UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission file number 0-9722
INTERGRAPH CORPORATION
----------------------
(Exact name of registrant as specified in its charter)
Delaware 63-0573222
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Intergraph Corporation
Huntsville, Alabama 35894-0001
-------------------------------------- ------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (205) 730-2000
--------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.10 per share
---------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. (X)
As of January 31, 1997, there were 47,758,544 shares of Intergraph
Corporation Common Stock $0.10 par value outstanding. The aggregate
market value of the voting stock held by nonaffiliates of the
registrant was approximately $362,316,000 based on the closing sale
price of such stock as reported by NASDAQ on January 31, 1997,
assuming that all shares beneficially held by executive officers
and members of the registrant's Board of Directors are shares owned
by "affiliates," a status which each of the executive officers and
directors individually disclaims.
DOCUMENTS INCORPORATED BY REFERENCE
Documents Form 10-K Reference
--------- -------------------
Portions of the Annual Report to
Shareholders for the year ended
December 31, 1996 Part I, Part II, Part IV
Portions of the Proxy Statement for the
May 15, 1997 Annual Shareholders' Meeting Part III
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
Page in
Number Description Form 10-K
------ ----------- ---------
3) Exhibits
3(a) Certificate of Incorporation, Bylaws,
and Certificate of Merger. (1)
3(b) Amendment to Certificate of
Incorporation. (2)
3(c) Restatement of Bylaws. (3)
4 Shareholder Rights Plan, dated
August 25, 1993. (4)
10(a)* Employment contracts of Allan B.
Wilson dated May 3, 1995. (5)
10(b)* Loan program for executive officers
of the Company as amended, dated
May 1, 1996. (6)
10(c) Loan and Security Agreement and
amendment, by and between Intergraph
Corporation and Foothill Capital
Corporation, dated December 20,1996.
10(d)* Intergraph Corporation 1997 Stock
Option Plan. (6)
11 Computations of Loss Per Share 18
13 Portions of the Intergraph Corporation
1996 Annual Report to Shareholders
incorporated by reference in this
Form 10-K Annual Report
21 Subsidiaries of the Company 19
23 Consent of Independent Auditors 20
27 Financial Data Schedule
99 Consent of Director Nominee 21
*Denotes management contract or compensatory plan, contract, or
arrangement required to be filed as an Exhibit to this Form 10-K
- --------------
(1)Incorporated by reference to exhibits filed with the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,1984,
under the Securities Exchange Act of 1934, File No. 0-9722.
(2)Incorporated by reference to exhibits filed with the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,1987,
under the Securities Exchange Act of 1934, File No. 0-9722.
(3)Incorporated by reference to exhibits filed with the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,1993,
under the Securities Exchange Act of 1934, File No. 0-9722.
(4)Incorporated by reference to exhibits filed with the Company's
Current Report on Form 8-K dated August 25,1993, under the
Securities Exchange Act of 1934, File No. 0-9722.
(5)Incorporated by reference to exhibits filed with the Company's
Annual Report on Form 10-K for the year ended December 31,1995,
under the Securities Exchange Act of 1934, File No. 0-9722.
(6)Incorporated by reference to exhibits filed with the Company's
Annual Report on Form 10-K for the year ended December 31,1996,
under the Securities Exchange Act of 1934, File No. 0-9722.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned thereunto duly authorized.
INTERGRAPH CORPORATION
By /s/ John W. Wilhoite Date: September 25, 1997
---------------------------------- ------------------
John W. Wilhoite
Vice President and Controller
(Principal Accounting Officer)
===============================================================================
LOAN AND SECURITY AGREEMENT
by and between
INTERGRAPH CORPORATION
and
FOOTHILL CAPITAL CORPORATION
Dated as of December 20, 1996
===============================================================================
TABLE OF CONTENTS
-----------------
Page(s)
-------
1. DEFINITIONS AND CONSTRUCTION. 1
1.1 Definitions 1
1.2 Accounting Terms 24
1.3 Code 25
1.4 Construction 25
1.5 Schedules and Exhibits. 25
2. LOAN AND TERMS OF PAYMENT. 25
2.1 Revolving Advances. 25
2.2 Letters of Credit. 26
2.3 Term Loan 29
2.4 [Intentionally omitted]. 29
2.5 Overadvances 29
2.6 Interest and Letter of Credit Fees: Rates,
Payments, and Calculations. 29
2.7 Collection of Accounts 30
2.8 Crediting Payments; Application of
Collections 31
2.9 Designated Account. 31
2.10 Maintenance of Loan Account; Statements of
Obligations. 32
2.11 Fees. 32
3. CONDITIONS; TERM OF AGREEMENT. 33
3.1 Conditions Precedent to the Initial Advance,
and Letter of Credit, and the Term Loan. 33
3.2 Conditions Precedent to all Advances, all
Letters of Credit, and the Term Loan. 36
3.3 Condition Subsequent. 36
3.4 Term. 39
3.5 Effect of Termination. 39
3.6 Early Termination by Borrower. 39
3.7 Termination Upon Event of Default. 40
4. CREATION OF SECURITY INTEREST. 40
4.1 Grant of Security Interest. 40
4.2 Negotiable Collateral. 41
4.3 Collection of Accounts, General Intangibles,
and Negotiable Collateral. 42
4.4 Delivery of Additional Documentation
Required. 42
4.5 Power of Attorney. 43
4.6 Right to Inspect. 43
5. REPRESENTATIONS AND WARRANTIES. 44
5.1 No Encumbrances. 44
5.2 Eligible Accounts. 44
5.3 Eligible Domestic Inventory. 44
5.4 Equipment. 44
5.5 Location of Inventory and Equipment. 44
5.6 Inventory Records. 44
5.7 Location of Chief Executive Office; FEIN. 45
5.8 Due Organization and Qualification;
Subsidiaries. 45
5.9 Due Authorization; No Conflict. 45
5.10 Litigation. 46
5.11 No Material Adverse Change. 47
5.12 Solvency. 47
5.13 Employee Benefits. 47
5.14 Environmental Condition. 47
5.15 Securities Accounts. 48
6. AFFIRMATIVE COVENANTS. 48
6.1 Accounting System. 48
6.2 Collateral Reporting. 48
6.3 Financial Statements, Reports, Certificates. 49
6.4 Tax Returns. 50
6.5 Guarantor Reports. 51
6.6 Returns. 51
6.7 Title to Equipment. 51
6.8 Maintenance of Equipment. 51
6.9 Taxes. 51
6.10 Insurance. 52
6.11 No Setoffs or Counterclaims. 53
6.12 Location of Inventory and Equipment. 53
6.13 Compliance with Laws. 54
6.14 Employee Benefits. 54
6.15 Leases. 55
7. NEGATIVE COVENANTS. 55
7.1 Indebtedness. 55
7.2 Liens. 56
7.3 Restrictions on Fundamental Changes. 56
7.4 Disposal of Assets. 57
7.5 Change Name. 57
7.6 [intentionally omitted]. 57
7.7 Nature of Business. 57
7.8 Prepayments and Amendments. 57
7.9 Change of Control. 57
7.10 Consignments. 57
7.11 Distributions. 58
7.12 Accounting Methods. 58
7.13 Investments. 58
7.14 Transactions with Affiliates. 58
7.15 Suspension. 58
7.16 [intentionally omitted]. 58
7.17 Use of Proceeds. 58
7.18 Change in Location of Chief Executive Office;
Inventory and Equipment with Bailees. 59
7.19 No Prohibited Transactions Under ERISA 59
7.20 Financial Covenants. 60
7.21 Capital Expenditures. 60
8. EVENTS OF DEFAULT. 60
9. FOOTHILL'S RIGHTS AND REMEDIES. 62
9.1 Rights and Remedies. 62
9.2 Remedies Cumulative. 65
10. TAXES AND EXPENSES. 65
11. WAIVERS; INDEMNIFICATION 66
11.1 Demand; Protest; etc. 66
11.2 Foothill's Liability for Collateral. 66
11.3 Indemnification. 66
12. NOTICES. 66
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 68
14. DESTRUCTION OF BORROWER'S DOCUMENTS. 68
15. GENERAL PROVISIONS. 69
15.1 Effectiveness. 69
15.2 Successors and Assigns. 69
15.3 Section Headings. 69
15.4 Interpretation. 69
15.5 Severability of Provisions. 69
15.6 Amendments in Writing. 69
15.7 Counterparts; Telefacsimile Execution. 69
15.8 Revival and Reinstatement of Obligations. 70
15.9 Integration. 70
15.10 Confidentiality. 71
SCHEDULES AND EXHIBITS
----------------------
Schedule E-1 Eligible Domestic Inventory Locations
Schedule P-1 Permitted Liens
Schedule P-2 Permitted Other Investments
Schedule R-1 Real Property Collateral
Schedule 5.8 Subsidiaries -- Capitalization and Assets
Schedule 5.10 Litigation
Schedule 5.13 ERISA Benefit Plans
Schedule 5.14 Environmental Condition
Schedule 6.12 Location of Inventory and Equipment
Schedule 7.1 Indebtedness
Exhibit A-1 Form of Aircraft Security Agreement
Exhibit C-1 Form of Compliance Certificate
Exhibit C-2 Form of Copyright Security Agreement
Exhibit P-1 Form of Patent Security Agreement
Exhibit P-2 Form of Pledge Agreement
Exhibit T-1 Form of Trademark Security Agreement
Exhibit V-1 Form of VCOC Letter
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is
entered into as of December 20, 1996, between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Foothill"), with a
place of business located at 11111 Santa Monica Boulevard,
Suite 1500, Los Angeles, California 90025-3333, and INTERGRAPH
CORPORATION, a Delaware corporation ("Borrower"), with its
chief executive office located at One Madison Industrial Park,
Huntsville, Alabama 35894.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the
following terms shall have the following definitions:
"Account Debtor" means any Person who is or who
may become obligated under, with respect to, or on account of,
an Account.
"Accounts" means all presently existing and
hereafter arising accounts, contract rights, and all other
forms of obligations owing to Borrower arising out of the
sale, license, or lease of goods or software or the rendition
of services by Borrower, irrespective of whether earned by
performance, and any and all credit insurance, guaranties, or
security therefor.
"Advances" has the meaning set forth in Section 2.1(a).
"Affiliate" means, as applied to any Person,
any other Person who directly or indirectly controls, is
controlled by, is under common control with or is a director
or officer of such Person. For purposes of this definition,
"control" means: (a) solely when "Affiliate" is used in
determining Eligible Accounts, the possession, directly or
indirectly, of the power to vote 5% or more of the securities
having ordinary voting power for the election of directors or
the direct or indirect power to direct the management and
policies of a Person; and (b) in all other cases, the
possession, directly or indirectly, of the power to vote 10%
or more of the securities having ordinary voting power for the
election of directors or the direct or indirect power to
direct the management and policies of a Person.
"Agreement" has the meaning set forth in the preamble hereto.
"Aircraft Security Agreement" means an Aircraft
Security Agreement, in the form of Exhibit A-1 attached
hereto, dated as of even date herewith, between Borrower and Foothill.
"AnaTech Division" means the AnaTech Division of Borrower.
"AnaTech Accounts" means Accounts created by
the AnaTech Division.
"Appraised Assets" means items of Equipment
that are the subject of that certain appraisal, dated December
11, 1996, performed by Acuval Associates, Inc. or any
subsequent appraisal performed by a qualified appraiser
satisfactory to Foothill.
"Asset Disposition" means any sale, license,
lease, exchange, transfer, or other disposition (including any
disposition as part of a sale and lease-back transaction),
directly or indirectly, by Borrower of any of the properties
or assets of Borrower.
"Authorized Person" means any officer or other
employee of Borrower.
"Average Unused Portion of Maximum Revolving
Amount" means, as of any date of determination, (a) the
Maximum Revolving Amount, less (b) the sum of (i) the average
Daily Balance of Advances that were outstanding during the
immediately preceding month, plus (ii) the average Daily
Balance of the Letter of Credit Usage during the immediately
preceding month.
"Availability" means the amount of money that
Borrower is entitled to borrow as Advances under Section 2.1,
such amount being the difference derived when (a) the sum of
the principal amount of Advances then outstanding (including
any amounts that Foothill may have paid for the account of
Borrower pursuant to any of the Loan Documents and that have
not been reimbursed by Borrower) is subtracted from (b) the
lesser of (i) the Maximum Revolving Amount less the Letter of
Credit Usage, or (ii) the Borrowing Base less the Letter of
Credit Usage.
"Bankruptcy Code" means the United States
Bankruptcy Code (11 U.S.C. 101 et seq.), as amended, and any
successor statute.
"Benefit Plan" means a "defined benefit plan"
(as defined in Section 3(35) of ERISA) for which Borrower, any
Subsidiary of Borrower, or any ERISA Affiliate has been an
"employer" (as defined in Section 3(5) of ERISA) within the
past six years.
"Bentley Equity Interests" means the equity
interests in Bentley Systems, Inc. owned of record by Borrower
and the rights of Borrower related thereto under that certain
Stockholders' Agreement, dated June 11, 1987, by and among
Bentley Systems, Inc., Borrower, and the "Management
Stockholders" party thereto (as amended).
"Bestinfo" means Bestinfo, Inc., a Delaware corporation.
"Books" means all of Borrower's books and
records including: ledgers; records indicating, summarizing,
or evidencing Borrower's properties or assets (including the
Collateral) or liabilities; all information relating to
Borrower's business operations or financial condition; and all
computer programs, disk or tape files, printouts, runs, or
other computer prepared information.
"Borrower" has the meaning set forth in the
preamble to this Agreement.
"Borrowing Base" has the meaning set forth in
Section 2.1(a). For purposes of this definition, any amount
that is denominated in a currency other than Dollars shall be
valued in Dollars based on the applicable Exchange Rate for
such currency as of the date 1 Business Day prior to the date
of determination.
"Business Day" means any day that is not a
Saturday, Sunday, or other day on which national banks are
authorized or required to close.
"Change of Control" shall be deemed to have
occurred at such time as a "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of more than 25% of the total
voting power of all classes of stock then outstanding of
Borrower entitled to vote in the election of directors.
"Chelmsford Property" means the Real Property
(and related improvements thereto) of Borrower located in or
about Chelmsford, Massachusetts.
"Closing Date" means the date of the first to
occur of the making of the initial Advance, the issuance of
the initial Letter of Credit, or the funding of the Term Loan.
"Code" means the California Uniform Commercial Code.
"Collateral" means all right, title, or
interest of Borrower with respect to the following:
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) the Real Property Collateral,
(h) any money, or other assets of Borrower that now or
hereafter come into the possession, custody, or control of Foothill, and
(i) the proceeds and products, whether
tangible or intangible, of any of the foregoing, including
proceeds of insurance covering any or all of the Collateral,
and any and all Accounts, Books, Equipment, General
Intangibles, Inventory, Negotiable Collateral, Real Property,
money, deposit accounts, or other tangible or intangible
property resulting from the sale, exchange, collection, or
other disposition of any of the foregoing, or any portion
thereof or interest therein, and the proceeds thereof.
"Collateral Access Agreement" means a landlord
waiver, mortgagee waiver, bailee letter, or acknowledgement
agreement of any warehouseman, processor, lessor, consignee,
or other Person in possession of, having a Lien upon, or
having rights or interests in the Equipment or Inventory, in
each case, in form and substance reasonably satisfactory to
Foothill.
"Collections" means all cash, checks, notes,
instruments, and other items of payment (including, insurance
proceeds, proceeds of cash sales, rental proceeds, and tax
refunds).
"Compliance Certificate" means a certificate
substantially in the form of Exhibit C-1 and delivered by the
chief financial officer or the chief accounting officer of
Borrower to Foothill.
"Consolidated Current Assets" means, as of any
date of determination, the aggregate amount of all current
assets of Borrower and its Subsidiaries that would, in
accordance with GAAP, be classified on a balance sheet as
current assets.
"Consolidated Current Liabilities" means, as of
any date of determination, the aggregate amount of all current
liabilities of Borrower and its Subsidiaries that would, in
accordance with GAAP, be classified on a balance sheet as
current liabilities. For purposes of this definition, all
Obligations outstanding under this Agreement shall be deemed
to be current liabilities without regard to whether they would
be deemed to be so under GAAP.
"Copyright Security Agreement" means a
Copyright Security Agreement, in the form of Exhibit C-2
attached hereto, dated as of even date herewith, between
Borrower and Foothill.
"Currency Protection Agreement" shall mean any
currency swap, cap, or collar agreement or other similar
insurance-type agreement in connection with hedging against
foreign currency rate fluctuations.
"Daily Balance" means the amount of an
Obligation owed at the end of a given day.
"deems itself insecure" means that the Person
deems itself insecure in accordance with the provisions of
Section 1208 of the Code.
"Default" means an event, condition, or default
that, with the giving of notice, the passage of time, or both,
would be an Event of Default.
"Designated Account" means account number 4068-
0637 of Borrower maintained with Borrower's Designated Account
Bank, or such other deposit account of Borrower (located
within the United States) which has been designated, in
writing and from time to time, by Borrower to Foothill.
"Designated Account Bank" means Citibank, N.A.,
whose office is located at 399 Park Avenue, New York, New York
10043, and whose ABA number is 021-000-089.
"Dilution" means, in each case based upon the
experience of the immediately prior 90 days, the result of
dividing the Dollar amount of (a) bad debt write-downs,
discounts, returns, credits, or other dilution with respect to
the Accounts, by (b) Collections with respect to Accounts (in
each case, excluding intercompany Accounts and extraordinary
items) plus the Dollar amount of clause (a).
"Dilution Reserve" means, as of any date of
determination pursuant to the report of Dilution delivered
under Section 6.2, an amount sufficient to reduce Foothill's
advance rate against Eligible Accounts by 1 percentage point
for each percentage point by which Dilution is in excess of
8%.
"Disbursement Letter" means an instructional
letter executed and delivered by Borrower to Foothill
regarding the extensions of credit to be made on the Closing
Date, the form and substance of which shall be reasonably
satisfactory to Foothill.
"Dollars or $" means United States dollars.
"Domestic Accounts" means Accounts with respect
to which the Account Debtor maintains its chief executive
office in the United States or is organized under the laws of
the United States or any State thereof.
"Early Termination Premium" has the meaning set
forth in Section 3.6.
"Eligible Accounts" means Eligible Domestic
Accounts and Eligible Unbilled Accounts.
"Eligible Domestic Accounts" means those
Accounts created by Borrower in the ordinary course of
business, that arise out of Borrower's sale, license, or lease
of goods or software or rendition of services, and that
strictly comply with each and all of the representations and
warranties respecting Accounts made by Borrower to Foothill in
the Loan Documents; provided, however, that standards of
eligibility may be fixed and revised from time to time by
Foothill in Foothill's reasonable credit judgment. Eligible
Domestic Accounts shall not include the following:
(a) Accounts that the Account Debtor has failed to pay
within 60 days of due date (or, in the case of Federal
Accounts, 90 days of due date) or Accounts with selling terms
of more than 60 days;
(b) Accounts owed by an Account Debtor or its Affiliates
where 50% or more of all Accounts owed by that Account Debtor
(or its Affiliates) are deemed ineligible under clause (a)
above;
(c) Accounts with respect to which the Account Debtor is
an employee, Affiliate, or agent of Borrower;
(d) Accounts with respect to which goods are placed on
consignment, guaranteed sale, sale or return, sale on
approval, bill and hold, or other terms by reason of which the
payment by the Account Debtor may be conditional;
(e) Accounts that are not payable in Dollars or with
respect to which the Account Debtor: (i) does not maintain its
chief executive office in the United States, or (ii) is not
organized under the laws of the United States or any State
thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or
other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof,
unless (y) the Account is supported by an irrevocable letter
of credit that is satisfactory to Foothill (as to form,
substance, and issuer or domestic confirming bank) and that,
upon the occurrence and during the continuance of an Event of
Default, has been delivered to Foothill and is directly
drawable by Foothill (provided, however, that nothing herein
shall limit Foothill's right to not make an Advance or issue a
Letter of Credit upon the occurrence and during the
continuance of an Event of Default), or (z) the Account is
covered by credit insurance in form and amount, and by an
insurer, satisfactory to Foothill;
(f) Accounts with respect to which the Account Debtor is
a creditor of Borrower, has or has asserted a right of setoff,
has disputed its liability (whether pursuant to a contractual
discrepancy or otherwise), or has made any claim with respect
to the Account; provided, however, that the foregoing only
shall apply to the extent of such right of setoff, disputed
liability, or other claim giving rise to such contra-account.
(g) Accounts with respect to an Account Debtor whose
total obligations owing to Borrower exceed 10% of all Eligible
Accounts, to the extent of the obligations owing by such
Account Debtor in excess of such percentage; provided,
however, that in the case of the United States and its
departments, agencies, and instrumentalities, taken as a
whole, the foregoing percentage shall be fifty percent (50%)
before the excess would be deemed ineligible;
(h) Accounts with respect to which the Account Debtor is
subject to any Insolvency Proceeding, or becomes insolvent, or
goes out of business;
(i) Accounts the collection of which Foothill, in its
reasonable credit judgment, believes to be doubtful by reason
of the Account Debtor's financial condition and with respect
to which Foothill has notified Borrower of such belief;
(j) Accounts (other than Eligible Unbilled Accounts)
with respect to which the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, the
services giving rise to such Account have not been performed
and accepted by the Account Debtor, or the Account otherwise
does not represent a final sale;
(k) Accounts with respect to which the Account Debtor is
located in the states of New Jersey, Minnesota, Indiana, or
West Virginia (or any other state that requires a creditor to
file a Business Activity Report or similar document in order
to bring suit or otherwise enforce its remedies against such
Account Debtor in the courts or through any judicial process
of such state), unless Borrower has qualified to do business
in New Jersey, Minnesota, Indiana, West Virginia, or such
other states, or has filed a Notice of Business Activities
Report with the applicable division of taxation, the
department of revenue, or with such other state offices, as
appropriate, for the then-current year, or is exempt from such
filing requirement;
(l) At such times as Foothill may determine in its sole
discretion, Federal Accounts (exclusive, however, of Accounts
with respect to which Borrower has complied, to the
satisfaction of Foothill and subject to Section 4.4(c) hereof,
with the Assignment of Claims Act, 31 U.S.C. 3727);
(m) At such times as Foothill may determine in its sole
discretion, Accounts with respect to which the Account Debtor
is any State of the United States (exclusive, however, of: (i)
Accounts owed by any State that does not have a statutory
counterpart to the Assignment of Claims Act; and (ii) Accounts
owed by any State that has a statutory counterpart to the
Assignment of Claims Act and with respect to which Borrower
has complied, to the satisfaction of Foothill and subject to
Section 4.4(c) hereof, with such statutory counterpart);
(n) Federal Accounts arising under any one underlying
contract or any series of related underlying contracts, the
total amount of which obligations owing Borrower exceeds 10%
of all Eligible Accounts, to the extent of the obligations
owing under such contract or contracts in excess of such
percentage;
(o) Federal Accounts in respect of which the subject
contract for goods and services is designated by the Account
Debtor as "classified" (i.e., the ability of Foothill to
receive information regarding such contract or such Account is
restricted by rules or regulations of the United States or any
department, agency, or instrumentality of the United States in
respect of classified information);
(p) Optronics Accounts or AnaTech Accounts;
(q) Accounts which represent progress payments or other
advance billings that are due prior to the completion of
performance by Borrower of the subject contract for goods or
services, except to the extent that such progress payments or
other advance billings are expressly permitted by the terms of
the subject contract (including so-called "maintenance
contracts"); or
(r) Accounts with respect to which a surety or other
bond has been issued in respect of the performance by Borrower
of the subject contract for goods or services.
"Eligible Domestic Inventory" means Eligible
Domestic Finished Goods Inventory and Eligible Domestic Raw
Materials Inventory.
"Eligible Domestic Finished Goods Inventory"
means Inventory consisting of first quality finished goods
held for sale or license in the ordinary course of Borrower's
business, that are located at or in-transit between Borrower's
premises identified on Schedule E-1, and that strictly comply
with each and all of the representations and warranties
respecting Inventory made by Borrower to Foothill in the Loan
Documents; provided, however, that standards of eligibility
may be fixed and revised from time to time by Foothill in
Foothill's reasonable credit judgment. In determining the
amount to be so included, Inventory shall be valued at the
lower of cost or market on a basis consistent with Borrower's
current and historical accounting practices. An item of
Inventory shall not be included in Eligible Domestic Finished
Goods Inventory if:
(a) through (g) are manually numbered(a) it
is not owned solely by Borrower or Borrower does not have
good, valid, and marketable title thereto;
(b) it is not located at one of the locations
set forth on Schedule E-1;
(c) it is not located on property owned or
leased by Borrower or in a contract warehouse, in each case,
subject to a Collateral Access Agreement executed by the
mortgagee, lessor, the warehouseman, or other third party, as
the case may be, and segregated or otherwise separately
identifiable from goods of others, if any, stored on the
premises;
(d) it is not subject to a valid and perfected
first priority security interest in favor of Foothill;
(e) it consists of goods returned or rejected
by Borrower's customers or goods in transit;
(f) it is Inventory of the Optronics Division
or the AnaTech Division; or
(g) it is obsolete or slow moving, a
restrictive or custom item, raw materials, work-in-process, a
component that is not part of finished goods, or constitutes
spare parts (other than spare parts located at the Huntsville
Property), packaging and shipping materials, supplies used or
consumed in Borrower's business, Inventory subject to a Lien
in favor of any third Person, bill and hold goods, defective
goods, "seconds," or Inventory acquired on consignment.
"Eligible Domestic Raw Materials Inventory"
means Inventory that does not qualify as Eligible Domestic
Finished Goods Inventory solely because it constitutes raw
materials consisting of components used as a part of first
quality finished goods held for sale in the ordinary course of
Borrower's business.
"Eligible Unbilled Accounts" means those
Domestic Accounts created by Borrower that would qualify as
Eligible Domestic Accounts except for the fact that they
constitute Unbilled Accounts.
"Equipment" means all of Borrower's present and
hereafter acquired machinery, machine tools, motors,
equipment, furniture, furnishings, fixtures, vehicles
(including motor vehicles and trailers), tools, parts, goods
(other than consumer goods, farm products, or Inventory),
wherever located, including, (a) any interest of Borrower in
any of the foregoing, and (b) all attachments, accessories,
accessions, replacements, substitutions, additions, and
improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income
Security Act of 1974, 29 U.S.C. 1000 et seq., amendments
thereto, successor statutes, and regulations or guidance
promulgated thereunder.
"ERISA Affiliate" means (a) any corporation
subject to ERISA whose employees are treated as employed by
the same employer as the employees of Borrower under IRC
Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer
as the employees of Borrower under IRC Section 414(c), (c)
solely for purposes of Section 302 of ERISA and Section 412 of
the IRC, any organization subject to ERISA that is a member of
an affiliated service group of which Borrower is a member
under IRC Section 414(m), or (d) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any party
subject to ERISA that is a party to an arrangement with
Borrower and whose employees are aggregated with the employees
of Borrower under IRC Section 414(o).
"ERISA Event" means (a) a Reportable Event with
respect to any Benefit Plan or Multiemployer Plan, (b) the
withdrawal of Borrower, any of its Subsidiaries or ERISA
Affiliates from a Benefit Plan during a plan year in which it
was a "substantial employer" (as defined in Section 4001(a)(2)
of ERISA), (c) the providing of notice of intent to terminate
a Benefit Plan in a distress termination (as described in
Section 4041(c) of ERISA), (d) the institution by the PBGC of
proceedings to terminate a Benefit Plan or Multiemployer Plan,
(e) any event or condition (i) that provides a basis under
Section 4042(a)(1), (2), or (3) of ERISA for the termination
of, or the appointment of a trustee to administer, any Benefit
Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A
of ERISA, (f) the partial or complete withdrawal within the
meaning of Sections 4203 and 4205 of ERISA, of Borrower, any
of its Subsidiaries or ERISA Affiliates from a Multiemployer
Plan, or (g) providing any security to any Plan under Section
401(a)(29) of the IRC by Borrower or its Subsidiaries or any
of their ERISA Affiliates.
"Event of Default" has the meaning set forth in Section 8.
"Exchange Rate" means the nominal rate of
exchange available to Foothill in a chosen foreign exchange
market for the purchase of the applicable non-Dollar currency
at 12:00 noon, local time, 1 Business Day prior to any date of
determination, expressed as the number of units of such
currency per Dollar.
"Excluded Foreign Portion" means, with respect
to any Foreign Subsidiary, the portion (if any) of the equity
securities of such Subsidiary owned of record by Borrower with
voting power that is in excess of 65% of the total combined
voting power of issued and outstanding stock of such
Subsidiary entitled to vote.
"Excluded Foreign Subsidiary Securities" means
(a) the Excluded Foreign Portion (if any) of the equity
securities of any Foreign Subsidiary of Borrower identified in
Schedule II of the Pledge Agreement (as the same may be
amended or supplemented from time to time), and (b) subject to
the last paragraph of Section 6.3, 100% of the fully diluted
issued and outstanding equity securities of any other Foreign
Subsidiary of Borrower.
"Existing Lender" means Citicorp USA, Inc., as
the representative of certain banks and other financial
institutions.
"Federal Accounts" means Accounts where the
United States or any department, agency, or instrumentality of
the United States is the Account Debtor.
"FEIN" means Federal Employer Identification Number.
"Foothill" has the meaning set forth in the
preamble to this Agreement.
"Foothill Account" has the meaning set forth in Section 2.7.
"Foothill Expenses" means all: costs or
expenses (including taxes, and insurance premiums) required to
be paid by Borrower under any of the Loan Documents that are
paid or incurred by Foothill; fees or charges paid or incurred
by Foothill in connection with Foothill's transactions with
Borrower, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication,
public record searches (including tax lien, litigation, and
UCC (or equivalent) searches and including searches with the
patent and trademark office, the copyright office, or the
department of motor vehicles), filing, recording, publication,
appraisal (including periodic Personal Property Collateral or
Real Property Collateral appraisals), real estate surveys,
real estate title policies and endorsements, and environmental
audits; costs and expenses incurred by Foothill in the
disbursement of funds to Borrower (by wire transfer or
otherwise); charges paid or incurred by Foothill resulting
from the dishonor of checks; costs and expenses paid or
incurred by Foothill to correct any default or enforce any
provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling,
preparing for sale, or advertising to sell the Personal
Property Collateral or the Real Property Collateral, or any
portion thereof, irrespective of whether a sale is
consummated; costs and expenses paid or incurred by Foothill
in examining Borrower's Books; costs and expenses of third
party claims or any other suit paid or incurred by Foothill in
enforcing or defending the Loan Documents or in connection
with the transactions contemplated by the Loan Documents or
Foothill's relationship with Borrower (or any of its
Subsidiaries party to one or more Loan Documents); and
Foothill's reasonable attorneys fees and expenses incurred in
advising, structuring, drafting, reviewing, administering,
amending, terminating, enforcing (including attorneys fees and
expenses incurred in connection with a "workout," a
"restructuring," or an Insolvency Proceeding concerning
Borrower), defending, or concerning the Loan Documents,
irrespective of whether suit is brought.
"Foreign Subsidiary" means any Subsidiary
organized under the laws of a jurisdiction other than the
United States or any State thereof.
"GAAP" means generally accepted accounting
principles as in effect from time to time in the United
States, consistently applied.
"General Intangibles" means all of Borrower's
present and future general intangibles and other personal
property (including contract rights, rights arising under
common law, statutes, or regulations, choses or things in
action, goodwill, patents, trade names, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase
orders, customer lists, monies due or recoverable from pension
funds, route lists, rights to payment and other rights under
any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or
tapes, literature, reports, catalogs, deposit accounts,
insurance premium rebates, tax refunds, and tax refund
claims), other than goods, Accounts, and Negotiable
Collateral.
"Governing Documents" means the certificate or
articles of incorporation, by-laws, or other organizational or
governing documents of any Person.
"Hazardous Materials" means (a) substances that
are defined or listed in, or otherwise classified pursuant to,
any applicable laws or regulations as "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances,"
or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, or "EP toxicity", (b) oil, petroleum,
or petroleum derived substances, natural gas, natural gas
liquids, synthetic gas, drilling fluids, produced waters, and
other wastes associated with the exploration, development, or
production of crude oil, natural gas, or geothermal resources,
(c) any flammable substances or explosives or any radioactive
materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of 50 parts per
million.
"Huntsville Property" means the Real Property
(and related improvements thereto) of Borrower located in or
about Huntsville, Alabama.
"IG Australia" means Intergraph Corporation
Pty., Ltd.. a corporation organized under the laws of Australia.
"IG Australia Existing Lender" means National
Bank of Australia.
"IG Australia Existing Lender Pay-Off Letter"
means a letter, in form and substance reasonably satisfactory
to Foothill, from IG Australia Existing Lender respecting the
amount necessary to repay in full all of the obligations of
Borrower or IG Australia owing to IG Australia Existing Lender
and obtain a termination or release of all of the Liens
existing in favor of IG Australia Existing Lender in and to
the properties or assets of Borrower and its Subsidiaries.
"IG Benelux" means Intergraph Benelux B.V., a
corporation organized under the laws of The Netherlands.
"IG Benelux Existing Lender" means ING Bank, N.V..
"IG Delaware" means Intergraph Delaware, Inc.,
a Delaware corporation.
"Indebtedness" means: (a) all obligations of
Borrower for borrowed money, (b) all obligations of Borrower
evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations of
Borrower in respect of letters of credit, bankers acceptances,
interest rate swaps, or other financial products, (c) all
obligations of Borrower under capital leases, (d) all
obligations or liabilities of others secured by a Lien on any
property or asset of Borrower, irrespective of whether such
obligation or liability is assumed, and (e) any obligation of
Borrower guaranteeing or intended to guarantee (whether
guaranteed, endorsed, co-made, discounted, or sold with
recourse to Borrower) any indebtedness, lease, dividend,
letter of credit, or other obligation of any other Person;
provided, however, that the term "Indebtedness" shall not
include (i) liabilities or obligations arising out of or
relating to guarantees, warranties, or other commitments that
products or systems sold by Borrower or any of its Affiliates
will meet particular performance or operating specifications
("Commercial Performance Guarantees"), or (ii) liabilities
arising out of or relating to agreements or commitments of
Borrower to maintain the financial condition or solvency of
any Affiliate of Borrower that are made, in the ordinary
course of Borrower's business consistent with past practices,
in connection with or in fulfillment of any Commercial
Performance Guarantee.
"Insolvency Proceeding" means any proceeding
commenced by or against any Person under any provision of the
Bankruptcy Code or under any other bankruptcy or insolvency
law, assignments for the benefit of creditors, formal or
informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement,
or other similar relief.
"Interest Rate Agreement" shall mean any
interest rate swap agreement or any other similar insurance-
type agreement in connection with any interest "cap" or
"collar" transaction or any other interest rate hedging
transaction.
"InterCAP" means InterCAP Graphic Systems,
Inc., a Delaware corporation.
"Intercompany Notes" means promissory notes, if
any, evidencing loan obligations between Borrower and any of
its Subsidiaries that constitute loans qualifying under the
definition of "Permitted Subsidiary Loans and Capital
Contributions" or that are permitted under Section 7.1(d).
"Inventory" means all present and future
inventory in which Borrower has any interest, including goods
held for sale, license, or lease or to be furnished under a
contract of service and all of Borrower's present and future
raw materials, work in process, finished goods, and packing
and shipping materials, wherever located.
"Inventory Advance Rate" means 25%; provided,
however, that the Inventory Advance Rate shall at no time
exceed the quotient, expressed as a percentage, equal to 100%
of the Liquidation Value based upon the most recent third
party appraisal of Borrower's Inventory located in the United
States conducted by an appraiser selected by Foothill, divided
by the value of Eligible Domestic Inventory on the date of
such appraisal.
"IRC" means the Internal Revenue Code of 1986,
as amended, and the regulations thereunder.
"L/C" has the meaning set forth in Section 2.2(a).
"L/C Guaranty" has the meaning set forth in Section 2.2(a).
"Letter of Credit" means an L/C or an L/C
Guaranty, as the context requires.
"Letter of Credit Usage" means the sum of (a)
the undrawn amount of Letters of Credit, plus (b) the amount
of unreimbursed drawings under Letters of Credit.
"Lien" means any interest in property securing
an obligation owed to, or a claim by, any Person other than
the owner of the property, whether such interest shall be
based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such
interest shall be contingent upon the occurrence of some
future event or events or the existence of some future
circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance,
pledge, hypothecation, assignment, deposit arrangement,
security agreement, adverse claim or charge, conditional sale
or trust receipt, or from a lease, consignment, or bailment
for security purposes and also including reservations,
exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Liquidation Value" means, in respect of any
item of Inventory or Equipment, the net orderly liquidation
value of such item of Inventory or Equipment as determined by
a qualified appraiser selected by Foothill.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the
Disbursement Letter, the Letters of Credit, the Lockbox
Agreements, the Mortgages, the Aircraft Security Agreement,
the Copyright Security Agreement, the Patent Security
Agreement, the Pledge Agreement, the Trademark Security
Agreement, the VCOC Letter, any note or notes executed by
Borrower and payable to Foothill, and any other agreement
entered into, now or in the future, in connection with this
Agreement.
"Lockbox Account" shall mean a depositary
account established pursuant to one of the Lockbox Agreements.
"Lockbox Agreements" means those certain
Lockbox Operating Procedural Agreements and those certain
Depository Account Agreements, in form and substance
reasonably satisfactory to Foothill, each of which is among
Borrower, Foothill, and one of the Lockbox Banks.
"Lockbox Banks" means Citibank, N.A., First
National Bank of Chicago, and NationsBank of Georgia.
"Lockboxes" has the meaning set forth in Section 2.7.
"M&S" means M&S Computing Investments, Inc., a
Delaware corporation.
"Material Adverse Change" means (a) a material
adverse change in the business, operations, results of
operations, assets, liabilities or condition of Borrower, (b)
the material impairment of Borrower's ability to perform its
obligations under the Loan Documents to which it is a party or
of Foothill to enforce the Obligations or to realize upon the
Collateral, (c) a material adverse effect on the value of the
Collateral or the amount that Foothill would be likely to
receive (after giving consideration to delays in payment and
costs of enforcement) in the liquidation of such Collateral,
or (d) a material impairment of the priority of Foothill's
Liens with respect to the Collateral; provided, however, that
the determination of any Material Adverse Change shall be made
after giving effect to the reserves, if any, created by
Foothill against the Borrowing Base, or the reduction, if any,
made by Foothill of the applicable advance rates based upon
the Borrowing Base, in each case, in respect of the event or
circumstance giving rise to such material adverse change,
material impairment, or material adverse effect.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Amount" means $100,000,000.
"Maximum Revolving Amount" means, as of any
date of determination, the result of (a) the Maximum Amount,
minus (b) the then outstanding principal balance of the Term Loan.
"Meadlock Note" means that certain promissory
note, dated May 1, 1996, made by James Meadlock to the order
of Borrower in the original principal amount of approximately
$4,400,000.
"Mortgage Policies" means mortgagee title
insurance policies (or marked commitments to issue the same)
for the Real Property Collateral issued by a title insurance
company reasonably satisfactory to Foothill in amounts
reasonably satisfactory to Foothill.
"Mortgages" means one or more mortgages, deeds
of trust, or deeds to secure debt, executed by Borrower in
favor of Foothill, the form and substance of which shall be
reasonably satisfactory to Foothill, that encumber the Real
Property Collateral and the related improvements thereto.
"Multiemployer Plan" means a "multiemployer
plan" (as defined in Section 4001(a)(3) of ERISA) to which
Borrower, any of its Subsidiaries, or any ERISA Affiliate has
contributed, or was obligated to contribute, within the past
six years.
"Negotiable Collateral" means all of Borrower's
present and future letters of credit, notes (including the
Meadlock Note), drafts, instruments, investment property,
security entitlements, securities (including the shares of
stock of Subsidiaries of Borrower, but expressly excluding the
Excluded Foreign Subsidiary Securities and the Bentley Equity
Interests), documents, personal property leases (wherein
Borrower is the lessor), chattel paper, and Borrower's Books
relating to any of the foregoing.
"Net Worth" means, as of any date of
determination, Borrower's total stockholder's equity.
"Obligations" means all loans, Advances, debts,
principal, interest (including any interest that, but for the
provisions of the Bankruptcy Code, would have accrued),
contingent reimbursement obligations under any outstanding
Letters of Credit, premiums (including Early Termination
Premiums), liabilities (including all amounts charged to
Borrower's Loan Account pursuant hereto), obligations, fees,
charges, costs, or Foothill Expenses (including any fees or
expenses that, but for the provisions of the Bankruptcy Code,
would have accrued), lease payments, guaranties, covenants,
and duties owing by Borrower to Foothill of any kind and
description (whether pursuant to or evidenced by the Loan
Documents or pursuant to any other agreement between Foothill
and Borrower, and irrespective of whether for the payment of
money), whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, and
including any debt, liability, or obligation owing from
Borrower to others that Foothill may have obtained by
assignment or otherwise, and further including all interest
not paid when due and all Foothill Expenses that Borrower is
required to pay or reimburse by the Loan Documents, by law, or
otherwise.
"Obligor" means any of Borrower or any of its Subsidiaries
party to one or more Loan Documents, including M&S and IG Delaware.
"Optronics Division" means the Optronics
Division of Borrower.
"Optronics Accounts" means Accounts created by
the Optronics Division.
"Ordinary Course Dispositions" means Asset
Dispositions of (a) Inventory in the ordinary course of
business, (b) Equipment that is substantially worn, damaged,
or obsolete in the ordinary course of business, (c) Equipment
that is a so-called "internal equipment item" that is replaced
by Borrower in the ordinary course of business and consistent
with past practices with another such item of equal or greater
value, and (d) Equipment that is a so-called "demonstration
item" in the ordinary course of business and consistent with
past practices.
"Overadvance" has the meaning set forth in Section 2.5.
"Participant" means any Person to which
Foothill has sold a participation interest in its rights under
the Loan Documents.
"Patent Security Agreement" means a Patent
Security Agreement, in the form of Exhibit P-1 attached
hereto, dated as of even date herewith, between Borrower and
Foothill.
"Pay-Off Letter" means a letter, in form and
substance reasonably satisfactory to Foothill, from Existing
Lender respecting the amount necessary to repay in full all of
the obligations of Borrower owing to Existing Lender and
obtain a termination or release of all of the Liens existing
in favor of Existing Lender in and to the properties or assets
of Borrower.
"PBGC" means the Pension Benefit Guaranty
Corporation as defined in Title IV of ERISA, or any successor thereto.
"Permitted AnaTech Dispositions" means, subject
to the prior or concurrent satisfaction of the Release
Condition therefor, Asset Dispositions of the assets of the
AnaTech Division, free and clear of Foothill's Lien thereon
(other than Foothill's Lien in the proceeds of such Asset Disposition).
"Permitted Appraised Assets Dispositions"
means, subject to the prior or concurrent satisfaction of the
Release Condition therefor, Asset Dispositions of Appraised
Assets (in the ordinary course of Borrower's business and
consistent with past practices), free and clear of Foothill's
Lien thereon (other than Foothill's Lien in the proceeds of
such Asset Disposition), so long as: (a) Borrower replaces the
Appraised Asset that is the subject of such Asset Disposition
(the "Disposed Appraised Asset") with a newly acquired item of
Equipment of equal or greater comparable value than the
appraised value of the Disposed Appraised Asset set forth in
the most recent appraisal thereof and reports such Asset
Disposition and replacement pursuant to Section 6.2; and (b)
in the case of any single Asset Disposition or series of
integrated Asset Dispositions involving one or more Disposed
Appraised Assets with an aggregate appraised value of $100,000
or more, the chief financial officer of Borrower shall deliver
to Foothill a certificate, in form and substance satisfactory
to Foothill, demonstrating in reasonable detail that the value
of such newly acquired item or items of Equipment are of equal
or greater comparable value than the appraised value of the
relevant Disposed Appraised Asset set forth in the most recent
appraisal thereof.
"Permitted Bentley Disposition" means, subject
to the prior or concurrent satisfaction of the Release
Condition therefor, Asset Dispositions of the Bentley Equity Interests.
"Permitted Bestinfo Disposition" means, subject
to the prior or concurrent satisfaction of the Release
Condition therefor, Asset Dispositions of the capital stock of
Bestinfo, free and clear of Foothill's Lien thereon (other
than Foothill's Lien in the proceeds of such Asset
Disposition).
"Permitted Disposition" means (a) Ordinary
Course Dispositions, (b) Permitted Optronics Dispositions,
Permitted AnaTech Dispositions, the Permitted Bentley
Disposition, and the Permitted Bestinfo Disposition, (c) the
Reston Sale/Leaseback, (d) subject to the prior or concurrent
satisfaction of the applicable Release Condition therefor,
Asset Dispositions of the assets that are the subject of
Permitted Toehold Investments and Permitted Other Investments,
(e) Permitted Appraised Assets Dispositions, and (f) subject
to the prior or concurrent satisfaction of the applicable
Release Condition therefor, other Asset Dispositions (but
excluding Asset Dispositions of Equipment constituting
Appraised Assets) not in the ordinary course of Borrower's
business that do not exceed, on a book value basis, $1,000,000
in the aggregate in any fiscal year and do not exceed, on a
book value basis, $250,000 in any one transaction or series of
related transactions.
"Permitted Investments" means: (a) Permitted
Ordinary Course Investments; (b) Permitted Repayment
Investments; (c) Permitted Toehold Investments; (d) Permitted
Subsidiary Loans and Capital Contributions; and (e) Permitted
Other Investments.
"Permitted Liens" means (a) Liens held by
Foothill, (b) Liens for unpaid taxes that either (i) are not
yet due and payable or (ii) are the subject of Permitted
Protests, (c) Liens set forth on Schedule P-1, (d) purchase
money Liens in respect of Equipment and the interests of
lessors under operating leases and of lessors under capital
leases to the extent that the acquisition or lease of the
underlying asset is permitted under Section 7.21 and so long
as the Lien only attaches to the asset purchased or acquired
and only secures the purchase price of the asset, (e) Liens
arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business of
Borrower and not in connection with the borrowing of money,
and which Liens either (i) are for sums not yet due and
payable, or (ii) are the subject of Permitted Protests, (f)
Liens arising from deposits made in connection with obtaining
worker's compensation or other unemployment insurance, (g)
Liens or deposits to secure performance of bids, tenders, or
leases (to the extent permitted under this Agreement),
incurred in the ordinary course of business of Borrower and
not in connection with the borrowing of money, (h) Liens
arising by reason of security for surety or appeal bonds in
the ordinary course of business of Borrower, (i) Liens of or
resulting from any judgment or award that would not have a
Material Adverse Effect and as to which the time for the
appeal or petition for rehearing of which has not yet expired,
or in respect of which Borrower is in good faith prosecuting
an appeal or proceeding for a review, and in respect of which
a stay of execution pending such appeal or proceeding for
review has been secured, (j) Liens with respect to the Real
Property Collateral that are exceptions to the commitments for
title insurance issued in connection with the Mortgages, as
accepted by Foothill, (k) with respect to any Real Property
that is not part of the Real Property Collateral, easements,
rights of way, zoning and similar covenants and restrictions,
and similar encumbrances that customarily exist on properties
of Persons engaged in similar activities and similarly
situated and that in any event do not materially interfere
with or impair the use or operation of the Collateral by
Borrower or the value of Foothill's Lien thereon or therein,
or materially interfere with the ordinary conduct of the
business of Borrower, (l) software escrow arrangements entered
into in the ordinary course of business consistent with past
practice, and (m) if and to the extent required under the
Payoff Letter, cash collateral pledged to Existing Lender to
secure the outstanding obligations, as of the Closing Date,
under letters of credit issued by Existing Lender or the
financial institutions for which it is acting as
representative in respect of the Indebtedness that is the
subject of the Payoff Letter.
"Permitted Optronics Dispositions" means,
subject to the prior or concurrent satisfaction of the Release
Condition therefor, (a) Asset Dispositions of the assets of
the Optronics Division, free and clear of Foothill's Lien
thereon (other than Foothill's Lien in the proceeds of such
Asset Disposition) to any Person other than a Subsidiary of
Borrower, or (b) the capital contribution by Borrower to
Scansystems of the operating assets of the Optronics Division.
"Permitted Ordinary Course Investment" means
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the
United States of America with a maturity not exceeding one
year, (b) certificates of deposit, time deposits, banker's
acceptances or other instruments of a bank having a combined
capital and surplus of not less than $500,000,000 with a
maturity not exceeding one year, (c) investments in commercial
paper rated at least A-1 or P-1 maturing within one year after
the date of acquisition thereof, (d) money market accounts
maintained at a bank having combined capital and surplus of no
less than $500,000,000 or at another financial institution
reasonably satisfactory to Foothill, (e) loans and advances to
officers and employees of Borrower (exclusive of loans
evidenced by the Meadlock Note) in the ordinary course of
business in an aggregate amount at any one time outstanding
not to exceed $3,000,000, (f) loans evidenced by the Meadlock
Note, (g) investments in negotiable instruments for
collection, (h) advances in connection with purchases of goods
or services in the ordinary course of business, and (i)
deposits required in connection with leases.
"Permitted Other Investments" means the equity
investments of Borrower as of the Closing Date identified on Schedule P-2.
"Permitted Protest" means the right of Borrower
to protest any Lien other than any such Lien that secures the
Obligations, tax (other than payroll taxes or taxes that are
the subject of a United States federal tax lien), or rental
payment, provided that (a) a reserve with respect to such
obligation is established on the books of Borrower in
accordance with GAAP (or, if higher, in an amount that
Foothill in good faith and in its reasonable credit judgment
believes to be appropriate under the circumstances), (b) any
such protest is instituted and diligently prosecuted by
Borrower in good faith, and (c) Foothill is satisfied that,
while any such protest is pending, there will be no impairment
of the enforceability, validity, or priority of any of the
Liens of Foothill in and to the Collateral.
"Permitted Repayment Investment" means (a) the
contribution or loan by Borrower to IG Benelux of
approximately $15,000,000 to enable IG Benelux to repay, in
full, all of its indebtedness owing to the IG Benelux Existing
Lender, or (b) subject to the timely satisfaction of the
condition set forth in Section 3.3(f), the contribution or
loan by Borrower to IG Australia of approximately $24,000,000
to enable IG Australia to repay, in full, all of its
indebtedness owing to the IG Australia Existing Lender.
"Permitted Subsidiary Loans and Capital
Contributions" means loans and capital contributions made
after the Closing Date by Borrower to any Subsidiary of
Borrower; provided, however, that all such loans and capital
contributions made by Borrower shall not exceed, in the
aggregate, (a) $20,000,000 during the 1997 calendar year, (b)
$25,000,000 during the 1998 calendar year, and (c) $30,000,000
during the 1999 calendar year.
"Permitted Toehold Investment" means the
acquisition of an equity interest in a Person other than a
Subsidiary of Borrower (but not to exceed 10% of all of the
issued and outstanding equity interests of such Person on a
fully diluted basis) so long as (a) no Default or Event of
Default shall have occurred and be continuing or would result
from the consummation of the proposed acquisition, (b) the
Person, in whom the equity interest is being acquired, is
engaged in the same business as that of Borrower or any of its
Subsidiaries or in a business reasonably related thereto, (c)
the relevant equity interest being acquired in such Person is
acquired directly by Borrower, (d) to the extent required
under Section 4.2, Borrower shall have executed and delivered
a supplement to the Pledge Agreement and shall have perfected
Foothill's security interest in the acquired equity interest,
and (e) the aggregate amount expended by Borrower in respect
of all such Permitted Toehold Investments does not exceed
$1,000,000 in any fiscal year.
"Person" means and includes natural persons,
corporations, limited liability companies, limited
partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business
trusts, or other organizations, irrespective of whether they
are legal entities, and governments and agencies and political
subdivisions thereof.
"Personal Property Collateral" means all
Collateral other than the Real Property Collateral.
"Plan" means any employee benefit plan,
program, or arrangement maintained or contributed to by
Borrower or with respect to which it may incur liability.
"Pledge Agreement" means a Pledge Agreement, in
the form of Exhibit P-2 attached hereto, dated as of even date
herewith, among Borrower, IG Delaware, M&S, and Foothill.
"Real Property" means any estates or interests
in real property now owned or hereafter acquired by Borrower.
"Real Property Collateral" means the parcel or
parcels of Real Property and the related improvements thereto
now owned by Borrower and identified on Schedule R-1, and any
Real Property hereafter acquired by Borrower.
"Reference Rate" means the variable rate of
interest, per annum, most recently announced by Norwest Bank
Minnesota, National Association, or any successor thereto, as
its "base rate," irrespective of whether such announced rate
is the best rate available from such financial institution.
"Release Condition" means, in respect of any
Asset Disposition, that (a) no Default or Event of Default has
occurred and is continuing or would result therefrom, and (b)
Borrower is receiving at least fair value (as determined in
accordance with Section 3439 of the California Civil Code, as
amended) for the property or assets that are the subject of
the Asset Disposition.
"Reportable Event" means any of the events
described in Section 4043(c) of ERISA or the regulations
thereunder other than a Reportable Event as to which the
provision of 30 days notice to the PBGC is waived under
applicable regulations.
"Reserve" means, as of any date of
determination, an amount equal the product of (a) $238,000
times (b) the number of months separating such date from the
Closing Date.
"Reston Property" means the Real Property (and
related improvements thereto) of Borrower located in or about
Reston, Virginia.
"Reston Sale/Leaseback" means the sale and
lease-back transaction in respect of the Reston Property.
"Retiree Health Plan" means an "employee
welfare benefit plan" within the meaning of Section 3(1) of
ERISA that provides benefits to individuals after termination
of their employment, other than as required by Section 601 of
ERISA.
"Scansystems" means Scansystems, Inc., a Delaware corporation.
"Securities Account" means a "securities
account" as that term is defined in Section 8-501 of official
text of the Uniform Commercial Code and as defined in
California Senate Bill 1591 which was approved by the Governor
on September 14, 1996 and will be effective on January 1, 1997.
"Solvent" means, with respect to any Person on
a particular date, that on such date (a) at fair valuations,
all of the properties and assets of such Person are greater
than the sum of the debts, including contingent liabilities,
of such Person, (b) the present fair salable value of the
properties and assets of such Person is not less than the
amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured,
(c) such Person is able to realize upon its properties and
assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal
course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts beyond such
Person's ability to pay as such debts mature, and (e) such
Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such
Person's properties and assets would constitute unreasonably
small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, it
is intended that such liabilities will be computed at the
amount that, in light of all the facts and circumstances
existing at such time, represents the amount that reasonably
can be expected to become an actual or matured liability.
"Subsidiary" of a Person means a corporation,
partnership, limited liability company, or other entity in
which that Person directly or indirectly owns or controls the
shares of stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors (or
appoint other comparable managers) of such corporation,
partnership, limited liability company, or other entity.
Anything to the contrary notwithstanding, Bentley Systems,
Inc. shall not be deemed to be a Subsidiary of Borrower.
"Term Loan" has the meaning set forth in Section 2.3.
"Trademark Security Agreement" means a
Trademark Security Agreement, in the form of Exhibit T-1
attached hereto, dated as of even date herewith, between
Borrower and Foothill.
"Triggering Event" means any of (a) the
occurrence and continuation of an Event of Default, or (b)
Foothill deems itself insecure.
"Unbilled Accounts" means Domestic Accounts
that are fully earned by performance, but have not yet been
billed to the Account Debtor and that, as of any date of
determination, arise from the sale of goods or rendition of
services within the prior 60 days.
"United States" means the United States of
America, or any department, agency, or instrumentality of any
of the foregoing.
"VCOC Letter" means a letter agreement between
Borrower and Foothill's Participants that meets the Venture
Capital Operating Company requirements and that is in
substantially the form of Exhibit V-1.
"VeriBest" means VeriBest, Inc., a Delaware corporation.
"Voidable Transfer" has the meaning set forth in Section 15.8.
1.2 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance
with GAAP. When used herein, the term "financial statements"
shall include the notes and schedules thereto. Whenever the
term "Borrower" is used in respect of a financial covenant or
a related definition, it shall be understood to mean Borrower
on a consolidated basis unless the context clearly requires otherwise.
1.3 Code. Any terms used in this Agreement that are
defined in the Code shall be construed and defined as set
forth in the Code unless otherwise defined herein.
1.4 Construction. Unless the context of this Agreement
clearly requires otherwise, references to the plural include
the singular, references to the singular include the plural,
the term "including" is not limiting, and the term "or" has,
except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this
Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. An Event of Default
shall "continue" or be "continuing" until such Event of
Default has been waived in writing by Foothill. Section,
subsection, clause, schedule, and exhibit references are to
this Agreement unless otherwise specified. Any reference in
this Agreement or in the Loan Documents to this Agreement or
any of the Loan Documents shall include all alterations,
amendments, changes, extensions, modifications, renewals,
replacements, substitutions, and supplements, thereto and
thereof, as applicable.
1.5 Schedules and Exhibits. All of the schedules and
exhibits attached to this Agreement shall be deemed
incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 Revolving Advances.
(a) Subject to the terms and conditions of this
Agreement, Foothill agrees to make advances ("Advances") to
Borrower in an amount outstanding not to exceed at any one
time the lesser of (i) the Maximum Revolving Amount less the
Letter of Credit Usage, or (ii) the Borrowing Base less the
Letter of Credit Usage. For purposes of this Agreement,
"Borrowing Base", as of any date of determination, shall mean
the result of:
(x) the lesser of (i) the result of
(A) 80% of Eligible Domestic Accounts, plus (B) the
lowest of (1) 80% of Eligible Unbilled Accounts, (2)
40% of the amount of credit availability created by
this clause (x), and (3) $20,000,000, minus (C) the
amount, if any, of the Dilution Reserve, and (ii) an
amount equal to the Collections with respect to the
Accounts of Borrower for the immediately preceding
60 day period, plus
(y) the lowest of (i) $30,000,000,
(ii) the product of (A) the Inventory Advance Rate
times (B) the value (calculated at the lower of cost
or market) of Eligible Domestic Inventory, and (iii)
30% of the amount of credit availability created by
clause (x) above, minus
(z) the sum of (i) prior to the full
satisfaction of the condition subsequent set forth
in Section 3.3(b), $20,000,000, and (ii) the Reserve.
(b) Anything to the contrary in Section 2.1(a) above
notwithstanding, Foothill may create reserves against or
reduce its advance rates based upon Eligible Domestic
Accounts, Eligible Unbilled Accounts, or Eligible Domestic
Inventory without declaring an Event of Default if it
determines in good faith and in its reasonable credit judgment
that there has occurred a Material Adverse Change.
(c) Foothill shall have the right to have the Inventory
reappraised by a qualified appraiser selected by Foothill from
time to time after the Closing Date for the purpose of
redetermining the Liquidation Value of the Inventory. In the
absence of the occurrence and continuation of an Event of
Default, such appraisals shall occur annually.
(d) Foothill shall have no obligation to make Advances
hereunder to the extent they would cause the outstanding
Obligations (other than under the Term Loan) to exceed the
Maximum Revolving Amount.
(e) Amounts borrowed pursuant to this Section 2.1 may be
repaid and, subject to the terms and conditions of this
Agreement, reborrowed at any time during the term of this Agreement.
2.2 Letters of Credit.
(a) Subject to the terms and conditions of this
Agreement, Foothill agrees to issue letters of credit for the
account of Borrower (each, an "L/C") or to issue guarantees of
payment (each such guaranty, an "L/C Guaranty") with respect
to letters of credit issued by an issuing bank for the account
of Borrower. Foothill shall have no obligation to issue a
Letter of Credit if any of the following would result:
(i) the Letter of Credit Usage
would exceed the Borrowing Base less the amount of
outstanding Advances, or
(ii) the Letter of Credit Usage
would exceed the lower of (y) the Maximum Revolving
Amount less the amount of outstanding Advances, or
(z) $60,000,000, or
(iii) the outstanding Obligations
(other than under the Term Loan) would exceed the
Maximum Revolving Amount.
Borrower and Foothill acknowledge and agree that certain of
the letters of credit that are to be the subject of L/C
Guarantees may be outstanding on the Closing Date. Each
Letter of Credit shall have an expiry date no later than 60
days prior to the date on which this Agreement is scheduled to
terminate under Section 3.4 and all such Letters of Credit
shall be in form and substance acceptable to Foothill in its
sole discretion. If Foothill is obligated to advance funds
under a Letter of Credit, Borrower immediately shall reimburse
such amount to Foothill and, in the absence of such
reimbursement, the amount so advanced immediately and
automatically shall be deemed to be an Advance hereunder and,
thereafter, shall bear interest at the rate then applicable to
Advances under Section 2.6.
(b) Borrower hereby agrees to indemnify, save, defend,
and hold Foothill harmless from any loss, cost, expense, or
liability, including payments made by Foothill, expenses, and
reasonable attorneys fees incurred by Foothill arising out of
or in connection with any Letter of Credit. Borrower agrees
to be bound by the issuing bank's regulations and
interpretations of any Letters of Credit guarantied by
Foothill and opened to or for Borrower's account or by
Foothill's interpretations of any L/C issued by Foothill to or
for Borrower's account, even though this interpretation may be
different from Borrower's own, and Borrower understands and
agrees that Foothill shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in
following Borrower's instructions or those contained in the
Letter of Credit or any modifications, amendments, or
supplements thereto. Borrower understands that the L/C
Guarantees may require Foothill to indemnify the issuing bank
for certain costs or liabilities arising out of claims by
Borrower against such issuing bank. Borrower hereby agrees to
indemnify, save, defend, and hold Foothill harmless with
respect to any loss, cost, expense (including reasonable
attorneys fees), or liability incurred by Foothill under any
L/C Guaranty as a result of Foothill's indemnification of any
such issuing bank.
(c) Borrower hereby authorizes and directs any bank that
issues a letter of credit guaranteed by Foothill to deliver to
Foothill all instruments, documents, and other writings and
property received by the issuing bank pursuant to such letter
of credit, and to accept and rely upon Foothill's instructions
and agreements with respect to all matters arising in
connection with such letter of credit and the related
application. Borrower may or may not be the "applicant" or
"account party" with respect to such letter of credit.
(d) Any and all charges, commissions, fees, and costs
incurred by Foothill relating to the letters of credit
guaranteed by Foothill shall be considered Foothill Expenses
for purposes of this Agreement and immediately shall be
reimbursable by Borrower to Foothill.
(e) Immediately upon the termination of this Agreement,
Borrower agrees to either (i) provide cash collateral to be
held by Foothill in an amount equal to 102% of the maximum
amount of Foothill's obligations under Letters of Credit, or
(ii) cause to be delivered to Foothill releases of all of
Foothill's obligations under outstanding Letters of Credit.
At Foothill's discretion, any proceeds of Collateral received
by Foothill after the occurrence and during the continuation
of an Event of Default may be held as the cash collateral
required by this Section 2.2(e).
(f) If by reason of (i) any change in any applicable law,
treaty, rule, or regulation or any change in the
interpretation or application by any governmental authority of
any such applicable law, treaty, rule, or regulation, or (ii)
compliance by the issuing bank or Foothill with any direction,
request, or requirement (irrespective of whether having the
force of law) of any governmental authority or monetary
authority including, without limitation, Regulation D of the
Board of Governors of the Federal Reserve System as from time
to time in effect (and any successor thereto):
(A) any reserve, deposit, or similar requirement is or
shall be imposed or modified in respect of any Letters of
Credit issued hereunder, or
(B) there shall be imposed on the issuing bank or
Foothill any other condition regarding any letter of credit,
or Letter of Credit, as applicable, issued pursuant hereto;
and the result of the foregoing is to increase, directly or
indirectly, the cost to the issuing bank or Foothill of
issuing, making, guaranteeing, or maintaining any letter of
credit, or Letter of Credit, as applicable, or to reduce the
amount receivable in respect thereof by such issuing bank or
Foothill, then, and in any such case, Foothill may, at any
time within a reasonable period after the additional cost is
incurred or the amount received is reduced, notify Borrower,
and Borrower shall pay on demand such amounts as the issuing
bank or Foothill may specify to be necessary to compensate the
issuing bank or Foothill for such additional cost or reduced
receipt, together with interest on such amount from the date
of such demand until payment in full thereof at the rate set
forth in Section 2.6(a)(i) or (c)(i), as applicable. The
determination by the issuing bank or Foothill, as the case may
be, of any amount due pursuant to this Section 2.2(f), as set
forth in a certificate setting forth the calculation thereof
in reasonable detail, shall, in the absence of manifest or
demonstrable error, be final and conclusive and binding on all
of the parties hereto.
2.3 Term Loan. Foothill has agreed to make a term loan
(the "Term Loan") to Borrower in the original principal amount
of $20,000,000. The outstanding principal balance and all
accrued and unpaid interest under the Term Loan shall not be
due and payable until the earlier to occur of (a) the Maturity
Date, and (b) the date of termination of this Agreement,
whether by its terms, by acceleration, or otherwise. The
unpaid principal balance of the Term Loan may not be prepaid
in whole or in part. All amounts outstanding under the Term
Loan shall constitute Obligations.
2.4 [Intentionally omitted].
2.5 Overadvances. If, at any time or for any reason,
the amount of Obligations owed by Borrower to Foothill
pursuant to Sections 2.1 and 2.2 is greater than either the
Dollar or percentage limitations set forth in Sections 2.1 or
2.2 (an "Overadvance"), Borrower immediately shall pay to
Foothill, in cash, the amount of such excess to be used by
Foothill first, to repay Advances outstanding under Section
2.1 and, thereafter, to be held by Foothill as cash collateral
to secure Borrower's obligation to repay Foothill for all
amounts paid pursuant to Letters of Credit.
2.6 Interest and Letter of Credit Fees: Rates,
Payments, and Calculations.
(a) Interest Rate. Except as provided in clause (b)
below, all Obligations (except for undrawn Letters of Credit)
shall bear interest at a per annum rate of 0.625 percentage
points above the Reference Rate.
(b) Letter of Credit Fee. Borrower shall pay Foothill a
fee (in addition to the charges, commissions, fees, and costs
set forth in Section 2.2(d)) equal to 1.0% per annum times the
aggregate undrawn amount of all outstanding Letters of Credit.
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default, all Obligations (except
for undrawn Letters of Credit) shall bear interest at a per
annum rate equal to 3.625 percentage points above the
Reference Rate, and (ii) the Letter of Credit fee provided in
Section 2.6(b) shall be increased to 4.0% per annum times the
amount of the undrawn Letters of Credit that were outstanding
during the immediately preceding month.
(d) Minimum Interest. In no event shall the rate of
interest chargeable hereunder for any day be less than 7.0%
per annum. To the extent that interest accrued hereunder at
the rate set forth herein would be less than the foregoing
minimum daily rate, the interest rate chargeable hereunder for
such day automatically shall be deemed increased to the minimum rate.
(e) Payments. Interest and Letter of Credit fees
payable hereunder shall be due and payable, in arrears, on the
first day of each month during the term hereof. Borrower
hereby authorizes Foothill, at its option, without prior
notice to Borrower, to charge such interest and Letter of
Credit fees, all Foothill Expenses (as and when incurred), the
charges, commissions, fees, and costs provided for in Section
2.2(d) (as and when accrued or incurred), the fees and charges
provided for in Section 2.11 (as and when accrued or
incurred), and all installments or other payments due under
the Term Loan or any Loan Document to Borrower's Loan Account,
which amounts thereafter shall accrue interest at the rate
then applicable to Advances hereunder. Any interest not paid
when due shall be compounded and shall thereafter accrue
interest at the rate then applicable to Advances hereunder.
(f) Computation. The Reference Rate as of the date of
this Agreement is 8.25% per annum. In the event the Reference
Rate is changed from time to time hereafter, the applicable
rate of interest hereunder automatically and immediately shall
be increased or decreased by an amount equal to such change in
the Reference Rate. All interest and fees chargeable under
the Loan Documents shall be computed on the basis of a 360 day
year for the actual number of days elapsed.
(g) Intent to Limit Charges to Maximum Lawful Rate. In no
event shall the interest rate or rates payable under this
Agreement, plus any other amounts paid in connection herewith,
exceed the highest rate permissible under any law that a court
of competent jurisdiction shall, in a final determination,
deem applicable. Borrower and Foothill, in executing and
delivering this Agreement, intend legally to agree upon the
rate or rates of interest and manner of payment stated within
it; provided, however, that, anything contained herein to the
contrary notwithstanding, if said rate or rates of interest or
manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto as of the date of this
Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment
received from Borrower in excess of such legal maximum,
whenever received, shall be applied to reduce the principal
balance of the Obligations to the extent of such excess.
2.7 Collection of Accounts. Borrower shall at all times
maintain lockboxes (the "Lockboxes") and, immediately after
the Closing Date, shall instruct all Account Debtors with
respect to the Accounts, General Intangibles, and Negotiable
Collateral of Borrower to remit all Collections in respect
thereof to such Lockboxes. Borrower, Foothill, and the
Lockbox Banks shall enter into the Lockbox Agreements, which
among other things shall provide for the opening of a Lockbox
Account for the deposit of Collections at a Lockbox Bank.
Borrower agrees that all Collections and other amounts
received by Borrower from any Account Debtor or any other
source immediately upon receipt shall be deposited into a
Lockbox Account. No Lockbox Agreement or arrangement
contemplated thereby shall be modified by Borrower without the
prior written consent of Foothill. Upon the terms and subject
to the conditions set forth in the Lockbox Agreements, all
amounts received in each Lockbox Account shall be wired each
Business Day into an account (the "Foothill Account")
maintained by Foothill at a depositary selected by Foothill.
2.8 Crediting Payments; Application of Collections. The
receipt of any Collections by Foothill (whether from transfers
to Foothill by the Lockbox Banks pursuant to the Lockbox
Agreements or otherwise) immediately shall be applied
provisionally to reduce the Obligations outstanding under
Section 2.1, but shall not be considered a payment on account
unless such Collection item is a wire transfer of immediately
available federal funds and is made to the Foothill Account or
unless and until such Collection item is honored when
presented for payment. From and after the Closing Date,
Foothill shall be entitled to charge Borrower for 1 Business
Days of `clearance' or `float' at the rate set forth in
Section 2.6(a)(i) or Section 2.6(c)(i), as applicable, on all
Collections that are received by Foothill (regardless of
whether forwarded by the Lockbox Banks to Foothill, whether
provisionally applied to reduce the Obligations under Section
2.1, or otherwise). This across-the-board 1 Business Day
clearance or float charge on all Collections is acknowledged
by the parties to constitute an integral aspect of the pricing
of Foothill's financing of Borrower, and shall apply
irrespective of the characterization of whether receipts are
owned by Borrower or Foothill, and whether or not there are
any outstanding Advances, the effect of such clearance or
float charge being the equivalent of charging 1 Business Days
of interest on such Collections. Should any Collection item
not be honored when presented for payment, then Borrower shall
be deemed not to have made such payment, and interest shall be
recalculated accordingly. Anything to the contrary contained
herein notwithstanding, any Collection item shall be deemed
received by Foothill only if it is received into the Foothill
Account on a Business Day on or before 11:00 a.m. California
time. If any Collection item is received into the Foothill
Account on a non-Business Day or after 11:00 a.m. California
time on a Business Day, it shall be deemed to have been
received by Foothill as of the opening of business on the
immediately following Business Day.
2.9 Designated Account. Foothill is authorized to make
the Advances, the Letters of Credit, and the Term Loan under
this Agreement based upon telephonic or other instructions
received from anyone purporting to be an Authorized Person, or
without instructions if pursuant to Section 2.6(e). Borrower
agrees to establish and maintain the Designated Account with
the Designated Account Bank for the purpose of receiving the
proceeds of the Advances requested by Borrower and made by
Foothill hereunder. Unless otherwise agreed by Foothill and
Borrower, any Advance requested by Borrower and made by
Foothill hereunder shall be made to the Designated Account.
2.10 Maintenance of Loan Account; Statements of
Obligations. Foothill shall maintain an account on its books
in the name of Borrower (the "Loan Account") on which Borrower
will be charged with all Advances and the Term Loan made by
Foothill to Borrower or for Borrower's account, including,
accrued interest, Foothill Expenses, and any other payment
Obligations of Borrower. In accordance with Section 2.8, the
Loan Account will be credited with all payments received by
Foothill from Borrower or for Borrower's account, including
all amounts received in the Foothill Account from any Lockbox
Bank. Foothill shall render statements regarding the Loan
Account to Borrower, including principal, interest, fees, and
including an itemization of all charges and expenses
constituting Foothill Expenses owing, and such statements
shall be conclusively presumed to be correct and accurate and
constitute an account stated between Borrower and Foothill
unless, within 30 days after receipt thereof by Borrower,
Borrower shall deliver to Foothill written objection thereto
describing the error or errors contained in any such
statements.
2.11 Fees. Borrower shall pay to Foothill the following fees:
(a) Closing Fee. On the Closing Date, a closing fee of
$500,000;
(b) Unused Line Fee. On the first day of each month
after the Closing Date during the term of this Agreement, an
unused line fee in an amount equal to 0.25% per annum times
the Average Unused Portion of the Maximum Revolving Amount;
(c) Annual Facility Fee. On the Closing Date and each
anniversary of the Closing Date, an annual facility fee in an
amount equal to 0.15% of the Maximum Amount;
(d) Financial Examination, Documentation, and Appraisal
Fees. Foothill's customary fee of $650 per day per examiner,
plus out-of-pocket expenses for each financial analysis and
examination (i.e., audits) of Borrower performed by personnel
employed by Foothill; Foothill's customary appraisal fee of
$1,500 per day per appraiser, plus out-of-pocket expenses for
each appraisal of the Collateral performed by personnel
employed by Foothill; and, the actual charges paid or incurred
by Foothill if it elects to employ the services of one or more
third Persons to perform such financial analyses and
examinations (i.e., audits) of Borrower or to appraise the
Collateral; and
(e) Agency Fee. On the first day of each month after
the Closing Date during the term of this Agreement, an agency
fee in an amount equal to $12,500.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 Conditions Precedent to the Initial Advance, and
Letter of Credit, and the Term Loan. The obligation of
Foothill to make the initial Advance, to issue the initial
Letter of Credit, or to make the Term Loan is subject to the
fulfillment, to the satisfaction of Foothill and its counsel,
of each of the following conditions on or before the Closing
Date:
(a) the Closing Date shall occur on or before January 17, 1997;
(b) Foothill shall have received confirmation of the
filing of its financing statements and fixture filings;
(c) Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full force
and effect:
(1) if and to the extent available on or
before the Closing Date, the Lockbox Agreements;
(2) the Disbursement Letter;
(3) the Pay-Off Letter, together with UCC
termination statements and other documentation evidencing
the termination by Existing Lender of its Liens in and to
the properties and assets of Borrower and its Subsidiaries
and the termination of any lockbox or other dominion
account arrangements in favor of Existing Lender;
(4) either (y) the IG Australia Existing
Lender Pay-Off Letter, together with termination statements
and other documentation evidencing the termination by IG
Australia Existing Lender of its Liens in and to the
properties and assets of Borrower and its Subsidiaries, or
(z) satisfactory evidence of the consent of IG Australia
Existing Lender to the refinancing by Borrower of its
Indebtedness owed to Existing Lender pursuant hereto and
the transactions contemplated hereby;
(5) the Mortgage on the Huntsville Property,
and such Mortgage shall have been recorded in the office of
the county recorder for Madison County, Alabama; and, if
and to the extent available on or before the Closing Date,
a Mortgage Policy in respect of the Huntsville Property
assuring Foothill that the Mortgage on the Huntsville
Property is a valid and enforceable first priority mortgage
Lien on the Huntsville Property free and clear of all
defects and encumbrances except Permitted Liens, and such
Mortgage Policy shall otherwise be in form and substance
reasonably satisfactory to Foothill;
(6) the Aircraft Security Agreement;
(7) the Copyright Security Agreement;
(8) the Patent Security Agreement;
(9) the Trademark Security Agreement;
(10) the Pledge Agreement; and
(11) the VCOC Letter;
(d) if and to the extent available on or before the
Closing Date, Foothill shall have received the original
certificates representing or evidencing all of the Pledged
Shares (as defined in the Pledge Agreement), together with
stock powers or equivalent assignments with respect thereto
duly endorsed in blank;
(e) Foothill shall have received originals of the
Meadlock Note and the Intercompany Notes, together with
endorsements with respect thereto duly endorsed in blank;
(f) Foothill shall have received a certificate from the
Secretary of each Obligor attesting to the resolutions of such
Obligor's Board of Directors authorizing its execution,
delivery, and performance of the Loan Documents to which it is
a party and authorizing specific officers of such Obligor to
execute the same;
(g) Foothill shall have received copies of each
Obligor's Governing Documents, as amended, modified, or
supplemented to the Closing Date, certified by the Secretary
of such Obligor;
(h) Foothill shall have received a certificate of status
with respect to each Obligor, dated within 10 days of the
Closing Date, such certificate to be issued by the appropriate
officer of the jurisdiction of organization of such Obligor,
which certificate shall indicate that such Obligor is in good
standing in such jurisdiction;
(i) Foothill shall have received certificates of status
with respect to Borrower, each dated within 15 days of the
Closing Date, such certificates to be issued by the
appropriate officer of the jurisdictions in which its failure
to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that
Borrower is in good standing in such jurisdictions;
(j) Foothill shall have received a certificate of
insurance, together with the endorsements thereto, as are
required by Section 6.10, the form and substance of which
shall be reasonably satisfactory to Foothill and its counsel;
(k) Foothill shall have received an opinion of the
Obligors' counsel in form and substance reasonably
satisfactory to Foothill in its sole discretion;
(l) after giving effect to the payment of fees due to
Foothill on or before the Closing Date and the payment of the
"Payoff Amount" (under and as defined in the Payoff Letter) to
the Existing Lender, the sum of Borrower's Availability plus
Borrower's unrestricted cash and cash equivalents shall not be
less than Twenty Million Dollars ($20,000,000);
(m) Foothill shall have received appraisals of the Real
Property Collateral and appraisals of the Equipment, in each
case satisfactory to Foothill;
(n) Foothill shall have completed "field surveys" and
location inspections of the Inventory, and the results of each
of them shall be satisfactory to Foothill;
(o) Foothill shall have completed reference checks
regarding key employees and executive officers of Borrower,
the results of which shall be satisfactory to Lender;
(p) Foothill shall have received satisfactory evidence
(which evidence may be in the form of a Certificate of the
chief accounting officer or the chief financial officer of
Borrower) that all tax returns required to be filed by
Borrower have been timely filed and all taxes upon Borrower or
its properties, assets, income, and franchises (including real
property taxes and payroll taxes) have been paid prior to
delinquency, except such taxes that are the subject of a
Permitted Protest; and
(q) all other documents and legal matters in connection
with the transactions contemplated by this Agreement shall
have been delivered, executed, or recorded and shall be in
form and substance reasonably satisfactory to Foothill and its
counsel.
3.2 Conditions Precedent to all Advances, all Letters of
Credit, and the Term Loan. The following shall be conditions
precedent to all Advances, all Letters of Credit, and the Term Loan hereunder:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and
correct in all respects on and as of the date of such
extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties
relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred
and be continuing on the date of such extension of credit, nor
shall either result from the making thereof; and
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the
extending of such credit shall have been issued and remain in
force by any governmental authority against Borrower,
Foothill, or any of their Affiliates.
3.3 Condition Subsequent. As a condition subsequent to
initial closing hereunder, Borrower shall perform or cause to
be performed the following (the failure by Borrower to so
perform or cause to be performed constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to
Foothill the certified copies of the policies of insurance,
together with the endorsements thereto, as are required by
Section 6.10, the form and substance of which shall be
reasonably satisfactory to Foothill and its counsel.
(b) on or as soon as possible after the Closing Date
(and, in any event, within 30 days of the Closing Date):
(i) to the extent not available on or
before the Closing Date under Section 3.1, Foothill shall have
received a Mortgage Policy in respect of the Huntsville
Property assuring Foothill that the Mortgage on the Huntsville
Property is a valid and enforceable first priority mortgage
Lien on the Huntsville Property free and clear of all defects
and encumbrances except Permitted Liens, and such Mortgage
Policy shall otherwise be in form and substance reasonably
satisfactory to Foothill; and
(ii) Foothill shall have received a phase-
I environmental report and a real estate survey shall have
been completed with respect to the Huntsville Property and
copies thereof delivered to Foothill; the environmental
consultants and surveyors retained for such reports or
surveys, the scope of the reports or surveys, and the results
thereof shall be acceptable to Foothill in its sole
discretion; and
(iii) to the extent not available on or
before the Closing Date under Section 3.1, Foothill shall have
received the Lockbox Agreements, duly executed, and each such
document shall be in full force and effect.
(c) upon the request of Foothill (if ever) after the
Closing Date, within 60 days after the date of such request:
(i) the Mortgage on the Chelmsford
Property shall have been duly executed and delivered by
Borrower, and the same shall be in full force and effect, and
such Mortgage shall have been recorded in the office of the
county recorder for Middlesex County, Massachusetts;
(ii) Foothill shall have received
supplemental opinions of Borrower's counsel, in form and
substance satisfactory to Foothill in its sole discretion, in
respect of the Mortgage on the Chelmsford Property;
(iii) Foothill shall have received a
preliminary title report in respect of the Chelmsford Property
in form and substance reasonably satisfactory to Foothill; and
(iv) Foothill shall have received a phase-
I environmental report and a real estate survey shall have
been completed with respect to the Chelmsford Property and
copies thereof delivered to Foothill; the environmental
consultants and surveyors retained for such reports or
surveys, the scope of the reports or surveys, and the results
thereof shall be acceptable to Foothill in its sole
discretion.
(d) upon the request of Foothill (if ever) after the
Closing Date, within 30 days after the date of such request:
(i) a Mortgage on any Real Property
acquired by Borrower after the Closing Date shall have been
duly executed and delivered by Borrower, and the same shall be
in full force and effect, and such Mortgage shall have been
recorded in the office of the county recorder for the county
in which such Real Property is located;
(ii) Foothill shall have received
supplemental opinions of Borrower's counsel, in form and
substance satisfactory to Foothill in its sole discretion, in
respect of the Mortgage on such Real Property;
(iii) Foothill shall have received a
preliminary title report in respect of such Real Property in
form and substance reasonably satisfactory to Foothill; and
(iv) Foothill shall have received a phase-
I environmental report and a real estate survey shall have
been completed with respect to the such Real Property and
copies thereof delivered to Foothill; the environmental
consultants and surveyors retained for such reports or
surveys, the scope of the reports or surveys, and the results
thereof shall be acceptable to Foothill in its sole
discretion.
(e) in the event the Reston Sale/Leaseback is not
consummated within 180 days of the Closing Date:
(i) the Mortgage on the Reston Property
shall have been duly executed and delivered by Borrower, and
the same shall be in full force and effect, and such Mortgage
shall have been recorded in the office of the county recorder
for Fairfax County, Virginia;
(ii) Foothill shall have received
supplemental opinions of Borrower's counsel, in form and
substance satisfactory to Foothill in its sole discretion, in
respect of the Mortgage on the Reston Property;
(iii) Foothill shall have received a
preliminary title report in respect of the Reston Property in
form and substance reasonably satisfactory to Foothill; and
(iv) Foothill shall have received a phase-
I environmental report and a real estate survey shall have
been completed with respect to the Reston Property and copies
thereof delivered to Foothill; the environmental consultants
and surveyors retained for such reports or surveys, the scope
of the reports or surveys, and the results thereof shall be
acceptable to Foothill in its sole discretion.
(f) within 60 days of either (i) the date that Borrower
makes the Permitted Repayment Investment in respect of the
indebtedness of IG Australia owing to the IG Australia
Existing Lender or (ii) one or more Letters of Credit are
issued to IG Australia Existing Lender in support of the
indebtedness of IG Australia owing to IG Australia Existing
Lender and IG Australia Existing Lender releases its Lien on
the capital stock of IG Australia (in either case, the "IG
Australia Payoff Date"), execute and deliver an appropriate
supplement to the Pledge Agreement and deliver to Foothill
possession of the original stock certificates, respecting 65%
of the issued and outstanding shares of stock of IG Australia,
together with stock powers with respect thereto endorsed in
blank; provided, however, that to the extent, if any, that
such shares are required to be pledged to the holder of any
project financing indebtedness of IG Australia incurred after
the IG Australia Payoff Date as security for such
indebtedness, then, upon Borrower's written request therefor
and with Foothill's prior written consent thereto (not to be
unreasonably withheld), Foothill agrees to release its Lien on
such shares; provided further, that if such holder will permit
such subordination, then, notwithstanding the foregoing
proviso, Foothill's Lien on such shares will not be released
and will become a subordinate Lien pursuant to documentation
in form and substance reasonably satisfactory to Foothill and
such holder.
(g) within 90 days of the Closing Date, Foothill shall
have completed appraisals of the Equipment and the results of
such appraisals shall be satisfactory to Foothill.
(h) to the extent not available on or before the Closing
Date under Section 3.1, Foothill shall have received, within
30 days of the Closing Date, the original certificates
representing or evidencing all of the Pledged Shares (as
defined in the Pledge Agreement), together with stock powers
or equivalent assignments with respect thereto duly endorsed in blank;
(i) from and after the Closing Date up until the date
that is 90 days after the Closing Date, Borrower shall use its
continued best efforts to obtain Collateral Access Agreements
from lessors, warehousemen, bailees, and other third persons
as Foothill may require.
3.4 Term. This Agreement shall become effective upon
the execution and delivery hereof by Borrower and Foothill and
shall continue in full force and effect for a term ending on
January 7, 2000 (the "Maturity Date"). The foregoing
notwithstanding, Foothill shall have the right to terminate
its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an
Event of Default.
3.5 Effect of Termination. On the date of termination
of this Agreement, all Obligations (including contingent
reimbursement obligations of Borrower with respect to any
outstanding Letters of Credit) immediately shall become due
and payable without notice or demand. No termination of this
Agreement, however, shall relieve or discharge Borrower of
Borrower's duties, Obligations, or covenants hereunder, and
Foothill's continuing security interests in the Collateral
shall remain in effect until all Obligations have been fully
and finally discharged and Foothill's obligation to provide
additional credit hereunder is terminated.
3.6 Early Termination by Borrower. Borrower has the
option, at any time prior to the Maturity Date and upon 60
days prior written notice to Foothill, to terminate this
Agreement by paying to Foothill, in cash, the Obligations
(including an amount equal to 102% of the undrawn amount of
the Letters of Credit), in full, together with a premium (the
"Early Termination Premium") equal to (a) during the first 18
months after the Closing Date, the product of (i) 0.10% times
(ii) the Maximum Amount times (iii) the number of months
(including partial months) remaining until the Maturity Date,
(b) during the next 6 months, $1,000,000, and (c) thereafter, $500,000.
3.7 Termination Upon Event of Default. If Foothill
terminates this Agreement upon the occurrence of an Event of
Default that intentionally is caused by Borrower for the
purpose, in Foothill's reasonable judgment, of avoiding
payment of the Early Termination Premium provided in Section
3.7, then, in view of the impracticability and extreme
difficulty of ascertaining actual damages and by mutual
agreement of the parties as to a reasonable calculation of
Foothill's lost profits as a result thereof, Borrower shall
pay to Foothill upon the effective date of such termination, a
premium in an amount equal to the Early Termination Premium.
The Early Termination Premium shall be presumed to be the
amount of damages sustained by Foothill as the result of the
early termination and Borrower agrees that it is reasonable
under the circumstances currently existing. The Early
Termination Premium provided for in this Section 3.7 shall be
deemed included in the Obligations.
4. CREATION OF SECURITY INTEREST.
4.1 Grant of Security Interest. (a) Borrower hereby
grants to Foothill a continuing security interest in all
currently existing and hereafter acquired or arising Personal
Property Collateral in order to secure prompt repayment of any
and all Obligations and in order to secure prompt performance
by Borrower of each of its covenants and duties under the Loan
Documents. Foothill's security interests in the Personal
Property Collateral shall attach to all Personal Property
Collateral without further act on the part of Foothill or
Borrower. Anything contained in this Agreement or any other
Loan Document to the contrary notwithstanding, except for
Permitted Dispositions, Borrower has no authority, express or
implied, to dispose of any item or portion of the Personal
Property Collateral or the Real Property Collateral.
Concurrent with the consummation of any Permitted Disposition,
Foothill agrees to release its Liens on the subject property
or asset (but not the proceeds from the Asset Disposition).
(b) Anything in this Agreement and the other
Loan Documents to the contrary notwithstanding, the foregoing
grant of a security interest shall not extend to, and the term
"Personal Property Collateral" shall not include, any General
Intangible, Federal Account, or Permitted Other Investment
that is now or hereafter held by Borrower as licensee, lessee,
or otherwise, solely in the event and to the extent that: (i)
as the proximate result of the foregoing grant of a security
interest, Borrower's rights in or with respect to such General
Intangible, Federal Account, or Permitted Other Investment
would be forfeited or would become void, voidable, terminable,
or revocable, or if Borrower would be deemed to have breached,
violated, or defaulted the underlying license, lease, or other
agreement that governs such General Intangible, Federal
Account, or Permitted Other Investment, in each case, pursuant
to the restrictions in the underlying lease, license, or other
agreement that governs such General Intangible, Federal
Account, or Permitted Other Investment; (ii) any such
restriction shall be effective and enforceable under
applicable law, including Section 9318(4) of the Code; and
(iii) any such forfeiture, voidness, voidability,
terminability, revocability, breach, violation, or default
cannot be remedied by Borrower using its best efforts (but
without any obligation to make any material expenditures of
money or to commence legal proceedings); provided, however,
that the foregoing grant of security interest shall extend to,
and the term "Personal Property Collateral" shall include, (y)
any and all proceeds of such General Intangible, Federal
Account, or Permitted Other Investment to the extent that the
assignment or encumbering of such proceeds is not so
restricted, and (z) upon any such licensor, lessor, or other
applicable party's consent with respect to any such otherwise
excluded General Intangible, Federal Account, or Permitted
Other Investment being obtained, thereafter such General
Intangible, Federal Account, or Permitted Other Investment as
well as any proceeds thereof that might theretofore have been
excluded from such grant of a security interest and the term
"Personal Property Collateral."
(c) Anything in this Agreement or the other
Loan Documents to the contrary notwithstanding and subject to
Section 4.1(b), (i) the security interest granted in the
Permitted Other Investments under Section 4.1(a) shall not
attach unless and until a Triggering Event has occurred, at
which time such security interest immediately and
automatically shall attach without notice or demand or further
act on the part of Foothill or Borrower, and (ii) Foothill
agrees that Borrower need not deliver any Negotiable
Collateral in respect of the Permitted Other Investments under
Section 4.2 unless and until a Triggering Event has occurred.
(d) Anything in this Agreement and the other
Loan Documents to the contrary notwithstanding, the foregoing
grant of a security interest shall not extend to, and the term
"Personal Property Collateral" shall not include, any Excluded
Foreign Subsidiary Securities or the assets or properties of
any Foreign Subsidiary.
4.2 Negotiable Collateral. In the event that any
Collateral, including proceeds, is evidenced by or consists of
Negotiable Collateral, Borrower, immediately upon the request
of Foothill, shall endorse and deliver (or cause to be
endorsed and delivered) physical possession of such Negotiable
Collateral to Foothill. The foregoing notwithstanding,
Borrower need not deliver any Negotiable Collateral in respect
of any Permitted Toehold Investment with a value less than or
equal to $500,000 unless and until there is a Triggering Event.
4.3 Collection of Accounts, General Intangibles, and
Negotiable Collateral. During a Triggering Event, Foothill or
Foothill's designee may (a) notify customers or Account
Debtors of Borrower that the Accounts, General Intangibles, or
Negotiable Collateral have been assigned to Foothill or that
Foothill has a security interest therein, and (b) collect the
Accounts, General Intangibles, and Negotiable Collateral
directly and charge the collection costs and expenses to the
Loan Account. Borrower agrees that it will hold in trust for
Foothill, as Foothill's trustee, any Collections that it
receives and immediately will deliver said Collections to
Foothill in their original form as received by it.
4.4 Delivery of Additional Documentation Required. (a)
At any time upon the request of Foothill, Borrower shall (and
shall cause its Subsidiaries to) execute and deliver to
Foothill all financing statements, continuation financing
statements, fixture filings, security agreements, pledges,
assignments, endorsements of certificates of title,
applications for title, affidavits, reports, notices,
schedules of accounts, letters of authority, and all other
documents (including documents required for compliance with
the Assignment of Claims Act, 31 U.S.C. 3727 or any State's
statutory counterpart thereto) that Foothill reasonably may
request, in form reasonably satisfactory to Foothill, to
perfect and continue perfected Foothill's security interests
in the Collateral and the other properties and assets of
Borrower and its Subsidiaries, and in order to fully
consummate all of the transactions contemplated hereby and
under the other Loan Documents.
(b) In respect of each of the Securities
Accounts of Borrower, if any, Foothill, Borrower, and each
applicable financial intermediary or depositary shall enter
into a control agreement that, among other things, provides
that, from and after the giving of notice by Foothill to such
financial intermediary or depositary, it shall take
instructions solely from Foothill with respect to the
applicable Securities Account and related securities
entitlements or deposit account, as applicable. Foothill
agrees that it will not give such notice unless a Triggering
Event has occurred. Borrower agrees that it will not transfer
assets out of such Securities Accounts or deposit accounts
other than in the ordinary course of business and, if to
another financial intermediary or depositary, unless Borrower,
Foothill, and the substitute financial intermediary or
depositary have entered into a control agreement of the type
described above. No arrangement contemplated hereby shall be
modified by Borrower without the prior written consent of
Foothill. Upon the occurrence of a Triggering Event, Foothill
may elect to notify the financial intermediary to liquidate
the securities entitlements in such Securities Account and may
elect to notify the financial intermediary or depositary to
remit the proceeds in the Securities Account or deposit
account to the Foothill Account.
(c) Anything in this Agreement to the contrary
notwithstanding, Foothill agrees that: (i) so long as no
Triggering Event has occurred and is continuing, (y) Borrower
need not execute and deliver to Foothill documents required
for compliance with the Assignment of Claims Act, 31 U.S.C.
3727 or any State's statutory counterpart thereto in respect
of any one underlying contract or series of related underlying
contracts giving rise to less than $1,000,000 of Accounts of
Borrower, and (z) Foothill agrees not to file notices or
copies of assignments under the Assignment of Claims Act or
any State's statutory counterpart thereto; and (ii) after the
occurrence and during the continuance of a Triggering Event,
(y) Borrower shall execute and deliver to Foothill all
documents that Foothill may request, in form satisfactory to
Foothill, required for compliance with the Assignment of
Claims Act or any State's statutory counterpart thereto,
irrespective of the amount of Accounts arising out of any
underlying contract, and (z) Foothill may file any notices or
copies of assignments under the Assignment of Claims Act or
any State's statutory counterpart thereto.
4.5 Power of Attorney. Borrower hereby irrevocably
makes, constitutes, and appoints Foothill (and any of
Foothill's officers, employees, or agents designated by
Foothill) as Borrower's true and lawful attorney, with power
to (a) if Borrower refuses to, or fails timely to execute and
deliver any of the documents described in Section 4.4, sign
the name of that Borrower on any of the documents described in
Section 4.4, (b) if there is a Triggering Event, sign that
Borrower's name on any invoice or bill of lading relating to
any Account, drafts against Account Debtors, schedules and
assignments of Accounts, verifications of Accounts, and
notices to Account Debtors, (c) send requests for verification
of Accounts, (d) endorse Borrower's name on any Collection
item that may come into Foothill's possession, (e) at any time
that an Event of Default has occurred and is continuing or
Foothill deems itself insecure, notify the post office
authorities to change the address for delivery of Borrower's
mail to an address designated by Foothill, to receive and open
all mail addressed to Borrower, and to retain all mail
relating to the Collateral and forward all other mail to
Borrower, (f) if there is a Triggering Event, make, settle,
and adjust all claims under Borrower's policies of insurance
and make all determinations and decisions with respect to such
policies of insurance, and (g) if there is a Triggering Event,
settle and adjust disputes and claims respecting the Accounts
directly with Account Debtors, for amounts and upon terms that
Foothill determines to be reasonable, and Foothill may cause
to be executed and delivered any documents and releases that
Foothill determines to be necessary. The appointment of
Foothill as Borrower's attorney, and each and every one of
Foothill's rights and powers, being coupled with an interest,
is irrevocable until all of the Obligations have been fully
and finally repaid and performed and Foothill's obligation to
extend credit hereunder is terminated.
4.6 Right to Inspect. Foothill (through any of its
officers, employees, or agents) shall have the right, from
time to time hereafter to inspect Borrower's Books and to
check, test, and appraise the Collateral in order to verify
Borrower's financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce Foothill to enter into this
Agreement, Borrower makes the following representations and
warranties which shall be true, correct, and complete in all
respects as of the Closing Date, and at and as of the date of
the making of each Advance or Letter of Credit made
thereafter, as though made on and as of the date of such
Advance or Letter of Credit (except to the extent that such
representations and warranties relate solely to an earlier
date) and such representations and warranties shall survive
the execution and delivery of this Agreement:
5.1 No Encumbrances. Borrower has good and indefeasible
title to the Collateral, free and clear of Liens except for Permitted Liens.
5.2 Eligible Accounts. The Eligible Accounts are bona
fide existing obligations created by the sale and delivery of
Inventory or the rendition of services to Account Debtors in
the ordinary course of Borrower's business, unconditionally
owed to Borrower without defenses, disputes, offsets,
counterclaims, or rights of return or cancellation. The
property giving rise to such Eligible Accounts has been
delivered to the Account Debtor, or to the Account Debtor's
agent for immediate shipment to and unconditional acceptance
by the Account Debtor (except for returns, in the ordinary
course of business, of products that fail to conform with
standard specifications). Borrower has not received notice of
actual or imminent bankruptcy, insolvency, or material
impairment of the financial condition of any Account Debtor
regarding any Eligible Account.
5.3 Eligible Domestic Inventory. All Eligible Domestic
Inventory is of good and merchantable quality, free from defects.
5.4 Equipment. All of the Equipment is used or held for
use in Borrower's business and is fit for such purposes.
5.5 Location of Inventory and Equipment. The Inventory
and Equipment are not stored with a bailee, warehouseman, or
similar party (without Foothill's prior written consent) and
are located only at the locations identified on Schedule 6.12
or otherwise permitted by Section 6.12.
5.6 Inventory Records. Borrower keeps correct and
accurate records itemizing and describing the kind, type,
quality, and quantity of the Inventory, and Borrower's cost therefor.
5.7 Location of Chief Executive Office; FEIN. The chief
executive office of Borrower is located at the address
indicated in the preamble to this Agreement. Borrower's FEIN is 63-0573222.
5.8 Due Organization and Qualification; Subsidiaries.
(a) Each Borrower is duly organized and existing and in
good standing under the laws of the jurisdiction of its
incorporation and qualified and licensed to do business in,
and in good standing in, any state where the failure to be so
licensed or qualified reasonably could be expected to have a
Material Adverse Change.
(b) Set forth on Schedule 5.8, is a complete and
accurate list of Borrower's direct and indirect Subsidiaries,
showing: (i) the jurisdiction of their organization; (ii) the
number of shares or units of each class of common and
preferred stock or other equity securities authorized for each
of such Subsidiaries; and (iii) the number and the percentage
of the outstanding shares or units of each such class owned
directly or indirectly by Borrower. All of the outstanding
capital stock or other equity securities of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(c) Except as set forth on Schedule 5.8, no capital
stock or other equity securities (or any securities,
instruments, warrants, options, purchase rights, conversion or
exchange rights, calls, commitments or claims of any character
convertible into or exercisable for capital stock or other
equity securities) of any direct or indirect Subsidiary of
Borrower is subject to the issuance of any security,
instrument, warrant, option, purchase right, conversion or
exchange right, call, commitment or claim of any right, title,
or interest therein or thereto.
(d) Set forth on Schedule 5.8 are, with respect to each
Subsidiary of Borrower that is not a Foreign Subsidiary: (i) a
description of the direct and indirect stockholders (or
holders of equivalent equity interests) of each such
Subsidiary; (ii) the total assets of each such Subsidiary;
(iii) the amount of the net value of Borrower's direct or
indirect investment in such Subsidiary; and (iv) a true,
correct, and complete statement regarding whether each such
Subsidiary's assets are comprised principally of (x) foreign
assets, (y) securities of other Subsidiaries of Borrower, or
(z) other operating assets.
5.9 Due Authorization; No Conflict.
(a) The execution, delivery, and performance by Borrower
of this Agreement and the Loan Documents to which it is a
party have been duly authorized by all necessary corporate action.
(b) The execution, delivery, and performance by Borrower
of this Agreement and the Loan Documents to which it is a
party do not and will not (i) violate any provision of
federal, state, or local law or regulation (including
Regulations G, T, U, and X of the Federal Reserve Board)
applicable to Borrower, the Governing Documents of Borrower,
or any order, judgment, or decree of any court or other
Governmental Authority binding on Borrower, (ii) conflict
with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any material
contractual obligation or material lease of Borrower,
(iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of
Borrower, other than Permitted Liens, or (iv) require any
approval of stockholders or any approval or consent of any
Person under any material contractual obligation of Borrower.
(c) Other than the filing of appropriate financing
statements, fixture filings, and mortgages, the execution,
delivery, and performance by Borrower of this Agreement and
the Loan Documents to which Borrower is a party do not and
will not require any registration with, consent, or approval
of, or (except for Borrower's filings with the Securities
Exchange Commission in the ordinary course of Borrower's
business) notice to, or other action with or by, any federal,
state, foreign, or other Governmental Authority or other Person.
(d) This Agreement and the Loan Documents to which
Borrower is a party, and all other documents contemplated
hereby and thereby, when executed and delivered by Borrower
will be the legally valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their
respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganiza
tion, moratorium, or similar laws relating to or limiting
creditors' rights generally.
(e) The Liens granted by Borrower to Foothill in and to
its properties and assets pursuant to this Agreement and the
other Loan Documents are validly created, perfected, and first
priority Liens, subject only to Permitted Liens.
5.10 Litigation. There are no actions or proceedings
pending by or against Borrower before any court or
administrative agency and Borrower does not have knowledge or
belief of any pending, threatened, or imminent litigation,
governmental investigations, or claims, complaints, actions,
or prosecutions involving Borrower or any guarantor of the
Obligations, except for: (a) ongoing collection matters in
which Borrower is the plaintiff; (b) matters disclosed on
Schedule 5.10; and (c) matters arising after the date hereof
that, if decided adversely to Borrower, would not have a
Material Adverse Change.
5.11 No Material Adverse Change. All financial
statements relating to Borrower or any guarantor of the
Obligations that have been delivered by Borrower to Foothill
have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and
fairly present Borrower's (or such guarantor's, as applicable)
financial condition as of the date thereof and Borrower's
results of operations for the period then ended. There has
not been a Material Adverse Change with respect to Borrower
(or such guarantor, as applicable) since the date of the
latest financial statements submitted to Foothill.
5.12 Solvency. Borrower is Solvent. No transfer of
property is being made by Borrower and no obligation is being
incurred by Borrower in connection with the transactions
contemplated by this Agreement or the other Loan Documents
with the intent to hinder, delay, or defraud either present or
future creditors of Borrower.
5.13 Employee Benefits. None of Borrower, any of its
Subsidiaries, or any of their ERISA Affiliates maintains or
contributes to any Benefit Plan, other than those listed on
Schedule 5.13. Borrower, each of its Subsidiaries and each
ERISA Affiliate have satisfied the minimum funding standards
of ERISA and the IRC with respect to each Benefit Plan to
which it is obligated to contribute. No ERISA Event has
occurred nor has any other event occurred that may result in
an ERISA Event that reasonably could be expected to result in
a Material Adverse Change. None of Borrower or its
Subsidiaries, or any ERISA Affiliate, is subject to any direct
or indirect liability with respect to any Plan under any
applicable law, treaty, rule, regulation, or agreement. None
of Borrower or its Subsidiaries or any ERISA Affiliate is
required to provide security to any Plan under Section
401(a)(29) of the IRC.
5.14 Environmental Condition. None of Borrower's
properties or assets has ever been used by Borrower or, to the
best of Borrower's knowledge, by previous owners or operators
in the disposal of, or to produce, store, handle, treat,
release, or transport, any Hazardous Materials, except in
compliance with all applicable laws and regulations in respect
thereof. None of Borrower's properties or assets has ever
been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials
disposal site, or a candidate for closure pursuant to any
environmental protection statute. No Lien arising under any
environmental protection statute has attached to any revenues
or to any real or personal property owned or operated by
Borrower. Except as set forth on Schedule 5.14, Borrower has
not received a summons, citation, notice, or directive from
the Environmental Protection Agency or any other federal or
state governmental agency concerning any action or omission by
Borrower resulting in the releasing or disposing of Hazardous
Materials into the environment.
5.15 Securities Accounts. Borrower does not have or
maintain any Securities Accounts.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any
credit hereunder shall be available and until full and final
payment of the Obligations, and unless Foothill shall
otherwise consent in writing, Borrower shall do all of the following:
6.1 Accounting System. Maintain one or more systems of
accounting that enable Borrower to produce financial
statements in accordance with GAAP, and maintain records
pertaining to the Collateral that contain information as from
time to time may be requested by Foothill. Borrower also
shall keep a modern inventory reporting system that shows all
additions, sales, claims, returns, and allowances with respect
to the Inventory.
6.2 Collateral Reporting. Provide Foothill with the
following documents at the following times in form
satisfactory to Foothill: (a) on a monthly basis and, in any
event, by no later than the 15th day of each month during the
term of this Agreement (or, in the event that Borrower's then
Availability is less than $10,000,000, on such more frequent
basis as Foothill may require), a monthly accounts receivable
roll-forward report and a detailed calculation of the
Borrowing Base as of such date; (b) on a monthly basis and, in
any event, by no later than the 15th day of each month during
the term of this Agreement, a detailed aging, by total, of the
Accounts, together with a reconciliation to the detailed
calculation of the Borrowing Base previously provided to
Foothill; (c) on a monthly basis and, in any event, by no
later than the 15th day of each month during the term of this
Agreement, a listing of Borrower's accounts payable, by
vendor; (d) on a monthly basis and, in any event, by no later
than the 15th day of each month during the term of this
Agreement (or, in the event that Borrower's then Availability
is less than $10,000,000, on such more frequent basis as
Foothill may require), Inventory reports specifying Borrower's
cost and the wholesale market value of its Inventory by
category, including a monthly Inventory roll-forward report;
(e) upon Foothill's reasonable request, copies of invoices in
connection with the Accounts, credit memos, and remittance
advices and reports in connection with the Accounts and for
Inventory and Equipment acquired by Borrower, purchase orders
and invoices; (f) in the event that Borrower's then
Availability is less than $10,000,000, then upon Foothill's
reasonable request, a sales journal, collection journal, and
credit register since the last such schedule and copies of
deposit slips, shipping and delivery documents in connection
with the Accounts and for Inventory and Equipment acquired by
Borrower; (g) on a quarterly basis, a detailed list of
Borrower's customers; (h) on a monthly basis, a calculation of
the Dilution for the prior month; (i) on a quarterly basis, a
detailed report specifying each Permitted Toehold Investment,
including the book value and market value thereof; (j) on a
monthly basis, a detailed report specifying each Permitted
Appraised Assets Disposition and Equipment replacement in
respect thereof consummated since the last such report; (k) on
a quarterly basis, a detailed report specifying the aggregate
amount of Permitted Subsidiary Loans and Capital Contributions
made by Borrower to date during the then current calendar year
and the aggregate amount of Indebtedness then outstanding and
permitted under Section 7.1(b), and (l) such other reports as
to the Collateral or the financial condition of Borrower as
Foothill may request from time to time. Original sales
invoices evidencing daily sales shall be mailed by Borrower to
each Account Debtor and, at Foothill's direction if there is a
Triggering Event, the invoices shall indicate on their face
that the Account has been assigned to Foothill and that all
payments are to be made directly to Foothill.
6.3 Financial Statements, Reports, Certificates.
Deliver to Foothill: (a) as soon as available, but in any
event within 30 days after the end of each month during each
of Borrower's fiscal years, a company prepared balance sheet,
income statement, and statement of cash flow covering
Borrower's operations during such period; and (b) as soon as
available, but in any event within 90 days after the end of
each of Borrower's fiscal years, financial statements of
Borrower for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Foothill
and certified, without any qualifications, by such accountants
to have been prepared in accordance with GAAP, together with a
certificate of such accountants addressed to Foothill stating
that such accountants do not have knowledge of the existence
of any Default or Event of Default. Such audited financial
statements shall include a balance sheet, profit and loss
statement, and statement of cash flow and, if prepared, such
accountants' letter to management. If Borrower is a parent
company of one or more Subsidiaries, or Affiliates, or is a
Subsidiary or Affiliate of another company, then, in addition
to the financial statements referred to above, Borrower agrees
to deliver such other information relative to such related
entity as Foothill reasonably may request and, solely to the
extent available, such financing statements on a consolidating
basis so as to present Borrower and each such related entity
separately.
Together with the above, Borrower also shall
deliver to Foothill Borrower's Form 10-Q Quarterly Reports,
Form 10-K Annual Reports, and Form 8-K Current Reports, and
any other filings made by Borrower with the Securities and
Exchange Commission, if any, within 1 Business Day of the date
that the same are filed, or any other information that is
provided by Borrower to its shareholders, and any other report
reasonably requested by Foothill relating to the financial
condition of Borrower.
Each month, together with the financial
statements provided pursuant to Section 6.3(a), Borrower shall
deliver to Foothill a certificate signed by its chief
financial officer to the effect that: (i) all financial
statements delivered or caused to be delivered to Foothill
hereunder have been prepared in accordance with GAAP (except,
in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and
fairly present the financial condition of Borrower, (ii) the
representations and warranties of Borrower contained in this
Agreement and the other Loan Documents are true and correct in
all material respects on and as of the date of such
certificate, as though made on and as of such date (except to
the extent that such representations and warranties relate
solely to an earlier date), (iii) for each month that also is
the date on which a financial covenant in Section 7.20 is to
be tested, a Compliance Certificate demonstrating in
reasonable detail compliance at the end of such period with
the applicable financial covenants contained in Section 7.20,
and (iv) on the date of delivery of such certificate to
Foothill there does not exist any condition or event that
constitutes a Default or Event of Default (or, in the case of
clauses (i), (ii), or (iii), to the extent of any non-
compliance, describing such non-compliance as to which he or
she may have knowledge and what action Borrower has taken, is
taking, or proposes to take with respect thereto).
Borrower shall have issued written instructions
to its independent certified public accountants authorizing
them to communicate with Foothill and to release to Foothill
whatever financial information concerning Borrower that
Foothill may request. Borrower hereby irrevocably authorizes
and directs all auditors, accountants, or other third parties
to deliver to Foothill, at Borrower's expense, copies of
Borrower's financial statements, papers related thereto, and
other accounting records of any nature in their possession,
and to disclose to Foothill any information they may have
regarding Borrower's business affairs and financial
conditions.
Each year, together with the financial
statements provided pursuant to Section 6.3(b), Borrower shall
deliver to Foothill a certificate signed by its chief
financial officer specifying, as to each Foreign Subsidiary of
Borrower, the amounts of assets and liabilities and
stockholder's equity of such Foreign Subsidiary as of the end
of the year then ended. Borrower hereby agrees that, in
respect of any Foreign Subsidiary whose capitalization has
materially improved (in Foothill's reasonable determination)
and upon Foothill's reasonable request therefor, Borrower
shall execute and deliver to Foothill a supplement to the
Pledge Agreement pursuant to which Borrower shall pledge to
Foothill all of Borrower's right, title, and interest in and
to such Foreign Subsidiary's equity securities (other than the
Excluded Foreign Portion) and deliver to Foothill all
Negotiable Collateral, if any, in respect of same, unless and
to the extent that doing so would, in any material respect,
violate applicable law or cause a breach or default under any
material contract, agreement, or arrangement binding on such Subsidiary.
6.4 Tax Returns. Deliver to Foothill copies of each of
Borrower's future federal income tax returns, and any
amendments thereto, within 30 days of the filing thereof with
the Internal Revenue Service.
6.5 Guarantor Reports. Cause any guarantor of any of
the Obligations to deliver its annual financial statements at
the time when Borrower provides its audited financial
statements to Foothill and copies of all federal income tax
returns as soon as the same are available and in any event no
later than 30 days after the same are required to be filed by law.
6.6 Returns. Cause returns and allowances, if any, as
between Borrower and its Account Debtors to be on the same
basis and in accordance with the usual customary practices of
Borrower, as they exist at the time of the execution and
delivery of this Agreement. If, at a time when no Event of
Default has occurred and is continuing, any Account Debtor
returns any Inventory to Borrower, Borrower promptly shall
determine the reason for such return and, if Borrower accepts
such return, issue a credit memorandum (with, upon reasonable
request, a copy to be sent to Foothill) in the appropriate
amount to such Account Debtor. If, at a time when an Event of
Default has occurred and is continuing, any Account Debtor
returns any Inventory to Borrower, Borrower promptly shall
determine the reason for such return and, if Foothill consents
(which consent shall not be unreasonably withheld), issue a
credit memorandum (with a copy to be sent to Foothill) in the
appropriate amount to such Account Debtor.
6.7 Title to Equipment. Upon Foothill's request after
the occurrence of an Event of Default, Borrower immediately
shall deliver to Foothill, properly endorsed, any and all
evidences of ownership of, certificates of title, or
applications for title to any items of Equipment; provided,
however, that the foregoing shall not be deemed to prevent
Permitted Dispositions to the extent otherwise permitted hereunder.
6.8 Maintenance of Equipment. Maintain the Equipment in
good operating condition and repair (ordinary wear and tear
excepted), and make all necessary replacements thereto so that
the value and operating efficiency thereof shall at all times
be maintained and preserved. Other than those items of
Equipment that constitute fixtures on the Closing Date,
Borrower shall not permit any item of Equipment to become a
fixture to real estate or an accession to other property, and
such Equipment shall at all times remain personal property.
6.9 Taxes. Cause all assessments and taxes, whether
real, personal, or otherwise, due or payable by, or imposed,
levied, or assessed against Borrower or any of its property to
be paid in full, before delinquency or before the expiration
of any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a
Permitted Protest. Borrower shall make due and timely payment
or deposit of all such federal, state, and local taxes,
assessments, or contributions required of it by law, and will
execute and deliver to Foothill, on demand, appropriate
certificates attesting to the payment thereof or deposit with
respect thereto. Borrower will make timely payment or deposit
of all tax payments and withholding taxes required of it by
applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal
income taxes, and will, upon request, furnish Foothill with
proof satisfactory to Foothill indicating that Borrower has
made such payments or deposits.
6.10 Insurance.
(a) At its expense, keep the Personal Property
Collateral insured against loss or damage by fire, theft,
explosion, sprinklers, and all other hazards and risks, and in
such amounts, as are ordinarily insured against by other
owners in similar businesses. Borrower also shall maintain
business interruption, public liability, product liability,
and property damage insurance relating to Borrower's ownership
and use of the Personal Property Collateral, as well as
insurance against larceny, embezzlement, and criminal
misappropriation.
(b) At its expense, obtain and maintain (i) insurance of
the type necessary to insure the Improvements and Chattels (as
such terms are defined in the Mortgages), for the full
replacement cost thereof, against any loss by fire, lightning,
windstorm, hail, explosion, aircraft, smoke damage, vehicle
damage, earthquakes, elevator collision, and other risks from
time to time included under "extended coverage" policies, in
such amounts as Foothill may require, but in any event in
amounts sufficient to prevent Borrower from becoming a
co-insurer under such policies, (ii) combined single limit
bodily injury and property damages insurance against any loss,
liability, or damages on, about, or relating to each parcel of
Real Property Collateral, in an amount satisfactory to
Foothill; (iii) business rental insurance covering annual
receipts for a 12 month period for each parcel of Real
Property Collateral; and (iv) insurance for such other risks
as Foothill may require. Replacement costs, at Foothill's
option, may be redetermined by an insurance appraiser,
satisfactory to Foothill, not more frequently than once every
12 months at Borrower's cost.
(c) All such policies of insurance shall be in such
form, with such companies, and in such amounts as may be
reasonably satisfactory to Foothill. All hazard insurance and
such other insurance as Foothill shall specify, shall contain
a Form 438BFU mortgagee endorsement, or an equivalent
endorsement satisfactory to Foothill, showing Foothill as sole
loss payee thereof, and shall contain a waiver of warranties.
Every policy of insurance referred to in this Section 6.10
shall contain an agreement by the insurer that it will not
cancel such policy except after 30 days prior written notice
to Foothill and that any loss payable thereunder shall be
payable notwithstanding any act or negligence of Borrower or
Foothill which might, absent such agreement, result in a
forfeiture of all or a part of such insurance payment and
notwithstanding (i) occupancy or use of the Real Property
Collateral for purposes more hazardous than permitted by the
terms of such policy, (ii) any foreclosure or other action or
proceeding taken by Foothill pursuant to the Mortgages upon
the happening of an Event of Default, or (iii) any change in
title or ownership of the Real Property Collateral. Borrower
shall deliver to Foothill certified copies of such policies of
insurance and evidence of the payment of all premiums therefor.
(d) Original policies or certificates thereof
satisfactory to Foothill evidencing such insurance shall be
delivered to Foothill at least 10 days prior to the expiration
of the existing or preceding policies. Borrower shall give
Foothill prompt notice of any loss covered by such insurance,
and, upon the occurrence and during the continuance of an
Event of Default, Foothill shall have the right to adjust any
loss. Foothill shall have the exclusive right to adjust all
losses payable under any such insurance policies without any
liability to Borrower whatsoever in respect of such
adjustments. Any monies received as payment for any loss
under any insurance policy including the insurance policies
mentioned above, shall be paid over to Foothill to be applied
at the option of Foothill either to the prepayment of the
Obligations without premium, in such order or manner as
Foothill may elect, or shall be disbursed to Borrower under
stage payment terms satisfactory to Foothill for application
to the cost of repairs, replacements, or restorations. All
repairs, replacements, or restorations shall be effected with
reasonable promptness and shall be of a value at least equal
to the value of the items or property destroyed prior to such
damage or destruction. Upon the occurrence of an Event of
Default, Foothill shall have the right to apply all prepaid
premiums to the payment of the Obligations in such order or
form as Foothill shall determine.
(e) Borrower shall not take out separate insurance
concurrent in form or contributing in the event of loss with
that required to be maintained under this Section 6.10, unless
Foothill is included thereon as named insured with the loss
payable to Foothill under a standard California 438BFU
(NS) Mortgagee endorsement, or its local equivalent. Borrower
immediately shall notify Foothill whenever such separate
insurance is taken out, specifying the insurer thereunder and
full particulars as to the policies evidencing the same, and
originals of such policies immediately shall be provided to Foothill.
6.11 No Setoffs or Counterclaims. Make payments
hereunder and under the other Loan Documents by or on behalf
of Borrower without setoff or counterclaim and free and clear
of, and without deduction or withholding for or on account of,
any federal, state, or local taxes.
6.12 Location of Inventory and Equipment. Keep the
Inventory and Equipment only at the locations identified on
Schedule 6.12; provided, however, that Borrower may amend
Schedule 6.12 so long as such amendment occurs by written
notice to Foothill not less than 30 days prior to the date on
which the Inventory or Equipment is moved to such new
location, so long as such new location is within the
continental United States, and so long as, at the time of such
written notification, Borrower provides any financing
statements or fixture filings necessary to perfect and
continue perfected Foothill's security interests in such
assets and also provides to Foothill a Collateral Access Agreement.
6.13 Compliance with Laws. Comply with the requirements
of all applicable laws, rules, regulations, and orders of any
governmental authority, including the Fair Labor Standards Act
and the Americans With Disabilities Act, other than laws,
rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not have and could not
reasonably be expected to have a Material Adverse Change.
6.14 Employee Benefits.
(a) Promptly, and in any event within 10 Business Days
after Borrower or any of its Subsidiaries knows or has reason
to know that an ERISA Event has occurred that reasonably could
be expected to result in a Material Adverse Change, a written
statement of the chief financial officer of Borrower
describing such ERISA Event and any action that is being
taking with respect thereto by Borrower, any such Subsidiary
or ERISA Affiliate, and any action taken or threatened by the
IRS, Department of Labor, or PBGC. Borrower or such
Subsidiary, as applicable, shall be deemed to know all facts
known by the administrator of any Benefit Plan of which it is
the plan sponsor, (ii) promptly, and in any event within 3
Business Days after the filing thereof with the IRS, a copy of
each funding waiver request filed with respect to any Benefit
Plan and all communications received by Borrower, any of its
Subsidiaries or, to the knowledge of Borrower, any ERISA
Affiliate with respect to such request, and (iii) promptly,
and in any event within 3 Business Days after receipt by
Borrower, any of its Subsidiaries or, to the knowledge of
Borrower, any ERISA Affiliate, of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice.
(b) Cause to be delivered to Foothill, upon Foothill's
request, each of the following: (i) a copy of each Plan (or,
where any such plan is not in writing, complete description
thereof) (and if applicable, related trust agreements or other
funding instruments) and all amendments thereto, all written
interpretations thereof and written descriptions thereof that
have been distributed to employees or former employees of
Borrower or its Subsidiaries; (ii) the most recent
determination letter issued by the IRS with respect to each
Benefit Plan; (iii) for the three most recent plan years,
annual reports on Form 5500 Series required to be filed with
any governmental agency for each Benefit Plan; (iv) all
actuarial reports prepared for the last three plan years for
each Benefit Plan; (v) a listing of all Multiemployer Plans,
with the aggregate amount of the most recent annual
contributions required to be made by Borrower or any ERISA
Affiliate to each such plan and copies of the collective
bargaining agreements requiring such contributions; (vi) any
information that has been provided to Borrower or any ERISA
Affiliate regarding withdrawal liability under any
Multiemployer Plan; and (vii) the aggregate amount of the most
recent annual payments made to former employees of Borrower or
its Subsidiaries under any Retiree Health Plan.
6.15 Leases. Pay when due all rents and other amounts
payable under any leases to which Borrower is a party or by
which Borrower's properties and assets are bound, unless such
payments are the subject of a Permitted Protest. To the
extent that Borrower fails timely to make payment of such
rents and other amounts payable when due under its leases,
Foothill shall be entitled, in its discretion, to reserve an
amount equal to such unpaid amounts against the Borrowing
Base.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any
credit hereunder shall be available and until full and final
payment of the Obligations, Borrower will not to do any of the
following without Foothill's prior written consent:
7.1 Indebtedness. Create, incur, assume, permit,
guarantee, or otherwise become or remain, directly or
indirectly, liable with respect to any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement, together
with Indebtedness to issuers of letters of credit that are the
subject of L/C Guarantees;
(b) (i) unsecured guarantees of indebtedness of
Borrower's Subsidiaries; and (ii) unsecured back-to-back
letters of credit or letter of credit guarantees to issuers of
underlying letters of credit, the account parties of which are
Borrower's Foreign Subsidiaries, that are not the subject of
L/C Guarantees; provided, however, that the aggregate amount
of such Indebtedness at any one time outstanding permitted
under this Section 7.1(b) shall not exceed $50,000,000;
(c) Indebtedness set forth on Schedule 7.1;
(d) unsecured Indebtedness of Borrower owing to one or
more of its Subsidiaries; provided, however, that upon the
request of Foothill, Borrower shall cause each of its
Subsidiaries that is a holder of such Indebtedness to execute
and deliver to Foothill a subordination agreement, in form and
substance satisfactory to Foothill, in respect of such Indebtedness;
(e) unsecured Indebtedness evidenced by Interest Rate
Agreements and Currency Protection Agreements entered into by
Borrower in the ordinary course of its business consistent
with past practices and entered into in connection with the
operational needs of Borrower's business and not for
speculative purposes;
(f) Indebtedness secured by Permitted Liens; and
(g) refinancings, renewals, or extensions of
Indebtedness permitted under clauses (c), (e), and (f) of this
Section 7.1 (and continuance or renewal of any Permitted Liens
associated therewith) so long as: (i) the terms and conditions
of such refinancings, renewals, or extensions do not
materially impair the prospects of repayment of the
Obligations by Borrower, (ii) the net cash proceeds of such
refinancings, renewals, or extensions do not result in an
increase in the aggregate principal amount of the Indebtedness
so refinanced, renewed, or extended, (iii) such refinancings,
renewals, refundings, or extensions do not result in a
shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, and (iv) to
the extent that Indebtedness that is refinanced was
subordinated in right of payment to the Obligations, then the
subordination terms and conditions of the refinancing
Indebtedness must be at least as favorable to Foothill as
those applicable to the refinanced Indebtedness.
7.2 Liens. Create, incur, assume, or permit to exist,
directly or indirectly, any Lien on or with respect to any of
its property or assets, of any kind, whether now owned or
hereafter acquired, or any income or profits therefrom, except
for Permitted Liens (including Liens that are replacements of
Permitted Liens to the extent that the original Indebtedness
is refinanced under Section 7.1(g) and so long as the
replacement Liens only encumber those assets or property that
secured the original Indebtedness). Without limiting the
generality of the foregoing, Borrower agrees not to create,
incur, assume, or permit to exist, directly or indirectly, any
Lien on or with respect to the equity securities of any
Subsidiary of Borrower and the equity securities evidencing
any Permitted Toehold Investment (except for Liens thereon in
favor of Foothill and Liens expressly permitted hereunder on
the equity securities of IG Australia).
7.3 Restrictions on Fundamental Changes. (a) Enter into
any merger, consolidation, reorganization, or
recapitalization, or reclassify its capital stock; (b)
liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution); or (c) except for Permitted
Dispositions, convey, sell, assign, lease, transfer, or
otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its property or assets.
7.4 Disposal of Assets. Except for Permitted
Dispositions, make any Asset Disposition.
7.5 Change Name. Change Borrower's name, FEIN,
corporate structure (within the meaning of Section 9402(7) of
the Code), or identity, or add any new fictitious name.
7.6 [intentionally omitted].
7.7 Nature of Business. Make any change in the
principal nature of Borrower's business.
7.8 Prepayments and Amendments.
(a) Except in connection with a refinancing permitted by
Section 7.1(g), prepay, redeem, defease, purchase, or
otherwise acquire any Indebtedness owing to any third Person,
other than the Obligations in accordance with this Agreement, and
(b) Directly or indirectly, amend, modify, alter,
increase, or change any of the terms or conditions of any
agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Sections
7.1(b), (c), (d), (e), or (f), except for any amendment,
modification, waiver, or consent the effect of which would be
to: (i) extend the maturity of all or part of the remaining
scheduled payments of principal outstanding thereunder;
(ii) make any covenant or default contained therein less
stringent; (iii) decrease the interest rate or interest rate
margin or the default interest rate or interest rate margin,
or both; (iv) amends or modify any other terms thereof so long
as the amendments or modifications referenced in this
clause (iv) are not in the aggregate materially more
expensive, burdensome, or otherwise adverse to Borrower or Foothill.
7.9 Change of Control. Cause, permit, or suffer,
directly or indirectly, any Change of Control.
7.10 Consignments. Consign any Inventory or sell any
Inventory on bill and hold, sale or return, sale on approval,
or other conditional terms of sale; provided, however, that
the foregoing shall not prevent Borrower from consigning
Inventory with a value not to exceed $500,000 at any one time
outstanding, in the ordinary course of Borrower's business,
consistent with past practices, so long as at the time of any
such consignment, Borrower shall take such steps as may be
necessary to ensure that such consigned Inventory is not
subject to the claims of the consignees' creditors or that
Borrower has priority over any perfected security interests in
the inventory of such consignee.
7.11 Distributions. Make any distribution or declare or
pay any dividends (in cash or other property, other than
capital stock) on, or purchase, acquire, redeem, or retire any
of Borrower's capital stock, of any class, whether now or
hereafter outstanding.
7.12 Accounting Methods. Modify or change significantly
its method of accounting or enter into, modify, or terminate
any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service
bureau for the preparation or storage of Borrower's accounting
records without said accounting firm or service bureau
agreeing to provide Foothill information regarding the
Collateral or Borrower's financial condition. Borrower waives
the right to assert a confidential relationship, if any, it
may have with any accounting firm or service bureau in
connection with any information requested by Foothill pursuant
to or in accordance with this Agreement, and agrees that
Foothill may contact directly any such accounting firm or
service bureau in order to obtain such information.
7.13 Investments. Except for Permitted Investments and
Permitted Dispositions, directly or indirectly make, acquire,
or incur any liabilities (including contingent obligations)
for or in connection with (a) the acquisition of the
securities (whether debt or equity) of, or other interests in,
a Person, (b) loans, advances, capital contributions, or
transfers of property to a Person, or (c) the acquisition of
all or substantially all of the properties or assets of a Person.
7.14 Transactions with Affiliates. Except for Permitted
Investments, directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of
Borrower's business, upon fair and reasonable terms, that are
fully disclosed to Foothill, and that are no less favorable to
Borrower than would be obtained in a comparable arm's length
transaction with a non-Affiliate.
7.15 Suspension. Suspend or go out of a substantial
portion of its business.
7.16 [intentionally omitted].
7.17 Use of Proceeds. Use the proceeds of the Advances
and the Term Loan made hereunder for any purpose other than
(a) on the Closing Date, (i) to repay in full the outstanding
principal, accrued interest, and accrued fees and expenses
owing to Existing Lender, and (ii) to pay transactional costs
and expenses incurred in connection with this Agreement, and
(b) thereafter, consistent with the terms and conditions
hereof, for its lawful and permitted corporate purposes.
7.18 Change in Location of Chief Executive Office;
Inventory and Equipment with Bailees. Relocate its chief
executive office to a new location without providing 30 days
prior written notification thereof to Foothill and so long as,
at the time of such written notification, Borrower provides
any financing statements or fixture filings necessary to
perfect and continue perfected Foothill's security interests
and also provides to Foothill a Collateral Access Agreement
with respect to such new location. The Inventory and
Equipment shall not at any time now or hereafter be stored
with a bailee, warehouseman, or similar party without
Foothill's prior written consent.
7.19 No Prohibited Transactions Under ERISA. Directly or indirectly:
(a) engage, or permit any Subsidiary of Borrower to
engage, in any prohibited transaction which is reasonably
likely to result in a civil penalty or excise tax described in
Sections 406 of ERISA or 4975 of the IRC for which a statutory
or class exemption is not available or a private exemption has
not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302 of
ERISA and 412 of the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to fail,
to pay timely required contributions or annual installments
due with respect to any waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower to
terminate, any Benefit Plan where such event would result in
any liability of Borrower, any of its Subsidiaries or any
ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any Subsidiary of Borrower to fail,
to make any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to fail,
to pay any required installment or any other payment required
under Section 412 of the IRC on or before the due date for
such installment or other payment;
7.(yyyy) amend, or permit any Subsidiary of Borrower to
amend, a Plan resulting in an increase in current liability
for the plan year such that either of Borrower, any Subsidiary
of Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the IRC; or
(h) withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is
reasonably likely to result in any liability of any such
entity under Title IV of ERISA;
which, individually or in the aggregate, results in or
reasonably would be expected to result in a claim against or
liability of Borrower, any of its Subsidiaries or any ERISA
Affiliate in excess of $1,500,000.
7.20 Financial Covenants. Fail to maintain:
(a) Current Ratio. A ratio of Consolidated Current
Assets divided by Consolidated Current Liabilities of at least
1.0: 1.0, measured on a fiscal quarter-end basis; and
(b) Net Worth. Net Worth of at least $325,000,000,
measured on a fiscal quarter-end basis.
7.21 Capital Expenditures. Make capital expenditures in
any fiscal year in excess of $80,000,000.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall
constitute an event of default (each, an "Event of Default")
under this Agreement:
8.1 If Borrower fails to pay when due and payable or
when declared due and payable, any portion of the Obligations
(whether of principal, interest (including any interest which,
but for the provisions of the Bankruptcy Code, would have
accrued on such amounts), fees and charges due Foothill,
reimbursement of Foothill Expenses, or other amounts
constituting Obligations);
8.2 (a) If Borrower fails or neglects to perform, keep,
or observe, in any material respect, any term, provision,
condition, covenant, or agreement contained in Sections 6.2
(Collateral Reports) or 6.3 (Financial Statements) of this
Agreement and such failure continues for a period of five (5)
days from the date Foothill sends Borrower telephonic or
written notice of such failure or neglect; (b) If Borrower
fails or neglects to perform, keep, or observe, in any
material respect, any term, provision, condition, covenant, or
agreement contained in Sections 6.4 (Tax Returns), 6.5
(Guarantor Reports), 6.7 (Title to Equipment), 6.12 (Location
of Inventory and Equipment), 6.13 (Compliance with Laws), 6.14
(Employee Benefits), or 6.15 (Leases) of this Agreement and
such failure continues for a period of fifteen (15) days from
the date of such failure or neglect; (c) If Borrower fails or
neglects to perform, keep, or observe, in any material
respect, any term, provision, condition, covenant, or
agreement contained in Sections 6.1 (Accounting System), 6.6
(Returns), or 6.8 (Maintenance of Equipment) of this Agreement
and such failure continues for a period of fifteen (15) days
from the date Foothill sends Borrower telephonic or written
notice of such failure or neglect; or (d) If Borrower fails or
neglects to perform, keep, or observe, in any material
respect, any other term, provision, condition, covenant, or
agreement contained in this Agreement, in any of the Loan
Documents, or in any other present or future agreement between
Borrower and Foothill (other than any such term, provision,
condition, covenant, or agreement that is the subject of
another provision of this Section 8);
8.3 If there is a Material Adverse Change;
8.4 If any material portion of Borrower's properties or
assets is attached, seized, subjected to a writ or distress
warrant, or is levied upon, or comes into the possession of
any third Person;
8.5 If an Insolvency Proceeding is commenced by Borrower;
8.6 If an Insolvency Proceeding is commenced against
Borrower and any of the following events occur: (a) such
Borrower consents to the institution of the Insolvency
Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the
petition commencing the Insolvency Proceeding is not dismissed
within 45 calendar days of the date of the filing thereof;
provided, however, that, during the pendency of such period,
Foothill shall be relieved of its obligation to extend credit
hereunder; (d) an interim trustee is appointed to take
possession of all or a substantial portion of the properties
or assets of, or to operate all or any substantial portion of
the business of, Borrower; or (e) an order for relief shall
have been issued or entered therein;
8.7 If Borrower is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any
material part of its business affairs;
8.8 (a) If a notice of Lien, levy, or assessment for
more than $1,500,000 is filed of record with respect to any of
Borrower's properties or assets by the United States, or if
any taxes or debts owing for an amount in excess of $1,500,000
at any time hereafter to the United States becomes a lien,
whether choate or otherwise, upon any of Borrower's properties
or assets; provided, however, that Foothill shall be entitled
to create a reserve against the Borrowing Base in an amount
sufficient to discharge such lien, levy, or assessment and any
and all penalties or interest payable in connection therewith; or
(b) If a notice of Lien, levy, or assessment
for more than $1,500,000 is filed of record with respect to
any of Borrower's properties or assets by any state, county,
municipal, or other non-federal governmental agency, or if any
taxes or debts owing for an amount in excess of $1,500,000 at
any time hereafter to any one or more of such entities becomes
a lien, whether choate or otherwise, upon any of Borrower's or
any of its Subsidiaries' properties or assets and, in any such
case, such taxes or debts are not the subject of a Permitted
Protest, and the lien, levy, or assessment is not released,
discharged, or bonded against before the earlier of 30 days of
the date it first arises or 5 days of the date when such
property or asset is subject to being forfeited; provided,
however, that Foothill shall be entitled to create a reserve
against the Borrowing Base in an amount sufficient to
discharge such lien, levy, or assessment and any and all
penalties or interest payable in connection therewith.
8.9 If a judgment or other claim for an amount in excess
of $1,500,000 becomes a Lien or encumbrance upon any material
portion of Borrower's properties or assets;
8.10 If there is a default in any material agreement to
which Borrower is a party with one or more third Persons and
such default (a) occurs at the final maturity of the
obligations thereunder, or (b) results in a right by such
third Person(s), irrespective of whether exercised, to
accelerate the maturity of Borrower's obligations thereunder
or to terminate the subject agreement;
8.11 If Borrower makes any payment on account of
Indebtedness that has been contractually subordinated in right
of payment to the payment of the Obligations, except to the
extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.12 If any material misstatement or misrepresentation
exists now or hereafter in any warranty, representation,
statement, or report made to Foothill by Borrower or any
officer, employee, agent, or director of Borrower, or if any
such warranty or representation is withdrawn; or
8.13 If the obligation of M&S or IG Delaware under the
Pledge Agreement is limited or terminated by operation of law
or by such Person thereunder, or any such Person becomes the
subject of an Insolvency Proceeding.
9. FOOTHILL'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence, and
during the continuation, of an Event of Default Foothill may,
at its election, without notice of its election and without
demand, do any one or more of the following, all of which are
authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise,
immediately due and payable;
(b) Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement, under any of the
Loan Documents, or under any other agreement between Borrower and Foothill;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of
Foothill, but without affecting Foothill's rights and security
interests in the Personal Property Collateral or the Real
Property Collateral and without affecting the Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Foothill
considers advisable, and in such cases, Foothill will credit
Borrower's Loan Account with only the net amounts received by
Foothill in payment of such disputed Accounts after deducting
all Foothill Expenses incurred or expended in connection therewith;
(e) Cause Borrower to hold all returned Inventory in
trust for Foothill, segregate all returned Inventory from all
other property of Borrower or in Borrower's possession and
conspicuously label said returned Inventory as the property of Foothill;
(f) Without notice to or demand upon Borrower, make such
payments and do such acts as Foothill considers necessary or
reasonable to protect its security interests in the
Collateral. Borrower agrees to assemble the Personal Property
Collateral if Foothill so requires, and to make the Personal
Property Collateral available to Foothill as Foothill may
designate. Borrower authorizes Foothill to enter the premises
where the Personal Property Collateral is located, to take and
maintain possession of the Personal Property Collateral, or
any part of it, and to pay, purchase, contest, or compromise
any encumbrance, charge, or Lien that in Foothill's
determination appears to conflict with its security interests
and to pay all expenses incurred in connection therewith.
With respect to any of Borrower's owned or leased premises,
Borrower hereby grants Foothill a license to enter into
possession of such premises and to occupy the same, without
charge, for up to 120 days in order to exercise any of
Foothill's rights or remedies provided herein, at law, in
equity, or otherwise;
(g) Without notice to Borrower (such notice being
expressly waived by Borrower), and without constituting a
retention of any collateral in satisfaction of an obligation
(within the meaning of Section 9505 of the Code), set off and
apply to the Obligations any and all (i) balances and deposits
of Borrower held by Foothill (including any amounts received
in the Lockbox Accounts), or (ii) indebtedness at any time
owing to or for the credit or the account of Borrower held by Foothill;
(h) Hold, as cash collateral, any and all balances and
deposits of Borrower held by Foothill, and any amounts
received in the Lockbox Accounts, to secure the full and final
repayment of all of the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the
manner provided for herein) the Personal Property Collateral.
Borrower hereby grants to Foothill a license or other right to
use, without charge, Borrower's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Personal
Property Collateral, in completing production of, advertising
for sale, and selling any Personal Property Collateral and
Borrower's rights under all licenses and all franchise
agreements shall inure to Foothill's benefit;
(j) Sell the Personal Property Collateral at either a
public or private sale, or both, by way of one or more
contracts or transactions, for cash or on terms, in such
manner and at such places (including any of Borrower's
premises) as Foothill determines is commercially reasonable.
It is not necessary that the Personal Property Collateral be
present at any such sale;
(k) Foothill shall give notice of the disposition of the
Personal Property Collateral as follows:
(1) Foothill shall give the applicable Borrower and each
holder of a security interest in the Personal Property
Collateral who has filed with Foothill a written request for
notice, a notice in writing of the time and place of public
sale, or, if the sale is a private sale or some other
disposition other than a public sale is to be made of the
Personal Property Collateral, then the time on or after which
the private sale or other disposition is to be made;
(2) The notice shall be personally delivered or mailed,
postage prepaid, to such Borrower as provided in Section 12,
at least 5 days before the date fixed for the sale, or at
least 5 days before the date on or after which the private
sale or other disposition is to be made; no notice needs to be
given prior to the disposition of any portion of the Personal
Property Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold on a
recognized market. Notice to Persons other than such Borrower
claiming an interest in the Personal Property Collateral shall
be sent to such addresses as they have furnished to Foothill;
(3) If the sale is to be a public sale, Foothill also
shall give notice of the time and place by publishing a notice
one time at least 5 days before the date of the sale in a
newspaper of general circulation in the county in which the
sale is to be held;
(l) Foothill may credit bid and purchase at any public
sale; and
(m) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid
immediately by Borrower. Any excess will be returned, without
interest and subject to the rights of third Persons, by
Foothill to Borrower.
9.2 Remedies Cumulative. Foothill's rights and remedies
under this Agreement, the Loan Documents, and all other
agreements shall be cumulative. Foothill shall have all other
rights and remedies not inconsistent herewith as provided
under the Code, by law, or in equity. No exercise by Foothill
of one right or remedy shall be deemed an election, and no
waiver by Foothill of any Event of Default shall be deemed a
continuing waiver. No delay by Foothill shall constitute a
waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased
properties or assets, rents or other amounts payable under
such leases) due to third Persons, or fails to make any
deposits or furnish any required proof of payment or deposit,
all as required under the terms of this Agreement, then, to
the extent that Foothill determines that such failure by such
Borrower could result in a Material Adverse Change, in its
discretion and without prior notice to Borrower, Foothill may
do any or all of the following: (a) make payment of the same
or any part thereof; (b) set up such reserves in Borrower's
Loan Account as Foothill deems necessary to protect Foothill
from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type described in Section
6.10, and take any action with respect to such policies as
Foothill deems prudent. Any such amounts paid by Foothill
shall constitute Foothill Expenses. Any such payments made by
Foothill shall not constitute an agreement by Foothill to make
similar payments in the future or a waiver by Foothill of any
Event of Default under this Agreement. Foothill need not
inquire as to, or contest the validity of, any such expense,
tax, or Lien and the receipt of the usual official notice for
the payment thereof shall be conclusive evidence that the same
was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 Demand; Protest; etc. Borrower waives demand,
protest, notice of protest, notice of default or dishonor,
notice of payment and nonpayment, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and
guarantees at any time held by Foothill on which Borrower may
in any way be liable.
11.2 Foothill's Liability for Collateral. So long as
Foothill complies with its obligations, if any, under Section
9207 of the Code, Foothill shall not in any way or manner be
liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of
any carrier, warehouseman, bailee, forwarding agency, or other
Person. All risk of loss, damage, or destruction of the
Collateral shall be borne by Borrower.
11.3 Indemnification. Borrower shall pay, indemnify,
defend, and hold Foothill, each Participant, and each of their
respective officers, directors, employees, counsel, agents,
and attorneys-in-fact (each, an "Indemnified Person") harmless
(to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees
and disbursements and other costs and expenses actually
incurred in connection therewith (as and when they are
incurred and irrespective of whether suit is brought), at any
time asserted against, imposed upon, or incurred by any of
them in connection with or as a result of or related to the
execution, delivery, enforcement, performance, and
administration of this Agreement and any other Loan Documents
or the transactions contemplated herein, and with respect to
any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds
of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission,
event or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities").
Borrower shall have no obligation to any Indemnified Person
under this Section 11.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision
shall survive the termination of this Agreement and the
repayment of the Obligations.
12. NOTICES.
Unless otherwise provided in this Agreement, all
notices or demands by any party relating to this Agreement or
any other Loan Document shall be in writing and (except for
financial statements and other informational documents which
may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight
courier, or telefacsimile to Borrower or to Foothill, as the
case may be, at its address set forth below:
If to Borrower: INTERGRAPH CORPORATION
One Madison Industrial Park
Huntsville, Alabama 35894
Attn: Mr. Larry J. Laster
Fax No. 205.730.2164
with copies to: BALCH & BINGHAM
1710 Sixth Avenue North
Birmingham, Alabama 35201
Attn: John F. Mandt, Esq.
Fax No. 205.226.8799
If to Foothill: FOOTHILL CAPITAL CORPORATION
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, California 90025-3333
Attn: Business Finance Division Manager
Fax No. 310.478.9788
with copies to: BROBECK, PHLEGER & HARRISON LLP
550 South Hope Street
Los Angeles, California 90071
Attn: John Francis Hilson, Esq.
Fax No. 213.745.3345
The parties hereto may change the address at which
they are to receive notices hereunder, by notice in writing in
the foregoing manner given to the other. All notices or
demands sent in accordance with this Section 12, other than
notices by Foothill in connection with Sections 9504 or 9505
of the Code, shall be deemed received on the earlier of the
date of actual receipt or 3 days after the deposit thereof in
the mail. Borrower acknowledges and agrees that notices sent
by Foothill in connection with Sections 9504 or 9505 of the
Code shall be deemed sent when deposited in the mail or
personally delivered, or, where permitted by law, transmitted
telefacsimile or other similar method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN AN
ANOTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES
HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE
THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE
OPTION OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF
BORROWER AND FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13.
BORROWER AND FOOTHILL HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
OR STATUTORY CLAIMS. EACH OF BORROWER AND FOOTHILL REPRESENTS
THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION,
A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other
papers delivered to Foothill may be destroyed or otherwise
disposed of by Foothill 4 months after they are delivered to
or received by Foothill, unless the applicable Borrower
requests, in writing, the return of said documents, schedules,
or other papers and makes arrangements, at Borrower's expense,
for their return.
15. GENERAL PROVISIONS.
15.1 Effectiveness. This Agreement shall be binding and
deemed effective when executed by Borrower and Foothill.
15.2 Successors and Assigns. This Agreement shall bind
and inure to the benefit of the respective successors and
assigns of each of the parties; provided, however, that
Borrower may not assign this Agreement or any rights or duties
hereunder without Foothill's prior written consent and any
prohibited assignment shall be absolutely void. No consent to
an assignment by Foothill shall release Borrower from its
Obligations. Foothill may assign this Agreement and its
rights and duties hereunder and no consent or approval by
Borrower is required in connection with any such assignment.
Foothill reserves the right to sell, assign, transfer,
negotiate, or grant participations in all or any part of, or
any interest in Foothill's rights and benefits hereunder. In
connection with any such assignment or participation, Foothill
may disclose all documents and information which Foothill now
or hereafter may have relating to Borrower or Borrower's
business, but such documents and information shall be subject
to the confidentiality provisions of Section 15.10. To the
extent that Foothill assigns its rights and obligations
hereunder to a third Person, Foothill thereafter shall be
released from such assigned obligations to the relevant
Borrower and such assignment shall effect a novation between
the relevant Borrower and such third Person.
15.3 Section Headings. Headings and numbers have been
set forth herein for convenience only. Unless the contrary is
compelled by the context, everything contained in each section
applies equally to this entire Agreement.
15.4 Interpretation. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved
against Foothill or Borrower, whether under any rule of
construction or otherwise. On the contrary, this Agreement
has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words
used so as to fairly accomplish the purposes and intentions of
all parties hereto.
15.5 Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of
this Agreement for the purpose of determining the legal
enforceability of any specific provision.
15.6 Amendments in Writing. This Agreement can only be
amended by a writing signed by both Foothill and Borrower.
15.7 Counterparts; Telefacsimile Execution. This
Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an
original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an
executed counterpart of this Agreement by telefacsimile shall
be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telefacsimile also
shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.
15.8 Revival and Reinstatement of Obligations. If the
incurrence or payment of the Obligations by Borrower or any
guarantor of the Obligations or the transfer by either or both
of such parties to Foothill of any property of either or both
of such parties should for any reason subsequently be declared
to be void or voidable under any state or federal law relating
to creditors' rights, including provisions of the Bankruptcy
Code relating to fraudulent conveyances, preferences, and
other voidable or recoverable payments of money or transfers
of property (collectively, a "Voidable Transfer"), and if
Foothill is required to repay or restore, in whole or in part,
any such Voidable Transfer, or elects to do so upon the
reasonable advice of its counsel, then, as to any such
Voidable Transfer, or the amount thereof that Foothill is
required or elects to repay or restore, and as to all
reasonable costs, expenses, and attorneys fees of Foothill
related thereto, the liability of Borrower or such guarantor
automatically shall be revived, reinstated, and restored and
shall exist as though such Voidable Transfer had never been made.
15.9 Integration. This Agreement, together with the
other Loan Documents, reflects the entire understanding of the
parties with respect to the transactions contemplated hereby
and shall not be contradicted or qualified by any other
agreement, oral or written, before the date hereof.
15.10 Confidentiality. Foothill agrees to treat all
material, non-public information regarding Borrower and its
Subsidiaries and their operations, assets, and existing and
contemplated business plans in a confidential manner; it being
understood and agreed by Borrower that in any event Foothill
may make disclosures (a) to counsel for and other advisors,
accountants, and auditors to Foothill, (b) reasonably required
by any bona fide potential or actual assignee, transferee, or
participant in connection with any contemplated or actual
assignment or transfer by Foothill of an interest herein or
any participation interest in Foothill's rights hereunder, (c)
of information that has become public by disclosures made by
Persons other than Foothill, or (d) as required or requested
by any court, governmental or administrative agency, pursuant
to any subpoena or other legal process, or by any law,
statute, regulation, or court order; provided, however, that,
unless prohibited by applicable law, statute, regulation, or
court order, Foothill shall notify Borrower of any request by
any court, governmental or administrative agency, or pursuant
to any subpoena or other legal process for disclosure of any
such non-public material information concurrent with, or where
practicable, prior to the disclosure thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in Los Angeles, California.
INTERGRAPH CORPORATION,
a Delaware corporation
By___________________________
Title:_______________________
FOOTHILL CAPITAL CORPORATION,
a California corporation
By___________________________
Title:_______________________
SCHEDULE E-1
INTERGRAPH CORPORATION
Eligible Domestic Inventory Locations
STATE CITY STREET ADDRESS
- ----- ---- --------------
ALABAMA HUNTSVILLE Building 21
ALABAMA HUNTSVILLE Building 5A & 5B
ALABAMA HUNTSVILLE Building 25
ALABAMA HUNTSVILLE Redstone Arsenal
ARIZONA PHOENIX 4742 N 24th Street
CALIFORNIA IRVINE 26 Technology
CALIFORNIA LA (ENCINO) 15821 Ventura Blvd.
CALIFORNIA SAN DIEGO 9988 Hibert Street
CALIFORNIA SACRAMENTO 777 Campus Commons
CALIFORNIA MTNVIEW 381 E Evelyn
COLORADO ENGLEWOOD 7400 E. Orchard Rd
FLORIDA TAMPA 5423 Beaumont Center
FLORIDA KENNEDYSPACE JF Kennedy Space Ctr
GEORGIA SMYRNA 3300 Highlands
HAWAII HONOLULU 840 Kawalahao
ILLINOIS ARLINGTON 85 West Algonquin
INDIANA INDIANAPOLIS 5881 E 82nd Street
KANSAS LENEXA 14839 W 95th St
KENTUCKY LOUISVILLE 12700 Shelbyville
LOUISIANA METAIRIE 3545 N. I-10 Service Rd
MASSACHUSETTS WESTBOROUGH 1800 W Park Dr
MICHIGAN SOUTHFIELD 28411 NW Hwy
MINNESOTA MENDOTA HTS 1355 Mendota Heights
MISSOURI ST LOUIS 11116 S. Town Sq
MISSOURI ST. LOUIS 3200 S. Second ST.
N CAROLINA CHARLOTTE 9731 J S. Pine
N JERSEY E. RUTHERFORD 1 Meadowland
NEW YORK ROCHESTER 120 Corporate Woods
OHIO MASON 4900 Parkway
OHIO VALLEY VIEW 9885 Rockside
PENNSYLVANIA K. OR PRUSSIA 1018 W 9th Avenue
PENNSYLVANIA PITTSBURGH 500 Business Center
PENNSYLVANIA RADNOR 100 Matson Ford Rd.
S CAROLINA GREENVILLE 201 Brookfield
TENNESSEE NASHVILLE 5211 Linbar Drive
TEXAS HOUSTON 675 Bering Drive
TEXAS DALLAS 8111 LBJ Freeway
TEXAS AUSTIN 9420 Research Blvd
TEXAS SAN ANTONIO 8930 4 Winds Drive
VIRGINIA RESTON 12347-B Sunrise
WASHINGTON BELLEVUE 11130 NE 33rd Place
WISCONSIN WAUKESHA 20725 Watertown
SCHEDULE P-1
INTERGRAPH CORPORATION
PERMITTED LIENS
as of November 30, 1996
Secured Party Jurisdiction Collateral Description
- ------------- ------------ ----------------------
Amplicon, Inc. AL Specific pieces of equipment
pursuant to lease
Amplicon, Inc. AL Specific pieces of equipment
pursuant to Lease Agreement
Amplicon, Inc. AL Specific pieces of equipment
pursuant to Lease Agreement
Amplicon, Inc. AL Specific pieces of equipment
pursuant to Lease Agreement
Amplicon, Inc. AL Specific pieces of equipment
pursuant to Lease Agreement
Amplicon, Inc. AL Specific pieces of equipment
Amplicon, Inc. AL Specific pieces of equipment
pursuant to Lease Agreement
Amplicon, Inc. AL Specific pieces of property and
equipment pursuant to Lease
Agreement
Amplicon, Inc. AL Specific pieces of property and
equipment pursuant to Lease
Agreement
Amplicon, Inc. AL Specific pieces of leased property
and equipment pursuant to Lease
Agreement
Amplicon, Inc. CA Specific pieces of leased property
and equipment
Amplicon, Inc. CA Specific pieces of leased property
and equipment
Amplicon, Inc. CA Specific pieces of leased property
and equipment
Amplicon, Inc. CA Specific pieces of leased equipment
pursuant to Lease Agreement
Amplicon, Inc. CO Specific pieces of leased property
and equipment pursuant to lease
Amplicon, Inc. CO Specific pieces of equipment
pursuant to Lease Agreement
Amplicon, Inc. CO Specific pieces of equipment
pursuant to Lease Agreement
Amplicon, Inc. FL Specific pieces of leased property
and equipment
Amplicon, Inc. FL Specific pieces of leased property
and equipment
Amplicon, Inc. FL Specific pieces of leased property
and equipment
Amplicon, Inc. IL Specific pieces of leased equipment
pursuant to the attached Lease
Agreement
Amplicon, Inc. MD Leased property and equipment
pursuant to Lease Agreement
Amplicon, Inc. MI Specific pieces of leased property
and equipment
Amplicon, Inc. OH Specific pieces of leased property
and equipment
Amplicon, Inc. OH Specific pieces of leased property
and equipment
Amplicon, Inc. OH Specific pieces of leased property
and equipment
Amplicon, Inc. OH Specific pieces of leased property
and equipment
Amplicon, Inc. OH Specific pieces of leased property
and equipment
Amplicon, Inc. OH Specific pieces of leased property
and equipment
Amplicon, Inc. TX Specific pieces of leased property
and equipment
Amplicon, Inc. TX Specific pieces of leased property
and equipment
Amplicon, Inc. TX Specific pieces of leased property
and equipment
Amplicon, Inc. VA Specific pieces of leased property
and equipment pursuant to lease
Amplicon, Inc. VA Specific pieces of leased property
and equipment pursuant to lease
Amplicon, Inc. VA Specific pieces of leased property
and equipment pursuant to lease
Amplicon, Inc. VA Specific pieces of leased property
and equipment pursuant to Lease
Agreement
Amplicon, Inc. WA Leased property and equipment
Amplicon, Inc.-ASSIGNEE:
GE Capital 6/27/95 95-06287801 VA Specific pieces of leased property
and equipment and equipment
Amplicon, Inc.-ASSIGNEE:
GE Capital 6/27/95 95-06287801 VA Specific pieces of leased property
and equipment
Amplicon, Inc.-ASSIGNEE:
GE Capital 7/10/95 95-07107393 VA Specific pieces of leased property
and equipment
Amplicon, Inc.-ASSIGNEE:
GE Capital 8/15/95 95-08157052 VA Specific pieces of leased property
and equipment
BellSouth Financial Services Corporation AL Specific pieces of equipment
Capital Associates MO Specific pieces of equipment per
Lease Agreement dated 8/24/95
Capital Associates International, Inc. AL Specific pieces of equipment
pursuant to Lease Agreement dated
8/24/95
Capital Associates International, Inc. AL Specific pieces of equipment
pursuant to Lease Agreement dated
8/24/95
Capital Associates International, Inc. CA Specific pieces of leased equipment
pursuant to Lease Agreement dated
8/24/95
Capital Associates International, Inc. CA Specific pieces of leased equipment
per Lease Agreement dated 8/24/95
Capital Associates International, Inc. CO Specific pieces of equipment
pursuant to Lease Agreement
Capital Associates International, Inc. CO Specific pieces of equipment
pursuant to Lease Agreement dated
8/24/95
Capital Associates International, Inc. MD Specific pieces of equipment per
Lease Agreement dated 8/24/95
Capital Associates International, Inc. MI Specific pieces of equipment
pursuant to Lease Agreement dated
8/24/95
Capital Associates International, Inc. MI Specific pieces of equipment
pursuant to Lease Agreement dated
8/24/95
SCHEDULE P-1
INTERGRAPH CORPORATION
PERMITTED LIENS
as of November 30, 1996
Secured Party Jurisdiction Collateral Description
- ------------- ------------ ----------------------
Capital Associates International, Inc. NY Specific pieces of equipment
pursuant to Lease Agreement
Capital Associates International, Inc. TX Specific pieces of equipment
pursuant to Lease Agreement dated
8/24/95
Capital Associates International, Inc. WA Specific pieces of equipment
pursuant to the Lease Agreement
dated 8/24/95
Capital Associates International, Inc.
- ASSIGNEE: USL Capital VA Specific pieces of equipment
pursuant to lease Agreement dated
8/24/95
Capital Preferred Yield Fund-III LP FL Specific pieces of equipment per
Lease Agreement dated 8/24/95
Copelco Capital, Inc. AL Specific piece of equipment
Copelco Capital, Inc. AL Specific pieces of equipment
Copelco Capital, Inc. AL Specific pieces of equipment
Copelco Capital, Inc. AL Specific pieces of equipment
covered by Lease Agreement
Copelco Capital, Inc. AL Specific piece of equipment
Copelco Capital, Inc. AL Specific pieces of equipment
Copelco Capital, Inc AL Specific piece of equipment
Copelco Capital, Inc. AL Specific piece of equipment
Copelco Capital, Inc. AL Specific pieces of equipment
Copelco Capital, Inc. AL Specific piece of equipment
Copelco Capital, Inc. AL Specific pieces of equipment
Copelco Capital, Inc. AL Specific piece of equipment
Copelco Capital, Inc. AL Specific piece of equipment
Digital Financial Services AL Specific pieces of equipment
Hewlett-Packard Company AL Specific Hewlett-Packard equipment
pursuant to lease agreement
Hewlett-Packard Company AL Specific pieces of equipment
Hewlett-Packard Company AL Specific pieces of equipment
Hewlett-Packard Company AL Specific pieces of equipment
Hewlett-Packard Company Finance CA Specific pieces of Hewlett-packard
equipment pursuant to attached
equipment schedule
Master Lease Div of Tokai Financial AL Specific pieces of equipment
Morton International, Dynachem AL Specific piece of equipment
Morton International, Dynachem AL Specific piece of equipment
Optrotech, Inc. AL Specific piece of equipment
Orbotech, Inc. AL Specific pieces of equipment
Sun Microsystems Finance, Inc. AL Specific pieces of equipment
pursuant to lease
Sun Microsystems Finance, Inc. CA Specific pieces of equipment
Sun Microsystems Finance, Inc. FL Specific pieces of equipment per
lease
Sun Microsystems Finance, Inc. IL Specific pieces of equipment
pursuant to lease
Sun Microsystems Finance, Inc. KS Specific pieces of equipment per
lease
Sun Microsystems Finance, Inc. MA Specific AT&T and Audix equipment
Sun Microsystems Finance, Inc. MA Specific pieces of equipment per
lease
Sun Microsystems Finance, Inc. MI Specific pieces of equipment
pursuant to lease
Sun Microsystems Finance, Inc. NY Specific pieces of equipment
pursuant to lease
Sun Microsystems Finance, Inc. NY Specific pieces of leased equipment
pursuant to lease
Sun Microsystems Finance, Inc. PA Specific pieces of equipment
pursuant to Lease Agreement
Sun Microsystems Finance, Inc. PA Lease of specific pieces of
equipment
Sun Microsystems Finance, Inc. TX Specific pieces of equipment per
lease
Sun Microsystems Finance, Inc. VA Specific pieces of equipment
pursuant to lease
Sun Microsystems Finance, Inc. VA Specific pieces of leased agreement
Williams Telecommunications
Systems, Inc. AL Specific pieces of equipment
* United National Bank FL Blanket
* This UCC is filed on a company other than the Borrower
Intergraph Corporation Schedule P-2
Permitted Other Investments
Book
Ownership Value
Percentage 11/30/96
---------- -----------
Bentley Systems, Inc. 50.00% $12,116,683
Centric Engineering Systems 4.60% 0 (1)
Dover Systems Corp. 37.00% 0 (1)
Loxley Intergraph Co. LTD 10.00% 119,048
NeoVista Solutions, Inc. 0.11% 0 (1)
Transcend (2) 1,000
TRIFID Corporation 17.98% 109,324
Versant Object Technology Corp. 4.50% 7,640,731 (3)
Waferscale 3.50% 0 (1)
SunPro, Inc. Convertible Note 10.00% 400,000 (4)
-----------
$20,386,786
===========
(1) The Company has written off the carrying value of these investments.
(2) The Company has warrants to purchase 50,000 shares of Transcend stock
at an exercise price of $.10 per share.
(3) Investment is marked-to-market at the end of each month in accordance
with GAAP. Represents market value at November 30, 1996 on this public
company.
(4) Transaction to be executed and delivered on December 31, 1996.
SCHEDULE "R-1" ATTACHED TO AND MADE A PART OF THAT
CERTAIN LOAN AND SECURITY AGREEMENT
DATED AS OF DECEMBER 20, 1996
TRACT I
-------
(Foothill)
All that part of Sections 21, 27, 28 and 33, Township 4 South,
Range 2 West of the Huntsville Meridian, Madison County, Alabama.
Particularly described as beginning at a concrete monument at the
center of the East boundary of Section 21, Township 4 South,
Range 2 West; thence from the point of true beginning, South 01
degrees 24 minutes 39 seconds West 2657.77 feet to a concrete
monument at the Southeast corner of said Section 21; thence South
01 degree 31 minutes 20 seconds West, 1204.68 feet to a concrete
monument; thence South 88 degrees 46 minutes 04 seconds East,
1259.91 feet to a concrete monument; thence South 18 degrees 56
minutes 51 seconds East, 140.57 feet to a concrete monument;
thence South 88 degrees 25 minutes 56 seconds East, 2.83 feet to
a concrete monument at the Northeast corner of the Southwest
Quarter of the Northwest Quarter of Section 27, Township 4 South,
Range 2 West; thence along the East boundary of said Quarter-
Quarter Section, South 01 degrees 51 minutes 00 seconds West,
1329.29 feet to a concrete monument at the Southeast corner of
the Southwest Quarter of the Northwest Quarter of said Section
27; thence along the Quarter-Section line, South 88 degrees 24
minutes 49 seconds East, 2132.29 feet to a concrete monument at
the Northwest corner of a Huntsville Utilities lot; thence along
the west boundary of said lot, South 01 degrees 35 minutes 11
seconds West, 250.00 feet to a concrete monument; thence South 88
degrees 24 minutes 49 seconds East, 230.00 feet to a concrete
monument; thence North 1 degrees 35 minutes 11 seconds East,
250.00 feet to a concrete monument on the Quarter Section line;
thence along the Quarter-Section line, South 88 degrees 24
minutes 49 seconds East, 1515.51 feet to a concrete monument on
the Westerly margin of Zierdt Road; thence along the westerly
margin of Zierdt Road, South 02 degrees 17 minutes 01 seconds
West, 1760.18 feet to a concrete monument at the Northeast corner
of the University of Alabama-Huntsville Property; thence along
the North boundary of said property, North 88 degrees 19 minutes
37 seconds West, 1901.00 feet to a concrete monument; thence
South 02 degrees 17 minutes 01 seconds West, 900.00 feet to a
concrete monument on the South boundary of Section 27, Township 4
South, Range 2 West; thence along the South boundary of said
Section 27, North 88 degrees 19 minutes 37 seconds West, 3245.75
feet to an unmonumented Southwest corner of Section 27, Southeast
corner Section 28, Northeast Corner of Section 33 and Northwest
corner of Section 34 all in Township 4 South, Range 2 West;
thence along the Easterly boundary of Section 33, South 03
degrees 31 minutes 04 seconds West 1330.88 feet to a concrete
monument at the center of the Easterly boundary of Section 33,
South 03 degrees 31 minutes 04 seconds West 1330.88 feet to a
concrete monument at the center of the East boundary of the
Northeast Quarter of said Section 33, Township 4 South, Range 2
West; thence along the South boundary of the North one-half of
the Northeast Quarter of Section 33, North 88 degrees 52 minutes
27 seconds West, 2121.77 feet to a concrete monument; thence
North 2 degrees 15 minutes 55 seconds East, 79.92 feet to a
concrete monument; thence North 85 degrees 29 minutes 04 seconds
West, 550.00 feet to a concrete monument on the Westerly margin
of Old Jim Williams Road; thence North 02 degrees 15 minutes 55
seconds East 614.78 feet to a point; thence continuing along the
Westerly margin of said road, around a curve to the left, with a
radius of 846.72 feet and a chord bearing and distance of North
05 degrees 10 minutes 18 seconds East, 219.21 feet to a concrete
monument on the North-South Quarter Section line of said Section
33; thence along the Quarter-Section line, North 02 degrees 23
minutes 03 seconds East, 383.29 feet to a concrete monument at
the center of the North boundary of Section 33; thence along the
North boundary of said Section 33, South 88 degrees 54 minutes 24
seconds East, 2728.16 feet to the unmonumented Northeast corner
of Section 33, Northwest corner of Section 34, Southeast corner
of Section 28 and the Southwest corner of Section 27; thence from
the Southwest corner of Section 27, North 01 degrees 31 minutes
20 seconds East, 2652.19 feet to a concrete monument at the
center of the East boundary of Section 28; thence along the
Quarter Section line of said Section 28, North 88 degrees 53
minutes 06 seconds West 970.05 feet to a concrete monument at the
Southeast corner of a Huntsville Utilities Lot; thence along the
East boundary of said lot, North 01 degrees 47 minutes 39
seconds East 225.00 feet to a concrete monument at the Northeast
corner of said lot; thence along the North boundary of the
Huntsville Utilities lot, North 88 degrees 53 minutes 06 seconds
West, 387.22 feet to a concrete monument on the North-South
Quarter-Quarter Section line; thence North 01 degrees 47 minutes
39 seconds East, along said Quarter-Quarter Section line, 803.83
feet to a concrete monument at the
TRACT I (Continued)
-------------------
(Foothill)
intersection of said Quarter-Quarter Section line with the
centerline of Dunlop Boulevard; thence continuing North 01
degrees 47 minutes 39 seconds East along said Quarter-Quarter
line 60.00 feet to a concrete monument on the North margin of
Dunlop Boulevard; thence along the North margin of Dunlop
Boulevard, North 89 degrees 01 minutes 20 seconds West, 10.00
feet to a concrete monument at the intersection of the Northerly
margin of Dunlop Boulevard with the Easterly margin of the
Southern Railway Systems Right-of-way; thence along the Easterly
margin of said railway right-of-way, North 01 degrees 47 minutes
39 seconds East, 1569.13 feet to an iron stake on the South
boundary of Section 21; thence along said boundary North 88
degrees 54 minutes 55 seconds West, 1.00 feet to an iron stake;
thence North 43 degrees 33 minutes 26 seconds West, 5.62 feet to
an iron stake; thence North 01 degrees 53 minutes 36 seconds
East, 39.65 feet to an iron stake and the P.C. of a curve to the
left; thence around said curve with a radius of 1180.00 feet and
a chord bearing and distance of North 12 degrees 25 minutes 34
seconds West, 583.27 feet to an iron stake at the point of
tangency; thence North 26 degrees 43 minutes 33 seconds West,
1927.34 feet to a concrete monument at the intersection of the
Easterly margin of the Southern Railway right-of-way with the
Southerly margin of Lime Quarry Road right-of-way; thence along
the Southerly margin of said road right-of-way North 64 degrees
04 minutes 39 seconds East, 447.53 feet to a concrete monument;
thence continuing along said right-of-way, North 83 degrees 24
minutes 23 seconds East, 219.35 feet to a concrete monument;
thence continuing along said right-of-way, South 87 degrees 57
minutes 53 seconds East, 248.49 feet to a concrete monument;
thence continuing along said right-of-way, North 51 degrees 55
minutes 25 seconds East, 130.76 feet to a concrete monument;
thence North 02 degrees 02 minutes 07 seconds East, 50.00 feet to
a concrete monument on the East-West Quarter Section line of
Section 21, Township 4 South, Range 2 West, and the termination
of Lime Quarry Road Right-of-way; thence South 88 degrees 08
minutes 47 seconds East, along said Quarter Section line, 1442.99
feet to the point of true beginning and containing 591.495 acres,
more or less.
TRACT II:
---------
(Foothill)
All that part of the South one-half of Section 21 and the North
one-half of Section 28, Township 4 South, Range 2 West of the
Huntsville Meridian, Madison County, Alabama.
Particularly described as beginning at a concrete monument at the
intersection of the Southerly margin of Lime Quarry Road with the
Westerly margin of the Southern Railway Systems right-of-way;
said point of true beginning is further described as being North
88 degrees 08 minutes 47 seconds West 1442.99 feet, South 02
degrees 02 minutes 07 seconds West, 50.00 feet, South 51 degrees
55 minutes 25 seconds West, 130.76 feet, North 87 degrees 57
minutes 53 seconds West, 248.49 feet, South 83 degrees 24 minutes
23 seconds West, 219.35 feet and South 64 degrees 04 minutes 39
seconds West, 517.53 feet from the center of the East boundary of
Section 21, Township 4 South, Range 2 West; thence from the point
of true beginning, South 26 degrees 43 minutes 33 seconds East,
along the Westerly margin of the Southern Railway right-of-way,
1928.33 feet to an iron stake at the P.C. of a curve to the
right; thence around said curve to the right, with a radius of
1110.00 feet and a chord bearing and distance of South 12 degrees
25 minutes 34 seconds East, 548.67 feet to an iron stake at the
point of tangency; thence South 01 degrees 53 minutes 36 seconds
West, 44.63 feet to an iron stake on the South boundary line of
Section 21; thence along said boundary line, North 88 degrees 54
minutes 55 seconds West, 5.00 feet to an iron stake; thence South
01 degrees 47 minutes 39 seconds West, along the westerly margin
of the Southern Railway right-of-way, 1569.27 feet to a concrete
monument at the intersection of the North margin of Dunlop
Boulevard with the West margin of the Southern Railway right-of-
way; thence along the North margin of Dunlop Boulevard, North 89
degrees 01 minutes 20 seconds West, 1455.77 feet to a concrete
monument; thence North 02 degrees 14 minutes 47 seconds East,
402.10 feet to a concrete monument; thence North 88 degrees 56
minutes 13 seconds West, 436.00 feet to a concrete monument;
thence North 02 degrees 14 minutes 47 seconds East, 400.00 feet
to a concrete monument on the South margin of Cochran Road Right-
of-way; thence along the South margin of said road, South 88
degrees 56 minutes 13 seconds East, 633.47 feet to a concrete
monument; thence North 01 degrees 03 minutes 47 seconds East,
70.00 feet to a concrete monument on the North margin of Cochran
Road; thence continuing North 01 degrees 03 minutes 47 seconds
East 699.86 feet to a concrete monument on the South boundary of
Section 21; thence along the South boundary of said Section 21,
North 88 degrees 56 minutes 13 seconds West, 425.00 feet to a
concrete monument; thence South 01 degrees 03 minutes 47 seconds
West, 699.86 feet to a concrete monument on the North margin of
Cochran Road; thence along the North margin of Cochran Road,
North 88 degrees 56 minutes 13 seconds West, 986.53 feet to a
concrete monument ; thence North 02 degrees 14 minutes 45 seconds
East, 175.08 feet to a concrete monument at the P.C. of a curve
to the right; thence around said curve to the right with a radius
of 503.295 feet and a chord bearing and distance of North 34
degrees 27 minutes 28 seconds East, 536.60 feet to a concrete
monument at the P.T. of the curve; thence North 02 degrees 14
minutes 46 seconds East, 76.81 feet to a concrete monument on the
South boundary of Section 21; thence along the South boundary of
said Section 21, North 88 degrees 56 minutes 13 seconds West,
1434.36 feet to a concrete monument at the intersection of the
South boundary of Section 21 with the East margin of the Wall-
Triana East Bound Ramp - Right-of-Way to Interstate Highway I-
565; thence along said right-of-way line, North 00 degrees 48
minutes 05 seconds East, 687.98 feet to a concrete monument;
thence continuing along said ramp right-of-way, North 46 degrees
22 minutes 04 seconds East, 1198.33 feet to a concrete monument
on the Southerly right-of-way of I-565; thence continuing along
said I-565 southerly right-of-way, North 65 degrees 14 minutes 22
seconds East, 1050.10 feet to a concrete monument; thence
continuing along said right-of-way line, North 64 degrees 27
minutes 16 seconds East, 113.00 feet to a concrete monument;
thence continuing along said right-of-way South 30 degrees 04
minutes 26 seconds East 244.93 feet to a concrete monument;
thence continuing along said right-of-way, North 32 degrees 00
minutes 09 seconds East, 80.99 feet to a concrete monument;
thence continuing along said right-of-way, North 55 degrees 22
minutes 38 seconds East, 28.53 feet to a concrete monument;
thence continuing along said right-of-way, North 30 degrees 04
minutes 26 seconds West, 196.83 feet to a concrete monument;
thence continuing along said right-of-way, North 64 degrees 27
minutes 16 seconds East, 810.29 feet to a concrete monument at
the intersection of I-565 southerly right-of-way with the
Westerly margin of Southern Railway Systems Right-of-way; thence
along the Westerly margin of the Southern Railway right-of-way
around a curve to the left, with a radius of 1467.692 feet and a
chord bearing and distance of South 23 degrees 41 minutes 00
seconds East, 155.50 feet to a concrete monument; thence along
said railway right-of-way, South 26 degrees 43 minutes 33 seconds
East, 24.69 feet to the point of beginning and containing 208.150
acres, more or less.
TRACT II (Continued)
--------------------
(Foothill)
LESS AND EXCEPT that certain property located in the Southwest
Quarter of Section 21, Township 4 South, Range 2 West, Madison
County, Alabama more particularly described as follows:
Commencing at a point that is South 87 degrees 30 minutes West
146.17 feet; thence North 2 degrees 47 minutes 20 seconds West
688.41 feet; thence North 42 degrees 46 minutes 39 seconds East
1,198.30 feet and North 61 degrees 38 minutes 54 seconds East
153.58 feet from the Southwest corner of Section 21, Township 4
South, Range 2 West, said point being the true point of
beginning;
thence from the point of true beginning North 61 degrees 38
minutes 54 seconds East 216.26 feet to a point; thence South 01
degree 33 minutes 06 seconds East 98.12 feet to a point; thence
South 88 degrees 37 minutes 54 seconds West 193.03 feet to the
point of beginning.
PROVIDED, HOWEVER, THAT WITH RESPECT TO THE PARCELS OF TRACT II
DESCRIBED BELOW THE INTEREST OF THE MORTGAGOR IS AS LESSEE UNDER
THE FOLLOWING DESCRIBED LEASES AND WITH RESPECT TO THE PROPERTY
DESCRIBED BELOW FOR EACH SUCH LEASE, AND WITH RESPECT TO SUCH
PROPERTIES THE MORTGAGE SHALL BE A LEASEHOLD MORTGAGE:
1. INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN
LEASE AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF MADISON, INC. AND SCHAEFER-ALABAMA
CORPORATION DATED JUNE 12, 1973 AND RECORDED IN DEED
BOOK 479, PAGE 19, JUDGE OF PROBATE, AND AS ASSIGNED TO
WELBILT CORPORATION PURSUANT TO MEMORANDUM OF
ASSIGNMENT OF LESSEE'S INTEREST IN LEASE DATED OCTOBER
21, 1982 AND RECORDED IN DEED BOOK 607, PAGE 37, AND AS
ASSIGNED TO INTERGRAPH CORPORATION PURSUANT TO THAT
CERTAIN ASSIGNMENT OF ASSUMPTION OF LEASE DATED
NOVEMBER 1, 1983, RECORDED IN DEED BOOK 624, PAGE 113,
IN THE OFFICE OF THE JUDGE OF PROBATE, MADISON COUNTY,
ALABAMA AND COVERING THE FOLLOWING DESCRIBED REAL
PROPERTY:
All that part of the South one-half of Section 21,
Township 4 South, Range 2 West of the Huntsville
Meridian, Madison County, Alabama. Particularly
described as beginning at a concrete monument on the
East margin of the Madison-Triana Road and at the
Northwest corner of the U.S. Corrugated Fibre Box
Company site, said point of true beginning is further
described as being North 87 degrees 30 minutes east,
50.0 feet from the Southwest corner of Section 21,
Township 4 South, Range 2 west. Thence from the point
of true beginning, along the East margin of the Madison-
Triana Road, North 01 degrees 22 minutes 06 seconds
West 900 feet to a point; thence North 87 degrees 30
minutes East, 2418.17 feet to a point in the center of
a drainage ditch; thence South 01 degrees 15 minutes 57
seconds East 950.34 feet to a concrete monument in the
center of said drainage ditch and on the projected
North boundary of the U.S. Corrugated Fibre Box Company
site; thence South 87 degrees 30 minutes West, along
the projected and North boundary of said U.S.
Corrugated Fibre Box Company site 2741.67 feet to the
point of true beginning and containing 53.29 acres,
more or less.
AND ALSO
- --------
2. INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN
LEASE AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF HUNTSVILLE AND INTERGRAPH
CORPORATION DATED AS OF MAY 1, 1983 AND AS OF RECORD IN
DEED BOOK 616, PAGE 809, IN THE OFFICE OF THE JUDGE OF
PROBATE OF MADISON COUNTY, ALABAMA AND COVERING THE
FOLLOWING DESCRIBED PROPERTY:
TRACT II (Continued)
--------------------
(Foothill)
2. (Continued)
All that part of the northeast quarter of Section 28,
Township 4 South, Range 2 West of the Huntsville
Meridian, Madison County, Alabama.
Particularly described as beginning at an iron stake at
the northwest corner of the tract herein described;
said point of true beginning is further described as
being North 87 degrees 30 minutes East, 2691.67 feet
from the Northwest corner of Section 28, Township 4
South, Range 2 West. Thence from the point of true
beginning North 87 degrees 30 minutes 52 seconds East,
1261.66 feet to an iron stake on the west margin of the
80.00 foot Southern Railway Company Right-of-Way;
thence along the margin of said Right-of-way, South 01
degree 48 minutes 36 seconds East, 1569.25 feet to an
iron stake on the north margin of the 120.00 foot Right-
of-Way for Dunlop Boulevard; thence along the north
margin of said Right-of-way, South 87 degrees 24
minutes 30 seconds West 444.86 feet to an iron stake;
thence North 2 degrees 35 minutes 30 seconds West,
100.00 feet to the P.C. of a curve to the left; thence
around said curve, having a radius of 672.63 feet, with
a chord bearing and distance of North 25 degrees 33
minutes 59 seconds West, 525.09 feet to the P.T. of
said curve; thence North 48 degrees 32 minutes 27
seconds West, 27.03 feet to the P.C. of a curve to the
left; thence around said curve, having a radius of
708.29 feet, with a chord bearing and distance of North
70 degrees 31 minutes 14 seconds West, 530.19 feet to
the P.T. of said curve; thence South 87 degrees 30
minutes West, 80.77 feet to a point on the south margin
of the 70.00 foot Right-of-Way for Cochran Road; thence
North 2 degrees 30 minutes West, 70.00 feet to an iron
stake on the north margin of the Right-of-way for
Cochran Road and the southeast corner of the Harris
Pine Mills property; thence along the east boundary of
said Harris Pine Mills site, North 2 degrees 30 minutes
West, 699.85 feet to the point of true beginning and
containing 33.00 acres, more or less.
TOGETHER WITH:
All that part of the northeast quarter of Section 28,
Township 4 South, Range 2 West of the Huntsville
Meridian, Madison County, Alabama.
Particularly described as beginning at an iron stake on
the east margin of the 80.00 foot Southern Railway
Company Right-of-way; said point of true beginning is
further described as being North 87 degrees 30 minutes
East, 4033.33 feet from the northwest corner of Section
28, Township 4 South, Range 2 West.
Thence from the point of true beginning North 87
degrees 30 minutes 52 seconds East, 10.00 feet to a
concrete monument at the center of the north boundary
of the northeast quarter of Section 28, Township 4
South, Range 2 West; thence along the quarter-quarter
section line, South 01 degree 48 minutes 36 seconds
East, 1569.08 feet to an iron stake on the north margin
of the 120.00 foot Right-of-way for Dunlop Boulevard;
thence along the north margin of said Right-of-way
South 87 degrees 24 minutes 30 seconds West, 10.00 feet
to an iron stake on the east margin of the 80.00 foot
Southern Railroad Company Right-of-way; thence along
the east margin of said Right-of-way, North 01 degrees
48 minutes 36 seconds West, 1569.10 feet to the point
of true beginning and containing 0.36 acres more or
less.
TRACT III:
----------
(Foothill)
INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN LEASE
AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
HUNTSVILLE AND THE H. D. LEE COMPANY, INC. DATED SEPTEMBER 1,
1973 AND RECORDED IN DEED BOOK 484, PAGE 437, JUDGE OF PROBATE,
AND AS ASSIGNED FROM THE H.D.LEE COMPANY, INC. TO THE LEE APPAREL
COMPANY, INC. DATED FEBRUARY 14, 1983 AND RECORDED IN MORTGAGE
BOOK 1459, PAGE 264, JUDGE OF PROBATE, AND ASSIGNED AND ASSUMED
BY INTERGRAPH CORPORATION BY THAT CERTAIN ASSIGNMENT AND
ASSUMPTION OF LEASE DATED NOVEMBER 14, 1986 AND RECORDED IN
MORTGAGE BOOK 1459, PAGE 267, JUDGE OF PROBATE AND COVERING THE
FOLLOWING DESCRIBED REAL PROPERTY:
All that part of the Southwest Quarter of Section 28, Township 4
South, Range 2 West of the Huntsville Meridian, Madison County,
Alabama.
Particularly described as beginning at a concrete monument at the
intersection of the North margin of the 70.00 foot right-of-way
for the old Jim Williams Road, with the Easterly margin of the
right-of-way for Martin Road; said point of true beginning is
described as being North 02 degrees 15 minutes 24 seconds East,
70.03 feet and North 86 degrees 01 minutes 06 seconds East, 47.15
feet from the Southwest corner of Section 28, Township 4 South,
Range 2 West; thence from the point of true beginning, along the
Easterly margin of Martin Road around a curve to the right,
having a radius of 2980.71 feet and a chord bearing and distance
of North 00 degrees 19 minutes 42 seconds West, 268.82 feet to a
concrete monument at the P.T. of the curve; thence continuing
along the Easterly margin of Martin Road, North 02 degrees 15
minutes 24 seconds East, 412.83 feet to a concrete monument at
the intersection of the Easterly margin of said Martin Road with
the Southerly margin of Kellner Road; thence along said Southerly
margin of Kellner Road, North 48 degrees 02 minutes 50 seconds
East, 132.49 feet to a concrete monument on the South margin of a
120.00 foot right-of-way for Kellner Road; thence South 89
degrees 10 minutes 36 seconds East, along the South margin of
Kellner Road; 1070.20 feet to a concrete monument; thence South
25 degrees 34 minutes 36 seconds East, 884.12 feet to a concrete
monument on the North margin of Old Jim Williams Road; thence
along the North margin of Old Jim Williams Road, North 89 degrees
05 minutes 25 seconds West, 1013.28 feet to a concrete monument
at the P.C. of a curve to the right; thence continuing along the
North margin of Old Jim Williams Road, around said curve to the
right, having a radius of 2931.22 feet and a chord bearing and
distance of North 86 degrees 46 minutes 31 seconds West, 236.97
feet to a concrete monument at the point of a reverse curve;
thence continuing along the North margin of said road, around a
curve to the left, having a radius of 2777.05 feet, and a chord
bearing and distance of North 86 degrees 57 minutes 43 seconds
West, 242.83 feet to a concrete monument at the P.T. of the
curve; thence continuing along the North margin of said road,
North 89 degrees 28 minutes 22 seconds West, 72.80 feet to the
point of true beginning and containing 24.629 acres, more or
less.
TRACT IV:
---------
(Foothill)
All that part of Madison Industrial Park as recorded in Plat Book
6, Page 21, Probate Records of Madison County, Alabama, and
further described as being a part of the Southwest Quarter of
Section 15, Township 4 South, Range 2 West of the Huntsville
Meridian, Madison County, Alabama.
Particularly described as beginning at a concrete monument on the
Easterly boundary of Research Boulevard; said point of true
beginning is further described as being North 01 degrees 57
minutes 26 seconds East, 1538.11 feet and South 64 degrees 35
minutes 25 seconds West, 955.28 feet from the Southeast corner of
the Southwest Quarter of Section 15, Township 4 South, Range 2
West; thence from the point of true beginning North 25 degrees
24 minutes 35 seconds West, 300.00 feet to a concrete monument at
the intersection of a ninety degree corner of Research Boulevard;
thence along the Southerly margin of said Boulevard North 64
degrees 35 minutes 25 seconds East, 561.92 feet to a concrete
monument at the P.C. of a curve to the left; thence around said
curve to the left with a radius of 160.00 feet and a chord
bearing and distance of 18.92 feet to a concrete monument at a
point on the curve; thence continuing around said curve and along
the Easterly margin of Research Boulevard, with a radius of
160.00 feet and a chord bearing and distance of North 29 degrees
52 minutes 50 seconds East, 149.86 feet to a concrete monument at
the P.T. of the curve; thence South 88 degrees 02 minutes 34
seconds East, 164.01 feet to a concrete monument; thence South 01
degrees 57 minutes 26 seconds West, 181.36 feet to a concrete
monument; thence South 64 degrees 35 minutes 25 seconds West,
185.49 feet to a concrete monument; thence South 25 degrees 24
minutes 35 seconds East, 150.01 feet to a concrete monument;
thence South 64 degrees 35 minutes 25 seconds West, 580.80 feet
to the point of beginning and containing 5.00 acres, more or
less.
TRACT V:
--------
(Foothill)
INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN LEASE
AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
MADISON, INC. AND INTERGRAPH CORPORATION DATED AS OF SEPTEMBER 1,
1982 AND AS OF RECORD IN DEED BOOK 609, PAGE 636 OF THE JUDGE OF
PROBATE AND COVERING THE FOLLOWING DESCRIBED REAL PROPERTY:
All that part of Madison Industrial Park as recorded in Plat Book
6, Page 21, Probate Records of Madison County, Alabama, and
further described as being a part of the Southwest Quarter of
Section 15, Township 4 South, Range 2 West of the Huntsville
Meridian, Madison County, Alabama.
Particularly described as beginning at a concrete monument on the
Westerly Boundary of Research Boulevard; said point of true
beginning is further described as being North 01 degrees 57
minutes 26 seconds East 1765.79 feet and North 88 degrees 02
minutes 34 seconds West, 460.80 feet to a concrete monument at
the P.C. of a curve on the Westerly margin of Research Boulevard;
thence along the Westerly margin of said Boulevard, around a
curve to the right, with a radius of 90.00 feet and chord bearing
and distance of South 33 degrees 16 minutes 33 seconds West,
103.95 feet to a concrete monument at the P.T. of the curve;
thence continuing along the Northerly margin of Research
Boulevard, South 64 degrees 35 minutes 25 seconds West, 741.94
feet to a concrete monument at the P.C. of a curve to the right;
thence around said curve to the right with a radius of 25.00 feet
and a chord bearing and distance of North 70 degrees 24 minutes
06 seconds West, 35.36 feet to a concrete monument at the P.T. of
the curve; thence North 25 degrees 24 minutes 38 seconds West,
123.48 feet to a concrete monument at the P.C. of a curve to the
right; thence around said curve to the right, and continuing
along the Easterly margin of Research Boulevard with a radius of
176.84 feet and a chord bearing and distance of North 11 degrees
49 minutes 25 seconds West, 83.11 feet to a concrete monument at
the P.T. of the curve; thence continuing along the Easterly
margin of Research Boulevard, North 01 degrees 45 minutes 35
seconds East, 584.53 feet to a concrete monument at the P.C. of a
curve to the right; thence around said curve to the right, with a
radius of 100.00 feet and a chord bearing and distance of North
46 degrees 46 minutes 03 seconds East, 141.44 feet to a concrete
monument at the P.T. of the curve; thence South 88 degrees 13
minutes 34 seconds East, along the Southerly margin of Research
Boulevard, 625.21 feet to a concrete monument at the P.C. of a
curve to the right; thence around said curve to the right, with a
radius of 100.00 feet and a chord bearing and distance of South
43 degrees 08 minutes 06 seconds East, 141.65 feet to a concrete
monument at the P.T. of the curve; thence along the Westerly
margin of Research Drive, South 01 degrees 57 minutes 26 seconds
East, 358.11 feet to the point of beginning and containing 13.495
acres, more or less.
Schedule R-1
- --------------------------------------------------------------------------
FACILITY ADDRESS CITY COUNTY STATE FOOTHILL NAME AMOUNT
- -------- ------- ---- ------ ----- -------- ---- ------
NAME AND ZIP LEIN OF OF PRIOR
- ---- ------- ---- -- --------
CODE POSITION PRIOR LIEN
---- -------- ----- ----
LIENOR
------
- --------------------------------------------------------------------------
Huntsville One Huntsville Madison Alabama First n/a n/a
Campus Madison
Industrial
Park
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
<TABLE>
Schedule 5.8
Shares of
Intergraph Corporation Direct and Indirect Subsidiaries
<CAPTION>
Owner Issuer Number Class Cert. Former Owner's Juris- Total Borrower's Composition of
of # Name, Percen diction Assets Investment Subsidiaries' Assets
Shares if any tage of at in Subsidiary
in Owner- Organi- 11/30/96
which ship of zation Securities Other
Certif- Total of Other Operat-
icate Issued For- Subs of ing
Issued & Out- eign Borrower Assets
standing
Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware $152,662,063 $152,654,468 X(*)
Corporation Delaware,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph M&S 1,000 Common 6 100% Delaware $191,584,960 $25,120,978 X
Corporation Computing
Invest-
ments,Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph InterCAP 1,000 Common 3 100% Delaware $5,510,749 $4,769,769 X
Corporation Graphics
Systems,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Bestinfo, 1,000 Common C19 100% Delaware $971,114 ($17,317,649) X
Corporation Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Scansys- 1,000 Common 1 100% Delaware Inactive Inactive Inactive
Corporation tems,
Inc. Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware $1,232,000 ($1,123,000) X
Corporation Asia
Pacific, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Veribest, 1,000 Common 1 Intergraph 100% Delaware $5,836,816 ($3,960,182) X
Corporation Inc, ** Electronics
Holdings,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware $3,148,599 $605,780 X
Corporation Services
Company,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 3,000 Common 1 100% Delaware $30,212,000 $30,212,000 X(*)
Delaware, DISC,Inc.
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 2 100% Delaware Inactive Inactive Inactive
Corporation DC
Corporation-
Subsidiary 3
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph N/A N/A N/A 90% Delaware $29,165,000 $23,892,000 X
Corporation European LLC
Manufact-
uring,
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph N/A N/A N/A 10% Delaware Included Include Included in IEM, LLC
Computing European LLC in IEM, in IEM, above
Investments,Manufact- LLC above LLC above
Inc. uring
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph N/A N/A N/A 95% Delaware $15,197,000 $4,233,000 X
Corporation (Middle LLC
East),
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph N/A N/A N/A 5% Delaware Included Included Included in IME, LLC
Computing (Middle LLC in in above
Investments,East), LLC IME, LLC IME, LLC
Inc. above above
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph N/A N/A N/A 5% Delaware $10,063,000 $(2,239,000) X
Corporation (Italia), LLC
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph N/A N/A N/A 79% Delaware Included Included Included in IA, LLC
Computing (Italia), LLC in in above
Investments,LLC IA, LLC IA, LLC
Inc. above above
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph N/A N/A N/A 16% Delaware Included Included Included in IA, LLC
DC (Italia), LLC in IA, LLC in IA, LLC above
Corporation LLC above above
- - Subsidiary
3
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware Inactive Inactive Inactive
Corportion DC
Corporation-
Subsidiary
8
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph INTS, LLC N/A N/A N/A Intergraph 95% Delaware Inactive Inactive Inactive
Corporation Technical
Services,
LLC
- ------------------------------------------------------------------------------------------------------------------------------------
M&S INTS, LLC N/A N/A N/A Intergraph 5% Delaware
Computing Technical
Investments, Services,
Inc. LLC
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware Inactive Inactive Inactive
Corporation Vietnam,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Inter- 1,000 Common 1 100% Delaware $0 $0 Operational in Q1 1997
Corporation national
Public
Safety,
Inc. **
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 100 Common 1 100% Delaware $441,000 ($151,000) X
Corporation China, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Worldwide 1,000 Common 1 Intergraph 100% Delaware $518,334 $800,085 X
Computing Services, Europe,
Investments,Inc. Inc.
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware $2,687,000 ($86,000) X
Corporation Express,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 25,000 Class A AC-20 100% Canada
Corporation Canada Voting
Ltd. Common
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 739,051 Class B BC-150 100% Canada
Corporation Canada, Non-
Ltd. Voting
Common
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 2,799,000 Capital 1 97% England
Corporation (UK), Ltd. Stock
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph 1 Capital Less England
Computing (UK), Ltd. Stock than
Investments, 1%
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 100,000 Capital 3% England
DC (UK), Ltd. Stock
Corporation
- - Subsidiary
3
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 3,353,999 Ordinary 5 100% Hong Kong
Corporation Hong Kong
Limited
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph 1 Ordinary Less Hong Kong
Computing Hong Kong than
Investments,Limited 1%
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph 30,595 Common 1,2,3,4 93% Spain
Computing Espana,S.A.
Investments,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 2,156 Common 7% Spain
Corporation Espana,S.A
- -----------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 100 Common 001-100 100% Sweden
Corporation (Sverige) 100 Common 101-200
100 Common 201-300
100 Common 301-400
100 Common 401-500
4,500 Common 501-5000
150,000 Common 5001-
155000
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph 260 Common 6 100% Switzer-
Computing (Switzer- land
Investments,land) AG
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 2 100% United
Delaware, Virgin States
Inc. Islands Virgin
Corporation Islands
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph 279,994 Common 96% France
Computing France SA
Investments,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 11,000 Common 4% France
DC France SA
Corporation
- - Subsidiary
3
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1 Common Less France
Corporation France SA than
1%
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph N/A N/A N/A 100% Germany
Corporation Holding
GmbH
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 5,350 Common 1,874- 100% The Nether-
Corporation Benelux B.V. 5,350 lands
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,125 Common 75% Saudi
Corporation Saudi Arabia
Arabia,
Ltd.
(a/k/a
Saudi
Arabian
Intergraph
Ltd.)
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph 4,889,610 Common 8 99% Singa-
Computing Systems pore
Investments,Singapore
Inc. Pte Ltd.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 49,390 Common 1% Singa-
Corporation Systems pore
Singapore
Pte Ltd.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,065 Common 100% Japan
Corporation Japan K.K.
- ------------------------------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 591,482 100% Korea
Corporation Korea, Ltd
- ------------------------------------------------------------------------------------------------------------------------------------
M&S Intergraph 9,500 Common 100% Finland
Computing Finland
Investments, Oy
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: This Schedule 5.8 excludes foreign subsidiaries for which shares were not
pledged.
* Also includes intercompany receivables.
** Employees and directors of each Company have been granted stock options
for common shares of stock in each respective Company.
SCHEDULE 5.10
Litigation
The presentation and schedule inclusion of these matters is based
upon their contingent nature and potential materiality, and the
uncertainty inherent in the litigation process; it should not be
deemed to constitute an acknowledgment that these matters, either
individually or in the aggregate, are presently viewed by
management to be material to Borrower. In each case, Borrower is
pursuing appropriate corrective action and/or vigorously
defending its interests where litigation or arbitration is
pending.
1. In 1990, Adage, Inc. of Billerica, Mass., indicated
that, in its view, Intergraph Corporation may be in violation of
two patents owned by Adage covering Z-buffer technology used to
display three dimensional images on video display screens. Adage
attorneys have offered Intergraph a license and have identified
other companies already licensed. This matter is under
investigation by Intergraph patent counsel.
2. In 1992, Optronics, a division of Intergraph answered a
Second Request for Information letter from the United States
Environmental Protection Agency (EPA). The EPA is investigating
the source of released hazardous waste at the 60 acre Iron Horse
Pike Site, Shaffer Landfill, Billerica, Massachusetts. Optronics
has informed the EPA that small quantifies of 1,1,1-
trichloroethane, a common industrial solvent, were deposited in
the garbage dumpster approximately every two months during an
unspecified period.
Optronics has entered into a PRP (Potentially Responsible Party)
agreement to work with 30 other PRP's to design and implement a
remedy for the landfill. In January, 1995, EPA filed suit
against ten of the PRP's, but did not file suit against
Optronics. Consultants to the PRP group have identified
Optronics as a de minimis participant, and the current structure
of the PRP operating relationship confirms that, as of the date
of this disclosure, the reviewing PRPs consider Optronics to be a
de minimis party.
3. During 1995, Intergraph asserted three of its patents
against a number of IBM's computer systems. During 1996,
Intergraph expanded the scope of its assertions to cover
additional IBM computer systems. IBM asserted additional patents
against Intergraph and made a pro forma denial which Intergraph
patent counsel continues to analyze. Negotiations will likely
extend well into 1997.
4. In 1993, CADTRAK, Inc. of Sunnyvale, California, as
patent licensing agent for Tektronics, Inc. of Beaverton, Oregon
sent a letter to Intergraph alleging infringement by Intergraph
of three patents related to computer display monitor technology.
CADTRAK thereafter withdrew its original charge of patent
infringement and has asserted patent infringement by Intergraph
of two different Tektronix patents. This new charge related to
software methods used in Mode/View and in MicroStation software.
Intergraph has responded by letter denying infringement.
Negotiations seem to be dormant at the present time.
5. In 1993 Intergraph received a letter from Raytheon
Company of Lexington, Massachusetts alleging the infringement of
U.S. Patent 4,069,511 relating to a digital memory system. This
appears to be one of several hundred similar letters distributed
widely by Raytheon to manufacturers in the electronics industry.
The patent expired January 17, 1995. This matter remains under
investigation by Intergraph patent counsel.
6.
In 1993 suit was filed against Intergraph in Jefferson
County Court, Birmingham, Alabama, in the style of Randolph C.
Marks d/b/a Historical Architecture Resource Planning v.
Intergraph Corporation, CV9309764. Claims allege breach of
contract, breach of warranty, fraud and misrepresentation for an
architectural system H.A.R.P. purchased in 1988 and operated with
borrowed mechanical design software. The amount originally
demanded is alleged to exceed the $10,000 jurisdictional minimum.
The trial originally scheduled for December, 1996 has been
postponed for health reasons by the Plaintiff.
7. Charles Braine v. Intergraph Corporation. An employee
of Consolidated Edison sued Intergraph alleging that Intergraph
negligently configured a system, which resulted in injury.
Intergraph did not supply, install or maintain the system at
issue. A Motion for Summary Judgment is being prepared by local
counsel.
8. Daniel C. Borden v. Apple Computers, Inc. and
Intergraph Corporation, Supreme Court, State of New York, County
of Kings, Case Number 38890/94. This matter involves a lawsuit
against Intergraph in New York State. The suit alleges that
Intergraph's keyboard caused repetitive stress injuries to the
Plaintiff. Intergraph's insurance carrier has assumed the
defense of this action. The case was removed to Federal Court in
New York. Intergraph filed a Motion for Summary Judgment on
Plaintiff's Complaint. Summary judgment was granted in favor of
Intergraph.
9. Theresa Sibley, wife of Lenard Sibley v. Intergraph
Corporation, Ergotron, Inc. and/or Ergotronic, LLC., ABC
Insurance Company and XYZ Insurance Company, Case NO. 94-0740
U.S. District Court, Eastern District of Louisiana. Sibley is a
Chevron employee in New Orleans who filed suit, alleging that
Intergraph's system configuration caused him personal injury. He
alleged permanent injury to his hand and wrist, as a result of a
fall from a stand which occurred while attempting to turn on a
power strip. The case was referred to Intergraph's insurance
carrier who retained local counsel. Neither the surge protector
nor the stand were manufactured by Intergraph. The jury awarded
the Plaintiff approximately $468,000.00. The matter is presently
on appeal to the Circuit Court of Appeals for the Fifth Circuit.
10. Attorneys representing Lemelson Medical, Educational
and Research Foundation allege infringement by Intergraph of
three U.S. patents concerning technology used in personal
computers. This matter is under investigation by Intergraph
patent counsel.
11. Intergraph Corp. v. Zydex, Inc., Case No. CV95-U-2147
in the United States District Court for the Northern District of
Alabama, in which Intergraph Corporation has filed an equitable
action seeking dissolution of Intergraph's joint venture
relationship with Zydex, Inc., a Houston based engineering and
consulting firm. Zydex has filed a counterclaim for breach of
contract, breach of fiduciary duty and fraud, claiming
compensatory and punitive damages claimed to be in excess of
$300,000,000.
12. Intergraph Corporation & Subsidiaries v. Commissioner
of Internal Revenue. Issue of whether a deduction in the amount
of $978,567 is allowable, for federal tax purposes, for foreign
exchange loss and accrued interest upon repayment of a yen-
denominated loan in 1987. The United States Tax Court rendered
its opinion, holding in favor of the government, in the matter of
Intergraph v. Commissioner of Internal Revenue, Docket No. 21286
in May, 1996. Intergraph has appealed to the United States Court
of Appeals for the Eleventh Circuit, Case No. 96-6821.
13. Miscellaneous Tax Matters.
* Intergraph Korea Ltd. Appeal of decision by the
Korean Tax Authorities, the National Tax Tribunal, to
the Seoul High Court regarding $15,000 in withholding
tax for 1992 (subsequent years have not yet been
addressed) on sales of application software to Korean
customers.
* Intergraph Espana, S.A. Appeal of decision by the
Technical Bureau of the Spanish Tax Authority to the
regular Spanish Courts of an issue related to transfer
pricing for spare parts and spare repair costs. Amount
at issue is nominally $1.5 million. A cash collateral
bond in the amount of $2 million has been provided.
The Company has been advised that this case will take
several years to resolve, but expects to prevail.
14. Intergraph v. Commonwealth of Pennsylvania, Docket No.
32 FR 95. This is an appeal from an order of the Board of
Finance and Revenue reported as BR&R Docket No. 25319. The issue
is whether a gain from the sale of shares of Cadence Design
Systems, Inc. should be treated as a taxable gain by the State of
Pennsylvania. The amount in controversy is approximately $20,000
exclusive of interest and costs.
15. Spanish Tax Audit. The audit period covers fiscal
years 1986-1989. The tax auditors challenged three major issues:
deductibility for tax of repair cost of spare parts;
deductibility for tax of entertainment expenses; and
deductibility for tax of a devaluation of spares inventory. The
cumulative disallowed expenses related to the three items above
amount to PTA 184,447,251 which, at a tax rate of 35%,
corresponds with additional taxes due of PTA 64,556,188.
In August of 1994, Intergraph Espana was assessed with the
additional taxes described above, plus a 100% penalty (150% for
1986), plus interest, for a combined total of PTA 160,272,337.
Intergraph Spain challenged this assessment and brought the
issues for the Regional Administrative Court, which is expected
to rule before the end of this year. It is not expected that the
tax authorities will appeal a ruling in favor of Intergraph. The
Company expects to prevail, except for entertainment expenses and
a portion of the Inventory devaluation, representing a total cash
tax exposure of approximately PTA 6 million, excluding penalties
and interest. This opinion is supported by Ernst & Young. If
the Regional Administrative Court rules unfavorably, the appeals
process could take as long as ten years.
Until a court decision is taken which is accepted by the Spanish
tax authorities, Intergraph Espana was forced to issue a
guarantee to the local tax authorities for the taxes, penalties
and interest due in an amount of PTA 160 million. The guarantee
is collateralized by a cash deposit. On the amount of the
guarantee further interest accrues until the moment when a court
decision is taken. Since the further interest due is calculated
at a higher rate than the interest which is received on the
deposit, a PTA 200 million cash deposit had to be made at Caja de
Madrid, which is the bank that issued the guarantee.
16. Intergraph v. Arthur Andersen, CV95-2302-JLB, Circuit
Court, Madison County, Alabama. This is an action filed by
Intergraph seeking an injunction against the issuance of a final
audit report and damages for Andersen's negligence in conducting
an audit. On September 4, 1995 Intergraph Corporation received a
letter from Arthur Andersen on behalf of Bentley Systems, Inc.
(BSI), an affiliate of, and supplier to, Intergraph, reporting
the results of an audit conducted by Arthur Andersen on behalf of
BSI. In conducting the audit, Arthur Andersen reviewed certain
Intergraph records relating to royalty payments made by
Intergraph to BSI for fiscal years 1993 and 1994. The letter
alleges royalty underpayments for those periods in an aggregate
amount of $10,400,000. Intergraph has initiated its own review
of the audit, and based on the preliminary results of this
review, is of the opinion that the audit results are based on
factual omissions and faulty assumptions in methodology
(including, for example, a failure to take into consideration
Intergraph's right to an unlimited number of royalty-free
internal use licenses). Accordingly, Intergraph believes the
actual amount of the underpayments (if any) to be nominal and, in
any event, immaterial to the Company and its operations.
17. John Osland v. Intergraph, CV95-2172-JLB, Circuit
Court, Madison County, Alabama. Suit by former Intergraph
employee for claimed unpaid compensation, fraud, and tortious
interference with contractual relations seeking damages in the
amount of $5 million. The plaintiff has also filed another
action in Colorado state court seeking the same allegedly unpaid
compensation at issue in the Alabama action, together with
statutory penalties of up to 50%. The Colorado action has been
stayed by agreement of the parties pending the outcome of the
Alabama case.
18. CSP Arbitration. Case No. 14-117-0038295 B/K, American
Arbitration Asso., Philadelphia, PA. Arbitration brought by
Bentley Systems, Inc. under a May, 1994 contract relating to the
sale of software maintenance services. Bentley asserts that
Intergraph did not use its "best efforts" to market Bentley's
maintenance CSP services to Intergraph customers as required
under the contract. Hearings are under way and scheduled to
continue during January and February.
19. Software License Agreement Arbitration. Case No. 30Y-
117-00094-96, American Arbitration Asso., Huntsville, AL.
Arbitration brought by Bentley System, Inc. under a 1987 Software
License Agreement for unpaid licensing fees. These are the fees
that were allegedly found by Arthur Andersen in the matter
discussed above. Discovery is underway and hearing is scheduled
for June 1997.
20. On September 27, 1996, a Mr. Haken Lans sent Intergraph
notice of his U. S. patent no. 4,303,986 related to computer
graphics technology and offered a license. This matter is under
investigation by Intergraph patent counsel.
21. On September 24, 1996, U. S. Phillips as licensing
agent for Gilbert P. Hyatt sent Intergraph a letter offering to
license nine patents in various computer-related technologies.
This matter is under investigation by Intergraph patent counsel.
22. Intergraph v. Mesa Solutions, CV-96-N-1918-NE. This
matter involves a suit alleging that former Intergraph employees
misappropriated trade secrets, stole hardware, infringed
Intergraph copyrights and tortuously interfered with Intergraph's
business relationships. The suit is pending in US District Court
in Birmingham before Judge Nelson. Initially, Intergraph
succeeded in obtaining a temporary restraining order against
Mesa, prohibiting the defendants from using Intergraph
technology. Intergraph's Motion for Preliminary Injunction
remains under submission. Mesa has filed a counterclaim in which
it alleges that Intergraph violated Section 1 of the Sherman Act
and misused its copyright on certain proprietary software. The
counterclaim seeks treble damages, costs and attorney's fees but
does not specify any compensatory damages. The case is presently
set for trial in April 1997.
23. Smith v. Intergraph, CV-96-630-CA, 19th Judicial
Circuit Court, Martin County, Florida. This matter involves a
lightning strike to an operator of an Intergraph E911 dispatch
system. The case is pending in Martin County, Florida.
Intergraph's carrier has engaged local counsel to defend the
action. A Motion to Dismiss, Answer and initial discovery
requests have been filed. Intergraph's Motion to Dismiss is
under submission.
24. Goldfield v. Intergraph, CV-761419, Superior Court for
County of Orange. This is a suit brought against Intergraph and
Optronics in Orange County, California, alleging breach of
warranty. Intergraph has filed an Answer, together with a
Counter Claim and initial discovery.
25. Melanie Vaughn, CV-96-752-CA, 19th Judicial Circuit
Court, Martin County, Florida. This is the second lightning
strike case to the Stuart, Florida E911 system. The incident
occurred in 1994. An Answer to Plaintiff's Complaint is being
prepared by local counsel.
26. Charles Costa v. Intergraph, CV96-1395-JWB, Circuit
Court for Madison County, Alabama. This case involves
allegations of commissions due to a salesman of consulting
services. The Plaintiff has alleged a violation of a state
compensation statute, which could result in the award of treble
damages. The Plaintiff has alleged that he is owed a total of
$72,000 in commissions, plus statutory damages.
27. Those matters disclosed on Schedule 5.14 to the Loan
Agreement.
Intergraph Corporation Schedule 5.13
Benefit Plans
Intergraph Corporation SavingsPlus Plan
Intergraph Corporation Stock Bonus Plan
Group Long-Term Disability Plan
Intergraph Corporation Health Care Plan (Medical and Dental)
Intergraph Corporation Prescription Drug Plan
Intergraph Corporation Life Insurance and Accidental Death and
Dismemberment Plan
Intergraph Corporation Travel Accident Insurance Plan
Intergraph Corporation Severance Plan
SCHEDULE 5.14
-------------
Summons, citations, notices or directives received in connection with:
- The Shaffer Landfill at the Iron Horse Park Superfund
Site, Billerica, Massachusetts.
- Discharges to a Septic Tank/Field at the Optronics
Facility, Chelmsford, Massachusetts.
- The Enterprise Recovery Systems Superfund Site, Marshall
County, Mississippi.
Also, in regard to environmental conditions, and as requested by
Foothill, Borrower is providing Foothill at Closing a draft of an
updated Phase I Environmental Site Assessment of the Intergraph
Corporation, Huntsville, Alabama ("Huntsville Report") prepared
by Environmental Strategies Corporation. The Huntsville Report
discusses environmental conditions which may affect the
Intergraph facility covered by the report. Within thirty days
post-closing, Borrower will provide Foothill with a final copy of
the Huntsville Report.
SCHEDULE 6.12
INTERGRAPH CORPORATION
LOCATION OF EQUIPMENT
STATE CITY STREET ADDRESS
- ----- ---- --------------
ALABAMA HUNTSVILLE Building 1
ALABAMA HUNTSVILLE Building 2
ALABAMA HUNTSVILLE Building 3
ALABAMA HUNTSVILLE Building 4
ALABAMA HUNTSVILLE Building 5A & 5B
ALABAMA HUNTSVILLE Building 7
ALABAMA HUNTSVILLE Building 8
ALABAMA HUNTSVILLE Building 10
ALABAMA HUNTSVILLE Building 11
ALABAMA HUNTSVILLE Building 12
ALABAMA HUNTSVILLE Building 14
ALABAMA HUNTSVILLE Building 15
ALABAMA HUNTSVILLE Building 16
ALABAMA HUNTSVILLE Building 17A - D
ALABAMA HUNTSVILLE Building 19
ALABAMA HUNTSVILLE Building 20
ALABAMA HUNTSVILLE Building 21
ALABAMA HUNTSVILLE Building 23A & B
ALABAMA HUNTSVILLE Building 24A - C
ALABAMA HUNTSVILLE Building 25
ALABAMA HUNTSVILLE Building 26
ALABAMA HUNTSVILLE Building 27
ALABAMA HUNTSVILLE Building 28
ALABAMA HUNTSVILLE Building 29
ALABAMA HUNTSVILLE Building 30
ALABAMA HUNTSVILLE 6767 Madison Pike
ALABAMA HUNTSVILLE Cad Caravan #1
ALABAMA HUNTSVILLE Cad Caravan #2
ALABAMA HUNTSVILLE Hsv. Int'l Airport
ALABAMA HUNTSVILLE Redstone Arsenal
ALABAMA BIRMINGHAM 300 Vestavia Parkway
ARIZONA PHOENIX 6080 N. 40TH ST.
ARIZONA PHOENIX 4742 N 24th Street
CALIFORNIA IRVINE 26 Technology
CALIFORNIA LA (ENCINO) 15821 Ventura Blvd.
CALIFORNIA SAN DIEGO 9988 Hilbert Street
CALIFORNIA SACRAMENTO 777 Campus Commons
CALIFORNIA MTNVIEW 381 E Evelyn
COLORADO LITTLETON 10499 Bradford Road
COLORADO BOULDER 6101 Lookout Rd
COLORADO ENGLEWOOD 6041 Syracuse WAY
COLORADO ENGLEWOOD 7400 E. Orchard Rd
FLORIDA BOCA RATON 931 Clint Moore Rd
FLORIDA JUPITER BEACH 19750 Beach Rd
FLORIDA TAMPA 5423 Beaumont Center
FLORIDA KENNEDYSPACE JF Kennedy Space Ctr
GEORGIA SMYRNA 3300 Highlands
HAWAII HONOLULU 840 Kawaiahao
ILLINOIS ARLINGTON 85 West Algonquin
INDIANA INDIANAPOLIS 5881 E 82nd Street
KANSAS LENEXA 14839 W 95th St
KENTUCKY LOUISVILLE 12700 Shelbyville
KENTUCKY LEXINGTON 2570 Wilhite Dr
LOUISIANA METAIRIE 3545 N. 1-10 Service Rd
MASSACHUSETTS WESTBOROUGH 1800 W Park Dr
MASSACHUSETTS CHELMSFORD 21 Alpha
MARYLAND COLUMBIA
MARYLAND TOWSON 8500 LaSalle Road
MICHIGAN KENTWOOD 3680 44th St
MICHIGAN SOUTHFIELD 28411 NW Hwy
MINNESOTA MENDOTA HTS 1355 Mendota Heights
SCHEDULE 6.12
INTERGRAPH CORPORATION
LOCATION OF EQUIPMENT
STATE CITY STREET ADDRESS
- ----- ---- --------------
MISSOURI ST LOUIS 11116 S. Town Sq
MISSOURI ST. LOUIS 3200 S. Second ST.
N CAROLINA CARY 2000 Regency
N CAROLINA CHARLOTTE 9731 JS. Pine
N JERSEY E. RUTHERFORD 1 Meadowland
NEW YORK ROCHESTER 120 Corporate Woods
OHIO MASON 4900 Parkway
OHIO VALLEY VIEW 9885 Rockside
PENNSYLVANIA K. OF PRUSSIA 1018 W 9th Avenue
PENNSYLVANIA PITTSBURGH 500 Business Center
PENNSYLVANIA RADNOR 100 Matson Ford Rd.
S CAROLINA GREENVILLE 201 Brookfield
TENNESSEE NASHVILLE 5211 Linbar Drive
TEXAS HOUSTON 675 Bering Drive
TEXAS DALLAS 8111 LBJ Freeway
TEXAS AUSTIN 9420 Research Blvd
TEXAS SAN ANTONIO 8930 4 Winds Drive
VIRGINIA RESTON 12347-B Sunrise
WASHINGTON BELLEVUE 11130 NE 33rd Place
WISCONSIN WAUKESHA 20725 Watertown
SCHEDULE 7.1
INTERGRAPH CORPORATION
INDEBTEDNESS
as of November 30, 1996
Book Value
------------
7.1(b)(i) Guarantees of indebtedness on behalf of
Borrower's Subsidiaries
- -------------------------------------------------
Subsidiary Bank Beneficiary Amount
---------- ------ ----------- ------
BELG ABN BRIZTON ZAVENTEM S.A. $62,474
BELG ABN DISTRIGAZ 62,210
BELG ABN DISTRIGAZ 21,617
BELG ABN ASLK 15,900
IMEL ABN GOVT OF ABU DHABI 11,853
IMEL ABN DUBAI LANDS DEPT 6,499
USA AMS HUNTSVILLE UTILITIES 300,000
IMEL AMS GOV'T OF THE ARAB REPUBLIC 69,990
IMEL AMS GOVERNMENT OF EGYPT 24,600
IMEL AMS GOVERNMENT OF EGYPT 9,000
AUST ANZ STATE AUTHORITIES SUPER. 118,961
AUST ANZ SYDNEY WATERBOARD 16,270
AUST ANZ STATE RAIL AUTHORITY 10,388
AUST ANZ VLB PARTNERSHIP 9,237
AUST ANZ HUNTER WATER CORP. LTD. 8,120
AUST ANZ WIDE BAY BURNETT 5,278
SPAIN AYR INSTITUTO GEOGRAFICO 2,950
SPAIN AYR TELEVISION ESPANOLA S.A. 2,078
SPAIN AYR GOBIERNO DE NAVARRA 1,662
SPAIN AYR CUARTEL GEN'L DE LA ARMADA 1,179
SPAIN AYR GOBIERNO DE NAVARRA 903
SPAIN AYR GOBIERNO DE NAVARRA 386
SPAIN AYR AYTO. DE LEGANES 131
SPAIN BANCO ENDESA 33,156
SPAIN BANCO DIRECCION REGIONAL DE NAVEGAC. 1,704
SPAIN BANCO DIRECCION REGIONAL DE NAV. 1,615
SPAIN BANCO GOVIERNO DE ANDORRA 1,558
ITAL BCI BANCA COMMERCIAL ITALIANA at Lira 2,000,000,000 1,310,000
FRAN BFCE SMESI - MAROC 12,911
SPAIN BS AENA 949
GERM BV STAEDT. WERKE MAGDEBURG 922,255
GERM BV TECHNOPARK GEWERBEBAU 501,508
GERM BV TECHNOPARK GEWERBEBAU 437,946
GERM BV DEUTSCHE BAHN AG, HALLE 265,625
GERM BV CASSELLA 156,863
GERM BV HORST MAIBURG 107,149
GERM BV DESPA IMMOBILIEN 98,039
GERM BV FIDES GMBH 68,700
GERM BV SKF LINEARSYSTEMS 43,137
GERM BV DVKB 19,608
GERM BV ITAG IMMOBILIEN-TREUHAND 19,608
GERM BV GOTHAER VERSICHERUNG 19,200
GERM BV KAAL-PETER RECC STUTTGART 16,340
GERM BV ITAG IMMOBILIEN-TREUHAND 15,686
GERM BV RAFFINERIESES. VOHBURS 13,072
GERM BV KARL-PETER RECK, STUTTGART 12,265
GERM BV ICEM SYS. GMBH, HANNOVER 9,359
GERM BV KARL-PETER RECK, STUTTGART 7,843
GERM BV NORDRHEIN AERZIFVERSORGING 4,941
GERM BV KARL-PETER KECK,STUTGART 4,931
IMEL CASH ISTANBUL MUNICIPALITY 1,976
INDIA CITI JANAKI RAMA 1,384,055
UK CITI H.M. CUSTOMS & EXCISE 625,000
ITAL CITI MINISTERO DIFESA 262,433
IMEL CITI GOV'T OF ABU DHABI 86,841
IMEL CITI AL AIN TOWN PLANNING DEPT. 81,916
ITAL CITI ARTESIA S.P.A. 72,825
GRE CITI MINISTRY OF AGRICULTURE 33,854
IMEL CITI HONEYWELL, KUWAIT 32,330
BELG CITI CITIBANK BELGIUM 31,800
PORT CITI CAMARA MUNICIPAL DE SINTRA 28,817
GRE CITI MINISTRY OF AGRICULTURE 28,681
IMEL CITI MIN OF DEF & AVIATION 26,667
GRE CITI PUBLIC TELEPHONE COMPANY 25,930
IMEL CITI GEN'L ORGAN. OF REMOTE SENSING 25,252
IMEL CITI ETISALAT, ABU DHABI 23,399
IMEL CITI KARAYOLLARI GENEL 20,800
ITAL CITI MINISTERO DELLA DIFESA 16,074
IMEL CITI MIN OF NATL DEF., ANKARA 15,000
IMEL CITI KING ABDULAZIZ CITY FOR SCIENCE 11,335
GRE CITI HELL AEROSPACE INDUSTRY 11,188
GRE CITI PUBLIC PETROLEUM COMPANY 10,372
GRE CITI PUBLIC ELECTR. COMPANY 10,071
IMEL CITI INTERGRAPH TURKEY 10,000
GRE CITI MIN OF TWON & PLAN 9,051
IMEL CITI MINISTRY OF DEFENSE-LEBANON 9,000
IMEL CITI ABU DHABI CO FOR ON-SHORE 8,853
IMEL CITI TURKISH TOURISM AUTH 8,721
PORT CITI INSTITUTO PORTUGUES 7,559
IMEL CITI ABU DHABI NATIONAL OIL CO. 6,311
GRE CITI PUBLIC GAS COMPANY 6,240
GRE CITI MUN OF KOZANI 4,352
GRE CITI PUBLIC PETROLEUM COMPANY 4,149
SPAIN CITI MINIST.ECONOMI.HACIEND. 3,115
IMEL CITI REPUBLIC OF TURKEY 2,700
GRE CITI MUN. OF KOZANI 2,178
GRE CITI PUBLIC GAS COMPANY 1,962
ITAL CITI MINISTERO POSTE COMUNIC 1,640
IMEL CITI GOV'T OF AUB DHABI 717
SPAIN CITI MINISTERIO HACIENDA 469
AUST CITIUS NAT'L AUSTRALIA BANK LTD 8,120,179
ITAL CITIUS CITIBANK - ITALY 3,600,000
IMEL CITIUS CITIBANK - DUBAI 1,500,000
INDIA CITIUS CITIBANK - INDIA 1,491,000
BENE CITIUS CITIBANK - BENELUX 1,000,000
PORT CITIUS CITIBANK, PORTUGAL, S.A. 993,582
HKONG CITIUS HONGKONG ELECTRIC CO., LTD 727,343
GRE CITIUS CITIBANK - GREECE 500,000
KOREA CITIUS INTERGRAPH KOREA 500,000
IMEL CITIUS MINISTRY OF DEFENCE & AVIATION 387,000
USA CITIUS NAT'L UNION FIRE INS. 320,000
USA CITIUS NATIONAL UNION INSURANCE 320,000
USA CITIUS NAT'L FIRE INS. CO. OF PITT 318,900
ISRA CITIUS BANK LEUMI LE ISRAEL 300,000
BELG CITIUS CITIBANK, BRUSSELS 198,773
DENM CITIUS UNIBANK A/S 170,602
RUSSIA CITIUS ROSNIC ZEMLYA 150,000
BRAZ CITIUS INSTITUTO NACIONAL 130,000
IMEL CITIUS MINISTRY OF DEFENCE & AVIATION 129,000
IMEL CITIUS CITIBANK ANKARA 100,270
POL CITIUS CITIBANK WARSAW-POLAND 100,000
KOREA CITIUS MINISTRY OF NAT'L DEFENSE 91,768
BENE CITIUS BEIGISCHE STRYDYRACHTEN 78,652
NORW CITIUS ANS NEOSOYVEIEN 4 77,651
AUS CITIUS CITIBANK - AUSTRIA 50,000
USA CITIUS FRITZ COMPANIES, INC. 49,623
IMEL CITIUS GOVERNMENT OF EQYPT 31,500
IMEL CITIUS GOV'T/EGYPT 29,906
KOREA CITIUS OFFICE OF SUPPLY 2,397
SPAIN CRED CUARTEL GENERAL DE LA 24,924
SPAIN CRED MINISTERIO DE DEFENSA 21,731
SPAIN CRED DIRECCION GEN'L DEL PATRIMONIO 15,578
SPAIN CRED PATRIMONIO DEL ESTADO 15,578
SPAIN CRED PATRIMONIO DEL ESTADO 15,578
SPAIN CRED SERVICIO GEOGRAFICO DEL EJERCITO 10,593
SPAIN CRED INSTITUTO CARTOGRAFICO 8,987
SPAIN CRED EJERC 8,548
SPAIN CRED AYUNTAMIENTO DE CACERES 7,789
SPAIN CRED GENERALITAT DE CATALUNA 7,166
SPAIN CRED EJRCITO DEL AIRE 6,449
SPAIN CRED MINISTEREO DE DEFENSA 6,332
SPAIN CRED GOBIERNO VASCO, DPTO 6,231
SPAIN CRED MINISTERIO DE DEFENSA 5,608
SPAIN CRED EJERCITO DELAIRE 5,139
SPAIN CRED AYUNTAMIENTO DE BADAJOZ 4,873
SPAIN CRED MINISTERIO DE DEFENSA 4,741
SPAIN CRED CUARTEL GEN'L DEL EJERCITO 4,720
SPAIN CRED UNIVERSIDAD DE VALENCIA 4,673
SPAIN CRED GENERALITAT DE CATALUNA 4,661
SPAIN CRED GENERALITAT DE CATALUNA 4,482
SPAIN CRED MINISTERIO DE DEFENSA 4,362
SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 4,270
SPAIN CRED EJERCITO DEL AIRE 4,173
SPAIN CRED INSTITUTO GEOGRAFICO (IGN) 4,045
SPAIN CRED GENERALITAT DE CAPALUNA 3,967
SPAIN CRED EJERCITO DEL AIRE 3,957
SPAIN CRED AYUNTAMIENTO DE CACERES 3,894
SPAIN CRED DIRECCION GENERAL DEL PATR. 3,894
SPAIN CRED DIRECCION GENERAL DEL PATR. 3,894
SPAIN CRED EJERCITO DEL AIRE 3,698
SPAIN CRED CUARTEL GENERAL DEL EJER. 3,232
SPAIN CRED CONSEJERID POLITICA 3,116
SPAIN CRED SERVICEO VASCO DE SALVD 3,116
SPAIN CRED CONSEJERIA DE POLITICA TERRIT. 3,090
SPAIN CRED DIPUTACION PROVINCIAL 3,084
SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 3,072
SPAIN CRED EJERCITO DEL AIRE 3,051
SPAIN CRED INSTITUTO CARTOGRAFICO DE CAT. 3,050
SPAIN CRED INSTITUTO CARTOGRAFICO 2,971
SPAIN CRED MINISTERIO DE DEFENSA 2,966
SPAIN CRED EJERCITYO DEL AIRE 2,661
SPAIN CRED MINISTERIO DE DEFENSA 2,492
SPAIN CRED SERVICIO GEOGRAFICO DEL EJERCITO 2,492
SPAIN CRED SERVICIO VASCO DE SALVD 2,492
SPAIN CRED CPT - COMUNIDAD DE MADRID 2,426
SPAIN CRED UNIVERSIDAD POLITENCNICA 2,337
SPAIN CRED AYUNTAMIENTO DE HOSP. 2,181
SPAIN CRED CISC 2,141
SPAIN CRED DIRECCION GENERAL DE TRAFICO 2,112
SPAIN CRED EJERCITO DEL AIRE 2,086
SPAIN CRED DIPUTACION DE LA CORUNA 2,069
SPAIN CRED UNIVERSIDAD DE MURCIA 2,025
SPAIN CRED GENERALITAT DE CATALUNA 1,947
SPAIN CRED EJERCITO DEL AIRE 1,714
SPAIN CRED MINISTERIO DE DEFENSA 1,714
SPAIN CRED CONSGJERIA DE POLITICA 1,587
SPAIN CRED EJERCITYO DEL AIRE 1,562
SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 1,479
SPAIN CRED EJERCITO DEL AIRE 1,448
SPAIN CRED GENERALIDAT DE CAPALUNA 1,432
SPAIN CRED AYUNTAMIENTO DE HOSPITALET 1,402
SPAIN CRED CONSEJERIA DE POLITICA 1,387
SPAIN CRED SEVICIO GEOGRAFICO DEL EJERCITO 1,246
SPAIN CRED CPT-CONUNIDAD DE MADRID 1,220
SPAIN CRED INSTITUTO GEOGRAFICO NACIONAL 1,198
SPAIN CRED COMUNIDAD DE MURCIA 1,181
SPAIN CRED UNIVERSIDAD POLITECNICA 1,134
SPAIN CRED AYTO.DE LAS PALMAS 1,125
SPAIN CRED EJERCITO DEL AIRE 1,123
SPAIN CRED C.P.T. COMUNIDAD DE MADRID 1,090
SPAIN CRED AYUNTAMIENTO DE GIJON 1,071
SPAIN CRED DIPUTACION DE LA CORUNA 1,034
SPAIN CRED AYUNTAMIENTO DE LEGANES 1,028
SPAIN CRED EJERCITO DEL AIRE 1,014
SPAIN CRED M.O.P.T. 998
SPAIN CRED AYUNMMIENTO DE LEGANES 974
SPAIN CRED INSTITUTO HIDROGRAFICO DE LA 931
SPAIN CRED AYRO DE HOSPITALIT 902
SPAIN CRED MINISTERIO DE DEFENSA 857
SPAIN CRED COMUNIDAD FORAL DE NAV. 840
SPAIN CRED GOBIERNO BALEAR 826
SPAIN CRED MINISTERIO OBRAS PUBLICAS 821
SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 783
SPAIN CRED CONSEJERIA DE POLITICA 779
SPAIN CRED MINISTERIO DE DEFENSA 763
SPAIN CRED AYTO TORRENT 748
SPAIN CRED AYUNMMIENTO DE LEGANES 654
SPAIN CRED AYUNTAMIENTO DE LEGANES 632
SPAIN CRED MINISTERIO DEFENSA 623
SPAIN CRED EJERCITO DEL AIRE 562
SPAIN CRED CPT COMUNIDAD DE MADRID 530
SPAIN CRED INTITUTO GEOGRAFICO NAC'L 471
SPAIN CRED INSTITUTO GEOGRAFICO 468
SPAIN CRED COMUNIDAD AUTONOMA 467
SPAIN CRED COMUNIDAD FORAL DE NAV. 452
SPAIN CRED DIPUTACION DE BARCELONA 439
SPAIN CRED COMUNIDADDE MADRID 403
SPAIN CRED AUUNTAMIENTO DE IRUN 398
SPAIN CRED MINISTERIO OBRAS PUBLICAS 308
SPAIN CRED INSTITUTO GEOGRAFICO 269
SPAIN CRED AYUNTAMIENTO DE LEGANES 243
SPAIN CRED AYUNTAMIENTO DE SIERO 132
SPAIN CRED AYUNTAMIENTO DE GIJON 126
IMEL EBIL ABV ROCK, SAUDI 731,543
IMEL EBIL DIRECTOR GENERAL DEFENSE PROC. 240,000
IMEL EBIL BURSA WATER & SEWERAGE ADMN 228,000
IMEL EBIL ABV ROCK, SAUDI 133,333
IMEL EBIL GHQ ARMED FORCES, AUB DHA 130,790
IMEL EBIL BURSA WATER & SEWERAGE ADMN 100,000
IMEL EBIL TCK GENEL MUDURLUGU 75,000
IMEL EBIL ARMED FORCES OPERATIONS, SAUDI 49,700
IMEL EBIL ARMED FORCES OPERATIONS, SAUDI 49,233
IMEL EBIL MINISTRY OF DEFENSE, ANKARA 45,000
IMEL EBIL GOV'T OF ABU DHABI 27,248
IMEL EBIL IBN ZAHR, SAUDI 26,133
IMEL EBIL RIYADH MUNICIPALITY 24,681
IMEL EBIL ETISALAT, ABU DHABI 23,151
IMEL EBIL RIYADH WATER & SEWER DEPT 18,667
IMEL EBIL SHARJAH MUNICIPALITY 17,694
IMEL EBIL ERDEMIR, T.A.S. ANKARA 10,000
IMEL EBIL UAE ARMED FORCES 8,038
IMEL EBIL DEWA 5,450
IMEL EBIL GOVT OF ABU DHABI 4,619
IMEL EBIL SCECO (EAST), SAUDI 4,000
IMEL EBIL GOVT OF ABU DHABI 3,676
IMEL EBIL RUWAIS FERTILIZER INDUSTRIES 2,725
IMEL EBIL QATAR NATIONAL BANK 2,225
IMEL EBIL ETISALAT, ABU DHABI 2,044
IMEL EBIL RIYADH WATER & SEWER DEPT 1,733
IMEL EBIL GOV'T OF ABU DHABI 1,642
IMEL EBIL GOV'T OF ABU DHABI 1,635
IMEL EBIL GOVT OF ABU DHABI 1,520
IMEL EBIL GOV'T OF ABU DHABI 763
HKONG HKB HONG KONG ELECTRIC 604,087
HKONG HKB HONG KONG ELECTRIC 604,087
SING HKB TELEKOM MALAYSIA BERHAD 453,187
SING HKB PUBLIC WORKS DEPARTMENT 214,364
HKONG HKB HONG KONG ELECTRIC 118,088
SING HKB PUBLIC WORKS DEPT 113,431
SING HKB PUBLIC WORKS DEPARTMENT 86,576
APH HKB CHINA NATIONAL TECHNICAL 81,239
SING HKB MINISTRY OF DEFENCE 72,102
APH HKB SHANGHAI INTERN'L TENDERING 50,000
SING HKB IMATERA DIGITAL IMAGE SERV 48,749
SING HKB PUBLIC WORKS DEPT 46,188
SING HKB NAVAL ANALYSIS SUBSYSTEM 38,130
HKONG HKB HONG KONG ELECTRIC 36,393
SING HKB MINISTRY OF THE ENVIRONMENT 25,548
SING HKB JURONG TOWN CORPORATION 19,225
APH HKB CMC INT'L TENDERING CO 19,100
SING HKB JURONG TOWN CORPORATION 17,563
SING HKB JURONG TOWN CORPORATION 16,687
SING HKB JURONG TOWN CORPORATION 11,742
SING HKB MINISTRY OF DEFENCE 11,067
SING HKB PETRONAS NASIONAL BERHAD 11,052
SING HKB PUBLIC WORKS DEPT 10,638
SING HKB PORT OF SINGAPORE AUTH. 9,508
SING HKB MINISTRY OF ENVIRONMENT 9,375
SING HKB FOSTER WHEELER EASTERN 9,213
SING HKB MIN. OF THE ENVIRONMENT 8,864
SING HKB PUBLIC WORKS DEPT 8,511
SING HKB MINISTRY OF DEFENSE 8,107
SING HKB FOSTER WHEELER EASTERN PRIVATE 7,034
SING HKB NAVAL ANALYSIS SUBSYSTEM 6,596
SING HKB MINISTRY OF DEFENSE 5,921
SING HKB MINISTRY OF DEFENSE 5,868
SING HKB FOSTER WHEELER EASTERN PRIVATE 5,630
SING HKB LAND TRANSPORT AUTHORITY 4,451
SING HKB PORT OF SINGAPORE AUTH. 3,921
SING HKB FOSTER WHEELER EASTERN PRIVATE 3,758
SING HKB HOUSING & DEV. BOARD 3,472
SING HKB PUBLIC WORKS DEPARTMENT 3,348
SING HKB PUBLIC WORKS DEPARTMENT 3,003
SING HKB URBAN REDEVELOPMENT AUTH 2,843
SING HKB PORT OF SINGAPORE AUTH. 2,837
SING HKB MARITIME & PORT AUTH. OF SING. 2,470
SING HKB JURONG TOWN CORPORATION 2,284
SING HKB FOSTER WHEELER EASTERN PRIVATE 2,092
SING HKB PORT OF SINGAPORE AUTH. 507
APH HSB CHINA NATIONAL INSTRUMENTS 418,490
UK NATWES BRISTOL CHAMBER OF COMMERCE 9,358
IMEL NBK MINISTRY OF DEFENSE, KUWAIT 2,000,000
IMEL NBK KUWAIT UNIVERSITY 6,667
IMEL NKU MINISTRY OF ELECTRIC & WATER 8,267
IMEL NKU KUWAIT MUNICIPALITY 1,533
IEM RAB DISTRICT ARNHEM 150,622
CAN RBC ROYAL BANK OF CANADA 1,015,000
IMEL SAB SAUDI CONSOLIDATED ELEC CO 7,113
SWE SEB SKANDINAVISKA ENSKILDA BANKEN at 3mm SEK 439,000
SPAIN SEG PATRIMONIO DEL ESTADO 46,733
SPAIN SEG AYUNTAMIENTO DE SANTO 13,085
SPAIN SEG DYUNTAMIENTO DE HOSPITALET 11,683
SPAIN SEG RADIO Y TELEVISION 7,020
SPAIN SEG YUNTOIENTO DE SANTA CRUZ 6,543
SPAIN SEG COMUNIDAD DE MADUD 3,583
SPAIN SEG XUNTA DE GALICIA 2,804
SPAIN SEG AYUNTAMIENTO DE GVADAGAJORD 2,337
SPAIN SEG XUNIA DE GALICIA 2,337
SPAIN SEG AYUNTAMIENTO DE HOSPIT. 2,150
SPAIN SEG MINISTERIO DE DEFENSA 1,869
SPAIN SEG COMUNIDAD DE MADRID 1,587
SPAIN SEG AYUNTAMIENTO DE LAS PALMAS 1,540
SPAIN SEG UNIVER. SEVILLA 1,260
SPAIN SEG AYUNNAMIENTO HOSPITALET 1,184
SPAIN SEG INSTITUTO GEOGRAFICO NACIO 1,120
SPAIN SEG M.O.P.T. 966
SPAIN SEG AYUNTAMIENTO DE LAS 935
SPAIN SEG AYUNTAMIENTO DEHOSPITALET 919
SPAIN SEG AYUNTAMIENTO DE VIGO 456
SPAIN SEG AYUNTAMIENTO DE VIGO 362
SPAIN SEG AYTO DE ZARAGOZA 304
SPAIN SEG DIPUTACION DE LA CORUNA 265
SPAIN SEG AYUNTAMIENTO DE VIGO 125
SPAIN SEG SERVICIO GEOGRAFICO DEL EJE 116
TAIW SINO MOI 4,001
TAIW SINO TPW 2,001
TAIW SINO TPW/UD 1,291
US STRUST SOUTHTRUST BANK 10,000
UK ULST INTERGRAPH IRELAND 312,500
----------
38,862,516
Borrower (Finova - Unsecured Financing) 665,000
----------
TOTAL ALL CATEGORIES 39,527,516
==========
AIRCRAFT SECURITY AGREEMENT
---------------------------
THIS AIRCRAFT SECURITY AGREEMENT ("this Agreement"), is
entered into as of December 20, 1996 between INTERGRAPH
CORPORATION, a Delaware corporation ("Debtor"), with its chief
executive office located at One Madison Industrial Park,
Huntsville, Alabama 35894, and FOOTHILL CAPITAL CORPORATION, a
California corporation ("Secured Party"), with a place of business
located at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles,
California 90025-3333, with reference to the following facts:
RECITALS
--------
WHEREAS, Debtor and Secured Party have entered into a Loan and
Security Agreement, dated as of December 20, 1996 (as amended,
restated, modified, renewed, or extended from time to time, the
"Loan Agreement");
WHEREAS, Debtor is the sole owner of the Aircraft described
and identified in Schedule 1 attached hereto and incorporated
herein by reference, subject only to the liens and rights of
Secured Party granted herein. (Unless the context clearly requires
otherwise, the term "Aircraft" as used hereinafter shall be deemed
to mean the aircraft identified in Schedule 1, together with the
engines attached or belonging thereto and any and all components,
appliances, equipment, accessories, avionics, instruments, parts,
manuals, books and records, and other property installed in,
appurtenant to or delivered with or in respect of each such
aircraft. Furthermore, capitalized words used herein but not
otherwise defined herein shall have the respective meanings
assigned to them in the Loan Agreement.);
WHEREAS, Secured Party wishes to obtain and Debtor wishes to
provide Secured Party with security for the repayment of all of the
Obligations owing by Debtor to Secured Party (hereinafter
collectively referred to as the "Secured Obligations"); and
WHEREAS, pursuant to the Loan Agreement and as one of the
conditions thereof precedent to the obligations of Secured Party
under the Loan Agreement, Debtor has agreed to execute and deliver
this Agreement to Secured Party.
GRANT OF SECURITY INTEREST AND MORTGAGE
---------------------------------------
NOW, THEREFORE, in order to secure prompt payment and
performance of all present and future Secured Obligations, Debtor
does hereby assign and grant a security interest in and mortgage to
Secured Party the following described personal property
(hereinafter sometimes collectively referred to as the "Mortgaged
Property"):
(1) The Aircraft identified in Schedule 1;
(2) All appurtenances, accessions, appliances, spare parts,
instruments, avionics, accessories or other equipment or parts
related to each Aircraft, whether now or hereafter belonging to
Debtor and part of, installed on or attached to any of the
Aircraft;
(3) All property constituting replacements of or additions to
any of the property described above, in the event that any such
replacements or additions shall become the property of Debtor;
(4) All right, title and interest of Debtor in and to any
lease, rental agreement or charter agreement respecting the
Aircraft, including without limitation the right to receive either
directly or indirectly from any party or person any rents or other
payments due under such agreement(s);
(5) All log books, records and other documents maintained by
Debtor with respect to the foregoing items (1) through (4); and
(6) All the proceeds and products of the foregoing items (1)
through (4), including without limitation, all accounts,
instruments, documents, contract rights, general intangibles,
money, deposit accounts, goods, inventory, equipment and machinery
and other tangible and intangible assets of Debtor arising out of
or resulting from the sale or other disposition of any of the
foregoing items and the proceeds of such proceeds, and the proceeds
of insurance policies issued with respect to the foregoing and with
respect to the use and operation of the Aircraft.
IT IS HEREBY COVENANTED AND AGREED by and between Secured
Party and Debtor that the terms, provisions and conditions upon
which the Mortgaged Property is to be held and disposed of are as
follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES AND
----------------------------------
COVENANTS OF DEBTOR
-------------------
Section 1.1 - Title to Mortgaged Property
Debtor represents and warrants that it has good and clear
title to the Mortgaged Property free of all Liens, other than
Permitted Liens.
ARTICLE 2
EVENTS OF DEFAULT AND REMEDIES
------------------------------
Section 2.1 - Rights and Remedies Upon Default
Upon the occurrence and during the continuance of any Event of
Default, Secured Party shall have the right, to the extent provided
under the Loan Agreement, to declare all or any portion of the
Secured Obligations immediately due and payable and to terminate
any commitment by Secured Party to make Revolving Advances or to
issue L/Cs or L/C Guaranties to Debtor under the Loan Agreement.
Secured Party shall have all other rights, powers, privileges and
remedies available to a secured party under the UCC, at law or in
equity, or otherwise.
Section 2.2 - Exercise of Remedies
Each right, power and remedy herein granted Secured Party
is cumulative and in addition to every other right, power and
remedy herein specifically given or now or hereafter existing under
or by virtue of the provisions of any other agreement between
Debtor and Secured Party or in equity, at law or by virtue of
statute or otherwise. No failure to exercise, and no delay in
exercising, any right, power or remedy held by Secured Party
hereunder or otherwise, shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or
remedy held hereunder or otherwise, preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy.
Section 2.3 - Replacements and Additions
Secured Party acknowledges that Debtor may, from time to
time, replace portions, repair, or make additions to, the Aircraft,
provided that the value of such Aircraft is not thereby impaired.
Any such replacement property or additions which may become the
property of Debtor shall immediately upon the acquisition thereof
be and become subject to the lien of the security interest and
mortgage created, granted and conveyed pursuant to this Agreement.
Debtor shall execute such documents as are reasonably necessary to
grant to Secured Party a security interest in or perfect Secured
Party's security interest in said replacements or additions.
ARTICLE 3
MISCELLANEOUS PROVISIONS
------------------------
Section 3.1 - Entire Agreement
This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof.
This Agreement cannot be changed or terminated orally.
Section 3.2 - Notices
Unless otherwise specifically provided in this Agreement,
any notice or other communication relating to this Agreement or any
other agreement entered into in connection therewith shall be in
writing and shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, or by
prepaid telex, TWX, telefacsimile, or telegram (with messenger
delivery specified) to Debtor or to Secured Party in the manner set
forth in the Loan Agreement
Section 3.3 - Loan Document
This Agreement is a Loan Document.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the day and year first written
above.
INTERGRAPH CORPORATION,
a Delaware corporation
By
------------------------------------
Title:
--------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By
------------------------------------
Title:
--------------------------------
SCHEDULE 1 TO AIRCRAFT SECURITY AGREEMENT
-----------------------------------------
This Schedule 1 is attached to and incorporated by
reference into that certain Aircraft Security Agreement (the
"Agreement"), dated as of December 20, 1996, between INTERGRAPH
CORPORATION ("Debtor") and FOOTHILL CAPITAL CORPORATION ("Secured
Party").
In accordance with the terms and conditions of the
Agreement, Debtor hereby assigns and grants a security interest in
and mortgages to Secured Party the following Aircraft:
1. AIRCRAFT MAKE AND MODEL:
-----------------------
British Aerospace, Model HS125 Series F400B
MANUFACTURER'S SERIAL NUMBER: 25270
----------------------------
U.S. FAA REGISTRATION NUMBER: N270AV
----------------------------
ENGINES Allied Signal
------- model TSE 731-3R-1H
serial numbers: P84419, P84422
EXHIBIT C-1
(Form of Compliance Certificate)
[on Borrower's letterhead]
To: Foothill Capital Corporation
11111 Santa Monica Boulevard, Suite 1500
Los Angeles, California 90025-3333
Attn: Business Finance Division Manager
Re: Compliance Certificate dated ____________, 199__
Ladies and Gentlemen:
Reference is made to that certain Loan and Security
Agreement, dated as of December 20, 1996 (as the same may from time
to time be amended, modified, supplemented or restated, the "Loan
Agreement") between Intergraph Corporation, a Delaware corporation
("Borrower") and Foothill Capital Corporation ("Foothill"). The
initially capitalized terms used in this Compliance Certificate
have the meanings set forth in the Loan Agreement unless
specifically defined herein.
Pursuant to Section 6.3 of the Loan Agreement, the
undersigned officer of Borrower hereby certifies that:
1. The financial information of Borrower furnished in
Schedule 1 attached hereto, has been prepared in accordance with
GAAP (except for year-end adjustments and the lack of footnotes, in
the case of financial statements delivered under Section 6.3(a) of
the Loan Agreement) and fairly presents the financial condition of
Borrower.
2. Such officer has reviewed the terms of the Loan
Agreement and has made, or caused to be made under his/her
supervision, a review in reasonable detail of the transactions and
condition of Borrower during the accounting period covered by
financial statements delivered pursuant to Section 6.3 of the Loan
Agreement.
3. Such review has not disclosed the existence on and
as of the date hereof, and the undersigned does not have knowledge
of the existence as of the date hereof of any event or condition
that constitutes a Default or Event of Default, except for such
conditions or events listed on Schedule 2 attached hereto,
specifying the nature and period of existence thereof and what
action Borrower has taken, is taking or proposes to take with
respect thereto.
4. Borrower is in timely compliance with all
representations, warranties, and covenants set forth in the Loan
Agreement and the other Loan Documents, except as set forth on
Schedule 2 attached hereto. Without limiting the generality of the
foregoing, Borrower is in compliance with the covenants contained
in Sections 7.20 and 7.21 of the Loan Agreement as demonstrated on
Schedule 3 hereof.
IN WITNESS WHEREOF, this Compliance Certificate is
executed by the undersigned this _____ day of _______________,
________.
Intergraph Corporation,
a Delaware corporation
By: ________________________
Name:
Title:
SCHEDULE 1
----------
(INTENTIONALLY LEFT BLANK)
SCHEDULE 2
----------
(INTENTIONALLY LEFT BLANK)
SCHEDULE 3
----------
1. Current Ratio.
(a) The ratio of Borrower's Consolidated Current Assets
divided by Consolidated Current Liabilities, as of the last day of
the fiscal quarter ending ___________, 19__, is calculated as
follows:
(i) Consolidated Current Assets of Borrower:
$_________________
(ii) Consolidated Current Liabilities of Borrower:
$_________________
Item (i) divided by Item (ii): ________ : 1.0
(b) The ratio set forth above [is/is not] less than [_______]: 1.0.
2. Minimum Net Worth.
(a) The Net Worth of Borrower, as of the last day of the
fiscal quarter ending ___________, 19__, is calculated as follows:
(i) Borrower's total stockholder equity:
$_________________
Item (i)
(= Net Worth): $_________________
(b) The Net Worth set forth above [is/is not] less than [$___________].
4. Capital Expenditures.
(a) The aggregate amount of capital expenditures made or
committed to be made to date in the current fiscal year is $________________.
(b) The aggregate amount set forth above [is/is not] in
excess of [$_______________].
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated
as of December 20, 1996 is made by INTERGRAPH CORPORATION, a
Delaware corporation ("Debtor"), in favor of FOOTHILL CAPITAL
CORPORATION, a California corporation ("Secured Party").
RECITALS
A. Debtor and Secured Party have entered into that certain
Loan and Security Agreement, dated as of the date hereof (as
amended, modified, renewed or extended from time to time, the
"Loan Agreement"), pursuant to which Secured Party has agreed to
make certain financial accommodations to Debtor, and Debtor has
granted to Secured Party a security interest in (among other
things) certain of the general intangibles of Debtor.
B. Pursuant to the Loan Agreement and as one of the
conditions precedent to the obligations of Secured Party under
the Loan Agreement, Debtor has agreed to execute and deliver this
Agreement to Secured Party for filing with the United States
Copyright Office and with any other relevant recording systems in
any domestic or foreign jurisdiction, and as further evidence of
and to effectuate Secured Party's existing security interests in
the copyrights and other general intangibles described herein.
ASSIGNMENT
NOW, THEREFORE, for valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Debtor hereby
agrees in favor of Secured Party as follows:
II. Definitions; Interpretation.
A. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Copyright Collateral" has the meaning set forth in Section 2.
"Copyrights" has the meaning set forth in Section 2.
"Lien" means any pledge, security interest, assignment,
charge or encumbrance, lien (statutory or other), or other prefer
ential arrangement (including any agreement to give any security
interest).
"Secured Obligations" means all liabilities,
obligations, or undertakings owing by Debtor to Secured Party of
any kind or description arising out of or outstanding under,
advanced or issued pursuant to, or evidenced by the Loan
Agreement, the other Loan Documents, or this Agreement,
irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due,
voluntary or involuntary, whether now existing or hereafter
arising, and including all interest (including interest that
accrues after the filing of a case under the Bankruptcy Code) and
any and all costs, fees (including attorneys fees), and expenses
which Debtor is required to pay pursuant to any of the foregoing,
by law, or otherwise.
"UCC" means the Uniform Commercial Code as in effect
from time to time in the State of California.
"United States" and "U.S." each mean the United States
of America.
B. Terms Defined in UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have
the meanings ascribed to them in the UCC.
C. Interpretation. In this Agreement, except to the
extent the context otherwise requires:
(i) Any reference to a Section or a Schedule
is a reference to a section hereof, or a schedule hereto,
respectively, and to a subsection or a clause is, unless
otherwise stated, a reference to a subsection or a clause of
the Section or subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement as
a whole and not merely to the specific Section, subsection,
paragraph or clause in which the respective word appears.
(iii) The meaning of defined terms shall
be equally applicable to both the singular and plural forms
of the terms defined.
(iv) The words "including," "includes" and
"include" shall be deemed to be followed by the words
"without limitation."
(v) References to agreements and other
contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto.
(vi) References to statutes or regulations
are to be construed as including all statutory and
regulatory provisions consolidating, amending or replacing
the statute or regulation referred to.
(vii) Any captions and headings are for
convenience of reference only and shall not affect the
construction of this Agreement.
(viii) Capitalized words not otherwise
defined herein shall have the respective meanings ascribed
to them in the Loan Agreement.
(ix) In the event of a direct conflict
between the terms and provisions of this Agreement and the Loan
Agreement, it is the intention of the parties hereto that both
such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be
resolved as aforesaid, the terms and provisions of the Loan
Agreement shall control and govern; provided, however, that the
inclusion herein of additional obligations on the part of Debtor
and supplemental rights and remedies in favor of Secured Party
(whether under California law or applicable federal law), in each
case in respect of the Copyright Collateral, shall not be deemed
a conflict with the Loan Agreement.
III. Security Interest.
A. Assignment and Grant of Security. As security for the
payment and performance of the Secured Obligations, Debtor hereby
grants, assigns, transfers and conveys to Secured Party a
continuing security interest in all of Debtor's right, title and
interest in, to and under the following property, whether now
existing or hereafter acquired or arising or in which Debtor now
has or hereafter acquires or develops an interest and wherever
the same may be located (the "Copyright Collateral"):
(i) all copyrights, rights, titles and interests in and to
published and unpublished works of authorship that Debtor owns or
uses in its business or will in the future adopt and so use, and
all copyrights in any original or derivative works of authorship
and all works protectable by copyright that are presently, or in
the future may be, owned, created, authored (as a work for hire),
acquired or used (whether pursuant to a license or otherwise) by
Debtor, in whole or in part (collectively, the "Copyrights"), all
copyright registrations and applications for copyright
registration that have heretofore been or may hereafter be issued
thereon or applied for in the United States or throughout the
world, including registrations, recordings, supplemental
registrations and pending applications for registration in the
United States Copyright Office (the "Registrations"), all common
law and other rights in and to the Copyrights throughout the
world, including all copyright licenses (collectively, the
"Copyright Rights"), and all renewals and extensions thereof,
throughout the world, including all proceeds thereof (such as, by
way of example and not by limitation, license royalties and
proceeds of infringement suits), the right (but not the
obligation) to renew and extend such Copyrights, Registrations
and Copyright Rights and to register works protectable by
copyright and the right (but not the obligation) to sue or bring
opposition or cancellation proceedings in the name of Debtor or
in the name of Secured Party for past, present and future
infringements or violations of the Copyrights, Registrations and
Copyright Rights, and recover damages for past, present and
future infringements or violations thereof, and all rights
corresponding thereto throughout the world, including:
(A) all of Debtor's right, title and
interest in and to all copyrights or rights or
interests in copyrights registered or recorded in the
United States Copyright Office, including the
Registrations listed on Schedule A attached hereto, as
the same may be amended or supplemented pursuant hereto
from time to time;
(B) all of Debtor's right, title and
interest in and to all renewals and extensions of any
such copyrights, including renewals or extensions of
the Registrations listed on Schedule A attached hereto,
that may be secured under the law now or hereafter in
force and effect;
(C) all of Debtor's right, title and
interest to make and exploit all derivative works based
on or adopted from all works covered by any of the
Copyright Collateral; and
(D) all of Debtor's right, title and
interest pursuant to or under licensing or other
contracts in favor of Debtor pertaining to copyrights
and works protectable by copyright presently or in the
future owned or used by third parties;
(ii) all inventions, designs, patents, patent applications,
registrations, trade secrets, proprietary rights, corporate or
other business records, computer programs, source codes, object
codes, data bases and all other intangible personal property at
any time used in connection with the businesses of Debtor
(referred to herein as "Proprietary Rights");
(iii) all general intangibles (as defined in the UCC)
and all intangible intellectual or other similar property of
Debtor of any kind or nature, whether now owned or hereafter
acquired or developed, associated with or arising out of any of
the Copyrights, Registrations, Copyright Rights or Proprietary
Rights and not otherwise described above; and
(iv) all proceeds of any and all of the foregoing Copyright
Collateral (including license royalties, rights to payment,
accounts receivable and proceeds of infringement suits) and, to
the extent not otherwise included, all payments under insurance
(whether or not Secured Party is the loss payee thereof) or any
indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to the foregoing Copyright
Collateral. For purposes of this Agreement, the term "proceeds"
includes whatever is receivable or received when Copyright
Collateral or proceeds are sold, licensed, collected, exchanged
or otherwise disposed of, whether such disposition is voluntary
or involuntary, and includes, without limitation, all rights to
payment, including returned premiums, with respect to any
insurance relating thereto.
B. Certain Exclusions from Grant of Security Interest.
Anything in this Agreement and the other Loan Documents to the
contrary notwithstanding, the foregoing grant, assignment,
transfer, and conveyance of a security interest shall not extend
to, and the term "Copyright Collateral" shall not include, any
item of Copyright Collateral described in Section 2(a) above that
is now or hereafter held by Debtor as licensee or otherwise,
solely in the event and to the extent that: (i) as the proximate
result of the foregoing grant, assignment, transfer, or
conveyance of a security interest, Debtor's rights in or with
respect to such item of Copyright Collateral would be forfeited
or would become void, voidable, terminable, or revocable, or if
Debtor would be deemed to have breached, violated, or defaulted
the underlying license or other agreement that governs such item
of Copyright Collateral pursuant to the restrictions in the
underlying license or other agreement that governs such item of
Copyright Collateral; (ii) any such restriction shall be
effective and enforceable under applicable law, including Section
9318(4) of the Code; and (iii) any such forfeiture, voidness,
voidability, terminability, revocability, breach, violation, or
default cannot be remedied by Debtor using its best efforts (but
without any obligation to make any material expenditures of money
or to commence legal proceedings); provided, however, that the
foregoing grant, assignment, transfer, and conveyance of security
interest shall extend to, and the term "Copyright Collateral"
shall include, (y) any and all proceeds of such item of Copyright
Collateral to the extent that the assignment or encumbering of
such proceeds is not so restricted, and (z) upon any such
licensor or other applicable party's consent with respect to any
such otherwise excluded item of Copyright Collateral being
obtained, thereafter such item of Copyright Collateral as well as
any proceeds thereof that might theretofore have been excluded
from such grant, assignment, transfer, and conveyance of a
security interest and the term "Copyright Collateral."
C. Continuing Security Interest. Debtor agrees that this
Agreement shall create a continuing security interest in the
Copyright Collateral which shall remain in effect until
terminated in accordance with Section 17.
D. Incorporation into Loan Agreement. This Agreement
shall be fully incorporated into the Loan Agreement and all
understandings, agreements and provisions contained in the Loan
Agreement shall be fully incorporated into this Agreement.
Without limiting the foregoing, the Copyright Collateral
described in this Agreement shall constitute part of the
Collateral in the Loan Agreement.
E. Licenses. Anything in the Loan Agreement or this
Agreement to the contrary notwithstanding, Debtor may grant non-
exclusive licenses of the Copyright Collateral (subject to the
security interest (if any) of Secured Party therein) in the
ordinary course of business consistent with past practice.
IV. Representations and Warranties. Debtor represents and
warrants to Secured Party and for the benefit of Secured Party
the following:
(a) True and Complete List. Set forth in Schedule A is a
true and complete list of all Copyrights, Registrations in the
United States Copyright Office, and applications for
Registrations in the United States Copyright Office owned by
Debtor or held (whether pursuant to a license or otherwise) or
used in conducting its business, in whole or in part;
(b) Powers. Debtor has full power, authority and legal
right to pledge and to grant to Secured Party a security interest
in all of the Copyright Collateral pursuant to this Agreement,
and to execute, deliver and perform its obligations in accordance
with the terms of this Agreement, without the consent or approval
of any other Person except as already obtained;
(c) Validity. Each of the Copyrights referred to in
Schedule A is valid, subsisting and enforceable, and Debtor has
properly complied with all applicable statutory and regulatory
requirements, including all notice requirements, in connection
with each of such Copyrights, and, except as set forth on
Schedule 5.10 to the Loan Agreement, no claim has been made that
the use of any of such Copyrights does or may infringe or
otherwise violate the rights of any third Person;
(d) Title. Debtor has rights in and good title to the
Copyright Collateral shown on the schedules hereto as being owned
by it, is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to such Copyright
Collateral, free and clear of any Liens (other than Liens in
favor of Secured Party), including pledges, agreements, licenses,
registered user agreements and covenants by Debtor not to sue
third Persons; for any Copyright Collateral for which Debtor is
either a licensor or a licensee pursuant to a license or
licensing agreement regarding such Copyright Collateral, each
such license or licensing agreement is in full force and effect,
Debtor is not in default of any of its obligations thereunder and
other than the parties to such licenses or licensing agreements,
no other Person has any rights in or to any of such Copyright
Collateral;
(e) No Violation. The execution, delivery and performance
by Debtor of this Agreement do not violate any provision of law
or the articles of incorporation or by-laws of Debtor or result
in a breach of or constitute a default under any contract,
obligation, indenture or other instrument to which Debtor is a
party or by which Debtor may be bound;
(f) Authorization. This Agreement has been duly
authorized, executed and delivered, and constitutes a legal,
valid and binding agreement of Debtor enforceable in accordance
with its terms; and
(g) Secrecy. Debtor has taken and will continue to take
all reasonable steps to protect the secrecy of all trade secrets
relating to any of its unpublished Copyright Collateral and its
Proprietary Rights.
V. Covenants. Debtor covenants that so long as this
Agreement shall be in effect, Debtor shall:
(a) Further Acts. On a continuing basis, make, execute,
acknowledge and deliver, and file and record in the proper filing
and recording places, all such instruments and documents,
including appropriate financing and continuation statements and
security agreements, and take all such action as reasonably may
be necessary or advisable or reasonably may be requested by
Secured Party to carry out the intent and purposes of this
Agreement, or for assuring, confirming or protecting the grant or
perfection of the security interest granted or purported to be
granted hereby, to ensure Debtor's compliance with this Agreement
or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to the Copyright Collateral.
Without limiting the generality of the foregoing sentence,
Debtor:
(i) authorizes Secured Party in its sole discretion after ten
(10) days prior notice to Debtor, to modify this Agreement
without first obtaining Debtor's approval of or signature to such
modification by amending Schedule A hereof to include a reference
to any right, title or interest in any existing Copyright,
Registration or Copyright Right or any Copyright, Registration or
Copyright Right acquired or developed by Debtor after the
execution hereof, or to delete any reference to any right, title
or interest in any Copyright, Registration or Copyright Right in
which Debtor no longer has or claims any right, title or
interest; and
(ii) hereby authorizes Secured Party, in its sole discretion,
to file one or more financing or continuation statements, and
after ten (10) days prior notice to Debtor, amendments thereto,
relative to all or any portion of the Copyright Collateral
without the signature of Debtor where permitted by law;
(b) Compliance with Law. Comply, in all material respects,
with all applicable statutory and regulatory requirements in
connection with any and all of the Copyright Collateral that is
the subject of the Registrations and give such notice of
copyright, prosecute such material claims, keep such
confidentiality and do all other acts and take all other measures
which may be necessary or desirable to preserve, protect and
maintain such Copyright Collateral and all of Debtor's rights
therein, including diligently prosecute any material copyright
application pending as of the date of this Agreement or
thereafter;
(c) Compliance with Agreement. Comply with each of the
terms and provisions of this Agreement, and not enter into any
agreement (for example, a license agreement) which is
inconsistent with the obligations of Debtor under this Agreement
without Secured Party's prior written consent; and
(d) Lien Protection. Not permit the inclusion in any
contract to which Debtor becomes a party of any provision that
could or might impair or prevent the creation of a security
interest in favor of Secured Party in Debtor's rights and
interest in any property included within the definitions of the
Copyrights, Registrations and Copyright Rights acquired under
such contracts.
VI. New Copyrights, Registrations and Copyright Rights. If
Debtor shall obtain rights to or develop any new works
protectable by copyright, or become entitled to the benefit of
any Copyright Rights, Registration or application for
Registration not described on the schedules hereto, or any
renewals or extension of any Copyright, Copyright Rights or
Registration, the provisions of this Agreement shall
automatically apply thereto. Debtor shall give Secured Party
written notice (a) of any such work or such rights of material
value to Debtor or the operation of its businesses and (b) any
such Registration, applications for Registration or renewal or
extension of any Copyright. Concurrently with or promptly after
the filing of an application for any Registration for any
Copyright, Debtor shall execute and deliver a Copyright Security
Agreement substantially in the form of this Agreement and
otherwise in form and substance satisfactory to the Secured
Party, pursuant to which Debtor shall grant and reaffirm its
grant of a security interest to the extent of its interest in
such Registration as provided herein to Secured Party, and Debtor
shall cause such agreement to be recorded in the offices and
jurisdictions indicated by Secured Party.
VII. Copyright Registration, Renewal and Litigation.
(a) Registration. Debtor shall have the duty diligently to
make any application for Registration on any existing or future
unregistered but copyrightable works that are material to
Debtor's business or operations and to do any and all acts which
are reasonably necessary or desirable to preserve, renew and
maintain all rights in all Copyrights, Registrations and
Copyright Rights; provided, however, that Debtor shall not be
obligated to renew any Copyrights, Registrations or Copyright
Rights covering any products that Debtor has not sold, licensed
or used in its business for the previous five (5) years and which
are of nominal commercial value or covering any products that are
immaterial to Debtor's business operations. Any expenses
incurred in connection therewith shall be borne solely by Debtor.
Except as otherwise permitted in this Section 6(a), Debtor shall
not do any act or omit to do any act whereby any of the Copyright
Collateral may become abandoned or fall into the public domain or
fail to renew any Copyright, Registration or Copyright Right
owned by Debtor without the prior written consent of Secured
Party.
(b) Protection. Except as provided in Section 8 and
notwithstanding Section 1, Debtor shall have the right and
obligation to commence and diligently prosecute in its own name,
as real party in interest, for its own benefit and at its own
expense, such suits, proceedings or other actions for
infringement or other damage as are in its reasonable business
judgment necessary to protect the Copyright Collateral or any of
Debtor's rights therein. Debtor shall provide to Secured Party
any information with respect thereto requested by Secured Party.
Secured Party shall provide at Debtor's expense all necessary
cooperation in connection with any such suit, proceeding or
action including joining as a nominal party if Secured Party
shall have been satisfied that it is not incurring any risk of
liability because of such joinder. Debtor shall provide at its
expense representation acceptable to Secured Party for the common
interest of Debtor and Secured Party with respect to such
proceedings.
(c) Notice. Debtor shall, promptly upon its becoming aware
thereof, notify Secured Party in writing of the institution of,
or any adverse determination in, any proceeding, application,
suit or action of any kind described in Section 6(a) or 6(b), or
regarding Debtor's claim of ownership in any of the Copyrights,
Registrations or Copyright Rights, its right to register the
same, or its right to keep and maintain such registration,
whether before the United States Copyright Office or any United
States or foreign court or governmental agency. Debtor shall
provide promptly to Secured Party any information with respect
thereto requested from time to time by Secured Party.
VIII. Events of Default. The occurrence of any "Event
of Default" under the Loan Agreement or any other Loan Document
shall constitute an Event of Default hereunder.
IX. Remedies. Following the occurrence and during the
continuation of an Event of Default, Secured Party shall have all
rights and remedies available to it under the Loan Agreement and
the other Loan Documents and applicable law (which rights and
remedies are cumulative) with respect to its security interests
in any of the Copyright Collateral or any other collateral.
Debtor agrees that such rights and remedies include the right of
Secured Party as a secured party to sell or otherwise dispose of
its collateral after default, pursuant to UCC Section 9-504.
Debtor agrees that Secured Party shall at all times have such
royalty free licenses, to the extent permitted by law, for any
Copyright, Copyright Rights, Proprietary Right and any other
Copyright Collateral that is reasonably necessary to permit the
exercise of any of Secured Party's rights or remedies upon or
after the occurrence of (and during the occurrence of) an Event
of Default with respect to (among other things) any tangible
asset of Debtor in which Secured Party has a security interest,
including Secured Party's rights to sell inventory, tooling or
packaging which is acquired by Debtor (or its successors,
permitted assignees, or trustee in bankruptcy). In addition to
and without limiting any of the foregoing, upon the occurrence
and during the continuance of an Event of Default, Secured Party
shall have the right but shall in no way be obligated to bring
suit, or to take such other action as Secured Party deems
necessary or advisable, in the name of Debtor or Secured Party,
to enforce or protect any Copyright, Registration, Copyright
Right or Proprietary Right, and any license thereunder, in which
event Debtor shall, at the request of Secured Party, do any and
all lawful acts and execute any and all documents required by
Secured Party in aid of such enforcement. To the extent that
Secured Party shall elect not to bring suit to enforce any
Copyright, Registration, Copyright Rights, Proprietary Right, or
any license thereunder, Debtor agrees to use all reasonable
measures and its diligent efforts, whether by action, suit,
proceeding or otherwise, to prevent the infringement,
misappropriation or violation thereof by others and for that
purpose agrees diligently to maintain any action, suit or
proceeding against any Person necessary to prevent such
infringement, misappropriation or violation.
X. Authorization. If Debtor fails to comply with any of
its obligations hereunder, Secured Party may do so in Debtor's
name or in Secured Party's name, but at Debtor's expense, and
Debtor hereby agrees to reimburse Secured Party in full upon
demand for all expenses, including attorneys fees, incurred by
Secured Party in protecting, defending and maintaining any of the
Copyright Collateral or any right, title or interest of Debtor or
Secured Party therein. Debtor hereby appoints Secured Party, and
authorizes, directs and empowers Secured Party to make,
constitute and appoint any officer or agent of Secured Party as
Secured Party may select, in its exclusive discretion, as the
true and lawful attorney-in-fact of Debtor, with the power, if
Debtor refuses or fails to do so timely, (a) to execute in the
name of Debtor any financing statement or other instrument and
any modification, supplement or amendment to this Agreement or
any supplemental Copyright Security Agreement described in
Sections 4(a) or 5 hereof, and do such other acts on Debtor's
behalf, that Secured Party reasonably may deem necessary or
advisable to accomplish the purposes hereof, and (b) upon and
after the occurrence and continuation of any Event of Default,
(i) to endorse Debtor's name on all applications, documents,
papers and instruments reasonably necessary for Secured Party to
use any of the Copyright Collateral, and (ii) to grant or issue
any exclusive or nonexclusive license under any of the Copyright
Collateral to anyone else, or as may be reasonably necessary for
Secured Party to assign, pledge, convey or otherwise transfer
title in or dispose of any of the Copyright Collateral or any
other collateral to anyone else. Debtor hereby ratifies all that
such attorney shall lawfully do or cause to be done by virtue
hereof. This power of attorney is coupled with an interest and
is irrevocable until termination of this Agreement.
XI. Notices. All notices and other communications
hereunder to or from Secured Party and Debtor shall be in writing
and shall be mailed, sent or delivered in accordance with the
Loan Agreement.
XII. GOVERNING LAW AND VENUE; JURY TRIAL WAIVER. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE ASSIGNMENT AND SECURITY
INTERESTS HEREUNDER IN RESPECT OF ANY PROPERTY ARE GOVERNED BY
FEDERAL LAW, IN WHICH CASE SUCH CHOICE OF CALIFORNIA LAW SHALL
NOT BE DEEMED TO DEPRIVE SECURED PARTY OF SUCH RIGHTS AND
REMEDIES AS MAY BE AVAILABLE UNDER FEDERAL LAW. THE VALIDITY OF
THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT
SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS
LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT
THE SOLE OPTION OF SECURED PARTY, IN ANY OTHER COURT IN WHICH
SECURED PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN
CONTROVERSY. DEBTOR AND SECURED PARTY WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
11.
DEBTOR AND SECURED PARTY HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. DEBTOR AND SECURED PARTY REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
XIII. Entire Agreement; Amendment. This Agreement,
together with the Schedules and Exhibits hereto, which are
incorporated herein by this reference, contains the entire
agreement of the parties with respect to the subject matter
hereof and supersedes all prior drafts and communications
relating to such subject matter. Neither this Agreement nor any
provision hereof may be modified, amended or waived except by the
written agreement of the parties, as provided in the Loan
Agreement. Notwithstanding the foregoing, Secured Party may re-
execute this Agreement, modify, amend or supplement the Schedules
hereto or execute a supplemental Copyright Security Agreement, as
provided herein, and the terms of any such modification,
amendment, supplement or supplemental Copyright Security
Agreement shall be deemed to be incorporated herein by this
reference.
XIV. Severability. If one or more provisions contained in
this Agreement shall be invalid, illegal or unenforceable in any
respect in any jurisdiction or with respect to any party, such
invalidity, illegality or unenforceability in such jurisdiction
or with respect to such party shall, to the fullest extent
permitted by applicable law, not invalidate or render illegal or
unenforceable any such provision in any other jurisdiction or
with respect to any other party, or any other provisions of this
Agreement.
XV. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
XVI. Loan Agreement. Debtor acknowledges that the rights
and remedies of Secured Party with respect to the security
interest in the Copyright Collateral granted hereby are more
fully set forth in the Loan Agreement, the applicable Security
Agreement, and the other Loan Documents and all such rights and
remedies are cumulative.
XVII. No Inconsistent Requirements. Debtor acknowledges
that this Agreement and the other Loan Documents may contain
covenants and other terms and provisions variously stated
regarding the same or similar matters, and Debtor agrees that all
such covenants, terms and provisions are cumulative and all shall
be performed and satisfied in accordance with their respective
terms.
XVIII. Termination. Upon the satisfaction in full of all
Secured Obligations, this Agreement shall terminate and Secured
Party shall execute and deliver such documents and instruments
and take such further action reasonably requested by Debtor and
at Debtor's expense as shall be necessary to evidence termination
of the security interest granted by Debtor to Secured Party
hereunder.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement, as of the date first above written.
INTERGRAPH CORPORATION
a Delaware corporation
By:
--------------------------
Title:
-----------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
--------------------------
Title:
-----------------------
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On January __, 1997, before me,
______________________________, Notary Public, personally
appeared ______________________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-------------------------
Signature
[SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On January __, 1997, before me,
______________________________, Notary Public, personally
appeared ______________________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
-------------------------
Signature
[SEAL]
SCHEDULE A
to the Copyright Security Agreement
[TO BE ATTACHED]
SCHEDULE A
United States Copyright
Applications and Registrations
------------------------------
United States
Reg. No. Title Reg. Date
- -------- ----- ---------
TX3763938 MGE PC-1 1.4 March 17, 1994
TX3727896 DRAFTWORKS 1.3 August 18, 1993
TX3727895 MGE project viewer 1.0 August 18, 1993
TX665498 MGE GRID analyst 1.0 July 26, 1993
TX3653674 DM/librarian July 26, 1993
TX3606160 Siteworks 1.4 August 18, 1993
TX3627540 Frameworks 1.6 August 20, 1993
TX3633622 Designworks 1.2 August 2, 1993
TX3608627 MGE grid analyst-PC 1.0 July 26, 1993
TX3153602 DMANDS/View and September 23, 1991
redline WS 2.3.0.6
TX3156805 DMANDS sponsor September 20, 1991
2.3.0.6
TX3151822 DMANDS view and September 20, 1991
Redline PC 2.3.0.6
TX3151818 DMANDS manager 2.3.0.6 September 20, 1991
TX3150481 Intergraph network file September 18, 1991
manager 2.2
TX3129627 Project layout 3.4 June 5, 1991
TX3140594 HiLib PLD: HILIB-PLD April 4, 1991
1.0; LHIPLD
United States
Reg. No. Title Reg. Date
- -------- ----- ---------
TX3132928 MGA (microstation June 18, 1991
graphic environment analyst):
MGE analyst 2.02.03.01
TX3104170 Facilities rulebased June 14, 1991
application model management
environment 2.2
TX3138321 Intergraph finite element August 21, 1991
modeling 1.4.3
TX3101682 Tigris mapper 2.2.1.7; April 2, 1991
T-mapper
TX3100459 AEC shell 3.0 June 5, 1991
TX3100723 AEC Shell 4.00 June 5, 1991
TX3096355 Project architect nucleus 3.4 May 20, 1991
TX3091786 Project architect 4.0: PARCH May 21, 1991
TX3087085 INROADS C-15: April 1, 1991
INROADS 1.0; TDP,
transportation design products
TX3081167 EEschematic and nucleus 3.04 June 17, 1991
TX3075453 I/RAS 32B: Microstation May 7, 1991
32 binary raster graphic
editor 4.0; I/RAS32B
TX3072055 MGE imager 2.2.3 April 22, 1991
TX3055827 Automatic test equipment April 1, 1991
nucleus 1.1: LTEST
TX3054611 Tigris analyst 2.2.1.2: T- April 2, 1991
analyst
TX3054610 Tiger II PCB autorouter 3.0 April 1, 1991
TX3047351 EDIF netlist reader, v. April 1, 1991
3.0.0: LENR200
United States
Reg. No. Title Reg. Date
- -------- ----- ---------
TX3047337 PLDesigner Plus, 1.4 April 1, 1991
TX3047336 Master librarian V.3.0.0 April 1, 1991
TX3047334 LGerber:Gerber formatter 1.1 April 1, 1994
TX3047333 Design engineer PC 2.0 April 1, 1991
TX3047331 EDIF process: EDIF April 1, 1991
schematic interface 3.0; LESI
TX3047310 Wire wrap nucleus 1.1: LWRAP April 2, 1991
TX3047309 I/DISP: I/Dispatcher 1.0 April 2, 1991
TX3047308 I/EXEC: I/Executive 1.0 April 2, 1991
TX3047307 LTIGER: Automatic router April 2, 1991
(single user) 3.0
TX3047306 Digital analysis tools 1.0 April 2, 1991
TX3047305 LDRILL: Numerical drill and April 2, 1991
router nucleus 1.1
TX3047304 LINSERT: Numerical April 2, 1991
control component insertion
nucleus 1.1
TX3047303 Abel 3.0: Label April 2, 1991
TX3047187 Modelview 2.0 April 1, 1991
TX3047186 CLD-DECOMP: CAM April 1, 1991
engineer version 1.1
TX3047184 GATES.C: GATES 4.1: LGATES April 1, 1991
TX3052999 IP/IPLOT: April 9, 1991
IGDS/InterPlot interface
TX3052998 Microstation I/IRAS PC 4.0 April 9, 1991
TX3052997 IP/IGDS metafile interpreter 6.0.0 April 9, 1991
United States
Reg. No. Title Reg. Date
- -------- ----- ---------
TX3049585 TIGRIS IMAGER 5.1; T-IMAGER April 22, 1991
TX3047036 Design Engineer 2.0 April 1, 1991
TX3045747 PLD programmer interface 3.0 April 1, 1991
TX3049507 Automatic placement 3.0 April 1, 1991
TX3049506 IKOS interface 3.0 April 1, 1991
TX3024413 Project architect 3.4.1.2: April 10, 1991
prev. or alternative ti., PARCH
TX2959178 Microstation GIS November 16, 1990
environment 1.0
TX2953491 Microstation GIS November 15, 1990
environment 2.0
TX2946963 MicroCat computer-assisted December 29, 1989
language translation system
TXu270709 IGDS: Interactive graphics January 16, 1987
design software, version 8.5
TXu270708 IGDS: interactive graphics January 16, 1987
design software, version 8.3
TXu270707 IGDS: Interactive graphics January 16, 1987
design software, version 8.6
TXu270706 IGDS: Interactive graphics January 16, 1987
design software, version 8.4
TXu270705 IGDS: Interactive graphics January 16, 1987
design software, version 8.8
TXu270704 IGDS: Interactive graphics January 16, 1987
design software, version 8.7
TX3782412 Draftworks 1.4 March 21, 1994
TX3727894 ROADWORKS 1.2 August 18, 1993
United States
Reg. No. Title Reg. Date
- -------- ----- ---------
TX3263779 Intergaph/engineering July 23, 1991
modeling system 1.2
PA531865 MicroStation PC/32 June 14, 1991
upgrade training video
TX3199508 Intergraph numerical control 1.3.0 September 3, 1991
TX3176591 Microstation 32 continuous April 22, 1991
continuous tone raster display 4.0.2
TX3153460 IMAGESTATION RECTIFY (ISR) September 4, 1991
TX3167618 FABRICATION OPTIMIZER 1.0 April 3, 1991
TX4122609 GEMINI CLIENT VERSION 1.0 October 4, 1995
(Windows)
TX4108439 GEMINI CLIENT VERSION 1.0 June 28, 1995
(Unix)
TX3673966 GEMINI SERVER VERSION 1.0 June 28, 1995
(Unix)
TX3673967 PIXELPRO V.1.0 June 28, 1995
TX4296544 DesignReview 3.0 October 3, 1995
TX4132875 ERMA Data Manager 6.0 September 27, 1995
TX4212375 ERMA Site Geoglist 6.0 February 20, 1996
TX4132876 ERMA Ground Water Manager 6.0 September 27, 1995
TX4157282 MOGLE 2.0 October 3, 1995
TX4111446 MGE PC 2.0 October 2, 1995
TX4130314 DM/Workflow 2.0 October 2, 1995
TX4157280 DM/Server 2.0 October 3, 1995
United States
Reg. No. Title Reg. Date
- -------- ----- ---------
TX4157281 DM/Structure 2.0 October 3, 1995
TX4148244 Photobrowser 5.4 October 2, 1995
TX4296543 InWater 1.0 October 3, 1995
TX4130315 MGE Advanced Imager 6.0 October 2, 1995
TX4130317 MGE Network 6.0 October 2, 1995
TX4141634 Plantgen 5.4 October 2, 1995
TX4087418 PipeGen 1.0 October 17, 1995
TX3100443 Project Layout 4.0 June 5, 1991
TX4197857 DM/View-Redline 2.0 October 17, 1995
TX4197856 Full Text Retrieval October 17, 1995
TX4122804 Voxel Analyst 2.0 November 13, 1995
TX4296910 FRAMME V3.7 August 27, 1996
TX3104170 FRAMME 2.2 June 14, 1991
PATENT SECURITY AGREEMENT
-------------------------
THIS PATENT SECURITY AGREEMENT (this "Agreement"), dated
as of December 20, 1996 is made by INTERGRAPH CORPORATION, a
Delaware corporation ("Debtor"), in favor of FOOTHILL CAPITAL
CORPORATION, a California corporation ("Secured Party").
RECITALS
--------
A. Debtor and Secured Party have entered into that certain
Loan and Security Agreement, dated as of the date hereof (as
amended, modified, renewed or extended from time to time, the "Loan
Agreement"), pursuant to which Secured Party has agreed to make
certain financial accommodations to Debtor, and pursuant to which
Debtor has granted to Secured Party a security interest in (among
other things) certain of the general intangibles of Debtor.
B. Pursuant to the Loan Agreement and as one of the
conditions precedent to the obligations of Secured Party under the
Loan Agreement, Debtor has agreed to execute and deliver this
Agreement to Secured Party for filing with the United States Patent
and Trademark Office and with any other relevant recording systems
in any domestic or foreign jurisdiction, and as further evidence of
and to effectuate Secured Party's existing security interests in
the patents and other general intangibles described herein.
ASSIGNMENT
----------
NOW, THEREFORE, for valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Debtor hereby agrees
in favor of Secured Party as follows:
II. Definitions; Interpretation.
A. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Bankruptcy Code" means the United States Bankruptcy Code
(11 U.S.C. 101 et seq.), as amended, and any successor statute.
"Event of Default" means any Event of Default under the
Loan Agreement.
"Lien" means any pledge, security interest, assignment,
charge or encumbrance, lien (statutory or other), or other prefer-
ential arrangement (including any agreement to give any security
interest).
"Loan Documents" has the meaning assigned to it in the
Loan Agreement.
"Patent Collateral" has the meaning set forth in
Section 2.
"Patents" has the meaning set forth in Section 2.
"Person" means an individual, corporation, partnership,
joint venture, trust, unincorporated organization or any other
juridical entity.
"Proceeds" means whatever is receivable or received from
or upon the sale, lease, license, collection, use, exchange or
other disposition, whether voluntary or involuntary, of any Patent
Collateral, including "proceeds" as defined at UCC Section 9306,
and all proceeds of proceeds. Proceeds shall include (i) any and
all accounts, chattel paper, instruments, general intangibles, cash
and other proceeds, payable to or for the account of Debtor, from
time to time in respect of any of the Patent Collateral, (ii) any
and all proceeds of any insurance, indemnity, warranty or guaranty
payable to or for the account of Debtor from time to time with
respect to any of the Patent Collateral, (iii) any and all claims
and payments (in any form whatsoever) made or due and payable to
Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any
part of the Patent Collateral by any Person acting under color of
governmental authority, and (iv) any and all other amounts from
time to time paid or payable under or in connection with any of the
Patent Collateral or for or on account of any damage or injury to
or conversion of any Patent Collateral by any Person.
"PTO" means the United States Patent and Trademark Office
and any successor thereto.
"Secured Obligations" means all liabilities, obligations,
or undertakings owing by Debtor to Secured Party of any kind or
description arising out of or outstanding under, advanced or
issued pursuant to, or evidenced by the Loan Agreement, the other
Loan Documents, or this Agreement, irrespective of whether for the
payment of money, whether direct or indirect, absolute or
contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest
(including interest that accrues after the filing of a case under
the Bankruptcy Code) and any and all costs, fees (including
attorneys fees), and expenses which Debtor is required to pay
pursuant to any of the foregoing, by law, or otherwise.
"UCC" means the Uniform Commercial Code as in effect from
time to time in the State of California.
"United States" and "U.S." each mean the United States of
America.
B. Terms Defined in UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have
the meanings ascribed to them in the UCC.
C. Interpretation. In this Agreement, except to the extent
the context otherwise requires:
(i) Any reference to a Section or a Schedule is a reference
to a section hereof, or a schedule hereto, respectively, and to a
subsection or a clause is, unless otherwise stated, a reference to
a subsection or a clause of the Section or subsection in which the
reference appears.
(ii) The words "hereof," "herein," "hereto," "hereunder" and
the like mean and refer to this Agreement as a whole and not merely
to the specific Section, subsection, paragraph or clause in which
the respective word appears.
(iii) The meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms
defined.
(iv) The words "including," "includes" and "include" shall
be deemed to be followed by the words "without limitation."
(v) References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments
and other modifications thereto.
(vi) References to statutes or regulations are to be
construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation referred to.
(vii) Any captions and headings are for convenience of
reference only and shall not affect the construction of this Agree-
ment.
(viii) Capitalized words not otherwise defined herein
shall have the respective meanings assigned to them in the Loan
Agreement.
(ix) In the event of a direct conflict between the terms and
provisions of this Agreement and the Loan Agreement, it is the
intention of the parties hereto that both such documents shall be
read together and construed, to the fullest extent possible, to be
in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the
terms and provisions of the Loan Agreement shall control and
govern; provided, however, that the inclusion herein of additional
obligations on the part of the Debtor and supplemental rights and
remedies in favor of Secured Party (whether under California law or
applicable federal law), in each case in respect of the Patent
Collateral, shall not be deemed a conflict with the Loan Agreement.
III. Security Interest.
A. Assignment and Grant of Security Interest. As security
for the payment and performance of the Secured Obligations, Debtor
hereby grants, assigns, transfers and conveys to Secured Party a
continuing security interest in all of Debtor's right, title and
interest in, to and under the following property, whether now
existing or hereafter acquired or arising (collectively, the
"Patent Collateral"):
(i) all letters patent of the U.S. or any other country, all
registrations and recordings thereof, and all applications for
letters patent of the U.S. or any other country, owned, held or
used by Debtor in whole or in part, including all existing U.S.
patents and patent applications of Debtor which are described in
Schedule A hereto, as the same may be amended or supplemented
pursuant hereto from time to time, and together with and including
all patent licenses held by Debtor, together with all reissues,
divisions, continuations, renewals, extensions and continuations-in-
part thereof and the inventions disclosed therein, and all rights
corresponding thereto throughout the world, including the right to
make, use, lease, sell and otherwise transfer the inventions
disclosed therein, and all proceeds thereof, including all license
royalties and proceeds of infringement suits (collectively, the
"Patents");
(ii) all claims, causes of action and rights to sue for past,
present and future infringement or unconsented use of any of the
Patents and all rights arising therefrom and pertaining thereto;
(iii) all general intangibles (as defined in the UCC) and
all intangible intellectual or other similar property of Debtor of
any kind or nature, whether now owned or hereafter acquired or
developed, associated with or arising out of any of the Patents and
not otherwise described above; and
(iv) all products and Proceeds of any and all of the
foregoing.
B. Certain Exclusions from Grant of Security Interest.
Anything in this Agreement and the other Loan Documents to the
contrary notwithstanding, the foregoing grant, assignment,
transfer, and conveyance of a security interest shall not extend
to, and the term "Patent Collateral" shall not include, any item of
Patent Collateral described in Section 2(a) above that is now or
hereafter held by Borrower as licensee or otherwise, solely in the
event and to the extent that: (i) as the proximate result of the
foregoing grant, assignment, transfer, or conveyance of a security
interest, Borrower's rights in or with respect to such item of
Patent Collateral would be forfeited or would become void,
voidable, terminable, or revocable, or if Borrower would be deemed
to have breached, violated, or defaulted the underlying license or
other agreement that governs such item of Patent Collateral
pursuant to the restrictions in the underlying license or other
agreement that governs such item of Patent Collateral; (ii) any
such restriction shall be effective and enforceable under
applicable law, including Section 9318(4) of the Code; and (iii)
any such forfeiture, voidness, voidability, terminability,
revocability, breach, violation, or default cannot be remedied by
Debtor using its best efforts (but without any obligation to make
any material expenditures of money or to commence legal
proceedings); provided, however, that the foregoing grant,
assignment, transfer, and conveyance of security interest shall
extend to, and the term "Patent Collateral" shall include, (y) any
and all Proceeds of such item of Patent Collateral to the extent
that the assignment or encumbering of such Proceeds is not so
restricted, and (z) upon any such licensor or other applicable
party's consent with respect to any such otherwise excluded item of
Patent Collateral being obtained, thereafter such item of Patent
Collateral as well as any Proceeds thereof that might theretofore
have been excluded from such grant, assignment, transfer, and
conveyance of a security interest and the term "Patent Collateral."
C. Continuing Security Interest. Debtor agrees that this
Agreement shall create a continuing security interest in the Patent
Collateral which shall remain in effect until terminated in
accordance with Section 16.
D. Incorporation into Loan Agreement. This Agreement shall
be fully incorporated into the Loan Agreement and all
understandings, agreements and provisions contained in the Loan
Agreement shall be fully incorporated into this Agreement. Without
limiting the foregoing, the Patent Collateral described in this
Agreement shall constitute part of the Collateral in the Loan
Agreement.
E. Licenses. Anything in the Loan Agreement or this
Agreement to the contrary notwithstanding, Debtor may grant non-
exclusive licenses of the Patent Collateral (subject to the
security interest (if any) of Secured Party therein) in the
ordinary course of business consistent with past practice.
IV. Further Assurances; Appointment of Secured Party as Attorney-
in-Fact. Debtor at its expense shall execute and deliver, or cause
to be executed and delivered, to Secured Party any and all
documents and instruments, in form and substance satisfactory to
Secured Party, and take any and all action, which Secured Party may
reasonably request from time to time, to perfect and continue
perfected, maintain the priority of or provide notice of Secured
Party's security interest in the Patent Collateral and to
accomplish the purposes of this Agreement. Secured Party shall
have the right to, in the name of Debtor, or in the name of Secured
Party or otherwise, without notice to or assent by Debtor, and
Debtor hereby irrevocably constitutes and appoints Secured Party
(and any of Secured Party's officers or employees or agents
designated by Secured Party) as Debtor's true and lawful attorney-
in-fact with full power and authority, if Debtor refuses or fails
to do so timely, (i) to sign the name of Debtor on all or any of
such documents or instruments, and perform all other acts, that
Secured Party reasonably deems necessary or advisable in order to
perfect or continue perfected, maintain the priority or
enforceability of or provide notice of Secured Party's security
interest in, the Patent Collateral, and (ii) to execute any and all
other documents and instruments, and to perform any and all acts
and things for and on behalf of Debtor, which Secured Party may
deem necessary or advisable to maintain, preserve and protect the
Patent Collateral and to accomplish the purposes of this Agreement,
including (A) after the occurrence and during the continuance of
any Event of Default, to defend, settle, adjust or institute any
action, suit or proceeding with respect to the Patent Collateral,
(B) during a Triggering Event, to assert or retain any rights under
any license agreement for any of the Patent Collateral, including
any rights of Debtor arising under Section 365(n) of the Bankruptcy
Code, and (C) after the occurrence and during the continuance of
any Event of Default, to execute any and all applications,
documents, papers and instruments for
Secured Party to use the Patent Collateral, to grant or
issue any exclusive or non-exclusive license with respect to any
Patent Collateral (it being understood that so long as no Event of
Default has occurred and is continuing, Debtor may grant or issue
licenses in the ordinary course of business with respect to the
Patent Collateral), and to assign, convey or otherwise transfer
title in or dispose of the Patent Collateral. The power of
attorney set forth in this Section 3, being coupled with an
interest, is irrevocable so long as this Agreement shall not have
terminated in accordance with Section 16.
Nothing in this Agreement shall obligate Debtor to
commence any suit, proceeding or other action for infringement of
any of the Patents that are not material to the business of Debtor.
V. Representations and Warranties. Debtor represents and
warrants to Secured Party as follows:
A. No Other Patents. A true and correct list of all of
the existing Patents owned, held (whether pursuant to a license or
otherwise) or used by Debtor, in whole or in part, is set forth in
Schedule A.
B. Validity. Each of the Patents listed on Schedule A is
subsisting and has not been adjudged invalid or unenforceable, in
whole or in part, all maintenance fees required to be paid on
account of any Patents have been timely paid for maintaining such
Patents in force, and, to the best of Debtor's knowledge, each of
the Patents is valid and enforceable.
C. Ownership of Patent Collateral; No Violation.
(i) Debtor has rights in and good title to the existing Patent Collateral,
(ii) with respect to the Patent Collateral shown on Schedule A
hereto as owned by it, Debtor is the sole and exclusive owner
thereof, free and clear of any Liens and rights of others (other
than the security interest created hereunder), including licenses,
shop rights and covenants by Debtor not to sue third persons and
(iii) with respect to any Patent for which Debtor is either a
licensor or a licensee pursuant to a license or licensee agreement
regarding such Patent, each such license or licensing agreement is
in full force and effect, Debtor is not in default of any of its
obligations thereunder and, other than the parties to such licenses
or licensing agreements, no other Person is known by Debtor to have
any rights in or to any of the Patent Collateral. To the best of
Debtor's knowledge, the past, present and contemplated future use
of the Patent Collateral by Debtor has not, does not and will not
infringe upon or violate any right, privilege or license agreement
of or with any other Person.
D. No Infringement. To the best of Debtor's knowledge, no
material infringement or unauthorized use presently is being made
of any of the Patent Collateral by any Person.
E. Powers. Debtor has the unqualified right, power and
authority to pledge and to grant to Secured Party a security
interest in all of the Patent Collateral pursuant to this
Agreement, and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or
approval of any other Person except as already obtained.
VI. Covenants. So long as any of the Secured Obligations remain
unsatisfied, Debtor agrees that it will comply with all of the
covenants, terms and provisions of this Agreement, the Loan
Agreement and the other Loan Documents, and Debtor will promptly
give Secured Party written notice of the occurrence of any event
that could have a material adverse effect on any of the Patents or
the Patent Collateral, including any petition under the Bankruptcy
Code filed by or against any licensor of any of the Patents for
which Debtor is a licensee.
VII. Future Rights. Except as otherwise expressly agreed to in
writing by Secured Party, for so long as any of the Secured
Obligations shall remain outstanding, or, if earlier, until Secured
Party shall have released or terminated, in whole but not in part,
its interest in the Patent Collateral, if and when Debtor shall
obtain rights to any new patentable inventions, or become entitled
to the benefit of any Patent, or any reissue, division,
continuation, renewal, extension or continuation-in-part of any
Patent or Patent Collateral or any improvement thereof (whether
pursuant to any license or otherwise), the provisions of Section 2
shall automatically apply thereto and Debtor shall give to Secured
Party prompt notice thereof. Debtor shall do all things deemed
necessary or advisable by Secured Party to ensure the validity,
perfection, priority and enforceability of the security interests
of Secured Party in such future acquired Patent Collateral. In
accordance with Section 3 hereof, Debtor hereby authorizes Secured
Party to modify, amend or supplement the Schedules hereto and to re-
execute this Agreement from time to time on Debtor's behalf and as
its attorney-in-fact to include any future patents which are or
become Patent Collateral and to cause such re-executed Agreement or
such modified, amended or supplemented Schedules to be filed with
the PTO.
VIII. Remedies. Secured Party shall have all rights and
remedies available to it under the Loan Agreement and applicable
law (which rights and remedies are cumulative) with respect to the
security interests in any of the Patent Collateral or any other
Collateral. Debtor agrees that such rights and remedies include
the right of Secured Party as a secured party to sell or otherwise
dispose of its Collateral after default, pursuant to UCC Section
9504. Debtor agrees that Secured Party shall at all times have
such royalty free licenses, to the extent permitted by law, for any
Patent Collateral that is reasonably necessary to permit the
exercise of any of Secured Party's rights or remedies upon or after
the occurrence of an Event of Default with respect to (among other
things) any tangible asset of Debtor in which Secured Party has a
security interest, including Secured Party's rights to sell
inventory, tooling or packaging which is acquired by Debtor (or its
successor, assignee or trustee in bankruptcy). In addition to and
without limiting any of the foregoing, upon the occurrence and
during the continuance of an Event of Default, Secured Party shall
have the right but shall in no way be obligated to bring suit, or
to take such other action as Secured Party deems necessary or
advisable, in the name of Debtor or Secured Party, to enforce or
protect any of the Patent Collateral, in which event Debtor shall,
at the request of Secured Party, do any and all lawful acts and
execute any and all documents required by Secured Party in aid of
such enforcement. To the extent that Secured Party shall elect not
to bring suit to enforce such Patent Collateral, upon, during, or
after the occurrence of an Event of Default, Debtor agrees to use
all reasonable measures and its diligent efforts, whether by
action, suit, proceeding or otherwise, to prevent the infringement,
misappropriation or violations thereof by others and for that
purpose agrees diligently to maintain any action, suit or
proceeding against any Person necessary to prevent such
infringement, misappropriation or violation.
IX. Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by Debtor and Secured Party
and their respective successors and assigns.
X. Notices. All notices and other communications hereunder
shall be in writing and shall be mailed, sent or delivered in
accordance with the Loan Agreement.
XI. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California, except to the extent that the validity or perfection of
the security interests hereunder in respect of any Patent
Collateral are governed by federal law, in which case such choice
of California law shall not be deemed to deprive Secured Party of
such rights and remedies as may be available under federal law.
XII. Entire Agreement; Amendment. This Agreement, together
with the Schedules hereto, contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes
all prior drafts and communications relating to such subject
matter. Neither this Agreement nor any provision hereof may be
modified, amended or waived except by the written agreement of the
parties, as provided in the Loan Agreement. Notwithstanding the
foregoing, Secured Party may re-execute this Agreement or modify,
amend or supplement the Schedules hereto as provided in Section 6
hereof.
XIII. Severability. If one or more provisions contained in
this Agreement shall be invalid, illegal or unenforceable in any
respect in any jurisdiction or with respect to any party, such
invalidity, illegality or unenforceability in such jurisdiction or
with respect to such party shall, to the fullest extent permitted
by applicable law, not invalidate or render illegal or
unenforceable any such provision in any other jurisdiction or with
respect to any other party, or any other provisions of this
Agreement.
XIV. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute but
one and the same agreement.
XV. Loan Agreement. Debtor acknowledges that the rights and
remedies of Secured Party with respect to the security interest in
the Patent Collateral granted hereby are more fully set forth in
the Loan Agreement and all such rights and remedies are cumulative.
XVI. No Inconsistent Requirements. Debtor acknowledges that this
Agreement and the other Loan Documents may contain covenants and
other terms and provisions variously stated regarding the same or
similar matters, and Debtor agrees that all such covenants, terms
and provisions are cumulative and all shall be performed and
satisfied in accordance with their respective terms.
XVII. Termination. Upon the indefeasible payment in full of
the Secured Obligations, including the cash collateralization,
expiration, or cancellation of all Secured Obligations, if any,
consisting of letters of credit, and the full and final termination
of any commitment to extend any financial accommodations under the
Loan Agreement, this Agreement shall terminate and Secured Party
shall execute and deliver such documents and instruments and take
such further action reasonably requested by Debtor and at Debtor's
expense as shall be necessary to evidence termination of the
security interest granted by Debtor to Secured Party hereunder.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement, as of the date first above written.
INTERGRAPH CORPORATION,
a Delaware corporation
By:
-----------------------------
Title:
--------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
-----------------------------
Title:
--------------------------
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On January __, 1997, before me,
______________________________, Notary Public, personally appeared
______________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s)
whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
------------------------
Signature
[SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On January __, 1997, before me,
______________________________, Notary Public, personally appeared
______________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s)
whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
-------------------------
Signature
[SEAL]
SCHEDULE A
to the Patent Security Agreement
[TO BE ATTACHED]
SCHEDULE A
to the Patent Security Agreement
Issued Patents
--------------
Patent Number Invention Date Patent Issued
- ------------- --------- ------------------
5,579,222 Distributed License 11/26/96
Administration System Using a
Local Policy Server to
Communicate with a License Server
and Control Execution of Computer
Programs
5,579,044 Digital Proofing System 11/26/96
5,560,028 Software Scheduled Superscalar 9/24/96
Computer Architecture
5,555,094 Apparatus and Method for 9/10/96
Interpreting Image Data for Use
in a Raster Plotter
5,546,569 Apparatus for Writing Data to and 8/13/96
Reading Data from a MultiPort Ram
in a Single Clock Cycle
5,542,088 M & A for Enabling control of 7/30/96
Task Execution
5,534,796 Self-Clocking Pipeline Register 7/9/96
5,526,142 Scanner/Plotter and Rotatable 06/11/96
Drum for Use Therein
5,508,640 Dynamic CMOS Logic Circuit with 4/16/96
Precharge (As amended)
5,504,925 Apparatus and Method for 4/2/96
Implementing Interrupts in
Pipelined Processors
5,502,829 Apparatus for Obtaining Data from 3/26/96
a Translation Memory Based on
Carry Signal from an Adder, as
amended
5,499,445 A Method of Making a Multi-Layer 3/19/96
to Package (As amended from Multi-
layer Packaging)
5,487,025 Carry Chain Adder Using 1/23/96
Regenerative Push-pull
Differential Logic
5,479,646 Method and Apparatus for 12/26/95
Obtaining Data from a Data
Circuit Utilizing Alternating
Clock Pulses to Gate the Data to
the Output
5,463,750 Method and Apparatus for 10/31/95
Translating Virtual Addresses in
a Data Processing System having
Multiple Instruction Pipelines
5,461,709 3D Input System for CAD Systems 10/24/95
5,455,528 Improved CMOS Circuit for 10/03/95
Implementing Boolean Functions
5,299,147 Decoder scheme for fully 3/29/94
associative translation look
aside buffer in memory system
5,255,384 Virtual-real memory address 10/19/93
translation method for computing
system having cache memory couple
to processor and main memory
5,212,454 Capacitance measurement method 5/18/93
and apparatus for semiconductor
wafers during integrated circuit
processing
5,186,377 Apparatus for stiffening circuit 2/16/93
board during soldering
RE33783 Multi-camera document scanning 12/31/91
system
4,686,581 Multi-camera document scanning 8/11/87
system
5,426,780 Geographic information system 6/20/95
dynamic segmentation method
5,216,297 MOS circuit for driving emitter 6/1/93
coupled logic receiving
differential output
5,191,447 Scanning beam control system for 3/2/93
document scanner
5,274,593 High Speed redundant rows and 12/28/93
columns for semiconductor
memories
5,280,370 Apparatus and method for scanning 1/18/94
by means of a rotatable detector
array
5,274,473 Reproducing images with rapid 12/28/93
variable angle digital screening
5,383,001 Vacuum drum for mounting media of 1/17/95
different sizes
5,338,970 Multi-layered high frequency IC 8/16/94
package
5,335,046 Clamping mechanism for use on 8/2/94
rotatable plotter drum
5,091,846 Cache address translation and 2/25/92
memory management system
architecture
5,075,779 Image data interpreting apparatus 12/24/91
and method for raster plotter
5,047,971 Analogue electronic circuit 9/10/91
simulation
4,985,779 Method and apparatus for 1/15/91
generating half-tone images
4,969,114 Method for determining defined 11/6/90
signal relationship among
physical entities
4,992,890 Very high speed laser graphic 2/12/91
plotter and scanner system
4,933,835 Apparatus for maintaining 6/12/90
consistency of cache memory
4,910,685 Video circuit with digital to 3/20/90
analog converter in monitor
4,811,215 Instruction execution accelerator 3/7/89
for pipelined digital machine
4,693,444 Height adjust mechanism for 9/15/87
computer keyboard
4,884,197 Method and apparatus for 11/28/89
addressing a cache memory
4,860,192 Computer integrated cache memory 8/22/89
system
4,595,115 Hidden panel connector for 6/17/86
electronics enclosure
4,556,825 CRT deflection circuit for TV 12/3/85
4,458,330 Banded vector to raster convertor 7/3/84
4,334,124 Floating coordinate system for 6/8/82
computer entry device
4,916,647 Hardwired pipeline processor for 4/10/90
logic simulation
4,718,105 Computer graphic digitizing data 1/5/88
entry system
4,759,075 Method and apparatus for 7/19/86
vectorizing documents and symbol
recognition
4,603,431 Method and apparatus for 7/29/86
vectorizing documents and symbol
recognition
4,413,286 Method and apparatus involving 11/1/83
digital screen generation
4,464,715 Memory accessing method 8/7/84
4,518,998 Method and apparatus for 5/21/85
producing a time advance output
pulse train from an input pulse
train
4,533,942 Method and apparatus for 8/6/85
reproducing an image which has a
coarser resolution than utilized
in scanning of the image
4,533,911 Video display system for 8/6/85
displaying symbol-fragments in
different orientations
4,677,433 Two speed clock scheme for co- 6/30/87
processors
4,737,858 Intensity controlled an aperture 4/12/88
defining image generating system
4,751,637 Digital computer for implementing 6/14/88
event driven simulation algorithm
4,814,983 Digital computer for implementing 3/21/89
event driven simulation algorithm
4,872,125 Multiple processor accelerator 10/3/89
for logic simulation
4,873,656 Multiple processor accelerator 10/10/89
for logic simulation
D305,756 Design for cursor 1/30/90
5,432,727 Apparatus for computing a sticky 7/11/95
bit for a floating point
arithmetic unit
5,446,685 Pulsed ground circuit for CAM and 8/29/95
PAL memories
Pending Patent Applications
Serial Number Title Filing Date
- ------------- ----- -----------
08/622,942 Universal Vacuum Drum and Mask 3/27/96
60/017,483 Improved Data Access 4/26/96
08/573,116 Scanner/Plotter and Rotatable 12/16/95
Drum for Use Therein
06/018,871 A & M for Improved Airflow 5/31/96
Through a Chassis
Not Yet Method and Apparatus for 11/18/96
Assigned Controlling an Instruction
Pipeline in a Data Processing
System
60/015,349 High-Speed Video Frame Buffer 4/12/96
Using Single Port Memory Chips
08/422,753 Software Scheduled Superscaler 6/20/96
Computer
06/023,795 Hardware Accelerated Photoreal 8/1/96
Rendering (RenderGL)
60/023,513 Hardware Accelerated Photoreal 8/7/96
Rendering (RenderGL)
60/025,061 Graphics Driver Verification 8/23/96
System
60/024,571 System and Method for Data Access 8/26/96
60/026,292 Graphics Processing with 9/10/96
Efficient Clipping
60/027,520 Active Pipeline 10/7/96
Not Yet Variable Mask and Universal 10/21/96
Assigned Vacuum Drum
Not Yet Digital Proofing System 11/6/96
Assigned
Not Yet Instruction Cache Associative 11/22/96
Assigned Crossbar Switch
08/438,048 Visible Line Processor 5/8/95
08/520,973 Method and Apparatus for Parallel 8/1/95
Access to Consecutive TLB Entries
08/509,847 System for Adding Attributes to 8/1/95
an Object at Run Time in an
Object Oriented Computer
29/038,048 Design for a Vertically Oriented 4/26/95
Computing Device
60/011,979 High Availability Super Server 2/20/96
60/011,932 Method and apparatus for Signal 2/20/96
Handling on GTL-Type Buses
08/576,876 Method and apparatus for 12/21/95
Speculative Execution of
Instructions
08/544,812 Optimal Projection Design 10/18/95
08/552,812 Method for Object Oriented 11/3/95
Program Using Dynamic Interfaces
60/008,281 Graphics Accelerator for Video 12/6/95
Graphics Controller
60/013,402 Large Scanner Plotter 3/14/96
(Hummingbird)
29/047,791 Vertically Oriented Computing 10/23/95
Device (FWC of
1247/113;29/038,048)
08/573,689 Cursor Positioning Method 12/18/95
60/014,226 Real Time Video Capture Board; 3/27/96
Video Capture and Playback Board
for Use in a Computer Graphics
System
60/015,258 Removable Circuit Board with 4/10/96
Ducted Cooling
60/016,368 Improved Data Access 4/19/96
08/330,984 RF Generator and Plotter 10/28/94
Incorporating Same
08/372,278 Register File with Bypass 1/12/95
Capability
08/378,251 OLE for Design and Modeling 1/23/95
08/385,496 Pulsed Ground Circuit for CAM and 2/8/95
PAL Memories
08/410,785 Spread Spectral Digital Screening 3/27/95
08/412,130 Variable Mask and Universal 3/28/95
Vacuum Drum
08/431,820 Direct Access to Slave Processor 5/1/95
by Unprotected Application Using
Context Saving and Restoring
08/431,821 Video Stream Data Mixing for 3D 5/1/95
Graphics System
08/432,029 Graphics Processing with 5/1/95
Efficient Vector Drawing
08/432,106 Apparatus and Method of a High- 5/1/95
Performance Video Controller
08/432,272 System and Method for Controlling 5/1/95
a Slave Processor
08/432,313 FIFO Logical Addresses for 5/1/95
Control and Error Recovery
08/432,314 Vertex List Management System 5/1/95
08/435,348 Method and Apparatus for 5/5/95
Dynamically Interpreting Drawing
Commands
08/435,647 Intelligent Object Selection 5/5/95
08/437,942 Object Relationship Management 5/9/95
System
Not Yet Peer to Peer Parallel Processing 12/5/96
Assigned Graphics Accelerator
Not Yet Online Testing Procedure 12/6/96
Assigned
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 20, 1996, made by
the Persons listed on the signature pages hereof (each a "Pledgor"
and collectively the "Pledgors"; provided that "Pledgor" shall be
deemed to include any other Person that executes and delivers an
amendment in the form of Exhibit A hereto agreeing to be bound by
the terms and provisions hereof), to Foothill Capital Corporation
("Foothill").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Intergraph Corporation ("Borrower") and Foothill
have entered into that certain Loan and Security Agreement, dated
as of even date herewith (as it may be amended, supplemented or
otherwise modified from time to time, the "Loan Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed thereto in the Loan Agreement);
and
WHEREAS, each Pledgor is the legal and beneficial owner
of the shares of capital stock or other equity securities described
in Schedules I, II, and III hereto (or any addenda thereto) and
issued by the respective issuers named therein (collectively, the
"Pledged Shares"); and
WHEREAS, as used herein, the term "Excluded Equity
Interests" shall mean: (i) equity interests in entities that are
not corporations or limited liability companies but are strategic
alliances, joint marketing ventures, joint development ventures, or
other similar joint arrangements entered into by Borrower in the
ordinary course of Borrower's business; and (ii) with respect to
any Subsidiary, options or other rights to acquire equity
securities of that Subsidiary that are issued or granted, in the
ordinary course of business and generally consistent with past
practice of Borrower's Subsidiaries (other than Foreign
Subsidiaries), to officers, directors, employees, or consultants of
that Subsidiary in connection with incentive compensation
arrangements and that do not in the aggregate, in the case of any
single Subsidiary, involve or permit the issuance of more than 15%
of the total equity securities of such Subsidiary, and equity
securities issued pursuant to the exercise of such rights or
options; and
WHEREAS, the Pledged Shares identified on Schedule I
hereto as of the date hereof (and any addenda thereto as of the
date thereof) represent all of the capital stock or other equity
securities (other than Excluded Equity Interests) of each direct or
indirect Subsidiary of Borrower having total assets of $100,000 or
more that is not a Foreign Subsidiary (each, a "Pledged Domestic
Issuer"); and
WHEREAS, the Pledged Shares identified on Schedule II
hereto (and any addenda thereto) represent all of the capital stock
or other equity securities (other than the Excluded Foreign
Portion) of each Foreign Subsidiary identified thereon (each, a
"Pledged Foreign Issuer); and
WHEREAS, the Pledged Shares identified on Schedule III
hereto (and any addenda thereto) represent all right, title, and
interest of Borrower in and to all of the capital stock or other
equity interests underlying the Permitted Toehold Investments (the
issuers thereof being the "Pledged Toehold Issuers"; the Pledged
Domestic Issuers, the Pledged Foreign Issuers, and the Pledged
Toehold Issuers being, collectively, the "Issuers"); and
WHEREAS, it is a condition precedent under the Loan
Agreement to the making of the Advances and the Term Loan and the
issuance of Letters of Credit that the Pledgors shall have made the
pledge contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and to
induce Foothill to make the Advances and the Term Loan and to cause
the issuance of the Letters of Credit, each Pledgor hereby agrees
with Foothill as follows:
SECTION l. Pledge. Each Pledgor hereby pledges to
Foothill, and grants to Foothill a security interest in, all of
such Pledgor's right, title, and interest in and to the following
(the "Pledged Collateral"):
(i) all of the Pledged Shares;
(ii) all additional shares of stock or other
securities of any Issuer of the Pledged Shares from time to
time acquired by such Pledgor in any manner (any such shares
being "Additional Shares"); provided, however, that with
respect to any Pledged Domestic Issuer, any such Additional
Shares shall not include the Excluded Equity Interests;
provided further that with respect to any Pledged Foreign
Issuer, any such Additional Shares shall not include the
Excluded Foreign Portion thereof;
(iii) the certificates (if any) representing the
shares referred to in clauses (i) and (ii) above; and
(iv) all dividends, cash, instruments and other
property or proceeds, from time to time received, receivable
or otherwise distributed in respect of or in exchange for any
or all of the Pledged Shares and/or Additional Shares.
SECTION 2. Security for Obligations. This Agreement
secures, and the Pledged Collateral is security for, the full and
prompt payment by Borrower when due (whether at stated maturity, by
acceleration or otherwise) of, and the performance by Borrower of,
the Obligations, whether now or hereafter existing and whether for
principal, interest, fees, expenses or otherwise, and the
performance by each Pledgor of its obligations hereunder
(collectively, the "Secured Obligations").
SECTION 3. Delivery of Pledged Collateral. Subject
to Section 4.1 and Section 4.2 of the Loan Agreement and only to
the extent any such certificates or instruments exist: (a) all
certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of
Foothill pursuant hereto (and, in the case of Pledged Shares issued
by any Pledged Foreign Issuer, to the extent permitted by
applicable foreign law) and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance
satisfactory to Foothill; (b) during any Triggering Event, Foothill
shall have the right to the extent permitted under any applicable
law, at any time in its discretion and without notice to any
Pledgor, to transfer to or to register in its name or in the name
of any of its nominees any or all of the Pledged Collateral; (c)
Foothill shall have the right at any time to exchange certificates
representing or evidencing any of the Pledged Collateral for
certificates of smaller or larger denominations; and (d) Foothill
acknowledges and agrees that, in the case of Pledged Shares issued
by any Pledged Foreign Issuer, any Pledgor may deliver to Foothill
one or more single certificates representing both Pledged Shares
and shares which are not pledged or required to be pledged
hereunder (the "Unpledged Shares") and that, upon any Pledgor's
written request, Foothill shall cooperate with such Pledgor to
permit the exchange of certificates of smaller or larger
denominations and shall return to, or permit to be retained by,
such Pledgor certificates representing any Unpledged Shares;
provided, however, that (i) Foothill shall not be obligated to
relinquish possession of any certificates representing (either in
whole or in part) Pledged Shares if in the reasonable opinion of
Foothill such action would cause the Lien of Foothill with respect
to such Pledged Shares to cease to be perfected, and (ii) in no
event shall such Pledgor be entitled to the return of certificates
representing more than the Excluded Foreign Portion of any Pledged
Foreign Issuer.
SECTION 4. Representations and Warranties. Each
Pledgor makes the following representations:
(a) As of the date that the applicable Pledged Shares
are pledged hereunder, the Pledged Shares (i) have been duly
authorized and validly issued; (ii) are fully paid and non-
assessable; and (iii) constitute (x) all of the issued and
outstanding capital stock and other equity securities (other than
Excluded Equity Interests) of each Pledged Domestic Issuer, (y) all
of the issued and outstanding capital stock and other equity
securities (other than the Excluded Foreign Portion thereof) of
each Pledged Foreign Issuer, and (z) all right, title, and interest
of Borrower in and to all of the capital stock or other equity
interests underlying the Permitted Toehold Investments (and, as to
each Pledged Toehold Issuer, representing the percentage indicated
on Schedule III of all of the capital stock and other equity
interests issued by such Issuer).
(b) Such Pledgor is the legal and beneficial owner of
the Pledged Collateral free and clear of any Lien, except for
Permitted Liens.
(c) Upon compliance with any applicable local law
registration requirements, the pledge of the Pledged Shares issued
by each Pledged Domestic Issuer pursuant to this Agreement creates
a valid, perfected and first priority security interest in such
Pledged Collateral, in favor of Foothill.
(d) Subject to Section 4.1 of the Loan Agreement and
except with respect to any Pledged Collateral relating to any
Pledged Foreign Issuer, no consent, authorization, approval, or
other action by, and no notice to or filing with, any Governmental
Authority is required either (i) for the pledge by such Pledgor of
the Pledged Collateral pursuant to this Agreement or for the due
execution, delivery or performance of this Agreement by such
Pledgor, or (ii) for the exercise by Foothill of the voting or
other rights provided for in this Agreement or of the remedies in
respect of the Pledged Collateral pursuant to this Agreement,
except as may be required in connection with the disposition of the
Pledged Collateral by laws affecting the offering and sale of
securities generally or for any filings necessary to comply with
applicable local law registration requirements.
SECTION 5. Further Assurances, Etc. (a) Each Pledgor
agrees that at any time and from time to time, at the cost and
expense of such Pledgor, such Pledgor will promptly execute and
deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Foothill may
reasonably request, in order to perfect and protect the Lien
granted or purported to be granted hereby or to enable Foothill to
exercise and enforce its rights and remedies hereunder with respect
to any Pledged Collateral.
(b) Each Pledgor agrees to defend the title to the
Pledged Collateral and the Lien thereon of Foothill against the
claim of any other Person and to maintain and preserve such Lien
until indefeasible payment in full of all obligations.
SECTION 6. Voting Rights; Dividends; Etc.
(a) As long as no Event of Default shall have occurred
and be continuing (and, in the case of subsection (a) (i) of this
Section 6, as long as no notice thereof shall have been given by
Foothill to the Pledgors pursuant to subsection (b) hereof):
(i) Each Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement or any other Loan Document;
provided, however, that such Pledgor shall not exercise or shall
refrain from exercising any such right if such action could
reasonably be expected to result in a Material Adverse Change;
(ii) Each Pledgor shall be entitled to receive and retain
(subject to any Lien thereon in favor of Foothill) any and all
dividends or distributions paid in respect of the Pledged
Collateral, other than any and all:
(A) dividends paid or payable other than in
cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect
of, or in exchange for, any Pledged Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Shares or
Additional Pledged Shares in connection with a partial or
total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in-surplus,
and
(C) cash paid, payable or otherwise
distributed in redemption of, or in exchange for, any
Pledged Collateral, all of which shall be forthwith
delivered to Foothill for deposit in the Lockboxes in the
manner set forth in the Loan Agreement, and shall, if
received by such Pledgor, be received in trust for the
benefit of Foothill, be segregated from the other
property or funds of such Pledgor, and be forthwith
delivered to Foothill for deposit in the Lockboxes in the
same form as so received (with any necessary
endorsement); and
(iii) Foothill shall execute and deliver (or cause to be
executed and delivered) to any Pledgor all such proxies and other
instruments as such Pledgor may reasonably request for the purpose
of enabling such Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends or distributions which it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default:
(i) Upon notice by Foothill to any Pledgor,
all rights of such Pledgor to exercise the voting and
other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 6(a) (i) above
shall cease, and all such rights shall thereupon become
vested in Foothill who shall thereupon have the sole
right to exercise such voting and other consensual
rights.
(ii) All rights of any Pledgor to receive the
dividends or distributions which it would otherwise be
authorized to receive and retain pursuant to Section 6(a)
(ii) above shall cease, and all such rights shall
thereupon become vested in Foothill who shall thereupon
have the sole right to receive and hold as Pledged
Collateral such dividends or distributions for deposit in
the Lockboxes.
(iii) All dividends or distributions which
are received by any Pledgor contrary to the provisions of
paragraph (ii) of this Section 6(b) shall be received in
trust for the benefit of Foothill, shall be segregated
from other property or funds of such Pledgor and shall be
forthwith delivered to Foothill for deposit in the
Lockboxes in the same form as so received (with any
necessary endorsement).
(iv) Each Pledgor shall, if necessary to permit
Foothill to exercise the voting and other rights which it
may be entitled to exercise pursuant to Section 6(b)(i)
above and to receive all dividends and distributions
which it may be entitled to receive under Section
6(b)(ii) above, execute and deliver to Foothill, from
time to time and upon written notice of Foothill,
appropriate proxies and other instruments as Foothill may
reasonably request. The foregoing shall not in any way
limit Foothill's power and authority granted pursuant to
Section 8 hereof.
SECTION 7. Transfers and Other Liens; Additional Shares.
(a) Each Pledgor agrees that it will not (i) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of
the Pledged Collateral except as permitted by the Loan Agreement,
or (ii) create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral, except for the Lien created pursuant
to this Agreement or Liens permitted pursuant to Section 7.2 of the
Loan Agreement.
(b) Each Pledgor agrees that it will (i) except as
permitted by the Loan Agreement, cause each Pledged Domestic Issuer
and each Pledged Foreign Issuer of the Pledged Shares not to issue
any shares of capital stock or other equity securities in addition
to or in substitution for the Pledged Shares (except for, in the
case of Pledged Domestic Issuers, any Excluded Equity Interests),
(ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all Additional Shares, and (iii)
promptly (and in any event within three Business Days) deliver to
Foothill a Pledge Amendment, duly executed by such Pledgor, in
substantially the form of Exhibit A hereto (a "Pledge Amendment"),
in respect of the Additional Shares, together with all certificates
or other instruments representing or evidencing the same. Each
Pledgor hereby (i) authorizes Foothill to attach each Pledge
Amendment to this Pledge Agreement, (ii) agrees that all capital
stock and other equity securities listed on any Pledge Amendment
delivered to Foothill shall for all purposes hereunder constitute
Pledged Shares, and (iii) is deemed to have made, upon such
delivery, the representations and warranties contained in Section 4
hereof with respect to such Pledged Collateral.
SECTION 8. Foothill Appointed Attorney-in-Fact and
Proxy. Subject to Section 6 hereof, each Pledgor hereby
irrevocably constitutes and appoints Foothill and any officer or
agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact and proxy with full irrevocable power and
authority in the place and stead of such Pledgor and in the name of
such Pledgor or in its own name, from time to time in Foothill's
discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute
and deliver any and all documents and instruments which Foothill
may deem necessary or advisable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing,
hereby gives Foothill the power and right, on behalf of such
Pledgor, upon the occurrence and during the continuance of an Event
of Default, to receive, indorse and collect all instruments made
payable to such Pledgor representing any dividend or distribution
in respect of the Pledged Collateral or any part thereof, to give
full discharge for the same, and to vote or grant any consent in
respect of the Pledged Shares authorized by Section 6(b) hereof.
Each Pledgor hereby ratifies, to the extent permitted by law, all
that any said attorney shall lawfully do or cause to be done by
virtue hereof. This power, being coupled with an interest, is
irrevocable until, and shall automatically terminate upon, the
termination of this Agreement pursuant to Section 17.
SECTION 9. Foothill May Perform. If any Pledgor
fails to perform any agreement contained herein, Foothill may
itself perform, or cause performance of, such agreement, and the
expenses of Foothill incurred in connection therewith shall be
payable by such Pledgor under Section 12 hereof and constitute
Obligations secured hereby.
SECTION 10. Reasonable Care. Foothill shall be deemed
to have exercised reasonable care in the custody and preservation
of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which
Foothill accords its own property, it being understood that
Foothill shall not have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged
Collateral, whether or not Foothill has or is deemed to have
knowledge of any such matter, or (ii) taking any necessary steps to
preserve rights against any Person with respect to any Pledged
Collateral.
SECTION 11. Remedies upon Default. If any Event of
Default shall have occurred and be continuing:
(a) Foothill may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of
a secured party after default under the Code or any other
applicable law in effect in the State of California at that time,
and Foothill may also, without notice except as specified below,
sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board
or at any office of Foothill or elsewhere, for cash, on credit or
for future delivery, and upon such other terms as Foothill may deem
commercially reasonable. Each Pledgor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice
to such Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. Foothill shall not be obligated to make
any sale of Pledged Collateral regardless of notice of sale having
been given. Foothill may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Pledgor hereby waives any
claims against Foothill arising by reason of the fact that the
price at which any Pledged Collateral may have been sold at such a
private sale was less than the price which might have been obtained
at a public sale, even if Foothill accepts the first offer received
and does not offer such Pledged Collateral to more than one
offeree. With respect to Pledged Collateral consisting of
securities registered under the Securities Act of 1933, as amended
(the "Securities Act"), Foothill will comply with applicable
securities laws in connection with any foreclosure sale.
(b) Each Pledgor recognizes that by reason of certain
prohibitions contained in the Securities Act and applicable state
securities laws, Foothill may be compelled, with respect to any
sale of all or any part of the Pledged Collateral, to limit
purchasers to those who will agree, among other things, to acquire
such securities for their own account, for investment, and not with
a view to the distribution or resale thereof. Each Pledgor
acknowledges and agrees that any such sale may result in prices and
other terms less favorable to the seller than if such sale were a
public sale without such restrictions and, notwithstanding such
circumstances, agrees that any such sale shall be deemed to have
been made in a commercially reasonable manner. Foothill shall be
under no obligation to delay the sale of any of the Pledged
Collateral for the period of time necessary to permit any Pledgor
to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such
Pledgor would agree to do so.
(c) If Foothill determines to exercise its right to sell
any or all of the Pledged Collateral, upon written request, each
Pledgor shall, from time to time, furnish to Foothill all such
information as Foothill may request in order to determine the
number of shares and other instruments included in the Pledged
Collateral which may be sold by Foothill as exempt transactions
under the Securities Act and rules of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect.
SECTION 12. Expenses. Each Pledgor will, jointly and
severally, upon demand pay to Foothill the amount of any and all
reasonable expenses, including, without limitation, the reasonable
fees and expenses of Foothill's counsel and of any experts and
agents, which Foothill may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation
of, sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any of the
rights and remedies hereunder of Foothill, or (iv) the failure by
any Pledgor to perform or observe any of the provisions hereof.
SECTION 13. Security Interest Absolute. All rights of
Foothill and obligations of the Pledgors hereunder, and all
security interests created or granted hereby, shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of
any provision of the Loan Agreement or any other Loan
Document or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of
payment of, or in any other term of, or any increase in
the amount of, all or any of the Secured Obligations, or
any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the
Loan Agreement or any other Loan Document;
(iii) any exchange, release or non-perfection
of any Lien on any other collateral, or any release or
amendment or waiver of any term of any guaranty of, or
consent to departure from any requirement of any guaranty
of, all or any of the Secured Obligations; or
(iv) any other circumstance which might
otherwise constitute a defense available to, or a
discharge of, Borrower or any Pledgor.
SECTION 14. Amendments, Etc. No amendment or waiver
of any provision of this Agreement nor consent to any departure by
any Pledgor herefrom shall in any event be effective unless the
same shall be in writing and signed by Foothill and each Pledgor
affected thereby, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given.
SECTION 15. Addresses for Notices. All notices and
other communications provided for hereunder shall be in writing
(including, without limitation, by telecopy) and mailed by postage
prepaid registered mail, return receipt requested, telecopied or
delivered by hand, if to any Pledgor, in care of Borrower and in
the manner set forth in Section 12 of the Loan Agreement, and if to
Foothill, in the manner set forth in Section 12 of the Loan
Agreement.
SECTION 16. Continuing Security Interest; Transfer of
Obligations. This Pledge Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) remain in
full force and effect until the termination of this Agreement
pursuant to Section 17, (ii) be binding upon each Pledgor, its
successors and assigns, and (iii) inure, together with the rights
and remedies of Foothill hereunder, to the benefit of and be
enforceable by Foothill and its successors, transferees and
assigns.
SECTION 17. Termination of Security Interest. This
Agreement, and the security interests created or granted hereby,
shall automatically terminate and be released on the date at which
(i) the commitments of Foothill to extend credit to Borrower under
the Loan Agreement have been irrevocably terminated, and (ii) all
Secured Obligations have been fully and finally paid in cash. In
addition, upon any Asset Disposition by any Pledgor of any of the
Pledged Collateral to the extent permitted under the Loan Agreement
(and the application of the proceeds thereof, if any, in accordance
with the Loan Agreement), Foothill shall release the security
interest created or granted hereby in respect of the Pledged
Collateral (but not the proceeds thereof) that is the subject of
such permitted Asset Disposition. Upon any release of the security
interest created by this Agreement in any of the Pledged Collateral
pursuant to this Section 17, Foothill (without recourse upon, or
any representation or warranty whatsoever by, Foothill) shall
promptly (i) return, transfer and deliver to the applicable Pledgor
all certificates, instruments and other property held by Foothill
pursuant to this Agreement representing or evidencing such Pledged
Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof, as the case may be, all without
recourse upon, or representation or warranty whatsoever by,
Foothill, except that the same shall be free and clear of any
claims, liens or encumbrances created by or in respect of Foothill,
and at the cost and expense of such Pledgor, and (ii) execute and
deliver to each Pledgor (at the cost and expense of such Pledgor)
such instruments as may be reasonably requested by such Pledgor
acknowledging the release of such security interest with respect to
such Pledged Collateral.
SECTION 18. Amendment of Governing Documents. As soon
as practicable and in any event within 90 days after the Closing
Date (or, if later, 90 days after the date that such Pledgor
becomes a party to this Agreement) and to the extent permitted by
applicable law, each Pledgor shall, and shall cause each applicable
Pledged Domestic Issuer or Pledged Foreign Issuer whose outstanding
common stock is pledged by it hereunder to, take all action
necessary to amend the governing documents of each Issuer where
such governing documents restrict the assignment of any such
shares, so as to allow the enforcement by Foothill of its rights
under this Agreement.
SECTION 19. Governing Law; Severability. This
Agreement shall be governed by, and be construed and interpreted in
accordance with, the law of the State of California. Wherever
possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity and without
invalidating the remaining provisions of this Agreement.
SECTION 20. Waiver of Jury Trial. Each Pledgor waives
any right it may have to a trial by jury in respect of any
litigation based on, or arising out of, under or in connection
with, this Agreement or any other Loan Document, or any course of
conduct, course of dealing, verbal or written statement or other
action of any loan party or any secured party.
SECTION 21. Section Titles. The Section titles contained
in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not part of this Agreement.
SECTION 22. Waivers.
(a) To the maximum extent permitted by law, each Pledgor
hereby waives: (i) notice of acceptance hereof; (ii) notice of any
loans or other financial accommodations made or extended under the Loan
Agreement, or the creation or existence of any Obligations; (iii) notice
of the amount of the Obligations, subject, however, to Section 2.10 of
the Loan Agreement and Pledgor's right to make inquiry of Foothill to
ascertain the amount of the Obligations at any reasonable time;
(iv) notice of any adverse change in the financial condition of Borrower
or of any other fact that might increase such Pledgor's risk hereunder;
(v) notice of presentment for payment, demand, protest, and notice
thereof as to any instrument among the Loan Documents; (vi) notice of
any Default or Event of Default under the Loan Agreement; and (vii) all
other notices (except if such notice is specifically required to be
given to such Pledgor under this Agreement) and demands to which such
Pledgor might otherwise be entitled.
(b) To the fullest extent permitted by applicable law,
each Pledgor waives the right by statute or otherwise to require
Foothill to institute suit against Borrower or to exhaust any rights and
remedies which Foothill has or may have against Borrower. Each Pledgor
further waives any defense arising by reason of any disability or other
defense (other than the defense that the Obligations shall have been
fully and finally indefeasibly paid) of Borrower or by reason of the
cessation from any cause (other than that the Obligations shall have
been fully and finally indefeasibly paid) whatsoever of the liability of
Borrower in respect thereof.
(c) To the maximum extent permitted by law, each Pledgor
hereby waives: (i) any rights to assert against Foothill any defense
(legal or equitable), set-off, counterclaim, or claim which such Pledgor
may now or at any time hereafter have against Borrower or any other
party liable to Foothill on account of or with respect to the
Obligations; (ii) any defense, set-off, counterclaim, or claim, of any
kind or nature, arising directly or indirectly from the present or
future sufficiency, validity, or enforceability of the Obligations;
(iii) any defense arising by reason of any claim or defense based upon
an election of remedies by Foothill including, to the extent applicable,
the provisions of 580d and 726 of the California Code of Civil
Procedure, or any similar law of California or any other jurisdiction;
(iv) the benefit of any statute of limitations affecting any Pledgor's
liability hereunder or the enforcement thereof.
(d) To the maximum extent permitted by law, each Pledgor
hereby waives any right of subrogation that such Pledgor has or may have
as against any other Pledgor with respect to the Obligations. In
addition, each Pledgor hereby waives any right to proceed against any
other Pledgor, now or hereafter, for contribution, indemnity,
reimbursement, or any other suretyship rights and claims (irrespective
of whether direct or indirect, liquidated or contingent), with respect
to the Obligations. Each Pledgor also hereby waives any right to
proceed or to seek recourse against or with respect to any property or
asset of any other Debtor. As between any Pledgor and Foothill, each
Pledgor hereby agrees that, in light of the waivers contained in this
Section, such Pledgor shall not be deemed to be a "creditor" (as that
term is defined in the Bankruptcy Code or otherwise) of any other
Pledgor, whether for purposes of the application of Sections 547 or 550
of the United States Bankruptcy Code or otherwise.
(e) If any of the Secured Obligations at any time are
secured by a mortgage or deed of trust upon real property, Foothill may
elect, in its sole discretion, upon a default with respect to the
Secured Obligations, to foreclose such mortgage or deed of trust
judicially or nonjudicially in any manner permitted by law, before or
after enforcing this Agreement, without diminishing or affecting the
liability of any Pledgor hereunder. Each Pledgor understands that (i)
by virtue of the operation of California's antideficiency law applicable
to nonjudicial foreclosures, an election by Foothill nonjudicially to
foreclose such a mortgage or deed of trust probably would have the
effect of impairing or destroying rights of subrogation, reimbursement,
contribution, or indemnity of such Pledgor against Borrower or
guarantors or sureties, and (ii) absent the waiver given by such Pledgor
herein, such an election might estop Foothill from enforcing this
Agreement against such Pledgor. Understanding the foregoing, and
understanding that each Pledgor is hereby relinquishing a defense to the
enforceability of this Agreement, each Pledgor hereby waives any right
to assert against Foothill any defense to the enforcement of this
Agreement, whether denominated "estoppel" or otherwise, based on or
arising from an election by Foothill nonjudicially to foreclose any such
mortgage or deed of trust. Each Pledgor understands that the effect of
the foregoing waiver may be that such Pledgor may have liability
hereunder for amounts with respect to which such Pledgor may be left
without rights of subrogation, reimbursement, contribution, or indemnity
against Borrower or guarantors or sureties. Each Pledgor also agrees
that the "fair market value" provisions of Section 580a of the
California Code of Civil Procedure shall have no applicability with
respect to the determination of such Pledgor's liability under this
Agreement.
(f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER
OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH PLEDGOR HEREBY
WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND
ALL DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF
CALIFORNIA CIVIL CODE 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2838,
2839, 2845, 2848, 2849, AND 2850, TO THE EXTENT APPLICABLE, CALIFORNIA
CODE OF CIVIL PROCEDURE 580a, 580b, 580c, 580d, AND 726, AND, TO THE
EXTENT APPLICABLE, CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL CODE.
[remainder of page intentionally left blank]
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER
OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH PLEDGOR HEREBY
WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY
FOOTHILL, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL
FORECLOSURE WITH RESPECT TO SECURITY FOR A SECURED OBLIGATION, HAS
DESTROYED SUCH PLEDGOR'S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST
THE PRINCIPAL BY THE OPERATION OF SECTION 580d OF THE CODE OF CIVIL
PROCEDURE OR OTHERWISE.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to
be duly executed and delivered by its duly authorized officer on the
date first above written.
INTERGRAPH CORPORATION
By:
-------------------------
Name:
Title:
INTERGRAPH DELAWARE, INC.
By:
-------------------------
Name:
Title:
M&S COMPUTING INVESTMENTS, INC.
By:
-------------------------
Name:
Title:
Accepted and Acknowledged:
FOOTHILL CAPITAL CORPORATION
By:
-------------------------
Name:
Title:
EXHIBIT A
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, 19___,
is delivered pursuant to Section 7 of the Pledge Agreement referred
to below. [If this Pledge Amendment is being executed and delivered by
a new Pledgor: The undersigned hereby acknowledges each and all of the
provisions of the Pledge Agreement and joins in and agrees to be bound thereby
as a Pledgor, mutatis mutandis.] The undersigned hereby agrees that: (a) this
Pledge Amendment may be attached to the Pledge Agreement, dated as of December
20, 1996, between the Pledgors referred to therein and Foothill Capital
Corporation; and (b) that the capital stock and other equity securities listed
on this Pledge Amendment shall be and become part of the Pledged Collateral
referred to in the Pledge Agreement and Schedule [I / II / III] thereto and
shall secure all Secured Obligations. The terms defined in the Pledge Agreement
or Loan Agreement are used herein as therein defined.
[NAME OF PLEDGOR]
By:___________
Name:
Title:
Pledgor Issuer Number Class Certif- Former Pledgor's Jurisdiction
of icate Name, if Percentage of
Shares Number(s) any, in Ownership Organization
which of Total
Certificate Issued and
Issued Outstanding
represented
by Pledged
Shares
SCHEDULE I
Pledged Shares (Domestic Issuers)
[TO BE ATTACHED]
SCHEDULE II
Pledged Shares (Foreign Issuers)
[TO BE ATTACHED]
<TABLE>
Schedule III
Pledged Shares (Pledged Toehold Issurers)
<CAPTION>
Pledgor Pledged Toehold Number of Class Certificate Former Pledgor's Jurisdiction
Issuer Shares Number(s) Name, if Percentage of
any, in Ownership of Organization
which Total Issued and
Certificate Outstanding
Issued represented by
Pledged Shares
<S> <S> <S> <S> <S> <S> <S> <S>
NONE NONE NONE n/a n/a n/a n/a n/a
</TABLE>
<TABLE>
Schedule I
Domestic Direct and Indirect Subsidiaries
Pledged Shares
<CAPTION>
Pledgor Pledged Number Class Certificate Former Pledgor's Percentage Jurisdiction of
Domestic of Number(s) Name, if Ownership of Total Organization
Issuer Shares any, in Issued and
which Outstanding
Certificate Represented by
Issued Pledged Shares
<S> <S> <S> <S> <S> <S> <S> <S>
- --------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware
Corporation Delaware, Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph M&S Computing 1,000 Common 6 100% Delaware
Corporation Investments, Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph InterCAP Graphics 1,000 Common 3 100% Delaware
Corporation Systems, Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph Bestinfo, Inc. 1,000 Common C19 100% Delaware
Corporation
- --------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Asia 1,000 Common 1 100% Delaware
Corporation Pacific, Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph Veribest, Inc. ** 1,000 Common 1 Intergraph 100% Delaware
Corporation Electronics
Holdings,
Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware
Corporation Services Company,
Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph Intergraph DISC, 3,000 Common 1 100% Delaware
Delaware, Inc.
Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph International 1,000 Common 1 100% Delaware
Corporation Public Safety,
Inc.**
- --------------------------------------------------------------------------------------------------------------
Intergraph Intergraph China, 1,000 Common 1 100% Delaware
Corporation Inc.
- --------------------------------------------------------------------------------------------------------------
M&S Computing Worldwide 1,000 Common 1 Intergraph 100% Delaware
Investments, Services, Inc. Europe, Inc.
Inc.
- --------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 1,000 Common 1 100% Delaware
Corporation Express, Inc.
- --------------------------------------------------------------------------------------------------------------
</TABLE>
** Employees and directors of each Company have been granted stock options for
common shares of stock in each respective Company.
<TABLE>
Schedule II
Foreign Direct and Indirect Subsidiaries
Pledged Shares
<CAPTION>
Pledgor Pledged Foreign Number Class Certificate Former Pledgor's Jurisdiction
Issuer of Numbers(s) Name, if Percentage of Organization
Shares any, in Ownership of
which Total Issued
Certificate and
Issued Outstanding
Represented
by Pledged
Shares
<S> <S> <S> <S> <S> <S> <S> <S>
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Canada 25,000 Class A AC-20 All but Canada
Corporation Ltd. Voting Excluded
Common Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Canada 739,051 Class B BC-150 All but Canada
Corporation Ltd. Non- Excluded
Voting Portion
Common
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph (UK), 2,799,000 Capital 1 All but England
Corporation Ltd. Stock Excluded
Portion
- ---------------------------------------------------------------------------------------------------------------
M&S Computing Intergraph (UK), 1 Capital All but England
Investments, Ltd. Stock Excluded
Inc. Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph DC Intergraph (UK), 100,000 Capital All but England
Corporation - Ltd. Stock Excluded
Subsidiary 3 Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Hong 3,353,999 Ordinary 5 All but Hong Kong
Corporation Kong Limited Excluded
Portion
- ---------------------------------------------------------------------------------------------------------------
M&S Computing Intergraph Hong 1 Ordinary All but Hong Kong
Investments, Kong Limited Excluded
Inc. Portion
- ---------------------------------------------------------------------------------------------------------------
M&S Computing Intergraph 30,595 Common 1,2,3,4 All but Spain
Investments, Espana, S.A. Excluded
Inc. Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 2,156 Common All but Spain
Corporation Espana, S.A. Excluded
Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 100 Common 001-100 All but Sweden
Corporation (Sverige) AB 100 Common 101-200 Excluded
100 Common 201-300 Foreign
100 Common 301-400 Portion
100 Common 401-500
4,500 Common 501-5000
150,000 Common 5001-
155000
- ---------------------------------------------------------------------------------------------------------------
M&S Computing Intergraph 260 Common 6 All but Switzerland
Investments, (Switzerland) AG Excluded
Inc. Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Virgin 1,000 Common 2 All but United
Delaware, Islands Excluded States
Inc. Corporation Foreign Virgin
Portion Islands
- ---------------------------------------------------------------------------------------------------------------
M&S Computing Intergraph France 279,994 Common All but France
Investments, SA Excluded
Inc. Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph DC Intergraph France 11,000 Common All but France
Corporation - SA Excluded
Subsidiary 3 Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph France 1 Common All but France
Corporation SA Excluded
Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph N/A N/A N/A All but Germany
Corporation Holding GmbH Excluded
Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 5,350 Common 1,874- All but The
Corporation Benelux B.V. 5,350 Excluded Netherlands
Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Saudi 1,125 Common All but Saudi
Corporation Arabia, Ltd. Excluded Arabia
(a/k/a Saudi Foreign
Arabian Portion
Intergraph Ltd. )
- ---------------------------------------------------------------------------------------------------------------
M&S Computing Intergraph 4,889,610 Common 8 All but Singapore
Investments, Systems Singapore Excluded
Inc. Pte Ltd. Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph 49,390 Common All but Singapore
Corporation Systems Singapore Excluded
Pte Ltd. Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Japan 1,065 Common All but Japan
Corporation K.K. Excluded
Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
Intergraph Intergraph Korea, 591,482 All but South Korea
Corporation Ltd. Excluded
Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
M&S Computing Intergraph 9,500 All but Finland
Investments, Finland, Oy Excluded
Inc. Foreign
Portion
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
TRADEMARK SECURITY AGREEMENT
----------------------------
This TRADEMARK SECURITY AGREEMENT (this "Agreement"),
dated as of December 20, 1996, is made by INTERGRAPH CORPORATION, a
Delaware corporation ("Debtor"), in favor of FOOTHILL CAPITAL
CORPORATION, a California corporation ("Secured Party").
RECITALS
--------
A. Debtor and Secured Party have entered into that certain
Loan and Security Agreement, dated as of even date herewith (as
amended, restated, modified, renewed or extended from time to time,
the "Loan Agreement"), pursuant to which Secured Party has agreed
to make certain financial accommodations to Debtor, and Debtor has
granted to Secured Party a security interest in (among other
things) certain of Debtor's general intangibles.
B. Pursuant to the Loan Agreement and as one of the
conditions precedent to the obligations of Secured Party under the
Loan Agreement, Debtor has agreed to execute and deliver this
Agreement to Secured Party for filing with the United States Patent
and Trademark Office and with any other relevant recording systems
in any domestic or foreign jurisdiction, and as further evidence of
and to effectuate Secured Party's existing security interests in
the trademarks and other general intangibles described herein.
ASSIGNMENT
----------
NOW, THEREFORE, for valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Debtor hereby agrees
in favor of Secured Party as follows:
II. Definitions; Interpretation.
A. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Event of Default" shall have the meaning ascribed
thereto in the Loan Agreement.
"Lien" means any pledge, security interest, assignment,
charge or encumbrance, lien (statutory or other), or other prefer
ential arrangement (including any agreement to give any security
interest).
"Proceeds" means whatever is receivable or received from
or upon the sale, lease, license, collection, use, exchange or
other disposition, whether voluntary or involuntary, of any
Trademark Collateral, including "proceeds" as defined at California
UCC Section 9306, all insurance proceeds and all proceeds of
proceeds. Proceeds shall include (i) any and all accounts, chattel
paper, instruments, general intangibles, cash and other proceeds,
payable to or for the account of Debtor, from time to time in
respect of any of the Trademark Collateral, (ii) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable
to or for the account of Debtor from time to time with respect to
any of the Trademark Collateral, (iii) any and all claims and
payments (in any form whatsoever) made or due and payable to Debtor
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the
Trademark Collateral by any Person acting under color of
governmental authority, and (iv) any and all other amounts from
time to time paid or payable under or in connection with any of the
Trademark Collateral or for or on account of any damage or injury
to or conversion of any Trademark Collateral by any Person.
"PTO" means the United States Patent and Trademark Office
and any successor thereto.
"Secured Obligations" means all liabilities, obligations,
or undertakings owing by Debtor to Secured Party of any kind or
description arising out of or outstanding under, advanced or issued
pursuant to, or evidenced by the Loan Agreement, the other Loan
Documents, or this Agreement, irrespective of whether for the
payment of money, whether direct or indirect, absolute or
contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest
(including interest that accrues after the filing of a case under
the Bankruptcy Code) and any and all costs, fees (including
attorneys fees), and expenses which Debtor is required to pay
pursuant to any of the foregoing, by law, or otherwise.
"Trademark Collateral" has the meaning set forth in Sec
tion 2.
"Trademarks" has the meaning set forth in Section 2.
"UCC" means the Uniform Commercial Code as in effect from
time to time in the State of California.
"United States" and "U.S." each mean the United States of
America.
B. Terms Defined in UCC. Where applicable and except as
otherwise defined herein, terms used in this Agreement shall have
the meanings assigned to them in the UCC.
C. Interpretation. In this Agreement, except to the extent
the context otherwise requires:
(i) Any reference to a Section or a Schedule
is a reference to a section hereof, or a schedule hereto,
respectively, and to a subsection or a clause is, unless
otherwise stated, a reference to a subsection or a clause of
the Section or subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement as a
whole and not merely to the specific Section, subsection,
paragraph or clause in which the respective word appears.
(iii) The meaning of defined terms shall be
equally applicable to both the singular and plural forms of
the terms defined.
(iv) The words "including," "includes" and
"include" shall be deemed to be followed by the words "without
limitation."
(v) References to agreements and other
contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto.
(vi) References to statutes or regulations are
to be construed as including all statutory and regulatory
provisions consolidating, amending or replacing the statute or
regulation referred to.
(vii) Any captions and headings are for con-
venience of reference only and shall not affect the
construction of this Agreement.
(viii) Capitalized words not otherwise
defined herein shall have the respective meanings assigned to
them in the Loan Agreement.
(ix) In the event of a direct conflict between
the terms and provisions of this Agreement and the Loan Agreement,
it is the intention of the parties hereto that both such documents
shall be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of the Loan Agreement shall
control and govern; provided, however, that the inclusion herein of
additional obligations on the part of Debtor and supplemental
rights and remedies in favor of Secured Party (whether under
California law or applicable federal law), in each case in respect
of the Trademark Collateral, shall not be deemed a conflict in the
Loan Agreement.
III. Security Interest.
-----------------
A. Assignment and Grant of Security Interest. To secure the
Secured Obligations, Debtor hereby grants, assigns, transfers and
conveys to Secured Party a continuing security interest in all of
Debtor's right, title and interest in and to the following
property, whether now existing or hereafter acquired or arising and
whether registered or unregistered (collectively, the "Trademark
Collateral"):
(i) all state (including common law), federal and foreign
trademarks, service marks and trade names, corporate names, company
names, business names, fictitious business names, trade styles,
trade dress, logos, other source or business identifiers, designs
and general intangibles of like nature, now existing or hereafter
adopted or acquired, together with and including all licenses
therefor held by Debtor, and all registrations and recordings
thereof, and all applications filed or to be filed in connection
therewith, including registrations and applications in the PTO, any
State of the United States or any other country or any political
subdivision thereof, and all extensions or renewals thereof,
including without limitation any of the foregoing identified on
Schedule A hereto (as the same may be amended, modified or
supplemented from time to time), and the right (but not the
obligation) to register claims under any state or federal trademark
law or regulation or any trademark law or regulation of any foreign
country and to apply for, renew and extend any of the same, to sue
or bring opposition or cancellation proceedings in the name of
Debtor or in the name of Secured Party for past, present or future
infringement or unconsented use thereof, and all rights arising
therefrom throughout the world (collectively, the "Trademarks");
(ii) all claims, causes of action and rights to sue for past,
present or future infringement or unconsented use of any Trademarks
and all rights arising therefrom and pertaining thereto;
(iii) all general intangibles related to or arising out of
any of the Trademarks and all the goodwill of Debtor's business
symbolized by the Trademarks or associated therewith; and
(iv) all products and Proceeds of any and all of the foregoing.
B. Certain Exclusions from Grant of Security Interest.
Anything in this Agreement and the other Loan Documents to the
contrary notwithstanding, the foregoing grant, assignment,
transfer, and conveyance of a security interest shall not extend
to, and the term "Trademark Collateral" shall not include, any item
of Trademark Collateral described in Section 2(a) above that is now
or hereafter held by Debtor as licensee or otherwise, solely in the
event and to the extent that: (i) as the proximate result of the
foregoing grant, assignment, transfer, or conveyance of a security
interest, Debtor's rights in or with respect to such item of
Trademark Collateral would be forfeited or would become void,
voidable, terminable, or revocable, or if Debtor would be deemed to
have breached, violated, or defaulted the underlying license or
other agreement that governs such item of Trademark Collateral
pursuant to the restrictions in the underlying license or other
agreement that governs such item of Trademark Collateral; (ii) any
such restriction shall be effective and enforceable under
applicable law, including Section 9318(4) of the Code; and (iii)
any such forfeiture, voidness, voidability, terminability,
revocability, breach, violation, or default cannot be remedied by
Debtor using its best efforts (but without any obligation to make
any material expenditures of money or to commence legal
proceedings); provided, however, that the foregoing grant,
assignment, transfer, and conveyance of security interest shall
extend to, and the term "Trademark Collateral" shall include, (y)
any and all Proceeds of such item of Trademark Collateral to the
extent that the assignment or encumbering of such Proceeds is not
so restricted, and (z) upon any such licensor or other applicable
party's consent with respect to any such otherwise excluded item of
Trademark Collateral being obtained, thereafter such item of
Trademark Collateral as well as any Proceeds thereof that might
theretofore have been excluded from such grant, assignment,
transfer, and conveyance of a security interest and the term
"Trademark Collateral."
C. Continuing Security Interest. Debtor agrees that this
Agreement shall create a continuing security interest in the
Trademark Collateral which shall remain in effect until terminated
in accordance with Section 17.
D. Incorporation into Loan Agreement. This Agreement shall
be fully incorporated into the Loan Agreement and all
understandings, agreements and provisions contained in the Loan
Agreement shall be fully incorporated into this Agreement. Without
limiting the foregoing, the Trademark Collateral described in this
Agreement shall constitute part of the Collateral in the Loan
Agreement.
E. Licenses. Anything in the Loan Agreement or this
Agreement to the contrary notwithstanding, Debtor may grant non-
exclusive licenses of the Trademark Collateral (subject to the
security interest (if any) of Secured Party therein) in the
ordinary course of business consistent with past practice.
IV. Further Assurances; Appointment of Secured Party as Attorney-
in-Fact. Debtor at its expense shall execute and deliver, or cause
to be executed and delivered, to Secured Party any and all
documents and instruments, in form and substance satisfactory to
Secured Party, and take any and all action, which Secured Party may
reasonably request from time to time, to perfect and continue
perfected, maintain the priority of or provide notice of Secured
Party's security interest in the Trademark Collateral and to
accomplish the purposes of this Agreement. Secured Party shall
have the right, in the name of Debtor, or in the name of Secured
Party or otherwise, without notice to or assent by Debtor, and
Debtor hereby irrevocably constitutes and appoints Secured Party
(and any of Secured Party's officers or employees or agents
designated by Secured Party) as Debtor's true and lawful attorney-
in-fact with full power and authority, if Debtor refuses or fails
to do so timely, (i) to sign the name of Debtor on all or any of
such documents or instruments and perform all other acts that
Secured Party deems necessary or advisable in order to perfect or
continue perfected, maintain the priority or enforceability of or
provide notice of Secured Party's security interest in, the
Trademark Collateral, and (ii) to execute any and all other
documents and instruments, and to perform any and all acts and
things, for and on behalf of Debtor, which Secured Party reasonably
may deem necessary or advisable to maintain, preserve and protect
the Trademark Collateral and to accomplish the purposes of this
Agreement, including (A) after the occurrence and during the
continuance of any Event of Default, to defend, settle, adjust or
institute any action, suit or proceeding with respect to the
Trademark Collateral, (B) during a Triggering Event, to assert or
retain any rights under any license agreement for any of the
Trademark Collateral, and (C) after the occurrence and during the
continuance of any Event of Default, to execute any and all
applications, documents, papers and instruments for Secured Party
to use the Trademark Collateral, to grant or issue any exclusive or
non-exclusive license with respect to any Trademark Collateral, and
to assign, convey or otherwise transfer title in or dispose of the
Trademark Collateral. The power of attorney set forth in this
Section 3, being coupled with an interest, is irrevocable so long
as this Agreement shall not have terminated in accordance with
Section 17.
V. Representations and Warranties. Debtor represents and
warrants to Secured Party as follows:
A. No Other Trademarks. Schedule A sets forth, as of the
Closing Date, a true and correct list of all of the existing
Trademarks that are registered, or for which any application for
registration has been filed with the PTO or any corresponding or
similar trademark office of any other U.S. or foreign jurisdiction,
and that are owned or held (whether pursuant to a license or
otherwise) and used by Debtor.
B. Trademarks Subsisting. Each of the Trademarks listed in
Schedule A is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and, to the best of Debtor's
knowledge, each of the Trademarks is valid and enforceable.
C. Ownership of Trademark Collateral; No Violation. (i)
Debtor has rights in and good and defensible title to the existing
Trademark Collateral, (ii) with respect to the Trademark Collateral
shown on Schedule A hereto as owned by it, Debtor is the sole and
exclusive owner thereof, free and clear of any Liens and rights of
others (other than the security interest created hereunder),
including licenses, registered user agreements and covenants by
Debtor not to sue third persons, and (iii) with respect to any
Trademarks for which Debtor is either a licensor or a licensee
pursuant to a license or licensee agreement regarding such
Trademark, each such license or licensing agreement is in full
force and effect, Debtor is not in default of any of its
obligations thereunder and, other than the parties to such licenses
or licensing agreements, no other Person has any rights in or to
any of the Trademark Collateral. To the best of Debtor's
knowledge, the past, present and contemplated future use of the
Trademark Collateral by Debtor has not, does not and will not
infringe upon or violate any right, privilege or license agreement
of or with any other Person.
D. No Infringement. To the best of Debtor's knowledge, no
material infringement or unauthorized use presently is being made
of any of the Trademark Collateral by any Person.
E. Powers. Debtor has the unqualified right, power and
authority to pledge and to grant to Secured Party a security
interest in all of the Trademark Collateral pursuant to this
Agreement, and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or
approval of any other Person except as already obtained.
VI. Covenants. So long as any of the Secured Obligations remain
unsatisfied, Debtor agrees that it will comply with all of the
covenants, terms and provisions of this Agreement, the Loan
Agreement and the other Loan Documents, and Debtor will promptly
give Secured Party written notice of the occurrence of any event
that could have a material adverse effect on any of the Trademarks
or the Trademark Collateral, including any petition under the
Bankruptcy Code filed by or against any licensor of any of the
Trademarks for which Debtor is a licensee.
VII. Future Rights. For so long as any of the Secured
Obligations shall remain outstanding, or, if earlier, until Secured
Party shall have released or terminated, in whole but not in part,
its interest in the Trademark Collateral, if and when Debtor shall
obtain rights to any new Trademarks, or any reissue, renewal or
extension of any Trademarks, the provisions of Section 2 shall
automatically apply thereto and Debtor shall give to Secured Party
prompt notice thereof. Debtor shall do all things deemed necessary
or advisable by Secured Party to ensure the validity, perfection,
priority and enforceability of the security interests of Secured
Party in such future acquired Trademark Collateral. In accordance
with Section 3 hereof, Debtor hereby authorizes Secured Party to
modify, amend or supplement the Schedules hereto and to re-execute
this Agreement from time to time on Debtor's behalf and as its
attorney-in-fact to include any future Trademarks which are or
become Trademark Collateral and to cause such re-executed Agreement
or such modified, amended or supplemented Schedules to be filed
with the PTO.
VIII. Secured Party's Duties. Notwithstanding any provision
contained in this Agreement, Secured Party shall have no duty to
exercise any of the rights, privileges or powers afforded to it and
shall not be responsible to Debtor or any other Person for any
failure to do so or delay in doing so. Except for the accounting
for moneys actually received by Secured Party hereunder or in
connection herewith, Secured Party shall have no duty or liability
to exercise or preserve any rights, privileges or powers pertaining
to the Trademark Collateral.
IX. Remedies. From and after the occurrence and during the
continuation of an Event of Default, Secured Party shall have all
rights and remedies available to it under the Loan Agreement and
applicable law (which rights and remedies are cumulative) with
respect to the security interests in any of the Trademark
Collateral or any other Collateral. Debtor agrees that such rights
and remedies include the right of Secured Party as a secured party
to sell or otherwise dispose of its Collateral after default,
pursuant to UCC Section 9504. Debtor agrees that Secured Party
shall at all times have such royalty-free licenses, to the extent
permitted by law, for any Trademark Collateral that is reasonably
necessary to permit the exercise of any of Secured Party's rights
or remedies upon or after the occurrence of (and during the
continuance of) an Event of Default with respect to (among other
things) any tangible asset of Debtor in which Secured Party has a
security interest, including Secured Party's rights to sell
inventory, tooling or packaging which is acquired by Debtor (or its
successor, assignee or trustee in bankruptcy). In addition to and
without limiting any of the foregoing, upon the occurrence and
during the continuance of an Event of Default, Secured Party shall
have the right but shall in no way be obligated to bring suit, or
to take such other action as Secured Party deems necessary or
advisable, in the name of Debtor or Secured Party, to enforce or
protect any of the Trademark Collateral, in which event Debtor
shall, at the request of Secured Party, do any and all lawful acts
and execute any and all documents required by Secured Party in aid
of such enforcement. To the extent that Secured Party shall elect
not to bring suit to enforce such Trademark Collateral, Debtor
agrees to use all reasonable measures and its diligent efforts,
whether by action, suit, proceeding or otherwise, to prevent the
infringement, misappropriation or violation thereof by others and
for that purpose agrees diligently to maintain any action, suit or
proceeding against any Person necessary to prevent such
infringement, misappropriation or violation.
X. Binding Effect. This Agreement shall be binding upon, inure
to the benefit of and be enforceable by Debtor and Secured Party
and their respective successors and assigns.
XI. Notices. All notices and other communications hereunder
shall be in writing and shall be mailed, sent or delivered in
accordance with the Loan Agreement.
XII. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California, except to the extent that the validity or perfection of
the assignment and security interests hereunder in respect of any
Trademark Collateral are governed by federal law, in which case
such choice of California law shall not be deemed to deprive
Secured Party of such rights and remedies as may be available under
federal law.
XIII. Entire Agreement; Amendment. This Agreement, together
with the Schedules hereto, contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes
all prior drafts and communications relating to such subject
matter. Neither this Agreement nor any provision hereof may be
modified, amended or waived except by the written agreement of the
parties as provided in the Loan Agreement. Notwithstanding the
foregoing, Secured Party may re-execute this Agreement or modify,
amend or supplement the Schedules hereto as provided in Section 6
hereof.
XIV. Severability. If one or more provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any respect
in any jurisdiction or with respect to any party, such invalidity,
illegality or unenforceability in such jurisdiction or with respect
to such party shall, to the fullest extent permitted by applicable
law, not invalidate or render illegal or unenforceable any such
provision in any other jurisdiction or with respect to any other
party, or any other provisions of this Agreement.
XV. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counter
parts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one
and the same agreement.
XVI. Loan Agreement. Debtor acknowledges that the rights and
remedies of Secured Party with respect to the security interest in
the Trademark Collateral granted hereby are more fully set forth in
the Loan Agreement and all such rights and remedies are cumulative.
XVII. No Inconsistent Requirements. Debtor acknowledges that
this Agreement and the other Loan Documents may contain covenants
and other terms and provisions variously stated regarding the same
or similar matters, and Debtor agrees that all such covenants,
terms and provisions are cumulative and all shall be performed and
satisfied in accordance with their respective terms. To the extent
of any conflict between the provisions of this Agreement and the
Loan Agreement, however, the provisions of the Loan Agreement shall
govern.
XVIII. Termination. Upon the indefeasible payment in full of
the Secured Obligations, including the cash collateralization,
expiration, or cancellation of all Secured Obligations, if any,
consisting of letters of credit, and the full and final termination
of any commitment to extend any financial accommodations under the
Loan Agreement, this Agreement shall terminate, and Secured Party
shall execute and deliver such documents and instruments and take
such further action reasonably requested by Debtor, at Debtor's
expense, as shall be necessary to evidence termination of the
security interest granted by Debtor to Secured Party hereunder,
including cancellation of this Agreement by written notice from
Secured Party to the PTO.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement, as of the date first above written.
INTERGRAPH CORPORATION,
a Delaware corporation
By:
-----------------------------
Title:
-----------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
------------------------------
Title:
------------------------------
STATE OF CALIFORNIA )
)ss
COUNTY OF LOS ANGELES )
On January ___, 1997, before me, ____________________________,
Notary Public, personally appeared ____________________________,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
---------------------------------
Signature
[SEAL]
STATE OF CALIFORNIA )
)ss
COUNTY OF LOS ANGELES)
On January ___, 1997, before me, ____________________________,
Notary Public, personally appeared ____________________________,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------
Signature
[SEAL]
SCHEDULE A
----------
to the Trademark Security Agreement
[TO BE ATTACHED]
SCHEDULE A
to the Trademark Security Agreement
United States Trademark
Applications and Registrations
------------------------------
United States Reg. Mark Reg. Date
- ------------------ ---- ---------
Serial No.
- ----------
74/597,438 Intervue 10/17/95
74/594,709 Smartsketch 10/10/95
74/553,690 Imagineer pending
74/548,732 Exalt 7/16/96
74/540,647 Geosolutions pending
74/483,556 Geomedia 3/12/96
1,893,800 Geospatial Information 5/9/95
Manager
1,906,354 Veriscope 7/18/95
1,893,549 A/D Link 5/9/95
1,811,902 Modelview 12/21/93
1,775,024 Render A Revelation 6/8/93
Animate A Dream and
design
1,727,288 Intergraph and design 10/27/92
1,873,705 TDI 1/17/95
1,846,558 EMS PowerPak 7/26/94
1,771,253 Interplot 5/18/93
1,816,380 Intertrak 1/11/94
74/691,667 Designreview Pending
74/691,666 Pipegen Pending
74/677,633 Mogle 3/19/96
74/677,632 Autogl Pending
74/668,557 Pixel Pro and design Pending
1,624,043 Intergraph 11/20/96
1,579,939 Worksurface 1/30/90
1,172,090 OT (stylized) and 10/6/81
design
74/721,439 Solid Edge Pending
75/111,467 Communicating Pending
Geographically
74/691,667 Designreview Pending
74/728,668 Imagescape Pending
75/001,347 Intergraph Imagineer Pending
75/072,383 Interstor Pending
75/007,393 Netcheck & Design Pending
74/668,557 PixelPro Pending
74/094,854 RIS Pending
75/072,375 SmartPlant Pending
75/135,343 TDZ Pending
Eagle 4/17/90
InRail 2/28/95
InterAct 12/30/86
InterPro 5/21/85
As of December 20, 1996
Foothill Partners II, L.P.
Foothill Partners III, L.P.
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, California 90025
Ladies and Gentlemen:
This letter will confirm the agreement of Intergraph
Corporation, a Delaware corporation ("Borrower") that each of
Foothill Partners II, L.P. and Foothill Partners III, L.P. (the
"Funds"), in connection with their acquisition of participation
interests in debt of the Borrower, will be entitled to the
following contractual rights, in addition to the specified rights
to certain non-public financial information, inspection rights,
and other rights specifically provided to Foothill Capital
Corporation ("FCC") and/or its participants under the Loan and
Security Agreement, dated as of December 20, 1996 (the "Loan
Agreement"):
(1) The Funds each shall be permitted to select one
representative ("Representatives") to consult with and advise
management of Borrower on significant business issues, including
such management's proposed annual operating plans, and management
of Borrower will make itself available to meet with those
Representatives regularly during each year by telephone and/or at
Borrower's facility at mutually agreeable times, on reasonable
prior written notice, for such consultation and advice and to
review progress in achieving such plans.
(2) In the event of any material development to or
affecting Borrower's business (a) that could reasonably be
expected to materially impair Borrower's ability to perform its
obligations under the Loan Agreement or of Foothill to enforce
the Obligations (as defined in the Loan Agreement) or to realize
upon the Collateral (as defined in the Loan Agreement), or (b)
that could reasonably be expected to have a material adverse
effect on the value of the Collateral or the amount that FCC
would be likely to receive (after giving consideration to delays
in payment and costs of enforcement) in the liquidation of such
Collateral, Borrower shall notify the Representatives and provide
the Representatives with the opportunity, on reasonable prior
written notice, to consult with and advise Borrower's management
of its views with respect thereto.
(3) The Representatives may examine the books and records
of Borrower and visit and inspect its facilities and may
reasonably request information at reasonable times and intervals
concerning the general status of Borrower's financial conditions
and operations.
Foothill Partners II, L.P.
Foothill Partners III, L.P.
As of December 20, 1996
Page 2
(4) On reasonable prior written notice, the Representatives
may discuss the business operations, properties and financial and
other conditions of Borrower with Borrower's officers, employees
and directors and with Borrower's independent certified
accountants and investment bankers.
(5) The Funds shall be entitled to request that Borrower
provide them when available, with copies of (i) all financial
statements, forecasts and projections provided to or approved by
its Board of Directors; (ii) all notices, minutes, proxy
materials, consents and correspondence and other material that it
provides to its Directors and shareholders; (iii) any letter
issued to Borrower by its accountants with respect to Borrower's
internal controls; (iv) any documents filed by Borrower with the
Securities and Exchange Commission; (v) copies of all
information, statements and reports provided to FCC under the
Loan Agreements; and/or (vi) such other business and financial
data as the Representatives reasonably may request in writing
from time to time; other than, in each case, any such materials
provided by Borrower to its Directors to the extent protected by
applicable attorney work-product doctrine and/or attorney-client
privilege.
The Funds agree that they will not disclose to any
third party any information provided to them by Borrower
hereunder which is not generally available to the public or which
is specifically designated by Borrower as confidential, except
with the prior express approval of Borrower or as may otherwise
by required by applicable law.
The rights described herein shall apply and continue
for so long as the Funds continue to hold any amount of
indebtedness (or a participation interest therein) of Borrower
owned by the Fund as of the closing date under the Loan
Agreement.
Very truly yours,
INTERGRAPH CORPORATION
By:
-------------------------------
Title:
----------------------------
Foothill Partners II, L.P.
Foothill Partners III, L.P.
As of December 20, 1996
Page 3
AGREED AND ACCEPTED AS OF THIS
20th DAY OF DECEMBER, 1996.
FOOTHILL PARTNERS II, L.P.
By:
---------------------------
Managing General Partner
FOOTHILL PARTNERS III, L.P.
By:
---------------------------
Managing General Partner
AMENDMENT NUMBER ONE TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER ONE TO LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of January 14,
1997, by and between Foothill Capital Corporation, a California
corporation ("Foothill"), on the one hand, and Intergraph
Corporation, a Delaware corporation ("Borrower"), with reference
to the following facts:
A. Foothill and Borrower heretofore have entered into that
certain Loan and Security Agreement, dated as of December 20,
1996 (as heretofore amended, supplemented, or otherwise modified,
the "Agreement");
B. Borrower has requested Foothill to amend the Agreement
to, among other things, permit a subfacility for indemnities in
respect of Borrower's Permitted F/X Contracts, as set forth in
this Amendment;
C. Foothill is willing to so amend the Agreement in
accordance with the terms and conditions hereof; and
D. All capitalized terms used herein and not defined
herein shall have the meanings ascribed to them in the Agreement,
as amended hereby.
NOW, THEREFORE, in consideration of the above recitals
and the mutual premises contained herein, Foothill and Borrower
hereby agree as follows:
1. Amendments to the Agreement.
a. Section 1.1 of the Agreement hereby is amended by
adding the following new defined terms in alphabetical order:
"First Amendment" means that certain Amendment
Number One to Loan and Security Agreement, dated as of
January 14, 1997, between Foothill and Borrower.
"F/X Bank" means Norwest Bank Minnesota, National
Association, or any successor thereto.
"F/X Bank Parameters Letter" means that certain
letter agreement, dated as of January 14, 1997, between F/X
Bank and Borrower, a copy of which is attached hereto as
Exhibit F-1, regarding the parameters under which F/X Bank
provides foreign exchange currency services to Borrower.
"F/X Line" has the meaning set forth in Section 2.4.
"F/X Reserve" means, as of any date of
determination, a reserve equal to the maximum amount of
obligations of Foothill to indemnify F/X Bank against losses
or expenses incurred by F/X Bank in connection with
Permitted F/X Contracts. As of January 14, 1997, the amount
of the F/X Reserve is $3,500,000.
"Permitted F/X Contracts" means foreign currency
exchange contracts between F/X Bank and Borrower that: (a)
are in respect of marked-to-market risk on foreign exchange
future trades or options; (b) are entered into by Borrower
in the ordinary course of its business; (c) are entered into
in connection with the operational needs of Borrower's
business and not for speculative purposes; (d) do not have a
maturity date that is after the date five (5) Business Days
prior to the Maturity Date; and (e) are provided by F/X Bank
pursuant to the F/X Bank Parameters Letter.
"Permitted Spot Trades" means foreign currency
exchange transactions between F/X Bank and Borrower that:
(a) are in respect of foreign exchange spot value trades;
(b) are entered into by Borrower in the ordinary course of
its business; and (c) are entered into in connection with
the operational needs of Borrower's business and not for
speculative purposes; and (d) are conducted pursuant to the
F/X Bank Parameters Letter.
b. The following definitions contained in Section 1.1 of
the Amendment are amended and restated in their entirety to read as follows:
"Availability" means the amount of money that
Borrower is entitled to borrow as Advances under Section
2.1, such amount being the difference derived when (a) the
sum of the principal amount of Advances then outstanding
(including any amounts that Foothill may have paid for the
account of Borrower pursuant to any of the Loan Documents
and that have not been reimbursed by Borrower) is subtracted
from (b) the lesser of (i) the Maximum Revolving Amount less
the sum of (y) the Letter of Credit Usage and (z) the F/X
Reserve, or (ii) the Borrowing Base less the sum of (y) the
Letter of Credit Usage and (z) the F/X Reserve.
c. The first sentence of Section 2.1(a) of the Agreement
hereby is amended and restated in its entirety to read as follows:
Subject to the terms and conditions of this Agreement,
Foothill agrees to make advances ("Advances") to Borrower in
an amount outstanding not to exceed at any one time the
lesser of (i) the Maximum Revolving Amount less the sum of
the Letter of Credit Usage and the F/X Reserve, or (ii) the
Borrowing Base less the sum of the Letter of Credit Usage
and the F/X Reserve.
d. The second sentence of Section 2.2(a) of the Agreement
hereby is amended and restated in its entirety to read as follows:
Foothill shall have no obligation to issue a Letter of
Credit if any of the following would result:
(i) the Letter of Credit
Usage would exceed the Borrowing Base less the sum
of the amount of outstanding Advances and the F/X
Reserve, or
(ii) the Letter of Credit
Usage would exceed the lower of (y) the Maximum
Revolving Amount less the sum of the amount of
outstanding Advances and the F/X Reserve, or (z)
$60,000,000, or
(iii) the outstanding
Obligations (other than under the Term Loan) would
exceed the Maximum Revolving Amount.
e. Section 2.4 of the Agreement hereby is amended and
restated in its entirety to read as follows:
2.4 Subfacility for Borrower's Permitted F/X
Contracts (the "F/X Line").
(a) If requested to do so by Borrower,
Foothill may, in its sole discretion, enter into agreements
with F/X Bank pursuant to which Foothill would indemnify F/X
Bank against losses or expenses incurred by F/X Bank in
connection with Permitted F/X Contracts, notwithstanding any
objections by Borrower as to the amount of such losses or
expenses. If Foothill is obligated to advance funds under
an F/X Line indemnity, Borrower immediately shall reimburse
such amount to Foothill and, in the absence of such
reimbursement, the amount so advanced immediately and
automatically shall be deemed to be an Advance hereunder
and, thereafter, shall bear interest at the rate then
applicable to Advances under Section 2.6. If, upon the
maturity date of any Permitted F/X Contract, Borrower does
not have Availability in an amount sufficient to pay the
full amount of Borrower's obligations to F/X Bank under such
contract, Foothill may, in its sole discretion, instruct F/X
Bank to liquidate such Permitted F/X Contract, at Borrower's
sole expense, and to apply any amounts thereunder that would
have been payable to Borrower against the amounts owed to
F/X Bank by Borrower. Any amounts paid by Foothill to F/X
Bank and any other costs or expenses incurred by Foothill in
connection with any such Permitted F/X Contracts shall
constitute Advances, shall be secured by all of the
Collateral, and thereafter shall be payable by Borrower to
Foothill together with interest as provided for herein.
(b) Borrower hereby agrees to indemnify,
save, defend, and hold Foothill harmless from any loss,
cost, expense, or liability, including payments made by
Foothill, expenses, and reasonable attorneys fees incurred
by Foothill arising out of or in connection with any F/X
Line indemnity.
(c) Any and all charges, commissions, fees,
and costs incurred by Foothill relating to Permitted F/X
Contracts that are the subject of an F/X Line indemnity by
Foothill shall be considered Foothill Expenses for purposes
of this Agreement and immediately shall be reimbursable by
Borrower to Foothill.
(d) Immediately upon the termination of this
Agreement, Borrower agrees to either (i) provide cash
collateral to be held by Foothill in an amount equal to 105%
of the maximum amount of Foothill's obligations under the
F/X Line indemnities, or (ii) cause to be delivered to
Foothill releases of all of Foothill's obligations under
outstanding F/X Line indemnities. At Foothill's discretion,
any proceeds of Collateral received by Foothill after the
occurrence and during the continuation of an Event of
Default may be held as the cash collateral required by this
Section 2.4(d).
(e) The amount of the F/X Reserve may be
reduced from time to time by Foothill upon the receipt and
written acceptance by Foothill of an F/X Reserve Reduction
Certificate, in the form of that attached hereto as
Exhibit F-2, duly executed by both Borrower and F/X Bank,
not less than 2 Business Days prior to the requested
effective date of such reduction.
(f) So long as no Triggering Event has
occurred and is continuing or would result therefrom, the
amount of the F/X Reserve may be increased from time to time
by Foothill in its sole discretion upon the receipt and
written acceptance by Foothill of an F/X Reserve Increase
Certificate, in the form of that attached hereto as Exhibit
F-3, duly executed by both Borrower and F/X Bank, not less
than 2 Business Days prior to the requested effective date
of such increase.
(g) Anything in the Loan Documents to the
contrary notwithstanding, Permitted Spot Trades shall be
deemed to qualify as Permitted F/X Contracts eligible for
coverage under an F/X Line indemnity solely until such time,
if ever, as Foothill is obligated to advance funds under an
F/X Line indemnity to cover obligations owing but unpaid by
Borrower to F/X Bank in respect of Permitted Spot Trades
and, thereafter, Permitted Spot Trades shall no longer be
deemed to qualify as Permitted F/X Contracts eligible for
coverage under an F/X Line indemnity and F/X Line
indemnities shall no longer be permitted to be issued in
respect of Permitted Spot Trades.
f. The first sentence of Section 3.5 of the Agreement
hereby is amended and restated in its entirety to read as follows:
On the date of termination of this Agreement, all
Obligations (including contingent reimbursement obligations
of Borrower with respect to any outstanding Letters of
Credit or any outstanding F/X Line indemnities) immediately
shall become due and payable without notice or demand.
g. The preamble to Section 5 of the Agreement hereby is
amended and restated in its entirety to read as follows:
In order to induce Foothill to enter into this Agreement,
Borrower makes the following representations and warranties
which shall be true, correct, and complete in all respects
as of the Closing Date, and at and as of the date of the
making of each Advance or Letter of Credit or F/X Line
indemnity made thereafter, as though made on and as of the
date of such Advance or Letter of Credit or F/X Line
indemnity (except to the extent that such representations
and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution
and delivery of this Agreement:
h. Section 7.1(a) of the Agreement hereby is amended and
restated in its entirety to read as follows:
(a) Indebtedness evidenced by this
Agreement, together with Indebtedness to issuers of letters
of credit that are the subject of L/C Guarantees and
Indebtedness to F/X Bank under Permitted F/X Contracts;
i. The subsection of Section 7.19 of the Agreement that
reads "withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is
reasonably likely to result in any liability of any such entity
under Title IV of ERISA;" and that is numbered in Section 7.19 of
the Agreement as `subsection 7.(yyyy)' hereby is re-numbered as
`subsection (h)'.
j. A new subsection (n) hereby is added to Section 9.1 of
the Agreement in proper numerical order as follows:
(n) Foothill may, at its option, require
Borrower to deposit with Foothill funds in an amount equal
to the F/X Line Reserve (if any), and, if Borrower fails to
make such deposit promptly, Foothill may advance such amount
as an Advance (whether or not an Overadvance is created
thereby). Any such deposit or the proceeds of such Advance
shall be held by Lender as a reserve to fund indemnity
obligations owing to F/X Bank under the F/X Line. At such
time (if ever) as all such indemnity obligations have been
paid or terminated, any amounts remaining in such reserve
shall be applied against any outstanding Obligations or, if
all Obligations have been indefeasibly paid in full,
returned to Borrower.
2. Representations and Warranties. Borrower hereby
represents and warrants to Foothill that: (a) the execution,
delivery, and performance of this Amendment and of the Agreement,
as amended by this Amendment, are within its corporate powers,
have been duly authorized by all necessary corporate action, and
are not in contravention of any law, rule, or regulation, or any
order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which
it is a party or by which any of its properties may be bound or
affected; (b) this Amendment and the Agreement, as amended by
this Amendment, constitute Borrower's legal, valid, and binding
obligation, enforceable against Borrower in accordance with its
terms; and (c) attached hereto as Exhibit F-1 is a true, correct,
and complete copy of the F/X Bank Parameters Letter.
3. Conditions Precedent to Amendment. The satisfaction of
each of the following on or before, unless otherwise specified
below, the First Amendment Closing Date shall constitute
conditions precedent to the effectiveness of this Amendment:
a. Foothill shall have received the reaffirmation and
consent of each of the Obligors (other than Borrower) attached
hereto as Exhibit A, duly executed and delivered by the
respective authorized officials thereof;
b. Foothill shall have received a certificate from the
Secretary of Borrower attesting to the incumbency and signatures
of authorized officers of Borrower and to the resolutions of
Borrower's Board of Directors authorizing its execution and
delivery of this Amendment and the performance of this Amendment
and the Agreement as amended by this Amendment, and authorizing
specific officers of Borrower to execute and deliver the same;
c. Foothill shall have received all required consents of
Foothill's participants in the Obligations to Foothill's
execution, delivery, and performance of this Amendment;
d. The representations and warranties in this Amendment,
the Agreement as amended by this Amendment, and the other Loan
Documents shall be true and correct in all respects on and as of
the date hereof, as though made on such date (except to the
extent that such representations and warranties relate solely to
an earlier date);
e. No Event of Default or event which with the giving of
notice or passage of time would constitute an Event of Default
shall have occurred and be continuing on the date hereof, nor
shall result from the consummation of the transactions contemplated herein;
f. No injunction, writ, restraining order, or other order
of any nature prohibiting, directly or indirectly, the
consummation of the transactions contemplated herein shall have
been issued and remain in force by any governmental authority
against Borrower, Foothill, or any of their Affiliates;
g. The Collateral shall not have declined materially in
value from the values set forth in the most recent appraisals or
field examinations previously done by Foothill; and
h. All other documents and legal matters in connection
with the transactions contemplated by this Amendment shall have
been delivered or executed or recorded and shall be in form and
substance satisfactory to Foothill and its counsel.
4. Effect on Agreement. The Agreement, as amended hereby,
shall be and remain in full force and effect in accordance with
its respective terms and hereby is ratified and confirmed in all
respects. The execution, delivery, and performance of this
Amendment shall not operate as a waiver of or, except as
expressly set forth herein, as an amendment, of any right, power,
or remedy of Foothill under the Agreement, as in effect prior to
the date hereof.
5. Further Assurances. Borrower shall execute and deliver
all agreements, documents, and instruments, in form and substance
satisfactory to Foothill, and take all actions as Foothill may
reasonably request from time to time, to perfect and maintain the
perfection and priority of Foothill's security interests in the
Collateral and the Real Property, and to fully consummate the
transactions contemplated under this Amendment and the Agreement,
as amended by this Amendment.
6. Miscellaneous.
a. Upon the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement", "hereunder",
"herein", "hereof" or words of like import referring to the
Agreement shall mean and refer to the Agreement as amended by this Amendment.
b. Upon the effectiveness of this Amendment, each
reference in the Loan Documents to the "Loan Agreement",
"thereunder", "therein", "thereof" or words of like import
referring to the Agreement shall mean and refer to the Agreement
as amended by this Amendment.
c. Upon the effectiveness of this Amendment, each
reference in the Agreement and the other Loan Documents to
Exhibit F-1, Exhibit F-2, or Exhibit F-3 of the Agreement shall
mean and refer to Exhibit F-1, Exhibit F-2, or Exhibit F-3
attached hereto, respectively.
d. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same instrument and any of the parties hereto may execute
this Amendment by signing any such counterpart.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By____________________________
Title:________________________
INTERGRAPH CORPORATION, a Delaware corporation
By____________________________
Title:________________________
EXHIBIT A
----------
Reaffirmation and Consent
All capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed to them
in that certain Amendment Number One to Loan and Security
Agreement, dated as of January 14, 1997 (the "Amendment"). Each
of the undersigned hereby (a) represents and warrants to Foothill
that the execution, delivery, and performance of this
Reaffirmation and Consent are within its corporate powers, have
been duly authorized by all necessary corporate action, and are
not in contravention of any law, rule, or regulation, or any
order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which
it is a party or by which any of its properties may be bound or
affected; (b) consents to the amendment of the Agreement by the
Amendment; (c) acknowledges and reaffirms its obligations owing
to Foothill under the Pledge Agreement and any other Loan
Documents to which it is party; and (d) agrees that each of the
Pledge Agreement and any other Loan Documents to which it is a
party is and shall remain in full force and effect. Although
each of the undersigned has been informed of the matters set
forth herein and has acknowledged and agreed to same, it
understands that Foothill has no obligation to inform it of such
matters in the future or to seek its acknowledgement or agreement
to future amendments, and nothing herein shall create such a duty.
M&S COMPUTING INVESTMENTS, INC., a
Delaware corporation
By ___________________________
Title:________________________
INTERGRAPH DELAWARE, INC., a Delaware
corporation
By ___________________________
Title:________________________
Exhibit F-1
-----------
[TO BE ATTACHED]
Exhibit F-2
-----------
F/X RESERVE REDUCTION CERTIFICATE
Today's date:____________________
(1) FROM INTERGRAPH TO: NORWEST BANK MINNESOTA
ATTENTION: Mike Schaefer/Ann Johnson
FACSIMILE: (612) 667-0513
(2) FROM NORWEST TO: FOOTHILL CAPITAL CORPORATION
ATTENTION: Bryan Hamm
FACSIMILE: (617) 722-9485
(3) FROM FOOTHILL TO INTERGRAPH AND NORWEST:
Reference hereby is made to that certain Loan and Security
Agreement, dated as of December 20, 1996 (as amended,
supplemented, and modified, the "Loan Agreement"), between
Foothill Capital Corporation ("Foothill") and Intergraph
Corporation ("Borrower"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them
in the Loan Agreement.
Pursuant to Section 2.4 of the Agreement, Borrower hereby
requests a reduction in the F/X Reserve from the current amount
of $____________ to the new amount of $_____________, such
reduction to become effective on _____________,______.
INTERGRAPH CORPORATION FACSIMILE: (205) 730-2742
ATTENTION: Roger Fulton
By:_______________________
Its:______________________
NORWEST BANK MINNESOTA, N.A.
By:_______________________
Its:______________________
FOOTHILL CAPITAL CORPORATION
By:_______________________
Its:______________________
Exhibit F-3
-----------
F/X RESERVE INCREASE CERTIFICATE
Today's date:____________________
(1) FROM INTERGRAPH TO: FOOTHILL CAPITAL CORPORATION
ATTENTION: Bryan Hamm
FACSIMILE: (617) 722-9485
(2) FROM FOOTHILL TO: NORWEST BANK MINNESOTA
ATTENTION: Mike Schaefer/Ann Johnson
FACSIMILE: (612) 667-0513
(3) FROM NORWEST TO INTERGRAPH AND FOOTHILL:
Reference hereby is made to that certain Loan and Security
Agreement, dated as of December 20, 1996 (as amended, restated,
supplemented, and modified from time to time, the "Loan
Agreement"), between Foothill Capital Corporation ("Foothill")
and Intergraph Corporation ("Borrower"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings
ascribed to them in the Loan Agreement.
Pursuant to Section 2.4 of the Agreement, Borrower hereby
requests an increase in the F/X Reserve from the current amount
of $____________ to the new amount of $_____________, such
increase to become effective on _____________,______.
INTERGRAPH CORPORATION FACSIMILE: (205) 730-2742
ATTENTION: Roger Fulton
By:_______________________
Its:______________________
FOOTHILL CAPITAL CORPORATION
By:_______________________
Its:______________________
NORWEST BANK MINNESOTA, N.A.
By:_______________________
Its:______________________
Exhibit F-1
-----------
January 14, 1997
Mr. Bryan Hamm
Vice President
Foothill Capital Corporation
60 State Street, Suite 1150
Boston, MA 02109
Dear Bryan:
Following are facts relating to the foreign exchange line we wish to
establish with Norwest Bank Minnesota, N.A.:
FACT ONE: Intergraph Corporation ("Intergraph") has previously entered
into a Loan and Security Agreement with Foothill Capital Corporation
("Foothill") dated as of December 20, 1996.
Intergraph desires to use the service (the "Service") of Norwest Bank
Minnesota ("Norwest"), effective immediately, in order to hedge its
foreign exchange exposure:
FACT THREE: Norwest is willing to perform such Service and establish
a foreign exchange line ("the FX Line") on the condition that Foothill
shall indemnify Norwest for the mark-to-market exposure ("Exposure Reserve")
on the FX line;
FACT FOUR: Foothill has agreed to provide such indemnification to Norwest
on behalf of Intergraph and to do so effective immediately, subject to
Intergraph executing additional documentation in a form acceptable to
Foothill;
FACT FIVE: Norwest has initially determined that it will require an
Exposure Reserve equal to seven and one half percent (7 1/2%) on each
foreign exchange trade and that it will only issue trades having a
maturity of no more than four months. And Intergraph has agreed to
the Norwest Exposure Reserve;
NOW THEREFORE the parties hereto agree as follows:
Intergraph hereby requests that Foothill reserve from availability on
its line of credit with Foothill an amount equal to $3,500,000.00 USD
and authorizes Foothill to provide the same amount to Norwest as
indemnification for the FX Line. Intergraph agrees that should it fail
to settle any trades with Norwest, Foothill will, upon receipt of
written notice from Norwest, pay Norwest the mark-to-market amount as
determined by Norwest, notwithstanding any objection by Intergraph
and Foothill will charge such amount against Intergraph's loan with
Foothill.
Foothill hereby agrees to indemnify Norwest for the mark-to-market exposure
on foreign exchange trades, up to $3,500,000.00 USD.
Norwest agrees it will institute the necessary internal procedures to
enable Intergraph to execute foreign exchange trades and acknowledges
that Foothill's indemnity to Norwest shall be equal to the lesser of
$3,500,000.00 USD or the total notional USD amount of all outstanding
foreign exchange trades, as determined on the trade date, times seven
and one half percent.
Foothill reserves the right to terminate this agreement at any time by
written notice to both Intergraph and Norwest. Such notice shall be
transmitted via facsimile, Certified Mail, courier or by personal
delivery. No such termination shall impair the rights of any party with
respect to transactions processed prior to the effective date of
termination.
Sincerely,
/s/ Larry J. Laster
Larry J. Laster
Executive Vice President
and Chief Financial Officer
AGREED TO AND ACKNOWLEDGED:
FOOTHILL CAPITAL CORPORATION
/s/ Bryan Hamm
- ------------------------------
BY: Bryan Hamm, Vice President
/s/ Paz Hernandez
- ------------------------------
BY: Paz Hernandez, Vice President/Assistant Treasurer
NORWEST BANK MINNESOTA, N.A.
/s/ Charles D. White
- ------------------------------
BY: Charles D. White, Treasurer
