1
EXHIBIT 10.1
FORBEARANCE AGREEMENT AND AMENDMENT
This Forbearance Agreement and Amendment Agreement (the "Forbearance
Agreement") is dated as of October 8, 1998 (the "Forbearance Effective Date")
and is made and entered into by and among First Union National Bank, successor
by merger to First Fidelity Bank, N.A. (the "Bank"), ECC International Corp., a
Delaware corporation ("ECCI"), ECC Simulation Limited, a company incorporated
under the laws of England and Wales ("Simulation"), ECC International, Inc., a
U.S. Virgin Islands corporation ("ECC, Inc.") and Educational Computer
Corporation International, a Delaware corporation ("E Computer"). ECCI and
Simulation are referred to collectively herein as the "Borrowers." ECCI,
Simulation, ECC, Inc. and E Computer are sometimes collectively referred to as
the "ECC Group" and, when used herein, the term "ECC Group" shall mean the
members of the ECC Group collectively, jointly and severally, each of them, any
of them, and/or all of them. In their respective capacities as guarantors of the
Obligations (hereafter defined), ECCI, Simulation, ECC, Inc. and E Computer are
referred to collectively herein as the "Guarantors" or individually as a
"Guarantor."
BACKGROUND
A. Pursuant to various loan agreements and documents, including that
certain Term Loan and Revolving Credit Agreement dated as of September 20, 1994
(as amended from time to time prior to the Forbearance Effective Date, the
"Existing ECCI Loan Agreement"), the Bank has extended a term loan (the "ECCI
Term Loan") and revolving credit loan (the "ECCI Revolving Credit Facility," and
together with the ECCI Term Loan, the "ECCI Credit Facilities") to ECCI. Such
loan agreements and documents (the "Existing ECCI Loan Documents") are listed on
Schedule I attached hereto.
B. Pursuant to various loan agreements and documents, including that
certain Revolving Credit Agreement dated as of September 20, 1994 (as amended
from time to time prior to the Forbearance Effective Date, the "Existing
Simulation Loan Agreement"), the Bank has extended a revolving credit loan (the
"Simulation Revolving Credit Facility") to Simulation. Such loan agreements and
documents (the "Existing Simulation Loan Documents") are listed on Schedule II
attached hereto.
As used herein, the term "Existing Credit Facilities" means, collectively, the
ECCI Credit Facilities and the Simulation Revolving Credit Facility. As used
herein, the term "Existing Loan Documents" shall mean the Existing ECCI Loan
Documents and the Existing Simulation Loan Documents. As used herein, the term
"Loan Documents" means the Existing Loan Documents, the Forbearance Agreement,
the Additional Forbearance Documents (hereafter defined) and all other documents
now or hereafter entered into by and among the Bank and the ECC Group to
evidence the Existing Credit
2
Facilities and/or any of the other Obligations (hereafter defined). All
capitalized terms contained herein which are not otherwise defined shall have
the definitions set forth in the Existing Loan Documents.
C. As of the Forbearance Effective Date, certain Events of
Default (collectively, the "Existing Events of Default") have occurred and are
continuing under the Existing Loan Documents as a result of the following:
(a) Under section R.1 of the ECCI Credit Agreement based upon
ECCI's failure to comply with the financial covenant set forth in section P.13
(Fixed Charge Ratio).
(b) Under section P.1 of the Simulation Credit Agreement based
upon the failure of Simulation to comply with the financial covenant set forth
in section M.13 (Fixed Charge Ratio).
(c) The failure of the Borrowers to repay the Existing Credit
Facilities in full on or before October 1, 1998.
D. The ECC Group has requested that the Bank forbear from taking
action with respect to the Existing Events of Default for the period from the
Forbearance Effective Date through January 11, 1999, to enable the ECC Group to
attempt to obtain replacement financing to repay the Obligations in full. The
Bank has agreed to these requests upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, incorporating the Background herein, and for good and
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Bank and the ECC
Group agree as follows:
ARTICLE 1. - ACKNOWLEDGMENTS
1.1 ACKNOWLEDGMENT OF EXISTING EVENTS OF DEFAULT; EXISTING LOAN
DOCUMENTS; WAIVER OF DEFENSES. The ECC Group acknowledges that: (a) the Existing
Events of Default enumerated in the Background Section of this Forbearance
Agreement currently exist; (b) the Existing Events of Default are material in
nature; and (c) the Existing Loan Documents are valid and enforceable against
the ECC Group in every respect, and all of the terms and conditions thereof are
binding upon the ECC Group. The ECC Group further acknowledges and agrees that,
as a result of the Existing Events of Default, the Bank is entitled immediately,
and without further notice or declaration to the ECC Group or anyone else, to
accelerate the Obligations and to exercise its rights and remedies under the
Existing Loan Documents or otherwise. To the extent that any of the Existing
Loan Documents require notification by the Bank to the ECC Group of the
existence of a default and an opportunity for the ECC Group to cure such a
default, such notice and period for cure have been properly given by the Bank or
are hereby waived by the ECC Group. To the extent that the ECC Group has any
defenses, setoffs, claims,
3
or counterclaims to repayment of the Obligations or against the Bank, such
defenses, setoffs, claims, or counterclaims are hereby waived.
1.2 ACKNOWLEDGMENT OF CURRENT OUTSTANDING OBLIGATIONS. As of the
date hereof, the ECC Group is indebted to the Bank in an aggregate amount equal
to the principal sum (including outstanding letters of credit) of $11,641,920.
plus accrued but unpaid interest, plus the Bank's costs and expenses associated
with the Existing Credit Facilities, including, without limitation, the Bank's
attorneys' fees incurred in the negotiation and preparation of this Forbearance
Agreement and the documents related hereto (the foregoing amounts are hereafter
collectively referred to as the "Current Outstanding Obligations"), all without
offset, counterclaims or defenses of any kind.
1.3 ACKNOWLEDGMENT AND REAFFIRMATION OF GUARANTOR OBLIGATIONS. As
of the date hereof, the Guarantors are jointly and severally liable to the Bank
for the Obligations pursuant to their respective guaranties executed prior to
the date hereof (collectively, the "Guaranties").
1.4 ACKNOWLEDGMENT OF LIENS AND PRIORITY. Pursuant to the Existing
Loan Documents, the Bank holds first priority, perfected security interests in,
liens upon and charges against all of the ECC Group's assets, wherever located,
now owned or hereafter acquired, and as more specifically described in the
Existing Loan Documents. Such security interests, liens and charges secure all
of the Obligations including, without limitation, all amounts owed under the
Existing Loan Documents. For purposes of this Forbearance Agreement, the word
"Obligations" shall mean any and all obligations and liabilities to the Bank, of
every kind and description, direct and indirect, absolute and contingent, sole,
joint, several, or joint and several, primary or secondary, due or to become
due, now existing or hereafter arising, regardless of how they arise or by what
agreement or instrument they may be evidenced or whether evidenced by any
agreement or instrument and includes obligations to perform acts and refrain
from taking actions as well as obligations to pay money, and also includes the
"Liabilities" as defined in the Existing Loan Documents and the Current
Outstanding Obligations.
1.5 REAFFIRMATION OF SECURITY INTERESTS; CROSS-COLLATERALIZATION.
All of the assets of the ECC Group pledged, assigned, conveyed, mortgaged,
hypothecated or transferred to the Bank pursuant to the Existing Loan Documents
including, without limitation, all real property, all accounts receivable,
inventory, equipment, general intangibles, contracts, contract rights,
instruments, letters of credit, deposits, documents of title, and proceeds
constitute security for all of the Obligations. The ECC Group hereby grants to
the Bank and reaffirms its prior conveyance to the Bank of a continuing security
interest in, lien on and charge against all of the collateral described herein
as well as a security interest in, lien on and charge against any and all funds
and/or monies contained in accounts located at the Bank or at any of the Bank's
subsidiaries or affiliates. The ECC Group agrees to execute and deliver to the
Bank such additional documentation deemed necessary or appropriate by the Bank,
in its sole and absolute discretion, to achieve the purpose of this Section of
the Forbearance Agreement.
4
1.6 REAFFIRMATION OF GUARANTY. In consideration of the
undertakings of the Bank pursuant to this Forbearance Agreement, the Guarantors
hereby reaffirm their respective Guaranties and all of their respective
obligations to the Bank thereunder. The Guarantors further agree that any and
all warrants to confess judgment contained in their respective guaranties are
valid and fully enforceable against them. Each of the Guarantors hereby consents
to the execution and delivery by the ECC Group of this Forbearance Agreement and
all other documents and instruments to be executed pursuant to or in connection
herewith. Each Guarantor waives any right it may have to contest the validity or
enforceability of its guaranties by virtue of the ECC Group's execution of this
Forbearance Agreement and the other documents entered into or delivered pursuant
to or in connection herewith.
ARTICLE 2. - AMENDMENTS TO EXISTING LOAN DOCUMENTS
2.1 MAXIMUM PRINCIPAL AMOUNT OF ECC REVOLVING CREDIT FACILITY. As
of the Forbearance Effective Date, and notwithstanding Section A.2.b. or any
other provision of the Existing ECCI Loan Agreement to the contrary, the maximum
aggregate principal amount of advances, including the face amount of Letters of
Credit (as defined in the Existing ECCI Loan Agreement), to be outstanding at
any time under the ECCI Revolving Credit Facility (the "Maximum Principal
Amount") shall be an amount which, when taken together with the principal amount
of cash advances and the face amount of letters of credit outstanding under the
Simulation Revolving Credit Facility, is not greater than $11,341,120. The
maximum aggregate principal amount outstanding under both the ECCI Credit
Facilities and the Simulation Revolving Credit Facility shall not exceed
$11,341,120.
2.2 MAXIMUM PRINCIPAL AMOUNT OF SIMULATION REVOLVING CREDIT
FACILITY. As of the Forbearance Effective Date, and notwithstanding Section
A.1.b. or any other provision of the Existing Simulation Loan Agreement to the
contrary, the Maximum Principal Amount (as defined in the Simulation Credit
Agreement) of advances, including the face amount of letters of credit, to be
outstanding at any time under the Simulation Revolver shall be an amount which
is equal to the lesser of (i) $5,134,000., plus the face amount of the letter of
credit referred to in Section 2.6 hereof, or (ii) an amount which, when taken
together with the principal amount of cash advances and the face amount of
letters of credit outstanding under the ECCI Revolving Credit Facility, is not
greater than $11,341,120. The maximum principal amount outstanding under both
the ECCI Credit Facilities and the Simulation Revolving Credit Facility shall
not exceed $11,341,120.
2.3 ALL LOANS TO BE DOLLAR DENOMINATED. As of the Forbearance
Effective Date, and notwithstanding any other provision of the Existing ECCI
Loan Agreement, the Existing Simulation Loan Agreement, or the other Existing
Loan Documents to the contrary, all pounds sterling denominated Loans under the
Existing Loan Documents have been converted to Dollar denominated Loans. From
and after the Forbearance Effective Date (except for the cash collateral for the
Simulation letter of credit for lease payments at Simulation's office in
England, which cash collateral is in pounds sterling, all Obligations will be
5
denominated, administered, and repaid by the Borrowers, or, as the case may be,
the other members of the ECC Group, in Dollars.
2.4 NON-DEFAULT INTEREST RATE. As of the Forbearance Effective
Date, and notwithstanding any other provision of the Existing ECCI Loan
Agreement (including, without limitation, section A.1.c., A.2.c., and D.2.
thereof), the Existing Simulation Loan Agreement (including, without limitation,
section A.1.c., and D.2. thereof), or the other Existing Loan Documents to the
contrary, all Loans shall be converted to and/or remain Base Rate Loans and,
prior to the occurrence of an Event of Default (as defined in this Forbearance
Agreement), interest on the outstanding principal balance outstanding under the
Existing Credit Facilities shall accrue at the Bank's Base Rate plus two and one
half percent (2 1/2%).
2.5 DEFAULT INTEREST RATE. As of the Forbearance Effective Date,
and notwithstanding any provision of the Existing Loan Documents to the
contrary, upon and at all times following the occurrence of an Event of Default
hereunder, including following the entry of any judgment against the Borrowers
or any other member of the ECC Group, interest on the outstanding principal
balance outstanding under the Existing Credit Facilities shall accrue at the
Bank's Base Rate plus four percent (4%).
2.6 LETTERS OF CREDIT; CASH COLLATERAL. As of the Forbearance
Effective Date, the Borrowers shall no longer be permitted to request, nor shall
the Bank issue for the account of either Borrower, any new Letter of Credit. As
to any letter of credit issued for the account of Simulation in connection with
lease payments due for Simulation's leased space in England, Simulation will
maintain at all times pound sterling cash collateral with the Bank to secure
such letter of credit in an amount equal to one hundred percent of the face
amount of such letter of credit for the entire term (including any renewals) of
such letter of credit, even if the term of the letter of credit exceeds the term
of this Forbearance Agreement. This provision shall survive the amendment or
termination of this Forbearance Agreement.
2.7 AMENDED AND RESTATED FIXED CHARGE COVENANT. Section P.13 of
the Existing ECCI Loan Agreement and Section M.13 of the Existing Simulation
Loan Agreement shall remain in full force and effect but the Bank shall forbear
from declaring an Event of Default on account of any violation of Section P.13
of the Existing ECCI Loan Agreement or Section M.13 of the Existing Simulation
Loan Agreement if each of ECCI and Simulation meet minimum Fixed Charge
Covenants as follows:
"Fixed Charge Covenant. As of each of the following designated dates,
permit the Fixed Charge Ratio to be less than the value corresponding
to such date as follows:
October 30, 1998 [6.2] to 1.00
November 30, 1998 [1.36] to 1.00
December 31, 1998 2.43 to 1.00
6
As used herein, "Fixed Charge Ratio" means, as of any date, the ratio
of (i) Consolidated net income PLUS depreciation, interest expense and
taxes for the month ending on such date, to (ii) Fixed Charges of the
Borrower and all Consolidated Persons for such month, and "Fixed
Charges" means the sum of dividends, payments on capital leases,
interest expense and principal payments ("Principal on Long Term Debt")
on indebtedness for borrowed money which matures more than one year
from the date of such principal payment."
ECCI and Simulation, respectively, will report to the Bank the minimum
Fixed Charge Covenants specified in this Section monthly by the date on
which ECCI and Simulation make their other reports to the Bank. All
reports shall be certified to be true, correct and complete by the
chief financial officer of ECCI and Simulation respectively.
ARTICLE 3. - ADDITIONAL COVENANTS OF BORROWERS AND
GUARANTORS
The ECC Group covenants and agrees that from the date hereof and until
the satisfaction of the Obligations, unless the Bank shall otherwise consent in
writing:
3.1 EXECUTION OF OTHER DOCUMENTS. At the Bank's request, the ECC
Group shall execute and deliver to the Bank such other documents and
instruments, including, without limitation, Uniform Commercial Code financing
statements, as the Bank, in its reasonable opinion, deems necessary or
convenient to carry out the terms of this Forbearance Agreement and all other
documents and instruments executed in connection herewith or otherwise relating
to this Forbearance Agreement.
3.2 EXISTING COVENANTS. Unless otherwise provided herein, the
Borrower and the ECC Group shall comply with each of their respective covenants
set forth in the Existing Loan Documents.
3.3 REFINANCING DOCUMENTATION. The ECC Group shall deliver to the
Bank on or before November 30, 1998 a fully executed commitment letter (the
"Commitment Letter"), in form and substance reasonably satisfactory to the Bank,
from a financial institution reasonably acceptable to the Bank, providing for
consummation of a refinancing of and repayment in full of the Obligations on or
before January 11, 1999.
3.4 MINIMUM DAILY AVAILABLE CASH BALANCES IN OPERATING ACCOUNT.
A. The Borrowers shall maintain minimum consolidated available
cash balances (not to include cash collateral) in bank accounts at the Bank for
each Friday from the Forbearance Effective Date until January 11, 1999, as
determined for consolidated available cash balances at 10:00 a.m. (Philadelphia
time) as follows:
Date Minimum Account Balance
---- -----------------------
7
October 9, 1998 $2,100,000
October 16, 1998 $2,200,000
October 23, 1998 $1,000,000
October 30, 1998 $3,900,000
November 6, 1998 $3,000,000
November 13, 1998 $2,900,000
November 20, 1998 $1,700,000
November 27, 1998 $2,100,000
December 4, 1998 $4,200,000
December 11, 1998 $2,500,000
December 18, 1998 $2,000,000
December 25, 1998 $3,000,000
January 1, 1999 $2,500,000
January 8, 1999 and $2,300,000
thereafter
B. For every day from the Forbearance Effective Date until
January 11, 1999, except for the days specified in 3.4A and 3.5 hereof, the
Borrowers shall maintain minimum consolidated available cash balances (not to
include cash collateral) in bank accounts at the Bank, as determined for
consolidated available cash balances at 10:00 a.m. (Philadelphia time), in an
amount which shall never be less than the amounts listed in Section 3.4A for
either the Friday beginning or the Friday ending the applicable week period,
whichever is lower.
3.5 MINIMUM MONTH-END BALANCES. For the following date, the
Borrowers shall maintain minimum consolidated available cash balances (not to
include cash collateral) in bank accounts at the Bank, as determined for
consolidated available cash balances at 10:00 a.m. (Philadelphia time) as
follows:
October 31, 1998 $3,700,000
3.6 FORBEARANCE FEE. As of the Forbearance Effective Date, in
consideration of the undertakings of the Bank pursuant to this Forbearance
Agreement, a forbearance fee in the amount of $75,000 has accrued and will be
payable by the ECC Group in three (3) installments as follows: (i) $25,000 on or
before the Forbearance Effective Date; (ii) $25,000 on or before November 1,
1998; (iii) $25,000 on or before December 1, 1998.
3.7 AUTOMATIC DEBIT OF ACCOUNTS. From and at all times after the
Forbearance Effective Date, the Bank may, and the Borrowers authorize the Bank
to, debit any account maintained by the Borrowers or either of them with the
Bank for the amount of any payment as and when such payment becomes due under
this Forbearance Agreement or under any Loan Document. The foregoing rights of
the Bank to debit the Borrowers' accounts shall be in addition to, and not in
limitation of, any rights of set-off which the Bank may have hereunder, under
any Loan Document or applicable law. The Bank agrees to give such advance notice
of such debiting as the Bank has historically
8
given the Borrowers but the failure of the Bank to give such notice shall not
limit the Bank's right to debit.
3.8 PROHIBITION OF DIVIDENDS AND ADVANCES. Until such time as the
Obligations are paid in full, the ECC Group shall not declare or pay any
dividend, or make any distributions of cash or property, in respect of any class
of its capital stock, or, directly or indirectly, redeem or otherwise acquire
any such shares or any option, warrant or right to acquire any such shares.
3.9 FEDERAL TAX REFUND PROCEDURE. Within five (5) Business Days of
the Forbearance Effective Date, the ECC Group will execute and deliver an
original assignment of United States Tax refund together with powers of attorney
and other assignment documents as provided by the Bank (collectively, the "Tax
Refund Assignment Documents"). On or before January 29, 1999, the ECC Group will
finalize and provide to the Bank for filing simultaneously with the Tax Refund
Assignment Documents the ECC Group's federal tax return. This provision shall
survive termination of the Forbearance Agreement unless the termination is due
to payment in full to the Bank of all Obligations on or before January 11, 1999.
Upon payment in full to the Bank of all Obligations on or before January 11,
1999, this Section shall terminate and the Bank will return the Tax Refund
Assignments to ECCI within five (5) Business Days.
ARTICLE 4. - FORBEARANCE BY THE BANK
Subject to the terms and conditions of this Forbearance Agreement, and
without waiving the Existing Events of Default and the right to exercise rights
and remedies, the Bank agrees to forbear from enforcing its remedies under the
Existing Loan Documents or applicable law as a result of the Existing Events of
Default until the earlier to occur of: (i) January 11, 1999, or (ii) the
occurrence of an Event of Default (other than the Existing Events of Default)
under this Forbearance Agreement (such date, as the case may be, to be referred
to hereinafter as the "Termination Date").
ARTICLE 5.- CONDITIONS PRECEDENT
The effectiveness of this Forbearance Agreement and the Bank's
obligations hereunder are conditioned upon the fulfillment by the ECC Group of
all of the following conditions precedent:
5.1 DOCUMENTS TO BE DELIVERED TO THE BANK. Within five (5)
Business Days of the Forbearance Effective Date, the ECC Group shall deliver or
cause to be delivered to the Bank, in form and substance reasonably mutually
satisfactory to the Bank and the ECC Group, the following (collectively, the
"Additional Forbearance Documents"):
(a) Cash Collateral Pledge Agreement (Simulation L/C);
(b) Subordination and Pledge Agreement by ECCI in favor
of the Bank;
9
(c) Assignment of Tax Refund, Powers of Attorney, and
related documents;
(d) Opinion of Counsel to the Borrowers;
(e) A Certification of Authority executed by the
Secretary of each member of the ECC Group, dated as
of the date of this Forbearance Agreement, certifying
the incumbency and signature of the officers of the
ECC Group executing this Forbearance Agreement and
all other documents to be delivered by them pursuant
hereto, together with evidence of the incumbency of
such Secretary and corporate resolutions for each of
the ECC Group, certified by their respective
secretaries, authorizing and approving the
Forbearance Agreement, and the documents and payments
specified in this Article V;
(f) each of the Closing Payments referenced in Sections
5.2 and 5.3 hereof; and
(g) such other documents as may be required by the Bank.
If the Additional Forbearance Documents are not delivered
within five (5) Business Days of the Forbearance Effective Date, that will allow
the Bank to terminate the Forbearance hereunder and to declare an Event of
Default.
5.2 PAYMENT OF BANK'S LEGAL FEES. Within five (5) Business Days
after the Forbearance Effective Date, the ECC Group shall pay to the Bank the
amount of the Bank's reasonable legal fees and expenses incurred in connection
with the Existing Events of Default, the Loan Documents, this Forbearance
Agreement, and all documents executed and negotiations undertaken in connection
with any of the foregoing. Payment may, at the option of the Bank, be
accomplished by the automatic debit specified in Section 3.7 hereof.
5.3 PAYMENT OF BANK'S COSTS. Within five (5) Business Days after
the Forbearance Effective Date, the ECC Group shall pay to the Bank the amount
of the Bank's reasonable costs incurred in connection with this Forbearance
Agreement and the other Loan Documents, if any. Payment may, at the option of
the Bank, be accomplished by the automatic debit specified in Section 3.7
hereof.
5.4 PAYMENT OF FIRST INSTALLMENT OF FORBEARANCE FEE. On or before
the Forbearance Effective Date, the ECC Group shall pay to the Bank the first
installment in the amount of $25,000 to be applied against the Forbearance Fee.
Payment may, at the option of the Bank, be accomplished by the automatic debit
specified in Section 3.7 hereof.
5.5 PERMANENT PAYDOWN. On or before the Forbearance Effective
Date, the Borrowers shall pay to the Bank $300,000. as a permanent paydown of
the Existing
10
Credit Facilities. Payment may, at the option of the Bank, be accomplished by
the automatic debit specified in Section 3.7 hereof.
ARTICLE 6. - REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Forbearance Agreement
and as partial consideration for the terms and conditions contained herein, the
ECC Group makes the following representations and warranties to the Bank, each
and all of which shall survive the execution and delivery of this Forbearance
Agreement and all of the other documents executed in connection herewith:
6.1 ORGANIZATION AND LOCATION.
(a) The members of the ECC Group are corporations duly
incorporated, organized, validly existing and in good standing under the laws of
their respective states or countries of incorporation, and are duly authorized
to do business and are duly qualified as foreign corporations in all
jurisdictions wherein the nature of their businesses or properties make such
qualification necessary, and have the corporate power to own their respective
properties and to carry on their respective businesses as now conducted;
(b) The members of the ECC Group have the requisite corporate
power and authority to deliver and perform this Forbearance Agreement and all of
the documents executed by them in connection herewith;
(c) Every fictitious name, trade name, division or style under
which the ECC Group conducts any business has been previously disclosed to the
Bank in writing together with the names of each and every jurisdiction in which
the same are utilized;
6.2 AUTHORIZATION; VALID AND BINDING AGREEMENT. All corporate
action required to be taken by the ECC Group and their respective officers,
directors and stockholders and all actions required to be taken by the
principals of the ECC Group for the authorization, execution, delivery and
performance of this Forbearance Agreement and other documents contemplated
hereby have been taken. Each person executing this Forbearance Agreement on
behalf of any member of the ECC Group is an authorized officer of such member.
This Forbearance Agreement is, and each of the documents executed pursuant
hereto will be, legal, valid, and binding obligations of the party or parties
thereto, enforceable against each such party in accordance with their respective
terms, subject only to bankruptcy, insolvency, reorganization, moratorium and
other laws or equitable principles affecting creditors' rights generally.
6.3 LOCATION OF ASSETS OF ECC GROUP. The locations of all of the
ECC Group's inventory, equipment, warehouses, sales offices, main offices, and
product distribution centers have been previously disclosed in writing to the
Bank. All of the real property owned by the ECC Group has been previously
disclosed in writing to the Bank.
11
6.4 COMPLIANCE WITH LAWS. Each of the members of the ECC Group is
in compliance in all material respects with all laws, regulations and
requirements applicable to its business, and has not received, and has no
knowledge of, any order or notice of any governmental investigation or of any
violations or claims of violation of any law, regulation or any governmental
requirement.
6.5 NO CONFLICT; GOVERNMENT APPROVALS. The execution, delivery and
performance by the ECC Group of this Forbearance Agreement and the other
documents executed in connection herewith will not:
(a) conflict with, violate or result in the breach of any
provisions of any applicable law, rule, regulation or order; or
(b) conflict with or result in the breach of any provision of
their respective Articles of Incorporation, operating agreements, charters,
and/or by-laws. No authorization, consent or approval of, or other action by,
and no notice of or filing with, any governmental authority or regulatory body
is required to be obtained or made by the ECC Group for the due execution,
delivery and performance of this Forbearance Agreement.
6.6 THIRD PARTY CONSENTS. The execution, delivery and performance
by the ECC Group of this Forbearance Agreement and the documents related hereto
will not:
(a) require any consent or approval of any person or entity
which has not been obtained prior to, and which is not in full force and effect
as of, the date of this Forbearance Agreement;
(b) result in the breach of, default under, or cause the
acceleration of any obligation owed under any loan, credit agreement, note,
security agreement, lease indenture, mortgage, loan document or other agreement
by which any of them are bound or affected; or
(c) result in, or require the creation or imposition of, any
lien or encumbrance on any of their respective properties other than those liens
or security interests in favor of the Bank or the liens or security interests
disclosed to the Bank in the Loan Documents.
6.7 FINANCIAL STATEMENTS; REPORTING.
(a) Except as otherwise disclosed in writing to the Bank prior
to the Forbearance Effective Date, all balance sheets, reports, budgets,
reconciliations, accounts receivable reports, and other financial information
supplied to the Bank by the ECC Group with respect to the ECC Group have been
prepared in conformity with GAAP, and present fairly the financial condition and
results of operations for the period covered thereby of the ECC Group. Since
June 30, 1998, there has been no material adverse
12
change in the financial condition or results of operation except as disclosed to
the Bank in writing prior to the Forbearance Effective Date.
(b) The ECC Group does not know of any facts, other than those
already disclosed in writing to the Bank, that materially adversely affect or in
so far as can be foreseen, will materially adversely affect their ability to
perform their respective obligations under this Forbearance Agreement and other
Loan Documents.
6.8 EXCLUSIVE AND FIRST PRIORITY PERFECTED LIEN. The Bank has, as
of the date of this Forbearance Agreement, and shall continue to have, until all
of the Obligations are paid in full, first priority, valid perfected liens upon
and security interests in all of the Collateral to secure the payment and
performance of all of the Obligations.
6.9 NO UNTRUE OR MISLEADING STATEMENTS. Neither this Forbearance
Agreement nor any other document executed in connection herewith contains any
untrue statement of a material fact or omits any material fact necessary in
order to make the statement made, in light of the circumstances under which it
was made, accurate.
6.10 NO EVENTS OF DEFAULT. Other than the Existing Events of
Default, no default(s) or Event(s) of Default has/have occurred as of the date
hereof under any of the Loan Documents.
ARTICLE 7. - EVENTS OF DEFAULT
The occurrence of any one or more of the following (other than an
Existing Event of Default) shall constitute an Event of Default under this
Forbearance Agreement:
7.1 BORROWER'S FAILURE TO PAY. The Borrowers fail to pay any
amount of principal, interest, fees or other sums when due under this
Forbearance Agreement or any of the Loan Documents, or any other Obligations,
whether upon stated maturity, acceleration, or otherwise.
7.2 BREACH OF COVENANTS OR CONDITIONS. The ECC Group fails to
perform or observe any covenant, term, agreement or condition in this
Forbearance Agreement or any of the other Loan Documents or is in violation of
or non-compliance with any provision of this Forbearance Agreement or any of the
Loan Documents after the expiration of any cure period, if any, set forth in the
Loan Documents with respect to such covenant, term, agreement or condition.
7.3 DEFAULTS IN OTHER MATERIAL AGREEMENTS. There shall occur any
default under or as defined in, any other material agreement applicable to the
ECC Group or by which the ECC Group is bound which shall not be remedied within
the period of time (if any) within which such other agreement permits such
default to be remedied, unless such default is waived by the other party thereto
or excused as a matter of law.
13
7.4 AGREEMENTS INVALID. The validity, binding nature of, or
enforceability of any material term or provision of any of the Loan Documents is
disputed by, on behalf of, or in the right or name of the ECC Group or any
material term or provision of any such Loan Document is found or declared to be
invalid, avoidable, or non-enforceable by any court of competent jurisdiction.
7.5 FALSE WARRANTIES; BREACH OF REPRESENTATIONS. Except as
otherwise disclosed to the Bank in writing prior to the Forbearance Effective
Date, any warranty or representation made by the ECC Group in this Forbearance
Agreement or any other Loan Document or in any certificate or other writing
delivered under or pursuant to this Forbearance Agreement or any other Loan
Document, or in connection with any provision of this Forbearance Agreement or
related to the transactions contemplated hereby shall prove to have been false
or incorrect or breached in any material respect.
7.6 BANKRUPTCY OR INSOLVENCY OF THE BORROWER.
(a) The ECC Group, on a consolidated basis, becomes insolvent,
or generally fails to pay, or is generally unable to pay, or admits in writing
its inability to pay, its debts as they become due or applies for, consents to,
or acquiesces in, the appointment of a trustee, receiver or other custodian or a
substantial part of its property, or makes a general assignment for the benefit
of creditors.
(b) Any one or more entities in the ECC Group commences any
bankruptcy, reorganization, debt arrangement, receivership, or other case or
proceeding under any bankruptcy, insolvency or receivership law, or any
dissolution or liquidation proceeding.
(c) Any bankruptcy, reorganization, debt arrangement,
receivership, or other case or proceeding under any bankruptcy, insolvency or
receivership law, or any dissolution or liquidation proceeding, is involuntarily
commenced against or in respect of any one or more entities in the ECC Group, or
an order for relief is entered in any such proceeding and such case or
proceeding is not fully and finally dismissed within thirty (30) days.
(d) A trustee, receiver, or other custodian is appointed for
any one or more entities in the ECC Group or a substantial part of any of its
assets.
7.7 TERMINATION OF CONTRACT(S). Any party to any customer contract
with the ECC Group shall terminate or seek to terminate such contract as a
result of such entity in the ECC Group's failure to perform its obligations
under such contract.
7.8 SUIT ON ECCI GUARANTEE. Any suit is commenced on any guarantee
granted by ECCI on account of an obligation of Simulation, which suit is not
dismissed or stayed within 30 days of filing of the suit.
14
7.9 EVENT OF DEFAULT UNDER OTHER LOAN DOCUMENTS. Any Event of
Default (other than the Existing Events of Default) occurs under any of the Loan
Documents.
ARTICLE 8. - REMEDIES
In addition to the rights and remedies set forth in the other Loan
Documents, the Bank shall also be entitled to exercise the following remedies as
indicated:
8.1 LOAN DOCUMENTS; APPLICABLE LAW. Upon and following the
occurrence of any one or more Events of Default, the Bank may, in its sole
discretion, enforce all of its remedies as set forth hereunder, under the Loan
Documents, and/or under applicable law, against the ECC Group. Without limiting
the foregoing, upon the occurrence of an Event of Default at the option of the
Bank, without notice to the Borrower or the Guarantors, all Obligations shall
automatically accelerate and immediately become due and payable.
8.2 RIGHT OF SET-OFF.
If any of the Obligations shall be due and payable or any one
or more Events of Default shall have occurred and any applicable cure periods
have expired, the Bank shall have the right, in addition to all other rights and
remedies available to it, without notice to any one or more entities in the ECC
Group, to apply toward and set-off against and apply to the then unpaid balance
of the Obligations any items or funds held by the Bank or any affiliates of the
Bank, any and all deposits (whether general or special, time or demand, matured
or unmatured, fixed or contingent, liquidated or unliquidated) now or hereafter
maintained by any one of the ECC Group with the Bank or with an affiliate of the
Bank, and any other indebtedness at any time held or owing by the Bank or an
affiliate of the Bank to or for the credit or the account of any one or more
entities in the ECC Group. For such purpose the Bank shall have, and the ECC
Group hereby grants to the Bank, a first lien on all such deposits. The Bank is
hereby authorized to charge any such account or indebtedness for any amounts due
to the Bank. Such right of set-off shall exist whether or not the Bank shall
have made any demand under this Forbearance Agreement, the Notes or any other
Loan Document and whether or not the Note, and the other Obligations are matured
or unmatured. The ECC Group confirms the Bank's lien on such accounts and the
Bank's rights of set-off, and nothing in this Forbearance Agreement shall be
deemed any waiver or prohibition of such lien and rights of set-off. This right
of set-off shall survive termination of this Forbearance Agreement.
8.3 CONFESSION OF JUDGMENT.
THE BORROWERS AND EACH OF THE GUARANTORS HEREBY IRREVOCABLY
AUTHORIZE AND EMPOWER THE BANK, BY ITS ATTORNEY, UPON THE OCCURRENCE OF AN EVENT
OF DEFAULT OR AT ANY TIME THEREAFTER, TO APPEAR FOR THE BORROWERS, THE
GUARANTORS AND/OR ANY ONE OR MORE OF THEM AND, WITHOUT DECLARATION OR STAY OF
15
EXECUTION, CONFESS AND ENTER JUDGMENT AGAINST THE BORROWERS, THE GUARANTORS
AND/OR ANY ONE OR MORE OF THEM IN FAVOR OF THE BANK IN ANY JURISDICTION IN WHICH
SUCH ENTITY OR ANY PROPERTY OF SUCH ENTITY IS LOCATED. SUCH JUDGMENT SHALL BE
FOR ALL OBLIGATIONS TOGETHER WITH COSTS OF SUIT AND WITH ACTUAL COLLECTION FEES
(INCLUDING ATTORNEYS' FEES) WITH RELEASE OF ALL ERRORS AND THE RIGHT TO ISSUE
EXECUTION FORTHWITH. THE BORROWERS AND THE GUARANTORS HEREBY KNOWINGLY,
WILLINGLY, AND INTENTIONALLY WAIVE AND RELEASE ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY, OR EXEMPTION LAW OF ANY STATE NOW IN FORCE OR HEREINAFTER
ENACTED. IF A COPY OF THIS FORBEARANCE AGREEMENT VERIFIED BY AFFIDAVIT OF THE
BANK OR A PERSON ON BEHALF OF THE BANK SHALL HAVE BEEN FILED IN SUCH ACTION, IT
SHALL NOT BE NECESSARY TO FILE THE ORIGINAL FORBEARANCE AGREEMENT AS A WARRANT
OF ATTORNEY. THIS AUTHORITY AND POWER TO APPEAR FOR AND CONFESS AND ENTER
JUDGMENT AGAINST THE BORROWERS, THE GUARANTORS, AND/OR ANY ONE OR MORE OF THEM
SHALL NOT BE EXHAUSTED BY THE SINGLE EXERCISE THEREOF AND SHALL CONTINUE UNTIL
THE OBLIGATIONS ARE FULLY PAID, PERFORMED, DISCHARGED AND SATISFIED.
ARTICLE 9. - MISCELLANEOUS
9.1 CONTINUING EFFECT. Except as amended hereby, all of the Loan
Documents shall remain in full force and effect and bind and inure to the
benefit of the parties thereto and are hereby ratified and confirmed.
9.2 SUBMISSION TO JURISDICTION; SELECTION OF FORUM. The ECC Group
submits to the jurisdiction of the courts of the Commonwealth of Pennsylvania,
and the United States District Court for the Eastern District of Pennsylvania.
The ECC Group further stipulates and acknowledges that venue is proper in any
court located in Pennsylvania and in the United States District Court for the
Eastern District of Pennsylvania and waives personal service of process and
agree that a summons and complaint commencing an action or proceeding in any
such court shall be properly served and shall confer personal jurisdiction if
served by registered or certified mail, return receipt requested, in accordance
with the notice provisions of this Forbearance Agreement.
9.3 JUDICIAL PROCEEDINGS. The ECC Group agrees that any suit,
action or proceeding, whether claim or counterclaim, brought or instituted by
the Borrowers, the Guarantors, or any of its successors or assigns, on or with
respect to this Forbearance Agreement, or the dealings of the parties with
respect hereto, shall be tried only by a court and not by a jury. THE ECC GROUP
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Further, the ECC Group waives any
right it may have to claim or recover, in any such suit, action or proceeding,
any special, exemplary, punitive or consequential damages or any damages other
than, or in addition to, actual damages. THE ECC GROUP ACKNOWLEDGES AND AGREES
THAT THIS SECTION
16
IS A SPECIFIC AND MATERIAL ASPECT OF THIS FORBEARANCE AGREEMENT AND THAT THE
BANK WOULD NOT ENTER INTO THIS FORBEARANCE AGREEMENT WITH THE ECC GROUP IF THE
WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS FORBEARANCE AGREEMENT.
9.4 COOPERATION; OTHER DOCUMENTS. At all times following the
execution of this Forbearance Agreement, the ECC Group shall execute and deliver
to the Bank, or shall cause to be executed and delivered to the Bank, and shall
do or cause to be done all such other acts and things as the Bank may reasonably
deem to be necessary or desirable to assure the Bank of the benefit of this
Forbearance Agreement and the documents comprising or relating to this
Forbearance Agreement.
9.5 REMEDIES CUMULATIVE; NO WAIVER. The rights, powers and
remedies of the Bank in this Forbearance Agreement and in the other Loan
Documents are cumulative and not exclusive of any right, power or remedy
provided in the Loan Documents, by law or equity and no failure or delay on the
part of the Bank in the exercise of any right, power or remedy shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or remedy preclude any other or further exercise thereof, or the exercise of any
other right, power or remedy.
9.6 NOTICES. Any notice given pursuant to this Forbearance
Agreement or pursuant to any document comprising or relating to this Forbearance
Agreement or any of the other Loan Documents shall be in writing, including
telecopies. Notice given by telecopy or other electronic mail shall be deemed to
have been given and received when sent. Notice given by overnight mail courier
shall be deemed to have been given and received one (1) day after the date
delivered to such overnight courier by the party sending such Notice. Notice by
mail shall be deemed to have been given and received three (3) days after the
date deposited, when sent by first class certified mail, postage prepaid, and
addressed as follows:
To the ECC Group:
ECC International Corp.
0000 X. Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx
Telecopy: 000-000-0000
With a copy to:
Xxxxxx X. Xxxxxx, Esquire
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: 000-000-0000
17
To the Bank:
First Union National Bank
Special Asset Management
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
XX 1246
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxx
Xxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Duane, Morris & Heckscher
Xxx Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esquire
Xxxxx X. Xxxxxx, Esquire
Telecopy: (000) 000-0000
A party may change his or its address by giving written notice of the changed
address to the other parties, as specified herein.
9.7 INDEMNIFICATION.
If, after receipt of any payment of all or any part of the
Obligations, the Bank is compelled to surrender such payment to any person or
entity for any reason (including, without limitation, a determination that such
payment is void or voidable as a preference or fraudulent conveyance, an
impermissible setoff, or a diversion of trust funds), then this Forbearance
Agreement and the other Loan Documents shall continue in the full force and
effect, and the ECC Group shall be jointly and severally liable for, and shall
indemnify, defend and hold harmless the Bank with respect to the full amount so
surrendered. The provisions of this section shall survive the termination of
this Forbearance Agreement and the other Loan Documents and shall be and remain
effective notwithstanding the payment of the Obligations, the cancellation of
the Notes, the release of any lien, security interest or other encumbrance
securing the Obligations or any other action which the Bank may have taken in
reliance upon its receipt of such payment. Any cancellation of the Notes,
release of any such encumbrance or other such action shall be deemed to have
been conditioned upon any payment of the Obligations having become final and
irrevocable.
9.8 COSTS, EXPENSES AND ATTORNEYS' FEES. The ECC Group agrees to
pay on demand by the Bank all reasonable out-of-pocket costs and expenses
incurred by the Bank, including, without limitation, all reasonable fees and
out-of-pocket expenses of counsel for the Bank in connection with: (i) the
negotiation, preparation and enforcement of this Forbearance Agreement and all
other documents and instruments
18
executed in connection herewith or otherwise relating to this Forbearance
Agreement; and (ii) the enforcement or exercise by the Bank of the Bank's rights
or remedies with respect to the collection of the Obligations or to preserve,
protect or enforce the Bank's interests.
9.9 RELEASE. The ECC Group, on behalf of themselves, and all
persons and entities claiming by, through, or under any one or more of them,
hereby release, waive and forever discharge the Bank, and all of the Bank's
officers, directors, attorneys, agents, affiliates, and successors and assigns,
of, from, and with respect to any and all manner of action and actions, cause
and causes of actions, suits, disputes, claims, counterclaims and/or
liabilities, cross claims, defenses, and any claims for avoidance or other
remedies available to a debtor, its estate or any trustee or representatives
thereof, whether now known or unknown, suspected or unsuspected, past or
present, asserted or unasserted, contingent or liquidated, whether or not well
founded in fact or law, whether in contract, in tort or otherwise, at law or in
equity, which the ECC Group had or now have, claim to have had, now claim to
have or hereafter can, shall or may claim to have against the Bank, for or by
reason of any cause, matter, or thing whatsoever arising from the beginning of
the world through the date hereof, including any claims based upon, relating to
or arising out of any and all transactions, relationships or dealings with or
loans made to the Borrower prior to the Forbearance Effective Date. This
provision shall survive any termination of this Forbearance Agreement.
9.10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the ECC Group contained in this Forbearance
Agreement and in all other documents and instruments executed in connection
herewith or otherwise relating to this Forbearance Agreement shall survive the
execution of this Forbearance Agreement and are material and have been or will
be relied upon by the Bank, notwithstanding any investigation made by any
person, entity or organization on the Bank's behalf. No implied representations
or warranties are created or arise as a result of this Forbearance Agreement or
the documents comprising or relating to this Forbearance Agreement. For purposes
of the foregoing, all statements in any certificate required by this Forbearance
Agreement to be delivered to the Bank on or after the execution of this
Forbearance Agreement by or on behalf of the ECC Group pursuant to and in
accordance with this Forbearance Agreement shall be deemed to be representations
and warranties contained in this Forbearance Agreement.
9.11 HEADINGS. The headings and underscoring of articles, sections
and clauses have been included herein for convenience only and shall not be
considered in interpreting this Forbearance Agreement.
9.12 GOVERNING LAW. This Forbearance Agreement and all documents
and instruments executed in connection herewith or otherwise relating to this
Forbearance Agreement shall be construed in accordance with and governed by the
internal laws of the Commonwealth of Pennsylvania without reference to conflict
of laws principles.
19
9.13 INTEGRATION. This Forbearance Agreement and all documents and
instruments executed in connection herewith or otherwise relating to this
Forbearance Agreement, including, without limitation, the Loan Documents,
constitute the sole agreement of the parties with respect to the subject matter
hereof and thereof and supersede all oral negotiations and prior writings with
respect to the subject matter hereof and thereof.
9.14 AMENDMENT AND WAIVER. No amendment of this Forbearance
Agreement, and no waiver, discharge or termination of any one or more of the
provisions thereof, shall be effective unless set forth in writing and signed by
all of the parties hereto.
9.15 SUCCESSORS AND ASSIGNS. This Forbearance Agreement and the
other Loan Documents: (i) shall be binding upon the Bank, the Borrowers, and the
Guarantors and upon their respective heirs, nominees, successors and assigns,
and (ii) shall inure to the benefit of the Bank and the ECC Group; provided,
however, that neither the Borrowers nor any of the Guarantors may assign any
rights hereunder or any interest herein without obtaining the prior written
consent of the Bank, and any such assignment or attempted assignment shall be
void and of no effect with respect to the Bank.
9.16 SEVERABILITY OF PROVISIONS. Any provision of this Forbearance
Agreement that is held to be inoperative, unenforceable, void or invalid in any
jurisdiction shall, as to that jurisdiction, be ineffective, unenforceable, void
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability or validity of that provision in any other
jurisdiction, and to this end the provisions of this Forbearance Agreement are
declared to be severable.
9.17 CONFLICTING PROVISIONS. To the extent that any of the terms in
this Forbearance Agreement contradict any of the terms contained in any of the
Loan Documents, the terms of this Forbearance Agreement shall control.
9.18 JOINT AND SEVERAL LIABILITY. The obligations and liabilities
of the Borrowers and the Guarantors hereunder are joint and several.
9.19 COUNTERPARTS; EFFECTIVENESS. This Forbearance Agreement may be
executed in any number of counterparts and by the different parties on separate
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute one and the same Forbearance
Agreement. This Forbearance Agreement shall be deemed to have been executed and
delivered when the Bank has received counterparts hereof executed by all parties
listed on the signature pages hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties have caused this Forbearance Agreement to be executed as of the date
first above written.
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxxx X. Xxxxx
---------------------------------
Title: Senior Vice President
ATTEST: ECC International Corp.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
ATTEST: Ecc Simulation Limited
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
ATTEST: Ecc International, Inc.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
ATTEST: Educational Computer
Corporation International
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
----------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
21
SCHEDULE "1" to Forbearance Agreement
between
First Fidelity Bank, National Association and ECC International Corp.
1. TERM LOAN AND REVOLVING CREDIT AGREEMENT
Borrower: ECC International Corp.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
2. AMENDMENTS TO CREDIT AGREEMENT
A. FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
Borrower: ECC Simulation Limited
Bank: First Fidelity Bank, National Association
Date: April 6, 1995
B. AMENDMENT TO CREDIT AGREEMENTS
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of October 13, 1995
C. AMENDMENT TO CREDIT AGREEMENTS
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of June 19, 1996
D. AMENDMENT TO CREDIT AGREEMENT
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of February 17, 1998
3. $11,000,000 REVOLVING CREDIT NOTE
Borrower: ECC International Corp.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
4. $9,000,000 TERM NOTE
Borrower: ECC International Corp.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
22
5. GENERAL SECURITY AGREEMENT WITH QUESTIONNAIRES
Borrowers: ECC International Corp. and ECC Simulation
Limited
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
6. GUARANTY AND SURETY AGREEMENT
Borrower: ECC International Corp.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
7. MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
Mortgagor: ECC International Corp.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
8. UCC-1 FINANCING STATEMENTS
9. LANDLORD'S WAIVER
Tenant: ECC International Corp.
Landlord: Strafford Office Buildings
Date: September 20, 1994
10. GUARANTY AND DEBENTURE WITH CERTIFICATE OF REGISTRATION
Guarantor: ECC Simulation Limited.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
11. BANK ACCOUNT SET-OFF LETTER AND ACKNOWLEDGMENT (DATED 9/19/94) TOGETHER
WITH SIDE LETTER RE: FUTURE BANK ACCOUNTS (dated 9/20/94)
12. POWER OF ATTORNEY-- appointing First Fidelity Bank, National
Association as ECC International Corp.'s attorney in fact
(dated September 20, 1994)
13. POSTAWARD SUBORDINATION AGREEMENT
Debtor: ECC International Corp.
Creditor: First Fidelity Bank, National Association
Date: September 20, 1994
14. Corporate Materials
A. OPINION OF XXXX AND XXXX regarding the Term Loan Revolving
Credit Agreement by and between ECC International Corp. and
First Fidelity Bank, National Association (dated September 20,
1994)
B. OPINION OF XXXXXXXX CHANCE in connection with the "Credit
Agreement" made between ECC Simulation Limited and First
Fidelity Bank,
23
National Association (dated September, 1994)
C. CLOSING CERTIFICATES
1. Certificate of President of ECC International, Inc. (dated
September 20, 1994)
2. Certificate of Secretary of ECC International, Inc. (dated
September 20, 1994)
D. GOOD STANDING CERTIFICATES
1. Articles of Incorporation-- ECC International, Inc.
2. By-Laws of ECC International Corp.
3. Various State Certificates of Good Standing
24
SCHEDULE "2" to Forbearance Agreement
between
First Fidelity Bank, National Association and ECC Simulation Limited.
1. REVOLVING CREDIT AGREEMENT
Borrower: ECC Simulation Limited
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
2. AMENDMENTS TO CREDIT AGREEMENT
A. FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
Borrower: ECC Simulation Limited
Bank: First Fidelity Bank, National Association
Date: April 6, 1995
B. AMENDMENT TO CREDIT AGREEMENTS
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of October 13, 1995
C. AMENDMENT TO CREDIT AGREEMENTS
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of June 19, 1996
3. $2,000,000 REVOLVING CREDIT NOTE
Borrower: ECC Simulation Limited
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
4. GENERAL SECURITY AGREEMENT WITH QUESTIONNAIRES
Borrowers: ECC International Corp. and ECC Simulation
Limited
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
5. GUARANTY AND SURETY AGREEMENT-- (CORPORATE)
Borrower: ECC Simulation Limited
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
25
6. MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
Mortgagor: ECC International Corp.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
7. UCC-1 FINANCING STATEMENTS
8. LANDLORD'S WAIVER
Tenant: ECC International Corp.
Landlord: Strafford Office Buildings
Date: September 20, 1994
9. GUARANTY AND DEBENTURE WITH CERTIFICATE OF REGISTRATION
Guarantor: ECC Simulation Limited.
Bank: First Fidelity Bank, National Association
Date: September 20, 1994
10. BANK ACCOUNT SET-OFF LETTER AND ACKNOWLEDGMENT (DATED 9/19/94) TOGETHER
WITH SIDE LETTER RE: FUTURE BANK ACCOUNTS (dated 9/20/94)
11. POWER OF ATTORNEY-- appointing First Fidelity Bank, National
Association as ECC International Corp.'s attorney in fact
(dated September 20, 1994)
12. POSTAWARD SUBORDINATION AGREEMENT
Debtor: ECC International Corp.
Creditor: First Fidelity Bank, National Association
Date: September 20, 1994
13. Corporate Materials
A. OPINION OF XXXX AND XXXX regarding the Term Loan Revolving
Credit Agreement by and between ECC International Corp. and
First Fidelity Bank, National Association (dated September 20,
1994)
B. OPINION OF XXXXXXXX CHANCE in connection with the "Credit
Agreement" made between ECC Simulation Limited and First
Fidelity Bank, National Association (dated September, 1994)
C. CLOSING CERTIFICATES
1. Certificate of President of ECC International, Inc.
(dated September 20, 1994)
2. Certificate of Secretary of ECC International, Inc. (dated
September 20, 1994)
D. ARTICLES OF INCORPORATION AND BY-LAWS
26
E. STATE CERTIFICATES OF GOOD STANDING
14. Amendments to Credit Agreement
A. FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
Borrower: ECC Simulation Limited
Bank: First Fidelity Bank, National Association
Date: April 6, 1995
B. AMENDMENT TO CREDIT AGREEMENTS
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of October 13, 1995
C. AMENDMENT TO CREDIT AGREEMENTS
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of June 19, 1996
D. AMENDMENT TO CREDIT AGREEMENT
Parties: ECC International Corp., ECC Simulation
Limited and First Union National Bank
Date: As of February 17, 1998
