Credit Agreement - Research Engineers Inc. and Imperial Bank
CREDIT AGREEMENT
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This Credit Agreement ("Agreement") is made and entered into on February 26,
1999, by and between Research Engineers, Inc. corporation, "Borrower" and
Imperial Bank, a California banking corporation, ("Bank").
Subject to the terms and conditions of this Agreement, any security agreement
executed by Borrower in favor of Bank, any notes executed by Borrower in favor
of Bank, or any other agreements executed in conjunction therewith
(collectively, the "Loan Documents"), Bank shall make the loans and or advances
referred to below to Borrower.
In consideration of mutual covenants and conditions hereof, the parties hereto
agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.01 Revolving Credit Commitment.
(a) Revolving Line of Credit. Subject to the terms and conditions of this
Agreement, provided that no event of default then has occurred and is
continuing, Bank shall, upon Borrower's request make advances ("Revolving
Loans") to Borrower, for the acquisition of R-Cube Technologies, Inc., and
general corporate purposes, in an amount not to exceed $ 2,320,000 (the
"Revolving Line of Credit") until September 1, 2000 (the "Revolving Line of
Credit Maturity Date"). Revolving Loans may be repaid and reborrowed, provided
that all outstanding principal and accrued interest on the Revolving Loans shall
be payable in full on the Revolving Credit Maturity Date.
(b) Revolving Note. The interest rate, principal and interest payments, maturity
date and certain other terms of the Revolving Loan will be contained in a
promissory note dated the date of this agreement, as such may be amended or
replaced from time to time.
1.02 Loan Fee. In addition to any other amounts due, or to become due,
concurrent with the execution hereof, in connection with the Revolving Line of
Credit, Borrower shall pay to Bank a loan fee of Forty Six Thousand Four Hundred
Dollars ($46,400) at the time of execution of this agreement.
1.03 Documentation Fee, Costs and Expenses. In addition to any other amounts
due, or to become due, concurrently with the execution hereof, Borrower agrees
to pay to Bank a documentation fee in the amount of $1,600, and all other costs
and expenses incurred by the Bank in the preparation of this Agreement, the
other Loan Documents and the perfection of any security interest granted to Bank
by Borrower.
1.04 Collateral. Borrower shall grant or cause to be granted to Bank a first
priority lien on any and all personal property assets of Borrower which is
assigned or hereafter is assigned to Bank as security or in which Bank now has
or hereafter acquires a security interest or pursuant to the terms of any
security agreement, an intellectual property security agreement or otherwise as
security for all of Borrower's obligations to Bank, all as may be subject to
Section 5.03 herein. Borrower has also assigned, or has caused
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to be assigned, a second "deed of trust" on the real estate property located at
22700 Savi Ranch, Yorba Linda, CA, as collateral for Borrower's obligations to
Bank. Additionally, "Single Premium Deferred Annuities" of Mr. Amrit K. Das,
described in Exhibit 1.11 attached hereto as collateral for Borrower's
obligations to Bank, shall be assigned to Bank.
1.05 Collection of Payments. Borrower authorizes Bank to collect all interest,
fees, costs, and/or expenses due under this Agreement by charging Borrower's
demand deposit account number 08224366 with Bank, or any other demand deposit
account maintained by Borrower with Bank, for the full amount thereof. Should
there be insufficient funds in any such demand deposit account to pay all such
sums when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.
2. REPRESENTATIONS OF BORROWER
Borrower represents and warrants that:
2.01 Existence and Rights. Borrower is a corporation, duly organized and
existing and in good standing under the laws of the state of Delaware. Borrower
is authorized and in good standing to do business in the state of its
incorporation; Borrower has the appropriate powers and adequate authority,
rights and franchises to own its property and to carry on its business as now
conducted, and is duly qualified and in good standing in each state in which the
character of the properties owned by it therein or the conduct of its business
makes such qualification necessary; and Borrower has the power and adequate
authority to make and carry out this Agreement. Borrower has no investment in
any other business entity unless specified in writing to Bank.
2.02 Agreement Authorized. The execution, delivery and performance of this
Agreement and the Loan Documents are duly authorized and do not require the
consent or approval of any governmental body or other regulatory authority; are
not in contravention of or in conflict with any law or regulation or any term or
provision of Borrower's articles of incorporation, by-laws, or similar document
as the case may be, and this Agreement is the valid, binding and legally
enforceable obligation of Borrower in accordance with its terms; subject only to
bankruptcy, insolvency or similar laws affecting creditors rights generally.
2.03 No Conflict. The execution, delivery and performance of this Agreement and
the Loan Documents are not in contravention of or in conflict with any
agreement, indenture or undertaking to which Borrower is a party or by which it
or any of its property may be bound or affected, and do not cause any lien,
charge or other encumbrance to be created or imposed upon any such property by
reason thereof.
2.04 Litigation. Except as disclosed in writing to bank by Borrower, there is no
litigation or other proceeding pending or threatened against or affecting
Borrower which if determined adversely to Borrower or its interest would have a
material adverse effect on the financial condition of Borrower, and Borrower is
not in default with respect to any order, writ, injunction, decree or demand of
any court or other governmental or regulatory authority.
2.05 Financial Condition. The consolidated balance sheet of Borrower, as of
12/31/98, and the related profit and loss statement for the nine month period
ended as of that date, a copy of which has
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heretofore been delivered to Bank by Borrower, and all other statements and data
submitted in writing by Borrower to Bank in connection with this request for
credit are true and correct, and said balance sheet truly presents the financial
condition of Borrower as of the date thereof, and has been prepared in
accordance with generally accepted accounting principles on a basis consistently
maintained. Since such date there have been no material adverse changes in the
financial condition or business of Borrower. Borrower has no knowledge of any
liabilities, contingent or otherwise, at such date not reflected in said balance
sheet, and Borrower has not entered into any special commitments or substantial
contracts which are not reflected in said balance sheet, other than in the
ordinary and normal course of its business, which may have a materially adverse
effect upon its financial condition, operations or business as now conducted.
2.06 Title to Assets. Borrower has good title to its assets, and the same are
not subject to any liens or encumbrances other than those permitted by Section
5.03 hereof.
2.07 Tax Status. Borrower has no liability for any delinquent state, local or
federal taxes, and, if Borrower has contracted with any government agency,
Borrower has no liability for renegotiation of profits.
2.08 Trademarks, Patents. Upon the filing of the copyrights for the software
shown on Exhibit 2.08 attached Borrower will possess all necessary trademarks,
trade names, copyrights, patents, patent rights, and licenses to conduct its
business as now operated, without any known conflict with the valid trademarks,
trade names, copyrights, patents and license rights of others.
2.09 Regulation U. None of the proceeds of any Loan shall be used to purchase or
carry margin stock (as defined within Regulation U of the Board of Governors of
the Federal Reserve system).
2.10 ERISA. All defined benefit pension plans as defined in the Employees
Retirement Income Security Act of 1974, as amended ("ERISA"), of Borrower meet,
as of the date hereof, the minimum funding standards of Section 302 of ERISA,
and no Reportable Event or Prohibited Transaction as defined in ERISA has
occurred with respect to any such plan.
2.11 Year 2000 Compliance. Borrower and its subsidiaries, as applicable, have
reviewed the areas within their operations and business which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the Year 2000 Problem and have made related appropriate inquiry of
material suppliers and vendors, and based on such review and program, the Year
2000 Problem will not have a material adverse effect upon its financial
condition, operations or business as now conducted. "Year 2000 Problem" means
the possibility that any computer applications or equipment used by Borrower may
be unable to recognize and properly perform date sensitive functions involving
certain dates prior to and any dates one or after December 31, 1999.
3. CONDITIONS PRECEDENT TO LOAN.
Prior to Bank being obligated to make any Loan pursuant to this
Agreement, Bank must receive all of the following, each of which must be in form
and substance satisfactory to Bank:
3.01 Promissory Note. Original, executed promissory note.
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3.02 Security Agreement. Original, executed security agreement covering the
personal property collateral securing the Loan and/or a deed of trust covering
the real estate collateral.
3.03 Financing Statement. Financing statements executed by Borrower and each
grantor of a security interest.
3.04 Guarantee . Continuing Guarantees in favor of Bank executed by Mr. Amrit K.
Das as an individual and as a Trustee of the A. and P. Das Living Trust
("Guarantor") both in the amount of $2,320,000 .
3.05 Insurance. Borrower shall have delivered to Bank evidence of insurance
coverage required pursuant to that Agreement to Provide Insurance executed by
Borrower, in form, substance, amounts, covering risks and issued by companies
satisfactory to Bank, and where required by Bank, with loss payable endorsements
in favor of Bank.
3.06 Organizational Documents. Copies of the charter/articles of incorporation
or similar document as the case may be, of the Borrower.
3.07 Authorizations. Certified copies of all action taken by the Borrower and
each Guarantor and each grantor of a security interest to authorize the
execution, delivery and performance of the Loan Documents.
3.08 Good Standing . Good standing certificates from the appropriate secretary
of state of the state in which the Borrower is organized and in each state in
which it is required to be qualified to do business.
3.09 Additional Documents. Such other documents as Bank may reasonably deem
necessary.
4. AFFIRMATIVE COVENANTS OF BORROWER
Borrower agrees that so long as it is indebted to Bank, under borrowings, or
other indebtedness, or so long as Bank has any obligation to extend credit to
Borrower it will, unless Bank shall otherwise consent in writing:
4.01 Rights and Facilities. Maintain and preserve all rights, franchises and
other authority adequate for the conduct of its business; maintain its
properties, equipment and facilities in good order and repair; conduct its
business in an orderly manner without voluntary interruption and, if a
corporation or partnership, maintain and preserve its existence.
4.02 Use of Proceeds. Use the proceeds of the Loans only for purposes specified
in Section1 of this Agreement.
4.03 Insurance. Maintain public liability, property damage and workers'
compensation insurance and insurance on all its insurable property against fire
and other hazards with responsible insurance carriers to the extent usually
maintained by similar businesses and/or in the exercise of good business
judgment, and as required by that Agreement to Provide Insurance executed by
Borrower, with the Bank to be shown as Lenders Loss Payee on such policies.
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4.04 Taxes and Other Liabilities. Pay and discharge, before the same become
delinquent and before penalties accrue thereon, all taxes, assessments and
governmental charges upon or against it or any of its properties, and all its
other liabilities at any time existing, except to the extent and so long as:
(a) The same are being contested in good faith and by appropriate proceedings in
such manner as not to cause any materially adverse effect upon its financial
condition or the loss of any right of redemption from any sale thereunder; and
(b) It shall have set aside on its books reserves (segregated to the extent
required by generally accepted accounting practice) deemed by it to be adequate
with respect thereto.
4.05 Records and Reports. Maintain a standard and modern system of accounting in
accordance with generally accepted accounting principles on a basis consistently
maintained; permit Bank's representatives to have access to, and to examine its
properties, books and records at all reasonable times and upon reasonable notice
during normal business hours; and furnish Bank:
(a)Monthly Financial Statement. As soon as available, and in any event within
thirty (30) days after the close of each month, a consolidating balance
sheet, profit and loss statement and reconciliation of Borrower's capital
balance accounts for Borrower's US operation as of the close of such period
and covering operations for the portion of Borrower's fiscal year ending on
the last day of such period, all in reasonable detail and reasonably
acceptable to Bank, in accordance with generally accepted accounting
principles on a basis consistently maintained by Borrower.
(b)Quarterly Financial Statement. As soon as available, and in any event within
forty five (45) days after the close of each quarter, a 10Q report and a
consolidated balance sheet, profit and loss statement and reconciliation of
Borrower's capital balance accounts as of the close of such period and
covering operations for the portion of Borrower's fiscal year ending on the
last day of such period, all in reasonable detail and reasonably acceptable
to Bank, in accordance with generally accepted accounting principles on a
basis consistently maintained by Borrower and certified by an appropriate
officer of Borrower.
(c)Annual Financial Statement. As soon as available, and in any event within
ninety (90) days after and as of the close of each fiscal year of Borrower, a
10K report and a consolidated report of audit of Company, all in reasonable
detail, audited by an independent certified public accountant selected by
Borrower and reasonably acceptable to Bank, in accordance with generally
accepted accounting principles on a basis consistently maintained by Borrower
and certified by an appropriate officer of Borrower.
(d)Officer's Certificate. Within forty five (45) days after the end of each
quarter of Borrower, a certificate of the chief financial officer of
Borrower, stating that Borrower has performed and observed each and every
covenant contained in this Agreement to be performed by it and that no event
has occurred and no condition then exists which constitutes an event of
default hereunder or would constitute such an event of default upon the lapse
of time or upon the giving of notice and the lapse of time specified herein;
or, if any such event has occurred or any such condition exists, specifying
the nature thereof.
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(e)Accounts Receivable And Accounts Payable Agings; Within fifteen (15) days
from each month-end, deliver to Bank, for Borrower's US operation, a detailed
accounts receivable aging reconciled to the general ledger of Borrower, a
detailed accounts payable aging reconciled to the Borrower's general ledger
and setting forth the amount of any book overdraft or the amount of checks
issued but not sent; and within twenty (20) days from each quarter end a
detailed consolidated accounts receivable aging reconciled to the general
ledger of Borrower, a detailed consolidated accounts payable aging reconciled
to the Borrower's general ledger and setting forth the amount of any book
overdraft or the amount of checks issued but not sent. All the foregoing will
be in a form and with such detail as Bank may request from time to time.
(f)Guarantors' Financial Statements. Cause each Guarantor to submit to Bank
such Guarantor's financial statement, confirmed as to its correctness by
Guarantor's signature, either on Bank's form or prepared by an independent
certified public accountant, together with a completed copy of such
Guarantor's federal income tax return for the previous calendar year, no
later than thirty (30) days after filing of same with the Internal Revenue
Service.
(g)Stockholder, Security and Exchange Commission Statements and Reports
Promptly after the same are available, copies of all such proxy statements,
financial statements and reports as Borrower or any subsidiary shall send to
its members or stockholders as appropriate, if any, and copies of all reports
which Borrower or any subsidiary may file with the Securities and Exchange
Commission.
(h)Other Information. Such other information relating to the affairs of
Borrower as the Bank reasonably may request from time to time.
4.06 Current Ratio. Maintain on a quarterly basis a consolidated minimum ratio
of total current assets excluding all amounts due from stockholders, officers
and affiliates divided by total current liabilities including all amounts due to
stockholders, officers and affiliates of 1.50:1.00.
4.07 Effective Tangible Net Worth. Maintain on a quarterly basis a consolidated
Effective Tangible Net Worth (defined as stockholder's equity less any value for
goodwill, trademarks, patents, copyrights, leaseholds, organization expense and
other similar intangible items, and any amounts due from stockholders, officers
and affiliates) plus any Subordinated Debt, meaning debt subordinated to the
obligations of Borrower to Bank, in form and substance satisfactory to Bank, of
not less than Two Million Seven Hundred Thousand Dollars ($2,700,000) plus 70%
of positive net income after taxes for each period.
4.08 Debt to Effective Tangible Net Worth. Maintain on a quarterly basis a
consolidated ratio of total liabilities to Effective Tangible Net Worth (defined
as stockholder's equity less any value for goodwill, trademarks, patents,
copyrights, leaseholds, organization expense and other similar intangible items,
and any amounts due from stockholders, officers and affiliates) plus any
Subordinated Debt, meaning debt subordinated to the obligations of Borrower to
Bank, in form and substance satisfactory to Bank, of not greater than
2.75.00:1.00.
4.09 ERISA. Cause all defined benefit pension plans, as defined in ERISA, of
Borrower to, at all times, meet the minimum funding standards of Section 302 of
ERISA, and ensure that no Reportable Event or Prohibited Transaction, as defined
in ERISA, will occur with respect to any such plan.
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4.10 Laws. At all times comply with, or cause to be complied with, all laws,
statues, rules, regulations, orders and directions of any governmental authority
having jurisdiction over Borrower or Borrower's business.
4.11 Use of Proceeds. Use the proceeds of the Loans only for the purposes
specified in Section 1 herein.
4.12 GAAP. Compliance with all financial covenants shall be calculated based on
generally accepted accounting principles applied on a consistent basis as
maintained by Borrower.
4.13 Year 2000 Compliant. Borrower shall perform all acts reasonably necessary
to ensure that (a) Borrower and any business in which Borrower holds a
substantial interest, and (b) all customers, suppliers and vendors whose
compliance is likely to be material to Borrower's business, become Year 2000
Compliant in a timely manner. Such acts shall include, without limitation,
performing a comprehensive review and assessment of all Borrower's systems and
adopting a detailed plan, with itemized budget, for the remediation, monitoring
and testing of such systems. As used in this paragraph, "Year 2000 Compliant"
shall mean, in regard to any entity, that all software, hardware, firmware,
equipment, goods or systems utilized by or material to the business operations
or financial condition of such entity, will properly perform date sensitive
functions before, during and after the year 2000. Borrower shall, immediately
upon request, provide to Agent such certifications or other evidence of
Borrower's compliance with the terms of this paragraph as Bank may from time to
time require.
4.14 Operating Accounts. Maintain all primary accounts and banking relationship
with the Bank. Maintain, or cause to be maintained, on deposit with Bank,
non-interest bearing demand deposit balances sufficient to compensate Bank for
all services provided by Bank. Balances shall be calculated after reduction for
the reserve requirement of the Federal Reserve Board and uncollected funds. Any
deficiencies shall be charged directly to the Borrower on a monthly basis.
4.15 Notices. Promptly notify Bank in writing of (i) the occurrence of any Event
of Default hereunder or any event which upon notice and lapse of time would be
an Event of Default; (ii) all litigation affecting Borrower where the amount is
$100,000 or more; any substantial dispute which may exist between Borrower and
any governmental regulatory body or law enforcement authority; any change in
Borrower's name or principal place of business; or any other matter which has
resulted or might result in a material adverse change in Borrower's financial
condition or operations.
4.16 Intellectual Property. Within 60 days from the date of this Agreement
Borrower will have registered those copyrights for the software shown on Exhibit
2.08 hereto with the U.S. Copyright Office and will grant Bank a security
interest in such copyrights in form and substance satisfactory to Bank. Borrower
also acknowledges that upon developing, creating or acquiring any intellectual
property it must notify Bank, register such intellectual property and grant Bank
a security interest in accordance with the addendum to the General Security
Agreement executed by Borrower on the date hereof.
5. NEGATIVE COVENANTS OF BORROWER
Borrower agrees that so long as it is indebted to Bank, or so long as Bank has
any obligation to extend credit to Borrower, it will not, without Bank's written
consent:
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5.01 Type of Business; Management; Change in Control. Make any
substantial change in the character of its business or make any change
in its executive management.
5.02 Outside Indebtedness. Create, incur, assume or permit to exist any
indebtedness for borrowed moneys other than Loans from the Bank except
obligations now existing as shown in the financial statement dated 12/31/98,
excluding those obligations being refinanced by Bank, or sell or transfer,
either with or without recourse, any accounts or notes receivable or any moneys
due or to become due.
5.03 Liens and Encumbrances. Create, incur, permit to exist, or assume any
mortgage, pledge, encumbrance, lien or charge of any kind upon any asset now
owned or hereafter acquired by it, other than liens for taxes not delinquent and
liens in Bank's favor and other than liens agreed to in writing by Bank.
5.04 Loans, Investments, Secondary Liabilities. Make any loans or advances to
any person or other entity other than in the ordinary and normal course of its
business as now conducted or make any investment in the securities of any person
or other entity other than the United States Government; or guarantee or
otherwise become liable upon the obligation of any person or other entity,
except by endorsement of negotiable instruments for deposit or collection in the
ordinary and normal course of its business.
5.05 Acquisition or Sale of Business; Merger or Consolidation. Purchase or
otherwise acquire the assets or business of any person or other entity; or
liquidate, dissolve, merge or consolidate, or commence any proceedings therefor;
or sell any assets except in the ordinary and normal course of its business as
now conducted; or sell, lease, assign, or transfer any substantial part of its
business or fixed assets, or any property or other assets necessary for the
continuance of its business as now conducted, including without limitation the
selling of any property or other asset accompanied by the leasing back of the
same.
5.06 Capital Expenditures. Make or incur obligations for fixed or capital
assets, which includes purchase money indebtedness or capital lease obligations
in excess of $25,000 from the date hereof until March 31, 1999 or $100,000 in
any twelve month period thereafter.
5.07 Operating Lease Expenditures. Make or incur obligations for operating
leases for real or personal property in excess of $25,000 from the date hereof
until March 31, 1999 or $100,000 in any twelve (12) month period thereafter.
5.08 Dividends. Declare or pay any dividend or make any other distribution on
any of its capital stock now outstanding or hereafter issued or purchase, redeem
or retire any of such stock other than in dividends or distributions payable in
Borrower's capital stock, except for the repurchase of Borrower's capital stock
from officers, directors, employees or consultants of Borrower upon termination
of their employment with or rendering of service to Borrower.
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6. EVENTS OF DEFAULT
The occurrence of any of the following events of default ("Events of Default")
shall, at Bank's option, terminate Bank's commitment to lend and make all sums
of principal and interest then remaining unpaid on all Borrower's indebtedness
to Bank immediately due and payable, all without demand, presentment or notice,
all of which are hereby expressly waived:
6.01 Failure to Pay. Failure to pay any installment of principal or of interest
on any indebtedness of Borrower to Bank within, five (5) days of its due date.
6.02 Breach of Covenant. Failure of Borrower to perform any other term or
condition of this Agreement or any Loan Document binding upon Borrower.
6.03 Breach of Warranty. Any of Borrower's representations or warranties made
herein or any statement or certificate at any time given in writing pursuant
hereto or in connection herewith shall be false or misleading in any respect.
6.04 Insolvency; Receiver or Trustee. Borrower shall become insolvent; or admit
its inability to pay its debts as they mature; or make an assignment for the
benefit of creditors; or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business.
6.05 Judgments, Attachments. Any money judgment in excess of $ 50,000, writ or
warrant of attachment, or similar process shall be entered or filed against
Borrower or any of its assets and shall remain unvacated, unbonded or unstayed
for a period of ten (10) days or in any event later than five (5) days prior to
the date of any proposed sale thereunder.
6.06 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against Borrower and, if
instituted against it, shall not be dismissed within thirty (30) days
thereafter.
6.07 Revocation of Guarantee. Any guarantee required hereunder is breached or
becomes ineffective; or any Guarantor or subordination creditor disavows or
attempts to revoke or terminate such guarantee or subordination agreement.
6.08 Ownership. Any change in ownership which results in the Guarantor's owning
less than 20 percent (20%) of Borrower's voting stock.
6.09 Cessation of Business...Borrower shall voluntarily suspend its business.
6.10 Adverse Change. Any change which, in the opinion of Bank, is materially
adverse to the financial condition of Borrower or any Guarantor; or should Bank,
for any reason, believe that the prospect of Borrower's payment or performance
hereunder or under any other agreement or instrument with Bank be impaired.
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6.11 Other Defaults. Borrower, or any Guarantor of Borrower's obligations to
Bank, shall commit or do or fail to commit or do any act or thing which would
constitute an event of default under any of the terms of any other agreement,
document or instrument executed or to be executed by it concerning the
obligation to pay money.
6.12 Advances. Notwithstanding anything to the contrary contained herein, Bank
shall have no duty to make advances while any event of default exists
notwithstanding any cure period provided for herein.
7. MISCELLANEOUS PROVISIONS
7.01 Failure or Indulgence Not Waiver. No failure or delay on the part of Bank
or any holder of notes issued hereunder, in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under this Agreement or any note (s) issued in connection with
a Loan that Bank may make hereunder, are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
7.02 Counterparts; Entire Agreement. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. This Agreement, and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersedes any prior agreements, written or oral, with respect thereto.
7.03 Attorney's Fees. Borrower will pay promptly to Bank without demand after
notice, with interest thereon from the date of expenditure at the rate
applicable to the Loan, reasonable attorneys' fees and all costs and expenses
paid or incurred by Bank in collecting or compromising the Loan after the
occurrence of an Event of Default, whether or not suit is filed. If suit is
brought to enforce any provision of this Agreement, the prevailing party shall
be entitled to recover its reasonable attorneys' fees and court costs in
addition to any other remedy or recovery awarded by the court.
7.04 Additional Remedies. The rights, powers and remedies given to Bank
hereunder shall be cumulative and not alternative and shall be in addition to
all rights, powers and remedies given to Bank by law against Borrower or any
other person, including but not limited to Bank's rights of setoff or banker's
lien.
7.05 Inurement. The benefits of this Agreement shall inure to the successors and
assigns of Bank and the permitted successors and assigns of Borrower.
7.06 Applicable Law. This Agreement and all other agreements and instruments
required by Bank in connection therewith shall be governed by and construed
according to the laws of the state of California, to the jurisdiction of whose
courts the parties hereby agree to submit.
7.07 Offset. In addition to and not in limitation of all rights of offset that
Bank or other holder of the Loan may have under applicable law, Bank or other
holder of any note issued hereunder shall, upon the occurrence of any Event of
Default or any event which with the passage of time or notice would constitute
such an Event of Default, have the right to appropriate and apply to the payment
of the Loan any and all balances, credits, deposits, accounts or monies of
Borrower then or thereafter with Bank
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or other holder, within ten (10) days after the Event of Default, and notice of
the occurrence of any Event of Default by Bank to Borrower.
7.08 Severability. Should any one or more provisions of the Agreement be
determined to be illegal or unenforceable, all other provisions nevertheless
shall be effective.
7.09 Time of the Essence. Time is hereby declared to be of the essence of this
Agreement and of every part hereof.
7.10 Accounting. All accounting terms shall have the meanings applied under
generally accepted accounting principles unless otherwise specified.
7.11 Reference Provision.
(a) Other than (i) nonjudicial foreclosure and all matters in connection
therewith regarding security interests in real or personal property; or (ii) the
appointment of a receiver, or the exercise of other provisional remedies (any
and all of which may be initiated pursuant to applicable law), each controversy,
dispute or claim between the parties arising out of or relating to this Credit
Agreement, any security agreement executed by Borrower in favor of Bank or any
note executed by Borrower in favor of Bank or any other agreement or instrument
issued in favor of Bank by Borrower (collectively in this Section, the
"Agreement") which controversy, dispute or claim is not settled in writing
within thirty (30) days after the "Claim Date" (defined as the date on which a
party subject to this Agreement gives written notice to all other parties that a
controversy, dispute or claim exists), will be settled by a reference proceeding
in California in accordance with the provisions of Section 638 et seq. of the
California Code of Civil Procedure, or their successor section ("CCP"), which
shall constitute the exclusive remedy for the settlement of any controversy,
dispute or claim concerning this Agreement, including whether such controversy,
dispute or claim is subject to the reference proceeding and except as set forth
above, the parties waive their rights to initiate any legal proceedings against
each other in any court or jurisdiction other than the Superior Court in the
County where the Real Property, if any, is located or Los Angeles County if none
(the "Court"). The referee shall be a retired Judge of the Court selected by
mutual agreement of the parties, and if they cannot so agree within forty-five
(45) days after the Claim Date, the referee shall be promptly selected by the
Presiding Judge of the Court (or his representative). The referee shall be
appointed to sit as a temporary judge, with all of the powers for a temporary
judge, as authorized by law, and upon selection should take and subscribe to the
oath of office as provided for in Rule 244 of the California Rules of Court (or
any subsequently enacted Rule). Each party shall have one peremptory challenge
pursuant to CCP ss.170.6. The referee shall (a) be requested to set the matter
for hearing within sixty (60) days after the date of selection of the referee
and (b) try any and all issues of law or fact and report a statement of decision
upon them, if possible, within ninety (90) days of the Claim Date. Any decision
rendered by the referee will be final, binding and conclusive and judgment shall
be entered pursuant to CCP ss.644 in any court in the state of California having
jurisdiction. Any party may apply for a reference proceeding at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation,
legal objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice, and request for production or inspection of documents shall be responded
to within ten (10) days after service. All disputes relating to discovery which
11
<PAGE>
cannot be resolved by the parties shall be submitted to the referee whose
decision shall be final and binding upon the parties. Pending appointment of the
referee as provided herein, the Superior Court is empowered to issue temporary
and/or provisional remedies, as appropriate.
(b) Except as expressly set forth in this Agreement, the referee shall determine
the manner in which the reference proceeding is conducted including the time and
place of all hearings, the order of presentation of evidence, and all other
questions that arise with respect to the course of the reference proceeding. All
proceedings and hearings conducted before the referee, except for trial, shall
be conducted without a court reporter except that when any party so requests, a
court reporter will be used at any hearing conducted before the referee. The
party making such a request shall have the obligation to arrange for and pay for
the court reporter. The costs of the court reporter at the trial shall be borne
equally by the parties.
(c) The referee shall be required to determine all issues in accordance with
existing case law and the statutory laws of the state of California. The rules
of evidence applicable to proceedings at law in the state of California will be
applicable to the reference proceeding. The referee shall be empowered to enter
equitable as well as legal relief, to provide all temporary and/or provisional
remedies and to enter equitable orders that will be binding upon the parties.
The referee shall issue a single judgment at the close of the reference
proceeding which shall dispose of all of the claims of the parties that are the
subject of the reference. The parties hereto expressly reserve the right to
contest or appeal from the final judgment or any appealable order or appealable
judgment entered by the referee. The parties hereto expressly reserve the right
to findings of fact, conclusions of laws, a written statement of decision, and
the right to move for a new trial or a different judgment, which new trial, if
granted, is also to be a reference proceeding under this provision.
(d) In the event that the enabling legislation which provides for appointment of
a referee is repealed (and no successor statute is enacted), any dispute between
the parties that would otherwise be determined by the reference procedure herein
described will be resolved and determined by arbitration. The arbitration will
be conducted by a retired judge of the Court, in accordance with the California
Arbitration Act, ss.1280 through ss.1294.2 of the CCP as amended from time to
time. The limitations with respect to discovery as set forth hereinabove shall
apply to any such arbitration proceeding.
7.12 This Agreement may be modified only by a writing signed by all parties
hereto.
This Agreement is executed on behalf of the parties by duly authorized officers
as of the date first above written.
IMPERIAL BANK Research Engineers, Inc.
("Bank") ("Borrower")
By: /S/ LEILA GHOROGHCHI By: /S/ JYOTI CHATTERJEE
--------------------------------- --------------------
Its: Vice President Its: EVP/COO
By: /S/ WAYNE BLAIR
--------------------
Its: CFO and Secretary
12
<PAGE>
Exhibit 1.11
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Surrender Value as
Company Policy # of 1/27/99 Annuitant Owner Beneficiary
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
KP (a) KA00489362 $189,151 Amrit Das Amrit Das Amrit K. Das
KP KA00713744 $ 78,574 Amrit Das Amrit Das Amrit K. Das
KP KA00733340 $ 58,006 Amrit Das Amrit Das Amrit K. Das
KP KA00733341 $ 58,423 Amrit Das Amrit Das Amrit K. Das
KP KA00738223 $ 71,925 Amrit Das Amrit Das Sormistha Das
SU (b) A0095504940 $255,240 Amrit Das Amrit Das Amrit K. Das
USG (c) 542942 $ 85,430 Amrit Das Amrit Das Amrit K. Das
Total $796,749
------------------------------------------------------------------------------------
<FN>
a. KP is Keyport Life Insurance
125 High Street
Boston, MA 02110
b. SU is Sun Life Insurance Co. of America
1 SunAmerica Center
Century City
Los Angeles, CA 90067
c. USG USG Annuity & Life Co.
909 Locust Street
Des Moines IA 50309
</FN>
</TABLE>
13
<PAGE>
Exhibit 2.08
SOFTWARE
Borrower to register copyrights for all versions of the following:
<TABLE>
<S> <C>
1. STAAD
STAAD - III
STAAD / PRO
2. AutoCIVIL
3. FABRICAD
4. STARDYNE
</TABLE>
14