AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
by and between
INTERGRAPH CORPORATION,
and
FOOTHILL CAPITAL CORPORATION
Dated as of November 30, 1999
TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION 1
1.1 DEFINITIONS 1
1.2 ACCOUNTING TERMS 23
1.3 CODE 23
1.4 CONSTRUCTION 23
1.5 SCHEDULES AND EXHIBITS 23
2. LOAN AND TERMS OF PAYMENT 24
2.1 REVOLVING ADVANCES 24
2.2 LETTERS OF CREDIT 24
2.3 TERM LOAN 26
2.4 SUBFACILITY FOR BORROWER'S PERMITTED F/X
CONTRACTS (THE "F/X LINE") 27
2.5 OVERADVANCES 28
2.6 INTEREST AND LETTER OF CREDIT FEES: RATES,
PAYMENTS, AND CALCULATIONS 28
2.7 COLLECTION OF ACCOUNTS 30
2.8 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS 30
2.9 DESIGNATED ACCOUNT 31
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS 31
2.11 FEES 31
2.12 MAXIMUM AMOUNT 32
3. CONDITIONS; TERM OF AGREEMENT 32
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE, LETTER
OF CREDIT, AND F/X LINE INDEMNITY 32
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES, ALL LETTERS
OF CREDIT, AND ALL F/X LINE INDEMNITIES ON OR
AFTER THE CLOSING DATE 34
3.3 CONDITION SUBSEQUENT 35
3.4 TERM 37
3.5 EFFECT OF TERMINATION 37
3.6 EARLY TERMINATION BY BORROWER 37
3.7 TERMINATION UPON EVENT OF DEFAULT 37
4. CREATION OF SECURITY INTEREST 37
4.1 GRANT OF SECURITY INTEREST 37
4.2 NEGOTIABLE COLLATERAL 39
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES,
AND NEGOTIABLE COLLATERAL 39
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED 39
4.5 POWER OF ATTORNEY 40
4.6 RIGHT TO INSPECT 41
5. REPRESENTATIONS AND WARRANTIES 41
5.1 NO ENCUMBRANCES 41
5.2 ELIGIBLE ACCOUNTS 41
5.3 [INTENTIONALLY OMITTED] 41
5.4 EQUIPMENT 41
5.5 LOCATION OF INVENTORY AND EQUIPMENT 41
5.6 INVENTORY RECORDS 41
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN 41
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES 42
5.9 DUE AUTHORIZATION; NO CONFLICT 42
5.10 LITIGATION 43
5.11 NO MATERIAL ADVERSE CHANGE 43
5.12 SOLVENCY 43
5.13 EMPLOYEE BENEFITS 43
5.14 ENVIRONMENTAL CONDITION 44
5.15 SECURITIES ACCOUNTS 44
5.16 YEAR 2000 COMPLIANCE 44
6. AFFIRMATIVE COVENANTS 45
6.1 ACCOUNTING SYSTEM 45
6.2 COLLATERAL REPORTING 45
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES 46
6.4 TAX RETURNS 47
6.5 GUARANTOR REPORTS 48
6.6 RETURNS 48
6.7 TITLE TO EQUIPMENT 48
6.8 MAINTENANCE OF EQUIPMENT 48
6.9 TAXES 48
6.10 INSURANCE 49
6.11 NO SETOFFS OR COUNTERCLAIMS 50
6.12 LOCATION OF INVENTORY AND EQUIPMENT 50
6.13 COMPLIANCE WITH LAWS 50
6.14 EMPLOYEE BENEFITS 50
6.15 LEASES 51
6.16 YEAR 2000 COMPLIANCE 51
6.17 COPYRIGHT REGISTRATIONS 51
6.18 SALE OR OTHER DISPOSITION OF BORROWER'S
HARDWARE BUSINESS 52
7. NEGATIVE COVENANTS 52
7.1 INDEBTEDNESS 52
7.2 LIENS 53
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES 53
7.4 DISPOSAL OF ASSETS 54
7.5 CHANGE NAME 54
7.6 [INTENTIONALLY OMITTED] 54
7.7 NATURE OF BUSINESS 54
7.8 PREPAYMENTS AND AMENDMENTS 54
7.9 CHANGE OF CONTROL 54
7.10 CONSIGNMENTS 54
7.11 DISTRIBUTIONS 54
7.12 ACCOUNTING METHODS 55
7.13 INVESTMENTS 55
7.14 TRANSACTIONS WITH AFFILIATES 55
7.15 SUSPENSION 55
7.16 [INTENTIONALLY OMITTED] 55
7.17 USE OF PROCEEDS 55
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE;
INVENTORY AND EQUIPMENT WITH BAILEES 55
7.19 NO PROHIBITED TRANSACTIONS UNDER ERISA 55
7.20 FINANCIAL COVENANTS 56
7.21 CAPITAL EXPENDITURES 57
8. EVENTS OF DEFAULT 57
9. FOOTHILL'S RIGHTS AND REMEDIES 59
9.1 RIGHTS AND REMEDIES 59
9.2 REMEDIES CUMULATIVE 61
10. TAXES AND EXPENSES 61
11. WAIVERS; INDEMNIFICATION 62
11.1 DEMAND; PROTEST; ETC 62
11.2 FOOTHILL'S LIABILITY FOR COLLATERAL 62
11.3 INDEMNIFICATION 62
12. NOTICES 62
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER 63
14. DESTRUCTION OF BORROWER'S DOCUMENTS 64
15. GENERAL PROVISIONS 64
15.1 EFFECTIVENESS 64
15.2 SUCCESSORS AND ASSIGNS 64
15.3 SECTION HEADINGS 65
15.4 INTERPRETATION 65
15.5 SEVERABILITY OF PROVISIONS 65
15.6 AMENDMENTS IN WRITING 65
15.7 COUNTERPARTS; TELEFACSIMILE EXECUTION 65
15.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS 65
15.9 INTEGRATION 66
15.10 CONFIDENTIALITY 66
SCHEDULES AND EXHIBITS
----------------------
Schedule P-1 Permitted Liens
Schedule P-2 Permitted Other Investments
Schedule R-1 Real Property Collateral
Schedule 5.8 Subsidiaries - Capitalization and
Assets
Schedule 5.10 Litigation
Schedule 5.13 ERISA Benefit Plans
Schedule 5.14 Environmental Condition
Schedule 6.12 Location of Inventory and Equipment
Schedule 7.1 Indebtedness
Exhibit C-1 Form of Compliance Certificate
Exhibit F-1 Form of F/X Bank Parameters Letter
Exhibit F-2 Form of F/X Reserve Reduction
Certificate
Exhibit F-3 Form of F/X Reserve Increase
Certificate
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
------------------------------------------------
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
"Agreement"), is entered into as of November 30, 1999, between
FOOTHILL CAPITAL CORPORATION, a California corporation
("Foothill"), with a place of business located at 00000 Xxxxx
Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000,
and INTERGRAPH CORPORATION, a Delaware corporation ("Borrower"),
with its chief executive office located at Xxx Xxxxxxx Xxxxxxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxx 00000.
R E C I T A L S:
- - - - - - - -
WHEREAS, Borrower and Foothill are parties to that certain
Loan and Security Agreement, dated as of December 20, 1996 (the
"Original Loan Agreement"), as amended by that certain Amendment
Number One to Loan and Security Agreement, dated as of January
14, 1997, that certain Amendment Number Two to Loan and Security
Agreement, dated as of November 25, 1997, that certain Amendment
Number Three to Loan and Security Agreement, dated as of October
30, 1998, that certain Amendment Number Four to Loan and Security
Agreement, dated as of April 29, 1999, and that certain Amendment
Number Five to Loan and Security Agreement, dated as of October
26, 1999 (the Original Loan Agreement, as so amended and as
otherwise modified or supplemented from time to time prior to the
Closing Date, is referred to herein as the "Existing Loan
Agreement");
WHEREAS, Borrower and Foothill desire to amend and restate
the Existing Loan Agreement in its entirety as provided in this
Agreement, it being understood that no repayment of the
obligations under the Existing Loan Agreement is being effected
hereby, but merely an amendment and restatement in accordance
with the terms hereof.
NOW THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrower
and Foothill agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the
following terms shall have the following definitions:
"Account Debtor" means any Person who is or who may
become obligated under, with respect to, or on account of, an
Account.
"Accounts" means all presently existing and hereafter
arising accounts, contract rights, and all other forms of
obligations owing to Borrower arising out of the sale, license,
or lease of goods or software or the rendition of services by
Borrower, irrespective of whether earned by performance, and any
and all credit insurance, guaranties, or security therefor.
"Advances" has the meaning set forth in Section 2.1(a).
"Additional Term Loan" has the meaning set forth in
Section 2.3.
"Affiliate" means, as applied to any Person, any other
Person who directly or indirectly controls, is controlled by, is
under common control with or is a director or officer of such
Person. For purposes of this definition, "control" means: (a)
solely when "Affiliate" is used in determining Eligible Accounts,
the possession, directly or indirectly, of the power to vote 5%
or more of the securities having ordinary voting power for the
election of directors or the direct or indirect power to direct
the management and policies of a Person; and (b) in all other
cases, the possession, directly or indirectly, of the power to
vote 10% or more of the securities having ordinary voting power
for the election of directors or the direct or indirect power to
direct the management and policies of a Person.
"Agreement" has the meaning set forth in the preamble
hereto.
"Appraised Assets" means items of Equipment that are
the subject of that certain appraisal, dated September 27, 1999,
performed by Acuval Associates, Inc. or any subsequent appraisal
performed by a qualified appraiser satisfactory to Foothill.
"Asset Disposition" means any sale, license, lease,
exchange, transfer, or other disposition (including any
disposition as part of a sale and lease-back transaction),
directly or indirectly, by Borrower of any of the properties or
assets of Borrower.
"Authorized Person" means any officer or other employee
of Borrower.
"Average Unused Portion of Maximum Revolving Amount"
means, as of any date of determination, (a) the Maximum Revolving
Amount, less (b) the sum of (i) the average Daily Balance of
Advances that were outstanding during the immediately preceding
month, plus (ii) the average Daily Balance of the Letter of
Credit Usage during the immediately preceding month.
"Availability" means the amount of money that Borrower
is entitled to borrow as Advances under Section 2.1, such amount
being the difference derived when (a) the sum of the principal
amount of Advances then outstanding (including any amounts that
Foothill may have paid for the account of Borrower pursuant to
any of the Loan Documents and that have not been reimbursed by
Borrower) is subtracted from (b) the lesser of (i) the Maximum
Revolving Amount less the sum of (y) the Letter of Credit Usage
and (z) the F/X Reserve, or (ii) the Borrowing Base less the sum
of (y) the Letter of Credit Usage and (z) the F/X Reserve.
"Bankruptcy Code" means the United States Bankruptcy
Code (11 U.S.C. section 101 et seq.), as amended, and any successor
statute.
"Benefit Plan" means a "defined benefit plan" (as
defined in Section 3(35) of ERISA) for which Borrower, any
Subsidiary of Borrower, or any ERISA Affiliate has been an
"employer" (as defined in Section 3(5) of ERISA) within the past
six years.
"Bentley Equity Interests" means the equity interests
in Bentley Systems, Inc. owned of record by Borrower as of the
Original Closing Date and the rights of Borrower related thereto
under that certain Stockholders' Agreement, dated June 11, 1987,
by and among Bentley Systems, Inc., Borrower, and the "Management
Stockholders" party thereto (as amended).
"Books" means all of Borrower's books and records
including: ledgers; records indicating, summarizing, or
evidencing Borrower's properties or assets (including the
Collateral) or liabilities; all information relating to
Borrower's business operations or financial condition; and all
computer programs, disk or tape files, printouts, runs, or other
computer prepared information.
"Borrower" has the meaning set forth in the preamble to
this Agreement.
"Borrowing Base" has the meaning set forth in Section
2.1(a). For purposes of this definition, any amount that is
denominated in a currency other than Dollars shall be valued in
Dollars based on the applicable Exchange Rate for such currency
as of the date 1 Business Day prior to the date of determination.
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which national banks are authorized or
required to close.
"Certifying Officer" means any one or more of the
following officers of Borrower: Treasurer, Assistant Treasurer,
Chief Financial Officer, and Chief Accounting Officer.
"Change of Control" shall be deemed to have occurred at
such time as a "person" or "group" (within the meaning of
Sections 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 more than 25% of the total voting power of all
classes of Stock then outstanding of Borrower entitled to vote in
the election of directors.
"Closing Date" means the date of the first to occur of
the making of the initial Advance, the issuance of the initial
Letter of Credit, or the issuance of the initial F/X Line
indemnity under this Agreement, in each case, pursuant to this
Agreement.
"Code" means the California Uniform Commercial Code.
"Collateral" means all right, title, or interest of
Borrower with respect to the following:
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) the Real Property Collateral,
(h) the Investment Property,
(i) any money, or other assets of Borrower that
now or hereafter come into the possession, custody, or control
of Foothill, and
(j) the proceeds and products, whether tangible
or intangible, of any of the foregoing, including proceeds of
insurance covering any or all of the Collateral, and any and
all Accounts, Books, Equipment, General Intangibles, Inventory,
Investment Property, Negotiable Collateral, Real Property, money,
deposit accounts, or other tangible or intangible property
resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof
or interest therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord waiver,
mortgagee waiver, bailee letter, or acknowledgement agreement of
any warehouseman, processor, lessor, consignee, or other Person
in possession of, having a Lien upon, or having rights or
interests in the Equipment or Inventory, in each case, in form
and substance reasonably satisfactory to Foothill.
"Collections" means all cash, checks, notes,
instruments, and other items of payment (including, insurance
proceeds, proceeds of cash sales, rental proceeds, and tax
refunds).
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C-1 and delivered by a
Certifying Officer of Borrower to Foothill.
"Consolidated Current Assets" means, as of any date of
determination, the aggregate amount of all current assets of
Borrower and its Subsidiaries that would, in accordance with
GAAP, be classified on a balance sheet as current assets.
"Consolidated Current Liabilities" means, as of any
date of determination, the aggregate amount of all current
liabilities of Borrower and its Subsidiaries that would, in
accordance with GAAP, be classified on a balance sheet as current
liabilities. For purposes of this definition, all Obligations
outstanding under this Agreement shall be deemed to be current
liabilities without regard to whether they would be deemed to be
so under GAAP.
"copyright" shall have the meaning ascribed to such
term in the United States Copyright Act of 1976, as amended, and
includes unregistered copyrights.
"Copyright Security Agreement" means an Amended and
Restated Copyright Security Agreement, in form and substance
satisfactory to Foothill, dated as of even date herewith, between
Borrower and Foothill.
"Currency Protection Agreement" shall mean any currency
swap, cap, or collar agreement or other similar insurance-type
agreement in connection with hedging against foreign currency
rate fluctuations.
"Daily Balance" means the amount of an Obligation owed
at the end of a given day.
"deems itself insecure" means that the Person deems
itself insecure in accordance with the provisions of Section 1208
of the Code.
"Default" means an event, condition, or default that,
with the giving of notice, the passage of time, or both, would be
an Event of Default.
"Designated Account" means account number 635504-2506
of Borrower maintained with Borrower's Designated Account Bank,
or such other deposit account of Borrower (located within the
United States) which has been designated, in writing and from
time to time, by Borrower to Foothill.
"Designated Account Bank" means Norwest Bank Minnesota,
whose office is located at Sixth & Marquette, Xxxxxxxxxxx,
Xxxxxxxxx, 00000, and whose ABA number is 000000000.
"Dilution" means, in each case based upon the
experience of the immediately prior 90 days, the result of
dividing the Dollar amount of (a) bad debt write-downs,
discounts, returns, credits, or other dilution with respect to
the Accounts, by (b) Collections with respect to Accounts (in
each case, excluding intercompany Accounts and extraordinary
items) plus the Dollar amount of clause (a).
"Dilution Reserve" means, as of any date of
determination pursuant to the report of Dilution delivered under
Section 6.2, an amount sufficient to reduce Foothill's advance
rate against Eligible Accounts by 1 percentage point for each
percentage point by which Dilution is in excess of 8%.
"Dollars or $" means United States dollars.
"Domestic Accounts" means Accounts with respect to
which the Account Debtor maintains its chief executive office in
the United States or is organized under the laws of the United
States or any State thereof.
"Early Termination Premium" has the meaning set forth
in Section 3.6.
"Eligible Accounts" means Eligible Domestic Accounts,
Eligible Foreign Accounts, and Eligible Unbilled Accounts.
"Eligible Domestic Accounts" means those Accounts
created by Borrower in the ordinary course of business, that
arise out of Borrower's sale, license, or lease of goods or
software or rendition of services, and that strictly comply with
each and all of the representations and warranties respecting
Accounts made by Borrower to Foothill in the Loan Documents;
provided, however, that standards of eligibility may be fixed and
revised from time to time by Foothill in Foothill's reasonable
credit judgment. Eligible Domestic Accounts shall not include
the following:
(a) Accounts that the Account Debtor has failed to
pay within 60 days of due date (or, in the case of Federal Accounts,
90 days of due date) or Accounts with selling terms of more than
60 days;
(b) Accounts owed by an Account Debtor or its
Affiliates where 50% or more of all Accounts owed by that Account
Debtor (or its Affiliates) are deemed ineligible under clause (a)
above;
(c) Accounts with respect to which the Account
Debtor is an employee, Affiliate, 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 that are not payable in Dollars or
with respect to which the Account Debtor: (i) does not maintain
its chief executive office in the United States, or (ii) is not
organized under the laws of the United States or any State
thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or of any department, agency,
public corporation, or other instrumentality thereof, unless (y)
the Account is supported by an irrevocable letter of credit that
is satisfactory to Foothill (as to form, substance, and issuer or
domestic confirming bank) and that, upon the occurrence and
during the continuance of an Event of Default, has been delivered
to Foothill and is directly drawable by Foothill (provided,
however, that nothing herein shall limit Foothill's right to not
make an Advance or issue a Letter of Credit or F/X Line indemnity
upon the occurrence and during the continuance of an Event of
Default), or (z) the Account is covered by credit insurance in
form and amount, and by an insurer, satisfactory to Foothill;
(f) Accounts with respect to which the Account
Debtor is a creditor of Borrower, has or has asserted a right
of setoff, has disputed its liability (whether pursuant to a
contractual discrepancy or otherwise), or has made any claim
with respect to the Account; provided, however, that the foregoing
only shall apply to the extent of such right of setoff, disputed
liability, or other claim giving rise to such contra-account.
(g) Accounts with respect to an Account Debtor
whose total obligations owing to Borrower exceed 10% of all
Eligible Accounts, to the extent of the obligations owing by
such Account Debtor in excess of such percentage; provided,
however, that in the case of the United States and its
departments, agencies, and instrumentalities, taken as a whole,
the foregoing percentage shall be fifty percent (50%) before
the excess would be deemed ineligible;
(h) Accounts with respect to which the Account
Debtor is subject to any Insolvency Proceeding, or becomes
insolvent, or goes out of business;
(i) Accounts the collection of which Foothill,
in its reasonable credit judgment, believes to be doubtful by
reason of the Account Debtor's financial condition and with
respect to which Foothill has notified Borrower of such belief;
(j) Accounts (other than Eligible Unbilled
Accounts) with respect to which the goods giving rise to such
Account have not been shipped and billed to the Account Debtor,
the services giving rise to such Account have not been
performed and accepted by the Account Debtor, or the Account
otherwise does not represent a final sale;
(k) Accounts with respect to which the Account
Debtor is located in the states of New Jersey, Minnesota,
Indiana, or West Virginia (or any other state that requires a
creditor to file a Business Activity Report or similar document
in order to bring suit or otherwise enforce its remedies
against such Account Debtor in the courts or through any
judicial process of such state), unless Borrower has qualified
to do business in New Jersey, Minnesota, Indiana, West Virginia,
or such other states, or has filed a Notice of Business
Activities Report with the applicable division of taxation,
the department of revenue, or with such other state offices,
as appropriate, for the then-current year, or is exempt from
such filing requirement;
(l) At such times as Foothill may determine
in its sole discretion, Federal Accounts (exclusive, however,
of Accounts with respect to which Borrower has complied, to
the satisfaction of Foothill and subject to Section 4.4(c)
hereof, with the Assignment of Claims Act, 31 U.S.C. section
3727);
(m) At such times as Foothill may determine
in its sole discretion, Accounts with respect to which the
Account Debtor is any State of the United States (exclusive,
however, of: (i) Accounts owed by any State that does not
have a statutory counterpart to the Assignment of Claims
Act; and (ii) Accounts owed by any State that has a statutory
counterpart to the Assignment of Claims Act and with respect
to which Borrower has complied, to the satisfaction of
Foothill and subject to Section 4.4(c) hereof, with such
statutory counterpart);
(n) Federal Accounts arising under any one
underlying contract or any series of related underlying
contracts, the total amount of which obligations owing
Borrower exceeds 10% of all Eligible Accounts, to the
extent of the obligations owing under such contract or
contracts in excess of such percentage;
(o) Federal Accounts in respect of which
the subject contract for goods and services is designated
by the Account Debtor as "classified" (i.e., the ability
of Foothill to receive information regarding such contract
or such Account is restricted by rules or regulations of
the United States or any department, agency, or instrumentality
of the United States in respect of classified information);
(p) [intentionally omitted];
(q) Accounts which represent progress payments
or other advance xxxxxxxx that are due prior to the completion
of performance by Borrower of the subject contract for goods
or services, except to the extent that such progress payments
or other advance xxxxxxxx are expressly permitted by the terms
of the subject contract (including so-called "maintenance
contracts"); or
(r) Accounts with respect to which a surety or
other bond has been issued in respect of the performance by
Borrower of the subject contract for goods or services.
"Eligible Foreign Accounts" means those Accounts
created by Borrower, with respect to which the Account Debtor is
IBM United Kingdom Ltd., a corporation organized under the laws
of the United Kingdom, Dell Asia Pacific Sdn., a company
organized under the laws of Malaysia, Dell Products, a company
organized under the laws of Ireland, Compaq Asia Pacific Pte
Ltd., a company organized under the laws of Singapore, or Hewlett
Packard, a company organized under the laws of France, that do
not qualify as Eligible Domestic Accounts solely because the
Account Debtor: (i) does not maintain its chief executive office
in the United States, or (ii) is not organized under the laws of
the United States or any State thereof.
"Eligible Unbilled Accounts" means those Domestic
Accounts created by Borrower that do not qualify as Eligible
Domestic Accounts solely because they constitute Unbilled
Accounts.
"Equipment" means all of Borrower's present and
hereafter acquired machinery, machine tools, motors, equipment,
furniture, furnishings, fixtures, vehicles (including motor
vehicles and trailers), tools, parts, goods (other than consumer
goods, farm products, or Inventory), wherever located, including,
(a) any interest of Borrower in any of the foregoing, and (b) all
attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security
Act of 1974, 29 U.S.C. section 1000 et seq., amendments thereto,
successor statutes, and regulations or guidance promulgated
thereunder.
"ERISA Affiliate" means (a) any corporation subject to
ERISA whose employees are treated as employed by the same
employer as the employees of Borrower under IRC Section 414(b),
(b) any trade or business subject to ERISA whose employees are
treated as employed by the same employer as the employees of
Borrower under IRC Section 414(c), (c) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any organization
subject to ERISA that is a member of an affiliated service group
of which Borrower is a member under IRC Section 414(m), or (d)
solely for purposes of Section 302 of ERISA and Section 412 of
the IRC, any party subject to ERISA that is a party to an
arrangement with Borrower and whose employees are aggregated with
the employees of Borrower under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with respect
to any Benefit Plan or Multiemployer Plan, (b) the withdrawal of
Borrower, any of its Subsidiaries or ERISA Affiliates from a
Benefit Plan during a plan year in which it was a "substantial
employer" (as defined in Section 4001(a)(2) of ERISA), (c) the
providing of notice of intent to terminate a Benefit Plan in a
distress termination (as described in Section 4041(c) of ERISA),
(d) the institution by the PBGC of proceedings to terminate a
Benefit Plan or Multiemployer Plan, (e) any event or condition
(i) that provides a basis under Section 4042(a)(1), (2), or (3)
of ERISA for the termination of, or the appointment of a trustee
to administer, any Benefit Plan or Multiemployer Plan, or
(ii) that may result in termination of a Multiemployer Plan
pursuant to Section 4041A of ERISA, (f) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA,
of Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan
under Section 401(a)(29) of the IRC by Borrower or its
Subsidiaries or any of their ERISA Affiliates.
"Event of Default" has the meaning set forth in Section
8.
"Exchange Rate" means the nominal rate of exchange
available to Foothill in a chosen foreign exchange market for the
purchase of the applicable non-Dollar currency at 12:00 noon,
local time, 1 Business Day prior to any date of determination,
expressed as the number of units of such currency per Dollar.
"Excluded Foreign Portion" means, with respect to any
Foreign Subsidiary, the portion (if any) of the equity securities
of such Subsidiary owned of record by Borrower with voting power
that is in excess of 65% of the total combined voting power of
issued and outstanding stock of such Subsidiary entitled to vote.
"Excluded Foreign Subsidiary Securities" means (a) the
Excluded Foreign Portion (if any) of the equity securities of any
Foreign Subsidiary of Borrower identified in Schedule II of the
Pledge Agreement (as the same may be amended or supplemented from
time to time), and (b) subject to the last paragraph of Section
6.3, 100% of the fully diluted issued and outstanding equity
securities of any other Foreign Subsidiary of Borrower.
"Exempt Copyright" means any Incipient Copyright or any
Obsolete Copyright.
"Existing Loan Agreement" has the meaning set forth in
the Recitals to this Agreement.
"Federal Accounts" means Accounts where the United
States or any department, agency, or instrumentality of the
United States is the Account Debtor.
"FEIN" means Federal Employer Identification Number.
"Foothill" has the meaning set forth in the preamble to
this Agreement.
"Foothill Account" has the meaning set forth in Section
2.7.
"Foothill Expenses" means all: costs or expenses
(including taxes, and insurance premiums) required to be paid by
Borrower under any of the Loan Documents that are paid or
incurred by Foothill; fees or charges paid or incurred by
Foothill in connection with Foothill's transactions with
Borrower, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, litigation, and UCC (or
equivalent) searches and including searches with the patent and
trademark office, the copyright office, or the department of
motor vehicles), filing, recording, publication, appraisal
(including periodic Personal Property Collateral or Real Property
Collateral appraisals), real estate surveys, real estate title
policies and endorsements, and environmental audits; costs and
expenses incurred by Foothill in the disbursement of funds to
Borrower (by wire transfer or otherwise); charges paid or
incurred by Foothill resulting from the dishonor of checks; costs
and expenses paid or incurred by Foothill to correct any default
or enforce any provision of the Loan Documents, or in gaining
possession of, maintaining, handling, preserving, storing,
shipping, selling, preparing for sale, or advertising to sell the
Personal Property Collateral or the Real Property Collateral, or
any portion thereof, irrespective of whether a sale is
consummated; costs and expenses paid or incurred by Foothill in
examining Borrower's Books; costs and expenses of third party
claims or any other suit paid or incurred by Foothill in
enforcing or defending the Loan Documents or in connection with
the transactions contemplated by the Loan Documents or Foothill's
relationship with Borrower (or any of its Subsidiaries party to
one or more Loan Documents); and Foothill's reasonable attorneys
fees and expenses incurred in advising, structuring, drafting,
reviewing, administering, amending, terminating, enforcing
(including attorneys fees and expenses incurred in connection
with a "workout," a "restructuring," or an Insolvency Proceeding
concerning Borrower), defending, or concerning the Loan
Documents, irrespective of whether suit is brought.
"Foreign Currency Letter of Credit" means (a) a Letter
of Credit payable in a denomination other than in Dollars, or (b)
a Letter of Credit with a face amount in Dollars-equivalent of a
denomination other than in Dollars.
"Foreign Currency Reserve" means an amount equal to 5%
of the aggregate outstanding face amount of Foreign Currency
Letters of Credit (if any); provided, however, that Foothill
shall have the right to adjust the then extant Foreign Currency
Reserve (if any) upwards or downwards in its reasonable business
credit judgment.
"Foreign Subsidiary" means any Subsidiary organized
under the laws of a jurisdiction other than the United States or
any State thereof.
"F/X Bank" means Norwest Bank Minnesota, National
Association, or any successor thereto.
"F/X Bank Parameters Letter" means that certain letter
agreement, dated as of January 14, 1997, between F/X Bank and
Borrower, a copy of which is attached hereto as Exhibit F-1,
regarding the parameters under which F/X Bank provides foreign
exchange currency services to Borrower.
"F/X Line" has the meaning set forth in Section 2.4.
"F/X Reserve" means, as of any date of determination, a
reserve equal to the maximum amount of obligations of Foothill to
indemnify F/X Bank against losses or expenses incurred by F/X
Bank in connection with Permitted F/X Contracts. As of the
Closing Date, the amount of the F/X Reserve is $0.
"GAAP" means generally accepted accounting principles
as in effect from time to time in the United States, consistently
applied.
"General Intangibles" means all of Borrower's present
and future general intangibles and other personal property
(including contract rights, rights arising under common law,
statutes, or regulations, choses or things in action, goodwill,
patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due
or recoverable from pension funds, route lists, rights to payment
and other rights under any royalty or licensing agreements,
infringement claims, computer programs, information contained on
computer disks or tapes, literature, reports, catalogs, deposit
accounts, insurance premium rebates, tax refunds, and tax refund
claims), other than goods, Accounts, and Negotiable Collateral.
"Governing Documents" means the certificate or articles
of incorporation, by-laws, or other organizational or governing
documents of any Person.
"Governmental Authority" means any nation or
government, any state, province, or other political subdivision
thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by
any of the foregoing.
"Hardware Business" means all or substantially all of
the assets of Borrower comprising the business of manufacturing,
or having manufactured, Intergraph hardware products (the
"Products") for Borrower's interactive computer graphics systems
and the related Inventory of Borrower as of the Closing Date.
The term "Products" does not include Image Stations, ruggedized
workstations, local products sold through EDC, TAMPS
workstations, photoscans, scan servers, and
printers/plotters/scanners sold through Borrower.
"Hazardous Materials" means (a) substances that are
defined or listed in, or otherwise classified pursuant to, any
applicable laws or regulations as "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances," or
any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids,
synthetic gas, drilling fluids, produced waters, and other wastes
associated with the exploration, development, or production of
crude oil, natural gas, or geothermal resources, (c) any
flammable substances or explosives or any radioactive materials,
and (d) asbestos in any form or electrical equipment that
contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Huntsville Property" means the Real Property (and
related improvements thereto) of Borrower located in or about
Huntsville, Alabama.
"ICS" means Intergraph Computer Systems, Inc., a
Delaware corporation.
"IG Australia" means Intergraph Corporation Pty., Ltd..
a corporation organized under the laws of Australia.
"IG Australia Existing Lender" means National Bank of
Australia.
"IG Australia Existing Lender Pay-Off Letter" means a
letter, in form and substance reasonably satisfactory to
Foothill, from IG Australia Existing Lender respecting the amount
necessary to repay in full all of the obligations of Borrower or
IG Australia owing to IG Australia Existing Lender and obtain a
termination or release of all of the Liens existing in favor of
IG Australia Existing Lender in and to the properties or assets
of Borrower and its Subsidiaries.
"IG Benelux" means Intergraph Benelux B.V., a
corporation organized under the laws of The Netherlands.
"IG Benelux Existing Lender" means ING Bank, N.V..
"IG Delaware" means Intergraph Delaware, Inc., a
Delaware corporation.
"Incipient Copyright" means any copyright that: (a)
relates to software of Borrower under development (whether in the
form of a new product, a new version of a pre-existing product,
an upgrade, add-on, or modification to a pre-existing product, or
otherwise) that has not yet become a completed product, version,
upgrade, add-on, or modification or is not yet being marketed by
or on behalf of Borrower; or (b) is not the subject of licenses
thereof or other dispositions by Borrower giving rise to
Accounts.
"Indebtedness" means: (a) all obligations of Borrower
for borrowed money, (b) all obligations of Borrower evidenced by
bonds, debentures, notes, or other similar instruments and all
reimbursement or other obligations of Borrower in respect of
letters of credit, bankers acceptances, interest rate swaps, or
other financial products, (c) all obligations of Borrower under
capital leases, (d) all obligations or liabilities of others
secured by a Lien on any property or asset of Borrower,
irrespective of whether such obligation or liability is assumed,
and (e) any obligation of Borrower guaranteeing or intended to
guarantee (whether guaranteed, endorsed, co-made, discounted, or
sold with recourse to Borrower) any indebtedness, lease,
dividend, letter of credit, or other obligation of any other
Person; provided, however, that the term "Indebtedness" shall not
include (i) liabilities or obligations arising out of or relating
to guarantees, warranties, or other commitments that products or
systems sold by Borrower or any of its Affiliates will meet
particular performance or operating specifications ("Commercial
Performance Guarantees"), or (ii) liabilities arising out of or
relating to agreements or commitments of Borrower to maintain the
financial condition or solvency of any Affiliate of Borrower that
are made, in the ordinary course of Borrower's business
consistent with past practices, in connection with or in
fulfillment of any Commercial Performance Guarantee.
"Initial Term Loan" has the meaning set forth in
Section 2.3.
"Insolvency Proceeding" means any proceeding commenced
by or against any Person under any provision of the Bankruptcy
Code or under any other bankruptcy or insolvency law, assignments
for the benefit of creditors, formal or informal moratoria,
compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.
"Interest Rate Agreement" shall mean any interest rate
swap agreement or any other similar insurance-type agreement in
connection with any interest "cap" or "collar" transaction or any
other interest rate hedging transaction.
"Intercompany Notes" means promissory notes, if any,
evidencing loan obligations between Borrower and any of its
Subsidiaries that constitute loans qualifying under the
definition of "Permitted Subsidiary Loans and Capital
Contributions" or that are permitted under Section 7.1(d).
"Inventory" means all present and future inventory in
which Borrower has any interest, including goods held for sale,
license, or lease or to be furnished under a contract of service
and all of Borrower's present and future raw materials, work in
process, finished goods, and packing and shipping materials,
wherever located.
"Investment Property" means "investment property" as
that term is defined in section 9115 of the Code, whether now
owned or hereafter acquired.
"IPS" means Intergraph Public Safety, Inc., a Delaware
corporation.
"IPS Copyright Security Agreement" means a Copyright
Security Agreement, in form and substance satisfactory to
Foothill, between IPS and Foothill relative to the copyrights
transferred to IPS by Borrower that remain subject to Foothill's
Liens.
"IPS Trademark Security Agreement" means a Trademark
Security Agreement, in form and substance satisfactory to
Foothill, between IPS and Foothill relative to the trademark's
transferred to IPS by Borrower that remain subject to Foothill's
Liens.
"IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.
"L/C" has the meaning set forth in Section 2.2(a).
"L/C Guaranty" has the meaning set forth in Section
2.2(a).
"Letter of Credit" means an L/C or an L/C Guaranty, as
the context requires.
"Letter of Credit Usage" means the sum of (a) the
undrawn amount of Letters of Credit, plus (b) the amount of
unreimbursed drawings under Letters of Credit, plus an amount
equal to the Foreign Currency Reserve.
"Lien" means any interest in property securing an
obligation owed to, or a claim by, any Person other than the
owner of the property, whether such interest shall be based on
the common law, statute, or contract, whether such interest shall
be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or
the existence of some future circumstance or circumstances,
including the lien or security interest arising from a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, security agreement, adverse claim or charge,
conditional sale or trust receipt, or from a lease, consignment,
or bailment for security purposes and also including
reservations, exceptions, encroachments, easements, rights-of-
way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Liquidation Value" means, in respect of any item of
Equipment, the net orderly liquidation value of such item of
Equipment as determined by a qualified appraiser selected by
Foothill.
"Loan Account" has the meaning set forth in Section
2.10.
"Loan Documents" means this Agreement, the Letters of
Credit, the F/X Bank Parameters Letter, the Lockbox Agreements,
the Mortgages, the Copyright Security Agreement, the Patent
Security Agreement, the Pledge Agreement, the Trademark Security
Agreement, the Reaffirmation Agreement, the Restructuring
Consent, the IPS Copyright Security Agreement, the IPS Trademark
Security Agreement, any note or notes executed by Borrower and
payable to Foothill, and any other agreement entered into, now or
in the future, in connection with this Agreement.
"Lockbox Account" shall mean a depositary account
established pursuant to one of the Lockbox Agreements.
"Lockbox Agreements" means those certain Lockbox
Operating Procedural Agreements and those certain Depository
Account Agreements, in form and substance reasonably satisfactory
to Foothill, each of which is among Borrower, Foothill, and the
Lockbox Bank.
"Lockbox Bank" means Bank One, as successor to First
National Bank of Chicago.
"Lockboxes" has the meaning set forth in Section 2.7.
"M&S" means M&S Computing Investments, Inc., a Delaware
corporation.
"Material Adverse Change" means (a) a material adverse
change in the business, operations, results of operations,
assets, liabilities or condition of Borrower, (b) the material
impairment of Borrower's ability to perform its obligations under
the Loan Documents to which it is a party or of Foothill to
enforce the Obligations or to realize upon the Collateral, (c) a
material adverse effect on the value of the Collateral or the
amount that Foothill would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in
the liquidation of such Collateral, or (d) a material impairment
of the priority of Foothill's Liens with respect to the
Collateral; provided, however, that the determination of any
Material Adverse Change shall be made after giving effect to the
reserves, if any, created by Foothill against the Borrowing Base,
or the reduction, if any, made by Foothill of the applicable
advance rates based upon the Borrowing Base, in each case, in
respect of the event or circumstance giving rise to such material
adverse change, material impairment, or material adverse effect.
"Maturity Date" has the meaning set forth in Section
3.4.
"Maximum Amount" means $100,000,000, as such amount may
be reduced from time to time pursuant to Section 2.12.
"Maximum Revolving Amount" means, as of any date of
determination, the result of (a) the Maximum Amount, minus (b)
the then outstanding principal balance of the Term Loan.
"Mortgage Policies" means mortgagee title insurance
policies (or marked commitments to issue the same) for the Real
Property Collateral issued by a title insurance company
reasonably satisfactory to Foothill in amounts reasonably
satisfactory to Foothill.
"Mortgages" means one or more mortgages, deeds of
trust, or deeds to secure debt, executed by Borrower in favor of
Foothill, the form and substance of which shall be reasonably
satisfactory to Foothill, that encumber the Real Property
Collateral and the related improvements thereto.
"Multiemployer Plan" means a "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) to which Borrower, any of
its Subsidiaries, or any ERISA Affiliate has contributed, or was
obligated to contribute, within the past six years.
"Negotiable Collateral" means all of Borrower's present
and future letters of credit, notes, drafts, instruments,
investment property, security entitlements, securities (including
the shares of stock of Subsidiaries of Borrower, but expressly
excluding the Excluded Foreign Subsidiary Securities and the
Bentley Equity Interests), documents, personal property leases
(wherein Borrower is the lessor), chattel paper, and Borrower's
Books relating to any of the foregoing.
"Net Worth" means, as of any date of determination,
Borrower's total stockholder's equity.
"Obligations" means all loans, Advances, debts,
principal, interest (including any interest that, but for the
provisions of the Bankruptcy Code, would have accrued),
contingent reimbursement obligations under any outstanding
Letters of Credit, premiums (including Early Termination
Premiums), liabilities (including all amounts charged to
Borrower's Loan Account pursuant hereto), obligations, fees,
charges, costs, or Foothill Expenses (including any fees or
expenses that, but for the provisions of the Bankruptcy Code,
would have accrued), lease payments, guaranties, covenants, and
duties owing by Borrower to Foothill of any kind and description
(whether pursuant to or evidenced by the Loan Documents or
pursuant to any other agreement between Foothill and Borrower,
and irrespective of whether for the payment of money), whether
direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including any debt,
liability, or obligation owing from Borrower to others that
Foothill may have obtained by assignment or otherwise, and
further including all interest not paid when due and all Foothill
Expenses that Borrower is required to pay or reimburse by the
Loan Documents, by law, or otherwise.
"Obligor" means any of Borrower or any of its
Subsidiaries party to one or more Loan Documents, including M&S,
IG Delaware, and IPS.
"Obsolete Copyright" means any copyright that relates
to software owned by Borrower that: (a) is no longer sold or
marketed by Borrower; (b) is not generating any material amount
of Accounts or revenues of Borrower; or (c) does not have a
material fair market value.
"Old Second Amendment" means that certain Amendment
Number Two to Loan and Security Agreement, dated as of November
25, 1997, between Foothill and Borrower.
"Old Second Amendment Closing Date" means the first
date on which all of the conditions to the effectiveness of the
Old Second Amendment have been satisfied (or waived or postponed
by Foothill in its sole discretion) pursuant to the terms
thereof.
"Ordinary Course Dispositions" means Asset Dispositions
of (a) Inventory in the ordinary course of business,
(b) Equipment that is substantially worn, damaged, or obsolete in
the ordinary course of business, (c) Equipment that is a so-
called "internal equipment item" that is replaced by Borrower in
the ordinary course of business and consistent with past
practices with another such item of equal or greater value, and
(d) Equipment that is a so-called "demonstration item" in the
ordinary course of business and consistent with past practices.
"Original Closing Date" means January 6, 1997.
"Original Loan Agreement" has the meaning set forth in
the Recitals to this Agreement.
"Overadvance" has the meaning set forth in Section 2.5.
"Participant" means any Person to which Foothill has
sold a participation interest in its rights under the Loan
Documents.
"Patent Security Agreement" means an Amended and
Restated Patent Security Agreement, in form and substance
satisfactory to Foothill, dated as of even date herewith, between
Borrower and Foothill.
"PBGC" means the Pension Benefit Guaranty Corporation
as defined in Title IV of ERISA, or any successor thereto.
"Permitted Appraised Assets Dispositions" means,
subject to the prior or concurrent satisfaction of the Release
Condition therefor, Asset Dispositions of Appraised Assets (in
the ordinary course of Borrower's business and consistent with
past practices), free and clear of Foothill's Lien thereon (other
than Foothill's Lien in the proceeds of such Asset Disposition),
so long as: (a) Borrower replaces the Appraised Asset that is the
subject of such Asset Disposition (the "Disposed Appraised
Asset") with a newly acquired item of Equipment of equal or
greater comparable value than the appraised value of the Disposed
Appraised Asset set forth in the most recent appraisal thereof
and reports such Asset Disposition and replacement pursuant to
Section 6.2; and (b) in the case of any single Asset Disposition
or series of integrated Asset Dispositions involving one or more
Disposed Appraised Assets with an aggregate appraised value of
$250,000 or more, a Certifying Officer of Borrower shall deliver
to Foothill a certificate, in form and substance satisfactory to
Foothill, demonstrating in reasonable detail that the value of
such newly acquired item or items of Equipment are of equal or
greater comparable value than the appraised value of the relevant
Disposed Appraised Asset set forth in the most recent appraisal
thereof.
"Permitted Bentley Dispositions" means, subject to the
prior or concurrent satisfaction of the Release Condition
therefor, Asset Dispositions of the Bentley Equity Interests.
"Permitted Disposition" means (a) Ordinary Course
Dispositions, (b) Permitted Bentley Dispositions, (c) subject to
the prior or concurrent satisfaction of the applicable Release
Condition therefor and the establishment and maintenance of a
reserve against the Borrowing Base relative thereto, Asset
Dispositions of (1) that portion of the Huntsville Property
commonly known as Building 25 or 25A, or (2) that portion of the
Huntsville Property denominated as "Excess Land" or "Raw Land" as
referenced on page 9 of that certain report of Appraisal
Associates Incorporated, dated September 22, 1999 relative to the
Huntsville Property, in each case, free and clear of Foothill's
Lien thereon (other than Foothill's Lien in the proceeds of such
Asset Disposition), (d) subject to the prior or concurrent
satisfaction of the applicable Release Condition therefor, Asset
Dispositions of the assets that are the subject of Permitted
Toehold Investments and Permitted Other Investments, (e)
Permitted Appraised Assets Dispositions, (f) Restructuring
Transactions constituting Asset Dispositions, (g) the sale or
other disposition of Borrower's Hardware Business, and (h)
subject to the prior or concurrent satisfaction of the applicable
Release Condition therefor and the establishment and maintenance
of a reserve against the Borrowing Base relative thereto, other
Asset Dispositions not in the ordinary course of Borrower's
business that do not exceed, on a book value basis, $5,000,000 in
the aggregate in any fiscal year and do not exceed, on a book
value basis, $250,000 in any one transaction or series of related
transactions.
"Permitted F/X Contracts" means foreign currency
exchange contracts between F/X Bank and Borrower that: (a) are in
respect of marked-to-market risk on foreign exchange future
trades or options; (b) are entered into by Borrower in the
ordinary course of its business; (c) are entered into in
connection with the operational needs of Borrower's business and
not for speculative purposes; (d) do not have a maturity date
that is after the date five (5) Business Days prior to the
Maturity Date; and (e) are provided by F/X Bank pursuant to the
F/X Bank Parameters Letter.
"Permitted Investments" means: (a) Permitted Ordinary
Course Investments; (b) Permitted Repayment Investments; (c)
Permitted Toehold Investments; (d) Permitted Subsidiary Loans and
Capital Contributions; (e) Permitted Other Investments; and (f)
Restructuring Transactions constituting equity investments.
"Permitted Liens" means (a) Liens held by Foothill,
(b) Liens for unpaid taxes that either (i) are not yet due and
payable or (ii) are the subject of Permitted Protests, (c) Liens
set forth on Schedule P-1, (d) purchase money Liens in respect of
Equipment and the interests of lessors under operating leases and
of lessors under capital leases to the extent that the
acquisition or lease of the underlying asset is permitted under
Section 7.21 and so long as the Lien only attaches to the asset
purchased or acquired and only secures the purchase price of the
asset, (e) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of
business of Borrower and not in connection with the borrowing of
money, and which Liens either (i) are for sums not yet due and
payable, or (ii) are the subject of Permitted Protests, (f) Liens
arising from deposits made in connection with obtaining worker's
compensation or other unemployment insurance, (g) Liens or
deposits to secure performance of bids, tenders, or leases (to
the extent permitted under this Agreement), incurred in the
ordinary course of business of Borrower and not in connection
with the borrowing of money, (h) Liens arising by reason of
security for surety or appeal bonds in the ordinary course of
business of Borrower, (i) Liens of or resulting from any judgment
or award that would not have a Material Adverse Effect and as to
which the time for the appeal or petition for rehearing of which
has not yet expired, or in respect of which Borrower is in good
faith prosecuting an appeal or proceeding for a review, and in
respect of which a stay of execution pending such appeal or
proceeding for review has been secured, (j) Liens with respect to
the Real Property Collateral that are exceptions to the
commitments for title insurance issued in connection with the
Mortgages, as accepted by Foothill, (k) with respect to any Real
Property that is not part of the Real Property Collateral,
easements, rights of way, zoning and similar covenants and
restrictions, and similar encumbrances that customarily exist on
properties of Persons engaged in similar activities and similarly
situated and that in any event do not materially interfere with
or impair the use or operation of the Collateral by Borrower or
the value of Foothill's Lien thereon or therein, or materially
interfere with the ordinary conduct of the business of Borrower,
and (l) software escrow arrangements entered into in the ordinary
course of business consistent with past practice.
"Permitted Ordinary Course Investment" means (a) direct
obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of
America with a maturity not exceeding one year, (b) certificates
of deposit, time deposits, banker's acceptances or other
instruments of a bank having a combined capital and surplus of
not less than $500,000,000 with a maturity not exceeding one
year, (c) investments in commercial paper rated at least A-1 or P-
1 maturing within one year after the date of acquisition thereof,
(d) money market accounts maintained at a bank having combined
capital and surplus of no less than $500,000,000 or at another
financial institution reasonably satisfactory to Foothill, (e)
loans and advances to officers and employees of Borrower in the
ordinary course of business in an aggregate amount at any one
time outstanding not to exceed $3,000,000, (f) [intentionally
omitted], (g) investments in negotiable instruments for
collection, (h) advances in connection with purchases of goods or
services in the ordinary course of business, and (i) deposits
required in connection with leases.
"Permitted Other Investments" means the equity
investments of Borrower as of the Closing Date identified on
Schedule P-2.
"Permitted Protest" means the right of Borrower to
protest any Lien other than any such Lien that secures the
Obligations, tax (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental payment,
provided that (a) a reserve with respect to such obligation is
established on the books of Borrower in accordance with GAAP (or,
if higher, in an amount that Foothill in good faith and in its
reasonable credit judgment believes to be appropriate under the
circumstances), (b) any such protest is instituted and diligently
prosecuted by Borrower in good faith, and (c) Foothill is
satisfied that, while any such protest is pending, there will be
no impairment of the enforceability, validity, or priority of any
of the Liens of Foothill in and to the Collateral.
"Permitted Repayment Investment" means (a) the
contribution or loan by Borrower to IG Benelux of approximately
$15,000,000 to enable IG Benelux to repay, in full, all of its
indebtedness owing to the IG Benelux Existing Lender, or (b)
subject to the timely satisfaction of the condition set forth in
Section 3.3(f), the contribution or loan by Borrower to IG
Australia of approximately $24,000,000 to enable IG Australia to
repay, in full, all of its indebtedness owing to the IG Australia
Existing Lender.
"Permitted Spot Trades" means foreign currency exchange
transactions between F/X Bank and Borrower that: (a) are in
respect of foreign exchange spot value trades; (b) are entered
into by Borrower in the ordinary course of its business; and (c)
are entered into in connection with the operational needs of
Borrower's business and not for speculative purposes; and (d) are
conducted pursuant to the F/X Bank Parameters Letter.
"Permitted Subsidiary Loans and Capital Contributions"
means loans and capital contributions made after the Original
Closing Date by Borrower to any Subsidiary of Borrower; provided,
however, that all such loans and capital contributions made by
Borrower shall not exceed, in the aggregate: (a) $20,000,000
during the 1997 calendar year; (b) $25,000,000 during the 1998
calendar year (including the "ICS Capital Infusion", the
"Intergraph European Subsidiary Recapitalization Transactions",
the transactions described in item (iii) of the definition of
"IPS Recapitalization Transactions", and the transactions
described in item (ii) of the definition of "Veribest
Recapitalization Transaction", in each case as such terms are
used and defined in the Restructuring Consent); (c) $30,000,000
during the 1999 calendar year; and (d) $30,000,000 during the
each calendar year thereafter.
"Permitted Toehold Investment" means the acquisition of
an equity interest in a Person other than a Subsidiary of
Borrower (but not to exceed 10% of all of the issued and
outstanding equity interests of such Person on a fully diluted
basis) so long as (a) no Default or Event of Default shall have
occurred and be continuing or would result from the consummation
of the proposed acquisition, (b) the Person, in whom the equity
interest is being acquired, is engaged in the same business as
that of Borrower or any of its Subsidiaries or in a business
reasonably related thereto, (c) the relevant equity interest
being acquired in such Person is acquired directly by Borrower,
(d) to the extent required under Section 4.2, Borrower shall have
executed and delivered a supplement to the Pledge Agreement and
shall have perfected Foothill's security interest in the acquired
equity interest, and (e) the aggregate amount expended by
Borrower in respect of all such Permitted Toehold Investments
does not exceed $1,000,000 in any fiscal year.
"Person" means and includes natural persons,
corporations, limited liability companies, limited partnerships,
general partnerships, limited liability partnerships, joint
ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities,
and governments and agencies and political subdivisions thereof.
"Personal Property Collateral" means all Collateral
other than the Real Property Collateral.
"Plan" means any employee benefit plan, program, or
arrangement maintained or contributed to by Borrower or with
respect to which it may incur liability.
"Pledge Agreement" means an Amended and Restated Pledge
Agreement, in form and substance satisfactory to Foothill, dated
as of even date herewith, among Borrower, IG Delaware, M&S, IPS,
and Foothill.
"Reaffirmation Agreement" means the Reaffirmation
Agreement, dated as of the Closing Date, by each of the Obligors
party to a Loan Document in favor of Foothill, in form and
substance satisfactory to Foothill, pursuant to which each of
each such Obligor reaffirms its obligations under the Loan
Documents to which it is party (including any grants of security
interests in favor of Foothill) notwithstanding the amendment and
restatement of the Existing Loan Agreement effected by this
Agreement.
"Real Property" means any estates or interests in real
property now owned or hereafter acquired by Borrower.
"Real Property Collateral" means the parcel or parcels
of Real Property and the related improvements thereto now owned
by Borrower and identified on Schedule R-1, and any Real Property
hereafter acquired by Borrower.
"Reference Rate" means, the rate of interest announced
within Xxxxx Fargo Bank, N.A. at its principal office in San
Francisco as its "prime rate", with the understanding that the
"prime rate" is one of Xxxxx Fargo's base rates (not necessarily
the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making
reference thereto and is evidenced by the recording thereof after
its announcement in such internal publication or publications as
Xxxxx Fargo may designate.
"Release Condition" means, in respect of any Asset
Disposition, that (a) no Default or Event of Default has occurred
and is continuing or would result therefrom, and (b) Borrower is
receiving at least fair value (as determined in accordance with
Section 3439 of the California Civil Code, as amended) for the
property or assets that are the subject of the Asset Disposition.
"Reportable Event" means any of the events described in
Section 4043(c) of ERISA or the regulations thereunder other than
a Reportable Event as to which the provision of 30 days notice to
the PBGC is waived under applicable regulations.
"Reserve" means, as of any date of determination, an
amount equal to the product of (i) $297,619 times (ii) the number
of months (or any portions thereof) separating such date from
November 30, 1999. Without limiting the generality of the
foregoing and solely by way of example, the amount of the Reserve
would equal: (x) zero (-0-) as of November 30, 1999; (y) $297,619
as of December 1, 1999; and (z) $595,238 as of January 1, 2000.
"Restructuring Consent" means that certain letter
agreement, dated as of August 31, 1998, between Borrower and
Foothill pursuant to which Foothill consented to the consummation
of the transactions described therein.
"Restructuring Transactions" means the transactions
contemplated under and described in the Restructuring Consent.
"Retiree Health Plan" means an "employee welfare
benefit plan" within the meaning of Section 3(1) of ERISA that
provides benefits to individuals after termination of their
employment, other than as required by Section 601 of ERISA.
"Securities Account" means a "securities account" as
that term is defined in the Code.
"Solvent" means, with respect to any Person on a
particular date, that on such date (a) at fair valuations, all of
the properties and assets of such Person are greater than the sum
of the debts, including contingent liabilities, of such Person,
(b) the present fair salable value of the properties and assets
of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize
upon its properties and assets and pay its debts and other
liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not
intend to, and does not believe that it will, incur debts beyond
such Person's ability to pay as such debts mature, and (e) such
Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such
Person's properties and assets would constitute unreasonably
small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount
that, in light of all the facts and circumstances existing at
such time, represents the amount that reasonably can be expected
to become an actual or matured liability.
"Subsidiary" of a Person means a corporation,
partnership, limited liability company, or other entity in which
that Person directly or indirectly owns or controls the shares of
stock or other ownership interests having ordinary voting power
to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited
liability company, or other entity. Anything to the contrary
notwithstanding, Bentley Systems, Inc. shall not be deemed to be
a Subsidiary of Borrower.
"Supplemental Reserve" means, $2,500,000.
"Term Loan" has the meaning set forth in Section 2.3.
"Trademark Security Agreement" means an Amended and
Restated Trademark Security Agreement, in form and substance
satisfactory to Foothill, dated as of even date herewith, between
Borrower and Foothill.
"Triggering Event" means any of (a) the occurrence and
continuation of an Event of Default, or (b) Foothill deems itself
insecure.
"Unbilled Accounts" means Domestic Accounts that are
fully earned by performance, but have not yet been billed to the
Account Debtor and that, as of any date of determination, arise
from the sale of goods or rendition of services within the prior
60 days.
"United States" means the United States of America, or
any department, agency, or instrumentality of any of the
foregoing.
"Voidable Transfer" has the meaning set forth in
Section 15.8.
"Year 2000 Compliant" means, with regard to any Person
and any software, that such software in goods produced or sold
by, or utilized by and material to the business operations or
financial condition of, such Person are able to interpret and
manipulate data on and involving all calendar dates correctly and
without causing any abnormal ending scenario, including in
relation to dates in and after the Year 2000.
1.2 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP. When used herein, the term "financial statements" shall
include the notes and schedules thereto. Whenever the term
"Borrower" is used in respect of a financial covenant or a
related definition, it shall be understood to mean Borrower
on a consolidated basis unless thecontext clearly requires
otherwise.
1.3 Code. Any terms used in this Agreement that are
defined in the Code shall be construed and defined as set forth
in the Code unless otherwise defined herein.
1.4 Construction. Unless the context of this Agreement
clearly requires otherwise, references to the plural include
the singular, references to the singular include the plural,
the term "including" is not limiting, and the term "or" has,
except where otherwise indicated, the inclusive meaning represented
by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement refer
to this Agreement as a whole and not to any particular provision
of this Agreement. An Event of Default shall "continue" or
be "continuing" until such Event of Default has been waived in
writing by Foothill. Section, subsection, clause, schedule, and
exhibit references are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the Loan
Documents to this Agreement or any of the Loan Documents shall
include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, and
supplements, thereto and thereof, as applicable.
1.5 Schedules and Exhibits. All of the schedules
and exhibits attached to this Agreement shall be deemed
incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 Revolving Advances.
(a) Subject to the terms and conditions of this Agreement,
Foothill agrees to make advances ("Advances") to Borrower in an
amount outstanding not to exceed at any one time the lesser of
(i) the Maximum Revolving Amount less the sum of (A) the Letter
of Credit Usage, plus (B) the F/X Reserve, or (ii) the Borrowing
Base less the sum of (A) the Letter of Credit Usage, plus (B) the
F/X Reserve. For purposes of this Agreement, "Borrowing Base",
as of any date of determination, shall mean the result of:
(x) the lesser of (i) the result of (A) 80% of
Eligible Domestic Accounts, plus (B) the lowest of (1) 80% of
Eligible Unbilled Accounts, (2) 40% of the amount of credit
availability created by the foregoing clause (A), and (3)
$20,000,000, plus (C) the lesser of (1) 80% of Eligible Foreign
Accounts, and (2) $3,000,000, minus (D) the amount, if any,
of the Dilution Reserve, and (ii) an amount equal to the
Collections with respect to the Accounts of Borrower for the
immediately preceding 60 day period, minus
(y) the Reserve, minus
(z) the Supplemental Reserve.
(b) Anything to the contrary in Section 2.1(a) above
notwithstanding, Foothill may create reserves against or reduce
its advance rates based upon Eligible Domestic Accounts or
Eligible Unbilled Accounts without declaring an Event of Default
if it determines in good faith and in its reasonable credit
judgment that there has occurred a Material Adverse Change.
(c) [intentionally omitted]
(d) Foothill shall have no obligation to make
Advances hereunder to the extent they would cause the outstanding
Obligations (other than under the Term Loan) to exceed the Maximum
Revolving Amount.
(e) Amounts borrowed pursuant to this Section 2.1
may be repaid and, subject to the terms and conditions of this
Agreement, reborrowed at any time during the term of this Agreement.
2.2 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement,
Foothill agrees to issue letters of credit for the account of
Borrower (each, an "L/C") or to issue guarantees of payment (each
such guaranty, an "L/C Guaranty") with respect to letters of
credit issued by an issuing bank for the account of Borrower.
Foothill shall have no obligation to issue a Letter of Credit if
any of the following would result:
(i) the Letter of Credit Usage would exceed
the Borrowing Base less the sum of the amount of
outstanding Advances and the F/X Reserve, or
(ii) the Letter of Credit Usage would exceed
the lower of (y) the Maximum Revolving Amount less the
sum of the amount of outstanding Advances and the F/X
Reserve, or (z) $60,000,000, or
(iii) the outstanding Obligations (other than
under the Term Loan) would exceed the Maximum Revolving
Amount.
Borrower and Foothill acknowledge and agree that certain of the
letters of credit that are to be the subject of L/C Guarantees
may be outstanding on the Closing Date. Each Letter of Credit
shall have an expiry date no later than 60 days prior to the date
on which this Agreement is scheduled to terminate under Section
3.4 and all such Letters of Credit shall be in form and substance
acceptable to Foothill in its sole discretion. If Foothill is
obligated to advance funds under a Letter of Credit, Borrower
immediately shall reimburse such amount to Foothill and, in the
absence of such reimbursement, the amount so advanced immediately
and automatically shall be deemed to be an Advance hereunder and,
thereafter, shall bear interest at the rate then applicable to
Advances under Section 2.6.
(b) Borrower hereby agrees to indemnify, save,
defend, and hold Foothill harmless from any loss, cost, expense,
or liability, including payments made by Foothill, expenses,
and reasonable attorneys fees incurred by Foothill arising
out of or in connection with any Letter of Credit. Borrower
agrees to be bound by the issuing bank's regulations and
interpretations of any Letters of Credit guarantied by Foothill
and opened to or for Borrower's account or by Foothill's
interpretations of any L/C issued by Foothill to or for
Borrower's account, even though this interpretation may be
different from Borrower's own, and Borrower understands and
agrees that Foothill shall not be liable for any error,
negligence, or mistake, whether of omission or commission,
in following Borrower's instructions or those contained in the
Letter of Credit or any modifications, amendments, or supplements
thereto. Borrower understands that the L/C Guarantees may
require Foothill to indemnify the issuing bank for certain costs
or liabilities arising out of claims by Borrower against such
issuing bank. Borrower hereby agrees to indemnify, save, defend,
and hold Foothill harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability
incurred by Foothill under any L/C Guaranty as a result of
Foothill's indemnification of any such issuing bank.
(c) Borrower hereby authorizes and directs any bank
that issues a letter of credit guaranteed by Foothill to deliver to
Foothill all instruments, documents, and other writings and property
received by the issuing bank pursuant to such letter of credit,
and to accept and rely upon Foothill's instructions and
agreements with respect to all matters arising in connection with
such letter of credit and the related application. Borrower may
or may not be the "applicant" or "account party" with respect to
such letter of credit.
(d) Any and all charges, commissions, fees, and
costs incurred by Foothill relating to the letters of credit
guaranteed by Foothill shall be considered Foothill Expenses
for purposes of this Agreement and immediately shall be
reimbursable by Borrower to Foothill.
(e) Immediately upon the termination of this
Agreement, Borrower agrees to either (i) provide cash collateral
to be held by Foothill in an amount equal to 102% of the maximum
amount of Foothill's obligations under Letters of Credit, plus
an amount equal to the Foreign Currency Reserve, or (ii) cause
to be delivered to Foothill releases of all of Foothill's obligations
under outstanding Letters of Credit. At Foothill's discretion,
any proceeds of Collateral received by Foothill after the
occurrence and during the continuation of an Event of Default may
be held as the cash collateral required by this Section 2.2(e).
(f) If by reason of (i) any change in any applicable
law, treaty, rule, or regulation or any change in the interpretation
or application by any Governmental Authority of any such
applicable law, treaty, rule, or regulation, or (ii) compliance
by the issuing bank or Foothill with any direction, request, or
requirement (irrespective of whether having the force of law) of
any Governmental Authority or monetary authority including,
without limitation, Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect (and any
successor thereto):
a. any reserve, deposit, or similar
requirement is or shall be imposed or modified in respect of
any Letters of Credit issued hereunder, or
b. there shall be imposed on the
issuing bank or Foothill any other condition regarding any
letter of credit, or Letter of Credit, as applicable, issued
pursuant hereto;
and the result of the foregoing is to increase, directly
or indirectly, the cost to the issuing bank or Foothill
of issuing, making, guaranteeing, or maintaining any letter of
credit, or Letter of Credit, as applicable, or to reduce the amount
receivable in respect thereof by such issuing bank or Foothill,
then, and in any such case, Foothill may, at any time within a
reasonable period after the additional cost is incurred or the
amount received is reduced, notify Borrower, and Borrower shall
pay on demand such amounts as the issuing bank or Foothill may
specify to be necessary to compensate the issuing bank or
Foothill for such additional cost or reduced receipt, together
with interest on such amount from the date of such demand until
payment in full thereof at the rate set forth in Section
2.6(a)(i) or (c)(i), as applicable. The determination by the
issuing bank or Foothill, as the case may be, of any amount due
pursuant to this Section 2.2(f), as set forth in a certificate
setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest or demonstrable error, be final
and conclusive and binding on all of the parties hereto.
2.3 Term Loan. Subject to the terms and conditions
of this Agreement, Foothill: (a) made a term loan to Borrower
on the Original Closing Date (in the original principal amount
of $20,000,000 (the "Initial Term Loan"); and (b) made an
additional term loan to Borrower on the Old Second Amendment
Closing Date in the original principal amount of $5,000,000
(the "Additional Term Loan"; the Initial Term Loan and the
Additional Term Loan are referred to, collectively, as the
"Term Loan"). The outstanding principal balance and all accrued
and unpaid interest under the Term Loan shall not be due and
payable until the earlier to occur of (a) the Maturity Date,
and (b) the date of termination of this Agreement, whether
by its terms, by acceleration, or otherwise. The unpaid
principal balance of the Term Loan may not be prepaid in whole
or in part. All amounts outstanding under the Term Loan
shall constitute Obligations.
2.4 Subfacility for Borrower's Permitted F/X Contracts
(the "F/X Line").
(a) If requested to do so by Borrower, Foothill
may, in its sole discretion, enter into agreements with F/X Bank
pursuant to which Foothill would indemnify F/X Bank against
losses or expenses incurred by F/X Bank in connection with
Permitted F/X Contracts, notwithstanding any objections by Borrower
as to the amount of such losses or expenses. If Foothill is
obligated to advance funds under an F/X Line indemnity,
Borrower immediately shall reimburse such amount to Foothill
and, in the absence of such reimbursement, the amount so
advanced immediately and automatically shall be deemed to
be an Advance hereunder and, thereafter, shall bear interest
at the rate then applicable to Advances under Section 2.6.
If, upon the maturity date of any Permitted F/X Contract,
Borrower does not have Availability in an amount sufficient
to pay the full amount of Borrower's obligations to
F/X Bank under such contract, Foothill may, in its sole
discretion, instruct F/X Bank to liquidate such Permitted F/X
Contract, at Borrower's sole expense, and to apply any
amounts thereunder that would have been payable to Borrower
against the amounts owed to F/X Bank by Borrower. Any amounts
paid by Foothill to F/X Bank and any other costs or expenses
incurred by Foothill in connection with any such Permitted F/X
Contracts shall constitute Advances, shall be secured by all of
the Collateral, and thereafter shall be payable by Borrower to
Foothill together with interest as provided for herein.
(b) Borrower hereby agrees to indemnify, save,
defend, and hold Foothill harmless from any loss, cost, expense,
or liability, including payments made by Foothill, expenses,
and reasonable attorneys fees incurred by Foothill arising out
of or in connection with any F/X Line indemnity.
(c) Any and all charges, commissions, fees, and
costs incurred by Foothill relating to Permitted F/X Contracts
that are the subject of an F/X Line indemnity by Foothill shall
be considered Foothill Expenses for purposes of this Agreement
and immediately shall be reimbursable by Borrower to Foothill.
(d) Immediately upon the termination of this
Agreement, Borrower agrees to either (i) provide cash collateral
to be held by Foothill in an amount equal to 105% of the maximum
amount of Foothill's obligations under the F/X Line indemnities,
or (ii) cause to be delivered to Foothill releases of all of
Foothill's obligations under outstanding F/X Line indemnities. At
Foothill's discretion, any proceeds of Collateral received by
Foothill after the occurrence and during the continuation of an
Event of Default may be held as the cash collateral required by
this Section 2.4(d).
(e) The amount of the F/X Reserve may be reduced
from time to time by Foothill upon the receipt and written
acceptance by Foothill of an F/X Reserve Reduction Certificate,
in the form of that attached hereto as Exhibit F-2, duly executed
by both Borrower and F/X Bank, not less than 2 Business Days
prior to the requested effective date of such reduction.
(f) So long as no Triggering Event has occurred
and is continuing or would result therefrom, the amount of the F/X
Reserve may be increased from time to time by Foothill in its
sole discretion upon the receipt and written acceptance by
Foothill of an F/X Reserve Increase Certificate, in the form of
that attached hereto as Exhibit F-3, duly executed by both
Borrower and F/X Bank, not less than 2 Business Days prior to the
requested effective date of such increase.
(g) Anything in the Loan Documents to the contrary
notwithstanding, Permitted Spot Trades shall be deemed to qualify
as Permitted F/X Contracts eligible for coverage under an F/X
Line indemnity solely until such time, if ever, as Foothill is
obligated to advance funds under an F/X Line indemnity to cover
obligations owing but unpaid by Borrower to F/X Bank in respect
of Permitted Spot Trades and, thereafter, Permitted Spot Trades
shall no longer be deemed to qualify as Permitted F/X Contracts
eligible for coverage under an F/X Line indemnity and F/X Line
indemnities shall no longer be permitted to be issued in respect
of Permitted Spot Trades.
2.5 Overadvances. If, at any time or for any
reason, the amount of Obligations owed by Borrower to Foothill
pursuant to Sections 2.1 and 2.2 is greater than either
the Dollar or percentage limitations set forth in Sections
2.1 or 2.2 (an "Overadvance"), Borrower immediately shall pay
to Foothill, in cash, the amount of such excess to be used
by Foothill first, to repay Advances outstanding under Section
2.1 and, thereafter, to be held by Foothill as cash
collateral to secure Borrower's obligation to repay Foothill
for all amounts paid pursuant to Letters of Credit.
2.6 Interest and Letter of Credit Fees: Rates,
Payments, and Calculations.
(a) Interest Rate. Except as provided in clause
(b) below, all Obligations (except for undrawn Letters of Credit)
shall bear interest at a per annum rate of 0.625 percentage points
above the Reference Rate; provided, however, that (i) effective
on the date that Foothill receives Borrower's audited financial
statements for Borrower's fiscal year ending on December 31,
2000, and provided, that Borrower's net income for such
fiscal year determined in accordance with GAAP, as evidenced by
such audited financial statements, shall have been greater than
$0, the then applicable rate of interest shall be reduced by
0.125 percentage points, and (ii) effective on the date that
Foothill receives Borrower's audited financial statements for
Borrower's fiscal year ending on December 31, 2001, and provided,
that Borrower's net income for such fiscal year determined in
accordance with GAAP, as evidenced by such audited financial
statements, shall have been greater than or equal to $0, the
then applicable rate of interest shall be reduced by 0.125
percentage points.
(b) Letter of Credit Fee. Borrower shall pay
Foothill a fee (in addition to the charges, commissions, fees,
and costs set forth in Section 2.2(d)) equal to 1.5% per annum
times the aggregate undrawn amount of all outstanding Letters of Credit.
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default, (i) all Obligations (except
for undrawn Letters of Credit) shall bear interest at a per annum
rate equal to 3.0 percentage points above the per annum rate
otherwise applicable thereto, and (ii) the Letter of Credit fee
provided in Section 2.6(b) shall be increased to 4.5% per annum
times the amount of the undrawn Letters of Credit that were
outstanding during the immediately preceding month.
(d) Minimum Interest. In no event shall the rate
of interest chargeable hereunder for any day be less than 7.0%
per annum. To the extent that interest accrued hereunder at the
rate set forth herein would be less than the foregoing minimum
daily rate, the interest rate chargeable hereunder for such day
automatically shall be deemed increased to the minimum rate.
(e) Payments. Interest and Letter of Credit fees
payable hereunder shall be due and payable, in arrears, on the
first day of each month during the term hereof. Borrower
hereby authorizes Foothill, at its option, without prior notice
to Borrower, to charge such interest and Letter of Credit fees,
all Foothill Expenses (as and when incurred), the charges,
commissions, fees, and costs provided for in Section 2.2(d)
(as and when accrued or incurred), the fees and charges provided
for in Section 2.11 (as and when accrued or incurred), and all
installments or other payments due under the Term Loan or any
Loan Document to Borrower's Loan Account, which amounts
thereafter shall accrue interest at the rate then applicable
to Advances hereunder. Any interest not paid when due shall
be compounded and shall thereafter accrue interest at the
rate then applicable to Advances hereunder.
(f) Computation. In the event the Reference Rate
is changed from time to time hereafter, the applicable rate of
interest hereunder automatically and immediately shall be increased
or decreased by an amount equal to such change in the Reference
Rate. All interest and fees chargeable under the Loan Documents
shall be computed on the basis of a 360 day year for the actual
number of days elapsed.
(g) Intent to Limit Charges to Maximum Lawful Rate.
In no event shall the interest rate or rates payable under this
Agreement, plus any other amounts paid in connection herewith,
exceed the highest rate permissible under any law that a court
of competent jurisdiction shall, in a final determination, deem
applicable. Borrower and Foothill, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates
of interest and manner of payment stated within it; provided,
however, that, anything contained herein to the contrary
notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then,
ipso facto as of the date of this Agreement, Borrower is and
shall be liable only for the payment of such maximum as allowed
by law, and payment received from Borrower in excess of such
legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such
excess.
2.7 Collection of Accounts. Borrower shall at all
times maintain lockboxes (the "Lockboxes") and, immediately
after the Closing Date, shall instruct all Account Debtors
(to the extent not so instructed prior to the Closing Date)
with respect to the Accounts, General Intangibles, and Negotiable
Collateral of Borrower to remit all Collections in respect
thereof to such Lockboxes. Borrower, Foothill, and the
Lockbox Bank shall enter into the Lockbox Agreements (to the
extent not so entered into prior to the Closing Date),
which among other things shall provide for the opening of a
Lockbox Account for the deposit of Collections at the Lockbox Bank.
Borrower agrees that all Collections and other amounts received
by Borrower from any Account Debtor or any other source immediately
upon receipt shall be deposited into a Lockbox Account. No
Lockbox Agreement or arrangement contemplated thereby shall
be modified by Borrower without the prior written consent of
Foothill. Upon the terms and subject to the conditions
set forth in the Lockbox Agreements, all amounts received
in each Lockbox Account shall be wired each Business Day into
an account (the "Foothill Account") maintained by Foothill
at a depositary selected by Foothill.
2.8 Crediting Payments; Application of Collections. The
receipt of any Collections by Foothill (whether from transfers
to Foothill by the Lockbox Bank pursuant to the Lockbox Agreements
or otherwise) immediately shall be applied provisionally
to reduce the Obligations outstanding under Section 2.1, but shall
not be considered a payment on account unless such Collection item
is a wire transfer of immediately available federal funds and
is made to the Foothill Account or unless and until such Collection
item is honored when presented for payment. From and after the
Closing Date, Foothill shall be entitled to charge Borrower for
1 Business Days of `clearance' or `float' at the rate set forth
in Section 2.6(a)(i) or Section 2.6(c)(i), as applicable, on
all Collections that are received by Foothill (regardless of
whether forwarded by the Lockbox Bank to Foothill, whether
provisionally applied to reduce the Obligations under Section
2.1, or otherwise). This across-the-board 1 Business Day clearance
or float charge on all Collections is acknowledged by the
parties to constitute an integral aspect of the pricing of
Foothill's financing of Borrower, and shall apply irrespective of
the characterization of whether receipts are owned by Borrower or
Foothill, and whether or not there are any outstanding Advances,
the effect of such clearance or float charge being the equivalent
of charging 1 Business Days of interest on such Collections.
Should any Collection item not be honored when presented for
payment, then Borrower shall be deemed not to have made such
payment, and interest shall be recalculated accordingly.
Anything to the contrary contained herein notwithstanding, any
Collection item shall be deemed received by Foothill only if it
is received into the Foothill Account on a Business Day on or
before 11:00 a.m. California time. If any Collection item is
received into the Foothill Account on a non-Business Day or after
11:00 a.m. California time on a Business Day, it shall be deemed
to have been received by Foothill as of the opening of business
on the immediately following Business Day.
2.9 Designated Account. Foothill is authorized to make
the Advances, the Letters of Credit, and the Term Loan under
this Agreement based upon telephonic or other instructions
received from anyone purporting to be an Authorized Person, or
without instructions if pursuant to Section 2.6(e). Borrower
agrees to establish and maintain the Designated Account with
the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrower and made by
Foothill hereunder. Unless otherwise agreed by Foothill and
Borrower, any Advance requested by Borrower and made by
Foothill hereunder shall be made to the Designated Account.
2.10 Maintenance of Loan Account; Statements of Obligations.
Foothill shall maintain an account on its books in the
name of Borrower (the "Loan Account") on which Borrower will be
charged with all Advances and the Term Loan made by Foothill to
Borrower or for Borrower's account, including, accrued interest,
Foothill Expenses, and any other payment Obligations of Borrower.
In accordance with Section 2.8, the Loan Account will be credited
with all payments received by Foothill from Borrower or for
Borrower's account, including all amounts received in the
Foothill Account from the Lockbox Bank. Foothill shall render
statements regarding the Loan Account to Borrower, including
principal, interest, fees, and including an itemization of all
charges and expenses constituting Foothill Expenses owing, and
such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrower and
Foothill unless, within 30 days after receipt thereof by
Borrower, Borrower shall deliver to Foothill written objection
thereto describing the error or errors contained in any such
statements.
2.11 Fees. Borrower shall pay to Foothill the following
fees:
(a) Modification/Extension Fee. On the Closing Date, a
modification/extension fee of $500,000, which fee shall be fully
earned and non-refundable when paid; provided, however, that
Foothill shall credit $500,000 of the "Commitment Fee" payable by
Borrower upon the execution of that certain letter agreement,
dated as of October 22, 1999 (the "Commitment Letter") against
such modification/extension fee to the extent the Commitment Fee
was paid by Borrower and not applied as a credit against the
agency fee payable pursuant to Section 2.11(b).
(b) Agency Fee. On the Closing Date, an agency
fee of $250,000, which fee shall be fully earned and non-refundable
when paid; provided, however, that Foothill shall credit $250,000
of the "Commitment Fee" payable by Borrower upon the execution of
the Commitment Letter against such agency fee to the extent the
Commitment Fee was paid by Borrower and not applied as a credit
against the modification/extension fee payable pursuant to
Section 2.11(a).
(c) Unused Line Fee. On the first day of each month
after the Closing Date during the term of this Agreement, an unused
line fee in an amount equal to 0.25% per annum times the Average
Unused Portion of the then extant Maximum Revolving Amount, which
fee shall be fully earned when due;
(d) Annual Facility Fee. On the Closing Date and
each anniversary of the Closing Date, an annual facility fee in an
amount equal to 0.15% of the then extant Maximum Amount, which
fee shall be fully earned when due;
(e) Financial Examination, Documentation, and
Appraisal Fees. Foothill's customary fee of $650 per day per
examiner, plus out-of-pocket expenses for each financial analysis
and examination (i.e., audits) of Borrower performed by personnel
employed by Foothill; Foothill's customary appraisal fee of $1,500
per day per appraiser, plus out-of-pocket expenses for each
appraisal of the Collateral performed by personnel employed by
Foothill; and, the actual charges paid or incurred by Foothill
if it elects to employ the services of one or more third Persons
to perform such financial analyses and examinations (i.e., audits)
of Borrower or to appraise the Collateral; and
(f) Monthly Agency Fee. On the first day of each
month after the Closing Date during the term of this Agreement, a
monthly agency fee in an amount equal to $12,500, which fee shall be
fully earned when due.
2.12 Maximum Amount. Borrower may elect, at any time and
from time to time, by irrevocable written notice to Foothill, to
permanently reduce the Maximum Amount by an amount equal to or
greater than the lesser of (a) $10,000,000, or (b) the amount
by which the Maximum Amount, prior to the effectiveness of any
such reduction, exceeds $75,000,000; provided, however, that
in no event shall the Maximum Amount be reduced below $75,000,000.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 Conditions Precedent to the Initial Advance, Letter of
Credit, and F/X Line Indemnity.
The obligation of Foothill to make the initial Advance, to
issue the initial Letter of Credit, or to issue the initial F/X
Line indemnity is subject to the fulfillment, to the satisfaction
of Foothill and its counsel, of each of the following conditions
on or before the Closing Date:
(a) the Closing Date shall occur on or before
December 10, 1999;
(b) Foothill shall have received confirmation of the
filing of its financing statements and fixture filings;
(c) Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full
force and effect:
(i) the Reaffirmation Agreement;
(ii) [intentionally omitted];
(iii) the Copyright Security Agreement;
(iv) the Patent Security Agreement; and
(v) the Trademark Security Agreement;
(d) if and to the extent available on or before the Closing
Date, Foothill shall have received the original certificates
representing or evidencing all of the Pledged Shares (as defined
in the Pledge Agreement), together with stock powers or
equivalent assignments with respect thereto duly endorsed in
blank;
(e) Foothill shall have received originals of the
Intercompany Notes, together with endorsements with respect thereto
duly endorsed in blank;
(f) Foothill shall have received a certificate from
the Secretary or an Assistant Secretary of each Obligor attesting to
the resolutions of such Obligor's Board of Directors authorizing
its execution, delivery, and performance of the Loan Documents to
which it is a party and authorizing specific officers of such
Obligor to execute the same;
(g) Foothill shall have received copies of each
Obligor's Governing Documents, as amended, modified, or supplemented
to the Closing Date, certified by the Secretary or an Assistant
Secretary of such Obligor;
(h) Foothill shall have received a certificate of
status with respect to each Obligor, dated within 10 days of the
Closing Date, such certificate to be issued by the appropriate
officer of the jurisdiction of organization of such Obligor, which
certificate shall indicate that such Obligor is in good standing
in such jurisdiction;
(i) Foothill shall have received certificates of
status with respect to Borrower, such certificates to be issued by the
appropriate officer of the jurisdictions in which its failure to
be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that Borrower is in
good standing in such jurisdictions, and (A) with respect to the
State of Alabama, shall be dated within 15 days of the Closing
Date, and (B) with respect to all other jurisdictions, shall be
dated within 70 days of the Closing Date;
(j) Foothill shall have received a certificate of
insurance, together with the endorsements thereto, as are required by
Section 6.10, the form and substance of which shall be reasonably
satisfactory to Foothill and its counsel;
(k) Foothill shall have received an opinion of the
Obligors' counsel in form and substance reasonably satisfactory to
Foothill in its sole discretion;
(l) Foothill shall have received satisfactory
evidence (which evidence may be in the form of a Certificate of
a Certifying Officer of Borrower) that all tax returns required
to be filed by Borrower have been timely filed and all taxes upon
Borrower or its properties, assets, income, and franchises
(including real property taxes and payroll taxes) have been paid
prior to delinquency, except such taxes that are the subject of a
Permitted Protest;
(m) No Material Adverse Change shall have occurred;
(n) Foothill shall have received payment of all
accrued and unpaid Foothill Expenses;
(o) Foothill shall have received (i) commitments
from lenders and in amounts acceptable to Foothill in its sole
discretion to purchase participation interests in the Obligations
pursuant to documentation acceptable to Foothill in its sole
discretion, and (ii) participation agreements or amendments to
participation agreements, as applicable, in each case, in form
and substance satisfactory to Foothill;
(p) Borrower shall have retained a consulting
firm reasonably acceptable to Foothill (it being understood that
Xxxxxx & Company is acceptable to Foothill), which consulting
firm shall be continued to be retained by Borrower until such
time as Borrower shall have net income (determined in accordance
with GAAP) of at least $1.00 for a period of 2 consecutive fiscal
quarters, or such earlier date as Foothill and Borrower shall
mutually agree;
(q) Borrower shall have delivered to Foothill a
cost-cutting plan for Borrower's fiscal year ending December 31,
2000, which cost-cutting plan shall include such detail as
Foothill may reasonably request and shall otherwise be reasonably
satisfactory to Foothill; and
(r) all other documents and legal matters in
connection with the transactions contemplated by this Agreement
shall have been delivered, executed, or recorded and shall be
in form and substance reasonably satisfactory to Foothill and
its counsel.
3.2 Conditions Precedent to all Advances, all Letters of
Credit, and all F/X Line indemnities on or after the Closing Date.
The following shall be conditions precedent to all
Advances, all Letters of Credit, and all F/X Line indemnities
hereunder on or after the Closing Date:
(a) the representations and warranties contained in
this Agreement and the other Loan Documents shall be true and correct
in all respects on and as of the date of such extension of
credit, as though made on and as of such date (except to the
extent that such representations and warranties relate solely to
an earlier date);
(b) no Default or Event of Default shall have
occurred and be continuing on the date of such extension of credit,
nor shall either result from the making thereof; and
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the
extending of such credit shall have been issued and remain in force
by any Governmental Authority against Borrower, Foothill, or any of
their Affiliates.
3.3 Condition Subsequent. As a condition subsequent
to initial closing hereunder, Borrower shall perform or cause to
be performed the following (the failure by Borrower to so perform
or cause to be performed constituting an Event of Default):
(a) (i) within 10 Business Days following the Closing
Date, Borrower shall have ordered certificates of status with respect
to Borrower from the appropriate officer of the jurisdictions in
which its failure to be duly qualified or licensed would
constitute a Material Adverse Change and paid all fees necessary
to obtain such certificates of status, and (ii) within 5 Business
Days of receipt by Borrower or its counsel of any such
certificate, deliver such certificate to Foothill, which
certificate shall indicate that Borrower is in good standing in
the applicable jurisdiction;
(b) within 30 days of the Closing Date, deliver
to Foothill the certified copies of the policies of insurance,
together with the endorsements thereto, as are required by Section
6.10, the form and substance of which shall be reasonably satisfactory to
Foothill and its counsel;
(c) on or before December 31, 1999, Foothill shall
have received each of the following documents, duly executed, and
each such document shall be in full force and effect:
(i) The IPS Copyright Security Agreement; and
(ii) The IPS Trademark Security Agreement;
(d) upon the request of Foothill (if ever) after the Closing
Date, within 30 days after the date of such request:
(i) a Mortgage on any Real Property acquired by
Borrower after the Closing Date shall have been duly
executed and delivered by Borrower, and the same shall be
in full force and effect, and such Mortgage shall have been
recorded in the office of the county recorder for the county
in which such Real Property is located;
(ii) Foothill shall have received supplemental
opinions of Borrower's counsel, in form and substance
satisfactory to Foothill in its sole discretion, in respect
of the Mortgage on such after acquired Real Property;
(iii) Foothill shall have received a preliminary
title report in respect of such after acquired Real Property
in form and substance reasonably satisfactory to Foothill; and
(iv) Foothill shall have received a phase-I
environmental report and a real estate survey shall have
been completed with respect to such after acquired Real
Property and copies thereof delivered to Foothill; the
environmental consultants and surveyors retained for such
reports or surveys, the scope of the reports or surveys,
and the results thereof shall be acceptable to Foothill in
its sole discretion;
(e) within 90 days following the Closing Date, Foothill
shall have received satisfactory evidence that all existing copyrights
of Borrower (other than Exempt Copyrights) required to be
registered under Section 6.17 have been registered with the
United States Copyright Office (or are the subject of a
diligently prosecuted application therefor), and that all such
copyrights (other than Exempt Copyrights) and any proceeds
thereof are specifically encumbered by the Copyright Security
Agreement;
(f) within 60 days of either (i) the date that
Borrower makes the Permitted Repayment Investment in respect of
the indebtedness of IG Australia owing to the IG Australia Existing
Lender or (ii) one or more Letters of Credit are issued to IG
Australia Existing Lender in support of the indebtedness of IG
Australia owing to IG Australia Existing Lender and IG Australia
Existing Lender releases its Lien on the capital stock of IG
Australia (in either case, the "IG Australia Payoff Date"), execute
and deliver an appropriate supplement to the Pledge Agreement and
deliver to Foothill possession of the original stock certificates,
respecting 65% of the issued and outstanding shares of stock of
IG Australia, together with stock powers with respect thereto
endorsed in blank; provided, however, that to the extent, if any,
that such shares are required to be pledged to the holder of any
project financing indebtedness of IG Australia incurred after the
IG Australia Payoff Date as security for such indebtedness, then,
upon Borrower's written request therefor and with Foothill's
prior written consent thereto (not to be unreasonably withheld),
Foothill agrees to release its Lien on such shares; provided
further, that if such holder will permit such subordination,
then, notwithstanding the foregoing proviso, Foothill's Lien on
such shares will not be released and will become a subordinate
Lien pursuant to documentation in form and substance reasonably
satisfactory to Foothill and such holder; and
(g) [intentionally omitted]
(h) to the extent not available on or before the
Closing Date under Section 3.1, Foothill shall have received, within
30 days of the Closing Date, the original certificates representing
or evidencing all of the Pledged Shares (as defined in the Pledge
Agreement), together with stock powers or equivalent assignments
with respect thereto duly endorsed in blank; provided, however,
that with respect to any "Pledged Foreign Issuer" (as defined in
the Pledge Agreement) as of the Closing Date, the Obligors need
not (i) deliver or cause to be delivered the original
certificates (to the extent any exist) representing or evidencing
the Pledged Shares issued by such Pledged Foreign Issuer, nor
(ii) comply or cause to be complied with all applicable foreign
law registration requirements for perfecting, under such foreign
law, the Lien of Foothill on such Pledged Shares, in each case,
until the date 60 days following the Closing Date before the
failure to do so would constitute an Event of Default.
3.4 Term. This Agreement shall become effective upon
the execution and delivery hereof by Borrower and Foothill and
shall continue in full force and effect for a term ending on
January 7, 2003 (the "Maturity Date"). The foregoing
notwithstanding, Foothill shall have the right to terminate
its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an
Event of Default.
3.5 Effect of Termination. On the date of
termination of this Agreement, all Obligations (including
contingent reimbursement obligations of Borrower with respect
to any outstanding Letters of Credit or any outstanding F/X
Line indemnities) immediately shall become due and payable
without notice or demand. No termination of this Agreement,
however, shall relieve or discharge Borrower of Borrower's
duties, Obligations, or covenants hereunder, and Foothill's
continuing security interests in the Collateral shall remain
in effect until all Obligations have been fully and
finally discharged and Foothill's obligation to provide
additional credit hereunder is terminated.
3.6 Early Termination by Borrower. Borrower has the
option, at any time prior to the Maturity Date and upon 60
days prior written notice to Foothill, to terminate this
Agreement by paying to Foothill, in cash, the Obligations
(including an amount equal to 102% of the undrawn amount of
the Letters of Credit plus the Foreign Currency Reserve),
in full, together with a premium (the "Early Termination
Premium") equal to $1,000,000. The Early Termination Premium
provided for in this section shall be deemed included in
the Obligations.
3.7 Termination Upon Event of Default. If Foothill
terminates this Agreement upon the occurrence of an Event of
Default that intentionally is caused by Borrower for the
purpose, in Foothill's reasonable judgment, of avoiding payment
of the Early Termination Premium provided in Section 3.6, then,
in view of the impracticability and extreme difficulty of
ascertaining actual damages and by mutual agreement of the
parties as to a reasonable calculation of Foothill's lost profits
as a result thereof, Borrower shall pay to Foothill upon the
effective date of such termination, a premium in an amount equal
to the Early Termination Premium. The Early Termination Premium
shall be presumed to be the amount of damages sustained by
Foothill as the result of the early termination and Borrower
agrees that it is reasonable under the circumstances currently
existing. The Early Termination Premium provided for in this
section shall be deemed included in the Obligations.
4. CREATION OF SECURITY INTEREST.
4.1 Grant of Security Interest. Borrower hereby
grants to Foothill a continuing security interest in all right,
title, and interest of Borrower in, to, and under all currently
existing and hereafter acquired or arising Personal Property
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. Foothill's security interests in the Personal Property
Collateral shall attach to all Personal Property Collateral without
further act on the part of Foothill or Borrower. Anything
contained in this Agreement or any other Loan Document to the
contrary notwithstanding, except for Permitted Dispositions,
Borrower has no authority, express or implied, to dispose of
any item or portion of the Personal Property Collateral or the
Real Property Collateral. Concurrent with the consummation of
any Permitted Disposition, Foothill agrees to release its Liens
on the subject property or asset (but not the proceeds from the
Asset Disposition).
(b) Anything in this Agreement and the other Loan
Documents to the contrary notwithstanding, the foregoing grant of
a security interest shall not extend to, and the term "Personal
Property Collateral" shall not include, any General Intangible,
Federal Account, or Permitted Other Investment that is now or
hereafter held by Borrower as licensee, lessee, or otherwise,
solely in the event and to the extent that: (i) as the proximate
result of the foregoing grant of a security interest, Borrower's
rights in or with respect to such General Intangible, Federal
Account, or Permitted Other Investment would be forfeited or would
become void, voidable, terminable, or revocable, or if Borrower
would be deemed to have breached, violated, or defaulted the
underlying license, lease, or other agreement that governs such
General Intangible, Federal Account, or Permitted Other Investment,
in each case, pursuant to the restrictions in the underlying lease,
license, or other agreement that governs such General Intangible,
Federal Account, or Permitted Other Investment; (ii) any such
restriction shall be effective and enforceable under applicable
law, including Section 9318(4) of the Code; and (iii) any such
forfeiture, voidness, voidability, terminability, revocability,
breach, violation, or default cannot be remedied by Borrower
using its best efforts (but without any obligation to make any
material expenditures of money or to commence legal proceedings);
provided, however, that the foregoing grant of security interest
shall extend to, and the term "Personal Property Collateral"
shall include, (y) any and all proceeds of such General
Intangible, Federal Account, or Permitted Other Investment to the
extent that the assignment or encumbering of such proceeds is not
so restricted, and (z) upon any such licensor, lessor, or other
applicable party's consent with respect to any such otherwise
excluded General Intangible, Federal Account, or Permitted Other
Investment being obtained, thereafter such General Intangible,
Federal Account, or Permitted Other Investment as well as any
proceeds thereof that might theretofore have been excluded from
such grant of a security interest and the term "Personal Property
Collateral."
(c) Anything in this Agreement or the other Loan
Documents to the contrary notwithstanding and subject to Section
4.1(b), (i) the security interest granted in the Permitted Other
Investments under Section 4.1(a) shall not attach unless and until a
Triggering Event has occurred, at which time such security
interest immediately and automatically shall attach without
notice or demand or further act on the part of Foothill or
Borrower, and (ii) Foothill agrees that Borrower need not deliver
any Negotiable Collateral in respect of the Permitted Other
Investments under Section 4.2 unless and until a Triggering Event
has occurred.
(d) Anything in this Agreement and the other Loan
Documents to the contrary notwithstanding, the foregoing grant of
a security interest shall not extend to, and the term "Personal
Property Collateral" shall not include, any Excluded Foreign Subsidiary
Securities or the assets or properties of any Foreign Subsidiary.
4.2 Negotiable Collateral. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable
Collateral, Borrower, immediately upon the request of Foothill,
shall endorse and deliver (or cause to be endorsed and
delivered) physical possession of such Negotiable Collateral
to Foothill. The foregoing notwithstanding, Borrower need not
deliver any Negotiable Collateral in respect of any Permitted
Toehold Investment with a value less than or equal to $500,000 unless
and until there is a Triggering Event.
4.3 Collection of Accounts, General Intangibles, and Negotiable
Collateral.
During a Triggering Event, Foothill or Foothill's designee
may (a) notify customers or Account Debtors of Borrower that the
Accounts, General Intangibles, or Negotiable Collateral have been
assigned to Foothill or that Foothill has a security interest
therein, and (b) collect the Accounts, General Intangibles, and
Negotiable Collateral directly and charge the collection costs
and expenses to the Loan Account. Borrower agrees that it will
hold in trust for Foothill, as Foothill's trustee, any
Collections that it receives and immediately will deliver said
Collections to Foothill in their original form as received by it.
4.4 Delivery of Additional Documentation Required. At
any time upon the request of Foothill, Borrower shall (and shall
cause its Subsidiaries to) execute and deliver to Foothill
all financing statements, continuation financing statements,
fixture filings, security agreements, pledges, assignments,
endorsements of certificates of title, applications for title,
affidavits, reports, notices, schedules of accounts, letters of
authority, and all other documents (including documents
required for compliance with the Assignment of Claims Act, 31
U.S.C. Section 3727 or any State's statutory counterpart
thereto) that Foothill reasonably may request, in form reasonably
satisfactory to Foothill, to perfect and continue perfected
Foothill's security interests in the Collateral and the other
properties and assets of Borrower and its Subsidiaries, and in
order to fully consummate all of the transactions contemplated
hereby and under the other Loan Documents.
(b) In respect of each of the Securities Accounts of
Borrower, if any, Foothill, Borrower, and each applicable financial
intermediary or depositary shall enter into a control agreement
that, among other things, provides that, from and after the
giving of notice by Foothill to such financial intermediary or
depositary, it shall take instructions solely from Foothill with
respect to the applicable Securities Account and related
securities entitlements or deposit account, as applicable.
Foothill agrees that it will not give such notice unless a
Triggering Event has occurred. Borrower agrees that it will not
transfer assets out of such Securities Accounts or deposit
accounts other than in the ordinary course of business and, if to
another financial intermediary or depositary, unless Borrower,
Foothill, and the substitute financial intermediary or depositary
have entered into a control agreement of the type described
above. No arrangement contemplated hereby shall be modified by
Borrower without the prior written consent of Foothill. Upon the
occurrence of a Triggering Event, Foothill may elect to notify
the financial intermediary to liquidate the securities
entitlements in such Securities Account and may elect to notify
the financial intermediary or depositary to remit the proceeds in
the Securities Account or deposit account to the Foothill
Account.
(c) Anything in this Agreement to the contrary
notwithstanding, Foothill agrees that: (i) so long as no Triggering
Event has occurred and is continuing, (y) Borrower need not execute
and deliver to Foothill documents required for compliance with the
Assignment of Claims Act, 31 U.S.C. Section 3727 or any State's
statutory counterpart thereto in respect of any one underlying
contract or series of related underlying contracts giving rise to
less than $1,000,000 of Accounts of Borrower, and (z) Foothill
agrees not to file notices or copies of assignments under the
Assignment of Claims Act or any State's statutory counterpart
thereto; and (ii) after the occurrence and during the continuance
of a Triggering Event, (y) Borrower shall execute and deliver to
Foothill all documents that Foothill may request, in form
satisfactory to Foothill, required for compliance with the
Assignment of Claims Act or any State's statutory counterpart
thereto, irrespective of the amount of Accounts arising out of
any underlying contract, and (z) Foothill may file any notices or
copies of assignments under the Assignment of Claims Act or any
State's statutory counterpart thereto.
4.5 Power of Attorney. Borrower hereby irrevocably
makes, constitutes, and appoints Foothill (and any of Foothill's
officers, employees, or agents designated by Foothill) as Borrower's
true and lawful attorney, with power to (a) if Borrower refuses
to, or fails timely to execute and deliver any of the documents
described in Section 4.4, sign the name of that Borrower on
any of the documents described in Section 4.4, (b) if there is
a Triggering Event, sign that 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, (c) send requests
for verification of Accounts, (d) endorse Borrower's name on any
Collection item that may come into Foothill's possession, (e) at
any time that an Event of Default has occurred and is continuing
or Foothill deems itself insecure, notify the post office
authorities to change the address for delivery of Borrower's mail
to an address designated by Foothill, to receive and open all
mail addressed to Borrower, and to retain all mail relating to
the Collateral and forward all other mail to Borrower, (f) if
there is a Triggering Event, make, settle, and adjust all claims
under Borrower's policies of insurance and make all
determinations and decisions with respect to such policies of
insurance, and (g) if there is a Triggering Event, settle and
adjust disputes and claims respecting the Accounts directly with
Account Debtors, for amounts and upon terms that Foothill
determines to be reasonable, and Foothill may cause to be
executed and delivered any documents and releases that Foothill
determines to be necessary. The appointment of Foothill as
Borrower's attorney, and each and every one of Foothill's rights
and powers, being coupled with an interest, is irrevocable until
all of the Obligations have been fully and finally repaid and
performed and Foothill's obligation to extend credit hereunder is
terminated.
4.6 Right to Inspect. Foothill (through any of its
officers, employees, or agents) shall have the right, from time
to time hereafter to inspect Borrower's Books and to check, test,
and appraise the Collateral in order to verify Borrower's
financial condition or the amount, quality, value, condition of,
or any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce Foothill to enter into this Agreement,
Borrower makes the following representations and warranties which
shall be true, correct, and complete in all respects as of the
Closing Date, and at and as of the date of the making of each
Advance or Letter of Credit or F/X Line indemnity made
thereafter, as though made on and as of the date of such Advance
or Letter of Credit or F/X Line indemnity (except to the extent
that such representations and warranties relate solely to an
earlier date) and such representations and warranties shall
survive the execution and delivery of this Agreement:
5.1 No Encumbrances. Borrower has good and indefeasible
title to the Collateral, free and clear of Liens except for
Permitted Liens.
5.2 Eligible Accounts. The Eligible Accounts are bona
fide existing obligations created by the sale and delivery of
Inventory or the rendition of services to Account Debtors in
the ordinary course of Borrower's business, unconditionally
owed to Borrower without defenses, disputes, offsets,
counterclaims, or rights of return or cancellation. The
property giving rise to such Eligible Accounts has been delivered
to the Account Debtor, or to the Account Debtor's agent for
immediate shipment to and unconditional acceptance by the
Account Debtor (except for returns, in the ordinary course
of business, of products that fail to conform with standard
specifications). Borrower has not received notice of actual
or imminent bankruptcy, insolvency, or material impairment
of the financial condition of any Account Debtor
regarding any Eligible Account.
5.3 [Intentionally Omitted]
5.4 Equipment. All of the Equipment is used or held for
use in Borrower's business and is fit for such purposes.
5.5 Location of Inventory and Equipment. The Inventory
and Equipment are not stored with a bailee, warehouseman, or similar
party (without Foothill's prior written consent) and are located
only at the locations identified on Schedule 6.12 or otherwise
permitted by Section 6.12.
5.6 Inventory Records. Borrower keeps correct and accurate
records itemizing and describing the kind, type, quality, and
quantity of the Inventory, and Borrower's cost therefor.
5.7 Location of Chief Executive Office; FEIN The chief
executive office of Borrower is located at the address indicated
in the preamble to this Agreement. Borrower's FEIN is 00-0000000.
5.8 Due Organization and Qualification; Subsidiaries.
(a) Borrower is duly organized and existing and in
good standing under the laws of the jurisdiction of its
incorporation and qualified and licensed to do business in, and
in good standing in, any state where the failure to be so
licensed or qualified reasonably could be expected to have a
Material Adverse Change.
(b) Set forth on Schedule 5.8, is a complete and
accurate list of Borrower's direct and indirect Subsidiaries,
showing: (i) the jurisdiction of their organization; (ii) the
number of shares or units of each class of common and preferred
stock or other equity securities authorized for each of such
Subsidiaries; and (iii) the number and the percentage of the
outstanding shares or units of each such class owned directly
or indirectly by Borrower. All of the outstanding capital stock
or other equity securities of each such Subsidiary has been
validly issued and is fully paid and non-assessable.
(c) Except as set forth on Schedule 5.8, no
capital stock or other equity securities (or any securities,
instruments, warrants, options, purchase rights, conversion
or exchange rights, calls, commitments or claims of any character
convertible into or exercisable for capital stock or other equity
securities) of any direct or indirect Subsidiary of Borrower is
subject to the issuance of any security, instrument, warrant,
option, purchase right, conversion or exchange right, call,
commitment or claim of any right, title, or interest therein or
thereto.
(d) Set forth on Schedule 5.8 are, with respect to
each Subsidiary of Borrower that is not a Foreign Subsidiary: (i) a
description of the direct and indirect stockholders (or holders
of equivalent equity interests) of each such Subsidiary; (ii) the
total assets of each such Subsidiary; (iii) the amount of the net
value of Borrower's direct or indirect investment in such
Subsidiary; and (iv) a true, correct, and complete statement
regarding whether each such Subsidiary's assets are comprised
principally of (x) foreign assets, (y) securities of other
Subsidiaries of Borrower, or (z) other operating assets.
5.9 Due Authorization; No Conflict.
(a) The execution, delivery, and performance by
each Obligor of the Loan Documents to which it is a party
have been duly authorized by all necessary corporate action.
(b) The execution, delivery, and performance by
each Obligor of the Loan Documents to which it is a party do not
and will not (i) violate any provision of federal, state, or local
law or regulation (including Regulations T, U, and X of the Federal
Reserve Board) applicable to such Obligor, the Governing
Documents of such Obligor, or any order, judgment, or decree of
any court or other Governmental Authority binding on such
Obligor, (ii) conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under any
material contractual obligation or material lease of such
Obligor, (iii) result in or require the creation or imposition of
any Lien of any nature whatsoever upon any properties or assets
of such Obligor, other than Permitted Liens, or (iv) require any
approval of stockholders or any approval or consent of any Person
under any material contractual obligation of such Obligor.
(c) Other than the filing of appropriate financing
statements, fixture filings, and mortgages, the execution, delivery,
and performance by each Obligor of the Loan Documents to which such
Obligor is a party do not and will not require any registration
with, consent, or approval of, or (except for Borrower's filings
with the Securities Exchange Commission in the ordinary course of
Borrower's business) notice to, or other action with or by, any
federal, state, foreign, or other Governmental Authority or other
Person.
(d) The Loan Documents to which each Obligor is a
party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Obligor will be the legally
valid and binding obligations of such Obligor, enforceable against
such Obligor in accordance with their respective terms, except as
enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors' rights generally.
(e) The Liens granted by each Obligor to Foothill
in and to its properties and assets pursuant to the Loan Documents
are validly created, perfected, and first priority Liens, subject
only to Permitted Liens.
5.10 Litigation. There are no actions or proceedings
pending by or against Borrower before any court or administrative
agency and Borrower does not have knowledge or belief of any
pending, threatened, or imminent litigation, governmental
investigations, or claims, complaints, actions, or prosecutions
involving Borrower or any guarantor of the Obligations, except
for: (a) ongoing collection matters in which Borrower is the
plaintiff; (b) matters disclosed on Schedule 5.10; and (c) matters
arising after the date hereof that, if decided adversely to
Borrower, would not have a Material Adverse Change.
5.11 No Material Adverse Change. All financial statements
relating to Borrower, any other Obligor, or any guarantor of the
Obligations that have been delivered by Borrower to Foothill
have been prepared in accordance with GAAP (except, in the case
of unaudited financial statements, for the lack of footnotes and
being subject to year-end audit adjustments) and fairly present
Borrower's (or such other Obligor's or such guarantor's, as
applicable) financial condition as of the date thereof and
Borrower's results of operations for the period then ended.
There has not been a Material Adverse Change with respect to
Borrower (or such other Obligor or such guarantor, as applicable)
since the date of the latest financial statements submitted to
Foothill.
5.12 Solvency. Borrower is Solvent. No transfer of
property is being made by Borrower and no obligation is being
incurred by Borrower in connection with the transactions
contemplated by this Agreement, or the other Loan Documents
with the intent to hinder, delay, or defraud either present or
future creditors of Borrower.
5.13 Employee Benefits. None of Borrower, any of its
Subsidiaries, or any of their ERISA Affiliates maintains or
contributes to any Benefit Plan, other than those listed on
Schedule 5.13. Borrower, each of its Subsidiaries and each
ERISA Affiliate have satisfied the minimum funding standards
of ERISA and the IRC with respect to each Benefit Plan to
which it is obligated to contribute. No ERISA Event has
occurred nor has any other event occurred that may result
in an ERISA Event that reasonably could be expected to
result in a Material Adverse Change. None of Borrower or its
Subsidiaries, or any ERISA Affiliate, is subject to any direct or
indirect liability with respect to any Plan under any applicable
law, treaty, rule, regulation, or agreement. None of Borrower or
its Subsidiaries or any ERISA Affiliate is required to provide
security to any Plan under Section 401(a)(29) of the IRC.
5.14 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 Materials, except in compliance with all
applicable laws and regulations in respect thereof. 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 Materials 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 or operated by Borrower. Except as set forth on
Schedule 5.14, Borrower has not received a summons, citation,
notice, or directive from the Environmental Protection Agency or
any other federal or state governmental agency concerning any
action or omission by Borrower resulting in the releasing or
disposing of Hazardous Materials into the environment.
5.15 Securities Accounts. Borrower does not have or
maintain any Securities Accounts.
5.16 Year 2000 Compliance. On the basis of a comprehensive
inventory, review and assessment currently being undertaken by
Borrower of Borrower's computer applications utilized by Borrower
or contained in products produced or sold by Borrower, and upon
inquiry made of Borrower's material suppliers and vendors,
Borrower's management is of the considered view that:
(a) Current and Future Generations of Hardware and
Software. All of Borrower's hardware and software products
listed in Borrower's `Year 2000 Price List' dated January 1, 1999
or any subsequent standard price list are certified as Year
2000 Compliant or will be so certified as new versions and utilities
are released.
(b) Prior Generation of Hardware and Software.
Borrower reasonably anticipates that Borrower will make its prior
generations of hardware and software Year 2000 Compliant except
where it would be commercially impracticable or impossible to do
so and where the failure to do so will not result in a Material
Adverse Change.
(c) Internal Business Systems. Borrower reasonably
anticipates that Borrower will successfully implement all internal
systems and programming changes necessary to make Borrower's internal
business systems Year 2000 Compliant in all material respects on
or before December 31, 1999.
(d) Suppliers and Other Third Parties. Borrower is
diligently conducting a program of investigation with Borrower's
critical suppliers to ensure that such suppliers are, or become on a
timely basis, Year 2000 Compliant in all material respects.
Borrower includes in its new supplier agreements a provision
relative to the relevant supplier's own status as, or program to
become on a timely basis, Year 2000 Compliant in all material
respects. Borrower also is diligently conducting discussions
with other entities with which Borrower interacts electronically
to ensure that such entities have appropriate plans to remediate
Year 2000 Compliance issues where such entities' systems
interface with Borrower's systems.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of
the Obligations, and unless Foothill shall otherwise consent in
writing, Borrower shall do all of the following:
6.1 Accounting System. Maintain one or more systems
of accounting that enable Borrower to produce financial statements
in accordance with GAAP, and maintain records pertaining to the
Collateral that contain information as from time to time may be
requested by Foothill. Borrower also shall keep a modern inventory
reporting system that shows all additions, sales, claims, returns,
and allowances with respect to the Inventory.
6.2 Collateral Reporting. Provide Foothill with the
following documents at the following times in form satisfactory
to Foothill: (a) on a monthly basis and, in any event, by no
later than the 25th day of each month during the term of this
Agreement (or, in the event that Borrower's then Availability is
less than $10,000,000, on such more frequent basis as Foothill
may require), a monthly accounts receivable roll-forward
report and a detailed calculation of the Borrowing Base as
of such date; (b) on a monthly basis and, in any event, by no
later than the 25th day of each month during the term of this
Agreement, a detailed aging, by total, of the Accounts, together
with a reconciliation to the detailed calculation of the Borrowing
Base previously provided to Foothill; (c) on such frequency (if any)
as Foothill reasonably may require, a listing of Borrower's accounts
payable, by vendor; (d) [intentionally omitted]; (e) upon
Foothill's reasonable request, copies of invoices in connection
with the Accounts, credit memos, and remittance advices and
reports in connection with the Accounts and for Inventory and
Equipment acquired by Borrower, purchase orders and invoices;
(f) in the event that Borrower's then Availability is less than
$10,000,000, on such frequent basis as Foothill may require,
a sales journal, collection journal, and credit register since
the last such schedule and copies of deposit slips, shipping
and delivery documents in connection with the Accounts and for
Inventory and Equipment acquired by Borrower; (g) on a quarterly
basis, a detailed list of Borrower's customers; (h) on a monthly
basis, a calculation of the Dilution for the prior month; (i)
on a quarterly basis, a detailed report specifying each Permitted
Toehold Investment, including the book value and market value
thereof; (j) (1) on a monthly basis, with respect to each
Permitted Appraised Asset Disposition with respect to which no
replacement Equipment was purchased in respect thereof, a
detailed report specifying each such Permitted Appraised Assets
Disposition consummated since the last such report, and (2) with
respect to each Permitted Appraised Asset Disposition with
respect to which replacement Equipment was purchased in respect
thereof, as requested by Foothill, a detailed report specifying
each Permitted Appraised Assets Disposition and Equipment
replacement in respect thereof consummated since the last such
report; (k) on a quarterly basis, a detailed report specifying
the aggregate amount of Permitted Subsidiary Loans and Capital
Contributions made by Borrower to date during the then current
calendar year and the aggregate amount of Indebtedness then
outstanding and permitted under Section 7.1(b), and (l) such
other reports as to the Collateral or the financial condition of
Borrower as Foothill may request from time to time. Original
sales invoices evidencing daily sales shall be mailed by Borrower
to each Account Debtor and, at Foothill's direction if there is a
Triggering Event, the invoices shall indicate on their face that
the Account has been assigned to Foothill and that all payments
are to be made directly to Foothill.
6.3 Financial Statements, Reports, Certificates. Deliver
to Foothill: (a) as soon as available, but in any event within
30 days after the end of each month during each of Borrower's
fiscal years, a company prepared balance sheet, income statement,
and statement of cash flow covering Borrower's operations
during such period, provided, however, that with respect
to any such month that is the last month of any of
Borrower's fiscal quarters, Borrower shall have until the date
that is the earlier of (i) the date that is 5 Business Days after
the date on which Borrower makes its quarterly earnings release
with respect to such fiscal quarter, or (ii) the date that is 45
days after the end of such month, to deliver such balance sheet,
income statement, and statement of cash flows to Foothill; and
(b) as soon as available, but in any event within 120 days after
the end of each of Borrower's fiscal years, financial statements
of Borrower for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Foothill
and certified, without any qualifications, by such accountants to
have been prepared in accordance with GAAP, together with a
certificate of such accountants addressed to Foothill stating
that such accountants do not have knowledge of the existence of
any Default or Event of Default. Such audited financial
statements shall include a balance sheet, profit and loss
statement, and statement of cash flow and, if prepared, such
accountants' letter to management. In addition to the financial
statements referred to above, Borrower agrees to deliver such
other information relative to Borrower and any Subsidiaries or
Affiliates thereof as Foothill reasonably may request and such
financial statements on a consolidating basis so as to present
Borrower and, solely to the extent available, each such related
entity, separately.
Together with the above, Borrower also shall deliver to
Foothill Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual
Reports, and Form 8-K Current Reports, and any other filings made
by Borrower with the Securities and Exchange Commission, if any,
within 5 Business Days of the date that the same are filed, or
any other information that is provided by Borrower to its
shareholders, and any other report reasonably requested by
Foothill relating to the financial condition of Borrower.
Each month, together with the financial statements provided
pursuant to Section 6.3(a), Borrower shall deliver to Foothill a
certificate signed by a Certifying Officer to the effect that:
(i) all financial statements delivered or caused to be delivered
to Foothill hereunder have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the
lack of footnotes and being subject to year-end audit
adjustments) and fairly present the financial condition of
Borrower, (ii) the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents are true
and correct in all material respects on and as of the date of
such certificate, as though made on and as of such date (except
to the extent that such representations and warranties relate
solely to an earlier date), (iii) for each month that also is the
date on which a financial covenant in Section 7.20 is to be
tested, a Compliance Certificate demonstrating in reasonable
detail compliance at the end of such period with the applicable
financial covenants contained in Section 7.20, and (iv) on the
date of delivery of such certificate to Foothill there does not
exist any condition or event that constitutes a Default or Event
of Default (or, in the case of clauses (i), (ii), or (iii), to
the extent of any non-compliance, describing such non-compliance
as to which he or she may have knowledge and what action Borrower
has taken, is taking, or proposes to take with respect thereto).
Borrower shall have issued written instructions to its
independent certified public accountants authorizing them to
communicate with Foothill and to release to Foothill whatever
financial information concerning Borrower that Foothill may
request. Borrower hereby irrevocably authorizes and directs all
auditors, accountants, or other third parties to deliver to
Foothill, at Borrower's expense, copies of Borrower's financial
statements, papers related thereto, and other accounting records
of any nature in their possession, and to disclose to Foothill
any information they may have regarding Borrower's business
affairs and financial conditions.
Each year, together with the financial statements provided
pursuant to Section 6.3(b), Borrower shall deliver to Foothill a
certificate signed by a Certifying Officer specifying, as to each
Foreign Subsidiary of Borrower, the amounts of assets and
liabilities and stockholder's equity of such Foreign Subsidiary
as of the end of the year then ended. Borrower hereby agrees
that, in respect of any Foreign Subsidiary whose capitalization
has materially improved (in Foothill's reasonable determination)
and upon Foothill's reasonable request therefor, Borrower shall
execute and deliver to Foothill a supplement to the Pledge
Agreement pursuant to which Borrower shall pledge to Foothill all
of Borrower's right, title, and interest in and to such Foreign
Subsidiary's equity securities (other than the Excluded Foreign
Portion) and deliver to Foothill all Negotiable Collateral, if
any, in respect of same, unless and to the extent that doing so
would, in any material respect, violate applicable law or cause a
breach or default under any material contract, agreement, or
arrangement binding on such Subsidiary.
6.4 Tax Returns. Deliver to Foothill copies of each
of Borrower's future federal income tax returns, and any amendments
thereto, within 30 days of the filing thereof with the Internal
Revenue Service.
6.5 Guarantor Reports. Cause any guarantor of any of
the Obligations to deliver its annual financial statements at
the time when Borrower provides its audited financial statements
to Foothill and copies of all federal income tax returns as
soon as the same are available and in any event no later than
30 days after the same are required to be filed by law.
6.6 Returns. Cause returns and allowances, if any, as
between Borrower and its Account Debtors to 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. If, at a time when no Event of Default has occurred
and is continuing, any Account Debtor returns any Inventory to
Borrower, Borrower promptly shall determine the reason for such
return and, if Borrower accepts such return, issue a credit
memorandum (with, upon reasonable request, a copy to be sent to
Foothill) in the appropriate amount to such Account Debtor. If,
at a time when an Event of Default has occurred and is continuing,
any Account Debtor returns any Inventory to Borrower, Borrower
promptly shall determine the reason for such return and, if
Foothill consents (which consent shall not be unreasonably
withheld), issue a credit memorandum (with a copy to be sent to
Foothill) in the appropriate amount to such Account Debtor.
6.7 Title to Equipment. Upon Foothill's request after the
occurrence of an Event of Default, Borrower immediately shall
deliver to Foothill, properly endorsed, any and all evidences
of ownership of, certificates of title, or applications for title
to any items of Equipment; provided, however, that the foregoing
shall not be deemed to prevent Permitted Dispositions to the extent
otherwise permitted hereunder.
6.8 Maintenance of Equipment. Maintain the Equipment in
good operating condition and repair (ordinary wear and tear excepted),
and make all necessary replacements thereto so that the value and
operating efficiency thereof shall at all times be maintained and
preserved. Other than those items of Equipment that constitute
fixtures on the Original Closing Date, Borrower shall not permit
any item of Equipment to become a fixture to real estate or an
accession to other property, and such Equipment shall at all times
remain personal property.
6.9 Taxes. Cause all assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or
assessed against Borrower or any of its property to be paid in
full, before delinquency or before the expiration of any extension
period, except to the extent that the validity of such assessment
or tax shall be the subject of a Permitted Protest. Borrower
shall make due and timely payment or deposit of all such federal,
state, and local taxes, assessments, or contributions required of
it by law, and will execute and deliver to Foothill, on demand,
appropriate certificates attesting to the payment thereof or
deposit with respect thereto. Borrower will make timely payment
or deposit of all tax payments and withholding taxes required of
it by applicable laws, including 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 Foothill with proof
satisfactory to Foothill indicating that Borrower has made such
payments or deposits.
6.10 Insurance.
(a) At its expense, keep the Personal Property
Collateral insured against loss or damage by fire, theft, explosion,
sprinklers, and all other hazards and risks, and in such amounts,
as are ordinarily insured against by other owners in similar
businesses. Borrower also shall maintain business interruption,
public liability, product liability, and property damage
insurance relating to Borrower's ownership and use of the
Personal Property Collateral, as well as insurance against
larceny, embezzlement, and criminal misappropriation.
(b) At its expense, obtain and maintain (i) insurance
of the type necessary to insure the Improvements and Chattels (as
such terms are defined in the Mortgages), for the full replacement
cost thereof, against any loss by fire, lightning, windstorm,
hail, explosion, aircraft, smoke damage, vehicle damage,
earthquakes, elevator collision, and other risks from time to
time included under "extended coverage" policies, in such amounts
as Foothill may require, but in any event in amounts sufficient
to prevent Borrower from becoming a co-insurer under such
policies, (ii) combined single limit bodily injury and property
damages insurance against any loss, liability, or damages on,
about, or relating to each parcel of Real Property Collateral, in
an amount satisfactory to Foothill; (iii) business rental
insurance covering annual receipts for a 12 month period for each
parcel of Real Property Collateral; and (iv) insurance for such
other risks as Foothill may require. Replacement costs, at
Foothill's option, may be redetermined by an insurance appraiser,
satisfactory to Foothill, not more frequently than once every
12 months at Borrower's cost.
(c) All such policies of insurance shall be in such
form, with such companies, and in such amounts as may be reasonably
satisfactory to Foothill. All hazard insurance and such other
insurance as Foothill shall specify, shall contain a Form 438BFU
mortgagee endorsement, or an equivalent endorsement satisfactory
to Foothill, showing Foothill as sole loss payee thereof, and
shall contain a waiver of warranties. Every policy of insurance
referred to in this Section 6.10 shall contain an agreement by
the insurer that it will not cancel such policy except after 30
days prior written notice to Foothill and that any loss payable
thereunder shall be payable notwithstanding any act or negligence
of Borrower or Foothill which might, absent such agreement,
result in a forfeiture of all or a part of such insurance payment
and notwithstanding (i) occupancy or use of the Real Property
Collateral for purposes more hazardous than permitted by the
terms of such policy, (ii) any foreclosure or other action or
proceeding taken by Foothill pursuant to the Mortgages upon the
happening of an Event of Default, or (iii) any change in title or
ownership of the Real Property Collateral. Borrower shall
deliver to Foothill certified copies of such policies of
insurance and evidence of the payment of all premiums therefor.
(d) Original policies or certificates thereof
satisfactory to Foothill evidencing such insurance shall be delivered
to Foothill at least 10 days prior to the expiration of the existing
or preceding policies. Borrower shall give Foothill prompt notice
of any loss in excess of $250,000 covered by such insurance, and,
upon the occurrence and during the continuance of an Event of
Default, Foothill shall have the right to adjust any loss.
Foothill shall have the exclusive right to adjust all losses
payable under any such insurance policies without any liability
to Borrower whatsoever in respect of such adjustments. Any
monies received as payment for any loss under any insurance
policy including the insurance policies mentioned above, shall be
paid over to Foothill to be applied at the option of Foothill
either to the prepayment of the Obligations without premium, in
such order or manner as Foothill may elect, or shall be disbursed
to Borrower under stage payment terms satisfactory to Foothill
for application to the cost of repairs, replacements, or
restorations. All repairs, replacements, or restorations shall
be effected with reasonable promptness and shall be of a value at
least equal to the value of the items or property destroyed prior
to such damage or destruction. Upon the occurrence of an Event
of Default, Foothill shall have the right to apply all prepaid
premiums to the payment of the Obligations in such order or form
as Foothill shall determine.
(e) Borrower shall not take out separate insurance
concurrent in form or contributing in the event of loss with that
required to be maintained under this Section 6.10, unless Foothill
is included thereon as named insured with the loss payable to
Foothill under a standard California 438BFU (NS) Mortgagee
endorsement, or its local equivalent. Borrower immediately shall
notify Foothill whenever such separate insurance is taken out,
specifying the insurer thereunder and full particulars as to the
policies evidencing the same, and originals of such policies
immediately shall be provided to Foothill.
6.11 No Setoffs or Counterclaims. Make payments hereunder
and under the other Loan Documents by or on behalf of Borrower
without setoff or counterclaim and free and clear of, and without
deduction or withholding for or on account of, any federal, state,
or local taxes.
6.12 Location of Inventory and Equipment. Keep the
Inventory and Equipment only at the locations identified on Schedule
6.12; provided, however, that Borrower may amend Schedule 6.12 so long
as such amendment occurs by written notice to Foothill not less
than 30 days prior to the date on which the Inventory or Equipment
is moved to such new location, so long as such new location is
within the continental United States, and so long as, at the time of
such written notification, Borrower provides any financing statements
or fixture filings necessary to perfect and continue perfected
Foothill's security interests in such assets and also provides
to Foothill a Collateral Access Agreement.
6.13 Compliance with Laws. Comply with the requirements
of all applicable laws, rules, regulations, and orders of any
Governmental Authority, including the Fair Labor Standards Act
and the Americans With Disabilities Act, other than laws, rules,
regulations, and orders the non-compliance with which, individually
or in the aggregate, would not have and could not reasonably be
expected to have a Material Adverse Change.
6.14 Employee Benefits.
(a) Promptly, and in any event within 10 Business Days
after Borrower or any of its Subsidiaries knows or has reason to
know that an ERISA Event has occurred that reasonably could be
expected to result in a Material Adverse Change, a written
statement of a Certifying Officer of Borrower describing such
ERISA Event and any action that is being taken with respect
thereto by Borrower, any such Subsidiary or ERISA Affiliate, and
any action taken or threatened by the IRS, Department of Labor,
or PBGC. Borrower or such Subsidiary, as applicable, shall be
deemed to know all facts known by the administrator of any
Benefit Plan of which it is the plan sponsor, (ii) promptly, and
in any event within 3 Business Days after the filing thereof with
the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by Borrower,
any of its Subsidiaries or, to the knowledge of Borrower, any
ERISA Affiliate with respect to such request, and (iii) promptly,
and in any event within 3 Business Days after receipt by
Borrower, any of its Subsidiaries or, to the knowledge of
Borrower, any ERISA Affiliate, of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice.
(b) Cause to be delivered to Foothill, upon Foothill's
request, each of the following: (i) a copy of each Plan (or, where
any such plan is not in writing, complete description thereof) (and
if applicable, related trust agreements or other funding
instruments) and all amendments thereto, all written
interpretations thereof and written descriptions thereof that
have been distributed to employees or former employees of
Borrower or its Subsidiaries; (ii) the most recent determination
letter issued by the IRS with respect to each Benefit Plan;
(iii) for the three most recent plan years, annual reports on
Form 5500 Series required to be filed with any governmental
agency for each Benefit Plan; (iv) all actuarial reports prepared
for the last three plan years for each Benefit Plan; (v) a
listing of all Multiemployer Plans, with the aggregate amount of
the most recent annual contributions required to be made by
Borrower or any ERISA Affiliate to each such plan and copies of
the collective bargaining agreements requiring such
contributions; (vi) any information that has been provided to
Borrower or any ERISA Affiliate regarding withdrawal liability
under any Multiemployer Plan; and (vii) the aggregate amount of
the most recent annual payments made to former employees of
Borrower or its Subsidiaries under any Retiree Health Plan.
6.15 Leases. Pay when due all rents and other amounts
payable under any leases to which Borrower is a party or by
which Borrower's properties and assets are bound, unless such
payments are the subject of a Permitted Protest. To the extent
that Borrower fails timely to make payment of such rents and
other amounts payable when due under its leases, Foothill shall be
entitled, in its discretion, to reserve an amount equal to such
unpaid amounts against the Borrowing Base.
6.16 Year 2000 Compliance. Borrower will be Year 2000
Compliant in all material respects by December 31, 1999.
6.17 Copyright Registrations. As soon as practicable but
in any event no less frequently than once every 6 months (or such
more frequent basis as Foothill reasonably may require), unless
Foothill otherwise agrees in writing, Borrower shall: (a) cause
all copyrights in commercially significant software owned by
Borrower (other than Exempt Copyrights) that are not already
the subject of a registration with the United States Copyright
Office (or an application therefor diligently prosecuted) to be
registered with the United States Copyright Office in a manner
sufficient to impart constructive notice of Borrower's ownership
thereof; and (b) cause to be prepared, executed, and delivered to
Foothill, with sufficient time to permit Foothill to record no later
than the last Business Day within 10 days following the date that
such copyrights have been registered or an application for
registration has been filed, a Copyright Security Agreement or
amendment thereto with supplemental schedules in respect thereof
reflecting the security interest of Foothill in all such new
copyrights in commercially significant software (other than
Exempt Copyrights, which, although subject to the security
interest of Foothill, shall not be required to be registered
until such time, if any, as they cease to be Exempt Copyrights),
which supplemental schedules shall be in form and content
suitable for registration with the United States Copyright Office
so as to give constructive notice, when so registered, of the
transfer by Borrower to Foothill of a security interest in such
copyrights.
6.18 Sale or Other Disposition of Borrower's Hardware
Business. Within 60 days after the Closing Date Borrower shall
retain the services of an investment banking firm to advise
Borrower on the sale or other disposition of Borrower's Hardware
Business. Within 120 days after the Closing Date, Borrower and
such investment banking firm shall develop and deliver to
Foothill a plan for the sale or other disposition of Borrower's
Hardware Business, which plan (including, without limitation, the
period of time within which to complete such sale or other
disposition) shall be acceptable to Foothill in its sole
discretion. Borrower shall complete the sale or other
disposition of Borrower's Hardware Business in accordance with
and within the period of time contained in such plan.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of
the Obligations, Borrower will not do any of the following
without Foothill's prior written consent:
7.1 Indebtedness. Create, incur, assume, permit, guarantee,
or otherwise become or remain, directly or indirectly, liable with
respect to any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement, together
with Indebtedness to issuers of letters of credit that are the subject
of L/C Guarantees and Indebtedness to F/X Bank under Permitted
F/X Contracts (which Indebtedness outstanding as of the Closing
Date is set forth in section (a) of Schedule 7.1);
(b) (i) unsecured guarantees of indebtedness of
Borrower's Subsidiaries, (ii) unsecured back-to-back letters of credit
or letter of credit guarantees to issuers of underlying letters of
credit, the account parties of which are Borrower's Foreign
Subsidiaries, that are not the subject of L/C Guarantees, and
(iii) guarantees of indebtedness of Z/I Imaging Corporation, a
Delaware corporation, in an aggregate amount at any one time
outstanding not to exceed $1,800,000, which guarantee may be
secured solely by a letter of credit (which Indebtedness
outstanding as of the Closing Date is set forth in section (b) of
Schedule 7.1); provided, however, that the aggregate amount of
such Indebtedness at any one time outstanding permitted under
this Section 7.1(b) shall not exceed $50,000,000;
(c) Indebtedness set forth in section (c) of
Schedule 7.1;
(d) unsecured Indebtedness of Borrower owing to
one or more of its Subsidiaries; provided, however, that upon the
request of Foothill, Borrower shall cause each of its Subsidiaries
that is a holder of such Indebtedness to execute and deliver to
Foothill a subordination agreement, in form and substance satisfactory
to Foothill, in respect of such Indebtedness;
(e) unsecured Indebtedness evidenced by Interest Rate
Agreements and Currency Protection Agreements entered into by Borrower
in the ordinary course of its business consistent with past
practices and entered into in connection with the operational
needs of Borrower's business and not for speculative purposes;
(f) Indebtedness secured by Permitted Liens; and
(g) refinancings, renewals, or extensions of
Indebtedness permitted under clauses (c), (e), and (f) of this
Section 7.1 (and continuance or renewal of any Permitted Liens
associated therewith) so long as: (i) the terms and conditions of
such refinancings, renewals, or extensions do not materially impair
the prospects of repayment of the Obligations by Borrower, (ii)
the net cash proceeds of such refinancings, renewals, or
extensions do not result in an increase in the aggregate
principal amount of the Indebtedness so refinanced, renewed, or
extended, (iii) such refinancings, renewals, refundings, or
extensions do not result in a shortening of the average weighted
maturity of the Indebtedness so refinanced, renewed, or extended,
and (iv) to the extent that Indebtedness that is refinanced was
subordinated in right of payment to the Obligations, then the
subordination terms and conditions of the refinancing
Indebtedness must be at least as favorable to Foothill as those
applicable to the refinanced Indebtedness.
7.2 Liens. Create, incur, assume, or permit to exist,
directly or indirectly, any Lien on or with respect to any of its
property or assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for
Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced
under Section 7.1(g) and so long as the replacement Liens only
encumber those assets or property that secured the original
Indebtedness). Without limiting the generality of the foregoing,
Borrower agrees not to create, incur, assume, or permit to exist,
directly or indirectly, any Lien on or with respect to the equity
securities of any Subsidiary of Borrower and the equity
securities evidencing any Permitted Toehold Investment (except
for Liens thereon in favor of Foothill and Liens expressly
permitted hereunder on the equity securities of IG Australia).
7.3 Restrictions on Fundamental Changes. (a) Other than
the Restructuring Transactions, enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify
its capital stock; (b) liquidate, wind up, or dissolve itself
(or suffer any liquidation or dissolution); or (c) except for
Permitted Dispositions, convey, sell, assign, lease, transfer,
or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its property or
assets.
7.4 Disposal of Assets. Except for Permitted
Dispositions and Restructuring Transactions, make any Asset
Disposition.
7.5 Change Name. Change Borrower's name, FEIN,
corporate structure (within the meaning of Section 9402(7) of the
Code), or identity, or add any new fictitious name.
7.6 [intentionally omitted].
7.7 Nature of Business. Make any change in the principal
nature of Borrower's business.
7.8 Prepayments and Amendments.
(a) Except in connection with a refinancing permitted by
Section 7.1(g), prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness owing to any third Person, other than the
Obligations in accordance with this Agreement, and
(b) Directly or indirectly, amend, modify, alter,
increase, or change any of the terms or conditions of any agreement,
instrument, document, indenture, or other writing evidencing or
concerning Indebtedness permitted under Sections 7.1(b), (c),
(d), (e), or (f), except for any amendment, modification, waiver,
or consent the effect of which would be to: (i) extend the
maturity of all or part of the remaining scheduled payments of
principal outstanding thereunder; (ii) make any covenant or
default contained therein less stringent; (iii) decrease the
interest rate or interest rate margin or the default interest
rate or interest rate margin, or both; (iv) amends or modify any
other terms thereof so long as the amendments or modifications
referenced in this clause (iv) are not in the aggregate
materially more expensive, burdensome, or otherwise adverse to
Borrower or Foothill.
7.9 Change of Control. Cause, permit, or suffer,
directly or indirectly, any Change of Control.
7.10 Consignments. Consign any Inventory or sell any
Inventory to any Person that is not an Affiliate of Borrower on
xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale; provided, however, that the foregoing
shall not prevent Borrower from consigning Inventory with a value
not to exceed $4,000,000 at any one time outstanding, in the
ordinary course of Borrower's business, consistent with past practices,
so long as at the time of any such consignment, Borrower shall take
such steps as may be necessary to ensure that such consigned Inventory
is not subject to the claims of the consignees' creditors or that
Borrower has priority over any perfected security interests in the
inventory of such consignee.
7.11 Distributions. Make any distribution or declare or
pay any dividends (in cash or other property, other than
capital stock) on, or purchase, acquire, redeem, or retire any
of Borrower's capital stock, of any class, whether now or hereafter
outstanding.
7.12 Accounting Methods. Modify or change significantly
its method of accounting or enter into, modify, or terminate
any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service
bureau for the preparation or storage of Borrower's accounting
records without said accounting firm or service bureau agreeing
to provide Foothill information regarding the Collateral or
Borrower's financial condition. Borrower waives the right to
assert a confidential relationship, if any, it may have with any
accounting firm or service bureau in connection with any information
requested by Foothill pursuant to or in accordance with this
Agreement, and agrees that Foothill may contact directly any such
accounting firm or service bureau in order to obtain such information.
7.13 Investments. Except for Permitted Investments, Permitted
Dispositions, and the Restructuring Transactions directly or
indirectly make, acquire, or incur any liabilities (including
contingent obligations) for or in connection with (a) the acquisition
of the securities (whether debt or equity) of, or other interests in, a
Person, (b) loans, advances, capital contributions, or transfers
of property to a Person, or (c) the acquisition of all or
substantially all of the properties or assets of a Person.
7.14 Transactions with Affiliates. Except for Permitted
Investments and the Restructuring Transactions, 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 fully disclosed to Foothill, and that
are no less favorable to Borrower than would be obtained in a
comparable arm's length transaction with a non-Affiliate.
7.15 Suspension. Suspend or go out of a substantial
portion of its business.
7.16 [intentionally omitted].
7.17 Use of Proceeds. Use the proceeds of the Advances
and the Term Loan made hereunder for any purpose other than, consistent
with the terms and conditions hereof, for its lawful and permitted
corporate purposes.
7.18 Change in Location of Chief Executive Office; Inventory and
Equipment with Bailees.
Relocate its chief executive office to a new location
without providing 30 days prior written notification thereof to
Foothill and so long as, at the time of such written
notification, Borrower provides any financing statements or
fixture filings necessary to perfect and continue perfected
Foothill's security interests and also provides to Foothill a
Collateral Access Agreement with respect to such new location.
The Inventory and Equipment shall not at any time now or
hereafter be stored with a bailee, warehouseman, or similar party
without Foothill's prior written consent.
7.19 No Prohibited Transactions Under ERISA. Directly or
indirectly:
(a) engage, or permit any Subsidiary of Borrower to
engage, in any prohibited transaction which is reasonably likely to
result in a civil penalty or excise tax described in Sections 406 of
ERISA or 4975 of the IRC for which a statutory or class exemption
is not available or a private exemption has not been previously
obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan
any accumulated funding deficiency (as defined in Sections 302 of
ERISA and 412 of the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to fail,
to pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower
to terminate, any Benefit Plan where such event would result in any
liability of Borrower, any of its Subsidiaries or any ERISA
Affiliate under Title IV of ERISA;
(e) fail, or permit any Subsidiary of Borrower to fail,
to make any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to fail,
to pay any required installment or any other payment required under
Section 412 of the IRC on or before the due date for such
installment or other payment;
(g) amend, or permit any Subsidiary of Borrower to amend,
a Plan resulting in an increase in current liability for the plan year
such that either of Borrower, any Subsidiary of Borrower or any
ERISA Affiliate is required to provide security to such Plan
under Section 401(a)(29) of the IRC; or
(h) withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is
reasonably likely to result in any liability of any such entity under
Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably
would be expected to result in a claim against or liability of
Borrower, any of its Subsidiaries or any ERISA Affiliate in
excess of $1,500,000.
7.20 Financial Covenants. Fail to maintain:
(a) Current Ratio. A ratio of Consolidated Current
Assets divided by Consolidated Current Liabilities of at least
1.0:1.0, measured on a fiscal quarter-end basis; and
(b) Net Worth. Net Worth, as of the end of each fiscal
quarter set forth below of at least the minimum amount corresponding
thereto:
Fiscal Quarter Ending Minimum Net Worth
December 31, 1999 $235,000,000
March 31, 2000 $216,000,000
June 30, 2000 and as $200,000,000
of the last day of
each fiscal quarter
thereafter
7.21 Capital Expenditures. Make capital expenditures in any
fiscal year in excess of $50,000,000.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this
Agreement:
8.1 If Borrower fails to pay when due and payable or when
declared due and payable, any portion of the Obligations (whether
of principal, interest (including any interest which, but for the
provisions of the Bankruptcy Code, would have accrued on such
amounts), fees and charges due Foothill, reimbursement of
Foothill Expenses, or other amounts constituting Obligations);
8.2 (a) If Borrower fails or neglects to perform, keep, or
observe, in any material respect, any term, provision, condition,
covenant, or agreement contained in Sections 6.2 (Collateral
Reports) or 6.3 (Financial Statements) of this Agreement and such
failure continues for a period of five (5) days from the date
Foothill sends Borrower telephonic or written notice of such
failure or neglect; (b) If Borrower fails or neglects to perform,
keep, or observe, in any material respect, any term, provision,
condition, covenant, or agreement contained in Sections 6.4 (Tax
Returns), 6.5 (Guarantor Reports), 6.7 (Title to Equipment), 6.12
(Location of Inventory and Equipment), 6.13 (Compliance with
Laws), 6.14 (Employee Benefits), or 6.15 (Leases) of this
Agreement and such failure continues for a period of fifteen (15)
days from the date of such failure or neglect; (c) If Borrower
fails or neglects to perform, keep, or observe, in any material
respect, any term, provision, condition, covenant, or agreement
contained in Sections 6.1 (Accounting System), 6.6 (Returns), or
6.8 (Maintenance of Equipment) of this Agreement and such failure
continues for a period of fifteen (15) days from the date
Foothill sends Borrower telephonic or written notice of such
failure or neglect; or (d) If Borrower fails or neglects to
perform, keep, or observe, in any material respect, any other
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 Foothill (other
than any such term, provision, condition, covenant, or agreement
that is the subject of another provision of this Section 8);
8.3 If there is a Material Adverse Change;
8.4 If any material portion of Borrower's properties or assets
is attached, seized, subjected to a writ or distress warrant, or
is levied upon, or comes into the possession of any third Person;
8.5 If an Insolvency Proceeding is commenced by Borrower;
8.6 If an Insolvency Proceeding is commenced against Borrower
and any of the following events occur: (a) Borrower consents to
the institution of the Insolvency Proceeding against it; (b) the
petition commencing the Insolvency Proceeding is not timely
controverted; (c) the petition commencing the Insolvency
Proceeding is not dismissed within 45 calendar days of the date
of the filing thereof; provided, however, that, during the
pendency of such period, Foothill shall be relieved of its
obligation to extend credit hereunder; (d) an interim trustee is
appointed to take possession of all or a substantial portion of
the properties or assets of, or to operate all or any substantial
portion of the business of, Borrower; or (e) an order for relief
shall have been issued or entered therein;
8.7 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;
8.8 (a) If a notice of Lien, levy, or assessment for more
than $1,500,000 is filed of record with respect to any of Borrower's
properties or assets by the United States, or if any taxes or
debts owing for an amount in excess of $1,500,000 at any time
hereafter to the United States becomes a lien, whether xxxxxx or
otherwise, upon any of Borrower's properties or assets; provided,
however, that Foothill shall be entitled to create a reserve
against the Borrowing Base in an amount sufficient to discharge
such lien, levy, or assessment and any and all penalties or
interest payable in connection therewith; or
(b) If a judgment or other claim for an amount in excess
of $1,500,000 becomes a Lien or encumbrance upon any material
portion of Borrower's properties or assets;
8.9 If there is a default in any material agreement to which
Borrower is a party with one or more third Persons and such
default (a) occurs at the final maturity of the obligations
thereunder, or (b) results in a right by such third Person(s),
irrespective of whether exercised, to accelerate the maturity of
Borrower's obligations thereunder or to terminate the subject
agreement;
8.10 If Borrower makes any payment on account of Indebtedness
that has been contractually subordinated in right of payment to
the payment of the Obligations, except to the extent such payment
is permitted by the terms of the subordination provisions
applicable to such Indebtedness;
8.11 If any material misstatement or misrepresentation exists
now or hereafter in any warranty, representation, statement, or
report made to Foothill by Borrower or any officer, employee,
agent, or director of Borrower, or if any such warranty or
representation is withdrawn; or
8.12 If the obligation of M&S, IG Delaware, or IPS under
any Loan Document to which it is a party is limited or terminated by
operation of law or by such Person thereunder, or any such Person
becomes the subject of an Insolvency Proceeding.
9. FOOTHILL'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence, and during
the continuation, of an Event of Default Foothill 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;
(b) Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement, under any of the Loan
Documents, or under any other agreement between Borrower and
Foothill;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Foothill, but
without affecting Foothill's rights and security interests in the
Personal Property Collateral or the Real Property Collateral and
without affecting the Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Foothill considers
advisable, and in such cases, Foothill will credit Borrower's
Loan Account with only the net amounts received by Foothill in
payment of such disputed Accounts after deducting all Foothill
Expenses incurred or expended in connection therewith;
(e) Cause Borrower to hold all returned Inventory in
trust for Foothill, segregate all returned Inventory from all other
property of Borrower or in Borrower's possession and
conspicuously label said returned Inventory as the property of
Foothill;
(f) Without notice to or demand upon Borrower, make
such payments and do such acts as Foothill considers necessary or
reasonable to protect its security interests in the Collateral.
Borrower agrees to assemble the Personal Property Collateral if
Foothill so requires, and to make the Personal Property
Collateral available to Foothill as Foothill may designate.
Borrower authorizes Foothill to enter the premises where the
Personal Property Collateral is located, to take and maintain
possession of the Personal Property Collateral, or any part of
it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or Lien that in Foothill's determination appears to
conflict with its security interests and to pay all expenses
incurred in connection therewith. With respect to any of
Borrower's owned or leased premises, Borrower hereby grants
Foothill a license to enter into possession of such premises and
to occupy the same, without charge, for up to 120 days in order
to exercise any of Foothill's rights or remedies provided herein,
at law, in equity, or otherwise;
(g) Without notice to Borrower (such notice being
expressly waived by Borrower), and without constituting a retention of
any collateral in satisfaction of an obligation (within the meaning
of Section 9505 of the Code), set off and apply to the
Obligations any and all (i) balances and deposits of Borrower
held by Foothill (including any amounts received in the Lockbox
Accounts), or (ii) indebtedness at any time owing to or for the
credit or the account of Borrower held by Foothill;
(h) Hold, as cash collateral, any and all balances
and deposits of Borrower held by Foothill, and any amounts
received in the Lockbox Accounts, to secure the full and final
repayment of all of the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Personal Property Collateral. Borrower
hereby grants to Foothill a license or other right 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 Personal Property Collateral, in
completing production of, advertising for sale, and selling any
Personal Property Collateral and Borrower's rights under all
licenses and all franchise agreements shall inure to Foothill's
benefit;
(j) Sell the Personal Property 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 any of Borrower's premises) as Foothill
determines is commercially reasonable. It is not necessary that
the Personal Property Collateral be present at any such sale;
(k) Foothill shall give notice of the disposition
of the Personal Property Collateral as follows:
(i) Foothill shall give the applicable Borrower
and each holder of a security interest in the Personal
Property Collateral who has filed with Foothill a written
request for notice, a notice in writing of the time and
place of public sale, or, if the sale is a private sale or
some other disposition other than a public sale is to be
made of the Personal Property Collateral, then the time
on or after which the private sale or other disposition is
to be made;
(ii) The notice shall be personally delivered
or mailed, postage prepaid, to Borrower as provided in
Section 12, at least 5 days before the date fixed for
the sale, or at least 5 days before the date on or after
which the private sale or other disposition is to be made;
no notice needs to be given prior to the disposition of
any portion of the Personal Property Collateral that is
perishable or threatens to decline speedily in value or
that is of a type customarily sold on a recognized market.
Notice to Persons other than Borrower claiming an interest
in the Personal Property Collateral shall be sent to such
addresses as they have furnished to Foothill;
(iii) If the sale is to be a public sale, Foothill
also shall give notice of the time and place by publishing
a notice one time at least 5 days before the date of the
sale in a newspaper of general circulation in the county in
which the sale is to be held;
(l) Foothill may credit bid and purchase at any public
sale;
(m) Any deficiency that exists after disposition of
the Personal Property Collateral as provided above will be paid
immediately by Borrower. Any excess will be returned, without
interest and subject to the rights of third Persons, by Foothill
to Borrower; and
(n) Foothill may, at its option, require Borrower to
deposit with Foothill funds in an amount equal to the F/X Line Reserve
(if any), and, if Borrower fails to make such deposit promptly,
Foothill may advance such amount as an Advance (whether or not an
Overadvance is created thereby). Any such deposit or the
proceeds of such Advance shall be held by Lender as a reserve to
fund indemnity obligations owing to F/X Bank under the F/X Line.
At such time (if ever) as all such indemnity obligations have
been paid or terminated, any amounts remaining in such reserve
shall be applied against any outstanding Obligations or, if all
Obligations have been indefeasibly paid in full, returned to
Borrower.
9.2 Remedies Cumulative. Foothill's rights and remedies
under this Agreement, the Loan Documents, and all other agreements
shall be cumulative. Foothill shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in
equity. No exercise by Foothill of one right or remedy shall be
deemed an election, and no waiver by Foothill of any Event of
Default shall be deemed a continuing waiver. No delay by
Foothill shall constitute a waiver, election, or acquiescence by
it.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased
properties or assets, rents or other amounts payable under such
leases) due to third Persons, or fails to make any deposits or
furnish any required proof of payment or deposit, all as required
under the terms of this Agreement, then, to the extent that
Foothill determines that such failure by Borrower could result in
a Material Adverse Change, in its discretion and without prior
notice to Borrower, Foothill may do any or all of the following:
(a) make payment of the same or any part thereof; (b) set up such
reserves in Borrower's Loan Account as Foothill deems necessary
to protect Foothill from the exposure created by such failure; or
(c) obtain and maintain insurance policies of the type described
in Section 6.10, and take any action with respect to such
policies as Foothill deems prudent. Any such amounts paid by
Foothill shall constitute Foothill Expenses. Any such payments
made by Foothill shall not constitute an agreement by Foothill to
make similar payments in the future or a waiver by Foothill of
any Event of Default under this Agreement. Foothill need not
inquire as to, or contest the validity of, any such expense, tax,
or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was
validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 Demand; Protest; etc. Borrower waives demand,
protest, notice of protest, notice of default or dishonor, notice
of payment and nonpayment, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of accounts, documents, instruments,
chattel paper, and guarantees at any time held by Foothill on
which Borrower may in any way be liable.
11.2 Foothill's Liability for Collateral. So long as
Foothill complies with its obligations, if any, under Section 9207
of the Code, Foothill 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. All
risk of loss, damage, or destruction of the Collateral shall be
borne by Borrower.
11.3 Indemnification. Borrower shall pay, indemnify,
defend, and hold Foothill, each Participant, and each of their
respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an "Indemnified Person") harmless (to
the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and
damages, and all reasonable attorneys fees and disbursements and
other costs and expenses actually incurred in connection therewith
(as and when they are incurred and irrespective of whether suit is
brought), at any time asserted against, imposed upon, or incurred
by any of them in connection with or as a result of or related to
the execution, delivery, enforcement, performance, and administration
of this Agreement and any other Loan Documents or the
transactions contemplated herein, and with respect to any
investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of
the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission,
event or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities").
Borrower shall have no obligation to any Indemnified Person under
this Section 11.3 with respect to any Indemnified Liability that
a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such
Indemnified Person. This provision shall survive the termination
of this Agreement and the repayment of the Obligations.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other Loan
Document 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 registered or certified mail (postage prepaid, return
receipt requested), overnight courier, or telefacsimile to
Borrower or to Foothill, as the case may be, at its address set
forth below:
If to Borrower: INTERGRAPH CORPORATION
Xxx Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Mail Stop HQ 1200
Attn: Xx. Xxxxxx X. Xxxxxx
Fax No. 000.000.0000
with copies to: XXXXX & XXXXXXX
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx, Esq.
Fax No. 000.000.0000
If to Foothill: FOOTHILL CAPITAL CORPORATION
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Business Finance Division Manager
Fax No. 000.000.0000
with copies to: XXXXXXX, PHLEGER & XXXXXXXX LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No. 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. All notices or demands sent
in accordance with this Section 12, other than notices by
Foothill in connection with Sections 9504 or 9505 of the Code,
shall be deemed received on the earlier of the date of actual
receipt or 3 days after the deposit thereof in the mail.
Borrower acknowledges and agrees that notices sent by Foothill in
connection with Sections 9504 or 9505 of the Code shall be deemed
sent when deposited in the mail or personally delivered, or,
where permitted by law, transmitted telefacsimile or other
similar method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN
DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF,
AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES
AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION
OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF BORROWER
AND FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 13. BORROWER AND
FOOTHILL 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 OF
BORROWER AND FOOTHILL REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered to Foothill may be destroyed or otherwise disposed of
by Foothill 4 months after they are delivered to or received by
Foothill, unless the applicable Borrower requests, in writing,
the return of said documents, schedules, or other papers and
makes arrangements, at Borrower's expense, for their return.
15. GENERAL PROVISIONS.
15.1 Effectiveness. This Agreement shall be binding and
deemed effective when executed by Borrower and Foothill.
15.2 Successors and Assigns. This Agreement shall bind
and inure to the benefit of the respective successors and assigns
of each of the parties; provided, however, that Borrower may not
assign this Agreement or any rights or duties hereunder without
Foothill's prior written consent and any prohibited assignment
shall be absolutely void. No consent to an assignment by Foothill
shall release Borrower from its Obligations. Foothill may assign
this Agreement and its rights and duties hereunder and no consent
or approval by Borrower is required in connection with any
such assignment. Foothill reserves the right to sell, assign,
transfer, negotiate, or grant participations in all or any part
of, or any interest in Foothill's rights and benefits hereunder.
In connection with any such assignment or participation, Foothill
may disclose all documents and information which Foothill now
or hereafter may have relating to Borrower or Borrower's
business, but such documents and information shall be subject
to the confidentiality provisions of Section 15.10. To the extent
that Foothill assigns its rights and obligations hereunder to a
third Person, Foothill thereafter shall be released from such
assigned obligations to the relevant Borrower and such assignment
shall effect a novation between the relevant Borrower and such
third Person.
15.3 Section Headings. Headings and numbers have been
set forth herein for convenience only. Unless the contrary
is compelled by the context, everything contained in each
section applies equally to this entire Agreement.
15.4 Interpretation. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or
resolved against Foothill or Borrower, whether under any rule
of construction or otherwise. On the contrary, this Agreement
has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of all
parties hereto.
15.5 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.
15.6 Amendments in Writing. This Agreement can only be
amended by a writing signed by both Foothill and Borrower.
15.7 Counterparts; Telefacsimile Execution. 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. Delivery of an executed counterpart of this Agreement
by telefacsimile shall be equally as effective as delivery
of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile
also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.
15.8 Revival and Reinstatement of Obligations. If the
incurrence or payment of the Obligations by Borrower or any
guarantor of the Obligations or the transfer by either or both
of such parties to Foothill of any property of either or both
of such parties should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to
creditors' rights, including provisions of the Bankruptcy
Code relating to fraudulent conveyances, preferences, and
other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if
Foothill is required to repay or restore, in whole or in part,
any such Voidable Transfer, or elects to do so upon the
reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that Foothill is required or
elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of Foothill related thereto, the
liability of Borrower or such guarantor automatically shall be
revived, reinstated, and restored and shall exist as though such
Voidable Transfer had never been made.
15.9 Integration. This Agreement, together with the
other Loan Documents, reflects the entire understanding of the
parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other
agreement, oral or written, before the date hereof.
15.10 Confidentiality. Foothill agrees to treat
all material, non-public information regarding Borrower and
its Subsidiaries and their operations, assets, and existing and
contemplated business plans in a confidential manner; it
being understood and agreed by Borrower that in any event
Foothill may make disclosures (a) to counsel for and other
advisors, accountants, and auditors to Foothill, (b) reasonably
required by any bona fide potential or actual assignee,
transferee, or participant in connection with any contemplated
or actual assignment or transfer by Foothill of an interest
herein or any participation interest in Foothill's rights
hereunder, (c) of information that has become public by
disclosures made by Persons other than Foothill, or (d) as
required or requested by any court, governmental or
administrative agency, pursuant to any subpoena or other legal
process, or by any law, statute, regulation, or court order;
provided, however, that, unless prohibited by applicable law,
statute, regulation, or court order, Foothill shall notify
Borrower of any request by any court, governmental or
administrative agency, or pursuant to any subpoena or other legal
process for disclosure of any such non-public material
information concurrent with, or where practicable, prior to the
disclosure thereof.
[Remainder of page left intentionally blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in Los Angeles, California.
INTERGRAPH CORPORATION,
a Delaware corporation
By /s/ Xxxx Xxxxxxxx
------------------------------
Title: Executive Vice President
--------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ Xxxxxx Xxxxxx
------------------------------
Title: Vice President
--------------------------
EXHIBIT C-1
(form of Compliance Certificate)
[on Borrower's letterhead]
To: Foothill Capital Corporation, as Agent
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Business Finance Division Manager
Re: Compliance Certificate dated ___________, 199_
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated
Loan and Security Agreement, dated as of November 30, 1999
(as the same may from time to time be amended, modified,
supplemented or restated, the "Loan Agreement") by and
between Intergraph Corporation, a Delaware corporation
("Borrower"), and Foothill Capital Corporation, a California
Corporation ("Foothill"). The initially capitalized terms
used in this Compliance Certificate have the meanings set
forth in the Loan Agreement unless specifically defined
herein.
Pursuant to Section 6.3 of the Loan Agreement, the
undersigned officer of Borrower hereby certifies that:
1. The financial information of Borrower furnished in
Schedule 1 attached hereto, has been prepared in accordance
with GAAP (except for year-end adjustments and the lack
of footnotes, in the case of financial statements delivered
under Section 6.3(a) of the Loan Agreement) and fairly presents
the financial condition of Borrower.
2. Such officer has reviewed the terms of the Loan
Agreement and has made, or caused to be made under his/her
supervision, a review in reasonable detail of the
transactions and condition of Borrower during the accounting
period covered by financial statements delivered pursuant to
Section 6.3 of the Loan Agreement.
3. Such review has not disclosed the existence on and
as of the date hereof, and the undersigned does not have
knowledge of the existence as of the date hereof of any
event or condition that constitutes a Default or Event of
Default, except for such conditions or events listed on
Schedule 2 attached hereto, specifying the nature and period
of existence thereof and what action Borrower has taken, is
taking or proposes to take with respect thereto.
4. Borrower is in timely compliance with all
representations, warranties, and covenants set forth in the
Loan Agreement and the other Loan Documents, except as set
forth on Schedule 2 attached hereto. Without limiting the
generality of the foregoing, Borrower is in compliance with
the covenants contained in Sections 7.20 and 7.21 of the
Loan Agreement as demonstrated on Schedule 3 hereof.
IN WITNESS WHEREOF, this Compliance Certificate is executed
by the undersigned this _____ day of _______________,
_________.
Intergraph Corporation
A Delaware corporation
By:_________________________
Name:
Title:
Exhibit F-1
(TO BE ATTACHED)
Exhibit F-2
F/X RESERVE REDUCTION CERTIFICATE
Today's date:__________________
(1) FROM INTERGRAPH TO: [NORWEST BANK MINNESOTA]
ATTENTION:
FACSIMILE:
(2) FROM [NORWEST] TO: FOOTHILL CAPITAL CORPORATION
ATTENTION:
FACSIMILE:
(3) FROM FOOTHILL TO INTERGRAPH AND NORWEST:
Reference hereby is made to that certain Amended and
Restated Loan and Security Agreement, dated as of November
__, 1999 (as amended, supplemented, and modified, the "Loan
Agreement"), between Foothill Capital Corporation
("Foothill") and Intergraph Corporation ("Borrower").
Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the loan
Agreement.
Pursuant to Section 2.4 of the Loan Agreement, Borrower
hereby requests a reduction in the F/X Reserve from the
current amount of $___________ to the new amount of
$___________, such reduction to become effective on
______________________, ______.
INTERGRAPH CORPORATION
By
Title:
Facimile:
Attn:
FOOTHILL CAPITAL CORPORATION
By
Title:
[NORWEST BANK, Minnesota, N.A.]
By
Title:
Exhibit F-3
F/X RESERVE INCREASE CERTIFICATE
--------------------------------
Today's date:__________________
(1) FROM INTERGRAPH TO: FOOTHILL CAPITAL CORPORATON
ATTENTION:
FACSIMILE:
(2) FROM FOOTHILL TO: [NORWEST BANK MINNESOTA]
ATTENTION:
FACSIMILE:
(3) FROM [NORWEST] TO INTERGRAPH AND FOOTHILL:
Reference hereby is made to that certain Amended and
Restated Loan and Security Agreement, dated as of November
__, 1999 (as amended, restated, supplemented, and modified
from time to time, the "Loan Agreement"), between Foothill
Capital Corporation ("Foothill") and Intergraph Corporation
("Borrower"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to
them in the loan Agreement.
Pursuant to Section 2.4 of the Loan Agreement, Borrower
hereby requests an increase in the F/X Reserve from the
current amount of $___________ to the new amount of
$___________, such increase to become effective on
______________________, ______.
INTERGRAPH CORPORATION
By
Title:
Facimile:
Attn:
FOOTHILL CAPITAL CORPORATION
By
Title:
[NORWEST BANK, Minnesota, N.A.]
By
Title:
