EXHIBIT 10.2
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XXX.XXXXXXXX CORPORATION
COMERICA BANK - CALIFORNIA
LOAN AND SECURITY AGREEMENT
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This LOAN AND SECURITY AGREEMENT is entered into as of August 11, 1999 by and
among COMERICA BANK-CALIFORNIA ("Bank") and XXX.Xxxxxxxx Corporation
("Borrower").
RECITALS
Borrower desires to obtain credit from Bank and Bank desires to provide credit
to Borrower. This Agreement sets forth the terms on which Bank will advance
credit to Borrower, and Borrower will repay the amounts owing to Bank.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING DEFINITIONS:
"Accounts" means all presently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to a
Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the rendering of
services by a Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower and Borrower's Books relating
to any of the foregoing.
"Advance" or "Advances" means a cash advance under the Revolving
Facility.
"Affiliate" means, with respect to any Person, any Person that
owns or controls directly or indirectly such Person, any Person that controls or
is controlled by or is under common control with such Person, and each of such
Person's senior executive officers, directors, and partners.
"Bank Expenses" means all reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
and Bank's reasonable attorneys' fees and expenses incurred in amending,
enforcing or defending the Loan Documents (including fees and expenses of
appeal), whether or not suit is brought.
"Borrower's Books" means all of a Borrower's books and records
including: ledgers; records concerning Borrower's assets or liabilities, the
Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment, containing such information.
"Borrowing Base" means an amount equal to eighty percent (80%) of
Eligible Accounts, as determined by Bank with reference to the most recent
Borrowing Base Certificate delivered by Borrower.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which banks in the State of California are authorized or required
to close and if such day relates to any LIBOR Rate Extensions, means any such
day on which dealings in Dollar deposits are conducted by and between banks in
the London interbank market.
"Change in Control" means a transaction in which any "person" or
"group" (within the meaning of Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) becomes the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or indirectly, of a
sufficient number of shares of all classes of stock then outstanding of Borrower
ordinarily entitled to vote in the election of directors, empowering such
"person" or "group" to elect a majority of the Board of Directors of Borrower,
who did not have such power before such transaction..
"Closing Date" means the date of this Agreement.
"Code" means the California Uniform Commercial Code.
"Collateral" means the property described on EXHIBIT A attached
hereto.
"Committed Revolving Line" means a credit extension of Fifteen
Million Dollars ($15,000,000).
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to (i) any indebtedness, lease, dividend, letter of credit or other
obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable; (ii) any obligations with respect to undrawn
letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term "Contingent Obligation" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.
"Copyrights" means any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.
"Credit Extension" means each Advance, the Term Loan or any other
extension of credit by Bank for the benefit of a Borrower hereunder.
"Current Assets" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included as current assets on the
consolidated balance sheet of a Borrower and its Subsidiaries as at such date.
"Current Liabilities" means, as of any applicable date, all
amounts that should, in accordance with GAAP, be included as current liabilities
on the consolidated balance sheet of a Borrower and its Subsidiaries, as at such
date, including all Indebtedness that is payable upon demand or within one year
from the date of determination thereof unless such Indebtedness is renewable or
extendable at the option of a Borrower or any Subsidiary to a date more than one
year from the date of determination.
"Daily Balance" means the amount of the Obligations owed at the
end of a given day.
"Effective Tangible Net Worth" means at any date as of which the
amount thereof shall be determined, the financial statement net worth of a
Person on a consolidated basis, minus intangible assets, plus Subordinated Debt,
on a consolidated basis determined in accordance with GAAP.
"Eligible Accounts" means those Accounts that arise in the
ordinary course of a Borrower's business that comply with all of the
representations and warranties to Bank set forth in Section 5.4; PROVIDED, that
standards of eligibility may be fixed and revised from time to time by Bank as a
consequence of any Collateral audits done pursuant to Section 6.3 in Bank's
reasonable judgment and upon notification thereof to Borrower in accordance with
the provisions hereof. Unless otherwise agreed to by Bank, Eligible Accounts
shall not include the following:
(a) Accounts that the account debtor has failed to pay within
ninety (90) days of invoice date;
(b) Accounts with respect to an account debtor, twenty-five
percent (25%) or more of whose Accounts the account debtor has failed to pay
within ninety (90) days of invoice date.
(c) Accounts with respect to which the account debtor is an
officer, employee, or agent of Borrower;
(d) Accounts with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on approval, xxxx and hold,
or other terms by reason of which the payment by the account debtor may be
conditional;
(e) Accounts with respect to which the account debtor is an
Affiliate of Borrower;
(f) Accounts with respect to which the account debtor does not
have its principal place of business in the United States and is not supported
by one or more letters of credit in an amount and of a tenor, and issued by a
financial institution, acceptable to Bank, except for Eligible Foreign Accounts;
(g) Accounts with respect to which the account debtor is the
United States or any agency or subdivision thereof;
(h) Accounts with respect to which Borrower is liable to the
account debtor for goods sold or services rendered by the account debtor to such
Borrower, but only to the extent of any amounts owing to the account debtor
against amounts owed to such Borrower;
(i) Accounts with respect to an account debtor, including
Subsidiaries and Affiliates of such account debtor, whose total obligations to
Borrower exceed twenty percent (20%) of all Accounts, to the extent such
obligations exceed the aforementioned percentage;
(j) Accounts with respect to which the account debtor disputes
liability or makes any claim with respect thereto as to which Bank believes, in
its sole discretion, that there may be a basis for dispute (but only to the
extent of the amount subject to such dispute or claim), or is subject to any
Insolvency Proceeding, or becomes insolvent, or goes out of business; and
(k) Accounts the collection of which Bank reasonably determines
to be doubtful.
"Eligible Foreign Accounts" means Accounts with respect to which
the account debtor does not have its principal place of business in the United
States and that Bank approves on a case-by-case basis.
"Equipment" means all present and future machinery, equipment,
tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.
"Event of Default" has the meaning assigned in Article 8.
"GAAP" means generally accepted accounting principles.
"Indebtedness" means (a) all indebtedness for borrowed money or
the deferred purchase price of property or services (other than trade payables),
(b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.
"Insolvency Proceeding" means any proceeding commenced by or
against any person or entity under any provision of the United States Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.
"Intellectual Property Collateral" means:
(a) Copyrights, Trademarks and Patents;
(b) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to Borrower
now or hereafter existing, created, acquired or held;
(d) Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, with the right, but not
the obligation, to xxx for and collect such damages for said use or infringement
of the intellectual property rights identified above;
(e) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such license or rights;
(f) All amendments, renewals and extensions of any of the
Copyrights, Trademarks or Patents; and
(g) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.
"Interest Period" means for each LIBOR Rate Extension, a period
of approximately one, two, three or six months as Borrower may elect, PROVIDED
that the last day of an Interest Period for a LIBOR Rate Extension shall be
determined in accordance with the practices of the LIBOR interbank market as
from time to time in effect, PROVIDED, FURTHER, in the case of Advances such
period shall expire not later than the Revolving Maturity Date and in the case
of the Term Loan such period shall expire not later than the Term Maturity Date.
"Inventory" means all present and future inventory in which
Borrower has any interest, including merchandise, raw materials, parts,
supplies, packing and shipping materials, work in process and finished products
intended for sale or lease or to be furnished under a contract of service, of
every kind and description now or at any time hereafter owned by or in the
custody or possession, actual or constructive, of Borrower, including such
inventory as is temporarily out of its custody or possession or in transit and
including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above, and Borrower's Books relating
to any of the foregoing.
"Investment" means any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.
"IRC" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.
"LIBOR Base Rate" means, for any Interest Period for a LIBOR Rate
Extension, the rate of interest per annum determined by Bank to be the per annum
rate of interest at which deposits in United States Dollars are offered to Bank
in the London interbank market in which Bank customarily participates at 11:00
a.m. (local time in such interbank market) two (2) Business Days before the
first day of such Interest Period for a period approximately equal to such
Interest Period and in an amount approximately equal to the amount of such
Credit Extension.
"LIBOR Rate" shall mean, for any Interest Period for a LIBOR Rate
Extension, a rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) equal to (i) the LIBOR Base Rate for such Interest Period divided by (ii)
1 minus the Reserve Requirement for such Interest Period.
"LIBOR Rate Advances" means any Advances or a portion thereof, on
which interest is payable based on the LIBOR Rate in accordance with the terms
hereof.
"LIBOR Rate Extensions" means any LIBOR Rate Advances or any
portion of the Term Loan bearing interest at a rate based on the LIBOR Rate.
"Lien" means any mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance.
"Loan Documents" means, collectively, this Agreement, any note or
notes executed by Borrower, and any other agreement entered into between
Borrower and Bank in connection with this Agreement, all as amended or extended
from time to time.
"Material Adverse Effect" means a material adverse effect on (i)
the business operations or condition (financial or otherwise) of Borrower and
its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.
"Negotiable Collateral" means all of Borrower's present and
future letters of credit of which it is a beneficiary, notes, drafts,
instruments, securities, documents of title, and chattel paper, and Borrower's
Books relating to any of the foregoing.
"Obligations" means all loans, advances, debts, liabilities and
obligations for monetary amounts owing by Borrower to Bank, whether due or to
become due, matured or unmatured, liquidated or unliquidated, contingent or
non-contingent, and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by any note, agreement or
other instrument, including those arising under any of the Loan Documents. This
term includes, without limitation, all principal, interest (including interest
that accrues after the commencement against Borrower or any Subsidiary of
Borrower under the Bankruptcy Code), fees, including, without limitation, any
and all closing fees, prepayment fees, commitment fees, advisory fees, and
attorneys' fees and any and all other fees, expenses, costs or other amounts
chargeable to Borrower under any of the Loan Documents.
"Patents" means all patents, patent applications and like
protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.
"Periodic Payments" means all interest payments and other
recurring payments that Borrower may now or hereafter become obligated to pay to
Bank under this Agreement.
"Permitted Indebtedness" means:
(a) Indebtedness of Borrower in favor of Bank arising under
this Agreement or any other Loan Document;
(b) Indebtedness existing on the Closing Date and disclosed
in the Schedule;
(c) Subordinated Debt;
(d) Indebtedness secured by a lien described in clause (c)
of the defined term "Permitted Liens", provided the amount of such
Indebtedness shall not exceed the cost of the Equipment acquired with the
proceeds of such Indebtedness; and
(e) Extensions, renewals, modifications, amendments and
restatements of any of the items of permitted Indebtedness (a) through (d)
above, provided that the principal amount thereof is not increased or the
terms thereof are not modified to impose materially more burdensome terms
upon Borrower.
"Permitted Investment" means:
(a) Investments existing on the Closing Date disclosed in the
Schedule;
(b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any State thereof
maturing within one (1) year from the date of acquisition thereof, (ii)
commercial paper maturing no more than one (1) year from the date of creation
thereof and currently having rating of at least A-2 or P-2 from either Standard
& Poor's Corporation or Xxxxx'x Investors Service, Inc., (iii) certificates of
deposit maturing no more than one (1) year from the date of investment therein
issued by Bank, (iv) Bank's money market accounts, and (v) money market accounts
listed on the Schedule and as disclosed to Bank in writing from time to time.
"Permitted Liens" means the following:
(a) Any Liens existing on the Closing Date and disclosed in the
Schedule or arising under this Agreement or the other Loan Documents;
(b) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings;
(c) Liens (i) upon or in any equipment acquired or held by
Borrower or any of its Subsidiaries to secure the purchase price or lease of
such equipment or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment, or (ii) existing on such equipment at the time of
its acquisition, PROVIDED that the Lien is confined solely to the property so
acquired and improvements thereon, and the proceeds of such equipment; and
(d) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (c) above, PROVIDED that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness being extended, renewed or
refinanced does not increase.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.
"Prime Rate" means the variable rate of interest, per annum, most
recently announced by Bank, as its "prime rate" or "reference rate," whether or
not such announced rate is the lowest rate available from Bank.
"Prime Rate Advances" means any Advances or any portion thereof,
on which interest is payable based on the Prime Rate in accordance with the
terms hereof.
"Prime Rate Extensions" means any Prime Rate Advances or any
portion of the Term Loan bearing interest at a rate based on the Prime Rate.
"Quick Assets" means, at any date as of which the amount thereof
shall be determined, the cash, cash-equivalents, net trade receivables and
marketable securities not classified as long term investments, of Borrower and
its Subsidiaries determined in accordance with GAAP.
"Regulatory Change" means a change after the date hereof, in, or
of the interpretation of, laws or regulations applicable to Bank.
"Reserve Requirement" means, for any Interest Period, the average
maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained during such Interest Period
under Regulation D against "Eurocurrency liabilities" (as such term is used in
Regulation D) by member banks of the Federal Reserve System. Without limiting
the effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by Bank by reason of any Regulatory Change
against (i) any category of liabilities which includes deposits by reference to
which the LIBOR Rate is to be determined as provided in the definition of "LIBOR
Base Rate" or (ii) any category of extensions of credit or other assets which
include Advances.
"Responsible Officer" means any of the Chief Executive Officer,
the Chief Operating Officer and the Chief Financial Officer of Borrower.
"Revolving Maturity Date" means May 31, 2001.
"Revolving Facility" means the facility under which Borrower may
request Bank to make Advances, as specified in Section 2.1.1 hereof.
"Schedule" means the schedule of exceptions attached hereto, if
any.
"Subordinated Debt" means any debt incurred by a Borrower that is
subordinated to the debt owing by Borrower to Bank on terms reasonably
acceptable to Bank.
"Subsidiary" means any corporation, limited liability company or
partnership in which (i) any general partnership interest or (ii) more than 50%
of the equity of which by the terms thereof ordinary voting power to elect the
Board of Directors, managers or trustees of the entity shall, at the time as of
which any determination is being made, be owned by Borrower, either directly or
through one or more Subsidiaries.
"Term Facility" means the facility under which Borrower may
request Bank to make the Term Loan, as specified in Section 2.1.2 hereof.
"Term Loan" means the term loan in the amount of Five Million
Dollars ($5,000,000) pursuant to the provisions of Section 2.1.2.
"Term Maturity Date" means the earlier of (i) the date that is
thirty (30) months from the date of funding of the Term Loan or (ii) February
28, 2002.
"Total Liabilities" means at any date as of which the amount
thereof shall be determined, all obligations that should, in accordance with
GAAP be classified as liabilities on the consolidated balance sheet of Borrower,
including in any event all Indebtedness.
"Trademarks" means any trademark and servicemark rights, whether
registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Borrower connected
with and symbolized by such trademarks.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP and all calculations made
hereunder shall be made in accordance with GAAP. When used herein, the terms
"financial statements" shall include the notes and schedules thereto.
2. LOAN AND TERMS OF PAYMENT.
2.1.1 REVOLVING ADVANCES.
(a) Subject to and upon the terms and conditions of this
Agreement, Borrower may request, and Bank agrees to make, Advances in an
aggregate outstanding amount not to exceed the Committed Revolving Line;
provided that any time the outstanding Advances exceed Five Million Dollars
($5,000,000), Borrower may request, and Bank agrees to make, Advances in an
aggregate outstanding amount not to exceed the lesser of the Committed
Revolving Line or the Borrowing Base; provided further, however, that from
and after the date that Borrower maintains a ratio of Senior Liabilities to
EBITDA of not more than 2.0 to 1.0 for two (2) consecutive fiscal quarters
(as such ratio is calculated under Section 6.13 hereof) and for so long as
Borrower remains in compliance with Sections 6.9 through 6.14 hereof,
Borrower may request, and Bank agrees to make, Advances, in an aggregate
amount not to exceed the Committed Revolving Line without reference to the
Borrowing Base. Subject to the terms and conditions of this Agreement,
amounts borrowed pursuant to this Section 2.1.1 may be repaid and reborrowed
at any time prior to the Revolving Maturity Date, at which time all Advances
under this Section 2.1.1 shall be immediately due and payable.
If at any time the availability of Advances hereunder is subject to the
Borrowing Base, the outstanding Advances under this Section 2.1.1 exceed the
lesser of the Borrowing Base or the Committed Revolving Line, Borrower shall
immediately pay Bank, in cash, the amount of such excess.
(b) Whenever Borrower desires an Advance, Borrower will
notify Bank by facsimile transmission or telephone no later than 11:00 a.m.
California time, on the Business Day that a Prime Rate Advance is to be made,
and 11:00 a.m. California time on the Business Day that is three (3) Business
Days prior to the Business Day on which a LIBOR Rate Advance is made. Each
such notification shall be promptly confirmed by a Payment/Advance Form in
substantially the form of EXHIBIT B-1 hereto. Bank is authorized to make
Advances under this Agreement, based upon instructions received from a
Responsible Officer or a designee of a Responsible Officer, or without
instructions if in Bank's discretion such Advances are necessary to meet
Obligations which have become due and remain unpaid. Bank shall be entitled
to rely on any telephonic notice given by a person who Bank reasonably
believes to be a Responsible Officer or a designee thereof, and Borrower
shall indemnify and hold Bank harmless for any damages or loss suffered by
Bank as a result of such reliance. Bank will credit the amount of Advances
made under this Section 2.1.1 to Borrower's deposit account, as specified by
such Borrower.
Each such notice shall specify:
(i) the date such Advance is to be made, which shall be a
Business Day;
(ii) the amount of such Advance;
(iii) whether such Advance is to be a Prime Rate Advance or
a LIBOR Rate Advance; and
(iv) if the Advance is to be a LIBOR Rate Advance, the
Interest Period for such Advance.
Each written request for an Advance, and each confirmation
of a telephone request for such an Advance, shall be in substantially the form
of EXHIBIT B-1 hereto executed by Borrower.
PRIME RATE ADVANCES. The outstanding principal balance of each Prime Rate
Advance shall bear interest until principal is due (computed daily on the basis
of a 360 day year and actual days elapsed), at a floating rate per annum equal
to the Prime Rate. Borrower shall pay the entire outstanding principal amount of
each Prime Rate Advance on the Revolving Maturity Date.
LIBOR RATE ADVANCES. Each LIBOR Rate Advance shall be in an amount of not less
than One Million Dollars ($1,000,000). The outstanding principal balance of each
LIBOR Rate Advance shall bear interest until principal is due (computed daily on
the basis of a 360 day year and actual
days elapsed) at a rate per annum equal to the LIBOR Rate plus 200 basis points
for such LIBOR Rate Advance. The entire outstanding principal amount of each
LIBOR Rate Advance shall be due and payable on the earlier of (i) the last day
of the LIBOR Rate Interest Period for such LIBOR Rate Advance if not converted
or continued pursuant to Section 2.5(a), and (ii) on the Revolving Maturity
Date.
(e) PREPAYMENT OF THE ADVANCES. Borrower may at any time
prepay any Prime Rate Advance or any LIBOR Rate Advance, in full or in part.
Each partial prepayment for a LIBOR Rate Advance shall be in an amount not
less than One Hundred Thousand Dollars ($100,000). Each prepayment shall be
made upon the irrevocable written or telephone notice of Borrower received by
Bank not later than 10:00 a.m. California time on the date of the prepayment
of a Prime Rate Advance, and not less than three (3) Business Days prior to
the date of the prepayment of a LIBOR Rate Advance. The notice of prepayment
shall specify the date of the prepayment, the amount of the prepayment, and
the Advance or Advances prepaid. Each prepayment of a LIBOR Rate Advance
shall be accompanied by the payment of accrued interest on the amount prepaid
and any amount required by Section 2.6.
2.1.2 TERM LOAN.
(a) Subject to and upon the terms and conditions of this
Agreement, Bank agrees to make one term loan to Borrower by August 30, 1999
in an aggregate amount of Five Million Dollars ($5,000,000). The Term Loan
shall be payable in thirty (30) equal monthly installments in the amount of
One Hundred Sixty Six Thousand Six Hundred Sixty Seven Dollars ($166,667),
plus all accrued interest, beginning on the day one (1) month after funding
of the Term Loan, and continuing on the same day of each month thereafter
through the Term Loan Maturity Date, at which time all amounts due under this
Section 2.1.2 and any other amounts relating to the Term Loan shall be
immediately due and payable.
(b) When Borrower desires the Term Loan, Borrower will notify
Bank by facsimile transmission in the form of EXHIBIT B-1 hereto no later
than 11:00 a.m. California time on the Business Day that is three (3)
Business Days prior to the Business Day on which the Term Loan is to be made.
Bank will credit the amount of the Term Loan to Borrower's deposit account,
as specified by such Borrower.
The notice shall specify:
(i) the date the Term Loan is to be made, which shall be a
Business Day;
(ii) the portion of the Term Loan that is to be a Prime Rate
Extension and a LIBOR Rate Extension; and
(iii) if any portion of the Term Loan is to be a LIBOR Rate
Extension, the Interest Period for such LIBOR Rate Extension.
(c) PRIME RATE EXTENSIONS. The outstanding principal balance
of each portion of the Term Loan that is a Prime Rate Extension shall bear
interest until principal is due (computed daily on the basis of a 360 day
year and actual days elapsed), at a floating rate per annum equal to the
Prime Rate.
(d) LIBOR RATE EXTENSIONS. Each LIBOR Rate Extension shall be
in an amount of not less than One Million Dollars ($1,000,000). The
outstanding principal balance of each portion of the Term Loan that is a
LIBOR Rate Extension shall bear interest until principal is due (computed
daily on the basis of a 360 day year and actual days elapsed) at a rate per
annum equal to the LIBOR Rate plus 225 basis points for such LIBOR Rate
Extension. The entire outstanding principal amount of each LIBOR Rate
Extension shall be due and payable on the earlier of (i) the last day of the
LIBOR Rate Interest Period for such LIBOR Rate Extension, if not converted or
continued pursuant to Section 2.5(a), and (ii) on the Term Maturity Date.
(e) PREPAYMENT OF THE TERM LOAN. Borrower may at any time
prepay any Prime Rate Extension or any LIBOR Rate Extension, in full or in
part. Each partial prepayment for a LIBOR Rate Extension shall be in an
amount not less than One Hundred Thousand Dollars ($100,000). Each prepayment
shall be made upon the irrevocable written or telephone notice of Borrower
received by Bank not later than 10:00 a.m. California time on the date of the
prepayment of a Prime Rate Extension, and not less than three (3) Business
Days prior to the date of the prepayment of a LIBOR Rate Extension. The
notice of prepayment shall specify the date of the prepayment, the amount of
the prepayment, and the Credit Extension or Credit Extensions prepaid. Each
prepayment of a LIBOR Rate Extension shall be accompanied by the payment of
accrued interest on the amount prepaid and any amount required by Section 2.6.
2.2. INTEREST RATES, PAYMENTS, AND CALCULATIONS.
(a) INTEREST RATES. Except as set forth in Section 2.2(b),
any Credit Extensions shall bear interest, on the average daily balance
thereof, at the rates specified in Sections 2.1.1 and 2.1.2 hereof.
(b) DEFAULT RATE. All Obligations shall bear interest after
notice from Bank of the imposition of such default rate, from and after the
occurrence and during the continuance of an Event of Default, at a rate equal
to three (3) percentage points above the interest rate applicable immediately
prior to the occurrence of the Event of Default.
(c) PAYMENTS. Accrued interest shall be due and payable in
arrears upon the earlier of (i) with respect to LIBOR Rate Extensions, the
end of the applicable Interest Period or (ii) with respect to LIBOR Rate
Extensions, any payment of principal or (iii) the last Business Day of each
calendar month. Bank shall automatically charge such interest and all
Periodic Payments against Borrower's deposit account held at Bank or against
the Committed Revolving Line, in which case those amounts shall thereafter
accrue interest at the rate then applicable hereunder. Any interest not paid
when due shall be compounded by becoming a part of the Obligations, and such
interest shall thereafter accrue interest at the rate then applicable
hereunder.
(d) COMPUTATION. In the event the Prime Rate is changed from
time to time hereafter, the applicable rate of interest hereunder shall be
increased or decreased effective as of the day the Prime Rate is changed, by
an amount equal to such change in the Prime Rate. All interest chargeable
under the Loan Documents shall be computed on the basis of a three hundred
sixty (360) day year for the actual number of days elapsed.
2.3. CREDITING PAYMENTS. Prior to the occurrence of an Event of Default,
Bank shall credit a wire transfer of funds, check or other item of payment to
such deposit account or Obligation as Borrower specifies. After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer
of funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or
unless and until such check or other item of payment is honored when
presented for payment. Notwithstanding anything to the contrary contained
herein, any wire transfer or payment received by Bank after 2:00 p.m.
California time shall be deemed to have been received by Bank as of the
opening of business on the immediately following Business Day. Whenever any
payment to Bank under the Loan Documents would otherwise be due (except by
reason of acceleration) on a date that is not a Business Day, such payment
shall instead be due on the next Business Day, and additional fees or
interest, as the case may be, shall accrue and be payable for the period of
such extension.
2.4. FEES. Borrower shall pay to Bank the following:
(a) FACILITY FEES. On account of the Revolving Facility,
Borrower shall pay to Bank a fee equal to 0.375 percent per annum of the
difference between the Revolving Committed Line and the average daily
outstanding
balance in a fiscal quarter under the Revolving Committed Line, which fee shall
be payable within five (5) days of the last day of such fiscal quarter. On
account of the Term Facility, Borrower shall pay Bank a fee equal to Twenty Five
Thousand Dollars ($25,000), which fee shall be payable as a condition to
Borrower's requesting the Term Loan.
(b) BANK EXPENSES. On the Closing Date, an amount equal to
the Bank Expenses (including reasonable attorneys' fees and expenses)
incurred in connection with the preparation and negotiation of the Loan
Documents and, after the Closing date, all Bank Expenses, including
reasonable attorneys' fees and expenses incurred in the enforcement of this
Agreement, as and when they become due.
2.5. CONVERSION/CONTINUATION OF EXTENSIONS.
(a) Borrower may from time to time submit in writing a
request that Prime Rate Extensions be converted to LIBOR Rate Extensions or
that any existing LIBOR Rate Extensions continue for an additional Interest
Period. Such request shall specify the amount of the Prime Rate Extensions
which will constitute LIBOR Rate Extensions (subject to the limits set forth
below) and the Interest Period to be applicable to such LIBOR Rate
Extensions. Each written request for a conversion to a LIBOR Rate Extension
or a continuation of a LIBOR Rate Extension shall be substantially in the
form of a Libor Rate Conversion/Continuation Certificate as set forth on
EXHIBIT B-2, which shall be duly executed by a Responsible Officer. Subject
to the terms and conditions contained herein, three (3) Business Days after
Bank's receipt of such a request from Borrower, such Prime Rate Extensions
shall be converted to LIBOR Rate Extensions or such LIBOR Rate Extensions
shall continue, as the case may be provided that:
(i) no Event of Default or event which with notice or
passage of time or both would constitute an Event of Default exists;
(ii) no party hereto shall have sent any notice of
termination of the Agreement;
(iii) Borrower shall have complied with such reasonable
and customary procedures as Bank has established from time to time for
Borrower's requests for LIBOR Rate Extensions; and
(iv) the amount of a LIBOR Rate Extension shall be
$1,000,000 or such greater amount which is an integral multiple of $500,000.
Any request by Borrower to convert Prime Rate Extensions to LIBOR Rate
Extensions or continue any existing LIBOR Rate Extensions shall be irrevocable.
Notwithstanding anything to the contrary contained herein, Bank shall not be
required to purchase United States Dollar deposits in the London interbank
market or other applicable LIBOR Rate market to fund any LIBOR Rate Extensions,
but the provisions hereof shall be deemed to apply as if Bank had purchased such
deposits to fund the LIBOR Rate Extensions.
(b) Any LIBOR Rate Extensions shall automatically convert to
Prime Rate Extensions upon the last day of the applicable Interest Period,
unless Bank has received and approved a complete and proper request to
continue such LIBOR Rate Extension at least three (3) Business Days prior to
such last day in accordance with the terms hereof. Any LIBOR Rate Extensions
shall, at Bank's option, convert to Prime Rate Extensions on the last day of
the applicable Interest Period in the event that an Event of Default shall
exist.
2.6. ADDITIONAL REQUIREMENTS/PROVISIONS REGARDING LIBOR RATE EXTENSIONS.
(a) If for any reason (including voluntary or mandatory
prepayment or acceleration), Bank receives all or part of the principal
amount of a LIBOR Rate Extension prior to the last day of the Interest Period
for such LIBOR Rate Extension, Borrower shall on demand by Bank, pay Bank the
amount (if any) by which (i) the additional interest which would have been
payable on the amount so received had it not been received until the last day
of such Interest Period or term exceeds (ii) the interest which would have
been recoverable by Bank by placing the amount so received on deposit in the
London Dollar interbank markets for a period starting on the date on which it
was so received and ending on the last day of such Interest Period. Bank's
determination as to such amount shall be conclusive absent manifest error.
(b) Borrower shall pay to Bank, upon demand by Bank, from
time to time such amounts as Bank may reasonably determine to be necessary to
compensate it for any costs incurred by Bank that Bank determines are
attributable to its making or maintaining of any amount receivable by Bank
hereunder in respect of any Credit Extensions relating thereto (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), in each case resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts
payable to Bank under this Agreement in respect of any Credit Extensions
(other than changes which affect taxes measured by or imposed on the overall
net income of Bank by the jurisdiction in which Bank has its principal office
or its lending office); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of Bank (including any Credit
Extensions or any deposits referred to in the definition of "LIBOR Base Rate"
other than those reflected in the calculation of the Reserve Requirement); or
(iii) imposes any other material condition affecting this
Agreement (or any of such extensions of credit or liabilities).
Bank will notify Borrower of any event occurring after the date of the Agreement
that will entitle Bank to compensation pursuant to this section as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation; provided that Borrower shall not be liable for any Additional
Costs which relate to a period more than 90 days prior to the giving of such
notices by Bank. Bank will furnish Borrower with a statement setting forth the
basis and a reasonably detailed calculation of the amount of each request by
Bank for compensation under this Section 2.6. Determinations and allocations by
Bank for purposes of this Section 2.6 of the effect of any Regulatory Change on
its costs of maintaining its obligations to make Credit Extensions or of making
or maintaining Credit Extensions or on amounts receivable by it in respect of
Credit Extensions, and of the additional amounts required to compensate Bank in
respect of any Additional Costs, shall be conclusive absent manifest error.
(c) Borrower shall pay to Bank, upon the request of Bank,
such amount or amounts as shall be sufficient (in the sole good faith opinion
of Bank) to compensate it for any reasonable loss, costs or expense incurred
by it as a result of any failure by Borrower to borrow a LIBOR Rate Extension
on the date for such borrowing specified in the relevant notice of borrowing
hereunder.
(d) If Bank shall determine that the adoption or
implementation of any applicable law, rule, regulation or treaty regarding
capital adequacy, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by Bank (or its applicable lending office) with any respect or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of Bank or any person or
entity controlling Bank (a "Parent") as a consequence of its obligations
hereunder to a level below that which Bank (or its Parent) could have
achieved but for such adoption, change or compliance (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by Bank to be material, then from time to time, within 15 days after
demand by Bank, Borrower shall pay to Bank such additional amount or amounts
as will compensate Bank for such reduction, other than amounts which relate
to a period more than 90 days prior to the making of such demand by Bank. A
statement of Bank claiming
compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive absent manifest
error.
(e) If at any time Bank, in its sole and absolute discretion,
determines that: (i) the amount of the LIBOR Rate Extensions for periods
equal to the corresponding Interest Periods or any other period are not
available to Bank in the offshore currency interbank markets, or (ii) the
LIBOR Rate does not accurately reflect the cost to Bank of lending the LIBOR
Rate Extension, then Bank shall promptly give notice thereof to Borrower, and
upon the giving of such notice Bank's obligation to make the LIBOR Rate
Extensions shall be suspended until such conditions no longer exist, unless
Bank and Borrower agree in writing to a different interest rate applicable to
LIBOR Rate Extensions. If it shall become unlawful for Bank to continue to
fund or maintain any LIBOR Rate Extensions, upon demand by Bank, Borrower
shall prepay the LIBOR Rate Extensions in full with accrued interest thereon
(including, without limitation, any amount payable in connection with such
prepayment pursuant to Section 2.6(a)).
2.7. TERM. This Agreement shall become effective on the Closing Date
and, subject to Section 12.7, shall continue in full force and effect for so
long as any Obligations are outstanding. Notwithstanding the foregoing, Bank
shall have the right to terminate its obligation to make Credit Extensions
under this Agreement immediately and without notice upon the occurrence and
during the continuance of an Event of Default. Notwithstanding termination,
Bank's Lien on the Collateral shall remain in effect for so long as any
Obligations are outstanding.
3. CONDITIONS OF CREDIT EXTENSIONS.
3.1 CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION. The obligation of
Bank to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory
to Bank, the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower with respect to
incumbency and resolutions authorizing the execution and delivery of this
Agreement;
(c) a financing statement (Form UCC-1);
(d) an intellectual property security agreement;
(e) an agreement to provide insurance;
(f) an audit of the Collateral of Borrower;
(g) landlord consents;
(h) an opinion of Borrower's counsel;
(i) and such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
3.2 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. The obligation of
Bank to make each Credit Extension, including the initial Credit Extension,
is further subject to the following conditions:
(a) timely receipt by Bank of the Payment/Advance Form as
provided in Section 2.1;
(b) the representations and warranties contained in Section 5
shall be true and correct in all material respects on and as of the date of
such Payment/Advance Form and on the effective date of each Credit Extension
as though made at and as of each such date, except those representations and
warranties that expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date, and no Event of Default shall have occurred
and be continuing, or would result from such Credit Extension. The making of
each Credit Extension shall be deemed to be a representation and warranty by
Borrower on the date of such Credit Extension as to the accuracy of the facts
referred to in this Section 3.2(b).
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants and pledges to
Bank a continuing security interest in all presently existing and hereafter
acquired or arising Collateral in order to secure prompt repayment of any and
all Obligations and in order to secure prompt performance by Borrower of each
of its covenants and duties under the Loan Documents. Such security interest
shall constitute a valid, first priority security interest in the presently
existing Collateral, and will constitute a valid, first priority security
interest in Collateral acquired after the date hereof, subject to Permitted
Liens. Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and Borrower shall not be deemed to have granted a
security interest in (i) any of Borrower's rights or interests in any
license, contract or agreement to which Borrower is a party
or any of its rights or interests thereunder to the extent, but only to the
extent, that such a grant would, under the terms of such license, contract or
agreement or otherwise, result in a breach of the terms of, or constitute a
default under any license, contract or agreement to which Borrower is a party
(other than to the extent that any such term would be rendered ineffective
pursuant to Section 9-318(4) of the Code or any other applicable law (including
the Bankruptcy Code) or principles of equity); PROVIDED that immediately upon
the ineffectiveness, lapse or termination of any such provision, the Collateral
shall include, and Borrower shall be deemed to have granted a security interest
in, all such rights and interests as if such provision had never been in effect.
4.2 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower shall from
time to time execute and deliver to Bank, at the request of Bank, all
Negotiable Collateral, all financing statements and other documents that Bank
may reasonably request, in form satisfactory to Bank, to perfect and continue
perfected Bank's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.
4.3 RIGHT TO INSPECT. Bank (through any of its officers, employees, or
agents) shall have the right at Borrower' expense (not to exceed $3,000 per
annum, as long as an Event of Default has not occurred and is continuing)
upon reasonable prior notice, from time to time during Borrower's usual
business hours, to inspect Borrower's Books and to make copies thereof and to
check, test, and audit and appraise the Collateral in order to verify
Borrower's financial condition or the amount, condition of, or any other
matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as follows:
5.1 DUE ORGANIZATION AND QUALIFICATION. Borrower is a corporation duly
existing under the laws of the State of Delaware and qualified and licensed
to do business in any state in which the conduct of its business or its
ownership of property requires that it be so qualified in which the failure
to so qualify could reasonably be expected to have a Material Adverse Effect.
5.2 DUE AUTHORIZATION; NO CONFLICT. The execution, delivery, and
performance of the Loan Documents are within Borrower's powers, have been
duly authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Certificate of Incorporation or Bylaws, nor
will they constitute an event of default under any material agreement to
which Borrower is a party or by which Borrower is bound. Borrower is not in
default under any agreement to which it is a party or by which it is bound,
which default could reasonably be expected to have a Material Adverse Effect.
5.3 NO PRIOR ENCUMBRANCES. Borrower has good and marketable title to the
Collateral, free and clear of Liens, except for Permitted Liens.
5.4 BONA FIDE ACCOUNTS. The Accounts are bona fide existing obligations.
The property giving rise to such Accounts has been delivered to the account
debtor or to the account debtor's agent for immediate shipment or downloading
to and unconditional acceptance (subject to warranties) by the account debtor.
5.5 MERCHANTABLE INVENTORY. All Inventory (except work-in-process) is in
all material respects of good and marketable quality, free from all material
defects, except for Inventory for which adequate reserves have been made.
5.6 NAME; LOCATION OF CHIEF EXECUTIVE OFFICE. Except as disclosed in the
Schedule, Borrower has not done business under any name other than that
specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.
5.7 INTELLECTUAL PROPERTY COLLATERAL. Borrower is the owner or licensee
of the Intellectual Property Collateral, except for non-exclusive licenses
granted by Borrower to its customers in the ordinary course of business. Each
of the Patents is valid and enforceable, and no part of the Intellectual
Property Collateral has been judged invalid or unenforceable, in whole or in
part, and to Borrower's knowledge, no claim has been made that any part of
the Intellectual Property Collateral violates the rights of any third party,
which violation could reasonably be expected to
have a Material Adverse Effect. Except as set forth in the Schedule, no part of
the Intellectual Property Collateral is subject to any agreement restricting the
transfer thereof or the grant of a security interest therein. The Copyrights,
Patents and Trademarks listed on the Exhibits to the Intellectual Property
Security Agreement constitute all of the intellectual property necessary to
sell, license or distribute all of Borrower's products in the ordinary course of
business. The Schedule lists all of the material licenses, contracts and
agreements as to which Borrower's rights are excluded from the Collateral
pursuant to Section 4.1.
5.8 LITIGATION. Except as set forth in the Schedule, there are no
actions or proceedings pending by or against Borrower or any Subsidiary
before any court or administrative agency in which an adverse decision could
reasonably be expected to have a Material Adverse Effect or a material
adverse effect on Borrower's interest or Bank's security interest in the
Collateral. Borrower does not have knowledge of any such pending or
threatened actions or proceedings.
5.9 NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS. All consolidated
financial statements related to Borrower and its Subsidiaries that are
delivered by Borrower to Bank fairly present in all material respects
Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended.
There has not been a material adverse change in the consolidated financial
condition of Borrower since the date of the most recent of such financial
statements submitted to Bank, other than as set forth in the Schedule.
5.10 SOLVENCY, PAYMENT OF DEBTS. Borrower is solvent and able to pay its
debts (including trade debts) as they mature.
5.11 REGULATORY COMPLIANCE. Borrower has met the minimum funding
requirements of ERISA with respect to any employee benefit plans subject to
ERISA. No event has occurred resulting from Borrower's failure to comply with
ERISA that is reasonably likely to result in Borrower's incurring any
liability that could have a Material Adverse Effect. Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940. Borrower is not engaged principally, or as one of the important
activities, in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of any regulations promulgated
by the Board of Governors of the Federal Reserve System). Borrower has
complied with all the provisions of the Federal Fair Labor Standards Act.
Borrower has not violated any statutes, laws, ordinances or rules applicable
to it, violation of which could reasonably be expected to have a Material
Adverse Effect.
5.12 ENVIRONMENTAL CONDITION. None of Borrower's properties or assets
has ever been used by Borrower or, to the best of Borrower's knowledge, by
previous owners or operators, in the disposal of, or to produce, store,
handle, treat, release, or transport, any hazardous waste or hazardous
substance other than in accordance with applicable law; to the best of
Borrower's knowledge, none of Borrower's properties or assets has ever been
designated or identified in any manner pursuant to any environmental
protection statute as a hazardous waste or hazardous substance disposal site,
or a candidate for closure pursuant to any environmental protection statute;
no lien arising under any environmental protection statute has attached to
any revenues or to any real or personal property owned by Borrower; and
Borrower has not received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower resulting
in the releasing, or otherwise disposing of hazardous waste or hazardous
substances into the environment.
5.13 TAXES. Borrower has filed or caused to be filed all tax returns
required to be filed, and has paid, or has made adequate provision for the
payment of, all taxes reflected therein, except for taxes which are being
contested in good faith by appropriate proceedings and reserved against (to
the extent required by GAAP) by Borrower.
5.14 SUBSIDIARIES. Borrower does not own any stock, partnership interest
or other equity securities of any Person, except for Permitted Investments.
5.15 GOVERNMENT CONSENTS. Borrower has obtained all material consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all governmental authorities that
are necessary for the continued operation of Borrower's business as currently
conducted, the failure to obtain which could reasonably be expected to have a
Material Adverse Effect.
5.16 YEAR 2000. Borrower has reviewed the areas within its operations and
business which could be adversely affected by, and has developed or is
developing a program to address on a timely basis, the Year 2000 Problem.
Based on such review and program, the Year 2000 Problem is not expected to
have a Material Adverse Effect upon its financial condition, operations or
business as now conducted. "Year 2000 Problem" means the possibility that any
computer applications or equipment used by Borrower may be unable to
recognize and properly perform date sensitive functions involving certain
dates prior to and any dates on or after December 31, 1999.
5.17 FULL DISCLOSURE. No representation, warranty or other statement
made by Borrower in any certificate or written statement furnished to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates
or statements not misleading.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Bank may have any commitment to make
a Credit Extension hereunder, Borrower shall do all of the following:
6.1 GOOD STANDING. Borrower shall maintain its and each of its material
Subsidiaries' corporate existence in its jurisdiction of incorporation and
maintain qualification in each jurisdiction in which the failure to so
qualify could reasonably by expected to have a Material Adverse Effect.
Borrower shall maintain, and shall cause each of its Subsidiaries to maintain
in force all licenses, approvals and agreements, the loss of which could
reasonably by expected to have a Material Adverse Effect.
6.2 GOVERNMENT COMPLIANCE. Borrower shall meet, and shall cause each
Subsidiary to meet, the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA. Borrower shall comply, and shall
cause each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with
which could reasonably by expected to have a Material Adverse Effect or a
material adverse effect on the Collateral or the priority of Bank's Lien on
the Collateral.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower shall deliver
to Bank: (a) as soon as available, but in any event within thirty (30) days
after the end of each month, company prepared consolidated and consolidating
income statements for Borrower covering its operations during such period, in
reasonable detail and in a form substantially similar to those delivered to
Bank prior to the Closing Date and certified by a Responsible Officer; (b) as
soon as available, but in any event within forty five (45) days after the end
of each fiscal quarter, a company prepared consolidated and consolidating
balance sheet, income statement and statement of cash flows for Borrower
covering its operations during such period in reasonable detail and in a form
substantially similar to those delivered to Bank prior to the Closing Date
and certified by a Responsible Officer; (c) as soon as available, but in any
event within ninety (90) days after the end of each fiscal year, audited
financial statements of Borrower prepared in accordance with GAAP,
consistently applied, together with an unqualified opinion on such financial
statements of an independent certified public accounting firm reasonably
acceptable to Bank (each of the "Big 5" accounting firms is acceptable),
which financial statements shall reflect no material adverse changes from the
financial statements prepared by Borrower and delivered to Bank; (d) as soon
as available, but in any event within five (5) days after filing, copies of
the reports filed by Borrower on Form 10-Q and 10-K with the Securities and
Exchange Commission; (e) promptly upon receipt of notice thereof, a report of
any legal actions pending or threatened against Borrower or any Subsidiary
that could result in damages or costs to Borrower or any Subsidiary of Two
Hundred Fifty Thousand Dollars ($250,000) or more; (f) as soon as available,
but in any case within thirty (30) days after the first day of each fiscal
year, Borrower's business plan, including operating budget, for such year;
(g) within twenty-five (25) days of the last day of each fiscal quarter, a
report signed by Borrower, in form reasonably acceptable to Bank, listing any
applications or registrations that Borrower has
made or filed in respect to any Patents, Copyrights or Trademarks and the status
of any outstanding applications or registrations, as well as any material change
in Borrower's intellectual property, including but not limited to any subsequent
ownership right of Borrower in or to any Trademark, Patent or Copyright not
specified in Exhibits A, B, and C of the Intellectual Property Security
Agreement delivered to Bank by Borrower in connection with this Agreement; and
(h) such budgets, sales projections, operating plans or other financial
information (including any filings, documents or reports submitted to the
Securities and Exchange Commission) regularly prepared by Borrower as Bank may
reasonably request from time to time. Borrower shall deliver to Bank with the
quarterly financial statements a Compliance Certificate signed by a Responsible
Officer in substantially the form of EXHIBIT D hereto. Within fifteen (15) days
of the last day of each month in which the Advances are subject under Section
2.1.1 to a Borrowing Base, Borrower shall deliver to Bank a Borrowing Base
Certificate signed by a Responsible Officer in substantially the form of EXHIBIT
C hereto, together a company-prepared balance sheet covering Borrower's domestic
operations and agings of Borrower's accounts payable and accounts receivable, in
each case in form and substance reasonably satisfactory to Bank and certified by
a Responsible Officer.
6.4 INVENTORY; RETURNS. Borrower shall keep all Inventory in good and
marketable condition, free from all material defects except for Inventory for
which adequate reserves have been made. Returns and allowances, if any, as
between Borrower and its account debtors shall be on the same basis and in
accordance with the usual customary practices of Borrower, as they exist at
the time of the execution and delivery of this Agreement. Borrower shall
promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than One
Hundred Thousand Dollars ($100,000).
6.5 TAXES. Borrower shall make, and shall cause each Subsidiary to make,
due and timely payment or deposit of all material federal, state, and local
taxes, assessments, or contributions required of it by law, and will execute
and deliver to Bank, on demand, appropriate certificates attesting to the
payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments
and withholding taxes required of it by applicable laws, including, but not
limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and
local, state, and federal income taxes, and will, upon request, furnish Bank
with proof satisfactory to Bank indicating that Borrower or a Subsidiary has
made such payments or deposits; provided that Borrower or a Subsidiary need
not make any payment if the amount or validity of such payment is contested
in good faith by appropriate proceedings and is reserved against (to the
extent required by GAAP) by Borrower.
6.6 INSURANCE. Borrower, at its expense, shall keep the Collateral
insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as ordinarily insured against
by other owners in similar businesses conducted in the locations where
Borrower's business is conducted on the date hereof. Borrower shall also
maintain insurance relating to Borrower's ownership and use of the Collateral
in amounts and of a type that are customary to businesses similar to
Borrower's. All such policies of insurance shall be in such form, with such
companies, and in such amounts as are reasonably satisfactory to Bank. All
such policies of property insurance shall contain a Bank's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional
loss payee thereof and all liability insurance policies shall show the Bank
as an additional insured, and shall specify that the insurer must give at
least twenty (20) days notice to Bank before canceling its policy for any
reason. Upon Bank's request, Borrower shall deliver to Bank certified copies
of such policies of insurance and evidence of the payments of all premiums
therefor. After the occurrence and during the continuance of an Event of
Default, all proceeds payable under any such policy that are not used to
repair or replace the property insured shall, at the option of Bank, be
payable to Bank to be applied on account of the Obligations.
6.7 YEAR 2000 COMPLIANCE. Borrower shall perform all acts reasonably
necessary to ensure that Borrower and its Subsidiaries become Year 2000
Compliant in a timely manner. Such acts shall include, without limitation,
performing a comprehensive review and assessment of all Borrower's
systems and adopting a detailed plan, with itemized budget, for the
remediation, monitoring and testing of such systems. As used in this
paragraph, "Year 2000 Compliant" shall mean, in regard to any entity, that
all software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition of such entity,
will properly perform date sensitive functions before, during and after the
year 2000. Borrower shall immediately upon request, provide to Bank such
certifications or other evidence of Borrower's compliance with the terms of
this paragraph as Bank may from time to time reasonably require.
6.8 REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS.
(a) Borrower shall register or cause to be registered on an
expedited basis (to the extent not already registered) with the United States
Patent and Trademark Office or the United States Copyright Office, as
applicable, those intellectual property rights listed on Exhibits A, B and C
to the Intellectual Property Security Agreement delivered to Bank by Borrower
in connection with this Agreement within thirty (30) days of the date of this
Agreement. Borrower shall, on an expedited basis, register or cause to be
registered with the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, and notify Bank of, all registerable
intellectual property rights which constitute or give rise to more than five
percent (5%) of Borrower's gross income in any given month which Borrower has
developed as of the date of this Agreement but heretofore failed to register
and give Bank notice thereof. Borrower shall register or cause to be
registered with the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, and notify Bank of those additional
intellectual property rights which constitute or give rise to more than five
percent (5%) of Borrower's gross income in any given month which are
developed or acquired by Borrower from time to time in connection with any
product prior to the sale or licensing of such product to any third party and
prior to Borrower's use of such product (including without limitation major
revisions or additions to the intellectual property rights listed on such
Exhibits A, B and C) and shall give Bank notice thereof.
(b) Borrower shall execute and deliver such additional instruments
and documents from time to time as Bank shall reasonably request to perfect
Bank's security interest in the Intellectual Property Collateral.
(c) Borrower shall (i) protect, defend and maintain the validity
and enforceability of the Trademarks, Patents and Copyrights, (ii) use its
best efforts to detect infringements of the Trademarks, Patents and
Copyrights and promptly advise Bank in writing of material infringements
detected and (iii) not allow any material Trademarks, Patents or Copyrights
to be abandoned, forfeited or dedicated to the public without the written
consent of Bank, which shall not be unreasonably withheld.
(d) Bank may audit Borrower's Intellectual Property Collateral to
confirm compliance with this Section 0, provided such audit may not occur
more often than once per year, unless an Event of Default has occurred and is
continuing. Bank shall have the right, but not the obligation, to take, at
Borrower's sole expense, any actions that Borrower is required under this
Section 6.8 to take but which Borrower fails to take, after fifteen (15)
days' notice to Borrower. Borrower shall reimburse and indemnify Bank for all
reasonable costs and reasonable expenses incurred in the reasonable exercise
of its rights under this Section 6.8.
6.9 QUICK RATIO. Borrower shall maintain, as of the last day of each
fiscal quarter, a Quick Ratio of not less than 1.5 to 1.0. "Quick Ratio"
means the ratio of Quick Assets to Current Liabilities, excluding deferred
revenue, but including Advances under the Revolving Facility.
6.10 FIXED CHARGE COVERAGE RATIO. Beginning December 31, 1999, Borrower
shall maintain, as of the last day of each fiscal quarter, a Fixed Charge
Ratio of not less than 1.10 to 1.00. Beginning June 30, 2000, Borrower shall
maintain, as of the last day of each fiscal quarter, a Fixed Charge Ratio of
not less than 1.25 to 1.00. "Fixed Charge Ratio" means the ratio of (x)
earnings before interest, taxes, depreciation and amortization on a rolling
four quarters basis to (y) the amount of scheduled principal payments on the
current portion of long term debt (including scheduled principal payments
made on Subordinated Debt) plus interest, taxes, software capitalized and
capital expenditures (net of financing) during such rolling four quarters.
6.11 TOTAL LIABILITIES-EFFECTIVE TANGIBLE NET WORTH. Beginning March 31,
2000, Borrower shall maintain, as of the last day of each fiscal quarter, a
ratio of Total Liabilities less Subordinated Debt and deferred revenue to
Effective Tangible Net Worth of not more than 2.50 to 1.00.
6.12 PROFITABILITY. Borrower shall not suffer a loss in more than one
fiscal quarter during any fiscal year. Borrower shall be profitable before
and after taxes on an annual basis.
6.13 SENIOR LIABILITIES-EBIDTA. Borrower shall maintain, as of the last
day of each fiscal quarter, a ratio of (i) Total Liabilities, excluding
deferred revenue and Subordinated Debt, to (ii) earnings before interest,
taxes, depreciation and amortization on a rolling four quarters basis of not
more than 4.5 to 1.0 as of June 30, 1999, not more than 3.25 to 1.0 as of
September 30, 1999, and not more than 2.0 to 1.0 as of December 31, 1999.
This Section 6.13 shall cease to be effective on March 31, 2000.
6.14 EFFECTIVE TANGIBLE NET WORTH. Borrower shall maintain a minimum
Effective Tangible Net Worth, as follows:
Measurement Date Minimum Effective Tangible Net Worth
---------------- ------------------------------------
June 30, 1999 $2,000,000
September 30, 1999 $6,500,000
December 31, 1999 and the end of $15,000,000 plus 75% of Borrower's net
each fiscal quarter thereafter income per quarter and 100% of the net
proceeds received from the sale or
issuance of equity securities.
6.15 FURTHER ASSURANCES. At any time and from time to time Borrower
shall execute and deliver such further instruments and take such further
action as may reasonably be requested by Bank to effect the purposes of this
Agreement.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until payment in full of the outstanding Obligations or
for so long as Bank may have any commitment to make any Credit Extensions,
Borrower will not do any of the following:
7.1 DISPOSITIONS. Convey, sell, lease, transfer or otherwise dispose of
(collectively, a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than: (i) Transfers of Inventory
in the ordinary course of business; (ii) Transfers of non-exclusive licenses and
similar arrangements for the use of the property of Borrower or its
Subsidiaries; (iii) Transfers of worn-out or obsolete Equipment or Equipment no
longer useful in Borrower's or such Subsidiary's business; (iv) Transfers from
Borrower to its Subsidiaries with a value of up to $250,000 per annum; or (v)
Transfers from any Subsidiary to Borrower or any Subsidiary.
7.2 CHANGE IN BUSINESS. Engage in any business, or permit any of its
Subsidiaries to engage in any business, other than the businesses currently
engaged in by Borrower and any business substantially similar or related
thereto (or incidental thereto), or suffer a Change in Control. Borrower will
not, without thirty (30) days prior written notification to Bank, relocate
its chief executive office.
7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person,
except for the acquisition of Computerized Structural Analysis & Research
Corporation in accordance with the terms of the agreement presented to Bank
prior to the Closing Date.
7.4 INDEBTEDNESS. Create, incur, assume or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.
7.5 ENCUMBRANCES. Create, incur, assume or suffer to exist any Lien with
respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens.
7.6 DISTRIBUTIONS. Pay any cash dividends or make any other distribution
or payment on account of or in redemption, retirement or purchase of any
capital stock, or otherwise Transfer any assets to any Affiliates; provided
Borrower may repurchase stock from employees and former employees in
accordance with the terms of repurchase or similar agreements between
Borrower and such
persons for so long as an Event of Default has not occurred and is continuing or
would not exist after giving effect to such repurchase.
7.7 INVESTMENTS. Directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.
7.8 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's
business, upon fair and reasonable terms that are no less favorable to
Borrower than would be obtained in an arm's length transaction with a
nonaffiliated Person.
7.9 SUBORDINATED DEBT. Make any payment in respect of any Subordinated
Debt, or permit any of its Subsidiaries to make any such payment, if an Event
of Default exists at the time of such payment or would exist after giving
effect to such payment, or make any payment on any Subordinated Debt except
in compliance with the terms of such Subordinated Debt, or amend any
provision contained in any documentation relating to the Subordinated Debt
without Bank's prior written consent.
7.10 INVENTORY AND EQUIPMENT. Store the Inventory or Equipment with a
bailee, warehouseman, or similar party unless Bank has received a pledge of
the warehouse receipt covering such Inventory or Equipment. Except for that
sold in the ordinary course of business and except for such other locations
as Bank may approve in writing, Borrower shall keep the Inventory and
Equipment only at the location set forth in Section 10 hereof or Schedule
7.10 hereto, and such other locations of which Borrower gives Bank prior
written notice and as to which Borrower signs and files a financing statement
where needed to perfect Bank's security interest.
7.11 COMPLIANCE. Become an "investment company" within the meaning of
the Investment Company Act of 1940, or become principally engaged in, or
undertake as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying margin stock, or use the
proceeds of any Credit Extension for such purpose. Fail to meet the minimum
funding requirements of ERISA, permit a Prohibited Transaction, as defined in
ERISA, to occur, fail to comply with the Federal Fair Labor Standards Act or
violate any law or regulation, which violation could have a Material Adverse
Effect or a material adverse effect on the Collateral or the priority of
Bank's Lien on the Collateral, or permit any of its Subsidiaries to do any of
the foregoing.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
8.1 PAYMENT DEFAULT. If Borrower fails to pay the principal of, or any
interest on, any Advances when due and payable; or fails to pay any of the
other Obligations not constituting principal or interest, (including without
limitation, Bank Expenses in accordance with the terms hereof) within thirty
(30) days of receipt by Borrower of an invoice for such other Obligations;
8.2 COVENANT DEFAULT. If Borrower violates any of the covenants
contained in Article 7 of this Agreement, or fails or neglects to perform,
keep, or observe any obligations under Article 6 or any other material term,
provision, condition, covenant, or agreement contained in this Agreement, in
any of the Loan Documents, or in any other present or future agreement
between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within twenty (20) days after Borrower receives notice
thereof or any officer of Borrower becomes aware thereof (provided that no
Credit Extensions will be required to be made during such cure period);
8.3 MATERIAL ADVERSE CHANGE. If there occurs a Material Adverse Effect,
or if Bank reasonably determines that Borrower is likely to fail to comply
with any of the financial covenants set forth in Sections 6.9 through 6.14 as
of the immediately ended quarter or the next occurring measurement date;
8.4 ATTACHMENT. If any portion of Borrower's assets with a value in
excess of $250,000 is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes into the possession of any trustee,
receiver or person acting in a similar capacity and such attachment, seizure,
writ or
distress warrant or levy has not been removed, discharged or rescinded within
thirty (30) days, or if Borrower is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part
of its business affairs, or if a judgment or other claim in excess of
$250,000 becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment in excess of
$250,000 is filed of record with respect to any of Borrower's assets by the
United States Government, or any department, agency, or instrumentality
thereof, or by any state, county, municipal, or governmental agency, and the
same is not paid within thirty (30) days after Borrower receives notice
thereof, provided that none of the foregoing shall constitute an Event of
Default where such action or event is stayed or an adequate bond has been
posted pending a good faith contest by Borrower (provided that no Credit
Extensions will be required to be made during such cure period);
8.5 INSOLVENCY. If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is
commenced against Borrower and is not dismissed or stayed within sixty (60)
days (provided that no Credit Extensions will be made prior to the dismissal
of such Insolvency Proceeding);
8.6 OTHER AGREEMENTS. If there is a default in any agreement to which
Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of Indebtedness in an amount in excess of Five Hundred Thousand
Dollars ($500,000) or that could have a Material Adverse Effect;
8.7 SUBORDINATED DEBT. If a Borrower makes any payment on account of
Subordinated Debt, except to the extent such payment is allowed under this
Agreement;
8.8 JUDGMENTS. If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least Five Hundred Thousand
Dollars ($500,000) shall be rendered against a Borrower and shall remain
unsatisfied and unstayed for a period of thirty (30) days (provided that no
Credit Extensions will be made prior to the satisfaction or stay of such
judgment);
8.9 MISREPRESENTATIONS. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set
forth herein or in any certificate delivered to Bank as of the date such
representation or warranty was made by any Responsible Officer pursuant to
this Agreement or to induce Bank to enter into this Agreement or any other
Loan Document.
9. BANK'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence and during the continuance
of an Event of Default, Bank may, at its election, without notice of its
election and without demand, do any one or more of the following, all of
which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable
(provided that upon the occurrence of an Event of Default described in
Section 8.5 all Obligations shall become immediately due and payable without
any action by Bank);
(b) Cease advancing money or extending credit to or for the benefit
of Borrower under this Agreement or under any other agreement between
Borrower and Bank;
(c) Settle or adjust disputes and claims directly with account
debtors for amounts, upon terms and in whatever order that Bank reasonably
considers advisable;
(d) Make such payments and do such acts as Bank considers necessary
or reasonable to protect its security interest in the Collateral. Borrower
agrees to assemble the Collateral if Bank so requires, and to make the
Collateral available to Bank as Bank may designate. Borrower authorizes Bank
to enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase,
contest, or compromise any encumbrance, charge, or lien which in Bank's
determination appears to be prior or superior to its security interest and to
pay all expenses incurred in connection therewith. With respect to any of
Borrower's owned premises, Borrower hereby grants Bank a license to enter
into possession of such premises and to occupy the same, without charge, in
order to exercise any of Bank's rights or remedies provided herein, at law,
in equity, or otherwise;
(e) Set off and apply to the Obligations any and all (i) balances
and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing
to or for the credit or the account of Borrower held by Bank;
(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein)
the Collateral. Bank is hereby granted a license or other right, solely
pursuant
to the provisions of this Section 9.1, to use, without charge, Borrower's
labels, patents, copyrights, rights of use of any name, trade secrets, trade
names, trademarks, service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and, in connection with Bank's
exercise of its rights under this Section 9.1, Borrower's rights under all
licenses and all franchise agreements shall inure to Bank's benefit except to
the extent such license would result in a breach of such agreement;
(g) Sell the Collateral at either a public or private sale, or both,
by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrower's premises) as Bank
determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate;
(h) Bank may credit bid and purchase at any public sale; and
(i) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.
9.2 POWER OF ATTORNEY. Borrower hereby irrevocably appoints Bank (and
any of Bank's designated officers, or employees) as Borrower's true and
lawful attorney to: (a) send requests for verification of Accounts or notify
account debtors of Bank's security interest in the Accounts; (b) if an Event
of Default has occurred and is continuing, endorse Borrower's name on any
checks or other forms of payment or security that may come into Bank's
possession; (c) if an Event of Default has occurred and is continuing, sign
Borrower's name on any invoice or xxxx of lading relating to any Account,
drafts against account debtors, schedules and assignments of Accounts,
verifications of Accounts, and notices to account debtors; (d) if an Event of
Default has occurred and is continuing, dispose of any Collateral; (e) if an
Event of Default has occurred and is continuing, make, settle, and adjust all
claims under and decisions with respect to Borrower's policies of insurance;
and (f) if an Event of Default has occurred and is continuing, settle and
adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable;
provided Bank may exercise such power of attorney to sign the name of
Borrower on any of the documents described in Section 4.2 regardless of
whether an Event of Default has occurred. The appointment of Bank as
Borrower's attorney in fact, and each and every one of Bank's rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully repaid and performed and Bank's obligation to
provide advances hereunder is terminated.
9.3 ACCOUNTS COLLECTION. If an Event of Default has occurred and is
continuing, Bank may notify any Person owing funds to a Borrower of Bank's
security interest in such funds and verify the amount of such Account. After
the occurrence and during the continuance of an Event of Default, Borrower
shall collect all amounts owing to Borrower for Bank, receive in trust all
payments as Bank's trustee, and immediately deliver such payments to Bank in
their original form as received from the account debtor, with proper
endorsements for deposit.
9.4 BANK EXPENSES. If a Borrower fails to pay any amounts or furnish any
required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Bank may do any or all of the following:
(a) make payment of the same or any part thereof; (b) set up such reserves
under the Revolving Facility as Bank deems necessary to protect Bank from the
exposure created by such failure; or (c) obtain and maintain insurance
policies of the type discussed in Section 6.6 of this Agreement, and take any
action with respect to such policies as Bank deems prudent. Any amounts so
paid or deposited by Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then applicable
rate hereinabove provided, and shall be secured by the Collateral. Any
payments made by Bank shall not constitute an agreement by Bank to make
similar payments in the future or a waiver by Bank of any Event of Default
under this Agreement.
9.5 BANK'S LIABILITY FOR COLLATERAL. Except as provided under the Code,
Bank shall not in any way or manner be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the
value thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other person whomsoever.
9.6 REMEDIES CUMULATIVE. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Bank of one
right or remedy shall be deemed an election, and no waiver by Bank of any
Event of Default on Borrower's part shall be deemed a continuing waiver. No
delay by Bank shall constitute a waiver, election, or acquiescence by it. No
waiver by Bank shall be effective unless made in a written document signed on
behalf of Bank and then shall be effective only in the specific instance and
for the specific purpose for which it was given.
9.7 DEMAND; PROTEST. Borrower waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, notice of
any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Bank on which Borrower may in any way be
liable.
10. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, certified mail, postage prepaid, return receipt requested, or
by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:
If to Borrower: XXX.Xxxxxxxx Corporation
000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xx. Xxx X. Xxxxx
FAX: (000) 000-0000
If to Bank: Comerica Bank-California
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxx
FAX: (000) 000-0000
The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.
11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of California, without regard to principles of
conflicts of law. Borrower and Bank hereby submit to the jurisdiction of the
state and Federal courts located in the County of Los Angeles and the County of
Santa Xxxxx, State of California. BORROWER AND BANK HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
12. GENERAL PROVISIONS.
12.1 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of each of the
parties; PROVIDED, HOWEVER, that neither this Agreement nor any rights
hereunder may be assigned by Borrower without Bank's prior written consent,
which consent may be granted or withheld in Bank's sole discretion. Bank
shall have the
right without the consent of or notice to Borrower to sell, transfer, negotiate,
or grant participation in all or any part of, or any interest in, Bank's
obligations, rights and benefits hereunder.
12.2 INDEMNIFICATION. Borrower shall defend, indemnify and hold harmless
Bank and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in
connection with the transactions contemplated by this Agreement; and (b) all
losses or Bank Expenses in any way suffered, incurred, or paid by Bank as a
result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under this Agreement, or
otherwise (including without limitation reasonable attorneys fees and
expenses), except for losses caused by Bank's gross negligence or willful
misconduct.
12.3 TIME OF ESSENCE. Time is of the essence for the performance of all
obligations set forth in this Agreement.
12.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall
be severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
12.5 AMENDMENTS IN WRITING, INTEGRATION. This Agreement cannot be
amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents.
12.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.
12.7 SURVIVAL. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities
described in Section 12.2 shall survive until all applicable statute of
limitations periods with respect to actions that may be brought against Bank
have run.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
XXX.XXXXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Title: Chief Financial Officer
-------------------------------------
COMERICA BANK-CALIFORNIA
By: /s/ Xxxxx Xxxxx
---------------------------------------
Title: Vice President
------------------------------------
EXHIBIT A
The Collateral shall consist of all right, title and interest of
Borrower in and to the following:
(a) Any and all goods and equipment now owned or hereafter acquired,
including, without limitation, all machinery, fixtures, vehicles (including
motor vehicles and trailers), and any interest in any of the foregoing, and
all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever located;
(b) Any and all inventory, now owned or hereafter acquired, including,
without limitation, all merchandise, raw materials, parts, supplies, packing
and shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds,
including insurance proceeds, resulting from the sale or disposition of any
of the foregoing and any documents of title representing any of the above,
and Borrower's Books relating to any of the foregoing;
(c) Any and all contract rights and general intangibles now owned or
hereafter acquired, including, without limitation, goodwill, trademarks,
servicemarks, trade styles, trade names, patents, patent applications,
license agreements, franchise agreements, blueprints, drawings, purchase
orders, customer lists, route lists, infringements, claims, computer
programs, computer discs, computer tapes, literature, reports, catalogs,
design rights, income tax refunds, payments of insurance and rights to
payment of any kind, but excluding real estate leases;
(d) Any and all now existing and hereafter arising accounts, contract
rights, royalties, license rights and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods, the licensing of
technology or the rendering of services by Borrower, whether or not earned by
performance, and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by Borrower and
Borrower's Books relating to any of the foregoing;
(e) Any and all documents, cash, deposit accounts, securities, financial
assets, securities entitlements, letters of credit, certificates of deposit,
instruments and chattel paper now owned or hereafter acquired and Borrower's
Books relating to the foregoing;
(f) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, now owned or hereafter
acquired; all trade secret rights, including all rights to unpatented
inventions, know-how, operating manuals, license rights and agreements and
confidential information, now owned or hereafter acquired; all mask work or
similar rights available for the protection of semiconductor chips, now owned
or hereafter acquired; all claims for damages by way of any past, present and
future infringement of any of the foregoing; and
(g) Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.
EXHIBIT B-1
ADVANCE REQUEST FORM
The undersigned hereby certifies as follows:
I, ________________________, am the duly elected and acting _________________
of XXX.Xxxxxxxx. This Advance Request Form is delivered on behalf of Borrower
to Comerica Bank-California, pursuant to that certain Loan and Security
Agreement between the undersigned and other Borrower and Comerica
Bank-California dated August 11, 1999 (the "Agreement"). The terms used
herein which are defined in the Agreement have the same meaning herein as
ascribed to them therein.
Borrower hereby requests on __________________, 19______ an Advance (the
"Advance") as follows:
(a) The date on which the Advance is to be made is _________,____.
(b) The amount of the Advance is to be ___________________
($____________), in the form of a Prime Rate Advance of $__________________;
and/or a LIBOR Rate Advance of $____________ for an Interest Period of
__________________ months.
All representations and warranties of Borrower and stated in the Agreement are
true and correct in all material respects as of the date of this request for an
Advance; provided, however, that those representations and warranties expressly
referring to another date shall be true and correct in all material respects as
of such date.
IN WITNESS WHEREOF, this Advance Request Form is executed by the undersigned as
of this ______ day of __________________, ______.
XXX.XXXXXXXX CORPORATION
By:
---------------------------------------
Title:
------------------------------------
EXHIBIT B-2
LIBOR RATE CONVERSION/CONTINUATION CERTIFICATE
The undersigned hereby certifies as follows:
I, ____________________, am the duly elected and acting ____________________ of
XXX.Xxxxxxxx ("Borrower").
This certificate is delivered on behalf of Borrower to Bank, pursuant to
Section 2 of that certain Loan and Security Agreement between the undersigned
and other Borrower and Bank (the "Agreement"). The terms used in this LIBOR
Rate Conversion/Continuation Certificate which are defined in the Agreement
have the same meaning herein as ascribed to them therein.
Borrower hereby requests on _________________, _______ a LIBOR Rate Extension
(the "Extension") as follows:
(a) ___ (i) A rate conversion of an existing Prime Rate
Extension from a Prime Rate Extension to a LIBOR Rate
Extension; or
___ (ii) A continuation of an existing LIBOR Rate Extension as a
LIBOR Rate Extension.
[CHECK (i) OR (ii) ABOVE]
(b) The date on which the Extension is to be made is
_____________________, ____
(c) The amount of the Extension is to be ___________________
($____________), for an Interest Period of ____________ month(s).
All representations and warranties of Borrower stated in the Agreement are
true and correct in all material respects as of the date of this request for
a loan; provided, however, that those representations and warranties
expressly referring to another date shall be true and correct in all material
respects as of such date.
IN WITNESS WHEREOF, this LIBOR Rate Conversion/Continuation Certificate is
executed by the undersigned as of this _____________ day of____________________,
_____.
XXX.XXXXXXXX CORPORATION
By:
---------------------------------------
Title:
------------------------------------
FOR INTERNAL BANK USE ONLY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
LIBOR Pricing Date LIBOR Rate LIBOR Rate Variance Maturity Date
--------------------------------------------------------------------------------
____%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXHIBIT C
BORROWING BASE CERTIFICATE
--------------------------------------------------------------------------------
Borrower: XXX.Xxxxxxxx Corporation Bank: Comerica Bank- California
Commitment Amount: $15,000,000
--------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE
1. Accounts Receivable Book Value as of ___ $_________
2. Additions (please explain on reverse) $_________
3. TOTAL ACCOUNTS RECEIVABLE $_________
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4. Amounts over 90 days due $_________
5. Balance of 25% over 90 day accounts $_________
6. Concentration Limits $_________
7. Foreign Accounts $_________
8. U.S. Governmental Accounts $_________
9. Contra Accounts $_________
10. Demo Accounts $_________
11. Intercompany/Employee Accounts $_________
12. Other (please explain on reverse) $_________
13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $_________
14. Eligible Accounts (#3 minus #13) $_________
15. LOAN VALUE OF ACCOUNTS (80% of #14) $_________
BALANCES
16. Maximum Loan Amount $_________
17. Total Funds Available (Lesser of #15 or $_________
#16)
18. Present balance owing on Line of Credit $_________
19. RESERVE POSITION (#17 minus #18) $_________
THE UNDERSIGNED REPRESENTS AND WARRANTS THAT THE FOREGOING IS TRUE, COMPLETE AND
CORRECT, AND THAT THE INFORMATION REFLECTED IN THIS BORROWING BASE CERTIFICATE
COMPLIES WITH THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE LOAN AND
SECURITY AGREEMENT BETWEEN THE UNDERSIGNED AND COMERICA BANK-CALIFORNIA.
COMMENTS:
XXX.Xxxxxxxx Corporation
By:
---------------------------------------
Authorized Signer
EXHIBIT D
COMPLIANCE CERTIFICATE
TO: COMERICA BANK-CALIFORNIA
FROM: XXX.Xxxxxxxx Corporation
The undersigned authorized officer, on behalf of XXX.Xxxxxxxx Corporation hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is
in complete compliance for the period ending _________________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof; provided, however that those representations and
warranties expressly referring to another date shall be true and correct as of
such date. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.
REPORTING COVENANT REQUIRED COMPLIES
------------------ -------- --------
Monthly income statements Monthly within 30 Yes No
Quarterly balance sheet, income Quarterly within 45 Yes No
statement and statement of cash flows days
Annual (CPA Audited) FYE within 90 days Yes No
10K and 10Q Within 5 days Yes No
Domestic balance sheet, A/R & A/P Monthly within 15 Yes No
Agings days (when
applicable)
A/R Audit Initial and Annual Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
Maintain on a Quarterly Basis:
Minimum Quick Ratio 1.50:1.00 _____:1.00 Yes No
Maximum Senior Liabilities-EBITDA 1 _____:1.0 Yes No
Maximum Debt-ETNW 2.50:1.00 2 _______ Yes No
Minimum Profitability $1.00 3 $_______ Yes No
Minimum Fixed Charge Coverage 1.10:1.00 4 _____:1.00 Yes No
Minimum Effective TNW 5
1 4.5:1.0 on 6/30/99; 3.25:1.0 on 9/30/99; 2.0:1.0 on 12/31/99. Terminates on
3/31/2000.
2 Beginning March 31, 2000.
3 Profitable Annually; no more than 1 quarter of losses.
4 Beginning December 31, 1999 on Quarterly Basis, increasing to 1.25:1.00 as
of June 30, 2000 and thereafter.
5 $2,000,000 on 6/30/99; $6,500,000 on 9/30/99; $15,000,000 on 12/31/99 to be
increased by 75% of net income plus 100% of equity proceeds received
thereafter.
-----------------------------------
BANK USE ONLY
COMMENTS REGARDING EXCEPTIONS: See
Attached
Received by:
---------------------
Sincerely, AUTHORIZED SIGNER
----------------------------------- Date:
SIGNATURE ----------------------------
Verified:
----------------------------------- ------------------------
TITLE AUTHORIZED SIGNER
----------------------------------- Date:
DATE ----------------------------
Compliance Status: Yes No
-----------------------------------
SCHEDULE OF EXCEPTIONS
SCHEDULE 1.1a
PERMITTED INDEBTEDNESS
1. Notes Payable - Former Silverado Investors $ 300,000
2. Notes Payable - Former Marc Investors $ 14,300,000
3. 7 Convertible Subordinated Debentures due 2004 $ 58,556,271
4. Company intends to issue additional 7 Convertible $ 7,943,729 Subordinated
Debentures due 2004
SCHEDULE 1.1b
PERMITTED INVESTMENTS
1. Union Bank of California N.A.
Business Trust Division
HighMark Money Market - U.S. Government Obligation Funds
2. Xxxxxxx Xxxxx Xxxxxx
Money Market Account
SCHEDULE 1.1c
PERMITTED LIENS
1. Financing Statement 97462988 filed with the Office of the Secretary of State
of Massachusetts on April 22, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett Packard Company Finance & Remark as secured
party.
2. Financing Statement 99608248 filed with the Office of the Secretary of State
of Massachusetts on February 4, 1999, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Leasetec Systems Credit as secured party.
3. Financing Statement 9521460830 filed with the Office of the Secretary of
State of California on July 31, 1995, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company as secured party (expires July
31, 2000).
4. Financing Statement 9711360309 filed with the Office of the Secretary of
State of California on April 21, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on April 22, 2002).
5. Financing Statement 9711360313 filed with the Office of the Secretary of
State of California on April 21, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on April 22, 2002).
6. Financing Statement 0000000000 filed with the Office of the Secretary of
State of California on April 21, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on April 22, 2002).
7. Financing Statement 9711360193 filed with the Office of the Secretary of
State of California on April 24, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on April 24, 2002).
8. Financing Statement 0000000000 filed with the Office of the Secretary of
State of California on July 17, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 17, 2002).
9. Financing Statement 97121760428 filed with the Office of the Secretary of
State of California on July 29, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 29, 2002).
10. Financing Statement 9726160456 filed with the Office of the Secretary of
State of California on September 15, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on September 16, 2002).
11. Financing Statement 0000000000 filed with the Office of the Secretary of
State of California on October 10, 1997, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on October 10, 2002).
12. Financing Statement 9809860722 filed with the Office of the Secretary of
State of California on April 8, 1998, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on April 8, 2003).
13. Financing Statement 9818460520 filed with the Office of the Secretary of
State of California on July 1, 1998, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 1, 2003).
14. Financing Statement 9819660362 filed with the Office of the Secretary of
State of California on July 13, 1998, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 13, 2003).
15. Financing Statement 9821161157 filed with the Office of the Secretary of
State of California on July 29, 1998, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 29, 2003).
16. Financing Statement 9821161200 filed with the Office of the Secretary of
State of California on July 29, 1998, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 29, 2003).
17. Financing Statement 9821161209 filed with the Office of the Secretary of
State of California on July 29, 1998, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 29, 2003).
18. Financing Statement 9821161216 filed with the Office of the Secretary of
State of California on July 29, 1998, disclosing The XxxXxxx-Xxxxxxxxxx
Corporation as debtor and Hewlett-Packard Company Finance & Remark as secured
party (expires on July 29, 2003).
19. Filing Number D262580 filed with the Office of the Secretary of State of
Michigan on July 29, 1997, disclosing The XxxXxxx-Xxxxxxxxxx Corporation as
debtor and Hewlett-Packard Co. as secured party.
20. Filing Number D279629 filed with the Office of the Secretary of State of
Michigan on September 15, 1997, disclosing The XxxXxxx-Xxxxxxxxxx Corporation as
debtor and Hewlett-Packard Co. as secured party.
21. Filing Number D392960 filed with the Office of the Secretary of State of
Michigan on July 1, 1998, disclosing The XxxXxxx-Xxxxxxxxxx Corporation as
debtor and Hewlett-Packard Co. as secured party.
SCHEDULE 5.6
NAMES
1. The XxxXxxx-Xxxxxxxxxx Corporation
SCHEDULE 5.7
INTELLECTUAL PROPERTY
MSC has license agreements (for components of MSC/NASTRAN, MSC/PATRAN,
MSC/DYTRAN and MSC/INVISION) with the following third parties:
-----------------------------------------------------------------------------------------------
THIRD PARTY CONTRACT BEGIN DATE LICENSED PRODUCT(S)
-----------------------------------------------------------------------------------------------
Apple Computer 11/03/98 QuickTime (on-line documentation)
-----------------------------------------------------------------------------------------------
AEA (Xxxxxxx Laboratories) 11/18/89 Math Kernels (MSC/NASTRAN only)
-----------------------------------------------------------------------------------------------
Advanced Visual Systems 10/02/97 AVS/Express
-----------------------------------------------------------------------------------------------
Adobe Technology 11/24/97 FrameMaker, Frame Viewer
-----------------------------------------------------------------------------------------------
Adobe Software 11/24/98 Adobe Fonts (on-line documentation)
-----------------------------------------------------------------------------------------------
Automotive Analytics, Inc. 01/02/97 XXX
-----------------------------------------------------------------------------------------------
Battelle Memorial 08/30/90 MIL-KDBK-5 databanks
-----------------------------------------------------------------------------------------------
BEQE Ltd. 09/01/91 XXX/DYNA
-----------------------------------------------------------------------------------------------
Blue Ridge Numerics 04/19/96 CF Design
-----------------------------------------------------------------------------------------------
The Boeing Company 08/08/97 BCSLIB_EXT
-----------------------------------------------------------------------------------------------
The Boeing Company 09/17/97 A502
-----------------------------------------------------------------------------------------------
CADSI 06/27/91 DADS
-----------------------------------------------------------------------------------------------
Cimplex 11/12/90 2 D Variational Curve Editor
-----------------------------------------------------------------------------------------------
Computer Generation Int'l 02/18/97 HView Widget Package
-----------------------------------------------------------------------------------------------
Computervision 06/30/92 CV-DORS
-----------------------------------------------------------------------------------------------
Dassault Systemes 10/11/91 CATEXpres and CATIA
-----------------------------------------------------------------------------------------------
DataFocus, Inc. 12/22/95 NuTCRACKER
-----------------------------------------------------------------------------------------------
Enterprise Software, Inc. 08/04/86 FEMAP
-----------------------------------------------------------------------------------------------
FE Design 11/02/97 Shape & Topology
-----------------------------------------------------------------------------------------------
Globetrotter 05/17/94 FLEXlm
-----------------------------------------------------------------------------------------------
Geometric Software Services 03/27/98 AFR
-----------------------------------------------------------------------------------------------
Geometric Software Services 11/30/97 PARACIS LIB
-----------------------------------------------------------------------------------------------
Harrow Software 06/30/96 Formula Graphics
-----------------------------------------------------------------------------------------------
Xxxxxxx, Karlssen & Xxxxxxxx 10/02/92 ABAQUS
-----------------------------------------------------------------------------------------------
Hummingbird 08/01/98 EXCEED
-----------------------------------------------------------------------------------------------
IBM 03/10/93 ILU-Preconditioners
-----------------------------------------------------------------------------------------------
Information Indexing 03/31/95 CenBASE/Materials
-----------------------------------------------------------------------------------------------
INRIA 01/14/98 GHS3D
-----------------------------------------------------------------------------------------------
Inprise (aka: Borland) 06/20/90 Interbase Runtime Software
-----------------------------------------------------------------------------------------------
INTECO 05/23/95 Library B (Interative Solvers)
-----------------------------------------------------------------------------------------------
Intelligent Light 0228/91 DAA
-----------------------------------------------------------------------------------------------
Interleaf 09/13/93 WorldView
-----------------------------------------------------------------------------------------------
Intergraph 08/17/98 OLE for D&M (patent license)
-----------------------------------------------------------------------------------------------
ITI 01/01/94 Step AP203
-----------------------------------------------------------------------------------------------
KL Group 12/07/97 Electra Chart Runtime Libraries
-----------------------------------------------------------------------------------------------
Xxxx Xxxxxxxxxx 11/30/93 Laminate Modeler
-----------------------------------------------------------------------------------------------
Materials Sciences Corp. 09/15/94 MIL-HDBK-17 databanks
-----------------------------------------------------------------------------------------------
XxXxxxxx Structural Dynamics 05/01/97 N5KQ
-----------------------------------------------------------------------------------------------
MDI 05/30/86 XXXX-KINESTATOCS
-----------------------------------------------------------------------------------------------
Moldflow Corp. 04/12/94 MoldFlow Interface Modules
-----------------------------------------------------------------------------------------------
NASA 05/xx/73 NASTRAN
-----------------------------------------------------------------------------------------------
nCode 08/16/94 FE-Fatigue
-----------------------------------------------------------------------------------------------
NewCode 10/10/94 Memory Tuning System
-----------------------------------------------------------------------------------------------
Open Software Foundation 08/24/89 OSF/Motif and various shareware
packages
-----------------------------------------------------------------------------------------------
Xxx Xxxx & Partners 02/29/96 DCODE
-----------------------------------------------------------------------------------------------
Penton Publishing 10/31/94 Materials Selector
-----------------------------------------------------------------------------------------------
Phar Lap Software 04/18/88 Runtime libraries
-----------------------------------------------------------------------------------------------
PKWare 01/11/95 PKSFX
-----------------------------------------------------------------------------------------------
Samtech 03/22/93 SAMCEF Interface
-----------------------------------------------------------------------------------------------
Samtech 08/22/93 XXXXXX
-----------------------------------------------------------------------------------------------
SCO (Santa Xxxx Operations) 03/11/98 SCO/XENIX
-----------------------------------------------------------------------------------------------
SFE GmbH 05/11/98 AKUSMOD
-----------------------------------------------------------------------------------------------
STI 05/09/94 Space Xxxx IMC
-----------------------------------------------------------------------------------------------
Spatial Technologies 03/21/95 ACIS (3D Toolkit)
-----------------------------------------------------------------------------------------------
Unigraphics Corp. 02/22/90 PARASOLID
-----------------------------------------------------------------------------------------------
Unigraphics Corp. 08/xx/99 Open Toolkit
-----------------------------------------------------------------------------------------------
VR&D 11/01/88 DOT
-----------------------------------------------------------------------------------------------
UDRI 09/13/90 AFML-TR-77-151, AFWAL-7R-81-4172
-----------------------------------------------------------------------------------------------
University of Minnesota 12/31/97 METIS
-----------------------------------------------------------------------------------------------
Visual Kinematics 0226/91 FOCUS and Vistools
-----------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxx, Inc. 02/28/94 Plastics Materials Properties Databanks
-----------------------------------------------------------------------------------------------
ZONA Technology 01/17/91 ZONA 51
-----------------------------------------------------------------------------------------------
- MSC cannot grant a security interest in the above products, but the
majority of the agreements are transferable with the consent of licensee,
which shall not be unreasonably withheld.
- MSC's hardware partners provide MSC with loaner equipment and software for
use in development and support activities. Title to this equipment and
software remains with the partner.
- MSC products will contain run-time library codes, belonging to the hardware
platform manufacturers, if required for operation on the given computer
system. All such codes remain the property of the hardware manufacturer.
SCHEDULE 5.8
LITIGATION
NONE
SCHEDULE 5.9
MATERIAL ADVERSE CHANGE
IN FINANCIAL STATEMENTS
NONE
SCHEDULE 7.10
LOCATIONS OF INVENTORY
AND EQUIPMENT
XXX.Xxxxxxxx Corporation
00000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
XXX.Xxxxxxxx Corporation
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
XXX.Xxxxxxxx Corporation
00000 Xxxxxxxxxxxx #000
Xxxxxxxxxx, XX 00000
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement is entered into as of August
11, 1999 by and between Comerica Bank-California ("Bank") and XXX.Xxxxxxxx
Corporation., a Delaware corporation ("Grantor").
RECITALS
A. Bank has agreed to make certain advances of money and to extend certain
other financial accommodation to Grantor (the "Loans") in the amounts and manner
set forth in that certain Loan and Security Agreement by and between Bank and
Grantor (as the same may be amended, modified or supplemented from time to time,
the "Loan Agreement"; capitalized terms used herein are used as defined in the
Loan Agreement). Bank is willing to make the Loans to Grantor, but only upon the
condition, among others, that Grantor shall grant to Bank a security interest in
certain Copyrights, Trademarks and Patents to secure the obligations of Grantor
under the Loan Agreement.
B. Pursuant to the terms of the Loan Agreement, Grantor has granted to Bank
a security interest in all of Grantor's right, title and interest, whether
presently existing or hereafter acquired, in, to and under all of the
Collateral.
NOW, THEREFORE, Grantor agrees as follows:
AGREEMENT
To secure its obligations under the Loan Agreement and other obligations
owing to Bank from time to time, Grantor grants and pledges to Bank a security
interest in all of Grantor's right, title and interest in, to and under certain
property (including without limitation those Copyrights, Patents and Trademarks
listed on Schedules A, B and C hereto), and including without limitation all
proceeds thereof (such as, by way of example but not by way of limitation,
license royalties and proceeds of infringement suits), the right to xxx for
past, present and future infringements, all rights corresponding thereto
throughout the world and all re-issues, divisions continuations, renewals,
extensions and continuations-in-part thereof (the "Intellectual Property
Collateral").
This security interest is granted in conjunction with the security interest
granted to Bank under the Loan Agreement. The rights and remedies of Bank with
respect to the security interest granted hereby are in addition to those set
forth in the Loan Agreement and the other Loan Documents, and those which are
now or hereafter available to Bank as a matter of law or equity. Each right,
power and remedy of Bank provided for herein or in the Loan Agreement or any of
the Loan Documents, or now or hereafter existing at law or in equity shall be
cumulative and concurrent and shall be in addition to every right, power or
remedy provided for herein and the exercise by Bank of any one or more of the
rights, powers or remedies provided for in this Intellectual Property Security
Agreement, the Loan Agreement or any of the other Loan Documents, or now or
hereafter existing at law or in equity, shall not preclude the simultaneous or
later exercise by any person, including Bank, of any or all other rights, powers
or remedies.
IN WITNESS WHEREOF, the parties have caused this Intellectual Property
Security Agreement to be duly executed by its officers thereunto duly authorized
as of the first date written above.
GRANTOR:
ADDRESS OF GRANTOR: XXX.XXXXXXXX CORPORATION
000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000 By: /s/ Xxxxx X. Xxxxx
------------------
Attn: Xx. Xxx Xxxxx Title: Chief Financial Officer
-----------------------
BANK:
ADDRESS OF BANK: COMERICA BANK-CALIFORNIA
00000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000 By: /s/ Xxxxx Xxxxx
---------------
Attn: Xx. Xxxxx Xxxxx Title: Vice President
--------------
EXHIBIT A
Copyrights
XXX.Xxxxxxxx Corporation has copyright applications pending for the following
products:
MSC/NASTRAN
MSC/PATRAN
MSC/DYTRAN
MSC/MVISION
XXX.Xxxxxxxx Corporation has the following copyrights registered with the United
States Copyright Office:
Title of Work: Number
MSC/NASTRAN Numerical Methods User's Guide TX-4-122-699
Version 68
MSC/NASTRAN Release Notes TX 0-000-000
Version 68
MSC/CASE TX 1 678 211
NVH_Manager TXu 672-362
SubSystem - Modeler; SubSystem - Template TXu 670-776
The XxxXxxx-Xxxxxxxxxx Corporation: TX - 2 332 521
The First Twenty Years
PROBE: A computer Implementation of the p-Version TXu 196-340
of the Finite Element Method
XXXX TX 1 752 523
MSC/mod TX 2 353 128
MSC/CASE TX 1 678 211
MSC/CAL TX 2 132 881
MSC/CEL TX 0-000-000
MSC/AutoFEM TX 1 974 358
PISCES ELK Program, User Manuals TX 2 066 001
ADCAD2 User's Manual TX 2 399 000
MSC/NASTRAN Common Questions and Answers TX 0-000-000
Second Edition, Version 68
MSC/NASTRAN: Common Questions & Answers TX 0-000-000
For Version 67.5
MSC/NASTRAN Bibliography Second Edition TX 0-000-000
MSC/NASTRAN Bibliography TX 0-000-000
MSC/NASTRAN Geometry Evaluator TX 0-000-000
Developer's Guide
MSC/Nastran Aerolastic Analysis User's Guide, TX 0-000-000
version 68
MSC/NASTRAN Design Sensitivity and Optimization TX 0-000-000
User's Guide, Version 68
User's Guide: MSC/NASTRAN Design Sensitivity TX 0-000-000
and Optimization (V.67)
Handbook for Structural Optimization TX 3 641 824
(MSC/NASTRAN V.66)
User's Guide: MSC/NASTRAN Numerical Methods TX 0-000-000
(V.67)
Handbook for Numerical Methods TX 3 641 825
(MSC/NASTRAN V.65)
MSC/NASTRAN DMAP Module Dictionary TX 0-000-000
Version 68
Handbook for Non-Linear Analysis TX 0-000-000
(Based on Version 67)
Getting Started with MSC/NASTRAN User's Guide TX 0-000-000
Users Manual - MSC/NASTRAN Version 67 TX 3 663 368
Users Manual (MSC/NASTRAN V.66) TX 3 682 218
MSC/NASTRAN Users Manual TX 0-000-000
(MSC/NASTRAN V. 66A) Vol. 1
MSC/NASTRAN Handbook for Superelement Analysis TX 0-000-000
MSC/NASTRAN Aeroelastic Supplement TX 2 392 005
MSC/NASTRAN Linear Static Analysis User's Guide TX 0-000-000
Version 68
MSC/NASTRAN Handbook for Linear Analysis TX 0-000-000
MSC/NASTRAN Handbook for Dynamic Analysis TX 2 326 640
MSC/NASTRAN Thermal Analysis User's Guide TX 0-000-000
Version 68
MSC/NASTRAN Handbook for Thermal Analysis TX 2 326 641
Introduction to MSC/NASTRAN Version 67 TX 3 730 982
Introduction to Finite Element Analysis TXu 230 999
and Nastran Utilization
MSC/NASTRAN Installation and Operation X 0-000-000
Instructions SUN (Solaris) Version 68
MSC/NASTRAN Installation and Operation TX 0-000-000
Instructions CRAY (UNICOS)
MSC/NASTRAN Installation and Operation TX 0-000-000
Instructions CONVEX (ConvexOS) Version 68
MSC/NASTRAN Installation and Operation TX 0-000-000
Instructions HP 9000 (HP-UX) Version 68
MSC/NASTRAN Installation and Operation TX 0-000-000
Instructions IBM RISC System/6000 V. 68
MSC/NASTRAN Installation and Operation TX 0-000-000
Instructions SUN (SunOS) Version 68
MSC/NASTRAN Installation and Operation TX 0-000-000
MSC/NASTRAN Installation and Operation TX 0-000-000
Instructions Digital Alpha (OSF/1) Version 68
MSC/NASTRAN Application Manual, Sections 7.6 TX 0-000-000
& 7.7 Intel 386/486 (SCO UNIX) Version 67.5
MSC/NASTRAN Application Manual, Sections 7.6 TX 0-000-000
& 7.7 HITACHI (HI-OSF/1-MJ) Version 67.5
MSC/NASTRAN Release Notes for Version 67.5 TX 3 641 823
MSC/NSTRAN V. 67.5 TX 3 641 821
Installation Procedure for Convex
MSC/NASTRAN V. 67.5 TX 3 679 607
Installation Procedure for CRAY (UNICOS)
MSC/NASTRAN V. 67.5 TX 0-000-000
Installation Procedure for DEC VAX (VMS)
MSC/NASTRAN V. 67R2 TX 0-000-000
MSC/NASTRAN V. 67.5 TX 0-000-000
Installation procedure for HP9000 (HP-UX)
MSC/NASTRAN, V. 67.5 TX 3 641 822
Installation Procedure for IBM RISC System 6000
MSC/NASTRAN V. 67.5 TX 3 679 606
Installation Procedure for IBM (MVS/XA)
MSC/NASTRAN V. 67.5 TX 0-000-000
Installation Procedure for SGI (IRIX)
MSC/NASTRAN V. 67.5 TX 3 679 608
Installation Procedure for Sun
MSR-48 MSGMESH USER'S GUIDE A 791247
MSC/NASTRAN APPLICATION MANUAL A 404717
[MSR-35, Xxxxxxx X. Xxxxxx,
Editor, November 1972]
MSC/NASTRAN APPLICATION MANUAL A 550535
MSR-35 Update Documentation,
Edition 73.1-C, 3/20/73
MSC/NASTRAN APPLICATION MANUAL A 550534
MSR-35 Update Documentation,
Edition 73.2-C, 5/1/73
MSC/NASTRAN APPLICATION MANUAL A 550533
MSR-35 Update Documentation,
Edition 73.3-C, 7/1/73
MSC/NSTRAN APPLICATION MANUAL A 550532
MSR-35 Update Documentation,
Edition 73.4-C, 8/1/73
MSC/NASTRAN APPLICATION MANUAL A 550531
MSR-35 Update Documentation,
Edition 73.5-C, 9/1/73
MSC/NASTRAN APPLICATION MANUAL A 550536
MSR-35 Update Documentation,
Edition 73.6-I, 10/10/73
MSC/NASTRAN APPLICATION MANUAL A 550537
MSR-35 Update Documentation,
Edition 73.1-I, 3/20/73
MSC/NASTRAN APPLICATION MANUAL A 550538
MSR-35 Update Documentation,
Edition 73.5-I, 9/1/73
MSC/NASTRAN APPLICATION MANUAL A 550539
MSC/NASTRAN APPLICATION MANUAL A 550540
MSR-35 Update Documentation,
Edition 73.3-I, 7/1/73
MSC/NSTRAN APPLICATION MANUAL A 550541
MSR-35 Update Documentation,
Edition 73.2-I, 5/1/73
MSC/NASTRAN APPLICATION MANUAL A 550542
MSR-35 Update Documentation,
Edition 73.6-C 10/10/73
MSC/NASTRAN APPLICATION MANUAL FOR A 657365
UNIVAC 1100 SERIES
MSR-35 January 1974
MSC/CDC NASTRAN APPLICATION MANUAL A 657366
Update Documentation 74.5 9/1/74
MSC/CDC NASTRAN APPLICATION MANUAL A 657367
Update Documentation 74.4 6/20/74
MSC/CDC NASTRAN APPLICATION MANUAL A 657368
Update Documentation 74.3 4/20/74
MSC/NASTRAN APPLICATION MANUAL A 657369
Update Documentation 74.2-C 3/10/74
MSC/NASTRAN APPLICATION MANUAL A 657370
Update Documentation 74.1-C 1/10/74
MSC/IBM NASTRAN APPLICATION MANUAL A 657371
Update Documentation 74.5 9/1/74
MSC/IBM NASTRAN APPLICATION MANUAL A 657372
Update Documentation 74.4 6/20/74
MSC/IBM NASTRAN APPLICATION MANUAL A 657373
Update Documentation 74.3 4/20/74
MSC/NASTRAN APPLICATION MANUAL A 657374
Update Documentation 74.2-I 3/10/74
MSC/NASTRAN APPLICATION MANUAL A 657375
Update Documentation 74.1-I 1/10/74
MSC/UNIVAC NASTRAN APPLICATION A 657376
MANUAL
Update Documentation 74.5 9/1/74
MSC/UNIVAC NASTRAN APPLICATION A 657577
MANUAL
Update Documentation 74.4 6/20/74
MSC/UNIVAC NASTRAN APPLICATION A 657378
MANUAL
Update Documentation 74.3 4/20/74
MSC/NASTRAN APPLICATION MANUAL A657379
MANUAL
Update Documentation 74.2-U 3/10/74
MSC/UNIVAC NASTRAN APPLICATION A 767282
MANUAL
{Update Documentation 75.1]
MSC/UNIVAC NASTRAN APPLICATION A 791243
MANUAL - 1975 Update Series
[Update Documentation 75.2]
MSC/IBM NASTRAN APPLICATION MANUAL A 791244
Update Series
[Update Documentation 75.2]
MSC/IBM NASTRAN APPLICATION MANUAL A 791245
Update Series
[Update Documentation 75.1]
MSC/CDC NASTRAN APPLICATION MANUAL A 791246
Update Series
[Update Documentation 75.1]
MSC/CDC 7600 NASTRAN APPLICATION A 791248
MANUAL - 1975 Update Series
MSC/CDC/6000 NASTRAN APPLICATION A 791249
MANUAL - 1975 Update Series
[Update Documentation 75-2]
MSC/NSTRAN APPLICATION MANUAL A 792761
FOR CDC 7000 SERIES
MSC/XL Users Manual (Version 2.0) TX 0-000-000
MSC/XL Users Manual Version 1 TX 3 658 655
Concept Solids, Version 4.0.1 TX 3 402 882
MSC/WORLD TX 0-000-000
Version 2
MSC/WORLD TX4-087-159
Version 1
MSC/WORLD TX 0-000-000
Volume IV
MSC/WORLD TX 0-000-000
Volume IV2
MSC/WORLD TX 0-000-000
Volume IV1
MSC/WORLD X 3 674 930
Volume III #3
MSC/WORLD TX 3 674 928
Volume III #2
MSC/WORLD TX 3 674 765
Volume III #1
MSC/WORLD TX 3 674 767
Volume II #2
MSC/WORLD TX 3 674 766
Volume II #1
MSC/WORLD TX 3 674 931
Volume 1 #2
MSC/WORLD TX 3 674 929
MSC/MATE TX 1 701 129
MSC/pal 2 TX 1 715 660
EXHIBIT B
Patents
XXX.Xxxxxxxx Corporation has a patent application pending for Distributed
Application Queuing Service Method and Application.
PDA Engineering, Inc. has filed a transfer application to assign seven patents
to XXX.Xxxxxxxx Corporation, a copy of the application is attached hereto.
EXHIBIT C
Trademarks
XXX.Xxxxxxxx Corporation has the following trademarks:
Name Class Registration Number Registration Date
EU
NASTRAN 09, 16, 42 000184085 April 1, 1996
DYTRAN 09, 16, 42 000184044 April 1, 1996
PATRAN 09, 16, 42 000184143 April 1, 1996
MSC/NASTRAN 09, 16, 42 000190777 April 3, 1996
MSC 09, 16, 42 000183947 April 1, 1996
Benelux
DYTRAN 09 577807 May 24, 1995
XXXXXXX 00 000000 May 24, 1995
MSC 09 497449 June 5, 0000
Xxxxxx
MSC 09, 16 1704054 June 19, 1991
NASTRAN 09 95/573020 May 24, 1995
XXX/XXXXXX 00, 00 00/000000 Xxx. 00, 0000
Xxxxxxx
MSC 09 395,21,871 Sept. 23, 1997
MSC/DYTRAN 09, 16 204687 July 19, 1993
MSC/NASTRAN 09, 16 2040688 July 19, 1993
Russian Federation
MSC/MVISION 09 171998 Dec. 26, 1996
XXX/XXXXXXX 00 000000 Xxx. 00, 0000
Xxxxxxxxx
MSC 16 559782 July 16, 1991
MSC 09 559781 July 16, 0000
Xxxxxx
MSC 09, 16, 42 319,655 Oct. 17, 1986
Ireland
MSC 09 172678 May 24, 1995
U. K.
MSC 09 1303974 March 14, 1987
MSC 16 1303976 March 14, 1987
MSC 35 1303977 March 14, 1987
MSC 41 1303978 March 14, 1987
MSC 42 1303979 Xxxxx 00, 0000
Xxxxxx
MSC 09 98884 May 28, 0000
Xxxxx
MSC 09, 16 612894 Dec. 29, 1993
Taiwan
(local class #)
XXX 00 00000 Xxx. 16, 1987
MSC 72 391789 Feb. 16, 1988
MSC 56 381345 Nov. 1, 1987
(Note: renewal registration for all three marks has been filed)
Spain
MSC 09 1986989 March 0, 0000
Xxxxxxxx xx Xxxxx (Xxxxx Xxxxx)
(local class #)
MSC 52 249451 Sept. 16, 1992
MSC/DYTRAN 39 286482 March 10, 0000
Xxxxxx Xxxxxx
MSC 16 1,324,421 March 12, 1985
MSC 42 1,341,607 June 11, 1985
MSC 09 1,571,643 Dec. 19, 1989
MSC 09 2,075,622 July 1, 1997
MSC/ 16 1,324,419 Xxxxx 00, 0000
XXX/ 09 1,330,631 April 16, 1985
MSC.cel 09 1,525,384 Feb. 21, 1989
MSC/DYTRAN 09 1,856,660 Oct. 4, 1994
MSC/MVISION 09 2,075,722 July 1, 1997
MSC/PATRAN 09 2,075,723 July 1, 1997
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. trademarks for obsolete products which are still in active use
MSC/ARIES 09 1,964,963 April 2, 1996
MSC.pal 09 1,367,412 Oct. 29, 1996
MSC/PISCES 09 1,647,975 June 18, 1991
MSC/XL 09 2,021,105 Dec. 3, 1996
MSC/XL 09 1,571,709 Dec. 19, 1989
