EXHIBIT 10.23
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "AGREEMENT"), is entered into as of February 12,
1997, between NUMEREX CORP. ("NUMEREX") AND ITS U.S. SUBSIDIARIES listed on the
signature pages hereto (NumereX and such Subsidiaries each individually a
"BORROWER" and collectively, the "BORROWERS"; NumereX and all of its
Subsidiaries, both U.S. and foreign, are sometimes collectively referred to as
"NUMEREX AND ITS SUBSIDIARIES"), and PNC BANK, NATIONAL ASSOCIATION (the
"BANK").
The Borrowers and the Bank, with the intent to be legally bound, agree as
follows:
1. LOAN AND SECURITY
1.1 LOAN. The following loans, lines of credit and credit facilities
(if one or more, collectively, the "LOAN"), made for the purpose indicated below
shall be subject to and governed by this Agreement:
Amount and Type Purpose
--------------- -------
$10,000,000 Convertible Line of Credit General working capital and
acquisitions
The Loan is or will be evidenced by a promissory note or notes of the Borrowers
(if one or more, collectively, the "NOTE") acceptable to the Bank, which shall
set forth the interest rate, repayment and other provisions, the terms of which
are incorporated into this Agreement by reference.
1.2 SECURITY. The security for repayment of the Loan shall consist
of equity interests of NumereX's direct and indirect foreign subsidiaries
pledged under stock pledge or similar agreements heretofore, contemporaneously
or hereafter executed and delivered to the Bank (the "SECURITY DOCUMENTS"),
which shall secure repayment of the Loan, the Note and all other loans,
advances, debts, liabilities, obligations, covenants and duties owing by the
Borrowers to the Bank of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under any
agreement, instrument or document, whether or not for the payment of money,
whether arising by reason of an extension of credit, opening of a letter of
credit, loan or guarantee or in any other manner, whether arising out of
overdrafts on deposit or other accounts or electronic funds transfers (whether
through automatic clearing houses or otherwise) or out of the Bank's non-receipt
of or inability to collect funds or otherwise not being made whole in connection
with depository transfer check or other similar arrangements, whether direct or
indirect (including those acquired by assignment or participation), absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising, and any amendments, extensions, renewals or increases and all costs and
expenses of the Bank incurred in the documentation, negotiation, modification,
enforcement, collection or otherwise in connection with any of the foregoing,
including but not limited to reasonable attorneys' fees and expenses
(hereinafter referred to collectively as the "OBLIGATIONS"). Unless expressly
provided to the contrary in documentation for any other loan or loans, it is the
express intent of the Bank and the
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Borrowers that all Obligations including those included in the Loan be
cross-collateralized and cross-defaulted, such that collateral securing any of
the Obligations shall secure repayment of all Obligations and a default under
any Obligation shall be a default under all Obligations.
This Agreement, the Note, the Security Documents and all other related documents
are collectively referred to as the "LOAN DOCUMENTS".
2. REPRESENTATIONS AND WARRANTIES. Each Borrower hereby makes the
following representations and warranties, which shall be continuing in nature
and remain in full force and effect until the Obligations are paid in full, and
which shall be true and correct except as otherwise set forth on the Schedules
attached hereto and incorporated herein by reference:
2.1. EXISTENCE, POWER AND AUTHORITY. NumereX and each of its
Subsidiaries are duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and have the power
and authority to own and operate their assets and to conduct their business as
now or proposed to be carried on, and each is duly qualified, licensed and in
good standing to do business in all jurisdictions where its ownership of
property or the nature of its business requires such qualification or licensing.
NumereX and each of its Subsidiaries are duly authorized to execute and deliver
the Loan Documents, all necessary action to authorize the execution and delivery
of the Loan Documents has been properly taken, and each Borrower is and will
continue to be duly authorized to borrow under this Agreement. NumereX and each
of its Subsidiaries are duly authorized to perform all of the other terms and
provisions of the Loan Documents.
2.2. FINANCIAL STATEMENTS. The Borrowers have delivered or caused to
be delivered the most recent balance sheet, income statement and statement of
cash flows for NumereX and its Subsidiaries (the "HISTORICAL FINANCIAL
STATEMENTS"). The Historical Financial Statements are true, complete and
accurate in all material respects and fairly present the financial condition,
assets and liabilities, whether accrued, absolute, contingent or otherwise and
the results of the operations of NumereX and its Subsidiaries for the period
specified therein. The Historical Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied from period to period subject in the case of interim statements to
normal year-end adjustments and to any comments and notes acceptable to the Bank
in its sole discretion.
2.3. NO MATERIAL ADVERSE CHANGE. Since the date of the most recent
Financial Statements, NumereX and its Subsidiaries on a consolidated basis have
not suffered any damage, destruction or loss, and no event or condition has
occurred or exists, which has resulted or could result in a material adverse
change in their business, assets, operations, financial condition or results of
operation.
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2.4. BINDING OBLIGATIONS. Each Borrower has full power and authority
to enter into the transactions provided for in this Agreement and has been duly
authorized to do so by appropriate action of its Board of Directors as may be
required by law, charter, other organizational documents or agreements; and the
Loan Documents, when executed and delivered by NumereX or any of its
Subsidiaries which are parties to the Loan Documents, will constitute the legal,
valid and binding obligations of such obligor, enforceable in accordance with
their terms.
2.5. NO DEFAULTS OR VIOLATIONS. There does not exist any Event of
Default under this Agreement or any default or violation by NumereX or any of
its Subsidiaries of or under any of the terms, conditions or obligations of: (i)
its articles or certificate of incorporation, regulations or bylaws or its other
organizational documents as applicable; (ii) any indenture, mortgage, deed of
trust, franchise, permit, contract, agreement, or other instrument to which it
is a party or by which it is bound; or (iii) any law, regulation, ruling, order,
injunction, decree, condition or other requirement applicable to or imposed upon
it by any law, the action by any court or any governmental authority or agency;
and the consummation of this Agreement and the transactions set forth herein
will not result in any such default or violation.
2.6. TITLE TO ASSETS. NumereX and its Subsidiaries have good and
marketable title to the assets reflected on the most recent Financial
Statements, free and clear of all liens and encumbrances, except for (i) current
taxes and assessments not yet due and payable, (ii) liens and encumbrances, if
any, reflected or noted in the Historical Financial Statements, (iii) assets
disposed of by NumereX or its Subsidiaries in the ordinary course of business
since the date of the most recent Financial Statements, and (iv) those liens or
encumbrances specified on Schedule 2.6.
2.7. LITIGATION. There are no actions, suits, proceedings or
governmental investigations pending or, to the knowledge of the Borrowers,
threatened against NumereX or any of its Subsidiaries, which could result in a
material adverse change in its business, assets, operations, financial condition
or results of operations and there is no basis known to the Borrowers for any
action, suit, proceedings or investigation which could result in such a material
adverse change. All pending or threatened litigation against NumereX or any of
its Subsidiaries is listed on Schedule 2.7.
2.8. TAX RETURNS. NumereX and each of its Subsidiaries have filed
all returns and reports that are required to be filed by any of them in
connection with any federal, state or local tax, duty or charge levied, assessed
or imposed upon any of them or any of their properties or withheld by any of
them, including unemployment, social security and similar taxes and all of such
taxes, have been either paid or adequate reserve or other provision has been
made.
2.9. EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which
NumereX or any of its Subsidiaries may have any liability complies in all
material respects with all applicable
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provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"),
including minimum funding requirements, and (i) no Prohibited Transaction (as
defined under ERISA) has occurred with respect to any such plan, (ii) no
Reportable Event (as defined under Section 4043 of ERISA) has occurred with
respect to any such plan which would cause the Pension Benefit Guaranty
Corporation to institute proceedings under Section 4042 of ERISA, (iii) the
Borrower has not withdrawn from any such plan or initiated steps to do so, and
(iv) no steps have been taken to terminate any such plan.
2.10. ENVIRONMENTAL MATTERS. NumereX and its Subsidiaries are in
compliance, in all material respects, with all Environmental Laws, including,
without limitation, all Environmental Laws in jurisdictions in which NumereX or
any Subsidiary owns or operates, or has owned or operated, a facility or site,
stores Collateral, arranges or has arranged for disposal or treatment of
hazardous substances, solid waste or other waste, accepts or has accepted for
transport any hazardous substances, solid waste or other wastes or holds or has
held any interest in real property or otherwise. Except as otherwise disclosed
on Schedule 2.7, no litigation or proceeding arising under, relating to or in
connection with any Environmental Law is pending or, to the best of the
Borrowers' knowledge, threatened against any real property which NumereX or any
of its Subsidiaries holds or has held an interest or any past or present
operation of NumereX or any such Subsidiary. No release, threatened release or
disposal of hazardous waste, solid waste or other wastes is occurring, or to the
best of the Borrowers' knowledge has occurred, on, under or to any real property
in which NumereX or any of its Subsidiaries holds any interest or performs any
of its operations, in violation of any Environmental Law. As used in this
Section, "LITIGATION OR PROCEEDING" means any demand, claim notice, suit, suit
in equity, action, administrative action, investigation or inquiry whether
brought by a governmental authority or other person, and "ENVIRONMENTAL LAWS"
means all provisions of laws, statutes, ordinances, rules, regulations, permits,
licenses, judgments, writs, injunctions, decrees, orders, awards and standards
promulgated by any governmental authority concerning health, safety and
protection of, or regulation of the discharge of substances into, the
environment.
2.11. INTELLECTUAL PROPERTY. NumereX and each Subsidiary owns or is
licensed to use all patents, patent rights, trademarks, trade names, service
marks, copyrights, intellectual property, technology, know-how and processes
used in their businesses as currently conducted that are material to the
condition (financial or otherwise), business or operations of NumereX or its
Subsidiaries.
2.12. REGULATORY MATTERS. No part of the proceeds of the Loan will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time in effect
or for any purpose which violates the provisions of the Regulations of such
Board of Governors.
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2.13. SOLVENCY. As of the date hereof and after giving effect to the
transactions contemplated by the Loan Documents, (i) the aggregate value of the
assets of NumereX and its Subsidiaries will exceed their liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities), (ii) NumereX
and its Subsidiaries will have sufficient cash flow to enable them to pay their
debts as they mature, and (iii) NumereX and its Subsidiaries will not have
unreasonably small capital for the businesses in which they are engaged.
2.14. DISCLOSURE. None of the Loan Documents contains or will
contain any untrue statement of material fact or omits or will omit to state a
material fact necessary in order to make the statements contained in this
Agreement or the Loan Documents not misleading. There is no fact known to any
Borrower which materially adversely affects or, so far as the Borrowers can now
reasonably foresee, might materially adversely affect the business, assets,
operations, financial condition or results of operation of NumereX or any
Subsidiary and which has not otherwise been fully set forth in this Agreement,
the Schedules hereto or in the Loan Documents.
2.15. SUBSIDIARIES. A complete listing of the Borrowers'
Subsidiaries, including information about their jurisdictions of formation and
their equity ownership is set forth on Schedule 2.15. As used in this Agreement,
a "SUBSIDIARY" of any Borrower at any time shall mean (i) any corporation,
Company or trust of which 50% or more (by number of shares or number of votes)
of the outstanding capital stock or shares of beneficial interest normally
entitled to vote for the election of one or more directors or trustees is at
such time owned directly or indirectly by such Borrower or one or more of such
Borrower's Subsidiaries, or any partnership of which such Borrower is a general
partner or of which 50% or more of the partnership interests is at the time
directly or indirectly owned by such Borrower or one or more of such Borrower's
Subsidiaries, or (ii) any corporation, company, trust, partnership or other
entity which is controlled or capable of being controlled by such Borrower or
one or more of such Borrower's Subsidiaries.
3. AFFIRMATIVE COVENANTS. Each Borrower agrees that from the date of
execution of this Agreement until all Obligations have been fully paid and any
commitments of the Bank to the Borrowers have been terminated, such Borrower
will, and will cause each of its Subsidiaries to:
3.1. BOOKS AND RECORDS. Maintain books and records in accordance
with GAAP and give representatives of the Bank access thereto at all reasonable
times, including permission to examine, copy and make abstracts from any of such
books and records and such other information as the Bank may from time to time
reasonably request, and NumereX and its Subsidiaries will make available to the
Bank for examination copies of any reports, statements or returns which NumereX
or any Subsidiary may make to or file with any governmental department, bureau
or agency, federal or state.
3.2. INTERIM FINANCIAL STATEMENTS; CERTIFICATE OF NO DEFAULT.
Furnish the Bank within 45 days after the end of each fiscal quarter the
Financial Statements of NumereX and its
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Subsidiaries for such period, in reasonable detail, certified by an authorized
officer of NumereX and prepared in accordance with GAAP applied from period to
period subject to normal year end adjustments, including footnotes and
explanations. NumereX shall also deliver a certificate, in the form of Exhibit A
attached hereto, as to compliance with applicable financial covenants for the
period then ended and whether any Event of Default exists, and, if so, the
nature thereof and the corrective measures the Borrower proposes to take.
"FINANCIAL STATEMENTS" means NumereX consolidated and consolidating balance
sheets, income statements and statements of cash flows of NumereX and its
Subsidiaries for the year, month or quarter together with year-to-date figures
and comparative figures for the corresponding periods of the prior year.
3.3. ANNUAL FINANCIAL STATEMENTS. Furnish annual Financial
Statements for NumereX and its Subsidiaries to the Bank within 120 days after
the end of each fiscal year. The annual consolidated Financial Statements will
be audited by an independent certified public accountant selected by the NumereX
and satisfactory to the Bank; the annual consolidating Financial Statements
shall be certified by an authorized officer of NumereX. The annual audited
Financial Statements shall contain the unqualified opinion of the independent
certified public accountant whose examination shall have been made in accordance
with GAAP consistently applied from period to period.
3.4. PAYMENT OF TAXES AND OTHER CHARGES. Pay and discharge when due
all indebtedness and all taxes, assessments, charges, levies and other
liabilities imposed upon NumereX and its Subsidiaries, their income, profits,
property or business, except those which currently are being contested in good
faith by appropriate proceedings and for which NumereX and its Subsidiaries
shall have set aside adequate reserves or made other adequate provision with
respect thereto acceptable to the Bank in its sole discretion.
3.5. MAINTENANCE OF EXISTENCE, OPERATION AND ASSETS. Do all things
necessary to maintain, renew and keep in full force and effect its
organizational existence and all rights, permits and franchises necessary to
enable it to continue its business; continue in operation in substantially the
same manner as at present; keep its properties in good operating condition and
repair; and make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto.
3.6. INSURANCE. Maintain with financially sound and reputable
insurers, insurance with respect to its property and business against such
casualties and contingencies, of such types and in such amounts as is customary
for established companies engaged in the same or similar business and similarly
situated.
3.7. COMPLIANCE WITH LAWS. Comply, in all material respects, with
all laws applicable to it and to the operation of its business (including any
statute, rule or regulation relating to employment practices and pension
benefits or to environmental, occupational and health standards and controls).
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3.8. BANK ACCOUNTS. Establish and maintain at the Bank each
Borrower's primary depository and disbursement accounts.
3.9. FINANCIAL COVENANTS. Comply with all of the financial and other
covenants, if any, set forth on the Addendum.
3.10. ADDITIONAL REPORTS. Provide prompt written notice to the Bank
of the occurrence of any of the following (together with a description of the
action which the Borrower proposes to take with respect thereto): (i) any Event
of Default or potential Event of Default, (ii) any litigation filed by or
against NumereX or any of its Subsidiaries, (iii) any Reportable Event or
Prohibited Transaction with respect to any Employee Benefit Plan(s) (as defined
in ERISA) or (iv) any event which might result in a material adverse change in
the business, assets, operations, financial condition or results of operation of
NumereX or any of its Subsidiaries.
3.11. ANNUAL PROJECTIONS, ETC. Furnish annual projections and
additional financial information, as the Bank may request.
4. NEGATIVE COVENANTS. Each Borrower covenants and agrees that from the
date of execution of this Agreement until all Obligations have been fully paid
and any commitments of the Bank to the Borrowers have been terminated, such
Borrower will not, and will not permit any of its Subsidiaries to, without the
Bank's prior written consent:
4.1. INDEBTEDNESS. Incur any indebtedness for borrowed money other
than: (i) the Loan and any subsequent indebtedness to the Bank; (ii) existing
indebtedness disclosed on the Historical Financial Statements referred to in
Section 3.2; and (iii) indebtedness not to exceed $500,000 in the aggregate
outstanding for NumereX and its Subsidiaries at any time.
4.2. LIENS AND ENCUMBRANCES. Create, assume or permit to exist any
mortgage, pledge, encumbrance or other security interest or lien upon any assets
(including equity interests in any Subsidiary of NumereX) now owned or hereafter
acquired or enter into any arrangement for the acquisition of property subject
to any conditional sales agreement except (i) liens and encumbrances described
in Section 2.6 (ii) liens and encumbrances securing indebtedness permitted under
Section 4.1(iii) and (iii) liens and encumbrances in favor of Bank.
4.3. GUARANTEES. Guarantee, endorse or become contingently liable
for the obligations of any person, firm or corporation, except (a) as provided
in Section 4.1, and (b) in connection with the endorsement and deposit of checks
in the ordinary course of business for collection.
4.4. LOANS, ADVANCES, INVESTMENTS. Purchase or hold beneficially any
stock, other securities or evidences of indebtedness of any loans or advances
to, or make any investment or acquire any interest whatsoever in, any other
person, firm or corporation, except loans, advances
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and investments that are (i) disclosed on the Historical Financial Statements of
NumereX and its Subsidiaries, (ii) acceptable to the Bank in its sole
discretion, (iii) permitted under Section 4.8, (iv) from any Subsidiary of any
Borrower to a Borrower, and (v) from NumereX to its Canadian Subsidiary in the
total amount of not more than $250,000.
4.5. MERGER OR TRANSFER OF ASSETS. Merge or consolidate with or into
any person, firm or corporation or lease, sell, transfer or otherwise dispose of
all, or substantially all, of its property, assets and business whether now
owned or hereafter acquired; provided, however, that NumereX may sell Digital
Audio Limited (UK).
4.6. CHANGE IN BUSINESS. Make or permit any material change in the
nature of its business as carried on as of the date hereof.
4.7. DIVIDENDS. Declare or pay any dividends on or make any
distribution with respect to any class of its equity or ownership interest, or
purchase, redeem, retire or otherwise acquire any of its equity, if such action
would cause an Event of Default; nor shall any Subsidiary of any Borrower pay
any dividend or any distribution to anyone other than a Borrower.
4.8. ACQUISITIONS. Acquire any person, firm or corporation unless
(i) the acquisition fits within such Borrower's current strategic business
direction in its present lines of business, (ii) no Event of Default exists at
the time of the acquisition or would result from the acquisition, and (iii) the
consideration paid for the acquisition when added to the consideration paid for
all other acquisitions after the date of this Agreement for which written
approval is not required is valued at less than $1,500,000.
4.9. SUBSIDIARIES. Create or acquire any Subsidiary unless (i) such
Subsidiary joins this Agreement as a Borrower; or (ii) if the Subsidiary is a
foreign entity and NumereX so chooses, 65% of the equity of such foreign
Subsidiary is pledged to the Bank as collateral security for the Obligations.
4.10. NEGATIVE PLEDGES. Agree with any party to limit its ability to
provide collateral security to Bank.
5. EVENTS OF DEFAULT. The occurrence of any of the following will be
deemed to be an "EVENT OF DEFAULT":
5.1. COVENANT DEFAULT. The Borrowers shall default in the
performance of any of the covenants or agreements contained in this Agreement.
5.2. BREACH OF WARRANTY. Any Financial Statement, representation,
warranty or certificate made or furnished by the Borrowers to the Bank in
connection with this Agreement shall be false, incorrect or incomplete when
made.
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5.3. OTHER DEFAULT. The occurrence of an Event of Default as defined
in the Note or other Loan Documents.
5.4. CHANGE IN CONTROL OF NUMEREX. The occurrence of a change of
control in the beneficial ownership of NumereX. For purposes of this Section
5.4, a "change of control" shall occur if any person or group of persons (within
the meaning of Sections 13(a) or 14(a) of the Securities Exchange Act of 1934,
as amended) other than Gwynedd Resources, Ltd. shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities
Exchange Commission under said Act) of 20% or more of the voting capital stock
of NumereX.
Upon the occurrence of an Event of Default, the Bank will have all rights and
remedies specified in the Note and the Loan Documents and all rights and
remedies (which are cumulative and not exclusive) available under applicable law
or in equity.
6. CONDITIONS. The Bank's obligation to make any advance under the Loan is
subject to the conditions that as of the date of the advance:
6.1. NO EVENT OF DEFAULT. No Event of Default or event which with
the passage of time, provision of notice or both would constitute an Event of
Default shall have occurred and be continuing.
6.2. AUTHORIZATION DOCUMENTS. The Bank shall have been furnished
certified copies of resolutions of each Borrower's board of directors
authorizing the transactions contemplated hereby or other proof of authorization
satisfactory to the Bank.
6.3. RECEIPT OF LOAN DOCUMENTS. The Bank shall have received the
Loan Documents and such other instruments and documents which the Bank may
reasonably request in connection with the transactions provided for in this
Agreement, which may include an opinion of counsel for any party executing any
of the Loan Documents in form and substance satisfactory to the Bank.
7. EXPENSES. The Borrowers agree to pay the Bank, upon the closing of this
Agreement, and otherwise on demand, all costs and expenses incurred by the Bank
in connection with the (i) preparation, negotiation and delivery of this
Agreement and the other Loan Documents, and any modifications thereto, and (ii)
collecting the loan or instituting, maintaining, preserving, enforcing and
foreclosing the security interest in any of the collateral securing the Loan,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions or proceedings arising out of or relating to this
Agreement, including reasonable fees and expenses of counsel (which may include
costs of in-house counsel) and foreign counsel, expenses for auditors,
appraisers and environmental consultants, lien searches, recording and filing
fees and taxes.
8. INCREASED COSTS. On written demand, together with the written evidence
of the justification therefor, the Borrowers agree to pay the Bank, all direct
costs incurred and any losses
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suffered or payments made by the Bank as a consequence of making the Loan by
reason of any change in law or regulation or its interpretation imposing any
reserve, deposit, allocation of capital or similar requirement (including
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) on the Bank, its holding company or any of their respective
assets.
9. MISCELLANEOUS.
9.1. NOTICES. All notices, demands, requests, consents, approvals
and other communications required or permitted hereunder must be in writing and
will be effective upon receipt if delivered personally to such party, or if sent
by facsimile transmission with confirmation of delivery, or by nationally
recognized overnight courier service, to the address set forth below or to such
other address as any party may give to the other in writing for such purpose:
TO THE BANK: PNC BANK, N.A.
0000 XXXXXXXXX XXXXX, XXXXX 000
XXXXXX, XX 00000
ATTENTION: XXXXXXX X. XXXXXXX
FACSIMILE NO.: (000) 000-0000
TELEPHONE NO.: (000) 000-0000
TO ANY BORROWER: NUMEREX CORP.
ROSE TREE CORPORATE CENTER II, SUITE 5500
0000 X. XXXXXXXXXX XXXX
XXXXX, XX 00000
ATTENTION: XXXXXXX X. XXXXX
FACSIMILE NO.: (000) 000-0000
TELEPHONE NO.: (000) 000-0000
9.2. PRESERVATION OF RIGHTS. No delay or omission on the part of the
Bank to exercise any right or power arising hereunder will impair any such right
or power or be considered a waiver of any such right or power or any
acquiescence therein, nor will the action or inaction of the Bank impair any
right or power arising hereunder. The Bank's rights and remedies hereunder are
cumulative and not exclusive of any other rights or remedies which the Bank may
have under other agreements, at law or in equity.
9.3. ILLEGALITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
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9.4. CHANGES IN WRITING. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrowers
therefrom, will in any event be effective unless the same is in writing and
signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on the Borrowers in any case will entitle the Borrowers to any other or
further notice or demand in the same, similar or other circumstance.
9.5. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.
9.6. COUNTERPARTS. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument.
9.7. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and
inure to the benefit of the Borrowers and the Bank and their respective heirs,
executors, administrators, successors and assigns; provided, however, that the
Borrowers may not assign this Agreement in whole or in part without the prior
written consent of the Bank and the Bank at any time may assign this Agreement
in whole or in part.
9.8. INTERPRETATION. In this Agreement, unless the Bank and the
Borrowers otherwise agree in writing, the singular includes the plural and the
plural the singular; words importing any gender include the other genders;
references to statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the word "or"
shall be deemed to include "and/or", the words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections) or exhibits are
to those of this Agreement unless otherwise indicated; and references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications to such instruments, but only to
the extent such amendments and other modifications are not prohibited by the
terms of this Agreement. Section headings in this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose. Unless otherwise specified in this Agreement, all
accounting terms shall be interpreted and all accounting determinations shall be
made in accordance with GAAP. If this Agreement is executed by more than one
party as Borrower, the obligations of such persons or entities will be joint and
several.
9.9. INDEMNITY. The Borrowers agree to indemnify each of the Bank,
its directors, officers and employees and each legal entity, if any, who
controls the Bank (the "INDEMNIFIED PARTIES") and to hold each Indemnified Party
harmless from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, all fees of counsel with
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whom any Indemnified Party may consult and all expenses of litigation or
preparation therefor) which any Indemnified Party may incur or which may be
asserted against any Indemnified Party in connection with or arising out of the
matters referred to in this Agreement or in the other Loan Documents by any
person, entity or governmental authority (including any person or entity
claiming derivatively on behalf of the Borrowers), whether (a) arising from or
incurred in connection with any breach of a representation, warranty or covenant
by any Borrower, or (b) arising out of or resulting from any suit, action,
claim, proceeding or governmental investigation, pending or threatened, whether
based on statute, regulation or order, or tort, or contract or otherwise, before
any court or governmental authority, which arises out of or relates to this
Agreement, any other Loan Document, or the use of the proceeds of the Loan;
provided, however, that the foregoing indemnity agreement shall not apply to
claims, damages, losses, liabilities and expenses solely attributable to an
Indemnified Party's gross negligence or willful misconduct. The indemnity
agreement contained in this Section shall survive the termination of this
Agreement, payment of any Loan and assignment of any rights hereunder. The
Borrowers may participate at its expense in the defense of any such action or
claim.
9.10. ASSIGNMENTS AND PARTICIPATIONS. At any time, without any
notice to the Borrowers, the Bank may sell, assign, transfer, negotiate, grant
participations in, or otherwise dispose of all or any part of the Bank's
interest in the Loan. The Borrowers hereby authorize the Bank to provide,
without any notice to the Borrowers, any information concerning the Borrowers,
including information pertaining to the Borrowers' financial condition, business
operations or general creditworthiness, to any person or entity which may
succeed to or participate in all or any part of the Bank's interest in the Loan.
9.11. GOVERNING LAW AND JURISDICTION. This Agreement has been
delivered to and accepted by the Bank and will be deemed to be made in the State
where the Bank's office indicated above is located. THIS AGREEMENT WILL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S OFFICE INDICATED ABOVE IS
LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The Borrowers hereby irrevocably
consent to the exclusive jurisdiction of any state or federal court for the
county or judicial district where the Bank's office indicated above is located,
and consents that all service of process be sent by nationally recognized
overnight courier service directed to the Borrowers at the Borrowers' registered
addresses or Borrowers' commercial registered office provider and service so
made will be deemed to be completed on the business day after deposit with such
courier; provided that nothing contained in this Agreement will prevent the Bank
from bringing any action, enforcing any award or judgment or exercising any
rights against any Borrower individually, against any security or against any
property of the Borrowers within any other county, state or other foreign or
domestic jurisdiction. The Bank and the Borrowers agree that the venue provided
above is the most convenient forum for both the Bank and the Borrowers. The
Borrowers waive any objection to venue and any objection based on a more
convenient forum in any action instituted under this Agreement.
-12-
9.12. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS AND THE BANK
IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH BORROWER AND THE BANK ACKNOWLEDGE
THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
9.13. APPOINTMENT OF AGENT. The Borrowers shall appoint an agent
such as CT Corporation, acceptable to Bank, as its agent for the service of
process on any action or proceeding undertaken or prosecuted in connection with
this Agreement or any of the other Loan Documents. This appointment shall not
affect the Bank's right to serve legal process in any other manner permitted by
law.
9.14. JOINT AND SEVERAL LIABILITY. The Obligations of each Borrower
under this Agreement, the Note and other Loan Documents are joint and several.
9.15 CONFIDENTIAL INFORMATION. The Bank acknowledges that the
reports, documents and other information supplied or to be supplied by the
Borrowers to the Bank pursuant to this Agreement, including without limitation,
the reports, documents and other information to be supplied pursuant to Section
3.2, are confidential (all such reports, documents and other information are
hereinafter referred to as "CONFIDENTIAL INFORMATION"). Notwithstanding the
foregoing, Confidential Information shall not include any reports, documents and
other information which are, or become, generally available to the public other
than as a result of a breach of this Section 9.15 by the Bank or its respective
directors, officers, employees, representatives, agents, affiliates or
professional advisors. Without the prior written consent of the Borrowers, the
Bank shall not disclose any Confidential Information to any person or entity
other than (a) its respective directors, officers, employees, representatives,
agents, affiliates and professional advisors and then only on a "need to know"
basis (the "Permitted Persons") or (b) to, or in any filing with, any state of
federal regulatory agency to which the Bank is required to report by its charter
or by statute or regulation. The Bank shall cause all Permitted Persons to
comply with all the terms and covenants of this Section 9.15. The Bank shall
inform all Permitted Persons of the confidential nature of the Confidential
Information and shall, if requested by the Borrowers, obtain the written
agreement of all Permitted Persons to be bound by and comply with the provisions
of this Section 9.15 on the same terms and conditions as if specifically named a
party. Without limiting the generality of the foregoing, the Bank agrees that it
shall not trade in, or make recommendations concerning trades in, the common
stock or other securities of the Borrowers. The Bank acknowledges that any
breach of this Section 9.15 may cause irreparable injury to a Borrower for which
money damages could not adequately compensate. If there is such a breach, such
Borrower shall be entitled, in addition to any other rights and remedies they
may have at law or in equity, to have an injunction issued by any competent
court enjoining and restraining the breaching parties from continuing such
breach. The existence of any claim or
-13-
cause of action which any of the breaching parties may have against the
Borrowers shall not constitute a defense or bar to the enforcement of this
Section 9.15. Notwithstanding the foregoing, if the Bank is required to disclose
any Confidential Information in a judicial, administrative or governmental
proceeding, the Bank will notify the Borrowers as promptly as practicable so
that the Borrowers may either seek an appropriate protective order or relief or
waive the provisions of this Section 9.15. If, in the absence of any such
protective order, relief or waiver, the Bank is required, in the written opinion
of its legal counsel, to disclose Confidential Information to any court,
governmental agency or tribunal or else stand liable for contempt or other
penalty, the Bank may disclose such Confidential Information without liability
hereunder.
Each Borrower acknowledges that it has read and understood all the provisions of
this Agreement, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of the date
first written above.
[CORPORATE SEAL] NUMEREX CORP.
Attest: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. XxXxx
-------------------------- -----------------------------------
Print Name: Xxxxxx Xxxxxxx Print Name:
----------------------- ------------------------
Title: Senior Accountant Title:
---------------------------- -----------------------------
[CORPORATE SEAL] DCX SYSTEMS, INC.
Attest: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. XxXxx
-------------------------- -----------------------------------
Print Name: Xxxxxx Xxxxxxx Print Name:
----------------------- ------------------------
Title: Senior Accountant Title:
---------------------------- -----------------------------
[CORPORATE SEAL] DIGILOG INC.
Attest: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. XxXxx
-------------------------- -----------------------------------
Print Name: Xxxxxx Xxxxxxx Print Name:
----------------------- ------------------------------
Title: Senior Accountant Title:
---------------------------- -----------------------------
-14-
[CORPORATE SEAL] NUMEREX INVESTMENT CORP.
Attest: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. XxXxx
-------------------------- -----------------------------------
Print Name: Xxxxxx Xxxxxxx Print Name:
----------------------- ------------------------
Title: Senior Accountant Title:
---------------------------- -----------------------------
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Print Name: Xxxxxxx Xxxxxxx
------------------------
Title: Asst. Vice President
-----------------------------
-15-
ADDENDUM
FINANCIAL COVENANTS
DEBT SERVICE COVERAGE RATIO. Beginning with the fiscal quarter ending January
31, 1997, the Borrowers will not permit the ratio of Operating Cash Flow to Debt
Service, calculated on a rolling basis as of the end of each fiscal quarter for
the previous four quarters, to be less than 1.10 to 1.00; provided, however,
that for the fiscal quarters ending January 31, April 30, and July 31, 1997, the
Debt Service Coverage Ratio will be measured cumulatively at quarter end for
such quarters only and not any prior quarters ending in fiscal year 1996.
FIXED CHARGE COVERAGE RATIO. The Borrowers will cause NumereX and its
Subsidiaries to maintain a Fixed Charge Coverage Ratio of at least 1.00 to 1 as
of the end of each fiscal quarter, beginning with the fiscal quarter ending
January 31, 1997.
LEVERAGE RATIO. The Borrowers will not permit (i) the ratio of their
consolidated liabilities to their consolidated Tangible Net Worth to exceed 1.20
to 1.00 at any time or (ii) the ratio of consolidated liabilities to Tangible
Net Worth for NumereX and its Subsidiaries to exceed 1.00 to 2.00 at any time.
TANGIBLE NET WORTH. The Borrowers (i) will maintain at all times consolidated
Tangible Net Worth of at least $18,000,000 and (ii) will cause NumereX and its
Subsidiaries to maintain at all times consolidated Tangible Net Worth of at
least $32,500,000.
OPERATING INCOME. The Borrowers will not have an operating loss for any fiscal
quarter or year, except that the Borrowers may have operating losses during
fiscal 1997 so long as the cumulative amount of such losses does not exceed
$250,000 for the fiscal year ending October 31, 1997. The quarterly calculation
of operating income shall not take into account expenses of foreign Subsidiaries
of NumereX which are eliminated in the annual consolidated Financial Statements.
As used above:
"DEBT SERVICE" means the sum of scheduled principal payments of long term debt
plus interest expense, measured for Borrowers on a consolidated basis at the end
of each quarter.
"EBITDA" means consolidated net income plus non-recurring, non-cash
extraordinary items, income tax expense, interest expense, depreciation and
amortization, measured at the end of each fiscal quarter for the previous four
quarters.
"FIXED CHARGES" means the consolidated sum of principal payments of long term
debt, interest expense, capital expenditures, income tax expense and dividends,
measured at the end of each fiscal quarter for the previous four quarters.
-3-
"FIXED CHARGE COVERAGE RATIO" means the ratio of EBITDA to Fixed Charges.
"OPERATING CASH FLOW" means net income plus interest expense, depreciation and
amortization measured for Borrowers on a consolidated basis at the end of each
fiscal quarter.
"TANGIBLE NET WORTH" means total consolidated stockholders' equity (which shall
not include expenses of foreign Subsidiaries of NumereX which are eliminated in
the annual consolidated Financial Statements) less total consolidated net
intangible assets.
All accounting terms not otherwise defined shall be defined, and all
calculations and other determinations shall be made, in accordance with GAAP
consistently applied from period to period.
ADDITIONAL TERMS AND CONDITIONS
PLEDGE OF STOCK IN CANADIAN SUBSIDIARY. The equity interests in DCX
Systems Company, NumereX's existing Canadian Subsidiary, cannot be transferred
because of a provision in its charter which cannot be amended. Within ten days
after the date of this Agreement, however, NumereX will either (i) cause DCX
Systems Company to discontinue operations and form a new Canadian Subsidiary
whose shares can be transferred or (ii) amalgamate DCX Systems Company with
another Canadian Subsidiary so that the shares in the resulting company can be
transferred. In either event, within the same ten day period, NumereX will also
deliver to Bank Security Documents by which NumereX pledges 65% of the equity
interests in its ultimate Canadian Subsidiary, accompanied by a legal opinion
from Canadian counsel in form and substance satisfactory to Bank.
RELEASE OF CERTAIN LIENS. Within 30 days of the date of this
Agreement, NumereX shall provide the Bank with satisfactory evidence that Lloyds
Bank has released its charge against the property of Digital Audio Limited. In
addition, as a condition precedent to the initial advance of the Loan, NumereX
shall provide the Bank with satisfactory evidence that (a) Digital Audio Limited
has terminated its line of credit with Lloyds Bank and taken appropriate steps
to assure the release of Lloyd's charge within 30 days of the date of this
Agreement and (b) Xxxxxx Xxxxxxx "and others" have released the charge they hold
on the property of Versus Technology Limited.
-4-
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
Submitted under the terms of the Loan Agreement dated February 10, 1997 between
NUMEREX CORP. AND ITS U.S. SUBSIDIARIES and PNC BANK, NATIONAL ASSOCIATION, the
undersigned, Chief Financial Officer of NumereX Corp., hereby certifies as
follows:
As of Fiscal Quarter Ending ________________________:
(A) For NumereX Corp. and its U.S. Subsidiaries
(i) DEBT SERVICE COVERAGE RATIO: _____________
(ii) TANGIBLE NET WORTH: _____________
(iii) LEVERAGE RATIO: _____________
(iv) MINIMUM OPERATING INCOME: _____________
(B) For NumereX Corp. and its Subsidiaries (both U.S. and foreign)
(i) FIXED CHARGE COVERAGE RATIO: _____________
(ii) TANGIBLE NET WORTH: _____________
(iii) LEVERAGE RATIO: _____________
(C) The representations and warranties set forth in the Loan Agreement are
true and correct on and as of the date hereof. During such period no Event
of Default has occurred under the Loan Agreement, and no event has
occurred which, with the passage of time or the giving of notice, or both,
would become such an Event of Default. Borrowers are in compliance with
all terms, conditions and provisions of the Loan Agreement and the Note
between Borrowers and Bank.
(D) A review of the activities of each Borrower and each foreign subsidiary of
NumereX Corp. during the immediately preceding calendar quarter has been
made under the immediate supervision of the Chief Financial Officer of
NumereX Corp., and such officer has determined that all of the obligations
or covenants under the Loan Agreement and in connection therewith have
been fulfilled.
NUMEREX CORP.
XXXXXXX X. XXXXX
CHIEF FINANCIAL OFFICER DATE:____________
-5-
AMENDMENT TO LOAN DOCUMENTS [LOGO]
THIS AMENDMENT TO LOAN DOCUMENTS (THIS "AMENDMENT") IS MADE AS OF JULY 1,
1997, BY AND BETWEEN NUMEREX CORP. ("NUMEREX") AND ITS U.S. SUBSIDIARIES LISTED
ON THE SIGNATURE PAGES HERETO (NUMEREX AND SUCH SUBSIDIARIES EACH INDIVIDUALLY A
"BORROWER" AND COLLECTIVELY, THE "BORROWERS"), AND PNC BANK, NATIONAL
ASSOCIATION (THE "BANK").
WITNESSETH:
WHEREAS, THE BORROWERS HAVE EXECUTED AND DELIVERED TO THE BANK, A
PROMISSORY NOTE, LOAN AGREEMENT, PLEDGE AGREEMENT, AND OTHER INSTRUMENTS,
CERTIFICATES AND DOCUMENTS, MORE FULLY DESCRIBED ON EXHIBIT A ATTACHED HERETO
AND MADE A PART HEREOF (COLLECTIVELY, THE "LOAN DOCUMENTS") WHICH EVIDENCE OR
SECURE SOME OR ALL OF THE BORROWERS' OBLIGATIONS TO THE BANK FOR ONE OR MORE
LOANS OR OTHER EXTENSION OF CREDIT (THE "OBLIGATIONS"); AND
WHEREAS, THE BORROWERS AND THE BANK DESIRE TO AMEND THE LOAN DOCUMENTS AS
PROVIDED FOR BELOW;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN CONTAINED
AND INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES HERETO AGREE AS FOLLOWS:
1. EACH OF THE LOAN DOCUMENTS IS AMENDED AS SET FORTH IN EXHIBIT A. ANY
AND ALL REFERENCES TO ANY LOAN DOCUMENT IN ANY OTHER LOAN DOCUMENT SHALL BE
DEEMED TO REFER TO SUCH LOAN DOCUMENT AS AMENDED HEREBY. ANY INITIALLY
CAPITALIZED TERMS USED IN THIS AMENDMENT WITHOUT DEFINITION SHALL HAVE THE
MEANINGS ASSIGNED TO THOSE TERMS IN THE LOAN DOCUMENTS.
2. THIS AMENDMENT IS DEEMED INCORPORATED INTO EACH OF THE LOAN DOCUMENTS.
TO THE EXTENT THAT ANY TERM OR PROVISION OF THIS AMENDMENT IS OR MAY BE DEEMED
EXPRESSLY INCONSISTENT WITH ANY TERM OR PROVISION IN ANY LOAN DOCUMENT, THE
TERMS AND PROVISIONS HEREOF SHALL CONTROL.
3. EACH BORROWER HEREBY REPRESENTS AND WARRANTS THAT (A) ALL OF ITS
REPRESENTATIONS AND WARRANTIES IN THE LOAN DOCUMENTS ARE TRUE AND CORRECT, (B)
NO DEFAULT OR EVENT OF DEFAULT EXISTS UNDER ANY LOAN DOCUMENT, OTHER THAN THE
BORROWERS' FAILURE TO COMPLY WITH (I) THE DEBT SERVICE COVERAGE RATIO; (II) THE
MINIMUM OPERATING INCOME COVENANT; AND (III) THE TANGIBLE NET WORTH COVENANT AS
OF FISCAL QUARTER ENDING APRIL 30, 1997, WHICH DEFAULTS ARE WAIVED BY THE BANK
HEREIN, AND (C) THIS AMENDMENT HAS BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED
AND CONSTITUTES ITS LEGAL, VALID AND BINDING OBLIGATION, ENFORCEABLE IN
ACCORDANCE WITH ITS TERMS.
4. EACH BORROWER HEREBY CONFIRMS THAT ANY COLLATERAL FOR THE OBLIGATIONS,
INCLUDING BUT NOT LIMITED TO LIENS, SECURITY INTERESTS, MORTGAGES, AND PLEDGES
GRANTED BY SUCH BORROWER OR THIRD PARTIES (IF APPLICABLE), SHALL CONTINUE
UNIMPAIRED AND IN FULL FORCE AND EFFECT.
5. THIS AMENDMENT MAY BE SIGNED IN ANY NUMBER OF COUNTERPART COPIES AND BY
THE PARTIES HERETO ON SEPARATE COUNTERPARTS, BUT ALL SUCH COPIES SHALL
CONSTITUTE ONE AND THE SAME INSTRUMENT.
6. THIS AMENDMENT WILL BE BINDING UPON AND INURE TO THE BENEFIT OF THE
BORROWERS AND THE BANK AND THEIR RESPECTIVE HEIRS, EXECUTORS, ADMINISTRATORS,
SUCCESSORS AND ASSIGNS.
7. EXCEPT AS AMENDED HEREBY, THE TERMS AND PROVISIONS OF THE LOAN
DOCUMENTS REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT. EXCEPT AS EXPRESSLY
PROVIDED HEREIN, THIS AMENDMENT SHALL NOT CONSTITUTE AN AMENDMENT, WAIVER,
CONSENT OR RELEASE WITH RESPECT TO ANY PROVISION OF ANY LOAN DOCUMENT, A WAIVER
OF ANY DEFAULT OR EVENT OF DEFAULT THEREUNDER, OR A WAIVER OR RELEASE OF ANY OF
THE BANK'S RIGHTS AND REMEDIES (ALL OF WHICH ARE HEREBY RESERVED). EACH BORROWER
EXPRESSLY RATIFIES AND CONFIRMS THE CONFESSION OF JUDGMENT AND WAIVER OF JURY
TRIAL PROVISIONS.
FORM 17F - PA REV. 12/95
WITNESS THE DUE EXECUTION HEREOF AS A DOCUMENT UNDER SEAL, AS OF THE DATE FIRST
WRITTEN ABOVE.
[CORPORATE SEAL] NUMEREX CORP.
ATTEST: BY: /S/ AUTHORIZED OFFICER
--------------------------------- ----------------------------------
PRINT NAME: PRINT NAME:
----------------------------- ---------------------------
TITLE: TITLE:
---------------------------------- --------------------------------
[CORPORATE SEAL] DCX SYSTEMS, INC.
ATTEST: BY: /S/ AUTHORIZED OFFICER
--------------------------------- ----------------------------------
PRINT NAME: PRINT NAME:
----------------------------- ---------------------------
TITLE: TITLE:
---------------------------------- --------------------------------
[CORPORATE SEAL] DIGILOG INC.
ATTEST: BY: /S/ AUTHORIZED OFFICER
--------------------------------- ----------------------------------
PRINT NAME: PRINT NAME:
----------------------------- ---------------------------
TITLE: TITLE:
---------------------------------- --------------------------------
[CORPORATE SEAL] NUMEREX INVESTMENT CORP.
ATTEST: BY: /S/ AUTHORIZED OFFICER
--------------------------------- ----------------------------------
PRINT NAME: PRINT NAME:
----------------------------- ---------------------------
TITLE: TITLE:
---------------------------------- --------------------------------
[CORPORATE SEAL] BROADBAND NETWORKS, INC.
ATTEST: BY: /S/ AUTHORIZED OFFICER
--------------------------------- ----------------------------------
PRINT NAME: PRINT NAME:
----------------------------- ---------------------------
TITLE: TITLE:
---------------------------------- --------------------------------
FORM 17F - PA REV. 12/95
PNC BANK, NATIONAL ASSOCIATION
BY: /S/ AUTHORIZED OFFICER
---------------------------------
PRINT NAME:
TITLE:
FORM 17F - PA REV. 12/95
AMENDMENT TO LOAN DOCUMENTS
EXHIBIT A
A. THE LOAN DOCUMENTS THAT ARE THE SUBJECT OF THIS AMENDMENT INCLUDE THE
FOLLOWING:
1. LOAN AGREEMENT DATED FEBRUARY 12, 1997
2. CONVERTIBLE LINE OF CREDIT NOTE
3. PLEDGE AGREEMENTS DATED FEBRUARY 12, 1997
B. THE LOAN DOCUMENTS ARE HEREBY AMENDED AS FOLLOWS:
1. DEBT SERVICE COVERAGE RATIO: THE BANK HEREBY WAIVES THE DEFAULT
CAUSED BY THE BORROWERS' FAILURE TO MEET THE DEBT SERVICE COVERAGE RATIO FOR THE
FISCAL QUARTER ENDING APRIL 30, 1997.
2. OPERATING INCOME: THE BANK HEREBY WAIVES THE DEFAULT CAUSED BY
THE BORROWERS' FAILURE TO MEET THE MINIMUM OPERATING INCOME COVENANT FOR THE
FISCAL QUARTER ENDING APRIL 30, 1997.
3. TANGIBLE NET WORTH: THE BANK HEREBY WAIVES THE DEFAULT CAUSED BY
THE BORROWERS' FAILURE TO MEET THE TANGIBLE NET WORTH COVENANT FOR THE FISCAL
QUARTER ENDING APRIL 30, 1997. THE TANGIBLE NET WORTH COVENANT IN THE ADDENDUM
TO THE LOAN AGREEMENT IS HEREBY DELETED AND REPLACED IN ITS ENTIRETY AS FOLLOWS:
TANGIBLE NET WORTH. THE BORROWERS (I) WILL MAINTAIN AT ALL TIMES
CONSOLIDATED TANGIBLE NET WORTH OF AT LEAST $13,000,000 AND
(II) WILL CAUSE NUMEREX AND ITS SUBSIDIARIES TO MAINTAIN AT ALL
TIMES CONSOLIDATED TANGIBLE NET WORTH OF AT LEAST $32,500,000.
FORM 17F - PA REV. 12/95
