Exhibit 10.43
FIFTH AMENDMENT TO SECOND RESTATED
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AND AMENDED LOAN AGREEMENT
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THIS FIFTH AMENDMENT TO SECOND RESTATED AND AMENDED LOAN AGREEMENT
(hereinafter called this "Amendment") is entered into on July 31, 1996, among
VISUAL NUMERICS, INC., a Texas corporation formerly known as IMSL, Inc. (the
"Company"), individually and as successor by merger to Visual Numerics, Inc. of
Colorado, a California corporation ("VNIC"), VISUAL NUMERICS, INC. (EUROPE), a
Texas corporation ("VNIE"), and XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION
(formerly known as First Interstate Bank of Texas, N.A.) (the "Bank"). Each of
XXXXXXX X. XXXXXXX (the "Guarantor") and XXXXXXXX X. XXXXXXX joins in the
execution hereof for the purpose of acknowledging the amendments and other
provisions hereof and agreeing to such amendments and other provisions
applicable to Xxxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx, respectively.
W I T N E S S E T H:
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WHEREAS, the Company, VNIC and the Bank entered into a Second Restated and
Amended Loan Agreement dated as of December 16, 1992 (hereinafter called the
"Second Restated and Amended Agreement"), whereby, upon the terms and conditions
therein stated, the Bank agreed to make available to the Company a credit
facility upon the terms and conditions set forth in the Agreement; and
WHEREAS, as of February 28, 1994 the Company, VNIC, VNIE, Guarantor,
Xxxxxxxx X. Xxxxxxx, and the Bank entered into a First Amendment to Second
Restated and Amended Loan Agreement (the "First Amendment"); and
WHEREAS, as of April 1, 1995 the Company, VNIC, VNIE, Guarantor, Xxxxxxxx
X. Xxxxxxx, and the Bank entered into a Second Amendment to Second Restated and
Amended Loan Agreement (the "Second Amendment"); and
WHEREAS, as of September 30, 1995 the Company, VNIC, VNIE, Guarantor,
Xxxxxxxx X. Xxxxxxx, and the Bank entered into a Third Amendment to Second
Restated and Amended Loan Agreement (the "Third Amendment"); and
WHEREAS, as of February 27, 1996 the Company, VNIE, Guarantor and the Bank
entered into a Fourth Amendment to Second Restated and Amended Loan Agreement
(the "Fourth Amendment" and, together with the First Amendment, the Second
Amendment, the Third Amendment, and the Second Restated and Amended Agreement,
the "Agreement"); and
WHEREAS, the Company, VNIE and the Guarantor have requested the Bank to (i)
refinance $1,000,000 of the current outstanding principal balance under the
Revolving Note as a term loan and, in connection therewith, (a) to modify,
rearrange, increase, and extend the maturity of Term Note A,
and (b) to modify, decrease, and rearrange the Revolving Note, and (ii) amend
certain covenants of the Company and the Corporate Guarantor contained in the
Agreement; and
WHEREAS, subject to and upon the terms and conditions hereinafter stated,
the Bank is willing to do so;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, the parties to this Amendment hereby agree as
follows:
SECTION 1. Terms Defined in Agreement. As used in this Amendment, except
as may otherwise be provided herein, all capitalized terms which are defined in
the Agreement shall have the same meaning herein as therein, all of such terms
and their definitions being incorporated herein by reference.
SECTION 2. Amendments to Agreement. Subject to the conditions precedent
set forth in Section 3 hereof, the Agreement is hereby amended as follows:
(a) The definition of "Line of Credit Commitment" found in Section 1.2
of the Agreement is hereby deleted from the Agreement and the following
definition of "Line of Credit Commitment" is substituted in lieu thereof:
"Line of Credit Commitment means $1,500,000, as such amounts may otherwise
be reduced from time to time pursuant to the terms of this Agreement."
(b) The definition of "Loan Formula" found in Section 1.2 of the
Agreement is hereby deleted from the Agreement and the following definition of
"Loan Formula" is substituted in lieu thereof:
"Loan Formula means at any time the amount equal to the then current sum of
(i) 80% of the Eligible Accounts of the Company directed to the Account,
plus (ii) an amount equal to the lesser of (a) 40% of the Eligible
Government Receivables of the Company directed to the Account, or (b)
$200,000."
(c) The definition of "Revolving Note" found in Section 1.2 of the
Agreement is hereby deleted from the Agreement and the following definition of
"Revolving Note" is substituted in lieu thereof:
"Revolving Note means the promissory note issued by the Company
pursuant to Section 3.3 hereof as the same may be renewed, rearranged,
modified, increased, decreased or extended at any time, or from time to
time, which note is given in modification, rearrangement and decrease of,
but not in novation or discharge of, that
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certain revolving note executed by the Company as of December 31, 1995 and
payable to the order of the Bank in the original principal amount of
$2,000,000, which note was given in renewal, reinstatement, and extension
of, but not in novation or discharge of, that certain revolving note
executed by the Company as of April 1, 1995 and payable to the order of the
Bank in the original principal amount of $2,000,000, which note was given
in modification, rearrangement, and increase of, but not in novation or
discharge of, that certain revolving note dated February 28, 1994, executed
by the Company and payable to the order of the Bank in the original
principal amount of $1,900,000.00, which note was given in renewal,
modification, rearrangement and extension of, but not in novation or
discharge of, that certain revolving note dated December 16, 1992, executed
by the Company and payable to the order of the Bank in the original
principal amount of $2,000,000."
(d) Section 3.1 of the Agreement is hereby deleted therefrom and the
following Section 3.1 is substituted in lieu thereof:
"Section 3.1 Term Loan. (a) Subject to and upon the terms,
conditions, covenants and agreements contained herein, the Bank agrees to
modify, rearrange, increase, and extend the maturity of that certain term
note (the "Prior Term Note A") dated January 23, 1996, executed by the
Company and payable to the order of the Bank in the original principal
amount of $500,000, which note was given in renewal, rearrangement,
reinstatement and extension of, but not in novation or discharge of, that
certain term note dated October 23, 1995, executed by the Company and
payable to the order of the Bank in the original principal amount of
$500,000, to be evidenced by the Company's promissory note payable to the
order of the Bank in substantially the form of Exhibit D attached hereto
("Term Note A").
(b) Term Note A is given in modification, rearrangement, increase, and
extension of, but not in novation or discharge of, the Prior Term Note A.
(c) All renewals, extensions, modifications, increases, and
rearrangements of Term Note A, if any, shall be deemed to be made pursuant
to this Agreement and, accordingly, shall be subject to the terms and
provisions hereof, and the Company shall be deemed to have ratified, as of
such renewal, extension, modification, increase, or arrangement date, all
of the representations, warranties, covenants and agreements set forth
herein.
(d) Upon issuance of Term Note A, the Bank shall make an advance
thereunder in the amount of $1,000,000, the proceeds of such advance to be
used to prepay $1,000,000 of principal of the Revolving Note."
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(e) The last sentence of the second to the last paragraph of Section
3.10 of the Agreement is hereby deleted therefrom and the following sentence is
substituted in lieu thereof:
"Payment of $1,500,000 of the amount from time to time outstanding
under the Notes shall be guaranteed by the Guarantor, such guaranty to be
evidenced by a Limited Guaranty and such guaranty and the Obligations to be
secured by first priority, perfected pledges of, liens on and security
interests in certificated stock acceptable to the Bank of a market value at
all times equal to at least $1,500,000, including, without limitation, (A)
4,200 shares of stock of International Business Machines Corporation and
(B) 100,000 shares of St. Xxxx Xxxx & Exploration Company."
(f) Sections 5.12, 5.13, 5.14 and 5.15 of the Agreement are hereby
deleted therefrom and the following Sections 5.12, 5.13, 5.14 and 5.15 are
substituted in lieu thereof:
"Section 5.12 Indebtedness to Net Worth Ratio. The Company and its
Subsidiaries will maintain, on a consolidated basis, a ratio of (a) total
Indebtedness less Unearned Revenues to (b) Net Worth, at all times during
each period set forth below, of not greater than the ratio set forth below
opposite such period:
Period Ratio
07/01/96 through 12/30/96 2.50 to 1.0
12/31/96 and thereafter 2.25 to 1.0
"Section 5.13 Net Worth. The Company and its Subsidiaries will
maintain, on a consolidated basis, a positive Net Worth, at all times
during each period set forth below, of at least the amount set forth below
opposite such period:
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Period Amount
07/01/96 through 12/30/96 $4,750,000
12/31/96 and thereafter $5,500,000
"Section 5.14 Tangible Net Worth. The Company and its Subsidiaries
will maintain, on a consolidated basis, a Tangible Net Worth, at all times
during each period set forth below, of at least the amount set forth below
opposite such period:
Period Amount
07/01/96 through 12/30/96 ($1,750,000)
12/31/96 and thereafter ($500,000)
"Section 5.15 Cash Flow (less Capitalized Software Development
Expenses) to Fixed Charge Ratio. The Company and its Subsidiaries will
maintain, on a consolidated basis, a ratio of Cash Flow (less Capitalized
Software Development Expenses) to Fixed Charges, calculated for each period
set forth below as of the last day of each calendar quarter during such
period, on a cumulative basis from the beginning of the year, of not less
than the ratio set forth opposite such period:
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Period Ratio
07/01/96 through 12/30/96 0.50 to 1.0
12/31/96 and thereafter 1.00 to 1.0
(g) Exhibits A, B, D and F to the Agreement are deleted therefrom and
Exhibits A, B, D and F attached hereto are substituted in lieu thereof.
SECTION 3. Conditions of Effectiveness. As a condition precedent to the
effectiveness of this Amendment and the Bank's agreements and obligations
hereunder, the Company, the Corporate Guarantor, the Guarantor and Xxxxxxxx X.
Xxxxxxx, as applicable, shall have taken the following actions and delivered to
the Bank the following documents and instruments, in form and substance
satisfactory to the Bank, on or before July 31, 1996 (the "Closing Date"):
(a) The Company, the Corporate Guarantor, the Guarantor and Xxxxxxxx
X. Xxxxxxx shall have duly executed and delivered this Amendment, amendments to
Limited Guaranty and Security Agreements-Pledge, and such other Loan Documents
and evidence of filings, acknowledgements or acceptances of any such documents,
as the Bank may reasonably request or require, all duly executed and delivered
by all parties thereto.
(b) The Company shall have delivered to the Bank certificates of the
Secretary or Assistant Secretary of each of the Company and the Corporate
Guarantor setting forth resolutions of its Board of Directors in form and
substance reasonably satisfactory to the Bank with respect to this Amendment.
(c) The Company shall have paid, in immediately available funds, all
accrued and unpaid interest on the Revolving Note.
(d) The Company shall have paid, in immediately available funds, a
restructuring fee in the amount of $5,000.
(e) The Company shall have paid all accrued and unpaid legal fees and
expenses referred to in Section 8.7 of the Agreement and Section 7 hereof to the
extent invoices for such fees and expenses have been delivered to the Company.
(f) The Company and the Corporate Guarantor shall have delivered to
the Bank opinions of counsel, in form and substance satisfactory to the Bank and
its counsel.
* (Except as might be waived by written Agreement with the Bank)
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(g) Such other evidence as the Bank may reasonably request to
establish the consummation of the transactions contemplated hereby, the taking
of all proceedings in connection herewith and compliance with the conditions set
forth in this Amendment.
SECTION 4. Representations, Warranties and Covenants of the Company and
the Corporate Guarantor. Each of the Company and the Corporate Guarantor
represents and warrants to the Bank, with full knowledge that the Bank is
relying on the following representations and warranties in executing this
Amendment, as follows:
(a) Each of the Company and the Corporate Guarantor has corporate
power and authority to execute, deliver and perform this Amendment, and all
corporate action on the part of the Company and the Corporate Guarantor
requisite for the due execution, delivery and performance of this Amendment has
been duly and effectively taken.
(b) The Agreement as amended by this Amendment and the Loan Documents
and each and every other document executed and delivered in connection with this
Amendment to which the Company, the Corporate Guarantor or any of their
respective Subsidiaries is a party constitute the legal, valid and binding
obligations of the Company, the Corporate Guarantor and any of their respective
Subsidiaries to the extent it is a party thereto, enforceable against such
Person in accordance with their respective terms.
(c) This Amendment does not and will not violate any provisions of the
articles or certificate of incorporation or bylaws of the Company or the
Corporate Guarantor, or any contract, agreement, instrument or requirement of
any Governmental Authority to which the Company or the Corporate Guarantor is
subject. Neither the Company's nor the Corporate Guarantor's execution of this
Amendment will result in the creation or imposition of any lien upon any
properties of the Company or the Corporate Guarantor, other than those permitted
by the Agreement and this Amendment.
(d) Neither the Company's nor the Corporate Guarantor's execution,
delivery and performance of this Amendment requires the consent or approval of
any other Person, including, without limitation, any Governmental Authority.
(e) The monthly unaudited consolidated balance sheet of the Company
and its Subsidiaries as of May 31, 1996, and the related consolidated statements
of earnings, capital accounts, and cash flows of the Company for the quarter and
month then ended and the consolidated balance sheet and related consolidated
statements of earnings, capital accounts and cash flows for the period
commencing the first day of the fiscal year and ending on the last day of such
month which have been furnished to the Bank, fairly present the financial
condition of the Company and its Subsidiaries as at such date and the results of
the operations of the Company and its Subsidiaries for the periods ended
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on such date, all in accordance with GAAP applied on a consistent basis, and
since May 31, 1996, there has been no material adverse change in such condition
or operations.
(f) Each of the Company and the Corporate Guarantor has performed and
complied with all agreements and conditions contained in the Agreement required
to be performed or complied with by the Company and the Corporate Guarantor
prior to or at the time of delivery of this Amendment.
(g) No Default or Event of Default exists.
(h) Nothing in this Section 4 of this Amendment is intended to amend
any of the representations or warranties contained in the Agreement or of the
Loan Documents to which the Company, the Corporate Guarantor or any of their
respective Subsidiaries is a party. Each of the Company and the Corporate
Guarantor represents and warrants that all of the representations and warranties
contained in the Agreement and all instruments and documents executed pursuant
thereto or contemplated thereby are true and correct in all material respects on
and as of this date, except (i) such representations that relate solely to an
earlier date and that were true and correct on such earlier date, and (ii) the
breach or inaccuracy of representations and warranties about which the Bank has
been notified in writing prior to the date of this Amendment.
SECTION 5. Reference to and Effect on the Agreement.
(a) Upon the effectiveness of Section 2 hereof, on and after the date
hereof, each reference in the Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import, shall mean and be a reference to
the Agreement as amended hereby.
(b) Except as specifically amended by this Amendment, the Agreement
shall remain in full force and effect and is hereby ratified and confirmed.
SECTION 6. Defaults and Events of Default. Each of the Company, the
Corporate Guarantor, the Guarantor and Xxxxxxxx X. Xxxxxxx agrees that no Event
of Default and no Default has been waived or remedied by the execution of this
Amendment by the Bank, and any Default or Event of Default heretofore arising
and currently continuing shall continue after the execution and delivery hereof.
SECTION 7. Cost, Expenses and Taxes. The Company agrees to pay on demand
all reasonable costs and expenses of the Bank in connection with the
preparation, reproduction, execution and delivery of this Amendment and the
other instruments and documents to be delivered hereunder, including reasonable
attorneys' fees and out-of-pocket expenses of the Bank. In addition, the
Company shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution and delivery, filing
or recording of this Amendment and the other
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instruments and documents to be delivered hereunder, and agrees to save the Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
SECTION 8. Extent of Amendments. Except as otherwise expressly provided
herein, the Agreement and the other Loan Documents are not amended, modified or
affected by this Amendment. Each of the Company and the Corporate Guarantor
ratifies and confirms that (i) except as expressly amended hereby, all of the
terms, conditions, covenants, representations, warranties and all other
provisions of the Agreement remain in full force and effect, (ii) each of the
other Loan Documents are and remain in full force and effect in accordance with
their respective terms, and (iii) the Collateral is unimpaired by this
Amendment.
SECTION 9. Acknowledgment. The undersigned officers of each of the
Company and the Corporate Guarantor executing this Amendment represent and
warrant that they have full power and authority to execute and deliver this
Amendment on behalf of the Company and the Corporate Guarantor, respectively,
that such execution and delivery has been duly authorized by each of the Board
of Directors of the Company and the Corporate Guarantor, respectively, and that
the resolutions previously delivered to the Bank in connection with the
execution and delivery of the Second Restated and Amended Loan Agreement, the
First Amendment, the Second Amendment, the Third Amendment and the Fourth
Amendment, are and remain in full force and effect and have not been altered,
amended or repealed in anyway.
SECTION 10. Grant and Affirmation of Security Interest.
(a) Each of the Guarantor and Xxxxxxxx X. Xxxxxxx hereby ratifies and
confirms the prior grant of a security interest in the Collateral to secure
payment and performance of the Guaranteed Obligations (as such term is defined
in Security Agreement-Pledges executed by the Guarantor and Xxxxxxxx X.
Xxxxxxx), including, without limitation, Term Note A and the Revolving Note, and
all documents and instruments executed in connection therewith, and each of the
Guarantor and Xxxxxxxx X. Xxxxxxx hereby confirms and agrees that any and all
liens, security interests and other security or Collateral now or hereafter held
by the Bank as security for payment and performance of the Guaranteed
Obligations hereby are renewed, extended and carried forth to secure payment and
performance of all of the Guaranteed Obligations. The Security Instruments
executed by the Guarantor and Xxxxxxxx X. Xxxxxxx are and remain legal, valid
and binding obligations of the parties thereto, enforceable in accordance with
their respective terms.
(b) Each of the Company and the Corporate Guarantor hereby ratifies
and confirms the prior grant of a security interest in the Collateral to secure
payment and performance of Term Note A, the Revolving Note, and the obligations
described in the Agreement and all documents and instruments executed in
connection therewith and, each of the Company and the Corporate Guarantor hereby
confirms and agrees that any and all liens, security interests and other
security or
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Collateral now or hereafter held by the Bank as security for payment and
performance of the Obligations (including, without limitation, Term Note A and
the Revolving Note) hereby are renewed, extended and carried forth to secure
payment and performance of all of the Obligations (including, without
limitation, Term Note A and the Revolving Note). The Security Instruments
executed by the Company and the Corporate Guarantor are and remain legal, valid
and binding obligations of the parties thereto, enforceable in accordance with
their respective terms.
SECTION 11. Guaranties; Option Agreement.
(a) VNIE hereby consents to and accepts the terms and conditions of
this Amendment, agrees to be bound by the terms and conditions hereof and
ratifies and confirms that its Guaranty, executed and delivered to the Bank on
February 28, 1995, guaranteeing payment of the Obligations, is and remains in
full force and effect and secures payment of, among other things, Term Note A
and the Revolving Note.
(b) Guarantor hereby consents to and accepts the terms and conditions
of this Amendment, agrees to be bound by the terms and conditions hereof, and
further agrees to execute an amendment, in form and substance satisfactory to
the Bank, to his Limited Guaranty increasing his guaranty of payment of the
Guaranteed Obligations, including Term Note A and the Revolving Note, from
$1,000,000 to $1,500,000.
(c) Upon the effectiveness of Section 2 hereof, the Option Agreement
dated February 28, 1994 by and between Guarantor and the Bank, continues in full
force and effect.
SECTION 12. Execution and Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of the signature page of
this Amendment by facsimile shall be equally as effective as delivery of a
manually executed counterpart of this Amendment.
SECTION 13. Severability. In the event any one or more provisions
contained in the Agreement or this Amendment should be held to be invalid,
illegal or unenforceable in any respect, the validity, enforceability and
legality of the remaining provisions contained herein and therein shall not be
affected in any way or impaired thereby and shall be enforceable in accordance
with their respective terms.
SECTION 14. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
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SECTION 15. Headings. Section headings in this Amendment are included
herein for convenience and reference only and shall not constitute a part of
this Amendment for any other purpose.
SECTION 16. Arbitration Program. The parties agree to be bound by the
terms and provisions of the current Arbitration Program of the Bank which is
incorporated by reference herein and is acknowledged as received by the parties
pursuant to which any and all disputes arising hereunder, under the Agreement,
under any of the other Loan Documents, or under any of the documents and
instruments contemplated thereby, or pertaining hereto or thereto, shall be
resolved by mandatory binding arbitration upon the request of any party.
Section 17. Waivers and Release of Claims. As additional consideration to
the execution, delivery, and performance of this Amendment by the parties hereto
and to induce the Bank to enter into this Amendment, each of the Company, the
Corporate Guarantor, Xxxxxxxx X. Xxxxxxx, and the Guarantor represents and
warrants that none of the Company, the Corporate Guarantor, Xxxxxxxx X. Xxxxxxx,
or the Guarantor knows of any facts, events, statuses or conditions which,
either now or with the passage of time or the giving of notice, or both,
constitute or will constitute a basis for any claim or cause of action against
the Bank or any defense, counterclaim or right of setoff to the payment or
performance of any obligations or indebtedness of the Company, the Corporate
Guarantor, Xxxxxxxx X. Xxxxxxx, or the Guarantor to the Bank, and in the event
any such facts, events, statuses or conditions exist or have existed, whether
known or unknown, each of the Company and the Corporate Guarantor for itself,
its subsidiaries, their respective representatives, agents, officers, directors,
employees, shareholders, and successors and assigns, and the Guarantor and
Xxxxxxxx X. Xxxxxxx, for themselves and their heirs and assigns, hereby fully,
finally, completely, generally and forever releases, discharges, acquits, and
relinquishes the Bank and its respective representatives, agents, officers,
directors, employees, shareholders, and successors and assigns, from any and all
claims, actions, demands, and causes of action of whatever kind or character
that may have arisen prior to the execution of this Amendment, whether joint or
several, whether known or unknown, for any and all injuries, harm, damages,
penalties, costs, losses, expenses, attorneys' fees, and/or liability whatsoever
and whenever incurred or suffered by any of them. Notwithstanding any provision
of this Amendment, the Agreement or any other Loan Document, this Section shall
remain in full force and effect and shall survive the delivery of the Notes,
this Amendment and the Other Loan Documents and the making, extension, renewal,
modification, amendment or restatement of any thereof.
SECTION 18. NO ORAL AGREEMENTS. THE AGREEMENT (AS AMENDED BY THIS
AMENDMENT) AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized.
COMPANY: BANK:
VISUAL NUMERICS, INC. XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION (formerly known as First
Interstate Bank of Texas, N.A.)
By /s/Xxxxxxx X. Xxxxx
Name:
Title: By
Name:
Title:
CORPORATE GUARANTOR:
VISUAL NUMERICS, INC. (EUROPE)
By
Name:
Title:
GUARANTOR:
/s/ Xxxxxxx X. Xxxxxxx
XXXXXXX X. XXXXXXX
/s/ Xxxxxxxx X. Xxxxxxx
XXXXXXXX X. XXXXXXX
Addendum - Arbitration Program
Exhibits
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Exhibit A - Loan Formula Certificate
Exhibit B - Certificate of Subsidiaries
Exhibit D - Term Note A
Exhibit F - Revolving Note
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