EXHIBIT 10.1
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LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
MANUGISTICS GROUP, INC.,
AND MANUGISTICS, INC.,
AS BORROWERS
AND
SILICON VALLEY BANK,
AS BANK
APRIL 12, 2002
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT dated April 12, 2002, between
SILICON VALLEY BANK ("Bank"), whose address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx 00000 and having a loan production office at 00000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 and MANUGISTICS GROUP, INC., a
corporation organized under the laws of the State of Delaware whose address is
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Company"),
MANUGISTICS, INC., a corporation organized under the laws of the State of
Delaware whose address is 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000 and any Persons who are now or hereafter made parties to this Agreement
(each a "Borrower" and collectively, "Borrowers"), provides the terms on which
Bank will lend to Borrowers and Borrowers will repay Bank. The parties agree
as follows:
1 ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP.
The term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation," in this or any Loan Document.
2 LOAN AND TERMS OF PAYMENT
2.1 PROMISE TO PAY
Borrowers jointly and severally promise to pay Bank the unpaid
principal amount of all Credit Extensions and interest on the unpaid principal
amount of the Credit Extensions in accordance with the Loan Documents.
2.1.1 EQUIPMENT ADVANCES.
(a) Subject to the terms and conditions of this Agreement, Bank
agrees to lend to Borrowers, from time to time prior to the Commitment
Termination Date, equipment advances (each an "Equipment Advance" and
collectively the "Equipment Advances") in an aggregate amount not to exceed
the Committed Equipment Line. When repaid, the Equipment Advances may not be
reborrowed. The proceeds of the Equipment Advances will be used solely to
reimburse Borrowers for the purchase of Eligible Equipment purchased within
ninety (90) days of the Equipment Advance provided that the first Equipment
Advance may be used to reimburse Borrowers for Eligible Equipment purchased
within one hundred twenty (120) days of the first Equipment Advance. All
Equipment Advances shall be evidenced by the Equipment Term Note to be
executed and delivered by Borrowers to Bank on the Closing Date and shall be
repaid in accordance with the terms of the Equipment Term Note. Bank's
obligation to lend hereunder shall terminate on the earlier of (i) the
occurrence and continuance of an Event of Default, or (ii) the Commitment
Termination Date. For purposes of this Section, the minimum amount of each
Equipment Advance is Twenty Five Thousand Dollars ($25,000) and the maximum
number of Equipment Advances that will be made is eight (8).
(b) To obtain an Equipment Advance, Borrowers will deliver to
Bank a completed supplement in substantially the form attached as Exhibit B
("Loan Supplement"), copies of invoices for the Financed Equipment, together
with a UCC Financing Statement, if requested by Bank, covering the Equipment
described on the Loan Supplement, and such additional information as Bank may
request at least five (5) Business Days before the proposed funding date (the
"Funding Date"). On each Funding Date, Bank will specify in the Loan
Supplement for each Equipment Advance, the Basic Rate, the Loan Factor, and
the Payment Dates. If Borrowers satisfy the conditions of each Equipment
Advance specified herein, Bank will disburse such Equipment Advance by
internal transfer to Company's deposit account with Bank. Each Equipment
Advance may not exceed one hundred percent (100%) of the Original Stated Cost.
(c) Bank's obligation to lend the undisbursed portion of the
Committed Equipment Line will terminate if, in Bank's sole discretion, there
has been a Material Adverse Change.
2.1.2 INTEREST RATE, PAYMENTS.
(a) Principal and Interest Payments On Payment Dates. Borrowers
will repay each Equipment Advance on the terms provided in the related Loan
Supplement. Borrowers will make payments monthly in advance of principal and
accrued interest for each Equipment Advance (collectively, "Scheduled
Payments"), on the first Business Day of the month following the Funding Date
(or commencing on the Funding Date if the Funding Date is the first Business
Day of the month) with respect to such Equipment Advance and continuing
thereafter during the Repayment Period on the first Business Day of each
calendar month (each a "Payment Date"), in an amount equal to the Loan Factor
multiplied by the Loan Amount for such Equipment Advance as of such Payment
Date. All unpaid principal and accrued interest is due and payable in full on
the last Payment Date with respect to such Equipment Advance. Payments
received after 12:00 noon Eastern time are considered received at the opening
of business on the next Business Day. An Equipment Advance may only be prepaid
in accordance with Sections 2.1.2(d) and 2.1.2(f). Bank may debit any of
Borrowers' deposit accounts including Account Number
_____________________________ for principal and interest payments owing or any
amounts Borrowers owe Bank if not paid when due or within the applicable cure
period. Bank will promptly notify Company when it debits Borrowers' accounts.
These debits are not a set-off. When a payment is due on a day that is not a
Business Day, the payment is due the next Business Day and additional fees or
interest accrue.
(b) Interest Rate. Borrowers will pay interest on the Payment
Dates (as described above) at the per annum rate of interest equal to the
Basic Rate determined by Bank as of the Funding Date for each Equipment
Advance in accordance with the definition of the Basic Rate. Any amounts
outstanding during the continuance of an Event of Default shall bear interest
at a per annum rate equal to the Basic Rate plus four percent (4%). If any
change in the law increases Bank's expenses or decreases its return from the
Equipment Advances, Borrowers will pay Bank (upon request and delivery by Bank
to Borrowers of a description of such increased expenses or decreased returns
and the methods by which Bank has allocated such increases or decreases to its
customers) the amount of such increase or decrease.
(c) Interim Payment. In addition to the Scheduled Payments, on
the Funding Date for each Equipment Advance (unless the Funding Date is the
first Business Day of the month) Borrowers shall pay to Bank, on behalf of
Bank, the projected interest to accrue from the Funding Date to the first
Payment Date, at the Bank's Prime Rate, plus two percent (2.0%) per annum.
(d) Prepayment Upon an Event of Loss. If any Financed Equipment
is subject to an Event of Loss and Borrowers are required to or elect to
prepay the Equipment Advance with respect to such Financed Equipment pursuant
to Section 6.7, then such Equipment Advance shall be prepaid to the extent and
in the manner provided in such section.
(e) Mandatory Prepayment Upon an Acceleration. If the Equipment
Advances are accelerated following the occurrence of an Event of Default or
otherwise (other than following an Event of Loss), then Borrowers will
immediately pay to Bank (i) all unpaid Scheduled Payments (including principal
and interest) with respect to each Equipment Advance, (ii) all remaining
Scheduled Payments (including principal and interest unpaid) (iii) all accrued
unpaid interest, including the default rate of interest, to the date of the
prepayment, and (iv) all other sums, if any, that shall have become due and
payable with respect to any Equipment Advance.
(f) Permitted Prepayment of Loans. Borrowers shall have the
option to prepay any Equipment Advance (or all Equipment Advances) advanced by
Bank under this Agreement, provided Borrowers (i) provide written notice to
Bank of its election to prepay such Equipment Advance at least thirty (30)
days prior to such prepayment, and (ii) pays, on the date of the prepayment
(A) all unpaid
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Scheduled Payments (including principal and interest) with respect to such
Equipment Advance; (B) all outstanding principal; (C) all unpaid accrued
interest to the date of the prepayment; (D) a prepayment fee (the "Prepayment
Fee") equal to (i) one and one half of one percent (1.5%) of the amount
prepaid if the prepayment occurs within the first twelve (12) months from the
date of the Equipment Advance; (ii) one percent (1%) of the amount prepaid if
the prepayment occurs after the first twelve (12) months, and prior to the
twenty fourth (24th) month from the date of the Equipment Advance; and (iii)
one half of one percent (.5%) of the amount prepaid at all times after the
first twenty four (24) months from the date of the Equipment Advance; and (E)
all other sums, if any, that shall have become due and payable hereunder with
respect to this Agreement. Notwithstanding the foregoing, Borrower shall not
be required to pay the Prepayment Fee in the event it elects to pay the
Obligations in full within thirty (30) days of obtaining knowledge that all or
any part of, or any interest in, Bank's obligations, rights and benefits under
this Agreement have been transferred, sold or assigned as permitted under
Section 12.1 herein.
2.2 REQUESTS FOR ADVANCES, ETC.
(a) Each of the Borrowers hereby represents and warrants to Bank
that each such Borrower will derive benefits, either directly or indirectly,
from the proceeds of each Credit Extension, both in its individual capacity
and as a member of the integrated group to which the Borrowers belong, because
the successful operation of the integrated group referred to in this Agreement
as "the Borrowers" is dependent upon the continued successful performance of
the functions of the integrated group as a whole.
(b) The Borrowers, in the discretion of their respective
managements, are to agree among themselves as to the allocation of the
benefits of the proceeds of the Credit Extensions and the purposes for which
such benefits and proceeds will be used, provided that no allocation, purpose
or use shall be in violation of this Agreement. For administrative
convenience, each Borrower is hereby irrevocably appointed by each and every
other Borrower as agent for each and every other Borrower for the purpose of
requesting Credit Extensions, receiving the benefits of the proceeds of such
Credit Extensions, and disbursing the proceeds of such Credit Extensions among
the Borrowers. By reason thereof, each Borrower is hereby irrevocably
appointed by each and every other Borrower with power and authority through
its duly authorized officer or officers (i) to endorse any check (if any) for
the proceeds of any Credit Extension for and on behalf of each and every
Borrower and in the name of each and every Borrower, and (ii) to instruct Bank
to credit the proceeds of any Credit Extension directly to a banking account
of one or more of the Borrowers which shall evidence the making of such Credit
Extension and shall constitute the acknowledgment by each and every Borrower
of the receipt of the proceeds of such Credit Extension. Bank may require from
time to time such certificates, reports and other items as Bank may reasonably
deem necessary to evidence the allocation of the proceeds of the Credit
Extensions among the Borrowers. In particular, Bank may require from time to
time that any advances of the proceeds of the Credit Extensions by one or more
of the Borrowers be evidenced by one or more promissory notes or other written
instruments or agreements between one or more of the Borrowers to evidence
intercompany receivables between one or more of the Borrowers. All actions
taken by each Borrower in connection with the Credit Extensions and the Loan
Documents shall be conclusively presumed to be the joint and several actions
of the Borrowers even though any one Borrower may act from time to time in its
name alone. This appointment is coupled with an interest and is irrevocable
without the prior written consent of Bank.
(c) Without implying any limitation on the joint and several
nature of the Obligations, Bank agrees that, notwithstanding any other
provision of this Agreement, the Borrowers may create inter-company
indebtedness between and/or among the Borrowers with respect to the allocation
of the benefits and proceeds of the advances under this Agreement. The
Borrowers agree among themselves, and Bank consents to that agreement, that
each and every Borrower shall have rights of contribution from all of the
other Borrowers to the extent each such Borrower incurs Obligations in excess
of the proceeds of the Credit Extensions received by, or allocated to purposes
for the direct benefit of, each such Borrower. All such indebtedness and
rights shall be, and are hereby agreed by the Borrowers to be, subordinate in
priority and payment to the indefeasible payment in full of the Obligations,
and, unless
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Bank agrees in writing otherwise, shall not be exercised or repaid in whole or
in part until all of the Obligations have been satisfied, provided, however,
that prior to the occurrence of a payment Default, the Borrowers shall be
permitted to make payments on account of any such inter-company indebtedness
from time to time in accordance with the terms thereof. Each and every
Borrower hereby waives all rights of counterclaim, recoupment and offset
between or among themselves arising on account of that indebtedness. Unless
required by the laws of the United States or the country where such
indebtedness is created, each and every Borrower agrees not to evidence that
indebtedness or rights by note or other instrument, and shall not secure that
indebtedness with any mortgage, security agreement or otherwise.
(d) Bank is hereby irrevocably authorized by the Borrowers to
make Credit Extensions to the Borrowers, all pursuant to the provisions of
this Agreement upon the written, oral or telephone request of any one of the
Persons who is from time to time a Responsible Officer of the Borrowers under
the provisions of the most recent certificate of corporate resolutions of the
Borrowers on file with Bank or as otherwise designated in writing by the
Borrowers. Except for gross negligence or willful misconduct, Bank assumes no
responsibility or liability for any errors, mistakes, and/or discrepancies in
the oral, telephonic, written or other transmissions of any instructions,
orders, requests and confirmations between Bank and the Borrowers in
connection with any of Credit Extension, or any other transaction in
connection with the provisions of this Agreement.
2.3 FEES.
Borrowers will pay:
(a) Facility Fee. A fully earned, nonrefundable fee in the
amount of Twenty Five Thousand Dollars ($25,000) on the Closing Date.
(b) Bank Expenses. All Bank Expenses (including reasonable
attorneys' fees and reasonable expenses) incurred through and after the date
of this Agreement, are payable when due.
3 CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION.
Bank's obligation to make the initial Credit Extension is subject to
the condition precedent that it receive the agreements, documents and fees it
requires and Bank's receipt of an insurance certificate in form and substance
acceptable to Bank showing that Bank has been added to such policies pursuant
to a lender's loss payable endorsement as an additional loss payee and with
respect to all liability policies, showing the Bank as an additional insured
and providing that the insurer must give Bank at least twenty (20) days notice
before canceling its policy.
3.2 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS.
Bank's obligations to make each Credit Extension, including the
initial Credit Extension, is subject to the following:
(a) timely receipt of any Loan Supplement; and
(b) the representations and warranties in Section 5 must be true
on the date of the Loan Supplement and on the effective date of each Credit
Extension and no Event of Default may have occurred and be continuing, or
result from the Credit Extension. Each Credit Extension is Borrowers'
representation and warranty on that date that the representations and
warranties of Section 5 remain true.
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4 CREATION OF SECURITY INTEREST
4.1 GRANT OF SECURITY INTEREST.
Borrowers grant Bank a continuing security interest in all presently
existing and later acquired Collateral to secure all Obligations and
performance of each of Borrowers' duties under the Loan Documents. Any
security interest will be a first priority security interest in the
Collateral. Bank upon the occurrence of any Event of Default, may place a
"hold" on any deposit account of any Borrower maintained with Bank. If this
Agreement is terminated, Bank's lien and security interest in the Collateral
will continue until Borrowers fully satisfy their Obligations.
5 REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants as follows:
5.1 DUE ORGANIZATION AND AUTHORIZATION.
Each Borrower is duly existing and in good standing in its state of
incorporation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership
of property requires that it be qualified, except where the failure to do so
could not reasonably be expected to cause a Material Adverse Change. Each
Borrower's exact legal name is as set forth on the signature pages of this
Agreement. The execution, delivery and performance of the Loan Documents have
been duly authorized, and do not conflict with Borrower's formation documents,
nor constitute an event of default under any material agreement by which
Borrower is bound. Each Borrower is not in default under any agreement to
which it is a party, or by which it is bound, in which the default could
reasonably be expected to cause a Material Adverse Change.
5.2 COLLATERAL.
Each Borrower has good title to the Collateral, free of Liens.
5.3 LITIGATION.
There are no actions or proceedings pending or, to the knowledge of
each Borrower's Responsible Officers, threatened by or against any Borrower or
any Subsidiary in which a likely adverse decision could reasonably be expected
to cause a Material Adverse Change.
5.4 NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS.
All consolidated financial statements for the Company and its
Subsidiaries, delivered to Bank fairly present in all material respects the
consolidated financial condition and the consolidated results of operations of
the Company and its Subsidiaries. There has not been any material
deterioration in the consolidated financial condition of the Company and its
Subsidiaries since the date of the most recent consolidated financial
statements submitted to Bank.
5.5 SOLVENCY.
The fair salable value of Borrowers' assets (including goodwill minus
disposition costs) exceeds the fair value of their liabilities; no Borrower is
left with unreasonably small capital after the transactions in this Agreement
or any of the Loan Documents; and each Borrower is able to pay its debts
(including trade debts) as they mature.
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5.6 REGULATORY COMPLIANCE.
No Borrower is an "investment company" or a company "controlled" by
an "investment company" under the Investment Company Act. No Borrower is
engaged as one of its important activities in extending credit for margin
stock (under Regulations T and U of the Federal Reserve Board of Governors).
Borrower has complied in all material respects with the Federal Fair Labor
Standards Act. No Borrower has violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse
Change. None of any Borrowers' or any Subsidiary's properties or assets has
been used by any Borrower or any Subsidiary or, to the best of any Borrower's
knowledge, by previous Persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally. Each Borrower and
each Subsidiary has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes, except those being contested in
good faith with adequate reserves under GAAP. Each Borrower and each
Subsidiary has obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently
conducted, except where the failure to do so could not reasonably be expected
to cause a Material Adverse Change.
5.7 OMITTED.
5.8 DESIGNATED SENIOR INDEBTEDNESS.
The Company represents, warrants and agrees with the Bank that the
Obligations shall at all times be deemed to be "Designated Senior
Indebtedness" under that certain Indenture dated October 20, 2000 between the
Company and State Street Bank and Trust Company as the same may from time to
time be amended, restated or otherwise modified.
5.9 FULL DISCLOSURE.
No written representation, warranty or other statement of any
Borrower in any certificate or written statement given to Bank (taken together
with all such written certificates and written statements to Bank) contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained in the certificates or statements
not misleading. It being recognized by Bank that the projections and forecasts
provided by each Borrower in good faith and based upon reasonable assumptions
are not viewed as facts and that actual results during the period or periods
covered by such projections and forecasts may differ from the projected and
forecasted results.
6 AFFIRMATIVE COVENANTS
Each Borrower will do all of the following for so long as Bank has an
obligation to make any Credit Extension, or there are outstanding Obligations:
6.1 GOVERNMENT COMPLIANCE.
Each Borrower will maintain its legal existence and good standing as
a Registered Organization in only the State of such Borrower's incorporation
as set forth in the Schedule and maintain qualification in each jurisdiction
in which the failure to so qualify would reasonably be expected to cause a
material adverse effect on such Borrower's business or operations. Each
Borrower will comply, and have each Subsidiary comply, with all laws,
ordinances and regulations to which it is subject, noncompliance with which
could have a material adverse effect on such Borrower's business or operations
or would reasonably be expected to cause a Material Adverse Change.
6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) The Company will deliver to Bank: (i) as soon as available,
but no later than fifty (50) days after the last day of each of the Company's
fiscal quarters, a company prepared quarterly financial
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statement including a consolidated balance sheet and income statement covering
Borrowers' consolidated operations during the period certified by a
Responsible Officer; (ii) as soon as available, but no later than one hundred
twenty (120) days after the last day of the Company's fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from an
independent certified public accounting firm acceptable to Bank; (iii) a
prompt report of any legal actions pending or threatened against any Borrower
or any Subsidiary that could result in damages or costs to any Borrower or any
Subsidiary in excess of $3,000,000 or which could result in a Material Adverse
Change; and (iv) budgets, sales projections, operating plans or other
financial information Bank reasonably requests. In lieu of items (a)(i) and
(a)(ii) above, Company may deliver to Bank, Company's 10-Q and 10-K along with
the unqualified opinion described above, as applicable, within the time frame
described above for delivering such financial statements.
(b) Within fifty (50) days after the last day of each of the
Company's fiscal quarters, The Company will deliver to Bank with the quarterly
financial statements a Compliance Certificate signed by a Responsible Officer
in the form of Exhibit C.
(c) Each document required to be delivered pursuant to
paragraphs (a) and (b) of this Section 6.2 shall be deemed to have been
delivered on the date on which the Company posts such document on the
Company's website on the Internet at the website address listed on the
Schedule, or when such document is posted on the Securities and Exchange
Commission's website at xxx.xxx.xxx; provided that (i) if the Bank so
requests, the Company shall deliver paper copies of all such documents to the
Bank until the Bank requests that the Company cease delivering such paper
copies and (ii) the Company shall notify the Bank by facsimile of the posting
of each such document.
6.3 LIQUIDITY.
The Borrowers shall maintain at all times unrestricted cash (and
equivalents) and investment grade marketable securities in the aggregate of
not less than One Hundred Million Dollars ($100,000,000) to be tested
quarterly.
6.4 TAXES.
Each Borrower will make, and cause each Subsidiary to make, timely
payment of all material federal, state, and local taxes or assessments (other
than taxes and assessments which Borrowers are contesting in good faith, with
adequate reserves maintained in accordance with GAAP) and will deliver to
Bank, on demand, appropriate certificates attesting to the payment.
6.5 INSURANCE.
Each Borrower will keep its business and the Collateral insured for
risks and in amounts standard for Borrower's industry, and as Bank may
reasonably request. Insurance policies will be in a form, with companies, and
in amounts that are satisfactory to Bank in Bank's reasonable discretion. At
Bank's request, Borrower will deliver certified copies of policies and
evidence of all premium payments. Proceeds payable under any policy will, at
Bank's option, be payable to Bank on account of the Obligations.
6.6 DEPOSIT ACCOUNTS.
Borrowers will at all times, maintain not less than $15,000,000 on
deposit with Bank and/or its Affiliates. Borrowers agree that in the event
that Borrowers request that any such amounts required to be maintained herein
be held in an investment or other account with any Affiliate of Bank,
Borrowers shall promptly execute and deliver an Account Control Agreement to
Bank in Bank's standard form
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6.7 LOSS, DESTRUCTION OR DAMAGE.
Each Borrower will bear the risk of the Financed Equipment being
lost, stolen, destroyed, or damaged. If during the term of this Agreement any
item of Financed Equipment is lost, stolen, destroyed, damaged beyond repair,
rendered permanently unfit for use, or seized by a governmental authority for
any reason for a period equal to at least the remainder of the term of this
Agreement (an "Event of Loss"), then in each case, Borrowers:
(a) prior to the occurrence of an Event of Default, at
Borrowers' option, will (1) pay to Bank on account of the Obligations relating
to the Financed Equipment affected by the Event of Loss all accrued interest
to the date of the prepayment, plus all outstanding principal, plus a
prepayment fee equal to (i) one and one half of one percent (1.5%) of the
amount prepaid if the prepayment occurs within the first twelve (12) months
from the date of the Equipment Advance; (ii) one percent (1%) of the amount
prepaid if the prepayment occurs after the first twelve (12) months, and prior
to the twenty fourth (24th) month from the date of the Equipment Advance; and
(iii) one half of one percent (.5%) of the amount prepaid at all times after
the first twenty four (24) months from the date of the Equipment Advance; or
(2) repair or replace any Financed Equipment subject to an Event of Loss
provided the repaired or replaced Financed Equipment is of equal or like value
to the Financed Equipment subject to an Event of Loss and provided further
that Bank has a first priority perfected security interest in such repaired or
replaced Financed Equipment.
(b) during the continuance of an Event of Default, on or before
the Payment Date after such Event of Loss for each such item of Financed
Equipment subject to such Event of Loss, Borrowers will, at Bank's option, pay
to Bank an amount equal to the sum of: (i) all accrued and unpaid Scheduled
Payments (with respect to such Equipment Advance related to the Event of Loss)
due prior to the next such Payment Date, (ii) all regularly Scheduled Payments
(including principal and interest), plus (iii) all other sums, if any, that
shall have become due and payable, including interest at the Default Rate with
respect to any past due amounts.
On the date of receipt by Bank of the amount specified above with
respect to each such item of Financed Equipment subject to an Event of Loss,
this Agreement shall terminate as to such Financed Equipment. If any proceeds
of insurance or awards received from governmental authorities are in excess of
the amount owed under this Section, Bank shall promptly remit to Borrowers the
amount in excess of the amount owed to Bank.
6.8 JOINDER OF SUBSIDIARIES.
In the event that any Subsidiary of any Borrower which is not then a
Borrower under this Loan Agreement becomes the owner of any interest in any
Financed Equipment purchased with any Equipment Advance through either the
initial purchase of such Financed Equipment from a third party or by way of
any transfer, assignment or sale of such Financed Equipment by any other
Borrower, Borrowers shall cause such Subsidiary to deliver to Bank, within
twenty (20) days of acquiring any such interest in any Financed Equipment, an
Additional Borrower Joinder Supplement in substantially the form attached
hereto as Exhibit D pursuant to which (a) it shall join as a Borrower under
each of the Loan Documents to which the Borrowers are parties, and (b)
encumber such Financed Equipment to secure the Obligations, free and clear of
all Liens.
6.9 FURTHER ASSURANCES.
Each Borrower will execute any further instruments and take further
action as Bank reasonably requests to perfect or continue Bank's security
interest in the Collateral or to effect the purposes of this Agreement.
7 NEGATIVE COVENANTS
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No Borrower will do any of the following without Bank's prior written
consent, for so long as Bank has an obligation to make Credit Extensions or
there are any outstanding Obligations:
7.1 DISPOSITIONS.
Convey, sell, lease, transfer or otherwise dispose of (collectively
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of
the Collateral (including, any Transfer to another Borrower for which Bank has
not filed a financing statement on such Borrower with respect to such
Collateral).
7.2 CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.
Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrower or reasonably
related thereto or have a material change in its senior management, unless
such senior management is replaced with an individual or individuals with
comparable experience and qualifications in Borrower's good faith business
judgment within 120 days or have a change in its ownership of greater than
thirty five percent (35%) (other than by the sale of Borrower's equity
securities in a public offering or to venture capital investors so long as
Borrower identifies and advises Bank of the venture capital investors prior to
the closing of the investment) except where (i) no Event of Default has
occurred and is continuing or would result from such action during the term of
this Agreement and (ii) Borrowers remain in compliance with Section 6.3 hereof
following any such transaction. A Subsidiary may merge or consolidate into
another Subsidiary or into any Borrower. Borrower will not, without at least
thirty (30) days prior written notice, change its state of formation, or
change the locations where the Collateral is located as set forth in the
Schedule or as previously disclosed to Bank.
7.3 MERGERS OR ACQUISITIONS.
Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except where (i) no Event of Default has occurred
and is continuing or would result from such action during the term of this
Agreement and (ii) Borrowers remain in compliance with Section 6.3 hereof
following any such transaction. A Subsidiary may merge or consolidate into
another Subsidiary or into any Borrower.
7.4 INDEBTEDNESS.
Create, incur, assume, or be liable for any Indebtedness, or permit
any Subsidiary to do so, other than Permitted Indebtedness.
7.5 ENCUMBRANCE.
Create, incur, or allow any Lien on any Collateral, or permit any of
its Subsidiaries to do so, or permit any Collateral not to be subject to the
first priority security interest granted here.
7.6 DISTRIBUTIONS; INVESTMENTS.
Directly or indirectly acquire or own any Person, or make any
Investment in any Person, other than Permitted Investments, or permit any of
its Subsidiaries to do so or pay any dividends or make any distribution or
payment or redeem, retire or purchase any capital stock, except where (i) no
Event of Default has occurred and is continuing or would result from such
action during the term of this Agreement and (ii) and Borrowers remain in
compliance with Section 6.3 hereof following any such transaction.
9
7.7 TRANSACTIONS WITH AFFILIATES.
Directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of any Borrower except for transactions that
are in the ordinary course of such Borrower's business, upon fair and
reasonable terms that are no less favorable to such Borrower than would be
obtained in an arm's length transaction with a nonaffiliated Person.
7.8 SUBORDINATED DEBT.
Amend any provision in any document relating to the Subordinated Debt
without Bank's prior written consent.
7.9 COMPLIANCE.
Become an "investment company" or a company controlled by an
"investment company," under the Investment Company Act of 1940 or undertake as
one of its important activities extending credit to purchase or carry margin
stock, or use the proceeds of any Credit Extension for that purpose; fail to
meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, if
the violation could reasonably be expected to have a material adverse effect
on any Borrower's business or operations or would reasonably be expected to
cause a Material Adverse Change, or permit any of its Subsidiaries to do so.
8 EVENTS OF DEFAULT
Any one of the following is an Event of Default:
8.1 PAYMENT DEFAULT.
If Borrowers fail to pay any of the Obligations when due and such
failure shall continue for three (3) Business Days. During the additional
time, the failure to cure the default is not an Event of Default (but no
Credit Extensions will be made during the cure period);
8.2 COVENANT DEFAULT.
If any Borrower does not perform any obligation in Section 6 or
violates any covenant in Section 7; or if any Borrower does not perform or
observe any other material term, condition or covenant in this Agreement, any
Loan Documents, or in any agreement between any Borrower and Bank; and in each
such case, as to any default under a term, condition or covenant that can be
cured, has not cured the default within fifteen (15) days from the earlier of
(i) notice from Bank of such default to a Responsible Officer of the Company
or (ii) actual knowledge of such default by an officer of any Borrower,
provided, however, if the default cannot be cured within fifteen (15) days or
cannot be cured after the defaulting Borrower's attempts within such fifteen
(15) day period, and the default may be cured within a reasonable time, then
the defaulting Borrower has an additional period (of not more than thirty (30)
days) to attempt to cure the default. During the additional time, the failure
to cure the default is not an Event of Default (but no Credit Extensions will
be made during the cure period);
8.3 MATERIAL ADVERSE CHANGE.
If there (i) occurs a material adverse change in the business,
operations, or condition (financial or otherwise) of the Borrowers and their
Subsidiaries taken as a whole, or (ii) is a material impairment of the
prospect of repayment of any portion of the Obligations or (iii) is a material
impairment of the value or priority of Bank's security interests in the
Collateral.
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8.4 ATTACHMENT.
If any material portion of any Borrower's assets is attached, seized,
levied on, or comes into possession of a trustee or receiver and the
attachment, seizure or levy is not removed in ten (10) days, or if any
Borrower is enjoined, restrained, or prevented by court order from conducting
a material part of its business or if a judgment or other claim becomes a Lien
on a material portion of any Borrower's assets, or if a notice of lien, levy,
or assessment is filed against any of any Borrower's assets by any government
agency and not paid within ten (10) days after such Borrower receives notice.
These are not Events of Default if stayed or if a bond is posted pending
contest by such Borrower (but no Credit Extensions will be made during the
cure period);
8.5 INSOLVENCY.
If any Borrower becomes insolvent or if any Borrower begins an
Insolvency Proceeding or an Insolvency Proceeding is begun against any
Borrower and not dismissed or stayed within forty-five (45) days (but no
Credit Extensions will be made before any Insolvency Proceeding is dismissed);
8.6 OTHER AGREEMENTS.
If there is a default in any agreement between any Borrower and a
third party that gives the third party the right to accelerate any
Indebtedness exceeding $3,000,000 or that could cause a Material Adverse
Change;
8.7 JUDGMENTS.
If a money judgment(s) in the aggregate of at least $3,000,000 is
rendered against any Borrower and is unsatisfied and unstayed for 10 days (but
no Credit Extensions will be made before the judgment is stayed or satisfied);
8.8 MISREPRESENTATIONS.
If any Borrower or any Person acting for any Borrower makes any
material misrepresentation or material misstatement now or later in any
warranty or representation in this Agreement or in any writing delivered to
Bank or to induce Bank to enter this Agreement or any Loan Document; or
8.9 SUBSIDIARIES.
Any circumstance described in Sections 8.3, 8.4, 8.5 or 8.7 occurs to
any Material Subsidiary of any Borrower.
9 BANK'S RIGHTS AND REMEDIES
9.1 RIGHTS AND REMEDIES.
When an Event of Default occurs and continues Bank may, without
notice or demand, do any or all of the following:
(a) Declare all Obligations immediately due and payable (but if
an Event of Default described in Section 8.5 occurs all Obligations are
immediately due and payable without any action by Bank);
(b) Stop advancing money or extending credit for Borrowers'
benefit under this Agreement or under any other agreement between any Borrower
and Bank;
(c) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrowers will
assemble the Collateral if Bank requires and make it
11
available as Bank designates. Bank may enter premises where the Collateral is
located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or
superior to its security interest and pay all expenses incurred. Each Borrower
grants Bank a license to enter and occupy any of its premises, without charge,
to exercise any of Bank's rights or remedies;
(d) Apply to the Obligations any (i) balances and deposits of
any Borrower, Bank or its Affiliate it holds, or (ii) any amount held by Bank
owing to or for the credit or the account of any Borrower;
(e) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell the Collateral;
(f) Exercise a right of set off or bank lien as to any monies of
any Borrower deposited in any accounts of any nature maintained by any
Borrower with Bank or any Affiliate of Bank, without advance notice,
regardless of whether such accounts are general or special. Each Borrower,
Bank and any Affiliate of Bank at which any such accounts are maintained agree
that such Affiliate shall comply with any instructions given by Bank with
respect to the disposition of funds held in any such account without further
consent of any Borrower; and
(g) Dispose of the Collateral according to the Code.
9.2 POWER OF ATTORNEY.
Effective only when an Event of Default occurs and continues, each
Borrower irrevocably appoints Bank as its lawful attorney to: (i) endorse such
Borrower's name on any checks or other forms of payment or security; (ii)
make, settle, and adjust all claims under such Borrower's insurance policies;
and (iii) transfer the Collateral into the name of Bank or a third party as
the Code permits. Bank may exercise the power of attorney to sign each
Borrower's name on any documents necessary to perfect or continue the
perfection of any security interest regardless of whether an Event of Default
has occurred if Borrower has refused to do so upon the Bank's request. Bank's
appointment as each Borrower's attorney in fact, and all of Bank's rights and
powers, coupled with an interest, are irrevocable until all Obligations have
been fully repaid and performed and Bank's obligation to provide Credit
Extensions terminates.
9.3 OMITTED.
9.4 BANK EXPENSES.
If any Borrower fails to pay any amount or furnish any required proof
of payment to third persons, Bank may make all or part of the payment or
obtain insurance policies required in Section 6.5, and take any action under
the policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses
and immediately due and payable, bearing interest at the then applicable rate
and secured by the Collateral. No payments by Bank are deemed an agreement to
make similar payments in the future or Bank's waiver of any Event of Default.
9.5 BANK'S LIABILITY FOR COLLATERAL.
If Bank complies with reasonable banking practices and the Code, it
is not liable for: (a) the safekeeping of the Collateral; (b) any loss or
damage to the Collateral; (c) any diminution in the value of the Collateral;
or (d) any act or default of any carrier, warehouseman, bailee, or other
person. Borrowers bear all risk of loss, damage or destruction of the
Collateral.
9.6 REMEDIES CUMULATIVE.
Bank's rights and remedies under this Agreement, the Loan Documents,
and all other agreements are cumulative. Bank has all rights and remedies
provided under the Code, by law, or in
12
equity. Bank's exercise of one right or remedy is not an election, and Bank's
waiver of any Event of Default is not a continuing waiver. Bank's delay is not
a waiver, election, or acquiescence. No waiver is effective unless signed by
Bank and then is only effective for the specific instance and purpose for
which it was given.
9.7 DEMAND WAIVER.
Each Borrower waives demand, notice of default or dishonor, notice of
payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrowers are
liable.
10 NOTICES
All notices or demands by any party about this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt
requested, or by telefacsimile to the addresses set forth at the beginning of
this Agreement. A party may change its notice address by giving the other
party written notice.
11 CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER
Virginia law governs the Loan Documents without regard to principles
of conflicts of law. Each Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in the Commonwealth of Virginia
provided, however, that if for any reason the Bank can not avail itself of the
courts of the Commonwealth of Virginia, the Borrower and Bank each submit to
the jurisdiction of the State and Federal Courts in Santa Xxxxx County,
California.
EACH BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.
THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12 GENERAL PROVISIONS
12.1 SUCCESSORS AND ASSIGNS.
This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrowers may not assign this Agreement or
any rights under it without Bank's prior written consent which may be granted
or withheld in Bank's discretion. Bank has the right, without the consent of
or notice to Borrowers, to sell, transfer, negotiate, or grant participation
in all or any part of, or any interest in, Bank's obligations, rights and
benefits under this Agreement.
12.2 INDEMNIFICATION.
Each Borrower will indemnify, defend and hold harmless Bank and its
officers, employees, and agents against: (a) all obligations, demands, claims,
and liabilities asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (b) all losses or Bank
Expenses incurred, or paid by Bank from, following, or consequential to
transactions between Bank and any Borrower (including reasonable attorneys
fees and expenses), except with respect to (a) and (b) above where such
losses, obligations, demands, claims or liabilities are caused by Bank's gross
negligence or willful misconduct.
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12.3 TIME OF ESSENCE.
Time is of the essence for the performance of all obligations in this
Agreement.
12.4 SEVERABILITY OF PROVISION.
Each provision of this Agreement is severable from every other
provision in determining the enforceability of any provision.
12.5 AMENDMENTS IN WRITING, INTEGRATION.
All amendments to this Agreement must be in writing and signed by
Borrowers and Bank. This Agreement represents the entire agreement about this
subject matter, and supersedes prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement merge into this
Agreement and the Loan Documents.
12.6 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.
12.7 SURVIVAL.
All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding. The
obligations of Borrowers in Section 12.2 to indemnify Bank will survive until
all statutes of limitations for actions that may be brought against Bank have
run.
12.8 CONFIDENTIALITY.
In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank's subsidiaries or affiliates
in connection with their business with Borrowers, (ii) to prospective
transferees or purchasers of any interest in the loans (provided, however,
Bank shall use commercially reasonable efforts in obtaining such prospective
transferee or purchasers agreement of the terms of this provision), (iii) as
required by law, regulation, subpoena, or other order, (iv) as required in
connection with Bank's examination or audit and (v) as Bank considers
appropriate exercising remedies under this Agreement. Confidential information
does not include information that either: (a) is in the public domain or in
Bank's possession when disclosed to Bank, or becomes part of the public domain
after disclosure to Bank; or (b) is disclosed to Bank by a third party, if
Bank does not know that the third party is prohibited from disclosing the
information.
12.9 ATTORNEYS' FEES, COSTS AND EXPENSES.
In any action or proceeding between any Borrower and Bank arising out
of the Loan Documents, the prevailing party will be entitled to recover its
reasonable attorneys' fees and other reasonable costs and expenses incurred,
in addition to any other relief to which it may be entitled.
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13 DEFINITIONS
13.1 DEFINITIONS.
In this Agreement:
"AFFILIATE" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is
under common control with the Person, and each of that Person's senior
executive officers, directors, partners and, for any Person that is a limited
liability company, that Person's managers and members.
"BANK EXPENSES" are all audit fees and expenses and reasonable costs
and expenses (including reasonable attorneys' fees and expenses) for
preparing, negotiating, administering (except for administrative expenses
incurred in the ordinary course or where such administration does not result
in out-of-pocket expenses), defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).
"BASIC RATE" is, as of the Funding Date, the per annum rate of
interest (based on a year of 360 days) equal to the greater of (i) the sum of
(a) the U.S. Treasury note yield to maturity for a term equal to the Treasury
Note Maturity as quoted in The Wall Street Journal on the day the Loan
Supplement is prepared, plus (b) the Loan Margin, or (ii) eight and one
quarter of one percent (8.25%).
"BORROWER'S BOOKS" are all of each Borrower's books and records
including ledgers, records regarding each Borrower's assets or liabilities,
the Collateral, business operations or financial condition and all computer
programs or discs or any equipment containing the information.
"BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on
which the Bank is closed.
"CLOSING DATE" is the date of this Agreement.
"CODE" is the Uniform Commercial Code, in effect in the Commonwealth
of Virginia as of the Closing Date.
"COLLATERAL" is the property described on Exhibit A.
"COMMITTED EQUIPMENT LINE" is a Credit Extension of up to Five
Million Dollars ($5,000,000).
"COMMITMENT TERMINATION DATE" is December 31, 2002.
"CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an
obligation directly or indirectly guaranteed, endorsed, co-made, discounted or
sold with recourse by that Person, or for which that Person is directly or
indirectly liable; (ii) any obligations for undrawn letters of credit for the
account of that Person; and (iii) all obligations from any interest rate,
currency or commodity swap agreement, interest rate cap or collar agreement,
or other agreement or arrangement designated to protect a Person against
fluctuation in interest rates, currency exchange rates or commodity prices;
but "Contingent Obligation" does not include endorsements in the ordinary
course of business. The amount of a Contingent Obligation is the stated or
determined amount of the primary obligation for which the Contingent
Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may
not exceed the maximum of the obligations under the guarantee or other support
arrangement.
"CREDIT EXTENSION" is each Equipment Advance, or any other extension
of credit by Bank for any Borrower's benefit.
15
"ELIGIBLE EQUIPMENT" is general purpose computer equipment, office
equipment, test and laboratory equipment, furnishings, and, subject to the
limitations set forth below, Other Equipment that complies with all of
Borrowers' representations and warranties to Bank and which is acceptable to
Bank in all respects. Equipment financed with the proceeds of Equipment
Advances may be new or used Equipment.
"EQUIPMENT" has the meaning set forth in the Code and includes all
present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which any Borrower has any
interest.
"EQUIPMENT ADVANCE" is defined in Section 2.1.1.
"EQUIPMENT TERM NOTE" means that certain Equipment Term Note of even
date herewith in the principal amount of Five Million Dollars ($5,000,000)
from Borrowers in favor of Bank, together with all renewals, amendments,
modifications and substitutions therefor.
"ERISA" is the Employment Retirement Income Security Act of 1974, and
its regulations.
"FINANCED EQUIPMENT" is defined in the Loan Supplement.
"FUNDING DATE" is any date on which an Equipment Advance is made to
or on account of Borrowers.
"GAAP" is generally accepted accounting principles.
"INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.
"INSOLVENCY PROCEEDING" are proceedings by or against any Person
under the United States Bankruptcy Code, or any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, compositions,
extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.
"INVESTMENT" is any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.
"LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
"LOAN AMOUNT" is the aggregate amount of the Equipment Advance.
"LOAN DOCUMENTS" are, collectively, this Agreement, the Equipment
Term Note, any note, or notes or guaranties executed by any Borrower and any
other present or future agreement between any Borrower and/or for the benefit
of Bank in connection with this Agreement, all as amended, extended or
restated.
"LOAN FACTOR" is the percentage which results from amortizing the
Equipment Advance over the Repayment Period, using the Basic Rate as the
interest rate.
"LOAN MARGIN" is five hundred (500) basis points.
"LOAN SUPPLEMENT" is attached as EXHIBIT B.
16
"MATERIAL ADVERSE CHANGE" has the meaning set forth in Section 8.3.
"MATERIAL SUBSIDIARY" means any Subsidiary now or hereafter existing,
that owns assets with an aggregate book value exceeding 5% of the aggregate
book value of the consolidated total assets of the Company and its
consolidated Subsidiaries taken as a whole, in each case, as measured as of
the last day of the most recently completed fiscal quarter for which financial
statements have been delivered pursuant to Section 6.2, or (ii) has generated
revenue during the most recently completed four fiscal quarter period
exceeding 5% of the aggregate consolidated revenue generated by the Company
and its Subsidiaries during the most recently completed four fiscal quarter
period for which financial statements have been delivered pursuant to Section
6.2 .
"OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts Borrowers owe Bank now or later, including cash management services,
letters of credit and foreign exchange contracts, if any and including
interest accruing after Insolvency Proceedings begin and debts, liabilities,
or obligations of Borrowers assigned to Bank.
"ORIGINAL STATED COST" is (i), the original cost to any Borrower of
the item of new Equipment (including without limitation Other Equipment) any
and all freight, installation, tax and related charges associated with the
purchase of such Equipment or (ii) the fair market value assigned to such item
of used Equipment (including without limitation Other Equipment) by mutual
agreement of Borrowers and Bank at the time of making of the Equipment
Advance, plus any and all freight, installation, tax and related charges
associated with the purchase of such Equipment, subject to the sub-limit on
Other Equipment set forth below.
"OTHER EQUIPMENT" is leasehold improvements, intangible property such
as computer software and software licenses, equipment specifically designed or
manufactured for any Borrower, other intangible property, limited use property
and other similar property and any and all freight, installation, tax and
other related charges associated with the purchase of Financed Equipment.
Unless otherwise agreed to by Bank not more than ten percent (10%) of the
Committed Equipment Line shall consist of Other Equipment.
"PERMITTED INDEBTEDNESS" is:
(a) Borrowers' indebtedness to Bank under this Agreement or any
other Loan Document;
(b) Indebtedness existing on the Closing Date and shown on the
Schedule;
(c) Subordinated Debt;
(d) Indebtedness to trade creditors incurred in the ordinary
course of business;
(e) Indebtedness of the Company and certain of its Subsidiaries
in favor of Bank of America, N.A. in the maximum principal amount of Twenty
Million Dollars ($20,000,000) and all renewals, extensions, or replacements of
the same provided the principal amount thereof is not increased;
(f) Indebtedness under capital leases and purchase money
obligations provided such Indebtedness does not exceed Fifteen Million Dollars
($15,000,000) in the aggregate for all Borrowers;
(g) Guaranty obligations of the Company or any Subsidiary in
respect of Indebtedness otherwise permitted hereunder of the Company or any
Subsidiary; and
(h) Indebtedness not otherwise permitted under subsections (a)
through (g) above to the extent that such Indebtedness does not exceed Ten
Million Dollars ($10,000,000) in the aggregate for all Borrowers.
17
"PERMITTED INVESTMENTS" are:
(a) Investments shown on the Schedule and existing on the
Closing Date; and
(b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition, (ii) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc., and (iii) Bank's certificates
of deposit issued maturing no more than 1 year after issue.
"PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit
corporation, firm, joint stock company, estate, entity or government agency.
"PROCEEDS" has the meaning described in the Code as in effect from
time to time.
"PRIME RATE" is Bank's most recently announced "prime rate," even if
it is not Bank's lowest rate.
"REGISTERED ORGANIZATION" means an organization organized solely
under the law of a single state or the United States and as to which the state
or the United States must maintain a public record showing the organization to
have been organized.
"REPAYMENT PERIOD," as to the Equipment Advances, is thirty six (36)
months.
"RESPONSIBLE OFFICER" is each of the chief executive officer, the
president, the chief financial officer and the chief accounting officer, the
treasurer or the assistant treasurer of either Borrower.
"SCHEDULE" is any attached schedule of exceptions.
"SUBORDINATED DEBT" is indebtedness under the Notes issued pursuant
to the Indenture dated as of October 20, 2000 between the Company and State
Street Bank & Trust Company, as Trustee, and any other debt incurred by any
Borrower subordinated to Borrowers' indebtedness owed to Bank and which is
reflected in a written agreement in a manner and form acceptable to Bank and
approved by Bank in writing.
"SUBSIDIARY" is for any Person, or any other business entity of which
more than 50% of the voting stock or other equity interests is owned or
controlled, directly or indirectly, by the Person or one or more Affiliates of
the Person.
"TREASURY NOTE MATURITY" is thirty six (36) months.
[Signatures appear on the following page]
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BORROWERS:
MANUGISTICS GROUP, INC.
By: /s/ Xxxxxxxx Xxxxxx
Name:
Title: Executive Vice President and Chief Financial Officer
MANUGISTICS, INC.
By: /s/ Xxxxxxxx Xxxxxx
Name:
Title: Executive Vice President and Chief Financial Officer
BANK:
SILICON VALLEY BANK
By: /s/ Xxxxx X. Xxxxxxx
Name:
Title: Vice President
