as of December 15, 2000. This
Agreement governs the Credit Accommodations described herein. Borrowers
understand and agree that: (a) in granting, issuing, renewing, or extending
such Credit Accommodations, Lender is relying upon each Borrower's
representations, warranties, and agreements set forth in this Agreement and the
other Financing Documents; and (b) such Credit Accommodations shall be and
remain subject to the following terms and conditions of this Agreement until
all Borrowers' Obligations hereunder have been paid and performed in full.
ARTICLE I
CERTAIN DEFINED TERMS
Section 1.1 Definitions. Capitalized terms used but not defined in this
Agreement shall have the meanings assigned those terms in the Borrower
Agreement. As used herein, the following terms shall have the following
meanings unless the context requires otherwise:
"Affiliate" means, as to any Person, any other Person (a) that directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, such Person; (b) that directly or indirectly
beneficially owns or holds five percent (5%) or more of any class of voting
stock of such Person; or (c) five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term "control" means to possess, directly or indirectly, the
power to direct the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise. Bank is not under
any circumstances to be deemed an Affiliate of either Borrower or any of their
respective subsidiaries.
"Agreement" shall mean this Export Loan Agreement, as it may be amended,
modified, restated, renewed and extended from time to time, together with all
exhibits and schedules attached hereto from time to time. This Agreement is the
Loan Agreement, as referred to in the Borrower Agreement.
"Borrowers" shall mean United States Data Corporation and eMake
Corporation, and "Borrower" means either of them, and their respective
successors and assigns.
"Borrower Agreement" shall mean the Borrower Agreement relating to the
Loan executed by Borrowers for the benefit of Lender and Ex-Im Bank, in the
form prescribed by Ex-Im Bank attached hereto as Exhibit A.
"Borrower's Obligations" shall mean all loans, advances, debts, expenses,
fees, liabilities, and obligations for the performance of covenants, tasks or
duties or for payment of monetary amounts (whether or not such performance is
then required or contingent, or such amounts are liquidated or determinable)
owing by Borrowers to Lender, of any kind or nature, present or future, arising
in connection with the Loan. Borrowers' Obligations are Loan Facility
Obligations, as defined in the Borrower Agreement, and are included in the
Indebtedness, as defined in the Security Agreement and the Guaranty.
"Collateral" shall mean all property and interests in property in and upon
which Lender has been granted a Lien, including the Security Interest, as
security for the payment and performance of Borrowers' Obligations, including
the Collateral identified in Section 6 of the Loan Authorization Notice and all
Proceeds thereof. The Collateral is included in the Collateral as defined in
the Security Agreement.
"Commitment" shall mean the commitment of Lender to extend to Borrowers
the Loan in accordance with the terms and conditions of this Agreement.
"Commitment Period" shall be the period commencing on the Effective Date
(as defined in the Borrower Agreement) and ending on the Commitment Termination
Date.
"Commitment Termination Date" shall be the Final Disbursement Date for the
Loan, unless the Commitment Termination Date is accelerated in accordance with
Section 8.2 of this Agreement.
"Dollars" and the sign "$" shall mean dollars in lawful money of the
United States of America and, in relation to all payments in Dollars hereunder,
(i) same day funds paid through the Regional Clearing House Interbank Payments
system, or (ii) immediately available funds paid through the Regional Federal
Reserve Bank, or (iii) such other funds as may then be required by the
customary procedure of member banks of the Regional Clearing House Association
for the settlement of payments.
"Event of Default" shall have the meaning assigned them in the Section
8.1 of this Agreement.
"Ex-Im Bank" shall mean the Export-Import Bank of the United States, its
successors and assigns.
"Ex-Im Bank Guarantee" shall mean the Master Guarantee Agreement between
Lender and Ex-Im Bank, together with (i) the Super Delegated Authority Letter
Agreement between Lender and Ex-Im Bank, (ii) the Affiliate Guarantee
Authorization Agreement between Lender and Ex-Im Bank, and (iii) the Loan
Authorization Notice.
"Export-related Collateral" shall mean all Export-related Inventory,
Export-related Accounts Receivable, Export-related General Intangibles, and all
Proceeds.
"Financing Documents" shall mean, collectively, this Agreement, the Note,
the Security Agreement, the Guaranty, the Borrower Agreement, the Ex-Im Bank
Guarantee, the Letter of Credit Application(s), all Letters of Credit issued
pursuant hereto, and any other documents, certificates and agreements which are
executed and delivered by Borrowers, any Guarantor or any other Person
evidencing, securing, guaranteeing or otherwise relating to Borrowers'
Obligations. The Financing Documents are the Loan Documents, as defined in the
Borrower Agreement, and are included in the Related Documents, as defined in
the Security Agreement and the Guaranty.
"Guarantor" shall mean each of US Data Corporation and eMake Solutions
Inc. and "Guarantors" shall mean all of them, collectively.
"Guaranty" shall mean the guaranty of even date herewith executed and
delivered by the Guarantors to Lender guaranteeing the payment and performance
of all Borrowers' Obligations.
"Highest Lawful Rate" shall mean the maximum nonusurious rate of interest
permitted to be charged by applicable Federal or Texas law (whichever permits
the higher lawful rate) from time to time in effect. To the extent that Texas
law determines the Highest Lawful Rate, the Highest Lawful Rate is the weekly
rate ceiling as defined in the Texas Finance Code Chapter 303.
"Lender" mean The Chase Manhattan Bank its successors and assigns.
"Letter of Credit Application" shall mean an Application and Agreement for
Irrevocable Standby Letter of Credit or an Application and Agreement for
Irrevocable Commercial Letter of Credit, as the case may be, in such form as is
provided by Lender to a Borrower and which is
2
executed by such Borrower and delivered to Lender in connection with a request
for the issuance of a Standby Letter of Credit or a Commercial Letter of Credit,
respectively, pursuant to this Agreement.
"Loan" means the credit facility described in the Section 2.1. The Loan is
the Loan Facility, as defined in the Borrower Agreement.
"Loan Authorization Notice" shall mean the Loan Authorization Notice
executed by Lender and delivered to and acknowledged by Ex-Im Bank setting
forth the terms and conditions of the Loan, a copy of which is attached hereto
as Exhibit B. The Loan Authorization Notice is the Loan Authorization Notice,
as defined in the Borrower Agreement.
"Maturity Date" shall mean the first Business Day following the Stated
Final Disbursement Date; provided, however, that with regard to Letter of Credit
Obligations outstanding on the Stated Final Disbursement Date, the Maturity Date
for any Disbursement under the Letter(s) of Credit related thereto shall be the
first Business Day following the date of such Disbursement.
"Note" shall mean the promissory note of even date herewith in the
original principal amount of Three Million and No/100 Dollars ($3,000,000)
executed by Borrowers and payable to Lender evidencing the outstanding
principal balance of Disbursements, together with all renewals, extensions,
modifications, refinancings and consolidations of and substitutions for such
promissory note.
"Proceeds" or "proceeds" shall mean, when used with respect to any of the
Collateral, all products and proceeds, cash and non-cash, within the meaning of
the UCC and shall include the proceeds of any and all contracts, letters of
credit and insurance policies.
"Security Agreement" shall mean the commercial security agreement of even
date herewith, executed by Borrowers in favor of Lender creating the Security
Interest in the Collateral, together with all amendments, modifications and
extensions thereof.
"Security Interest" is the Security Interest, as defined by the Security
Agreement.
"Subordinated Debt" shall mean any and all Borrowers' Obligations to
Lender on terms and conditions satisfactorily to Lender.
"Stated Final Disbursement Date" means the date stipulated as the Final
Disbursement Date in Section 10 of the Loan Authorization Notice.
"Tangible Net Worth" shall mean, as of the date of determination, the
tangible net worth of Borrower determined in accordance with GAAP
(i) increased by debt subordinated to the Loan, and (ii) decreased by the
following intangible assets: patents, licenses, goodwill, subscription lists,
capitalized software, organization expenses, covenants not to compete,
investment in and Accounts Receivable and other moneys due from Affiliates
(including, without limitation, officers and directors) of Borrower, and all
other intangible assets of Borrower.
"Working Capital" shall mean, as of the date of determination, the amount
by which a Borrower's current assets exceed its current liabilities, determined
as to classification of items and as to amounts in accordance with GAAP, except
that there shall be excluded from current assets (i) all prepaid expenses and
(ii) all amounts due from Affiliates (including, without limitation, officers
and directors) of such Borrower.
Section 1.2 Accounting Terms. All accounting terms used but not defined
in this Agreement or the Borrower Agreement shall be construed in accordance
and conformity with GAAP applied on a consistent basis. Except as expressly
provided herein, terms used herein that are defined in the UCC and are not
otherwise defined in this Agreement or the Borrower Agreement shall have the
meanings assigned to such terms in the UCC.
Section 1.3 Miscellaneous. The words "hereof", "herein" and "hereunder"
and words of similar import, when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Article, Section and Exhibit references are to Articles, Sections and Exhibits
to this Agreement, unless otherwise specified.
ARTICLE II
TERMS AND CONDITIONS
Section 2.1 Advances and Letters of Credit
(a) Subject to the provisions of this Agreement, including without
limitation the satisfaction of the conditions described in Article III, Lender
agrees to establish a Revolving Loan Facility and make and incur Credit
Accommodations in support of Export Orders as hereinafter provided, provided the
aggregate Credit Accommodation Amount outstanding at any time shall not exceed
at such time the lesser of (a) the Export-related Borrowing Base and (b) the
Maximum Amount. All Disbursements hereunder shall be made in Dollars.
(b) Lender agrees to make advances directly to a Borrower or for such
Borrower's account during the Commitment Period. A Borrower shall request each
advance under the Loan by delivering to Lender a written request therefor, an
Export-related Borrowing Base Certificate, a copy of the Export Order(s) against
which such Borrower is requesting an advance or, at Lender's discretion, the
summaries thereof pursuant to Section 4.3, and such other information and
documentation as Lender may require, in accordance with Section 6.10 of this
Agreement. Upon receipt of the above described information and documents by
Lender, Lender shall make such advance within one Business Days following
Lender's determination that all conditions to the making of such advance have
been satisfied. Lender shall be under no obligation to make advances based on
Export-related Borrowing Base Certificate not issued within five Business Days
of the date of each such Borrowers' request. Each advance shall be conclusively
deemed to have been made at the request of and for the benefit of the requesting
Borrower (a) when credited to any deposit account of such Borrower maintained
with Lender, or (b) when advanced in accordance with the instructions of an
authorized Person. Lender, at its option, may set a cutoff time, after which all
requests for advances under the Loan will be treated as having been requested on
the next succeeding Business Day.
(c) Lender agrees to issue Letters of Credit on behalf of a Borrower or for
such Borrower's account from time to time during the Commitment Period. Standby
Letters of Credit shall be issued for a borrower's account, for use as bid
bonds, performance bonds or payment guarantees, which Standby Letters of Credit
can be drawn upon by Buyers only if such Borrower fails to perform its
obligations with respect to the relevant Export Order(s). Each Disbursement to
fund a drawing under a Letter of Credit shall conclusively be deemed to have
been made when advanced in accordance with a draw request or instructions of an
authorized Person. Each Letter of Credit will be in form and substance
satisfactory to Lender and will be issued by Lender as soon as practicable
following (a) Lender's receipt of a completed Letter of Credit Application, an
Export-related Borrowing Base Certificate, a copy of the Export Order(s) with
respect to which a Borrower is requesting a Letter of Credit, and such other
information and documentation as Lender may require, in accordance with Section
6.10 of this Agreement; and (b) Lender's determination that all conditions to
issuing such Letter of Credit have been satisfied. Lender shall reserve from the
applicable Export-related Borrowing Base an amount equal to at least 100% of the
outstanding face amount of each Letter of Credit issued hereunder. In no event
shall the expiry date of any Letter of Credit be later than (i) 12 months from
the date of issuance of the Letter of Credit or (ii) the Stated Final
Disbursement Date. If the Loan is a Revolving Loan Facility (including a
Transaction Specific Revolving Loan Facility), Lender shall not be obligated to
issue during the last 60 days of the Commitment Period (for this purpose the
Commitment Period is deemed to end on the Stated Final Disbursement Date) any
Letter of Credit which will expire after the Stated Final Disbursement Date
unless Lender agrees in writing to a Renewal of the Loan, or Ex-Im Bank's prior
written approval of the issuance of such Letter of Credit is obtained.
-2-
3
(d) The terms and conditions of each Letter of Credit Application
delivered by a Borrower and accepted by Lender hereunder, including without
limitation terms related to reimbursement of amounts drawn and the payment of
fees and interest, are incorporated herein by this reference; provided,
however, that (a) no provisions subjecting Lender and such Borrower to
arbitration or other dispute resolution provisions contained in any Letter of
Credit Application shall be incorporated into this Agreement or applicable to
Letters of Credit issued pursuant to this Agreement, and (b) to the extent that
there is any conflict between the terms and conditions of any Letter of Credit
Application and this Agreement, the terms of this Agreement shall prevail,
except for (i) definitions contained in any Letter of Credit Application, and
(ii) if there is any provision contained in any Letter of Credit Application
which subjects the Letter of Credit issued pursuant thereto to the UCP, the UCP
shall prevail.
(c) The outstanding principal balance of Disbursements hereunder shall be
evidenced by, and shall bear interest and be payable as provided in, the Note:
Section 2.2 Credit Accommodations.
(a) The amount of the Credit Accommodations available to be made or
incurred hereunder at any particular time from time to time for the benefit of
a Borrower shall be equal to the difference between (a) the lesser at such time
of (i) the Maximum Amount, or (ii) the Export related Borrowing Base; and (b)
the Credit Accommodation Amount at such time. The Export-related Borrowing Base
shall be determined in accordance with this Agreement, the Borrower Agreement
and the Export-related Borrowing Base Certificate.
(i) Any Eligible Export-related Account Receivable or Eligible
Export-related Inventory included in the Export-related Borrowing Base
which subsequently fails to satisfy any of the applicable eligibility
criteria shall immediately cease to be included in the Export-related
Borrowing Base.
(ii) Upon the sale, shipment, delivery to and acceptance by Buyer of
any Item of Eligible Export-related Inventory, such Item shall cease to be
included in the Export-related Borrowing Base as Export-related Inventory;
however, the resulting Export-related Account Receivable shall be included
in the Export-related Borrowing Base provided that it otherwise satisfies
all of the eligibility criteria for Eligible Export-related Accounts
Receivable.
(b) Notwithstanding anything contained in this Agreement to the contrary;
(i) Lender shall not undertake any new Credit Accommodation under
this Agreement for any Borrower:
(A) after the Final Disbursement Date;
(B) during the continuance of an Event of Default hereunder;
(C) if the Credit Accommodation has been or will be used in a
manner prohibited by the Borrower Agreement; or
(D) if no outstanding Export Order(s) exist with respect to such
Borrower.
(ii) No Warranty Letters of Credit shall be issued by Lender under
this Agreement without the prior written approval of Lender and Ex-Im Bank;
and if such approval is obtained, any Warranty Letter of Credit so approved
shall be issued only upon the satisfaction of all conditions to such
issuance, including reserves from the Export-Related Borrowing Base,
established by Lender and Ex-Im Bank.
Section 2.3 Payments and Prepayment of Borrowers' Obligations
(a) Borrowers' Obligations shall be paid (and may be prepaid) in
accordance with the provisions of this Agreement, the Borrower Agreement and
the Note. Unless sooner due and payable or paid pursuant to the other
provisions of this Agreement, the Borrower Agreement and the Note, Borrowers
shall pay to Lender in full on the Maturity Date all outstanding Borrowers'
Obligations, including, without limitation, the aggregate principal amount of
all Disbursements then outstanding and all accrued but unpaid interest,
together with all other applicable fees, costs and charges, if any, not yet
paid. If the Loan is a Revolving Loan Facility, Disbursements made to a
Borrower or for such Borrower's account and repaid by Borrower during the
Commitment Period shall be available on a continuous basis until the Final
Disbursement Date to fund Credit Accommodations made or incurred under the Loan
in accordance with the terms of this Agreement and the Borrower Agreement.
(b) In accordance with the Borrower Agreement, upon demand by Lender,
Borrowers shall provide additional Collateral or make additional payment(s) to
Lender to ensure that at all times (i) the Export-related Borrowing Base equals
or exceeds the Credit Accommodation Amount; and (ii) if the Loan is a Revolving
Loan Facility (other than a Transaction Specific Revolving Loan Facility), the
outstanding principal balance of the Credit Accommodations that is supported by
Export-Related Inventory does not exceed 60% of the sum of (y) the outstanding
principal balance of the Disbursement(s), and (z) the undrawn face amount of
all outstanding Commercial Letters of Credit hereunder.
(c) All payments made by or received from a Borrower or for such
Borrower's account in respect of Borrowers' Obligations (including prepayments
by a Borrower and Proceeds received by Lender) shall be applied by Lender first
to the payment of accrued and unpaid interest, second to the payment of the
principal amount of Borrowers' Obligations, and third to any unpaid costs, fees
and expenses due under this Agreement and the other Financing Documents.
Section 2.4 Reliance by Lender on Communications and Authorizations
from Borrowers. In making or incurring any Credit Accommodation pursuant to
this Agreement and the other Financing Documents, Lender shall be authorized to
rely on any Export-related Borrowing Base Certificate, Letter of Credit
Application, or other information, documentation, notice or communication which
appears to have been executed and delivered by any of the authorized
representatives of a Borrower who are designated in the general certificate
delivered by such Borrower to Lender. In the event that the Person(s)
authorized to execute and deliver such documents or to take action hereunder on
behalf of a Borrower become(s) unavailable or unable to do so, such Borrower
promptly shall appoint one or more successor representative(s) and shall
furnish Lender with a certificate satisfactory to Lender which shall contain a
copy of the resolutions or other actions taken by such Borrower to authorize
such appointment(s) and the specimen signature of each Person so appointed to
act on behalf of such Borrower pursuant to this Agreement.
Section 2.5 Past Due Amounts. Each amount due to Lender in connection
with the Loan Documents will bear interest from its due date until paid at the
Highest Lawful Rate unless the applicable Loan Document provides otherwise.
ARTICLE III
CONDITIONS PRECEDENT AND SUBSEQUENT
Section 3.1 Conditions to Credit Accommodation. The obligation of
Lender to make or incur any Credit Accommodation in each case is subject to
satisfaction of the following conditions precedent, with all documents,
instruments, opinions, reports, and other items required under this Agreement
to be in form and substance satisfactory to Lender:
-3-
4
(a) Lender shall have received evidence that this Agreement and all other
Financing Documents have been duly authorized, executed, and delivered by the
parties thereto and shall be and remain valid and enforceable.
(b) To the extent not previously received by Lender, Lender shall have
received a general certificate of the Secretary of each Borrower, dated no
later than the date of the execution and delivery of this Agreement, certifying
(i) that attached thereto is a true, complete and correct copy of the
Certificate of Incorporation of such Borrower as in effect on the date of such
certification and a true, complete and correct copy of the By-laws of such
Borrower, (ii) that attached thereto is a true, complete and correct copy of
resolutions adopted by the directors of such Borrower authorizing the execution
and delivery of this Agreement and each of the other Financing Documents and
authorizing Borrower to incur Borrower's Obligations and to perform all other
covenants and agreements of such Borrower contained in this Agreement and in
the other Financing Documents, and (iii) as to the incumbency and specimen
signature of each officer of such Borrower who is authorized to execute and
deliver this Agreement, all Export-related Borrowing Base Certificates and
Letter of Credit Applications to be delivered pursuant hereto, and any other
Financing Documents and other instruments, certificates and documents to be
executed and delivered by such Borrower hereunder.
(c) Lender shall have received satisfactory evidence that the insurance
which Borrowers are required to maintain pursuant to this Agreement is in full
force and effect.
(d) Borrowers shall have paid all of the fees, costs and expenses which
are due and payable under this Agreement and any other Financing Document.
(e) Ex-Im Bank shall have acknowledged receipt of the Loan Authorization
Notice to Lender to effect the coverage of Borrowers' Obligations under the
Ex-Im Bank Guarantee.
(f) All conditions set forth in the Loan Authorization Notice that were to
be satisfied as of the date of Lender's making or incurring the requested
Credit Accommodation shall have been satisfied, and Lender otherwise shall be
permitted under the Ex-Im Bank Guarantee to make and incur Credit
Accommodations hereunder.
(g) All legal matters incident to the Loan and all documents necessary in
the opinion of Lender to the making or incurring of Credit Accommodations shall
be satisfactory in all respects to counsel for Lender.
(h) All Liens, including the Security Interest, in and upon the Collateral
shall have been duly authorized, created and perfected, (i) with first
priority, with respect to the Collateral described in Section 6(A) of the Loan
Authorization Notice, and (ii) with the priorities set forth in Sections 6(E)
and (F) of the Loan Authorization Notice with respect to other Collateral, in
each case subject only to Permitted Liens, and shall be valid and enforceable.
(i) Lender, at its option and for its sole benefit, shall have conducted
an audit of each Borrower's Export-related Collateral, books, records, and
operations, and Lender shall be satisfied as to their condition.
(j) Lender shall have received a completed and executed Export-related
Borrowing Base Certificate and any other information and documentation that
Lender may require, in accordance with the Subsection titled "Export-related
Borrowing Base Certificates."
(k) (i) Borrowers shall have complied with, and shall then be in
compliance with, all the terms, covenants, and conditions of this Agreement,
the Borrower Agreement, and all other Financing Documents which are binding
upon it, (ii) there shall exist no Event of Default under this Agreement, and
(iii) all representations and warranties of Borrowers contained in this
Agreement and all other Financing Documents shall be true and correct.
(l) Borrowers shall have complied with, and shall then be in compliance
with, all the terms, covenants, and conditions of any other agreement now
existing or hereafter arising between Lender and Borrowers, and there shall
exist no default or event of default thereunder.
(m) Borrowers shall have complied with applicable laws, and regulations in
each instance in which Borrowers shall have generated, handled, used, stored or
disposed of any hazardous or toxic waste or substance, on or off its premises
(whether or not owned by Borrowers). Borrowers shall have no material
contingent liability for non-compliance with environmental or hazardous waste
laws. Borrowers shall have not received any notice that it or any of its
property or operations does not comply with, or that any governmental authority
is investigating its compliance with any environmental or hazardous waste laws.
Section 3.2 Condition Subsequent. The obligation of Lender to make or
incur any Credit Accommodation hereunder is conditioned upon Lender's receipt
(at Borrower's expense) of a post closing lien search confirming that all UCC
financing statements and other documents necessary to perfect the Liens in the
Collateral in favor of Lender in the priorities required hereunder have been
filed among all appropriate records.
ARTICLE IV
SECURITY
Section 4.1 Collateral. To secure payment and performance of all
Borrower's Obligations, Borrowers shall grant to Lender valid, enforceable and
duly perfected Liens, including the Security Interest on all Collateral. The
Liens shall be of first priority with respect to the Collateral described in
Section 6(A) of the Loan Authorization Notice, and the Liens shall have the
priorities set forth in Sections 6(E) and (F) of the Loan Authorization Notice
with respect to the other Collateral, in each case subject only to Permitted
Liens. Borrowers agree that Lender shall have in respect of all Collateral that
is subject to the UCC all of the rights and remedies of a secured party under
the UCC in all states in which any portion of the Collateral may be located, as
well as those provided in this Agreement. In the event Lender has extended or
extends a loan or other credit accommodation to Borrowers in addition to the
Loan and receives a Lien on any assets or property, the Lien on such assets and
property shall also secure Borrowers' Obligations, and Borrowers agree to
execute such documents and instruments as Lender requires to extend such
security to Borrower's Obligations.
Section 4.2 Perfection of Security Interests. Borrowers agree to execute
such financing statements and other documents and to take whatever other
actions are requested by Lender to perfect and continue Lender's Liens upon the
Collateral. Each Borrower hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any financing statements and other
documents necessary to perfect or to continue its Liens. Lender may at any
time and without further authorization from such Borrower, file a carbon,
photograph, facsimile, or other reproduction of any financing statement for use
as a financing statement. Borrowers will reimburse Lender for all expenses for
the perfection, termination, and the continuation of the perfection of Lender's
Liens upon the Collateral. Each Borrower will promptly notify Lender of any
change in such Borrower's name including any change to the assumed business
names of such Borrower. Each Borrower also will promptly notify Lender of any
change in such Borrower's social security number or employer identification
number. Lender's Security Interest in any Export-related Accounts Receivable
shall be further perfected by the respective Borrower's execution and delivery
to Lender of any instruments, the giving of any notices and the taking of any
additional steps that may be required under foreign law in order to ensure the
effectiveness of the assignment of such Export-related Accounts Receivable
against the Buyer.
-4-
5
Section 4.3 Collateral Records and Reports. Each Borrower does now, and
at all times hereafter shall keep correct and accurate books and records of the
Collateral, all of which books and records shall be available to Lender or
Lender's representative upon demand for inspection and copying at any
reasonable time. In this connection, each Borrower acknowledges that Lender is
required by Ex-Im Bank to perform (or contract to perform) a field examination
of such Borrower and the Collateral in accordance with Lender's customary
procedures but in no event less than every six months. Such field examination
shall include without limitation an inspection and valuation of Inventory and
Other Assets, a book audit of Accounts Receivable and a review of the Accounts
Receivable aging report. For Revolving Loan Facilities, if Lender elects in its
sole discretion to make Credit Accommodations based upon summaries of Export
Orders, than at least once each quarter, Lender shall review a sampling
selected by Lender of those Export Orders representing at least 10% of the
aggregate Dollar volume of Export Orders and 10% of the number of Export Orders
supporting Credit Accommodations made or incurred during the past quarter.
Specifically with respect to Export-related Collateral, each Borrower agrees to
keep and maintain such books and records as Lender may require, including,
without limitation, information concerning the eligibility of Export-related
Collateral for Export-related Borrowing Base purposes, Export-related Accounts
Receivable balances and number of days outstanding, descriptions and
itemizations of the kind, type, quality, and quantity of Export-related
Inventory, Inventory costs and selling prices, and records of daily withdrawals
and additions to Export-related Inventory. Each Borrower shall submit to Lender
in writing from time to time upon Lender's request and in any event no later
than the 30th day of each month (a) an Inventory schedule for the immediately
preceding month, which schedule shall include the location of each Item of
Inventory, (b) an Accounts Receivable aging report for the immediately
preceding month, which report shall include the customer name, Dollar amount
due and number of days outstanding for each Export-related Account Receivable,
(c) information concerning the status of completion of Export Orders, and (d)
such other information, reports, contracts, invoices and other data relating to
the Collateral as Lender may request.
Section 4.4 Payments under Letters of Credit in favor of Borrowers
(a) Each Borrower shall require that each commercial letter of credit
issued for its benefit for the account of a Buyer with respect to any
Export-related Account Receivable or Export-related Inventory shall provide
that all payments of drawings thereunder shall be paid for the account of such
Borrower directly to such Borrowers account with Lender (US Data No.
08805166947 and eMake No. 08806253784), or alternatively, that payment shall be
made only to Lender's account.
Section 4.5 Assignment of Foreign Credit Insurance Policy Proceeds and
Buyer/Supplier Financing. Each Borrower shall, simultaneously with the
execution of this Agreement and as and when such policies are put into effect
or financing is obtained by such Borrower for the benefit of any Buyer, at any
time prior to the payment and performance in full of Borrowers' Obligations,
assign to Lender the proceeds of all foreign credit insurance policies
maintained by such Borrower and any financing obtained by such Borrower for the
benefit of any Buyer, including, without limitation, any financing the
repayment of which is guaranteed or insured by Ex-Im Bank, such assignment to
provide for payment to be made directly into such Borrower's account with
Lender or to Lender.
Section 4.6 Loss of Collateral. Lender shall not be liable for the loss
of any Collateral in its possession, nor shall such loss diminish Borrowers'
Obligations.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants the following to Lender and Ex-Im
Bank, as of the Effective Date, as of the date each Credit Accommodation is
made or incurred hereunder, as of the date of any Renewal, extension or
modification of the Loan, and at all times any of Borrowers' Obligations are
outstanding, and it is the affirmative obligation of such Borrower to notify
Lender in writing promptly, but in any event within five (5) Business Days, of
any occurrence, circumstance or fact which would affect its ability to make the
representations and warranties contained herein:
Section 5.1 Organization and Authority. Each Borrower is a C
corporation, duly organized, validly existing, and in good standing under the
laws of the state of Delaware and is duly qualified and in good standing in all
other states in which such Borrower is doing business. Each Borrower has the
full power and authority to own its properties and to transact the businesses
in which it is presently engaged or presently proposes to engage. Each Borrower
has not been suspended or debarred from doing business with the United States
government. The execution, delivery, and performance of this Agreement and all
other Financing Documents to which each Borrower is a party have been duly
authorized by all necessary action by such Borrower, do not require the consent
or approval of any other Person; and do not conflict with, result in a
violation of, or constitute a default under (a) any provision of its
certificate of incorporation bylaws, or any other agreement or instrument
binding upon such Borrower, or (b) any law, governmental regulation, court
decree, or order applicable to such Borrower. Each Borrower has all requisite
power and authority to execute and deliver this Agreement and all other
Financing Documents to which such Borrower is a party.
Section 5.2 Financial Condition. Each financial statement of such
Borrower supplied to Lender fairly presents financial condition of such
Borrower as of the date of the statement, and there has been no change in such
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender, which has had or could reasonably be
expected to have a Material Adverse Effect. Such Borrower has no material
contingent obligations required to be disclosed by GAAP except as disclosed in
such financial statements.
Section 5.3 Legal Effect. This Agreement and all other Financing
Documents to which each Borrower is a party constitute legal, valid and binding
obligations of such Borrower enforceable against such Borrower in accordance
with their respective terms.
Section 5.4 Properties. Each Borrower is the sole owner of, and has
good title to, all of such Borrower's properties free and clear of all security
interests except for liens and security interests in favor of Lender, and has
not executed any security documents or financing statements relating to such
properties. Title to all of such Borrower's properties are in such Borrower's
legal name, and such Borrower has not used, or filed a UCC financing statement
under, any other name for at least the last six (6) years. Each Borrower and
each Subsidiary of such Borrower possesses all permits, licenses, patents,
trademarks, and copyrights required to conduct its business. All material
easements, rights-of-way and other rights necessary to maintain and operate
such Borrower's property have been obtained and are in full force and effect.
Section 5.5 Compliance. Except as disclosed to and acknowledged by
Lender in writing, (a) each Borrower is conducting such Borrower's businesses
in material compliance with all applicable federal, state and local laws,
statutes, ordinances, rules, regulations, orders, determinations and court
decisions, including, without limitation, those pertaining to health or
environmental matters, and (b) each Borrower otherwise does not have any
contingent liability in connection with the release into the environment,
disposal or the improper storage of any toxic or hazardous substance or solid
waste which has had or could reasonably be expected to have a Material Adverse
Effect.
Section 5.6 Licenses. All necessary licenses, permits and
authorizations required for the exporting of the Export-related Inventory have
been or will be timely obtained by each Borrower, and to the best of such
Borrower's knowledge, all required necessary licenses, permits and
authorizations have been or will be timely obtained by each importer.
Section 5.7 Performance. Each Borrower has an operating history of at
least one year. Such Borrower has sufficient financial resources with which to
perform its Export Orders and to pay any costs of completing its Export Orders
which are not paid from the proceeds of the Loan.
-5-
6
Section 5.8 Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid taxes)
against such Borrower is pending or threatened, and no other event has occurred
which has had or could reasonably be expected to have a Material Adverse Effect
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
Section 5.9 Taxes. All tax returns and reports of such Borrower that are
or were required to be filed have been filed in a timely manner, and all taxes,
assessments and other governmental charges have been paid in full, except those
that have been disclosed in writing to Lender which are presently being or to
be contested by such Borrower in good faith in the ordinary course of business
and for which adequate reserves have been provided.
Section 5.10 Lien Priority. Unless otherwise previously disclosed to and
approved by Lender in writing, such Borrower has not entered into any security
agreements, granted a Lien or permitted the filing or attachment of any Lien
(other than Permitted Liens) on or affecting any of the Collateral, except in
favor of Lender.
Section 5.11 Employee Benefit Plans. Each employee benefit plan as to
which such Borrower may have any liability complies in all material respects
with all applicable requirements of law and regulations, and (a) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred with
respect to any such plan, (b) such Borrower has not withdrawn from any such
plan or initiated steps to do so, (c) no steps have been taken to terminate any
such plan, and (d) there are no unfunded liabilities other than those
previously disclosed to Lender in writing.
Section 5.12 Location of Borrower's Offices and Records. Such Borrower's
place of business, or such Borrower's chief executive office if Borrower has
more than one place of business, is located at the address for notices to such
Borrower set forth in the Subsection titled "Notices". Unless such Borrower has
notified Lender and Lender has acknowledged in writing to the contrary, said
address is also the location of such Borrower's books and records concerning
the Collateral.
Section 5.13 Export-related Accounts Receivable.
(a) All Export-related Accounts Receivable represented by such Borrower to
constitute Eligible Export-related Accounts Receivable satisfy all relevant
eligibility criteria.
(b) All Export-related Receivables information contained in Export-related
Borrowing Base Certificates and related reports delivered to Lender will be
true and correct, subject to immaterial variance.
(c) Lender shall have the right at any time during normal business hours
and at such Borrower's expense to confirm with Buyers the accuracy of such
Export-related Accounts Receivable information.
Section 5.15 Guarantors. US Data Corporation owns 100% of the voting share
capital of US Data. US Data Corporation owns 55% of the voting share capital of
eMake. The Guarantors are the only Persons, other than venture capital
companies, owning or otherwise controlling more than 20% of the voting share
capital of eMake, or having the power to direct Borrower's policies and/or
management whether by contract or otherwise.
Section 5.16 Information. All information heretofore or contemporaneously
herewith furnished by each Borrower to Lender for the purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all information hereafter furnished by or on behalf of such Borrower to
Lender will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such information is
or will be incomplete by omitting to state any material fact necessary to make
such information not misleading. Such Borrower understands and agrees that
Lender, without independent investigation, is relying upon the above
representations and warranties in extending the Loan to Borrowers. Each
Borrower further agrees that the foregoing representations and warranties shall
be continuing in nature and shall remain in full force and effect as long as
any of Borrowers' Obligations remain outstanding.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees with Lender that, while this Agreement
is in effect and until all of Borrowers' Obligations are fully paid and
performed, such Borrower shall:
Section 6.1 Additional Liabilities. Promptly, but in any event within five
(5) Business Days, inform Lender in writing (a) in the event any litigation,
claim, investigation, administrative proceeding or similar action affecting
such Borrower or any Guarantor which could reasonably be expected to have a
Material Adverse Effect is filed or threatened against such Borrower or any
Guarantor, and (b) of the creation, occurrence or assumption by such Borrower of
any actual or contingent liabilities not permitted under this Agreement.
Section 6.2 Financial Records. Maintain or cause to be maintained books
and records in accordance with GAAP, and permit Lender and Ex-Im Bank or their
representatives to examine, review, audit and make and take away copies or
reproductions of such Borrower's books and records at all reasonable times. If
any books and records, including, without limitation, computer generated
records and computer software programs for the generation of such records, now
or hereafter are maintained in the possession of a third party, such Borrower,
upon request of Lender, shall instruct such party to permit Lender and Ex-Im
Bank or their representatives free access to such records at all reasonable
times and to provide Lender with copies of any records it may request, all at
such Borrower's expense.
Section 6.3 Reporting Requirements. Furnish to Lender:
(a) As soon as available and in any event not later than 30 days after the
end of each month the unaudited financial statements of each Borrower, as of
the end of such month and the related unaudited statements of income, members'
equity and cash flows for the period commencing at the end of the previous year
and ending with the end of such month and the corresponding figures as at the
end of, and for, the corresponding period in the preceding fiscal year, all in
reasonable detail and duly certified with respect to such statements (subject
to year-end audit adjustments) by an authorized financial officer of such
Borrower as having been prepared in accordance with GAAP.
(b) As soon as available and in any event not later than 90 days after the
end of each fiscal year of such Borrower, a copy of the audited annual
financial statement for such year for such Borrower, including therein audited
balance sheets of such Borrower as of the end of such fiscal year and the
related statements of income, members' equity and cash flows for such fiscal
year, and the corresponding figures as at the end of, and for, the preceding
fiscal year, in each case audited and certified by a firm of independent
certified public accountants of recognized standing acceptable to Lender and
including any management letters delivered by such accounting firm to such
Borrower in connection with such audit together with a certificate of such
accounting firm to Lender stating that, in the course of the regular review of
the business of such Borrower which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that an Event of Default has occurred and is
continuing, or if, in the opinion of such accounting firm, an Event of Default
has occurred and is continuing, a statement as to the nature thereof;
(c) Within 30 days after filing with the Internal Revenue Service and in
any event not later than May 15 of each year, copies of each Borrower's
corporate income tax return and each Guarantor's signed federal income tax
returns for the prior year; and
-6-
7
(d) To the extent not hereinabove described, the financial statements of
such Borrower and each Guarantor deliverable pursuant to the Loan Authorization
Notice by the dates set forth therein.
Section 6.4 Taxes, Charges and Liens.
(a) Pay and discharge when due and prior to the date on which penalties
would attach, all of each Borrower's indebtedness and obligations, including,
without limitation, all assessments, taxes, governmental charges, levies and
liens, of every kind and nature, imposed upon such Borrower or its properties,
income, or profits, and all lawful claims that, if unpaid, might become a lien
or charge upon any of such Borrower's properties, income, or profits; provided,
however, Borrowers will not be required to pay and discharge any such
assessment, tax, charge, xxxx, xxxx or claim so long as (i) the legality of the
same shall be contested in good faith by appropriate proceedings, and (ii)
Borrowers shall have established or caused to have been established adequate
reserves with respect to such contested assessment, tax, charge, levy, lien, or
claim in accordance with GAAP.
(b) Each Borrower, upon demand of Lender, will furnish to Lender evidence
of payment of the assessments, taxes, charges, levies, liens and claims and
will authorize the appropriate governmental official to deliver to Lender at
any time a written statement of any assessments, taxes, charges, levies, liens
and claims against such Borrower's properties, income, or profits.
Section 6.5 Additional Information. Furnish to Lender such additional
information and statements, lists of assets and liabilities, agings of
receivables and payables, inventory schedules, budgets, forecasts, financial
information on principal suppliers of each Borrower, and other reports with
respect to such Borrower's financial condition and business operations as
Lender may request from time to time, including, without limitation, reports
with respect to such Borrower's accounts payable within 30 days after the end
of each calendar month.
Section 6.6 Insurance. Maintain fire and other risk insurance, public
liability insurance, and such other insurance as Lender may require with
respect to such Borrower's properties and operations, in form, amounts,
coverages and with insurance companies reasonably acceptable to Lender. If such
Borrower fails to provide any required insurance or fails to continue such
insurance in force, Lender may, but shall not be required to, obtain such
insurance at such Borrower's expense, and the cost of such insurance will be
added to Borrowers' Obligations. Each Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates of insurance
in form and substance satisfactory to Lender, including stipulations that
coverages will not be canceled or changed without at least 10 days' prior
written notice to Lender. In connection with all policies covering any of the
Collateral, each Borrower will provide Lender with such loss payable or other
endorsements as Lender may require; and each such policy in any event shall
contain a standard non-contributing, non-reporting mortgagee or loss payee
clause naming Lender as mortgagee and loss payee. Each liability insurance
policy shall name Lender as additional insured. At Lender's request each
Borrower shall furnish to Lender from time to time reports on each existing
insurance policy including, without limitation, the following: (a) the name of
the insurer; (b) the risks insured; (c) the amount of the policy; (d) the
properties insured; (e) the then current property values on the basis of which
insurance has been obtained, and the manner of determining those values; (f)
the expiration date of the policy; and (g) such additional information as
Lender may request.
Section 6.7 Other Agreements. Comply with all terms and conditions of
all other agreements, whether now or hereafter existing, between such Borrower
and any other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
Section 6.8 Performance. Perform and comply with all terms, conditions,
and provisions set forth in this Agreement and in the other Financing Documents
and in all Export Orders (including, without limitation, the delivery of the
goods required thereby free and clear of defects and prior to the deadline
specified therein) in a timely manner, and promptly notify Lender (including,
without limitation, providing such notice of events as is required pursuant to
the Borrower Agreement) of the occurrence of any event which constitutes or may
constitute an Event of Default under this Agreement or a default under any of
the other Financing Documents or Export Orders. Such Borrower shall, as soon as
possible, take all actions necessary to entitle such Borrower to receive any
payments due under all Export Orders, including, without limitation, the timely
drawing of drafts under any letters of credit issued for the benefit of such
Borrower in connection therewith and the timely presentation of any claims
under any insurance policy issued by, or financing guaranteed by, Ex-Im Bank or
any other insurer or guarantor.
Section 6.9 Operations. Conduct its business affairs in a reasonable
and prudent manner and in material compliance with all applicable federal,
state, municipal, and foreign laws, ordinances, rules and regulations
respecting its properties, charters, businesses and operations, including
without limitation, compliance with the Americans with Disabilities Act, all
applicable environmental statutes, rules, regulations and ordinances and with
all minimum funding standards and other requirements of ERISA and other laws
applicable to such Borrower's employee benefit plans.
Section 6.10 Export-Related Borrowing Base Certificates. In addition to
deliveries at the time each request for a Credit Accommodation is made by such
Borrower (if required by Lender) or as otherwise required by Lender and Ex-Im
Bank, and so long as there are any Credit Accommodations outstanding under the
Loan, deliver to Lender no later than the 20th day of each calendar month an
Exported-Related Borrowing Base Certificate, along with such supporting
documentation as Lender may request. Without limiting the generality of the
foregoing, each Export-Related Borrowing Base Certificate shall include or be
accompanied by (a) in the event such Borrower is requesting Credit
Accommodations, a copy of the Export Order(s) (or, for Revolving Loan
Facilities, if permitted in writing by Lender, a written summary of the Export
Orders) and related invoice(s) against which such Borrower is requesting Credit
Accommodations, and copies of all other documentation pursuant to which the
Buyer's obligations in respect of the Export Order(s) are evidenced, secured or
guaranteed, and (b) in all cases, an Accounts Receivable aging report and
Inventory schedule as described in the Subsection titled "Collateral Records
and Reports," reconciled directly to such Borrower's month-end Accounts
Receivable report, its month-end Inventory schedule, and its general ledger,
adjusted for intra-month sales, receipts, credits and other adjustments.
Section 6.11 Additional Assurances. Execute, acknowledge and deliver, or
cause to be executed, acknowledged or delivered, to Lender and Ex-Im Bank such
promissory notes, mortgages, deeds of trust, security agreements, financing
statements, instruments, documents and other agreements as Lender or Ex-Im Bank
may reasonably request to evidence and secure the Loan, to perfect the Liens or
otherwise facilitate the performance of this Agreement and any of the other
Financing Documents.
Section 6.12 Compliance Certificate. Unless waived in writing by Lender,
provide Lender within 30 days after the end of each month with a certificate
substantially in the form of Exhibit C hereto, executed by such Borrower's
chief financial officer or other officer or person acceptable to Lender (a)
certifying that the representations and warranties set forth in this Agreement
and the other Financing Documents are true and correct as of the date of the
certificate and that, as of the date of the certificate, no Event of Default
exists under this Agreement, and (b) demonstrating compliance with all
financial covenants and ratios set forth in this Agreement.
ARTICLE VII
NEGATIVE COVENANTS
Section 7.1 Financial Covenants. The Borrowers covenant and agree with
Lender that while this Agreement is in effect and until all Borrowers'
Obligations are fully paid and performed, each Borrower shall not, without the
prior written consent of Lender and, to the extent required, Ex-Im Bank:
(a) Permit its Tangible Net Worth as of the last day of each fiscal
quarter to be in an amount less than [$(200,000)]; and
(b) (i) For the period commencing on October 1, 2000 and ending on
December 31, 2000, permit its EBITDA to be less than minus $5,000,000; (ii) For
the period commencing on January 1, 2001 and ending on March 31, 2001, permit
its EBITDA to be less than $400,000; (iii) For
- 7 -
8
the period commencing on April 1, 2001 and ending on June 30, 2001, permit its
EBITDA to be less than $500,000; (iv) For the period commencing on July 1, 2001
and ending on September 30, 2001, permit its EBITDA to be less than $500,000.
Section 7.2 Maintain Basic Business. Engage in any business activities
substantially different than those in which such Borrower is presently engaged.
Section 7.3 Continuity of Operations. Cease operations, liquidate,
dissolve or merge or consolidate with or into any other entity or make any
material change in its corporate structure or identity, or enter into any
agreement to do any of the following.
Section 7.4 Indebtedness. Create, incur or assume additional indebtedness
for borrowed money, including capital leases, or guarantee any indebtedness
owing by others, other than (a) current unsecured trade debt incurred in the
ordinary course of business, (b) indebtedness owing to Lender, (c) borrowings
outstanding as of the Effective Date and disclosed to Lender in writing, and (d)
any borrowings otherwise approved by Lender in writing.
Section 7.5 Transfer of Assets and Liens. Transfer, sell or otherwise
dispose of any of such Borrower's assets other than in the ordinary course of
business, or mortgage, assign, pledge, or grant a security interest in or
otherwise encumber such Borrower's assets.
Section 7.6 Change in Management. Permit a change in the senior executive
or management personnel of such Borrower.
Section 7.7 Transfer of Ownership. Permit the sale, pledge or other
transfer of any ownership interest in such Borrower.
Section 7.8 Other Corporate Change: (a) liquidate and dissolve, (b) sell
or dispose of any interest in any of its subsidiaries, or permit any of its
subsidiaries to issue additional equity other than to such Borrower, or (c) be a
party to any merger or consolidation.
Section 7.9 Investments and Loans. Make any substantial investment in or
loan to, or purchase, create, form or acquire any substantial interest in, any
other Person or enterprise including, without limitation, any Affiliate
(including, without limitation, an officer or director) of such Borrower other
than loans to Affiliates outstanding as of the Effective Date and disclosed to
and acknowledged by Lender in writing.
Section 7.10 Dividends. Pay any dividends of such Borrower's capital
stock or purchase, redeem, retire or otherwise acquire any of Borrower's capital
stock or alter or amend such Borrower's capital structure; provided, however, if
such Borrower is and becomes a Subchapter S corporation, such Borrower may make
distributions to each of its shareholders equal to each shareholder's additional
federal and state income tax liability attributable to such shareholder's
ownership of capital stock in such Borrower.
Section 7.11 Affiliates. Enter into any transaction, including, without
limitation, the purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate (including, without limitation, any officer
or director) of such Borrower, except in the ordinary course of and pursuant to
the reasonable requirements of such Borrower's business and upon fair and
reasonable terms no less favorable than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate of such Borrower.
Section 5.11 Use of Proceeds. Use any Loan proceeds for (i) the
purchasing of fixed assets, (ii) capital expenditures or, (iii) the purchasing
or carrying of "margin stock" as defined in Regulation U issued by the Board of
Governors of the Federal Reserve System.
ARTICLE VIII
REMEDIES
Section 8.1 Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:
(a) Failure of Borrowers to make any payment within five (5) days after the
date when due on any of Borrowers' Obligations, including, without limitation,
any mandatory prepayments of Borrowers' Obligations from the Proceeds of or
comprising Export-related Accounts Receivable and Export-related Inventory;
(b) Failure of any Borrower or Guarantor to comply with or to perform when
due any other term, obligation, covenant or condition contained in this
Agreement, the Note, the Borrower Agreement or in any of the other Financing
Documents, and such failure remains uncured or uncorrected for a period of five
(5) days;
(c) Failure of any Borrower or Guarantor to pay when due any amount payable
to Lender under any other loan or credit accommodation to such Borrower or
Guarantor;
(d) The occurrence of any default or event of default under any other
agreement now existing or hereafter arising between Lender and any Borrower or
Guarantor;
(e) Any warranty, representation or statement made in or furnished to
Lender under this Agreement or the other Financing Documents is false or
misleading in any material respect when made or furnished, or becomes false or
misleading at any time thereafter;
(f) The occurrence of any event which permits the acceleration of the
maturity of any indebtedness owing by any Borrower or Guarantor to any third
party under any agreement or undertaking, or any such indebtedness shall not be
paid as and when due;
(g) Any Borrower or Guarantor (i) applies for, consents to or suffers the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
liquidator or similar fiduciary of such Borrower or Guarantor, or of all or a
substantial part of such Borrower's or Guarantor's property or calls a meeting
of such Borrower's or Guarantor's creditors, (ii) admits in writing such
Borrower's or Guarantor's inability, or is generally unable, to pay such
Borrower's or Guarantor's debts as they become due or ceases operations of such
Borrower's or Guarantor's present business, (iii) makes a general assignment for
the benefit of creditors, (iv) commences a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as
bankrupt or insolvent, (vi) files a petition seeking to take advantage of any
other law providing for the relief of debtors, (vii) acquiesces to, or fails to
have dismissed within 30 days, any petition filed against it in any involuntary
case under such bankruptcy laws, (viii) is the subject of any proceeding for the
liquidation of its assets or dissolution, or (ix) takes any action for the
purpose of effecting any of the foregoing.
(h) Any change in ownership of 25% or more of the capital stock of either
Borrower, or either Borrower becomes the subject of any merger or consolidation.
(i) Commencement of foreclosure or forfeiture proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any
creditor of a Borrower or Guarantor, or by any governmental agency; or the
issuance of any levy, assessment, attachment, seizure or Lien, other than a
Permitted Lien, against any of the Collateral which is not stayed or lifted
within 15 days.
(j) The occurrence of any event of default under the Ex-Im Bank Guarantee
or the Ex-Im Bank Guarantee ceases to be in effect for any reason whatsoever
without Lender's prior written consent, including, without limitation, Borrowers
failure to pay all fees due Ex-Im Bank.
-8-
9
(k) Any material delay occurs in any Borrower's performance of its
obligations under any Export Order, unless such delay is due to force majeure
and such Borrower is able to satisfy Lender that the delay will not cause a
default under the applicable Export Order or diminish the Buyer's payment
obligations thereunder; or a material adverse change occurs in the financial
condition of any supplier to such Borrower.
(l) An event occurs which has had or could reasonably be expected to have
a Material Adverse Effect.
(m) Any Lien in any of the Collateral granted or intended by the Financing
Documents to be granted to Lender ceases to be a valid, enforceable, perfected,
first priority Lien (or a lesser priority if expressly permitted pursuant to
Section 6 of the Loan Authorization Notice) subject only to Permitted Liens.
(n) Any material provision of any Financing Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms.
(o) Any litigation is filed against any Borrower or Guarantor which has had
or could reasonably be expected to have a Material Adverse Effect and such
litigation is not withdrawn or dismissed within 30 days of the filing thereof.
Section 8.2 Effect of an Event of Default. If any Event of Default shall
occur, and unless such Event of Default shall be cured to the satisfaction of
Lender and Ex-Im Bank, Lender may, at its option, without further notice or
demand, (a) accelerate the Commitment Termination Date, whereupon the Commitment
shall terminate as of the accelerated Commitment Termination Date; (b) terminate
all other commitments and obligations of Lender to make loans or other credit
accommodations to Borrowers, if any; (c) declare the Loan and any other
indebtedness of Borrowers (contingent or otherwise) to Lender immediately due
and payable; (d) refuse to make or incur any additional Credit Accommodations
under this Agreement or the Note; (e) assemble, sell, lease, buy, transfer or
otherwise dispose of the Collateral or the Proceeds thereof; and (f) exercise
all the rights and remedies provided in this Agreement, the Note or in any of
the other Financing Documents or available at law, in equity, or otherwise;
provided, however, that if any Event of Default of the type described in the
Subsection 8.1(g) shall occur, the Loan and any other indebtedness of Borrowers
to Lender shall automatically become fully due and payable, without any notice,
demand or action by Lender. Except as may be prohibited by applicable law, all
of Lender's rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of any Borrower or Guarantor shall not
affect Lender's right to declare a default and to exercise its rights and
remedies.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments. This Agreement, together with the other
Financing Documents, constitute the entire understanding and agreement of the
parties as to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing and
signed by the party or parties sought to be charged or bound by the alteration
or amendment. This Agreement and the other Financing Documents supersede all
existing agreements, oral or written, previously entered into between Borrowers
and Lender with respect to the Loan unless Borrowers and Lender agree in
writing to the contrary.
Section 9.2 Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Section 9.3 Consent to Loan Participation. Borrowers agree and consent
to Lender's sale or transfer, at Lender's sole discretion, whether now or
later, of one or more participation interests in the Loan to one or more
purchasers, whether related or unrelated to Lender. Lender may provide, without
any limitation whatsoever, to any one or more purchasers, potential purchasers,
or affiliates of Lender, any information or knowledge Lender may have about
Borrowers or about any other matter relating to the Loan, and Borrowers hereby
waive any rights to privacy it may have with respect to such matters. Borrowers
additionally waive any and all notices of sale of participation interests, as
well as all notices of any repurchase of such participation interests.
Section 9.4 Notices. All communications and notices required to be
given under this Agreement shall be hand delivered or sent by nationally
recognized overnight courier or United States mail, certified or registered,
postage prepaid, addressed to the party to whom the notice is to be given at
the address shown below. All such communications and notices shall be effective
upon delivery. Any party may change its address for notices under this
Agreement by giving formal written notice to the other parties, specifying that
the purpose of the notice is to change the party's address. To the extent
permitted by applicable law, notice to any Borrower will constitute notice to
all Borrowers:
if to US Data:
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
ATTN: Mr. Xxxxxxxx Xxxxxx
if to eMake:
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
ATTN: Mr. Xxxxxxxx Xxxxxx
if to Lender:
The Chase Manhattan Bank
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
ATTN: Xx. Xxx Xxxxxx
-9-
10
with copy to:
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
ATTN: Xxxxxxx X. Xxxxxxx
if to Ex-Im Bank:
Export-Import Bank of the United States
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
ATTN: Vice President, Business Credit Division
Section 9.5 Survival. All covenants, agreements, representations and
warranties of Borrowers and any Guarantor made herein and in the other Financing
Documents and in the certificates, instruments and other documents delivered
pursuant hereto or thereto shall survive the making or incurring of Credit
Accommodations hereunder, and shall continue in full force and effect until all
of Borrowers' Obligations have been paid and performed in full.
Section 9.6 Successor and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party; and all covenants, promises and
agreements by or on behalf of Borrower which are contained in this Agreement or
in the other Financing Documents shall inure to the benefit of the successors
and assigns of Lender and Ex-Im Bank, which is a third-party beneficiary of this
Agreement and each of the other Financing Documents to which it is not a direct
party. Borrowers may not assign any interest that it may have under this
Agreement, including, without limitation, the right to receive the benefit of
the Loan to be extended hereunder, without the prior written consent of Lender
and Ex-Im Bank. Any assignment made or attempted by Borrowers without the prior
written consent of Lender and Ex-Im Bank shall be void and of no effect. No
consent by Lender and Ex-Im Bank to an assignment by any Borrower shall release
such Borrower as the party primarily obligated and liable under the terms of
this Agreement unless such Borrower shall be released specifically by Lender and
Ex-Im Bank in writing. No consent by Lender and Ex-Im Bank to an assignment
shall be deemed to be a waiver of the requirement of prior written consent by
Lender and Ex-Im Bank with respect to each and every further assignment and as a
condition precedent to the effectiveness of such assignment. Lender may assign
its interest in any or all of the Financing Documents to any Person, including
Ex-Im Bank, without the consent of or notice to Borrowers, any Guarantor, or any
other Person, upon such terms as Lender in its sole discretion deems
appropriate.
Section 9.7 Payment of Fees and Expenses. At Lender's discretion,
Borrowers will pay all out-of-pocket expenses, including, without limitation,
the fees and disbursements of legal counsel employed by Lender, incurred by
Lender in connection with (a) the preparation and negotiation of this Agreement
and the other Financing Documents, (b) the making or incurring of Credit
Accommodations by Lender, (c) the protection of the Collateral and any other
security for the repayment of Borrowers' Obligations, and (d) the enforcement
and protection of the rights of Lender in connection with this Agreement or any
of the other Financing Documents. Prior to Lender's making or incurring any
Credit Accommodations hereunder, Borrowers shall pay to Lender, in consideration
for the establishment of the Commitment and as an additional condition precedent
to the making or incurring of Credit Accommodations, the Ex-Im Bank facility fee
determined in accordance with the Loan Authorization Notice and all other fees
and expenses due Lender.
Without limiting the generality of the foregoing, Borrowers shall pay
or cause to be paid to the Lender the following fees:
(i) a facility fee in the amount of $37,500, payable on the Effective Date
and at each renewal hereof; and
(ii) a fee for the issuance of each Letter of Credit under this Agreement
which shall be the greater of (a) one and one half of one percent (1.5%) per
annum, calculated on the face amount of such Letter of Credit, or (b) $1,000,
together with all of Lender's out-of-pocket expenses related to the issuance of
each such Letter of Credit, payable upon submission of each such Letter of
Credit Application.
Section 9.8 Applicable Law; Jurisdiction; Consent to Service of
Process. Except as hereinafter expressly provided, this Agreement is governed
by and shall be construed in accordance with the laws of the State of Texas;
provided, however, that Chapter 346 of the Texas Finance Code, which regulates
certain revolving credit loan accounts, shall not apply to the transactions
contemplated by this Agreement and the Note executed in connection herewith. The
Ex-Im Bank Guarantee is governed by New York law. Accordingly, notwithstanding
any provision to the contrary contained herein or in any of the other Financing
Documents, to the extent, but only to the extent, necessary to assure full
satisfaction of and compliance with all terms and conditions of Ex-Im Bank's
guaranty of Borrower's Obligations under the Ex-Im Bank Guarantee and to
preserve Lender's rights thereunder, this Agreement and each of the other
Financing Documents shall be governed by and construed in accordance with the
laws of the State of New York. Lender and Borrowers hereby submit to the
non-exclusive jurisdiction of any New York court or federal court sitting in New
York City over any suit, action or proceeding arising out of or relating to this
Agreement. Final judgment in any such suit, action or proceeding brought in any
such court shall be conclusive and binding upon each Borrower and may be
enforced in any court to the jurisdiction of which such Borrower is subject, by
a suit upon the judgment.
Section 9.9 No Liability of Lender. Neither Lender nor Ex-Im Bank
shall be liable for any act or omission by it pursuant to the provisions of this
Agreement, in the absence of fraud or gross negligence. Borrowers hereby agree
that neither Lender nor Ex-Im Bank shall be chargeable for any negligence,
mistake, act or omission of any accountant, examiner, agency or attorney
employed by it in making examinations, investigations or collections, or
otherwise in perfecting, maintaining, protecting or realizing upon any lien or
Security Interest in the Collateral or any other interest in any security for
Borrowers' Obligations. Neither Lender nor Ex-Im Bank shall incur any liability
to Borrower or to any other party in connection with the acts or omissions of
Lender or Ex-Im Bank in reliance upon any certificate or other paper believed by
Lender or Ex-Im Bank to be genuine or with respect to any other thing which
Lender or Ex-Im Bank may do or refrain from doing, unless such act or omission
amounts to fraud or gross negligence.
Section 9.10 Indemnification. Borrowers agrees to protect, indemnify,
defend and hold harmless Lender and Ex-Im Bank from and against any and all
claims, damages, losses, liabilities, costs or expenses (including, without
limitation, attorneys' fees) whatsoever which Lender and Ex-Im Bank may, at any
time, sustain or incur by reason of or in consequence of or arising out of
extending the Loan to Borrowers, the making or incurring of Credit
Accommodations, or the issuance of a guaranty of Borrowers' Obligations, as the
case may be; it being the intention of the parties that this Agreement shall be
construed and applied to protect, indemnify, defend and hold harmless Lender and
Ex-Im Bank against any and all risks involved in the transactions contemplated
by this Agreement and the other Financing Documents, all of which risks are
hereby assumed by Borrower. The provisions of this Section shall survive the
expiration or termination of this Agreement, the other Financing Documents, and
the Commitment and the payment and performance of Borrowers' Obligations.
Section 9.11 No Partnership. Nothing contained in this Agreement
shall be construed in a manner to create any relationship among Borrowers,
Lender and Ex-Im Bank other than the relationship of borrower, lender and credit
enhancement provider, and Borrowers. Lender and Ex-Im Bank shall not be
considered partners or co-venturers for any purpose on account of this
Agreement.
Section 9.12 Controlling Agreement. Borrowers acknowledge and agree
that (a) the Borrower Agreement contains additional representations, terms,
covenants and conditions related to Borrowers and the Loan, and (b) as between
Lender and Borrowers this Agreement and the Borrower Agreement together govern
the establishment of the Loan as a Loan Facility guaranteed pursuant to the
Ex-Im Bank Guarantee and the
-10-
11
making and incurring of Credit Accommodations under the Loan. In the event any
of the representations, terms, covenants, or conditions contained in this
Agreement conflict with those contained in the Borrower Agreement, then as
between Lender and Borrowers, the more stringent provisions of each with respect
to Borrowers shall govern and prevail.
Section 9.13 Waiver of Trial by Jury. EACH BORROWER AND LENDER HEREBY
WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWERS AND LENDER
MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT OR ANY
OF THE OTHER FINANCING DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH
ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH
BORROWER AND LENDER, AND EACH BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS
OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH BORROWER FURTHER
REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO BE REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.
Section 9.14 Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity, however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in all
other respect shall remain valid and enforceable.
Section 9.15 Rules of Construction. For purposes of this Agreement, the
following additional rules of construction shall apply, unless specifically
indicated to the contrary: (a) wherever from the context if appears appropriate,
each term stated in either the singular or plural shall include the singular and
the plural, and pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, the feminine and the neuter; (b) the term "or" is
not exclusive; (c) the term "including" (or any form thereof) shall not be
limiting or exclusive; (d) all references to statues and related regulations
shall include any amendments of same and any successor statues and regulations;
(e) the words "this Agreement", "herein", "hereof", "hereunder" or other words
of similar import refer to this Agreement as a whole including the exhibits
hereto as the same may be amended, modified or supplemented; (f) all references
in this Agreement to sections, subsections, paragraphs and exhibits shall refer
to the corresponding sections, subsections, paragraphs and exhibits of or to
this Agreement; and (g) all references to any instruments or agreements,
including references to any of the Financing Documents, shall include any and
all modifications, amendments and supplements thereto and any and all
restatements, extensions or renewals thereof to the extent permitted under this
Agreement.
Section 9.16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed and original and all of which
together shall constitute the same document. Signature pages may be detached
from the counterparts to a single copy of this Agreement to physically form one
document.
Section 9.17. Time is of the Essence. Time is of the essence in the
performance of this Agreement.
Section 9.18 Waiver. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of a
provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any course of
dealing between Lender and any Borrower, or between Lender and any Guarantor,
shall constitute a waiver of any of Lender's rights or of any obligations of
such Borrower or Guarantor as to any future transactions. Whenever the consent
of Lender is required under this Agreement, the granting of such consent by
Lender in any instance shall not constitute continuing consent in subsequent
instances where such consent is required, and in all cases such consent may be
granted or withheld in the sole discretion of Lender.
Section 9.19. Usury not intended. Borrowers and Lender intend to conform
strictly to applicable usury laws. Therefore, the total amount of interest (as
defined under applicable law) contracted for, charged or collected under this
Agreement or any other Loan Document will never exceed the Highest Lawful Rate.
If Bank contracts for, charges or receives any excess interest, it will be
deemed a mistake. Bank will automatically reform the Loan Document or charge to
conform to applicable law, and if excess interest has been received, Bank will
either refund the excess to Borrowers or credit the excess on any unpaid
principal amount of the Note or any other Loan Document. All amounts
constituting interest will be spread throughout the full term of the Loan
Document or applicable Note in determining whether interest exceeds lawful
amounts.
SECTION 9.20 ENTIRE AGREEMENT. PURSUANT TO SECTION 26.02 OF THE TEXAS
BUSINESS AND COMMERCIAL CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN
THE LOAN AGREEMENT EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN
AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S
AUTHORIZED REPRESENTATIVE. THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN
AGREEMENT SUBJECT TO THE PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE
WRITTEN LOAN AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE
SUPERSEDED BY AND MERGED INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
-11-
12
EXECUTED as of the 15th day of December, 2000.
BORROWERS:
UNITED STATES DATA CORPORATION
By: /s/ XXXXXX X. MERRY
------------------------------------------
Name: Xxxxxx X. Merry
----------------------------------------
Title: President and Chief Executive Officer
---------------------------------------
eMAKE CORPORATION
By: /s/ XXXXXX X. MERRY
------------------------------------------
Name: Xxxxxx X. Merry
----------------------------------------
Title: Chairman
---------------------------------------
LENDER:
THE CHASE MANHATTAN BANK
By: /s/ XXX XXXXXX
------------------------------------------
Authorized Officer
Vice President
13
EXHIBIT A
BORROWER AGREEMENT
-14-
14
EXHIBIT B
LOAN AUTHORIZATION NOTICE
-15-
15
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
-16-
16
FORM OF
COMPLIANCE CERTIFICATE
THE CHASE MANHATTAN BANK ("LENDER"), UNITED STATES DATA CORPORATION ("US
DATA"), AND eMAKE CORPORATION ("EMAKE," AND TOGETHER WITH US DATA, "BORROWERS"
AND EACH A "BORROWER"), EXECUTED AS OF DECEMBER 15, 2000 (THE "AGREEMENT"), AS
AMENDED, RESTATED AND SUPPLEMENTED.
REPORTING REQUIREMENTS, FINANCIAL COVENANTS AND COMPLIANCE
CERTIFICATE FOR CURRENT REPORTING PERIOD ENDING _________ ("END DATE")
A. REPORTING PERIOD. THIS EXHIBIT WILL BE IN PROPER FORM AND SUBMITTED
WITHIN 30 DAYS AFTER THE END OF EACH CALENDAR MONTH INCLUDING THE LAST
REPORTING PERIOD OF THE FISCAL YEAR AND WITH THE FISCAL YEAR END
FINANCIAL STATEMENT, BORROWERS' FISCAL YEAR ENDS ON 12/31/00.
-------------------------------------------------------------------------------------------------------------------- -------------
B. Financial Reporting. Borrower will provide the following financial information within the times indicated: Compliance
Certificate
(Circle)
----------------------- ------------------------------------ ----------------------------------------------------- -------------
WHO WHEN DUE WHAT
----------------------- ------------------------------------ ----------------------------------------------------- -------------
BORROWER (i) Within 90 days of fiscal year Annual audited financial statements (balance sheet, Yes No
end income statement, cash flow statement) by independent
certified public accountants satisfactory to Bank,
accompanied by Compliance Certificate
----------------------- ------------------------------------ ----------------------------------------------------- -------------
(ii) Within 30 days of end of each Unaudited interim financial statements accompanied by Yes No
month, including final period of Compliance Certificate
fiscal year.
----------------------- ------------------------------------ ----------------------------------------------------- -------------
(iii) Within 30 days after filing Copy of corporate income tax return Yes No
with the IRS, but no later than
May 15 of each year
----------------------- ------------------------------------ ----------------------------------------------------- -------------
(iv) no later than the 20th day of Borrowing Base Certificate Yes No
each calendar month
----------------------- ------------------------------------ ----------------------------------------------------- -------------
(v) Until the 30th day of each month (a) Accounts Receivable aging report for the Yes No
immediately preceding month, (b) information
regarding status of completion of Export Orders and
(c) such other information, reports, contracts,
invoices and other data relating to the Collateral as
Lender may request.
----------------------- ------------------------------------ ----------------------------------------------------- -------------
GUARANTOR (vi) Within 30 days after filing Copy of corporate income tax return
with IRS, but no later than May 15
of each year.
----------------------- ------------------------------------ ----------------------------------------------------- -------------
------------------------------------------------------------- ----------------------------------------------------- -------------
C. FINANCIAL COVENANTS. Borrowers will comply with the COMPLIANCE CERTIFICATE
following financial covenants, defined in accordance with
GAAP and the definitions in the Agreement, and incorporating
the calculation adjustments indicated on the Compliance
Certificate:
------------------------------------------------------------- ----------------------------------------------------- -------------
REQUIRED ACTUAL REPORTED Compliance
Except as specified otherwise, each covenant will be (circle)
maintained at all times and reported for each Reporting For Current Reporting Period/as of the End Date
Period or as of each Reporting Period End Date, as Yes No
appropriate:
------------------------------------------------------------- ----------------------------------------------------- -------------
1. Maintain a Tangible Net Worth, as adjusted of at least Stockholders' Equity $___________
$(200,000) [ILLEGIBLE] Minus: Goodwill $___________ Yes No
Other Intangible Assets $___________
Loans Advances to
Equity holders $___________
Loans to Affiliates $___________
Plus: Subordinated Debt $___________
= Tangible Net Worth $___________
------------------------------------------------------------- ----------------------------------------------------- -------------
2. Have a minimum EBITDA (Cash Flow before interest Net Income $___________
and income tax expense) for the 3 months ending at each (after interest & tax expense) Yes No
End Date listed below of at least the following amounts:
Plus: Depreciation $___________
12/31/2000 (5,000,000) Amortization $___________
3/31/2001 400,000 Minus: Nonrecurring items $___________
6/30/2001 500,000 Equals: Cash Flow $___________
9/30/2001 500,000 Cash Flow $___________
Plus: Tax Expense $___________
Interest Expense $___________
Equals: EBIDTA of $___________
------------------------------------------------------------- ----------------------------------------------------- -------------
The above summary represents some of the covenants and agreements contained in
the Agreement and does not in any way restrict or modify the terms and
conditions of the Agreement. In case of conflict between this Exhibit C and the
Agreement, the agreement shall control.
The undersigned hereby certifies that the above information and computations
are true and correct and not misleading as of the date hereof and that since
the date of Borrower's most recent Compliance Certificate (if any):
-17-
17
1. Events of Default
No default or Event of Default has occurred or been
discovered since the date of the most recent Compliance
Certificate.
Since the date of the most recent Compliance Certificate, a
default or Event of Default (as described below) has occurred
or has been discovered:
was cured on ____________________.
was waived by Lender in writing on._____________.
is continuing.
Description of Event of Default:
--------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
2. Representations and Warranties
The representations and warranties set forth in the Agreement and the
other Financing Documents are true and correct as of the date hereof.
Executed this ___ day of ______________ 200_.
BORROWERS:
UNITED STATES DATA CORPORATION eMAKE CORPORATION
By: By:
---------------------------------- -------------------------------
Name: Name:
-------------------------------- -----------------------------
Title: [Chief Financial Officer] Title: [Chief Financial Officer]
By: By:
---------------------------------- -------------------------------
Name: Name:
-------------------------------- -----------------------------
Title: Title:
------------------------------- ----------------------------
Address: 0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000
-18-
