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EXHIBIT 10.6
LETTER LOAN AGREEMENT
June 10, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇, N.A.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned, BINDVIEW DEVELOPMENT CORPORATION, a Texas corporation
("Borrower"), duly organized and existing under the laws of the State of Texas,
has requested that SOUTHWEST BANK OF TEXAS, N.A. ("Lender") lend to Borrower
the aggregate sum of $1,300,000.00. Lender has advised Borrower that Lender is
willing to lend such funds to Borrower upon the terms and subject to the
conditions set forth in this letter loan agreement (the "Agreement"). In
consideration for the above premises and the mutual promises and covenants
herein contained, Borrower and Lender do hereby agree as follows:
1. Loans. On the terms and subject to the conditions hereinafter
set forth, Lender agrees to lend to Borrower the aggregate sum of $1,300,000.00
(collectively, the "Loan"). The Loan shall be evidenced by (i) a master
revolving credit note (the "Revolving Note") in a form satisfactory to Lender,
duly executed by Borrower in the principal amount of $1,000,000.00 and made
payable to the order of Lender, and (ii) guidance line of credit notes (the
"Guidance Notes") in a form satisfactory to Lender, duly executed from time to
time by Borrower in an aggregate principal amount not to exceed $300,000.00 and
made payable to the order of Lender. The principal and interest on the
Revolving Note shall be due and payable in the manner and at the times set
forth in the Revolving Note with final maturity on June 10, 1997 (the "Maturity
Date"). Principal and interest on the Guidance Notes shall be due and payable
upon maturity, with final maturity on each individual note being thirty (30)
months from the execution of said note and final maturity on the guidance line
of credit being the Maturity Date. The Revolving Note and the Guidance Notes,
and any renewals, extensions and modifications thereof are collectively
referred to as the "Notes."
2. Revolving Credit Advances. Subject to the terms hereof,
Borrower may borrow, pay, reborrow and repay under the Revolving Note,
provided, however, the maximum principal outstanding under the Revolving Note
shall not exceed the lesser of (i) $1,000,000.00, or (ii) the Borrower's Loan
Limit, as such term is defined in Schedule "A" attached hereto and made a part
hereof. Borrower's requests for advances under the Revolving Note shall
specify the aggregate amount of the advance and the date of such advance.
Borrower shall furnish to Lender a request for borrowing in a form reasonably
satisfactory to Lender by 11:00 a.m. on the date of the requested borrowing.
After receiving notice of a requested advance in the manner provided herein,
Lender shall make the requested funds available to Borrower on the requested
borrowing date at Lender's principal banking office in Houston, Texas. The
funds advanced under the Revolving Note are to enable Borrower to finance
working capital needs. If at any time prior to the Maturity Date, the
outstanding advances under the Revolving Note exceed the Borrower's
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Loan Limit, Borrower shall prepay on the Revolving Note such amount as may be
necessary to eliminate such excess.
3. Guidance Notes. Subject to the terms hereof, Borrower may
borrow under the Guidance Notes, provided however, that the maximum principal
outstanding thereunder does not exceed an aggregate amount of $300,000.00.
Each of the Guidance Notes shall (i) mature no later than thirty (30) months
from the date thereof, and (ii) provide for payment of principal and accrued,
unpaid interest at maturity. Borrower's request for advances under the
Guidance Notes shall specify the amount of the requested advance, the date of
the requested advance, and be in a form and with such information as are
reasonably satisfactory to Lender, with adequate time for Lender to comply with
such request. The funds advanced under the Guidance Notes are to enable
Borrower to purchase equipment; however, in no event shall the funds advanced
under the Guidance Notes be used to purchase equipment or inventory the
ownership of which is evidenced by a Certificate of Title. With respect to
equipment purchases, Lender agrees to loan up to one hundred (100%) of the
actual cost of such purchase.
4. Conditions Precedent.
(a) The obligation of Lender to make the initial advance
under the Revolving Note is subject to the conditions precedent that, as of the
date of such advance, (i) Lender shall have received duly executed copies of
each document listed on the last page hereof relating to the Loan (except the
Subordination Agreement which must be provided to Lender within thirty (30)
days from the date hereof), in form and substance reasonably acceptable to
Lender and its legal counsel (all the documents listed on the last page hereof,
together with this Agreement and any other security documents relating to the
Loan, and any modifications thereof, are hereinafter collectively referred to
as the "Loan Documents") and (ii) Lender's approval of a pre-closing field
audit acceptable to Lender.
(b) Lender's obligation to make any advances under the
Loan shall be subject to the additional conditions precedent that, as of the
date of such advance and after giving effect thereto: (i) all representations
and warranties made by Borrower to Lender are true and correct, in all material
respects, as if made on such date, (ii) all documents and proceedings shall be
reasonably satisfactory to legal counsel for Lender, (iii) no condition or
event exists which constitutes an Event of Default (as hereinafter defined) or
which, with the lapse of time and/or giving of notice, would constitute an
Event of Default, and (iv) all conditions precedent set forth in subparagraph
(a) above shall have been satisfied.
5. Representations and Warranties. In order to induce Lender to
make the Loan, Borrower represents and warrants to Lender that:
(a) The Loan Documents are the legal and binding
obligations of Borrower, enforceable in accordance with their respective terms,
except as limited by bankruptcy, insolvency or other laws of general
application relating to the enforcement of creditors' rights;
(b) All financial statements delivered by Borrower to
Lender prior to the date hereof, fairly present the financial condition of
Borrower and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles, consistently applied; as of the date
hereof, there are no obligations, liabilities or indebtedness (including
contingent and indirect
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liabilities) which are material to Borrower or its subsidiaries taken as a
whole and not reflected in such financial statements; and no material adverse
changes have occurred in the financial condition or business of Borrower or its
subsidiaries since the date of the most recent financial statements which
Borrower has delivered to Lender;
(c) Neither the execution and delivery of this Agreement
and the other Loan Documents, nor consummation of any of the transactions
herein or therein contemplated, nor compliance with the terms and provisions
hereof or thereof, will, in a manner which could have a material adverse
effect, contravene or conflict with any provision of law, statute or regulation
to which Borrower is subject or any judgment, license, order or permit
applicable to Borrower or any material indenture, mortgage, deed of trust or
other instrument to which Borrower may be subject; no consent, approval,
authorization or order of any court, governmental authority or third party is
required in connection with the execution and delivery by Borrower of this
Agreement or transactions contemplated herein or therein;
(d) No litigation, investigation, or governmental
proceeding is pending, or, to the knowledge of any of Borrower's officers,
threatened against or affecting Borrower or any of its subsidiaries, which may
result in any material adverse change in Borrower's or its subsidiaries'
business, properties or operations taken as a whole;
(e) There is no specific fact known to Borrower that
Borrower has not disclosed to Lender in writing which is likely to result in
any material adverse change in Borrower's or its subsidiaries' business,
properties or operations taken as a whole;
(f) Borrower (or its subsidiaries) owns all of the assets
reflected on its most recent consolidated balance sheet free and clear of all
liens, security interests or other encumbrances, except (i) as previously
disclosed in writing to Lender, (ii) inchoate liens for taxes which are not
delinquent or which are being contested as good faith, (iii) liens arising by
operation of law or (iv) purchase money liens which do not exceed $10,000.00;
(g) The principal office, chief executive office and
principal place of business of Borrower is in Houston, Texas;
(h) All taxes required to be paid by Borrower and its
subsidiaries that are currently due have been paid, except for taxes being
contested in good faith by appropriate proceedings for which adequate reserves
have been established;
(i) Borrower is not in violation, in a manner which could
have a material adverse effect, of any law, ordinance, governmental rule or
regulation to which it is subject, and is not in default under any material
agreement, contract or understanding to which it is a party; and
(j) No written certificate or written statement herewith
or heretofore delivered by Borrower to Lender in connection herewith, or in
connection with any transaction contemplated hereby, contains any untrue
statement of a material fact or fails to state any material fact necessary to
keep the statements contained therein, in light of the circumstances in which
made, from being misleading.
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6. Affirmative Covenants. Until payment in full of the Notes and
all other obligations and liabilities of Borrower hereunder, Borrower agrees
and covenants that (unless Lender shall otherwise consent in writing):
(a) As soon as available, and in any event within
twenty-five (25) days after the end of each month in which principal and or
interest is outstanding on the Revolving Note and/or the Guidance Notes,
Borrower shall deliver to Lender (i) a Borrowing Base Report and Compliance
Certificate in the form of Schedule "B" attached hereto together with such
other information as may be.deemed reasonably necessary or appropriate by
Lender, and (ii) an aging and listing of all accounts receivable of Borrower in
a form reasonably acceptable to Lender;
(b) As soon as available, and in any event within
forty-five (45) days after the end of each calendar quarter, Borrower shall
deliver to Lender an unaudited financial statement showing the financial
condition of Borrower and its subsidiaries at the close of each such quarter
and the results of operations during such quarter, which financial statements
shall include, but shall not be limited to, a profit and loss statement,
balance sheet, and such other matters as Lender may reasonably request; all
such quarterly financial statements shall be certified on the face thereof by
the chief financial officer of Borrower, or any person acceptable to Lender,
and shall be forwarded to Lender with a letter of transmittal from him in which
he shall certify that Borrower is in compliance with all of the covenants
contained in Paragraph 5 and Paragraph 6 hereof, and further stating that no
Event of Default exists in the performance by Borrower of any of the other
terms, conditions and covenants required under this Agreement to be performed
by Borrower;
(c) As soon as available, and in any event within ninety
(90) days after the end of each fiscal year of Borrower (December 31), Borrower
shall deliver to Lender a copy of the annual audited financial statement of
Borrower prepared in conformity with generally accepted accounting principles,
certified (with no material qualifications or exceptions) by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
L.L.P. or other independent public accountants selected by Borrower and
reasonably acceptable to Lender, which show the financial condition of Borrower
and it subsidiaries at the close of such fiscal year and the results of
operations during such fiscal year, and shall include, but not be limited to, a
profit and loss statement, balance sheet and such other matters as Lender may
reasonably request;
(d) Commencing on June 30, 1997 Borrower shall furnish to
Lender within thirty (30) days after the end of each June 30, field audit
reports prepared by a company acceptable to Lender, in a form reasonably
acceptable to Lender; provided, however, that Lender shall pay for all costs
associated with each field audit in excess of $500.00;
(e) As soon as available, and in any event within thirty
(30) days after the end of each calendar year, Borrower shall cause each
Guarantor to deliver to Lender an unaudited financial statement showing the
financial condition of each Guarantor, which financial statements shall
include, but shall not be limited to, a balance sheet, an income statement, a
cash flow statement, statement of contingent liabilities and such other matters
as Lender may reasonably request; all such financial statements shall be
certified on the face thereof by such Guarantor;
(f) Borrower shall conduct its business in a manner
consistent with prior business practices and in accordance with all valid
regulations, laws and orders of any
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governmental authority and will act in accordance with customary industry
standards in maintaining and operating its assets, properties and investments;
(g) Borrower shall maintain complete and accurate books
and records of its transactions in accordance with generally accepted
accounting principles, and will give Lender access during business hours to all
books, records and documents of Borrower and permit Lender to make and take
away copies thereof;
(h) Borrower shall furnish to Lender, immediately upon
becoming aware of the existence of any condition or event constituting an Event
of Default or event which, with the lapse of time and/or giving of notice,
would constitute an Event of Default, written notice specifying the nature and
period of existence thereof and any action which Borrower is taking or proposes
to take with respect thereto;
(i) Borrower shall promptly notify Lender of (i) any
material adverse change in its consolidated financial condition or business;
(ii) any default under any material agreement, contract or other instrument to
which Borrower is a party or by which any of its properties are bound, which
could have a material adverse effect on Borrower, or any acceleration of any
maturity of any indebtedness owing by Borrower, which could have a material
adverse effect on Borrower, (iii) any material adverse claim against or
affecting Borrower or any of its subsidiaries or properties; and (iv) any
litigation, or any claim or controversy which might become the subject of
litigation, against Borrower or its subsidiaries affecting any property, if
such litigation or potential litigation might, in the event of an unfavorable
outcome, have a material adverse effect on Borrower's consolidated financial
condition or business or might cause an Event of Default;
(j) Borrower shall promptly pay all lawful claims,
whether for labor, materials or otherwise, which might or could, if unpaid,
become a lien or charge on any property or assets of Borrower, unless and to
the extent only that the same are permitted hereby or are being contested in
good faith by appropriate proceedings and reserves deemed adequate by Lender
have been established therefor;
(k) Borrower shall maintain or cause to be maintained
insurance from responsible and reputable companies in such amounts and covering
such risks as are reasonably acceptable to Lender, is prudent and is usually
carried by companies engaged in businesses similar to that of Borrower;
Borrower shall furnish Lender, on request, with certified copies of insurance
policies or other appropriate evidence of compliance with the foregoing
covenant;
(l) Borrower shall preserve and maintain all licenses,
privileges, franchises, and certificates necessary for the operation of its
business;
(m) Borrower shall promptly furnish to Lender, at
Lender's request, such additional financial or other information concerning
assets, liabilities, operations and transactions of Borrower as Lender may from
time to time reasonably request;
(n) Borrower shall make, execute or endorse, and
acknowledge and deliver or file or cause the same to be done, all such
vouchers, invoices, notices, certifications and additional agreements,
undertakings, conveyances, deeds of trust, mortgages, transfers, assignments,
financing statements or other assurances, and take any and all such other
action, as
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Lender may, from time to time, deem reasonably necessary or proper in
connection with any of the Loan Documents, the obligations of Borrower, or for
better assuring and confirming unto Lender all or any part of the security for
any of such obligations; and
(o) Borrower shall establish a lock box arrangement with
Lender in accordance with Lender's normal practices in connection with the
payment and collection of Borrower's accounts receivable.
7. Negative Covenants. Until payment in full of the
Notes and all other obligations and liabilities of Borrower hereunder, Borrower
covenants that it shall not (unless Lender shall otherwise consent in writing):
(a) Permit at any time its ratio of current assets to
current liabilities (excluding deferred revenues which are cash collected and
non-refundable) to be less than 1.50 to 1.00;
(b) Permit at any time Borrower's Tangible Net Worth to
be less than $1,000,000.00, as used herein, the term "Tangible Net Worth" shall
mean the total assets of Borrower, minus its total liabilities, plus deferred
revenues which are cash collected and non-refundable, minus all intangibles,
expenses and other items deducted in arriving at tangible net worth;
(c) Permit at any time its ratio of total liabilities to
Tangible Net Worth to be more than 1.80 to 1.00.
(d) Incur or assume any indebtedness or borrow money in
excess of $100,000 annually without the prior written approval of Lender except
for (i) the Loan; (ii) debt incurred in the ordinary course of business; and
(iii) debt reflected on Borrower's most recent balance sheet; or sell any of
its accounts receivable, with or without recourse;
(e) Endorse, guarantee, or otherwise become liable for
the obligations of any person, firm or corporation except for endorsements of
negotiable instruments by Borrower in the ordinary course of business;
(f) Mortgage, assign, encumber, incur, assume or grant a
security interest in or lien upon any of Borrower's assets, except to Lender
and as permitted herein (provided, however, that the foregoing shall not apply
to an inchoate lien for taxes which are not delinquent or which are being
contested in good faith and liens resulting from deposits to secure the
payments of worker's compensation or social security or to secure the
performance of bids or contracts in the ordinary course of business or others
arising by operation of law);
(g) Liquidate, dissolve or reorganize; or merge or
consolidate with, or acquire all or substantially all of the assets of, any
other company, firm or association in excess of $1,000,000.00; or make any
other substantial change in its capitalization or its business;
(h) Permit any transfer, pledge or other change in the
controlling interest of the stock of Borrower during the term of the Loan,
other than such pledges to the Lender, as used herein, the term "controlling
interest" shall mean fifty-one percent (51%) of the stock of Borrower; or
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(i) Expend or enter into any commitment to expend any
amount for the acquisition or lease of tangible, fixed or capital assets,
including repairs, replacements and improvements, which are capitalized under
proper accounting practice, and which exceeds, in the aggregate, $250,000.00.
8. Default. An "Event of Default" shall exist if any one or more
of the following events (herein collectively called "Events of Default") shall
occur:
(a) Borrower shall fail to pay when due any principal of,
or interest on, the Notes or any other fee or payment due hereunder or under
any of the Loan Documents within twenty (20) days of Lender's sending written
demand therefor; provided, however, Lender shall not be obligated to send such
demand more than twice per any twelve month period, and thereafter Borrower
shall be in default upon its failure to pay such sums when due;
(b) Any representation or warranty made in any of the
Loan Documents shall prove to be untrue or inaccurate in any material respect
as of the date on which such representation or warranty is made;
(c) Default shall occur in the performance of any of the
covenants or agreements of Borrower contained herein or in any of the other
Loan Documents and with respect to the Affirmative Covenants set forth herein
([except subparagraphs 6(g), (h), (i) and (m)] and Negative Covenants as set
forth herein [except subparagraphs 7(a), (b) and (c)] such default shall
continue for more than thirty (30) days after Lender's sending written notice
thereof,
(d) Borrower shall fail to pay when due any principal of,
or interest on, any other indebtedness of Borrower owing to Lender, or any
other default shall occur in the performance of any of the covenants or
agreements of Borrower contained in any other loan documents with Lender;
(e) Borrower shall (i) apply for or consent to the
appointment of a receiver, custodian, trustee, intervenor or liquidator of it
or of all or a substantial part of its assets, (ii) voluntarily become the
subject of a bankruptcy, reorganization or insolvency proceeding or be
insolvent or admit in writing that it is unable to pay debts as they become
due, (iii) make a general assignment for the benefit of creditors, (iv) file a
petition or answer seeking reorganization or an arrangement with creditors or
to take advantage of any bankruptcy or insolvency laws, (v) file an answer
admitting the material allegations of, or consent to, or default in answering,
a petition filed against it in any bankruptcy, reorganization or insolvency
proceeding, (vi) become the subject of an order for relief under any
bankruptcy, reorganization or insolvency proceeding, or (vii) fail to pay any
money judgment against it before the expiration of thirty (30) days after such
judgment becomes final and no longer subject to appeal;
(f) An order, judgment or decree shall be entered by any
court of competent jurisdiction or other competent authority approving a
petition appointing a receiver, custodian, trustee, intervenor or liquidator of
Borrower or of all or substantially all of its assets, and such order, judgment
or decree shall continue unstayed and in effect for a period of thirty (30)
days; or a complaint or petition shall be filed against Borrower seeking or
instituting a bankruptcy, insolvency, reorganization, rehabilitation or
receivership proceeding of Borrower, and such petition or complaint shall not
have been dismissed within thirty (30) days; or
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(g) Borrower shall default in the payment of any
indebtedness of Borrower or in the performance of any of Borrower's obligations
and such default shall continue for more than any applicable period of grace.
9. Remedies Upon Event of Default. If an Event of Default shall
have occurred, then Lender, at its option, may, except as otherwise provided
herein, (i) declare the principal of, and all interest then accrued on, the
Notes and any other liabilities of Borrower to Lender to be forthwith due and
payable, whereupon the same shall forthwith become due and payable without
notice, presentment, demand, protest, notice of intention to accelerate, or
other notice of any kind, all of which Borrower hereby expressly waives,
anything contained herein or in the Notes to the contrary notwithstanding, (ii)
reduce any claim to judgment, and/or (iii) without notice of default or demand,
pursue and enforce any of Lender's rights and remedies under the Loan Documents
or otherwise provided under or pursuant to any applicable law or agreement.
10. Collateral and Guaranty.
(a) Payment of the Notes and performance of the
obligations described herein shall be secured, directly or indirectly, by a
first lien on Borrower's equipment, inventory, leases, chattel paper, general
intangibles and accounts.
(b) Payment of the Notes and performance of the
obligations described herein shall be guaranteed by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the
"Guarantor").
11. Miscellaneous.
(a) Waiver. No failure to exercise, and no delay in
exercising, on the part of Lender, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right. The
rights of Lender hereunder and under the other Loan Documents shall be in
addition to all other rights provided by law. No notice or demand given in any
case shall constitute a waiver of the right to take other action in the same,
similar or other instances without such notice or demand.
(b) Notices. Any notices or other communications
required or permitted to be given by any of the Loan Documents must be given in
writing and must be personally delivered, or mailed by prepaid certified or
registered mail to the party to whom such notice or communication is directed
at the address of such party as follows:
(i) Borrower: BindView Development Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
(ii) Lender: Southwest Bank of Texas
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Any such notice or other communication shall be deemed to have been given
(whether actually received or not) on the day it is personally delivered as
aforesaid, or, if mailed, on the third day after it is mailed as aforesaid.
Any party may change its address for purposes of this Agreement by giving
notice of such change to all other parties pursuant to this Paragraph.
(c) Governing Law. This Agreement and the other Loan
Documents are being executed and delivered, and are intended to be performed,
in the State of Texas, and the substantive laws of Texas shall govern the
validity, construction, enforcement and interpretation of this Agreement and
all other Loan Documents, except to the extent: (i) otherwise specified
therein; (ii) the federal or state laws governing national banking associations
expressly supersede and have contrary application; or (iii) federal laws
governing maximum interest rates shall provide for rates of interest higher
than those permitted under the laws of the State of Texas.
(d) Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term of this Agreement, such provision shall
be fully severable and this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement.
(e) Maximum Interest Rate. It is the intention of the
parties hereto to comply with the usury laws of the State of Texas and the
United States; accordingly, it is agreed that notwithstanding any provision to
the contrary in the Notes, or in any of the documents securing payment hereof
or otherwise relating hereto, no such provision shall require the payment or
permit the collection of interest in excess of the maximum permitted by
applicable state or federal law. If any excess of interest in such respect is
provided for, or shall be adjudicated to be so provided for, in the Notes or in
any of the documents securing payment hereof or otherwise relating hereto, or
in the event the maturity of the indebtedness evidenced by the Notes is
accelerated in whole or in part, or in the event that all or part of the
principal or interest of the Notes shall be prepaid, so that under any of such
circumstances the amount of interest contracted for, charged or received under
the Notes or under any of the instruments securing payment hereof or otherwise
relating hereto, on the amount of principal actually outstanding from time to
time under the Notes shall exceed the maximum amount of interest permitted by
the usury laws of the State of Texas and the United States, then, in any such
event, (i) the provisions of this paragraph shall govern and control, (ii)
neither Borrower nor its legal representatives or assigns or any other party
liable for the payment hereof shall be obligated to pay the amount of such
interest to the extent that it is in excess of the maximum amount permitted by
applicable state or federal law, (iii) any such excess which may have been
collected shall be, at the holder's option (at maturity or in the Event of
Default hereunder), either applied as a credit against the then unpaid
principal amount hereof or refunded to Borrower, and (iv) the effective rate of
interest shall be automatically subject to reduction to the maximum lawful
contract rate allowed under the usury laws of the State of Texas or the United
States as now or hereafter construed by the courts having jurisdiction. It is
further agreed that without limitation of the foregoing, all calculations of
the rate of interest contracted for, charged or received under the Notes or
under such other documents which are made for the purpose of determining
whether such rate exceeds the maximum lawful rate of interest, shall be made,
to the extent permitted by the laws of the State of Texas and the United
States, by amortizing, prorating, allocating and spreading in equal parts
during the period
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of the full stated term of the Loans, all interest at any time contracted for,
charged or received from Borrower or otherwise by the holder of the Notes in
connection with such Loan.
(f) Entirety and Amendments. The Loan Documents embody
the entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof and thereof, and
this Agreement and the other Loan Documents may be amended only by an
instrument in writing executed by the party, or an authorized officer of the
party, against whom such amendment is sought to be enforced.
(g) Parties Bound. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, that Borrower
may not, without the prior written consent of Lender, assign any rights,
powers, duties or obligations hereunder.
(h) Headings. Paragraph and section headings are for
convenience of reference only and shall in no way affect the interpretation of
this Agreement.
(i) Financial Terms. As used in this Agreement, all
financial and accounting terms not otherwise defined herein shall be defined
and calculated in accordance with generally accepted accounting principles
consistently applied.
(j) Expenses of Lender. Borrower will, on demand,
reimburse Lender for all expenses except as otherwise provided herein,
including, but not limited to, the reasonable fees and expenses of legal
counsel for Lender, incurred by Lender in connection with the preparation,
administration, amendment, modification or enforcement of this Agreement, the
Notes and the Loan Documents and the collection or the attempted collection of
the Notes.
(k) Construction and Conflicts. The provisions of this
Agreement shall be in addition to those of the Notes, the Loan Documents and
any guaranty, pledge or security agreement, note or other evidence of liability
held by Lender, all of which shall be construed as complementary to each other.
Nothing herein contained shall prevent Lender from enforcing the Notes, the
Loan Documents and any and all other notes, guaranty, pledge or security
agreements in accordance with their respective terms. To the extent of any
irreconcilable conflict between the terms hereof and the terms of the Notes,
the Loan Documents or any other document executed in connection herewith, the
terms of this Agreement shall control.
12. Agreement for Binding Arbitration. The parties agree to be
bound by the terms and provisions of the Arbitration Agreement by and among the
parties hereto, which Agreement is incorporated by reference herein, pursuant
to which any and all disputes shall be resolved by mandatory binding
arbitration upon the request of any party.
13. NO ORAL AGREEMENTS. THE WRITTEN LOAN AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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If Lender agrees to the foregoing, Lender should execute this
Agreement in the space indicated below.
"BORROWER"
BINDVIEW DEVELOPMENT CORPORATION, a
Texas corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: President
---------------------------------
ACCEPTED:
"LENDER"
SOUTHWEST BANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, SENIOR VICE PRESIDENT
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President
List of Loan Documents
1. Letter Loan Agreement
2. Master Revolving Credit Note
3. Guidance Notes (Bank Form)
4. Security Agreement
5. Corporate Resolutions
6. UCC-1 Financing Statements
7. Notice of Invalidity of Oral Agreements
8. Subordination Agreement (Landlord)
9. Arbitration Agreement
10. Continuing Guaranty-▇▇▇▇ ▇▇▇▇▇▇▇
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SCHEDULE "A"
DEFINITIONS
"BORROWER'S LOAN LIMIT", as used herein, shall mean the Borrowing Base
(as defined below) less the total principal amount outstanding under the
Revolving Note at the time of calculation.
"BORROWING BASE", as used herein, shall mean an amount equal to eighty
percent (80%) of Borrower's Eligible Accounts (as defined below) outstanding on
the date of a request for a Loan advance.
An "ELIGIBLE ACCOUNT" shall mean an account which is and shall at all
times continue to be acceptable to Lender in all reasonable respects. In
general, an account which continuously meets each of the following requirements
is an Eligible Account: (i) it is lawfully owned by Borrower, and Borrower has
the right to transfer any interest therein; (ii) it arises from the sale or
lease of goods, the goods have been shipped or delivered to the person who is
obligated on the account (the "account debtor"); (iii) it arises from the
performance of services, such services have been fully rendered, to the extent
of the billing; (iv) it is a valid obligation of the account debtor,
enforceable in accordance with its terms and free and clear of all liens,
security interests, restrictions, setoffs, adverse claims, assessments,
defaults, prepayments, defenses and conditions precedent other than the
security interest created by the Security Agreement executed in connection with
the Loan; (v) it is rendered to the account debtor and is not evidenced by any
instrument or chattel paper; (vi) it is not aged more than ninety (90) days
from the date of invoice; and (vii) it is not owed by any account debtor
closely affiliated with, related to or employed by Borrower.
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SCHEDULE "B"
BORROWING BASE REPORT
AND COMPLIANCE CERTIFICATE
I. Total Accounts Receivable of Borrower: $
------------
Less: Ineligible Accounts - $
------------
Eligible Accounts Receivable =
$
-----------------------------------------------------------------------------
II. 80% x Eligible Accounts Receivable $
------------
Borrower's Loan Limit: =
$
-----------------------------------------------------------------------------
(maximum $1,000,000)
III Current Principal Balance: $
------------
IV. Available Funds: $
------------
V. Advance Request: $
------------
VI. Total Outstanding After Advance: $
------------
-----------------------
I. Minimum Current Ratio (1.50 to 1.00) $
------------
II. Minimum Tangible Net Worth ($1,000,000) $
------------
III. Maximum Debt to Worth Ratio (1.80 to 1.00) $
------------
-----------------------
The undersigned officer of Borrower, hereby certifies to Lender that
to the best of his knowledge (i) the computations set forth above are true,
correct and complete as of the date set forth above or as of the date of
execution hereof, as the case may be, (ii) such computations have been made in
full compliance with and conformity to the Letter Loan Agreement (the "Loan
Agreement") between Borrower and Lender, (iii) the matters set forth in
Paragraph 5 of the Loan Agreement are true and correct in all material
respects, and (iv) there has not been an Event of Default under the Loan
Agreement.
All capitalized terms used herein which have been defined in the Loan
Agreement have been used in accordance with the definitions ascribed to them in
the Loan Agreement.
EXECUTED this ___ day of ______________________, 19_______.
BINDVIEW DEVELOPMENT CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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