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MEDAR, INC.
INTEGRAL VISION LTD.
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$10,000,000
AMENDED AND RESTATED
REVOLVING CREDIT AND LOAN AGREEMENT
DATED AS OF JULY 31, 1998
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NBD BANK
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TABLE OF CONTENTS
PAGE
INTRODUCTION..............................................................................................................1
ARTICLE I. DEFINITIONS.............................................................................................1
1.1 Certain Definitions.....................................................................................1
1.2 Certain Rules of Construction..........................................................................10
1.3 Acknowledgment and Restatement of Credit...............................................................11
ARTICLE II. THE CREDIT FACILITIES..................................................................................11
2.1 Revolving Loan.........................................................................................11
2.2 Commitment Fee and Reducing Commitment.................................................................12
2.3 Letters of Credit......................................................................................13
2.4 Real Estate Loans......................................................................................15
2.6 NBD Records and Determinations.........................................................................15
ARTICLE III. PAYMENTS AND PREPAYMENTS OF LOANS......................................................................15
3.1 Interest Rate and Method of Computation................................................................15
3.2 Payment of Principal and Interest......................................................................16
3.3 Prepayment.............................................................................................16
3.4 Manner, Time and Place of Payment......................................................................16
3.5 Authorization of Payments..............................................................................17
3.6 No Setoff or Deduction.................................................................................17
3.7 Payment on Non-Business Day; Payment Computations......................................................17
3.8 Conditions for Initial Loans...........................................................................17
3.9 Further Conditions for Disbursement....................................................................18
ARTICLE IV. - ADDITIONAL COSTS.......................................................................................19
4.1 Increased Costs........................................................................................19
4.2 Capital Requirements...................................................................................19
ARTICLE V. REPRESENTATIONS AND WARRANTIES.........................................................................20
5.1 Corporate Existence and Power..........................................................................20
5.2 Corporate Authority....................................................................................20
5.3 Binding Effect.........................................................................................20
5.4 Subsidiaries...........................................................................................21
5.5 Litigation.............................................................................................21
5.6 Financial Condition....................................................................................21
5.7 Use of Loans...........................................................................................21
5.8 Consents, Etc..........................................................................................21
5.9 Taxes..................................................................................................21
5.10 Title to Properties....................................................................................22
5.11 Compliance with Governmental Regulations...............................................................22
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5.12 ERISA..................................................................................................22
5.13 Environmental Matters..................................................................................22
5.14 Investment Company Act.................................................................................23
5.15 Disclosure.............................................................................................23
ARTICLE VI. COVENANTS..............................................................................................23
6.1 Affirmative Covenants..................................................................................23
6.2 Negative Covenants.....................................................................................26
ARTICLE VII. DEFAULT................................................................................................29
7.1 Events of Default......................................................................................29
7.2 Remedies...............................................................................................32
ARTICLE VIII. CROSS-GUARANTIES.......................................................................................33
8. Cross Guaranties
8.1 Guaranty...............................................................................................33
8.2 Waivers and Consents...................................................................................33
8.3 Subrogation; Subordination.............................................................................34
ARTICLE IX. MISCELLANEOUS..........................................................................................34
9.1 Amendments.............................................................................................34
9.2 Notices................................................................................................34
9.3 No Waiver By Conduct; Remedies Cumulative..............................................................34
9.4 Reliance on and Survival of Various Provisions.........................................................35
9.5 Expenses; Indemnification..............................................................................35
9.6 Successors and Assigns.................................................................................36
9.7 Participations.........................................................................................36
9.8 Disclosure of Information..............................................................................36
9.9 Counterparts...........................................................................................36
9.10 Governing Law..........................................................................................36
9.11 Table of Contents and Headings.........................................................................37
9.12 Construction of Certain Provisions.....................................................................37
9.13 Integration and Severability...........................................................................37
9.14 Independence of Covenants..............................................................................37
9.15 Joint and Several Liability............................................................................37
9.16 Interest Rate Limitation...............................................................................38
9.17 Limitation of Liability................................................................................38
9.18 Waiver Of Jury Trial...................................................................................38
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EXHIBITS
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Exhibit 2.1 Revolving Note
Exhibit 3.2 Request for Revolving Loan
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SCHEDULES
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Schedule 5.4 Subsidiaries
Schedule 5.5 Litigation
Schedule 5.6 Financial Statements
Schedule 5.13 Environmental Matters
Schedule 6.2(c) Existing Indebtedness
Schedule 6.2(d) Existing Liens
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AMENDED AND RESTATED
REVOLVING CREDIT AND LOAN AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND LOAN AGREEMENT (this
"Agreement"), dated as of July 31, 1998, is by and between MEDAR, INC., a
Michigan corporation (the "Company"), and INTEGRAL VISION LTD., a corporation
established under the laws of the United Kingdom ("Integral"), as borrowers, and
NBD BANK, a Michigan banking corporation ("NBD"), formerly NBD Bank, N.A. The
Company and Integral are collectively referred to as the "Borrowers" and
individually as a "Borrower."
INTRODUCTION
WHEREAS, Integral and Medar Canada, Ltd. ("Guarantor") are wholly owned
Subsidiaries of the Company and receive substantial benefit from the Company and
each other, including without limitation, accounting and administrative
services, research and development, marketing and sales assistance.
WHEREAS, NBD has provided a committed line of credit of varying amounts
to the Company (including Automatic Inspection Devices, Inc. which has since
been merged into the Company) and Integral under the terms of a Revolving Credit
and Loan Agreement dated August 10, 1995 as amended by agreements dated October
12, 1995, October 31, 1995, March 29, 1996, August 11, 1996, February 27, 1997,
March 28, 1997, June 27, 1997, July 15, 1997 and March 16, 1998 ("Existing Loan
Agreement"), and has provided various other financial accommodations to the
Company and its Subsidiaries, including mortgage loans and various equipment
loans and letters of credit.
WHEREAS, in order to provide funds for the working capital and other
corporate purposes of the Borrowers and Guarantor, NBD has agreed to extend a
discretionary authorization, in addition to the outstanding term loans in favor
of the Borrowers on the terms and conditions herein set forth.
Therefore, the parties agree as follows:
ARTICLE I. DEFINITIONS
1.1 Certain Definitions. In addition to the terms defined elsewhere in
this Agreement, as used in this Agreement, the following terms shall have the
following meanings:
"Affiliate", when used with respect to any person, means 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 the correlative meanings of 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
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policies of such person, whether through the ownership of voting securities or
by contract or otherwise.
"Applicable Rate" means, (i) with respect to the Revolving Loans, the
Floating Rate, (ii) with respect to the Existing Equipment Loan, the rate
specified as the non-default interest rate in the applicable Equipment Loan
Documents for such Existing Equipment Loan, and (iii) with respect to the 1995
Mortgage Loan and the 1993 Mortgage Loan, the Term Rate.
"Borrowing Base" means an amount determined by NBD equal to the sum of
the following:
(a) Up to 80% of the book value of Eligible Accounts Receivables
of the Borrowers and Guarantor; plus
(b) Up to 40% of the lower of costs or market value of Eligible
Inventory of the Borrowers and Guarantor for advances made on or before
September 30, 1998, and up to 35% of the lower of cost or market value
of Eligible Inventory of the Borrowers and Guarantor for advances made
on or after October 1, 1998. Notwithstanding the foregoing, in no event
will the amount advanced against Eligible Inventory exceed $4,000,000
until September 30, 1998, and $3,500,000 beginning October 1, 1998.
"Business Day" means a day other than a Saturday, Sunday or other day
on which NBD is not open to the public for carrying on substantially all of its
banking functions.
"Capital Expenditures" means, for any period, the additions to
property, plant and equipment and other capital expenditures of the Borrowers
and the Guarantor for such period, as the same are or should be set forth on the
Combined financial statements of the Company and its Subsidiaries in accordance
with GAAP.
"Capital Lease" of any person means any lease which, in accordance with
GAAP, is or should be capitalized on the books of such person.
"Cash Equivalents" means, as to any person, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than 12
months from the date of acquisition, (b) time deposits and certificates of
deposit of any commercial bank with a long term unsecured debt rating of at
least A or its equivalent from Standard & Poor's Rating Group or at least A-2 or
its equivalent from ▇▇▇▇▇'▇ Investors Service, Inc. with maturities of not more
than six months from the date of acquisition by such person, (c) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, (d) commercial paper issued by any
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person incorporated in the United States, which commercial paper is rated at
least A1 or the equivalent thereof by Standard & Poor's Ratings Group or at
least P1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. or at
least F1 or the equivalent thereof by Fitch Investor Services, Inc. and in each
case maturing not more than 180 days after the date of issuance by such person,
and (e) investments in money market funds substantially all the assets of which
are comprised of securities of the types described in clauses (a) through (d)
above.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations thereunder.
"Combined" or "combined" means, when used with reference to any
financial term in this Agreement, the aggregate for the Company, Integral and
the Guarantor of the amounts signified by such term for all such persons
determined on a combined basis in accordance with GAAP.
"Commitment" means the commitment of NBD to make Revolving Loans
pursuant to Section 2.1, in the initial amount of $10,000,000, as such amount
may be reduced from time to time pursuant to Section 2.2(b).
"Contingent Liabilities" of any person means, as of any date, all
obligations of such person or of others for which such person is contingently
liable, as obligor, guarantor, surety or in any other capacity, or in respect of
which obligations such person assures a creditor against loss or agrees to take
any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including all
reimbursement obligations of such person in respect of any letters of credit,
surety bonds or similar obligations and all obligations of such person to
advance funds to, or to purchase assets, property or services from, any other
person in order to maintain the financial condition of such other person.
"Debt to Worth Ratio" means the relationship, expressed as a numerical
ratio, which Total Debt bears to Tangible Net Worth.
"Default" means any of the events or conditions described in Section
7.1 which might become an Event of Default with notice or lapse of time or both.
"Default Rate" means the rate per annum which is two percent (2%) per
annum in excess of the Applicable Rate.
"Dollars" and "$" means the lawful money of the United States of
America.
"Eligible Accounts Receivable" means each account owing to any of the
Borrowers or Guarantor ("Loan Party") which meets the following
specifications:
(a) it arose from a bona fide sale of goods, in the ordinary
course of business, such goods having been delivered or shipped to the
account debtor and
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the appropriate Loan Party has genuine purchase orders, invoices and
shipping documents or receipts;
(b) has been outstanding for no more than 120 days from the date
of shipment or delivery;
(c) it is owned by the appropriate Loan Party, free and clear of
any Lien, other than the perfected, first priority Lien created in
favor of NBD and a Lien subject to the Subordination Agreement;
(d) it is enforceable against the account debtor for the amount
included in the Borrowing Base, is in compliance with applicable laws
and regulations, is not subject to any set-off, credit allowance or
adjustment (except discounts for prompt payment reflected in the
computation thereof) and the account debtor has not returned the goods
or disputed liability with respect to such account;
(e) none of the Loan Parties have notice or knowledge of any fact
or occurrence which could reasonably be expected to impair the credit
worthiness of the account debtor;
(f) the account debtor is not an Affiliate of any Loan Party, nor
is it the United States of America, or any agency thereof;
(g) the account debtor has its principle place of business in the
United States, or Canada, or the account is covered by acceptable
credit insurance; and
(h) NBD has not notified the Borrowers that the account or
account debtor is unsatisfactory, in the sole discretion of NBD.
"Eligible Inventory" means finished goods, work-in-progress or raw
material inventory of any of the Loan Parties which meets the following
specifications:
(a) it is owned by the appropriate Loan Party free and clear of
any Lien other than the perfected, first priority Lien created in favor
of NBD and a Lien subject to the Subordination Agreement;
(b) it is in good and saleable condition and does not consist of
returned goods, or damaged, obsolete or slow-moving inventory;
(c) it is located at a location owned or leased by a Loan Party
and NBD is properly perfected on inventory in such location; and
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(d) NBD has not notified the Borrowers that the Inventory is
unsatisfactory, in the sole discretion of NBD.
"Environmental Laws" means any and all Governmental Regulations
concerning the protection of, or regulating the discharge of substances into,
the environment, including the Governmental Regulations specified in the
definition of Hazardous Materials.
"Effective Date" means the effective date specified in the final
paragraph of this Agreement.
"Equipment Loans" means the loan evidenced by the Existing Equipment
Note and the loan, lease or conditional sales contract funded or otherwise
guarantied by NBD Section 2.5.
"Equipment Loans Documents" means any and all documents which NBD may
require in connection with any Equipment Loan, as originally executed or as they
may from time to time be supplemented, modified, amended, renewed or extended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations thereunder.
"ERISA Affiliate" means, with respect to any person, any trade or
business (whether or not incorporated) which, together with such person or any
Subsidiary of such person, would be treated as a single employer under Section
414 of the Code.
"Event of Default" means any of the events or conditions described in
Section 7.1.
"Existing Equipment Loan" means the equipment loan made to Borrower
under the Existing Loan Agreement, as evidenced by the Existing Equipment Note.
"Existing Equipment Note" means the Term Note dated March 20, 1997 in
the original principal amount of $131,315.80, together with any amendment,
restatement, replacement or renewal thereof.
"Floating Rate" means the per annum rate equal to 1/4% per annum, plus
the Prime Rate in effect from time to time.
"Funding Date" means any Business Day designated by the Company as a
day on which a Revolving Loan is to be made.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those reflected in the financial statements listed in
Schedule 5.6.
"Governmental Regulations" means any and all laws, statutes,
ordinances, rules,
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regulations, judgments, writs, injunctions, decrees, orders, awards and
standards, or any similar requirement, of the government of the United States,
any foreign government or any state, province, municipality or other political
subdivision thereof or therein or any court, agency, instrumentality, regulatory
authority or commission of any of the foregoing.
"Guarantor" means Medar Canada, Ltd., a Canadian corporation, and any
other subsidiary of the Company which may from time to time execute a guaranty
of the Obligations.
"Guaranty Agreement" means the Guaranty Agreement dated August 10, 1995
executed and delivered by the Guarantor to NBD.
"Hazardous Materials" means asbestos-containing materials, mono- or
polychlorinated biphenyls, urea formaldehyde products, radon, radioactive
materials and any "hazardous substance", "hazardous waste", "pollutant", "toxic
pollutant", "oil" or "contaminant" as used in, or defined pursuant to, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 USC Sections 9601 et seq., and 40 CFR Sections 302.1 et seq.; the
Federal Clean Air Act, as amended, 42 USC Sections 7401 et seq., and regulations
thereunder; the Resource Conservation and Recovery Act, 42 USC Sections 6901 et
seq., as amended, and regulations thereunder; the Federal Water Pollution
Control Act, 33 USC Sections 1251 et seq., as amended, and regulations
thereunder; 40 CFR Sections 116.1 et seq. and Sections 129.1 et seq.; and any
other substance, waste, pollutant, contaminant or material, including petroleum
products and derivatives, the use, transport, disposal, storage, treatment,
recycling, handling, release, threatened release, or emission of which is
regulated or governed by any Environmental Laws.
"Indebtedness" of any person means (a) all obligations of such person
for borrowed money, (b) all obligations of such person as lessee under any
Capital Lease, (c) all obligations which are secured by any Lien existing on any
asset or property of such person whether or not the obligation secured thereby
shall have been assumed by such person, (d) the unpaid purchase price for goods,
property or services acquired by such person, except for trade accounts payable
arising in the ordinary course of business that are not past due, (e) all
obligations of such person to purchase goods, property or services where payment
therefor is required regardless of whether delivery of such goods or property or
the performance of such services is ever made or tendered (generally referred to
as "take or pay contracts"), (f) all liabilities of such person in respect of
unfunded benefit liabilities (determined in accordance with Section 4001(a)(18)
of ERISA) under any Plan of such person or of any ERISA Affiliate, (g) all
obligations of such person in respect of any interest rate or currency swap,
rate cap or other similar transaction (valued in an amount equal to the highest
termination payment, if any, that would be payable by such person upon
termination for any reason on the date of determination), and (h) all Contingent
Liabilities of such person.
"Investment" means (a) any transfer or delivery of cash, stock or other
property or value by such Person in exchange for Indebtedness, stock or any
other security of another Person; (b) any loan, advance or capital contribution
to or in any other Person; (c) any guaranty, creation or
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assumption of any liability or obligation of any other Person; and (d) any
investment in any fixed property or fixed assets other than fixed properties and
fixed assets acquired and used in the ordinary course of the business of that
Person.
"L/C Documents" means the L/C and all applications and other documents
which NBD may require in connection with any issuance of an L/C by NBD
hereunder, as originally executed or as they may from time to time be
supplemented, modified, amended, renewed or extended.
"L/Cs" means the letters of credit issued by NBD on behalf of any
Borrower pursuant to Section 2.3, and any amendments, restatements,
replacements, extensions or renewals thereof.
"L/C Sublimit" means the maximum amount of L/Cs which may be
outstanding at any time, which amount shall be $500,000.
"Lien" means any pledge, assignment, hypothecation, mortgage, security
interest, deposit arrangement, option, conditional sale or title retaining
contract, sale and leaseback transaction, financing statement filing, lessor's
or lessee's interest under any lease, subordination of any claim or right, or
any other type of lien, charge, encumbrance, preferential arrangement or other
claim or right.
"Loans" means (i) the Revolving Loans made by NBD to the Borrowers
pursuant to Section 2.1 evidenced by the Revolving Note, (ii) the Existing
Equipment Loan (iii) the 1995 Mortgage Loan made by NBD to the Company as
described in Section 2.4(a), and (iv) the 1993 Mortgage Loan made by NBD to the
Company as described in Section 2.4(b).
"Loan Documents" means this Agreement, the Notes, the Guaranty
Agreement, the L/C Documents, the Equipment Loan Documents, the Security
Documents, the 1995 Term Note (defined in Section 2.4(a)), the 1995 Mortgage
(defined in Section 2.4(a)), the 1993 Term Note (defined in Section 2.4(b)) and
the 1993 Mortgage (defined in Section 2.4(b)), given to NBD, as any of the
foregoing may be amended from time to time, and all other agreements, documents
or instruments now or hereafter executed by or on behalf of any of the Borrowers
or the Guarantor and delivered to NBD in connection with this Agreement or any
amendment thereof.
"Loans" means (i) the Revolving Loans made by NBD to the Borrower
pursuant to Section 2.1, evidenced by the Revolving Note, (ii) the Equipment
Loans made by NBD to any one or more of the Borrowers pursuant to Section 2.4,
(iii) 1995 Mortgage Loan described in Section 2.4(a), and (iv) the 1993 Mortgage
Loan described in Section 2.4(b).
"Material Adverse Event" means any event, occurrence or state of facts
which has or could have a material adverse effect on the business, properties,
assets, operations, condition (financial or otherwise) or prospects of any
Borrower or any Guarantor.
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"Multiemployer Plan" means any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Notes" means the Revolving Note, the 1995 Term Note, the 1993 Term
Note, and the Existing Equipment Note, together with any amendment, restatement,
replacement or renewal thereof, together with any amendment, restatement,
replacement or renewal thereof.
"Note Subordination Agreement" means the Subordination Agreement given
to NBD by the holders of the Subordinated Notes, dated July 14, 1997, and any
amendment, replacement or restatement thereof which has been approved by NBD.
"Obligations" means the principal of and interest on the Loans, the
aggregate amount of outstanding L/Cs and all other indebtedness, obligations and
liabilities of any of the Borrowers to NBD under, arising out of or in
connection with this Agreement or any other Loan Document (including
indemnities, fees and expenses), whether now existing or hereafter incurred,
direct or indirect, absolute or contingent, matured or unmatured, joint or
several, whether for principal, interest, reimbursement obligations, fees,
expenses or otherwise, and the due performance and compliance with the terms and
conditions of this Agreement and the other Loan Documents by any Borrower or any
Guarantor.
"Payment Date" means the last Business Day of each month, commencing
July 31, 1998.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means the Liens permitted by Section 6.2(d).
"Person" or "person" includes an individual, a corporation, an
association, a partnership, a trust or estate, a joint stock company, an
unincorporated organization, a joint venture, a trade or business (whether or
not incorporated), a government (foreign or domestic) and any agency or
political subdivision thereof, or any other entity.
"Plan" means, with respect to any person, any pension plan (other than
a Multiemployer Plan) subject to Title IV of ERISA or to the minimum funding
standards of Section 412 of the Code which has been established or maintained by
such person, any Subsidiary of such person or any ERISA Affiliate, or by any
other person if such person, any Subsidiary of such person or any ERISA
Affiliate could have liability with respect to such pension plan.
"Prime Rate" means the prime rate of interest as announced by NBD at
its principal office at Detroit, Michigan, as in effect from time to time, which
rate may not be the lowest rate charged by NBD to any of its customers, which
Prime Rate shall change simultaneously with any change in such announced rate.
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"Prohibited Transaction" means any transaction involving any Plan which
is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Property" means any real property in which any Borrower or any
Guarantor has an interest or right of possession.
"Purchase Money Liens" means Liens securing purchase money Indebtedness
incurred in connection with the acquisition of capital assets by any Borrower or
any Guarantor in the ordinary course of business; provided that (a) such Liens
do not extend to or cover assets or properties other than those purchased in
connection with the purchase in which such Indebtedness was incurred and (b) the
obligation secured by any such Lien so created shall not exceed 100% of the cost
of the property including transportation and installation costs covered thereby.
"Reportable Event" means a reportable event as described in Section
4043(b) of ERISA including those events as to which the 30-day notice period is
waived under Part 2615 of the regulations promulgated by the PBGC under ERISA.
"Restricted Payments" means any dividend (other than dividends payable
solely in capital stock of such person) or returns of capital to any shareholder
of such person, or any other distribution, payment or delivery of property or
cash to any of such person's shareholder's or any redemption, retirement,
purchase or other acquisition of capital stock of such person.
"Revolving Loan" means a loan made by NBD to the Borrowers pursuant to
Section 2.1.
"Revolving Note" means the Revolving Credit Note of the Borrowers
evidencing the Revolving Loans in the form of Exhibit 2.1, together with any
amendment, restatement, replacement or renewal thereof.
"Security Documents" means the General Security Agreement, dated March
29, 1996, from the Company to the Bank, the Composite Guarantee and Debenture
dated June 7, 1996, from Integral to the Bank, the General Security Agreement,
dated May 1, 1996, from Medar Canada, Ltd. and other documents from any Borrower
or Guarantor which grant or perfect a lien in favor of NBD.
"Subordinated Notes" means Indebtedness of the Company under seven
12.95% Senior Subordinated Secured Notes dated July 14, 1997, in the aggregate
original principal amount of $7,000,000, which have been issued under the Note
and Warrant Purchase Agreement, dated as of July 14, 1997, and any replacements
thereof; provided that such Indebtedness, any guaranties and any Liens are made
subordinate to the Obligations and Liens of NBD on terms satisfactory to NBD.
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"Subsidiary" of any person means any other person (whether now existing
or hereafter organized or acquired) in which (other than directors' qualifying
shares required by law) at least a majority of the securities or other ownership
interests of each class having ordinary voting power or analogous right (other
than securities or other ownership interests which at the time as of which any
determination is being made, are owned, have such power or right only by reason
of the happening of a contingency), beneficially and of record, by such person
or by one or more of the other Subsidiaries of such person or by any combination
thereof.
"Tangible Net Worth" means (a) the excess, if any, of the assets of the
Borrowers and the Guarantor (excluding capitalized software development costs,
goodwill, patents, trademarks, trade names, copyrights and other assets properly
classified as intangible assets in accordance with GAAP) over the liabilities of
the Borrowers and the Guarantors, determined on a combined basis in accordance
with GAAP, plus (c) Subordinated Debt; provided, however, that, in determining
Tangible Net Worth, (i) there shall be included in liabilities any and all
evidences of Indebtedness of the Borrowers or any Guarantor, including notes and
debentures of any Borrower or Guarantor which are evidenced by the subordinated
Notes, and (ii) there shall be excluded from assets any and all assets of the
Borrowers and the Guarantor which are Investments in any other Person.
"Term Loans" means the loans made by NBD to the Company as described in
Sections 2.3 and 2.4.
"Term Rate" means the per annum rate equal to (i) 1/4% per annum, plus
(ii) the greater of .50% above the Federal Funds Rate or the Prime Rate in
effect from time to time.
"Termination Date" means the earlier to occur of (a) ▇▇▇▇▇▇ ▇▇, ▇▇▇▇,
(▇) the date on which NBD's obligations under this Agreement are terminated
pursuant to Section 2.2(b) or 7.2, and (c) demand for payment of the
Obligations.
"Total Debt" means the total of all liabilities of the Borrowers and
the Guarantors which would appear as liabilities on a Combined balance sheet of
the Borrowers and the Guarantor, determined in accordance with GAAP.
1.2 Certain Rules of Construction. For purposes of this Agreement:
(a) Certain References. The words "herein," "hereof" and
"hereunder," and words of similar import, refer to this Agreement as a whole and
not to any particular provision of this Agreement, and references to Articles,
Sections, Exhibits or Schedules, and similar references, are to Articles or
Sections of, or Exhibits or Schedules to, this Agreement unless otherwise
specified.
(b) General Rules. Unless the context otherwise requires: (i) the
singular includes the plural, and vice versa; (ii) all definitions and
references to an agreement, instrument
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or document shall mean such agreement, instrument or document together with all
exhibits and schedules thereto and any and all amendments, supplements or
modifications thereto as the same may be in effect at the time such definition
or reference is applicable for any purpose; (iii) all references to any party
shall include such party's successors and permitted assigns; (iv) the term
"including" means including, without limitation; and (v) reasonable attorneys'
fees shall include allocated costs of in-house counsel.
(c) Accounting Terms. All accounting terms used herein which are
not expressly defined in this Agreement shall have the meanings given to them in
accordance with GAAP, all computations made pursuant to this Agreement shall be
made in accordance with GAAP, and all financial statements shall be prepared in
accordance with GAAP.
1.3 Acknowledgment and Restatement of Credit.
(a) Acknowledgment. By executing this Agreement, NBD and the
Borrowers acknowledge and agree that as of July 30, 1998, (i) the principal
amount owed to NBD under Section 2.1 of the Existing Loan Agreement by the
Borrowers is (in the aggregate principal amount) $8,743,000.00 (ii) the
principal amount owed to NBD under the 1995 Mortgage Loan and the 1993 Mortgage
Loan is (in the aggregate principal amount) $3,338,448.00, and (iii) the
principal amount owed to NBD under the Existing Equipment Note is $96,298.20
(collectively, the "Existing Indebtedness"). All borrowings on July 30, 1998
under Section 2.1 of the Existing Loan Agreement shall be deemed to be an
advance under Section 2.1 of this Agreement. The Borrowers further acknowledge
and agree that, as of the Effective Date, all Existing Indebtedness is and shall
be owed to NBD without offset, deduction, counterclaim or any other defense or
claim whatsoever.
(b) Effect of Restatement. The parties acknowledge and agree that
this Agreement and the other Loan Agreement amend, modify and restate the
Existing Indebtedness to NBD under the Existing Loan Documents and the execution
and delivery of this Agreement or any of the Loan Documents shall not constitute
(i) a novation or (ii) a waiver or release of any Default or Event of Default
based on any facts or events occurring or existing prior to the date hereof and
unknown to NBD prior to the date hereof.
ARTICLE II. THE CREDIT FACILITIES
2.1 Revolving Loan.
(a) Commitment. Subject to the terms and conditions of this
Agreement, NBD will make Revolving Loans to the Borrowers, jointly and
severally, on a revolving basis from the Effective Date and before the
Termination Date as the Borrowers may from time to time request from NBD;
provided, however, that the aggregate principal amount of all Revolving Loans
outstanding hereunder when added to the face amount of all then outstanding L/Cs
shall not at any time exceed the lesser of the (a) Commitment or (b) the
Borrowing Base at such time.
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The principal amount of each Revolving Loan shall be in an integral multiples of
$10,000 and shall be in an amount not less than $10,000. The Revolving Loans
advanced under this Section 2.1 shall be evidenced by a Revolving Note of the
Company in substantially the form of Exhibit 2.1. The Revolving Note shall be
dated the Effective Date and be due on the Termination Date. Interest shall
accrue on the unpaid principal balance of the Revolving Loans from time to time
outstanding under this Section 2.1 at the Floating Rate and shall be payable in
accordance with Article III. Subject to the other terms and conditions of this
Agreement the Revolving Loans may be borrowed, repaid and reborrowed prior to
the Termination Date. Although the Revolving Credit Note shall be expressed to
be payable in the maximum amount of the Commitment, the Borrowers shall be
obligated to pay only the unpaid balance of the Revolving Loans together with
interest thereon and other amounts due in connection therewith as provided
herein and in the Revolving Note. The proceeds of Revolving Loans shall be used
by the Borrowers for working capital or other general corporate purposes of the
Borrowers and/or Guarantors.
(b) Procedure for Borrowing. The Company shall give notice to the
Bank of each proposed Revolving Loan not later than 3:00 p.m., Detroit time, on
the proposed Funding Date. Each such request shall be effective upon receipt by
the Bank, shall be in writing or by telephone to be promptly confirmed in
writing, shall specify the Funding Date and amount of the requested Revolving
Loan. Each of the Borrowers hereby authorizes the Company to request Revolving
Loans and otherwise give and receive notices regarding the Loans and this
Agreement on its behalf. Subject to the terms and conditions of this Agreement,
the proceeds of each Revolving Loan shall be made available to the Borrowers by
depositing on the Funding Date the proceeds thereof, in immediately available
funds, in an account maintained by the Company or in Subsidiaries at the main
office of the Bank.
2.2 Commitment Fee and Reducing Commitment.
(a) Commitment Fee. The Borrowers agree to pay to NBD a
commitment fee computed at the rate of 1/2% per annum on the average daily
unused portion of the Commitment. The face amount of any outstanding standby L/C
issued pursuant Section 2.3 will be considered an amount used for purposes of
calculating such commitment fee, however, the face amount of any commercial L/C
will not be considered an amount used for purposes of calculating such
commitment fee. Such commitment fee will accrue from and after the Effective
Date, shall be calculated on a daily basis during the applicable period and will
be due and payable quarterly in arrears, beginning on September 30, 1998, and on
each December 31, March 31 and September 30 thereafter through the Termination
Date, with any accrued but unpaid commitment fee due on the Termination Date.
(b) Reducing and Terminating Commitment. The Borrowers will have
the right to terminate or reduce the Commitment at any time and from time to
time, in which case the Commitment will be terminated or permanently reduced by
the amount so specified, as the case may be; provided, however, that (a) the
Borrowers shall give notice of such termination or
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reduction to NBD at least five Business Days in advance thereof, specifying the
amount and effective date thereof, (b) each partial reduction of the Commitment
shall be in a minimum amount of $1,000,000 and in an integral multiple of
$100,000, (c) no such termination or reduction shall be permitted with respect
to any portion of the Commitment as to which a request for a Revolving Loan or a
L/C is then pending, and (d) the entire Commitment may not be terminated if any
Revolving Loans are then outstanding and may not be reduced below the sum of the
principal amount of Revolving Loans then outstanding plus the aggregate amount
of all then outstanding L/Cs. The Commitment or any portion thereof so
terminated or reduced pursuant to this Section 2.2(b) may not be reinstated.
2.3 Letters of Credit
(a) Issuance of L/Cs. Provided there is sufficient availability
under the Borrowing Base and Commitment and if requested by the Borrowers (with
no less than three Business Days prior written application in such form as
requested by NBD), NBD shall issue for the account of any Borrower standby or
commercial letters of credit, upon the following conditions:
(i) Total Amount. The total face amount of all outstanding
L/Cs at any time shall not exceed an amount equal to the lesser, at
such time, of (A) the L/C Sublimit or (B) the lesser of (1) the
Commitment or (2) the Borrowing Base at such time.
(ii) Expiry. The expiry date of any L/C shall not exceed a
maximum of 12 months from the date of issuance, provided, however, that
any L/Cs outstanding on the Termination Date will be (A) secured by
cash or other collateral satisfactory to NBD, or (B) replaced as of the
Termination Date under conditions which cause such outstanding L/Cs to
be cancelled.
(iii) Fees. The Borrowers will be charged a $150 issuance fee
for each standby L/C issued pursuant to this Section 2.3. Any
outstanding standby will accrue a commission at a per annum rate of
1.25% of the face amount of such L/C, payable annually in advance at
time of issuance. All commercial L/Cs will incur the usual and
customary charges, to be agreed upon by the Borrowers and NBD at the
time of issuance, for the issuance of commercial L/Cs.
(iv) Documentation. The Borrowers shall execute standard
documentation as requested by NBD with respect to the issuance of each
L/C.
(v) Conditions Met. On the date of issuance, all of the
conditions present specified in Sections 3.9 and 3.10 have been
satisfied.
(b) Obligations Unconditional. The obligation of the to pay to
NBD the amount of any L/C shall be absolute, unconditional and irrevocable and
shall remain in
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full force and effect until all Obligations of the Borrowers shall have been
satisfied, and the Obligations with respect to each L/C shall not be affected,
modified or impaired upon the happening of any event, including, without
limitation, any of the following, whether or not with notice to, or the consent
of, the Borrowers:
(i) Any lack of validity or enforceability of any L/C or
any other L/C Document or to any transaction related in any way to such
L/C;
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest
in collateral or security, with respect to any of the L/C Documents;
(iii) The existence of any claim, setoff, defense or other
right which any Borrower may have at any time against any beneficiary
or any transferee of any L/C (or any persons for whom any such
beneficiary or any such transferee may be acting), NBD or any other
person or entity, whether in connection with any of the L/C Documents,
the transactions contemplated herein or therein or any unrelated
transactions;
(iv) Any draft or other statement or document presented
under any L/C proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in
any respect;
(v) Payment by NBD to the beneficiary under any L/C against
presentation of documents which do not strictly comply with the terms
of the L/C, including failure of any documents to bear any reference or
adequate reference to such L/C;
(vi) Any failure, omission, delay or lack on the part of NBD
or any party to any of the L/C Documents to enforce, assert or exercise
any right, power or remedy conferred upon NBD or any such party under
this Agreement or any of the L/C Documents, or any other acts or
omissions on the part of NBD or any such party; and
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation
of law or otherwise of the Borrowers from the performance or observance
of any obligation, covenant or agreement contained in this Section 2.3.
(d) Repayment. The Borrowers agree, jointly and severally, to pay
to NBD, on the day on which any L/C shall come due, the face amount of such L/C
and all expenses paid or incurred by NBD relative thereto. Unless the Borrowers
shall have made such payment to NBD on such day, NBD shall be deemed to have
disbursed to the Borrowers and the Borrowers shall be deemed to have elected to
satisfy its repayment obligation by a Revolving Loan in an amount equal to the
amount due with respect to such L/C. Such Revolving Loan shall be
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disbursed notwithstanding any failure to satisfy any conditions for disbursement
of any Loan set forth in Section 3.10 and, to the extent of such Revolving Loan,
the repayment obligation of the Borrowers with respect to such L/C under this
subsection shall be deemed satisfied.
2.4 Real Estate Loans. (a) NBD has extended a term loan to the Company
in the original principal amount of $2,540,000 ("1995 Mortgage Loan"), evidenced
by an Installment Business Loan Note in such amount, dated October 31, 1995
(together with any amendments, restatements, replacements or renewals, the "1995
Term Note"). In connection with the 1995 Mortgage Loan, the Company granted to
NBD a mortgage (the "1995 Mortgage") on the property commonly known as ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, which the Company acknowledges
secures the 1995 Term Note, the other Obligations of the Borrowers under this
Agreement and any other amounts owed by the Company to NBD.
(b) NBD has extended a term loan to the Company in the principal
amount of $2,500,000 ("1993 Mortgage Loan"), evidenced by a Term Note, dated
June 29, 1993 (together with any amendments, restatements, replacements or
renewals, the "1993 Term Note"). In connection with the 1993 Mortgage Loan, the
Company granted to NBD a mortgage (the "1993 Mortgage") on the property commonly
known as ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, which the Company
acknowledges secures the 1993 Term Note, the other Obligations of the Borrowers
under this Agreement and any other amounts owed by the Company to NBD.
2.5 NBD Records and Determinations. NBD is hereby authorized by the
Borrowers to note on NBD's books and records, the date and amount of each
Revolving Loan and Equipment Loan, the amount of each payment or prepayment on
any of the Loans and such other information as appropriate, which books and
records shall constitute prima facie evidence of the information so noted.
Notwithstanding the foregoing, the failure of NBD to record, or any error in
recording, any such information shall not relieve the Borrowers of their
obligation to repay the outstanding principal amount of the Loans, the L/Cs, all
accrued interest thereon and other amounts payable with respect thereto in
accordance with the terms of the Notes, the L/C Documents, and this Agreement.
NBD's determinations of the Applicable Rates, the Default Rate, the fees, any
indemnity payment or other amounts payable under this Agreement shall be
conclusive and binding absent manifest error.
ARTICLE III. PAYMENTS AND PREPAYMENTS OF LOANS
3.1 Interest Rate and Method of Computation.
(a) Interest Rates. The outstanding principal balance of the
Revolving Loans shall bear interest at the Floating Rate in effect from time
to time and 1995 Mortgage Loan and 1993 Mortgage Loan shall bear interest at the
Term Rate in effect from time to time; provided that if there is an Event of
Default or if any amount of principal and interest (to the extent legally
enforceable) that is not paid when due (whether at maturity, upon mandatory
prepayment, by acceleration or otherwise) shall bear interest, payable upon
demand, at the Default Rate or the
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maximum rate permitted by law, whichever is lower, for the period commencing
on the due date thereof until the same is paid in full. In addition to the
foregoing, during the period that an Event of Default has occurred and shall be
continuing, the Borrowers shall pay on demand, at the election of the Bank,
interest at the Default Rate on the outstanding principal amount of all the
Obligations which are outstanding during such period from and after the date of
any such demand.
(b) Computations. All computations of interest and other
amounts due under this Agreement (including fees) shall be made on the basis of
a year of 360 days using the actual number of days occurring in the period for
which such interest or other amounts are payable, including the first day but
excluding the last day of the relevant period. Each determination by the Bank of
such amounts shall be presumed to be correct.
3.2 Payment of Principal and Interest. The Borrowers shall pay all
accrued and unpaid interest on the outstanding principal balance of the
Revolving Loans on (i) the last day of each month and (ii) the Termination Date.
Principal and accrued and unpaid interest on the outstanding balance of the 1995
Mortgage Loan, the 1993 Mortgage Loan and the Existing Equipment Loan shall be
paid by the Borrowers as set forth in the corresponding Notes.
3.3 Prepayment.
(a) Mandatory Prepayment. If the principal balance outstanding
under Section 2.1 when added to the face amount of all outstanding L/Cs exceeds
the Commitment or the Borrowing Base at any time, the Borrowers shall
immediately prepay the amount of such excess to the Bank.
(b) Voluntary Prepayment of Notes. The Loans may be voluntarily
prepaid in whole or in part at any time, without premium or penalty (except for
any fixed rate Equipment Loans which may be subject to a prepayment premium).
The Company, on behalf of the Borrowers, may designate the Note or Notes to
which a payment is to be applied and the Bank will apply such payment to the
Note or Notes so designated. In case of prepayment of less than all of the
outstanding principal amount of the Notes, the prepayment will be applied first
to accrued, but unpaid interest on the Note designated for prepayment by the
Company, and then to the principal amounts due on that Note, and if the
principal prepayments are to be made on the 1995 Mortgage Note, the 1993
Mortgage Note or on any Equipment Loan, then to installment payments of
principal in the inverse order of maturity.
3.4 Manner, Time and Place of Payment. All payments (and prepayments
when required or permitted under Section 3.3) of principal, interest or fees
shall be made in Dollars in immediately available funds to the Bank at its
address set forth in this Agreement no later than 3:00 p.m., Detroit time, on
the dates when due. Any payments received after such time shall be deemed to
have been received on the following Business Day. If any payment under this
Agreement or any Note becomes due on a day other than a Business Day, its
maturity will be
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extended to the next succeeding Business Day, with interest continuing to accrue
on the unpaid principal.
3.5 Authorization of Payments. If the Borrowers shall not otherwise
have made payment of any of the Obligations as provided in this Agreement, NBD
is expressly authorized to charge any such Obligations, when due, to any of the
Borrower's demand deposit accounts maintained with NBD or, if such accounts
shall not control sufficient funds, to any other account maintained by any
Borrower with NBD.
3.6 No Setoff or Deduction. All payments of principal of and interest
on the Loans and other Obligations shall be paid by the Borrowers without setoff
or counterclaim, and free and clear of, and without deduction or withholding
for, or on account of, any present or future taxes, levies, imposts, duties,
fees, assessments, or other charges of whatever nature, imposed by any
governmental authority, or by any department, agency or other political
subdivision or taxing authority or other person.
3.7 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement, whenever any installment of principal of,
or interest on, any Loan or any other Obligation becomes due and payable on a
day which is not a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day and, in the case of any installment of principal,
interest shall be payable thereon at the then Applicable Rate during such
extension.
3.8 Conditions for Initial Loans. The obligation of NBD to make the
first Revolving Loans or to issue the first L/C hereunder is subject to receipt
by NBD of the following documents and completion of the following matters on or
prior to the Effective Date, in form and substance satisfactory to NBD:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the jurisdiction of incorporation of Medar,
Inc. listing all charter documents of Medar, Inc. on file in that office and
certifying as to the good standing and corporate existence of Medar, Inc.,
together with copies of such charter documents of Medar, Inc. certified as of a
recent date by such authority or official, and certified as true and correct as
of the Effective Date by a duly authorized officer of Medar, Inc.
(b) By-Laws and Corporate Authorizations. Copies of the by-laws
of each Borrower and Guarantor, together with all authorizing resolutions and
evidence of other corporate action taken by each Borrower and Guarantor. to
authorize the execution, delivery and performance by such Person of this
Agreement and the other Loan Documents to which it is a party and the
consummation by such Person of the transactions contemplated hereby, certified
as true and correct as of the Effective Date by a duly authorized officer of
such Person.
(c) Incumbency Certificate. Certificates of incumbency of each
Borrower and
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Guarantor containing, and attesting to the genuineness of, the signatures of
those officers authorized to act on behalf of the Borrowers in connection with
this Agreement and the other Loan Documents to which the Borrowers is a party
and the consummation by the Borrowers of the transactions contemplated hereby,
certified as true and correct as of the Effective Date by a duly authorized
officer of such Borrower.
(d) Note. The Revolving Note appropriately completed and duly
executed on behalf of the Borrowers.
(e) Legal Opinion. The favorable written opinion of counsel for
Medar, with respect to each of the matters set forth in Sections 5.1, 5.2, 5.3,
5.5 and 5.8, and as to such other matters as NBD may reasonably request.
(f) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of the Borrowers in connection with the
execution, delivery and performance of this Agreement and the other Loan
Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Agreement or the other Loan
Documents, certified as true and correct and in full force and effect as of the
Effective Date by a duly authorized officer of the appropriate Borrower.
(g) Satisfaction of Legal Counsel. Satisfaction of legal counsel
to NBD with all documents and instruments delivered hereunder or under any other
Loan Document and all proceedings related to the consummation of the
transactions contemplated by this Agreement and the other Loan Documents, and
delivery to NBD and such legal counsel of copies (executed or certified as may
be appropriate) of all legal documents or proceedings which NBD or such legal
counsel may reasonably request in connection with the consummation of such
transactions.
(h) Reaffirmation of Guaranty of Medar Canada, LTD executed by a
duly authorized officer of Guarantor.
3.9 Further Conditions for Disbursement. The obligation of NBD to make
any Revolving Loans or to issue any L/C hereunder is subject to the following
conditions being true and correct and the Borrowers shall be deemed to have made
to NBD at the time any Loan is advanced or any L/C is issued (including any
renewal or extension of any L/C) the following representations and warranties
unless otherwise stated in writing by the Borrowers:
(a) Representations True. The representations and warranties
contained in Article V are true and correct on and as of the date such Loan is
made or such L/C is issued (both before and after such Loan is made or such L/C
is issued) as if such representations and warranties were made on and as of such
date. For purposes of this Section 3.10, the representations and warranties
contained in Section 5.6 shall be deemed made with respect to both the financial
statements referred to therein and the most recent financial statements
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delivered pursuant to Section 6.1(d).
(b) No Default. No Default or Event of Default exists or has
occurred and is continuing on the date such Loan is made or such L/C is issued
(whether before or after such Loan is made or such L/C issued).
(c) No Material Adverse Event. Nothing has occurred since the
Effective Date which either (i) constitutes a Material Adverse Event or (ii)
has, or may have, an adverse effect on the rights or remedies of NBD under this
Agreement or any other Loan Document.
ARTICLE IV - ADDITIONAL COSTS
4.1 Increased Costs. In the event that any Governmental Regulation now
or hereafter in effect and whether or not presently applicable to NBD, or any
interpretation or administration thereof by any governmental authority
(including without limitation the Board of Governors of the Federal Reserve
System) charged with the interpretation or administration thereof, or compliance
by NBD with any guideline, request or directive of any such authority (whether
or not having the force of law), shall (i) affect the basis of taxation of
payments to NBD of any amounts payable by the Borrowers under this Agreement or
any other Loan Documents (other than taxes imposed on the overall net income of
NBD, by the jurisdiction, or by any political subdivision or taxing authority of
any such jurisdiction, in which NBD has its principal office), or (ii) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
NBD, or (iii) impose any other condition with respect to this Agreement, the
Commitment, the Note, the Loans or any other Obligation, and the result of any
of the foregoing is to increase the cost to NBD of making, funding or
maintaining any Loan or to reduce the amount of any sum receivable by NBD under
this Agreement, then the Borrowers shall pay to NBD, from time to time, upon
request by NBD, additional amounts sufficient to compensate NBD for such
increased cost or reduced sum receivable. A statement as to the amount of such
increased cost or reduced sum receivable, prepared in good faith and in
reasonable detail by NBD and submitted by NBD to the Borrowers, shall be
conclusive and binding for all purposes absent manifest error in computation.
4.2 Capital Requirements. In the event that any Governmental
Regulation now or hereafter in effect and whether or not presently applicable to
NBD, or any interpretation or administration thereof by any governmental
authority (including without limitation the Board of Governors of the Federal
Reserve System) charged with the interpretation or administration thereof, or
compliance by NBD with any guideline, request or directive of any such authority
(whether or not having the force of law), including any risk-based capital
guidelines, affects or would affect the amount of capital required or expected
to be maintained by NBD (or any corporation controlling NBD) and NBD determines
that the amount of such capital is increased by or based upon the existence of
NBD's obligations hereunder and such increase has the effect of reducing the
rate of return on NBD's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which NBD (or
such controlling
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corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by NBD to be material, then the Borrowers shall pay to NBD, from time to time,
upon request by NBD, additional amounts sufficient to compensate NBD (or such
controlling corporation) for any increase in the amount of capital and reduced
rate of return which NBD reasonably determines to be allocable to the existence
of NBD's obligations hereunder. A statement as to the amount of such
compensation, prepared in good faith and in reasonable detail by NBD and
submitted by NBD to the Borrowers, shall be conclusive and binding for all
purposes absent manifest error in computation.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to NBD as follows, on the Effective
Date and on each Funding Date:
5.1 Corporate Existence and Power. Each Borrower and each Guarantor is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and is duly qualified to do
business, and is in good standing, in all additional jurisdictions where such
qualification is necessary under applicable law. Each Borrower and each
Guarantor has all requisite corporate power to own or lease the properties used
in its business and to carry on its business as now being conducted and as
proposed to be conducted, and to execute and deliver this Agreement and the
other Loan Documents to be executed by such Borrower and such Guarantor and to
engage in the transactions contemplated by this Agreement.
5.2 Corporate Authority.
(a) The execution, delivery and performance by each Borrower of
this Agreement and the other Loan Documents have been duly authorized by all
necessary corporate action and are not in contravention of any Governmental
Regulation, or of the terms of the respective Borrower's charter or by-laws, or
of any contract or undertaking to which any Borrower is a party or by which such
Borrower or its property may be bound or affected and do not result in the
imposition of any Lien, except for the Liens granted to NBD.
(b) The execution, delivery and performance by Guarantor of the
Guaranty Agreement has been duly authorized by all necessary corporate action
and are not in contravention of any Governmental Regulation, or of the terms of
Guarantor's charter or by-laws, or of any contract or undertaking to which
Guarantor is a party or by which Guarantor or its property may be bound or
affected and do not result in the imposition of any Lien, except the Liens
granted to NBD.
5.3 Binding Effect. This Agreement is, and each of the Loan Documents
when delivered hereunder will be, legal, valid and binding obligations of each
Borrower or the Guarantors, which is a party to such agreement, enforceable
against each Borrower or the
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Guarantors in accordance with their respective terms.
5.4 Subsidiaries. All of the Subsidiaries of the Company (and any of
the other Borrowers or Guarantor) are listed on Schedule 5.4, together with the
percentage of ownership thereof.
5.5 Litigation. Except as set forth in Schedule 5.5, there is no
action, suit or proceeding pending or, to the best of the Borrowers' knowledge,
threatened against or affecting any Borrower or any Guarantor before or by any
court, governmental authority or arbitrator, which if adversely decided might
result, either individually or collectively, in any Material Adverse Event or in
any adverse effect on the legality, validity or enforceability of this Agreement
or any other Loan Document and, to the best of the Borrowers' knowledge, there
is no basis for any such action, suit or proceeding.
5.6 Financial Condition. The financial statements listed in Schedule
5.6, copies of which have been furnished to NBD, fairly present, and the
financial statements delivered pursuant to Section 6.1(d) will fairly present,
the financial position of the Borrowers and the Guarantor as at the respective
dates thereof, and the results of operations of the Company and the Guarantor
for the respective periods indicated, all on a Combined basis in accordance with
GAAP (subject, in the case of interim statements, to normal, immaterial year-end
audit adjustments). There has been no Material Adverse Event since December 31,
1997. There is no material Contingent Liability of any Borrower or any Guarantor
that is not reflected in such Combined statements or in the notes thereto.
5.7 Use of Loans. The Borrowers will use the proceeds of the Loans for
their working capital and other general corporate purposes. The Borrowers do not
extend or maintain, in the ordinary course of business, credit for the purpose,
whether immediate, incidental, or ultimate, of buying or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Loan will be used for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying any
such margin stock or maintaining or extending credit to others for such purpose.
5.8 Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the
Borrowers pursuant to Section 3.8(f), if any, each of which is in full force and
effect, no consent, approval or authorization of or declaration, registration or
filing with any governmental authority or any nongovernmental person, including
any creditor, lessor or shareholder of any Borrower or any Guarantor, is
required on the part of any Borrower or the Guarantor in connection with the
execution, delivery and performance of this Agreement and the other Loan
Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Agreement and the other Loan
Documents.
5.9 Taxes. Each of the Company and the Guarantors has filed all tax
returns (federal,
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state and local) required to be filed and have paid all taxes shown thereon to
be due, including interest and penalties, or has established adequate financial
reserves on its books and records for payment thereof. The Borrowers do not know
of any actual or proposed tax assessment or any basis therefor, and no extension
of time for the assessment of deficiencies in any federal or state tax has been
granted to any of the Borrowers.
5.10 Title to Properties. Except as otherwise disclosed in the latest
Combined balance sheet delivered pursuant to Section 5.6 or 6.1(d), the
Borrowers and the Guarantor have a valid and indefeasible ownership interest in
all of the properties and assets reflected in the Combined balance sheet of the
Borrowers and the Guarantors or subsequently acquired by any Borrowers or any
Guarantor. All of such properties and assets are free and clear of any Lien,
except for Permitted Liens.
5.11 Compliance with Governmental Regulations. Each of the Borrowers
and the Guarantor is in compliance in all material respects with all
Governmental Regulations (including Environmental Laws) applicable to such
person or its business or properties. Without limiting the generality of the
foregoing, all licenses, permits, orders or approvals which are required under
any Governmental Regulation in connection with any of the businesses or
properties of any Borrower or any Guarantor ("Permits") are in full force and
effect, no notice of any violation has been received in respect of any such
Permits and no proceeding is pending or, to the knowledge of the Borrowers,
threatened to terminate, revoke or limit any such Permits.
5.12 ERISA. The Borrowers, the Guarantor, their ERISA Affiliates and
their respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
Respect to any such Plan. None of the Borrowers, the Guarantor or any of their
ERISA Affiliates is an employer with respect to any Multiemployer Plan. The
Borrowers, the Guarantor and each of their ERISA Affiliates have met the minimum
funding requirements under ERISA and the Code with respect to each of their
respective Plans, if any, and have not incurred any liability to the PBGC or any
Plan. There is no material unfunded benefit liability, determined in accordance
with Section 4001(a)(18) of ERISA, with respect to any Plan of the Company, the
Guarantors or their ERISA Affiliates.
5.13 Environmental Matters. Except as disclosed in Schedule 5.13, and
without limiting the generality of Section 5.11:
(a) No written demand, claim, notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether brought by any
governmental authority, private person or otherwise, arising under, relating to
or in connection with any Environmental Laws is pending or, to the best of the
Borrowers' knowledge, threatened against any Borrower, any Guarantor, any
Property or any past or present operation of any Borrower or any Guarantor which
could result in a Material Adverse Event.
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(b) The Borrowers do not have any knowledge that any other person
has ever received any notice, claim or allegation of any violation, and the
Borrowers are not aware of any existing violation, of Environmental Laws at or
about any Property, and the Borrowers do not have any knowledge of any actions
commenced or threatened by any party for or related to or arising out of
non-compliance with Environmental Laws which apply to any Property, activities
at any Property or Hazardous Materials at, from or affecting any Property.
(c) None of the Property appears on the National Priority List
(as defined under federal law) or any state listing which identifies sites for
remedial clean-up or investigatory actions. To the best of the Borrowers'
knowledge, none of the Property has been contaminated with substances which
give rise to a clean-up obligation under any Environmental Law or common law.
5.14 Investment Company Act. Neither any Borrower nor any Guarantor is
an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
5.15 Disclosure. No report or other information furnished in writing by
or on behalf of any Borrower to NBD in connection with the negotiation or
administration of this Agreement contains any material misstatement of fact or
omits to state any material fact or any fact necessary to make the statements
contained therein not misleading. Neither this Agreement, the other Loan
Documents, nor any other document, certificate, or report or statement or other
information furnished to the NBD by or on behalf of any Borrower in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact in order to make the statements
contained herein and therein not misleading. There is no fact known to any
Borrower which materially and adversely affects, or which in the future may (so
far as the Borrowers can now foresee) materially and adversely affect, the
business, properties, operations, condition, financial or otherwise, or
prospects of any Borrower or any Guarantor, which has not been set forth in this
Agreement or in the other documents, certificates, statements, reports and other
information furnished in writing to NBD by or on behalf of any Borrower in
connection with the transactions contemplated hereby.
ARTICLE VI. COVENANTS
6.1 Affirmative Covenants. Each Borrower covenants and agrees that,
until the Termination Date and thereafter until payment in full of the principal
of and accrued interest on the Note and the payment or performance of all other
Obligations, unless NBD shall otherwise consent in writing, each Borrower, and
shall cause each other Borrower and each Guarantor to:
(a) Preservation of Corporate Existence; Etc. Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except to the extent permitted by Section 6.2(g), and its
qualification as a foreign corporation in good standing in each jurisdiction in
which such qualification is necessary under applicable law, and
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the rights, licenses, permits (including those required under Environmental
Laws), franchises, patents, copyrights, trademarks and trade names material to
the conduct of its businesses; and defend all of the foregoing against all
claims, actions, demands, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency or regulatory authority.
(b) Compliance with Laws; Etc. Comply with all Governmental
Regulations (including ERISA, the Code and Environmental Laws), in effect from
time to time; and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, revenues or
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
might give rise to any Lien upon such properties or any portion thereof, except
to the extent that payment of any of the foregoing is then being contested in
good faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of such
Borrower or such Guarantor.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of its business and keep
such property in good repair, working order and condition and from time to time
make, or cause to be made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times in
accordance with customary and prudent business practices for similar businesses;
and maintain in full force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such terms and covering
such risks, including fire and other risks insured against by extended coverage,
as is usually carried by companies engaged in similar businesses and owning
similar properties similarly situated and maintain in full force and effect
public liability insurance, business interruption insurance, insurance against
claims for personal injury or death or property damage occurring in connection
with any of its activities or any of any properties owned, occupied or
controlled by it, in such amounts as it shall reasonably deem necessary, and
maintain such other insurance as may be required by Governmental Regulations or
as may be reasonably requested by NBD. Upon request, the Borrowers shall deliver
to NBD copies of all or any of such insurance policies or the related
certificates of insurance.
(d) Reporting Requirements. Furnish to NBD the following:
(i) promptly and in any event within three calendar days
after becoming aware of the occurrence of (A) any Default or Event of
Default, (B) the commencement of any material litigation against, by or
affecting any Borrower or any Guarantor, and any material developments
therein, or (C) any development in the business or affairs of any
Borrower or any Guarantor which has resulted in or which is likely, in
the reasonable judgment of the Borrowers, to result in a Material
Adverse Event, a statement of the chief financial officer of the
Company setting forth details of such Event of Default or such event or
condition or such litigation and the action which the affected person
has taken and proposes to take with respect thereto;
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(ii) as soon as available and in any event within 45 days
after the end of each fiscal quarter of the Borrowers (other than the
fourth fiscal quarter), (x) the Combined balance sheet of the Borrowers
and the Guarantor as of the end of each such quarter and Combined
statements of income, surplus and cash flow of the Borrowers and the
Guarantors for each such quarter and for the period commencing at the
end of the previous fiscal year and ending with the end of such
quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the
preceding fiscal year, and (y) the combining balance sheet and
statements of income, surplus and cash flows with respect to the
Borrowers and the Guarantor for such periods (prepared in a manner
consistent with such Combined balance sheet and statements), all in
reasonable detail and duly certified (subject to normal, immaterial
year-end audit adjustments) by the chief financial officer or
controller of the Company as having been prepared in accordance with
GAAP, together with a certificate of the chief financial officer or
controller of the Company (A) stating that no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, a statement setting forth the
details thereof and the action which the applicable person has taken
and proposes to take with respect thereto, and (B) setting forth a
computation (which computation shall accompany such certificate and
shall be in reasonable detail) showing compliance with Sections 6.2(a)
and (b) in conformity with the terms of this Agreement;
(iii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, a copy of the annual
audited Combined financial statements of the Borrowers and the
Guarantor for such fiscal year, with a customary audit report of such
independent certified public accountants selected by the Company and
reasonably acceptable to NBD, without qualifications unacceptable to
NBD, together with the unaudited combining annual financial statements
of the Borrowers and the Guarantor (prepared in a manner consistent
with the Company's audited Combined annual financial statements) and a
certificate of the chief financial officer or controller of the Company
(A) stating that no Default or Event of Default has occurred or is
continuing or if any Default or Event of Default has occurred and is
continuing, a statement setting forth the details thereof and the
action which the applicable person has taken and proposes to take with
respect thereto, and (B) setting forth a computation (which computation
shall accompany such certificate and shall be in reasonable detail)
showing compliance with Sections 6.2(a) and (b) in conformity with the
terms of this Agreement;
(iv) promptly after receipt thereof by any Borrower, copies
of any audit or management reports submitted to it by independent
accountants in connection with any audit, interim audit or other report
submitted to the board of directors (or other governing body) of any
Borrower or any Guarantor;
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(v) promptly after the same are available, copies of each
annual report, proxy or financial statement or other communication sent
to a Borrowers' or a Guarantor's stockholders and copies of all annual,
regular, periodic and special reports and registration statements which
the Company may file or be required to file with the Securities and
Exchange Commission or with any securities exchange or the National
Association of Securities Dealers, Inc.; and
(vi) promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise,
of any Borrower or any Guarantor as NBD may from time to time
reasonably request upon reasonable notice.
(e) Accounting; Access to Records, Books, Etc. Maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with GAAP
and to comply with the requirements of this Agreement and, at any reasonable
time and from time to time, (i) permit NBD or any agents or representatives
thereof to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, such person and to discuss the
affairs, finances and accounts of such person with their respective directors,
officers, employees and independent auditors, and by this provision each
Borrower does hereby authorize the same, and (ii) permit NBD or any of its
agents or representatives to conduct a comprehensive field audit of its books,
records, properties and assets.
(f) Further Assurances. Execute and deliver promptly after
request therefor by NBD, all further instruments and documents and take all
further action that may be necessary or desirable, or that NBD may request, in
order to give effect to, and to aid in the exercise and enforcement of the
rights and remedies of NBD under, this Agreement and the other Loan Documents.
(g) Audits. Prior to the occurrence of an Event of Default,
permit NBD's representatives to conduct quarterly, on-site audits of the
Borrowers' and Guarantor's business operations, after the occurrence of an Event
of Default, NBD may audit the Borrowers, Guarantor and their respective
businesses as frequently as NBD desires, and the Borrowers must reimburse NBD
for all costs (including its standard auditor fees) incurred in connection
therewith within 10 days after receipt of an invoice therefor.
6.2 Negative Covenants. Each Borrower covenants and agrees that, until
the Termination Date and thereafter until payment in full of the principal of
and accrued interest on the Note and the payment and performance of all other
Obligations, unless NBD shall otherwise consent in writing (which consent shall
not be unreasonably withheld in connection with Sections 6.2 (c), (f), (h), (j)
and (k)), each Borrower shall not, and shall cause each other Borrower and each
Guarantor not to:
(a) Tangible Net Worth. Permit or suffer Tangible Net Worth to be
(a) on
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June 30, 1998, less than $4,250,000, (b) on November 30, 1998, less than
$4,500,000, and (c) on December 31, 1998 and thereafter, less than $5,000,000.
(b) Debt to Worth Ratio. Permit or suffer the Debt to Worth Ratio
to exceed, (a) on June 30, 1998, to 6.25 to 1.0, (b) on November 30, 1998, 5.5
to 1.0, and (c) on December 31, 1998 and thereafter, 4.25 to 1.0.
(c) Indebtedness. Create, incur, assume or any manner become
liable in respect of, or suffer to exist, any Indebtedness other than:
(i) Indebtedness to NBD or NBD Equipment Finance;
(ii) Indebtedness secured by Permitted Liens;
(iii) Indebtedness existing as the date of this Agreement and
listed on Schedule 6.2(c), and renewals, extensions and refinancings
thereof (as long as the principal amount of such Indebtedness is not
increased);
(iv) Indebtedness of the Company under the Subordinated
Notes and the guarantee of such debt by Integral and Guarantor; and
(v) Other Indebtedness (including Capital Leases), in
addition to that permitted under clauses (i) through (iii) above,
having an aggregate outstanding balance at any time not to exceed
$500,000.
(d) Liens. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of any Borrower or any
Guarantor, except:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which
adequate financial reserves have been established on its books and
records;
(ii) Liens (other than any Lien imposed by ERISA) created
and maintained in the ordinary course of business which are not
material in the aggregate, and which would not constitute or result in
a Material Adverse Event, and which constitute (A) pledges or deposits
under worker's compensation laws, unemployment insurance laws or
similar legislation, (B) good faith deposits in connection with bids,
tenders, contracts or leases to which a Borrower or a Guarantor is a
party for a purpose other than borrowing money or obtaining credit,
including rent security deposits, (C) Liens imposed by law, such as
those of carriers, warehousemen and mechanics, if payment of the
obligation secured thereby is not yet due, (D) Liens securing taxes,
assessments or other governmental charges or levies not yet subject to
penalties for nonpayment, and
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(E) pledges or deposits to secure public or statutory obligations of a
Borrower or a Guarantor, or surety, customs or appeal bonds to which a
Borrower or a Guarantor is a party;
(iii) Liens affecting real property which constitute minor
survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the
use of such real property; provided, however, that all of the
foregoing, in the aggregate, do not at any time materially detract from
the value of said properties or materially impair their use in the
operation of the businesses of any Borrower or any Guarantor, as the
case may be;
(iv) Liens described on Schedule 6.2(d), which may be
suffered to exist upon the same terms as those existing on the date
hereof, but no extension or renewal thereof shall be permitted except
for a refinancing in the ordinary course of business for an amount not
in excess of the original amount subject to such Liens;
(v) Purchase Money Liens securing purchase money
Indebtedness; provided, however, that the aggregate outstanding amount
of Indebtedness not extended by NBD and secured by all such Purchase
Money Liens for the Borrowers and the Guarantors shall not exceed, on
an aggregate basis, $500,000 at any time after the Effective Date; and.
(vi) Liens in favor of NBD and Liens granted in connection
with the Subordinated Notes by the Company and subordinated to NBD's
Liens under the Note Subordination Agreement.
(e) Merger; Purchase of Assets; Acquisitions; Etc. Purchase or
otherwise acquire, whether in one or a series of transactions, all or a
substantial portion of the business, assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, of any person, or all or a
substantial portion of the capital stock of or other ownership interest in any
other person; nor merge or consolidate or amalgamate with any other person or
take any other action having a similar effect, nor enter into any joint venture
or similar arrangement with any other person.
(f) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of any of its business, assets, rights, revenues or
property, real, personal or mixed, tangible or intangible, whether in one or a
series of transactions, other than, prior to the occurrence of an Event of
Default, (i) inventory sold in the ordinary course of business upon customary
credit terms, (ii) sales or other disposition of equipment, provided that such
equipment is replaced by equipment of a similar kind and equivalent value, and
(iii) dispositions by the Borrowers and the Guarantor in any single fiscal year
of assets or properties having an aggregate net book value of $500,000 or less
on a non-cumulative basis.
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(g) Sale and Leaseback. Enter into any agreement, directly or
indirectly, to sell or transfer any real or personal property used in its
business and thereafter to lease back the same or similar property.
(h) Investments. Make or commit to make any Investments
(including any loan, extension of credit or guarantee), other than: (i) trade
credit extended in the ordinary course of a Borrower's business; (ii) Cash
Equivalents; (iii) loans and advances made in the ordinary course of business to
officers and employees of Borrower for relocation expenses, travel advances and
similar expenses relating to their employment; (iv) endorsements of instruments
or items of payment for deposit to a Borrower's bank accounts; (v) capital stock
in Subsidiaries owned by the Company on the date hereof and disclosed on
Schedule 5.4; and (vi) additional Investments not to exceed $100,000 in the
aggregate.
(i) Restricted Payments. Make or commit to make any Restricted
Payment at any time after the Effective Date, provided that so long as no
Default or Event of Default exists both before and after the declaring and
payment of a dividend, Integral and the Guarantor may pay cash dividends to the
Company.
(j) Nature of Business. Make any substantial change in the nature
of its business from that engaged in on the Effective Date or engage in any
other businesses other than those in which it is engaged on the Effective Date.
(k) Transactions with Affiliates. Enter into, or permit or suffer
to exist, any transaction or arrangement with any Affiliate, except on terms
which are no less favorable to such Borrower or such Guarantor than could be
obtained from persons who are not Affiliates.
ARTICLE VII. DEFAULT
7.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived by NBD pursuant to Section 8.1:
(a) Nonpayment. The Borrowers shall fail to pay (i) when due
(whether by mandatory prepayment or otherwise) any principal of the Note or the
amount due under any L/C Document or Guaranty Issued by NBD Document or (ii)
more than five days after the due date thereof, any interest on the Note or any
fees or any other Obligations payable hereunder.
(b) Other NBD Debt. Any default, event of default or event of
acceleration under any other agreement between any Borrower or Guarantor, on one
hand, and NBD or any Affiliate of NBD (including NBD Equipment Finance), on the
other hand, which has not been waived in writing by NBD.
(c) Misrepresentation. Any representation or warranty made by any
Borrower
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in Article V or in any certificate, report, financial statement other document
furnished by or on behalf of any Borrower in connection with this Agreement,
shall prove to have been incorrect in any material respect when made or deemed
made.
(d) Certain Covenants. Any term, covenant or agreement contained
in Section 6.2 shall be breached.
(e) Other Defaults. Any term, covenant or agreement contained in
this Agreement or any other Loan Document (other than Section 6.2 or with regard
to payments) shall be breached, and such breach shall remain unremedied for 10
calendar days after written notice is sent by NBD to any Borrower.
(f) Cross Default. Any Borrower or any Guarantor shall fail to
pay any part of the principal of, the premium, if any, or the interest on, or
any other payment of money due under, any of its Indebtedness (other than
Indebtedness under this Agreement), beyond any period of grace provided with
respect thereto, which individually or together with other such Indebtedness as
to which any such failure exists has an aggregate outstanding principal amount
in excess of $100,000; or any Borrower or any Guarantor shall fail to perform or
observe any other term, covenant or agreement contained in any agreement,
document or instrument evidencing or securing any Indebtedness in an aggregate
outstanding principal amount in excess of $100,000, or under which any such
Indebtedness was issued or created, beyond any period of grace, if any, if the
effect of such failure is to cause, or permit the holders of such Indebtedness
(or a trustee on behalf of such holders) to cause, any payment in respect of
such Indebtedness to become due prior to its due date.
(g) Judgments. One or more judgments or orders for the payment of
money in an aggregate amount of $250,000 or more shall be rendered against any
of the Borrowers or any Guarantor, or any other judgment or order (whether or
not for the payment of money) shall be rendered against or shall affect any
Borrower or any Guarantor which causes or could cause a Material Adverse Event
or which does or could have an adverse effect on the legality, validity or
enforceability of this Agreement or any other Loan Document and either (i) such
judgment or order shall have remained unsatisfied and such Borrower or such
Guarantor shall not have taken action necessary to stay enforcement thereof by
reason of pending appeal or otherwise, prior to the expiration of the applicable
period of limitations for taking such action or, if such action shall have been
taken, a final order denying such stay shall have been rendered, or (ii)
enforcement proceedings shall have been commenced by any creditor upon any such
judgment or order; provided that (I) no final judgment shall be included in the
calculation under this subsection to the extent that the claim underlying such
judgment is covered by insurance and defense of such claim has been tendered to
and accepted by the insurer without reservation, and (II) any settlement or
judgment rendered against the Company in either Case No. 94-CV-7140807, filed in
the U.S. District Court, Eastern District of Michigan or Case No. 94-184, filed
in the U.S. District Court, Delaware, will not be included in the calculation to
the extent the aggregate amounts do not result in an operational charge under
GAAP in excess of $4,000,000 during
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fiscal year ended December 31, 1995.
(h) ERISA. The occurrence of a Reportable Event that results in
or could result in liability of any Borrower, or their respective ERISA
Affiliates to the PBGC or to any Plan in excess of $50,000 and such Reportable
Event is not corrected within thirty (30) days after the occurrence thereof; or
the occurrence of any Reportable Event which could constitute grounds for
termination of any Plan of the Company, any other Borrower or their respective
ERISA Affiliates by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer any such Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the filing by the Company, any other Borrower or any of their
respective ERISA Affiliates of a notice of intent to terminate a Plan or the
institution of other proceedings to terminate a Plan; or the Company, any other
Borrower or any of their respective ERISA Affiliates shall fail to pay when due
any liability to the PBGC or to a Plan in excess of $50,000; or the PBGC shall
have instituted proceedings to terminate, or to cause a trustee to be appointed
to administer, any Plan of the Company, any other Borrower or their respective
ERISA Affiliates; or any person engages in a Prohibited Transaction with respect
to any Plan which results in or could result in liability of any Borrower, any
of their respective ERISA Affiliates, any Plan of any Borrower or their
respective ERISA Affiliates or any fiduciary of any such Plan in excess of
$50,000; or failure by any Borrower or any of their respective ERISA Affiliates
to make a required installment or other payment to any Plan within the meaning
of Section 302(f) of ERISA or Section 412(n) of the Code that results in or
could result in liability of any Borrower or any of their respective ERISA
Affiliates to the PBGC or any Plan in excess of $50,000; or the withdrawal of
any Borrower or any of their respective ERISA Affiliates from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or any Borrower or any of their respective ERISA Affiliates
becomes an employer with respect to any Multiemployer Plan without the prior
written consent of NBD.
(i) Insolvency, Etc. Any Borrower or any Guarantor: shall be
dissolved or liquidated (or any judgment, order or decree therefor shall be
entered); or shall generally not pay its debts as they become due; or shall
admit in writing its inability to pay its debts generally; or shall make a
general assignment for the benefit of creditors; or shall institute, or there
shall be instituted against any Borrower or any Guarantor, any proceeding or
case seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief or protection of debtors or seeking the entry of an
order for relief, or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its assets, rights,
revenues or property, and, if such proceeding is instituted against any Borrower
or any Guarantor and is being contested by such Borrower or such Guarantor, in
good faith by appropriate proceedings, such proceeding shall remain undismissed
or unstayed for a period of 60 days; or shall take any action (corporate or
other) to authorize or further any of the actions described above in this
subsection.
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(j) Change of Control. The Company shall cease to own 100% of
each class of the outstanding voting stock of each of the other Borrowers and
the Guarantor.
(k) Enforceability of Loan Documents. This Agreement or any of
the other Loan Documents shall, at any time after their respective execution and
delivery, and for any reason, cease to be in full force and effect or shall be
declared null and void, or be revoked or terminated, or the validity or
enforceability thereof or hereof shall be contested by any Borrower, the
Guarantor, or any stockholder of any Borrower, or any Borrower or the Guarantor
shall deny that it has any or further liability or obligation thereunder or
hereunder, as the case may be.
7.2 Remedies.
(a) Termination of Commitment; Acceleration. Upon the occurrence
and during the continuance of any Event of Default, NBD shall by notice to
Borrowers terminate the Commitment or declare the outstanding principal of, and
accrued interest on, the Note and all other Obligations to be immediately due
and payable, or both, whereupon the Commitment shall terminate forthwith and all
such amounts shall become immediately due and payable, or both; provided,
however, that, in the case of any event or condition described in Section 7.1(i)
with respect to any Borrower, the Commitment shall automatically terminate
forthwith and all such amounts shall automatically become immediately due and
payable without notice; in all cases without demand, presentment, protest,
diligence, notice of dishonor or other formality, all of which are hereby
expressly waived.
(b) Other Remedies. Upon the occurrence and during the
continuance of an Event of Default, NBD may exercise and enforce any and all
other rights and remedies available to it, whether arising under this Agreement
or any other Loan Document or under applicable law, in any manner deemed
appropriate by it, including suit in equity, action at law, or other appropriate
proceedings, whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Agreement or in any other
Loan Document or in aid of the exercise of any power granted in this Agreement
or any other Loan Document or under applicable law.
(c) Set off. Upon the occurrence and during the continuance of
any Event of Default, NBD (including the London Branch) may at any time and from
time to time, without notice to the Borrowers (any requirement for such notice
being expressly waived by the Borrowers) set off and apply against any and all
of the Obligations any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by NBD to or for the credit or the account of any Borrower and any property of
any Borrower from time to time in possession of NBD, irrespective of whether or
not NBD shall have made any demand hereunder and although such obligations may
be contingent and unmatured. The Borrowers hereby grant to NBD a Lien on all
such deposits, indebtedness and property as collateral security for the payment
and performance of the Obligations. The rights of NBD under this Section 7.2(c)
are in addition to other rights and remedies (including other rights
32
38
of setoff) which NBD may otherwise have.
ARTICLE VIII CROSS-GUARANTIES
8. Cross Guaranties.
8.1 Guaranty. Each Borrower hereby unconditionally and absolutely
guarantees to NBD the full and complete payment and performance when due of the
obligations of each of the other Borrowers to NBD, whether under this Loan
Agreement and the Notes, or otherwise. The obligations of any Borrower to NBD
shall be referred to as "Guarantied Obligations" and the foregoing guaranty of
each Borrower shall be referred to as "Guaranty."
8.2 Waivers and Consents. Upon the occurrence and during the
continuance of any Event of Default, NBD may enforce the Guaranty of any
Borrower independently of any other remedy, guaranty or security of NBD at any
time may have or hold in connection with the Guarantied Obligations. It will not
be necessary for NBD to proceed upon or against and/or exhaust any security or
remedy before proceeding to enforce the Guaranty of any Borrower. Each Borrower
expressly waives any right it may have to receive notice of acceptance by NBD,
any credit that NBD extends to the other Borrowers, default, demand and any
action or forbearance that NBD takes regarding any Borrower, any collateral or
any of the Guarantied Obligations which it might be entitled to by law or under
any other agreement. Each Borrower also waives any right to require NBD to
marshal assets in favor of any other Borrower or any other person or to proceed
against any other Borrower or any other guarantor of the Guarantied Obligations
or any collateral provided by any person. Each Borrower expressly waives any and
all defenses now or hereafter arising or asserted by reason of (i) any
disability or other defense of any other Borrower or any other guarantor for the
Guarantied Obligations with respect to the Guarantied Obligations, (ii) the
unenforceability or invalidity of any security for or guaranty of the Guarantied
Obligations or the lack of perfection or continuing perfection or failure of
priority of any security for the Guarantied Obligations, (iii) the cessation for
any cause whatsoever of the liability of any other Borrower or any other
guarantor of the Guarantied Obligations (other than by reason of the full
payment and performance of all Guarantied Obligations), (iv) any failure of NBD
to give notice of sale or other disposition of collateral to any other Borrower
or any other person or any defect in any notice that may be given in connection
with any sale or disposition of collateral, (v) any act or omission of NBD or
others that directly or indirectly results in or aids the discharge or release
of any other Borrower or any other guarantor of the Guarantied Obligations, or
of any security or guaranty therefor by operation of law or otherwise, (vi) any
failure of NBD to file or enhance a claim in any bankruptcy or other proceeding
with respect to any person, (vii) the avoidance of any lien or security interest
in favor of NBD for any reason, (viii) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any person, including without limitation any
discharge of, or bar or stay against collecting, all or any of the Guarantied
Obligations (or any interest thereon) in or as a result of any such proceeding,
or (ix) any action taken by NBD that is authorized by this Section.
33
39
8.3 Subrogation; Subordination. No claim, including without
limitation, reimbursement, contribution, indemnity or subrogation, which any
Borrower may have against any other guarantor of any of the Guarantied
Obligations or against any other Borrower shall be enforced nor any payment
accepted until the Obligations are paid in full and all such payments are not
subject to any right of recovery.
ARTICLE IX. MISCELLANEOUS
9.1 Amendments. No provision of this Agreement or any other Loan
Document may be modified, waived, or amended except by an instrument or
instruments signed by the Company and NBD.
9.2 Notices.
(a) General. Except as otherwise provided in Section 9.2(c), all
notices, requests, consents and other communications hereunder shall be in
writing and shall be delivered, telecopied or sent to the Borrowers or NBD at
the "Address for Notices" set forth on the signature pages hereof; or to such
other address as may be designated by the Borrowers or NBD by written notice to
each other. All notices, requests, consents and other communications shall be
deemed to have been given when received if hand delivered, if mailed by
certified or registered mail, postage prepaid, on the third (3rd) day after such
mailing, or if deposited with an expedited courier service such as "Federal
Express" or "Purolator", on the Business Day following such deposit, or if
telecopied, on the Business Day on which such telecopy is confirmed as having
been received, in all cases, addressed to the respective address set forth on
the signature pages hereof or as may otherwise be designated in accordance
herewith.
(b) Notices of Termination or Prepayment. Notices by the
Borrowers to NBD with respect to terminations or reductions of the Commitment or
the L/C Sublimit pursuant to Section 2.2, and notices of prepayment pursuant to
Section 4.1 shall be irrevocable and binding on the Borrowers.
(c) Telephonic Notices. Any notice to be given by the Borrowers
to NBD pursuant to Section 3.1, 3.2, 3.3 or 3.4 and any notice to be given by
NBD hereunder, may be given by telephone, to be confirmed in writing in the
manner provided in Section 9.2(a). Any such notice given by telephone shall be
deemed effective upon receipt thereof by the party to whom such notice is given.
9.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on
the part of NBD, nor any delay or failure on the part of NBD in exercising any
right, power or privilege hereunder or under any other Loan Document shall
operate as a waiver of such right, power or privilege or otherwise prejudice
NBD's rights and remedies hereunder or under any other Loan Document; nor shall
any single or partial exercise thereof preclude any further exercise thereof
34
40
or the exercise of any other right, power or privilege. No right or remedy
conferred upon or reserved to NBD under this Agreement or under any other Loan
Document is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right or
remedy granted thereunder or now or hereafter existing under any applicable law.
Every right and remedy granted by this Agreement or under any other Loan
Document or by applicable law to NBD may be exercised from time to time and as
often as may be deemed expedient by NBD and, unless contrary to the express
provisions of this Agreement or the other Loan Documents, irrespective of the
occurrence or continuance of any Default or Event of Default.
9.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Borrowers made
herein or in any certificate, report, financial statement or other document
furnished by or on behalf of the Borrowers or the Guarantor in connection with
this Agreement or any other Loan Document shall be deemed to be material and to
have been relied upon by NBD, notwithstanding any investigation heretofore or
hereafter made by NBD, and those covenants and agreements of the Borrowers set
forth in Article IV and Section 9.5 shall survive the repayment in full of the
Obligations and the termination of this Agreement and the Commitments.
9.5 Expenses; Indemnification. The Borrowers agree, jointly and
severally, to pay, or reimburse NBD for the payment of, on demand, (a) the
reasonable fees and expenses of counsel to NBD, including the fees and expenses
of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ in connection with the preparation,
execution, delivery and administration of this Agreement and the consummation of
the transactions contemplated hereby, and in connection with advising NBD as to
its rights and responsibilities with respect thereto, and in connection with any
amendments, waivers or consents in connection therewith, and (b) all stamp and
other taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing or recording of this Agreement, the Note and the
other Loan Documents and the consummation of the transactions contemplated
hereby, and any and all liabilities with respect to or resulting from any delay
in paying or omitting to pay such taxes or fees, and (c) all reasonable costs
and expenses of NBD (including reasonable fees and expenses of counsel and
whether incurred through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the enforcement of, or the
exercise or preservation of any rights under, this Agreement or any other Loan
Document or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement. The Borrowers, jointly and
severally, further agree to indemnify NBD for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever (including
reasonable attorneys' fees) which may be imposed on, incurred by or asserted
against NBD in any way relating to or arising out of its duties under this
Agreement or any other Loan Documents or the transactions contemplated hereby
(excluding, unless a Default or an Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its duties hereunder); provided, however, that the Borrowers shall not be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct
35
41
of NBD.
9.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the Borrowers may not, without the prior
consent of NBD, assign its rights or obligations hereunder or under the Note and
NBD shall not be obligated to make any Loan or issue any L/C or Guaranty Issued
by NBD hereunder to or for the account of any person other than the Borrowers.
9.7 Participations. NBD may grant participations in all or any part of
its Loans, Note and Commitment to any bank or other institutional investor
(including any Affiliate of NBD), without the consent of the Borrowers. The
Borrowers hereby acknowledge and agree that any participant described in this
Section 9.7 shall be considered to have the same rights and remedies as NBD
hereunder (including for purposes of Section 7.2(c)) and may rely on, and
possess all rights under, any opinions, certificates, or other instruments or
documents delivered under or in connection with this Agreement or any Loan
Document.
9.8 Disclosure of Information. The Borrowers authorize NBD to disclose
to any permitted participant or assignee of NBD or to any successor of NBD
(each, a "Transferee") and any prospective Transferee any and all financial and
other information in NBD's possession concerning the Borrowers which has been
delivered to NBD by the Borrowers pursuant to this Agreement or the other Loan
Documents or which has been received by NBD in connection with its credit
evaluation of the Borrowers prior to entering into this Agreement.
9.9 Counterparts. This Agreement 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 Agreement by signing
any such counterpart.
9.10 Governing Law.
(a) General. This Agreement is a contract made under, and shall
be governed by and construed in accordance with, the laws of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State,
except that any Guaranty Issued by NBD hereunder shall be governed by and
construed in accordance with the laws of the United Kingdom. The Company further
agrees that any legal action or proceeding with respect to this Agreement or any
other Loan Document or the transactions contemplated hereby may be brought in
any court of the State of Michigan, or in any court of the United States of
America sitting in the Eastern District of Michigan, or, with respect to
Guaranties Issued by NBD or Revolving Loans denominated in Pounds Sterling any
court of the United Kingdom sitting in or having jurisdiction over London; and
the Borrowers hereby submits to and accepts generally and unconditionally the
jurisdiction of those courts with respect to its person and property.
36
42
(b) Suit in Other Jurisdictions. Nothing in Section 9.10(a) shall
affect the right of NBD to serve legal process in any other manner permitted by
law or affect the right of NBD to bring any action or proceeding against the
borrowers, the Guarantor or their respective property in the courts of any other
jurisdictions.
(c) Immunity. To the extent that such Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from any service of
process (whether from service or notice, or otherwise) with respect to itself or
its property, such Borrower hereby irrevocably waives such immunity in respect
of its obligations under this Agreement, the Note and the other Loan Documents.
9.11 Table of Contents and Headings. The table of contents and the
headings of the various Articles, Sections and paragraphs hereof are for the
convenience of reference only and shall in no way modify any of the terms or
provisions hereof.
9.12 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not expressly
specified in such provision.
9.13 Integration and Severability. This Agreement and the other Loan
Documents embody the entire agreement and understanding between the Borrowers
and NBD with respect to the revolving credit granted by NBD to the Borrowers,
and supersede all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations, of any of the
Borrowers under this Agreement or any other Loan Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining obligations of the Borrowers shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality nor
enforceability of the obligations of the Borrowers under this Agreement or any
other Loan Document in any other jurisdiction.
9.14 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default or any event or condition
which with notice or lapse of time, or both, could become such a Default or an
Event of Default if such action is taken or such condition exists.
9.15 Joint and Several Liability. All liabilities of the Borrowers
under this Agreement and the Notes shall be joint and several.
37
43
9.16 Interest Rate Limitation. Notwithstanding any provisions of this
Agreement or any other Loan Document, in no event shall the amount of interest
paid or agreed to be paid by the Borrowers exceed an amount computed at the
highest rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Agreement or any
other Loan Document at the time performance of such provision shall be due,
shall involve exceeding the interest rate limitation validly prescribed by law
which a court of competent jurisdiction may deem applicable hereto, then, ipso
facto, the obligations to be fulfilled shall be reduced to an amount computed at
the highest rate of interest permissible under applicable law, and if for any
reason whatsoever NBD shall ever receive as interest an amount which would be
deemed unlawful under such applicable law such interest shall be automatically
applied to the payment of principal of the Loans outstanding hereunder (whether
or not then due and payable) and not to the payment of interest, or shall be
refunded to the Borrowers if such principal and all other Obligations of the
Borrowers to NBD have been paid in full.
9.17 Limitation of Liability. Neither NBD nor any of its Affiliates,
directors, officers, agents, attorneys or employees shall be liable to the
Borrowers or any of the Borrower's Affiliates for any action taken, or omitted
to be taken, by it or them or any of them under this Agreement or any other Loan
Document or in connection herewith or therewith, except that no person shall be
relieved of any liability imposed by law for gross negligence or willful
misconduct. No claim may be made by the Borrowers or any of the Borrowers'
Affiliates against NBD, or any of its Affiliates, directors, officers, agents,
attorneys or employees, for any special, indirect, consequential or punitive
damages in respect of any breach or wrongful conduct (whether the claim is based
on contract or tort or duty imposed by law) arising out of or related to this
Agreement or any other Loan Document, or the transactions contemplated hereby or
thereby, or any act, omission or event occurring in connection herewith or
therewith. The Borrowers, on their own behalf and on behalf of their Affiliates,
hereby waive, release and agree not to ▇▇▇ upon any claim for any such damages,
whether or not accrued, and whether or not known or suspected to exist in its
favor.
9.18 WAIVER OF JURY TRIAL. NBD AND EACH BORROWER, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
ANY OF THEM. NEITHER NBD NOR THE ANY OF THE BORROWERS SHALL SEEK TO CONSOLIDATE,
BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY NBD OR THE BORROWERS EXCEPT BY A ▇▇▇▇▇▇▇
▇▇
▇▇
INSTRUMENT EXECUTED BY ALL OF THEM.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of this 31st day of July, 1998, which shall be the date
inserted by NBD on which it has received counterparts of this Agreement executed
by each of the parties hereto, notwithstanding the date first above written or
the date this Agreement is executed by any of the parties hereto on the
following signature pages.
Address for Notices:
MEDAR, INC.
a Michigan corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ Current By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: 810/▇▇▇-▇▇▇▇ -----------------------------------
Telecopy: 810/477-8897 ▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: Chairman
INTEGRAL VISION, LTD.
an English corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ Current
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ -----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Current
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Its: Company Secretary
---------------------------
Telephone: 44/▇▇▇▇-▇▇▇▇▇▇
Telecopy: 44/1234-843390
NBD BANK
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: 313/▇▇▇-▇▇▇▇ -----------------------------------
Telecopy: 313/454-7723 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: First Vice President
and
By: /s/▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇
Its: Assistant Vice President
39
45
REVOLVING NOTE
$10,000,000 July 31, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned, MEDAR, INC. ("Medar"), and
INTEGRAL VISION, LTD. (collectively, "Borrowers"), jointly and severally, hereby
promise to pay to the order of NBD Bank, ("Bank"), pursuant to that Amended and
Restated Revolving Credit and Loan Agreement, entered into as of July 31, 1998
(the "Loan Agreement"), among Borrowers and Bank, at the main office of Bank in
Detroit, Michigan in accordance with the Loan Agreement, in immediately
available funds, the principal sum of Ten Million and 00/100 Dollars (U.S.
$10,000,000), or such lesser amount as is recorded on the books and records of
Bank, on August 31, 1999, or such later Termination Date as may be agreed to
under the Loan Agreement as amended from time to time, together with interest on
the outstanding balance thereof as provided in the Loan Agreement. Capitalized
terms used but not defined in this Note shall have the respective meanings
assigned to them in the Loan Agreement.
Bank is hereby authorized by Borrowers to record on its books and
records, the date and amount of each Revolving Loan, the Loan Period, the
applicable interest rate (including any changes therein), the amount of each
payment of principal thereon and such other information as appropriate, which
books and records shall constitute rebuttable presumptive evidence of the
information so recorded, provided, however, that any failure by Bank to record
any such information shall not relieve Borrowers of their obligation to repay
the outstanding principal amount of all Revolving Loans made by Bank, all
accrued interest thereon and any amount payable with respect thereto in
accordance with the terms of this Note and the Loan Agreement. All payments of
principal and interest shall be made in lawful money of the United States of
America.
This Note is subject to, and evidences the Revolving Loans made by Bank
under, the Loan Agreement, to which reference is hereby made for a statement of
the circumstances and terms under which all or a portion of this Note is subject
to prepayment and under which its due date may be accelerated and other terms
applicable to this Note. An Event of Default under the Loan Agreement
constitutes a default hereunder. During the period that any amount owing on this
Note is not paid in full when due (whether at stated maturity, by acceleration
or otherwise), such amount shall bear interest at the Default Rate applicable to
each Revolving Loan in effect from time to time or the maximum rate permitted by
law, whichever is lower, for the period commencing on the due date until the
same is paid in full. In addition to the foregoing, during the period that any
other Event of Default has occurred and shall be continuing, Borrowers shall pay
on demand, at the election of Bank, interest at the Default Rate or the maximum
rate permitted by law, whichever is lower, on the outstanding principal amount
of all the Obligations which are outstanding during such period from and after
the date of any such demand.
This Revolving Note amends and restates, but does not satisfy, certain
existing obligations of the Borrowers evidenced by the Amended and Restated
Revolving Note in the
46
principal amount of $8,000,000 dated August 10, 1995, from Borrowers and
Automatic Inspection Devices, Inc. (which has since merged into Medar, Inc.) to
Bank.
Borrowers and each endorser or guarantor hereof waive demand,
presentment, protest, diligence, notice of dishonor and any other formality in
connection with this Note. Borrowers further agree to pay, in addition to the
principal, interest and other sums due and payable hereon, all costs of
collecting this Note, including reasonable attorneys' fees and expenses.
This Note is made under, and shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts made
and to be performed entirely within the State of Michigan and without giving
effect to the choice of law principles of the State of Michigan.
MEDAR, INC.,
a Michigan corporation
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: President
INTEGRAL VISION, LTD.
an English corporation
By: /s/▇▇▇▇▇▇▇ Current
-----------------------------------
▇▇▇▇▇▇▇ Current
Its: Company Secretary
47
EXHIBIT 3.2
REQUEST UNDER REVOLVING CREDIT AGREEMENT
(FLOATING, BASE OR EURODOLLAR)
The undersigned, Medar, Inc., Automatic Inspection Devices, Inc. and
Integral Vision, Ltd. (collectively, "Borrowers"), hereby certify as set forth
below pursuant to the Revolving Credit and Loan Agreement, dated as of August
10, 1995, among the Borrowers and NBD Bank (such agreement, as amended, modified
or supplemented from time to time, is referred to herein as the "Credit
Agreement"). Reference is made to the Credit Agreement for definitions of
capitalized terms not otherwise defined herein and for additional terms and
conditions for Revolving Loans.
Check applicable number(s) and complete request as appropriate. All Floating
Rate Loans are in U.S. Dollars. All Base Rate Loans and Eurodollar Rate Loans
are in Pounds Sterling.
___ 1. NEW ADVANCE. Borrowers hereby request a new Revolving Loan in the
amount of ____________, with such terms as described in Section 3 below.
___ 2. CONVERSION OR EXTENSIONS. Borrowers hereby request that the
following Revolving Loans be converted or extended with such new terms as
described in Section 3 below:
a. Type of Loan being converted or extended: ______________
b. Amount of such Loan: ______________
c. Due date of such Loan: ______________
3. TERMS. Terms of new, extended or converted Loan, as applicable:
a. Type of Advance: ___________________________________________
(specify Floating, Base Rate or Eurodollar)
b. Loan Period Requested: ______________________________________
(Eurodollar - 1, 2 or 3 month only)
c. Funding Date (same as former due date for conversion):_______
4. CERTIFICATION. Borrowers certify that: (a) representations and
warranties in the Credit Agreement are true in all material respects as of the
date hereof (both before and after giving effect to the making of the Loan
requested herein); (b) the aggregate amount of all outstanding Revolving Loans
and Loans to be outstanding upon the making of the Loan requested herein
together with the face amount of all outstanding L/Cs and Guarantees Issued by
NBD and will not exceed the current Activated Amount; and (c) no Default or
Event of Default has occurred and is continuing as of the date hereof.
5. TRANSFER REQUEST. Borrowers hereby request that, any new Loan be
credited to Acct. No. ______________ of ________________ at NBD Bank.
This Request Under Revolving Credit Agreement is executed and delivered
to NBD by the undersigned authorized representative of the Borrowers on
____________, 199__.
MEDAR, INC.
_________________________ By:__________________________
(Insert Company Name)
By:______________________ Its:______________________
Its:__________________
48
SCHEDULE 5.4
SUBSIDIARIES
1. Integral - 100% owned by the Company.
2. Medar Canada, Ltd. - 100% owned by the Company.
40
49
SCHEDULE 5.5
LITIGATION
NONE
41
50
SCHEDULE 5.6
FINANCIAL STATEMENTS
Audited Annual Financial Statements for the year ending December 31, 1997.
Quarterly Financial Statements for the quarter ending March 31, 1998 and the
periods then ending.
42
51
SCHEDULE 5.13
ENVIRONMENTAL MATTERS
NONE
43
52
SCHEDULE 6.2 (C)
EXISTING INDEBTEDNESS
Patent license obligations in the amount of $1,554,239 (Net of current
maturities) to Square D Corporation (payable $300,000 per year including
interest).
44
53
REVOLVING NOTE
$10,000,000 July 31, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned, MEDAR, INC. ("Medar"), and
INTEGRAL VISION, LTD. (collectively, "Borrowers"), jointly and severally, hereby
promise to pay to the order of NBD Bank, ("Bank"), pursuant to that Amended and
Restated Revolving Credit and Loan Agreement, entered into as of July 31, 1998
(the "Loan Agreement"), among Borrowers and Bank, at the main office of Bank in
Detroit, Michigan in accordance with the Loan Agreement, in immediately
available funds, the principal sum of Ten Million and 00/100 Dollars (U.S.
$10,000,000), or such lesser amount as is recorded on the books and records of
Bank, on August 31, 1999, or such later Termination Date as may be agreed to
under the Loan Agreement as amended from time to time, together with interest on
the outstanding balance thereof as provided in the Loan Agreement. Capitalized
terms used but not defined in this Note shall have the respective meanings
assigned to them in the Loan Agreement.
Bank is hereby authorized by Borrowers to record on its books and
records, the date and amount of each Revolving Loan, the Loan Period, the
applicable interest rate (including any changes therein), the amount of each
payment of principal thereon and such other information as appropriate, which
books and records shall constitute rebuttable presumptive evidence of the
information so recorded, provided, however, that any failure by Bank to record
any such information shall not relieve Borrowers of their obligation to repay
the outstanding principal amount of all Revolving Loans made by Bank, all
accrued interest thereon and any amount payable with respect thereto in
accordance with the terms of this Note and the Loan Agreement. All payments of
principal and interest shall be made in lawful money of the United States of
America.
This Note is subject to, and evidences the Revolving Loans made by Bank
under, the Loan Agreement, to which reference is hereby made for a statement of
the circumstances and terms under which all or a portion of this Note is subject
to prepayment and under which its due date may be accelerated and other terms
applicable to this Note. An Event of Default under the Loan Agreement
constitutes a default hereunder. During the period that any amount owing on this
Note is not paid in full when due (whether at stated maturity, by acceleration
or otherwise), such amount shall bear interest at the Default Rate applicable to
each Revolving Loan in effect from time to time or the maximum rate permitted by
law, whichever is lower, for the period commencing on the due date until the
same is paid in full. In addition to the foregoing, during the period that any
other Event of Default has occurred and shall be continuing, Borrowers shall pay
on demand, at the election of Bank, interest at the Default Rate or the maximum
rate permitted by law, whichever is lower, on the outstanding principal amount
of all the Obligations which are outstanding during such period from and after
the date of any such demand.
This Revolving Note amends and restates, but does not satisfy, certain
existing obligations of the Borrowers evidenced by the Amended and Restated
Revolving Note in the
54
principal amount of $8,000,000 dated August 10, 1995, from Borrowers and
Automatic Inspection Devices, Inc. (which has since merged into Medar, Inc.) to
Bank.
Borrowers and each endorser or guarantor hereof waive demand,
presentment, protest, diligence, notice of dishonor and any other formality in
connection with this Note. Borrowers further agree to pay, in addition to the
principal, interest and other sums due and payable hereon, all costs of
collecting this Note, including reasonable attorneys' fees and expenses.
This Note is made under, and shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts made
and to be performed entirely within the State of Michigan and without giving
effect to the choice of law principles of the State of Michigan.
MEDAR, INC.,
a Michigan corporation
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
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Its: President
INTEGRAL VISION, LTD.
an English corporation
By: /s/▇▇▇▇▇▇▇ Current
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▇▇▇▇▇▇▇ Current
Its: Company Secretary