EXPORT-IMPORT BANK OF THE UNITED STATES
WORKING CAPITAL GUARANTEE PROGRAM
BORROWER AGREEMENT
THIS BORROWER AGREEMENT (this "Agreement") is made and
entered into by the entity identified as Borrower on the signature
page hereof ("Borrower") in favor of the Export-Import Bank of the
United States ("Ex-Im Bank") and the institution identified as
Lender on the signature page hereof ("Lender").
RECITALS
Borrower has requested that Lender establish a Loan Facility
in favor of Borrower for the purposes of providing Borrower with
pre-export working capital to finance the manufacture, production
or purchase and subsequent export sale of Items.
It is a condition to the establishment of such Loan Facility
that Ex-Im Bank guarantee the payment of ninety percent (90%) of
certain credit accommodations subject to the terms and conditions
of a Master Guarantee Agreement, the Loan Authorization Agreement,
and to the extent applicable, the Delegated Authority Letter
Agreement.
Borrower is executing this Agreement for the benefit of
Lender and Ex-Im Bank in consideration for and as a condition to
Lender's establishing the Loan Facility and Ex-Im Bank's agreement
to guarantee such Loan Facility pursuant to the Master Guarantee
Agreement.
NOW, THEREFORE, Borrower hereby agrees as follows:
ARTICLE I
DEFINITIONS
1.01 Definition of Terms. As used in this Agreement, including
the Recitals to this Agreement and the Loan Authorization
Agreement, the following terms shall have the following meanings:
"Accounts Receivable" shall mean all of Borrower's now owned
or hereafter acquired (a) "accounts" (as such term is defined in
the UCC), other receivables, book debts and other forms of
obligations, whether arising out of goods sold or services rendered
or from any other transaction; (b) rights in, to and under all
purchase orders or receipts for goods or services; (c) rights to
any goods represented or purported to be represented by any of the
foregoing (including unpaid sellers' rights of rescission,
replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods); (d) moneys due or to
become due to such Borrower under all purchase orders and contracts
for the sale of goods or the performance of services or both by
Borrower (whether or not yet earned by performance on the part of
Borrower), including the proceeds of the foregoing; (e) any notes,
drafts, letters of credit, insurance proceeds or other instruments,
documents and writings evidencing or supporting the foregoing; and
(f) all collateral security and guarantees of any kind given by any
other Person with respect to any of the foregoing.
"Advance Rate" shall mean the rate specified in Section 5(C)
of the Loan Authorization Agreement for each category of
Collateral.
"Business Day" shall mean any day on which the Federal
Reserve Bank of New York is open for business.
"Buyer" shall mean a Person that has entered into one or more
Export Orders with Borrower.
"Collateral" shall mean all property and interest in property
in or upon which Lender has been granted a Lien as security for the
payment of all the Loan Facility Obligations including the
Collateral identified in Section 6 of the Loan Authorization
Agreement and all products and proceeds (cash and non-cash)
thereof.
"Commercial Letters of Credit" shall mean those letters of
credit subject to the UCP payable in Dollars and issued or caused
to be issued by Lender on behalf of Borrower under a Loan Facility
for the benefit of a supplier(s) of Borrower in connection with
Borrower's purchase of goods or services from the supplier in
support of the export of the Items.
"Country Limitation Schedule" shall mean the schedule
published from time to time by Ex-Im Bank and provided to Borrower
by Lender which sets forth on a country by country basis whether
and under what conditions Ex-Im Bank will provide coverage for the
financing of export transactions to countries listed therein.
"Credit Accommodation Amount" shall mean, the sum of (a) the
aggregate outstanding amount of Disbursements and (b) the aggregate
outstanding face amount of Letter of Credit Obligations.
"Credit Accommodations" shall mean, collectively,
Disbursements and Letter of Credit Obligations.
"Debarment Regulations" shall mean, collectively, (a) the
Governmentwide Debarment and Suspension (Nonprocurement)
regulations (Common Rule), 53 Fed. Reg. 19204 (May 26, 1988), (b)
Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the
Federal Acquisition Regulations, 48 C.F.R. 9.400-9.409 and (c) the
revised Governmentwide Debarment and Suspension (Nonprocurement)
regulations (Common Rule), 60 Fed. Reg. 33037 (June 26, 1995).
"Delegated Authority Letter Agreement" shall mean the
Delegated Authority Letter Agreement, if any, between Ex-Im Bank
and Lender.
"Disbursement" shall mean, collectively, (a) an advance of a
working capital loan from Lender to Borrower under the Loan
Facility, and (b) an advance to fund a drawing under a Letter of
Credit issued or caused to be issued by Lender for the account of
Borrower under the Loan Facility.
"Dollars" or "$" shall mean the lawful currency of the United
States.
"Effective Date" shall mean the date on which (a) the Loan
Documents are executed by Lender and Borrower or the date, if
later, on which agreements are executed by Lender and Borrower
adding the Loan Facility to an existing working capital loan
arrangement between Lender and Borrower and (b) all of the
conditions to the making of the initial Credit Accommodations under
the Loan Documents or any amendments thereto have been satisfied.
"Eligible Export-Related Accounts Receivable" shall mean an
Export-Related Account Receivable which is acceptable to Lender and
which is deemed to be eligible pursuant to the Loan Documents, but
in no event shall Eligible Export-Related Accounts Receivable
include any Account Receivable:
(a) that does not arise from the sale of Items in the
ordinary course of Borrower's business;
(b) that is not subject to a valid, perfected first
priority Lien in favor of Lender;
(c) as to which any covenant, representation or warranty
contained in the Loan Documents with respect to such Account
Receivable has been breached;
(d) that is not owned by Borrower or is subject to any
right, claim or interest of another Person other than the Lien in
favor of Lender;
(e) with respect to which an invoice has not been sent;
(f) that arises from the sale of defense articles or
defense services;
(g) that is due and payable from a Buyer located in a
country with which Ex-Im Bank is prohibited from doing business as
designated in the Country Limitation Schedule;
(h) that does not comply with the requirements of the
Country Limitation Schedule;
(i) that is due and payable more than one hundred eighty
(180) days from the date of the invoice;
(j) that is not paid within sixty (60) calendar days from
its original due date, unless it is insured through Ex-Im Bank
export credit insurance for comprehensive commercial and political
risk, or through Ex-Im Bank approved private insurers for
comparable coverage, in which case it is not paid within ninety
(90) calendar days from its due date;
(k) that arises from a sale of goods to or performance of
services for an employee of Borrower, a stockholder of Borrower, a
subsidiary of Borrower, a Person with a controlling interest in
Borrower or a Person which shares common controlling ownership with
Borrower;
(l) that is backed by a letter of credit unless the Items
covered by the subject letter of credit have been shipped;
(m) that Lender or Ex-Im Bank, in its reasonable judgment,
deems uncollectible for any reason;
(n) that is due and payable in a currency other than
Dollars, except as may be approved in writing by Ex-Im Bank;
(o) that is due and payable from a military Buyer, except
as may be approved in writing by Ex-Im Bank;
(p) that does not comply with the terms of sale set forth
in Section 7 of the Loan Authorization Agreement;
(q) that is due and payable from a Buyer who (i) applies
for, suffers, or consents to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or calls a
meeting of its creditors, (ii) admits in writing its inability, or
is generally unable, to pay its debts as they become due or ceases
operations of its present business, (iii) makes a general
assignment for the benefit of creditors, (iv) commences a voluntary
case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) is adjudicated as bankrupt or insolvent,
(vi) files a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesces to, or fails
to have dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy laws, or (viii) takes any
action for the purpose of effecting any of the foregoing;
(r) that arises from a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other
repurchase or return basis or is evidenced by chattel paper;
(s) for which the Items giving rise to such Account
Receivable have not been shipped and delivered to and accepted by
the Buyer or the services giving rise to such Account Receivable
have not been performed by Borrower and accepted by the Buyer or
the Account Receivable otherwise does not represent a final sale;
(t) that is subject to any offset, deduction, defense,
dispute, or counterclaim or the Buyer is also a creditor or
supplier of Borrower or the Account Receivable is contingent in any
respect or for any reason;
(u) for which Borrower has made any agreement with the
Buyer for any deduction therefrom, except for discounts or
allowances made in the ordinary course of business for prompt
payment, all of which discounts or allowances are reflected in the
calculation of the face value of each respective invoice related
thereto; or
(v) for which any of the Items giving rise to such Account
Receivable have been returned, rejected or repossessed.
"Eligible Export-Related Inventory" shall mean Export-Related
Inventory which is acceptable to Lender and which is deemed to be
eligible pursuant to the Loan Documents, but in no event shall
Eligible Export-Related Inventory include any Inventory:
(a) that is not subject to a valid, perfected first
priority Lien in favor of Lender;
(b) that is located at an address that has not been
disclosed to Lender in writing;
(c) that is placed by Borrower on consignment or held by
Borrower on consignment from another Person;
(d) that is in the possession of a processor or bailee, or
located on premises leased or subleased to Borrower, or on premises
subject to a mortgage in favor of a Person other than Lender,
unless such processor or bailee or mortgagee or the lessor or
sublessor of such premises, as the case may be, has executed and
delivered all documentation which Lender shall require to evidence
the subordination or other limitation or extinguishment of such
Person's rights with respect to such Inventory and Lender's right
to gain access thereto;
(e) that is produced in violation of the Fair Labor
Standards Act or subject to the "hot goods" provisions contained in
29 US.C. Section 215 or any successor statute or section;
(f) as to which any covenant, representation or warranty
with respect to such Inventory contained in the Loan Documents has
been breached;
(g) that is not located in the United States;
(h) that is demonstration Inventory;
(i) that consists of proprietary software (i.e. software
designed solely for Borrower's internal use and not intended for
resale);
(j) that is damaged, obsolete, returned, defective,
recalled or unfit for further processing;
(k) that has been previously exported from the United
States;
(l) that constitutes defense articles or defense services;
(m) that is to be incorporated into Items destined for
shipment to a country as to which Ex-Im Bank is prohibited from
doing business as designated in the Country Limitation Schedule;
(n) that is to be incorporated into Items destined for
shipment to a Buyer located in a country in which Ex-Im Bank
coverage is not available for commercial reasons as designated in
the Country Limitation Schedule, unless and only to the extent that
such Items are to be sold to such country on terms of a letter of
credit confirmed by a bank acceptable to Ex-Im Bank; or
(o) that is to be incorporated into Items whose sale would
result in an Account Receivable which would not be an Eligible
Export-Related Account Receivable.
"Eligible Person" shall mean a sole proprietorship,
partnership, limited liability partnership, corporation or limited
liability company which (a) is domiciled, organized, or formed, as
the case may be, in the United States; (b) is in good standing in
the state of its formation or otherwise authorized to conduct
business in the United States; (c) is not currently suspended or
debarred from doing business with the United States government or
any instrumentality, division, agency or department thereof; (d)
exports or plans to export Items; (e) operates and has operated as
a going concern for at least one (1) year; (f) has a positive
tangible net worth determined in accordance with GAAP; and (g) has
revenue generating operations relating to its core business
activities for at least one year.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974 and the rules and regulations promulgated thereunder.
"Export Order" shall mean a written export order or contract
for the purchase by the Buyer from Borrower of any of the Items.
"Export-Related Accounts Receivable" shall mean those
Accounts Receivable arising from the sale of Items which are due
and payable to Borrower in the United States.
"Export-Related Accounts Receivable Value" shall mean, at the
date of determination thereof, the aggregate face amount of
Eligible Export-Related Accounts Receivable less taxes, discounts,
credits, allowances and Retainages, except to the extent otherwise
permitted by Ex-Im Bank in writing.
"Export-Related Borrowing Base" shall mean, at the date of
determination thereof, the sum of (a) the Export-Related Inventory
Value multiplied by the Advance Rate applicable to Export-Related
Inventory set forth in Section 5(C)(1) of the Loan Authorization
Agreement, (b) the Export-Related Accounts Receivable Value
multiplied by the Advance Rate applicable to Export-Related
Accounts Receivable set forth in Section 5(C)(2) of the Loan
Authorization Agreement, (c) if permitted by Ex-Im Bank in writing,
the Retainage Value multiplied by the Retainage Advance Rate set
forth in Section 5(C)(3) of the Loan Authorization Agreement and
(d) the Other Assets Value multiplied by the Advance Rate
applicable to Other Assets set forth in Section 5(C)(4) of the Loan
Authorization Agreement.
"Export-Related Borrowing Base Certificate" shall mean a
certificate in the form provided or approved by Lender, executed by
Borrower and delivered to Lender pursuant to the Loan Documents
detailing the Export-Related Borrowing Base supporting the Credit
Accommodations which reflects, to the extent included in the
Export-Related Borrowing Base, Export-Related Accounts Receivable,
Eligible Export-Related Accounts Receivable, Export-Related
Inventory and Eligible Export-Related Inventory balances that have
been reconciled with Borrower's general ledger, Accounts Receivable
aging report and Inventory schedule.
"Export-Related General Intangibles" shall mean those General
Intangibles necessary or desirable to or for the disposition of
Export-Related Inventory.
"Export-Related Inventory" shall mean the Inventory of
Borrower located in the United States that has been purchased,
manufactured or otherwise acquired by Borrower for resale pursuant
to Export Orders.
"Export-Related Inventory Value" shall mean, at the date of
determination thereof, the lower of cost or market value of
Eligible Export-Related Inventory of Borrower as determined in
accordance with GAAP.
"Final Disbursement Date" shall mean, unless subject to an
extension of such date agreed to by Ex-Im Bank, the last date on
which Lender may make a Disbursement set forth in Section 10 of the
Loan Authorization Agreement or, if such date is not a Business
Day, the next succeeding Business Day; provided, however, to the
extent that Lender has not received cash collateral or an indemnity
with respect to Letter of Credit Obligations outstanding on the
Final Disbursement Date, the Final Disbursement Date with respect
to an advance to fund a drawing under a Letter of Credit shall be
no later than thirty (30) Business Days after the expiry date of
the Letter of Credit related thereto.
"GAAP" shall mean the generally accepted accounting
principles issued by the American Institute of Certified Public
Accountants as in effect from time to time.
"General Intangibles" shall mean all intellectual property
and other "general intangibles" (as such term is defined in the
UCC) necessary or desirable to or for the disposition of Inventory.
"Guarantor" shall mean each Person, if any, identified in
Section 3 of the Loan Authorization Agreement who shall guarantee
(jointly and severally if more than one) the payment and
performance of all or a portion of the Loan Facility Obligations.
"Guaranty Agreement" shall mean a valid and enforceable
agreement of guaranty executed by each Guarantor in favor of
Lender.
"Inventory" shall mean all "inventory" (as such term is
defined in the UCC), now or hereafter owned or acquired by
Borrower, wherever located, including all inventory, merchandise,
goods and other personal property which are held by or on behalf of
Borrower for sale or lease or are furnished or are to be furnished
under a contract of service or which constitute raw materials, work
in process or materials used or consumed or to be used or consumed
in Borrower's business or in the processing, production, packaging,
promotion, delivery or shipping of the same, including other
supplies.
"ISP" shall mean the International Standby Practices-ISP98,
International Chamber of Commerce Publication No. 590 and any
amendments and revisions thereof.
"Issuing Bank" shall mean the bank that issues a Letter of
Credit, which bank is Lender itself or a bank that Lender has
caused to issue a Letter of Credit by way of guarantee.
"Items" shall mean the finished goods or services which are
intended for export from the United States, as specified in Section
4(A) of the Loan Authorization Agreement.
"Letter of Credit" shall mean a Commercial Letter of Credit
or a Standby Letter of Credit.
"Letter of Credit Obligations" shall mean all outstanding
obligations incurred by Lender, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the
issuance or guarantee by Lender or the Issuing Bank of Letters of
Credit.
"Lien" shall mean any mortgage, security deed or deed of
trust, pledge, hypothecation, assignment, deposit arrangement,
lien, charge, claim, security interest, security title, easement or
encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the UCC or
comparable law of any jurisdiction) by which property is encumbered
or otherwise charged.
"Loan Agreement" shall mean a valid and enforceable agreement
between Lender and Borrower setting forth the terms and conditions
of the Loan Facility.
"Loan Authorization Agreement" shall mean the Loan
Authorization Agreement entered into between Lender and Ex-Im Bank
or the Loan Authorization Notice setting forth certain terms and
conditions of the Loan Facility, a copy of which is attached hereto
as Annex A.
"Loan Authorization Notice" shall mean the Loan Authorization
Notice executed by Lender and delivered to Ex-Im Bank in accordance
with the Delegated Authority Letter Agreement setting forth the
terms and conditions of each Loan Facility.
"Loan Documents" shall mean the Loan Authorization Agreement,
the Loan Agreement, this Agreement, each promissory note (if
applicable), each Guaranty Agreement, and all other instruments,
agreements and documents now or hereafter executed by Borrower or
any Guarantor evidencing, securing, guaranteeing or otherwise
relating to the Loan Facility or any Credit Accommodations made
thereunder.
"Loan Facility" shall mean the Revolving Loan Facility, the
Transaction Specific Loan Facility or the Transaction Specific
Revolving Loan Facility established by Lender in favor of Borrower
under the Loan Documents.
"Loan Facility Obligations" shall mean all loans, advances,
debts, expenses, fees, liabilities, and obligations for the
performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required
or contingent, or amounts are liquidated or determinable) owing by
Borrower to Lender, of any kind or nature, present or future,
arising in connection with the Loan Facility.
"Loan Facility Term" shall mean the number of months from the
Effective Date to the Final Disbursement Date as originally set
forth in the Loan Authorization Agreement.
"Master Guarantee Agreement" shall mean the Master Guarantee
Agreement between Ex-Im Bank and Lender, as amended, modified,
supplemented and restated from time to time.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, assets, operations, prospects or
financial or other condition of Borrower or any Guarantor, (b)
Borrower's ability to pay or perform the Loan Facility Obligations
in accordance with the terms thereof, (c) the Collateral or
Lender's Liens on the Collateral or the priority of such Lien or
(d) Lender's rights and remedies under the Loan Documents.
"Maximum Amount" shall mean the maximum principal balance of
Credit Accommodations that may be outstanding at any time under the
Loan Facility specified in Section 5(A) of the Loan Authorization
Agreement.
"Other Assets" shall mean the Collateral, if any, described
in Section 5(C)(4) of the Loan Authorization Agreement.
"Other Assets Value" shall mean, at the date of determination
thereof, the value of the Other Assets as determined in accordance
with GAAP.
"Permitted Liens" shall mean (a) Liens for taxes, assessments
or other governmental charges or levies not delinquent, or, being
contested in good faith and by appropriate proceedings and with
respect to which proper reserves have been taken by Borrower;
provided, that, the Lien shall have no effect on the priority of
the Liens in favor of Lender or the value of the assets in which
Lender has such a Lien and a stay of enforcement of any such Lien
shall be in effect; (b) deposits or pledges securing obligations
under worker's compensation, unemployment insurance, social
security or public liability laws or similar legislation; (c)
deposits or pledges securing bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature
arising in the ordinary course of Borrower's business; (d) judgment
Liens that have been stayed or bonded; (e) mechanics', workers',
materialmen's or other like Liens arising in the ordinary course of
Borrower's business with respect to obligations which are not due;
(f) Liens placed upon fixed assets hereafter acquired to secure a
portion of the purchase price thereof, provided, that, any such
Lien shall not encumber any other property of Borrower; (g)
security interests being terminated concurrently with the execution
of the Loan Documents; (h) Liens in favor of Lender securing the
Loan Facility Obligations; and (i) Liens disclosed in Section 6(D)
of the Loan Authorization Agreement.
"Person" shall mean any individual, sole proprietorship,
partnership, limited liability partnership, joint venture, trust,
unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, entity
or government (whether national, federal, provincial, state,
county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof), and
shall include such Person's successors and assigns.
"Principals" shall mean any officer, director, owner,
partner, key employee, or other Person with primary management or
supervisory responsibilities with respect to Borrower or any other
Person (whether or not an employee) who has critical influence on
or substantive control over the transactions covered by this
Agreement.
"Retainage" shall mean that portion of the purchase price of
an Export Order that a Buyer is not obligated to pay until the end
of a specified period of time following the satisfactory
performance under such Export Order.
"Retainage Accounts Receivable" shall mean those portions of
Eligible Export-Related Accounts Receivable arising out of a
Retainage.
"Retainage Advance Rate" shall mean the percentage rate
specified in Section 5(C)(3) of the Loan Authorization Agreement as
the Advance Rate for the Retainage Accounts Receivable of Borrower.
"Retainage Value" shall mean, at the date of determination
thereof, the aggregate face amount of Retainage Accounts
Receivable, less taxes, discounts, credits and allowances, except
to the extent otherwise permitted by Ex-Im Bank in writing.
"Revolving Loan Facility" shall mean the credit facility or
portion thereof established by Lender in favor of Borrower for the
purpose of providing pre-export working capital in the form of
loans and/or Letters of Credit to finance the manufacture,
production or purchase and subsequent export sale of Items pursuant
to Loan Documents under which Credit Accommodations may be made and
repaid on a continuous basis based solely on the Export-Related
Borrowing Base during the term of such credit facility.
"Special Conditions" shall mean those conditions, if any, set
forth in Section 13 of the Loan Authorization Agreement.
"Specific Export Orders" shall mean those Export Orders
specified in Section 5(D) of the Loan Authorization Agreement.
"Standby Letter of Credit" shall mean those letters of credit
subject to the ISP or UCP issued or caused to be issued by Lender
for Borrower's account that can be drawn upon by a Buyer only if
Borrower fails to perform all of its obligations with respect to an
Export Order.
"Transaction Specific Loan Facility" shall mean a credit
facility or a portion thereof established by Lender in favor of
Borrower for the purpose of providing pre-export working capital in
the form of loans and/or Letters of Credit to finance the
manufacture, production or purchase and subsequent export sale of
Items pursuant to Loan Documents under which Credit Accommodations
are made based solely on the Export-Related Borrowing Base relating
to Specific Export Orders and once such Credit Accommodations are
repaid they may not be reborrowed.
"Transaction Specific Revolving Loan Facility" shall mean a
Revolving Credit Facility established to provide financing of
Specific Export Orders.
"UCC" shall mean the Uniform Commercial Code as the same may
be in effect from time to time in the jurisdiction in which
Borrower or Collateral is located.
"UCP" shall mean the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 and any amendments and revisions
thereof.
"U.S." or "United States" shall mean the United States of
America and its territorial possessions.
"U.S. Content" shall mean with respect to any Item all the
labor, materials and services which are of U.S. origin or
manufacture, and which are incorporated into an Item in the United
States.
"Warranty" shall mean Borrower's guarantee to Buyer that the
Items will function as intended during the warranty period set
forth in the applicable Export Order.
"Warranty Letter of Credit" shall mean a Standby Letter of
Credit which is issued or caused to be issued by Lender to support
the obligations of Borrower with respect to a Warranty or a Standby
Letter of Credit which by its terms becomes a Warranty Letter of
Credit.
1.02 Rules of Construction. For purposes of this Agreement, the
following additional rules of construction shall apply, unless
specifically indicated to the contrary: (a) wherever from the
context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter; (b) the term
"or" is not exclusive; (c) the term "including" (or any form
thereof) shall not be limiting or exclusive; (d) all references to
statutes and related regulations shall include any amendments of
same and any successor statutes and regulations; (e) the words
"this Agreement", "herein", "hereof", "hereunder" or other words of
similar import refer to this Agreement as a whole including the
schedules, exhibits, and annexes hereto as the same may be amended,
modified or supplemented; (f) all references in this Agreement to
sections, schedules, exhibits, and annexes shall refer to the
corresponding sections, schedules, exhibits, and annexes of or to
this Agreement; and (g) all references to any instruments or
agreements, including references to any of the Loan Documents, or
the Delegated Authority Letter Agreement shall include any and all
modifications, amendments and supplements thereto and any and all
extensions or renewals thereof to the extent permitted under this
Agreement.
1.03 Incorporation of Recitals. The Recitals to this Agreement
are incorporated into and shall constitute a part of this
Agreement.
ARTICLE II
OBLIGATIONS OF BORROWER
Until payment in full of all Loan Facility Obligations and
termination of the Loan Documents, Borrower agrees as follows:
2.01 Use of Credit Accommodations. (a) Borrower shall use Credit
Accommodations only for the purpose of enabling Borrower to finance
the cost of manufacturing, producing, purchasing or selling the
Items. Borrower may not use any of the Credit Accommodations for
the purpose of: (i) servicing or repaying any of Borrower's pre-
existing or future indebtedness unrelated to the Loan Facility
(unless approved by Ex-Im Bank in writing); (ii) acquiring fixed
assets or capital goods for use in Borrower's business; (iii)
acquiring, equipping or renting commercial space outside of the
United States; (iv) paying the salaries of non U.S. citizens or
non-U.S. permanent residents who are located in offices outside of
the United States; or (v) in connection with a Retainage or
Warranty (unless approved by Ex-Im Bank in writing).
(b) In addition, no Credit Accommodation may be used to
finance the manufacture, purchase or sale of any of the following:
(i) Items to be sold or resold to a Buyer located in a
country as to which Ex-Im Bank is prohibited from doing business as
designated in the Country Limitation Schedule;
(ii) that part of the cost of the Items which is not
U.S. Content unless such part is not greater than fifty percent
(50%) of the cost of the Items and is incorporated into the Items
in the United States;
(iii) defense articles or defense services; or
(iv) without Ex-Im Bank's prior written consent, any
Items to be used in the construction, alteration, operation or
maintenance of nuclear power, enrichment, reprocessing, research or
heavy water production facilities.
2.02 Loan Documents and Loan Authorization Agreement. (a) Each
Loan Document and this Agreement have been duly executed and
delivered on behalf of Borrower, and each such Loan Document and
this Agreement are and will continue to be a legal and valid
obligation of Borrower, enforceable against it in accordance with
its terms.
(b) Borrower shall comply with all of the terms and
conditions of the Loan Documents, this Agreement and the Loan
Authorization Agreement.
2.03 Export-Related Borrowing Base Certificates and Export Orders.
In order to receive Credit Accommodations under the Loan Facility,
Borrower shall have delivered to Lender an Export-Related Borrowing
Base Certificate as frequently as required by Lender but at least
within the past thirty (30) calendar days and a copy of the Export
Order(s) (or, for Revolving Loan Facilities, if permitted by
Lender, a written summary of the Export Orders) against which
Borrower is requesting Credit Accommodations. If Lender permits
summaries of Export Orders, Borrower shall also deliver promptly to
Lender copies of any Export Orders requested by Lender. In
addition, so long as there are any Credit Accommodations
outstanding under the Loan Facility, Borrower shall deliver to
Lender at least once each month no later than the twentieth (20th)
day of such month or more frequently as required by the Loan
Documents, an Export-Related Borrowing Base Certificate.
2.04 Exclusions from the Export-Related Borrowing Base. In
determining the Export-Related Borrowing Base, Borrower shall
exclude therefrom Inventory which is not Eligible Export-Related
Inventory and Accounts Receivable which are not Eligible Export-
Related Accounts Receivable. Borrower shall promptly, but in any
event within five (5) Business Days, notify Lender (a) if any then
existing Export-Related Inventory no longer constitutes Eligible
Export-Related Inventory or (b) of any event or circumstance which
to Borrower's knowledge would cause Lender to consider any then
existing Export-Related Accounts Receivable as no longer
constituting an Eligible Export-Related Accounts Receivable.
2.05 Financial Statements. Borrower shall deliver to Lender the
financial statements required to be delivered by Borrower in
accordance with Section 11 of the Loan Authorization Agreement.
2.06 Schedules, Reports and Other Statements. Borrower shall
submit to Lender in writing each month (a) an Inventory schedule
for the preceding month and (b) an Accounts Receivable aging report
for the preceding month detailing the terms of the amounts due from
each Buyer. Borrower shall also furnish to Lender promptly upon
request such information, reports, contracts, invoices and other
data concerning the Collateral as Lender may from time to time
specify.
2.07 Additional Security or Payment. (a) Borrower shall at all
times ensure that the Export-Related Borrowing Base equals or
exceeds the Credit Accommodation Amount. If informed by Lender or
if Borrower otherwise has actual knowledge that the Export-Related
Borrowing Base is at any time less than the Credit Accommodation
Amount, Borrower shall, within five (5) Business Days, either (i)
furnish additional Collateral to Lender, in form and amount
satisfactory to Lender and Ex-Im Bank or (ii) pay to Lender an
amount equal to the difference between the Credit Accommodation
Amount and the Export-Related Borrowing Base.
(b) For purposes of this Agreement, in determining the
Export-Related Borrowing Base there shall be deducted from the
Export-Related Borrowing Base (i) an amount equal to twenty-five
percent (25%) of the outstanding face amount of Commercial Letters
of Credit and Standby Letters of Credit and (ii) one hundred
percent (100%) of the face amount of Warranty Letters of Credit
less the amount of cash collateral held by Lender to secure
Warranty Letters of Credit.
(c) Unless otherwise approved in writing by Ex-Im Bank, for
Revolving Loan Facilities (other than Transaction Specific
Revolving Loan Facilities), Borrower shall at all times ensure that
the outstanding principal balance of the Credit Accommodations that
is supported by Export-Related Inventory does not exceed sixty
percent (60%) of the sum of the total outstanding principal balance
of the Disbursements and the undrawn face amount of all outstanding
Commercial Letters of Credit. If informed by Lender or if Borrower
otherwise has actual knowledge that the outstanding principal
balance of the Credit Accommodations that is supported by Inventory
exceeds sixty percent (60%) of the sum of the total outstanding
principal balance of the Disbursements and the undrawn face amount
of all outstanding Commercial Letters of Credit, Borrower shall,
within five (5) Business Days, either (i) furnish additional non-
Inventory Collateral to Lender, in form and amount satisfactory to
Lender and Ex-Im Bank, or (ii) pay down the applicable portion of
the Credit Accommodations so that the above described ratio is not
exceeded.
2.08 Continued Security Interest. Borrower shall not change (a)
its name or identity in any manner, (b) the location of its
principal place of business, (c) the location of any of the
Collateral or (d) the location of any of the books or records
related to the Collateral, in each instance without giving thirty
(30) days prior written notice thereof to Lender and taking all
actions deemed necessary or appropriate by Lender to continuously
protect and perfect Lender's Liens upon the Collateral.
2.09 Inspection of Collateral. Borrower shall permit the
representatives of Lender and Ex-Im Bank to make at any time during
normal business hours inspections of the Collateral and of
Borrower's facilities, activities, and books and records, and shall
cause its officers and employees to give full cooperation and
assistance in connection therewith.
2.10 General Intangibles. Borrower represents and warrants that
it owns, or is licensed to use, all General Intangibles necessary
to conduct its business as currently conducted except where the
failure of Borrower to own or license such General Intangibles
could not reasonably be expected to have a Material Adverse Effect.
2.11 Notice of Certain Events. Borrower shall promptly, but in
any event within five (5) Business Days, notify Lender in writing
of the occurrence of any of the following:
(a) Borrower or any Guarantor (i) applies for, consents to or
suffers the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar fiduciary of
itself or of all or a substantial part of its property or calls a
meeting of its creditors, (ii) admits in writing its inability, or
is generally unable, to pay its debts as they become due or ceases
operations of its present business, (iii) makes a general
assignment for the benefit of creditors, (iv) commences a voluntary
case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) is adjudicated as bankrupt or insolvent,
(vi) files a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesces to, or fails
to have dismissed within thirty (30) days, any petition filed
against it in any involuntary case under such bankruptcy laws, or
(vii) takes any action for the purpose of effecting any of the
foregoing;
(b) any Lien in any of the Collateral, granted or intended by
the Loan Documents to be granted to Lender, ceases to be a valid,
enforceable, perfected, first priority Lien (or a lesser priority
if expressly permitted pursuant to Section 6 of the Loan
Authorization Agreement) subject only to Permitted Liens;
(c) the issuance of any levy, assessment, attachment, seizure
or Lien, other than a Permitted Lien, against any of the Collateral
which is not stayed or lifted within thirty (30) calendar days;
(d) any proceeding is commenced by or against Borrower or any
Guarantor for the liquidation of its assets or dissolution;
(e) any litigation is filed against Borrower or any Guarantor
which has had or could reasonably be expected to have a Material
Adverse Effect and such litigation is not withdrawn or dismissed
within thirty (30) calendar days of the filing thereof;
(f) any default or event of default under the Loan Documents;
(g) any failure to comply with any terms of the Loan
Authorization Agreement;
(h) any material provision of any Loan Document or this
Agreement for any reason ceases to be valid, binding and
enforceable in accordance with its terms;
(i) any event which has had or could reasonably be expected
to have a Material Adverse Effect; or
(j) the Credit Accommodation Amount exceeds the applicable
Export-Related Borrowing Base.
2.12 Insurance. Borrower will at all times carry property,
liability and other insurance, with insurers acceptable to Lender,
in such form and amounts, and with such deductibles and other
provisions, as Lender shall require, and Borrower will provide
evidence of such insurance to Lender, so that Lender is satisfied
that such insurance is, at all times, in full force and effect.
Each property insurance policy shall name Lender as loss payee and
shall contain a lender's loss payable endorsement in form
acceptable to Lender and each liability insurance policy shall name
Lender as an additional insured. All policies of insurance shall
provide that they may not be cancelled or changed without at least
ten (10) days' prior written notice to Lender and shall otherwise
be in form and substance satisfactory to Lender. Borrower will
promptly deliver to Lender copies of all reports made to insurance
companies.
2.13 Taxes. Borrower has timely filed all tax returns and reports
required by applicable law, has timely paid all applicable taxes,
assessments, deposits and contributions owing by Borrower and will
timely pay all such items in the future as they became due and
payable. Borrower may, however, defer payment of any contested
taxes; provided, that Borrower (a) in good faith contests
Borrower's obligation to pay such taxes by appropriate proceedings
promptly and diligently instituted and conducted; (b) notifies
Lender in writing of the commencement of, and any material
development in, the proceedings; (c) posts bonds or takes any other
steps required to keep the contested taxes from becoming a Lien
upon any of the Collateral; and (d) maintains adequate reserves
therefor in conformity with GAAP.
2.14 Compliance with Laws. Borrower represents and warrants that
it has complied in all material respects with all provisions of all
applicable laws and regulations, including those relating to
Borrower's ownership of real or personal property, the conduct and
licensing of Borrower's business, the payment and withholding of
taxes, ERISA and other employee matters, safety and environmental
matters.
2.15 Negative Covenants. Without the prior written consent of Ex-
Im Bank and Lender, Borrower shall not (a) merge, consolidate or
otherwise combine with any other Person; (b) acquire all or
substantially all of the assets or capital stock of any other
Person; (c) sell, lease, transfer, convey, assign or otherwise
dispose of any of its assets, except for the sale of Inventory in
the ordinary course of business and the disposition of obsolete
equipment in the ordinary course of business; (d) create any Lien
on the Collateral except for Permitted Liens; (e) make any material
changes in its organizational structure or identity; or (f) enter
into any agreement to do any of the foregoing.
2.16 Reborrowings and Repayment Terms. (a) If the Loan Facility
is a Revolving Loan Facility, provided that Borrower is not in
default under any of the Loan Documents, Borrower may borrow, repay
and reborrow amounts under the Loan Facility until the close of
business on the Final Disbursement Date. Unless the Revolving Loan
Facility is renewed or extended by Lender with the consent of Ex-Im
Bank, Borrower shall pay in full the outstanding Loan Facility
Obligations and all accrued and unpaid interest thereon no later
than the first Business Day after the Final Disbursement Date.
(b) If the Loan Facility is a Transaction Specific Loan
Facility, Borrower shall, within two (2) Business Days of the
receipt thereof, pay to Lender (for application against the
outstanding Loan Facility Obligations and accrued and unpaid
interest thereon) all checks, drafts, cash and other remittances it
may receive in payment or on account of the Export-Related Accounts
Receivable or any other Collateral, in precisely the form received
(except for the endorsement of Borrower where necessary). Pending
such deposit, Borrower shall hold such amounts in trust for Lender
separate and apart and shall not commingle any such items of
payment with any of its other funds or property.
2.17 Cross Default. Borrower shall be deemed in default under the
Loan Facility if Borrower fails to pay when due any amount payable
to Lender under any loan or other credit accommodations to Borrower
whether or not guaranteed by Ex-Im Bank.
2.18 Munitions List. If any of the Items are articles, services,
or related technical data that are listed on the United States
Munitions List (part 121 of title 22 of the Code of Federal
Regulations), Borrower shall send a written notice promptly, but in
any event within five (5) Business Days, of Borrower learning
thereof to Lender describing the Items(s) and the corresponding
invoice amount.
2.19 Suspension and Debarment, etc. On the date of this Agreement
neither Borrower nor its Principals are (a) debarred, suspended,
proposed for debarment with a final determination still pending,
declared ineligible or voluntarily excluded (as such terms are
defined under any of the Debarment Regulations referred to below)
from participating in procurement or nonprocurement transactions
with any United States federal government department or agency
pursuant to any of the Debarment Regulations or (b) indicted,
convicted or had a civil judgment rendered against Borrower or any
of its Principals for any of the offenses listed in any of the
Debarment Regulations. Unless authorized by Ex-Im Bank, Borrower
will not knowingly enter into any transactions in connection with
the Items with any person who is debarred, suspended, declared
ineligible or voluntarily excluded from participation in
procurement or nonprocurement transactions with any United States
federal government department or agency pursuant to any of the
Debarment Regulations. Borrower will provide immediate written
notice to Lender if at any time it learns that the certification
set forth in this Section 2.19 was erroneous when made or has
become erroneous by reason of changed circumstances.
ARTICLE III
RIGHTS AND REMEDIES
3.01 Indemnification. Upon Ex-Im Bank's payment of a Claim to
Lender in connection with the Loan Facility pursuant to the Master
Guarantee Agreement, Ex-Im Bank may assume all rights and remedies
of Lender under the Loan Documents and may enforce any such rights
or remedies against Borrower, the Collateral and any Guarantors.
Borrower shall hold Ex-Im Bank and Lender harmless from and
indemnify them against any and all liabilities, damages, claims,
costs and losses incurred or suffered by either of them resulting
from (a) any materially incorrect certification or statement
knowingly made by Borrower or its agent to Ex-Im Bank or Lender in
connection with the Loan Facility, this Agreement, the Loan
Authorization Agreement or any other Loan Documents or (b) any
material breach by Borrower of the terms and conditions of this
Agreement, the Loan Authorization Agreement or any of the other
Loan Documents. Borrower also acknowledges that any statement,
certification or representation made by Borrower in connection with
the Loan Facility is subject to the penalties provided in Article
18 U.S.C. Section 1001.
3.02 Liens. Borrower agrees that any and all Liens granted by it
to Lender are also hereby granted to Ex-Im Bank to secure
Borrower's obligation, however arising, to reimburse Ex-Im Bank for
any payments made by Ex-Im Bank pursuant to the Master Guarantee
Agreement. Lender is authorized to apply the proceeds of, and
recoveries from, any property subject to such Liens to the
satisfaction of Loan Facility Obligations in accordance with the
terms of any agreement between Lender and Ex-Im Bank.
XXXXXX XX
MISCELLANEOUS
4.01 Governing Law. This Agreement and the Loan Authorization
Agreement and the obligations arising under this Agreement and the
Loan Authorization Agreement shall be governed by, and construed in
accordance with, the law of the state governing the Loan Documents.
4.02 Notification. All notices required by this Agreement shall
be given in the manner and to the parties provided for in the Loan
Agreement.
4.03 Partial Invalidity. If at any time any of the provisions of
this Agreement becomes illegal, invalid or unenforceable in any
respect under the law of any jurisdiction, neither the legality,
the validity nor the enforceability of the remaining provisions
hereof shall in any way be affected or impaired.
4.04 Waiver of Jury Trial. BORROWER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY ACTION, SUIT, PROCEEDING OR OTHER
LITIGATION BROUGHT TO RESOLVE ANY DISPUTE ARISING UNDER, ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE LOAN AUTHORIZATION
AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER AGREEMENT, DOCUMENT OR
INSTRUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OR OMMISSIONS OF LENDER,
EX-IM BANK, OR ANY OTHER PERSON, RELATING TO THIS AGREEMENT, THE
LOAN AUTHORIZATION AGREEMENT OR ANY OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly
executed as of the 12th day of April, 2000.
Datron/Transco Inc.
(Name of Borrower)
By:/s/ Xxxxxxx X. Xxxxxxx
(Signature)
Name: Xxxxxxx X. Xxxxxxx
(Print or Type)
Title: Secretary and Treasurer
(Print or Type)
ACKNOWLEDGED:
Comerica Bank-California
(Name of Lender)
By:/s/ Richmond X. Xxxxx
(Signature)
Name: Richmond X. Xxxxx
(Print or Type)
Title: Corporate Banking Officer
(Print or Type)
ANNEXES:
Annex A - Loan Authorization Agreement or Loan Authorization
Notice
CONSENT OF GUARANTORS
Each of the undersigned as a Guarantor of the obligations of
Borrower to the Lender executing the foregoing Agreement hereby
agrees that the foregoing Agreement, each of their respective
Guaranty Agreements and each other Loan Documents may be assigned
to the Export-Import Bank of the United States.
Datron World Communications Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
Name : Xxxxxxx X. Xxxxxxx
Title: Secretary/Treasurer
Datron Systems Incorporated
By: /s/ Xxxxx X. Derby
Name: Xxxxx X. Derby
Title: Chairman, President and Chief
Executive Officer
