Amended and Restated Credit Agreement - Page 1
CBT/04060
AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Credit Agreement") is made and
delivered to be effective as of July 30, 2004, by and between Microwave
Transmission Systems, Inc. (herein referred to with all successors, assigns
and/or personal representatives as the "Parent"), MTSI, Inc., a Texas
corporation ("MTSI"), Epic Communications, Inc., a Texas corporation ("ECI"),
CKS Management, Inc., a Texas corporation ("CKS"), Viper Communication Systems,
Inc., a Texas corporation ("VCS") (Parent, MTSI, ECI, CKS, and VCS, each
individually a "Borrower" and collectively the "Borrowers") and COMERICA BANK
(herein referred to with its successors and assigns as the "Bank"). For and in
consideration of the mutual promises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrowers and Bank agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. The following terms, as used in this Agreement, shall have
the meanings set forth below. The singular number shall be deemed to include the
plural, the masculine gender shall include the feminine and neuter genders, and
vice versa.
"Advance Formula Agreement" means that certain Amended and Restated
Advance Formula Agreement dated of even date herewith between Borrowers
and Bank, as amended from time to time.
"Affiliate" shall mean, when used with respect to any Person, any other
Person which, directly or indirectly, controls or is controlled by or
is under common control with such Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), with respect to any
Person, shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract
or otherwise.
"Agreement" shall mean this Amended and Restated Credit Agreement,
including all addenda, exhibits and schedules now or hereafter made a
part hereof, as the same may be amended from time to time.
"Applicable Interest Rate" shall mean, with respect to the Indebtedness
from time to time outstanding under any promissory note or other Loan
Document evidencing the Indebtedness, the rate or rates provided in
such note as the applicable interest rate.
"Borrowing Base" shall have the meaning given such term in the Advance
Formula Agreement.
"Borrowing Base Certificate" shall mean a borrowing base certificate in
a form prescribed by Bank.
"Collateral" shall mean all property, assets and rights in which a Lien
or other encumbrance in favor of or for the benefit of Bank is or has
been granted or arises or has arisen, or may hereafter be granted or
arise, under or in connection with any Loan Document, or otherwise, to
secure the payment or performance of any portion of the Indebtedness.
"Debt" shall mean, as of any applicable date of determination thereof,
all liabilities of a Person that should be classified as liabilities in
accordance with GAAP. In the case of Borrowers, the term "Debt" shall
include, without limitation, the Indebtedness.
"Default" shall mean, any condition or event which, with the giving of
notice or the passage of time, or both, would constitute an Event of
Default.
"Environmental Law(s)" shall mean all laws, codes, ordinances, rules,
regulations, orders, decrees and directives issued by any federal,
state, local, foreign or other governmental or quasi governmental
authority or body (or any agency, instrumentality or political
subdivision thereof) pertaining to Hazardous Materials or otherwise
intended to regulate or improve health, safety or the environment,
including, without limitation, any hazardous materials or wastes, toxic
substances, flammable, explosive or radioactive materials, asbestos,
and/or other similar materials; any so-called "superfund" or
"superlien" law, pertaining to Hazardous Materials on or about any of
the Collateral, or any other property at any time owned, leased or
otherwise used by any Loan Party, or any portion thereof, including,
without limitation, those relating to soil, surface, subsurface ground
water conditions and the condition of the ambient air; and any other
federal, state, foreign or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic,
radioactive, flammable or dangerous waste, substance or material, as
now or at anytime hereafter in effect.
"Equipment" shall have the meaning assigned to such term in the UCC on
the date of this Agreement together with all of the following to the
extent, if any, the same are not included within such definition: all
machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (except Inventory) including, without
limitation, data processing hardware and software, motor vehicles,
aircraft, dies, tools, jigs, and. office equipment, as well as all of
such types of property that are leased and all rights and interests
with respect thereto under such leases to the extent that any of the
foregoing are now owned or hereafter acquired by the Borrower and to
the extent that any other Loan Party now or hereafter grants or
purports to ▇▇▇▇▇ ▇ ▇▇▇▇ upon all or any of the foregoing as security
for all or any portion of the Indebtedness.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor act or code.
"Event of Default" shall mean any of those conditions or events listed
in Section 6.1 of this Agreement.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"Governmental Authority" shall mean the United States, each state, each
county, each city, and each other political subdivision in which all or
any portion of the Collateral is located, and each other political
subdivision, agency, or instrumentality exercising jurisdiction over
Bank, any Loan Party, any of the Indebtedness or any Collateral.
"Governmental Requirements" shall mean all laws, ordinances, rules, and
regulations of any Governmental Authority applicable to any Loan Party,
any of the Indebtedness or any Collateral.
"Guarantor(s)" shall mean, as the context dictates, any Person(s)
(other than the Borrowers) who shall, at any time guarantee otherwise
be or become obligated for the repayment of all or any part of the
Indebtedness including, without limitation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in, or for
purposes of, any Environmental Law(s).
"Indebtedness" shall mean all obligations and liabilities of any Loan
Party to Bank under any Loan Document, together with all other
indebtedness, obligations and liabilities whatsoever of Borrowers to
Bank, whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, joint or several, due or to become
due, now existing or hereafter arising, voluntary or involuntary, known
or unknown, or originally payable to Bank or to a third party and
subsequently acquired by Bank including, without limitation, any: late
charges; loan fees or charges; overdraft indebtedness; costs incurred
by Bank in establishing, determining, continuing or defending the
validity or priority of any Lien or in pursuing any of its rights or
remedies under any Loan Document or in connection with any proceeding
involving Bank as a result of any financial accommodation to Borrowers;
debts, obligations and liabilities for which Borrowers would otherwise
be liable to the Bank were it not for the invalidity or enforceability
of them by reason of any bankruptcy, Insolvency or other law or for any
other reason; and reasonable costs and expenses of attorneys and
paralegals, whether any suit or other action is instituted, and to
court costs if suit or action is instituted, and whether any such fees,
costs or expenses are incurred at the trial court level or on appeal,
in bankruptcy, in administrative proceedings, in probate proceedings or
otherwise; provided, however, that the term Indebtedness shall not
include any consumer loan to the extent treatment of such loan as part
of the Indebtedness would violate any Governmental Requirement.
"Lien" shall mean any valid and enforceable interest in any property,
whether real, personal or mixed, securing an indebtedness, obligation
or liability owed to or claimed by any Person other than the owner of
such property, whether such indebtedness is based on the common law or
any statute or contract and including, but not limited to, a security
interest, pledge, mortgage, assignment, conditional sale, trust
receipt, lease, consignment or bailment for security purposes.
"Loan Documents" shall mean collectively, this Agreement, the Advance
Formula Agreement, the Master Revolving Note, the Variable
Rate-Installment Note, any other promissory notes evidencing
Indebtedness, any approved subordination agreement, and any other
documents, instruments or agreements evidencing, governing, securing,
guaranteeing or otherwise relating to or executed pursuant to or in
connection with any of the Indebtedness or any Loan Document (whether
executed and delivered prior to, concurrently with or subsequent to
this Agreement), as such documents may have been or may hereafter be
amended from time to time.
"Loan Party" shall mean Borrowers, and each of the Borrowers'
Subsidiaries (whether or not a party to any Loan Document) and each
other Person who or which shall be liable for the payment or
performance of all or any portion of the Indebtedness or who or which
shall own any property that is subject to (or purported to be subject
to) a Lien which secures all or any portion of the Indebtedness.
"Material Adverse Effect" shall mean any act, event, condition or
circumstance which could materially and adversely affect the business,
operations, condition (financial or otherwise), performance or assets
of any Loan Party, the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party or by which
it is bound or the enforceability of any Loan Document.
"Maximum Legal Rate" shall mean the maximum rate of nonusurious
interest per annum permitted to be paid by Borrower or, if applicable,
another Loan Party or received by Bank with respect to the applicable
portion of the Indebtedness from time to time under applicable state or
federal law as now or as may be hereafter in effect, including Chapter
1 D of Title 79 Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but. otherwise
without limitation, that rate based upon the "weekly ceiling rate" (as
defined in ss.303 of the Texas Finance Code).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
Person succeeding to the present powers and functions of the Pension
Benefit Guaranty Corporation.
"Pension Plan(s)" shall mean any and all employee benefit pension plans
of Borrowers and/or any of its Subsidiaries in effect from time to
time, as such term is defined in ERISA.
"Permitted Encumbrances" shall mean: (a) Liens in favor of the Bank;
(b) Liens for taxes, assessments or other governmental charges which
are not yet due and payable, incurred in the ordinary course of
business and for which no interest, late charge or penalty is attaching
or which are being contested in good faith by appropriate proceedings
and, if requested by Bank, bonded in an amount and manner satisfactory
to Bank; (c) Liens, not delinquent, arising in the ordinary course of
business and created by statute in connection with worker's
compensation, unemployment insurance, social security and similar
statutory obligations; (d) Liens of mechanics, materialmen, carriers,
warehousemen or other like statutory or common law Liens securing
obligations incurred in good faith in the ordinary course of business
without violation of any Loan Document that are not yet due and
payable; and (e) Liens existing as of the date hereof which have been
specifically disclosed in writing to Bank and have been approved by
Bank in writing.
"Person" or "person" shall mean any individual, corporation,
partnership, joint venture, limited liability company, association,
trust, unincorporated association, joint stock company, government,
municipality, political subdivision or agency, or other entity.
"Revolving Credit Maturity Date" shall mean the date on which the
entire unpaid principal amount of all Revolving Loans becomes due and
payable whether by demand for payment, acceleration or otherwise;
provided, however, if any such date is not a business day, then the
Revolving Credit Maturity Date shall be the next succeeding business
day.
"Revolving Credit Maximum Amount" shall mean the lesser of (a)
$3,000,000.00 or (b) the maximum amount permitted by the Advance
Formula Agreement.
"Revolving Credit" shall mean the Master Revolving Note dated of even
date herewith in the maximum original principal amount of $3,000,000.00
made by Borrowers payable to the order of the Bank, as the same may be
renewed, extended, modified, increased or restated from time to time.
"Revolving Loan" shall mean an advance made, or to be made, under the
revolving credit facility to or for the credit of Borrowers by the Bank
pursuant to this Agreement.
"Subordinated Debt" shall mean any Debt of Borrowers (other than the
Indebtedness) which has been subordinated to the Indebtedness pursuant
to a subordination agreement in form and content satisfactory to the
Bank.
"Subsidiary" shall mean as to any particular parent entity, any
corporation, partnership, limited liability company or other entity
(whether now existing or hereafter organized or acquired) in which more
than fifty percent (50%) of the outstanding equity ownership interests
having voting rights as of any applicable date of determination, shall
be owned directly, or indirectly through one or more Subsidiaries, by
such parent entity. As of the date of this Agreement, Parent's only
Subsidiaries are: MTSI, Inc., ECI, CKS, and VCS.
"Term Loan" shall mean the loans made, or to be made, by Bank to or for
the credit of Borrowers in one or more advances not to exceed
$1,610,000.00 in the aggregate pursuant to this Agreement.
"Term Loan Maturity Date" shall mean July 30, 2009.
"Term Note" shall mean that certain Variable Rate Installment Note
dated of even date herewith in the original principal amount of
$1,610,000.00 executed by Borrowers, payable to the order of Bank as
the same may be renewed, extended, modified, increased or restated from
time to time.
"UCC" shall mean the Uniform Commercial Code as adopted and in force in
the State of Texas, as amended.
1.2 Accounting Terms. All accounting terms not specifically defined in this
Agreement shall be determined and construed in accordance with GAAP.
SECTION 2. FUNDING LOANS, PAYMENTS, RECOVERIES AND COLLECTIONS
2.1 Funding Loans. Subject to the terms, conditions and procedures of this
Agreement and each other Loan Document and to the satisfaction of all
conditions precedent to the making and funding of any loan as set forth
in any Loan Document, Bank shall make the proceeds of any such loan
available to Borrower on the disbursement date agreed upon by Bank and
Borrowers by depositing such proceeds into an account maintained by
Borrower with Bank or as otherwise agreed to in writing by Borrowers
and Bank.
2.2 Revolving Loans. Subject to the terms and conditions of the Loan
Documents and to the satisfaction of all conditions precedent to the
making and funding of any loan as set forth in any Loan Document, the
Bank agrees to make Revolving Loans to Borrowers at any time and from
time to time from the effective date hereof until (but not including)
the Revolving Credit Maturity Date. The proceeds of Revolving Loans
shall be used solely by Borrower for strategic acquisitions and other
working capital needs of Borrower.
Except as hereinafter provided, Borrower may request a Revolving Loan
by submitting to Bank a request for advance by an authorized officer or
other representative of Borrower, subject to the following: (a) each
such request for advance shall include, without limitation, the
proposed amount of such revolving loan and the proposed disbursement
date, which date must be a business day; (b) each such request for
advance shall be communicated to Bank by 2:00 p.m. (Dallas, Texas time)
on the proposed disbursement date; (c) a request for advance, once
communicated to Bank, shall not be revocable by Borrowers; and (d) each
request for advance, once communicated to Bank, shall constitute a
representation, warranty and certification by Borrower as of the date
thereof that: (i) both before and after the making of such Revolving
Loan, the obligations set forth in the Loan Documents are and shall be
valid, binding and enforceable obligations of each Loan Party, as
applicable; (ii) all terms and conditions precedent to the making of
such Revolving Loan have been satisfied, and shall remain satisfied
through the date of such Revolving Loan; (iii) the making of such
Revolving Loan will not cause the aggregate outstanding principal
amount of all Revolving Loans, to exceed the Revolving Credit Maximum
Amount; (iv) no Default or Event of Default shall have occurred or be
in existence, and none will exist or arise upon the making of such
Revolving Loan; (v) the representations and warranties contained in the
Loan Documents are true and correct in all material respects and shall
be true and correct in all material respects as of the making of such
Revolving Loan; and (vi) the request for advance will not violate the
terms or conditions of any contract, indenture, agreement or other
borrowing of any Loan Party.
Bank may elect (but without any obligation to do so) to make a
Revolving Loan upon the telephonic or facsimile request of Borrower,
provided that Borrower has first executed and delivered to Bank a
telephone notice authorization in form and content satisfactory to
Bank. If any such Revolving Loan based upon a telephonic or facsimile
request is made by Borrower, Bank may require Borrower to confirm said
telephonic or facsimile request in writing by delivering to Bank, on or
before 11:00 a.m. (Dallas, Texas time) on the next business day
following the disbursement date of such Revolving Loan, a duly executed
written request for advance, and all other provisions of this Section
2.2 shall be applicable with respect to such Revolving Loan. In
addition, Borrower may authorize the Bank to automatically make
revolving loans pursuant to such other written agreements as may be
entered into by Bank and Borrower.
Notwithstanding anything contained in this Agreement to the contrary,
the aggregate principal amount of all Revolving Loans at any time
outstanding shall not exceed the Revolving Credit Maximum Amount. If
said limitations are exceeded at anytime, Borrowers shall immediately,
without demand by Bank, pay to Bank an amount not less than such
excess, or, if Bank, in its sole discretion, shall so agree, Borrowers
shall provide Bank cash collateral in an amount not less than such
excess, and Borrowers hereby pledge and grant to Bank a security
interest in such cash collateral so provided to Bank. Unless otherwise
expressly provided in a Loan Document, all sums payable by Borrowers to
Bank under or pursuant to any Loan Document, whether principal,
interest, or otherwise, shall be paid, when due, directly to Bank at
any office of Bank located in the State of Texas in immediately
available United States funds, and without setoff, deduction or
counterclaim. Bank may, in its discretion, charge any and all deposit
or other accounts (including, without limitation, any account evidenced
by a certificate of deposit or time deposit) of Borrowers maintained
with Bank for all or any part of any Indebtedness then due and payable;
provided, however, that such authorization shall not affect Borrowers'
obligations to pay all Indebtedness, when due, whether or not any such
account balances maintained by Borrowers with Bank are insufficient to
pay any amounts then due.
The provisions of Chapter 346 of the Texas Finance Code are
specifically declared by the parties not to be applicable to any of the
Loan Documents or the transactions contemplated thereby.
2.3 Term Loan. On the date of this Agreement, subject to the terms and
conditions of this Agreement and the other Loan Documents, the Bank
agrees to make the Term Loan as a single advance to Borrowers. At the
time of borrowing the Term Loan, Borrowers agree to execute and deliver
to Bank the Term Note to evidence the Indebtedness of Borrowers to Bank
under and in respect of the Term Loan. The proceeds of the Term Loan
shall be used to refinance the following existing indebtedness of
Borrowers to Bank:
a) Microwave Transmission Systems, Inc., Obligor #3273543291,
Loan No. 67 ($475,724.19);
b) Microwave Transmission Systems, Inc., Obligor #3273543291,
Loan No. 75, ($210,405.00); and
c) MTSI, Inc., Obligor #3419439479, all Notes except Loan No. 257
collectively, ($570,401.00).
2.4 Maximum Interest Rate. At no time shall any Applicable Interest Rate or
default rate in respect of any Indebtedness hereunder, exceed the
Maximum Legal Rate. In the event that any interest is charged or
otherwise received by Bank in excess of the Maximum Legal Rate,
Borrowers hereby acknowledge and agree that any such excess interest
shall be the result of an accidental and bona fide error, and any such
excess shall be deemed to have been payment of principal, and not of
interest, and shall be applied, first, to reduce the principal
Indebtedness then outstanding, second, any remaining excess, if any,
shall be applied to reduce any other Indebtedness, and third, any
remaining excess, if any, shall be returned to Borrower.
Notwithstanding the foregoing or anything to the contrary contained in
this Agreement or any other Loan Document, but subject to all
limitations contained in this Section, if at any time any Applicable
Interest Rate or default rate or other rate of interest applicable to
any portion of the Indebtedness is computed on the basis of the Maximum
Legal Rate, any subsequent reduction in the Applicable Interest Rate,
default rate or such other rate of interest shall not reduce such
interest rate thereafter payable below the Maximum Legal Rate until the
aggregate amount of interest accrued equals the total amount of
interest that would have accrued if interest had, at all times, been
computed solely on the basis of the Applicable Interest Rate, default
rate or such other interest rate. This Section shall control all
agreements between the Borrowers and the Bank.
2.5 Receipt of Payments by Bank. Any payment by Borrowers of any of the
Indebtedness made by mail will be deemed tendered and received by Bank
only upon actual receipt thereof by Bank at the address designated for
such payment, whether or not Bank has authorized payment by mail or in
any other manner, and such payment shall not be deemed to have been
made in a timely manner unless actually received by Bank on or before
the date due for such payment, time being of the essence. Borrower
expressly assumes all risks of loss or liability resulting from
non-delivery or delay of delivery of any item of payment transmitted by
mail or in any other manner. Acceptance by Bank of any payment in any
amount less than the amount then due shall be deemed an acceptance on
account only, and any failure to pay the entire amount then due shall
constitute and continue to be an Event of Default. Prior to the
occurrence of any Default, Borrower shall have the right to direct the
application of any and all payments made to Bank hereunder to the
Indebtedness evidenced by the respective notes evidencing the
Indebtedness. Borrowers waive the right to direct the application of
any and all payments received by Bank hereunder at any time or times
after the occurrence and during the continuance of any Default.
Borrowers further agree that after the occurrence and during the
continuance of any Default, or prior to the occurrence of any Default
if Borrowers have failed to direct such application, Bank shall have
the continuing exclusive right to apply and to reapply any and all
payments received by Bank at any time or times, whether as voluntary
payments, proceeds from any Collateral, offsets, or otherwise, against
the Indebtedness in such order and in such manner as Bank may, in its
sole discretion, deem advisable, notwithstanding any entry by Bank upon
any of its books and records. Borrower hereby expressly agrees that, to
the extent that Bank receives any payment or benefit of or otherwise
upon any of the Indebtedness, and such payment or benefit, or any part
thereof, is subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required to be repaid to a trustee,
receiver, or any other Person under any bankruptcy act, state or
federal law, common law, equitable cause or otherwise, then to the
extent of such payment or benefit, the Indebtedness, or part thereof,
intended to be satisfied shall be revived and continued in full force
and effect as if such payment or benefit had not been made or received
by Bank, and, further, any such repayment by Bank shall be added to and
be deemed to be additional Indebtedness.
2.6 Conditions Precedent to Loans. The obligation of the Bank to make any
loan under or pursuant to this Agreement shall be subject to the
following conditions precedent:
a. Borrowers shall have executed and delivered to Bank, or caused
to have been executed and delivered to Bank, all such
instruments, agreements, certificates, opinions, financial
statements, appraisals, evidence of title, evidence of
insurance, environmental audits, and other information and
other documents as the Bank shall require, and all of the
foregoing shall be in form and content acceptable to Bank and
all instruments and agreements shall be in full force and
effect and binding and enforceable obligations of Borrower, to
the extent that it is a party thereto or otherwise bound
thereby, of each other Person who may be a party thereto or
bound thereby including without limitation: (i) evidence of
existence, good standing, qualification to conduct business
and authority-for each Loan Party and signatory on behalf of
each Loan Party; (ii) all notes, guaranties, security
agreements, mortgages, deeds of trust, pledge agreements,
assignments, financing statements and other documents
requested by Bank to evidence the Indebtedness or to create,
protect or perfect Liens upon the Collateral required by Bank
as security for the Indebtedness and to accord Bank a
perfected security position in the Collateral, subject only to
Permitted Encumbrances; (iii) a guaranty agreement from each
Guarantor required by Bank; (iv) in form and substance
satisfactory to Bank, a pro-forma balance sheet of Borrowers
reflecting the Revolving Loan and the Term Loan as provided
herein, accompanied by a certificate, dated as of even date
herewith, of the chief financial officer of Borrower, stating
that such pro-forma balance sheet represents the reasonable,
good faith opinion of such officer as the subject matter
thereof as of the date of such certificate; (v) evidence of an
assignment to Bank of in-force life insurance policies of an
aggregate net amount of at least $1,000,000 insuring the life
of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; and (vi) such other documents or
agreements of security, assurances of Loan Document validity,
legality and enforceability, and appropriate assurances of
validity, perfection and priority of Lien as Bank may request,
and Bank shall have received proof that appropriate security
agreements, financing statements, mortgages, deeds of trust,
collateral and other documents covering the Collateral shall
have been executed and delivered by the appropriate Persons
and recorded or filed in such jurisdictions and such other
steps shall have been taken as necessary to perfect and
protect, subject only to Permitted Encumbrances, the Liens
granted thereby.
b. All actions, proceedings, instruments and documents required
to carry out the borrowings and transactions contemplated by
this Agreement or any other Loan Document or incidental
thereto, and all other related legal matters, shall have been
satisfactory to and approved by Bank.
c. Each Loan Party shall have performed and complied with all
agreements and conditions contained in the Loan Documents
applicable to it and which are then in effect.
d. Each of the representations and warranties of each Loan Party
under any Loan Document shall be true and correct in all
material respects as if made on each loan disbursement date.
e. No Default or Event of Default shall have occurred and be
continuing; there shall have been no material adverse change
in the condition (financial or otherwise), properties,
business, or operations of any Loan Party since the date of
the financial statements most recently delivered to Bank prior
to the date of this Agreement; and no provision of law, any
order of any Governmental Authority, or any regulation, rule
or interpretation thereof, shall have had any Material Adverse
Effect on the validity or enforceability of any Loan Document.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant, and such representations and warranties shall
be deemed to be continuing representations and warranties during the entire life
of this Agreement, and so long as Bank shall have any commitment or obligation
to make any loans and so long as any Indebtedness remains unpaid and outstanding
under any Loan Document, as follows:
3.1 Authority. Each Loan Party and, if applicable, each of its partners and
members who is not a natural Person is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization and is duly qualified and authorized to do business in
each other jurisdiction in which the character of its assets or the
nature of its business makes such qualification necessary.
3.2 Due Authorization. Each Loan Party has all requisite power and
authority to execute, deliver and perform its obligations under each
Loan Document to which it is a party or is otherwise bound, all of
which have been duly authorized by all necessary action, and are not in
contravention of law or the terms of any Loan Party's organizational or
other governing documents.
3.3 Title to Property. Each Loan Party has good title to all property and
assets purported to be owned by it, including those assets identified
on the financial statements most recently delivered to Bank.
3.4 Encumbrances. There are no security interests or other Liens or
encumbrances on, and no financing statements on file with respect to,
any of the property or assets of any Loan Party, except for Permitted
Encumbrances.
3.5 Subsidiaries. Borrower has no Subsidiaries except those specifically
disclosed in the Defined Terms.
3.6 Taxes. Each Loan Party has filed, on or before their respective due
dates, all federal, state, local and foreign tax returns which are
required to be filed, or has obtained extensions for filing such tax
returns, and is not delinquent in filing such returns in accordance
with such extensions, and has paid all taxes which have become due
pursuant to those returns or pursuant to any assessments received by
any such party, as the case may be, to the extent such taxes have
become due, except to the extent such tax payments are being actively
and diligently contested in good faith by appropriate proceedings, and
if requested by Bank, have been bonded or reserved in an amount and
manner satisfactory to Bank.
3.7 Capitalization. Each Borrower is solvent and will continue to be
solvent after the creation of the Term Loan and the Revolving Loan, the
security interests of Bank and the other transactions contemplated
hereunder, is able to pay its debts as they mature and has (and has
reason to believe it will continue to have) sufficient capital (and not
unreasonably small capital) to carry on its business and all businesses
which it is about to engage. The assets and properties of Borrower at a
fair valuation and at their present fair salable value are (and, giving
effect to the transactions contemplated by this Agreement will be),
greater than the indebtedness of Borrower, and to the best of
Borrowers' knowledge, represents an amount which are greater than all
contingencies that can reasonably be expected to become an actual or
matured liability.
3.8 No-Defaults. There exists no default (or event which, with the giving
of notice or passage of time, or both, would result in a default) under
the provisions of any instrument or agreement evidencing, governing,
securing or otherwise relating to any Debt of any Loan Party or
pertaining to any of the Permitted Encumbrances.
3.9 Enforceability of Agreement and Loan Documents. Each Loan Document has
been duly executed and delivered by duly authorized officer(s) or other
representative(s) of each Loan Party and constitutes the valid and
binding obligation of each Loan Party, enforceable in accordance with
its terms, except to the extent that enforcement thereof may be limited
by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights generally
at the time in effect.
3.10 Non-contravention. The execution, delivery and performance by each Loan
Party of the Loan Documents to which such Loan Party is a party or
otherwise bound, are not in contravention of the terms of any
indenture, agreement or undertaking to which any such Loan Party is a
party or by which it is bound, except to the extent that such terms
have been waived or that failure to comply with any such terms would
not have a Material Adverse Effect.
3.11 Actions, Suits, Litigation or Proceedings. There are no actions, suits,
litigation or proceedings, at law or in equity, and no proceedings
before any arbitrator or by or before any Governmental Authority,
pending, or, to the best knowledge of Borrower, threatened against or
affecting any Loan Party, which, if adversely determined, could
materially impair the right of any Loan Party to carry on its business
substantially as now conducted or could have a Material Adverse Effect.
No Loan Party is under investigation by, or is operating under any
restrictions imposed by, any Governmental Authority.
3.12 Compliance with Laws. Each Loan Party has complied with all
Governmental Requirements, including, without limitation, Environmental
Laws, to the extent that failure to so comply could have a Material
Adverse Effect.
3.13 Consents, Approvals and Filings, Etc. Except as have been previously
obtained or as otherwise expressly provided in this Agreement, no
authorization, consent, approval, license, qualification or formal
exemption from, or any filing, declaration or registration with, any
Governmental Authority and no material authorization, consent or
approval from any other Person, is required in connection with the
execution, delivery and performance by any Loan Party of any Loan
Document to which it is a party. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings, declarations
and registrations which have previously been obtained or made, as the
case may be, are in full force and effect and are not the subject of
any attack, or to the knowledge of Borrowers, any threatened attack, in
any material respect, by appeal, direct proceeding or otherwise.
3.14 Environmental Representations. No Loan Party has used Hazardous
Materials on, in, under or otherwise affecting any real or personal
property now or at any time owned, occupied or operated by such Person
or upon which such Person has a place of business which, in any manner,
violates any Environmental Law, to the extent any such violation could
result in a Material Adverse Effect, and to the best of Borrower's
knowledge, no prior or current owner, occupant or operator of any of
such property does or has used any Hazardous Materials on or affecting
such property in. any manner which violates any Environmental Law to
the extent that any such violation could result in a Material Adverse
Effect. No Loan Party has received any notice of any violation of any
Environmental Law, and to the best knowledge of the Borrowers, there
have been no actions commenced or threatened by any Person against any
such property or against any Loan Party for non-compliance with any
Environmental Law which could result in a Material Adverse Effect.
3.15 Accuracy of Information. All financial statements previously furnished
to Bank have been prepared in accordance with GAAP, and fairly present
the financial condition of Borrowers and, as applicable, the
consolidated financial condition of Borrowers and such other Person(s)
as such financial statements purport to present, and the results of
their respective operations as of the dates and for the periods covered
thereby; and since the date(s) of said financial statements, there has
been no material adverse change in the financial condition of Borrowers
or any other Person covered by such financial statements. Each Loan
Party is solvent, able to pay its debts as they mature, has capital
sufficient to carry on its business and has assets the fair market
value of which exceed its liabilities, and no Loan Party will be
rendered insolvent, or unable to pay debts generally as they become due
by the execution or performance of any Loan Document to which it is a
party or by which it is otherwise bound.
SECTION 4. AFFIRMATIVE COVENANTS
Borrowers covenant and agree that, until all instruments and agreements
evidencing each and every loan and other financial accommodation by the Bank to
the Borrowers or any Loan Party are fully discharged and terminated, and
thereafter, so long as any Indebtedness remains outstanding, it will, and, as
applicable, it will cause each Loan Party within its control or under common
control to:
4.1 Preservation of Existence Etc. Preserve and maintain its existence and
preserve and maintain such of its rights, licenses, and privileges as
are material to the business and operations conducted by it; qualify
and remain qualified to do business in each jurisdiction in which such
qualification is material to its business and operations or ownership
of its properties, continue to conduct and operate its business
substantially as conducted and operated during the present and
preceding calendar year; at all times maintain, preserve and protect
all of its franchises and trade names and preserve all the remainder of
its property and keep the same in good repair, working order and
condition; and from time to time make, or cause to be made, all needed
and proper repairs, renewals, replacements, betterments and
improvements thereto.
4.2 Keeping of Books: Audits of Collateral; Fees. Keep proper books of
record and account in which full and correct entries shall be made of
all of its financial transactions and its assets and businesses so as
to permit the presentation of financial statements prepared in
accordance with GAAP; and permit Bank, or its representatives, at
reasonable times and intervals, at Borrower's cost and expense, to
examine its books and records and to discuss its financial matters with
its officers, employees and independent certified public accountants;
and permit Bank from time to time to audit Borrowers' accounts,
inventory, or other Collateral, provided that such audits will be
conducted upon reasonable notice. Borrowers agree to reimburse Bank, on
demand, for customary and reasonable fees and costs incurred by Bank
for such audits, one such audit each six months, and for each appraisal
of Collateral and financial analysis and examination of Borrower
performed by its agents.
4.3 Reporting Requirements. Furnish to Bank, or cause to be furnished to
Bank, the following:
a. as soon as possible, and in any event within five (5) calendar
days after becoming aware of the occurrence or existence of
each Default or Event of Default hereunder or any material
adverse change in the financial condition of any Loan Party, a
written statement of the chief financial officer of Borrowers
(or in his or her absence, a responsible senior officer),
setting forth details of such Default, Event of Default or
change, and the action which Borrowers have taken, or has
caused to be taken, or proposes to take, or to cause to be
taken, with respect thereto;
b. as soon as available, and in any event within one hundred
twenty (120) days after and as of the end of each fiscal year
of each Borrower, audited financial statements of each
Borrower and such other of the Loan Parties as may be required
by the Bank, consolidated, as applicable, including a balance
sheet, statement of profit and loss, statement of shareholders
equity and statement of cash flows, for and as of such fiscal
year then ending and including such other comments and
financial details as are usually included in similar reports.
Such financial statements shall be prepared in accordance with
GAAP by independent certified public accountants of recognized
standing selected by Borrowers and approved by Bank and
containing unqualified opinions as to the fairness of the
statements therein contained.
c. as soon as available, and in any event within thirty (30) days
after and as of the end of each calendar quarter, including
the last such reporting period of each Borrower's fiscal
years, consolidated and consolidating financial statements of
each Borrower and such of the other Loan Parties as may be
required by the Bank, consolidated, as applicable, for and as
of such reporting period, including a balance sheet, statement
of profit and loss and statement of cash flows for and as of
such reporting period then ending and for and as of that
portion of the fiscal year then ending, in each case, prepared
and certified by the chief financial officer of each Borrower
(or in his or her absence, a responsible senior officer of
each Borrower) and, as applicable, each other Loan Party as to
consistency with prior financial reports and accounting
periods, accuracy and fairness of presentation.
d. promptly after filing the same, a copy of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇
annual federal income tax return prepared by independent
certified public accountants of recognized standing selected
by Borrower and approved by Bank.
e. within one hundred twenty (120) days after and as of the end
of each fiscal year of Borrower financial statements to be
provided for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, including a balance sheet and
income statement for the fiscal year then ending and such
other comments and details as usually included in similar
reports.
f. as soon as available, and in any event on or before the fifth
(5th) day of each month and the twenty-fifth (25th) day of
each month, detailed reports and agings of the accounts
receivable for each Borrower in a form acceptable to the Bank.
g. as soon as available, and in any event on or before the
twentieth (20th) day of each month, for the period ending on
the last day of the immediately preceding month, detailed
reports and agings of the accounts payable for each Borrower
in a form acceptable to the Bank.
h. on the fifth (5th) and the twenty-fifth (25th) day of each
month, a borrowing base certificate in form satisfactory to
Bank, evidencing the Borrowing Base as described in the
Advance Formula Agreement.
i. as soon as available, and in any event within thirty-five (35)
days after the end of each calendar month, a compliance
certificate, in form and substance satisfactory to the Bank,
in Bank's sole discretion, certifying to Bank that the
Borrower and the other Loan Parties, as applicable, are in
compliance with the covenants set forth in this Agreement,
prepared and certified by the chief financial officer of
Borrower (or in his or her absence, a responsible senior
officer of Borrower) and, as applicable, each other Loan Party
as to consistency with prior financial reports and accounting
periods, accuracy and fairness of presentation.
Financial Covenants. Maintain all financial covenants set forth below
(for purposes of the financial covenants, definitions for capitalized
terms not otherwise defined in this Agreement follow the covenants):
Debt-to-Tangible Net Worth Ratio. Maintain a Debt-to-Tangible Net Worth
Ratio of not more than the ratio set forth below at end of each fiscal
quarter of Borrowers and measured quarterly on the last day of each
fiscal quarter:
Period Ratio
From June 30, 2004 through September 31, 2004 2.5:1
September 31, 2004 through December 31, 2004 2.5:1
At all times from and after December 31, 2004 2.5:1
Cash Flow. Maintain Cash Flow Coverage Ratio at all times of not less
than 1:25:1:00 which shall be tested quarterly on the last day of each
fiscal quarter.
"Affiliate Receivables" shall mean, as of any time of determination,
any amounts in respect of loans or advances owing to Borrowers or
another Loan Party from any of the Borrower's Subsidiaries or
Affiliates (other than Affiliates which are Guarantors of all
Indebtedness) at such time.
"Cash Flow Coverage Ratio" of any Person shall mean, for any applicable
period of determination, the ratio of (a) the sum of (i) the Net Income
of such Person for such period (after deduction for income taxes and
other taxes of such Person determined by reference to income or profits
of such Person), plus (ii), to the extent deducted in the computation
of such Net Income, the amount of depreciation and amortization expense
and deferred tax liabilities of such Person for such period; plus (iii)
to the extent deducted in the computation of such Net Income, interest
expense for such period, minus, (iv) owner draws or dividends, to (b)
the sum of (i) the aggregate amount of principal payments on long-term
Debt made by such Person during such Period, plus (ii) the aggregate of
all interest paid during this period.
"Debt-to-Tangible Net Worth Ratio" shall mean, in respect of a Person
and as of any applicable date of determination thereof, the ratio of
(a) the total Debt of such Person less the total Subordinated Debt of
such Person at such time to (b) the Tangible Net Worth of such Person
plus the Subordinated Debt of such Person at such time.
"Long Term Indebtedness" shall mean, in respect of a Person and as of
any applicable date of determination thereof, all Debt (other than the
aggregate outstanding principal balance of all Revolving Loans) which
should be classified as "funded indebtedness" or "long term
indebtedness" on a balance sheet of such Person as of such date in
accordance with GAAP.
"Net Income" shall mean the net income (or loss) of a Person for any
applicable period of determination, determined in accordance with GAAP,
but excluding, in any event:
(a) any gains or losses on the sale or other disposition, not in
the ordinary course of business, of investments or fixed or
capital assets, and any taxes on the excluded gains and any
tax deductions or credits on account of any excluded losses;
and
(b) in the case of Borrowers net earnings of any Person in which
Borrowers have an ownership interest, unless such net earnings
shall have actually been received by Borrowers in the form of
cash distributions.
"Tangible Net Worth" shall mean, with respect to any Person, and as to
any applicable date of determination, the excess of (a) the net book
value of all assets of such Person (excluding Affiliate Receivables,
patent rights, goodwill, investment in subsidiaries, trademarks, trade
names, franchises, copyrights and all other intangible assets, and
excluding any markup in valuation of assets pursuant to merger or other
reorganization transactions) after all appropriate deductions in
accordance with GAAP (including, without limitation, reserves for
doubtful receivables, obsolescence, depreciation and amortization),
over (b) all Debt of such Person at such time.
"Working Capital" shall mean, with respect to any Person and as of any
applicable date of determination, Current Assets minus Current
Liabilities.
4.4 Further Assurances: Financing Statements. Furnish Bank, at Borrower's
cost and expense, upon Bank's request and in form satisfactory to Bank
(and execute and deliver or cause to be executed and delivered), such
additional assignments, mortgages, Lien instruments or other security
instruments, consents, acknowledgments, subordinations and financing
statements covering any or all of the Collateral together with such
other documents or instruments as Bank may require to effectuate more
fully the purposes of any Loan Document.
4.5 Insurance. Maintain insurance coverage by insurers acceptable to Bank
on its physical assets and against other business risks in such amounts
and of such types as are customarily carried by companies similar in
size and nature or as may otherwise be required by Bank, and in the
event of acquisition of additional property, real or personal, or of
the incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent
business judgment and present practice would dictate; and in the case
of all policies covering property subject to any Loan Document or
property in which the Bank shall have a Lien of any kind whatsoever,
other than those policies protecting against casualty liabilities to
strangers, all such insurance policies shall provide that the loss
payable thereunder shall be payable to Borrowers (or other Person
providing Collateral) and Bank, with mortgagee's clauses in favor of
and satisfactory to Bank for all such policies, and such policies shall
also provide that they may not be canceled or changed without thirty
(30) days' prior written notice to Bank. Upon the request of Bank, all
of said policies, or copies thereof, including all endorsements thereon
and those required hereunder, shall be deposited with Bank.
4.6 Compliance with ERISA. In the event that any Loan Party or any of its
Subsidiaries maintain(s) or establish(es) a Pension Plan subject to
ERISA, (a) comply in all material respects with all requirements
imposed by ERISA as presently in effect or hereafter promulgated,
including, but not limited to, the minimum funding requirements
thereof; (b) promptly notify Bank upon the occurrence of a "reportable
event" or "prohibited transaction" within the meaning of ERISA, or that
the PBGC or any Loan Party has instituted or will institute proceedings
to terminate any Pension Plan, together with a copy of any proposed
notice of such event which may be required to be filed with the PBGC;
and (c) furnish to Bank (or cause the plan administrator to furnish
Bank) a copy of the annual return (including all schedules and
attachments) for each Pension Plan covered by ERISA, and filed with the
Internal Revenue Service by any Loan Party not later than ten (10) days
after such report has been so filed.
4.7 Environmental Covenants. Comply with all applicable Environmental Laws,
and maintain all permits, licenses and approvals required under
applicable Environmental Laws, where the failure to do so could have a
Material Adverse Effect. Promptly notify Bank, in writing, as soon as
Borrower becomes aware of any condition or circumstance which makes any
of the environmental representations or warranties set forth in this
Agreement incomplete, incorrect or inaccurate in any material respect
as of any date; and promptly provide to Bank, immediately upon receipt
thereof, copies of any material correspondence, notice, pleading,
citation, indictment, complaint, order, decree, or other document from
any source asserting or alleging a violation of any Environmental Law
by any Loan Party, or of any circumstance or condition which requires
or may require, a financial contribution by any Loan Party, or a
clean-up, removal, remedial action or other response by or on behalf of
any Loan Party, under applicable Environmental Law, or which seeks
damages or civil, criminal or punitive penalties form any Loan Party or
any violation or alleged violation of any Environmental Law. Borrower
hereby agrees to indemnify, defend and hold Bank, and any of Bank's
past, present and future officers, directors, shareholders, employees,
representatives and consultants, harmless form any and all claims,
losses, damages, suits, penalties, costs, liabilities, obligations and
expenses (including, without limitation, reasonable legal expenses and
attorneys' fees, whether inside or outside counsel is used) incurred or
arising out of any claim, loss or damage of any property, injuries to
or death of any persons, contamination of or adverse effects on the
environment, or other violation of any applicable Environmental Law, in
any case, caused by any Loan Party or in any way related to any
property owned or operated by any Loan Party or due to any acts of any
Loan Party or any of its officers, directors, shareholders, employees,
consultants and/or representatives INCLUDING ANY CLAIMS, LOSSES,
DAMAGES, SUITS, PENALTIES, COSTS, LIABILITIES, OBLIGATIONS OR EXPENSES,
RESULTING FROM BANK'S OWN NEGLIGENCE; provided however, that the
foregoing indemnification shall not be applicable, and Borrowers shall
not be liable for any such claims, losses, damages, suits, penalties,
costs, liabilities, obligations or expenses, to the extent (but only to
the extent) the same arise or result from any gross negligence or
willful misconduct of Bank or any of its agents or employees.
4.8 Life Insurance. Maintain in effect at all times the $1,000,000 life
insurance policies on the life of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ which have been
assigned to the Bank.
SECTION 5. NEGATIVE COVENANTS
Borrowers covenant and agree that, until all instruments and agreements
evidencing each and every loan and other financial accommodation by the Bank to
the Borrowers or any Loan Party are fully discharged and terminated, and
thereafter, so long as any Indebtedness remains outstanding, it will not, and it
will not allow any Loan Party within its control or under common control to,
without the prior written consent of the Bank:
5.1 Capital Structure; Business Objects or Purpose: Mergers; Asset
Disposition: Acquisitions. Purchase, acquire or redeem any of its
equity ownership interests; or enter into any reorganization or
recapitalization; or reclassify its equity ownership interests; or make
any material change in its capital structure or general business
objects or purpose; or change its name, or enter into any merger or
consolidation, whether or not the surviving entity- thereunder; or
sell, lease, transfer, relocate or dispose of all, substantially all,
or any material part of its assets (whether in a single transaction or
in a series of transactions); or purchase or otherwise acquire or
become obligated for the purchase of all or substantially all of the
assets or business interests of any Person or any shares of stock or
other ownership interests of any Person or in any other manner
effectuate or attempt to effectuate an expansion of present business by
acquisition.
5.2 Guaranties. Guarantee, endorse, or otherwise become secondarily liable
for or upon the obligations or Debt of others (whether directly or
indirectly), except guaranties in favor of and satisfactory to Bank and
endorsements for deposit or collection in the ordinary course of
business.
5.3 Debt. Become or remain obligated for any Debt, except: Indebtedness and
other Debt from time to time outstanding and owing to Bank; current
unsecured trade, utility or non-extraordinary accounts payable arising
in the ordinary course of business or other Debt up to $150,000
(including, without limitation, capital lease obligations outstanding
as of the date hereof.
5.4 Encumbrances. Create, incur, assume or suffer to exist any Lien upon
any of its property or assets, whether now owned or hereafter acquired,
except for Permitted Encumbrances.
5.5 Investments; Extensions of Credit. Make or allow to remain outstanding
any investment (whether such investment shall be of the character of
investment in shares of stock, evidences of indebtedness or other
securities or otherwise) in, or any loans; advances or extensions of
credit to, any Person, other than (a) Borrower's current ownership
interests in those Subsidiaries of Borrower, if any, which are
specifically disclosed in the definition of Subsidiaries, and (b) any
investment in direct obligations of the United States of America or any
agency thereof, or in certificates of deposit issued by Bank,
maintained consistent with Borrowers' Subsidiary's business practices
prior to the date hereof; provided, that no such investment shall
mature more than one (1) year after the date when made or the issuance
thereof, and (c) marketable, traded stock and other securities issued
by entities organized under the laws of the United States or a state
thereof.
5.6 Pension Plans. Except in compliance with this Agreement, enter into,
maintain, or make contribution to, directly or indirectly, any Pension
Plan that is subject to ERISA.
5.7 Subordinate Indebtedness. Subordinate any indebtedness due to it from
any Person to indebtedness of other creditors of such Person; provided,
however, Parent or MTSI may subordinate any such indebtedness due to
either of them to indebtedness of other creditors of such Person if the
aggregate unpaid principal balance of the total indebtedness being
subordinated (as to both Parent and MTSI, combined) does not exceed
$150,000.
SECTION 6. EVENTS OF DEFAULT
6.1 Events of Default. The occurrence or existence of any of the following
conditions or events shall constitute an "Event of Default" hereunder:
(a) non-payment of any principal, interest or other sums due upon the
Indebtedness at such time the same becomes due or, if applicable, upon
expiration of the grace period, if any; (b) default in the observance
or performance of any of the other conditions, covenants (other than
financial covenants and financial reporting covenants) or agreements of
any Loan Party set forth in this Agreement or any other Loan Document
if such default or nonperformance continues for more than thirty (30)
days from the date on which such default or nonperformance first
occurs; (c) any representation or warranty made by any Loan Party in
any Loan Document shall be untrue or incorrect in any material respect
and remains uncured for a period of more than thirty (30) days beyond
the date on which such representation or warranty first becomes untrue
or incorrect in any material respect (except that there will be no
30-day cure period for untrue or incorrect representations or
warranties which by their nature cannot be cured); (d) any default or
event of default, as the case may be, shall occur under any other Loan
Documents and shall continue beyond the applicable grace period, if
any; and (e) any change in the management, ownership or control of
Borrowers, whether by reason of incapacity, death, resignation,
termination or otherwise which, in bank's sole judgment, could become a
Material Adverse Effect.
6.2. Remedies Upon Event of Default. Upon the occurrence and at any time
during the existence or continuance of any Event of Default, but
without impairing or otherwise limiting the Bank's right to demand
payment of all or any portion of the Indebtedness which is payable on
demand, at Bank's option, Bank may give notice to Borrower declaring
all or any portion of the Indebtedness remaining unpaid and
outstanding, whether under the notes evidencing the Indebtedness or
otherwise, to be due and payable in full without presentation, demand,
protest, notice of dishonor, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby
expressly waived, whereupon all such Indebtedness shall immediately
become due and payable. Furthermore, upon the occurrence of a Default
or Event of Default and at any time during the existence or continuance
of any Default or Event of Default, but without impairing or otherwise
limiting the right of Bank, if reserved under any Loan Document, to
make or withhold financial accommodations at its discretion, to the
extent not yet disbursed, any commitment by Bank to make any further
loans. The foregoing rights and remedies are in addition to any other
rights, remedies and privileges Bank may otherwise have or which may be
available to it, whether under this Agreement, any other Loan Document,
by law, or otherwise.
6.3 Waiver of Defaults. No Default or Event of Default shall be waived by
Bank except in a written instrument specifying the scope and terms of
such waiver and signed by an authorized officer of Bank, and such
waiver and shall be effective only for the specific time(s) and
purpose(s) given. No single or partial exercise of any right, power or
privilege hereunder, or any delay in the exercise thereof, shall
preclude other or further exercise of Bank's rights. No waiver of any
Default or Event of Default shall extend to any other or further
Default or Event of Default. No forbearance on the part of Bank in
enforcing any of Bank's rights or remedies under any Loan Document
shall constitute a waiver of any of its rights or remedies. Borrowers
expressly agrees that this Section may not be waived or modified by
Bank by course of performance, estoppel or otherwise.
SECTION 7. MISCELLANEOUS
7.1 Governing Law. Each Loan Document shall be deemed to have been
delivered in and shall be governed by and construed and enforced in
accordance with the laws of the State of Texas, except to the extent
that the UCC, other personal property law or real property law of
another jurisdiction where Collateral is located is applicable, and
except to the extent expressed to the contrary in any Loan Document.
7.2 Costs and Expenses. Borrowers shall pay Bank, on demand, all costs and
expenses, including, without limitation, reasonable attorneys' fees and
legal expenses (whether inside or outside counsel is used), incurred by
Bank in perfecting, revising, protecting or enforcing any of its rights
or remedies against any Loan Party or any Collateral, or otherwise
incurred by Bank in connection with any Default or Event of Default or
the enforcement of the Loan Documents or the Indebtedness. Following
Bank's demand upon Borrowers for the payment of any such costs and
expenses, and until the same are paid in full, the unpaid amount of
such costs and expenses shall constitute Indebtedness and shall bear
interest at the highest default rate of interest provided in any Loan
Document.
7.3 Successors and Assigns; Participation. This Agreement shall be binding
upon and shall inure to the benefit of Borrower and Bank and their
respective successors and assigns. The foregoing shall not authorize
any assignment or transfer by Borrowers of any of its respective
rights, duties or obligations hereunder, such assignments or transfers
being expressly prohibited. Bank, however, may freely assign, whether
by assignment, participation or otherwise, its rights and obligations
hereunder, and is hereby authorized to disclose to any such assignee or
participant (or proposed assignee or participant) any financial or
other information in its knowledge or possession regarding any Loan
Party or the Indebtedness.
7.4 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of any Loan Party made in
any Loan Document, or in any certificate, report, financial statement
or other document furnished by or on behalf of any Loan Party in
connection with any Loan Document, shall be deemed to have been relied
upon by Bank, notwithstanding any investigation heretofore or hereafter
made by Bank or on Bank's behalf, and those covenants and agreements of
Borrowers set forth in Section 4.8 hereof (together with any other
indemnities of Borrowers contained elsewhere in any Loan Document)
shall survive the termination of this Agreement and the repayment in
full of the Indebtedness.
7.5 Complete Agreement; Conflicts. This Agreement, the other Loan
Documents, and any commitment letter previously issued by Bank with
respect thereto (provided that in the event of any inconsistency or
conflict between this Agreement and the other Loan Documents, on one
hand, and such commitment letter, on the other hand, this Agreement and
the Loan Documents shall control), contain the entire agreement of the
parties thereto and supercede all prior agreements and understandings
related to the subject matter hereof, and none of the parties shall be
bound by anything not expressed in writing. In the event that, and to
the extent that, any of the terms, conditions or provisions of any of
the other Loan Documents are inconsistent with or in conflict with any
of the terms, conditions or provisions of this Agreement, the
applicable terms, conditions and provisions of this Agreement shall
govern and control. Any amendments or modifications hereto shall be in
writing signed by all parties.
7.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the
same agreement.
7.7 WAIVER OF JURY TRIAL. BANK AND BORROWERS EACH ACKNOWLEDGE THAT THE
RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL "ONE, BUT THAT IT MAY BE
WAIVED. EACH OF THEM, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR ANY
COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTION OF EITHER OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR BORROWERS,
EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM.
7.8 ORAL AGREEMENTS INEFFECTIVE. THIS AGREEMENT AND THE OTHER "LOAN
AGREEMENTS" (AS DEFINED IN SECTION 26.02(A)(2) OF THE TEXAS BUSINESS &
COMMERCE CODE, AS AMENDED) REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES, AND THIS AGREEMENT AND THE OTHER WRITTEN LOAN AGREEMENTS MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
WITNESS the due execution hereof as of the day and year first above written.
COMERICA BANK BORROWERS:
---------
By:_________________________ MICROWAVE TRANSMISSION SYSTEMS, INC.
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President By:_________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: P.O. Box 650282 Title: President Chief Executive Officer
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Mail Code 6565
Facsimile No.(▇▇▇) ▇▇▇-▇▇▇▇
MTSI, INC.
By:___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
EPIC COMMUNICATIONS, INC.
By:___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
CKS MANAGEMENT, INC.
By:___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
VIPER COMMUNICATION SYSTEMS, INC.
By: ___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Address for all Borrowers:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
