Exhibit 10.3
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 entities identified as Borrower on the signature page hereof (jointly and
severally and individually and collectively, the "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
1.1 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:
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(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;
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(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 bill-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;
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(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.
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"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.
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"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.
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"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
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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.
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"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.
1.2 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
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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.
1.3 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:
2.1 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.
2.2 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.
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(b) Borrower shall comply with all of the terms and conditions of
the Loan Documents, this Agreement and the Loan Authorization
Agreement.
2.3 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.
2.4 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.
2.5 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.
2.6 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.
2.7 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.
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(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.
2.8 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.
2.9 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;
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(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,
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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
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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
3.1 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.
3.2 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.
ARTICLE IV
MISCELLANEOUS
4.1 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.
4.2 NOTIFICATION. All notices required by this Agreement shall be given
in the manner and to the parties provided for in the Loan Agreement.
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4.3 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.
4.4 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 OMISSIONS OF LENDER, EX-IM BANK, OR ANY OTHER PERSON,
RELATING TO THIS AGREEMENT, THE LOAN AUTHORIZATION AGREEMENT OR ANY OTHER LOAN
DOCUMENT.
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IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly
executed as of the 30th day of January, 2003.
ASPEN TECHNOLOGY, INC.
By: /s/ LISA W. ZAPPALA
--------------------------------
(Signature)
Name: LISA W. ZAPPALA
--------------------------------
(Print or Type)
Title: Senior Vice President and
Chief Financial Officer
--------------------------------
(Print or Type)
ASPENTECH, INC.
By: /s/ LISA W. ZAPPALA
--------------------------------
(Signature)
Name: LISA W. ZAPPALA
--------------------------------
(Print or Type)
Title: Treasurer
(Print or Type)
ACKNOWLEDGED:
SILICON VALLEY BANK, d/b/a
SILICON VALLEY "EAST"
By: /s/ JOHN V. ATANASOFF
--------------------------------
(Signature)
Name: JOHN V. ATANASOFF
--------------------------------
(Print or Type)
Title: Vice President
--------------------------------
(Print or Type)
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ANNEXES:
Annex A - Loan Authorization Agreement or Loan Authorization Notice
19