-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BpOudF2+Iw2xjXXDKBk1dptT5e4iUseT6H/zmmduMW4JuA+R3lP8kVOSYxS85eHS 6HgNzf0TNvQp5aaTiFdA5w== 0000351145-97-000009.txt : 19970926 0000351145-97-000009.hdr.sgml : 19970926 ACCESSION NUMBER: 0000351145-97-000009 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970925 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERGRAPH CORP CENTRAL INDEX KEY: 0000351145 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 630573222 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-09722 FILM NUMBER: 97685643 BUSINESS ADDRESS: STREET 1: THIGPEN HQ011 #9384 CITY: HUNTSVILLE STATE: AL ZIP: 35894-0001 BUSINESS PHONE: 2057302000 10-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 2 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------- ------- Commission file number 0-9722 INTERGRAPH CORPORATION ---------------------- (Exact name of registrant as specified in its charter) Delaware 63-0573222 ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Intergraph Corporation Huntsville, Alabama 35894-0001 -------------------------------------- ------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (205) 730-2000 -------------- Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.10 per share --------------------------------------- (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (X) As of January 31, 1997, there were 47,758,544 shares of Intergraph Corporation Common Stock $0.10 par value outstanding. The aggregate market value of the voting stock held by nonaffiliates of the registrant was approximately $362,316,000 based on the closing sale price of such stock as reported by NASDAQ on January 31, 1997, assuming that all shares beneficially held by executive officers and members of the registrant's Board of Directors are shares owned by "affiliates," a status which each of the executive officers and directors individually disclaims. DOCUMENTS INCORPORATED BY REFERENCE Documents Form 10-K Reference --------- ------------------- Portions of the Annual Report to Shareholders for the year ended December 31, 1996 Part I, Part II, Part IV Portions of the Proxy Statement for the May 15, 1997 Annual Shareholders' Meeting Part III PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K Page in Number Description Form 10-K ------ ----------- --------- 3) Exhibits 3(a) Certificate of Incorporation, Bylaws, and Certificate of Merger. (1) 3(b) Amendment to Certificate of Incorporation. (2) 3(c) Restatement of Bylaws. (3) 4 Shareholder Rights Plan, dated August 25, 1993. (4) 10(a)* Employment contracts of Allan B. Wilson dated May 3, 1995. (5) 10(b)* Loan program for executive officers of the Company as amended, dated May 1, 1996. (6) 10(c) Loan and Security Agreement and amendment, by and between Intergraph Corporation and Foothill Capital Corporation, dated December 20,1996. 10(d)* Intergraph Corporation 1997 Stock Option Plan. (6) 11 Computations of Loss Per Share 18 13 Portions of the Intergraph Corporation 1996 Annual Report to Shareholders incorporated by reference in this Form 10-K Annual Report 21 Subsidiaries of the Company 19 23 Consent of Independent Auditors 20 27 Financial Data Schedule 99 Consent of Director Nominee 21 *Denotes management contract or compensatory plan, contract, or arrangement required to be filed as an Exhibit to this Form 10-K - -------------- (1)Incorporated by reference to exhibits filed with the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,1984, under the Securities Exchange Act of 1934, File No. 0-9722. (2)Incorporated by reference to exhibits filed with the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,1987, under the Securities Exchange Act of 1934, File No. 0-9722. (3)Incorporated by reference to exhibits filed with the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,1993, under the Securities Exchange Act of 1934, File No. 0-9722. (4)Incorporated by reference to exhibits filed with the Company's Current Report on Form 8-K dated August 25,1993, under the Securities Exchange Act of 1934, File No. 0-9722. (5)Incorporated by reference to exhibits filed with the Company's Annual Report on Form 10-K for the year ended December 31,1995, under the Securities Exchange Act of 1934, File No. 0-9722. (6)Incorporated by reference to exhibits filed with the Company's Annual Report on Form 10-K for the year ended December 31,1996, under the Securities Exchange Act of 1934, File No. 0-9722. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. INTERGRAPH CORPORATION By /s/ John W. Wilhoite Date: September 25, 1997 ---------------------------------- ------------------ John W. Wilhoite Vice President and Controller (Principal Accounting Officer) EX-10.C 2 =============================================================================== LOAN AND SECURITY AGREEMENT by and between INTERGRAPH CORPORATION and FOOTHILL CAPITAL CORPORATION Dated as of December 20, 1996 =============================================================================== TABLE OF CONTENTS ----------------- Page(s) ------- 1. DEFINITIONS AND CONSTRUCTION. 1 1.1 Definitions 1 1.2 Accounting Terms 24 1.3 Code 25 1.4 Construction 25 1.5 Schedules and Exhibits. 25 2. LOAN AND TERMS OF PAYMENT. 25 2.1 Revolving Advances. 25 2.2 Letters of Credit. 26 2.3 Term Loan 29 2.4 [Intentionally omitted]. 29 2.5 Overadvances 29 2.6 Interest and Letter of Credit Fees: Rates, Payments, and Calculations. 29 2.7 Collection of Accounts 30 2.8 Crediting Payments; Application of Collections 31 2.9 Designated Account. 31 2.10 Maintenance of Loan Account; Statements of Obligations. 32 2.11 Fees. 32 3. CONDITIONS; TERM OF AGREEMENT. 33 3.1 Conditions Precedent to the Initial Advance, and Letter of Credit, and the Term Loan. 33 3.2 Conditions Precedent to all Advances, all Letters of Credit, and the Term Loan. 36 3.3 Condition Subsequent. 36 3.4 Term. 39 3.5 Effect of Termination. 39 3.6 Early Termination by Borrower. 39 3.7 Termination Upon Event of Default. 40 4. CREATION OF SECURITY INTEREST. 40 4.1 Grant of Security Interest. 40 4.2 Negotiable Collateral. 41 4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral. 42 4.4 Delivery of Additional Documentation Required. 42 4.5 Power of Attorney. 43 4.6 Right to Inspect. 43 5. REPRESENTATIONS AND WARRANTIES. 44 5.1 No Encumbrances. 44 5.2 Eligible Accounts. 44 5.3 Eligible Domestic Inventory. 44 5.4 Equipment. 44 5.5 Location of Inventory and Equipment. 44 5.6 Inventory Records. 44 5.7 Location of Chief Executive Office; FEIN. 45 5.8 Due Organization and Qualification; Subsidiaries. 45 5.9 Due Authorization; No Conflict. 45 5.10 Litigation. 46 5.11 No Material Adverse Change. 47 5.12 Solvency. 47 5.13 Employee Benefits. 47 5.14 Environmental Condition. 47 5.15 Securities Accounts. 48 6. AFFIRMATIVE COVENANTS. 48 6.1 Accounting System. 48 6.2 Collateral Reporting. 48 6.3 Financial Statements, Reports, Certificates. 49 6.4 Tax Returns. 50 6.5 Guarantor Reports. 51 6.6 Returns. 51 6.7 Title to Equipment. 51 6.8 Maintenance of Equipment. 51 6.9 Taxes. 51 6.10 Insurance. 52 6.11 No Setoffs or Counterclaims. 53 6.12 Location of Inventory and Equipment. 53 6.13 Compliance with Laws. 54 6.14 Employee Benefits. 54 6.15 Leases. 55 7. NEGATIVE COVENANTS. 55 7.1 Indebtedness. 55 7.2 Liens. 56 7.3 Restrictions on Fundamental Changes. 56 7.4 Disposal of Assets. 57 7.5 Change Name. 57 7.6 [intentionally omitted]. 57 7.7 Nature of Business. 57 7.8 Prepayments and Amendments. 57 7.9 Change of Control. 57 7.10 Consignments. 57 7.11 Distributions. 58 7.12 Accounting Methods. 58 7.13 Investments. 58 7.14 Transactions with Affiliates. 58 7.15 Suspension. 58 7.16 [intentionally omitted]. 58 7.17 Use of Proceeds. 58 7.18 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees. 59 7.19 No Prohibited Transactions Under ERISA 59 7.20 Financial Covenants. 60 7.21 Capital Expenditures. 60 8. EVENTS OF DEFAULT. 60 9. FOOTHILL'S RIGHTS AND REMEDIES. 62 9.1 Rights and Remedies. 62 9.2 Remedies Cumulative. 65 10. TAXES AND EXPENSES. 65 11. WAIVERS; INDEMNIFICATION 66 11.1 Demand; Protest; etc. 66 11.2 Foothill's Liability for Collateral. 66 11.3 Indemnification. 66 12. NOTICES. 66 13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 68 14. DESTRUCTION OF BORROWER'S DOCUMENTS. 68 15. GENERAL PROVISIONS. 69 15.1 Effectiveness. 69 15.2 Successors and Assigns. 69 15.3 Section Headings. 69 15.4 Interpretation. 69 15.5 Severability of Provisions. 69 15.6 Amendments in Writing. 69 15.7 Counterparts; Telefacsimile Execution. 69 15.8 Revival and Reinstatement of Obligations. 70 15.9 Integration. 70 15.10 Confidentiality. 71 SCHEDULES AND EXHIBITS ---------------------- Schedule E-1 Eligible Domestic Inventory Locations Schedule P-1 Permitted Liens Schedule P-2 Permitted Other Investments Schedule R-1 Real Property Collateral Schedule 5.8 Subsidiaries -- Capitalization and Assets Schedule 5.10 Litigation Schedule 5.13 ERISA Benefit Plans Schedule 5.14 Environmental Condition Schedule 6.12 Location of Inventory and Equipment Schedule 7.1 Indebtedness Exhibit A-1 Form of Aircraft Security Agreement Exhibit C-1 Form of Compliance Certificate Exhibit C-2 Form of Copyright Security Agreement Exhibit P-1 Form of Patent Security Agreement Exhibit P-2 Form of Pledge Agreement Exhibit T-1 Form of Trademark Security Agreement Exhibit V-1 Form of VCOC Letter LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered into as of December 20, 1996, between FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), with a place of business located at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90025-3333, and INTERGRAPH CORPORATION, a Delaware corporation ("Borrower"), with its chief executive office located at One Madison Industrial Park, Huntsville, Alabama 35894. The parties agree as follows: 1. DEFINITIONS AND CONSTRUCTION. 1.1 Definitions. As used in this Agreement, the following terms shall have the following definitions: "Account Debtor" means any Person who is or who may become obligated under, with respect to, or on account of, an Account. "Accounts" means all presently existing and hereafter arising accounts, contract rights, and all other forms of obligations owing to Borrower arising out of the sale, license, or lease of goods or software or the rendition of services by Borrower, irrespective of whether earned by performance, and any and all credit insurance, guaranties, or security therefor. "Advances" has the meaning set forth in Section 2.1(a). "Affiliate" means, as applied to any Person, any other Person who directly or indirectly controls, is controlled by, is under common control with or is a director or officer of such Person. For purposes of this definition, "control" means: (a) solely when "Affiliate" is used in determining Eligible Accounts, the possession, directly or indirectly, of the power to vote 5% or more of the securities having ordinary voting power for the election of directors or the direct or indirect power to direct the management and policies of a Person; and (b) in all other cases, the possession, directly or indirectly, of the power to vote 10% or more of the securities having ordinary voting power for the election of directors or the direct or indirect power to direct the management and policies of a Person. "Agreement" has the meaning set forth in the preamble hereto. "Aircraft Security Agreement" means an Aircraft Security Agreement, in the form of Exhibit A-1 attached hereto, dated as of even date herewith, between Borrower and Foothill. "AnaTech Division" means the AnaTech Division of Borrower. "AnaTech Accounts" means Accounts created by the AnaTech Division. "Appraised Assets" means items of Equipment that are the subject of that certain appraisal, dated December 11, 1996, performed by Acuval Associates, Inc. or any subsequent appraisal performed by a qualified appraiser satisfactory to Foothill. "Asset Disposition" means any sale, license, lease, exchange, transfer, or other disposition (including any disposition as part of a sale and lease-back transaction), directly or indirectly, by Borrower of any of the properties or assets of Borrower. "Authorized Person" means any officer or other employee of Borrower. "Average Unused Portion of Maximum Revolving Amount" means, as of any date of determination, (a) the Maximum Revolving Amount, less (b) the sum of (i) the average Daily Balance of Advances that were outstanding during the immediately preceding month, plus (ii) the average Daily Balance of the Letter of Credit Usage during the immediately preceding month. "Availability" means the amount of money that Borrower is entitled to borrow as Advances under Section 2.1, such amount being the difference derived when (a) the sum of the principal amount of Advances then outstanding (including any amounts that Foothill may have paid for the account of Borrower pursuant to any of the Loan Documents and that have not been reimbursed by Borrower) is subtracted from (b) the lesser of (i) the Maximum Revolving Amount less the Letter of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit Usage. "Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. 101 et seq.), as amended, and any successor statute. "Benefit Plan" means a "defined benefit plan" (as defined in Section 3(35) of ERISA) for which Borrower, any Subsidiary of Borrower, or any ERISA Affiliate has been an "employer" (as defined in Section 3(5) of ERISA) within the past six years. "Bentley Equity Interests" means the equity interests in Bentley Systems, Inc. owned of record by Borrower and the rights of Borrower related thereto under that certain Stockholders' Agreement, dated June 11, 1987, by and among Bentley Systems, Inc., Borrower, and the "Management Stockholders" party thereto (as amended). "Bestinfo" means Bestinfo, Inc., a Delaware corporation. "Books" means all of Borrower's books and records including: ledgers; records indicating, summarizing, or evidencing Borrower's properties or assets (including the Collateral) or liabilities; all information relating to Borrower's business operations or financial condition; and all computer programs, disk or tape files, printouts, runs, or other computer prepared information. "Borrower" has the meaning set forth in the preamble to this Agreement. "Borrowing Base" has the meaning set forth in Section 2.1(a). For purposes of this definition, any amount that is denominated in a currency other than Dollars shall be valued in Dollars based on the applicable Exchange Rate for such currency as of the date 1 Business Day prior to the date of determination. "Business Day" means any day that is not a Saturday, Sunday, or other day on which national banks are authorized or required to close. "Change of Control" shall be deemed to have occurred at such time as a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of more than 25% of the total voting power of all classes of stock then outstanding of Borrower entitled to vote in the election of directors. "Chelmsford Property" means the Real Property (and related improvements thereto) of Borrower located in or about Chelmsford, Massachusetts. "Closing Date" means the date of the first to occur of the making of the initial Advance, the issuance of the initial Letter of Credit, or the funding of the Term Loan. "Code" means the California Uniform Commercial Code. "Collateral" means all right, title, or interest of Borrower with respect to the following: (a) the Accounts, (b) the Books, (c) the Equipment, (d) the General Intangibles, (e) the Inventory, (f) the Negotiable Collateral, (g) the Real Property Collateral, (h) any money, or other assets of Borrower that now or hereafter come into the possession, custody, or control of Foothill, and (i) the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the Collateral, and any and all Accounts, Books, Equipment, General Intangibles, Inventory, Negotiable Collateral, Real Property, money, deposit accounts, or other tangible or intangible property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or interest therein, and the proceeds thereof. "Collateral Access Agreement" means a landlord waiver, mortgagee waiver, bailee letter, or acknowledgement agreement of any warehouseman, processor, lessor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in the Equipment or Inventory, in each case, in form and substance reasonably satisfactory to Foothill. "Collections" means all cash, checks, notes, instruments, and other items of payment (including, insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds). "Compliance Certificate" means a certificate substantially in the form of Exhibit C-1 and delivered by the chief financial officer or the chief accounting officer of Borrower to Foothill. "Consolidated Current Assets" means, as of any date of determination, the aggregate amount of all current assets of Borrower and its Subsidiaries that would, in accordance with GAAP, be classified on a balance sheet as current assets. "Consolidated Current Liabilities" means, as of any date of determination, the aggregate amount of all current liabilities of Borrower and its Subsidiaries that would, in accordance with GAAP, be classified on a balance sheet as current liabilities. For purposes of this definition, all Obligations outstanding under this Agreement shall be deemed to be current liabilities without regard to whether they would be deemed to be so under GAAP. "Copyright Security Agreement" means a Copyright Security Agreement, in the form of Exhibit C-2 attached hereto, dated as of even date herewith, between Borrower and Foothill. "Currency Protection Agreement" shall mean any currency swap, cap, or collar agreement or other similar insurance-type agreement in connection with hedging against foreign currency rate fluctuations. "Daily Balance" means the amount of an Obligation owed at the end of a given day. "deems itself insecure" means that the Person deems itself insecure in accordance with the provisions of Section 1208 of the Code. "Default" means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default. "Designated Account" means account number 4068- 0637 of Borrower maintained with Borrower's Designated Account Bank, or such other deposit account of Borrower (located within the United States) which has been designated, in writing and from time to time, by Borrower to Foothill. "Designated Account Bank" means Citibank, N.A., whose office is located at 399 Park Avenue, New York, New York 10043, and whose ABA number is 021-000-089. "Dilution" means, in each case based upon the experience of the immediately prior 90 days, the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, returns, credits, or other dilution with respect to the Accounts, by (b) Collections with respect to Accounts (in each case, excluding intercompany Accounts and extraordinary items) plus the Dollar amount of clause (a). "Dilution Reserve" means, as of any date of determination pursuant to the report of Dilution delivered under Section 6.2, an amount sufficient to reduce Foothill's advance rate against Eligible Accounts by 1 percentage point for each percentage point by which Dilution is in excess of 8%. "Disbursement Letter" means an instructional letter executed and delivered by Borrower to Foothill regarding the extensions of credit to be made on the Closing Date, the form and substance of which shall be reasonably satisfactory to Foothill. "Dollars or $" means United States dollars. "Domestic Accounts" means Accounts with respect to which the Account Debtor maintains its chief executive office in the United States or is organized under the laws of the United States or any State thereof. "Early Termination Premium" has the meaning set forth in Section 3.6. "Eligible Accounts" means Eligible Domestic Accounts and Eligible Unbilled Accounts. "Eligible Domestic Accounts" means those Accounts created by Borrower in the ordinary course of business, that arise out of Borrower's sale, license, or lease of goods or software or rendition of services, and that strictly comply with each and all of the representations and warranties respecting Accounts made by Borrower to Foothill in the Loan Documents; provided, however, that standards of eligibility may be fixed and revised from time to time by Foothill in Foothill's reasonable credit judgment. Eligible Domestic Accounts shall not include the following: (a) Accounts that the Account Debtor has failed to pay within 60 days of due date (or, in the case of Federal Accounts, 90 days of due date) or Accounts with selling terms of more than 60 days; (b) Accounts owed by an Account Debtor or its Affiliates where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above; (c) Accounts with respect to which the Account Debtor is an employee, Affiliate, or agent of Borrower; (d) Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or return, sale on approval, bill and hold, or other terms by reason of which the payment by the Account Debtor may be conditional; (e) Accounts that are not payable in Dollars or with respect to which the Account Debtor: (i) does not maintain its chief executive office in the United States, or (ii) is not organized under the laws of the United States or any State thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (y) the Account is supported by an irrevocable letter of credit that is satisfactory to Foothill (as to form, substance, and issuer or domestic confirming bank) and that, upon the occurrence and during the continuance of an Event of Default, has been delivered to Foothill and is directly drawable by Foothill (provided, however, that nothing herein shall limit Foothill's right to not make an Advance or issue a Letter of Credit upon the occurrence and during the continuance of an Event of Default), or (z) the Account is covered by credit insurance in form and amount, and by an insurer, satisfactory to Foothill; (f) Accounts with respect to which the Account Debtor is a creditor of Borrower, has or has asserted a right of setoff, has disputed its liability (whether pursuant to a contractual discrepancy or otherwise), or has made any claim with respect to the Account; provided, however, that the foregoing only shall apply to the extent of such right of setoff, disputed liability, or other claim giving rise to such contra-account. (g) Accounts with respect to an Account Debtor whose total obligations owing to Borrower exceed 10% of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided, however, that in the case of the United States and its departments, agencies, and instrumentalities, taken as a whole, the foregoing percentage shall be fifty percent (50%) before the excess would be deemed ineligible; (h) Accounts with respect to which the Account Debtor is subject to any Insolvency Proceeding, or becomes insolvent, or goes out of business; (i) Accounts the collection of which Foothill, in its reasonable credit judgment, believes to be doubtful by reason of the Account Debtor's financial condition and with respect to which Foothill has notified Borrower of such belief; (j) Accounts (other than Eligible Unbilled Accounts) with respect to which the goods giving rise to such Account have not been shipped and billed to the Account Debtor, the services giving rise to such Account have not been performed and accepted by the Account Debtor, or the Account otherwise does not represent a final sale; (k) Accounts with respect to which the Account Debtor is located in the states of New Jersey, Minnesota, Indiana, or West Virginia (or any other state that requires a creditor to file a Business Activity Report or similar document in order to bring suit or otherwise enforce its remedies against such Account Debtor in the courts or through any judicial process of such state), unless Borrower has qualified to do business in New Jersey, Minnesota, Indiana, West Virginia, or such other states, or has filed a Notice of Business Activities Report with the applicable division of taxation, the department of revenue, or with such other state offices, as appropriate, for the then-current year, or is exempt from such filing requirement; (l) At such times as Foothill may determine in its sole discretion, Federal Accounts (exclusive, however, of Accounts with respect to which Borrower has complied, to the satisfaction of Foothill and subject to Section 4.4(c) hereof, with the Assignment of Claims Act, 31 U.S.C. 3727); (m) At such times as Foothill may determine in its sole discretion, Accounts with respect to which the Account Debtor is any State of the United States (exclusive, however, of: (i) Accounts owed by any State that does not have a statutory counterpart to the Assignment of Claims Act; and (ii) Accounts owed by any State that has a statutory counterpart to the Assignment of Claims Act and with respect to which Borrower has complied, to the satisfaction of Foothill and subject to Section 4.4(c) hereof, with such statutory counterpart); (n) Federal Accounts arising under any one underlying contract or any series of related underlying contracts, the total amount of which obligations owing Borrower exceeds 10% of all Eligible Accounts, to the extent of the obligations owing under such contract or contracts in excess of such percentage; (o) Federal Accounts in respect of which the subject contract for goods and services is designated by the Account Debtor as "classified" (i.e., the ability of Foothill to receive information regarding such contract or such Account is restricted by rules or regulations of the United States or any department, agency, or instrumentality of the United States in respect of classified information); (p) Optronics Accounts or AnaTech Accounts; (q) Accounts which represent progress payments or other advance billings that are due prior to the completion of performance by Borrower of the subject contract for goods or services, except to the extent that such progress payments or other advance billings are expressly permitted by the terms of the subject contract (including so-called "maintenance contracts"); or (r) Accounts with respect to which a surety or other bond has been issued in respect of the performance by Borrower of the subject contract for goods or services. "Eligible Domestic Inventory" means Eligible Domestic Finished Goods Inventory and Eligible Domestic Raw Materials Inventory. "Eligible Domestic Finished Goods Inventory" means Inventory consisting of first quality finished goods held for sale or license in the ordinary course of Borrower's business, that are located at or in-transit between Borrower's premises identified on Schedule E-1, and that strictly comply with each and all of the representations and warranties respecting Inventory made by Borrower to Foothill in the Loan Documents; provided, however, that standards of eligibility may be fixed and revised from time to time by Foothill in Foothill's reasonable credit judgment. In determining the amount to be so included, Inventory shall be valued at the lower of cost or market on a basis consistent with Borrower's current and historical accounting practices. An item of Inventory shall not be included in Eligible Domestic Finished Goods Inventory if: (a) through (g) are manually numbered(a) it is not owned solely by Borrower or Borrower does not have good, valid, and marketable title thereto; (b) it is not located at one of the locations set forth on Schedule E-1; (c) it is not located on property owned or leased by Borrower or in a contract warehouse, in each case, subject to a Collateral Access Agreement executed by the mortgagee, lessor, the warehouseman, or other third party, as the case may be, and segregated or otherwise separately identifiable from goods of others, if any, stored on the premises; (d) it is not subject to a valid and perfected first priority security interest in favor of Foothill; (e) it consists of goods returned or rejected by Borrower's customers or goods in transit; (f) it is Inventory of the Optronics Division or the AnaTech Division; or (g) it is obsolete or slow moving, a restrictive or custom item, raw materials, work-in-process, a component that is not part of finished goods, or constitutes spare parts (other than spare parts located at the Huntsville Property), packaging and shipping materials, supplies used or consumed in Borrower's business, Inventory subject to a Lien in favor of any third Person, bill and hold goods, defective goods, "seconds," or Inventory acquired on consignment. "Eligible Domestic Raw Materials Inventory" means Inventory that does not qualify as Eligible Domestic Finished Goods Inventory solely because it constitutes raw materials consisting of components used as a part of first quality finished goods held for sale in the ordinary course of Borrower's business. "Eligible Unbilled Accounts" means those Domestic Accounts created by Borrower that would qualify as Eligible Domestic Accounts except for the fact that they constitute Unbilled Accounts. "Equipment" means all of Borrower's present and hereafter acquired machinery, machine tools, motors, equipment, furniture, furnishings, fixtures, vehicles (including motor vehicles and trailers), tools, parts, goods (other than consumer goods, farm products, or Inventory), wherever located, including, (a) any interest of Borrower in any of the foregoing, and (b) all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing. "ERISA" means the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1000 et seq., amendments thereto, successor statutes, and regulations or guidance promulgated thereunder. "ERISA Affiliate" means (a) any corporation subject to ERISA whose employees are treated as employed by the same employer as the employees of Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which Borrower is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any party subject to ERISA that is a party to an arrangement with Borrower and whose employees are aggregated with the employees of Borrower under IRC Section 414(o). "ERISA Event" means (a) a Reportable Event with respect to any Benefit Plan or Multiemployer Plan, (b) the withdrawal of Borrower, any of its Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan year in which it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to terminate a Benefit Plan in a distress termination (as described in Section 4041(c) of ERISA), (d) the institution by the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e) any event or condition (i) that provides a basis under Section 4042(a)(1), (2), or (3) of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of Borrower, any of its Subsidiaries or ERISA Affiliates from a Multiemployer Plan, or (g) providing any security to any Plan under Section 401(a)(29) of the IRC by Borrower or its Subsidiaries or any of their ERISA Affiliates. "Event of Default" has the meaning set forth in Section 8. "Exchange Rate" means the nominal rate of exchange available to Foothill in a chosen foreign exchange market for the purchase of the applicable non-Dollar currency at 12:00 noon, local time, 1 Business Day prior to any date of determination, expressed as the number of units of such currency per Dollar. "Excluded Foreign Portion" means, with respect to any Foreign Subsidiary, the portion (if any) of the equity securities of such Subsidiary owned of record by Borrower with voting power that is in excess of 65% of the total combined voting power of issued and outstanding stock of such Subsidiary entitled to vote. "Excluded Foreign Subsidiary Securities" means (a) the Excluded Foreign Portion (if any) of the equity securities of any Foreign Subsidiary of Borrower identified in Schedule II of the Pledge Agreement (as the same may be amended or supplemented from time to time), and (b) subject to the last paragraph of Section 6.3, 100% of the fully diluted issued and outstanding equity securities of any other Foreign Subsidiary of Borrower. "Existing Lender" means Citicorp USA, Inc., as the representative of certain banks and other financial institutions. "Federal Accounts" means Accounts where the United States or any department, agency, or instrumentality of the United States is the Account Debtor. "FEIN" means Federal Employer Identification Number. "Foothill" has the meaning set forth in the preamble to this Agreement. "Foothill Account" has the meaning set forth in Section 2.7. "Foothill Expenses" means all: costs or expenses (including taxes, and insurance premiums) required to be paid by Borrower under any of the Loan Documents that are paid or incurred by Foothill; fees or charges paid or incurred by Foothill in connection with Foothill's transactions with Borrower, including, fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, litigation, and UCC (or equivalent) searches and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, publication, appraisal (including periodic Personal Property Collateral or Real Property Collateral appraisals), real estate surveys, real estate title policies and endorsements, and environmental audits; costs and expenses incurred by Foothill in the disbursement of funds to Borrower (by wire transfer or otherwise); charges paid or incurred by Foothill resulting from the dishonor of checks; costs and expenses paid or incurred by Foothill to correct any default or enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Personal Property Collateral or the Real Property Collateral, or any portion thereof, irrespective of whether a sale is consummated; costs and expenses paid or incurred by Foothill in examining Borrower's Books; costs and expenses of third party claims or any other suit paid or incurred by Foothill in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or Foothill's relationship with Borrower (or any of its Subsidiaries party to one or more Loan Documents); and Foothill's reasonable attorneys fees and expenses incurred in advising, structuring, drafting, reviewing, administering, amending, terminating, enforcing (including attorneys fees and expenses incurred in connection with a "workout," a "restructuring," or an Insolvency Proceeding concerning Borrower), defending, or concerning the Loan Documents, irrespective of whether suit is brought. "Foreign Subsidiary" means any Subsidiary organized under the laws of a jurisdiction other than the United States or any State thereof. "GAAP" means generally accepted accounting principles as in effect from time to time in the United States, consistently applied. "General Intangibles" means all of Borrower's present and future general intangibles and other personal property (including contract rights, rights arising under common law, statutes, or regulations, choses or things in action, goodwill, patents, trade names, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, information contained on computer disks or tapes, literature, reports, catalogs, deposit accounts, insurance premium rebates, tax refunds, and tax refund claims), other than goods, Accounts, and Negotiable Collateral. "Governing Documents" means the certificate or articles of incorporation, by-laws, or other organizational or governing documents of any Person. "Hazardous Materials" means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as "hazardous substances," "hazardous materials," "hazardous wastes," "toxic substances," or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million. "Huntsville Property" means the Real Property (and related improvements thereto) of Borrower located in or about Huntsville, Alabama. "IG Australia" means Intergraph Corporation Pty., Ltd.. a corporation organized under the laws of Australia. "IG Australia Existing Lender" means National Bank of Australia. "IG Australia Existing Lender Pay-Off Letter" means a letter, in form and substance reasonably satisfactory to Foothill, from IG Australia Existing Lender respecting the amount necessary to repay in full all of the obligations of Borrower or IG Australia owing to IG Australia Existing Lender and obtain a termination or release of all of the Liens existing in favor of IG Australia Existing Lender in and to the properties or assets of Borrower and its Subsidiaries. "IG Benelux" means Intergraph Benelux B.V., a corporation organized under the laws of The Netherlands. "IG Benelux Existing Lender" means ING Bank, N.V.. "IG Delaware" means Intergraph Delaware, Inc., a Delaware corporation. "Indebtedness" means: (a) all obligations of Borrower for borrowed money, (b) all obligations of Borrower evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations of Borrower in respect of letters of credit, bankers acceptances, interest rate swaps, or other financial products, (c) all obligations of Borrower under capital leases, (d) all obligations or liabilities of others secured by a Lien on any property or asset of Borrower, irrespective of whether such obligation or liability is assumed, and (e) any obligation of Borrower guaranteeing or intended to guarantee (whether guaranteed, endorsed, co-made, discounted, or sold with recourse to Borrower) any indebtedness, lease, dividend, letter of credit, or other obligation of any other Person; provided, however, that the term "Indebtedness" shall not include (i) liabilities or obligations arising out of or relating to guarantees, warranties, or other commitments that products or systems sold by Borrower or any of its Affiliates will meet particular performance or operating specifications ("Commercial Performance Guarantees"), or (ii) liabilities arising out of or relating to agreements or commitments of Borrower to maintain the financial condition or solvency of any Affiliate of Borrower that are made, in the ordinary course of Borrower's business consistent with past practices, in connection with or in fulfillment of any Commercial Performance Guarantee. "Insolvency Proceeding" means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief. "Interest Rate Agreement" shall mean any interest rate swap agreement or any other similar insurance- type agreement in connection with any interest "cap" or "collar" transaction or any other interest rate hedging transaction. "InterCAP" means InterCAP Graphic Systems, Inc., a Delaware corporation. "Intercompany Notes" means promissory notes, if any, evidencing loan obligations between Borrower and any of its Subsidiaries that constitute loans qualifying under the definition of "Permitted Subsidiary Loans and Capital Contributions" or that are permitted under Section 7.1(d). "Inventory" means all present and future inventory in which Borrower has any interest, including goods held for sale, license, or lease or to be furnished under a contract of service and all of Borrower's present and future raw materials, work in process, finished goods, and packing and shipping materials, wherever located. "Inventory Advance Rate" means 25%; provided, however, that the Inventory Advance Rate shall at no time exceed the quotient, expressed as a percentage, equal to 100% of the Liquidation Value based upon the most recent third party appraisal of Borrower's Inventory located in the United States conducted by an appraiser selected by Foothill, divided by the value of Eligible Domestic Inventory on the date of such appraisal. "IRC" means the Internal Revenue Code of 1986, as amended, and the regulations thereunder. "L/C" has the meaning set forth in Section 2.2(a). "L/C Guaranty" has the meaning set forth in Section 2.2(a). "Letter of Credit" means an L/C or an L/C Guaranty, as the context requires. "Letter of Credit Usage" means the sum of (a) the undrawn amount of Letters of Credit, plus (b) the amount of unreimbursed drawings under Letters of Credit. "Lien" means any interest in property securing an obligation owed to, or a claim by, any Person other than the owner of the property, whether such interest shall be based on the common law, statute, or contract, whether such interest shall be recorded or perfected, and whether such interest shall be contingent upon the occurrence of some future event or events or the existence of some future circumstance or circumstances, including the lien or security interest arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement, security agreement, adverse claim or charge, conditional sale or trust receipt, or from a lease, consignment, or bailment for security purposes and also including reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Real Property. "Liquidation Value" means, in respect of any item of Inventory or Equipment, the net orderly liquidation value of such item of Inventory or Equipment as determined by a qualified appraiser selected by Foothill. "Loan Account" has the meaning set forth in Section 2.10. "Loan Documents" means this Agreement, the Disbursement Letter, the Letters of Credit, the Lockbox Agreements, the Mortgages, the Aircraft Security Agreement, the Copyright Security Agreement, the Patent Security Agreement, the Pledge Agreement, the Trademark Security Agreement, the VCOC Letter, any note or notes executed by Borrower and payable to Foothill, and any other agreement entered into, now or in the future, in connection with this Agreement. "Lockbox Account" shall mean a depositary account established pursuant to one of the Lockbox Agreements. "Lockbox Agreements" means those certain Lockbox Operating Procedural Agreements and those certain Depository Account Agreements, in form and substance reasonably satisfactory to Foothill, each of which is among Borrower, Foothill, and one of the Lockbox Banks. "Lockbox Banks" means Citibank, N.A., First National Bank of Chicago, and NationsBank of Georgia. "Lockboxes" has the meaning set forth in Section 2.7. "M&S" means M&S Computing Investments, Inc., a Delaware corporation. "Material Adverse Change" means (a) a material adverse change in the business, operations, results of operations, assets, liabilities or condition of Borrower, (b) the material impairment of Borrower's ability to perform its obligations under the Loan Documents to which it is a party or of Foothill to enforce the Obligations or to realize upon the Collateral, (c) a material adverse effect on the value of the Collateral or the amount that Foothill would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of such Collateral, or (d) a material impairment of the priority of Foothill's Liens with respect to the Collateral; provided, however, that the determination of any Material Adverse Change shall be made after giving effect to the reserves, if any, created by Foothill against the Borrowing Base, or the reduction, if any, made by Foothill of the applicable advance rates based upon the Borrowing Base, in each case, in respect of the event or circumstance giving rise to such material adverse change, material impairment, or material adverse effect. "Maturity Date" has the meaning set forth in Section 3.4. "Maximum Amount" means $100,000,000. "Maximum Revolving Amount" means, as of any date of determination, the result of (a) the Maximum Amount, minus (b) the then outstanding principal balance of the Term Loan. "Meadlock Note" means that certain promissory note, dated May 1, 1996, made by James Meadlock to the order of Borrower in the original principal amount of approximately $4,400,000. "Mortgage Policies" means mortgagee title insurance policies (or marked commitments to issue the same) for the Real Property Collateral issued by a title insurance company reasonably satisfactory to Foothill in amounts reasonably satisfactory to Foothill. "Mortgages" means one or more mortgages, deeds of trust, or deeds to secure debt, executed by Borrower in favor of Foothill, the form and substance of which shall be reasonably satisfactory to Foothill, that encumber the Real Property Collateral and the related improvements thereto. "Multiemployer Plan" means a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) to which Borrower, any of its Subsidiaries, or any ERISA Affiliate has contributed, or was obligated to contribute, within the past six years. "Negotiable Collateral" means all of Borrower's present and future letters of credit, notes (including the Meadlock Note), drafts, instruments, investment property, security entitlements, securities (including the shares of stock of Subsidiaries of Borrower, but expressly excluding the Excluded Foreign Subsidiary Securities and the Bentley Equity Interests), documents, personal property leases (wherein Borrower is the lessor), chattel paper, and Borrower's Books relating to any of the foregoing. "Net Worth" means, as of any date of determination, Borrower's total stockholder's equity. "Obligations" means all loans, Advances, debts, principal, interest (including any interest that, but for the provisions of the Bankruptcy Code, would have accrued), contingent reimbursement obligations under any outstanding Letters of Credit, premiums (including Early Termination Premiums), liabilities (including all amounts charged to Borrower's Loan Account pursuant hereto), obligations, fees, charges, costs, or Foothill Expenses (including any fees or expenses that, but for the provisions of the Bankruptcy Code, would have accrued), lease payments, guaranties, covenants, and duties owing by Borrower to Foothill of any kind and description (whether pursuant to or evidenced by the Loan Documents or pursuant to any other agreement between Foothill and Borrower, and irrespective of whether for the payment of money), whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including any debt, liability, or obligation owing from Borrower to others that Foothill may have obtained by assignment or otherwise, and further including all interest not paid when due and all Foothill Expenses that Borrower is required to pay or reimburse by the Loan Documents, by law, or otherwise. "Obligor" means any of Borrower or any of its Subsidiaries party to one or more Loan Documents, including M&S and IG Delaware. "Optronics Division" means the Optronics Division of Borrower. "Optronics Accounts" means Accounts created by the Optronics Division. "Ordinary Course Dispositions" means Asset Dispositions of (a) Inventory in the ordinary course of business, (b) Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business, (c) Equipment that is a so-called "internal equipment item" that is replaced by Borrower in the ordinary course of business and consistent with past practices with another such item of equal or greater value, and (d) Equipment that is a so-called "demonstration item" in the ordinary course of business and consistent with past practices. "Overadvance" has the meaning set forth in Section 2.5. "Participant" means any Person to which Foothill has sold a participation interest in its rights under the Loan Documents. "Patent Security Agreement" means a Patent Security Agreement, in the form of Exhibit P-1 attached hereto, dated as of even date herewith, between Borrower and Foothill. "Pay-Off Letter" means a letter, in form and substance reasonably satisfactory to Foothill, from Existing Lender respecting the amount necessary to repay in full all of the obligations of Borrower owing to Existing Lender and obtain a termination or release of all of the Liens existing in favor of Existing Lender in and to the properties or assets of Borrower. "PBGC" means the Pension Benefit Guaranty Corporation as defined in Title IV of ERISA, or any successor thereto. "Permitted AnaTech Dispositions" means, subject to the prior or concurrent satisfaction of the Release Condition therefor, Asset Dispositions of the assets of the AnaTech Division, free and clear of Foothill's Lien thereon (other than Foothill's Lien in the proceeds of such Asset Disposition). "Permitted Appraised Assets Dispositions" means, subject to the prior or concurrent satisfaction of the Release Condition therefor, Asset Dispositions of Appraised Assets (in the ordinary course of Borrower's business and consistent with past practices), free and clear of Foothill's Lien thereon (other than Foothill's Lien in the proceeds of such Asset Disposition), so long as: (a) Borrower replaces the Appraised Asset that is the subject of such Asset Disposition (the "Disposed Appraised Asset") with a newly acquired item of Equipment of equal or greater comparable value than the appraised value of the Disposed Appraised Asset set forth in the most recent appraisal thereof and reports such Asset Disposition and replacement pursuant to Section 6.2; and (b) in the case of any single Asset Disposition or series of integrated Asset Dispositions involving one or more Disposed Appraised Assets with an aggregate appraised value of $100,000 or more, the chief financial officer of Borrower shall deliver to Foothill a certificate, in form and substance satisfactory to Foothill, demonstrating in reasonable detail that the value of such newly acquired item or items of Equipment are of equal or greater comparable value than the appraised value of the relevant Disposed Appraised Asset set forth in the most recent appraisal thereof. "Permitted Bentley Disposition" means, subject to the prior or concurrent satisfaction of the Release Condition therefor, Asset Dispositions of the Bentley Equity Interests. "Permitted Bestinfo Disposition" means, subject to the prior or concurrent satisfaction of the Release Condition therefor, Asset Dispositions of the capital stock of Bestinfo, free and clear of Foothill's Lien thereon (other than Foothill's Lien in the proceeds of such Asset Disposition). "Permitted Disposition" means (a) Ordinary Course Dispositions, (b) Permitted Optronics Dispositions, Permitted AnaTech Dispositions, the Permitted Bentley Disposition, and the Permitted Bestinfo Disposition, (c) the Reston Sale/Leaseback, (d) subject to the prior or concurrent satisfaction of the applicable Release Condition therefor, Asset Dispositions of the assets that are the subject of Permitted Toehold Investments and Permitted Other Investments, (e) Permitted Appraised Assets Dispositions, and (f) subject to the prior or concurrent satisfaction of the applicable Release Condition therefor, other Asset Dispositions (but excluding Asset Dispositions of Equipment constituting Appraised Assets) not in the ordinary course of Borrower's business that do not exceed, on a book value basis, $1,000,000 in the aggregate in any fiscal year and do not exceed, on a book value basis, $250,000 in any one transaction or series of related transactions. "Permitted Investments" means: (a) Permitted Ordinary Course Investments; (b) Permitted Repayment Investments; (c) Permitted Toehold Investments; (d) Permitted Subsidiary Loans and Capital Contributions; and (e) Permitted Other Investments. "Permitted Liens" means (a) Liens held by Foothill, (b) Liens for unpaid taxes that either (i) are not yet due and payable or (ii) are the subject of Permitted Protests, (c) Liens set forth on Schedule P-1, (d) purchase money Liens in respect of Equipment and the interests of lessors under operating leases and of lessors under capital leases to the extent that the acquisition or lease of the underlying asset is permitted under Section 7.21 and so long as the Lien only attaches to the asset purchased or acquired and only secures the purchase price of the asset, (e) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business of Borrower and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet due and payable, or (ii) are the subject of Permitted Protests, (f) Liens arising from deposits made in connection with obtaining worker's compensation or other unemployment insurance, (g) Liens or deposits to secure performance of bids, tenders, or leases (to the extent permitted under this Agreement), incurred in the ordinary course of business of Borrower and not in connection with the borrowing of money, (h) Liens arising by reason of security for surety or appeal bonds in the ordinary course of business of Borrower, (i) Liens of or resulting from any judgment or award that would not have a Material Adverse Effect and as to which the time for the appeal or petition for rehearing of which has not yet expired, or in respect of which Borrower is in good faith prosecuting an appeal or proceeding for a review, and in respect of which a stay of execution pending such appeal or proceeding for review has been secured, (j) Liens with respect to the Real Property Collateral that are exceptions to the commitments for title insurance issued in connection with the Mortgages, as accepted by Foothill, (k) with respect to any Real Property that is not part of the Real Property Collateral, easements, rights of way, zoning and similar covenants and restrictions, and similar encumbrances that customarily exist on properties of Persons engaged in similar activities and similarly situated and that in any event do not materially interfere with or impair the use or operation of the Collateral by Borrower or the value of Foothill's Lien thereon or therein, or materially interfere with the ordinary conduct of the business of Borrower, (l) software escrow arrangements entered into in the ordinary course of business consistent with past practice, and (m) if and to the extent required under the Payoff Letter, cash collateral pledged to Existing Lender to secure the outstanding obligations, as of the Closing Date, under letters of credit issued by Existing Lender or the financial institutions for which it is acting as representative in respect of the Indebtedness that is the subject of the Payoff Letter. "Permitted Optronics Dispositions" means, subject to the prior or concurrent satisfaction of the Release Condition therefor, (a) Asset Dispositions of the assets of the Optronics Division, free and clear of Foothill's Lien thereon (other than Foothill's Lien in the proceeds of such Asset Disposition) to any Person other than a Subsidiary of Borrower, or (b) the capital contribution by Borrower to Scansystems of the operating assets of the Optronics Division. "Permitted Ordinary Course Investment" means (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America with a maturity not exceeding one year, (b) certificates of deposit, time deposits, banker's acceptances or other instruments of a bank having a combined capital and surplus of not less than $500,000,000 with a maturity not exceeding one year, (c) investments in commercial paper rated at least A-1 or P-1 maturing within one year after the date of acquisition thereof, (d) money market accounts maintained at a bank having combined capital and surplus of no less than $500,000,000 or at another financial institution reasonably satisfactory to Foothill, (e) loans and advances to officers and employees of Borrower (exclusive of loans evidenced by the Meadlock Note) in the ordinary course of business in an aggregate amount at any one time outstanding not to exceed $3,000,000, (f) loans evidenced by the Meadlock Note, (g) investments in negotiable instruments for collection, (h) advances in connection with purchases of goods or services in the ordinary course of business, and (i) deposits required in connection with leases. "Permitted Other Investments" means the equity investments of Borrower as of the Closing Date identified on Schedule P-2. "Permitted Protest" means the right of Borrower to protest any Lien other than any such Lien that secures the Obligations, tax (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on the books of Borrower in accordance with GAAP (or, if higher, in an amount that Foothill in good faith and in its reasonable credit judgment believes to be appropriate under the circumstances), (b) any such protest is instituted and diligently prosecuted by Borrower in good faith, and (c) Foothill is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of the Liens of Foothill in and to the Collateral. "Permitted Repayment Investment" means (a) the contribution or loan by Borrower to IG Benelux of approximately $15,000,000 to enable IG Benelux to repay, in full, all of its indebtedness owing to the IG Benelux Existing Lender, or (b) subject to the timely satisfaction of the condition set forth in Section 3.3(f), the contribution or loan by Borrower to IG Australia of approximately $24,000,000 to enable IG Australia to repay, in full, all of its indebtedness owing to the IG Australia Existing Lender. "Permitted Subsidiary Loans and Capital Contributions" means loans and capital contributions made after the Closing Date by Borrower to any Subsidiary of Borrower; provided, however, that all such loans and capital contributions made by Borrower shall not exceed, in the aggregate, (a) $20,000,000 during the 1997 calendar year, (b) $25,000,000 during the 1998 calendar year, and (c) $30,000,000 during the 1999 calendar year. "Permitted Toehold Investment" means the acquisition of an equity interest in a Person other than a Subsidiary of Borrower (but not to exceed 10% of all of the issued and outstanding equity interests of such Person on a fully diluted basis) so long as (a) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed acquisition, (b) the Person, in whom the equity interest is being acquired, is engaged in the same business as that of Borrower or any of its Subsidiaries or in a business reasonably related thereto, (c) the relevant equity interest being acquired in such Person is acquired directly by Borrower, (d) to the extent required under Section 4.2, Borrower shall have executed and delivered a supplement to the Pledge Agreement and shall have perfected Foothill's security interest in the acquired equity interest, and (e) the aggregate amount expended by Borrower in respect of all such Permitted Toehold Investments does not exceed $1,000,000 in any fiscal year. "Person" means and includes natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof. "Personal Property Collateral" means all Collateral other than the Real Property Collateral. "Plan" means any employee benefit plan, program, or arrangement maintained or contributed to by Borrower or with respect to which it may incur liability. "Pledge Agreement" means a Pledge Agreement, in the form of Exhibit P-2 attached hereto, dated as of even date herewith, among Borrower, IG Delaware, M&S, and Foothill. "Real Property" means any estates or interests in real property now owned or hereafter acquired by Borrower. "Real Property Collateral" means the parcel or parcels of Real Property and the related improvements thereto now owned by Borrower and identified on Schedule R-1, and any Real Property hereafter acquired by Borrower. "Reference Rate" means the variable rate of interest, per annum, most recently announced by Norwest Bank Minnesota, National Association, or any successor thereto, as its "base rate," irrespective of whether such announced rate is the best rate available from such financial institution. "Release Condition" means, in respect of any Asset Disposition, that (a) no Default or Event of Default has occurred and is continuing or would result therefrom, and (b) Borrower is receiving at least fair value (as determined in accordance with Section 3439 of the California Civil Code, as amended) for the property or assets that are the subject of the Asset Disposition. "Reportable Event" means any of the events described in Section 4043(c) of ERISA or the regulations thereunder other than a Reportable Event as to which the provision of 30 days notice to the PBGC is waived under applicable regulations. "Reserve" means, as of any date of determination, an amount equal the product of (a) $238,000 times (b) the number of months separating such date from the Closing Date. "Reston Property" means the Real Property (and related improvements thereto) of Borrower located in or about Reston, Virginia. "Reston Sale/Leaseback" means the sale and lease-back transaction in respect of the Reston Property. "Retiree Health Plan" means an "employee welfare benefit plan" within the meaning of Section 3(1) of ERISA that provides benefits to individuals after termination of their employment, other than as required by Section 601 of ERISA. "Scansystems" means Scansystems, Inc., a Delaware corporation. "Securities Account" means a "securities account" as that term is defined in Section 8-501 of official text of the Uniform Commercial Code and as defined in California Senate Bill 1591 which was approved by the Governor on September 14, 1996 and will be effective on January 1, 1997. "Solvent" means, with respect to any Person on a particular date, that on such date (a) at fair valuations, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person, (b) the present fair salable value of the properties and assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its properties and assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts beyond such Person's ability to pay as such debts mature, and (e) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that reasonably can be expected to become an actual or matured liability. "Subsidiary" of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the shares of stock or other ownership interests having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity. Anything to the contrary notwithstanding, Bentley Systems, Inc. shall not be deemed to be a Subsidiary of Borrower. "Term Loan" has the meaning set forth in Section 2.3. "Trademark Security Agreement" means a Trademark Security Agreement, in the form of Exhibit T-1 attached hereto, dated as of even date herewith, between Borrower and Foothill. "Triggering Event" means any of (a) the occurrence and continuation of an Event of Default, or (b) Foothill deems itself insecure. "Unbilled Accounts" means Domestic Accounts that are fully earned by performance, but have not yet been billed to the Account Debtor and that, as of any date of determination, arise from the sale of goods or rendition of services within the prior 60 days. "United States" means the United States of America, or any department, agency, or instrumentality of any of the foregoing. "VCOC Letter" means a letter agreement between Borrower and Foothill's Participants that meets the Venture Capital Operating Company requirements and that is in substantially the form of Exhibit V-1. "VeriBest" means VeriBest, Inc., a Delaware corporation. "Voidable Transfer" has the meaning set forth in Section 15.8. 1.2 Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. When used herein, the term "financial statements" shall include the notes and schedules thereto. Whenever the term "Borrower" is used in respect of a financial covenant or a related definition, it shall be understood to mean Borrower on a consolidated basis unless the context clearly requires otherwise. 1.3 Code. Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein. 1.4 Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term "including" is not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. An Event of Default shall "continue" or be "continuing" until such Event of Default has been waived in writing by Foothill. Section, subsection, clause, schedule, and exhibit references are to this Agreement unless otherwise specified. Any reference in this Agreement or in the Loan Documents to this Agreement or any of the Loan Documents shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, and supplements, thereto and thereof, as applicable. 1.5 Schedules and Exhibits. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference. 2. LOAN AND TERMS OF PAYMENT. 2.1 Revolving Advances. (a) Subject to the terms and conditions of this Agreement, Foothill agrees to make advances ("Advances") to Borrower in an amount outstanding not to exceed at any one time the lesser of (i) the Maximum Revolving Amount less the Letter of Credit Usage, or (ii) the Borrowing Base less the Letter of Credit Usage. For purposes of this Agreement, "Borrowing Base", as of any date of determination, shall mean the result of: (x) the lesser of (i) the result of (A) 80% of Eligible Domestic Accounts, plus (B) the lowest of (1) 80% of Eligible Unbilled Accounts, (2) 40% of the amount of credit availability created by this clause (x), and (3) $20,000,000, minus (C) the amount, if any, of the Dilution Reserve, and (ii) an amount equal to the Collections with respect to the Accounts of Borrower for the immediately preceding 60 day period, plus (y) the lowest of (i) $30,000,000, (ii) the product of (A) the Inventory Advance Rate times (B) the value (calculated at the lower of cost or market) of Eligible Domestic Inventory, and (iii) 30% of the amount of credit availability created by clause (x) above, minus (z) the sum of (i) prior to the full satisfaction of the condition subsequent set forth in Section 3.3(b), $20,000,000, and (ii) the Reserve. (b) Anything to the contrary in Section 2.1(a) above notwithstanding, Foothill may create reserves against or reduce its advance rates based upon Eligible Domestic Accounts, Eligible Unbilled Accounts, or Eligible Domestic Inventory without declaring an Event of Default if it determines in good faith and in its reasonable credit judgment that there has occurred a Material Adverse Change. (c) Foothill shall have the right to have the Inventory reappraised by a qualified appraiser selected by Foothill from time to time after the Closing Date for the purpose of redetermining the Liquidation Value of the Inventory. In the absence of the occurrence and continuation of an Event of Default, such appraisals shall occur annually. (d) Foothill shall have no obligation to make Advances hereunder to the extent they would cause the outstanding Obligations (other than under the Term Loan) to exceed the Maximum Revolving Amount. (e) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. 2.2 Letters of Credit. (a) Subject to the terms and conditions of this Agreement, Foothill agrees to issue letters of credit for the account of Borrower (each, an "L/C") or to issue guarantees of payment (each such guaranty, an "L/C Guaranty") with respect to letters of credit issued by an issuing bank for the account of Borrower. Foothill shall have no obligation to issue a Letter of Credit if any of the following would result: (i) the Letter of Credit Usage would exceed the Borrowing Base less the amount of outstanding Advances, or (ii) the Letter of Credit Usage would exceed the lower of (y) the Maximum Revolving Amount less the amount of outstanding Advances, or (z) $60,000,000, or (iii) the outstanding Obligations (other than under the Term Loan) would exceed the Maximum Revolving Amount. Borrower and Foothill acknowledge and agree that certain of the letters of credit that are to be the subject of L/C Guarantees may be outstanding on the Closing Date. Each Letter of Credit shall have an expiry date no later than 60 days prior to the date on which this Agreement is scheduled to terminate under Section 3.4 and all such Letters of Credit shall be in form and substance acceptable to Foothill in its sole discretion. If Foothill is obligated to advance funds under a Letter of Credit, Borrower immediately shall reimburse such amount to Foothill and, in the absence of such reimbursement, the amount so advanced immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances under Section 2.6. (b) Borrower hereby agrees to indemnify, save, defend, and hold Foothill harmless from any loss, cost, expense, or liability, including payments made by Foothill, expenses, and reasonable attorneys fees incurred by Foothill arising out of or in connection with any Letter of Credit. Borrower agrees to be bound by the issuing bank's regulations and interpretations of any Letters of Credit guarantied by Foothill and opened to or for Borrower's account or by Foothill's interpretations of any L/C issued by Foothill to or for Borrower's account, even though this interpretation may be different from Borrower's own, and Borrower understands and agrees that Foothill shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower's instructions or those contained in the Letter of Credit or any modifications, amendments, or supplements thereto. Borrower understands that the L/C Guarantees may require Foothill to indemnify the issuing bank for certain costs or liabilities arising out of claims by Borrower against such issuing bank. Borrower hereby agrees to indemnify, save, defend, and hold Foothill harmless with respect to any loss, cost, expense (including reasonable attorneys fees), or liability incurred by Foothill under any L/C Guaranty as a result of Foothill's indemnification of any such issuing bank. (c) Borrower hereby authorizes and directs any bank that issues a letter of credit guaranteed by Foothill to deliver to Foothill all instruments, documents, and other writings and property received by the issuing bank pursuant to such letter of credit, and to accept and rely upon Foothill's instructions and agreements with respect to all matters arising in connection with such letter of credit and the related application. Borrower may or may not be the "applicant" or "account party" with respect to such letter of credit. (d) Any and all charges, commissions, fees, and costs incurred by Foothill relating to the letters of credit guaranteed by Foothill shall be considered Foothill Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrower to Foothill. (e) Immediately upon the termination of this Agreement, Borrower agrees to either (i) provide cash collateral to be held by Foothill in an amount equal to 102% of the maximum amount of Foothill's obligations under Letters of Credit, or (ii) cause to be delivered to Foothill releases of all of Foothill's obligations under outstanding Letters of Credit. At Foothill's discretion, any proceeds of Collateral received by Foothill after the occurrence and during the continuation of an Event of Default may be held as the cash collateral required by this Section 2.2(e). (f) If by reason of (i) any change in any applicable law, treaty, rule, or regulation or any change in the interpretation or application by any governmental authority of any such applicable law, treaty, rule, or regulation, or (ii) compliance by the issuing bank or Foothill with any direction, request, or requirement (irrespective of whether having the force of law) of any governmental authority or monetary authority including, without limitation, Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect (and any successor thereto): (A) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letters of Credit issued hereunder, or (B) there shall be imposed on the issuing bank or Foothill any other condition regarding any letter of credit, or Letter of Credit, as applicable, issued pursuant hereto; and the result of the foregoing is to increase, directly or indirectly, the cost to the issuing bank or Foothill of issuing, making, guaranteeing, or maintaining any letter of credit, or Letter of Credit, as applicable, or to reduce the amount receivable in respect thereof by such issuing bank or Foothill, then, and in any such case, Foothill may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrower, and Borrower shall pay on demand such amounts as the issuing bank or Foothill may specify to be necessary to compensate the issuing bank or Foothill for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate set forth in Section 2.6(a)(i) or (c)(i), as applicable. The determination by the issuing bank or Foothill, as the case may be, of any amount due pursuant to this Section 2.2(f), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto. 2.3 Term Loan. Foothill has agreed to make a term loan (the "Term Loan") to Borrower in the original principal amount of $20,000,000. The outstanding principal balance and all accrued and unpaid interest under the Term Loan shall not be due and payable until the earlier to occur of (a) the Maturity Date, and (b) the date of termination of this Agreement, whether by its terms, by acceleration, or otherwise. The unpaid principal balance of the Term Loan may not be prepaid in whole or in part. All amounts outstanding under the Term Loan shall constitute Obligations. 2.4 [Intentionally omitted]. 2.5 Overadvances. If, at any time or for any reason, the amount of Obligations owed by Borrower to Foothill pursuant to Sections 2.1 and 2.2 is greater than either the Dollar or percentage limitations set forth in Sections 2.1 or 2.2 (an "Overadvance"), Borrower immediately shall pay to Foothill, in cash, the amount of such excess to be used by Foothill first, to repay Advances outstanding under Section 2.1 and, thereafter, to be held by Foothill as cash collateral to secure Borrower's obligation to repay Foothill for all amounts paid pursuant to Letters of Credit. 2.6 Interest and Letter of Credit Fees: Rates, Payments, and Calculations. (a) Interest Rate. Except as provided in clause (b) below, all Obligations (except for undrawn Letters of Credit) shall bear interest at a per annum rate of 0.625 percentage points above the Reference Rate. (b) Letter of Credit Fee. Borrower shall pay Foothill a fee (in addition to the charges, commissions, fees, and costs set forth in Section 2.2(d)) equal to 1.0% per annum times the aggregate undrawn amount of all outstanding Letters of Credit. (c) Default Rate. Upon the occurrence and during the continuation of an Event of Default, all Obligations (except for undrawn Letters of Credit) shall bear interest at a per annum rate equal to 3.625 percentage points above the Reference Rate, and (ii) the Letter of Credit fee provided in Section 2.6(b) shall be increased to 4.0% per annum times the amount of the undrawn Letters of Credit that were outstanding during the immediately preceding month. (d) Minimum Interest. In no event shall the rate of interest chargeable hereunder for any day be less than 7.0% per annum. To the extent that interest accrued hereunder at the rate set forth herein would be less than the foregoing minimum daily rate, the interest rate chargeable hereunder for such day automatically shall be deemed increased to the minimum rate. (e) Payments. Interest and Letter of Credit fees payable hereunder shall be due and payable, in arrears, on the first day of each month during the term hereof. Borrower hereby authorizes Foothill, at its option, without prior notice to Borrower, to charge such interest and Letter of Credit fees, all Foothill Expenses (as and when incurred), the charges, commissions, fees, and costs provided for in Section 2.2(d) (as and when accrued or incurred), the fees and charges provided for in Section 2.11 (as and when accrued or incurred), and all installments or other payments due under the Term Loan or any Loan Document to Borrower's Loan Account, which amounts thereafter shall accrue interest at the rate then applicable to Advances hereunder. Any interest not paid when due shall be compounded and shall thereafter accrue interest at the rate then applicable to Advances hereunder. (f) Computation. The Reference Rate as of the date of this Agreement is 8.25% per annum. In the event the Reference Rate is changed from time to time hereafter, the applicable rate of interest hereunder automatically and immediately shall be increased or decreased by an amount equal to such change in the Reference Rate. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year for the actual number of days elapsed. (g) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrower and Foothill, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto as of the date of this Agreement, Borrower is and shall be liable only for the payment of such maximum as allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess. 2.7 Collection of Accounts. Borrower shall at all times maintain lockboxes (the "Lockboxes") and, immediately after the Closing Date, shall instruct all Account Debtors with respect to the Accounts, General Intangibles, and Negotiable Collateral of Borrower to remit all Collections in respect thereof to such Lockboxes. Borrower, Foothill, and the Lockbox Banks shall enter into the Lockbox Agreements, which among other things shall provide for the opening of a Lockbox Account for the deposit of Collections at a Lockbox Bank. Borrower agrees that all Collections and other amounts received by Borrower from any Account Debtor or any other source immediately upon receipt shall be deposited into a Lockbox Account. No Lockbox Agreement or arrangement contemplated thereby shall be modified by Borrower without the prior written consent of Foothill. Upon the terms and subject to the conditions set forth in the Lockbox Agreements, all amounts received in each Lockbox Account shall be wired each Business Day into an account (the "Foothill Account") maintained by Foothill at a depositary selected by Foothill. 2.8 Crediting Payments; Application of Collections. The receipt of any Collections by Foothill (whether from transfers to Foothill by the Lockbox Banks pursuant to the Lockbox Agreements or otherwise) immediately shall be applied provisionally to reduce the Obligations outstanding under Section 2.1, but shall not be considered a payment on account unless such Collection item is a wire transfer of immediately available federal funds and is made to the Foothill Account or unless and until such Collection item is honored when presented for payment. From and after the Closing Date, Foothill shall be entitled to charge Borrower for 1 Business Days of `clearance' or `float' at the rate set forth in Section 2.6(a)(i) or Section 2.6(c)(i), as applicable, on all Collections that are received by Foothill (regardless of whether forwarded by the Lockbox Banks to Foothill, whether provisionally applied to reduce the Obligations under Section 2.1, or otherwise). This across-the-board 1 Business Day clearance or float charge on all Collections is acknowledged by the parties to constitute an integral aspect of the pricing of Foothill's financing of Borrower, and shall apply irrespective of the characterization of whether receipts are owned by Borrower or Foothill, and whether or not there are any outstanding Advances, the effect of such clearance or float charge being the equivalent of charging 1 Business Days of interest on such Collections. Should any Collection item not be honored when presented for payment, then Borrower shall be deemed not to have made such payment, and interest shall be recalculated accordingly. Anything to the contrary contained herein notwithstanding, any Collection item shall be deemed received by Foothill only if it is received into the Foothill Account on a Business Day on or before 11:00 a.m. California time. If any Collection item is received into the Foothill Account on a non-Business Day or after 11:00 a.m. California time on a Business Day, it shall be deemed to have been received by Foothill as of the opening of business on the immediately following Business Day. 2.9 Designated Account. Foothill is authorized to make the Advances, the Letters of Credit, and the Term Loan under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person, or without instructions if pursuant to Section 2.6(e). Borrower agrees to establish and maintain the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Advances requested by Borrower and made by Foothill hereunder. Unless otherwise agreed by Foothill and Borrower, any Advance requested by Borrower and made by Foothill hereunder shall be made to the Designated Account. 2.10 Maintenance of Loan Account; Statements of Obligations. Foothill shall maintain an account on its books in the name of Borrower (the "Loan Account") on which Borrower will be charged with all Advances and the Term Loan made by Foothill to Borrower or for Borrower's account, including, accrued interest, Foothill Expenses, and any other payment Obligations of Borrower. In accordance with Section 2.8, the Loan Account will be credited with all payments received by Foothill from Borrower or for Borrower's account, including all amounts received in the Foothill Account from any Lockbox Bank. Foothill shall render statements regarding the Loan Account to Borrower, including principal, interest, fees, and including an itemization of all charges and expenses constituting Foothill Expenses owing, and such statements shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrower and Foothill unless, within 30 days after receipt thereof by Borrower, Borrower shall deliver to Foothill written objection thereto describing the error or errors contained in any such statements. 2.11 Fees. Borrower shall pay to Foothill the following fees: (a) Closing Fee. On the Closing Date, a closing fee of $500,000; (b) Unused Line Fee. On the first day of each month after the Closing Date during the term of this Agreement, an unused line fee in an amount equal to 0.25% per annum times the Average Unused Portion of the Maximum Revolving Amount; (c) Annual Facility Fee. On the Closing Date and each anniversary of the Closing Date, an annual facility fee in an amount equal to 0.15% of the Maximum Amount; (d) Financial Examination, Documentation, and Appraisal Fees. Foothill's customary fee of $650 per day per examiner, plus out-of-pocket expenses for each financial analysis and examination (i.e., audits) of Borrower performed by personnel employed by Foothill; Foothill's customary appraisal fee of $1,500 per day per appraiser, plus out-of-pocket expenses for each appraisal of the Collateral performed by personnel employed by Foothill; and, the actual charges paid or incurred by Foothill if it elects to employ the services of one or more third Persons to perform such financial analyses and examinations (i.e., audits) of Borrower or to appraise the Collateral; and (e) Agency Fee. On the first day of each month after the Closing Date during the term of this Agreement, an agency fee in an amount equal to $12,500. 3. CONDITIONS; TERM OF AGREEMENT. 3.1 Conditions Precedent to the Initial Advance, and Letter of Credit, and the Term Loan. The obligation of Foothill to make the initial Advance, to issue the initial Letter of Credit, or to make the Term Loan is subject to the fulfillment, to the satisfaction of Foothill and its counsel, of each of the following conditions on or before the Closing Date: (a) the Closing Date shall occur on or before January 17, 1997; (b) Foothill shall have received confirmation of the filing of its financing statements and fixture filings; (c) Foothill shall have received each of the following documents, duly executed, and each such document shall be in full force and effect: (1) if and to the extent available on or before the Closing Date, the Lockbox Agreements; (2) the Disbursement Letter; (3) the Pay-Off Letter, together with UCC termination statements and other documentation evidencing the termination by Existing Lender of its Liens in and to the properties and assets of Borrower and its Subsidiaries and the termination of any lockbox or other dominion account arrangements in favor of Existing Lender; (4) either (y) the IG Australia Existing Lender Pay-Off Letter, together with termination statements and other documentation evidencing the termination by IG Australia Existing Lender of its Liens in and to the properties and assets of Borrower and its Subsidiaries, or (z) satisfactory evidence of the consent of IG Australia Existing Lender to the refinancing by Borrower of its Indebtedness owed to Existing Lender pursuant hereto and the transactions contemplated hereby; (5) the Mortgage on the Huntsville Property, and such Mortgage shall have been recorded in the office of the county recorder for Madison County, Alabama; and, if and to the extent available on or before the Closing Date, a Mortgage Policy in respect of the Huntsville Property assuring Foothill that the Mortgage on the Huntsville Property is a valid and enforceable first priority mortgage Lien on the Huntsville Property free and clear of all defects and encumbrances except Permitted Liens, and such Mortgage Policy shall otherwise be in form and substance reasonably satisfactory to Foothill; (6) the Aircraft Security Agreement; (7) the Copyright Security Agreement; (8) the Patent Security Agreement; (9) the Trademark Security Agreement; (10) the Pledge Agreement; and (11) the VCOC Letter; (d) if and to the extent available on or before the Closing Date, Foothill shall have received the original certificates representing or evidencing all of the Pledged Shares (as defined in the Pledge Agreement), together with stock powers or equivalent assignments with respect thereto duly endorsed in blank; (e) Foothill shall have received originals of the Meadlock Note and the Intercompany Notes, together with endorsements with respect thereto duly endorsed in blank; (f) Foothill shall have received a certificate from the Secretary of each Obligor attesting to the resolutions of such Obligor's Board of Directors authorizing its execution, delivery, and performance of the Loan Documents to which it is a party and authorizing specific officers of such Obligor to execute the same; (g) Foothill shall have received copies of each Obligor's Governing Documents, as amended, modified, or supplemented to the Closing Date, certified by the Secretary of such Obligor; (h) Foothill shall have received a certificate of status with respect to each Obligor, dated within 10 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Obligor, which certificate shall indicate that such Obligor is in good standing in such jurisdiction; (i) Foothill shall have received certificates of status with respect to Borrower, each dated within 15 days of the Closing Date, such certificates to be issued by the appropriate officer of the jurisdictions in which its failure to be duly qualified or licensed would constitute a Material Adverse Change, which certificates shall indicate that Borrower is in good standing in such jurisdictions; (j) Foothill shall have received a certificate of insurance, together with the endorsements thereto, as are required by Section 6.10, the form and substance of which shall be reasonably satisfactory to Foothill and its counsel; (k) Foothill shall have received an opinion of the Obligors' counsel in form and substance reasonably satisfactory to Foothill in its sole discretion; (l) after giving effect to the payment of fees due to Foothill on or before the Closing Date and the payment of the "Payoff Amount" (under and as defined in the Payoff Letter) to the Existing Lender, the sum of Borrower's Availability plus Borrower's unrestricted cash and cash equivalents shall not be less than Twenty Million Dollars ($20,000,000); (m) Foothill shall have received appraisals of the Real Property Collateral and appraisals of the Equipment, in each case satisfactory to Foothill; (n) Foothill shall have completed "field surveys" and location inspections of the Inventory, and the results of each of them shall be satisfactory to Foothill; (o) Foothill shall have completed reference checks regarding key employees and executive officers of Borrower, the results of which shall be satisfactory to Lender; (p) Foothill shall have received satisfactory evidence (which evidence may be in the form of a Certificate of the chief accounting officer or the chief financial officer of Borrower) that all tax returns required to be filed by Borrower have been timely filed and all taxes upon Borrower or its properties, assets, income, and franchises (including real property taxes and payroll taxes) have been paid prior to delinquency, except such taxes that are the subject of a Permitted Protest; and (q) all other documents and legal matters in connection with the transactions contemplated by this Agreement shall have been delivered, executed, or recorded and shall be in form and substance reasonably satisfactory to Foothill and its counsel. 3.2 Conditions Precedent to all Advances, all Letters of Credit, and the Term Loan. The following shall be conditions precedent to all Advances, all Letters of Credit, and the Term Loan hereunder: (a) the representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all respects on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); (b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof; and (c) no injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the extending of such credit shall have been issued and remain in force by any governmental authority against Borrower, Foothill, or any of their Affiliates. 3.3 Condition Subsequent. As a condition subsequent to initial closing hereunder, Borrower shall perform or cause to be performed the following (the failure by Borrower to so perform or cause to be performed constituting an Event of Default): (a) within 30 days of the Closing Date, deliver to Foothill the certified copies of the policies of insurance, together with the endorsements thereto, as are required by Section 6.10, the form and substance of which shall be reasonably satisfactory to Foothill and its counsel. (b) on or as soon as possible after the Closing Date (and, in any event, within 30 days of the Closing Date): (i) to the extent not available on or before the Closing Date under Section 3.1, Foothill shall have received a Mortgage Policy in respect of the Huntsville Property assuring Foothill that the Mortgage on the Huntsville Property is a valid and enforceable first priority mortgage Lien on the Huntsville Property free and clear of all defects and encumbrances except Permitted Liens, and such Mortgage Policy shall otherwise be in form and substance reasonably satisfactory to Foothill; and (ii) Foothill shall have received a phase- I environmental report and a real estate survey shall have been completed with respect to the Huntsville Property and copies thereof delivered to Foothill; the environmental consultants and surveyors retained for such reports or surveys, the scope of the reports or surveys, and the results thereof shall be acceptable to Foothill in its sole discretion; and (iii) to the extent not available on or before the Closing Date under Section 3.1, Foothill shall have received the Lockbox Agreements, duly executed, and each such document shall be in full force and effect. (c) upon the request of Foothill (if ever) after the Closing Date, within 60 days after the date of such request: (i) the Mortgage on the Chelmsford Property shall have been duly executed and delivered by Borrower, and the same shall be in full force and effect, and such Mortgage shall have been recorded in the office of the county recorder for Middlesex County, Massachusetts; (ii) Foothill shall have received supplemental opinions of Borrower's counsel, in form and substance satisfactory to Foothill in its sole discretion, in respect of the Mortgage on the Chelmsford Property; (iii) Foothill shall have received a preliminary title report in respect of the Chelmsford Property in form and substance reasonably satisfactory to Foothill; and (iv) Foothill shall have received a phase- I environmental report and a real estate survey shall have been completed with respect to the Chelmsford Property and copies thereof delivered to Foothill; the environmental consultants and surveyors retained for such reports or surveys, the scope of the reports or surveys, and the results thereof shall be acceptable to Foothill in its sole discretion. (d) upon the request of Foothill (if ever) after the Closing Date, within 30 days after the date of such request: (i) a Mortgage on any Real Property acquired by Borrower after the Closing Date shall have been duly executed and delivered by Borrower, and the same shall be in full force and effect, and such Mortgage shall have been recorded in the office of the county recorder for the county in which such Real Property is located; (ii) Foothill shall have received supplemental opinions of Borrower's counsel, in form and substance satisfactory to Foothill in its sole discretion, in respect of the Mortgage on such Real Property; (iii) Foothill shall have received a preliminary title report in respect of such Real Property in form and substance reasonably satisfactory to Foothill; and (iv) Foothill shall have received a phase- I environmental report and a real estate survey shall have been completed with respect to the such Real Property and copies thereof delivered to Foothill; the environmental consultants and surveyors retained for such reports or surveys, the scope of the reports or surveys, and the results thereof shall be acceptable to Foothill in its sole discretion. (e) in the event the Reston Sale/Leaseback is not consummated within 180 days of the Closing Date: (i) the Mortgage on the Reston Property shall have been duly executed and delivered by Borrower, and the same shall be in full force and effect, and such Mortgage shall have been recorded in the office of the county recorder for Fairfax County, Virginia; (ii) Foothill shall have received supplemental opinions of Borrower's counsel, in form and substance satisfactory to Foothill in its sole discretion, in respect of the Mortgage on the Reston Property; (iii) Foothill shall have received a preliminary title report in respect of the Reston Property in form and substance reasonably satisfactory to Foothill; and (iv) Foothill shall have received a phase- I environmental report and a real estate survey shall have been completed with respect to the Reston Property and copies thereof delivered to Foothill; the environmental consultants and surveyors retained for such reports or surveys, the scope of the reports or surveys, and the results thereof shall be acceptable to Foothill in its sole discretion. (f) within 60 days of either (i) the date that Borrower makes the Permitted Repayment Investment in respect of the indebtedness of IG Australia owing to the IG Australia Existing Lender or (ii) one or more Letters of Credit are issued to IG Australia Existing Lender in support of the indebtedness of IG Australia owing to IG Australia Existing Lender and IG Australia Existing Lender releases its Lien on the capital stock of IG Australia (in either case, the "IG Australia Payoff Date"), execute and deliver an appropriate supplement to the Pledge Agreement and deliver to Foothill possession of the original stock certificates, respecting 65% of the issued and outstanding shares of stock of IG Australia, together with stock powers with respect thereto endorsed in blank; provided, however, that to the extent, if any, that such shares are required to be pledged to the holder of any project financing indebtedness of IG Australia incurred after the IG Australia Payoff Date as security for such indebtedness, then, upon Borrower's written request therefor and with Foothill's prior written consent thereto (not to be unreasonably withheld), Foothill agrees to release its Lien on such shares; provided further, that if such holder will permit such subordination, then, notwithstanding the foregoing proviso, Foothill's Lien on such shares will not be released and will become a subordinate Lien pursuant to documentation in form and substance reasonably satisfactory to Foothill and such holder. (g) within 90 days of the Closing Date, Foothill shall have completed appraisals of the Equipment and the results of such appraisals shall be satisfactory to Foothill. (h) to the extent not available on or before the Closing Date under Section 3.1, Foothill shall have received, within 30 days of the Closing Date, the original certificates representing or evidencing all of the Pledged Shares (as defined in the Pledge Agreement), together with stock powers or equivalent assignments with respect thereto duly endorsed in blank; (i) from and after the Closing Date up until the date that is 90 days after the Closing Date, Borrower shall use its continued best efforts to obtain Collateral Access Agreements from lessors, warehousemen, bailees, and other third persons as Foothill may require. 3.4 Term. This Agreement shall become effective upon the execution and delivery hereof by Borrower and Foothill and shall continue in full force and effect for a term ending on January 7, 2000 (the "Maturity Date"). The foregoing notwithstanding, Foothill shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default. 3.5 Effect of Termination. On the date of termination of this Agreement, all Obligations (including contingent reimbursement obligations of Borrower with respect to any outstanding Letters of Credit) immediately shall become due and payable without notice or demand. No termination of this Agreement, however, shall relieve or discharge Borrower of Borrower's duties, Obligations, or covenants hereunder, and Foothill's continuing security interests in the Collateral shall remain in effect until all Obligations have been fully and finally discharged and Foothill's obligation to provide additional credit hereunder is terminated. 3.6 Early Termination by Borrower. Borrower has the option, at any time prior to the Maturity Date and upon 60 days prior written notice to Foothill, to terminate this Agreement by paying to Foothill, in cash, the Obligations (including an amount equal to 102% of the undrawn amount of the Letters of Credit), in full, together with a premium (the "Early Termination Premium") equal to (a) during the first 18 months after the Closing Date, the product of (i) 0.10% times (ii) the Maximum Amount times (iii) the number of months (including partial months) remaining until the Maturity Date, (b) during the next 6 months, $1,000,000, and (c) thereafter, $500,000. 3.7 Termination Upon Event of Default. If Foothill terminates this Agreement upon the occurrence of an Event of Default that intentionally is caused by Borrower for the purpose, in Foothill's reasonable judgment, of avoiding payment of the Early Termination Premium provided in Section 3.7, then, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of Foothill's lost profits as a result thereof, Borrower shall pay to Foothill upon the effective date of such termination, a premium in an amount equal to the Early Termination Premium. The Early Termination Premium shall be presumed to be the amount of damages sustained by Foothill as the result of the early termination and Borrower agrees that it is reasonable under the circumstances currently existing. The Early Termination Premium provided for in this Section 3.7 shall be deemed included in the Obligations. 4. CREATION OF SECURITY INTEREST. 4.1 Grant of Security Interest. (a) Borrower hereby grants to Foothill a continuing security interest in all currently existing and hereafter acquired or arising Personal Property Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Foothill's security interests in the Personal Property Collateral shall attach to all Personal Property Collateral without further act on the part of Foothill or Borrower. Anything contained in this Agreement or any other Loan Document to the contrary notwithstanding, except for Permitted Dispositions, Borrower has no authority, express or implied, to dispose of any item or portion of the Personal Property Collateral or the Real Property Collateral. Concurrent with the consummation of any Permitted Disposition, Foothill agrees to release its Liens on the subject property or asset (but not the proceeds from the Asset Disposition). (b) Anything in this Agreement and the other Loan Documents to the contrary notwithstanding, the foregoing grant of a security interest shall not extend to, and the term "Personal Property Collateral" shall not include, any General Intangible, Federal Account, or Permitted Other Investment that is now or hereafter held by Borrower as licensee, lessee, or otherwise, solely in the event and to the extent that: (i) as the proximate result of the foregoing grant of a security interest, Borrower's rights in or with respect to such General Intangible, Federal Account, or Permitted Other Investment would be forfeited or would become void, voidable, terminable, or revocable, or if Borrower would be deemed to have breached, violated, or defaulted the underlying license, lease, or other agreement that governs such General Intangible, Federal Account, or Permitted Other Investment, in each case, pursuant to the restrictions in the underlying lease, license, or other agreement that governs such General Intangible, Federal Account, or Permitted Other Investment; (ii) any such restriction shall be effective and enforceable under applicable law, including Section 9318(4) of the Code; and (iii) any such forfeiture, voidness, voidability, terminability, revocability, breach, violation, or default cannot be remedied by Borrower using its best efforts (but without any obligation to make any material expenditures of money or to commence legal proceedings); provided, however, that the foregoing grant of security interest shall extend to, and the term "Personal Property Collateral" shall include, (y) any and all proceeds of such General Intangible, Federal Account, or Permitted Other Investment to the extent that the assignment or encumbering of such proceeds is not so restricted, and (z) upon any such licensor, lessor, or other applicable party's consent with respect to any such otherwise excluded General Intangible, Federal Account, or Permitted Other Investment being obtained, thereafter such General Intangible, Federal Account, or Permitted Other Investment as well as any proceeds thereof that might theretofore have been excluded from such grant of a security interest and the term "Personal Property Collateral." (c) Anything in this Agreement or the other Loan Documents to the contrary notwithstanding and subject to Section 4.1(b), (i) the security interest granted in the Permitted Other Investments under Section 4.1(a) shall not attach unless and until a Triggering Event has occurred, at which time such security interest immediately and automatically shall attach without notice or demand or further act on the part of Foothill or Borrower, and (ii) Foothill agrees that Borrower need not deliver any Negotiable Collateral in respect of the Permitted Other Investments under Section 4.2 unless and until a Triggering Event has occurred. (d) Anything in this Agreement and the other Loan Documents to the contrary notwithstanding, the foregoing grant of a security interest shall not extend to, and the term "Personal Property Collateral" shall not include, any Excluded Foreign Subsidiary Securities or the assets or properties of any Foreign Subsidiary. 4.2 Negotiable Collateral. In the event that any Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral, Borrower, immediately upon the request of Foothill, shall endorse and deliver (or cause to be endorsed and delivered) physical possession of such Negotiable Collateral to Foothill. The foregoing notwithstanding, Borrower need not deliver any Negotiable Collateral in respect of any Permitted Toehold Investment with a value less than or equal to $500,000 unless and until there is a Triggering Event. 4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral. During a Triggering Event, Foothill or Foothill's designee may (a) notify customers or Account Debtors of Borrower that the Accounts, General Intangibles, or Negotiable Collateral have been assigned to Foothill or that Foothill has a security interest therein, and (b) collect the Accounts, General Intangibles, and Negotiable Collateral directly and charge the collection costs and expenses to the Loan Account. Borrower agrees that it will hold in trust for Foothill, as Foothill's trustee, any Collections that it receives and immediately will deliver said Collections to Foothill in their original form as received by it. 4.4 Delivery of Additional Documentation Required. (a) At any time upon the request of Foothill, Borrower shall (and shall cause its Subsidiaries to) execute and deliver to Foothill all financing statements, continuation financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, applications for title, affidavits, reports, notices, schedules of accounts, letters of authority, and all other documents (including documents required for compliance with the Assignment of Claims Act, 31 U.S.C. 3727 or any State's statutory counterpart thereto) that Foothill reasonably may request, in form reasonably satisfactory to Foothill, to perfect and continue perfected Foothill's security interests in the Collateral and the other properties and assets of Borrower and its Subsidiaries, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents. (b) In respect of each of the Securities Accounts of Borrower, if any, Foothill, Borrower, and each applicable financial intermediary or depositary shall enter into a control agreement that, among other things, provides that, from and after the giving of notice by Foothill to such financial intermediary or depositary, it shall take instructions solely from Foothill with respect to the applicable Securities Account and related securities entitlements or deposit account, as applicable. Foothill agrees that it will not give such notice unless a Triggering Event has occurred. Borrower agrees that it will not transfer assets out of such Securities Accounts or deposit accounts other than in the ordinary course of business and, if to another financial intermediary or depositary, unless Borrower, Foothill, and the substitute financial intermediary or depositary have entered into a control agreement of the type described above. No arrangement contemplated hereby shall be modified by Borrower without the prior written consent of Foothill. Upon the occurrence of a Triggering Event, Foothill may elect to notify the financial intermediary to liquidate the securities entitlements in such Securities Account and may elect to notify the financial intermediary or depositary to remit the proceeds in the Securities Account or deposit account to the Foothill Account. (c) Anything in this Agreement to the contrary notwithstanding, Foothill agrees that: (i) so long as no Triggering Event has occurred and is continuing, (y) Borrower need not execute and deliver to Foothill documents required for compliance with the Assignment of Claims Act, 31 U.S.C. 3727 or any State's statutory counterpart thereto in respect of any one underlying contract or series of related underlying contracts giving rise to less than $1,000,000 of Accounts of Borrower, and (z) Foothill agrees not to file notices or copies of assignments under the Assignment of Claims Act or any State's statutory counterpart thereto; and (ii) after the occurrence and during the continuance of a Triggering Event, (y) Borrower shall execute and deliver to Foothill all documents that Foothill may request, in form satisfactory to Foothill, required for compliance with the Assignment of Claims Act or any State's statutory counterpart thereto, irrespective of the amount of Accounts arising out of any underlying contract, and (z) Foothill may file any notices or copies of assignments under the Assignment of Claims Act or any State's statutory counterpart thereto. 4.5 Power of Attorney. Borrower hereby irrevocably makes, constitutes, and appoints Foothill (and any of Foothill's officers, employees, or agents designated by Foothill) as Borrower's true and lawful attorney, with power to (a) if Borrower refuses to, or fails timely to execute and deliver any of the documents described in Section 4.4, sign the name of that Borrower on any of the documents described in Section 4.4, (b) if there is a Triggering Event, sign that Borrower's name on any invoice or bill of lading relating to any Account, drafts against Account Debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to Account Debtors, (c) send requests for verification of Accounts, (d) endorse Borrower's name on any Collection item that may come into Foothill's possession, (e) at any time that an Event of Default has occurred and is continuing or Foothill deems itself insecure, notify the post office authorities to change the address for delivery of Borrower's mail to an address designated by Foothill, to receive and open all mail addressed to Borrower, and to retain all mail relating to the Collateral and forward all other mail to Borrower, (f) if there is a Triggering Event, make, settle, and adjust all claims under Borrower's policies of insurance and make all determinations and decisions with respect to such policies of insurance, and (g) if there is a Triggering Event, settle and adjust disputes and claims respecting the Accounts directly with Account Debtors, for amounts and upon terms that Foothill determines to be reasonable, and Foothill may cause to be executed and delivered any documents and releases that Foothill determines to be necessary. The appointment of Foothill as Borrower's attorney, and each and every one of Foothill's rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully and finally repaid and performed and Foothill's obligation to extend credit hereunder is terminated. 4.6 Right to Inspect. Foothill (through any of its officers, employees, or agents) shall have the right, from time to time hereafter to inspect Borrower's Books and to check, test, and appraise the Collateral in order to verify Borrower's financial condition or the amount, quality, value, condition of, or any other matter relating to, the Collateral. 5. REPRESENTATIONS AND WARRANTIES. In order to induce Foothill to enter into this Agreement, Borrower makes the following representations and warranties which shall be true, correct, and complete in all respects as of the Closing Date, and at and as of the date of the making of each Advance or Letter of Credit made thereafter, as though made on and as of the date of such Advance or Letter of Credit (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement: 5.1 No Encumbrances. Borrower has good and indefeasible title to the Collateral, free and clear of Liens except for Permitted Liens. 5.2 Eligible Accounts. The Eligible Accounts are bona fide existing obligations created by the sale and delivery of Inventory or the rendition of services to Account Debtors in the ordinary course of Borrower's business, unconditionally owed to Borrower without defenses, disputes, offsets, counterclaims, or rights of return or cancellation. The property giving rise to such Eligible Accounts has been delivered to the Account Debtor, or to the Account Debtor's agent for immediate shipment to and unconditional acceptance by the Account Debtor (except for returns, in the ordinary course of business, of products that fail to conform with standard specifications). Borrower has not received notice of actual or imminent bankruptcy, insolvency, or material impairment of the financial condition of any Account Debtor regarding any Eligible Account. 5.3 Eligible Domestic Inventory. All Eligible Domestic Inventory is of good and merchantable quality, free from defects. 5.4 Equipment. All of the Equipment is used or held for use in Borrower's business and is fit for such purposes. 5.5 Location of Inventory and Equipment. The Inventory and Equipment are not stored with a bailee, warehouseman, or similar party (without Foothill's prior written consent) and are located only at the locations identified on Schedule 6.12 or otherwise permitted by Section 6.12. 5.6 Inventory Records. Borrower keeps correct and accurate records itemizing and describing the kind, type, quality, and quantity of the Inventory, and Borrower's cost therefor. 5.7 Location of Chief Executive Office; FEIN. The chief executive office of Borrower is located at the address indicated in the preamble to this Agreement. Borrower's FEIN is 63-0573222. 5.8 Due Organization and Qualification; Subsidiaries. (a) Each Borrower is duly organized and existing and in good standing under the laws of the jurisdiction of its incorporation and qualified and licensed to do business in, and in good standing in, any state where the failure to be so licensed or qualified reasonably could be expected to have a Material Adverse Change. (b) Set forth on Schedule 5.8, is a complete and accurate list of Borrower's direct and indirect Subsidiaries, showing: (i) the jurisdiction of their organization; (ii) the number of shares or units of each class of common and preferred stock or other equity securities authorized for each of such Subsidiaries; and (iii) the number and the percentage of the outstanding shares or units of each such class owned directly or indirectly by Borrower. All of the outstanding capital stock or other equity securities of each such Subsidiary has been validly issued and is fully paid and non-assessable. (c) Except as set forth on Schedule 5.8, no capital stock or other equity securities (or any securities, instruments, warrants, options, purchase rights, conversion or exchange rights, calls, commitments or claims of any character convertible into or exercisable for capital stock or other equity securities) of any direct or indirect Subsidiary of Borrower is subject to the issuance of any security, instrument, warrant, option, purchase right, conversion or exchange right, call, commitment or claim of any right, title, or interest therein or thereto. (d) Set forth on Schedule 5.8 are, with respect to each Subsidiary of Borrower that is not a Foreign Subsidiary: (i) a description of the direct and indirect stockholders (or holders of equivalent equity interests) of each such Subsidiary; (ii) the total assets of each such Subsidiary; (iii) the amount of the net value of Borrower's direct or indirect investment in such Subsidiary; and (iv) a true, correct, and complete statement regarding whether each such Subsidiary's assets are comprised principally of (x) foreign assets, (y) securities of other Subsidiaries of Borrower, or (z) other operating assets. 5.9 Due Authorization; No Conflict. (a) The execution, delivery, and performance by Borrower of this Agreement and the Loan Documents to which it is a party have been duly authorized by all necessary corporate action. (b) The execution, delivery, and performance by Borrower of this Agreement and the Loan Documents to which it is a party do not and will not (i) violate any provision of federal, state, or local law or regulation (including Regulations G, T, U, and X of the Federal Reserve Board) applicable to Borrower, the Governing Documents of Borrower, or any order, judgment, or decree of any court or other Governmental Authority binding on Borrower, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation or material lease of Borrower, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any properties or assets of Borrower, other than Permitted Liens, or (iv) require any approval of stockholders or any approval or consent of any Person under any material contractual obligation of Borrower. (c) Other than the filing of appropriate financing statements, fixture filings, and mortgages, the execution, delivery, and performance by Borrower of this Agreement and the Loan Documents to which Borrower is a party do not and will not require any registration with, consent, or approval of, or (except for Borrower's filings with the Securities Exchange Commission in the ordinary course of Borrower's business) notice to, or other action with or by, any federal, state, foreign, or other Governmental Authority or other Person. (d) This Agreement and the Loan Documents to which Borrower is a party, and all other documents contemplated hereby and thereby, when executed and delivered by Borrower will be the legally valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganiza tion, moratorium, or similar laws relating to or limiting creditors' rights generally. (e) The Liens granted by Borrower to Foothill in and to its properties and assets pursuant to this Agreement and the other Loan Documents are validly created, perfected, and first priority Liens, subject only to Permitted Liens. 5.10 Litigation. There are no actions or proceedings pending by or against Borrower before any court or administrative agency and Borrower does not have knowledge or belief of any pending, threatened, or imminent litigation, governmental investigations, or claims, complaints, actions, or prosecutions involving Borrower or any guarantor of the Obligations, except for: (a) ongoing collection matters in which Borrower is the plaintiff; (b) matters disclosed on Schedule 5.10; and (c) matters arising after the date hereof that, if decided adversely to Borrower, would not have a Material Adverse Change. 5.11 No Material Adverse Change. All financial statements relating to Borrower or any guarantor of the Obligations that have been delivered by Borrower to Foothill have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and fairly present Borrower's (or such guarantor's, as applicable) financial condition as of the date thereof and Borrower's results of operations for the period then ended. There has not been a Material Adverse Change with respect to Borrower (or such guarantor, as applicable) since the date of the latest financial statements submitted to Foothill. 5.12 Solvency. Borrower is Solvent. No transfer of property is being made by Borrower and no obligation is being incurred by Borrower in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of Borrower. 5.13 Employee Benefits. None of Borrower, any of its Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any Benefit Plan, other than those listed on Schedule 5.13. Borrower, each of its Subsidiaries and each ERISA Affiliate have satisfied the minimum funding standards of ERISA and the IRC with respect to each Benefit Plan to which it is obligated to contribute. No ERISA Event has occurred nor has any other event occurred that may result in an ERISA Event that reasonably could be expected to result in a Material Adverse Change. None of Borrower or its Subsidiaries, or any ERISA Affiliate, is subject to any direct or indirect liability with respect to any Plan under any applicable law, treaty, rule, regulation, or agreement. None of Borrower or its Subsidiaries or any ERISA Affiliate is required to provide security to any Plan under Section 401(a)(29) of the IRC. 5.14 Environmental Condition. None of Borrower's properties or assets has ever been used by Borrower or, to the best of Borrower's knowledge, by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, except in compliance with all applicable laws and regulations in respect thereof. None of Borrower's properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, or a candidate for closure pursuant to any environmental protection statute. No Lien arising under any environmental protection statute has attached to any revenues or to any real or personal property owned or operated by Borrower. Except as set forth on Schedule 5.14, Borrower has not received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal or state governmental agency concerning any action or omission by Borrower resulting in the releasing or disposing of Hazardous Materials into the environment. 5.15 Securities Accounts. Borrower does not have or maintain any Securities Accounts. 6. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, so long as any credit hereunder shall be available and until full and final payment of the Obligations, and unless Foothill shall otherwise consent in writing, Borrower shall do all of the following: 6.1 Accounting System. Maintain one or more systems of accounting that enable Borrower to produce financial statements in accordance with GAAP, and maintain records pertaining to the Collateral that contain information as from time to time may be requested by Foothill. Borrower also shall keep a modern inventory reporting system that shows all additions, sales, claims, returns, and allowances with respect to the Inventory. 6.2 Collateral Reporting. Provide Foothill with the following documents at the following times in form satisfactory to Foothill: (a) on a monthly basis and, in any event, by no later than the 15th day of each month during the term of this Agreement (or, in the event that Borrower's then Availability is less than $10,000,000, on such more frequent basis as Foothill may require), a monthly accounts receivable roll-forward report and a detailed calculation of the Borrowing Base as of such date; (b) on a monthly basis and, in any event, by no later than the 15th day of each month during the term of this Agreement, a detailed aging, by total, of the Accounts, together with a reconciliation to the detailed calculation of the Borrowing Base previously provided to Foothill; (c) on a monthly basis and, in any event, by no later than the 15th day of each month during the term of this Agreement, a listing of Borrower's accounts payable, by vendor; (d) on a monthly basis and, in any event, by no later than the 15th day of each month during the term of this Agreement (or, in the event that Borrower's then Availability is less than $10,000,000, on such more frequent basis as Foothill may require), Inventory reports specifying Borrower's cost and the wholesale market value of its Inventory by category, including a monthly Inventory roll-forward report; (e) upon Foothill's reasonable request, copies of invoices in connection with the Accounts, credit memos, and remittance advices and reports in connection with the Accounts and for Inventory and Equipment acquired by Borrower, purchase orders and invoices; (f) in the event that Borrower's then Availability is less than $10,000,000, then upon Foothill's reasonable request, a sales journal, collection journal, and credit register since the last such schedule and copies of deposit slips, shipping and delivery documents in connection with the Accounts and for Inventory and Equipment acquired by Borrower; (g) on a quarterly basis, a detailed list of Borrower's customers; (h) on a monthly basis, a calculation of the Dilution for the prior month; (i) on a quarterly basis, a detailed report specifying each Permitted Toehold Investment, including the book value and market value thereof; (j) on a monthly basis, a detailed report specifying each Permitted Appraised Assets Disposition and Equipment replacement in respect thereof consummated since the last such report; (k) on a quarterly basis, a detailed report specifying the aggregate amount of Permitted Subsidiary Loans and Capital Contributions made by Borrower to date during the then current calendar year and the aggregate amount of Indebtedness then outstanding and permitted under Section 7.1(b), and (l) such other reports as to the Collateral or the financial condition of Borrower as Foothill may request from time to time. Original sales invoices evidencing daily sales shall be mailed by Borrower to each Account Debtor and, at Foothill's direction if there is a Triggering Event, the invoices shall indicate on their face that the Account has been assigned to Foothill and that all payments are to be made directly to Foothill. 6.3 Financial Statements, Reports, Certificates. Deliver to Foothill: (a) as soon as available, but in any event within 30 days after the end of each month during each of Borrower's fiscal years, a company prepared balance sheet, income statement, and statement of cash flow covering Borrower's operations during such period; and (b) as soon as available, but in any event within 90 days after the end of each of Borrower's fiscal years, financial statements of Borrower for each such fiscal year, audited by independent certified public accountants reasonably acceptable to Foothill and certified, without any qualifications, by such accountants to have been prepared in accordance with GAAP, together with a certificate of such accountants addressed to Foothill stating that such accountants do not have knowledge of the existence of any Default or Event of Default. Such audited financial statements shall include a balance sheet, profit and loss statement, and statement of cash flow and, if prepared, such accountants' letter to management. If Borrower is a parent company of one or more Subsidiaries, or Affiliates, or is a Subsidiary or Affiliate of another company, then, in addition to the financial statements referred to above, Borrower agrees to deliver such other information relative to such related entity as Foothill reasonably may request and, solely to the extent available, such financing statements on a consolidating basis so as to present Borrower and each such related entity separately. Together with the above, Borrower also shall deliver to Foothill Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual Reports, and Form 8-K Current Reports, and any other filings made by Borrower with the Securities and Exchange Commission, if any, within 1 Business Day of the date that the same are filed, or any other information that is provided by Borrower to its shareholders, and any other report reasonably requested by Foothill relating to the financial condition of Borrower. Each month, together with the financial statements provided pursuant to Section 6.3(a), Borrower shall deliver to Foothill a certificate signed by its chief financial officer to the effect that: (i) all financial statements delivered or caused to be delivered to Foothill hereunder have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and fairly present the financial condition of Borrower, (ii) the representations and warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of such certificate, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date), (iii) for each month that also is the date on which a financial covenant in Section 7.20 is to be tested, a Compliance Certificate demonstrating in reasonable detail compliance at the end of such period with the applicable financial covenants contained in Section 7.20, and (iv) on the date of delivery of such certificate to Foothill there does not exist any condition or event that constitutes a Default or Event of Default (or, in the case of clauses (i), (ii), or (iii), to the extent of any non- compliance, describing such non-compliance as to which he or she may have knowledge and what action Borrower has taken, is taking, or proposes to take with respect thereto). Borrower shall have issued written instructions to its independent certified public accountants authorizing them to communicate with Foothill and to release to Foothill whatever financial information concerning Borrower that Foothill may request. Borrower hereby irrevocably authorizes and directs all auditors, accountants, or other third parties to deliver to Foothill, at Borrower's expense, copies of Borrower's financial statements, papers related thereto, and other accounting records of any nature in their possession, and to disclose to Foothill any information they may have regarding Borrower's business affairs and financial conditions. Each year, together with the financial statements provided pursuant to Section 6.3(b), Borrower shall deliver to Foothill a certificate signed by its chief financial officer specifying, as to each Foreign Subsidiary of Borrower, the amounts of assets and liabilities and stockholder's equity of such Foreign Subsidiary as of the end of the year then ended. Borrower hereby agrees that, in respect of any Foreign Subsidiary whose capitalization has materially improved (in Foothill's reasonable determination) and upon Foothill's reasonable request therefor, Borrower shall execute and deliver to Foothill a supplement to the Pledge Agreement pursuant to which Borrower shall pledge to Foothill all of Borrower's right, title, and interest in and to such Foreign Subsidiary's equity securities (other than the Excluded Foreign Portion) and deliver to Foothill all Negotiable Collateral, if any, in respect of same, unless and to the extent that doing so would, in any material respect, violate applicable law or cause a breach or default under any material contract, agreement, or arrangement binding on such Subsidiary. 6.4 Tax Returns. Deliver to Foothill copies of each of Borrower's future federal income tax returns, and any amendments thereto, within 30 days of the filing thereof with the Internal Revenue Service. 6.5 Guarantor Reports. Cause any guarantor of any of the Obligations to deliver its annual financial statements at the time when Borrower provides its audited financial statements to Foothill and copies of all federal income tax returns as soon as the same are available and in any event no later than 30 days after the same are required to be filed by law. 6.6 Returns. Cause returns and allowances, if any, as between Borrower and its Account Debtors to be on the same basis and in accordance with the usual customary practices of Borrower, as they exist at the time of the execution and delivery of this Agreement. If, at a time when no Event of Default has occurred and is continuing, any Account Debtor returns any Inventory to Borrower, Borrower promptly shall determine the reason for such return and, if Borrower accepts such return, issue a credit memorandum (with, upon reasonable request, a copy to be sent to Foothill) in the appropriate amount to such Account Debtor. If, at a time when an Event of Default has occurred and is continuing, any Account Debtor returns any Inventory to Borrower, Borrower promptly shall determine the reason for such return and, if Foothill consents (which consent shall not be unreasonably withheld), issue a credit memorandum (with a copy to be sent to Foothill) in the appropriate amount to such Account Debtor. 6.7 Title to Equipment. Upon Foothill's request after the occurrence of an Event of Default, Borrower immediately shall deliver to Foothill, properly endorsed, any and all evidences of ownership of, certificates of title, or applications for title to any items of Equipment; provided, however, that the foregoing shall not be deemed to prevent Permitted Dispositions to the extent otherwise permitted hereunder. 6.8 Maintenance of Equipment. Maintain the Equipment in good operating condition and repair (ordinary wear and tear excepted), and make all necessary replacements thereto so that the value and operating efficiency thereof shall at all times be maintained and preserved. Other than those items of Equipment that constitute fixtures on the Closing Date, Borrower shall not permit any item of Equipment to become a fixture to real estate or an accession to other property, and such Equipment shall at all times remain personal property. 6.9 Taxes. Cause all assessments and taxes, whether real, personal, or otherwise, due or payable by, or imposed, levied, or assessed against Borrower or any of its property to be paid in full, before delinquency or before the expiration of any extension period, except to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest. Borrower shall make due and timely payment or deposit of all such federal, state, and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Foothill, on demand, appropriate certificates attesting to the payment thereof or deposit with respect thereto. Borrower will make timely payment or deposit of all tax payments and withholding taxes required of it by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Foothill with proof satisfactory to Foothill indicating that Borrower has made such payments or deposits. 6.10 Insurance. (a) At its expense, keep the Personal Property Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as are ordinarily insured against by other owners in similar businesses. Borrower also shall maintain business interruption, public liability, product liability, and property damage insurance relating to Borrower's ownership and use of the Personal Property Collateral, as well as insurance against larceny, embezzlement, and criminal misappropriation. (b) At its expense, obtain and maintain (i) insurance of the type necessary to insure the Improvements and Chattels (as such terms are defined in the Mortgages), for the full replacement cost thereof, against any loss by fire, lightning, windstorm, hail, explosion, aircraft, smoke damage, vehicle damage, earthquakes, elevator collision, and other risks from time to time included under "extended coverage" policies, in such amounts as Foothill may require, but in any event in amounts sufficient to prevent Borrower from becoming a co-insurer under such policies, (ii) combined single limit bodily injury and property damages insurance against any loss, liability, or damages on, about, or relating to each parcel of Real Property Collateral, in an amount satisfactory to Foothill; (iii) business rental insurance covering annual receipts for a 12 month period for each parcel of Real Property Collateral; and (iv) insurance for such other risks as Foothill may require. Replacement costs, at Foothill's option, may be redetermined by an insurance appraiser, satisfactory to Foothill, not more frequently than once every 12 months at Borrower's cost. (c) All such policies of insurance shall be in such form, with such companies, and in such amounts as may be reasonably satisfactory to Foothill. All hazard insurance and such other insurance as Foothill shall specify, shall contain a Form 438BFU mortgagee endorsement, or an equivalent endorsement satisfactory to Foothill, showing Foothill as sole loss payee thereof, and shall contain a waiver of warranties. Every policy of insurance referred to in this Section 6.10 shall contain an agreement by the insurer that it will not cancel such policy except after 30 days prior written notice to Foothill and that any loss payable thereunder shall be payable notwithstanding any act or negligence of Borrower or Foothill which might, absent such agreement, result in a forfeiture of all or a part of such insurance payment and notwithstanding (i) occupancy or use of the Real Property Collateral for purposes more hazardous than permitted by the terms of such policy, (ii) any foreclosure or other action or proceeding taken by Foothill pursuant to the Mortgages upon the happening of an Event of Default, or (iii) any change in title or ownership of the Real Property Collateral. Borrower shall deliver to Foothill certified copies of such policies of insurance and evidence of the payment of all premiums therefor. (d) Original policies or certificates thereof satisfactory to Foothill evidencing such insurance shall be delivered to Foothill at least 10 days prior to the expiration of the existing or preceding policies. Borrower shall give Foothill prompt notice of any loss covered by such insurance, and, upon the occurrence and during the continuance of an Event of Default, Foothill shall have the right to adjust any loss. Foothill shall have the exclusive right to adjust all losses payable under any such insurance policies without any liability to Borrower whatsoever in respect of such adjustments. Any monies received as payment for any loss under any insurance policy including the insurance policies mentioned above, shall be paid over to Foothill to be applied at the option of Foothill either to the prepayment of the Obligations without premium, in such order or manner as Foothill may elect, or shall be disbursed to Borrower under stage payment terms satisfactory to Foothill for application to the cost of repairs, replacements, or restorations. All repairs, replacements, or restorations shall be effected with reasonable promptness and shall be of a value at least equal to the value of the items or property destroyed prior to such damage or destruction. Upon the occurrence of an Event of Default, Foothill shall have the right to apply all prepaid premiums to the payment of the Obligations in such order or form as Foothill shall determine. (e) Borrower shall not take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 6.10, unless Foothill is included thereon as named insured with the loss payable to Foothill under a standard California 438BFU (NS) Mortgagee endorsement, or its local equivalent. Borrower immediately shall notify Foothill whenever such separate insurance is taken out, specifying the insurer thereunder and full particulars as to the policies evidencing the same, and originals of such policies immediately shall be provided to Foothill. 6.11 No Setoffs or Counterclaims. Make payments hereunder and under the other Loan Documents by or on behalf of Borrower without setoff or counterclaim and free and clear of, and without deduction or withholding for or on account of, any federal, state, or local taxes. 6.12 Location of Inventory and Equipment. Keep the Inventory and Equipment only at the locations identified on Schedule 6.12; provided, however, that Borrower may amend Schedule 6.12 so long as such amendment occurs by written notice to Foothill not less than 30 days prior to the date on which the Inventory or Equipment is moved to such new location, so long as such new location is within the continental United States, and so long as, at the time of such written notification, Borrower provides any financing statements or fixture filings necessary to perfect and continue perfected Foothill's security interests in such assets and also provides to Foothill a Collateral Access Agreement. 6.13 Compliance with Laws. Comply with the requirements of all applicable laws, rules, regulations, and orders of any governmental authority, including the Fair Labor Standards Act and the Americans With Disabilities Act, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, would not have and could not reasonably be expected to have a Material Adverse Change. 6.14 Employee Benefits. (a) Promptly, and in any event within 10 Business Days after Borrower or any of its Subsidiaries knows or has reason to know that an ERISA Event has occurred that reasonably could be expected to result in a Material Adverse Change, a written statement of the chief financial officer of Borrower describing such ERISA Event and any action that is being taking with respect thereto by Borrower, any such Subsidiary or ERISA Affiliate, and any action taken or threatened by the IRS, Department of Labor, or PBGC. Borrower or such Subsidiary, as applicable, shall be deemed to know all facts known by the administrator of any Benefit Plan of which it is the plan sponsor, (ii) promptly, and in any event within 3 Business Days after the filing thereof with the IRS, a copy of each funding waiver request filed with respect to any Benefit Plan and all communications received by Borrower, any of its Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate with respect to such request, and (iii) promptly, and in any event within 3 Business Days after receipt by Borrower, any of its Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate, of the PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies of each such notice. (b) Cause to be delivered to Foothill, upon Foothill's request, each of the following: (i) a copy of each Plan (or, where any such plan is not in writing, complete description thereof) (and if applicable, related trust agreements or other funding instruments) and all amendments thereto, all written interpretations thereof and written descriptions thereof that have been distributed to employees or former employees of Borrower or its Subsidiaries; (ii) the most recent determination letter issued by the IRS with respect to each Benefit Plan; (iii) for the three most recent plan years, annual reports on Form 5500 Series required to be filed with any governmental agency for each Benefit Plan; (iv) all actuarial reports prepared for the last three plan years for each Benefit Plan; (v) a listing of all Multiemployer Plans, with the aggregate amount of the most recent annual contributions required to be made by Borrower or any ERISA Affiliate to each such plan and copies of the collective bargaining agreements requiring such contributions; (vi) any information that has been provided to Borrower or any ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan; and (vii) the aggregate amount of the most recent annual payments made to former employees of Borrower or its Subsidiaries under any Retiree Health Plan. 6.15 Leases. Pay when due all rents and other amounts payable under any leases to which Borrower is a party or by which Borrower's properties and assets are bound, unless such payments are the subject of a Permitted Protest. To the extent that Borrower fails timely to make payment of such rents and other amounts payable when due under its leases, Foothill shall be entitled, in its discretion, to reserve an amount equal to such unpaid amounts against the Borrowing Base. 7. NEGATIVE COVENANTS. Borrower covenants and agrees that, so long as any credit hereunder shall be available and until full and final payment of the Obligations, Borrower will not to do any of the following without Foothill's prior written consent: 7.1 Indebtedness. Create, incur, assume, permit, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except: (a) Indebtedness evidenced by this Agreement, together with Indebtedness to issuers of letters of credit that are the subject of L/C Guarantees; (b) (i) unsecured guarantees of indebtedness of Borrower's Subsidiaries; and (ii) unsecured back-to-back letters of credit or letter of credit guarantees to issuers of underlying letters of credit, the account parties of which are Borrower's Foreign Subsidiaries, that are not the subject of L/C Guarantees; provided, however, that the aggregate amount of such Indebtedness at any one time outstanding permitted under this Section 7.1(b) shall not exceed $50,000,000; (c) Indebtedness set forth on Schedule 7.1; (d) unsecured Indebtedness of Borrower owing to one or more of its Subsidiaries; provided, however, that upon the request of Foothill, Borrower shall cause each of its Subsidiaries that is a holder of such Indebtedness to execute and deliver to Foothill a subordination agreement, in form and substance satisfactory to Foothill, in respect of such Indebtedness; (e) unsecured Indebtedness evidenced by Interest Rate Agreements and Currency Protection Agreements entered into by Borrower in the ordinary course of its business consistent with past practices and entered into in connection with the operational needs of Borrower's business and not for speculative purposes; (f) Indebtedness secured by Permitted Liens; and (g) refinancings, renewals, or extensions of Indebtedness permitted under clauses (c), (e), and (f) of this Section 7.1 (and continuance or renewal of any Permitted Liens associated therewith) so long as: (i) the terms and conditions of such refinancings, renewals, or extensions do not materially impair the prospects of repayment of the Obligations by Borrower, (ii) the net cash proceeds of such refinancings, renewals, or extensions do not result in an increase in the aggregate principal amount of the Indebtedness so refinanced, renewed, or extended, (iii) such refinancings, renewals, refundings, or extensions do not result in a shortening of the average weighted maturity of the Indebtedness so refinanced, renewed, or extended, and (iv) to the extent that Indebtedness that is refinanced was subordinated in right of payment to the Obligations, then the subordination terms and conditions of the refinancing Indebtedness must be at least as favorable to Foothill as those applicable to the refinanced Indebtedness. 7.2 Liens. Create, incur, assume, or permit to exist, directly or indirectly, any Lien on or with respect to any of its property or assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens (including Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is refinanced under Section 7.1(g) and so long as the replacement Liens only encumber those assets or property that secured the original Indebtedness). Without limiting the generality of the foregoing, Borrower agrees not to create, incur, assume, or permit to exist, directly or indirectly, any Lien on or with respect to the equity securities of any Subsidiary of Borrower and the equity securities evidencing any Permitted Toehold Investment (except for Liens thereon in favor of Foothill and Liens expressly permitted hereunder on the equity securities of IG Australia). 7.3 Restrictions on Fundamental Changes. (a) Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its capital stock; (b) liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution); or (c) except for Permitted Dispositions, convey, sell, assign, lease, transfer, or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its property or assets. 7.4 Disposal of Assets. Except for Permitted Dispositions, make any Asset Disposition. 7.5 Change Name. Change Borrower's name, FEIN, corporate structure (within the meaning of Section 9402(7) of the Code), or identity, or add any new fictitious name. 7.6 [intentionally omitted]. 7.7 Nature of Business. Make any change in the principal nature of Borrower's business. 7.8 Prepayments and Amendments. (a) Except in connection with a refinancing permitted by Section 7.1(g), prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness owing to any third Person, other than the Obligations in accordance with this Agreement, and (b) Directly or indirectly, amend, modify, alter, increase, or change any of the terms or conditions of any agreement, instrument, document, indenture, or other writing evidencing or concerning Indebtedness permitted under Sections 7.1(b), (c), (d), (e), or (f), except for any amendment, modification, waiver, or consent the effect of which would be to: (i) extend the maturity of all or part of the remaining scheduled payments of principal outstanding thereunder; (ii) make any covenant or default contained therein less stringent; (iii) decrease the interest rate or interest rate margin or the default interest rate or interest rate margin, or both; (iv) amends or modify any other terms thereof so long as the amendments or modifications referenced in this clause (iv) are not in the aggregate materially more expensive, burdensome, or otherwise adverse to Borrower or Foothill. 7.9 Change of Control. Cause, permit, or suffer, directly or indirectly, any Change of Control. 7.10 Consignments. Consign any Inventory or sell any Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale; provided, however, that the foregoing shall not prevent Borrower from consigning Inventory with a value not to exceed $500,000 at any one time outstanding, in the ordinary course of Borrower's business, consistent with past practices, so long as at the time of any such consignment, Borrower shall take such steps as may be necessary to ensure that such consigned Inventory is not subject to the claims of the consignees' creditors or that Borrower has priority over any perfected security interests in the inventory of such consignee. 7.11 Distributions. Make any distribution or declare or pay any dividends (in cash or other property, other than capital stock) on, or purchase, acquire, redeem, or retire any of Borrower's capital stock, of any class, whether now or hereafter outstanding. 7.12 Accounting Methods. Modify or change significantly its method of accounting or enter into, modify, or terminate any agreement currently existing, or at any time hereafter entered into with any third party accounting firm or service bureau for the preparation or storage of Borrower's accounting records without said accounting firm or service bureau agreeing to provide Foothill information regarding the Collateral or Borrower's financial condition. Borrower waives the right to assert a confidential relationship, if any, it may have with any accounting firm or service bureau in connection with any information requested by Foothill pursuant to or in accordance with this Agreement, and agrees that Foothill may contact directly any such accounting firm or service bureau in order to obtain such information. 7.13 Investments. Except for Permitted Investments and Permitted Dispositions, directly or indirectly make, acquire, or incur any liabilities (including contingent obligations) for or in connection with (a) the acquisition of the securities (whether debt or equity) of, or other interests in, a Person, (b) loans, advances, capital contributions, or transfers of property to a Person, or (c) the acquisition of all or substantially all of the properties or assets of a Person. 7.14 Transactions with Affiliates. Except for Permitted Investments, directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for transactions that are in the ordinary course of Borrower's business, upon fair and reasonable terms, that are fully disclosed to Foothill, and that are no less favorable to Borrower than would be obtained in a comparable arm's length transaction with a non-Affiliate. 7.15 Suspension. Suspend or go out of a substantial portion of its business. 7.16 [intentionally omitted]. 7.17 Use of Proceeds. Use the proceeds of the Advances and the Term Loan made hereunder for any purpose other than (a) on the Closing Date, (i) to repay in full the outstanding principal, accrued interest, and accrued fees and expenses owing to Existing Lender, and (ii) to pay transactional costs and expenses incurred in connection with this Agreement, and (b) thereafter, consistent with the terms and conditions hereof, for its lawful and permitted corporate purposes. 7.18 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees. Relocate its chief executive office to a new location without providing 30 days prior written notification thereof to Foothill and so long as, at the time of such written notification, Borrower provides any financing statements or fixture filings necessary to perfect and continue perfected Foothill's security interests and also provides to Foothill a Collateral Access Agreement with respect to such new location. The Inventory and Equipment shall not at any time now or hereafter be stored with a bailee, warehouseman, or similar party without Foothill's prior written consent. 7.19 No Prohibited Transactions Under ERISA. Directly or indirectly: (a) engage, or permit any Subsidiary of Borrower to engage, in any prohibited transaction which is reasonably likely to result in a civil penalty or excise tax described in Sections 406 of ERISA or 4975 of the IRC for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the Department of Labor; (b) permit to exist with respect to any Benefit Plan any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the IRC), whether or not waived; (c) fail, or permit any Subsidiary of Borrower to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; (d) terminate, or permit any Subsidiary of Borrower to terminate, any Benefit Plan where such event would result in any liability of Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV of ERISA; (e) fail, or permit any Subsidiary of Borrower to fail, to make any required contribution or payment to any Multiemployer Plan; (f) fail, or permit any Subsidiary of Borrower to fail, to pay any required installment or any other payment required under Section 412 of the IRC on or before the due date for such installment or other payment; 7.(yyyy) amend, or permit any Subsidiary of Borrower to amend, a Plan resulting in an increase in current liability for the plan year such that either of Borrower, any Subsidiary of Borrower or any ERISA Affiliate is required to provide security to such Plan under Section 401(a)(29) of the IRC; or (h) withdraw, or permit any Subsidiary of Borrower to withdraw, from any Multiemployer Plan where such withdrawal is reasonably likely to result in any liability of any such entity under Title IV of ERISA; which, individually or in the aggregate, results in or reasonably would be expected to result in a claim against or liability of Borrower, any of its Subsidiaries or any ERISA Affiliate in excess of $1,500,000. 7.20 Financial Covenants. Fail to maintain: (a) Current Ratio. A ratio of Consolidated Current Assets divided by Consolidated Current Liabilities of at least 1.0: 1.0, measured on a fiscal quarter-end basis; and (b) Net Worth. Net Worth of at least $325,000,000, measured on a fiscal quarter-end basis. 7.21 Capital Expenditures. Make capital expenditures in any fiscal year in excess of $80,000,000. 8. EVENTS OF DEFAULT. Any one or more of the following events shall constitute an event of default (each, an "Event of Default") under this Agreement: 8.1 If Borrower fails to pay when due and payable or when declared due and payable, any portion of the Obligations (whether of principal, interest (including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts), fees and charges due Foothill, reimbursement of Foothill Expenses, or other amounts constituting Obligations); 8.2 (a) If Borrower fails or neglects to perform, keep, or observe, in any material respect, any term, provision, condition, covenant, or agreement contained in Sections 6.2 (Collateral Reports) or 6.3 (Financial Statements) of this Agreement and such failure continues for a period of five (5) days from the date Foothill sends Borrower telephonic or written notice of such failure or neglect; (b) If Borrower fails or neglects to perform, keep, or observe, in any material respect, any term, provision, condition, covenant, or agreement contained in Sections 6.4 (Tax Returns), 6.5 (Guarantor Reports), 6.7 (Title to Equipment), 6.12 (Location of Inventory and Equipment), 6.13 (Compliance with Laws), 6.14 (Employee Benefits), or 6.15 (Leases) of this Agreement and such failure continues for a period of fifteen (15) days from the date of such failure or neglect; (c) If Borrower fails or neglects to perform, keep, or observe, in any material respect, any term, provision, condition, covenant, or agreement contained in Sections 6.1 (Accounting System), 6.6 (Returns), or 6.8 (Maintenance of Equipment) of this Agreement and such failure continues for a period of fifteen (15) days from the date Foothill sends Borrower telephonic or written notice of such failure or neglect; or (d) If Borrower fails or neglects to perform, keep, or observe, in any material respect, any other term, provision, condition, covenant, or agreement contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Foothill (other than any such term, provision, condition, covenant, or agreement that is the subject of another provision of this Section 8); 8.3 If there is a Material Adverse Change; 8.4 If any material portion of Borrower's properties or assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any third Person; 8.5 If an Insolvency Proceeding is commenced by Borrower; 8.6 If an Insolvency Proceeding is commenced against Borrower and any of the following events occur: (a) such Borrower consents to the institution of the Insolvency Proceeding against it; (b) the petition commencing the Insolvency Proceeding is not timely controverted; (c) the petition commencing the Insolvency Proceeding is not dismissed within 45 calendar days of the date of the filing thereof; provided, however, that, during the pendency of such period, Foothill shall be relieved of its obligation to extend credit hereunder; (d) an interim trustee is appointed to take possession of all or a substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, Borrower; or (e) an order for relief shall have been issued or entered therein; 8.7 If Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs; 8.8 (a) If a notice of Lien, levy, or assessment for more than $1,500,000 is filed of record with respect to any of Borrower's properties or assets by the United States, or if any taxes or debts owing for an amount in excess of $1,500,000 at any time hereafter to the United States becomes a lien, whether choate or otherwise, upon any of Borrower's properties or assets; provided, however, that Foothill shall be entitled to create a reserve against the Borrowing Base in an amount sufficient to discharge such lien, levy, or assessment and any and all penalties or interest payable in connection therewith; or (b) If a notice of Lien, levy, or assessment for more than $1,500,000 is filed of record with respect to any of Borrower's properties or assets by any state, county, municipal, or other non-federal governmental agency, or if any taxes or debts owing for an amount in excess of $1,500,000 at any time hereafter to any one or more of such entities becomes a lien, whether choate or otherwise, upon any of Borrower's or any of its Subsidiaries' properties or assets and, in any such case, such taxes or debts are not the subject of a Permitted Protest, and the lien, levy, or assessment is not released, discharged, or bonded against before the earlier of 30 days of the date it first arises or 5 days of the date when such property or asset is subject to being forfeited; provided, however, that Foothill shall be entitled to create a reserve against the Borrowing Base in an amount sufficient to discharge such lien, levy, or assessment and any and all penalties or interest payable in connection therewith. 8.9 If a judgment or other claim for an amount in excess of $1,500,000 becomes a Lien or encumbrance upon any material portion of Borrower's properties or assets; 8.10 If there is a default in any material agreement to which Borrower is a party with one or more third Persons and such default (a) occurs at the final maturity of the obligations thereunder, or (b) results in a right by such third Person(s), irrespective of whether exercised, to accelerate the maturity of Borrower's obligations thereunder or to terminate the subject agreement; 8.11 If Borrower makes any payment on account of Indebtedness that has been contractually subordinated in right of payment to the payment of the Obligations, except to the extent such payment is permitted by the terms of the subordination provisions applicable to such Indebtedness; 8.12 If any material misstatement or misrepresentation exists now or hereafter in any warranty, representation, statement, or report made to Foothill by Borrower or any officer, employee, agent, or director of Borrower, or if any such warranty or representation is withdrawn; or 8.13 If the obligation of M&S or IG Delaware under the Pledge Agreement is limited or terminated by operation of law or by such Person thereunder, or any such Person becomes the subject of an Insolvency Proceeding. 9. FOOTHILL'S RIGHTS AND REMEDIES. 9.1 Rights and Remedies. Upon the occurrence, and during the continuation, of an Event of Default Foothill may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower: (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable; (b) Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement, under any of the Loan Documents, or under any other agreement between Borrower and Foothill; (c) Terminate this Agreement and any of the other Loan Documents as to any future liability or obligation of Foothill, but without affecting Foothill's rights and security interests in the Personal Property Collateral or the Real Property Collateral and without affecting the Obligations; (d) Settle or adjust disputes and claims directly with Account Debtors for amounts and upon terms which Foothill considers advisable, and in such cases, Foothill will credit Borrower's Loan Account with only the net amounts received by Foothill in payment of such disputed Accounts after deducting all Foothill Expenses incurred or expended in connection therewith; (e) Cause Borrower to hold all returned Inventory in trust for Foothill, segregate all returned Inventory from all other property of Borrower or in Borrower's possession and conspicuously label said returned Inventory as the property of Foothill; (f) Without notice to or demand upon Borrower, make such payments and do such acts as Foothill considers necessary or reasonable to protect its security interests in the Collateral. Borrower agrees to assemble the Personal Property Collateral if Foothill so requires, and to make the Personal Property Collateral available to Foothill as Foothill may designate. Borrower authorizes Foothill to enter the premises where the Personal Property Collateral is located, to take and maintain possession of the Personal Property Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or Lien that in Foothill's determination appears to conflict with its security interests and to pay all expenses incurred in connection therewith. With respect to any of Borrower's owned or leased premises, Borrower hereby grants Foothill a license to enter into possession of such premises and to occupy the same, without charge, for up to 120 days in order to exercise any of Foothill's rights or remedies provided herein, at law, in equity, or otherwise; (g) Without notice to Borrower (such notice being expressly waived by Borrower), and without constituting a retention of any collateral in satisfaction of an obligation (within the meaning of Section 9505 of the Code), set off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Foothill (including any amounts received in the Lockbox Accounts), or (ii) indebtedness at any time owing to or for the credit or the account of Borrower held by Foothill; (h) Hold, as cash collateral, any and all balances and deposits of Borrower held by Foothill, and any amounts received in the Lockbox Accounts, to secure the full and final repayment of all of the Obligations; (i) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Personal Property Collateral. Borrower hereby grants to Foothill a license or other right to use, without charge, Borrower's labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Personal Property Collateral, in completing production of, advertising for sale, and selling any Personal Property Collateral and Borrower's rights under all licenses and all franchise agreements shall inure to Foothill's benefit; (j) Sell the Personal Property Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including any of Borrower's premises) as Foothill determines is commercially reasonable. It is not necessary that the Personal Property Collateral be present at any such sale; (k) Foothill shall give notice of the disposition of the Personal Property Collateral as follows: (1) Foothill shall give the applicable Borrower and each holder of a security interest in the Personal Property Collateral who has filed with Foothill a written request for notice, a notice in writing of the time and place of public sale, or, if the sale is a private sale or some other disposition other than a public sale is to be made of the Personal Property Collateral, then the time on or after which the private sale or other disposition is to be made; (2) The notice shall be personally delivered or mailed, postage prepaid, to such Borrower as provided in Section 12, at least 5 days before the date fixed for the sale, or at least 5 days before the date on or after which the private sale or other disposition is to be made; no notice needs to be given prior to the disposition of any portion of the Personal Property Collateral that is perishable or threatens to decline speedily in value or that is of a type customarily sold on a recognized market. Notice to Persons other than such Borrower claiming an interest in the Personal Property Collateral shall be sent to such addresses as they have furnished to Foothill; (3) If the sale is to be a public sale, Foothill also shall give notice of the time and place by publishing a notice one time at least 5 days before the date of the sale in a newspaper of general circulation in the county in which the sale is to be held; (l) Foothill may credit bid and purchase at any public sale; and (m) Any deficiency that exists after disposition of the Personal Property Collateral as provided above will be paid immediately by Borrower. Any excess will be returned, without interest and subject to the rights of third Persons, by Foothill to Borrower. 9.2 Remedies Cumulative. Foothill's rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Foothill shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Foothill of one right or remedy shall be deemed an election, and no waiver by Foothill of any Event of Default shall be deemed a continuing waiver. No delay by Foothill shall constitute a waiver, election, or acquiescence by it. 10. TAXES AND EXPENSES. If Borrower fails to pay any monies (whether taxes, assessments, insurance premiums, or, in the case of leased properties or assets, rents or other amounts payable under such leases) due to third Persons, or fails to make any deposits or furnish any required proof of payment or deposit, all as required under the terms of this Agreement, then, to the extent that Foothill determines that such failure by such Borrower could result in a Material Adverse Change, in its discretion and without prior notice to Borrower, Foothill may do any or all of the following: (a) make payment of the same or any part thereof; (b) set up such reserves in Borrower's Loan Account as Foothill deems necessary to protect Foothill from the exposure created by such failure; or (c) obtain and maintain insurance policies of the type described in Section 6.10, and take any action with respect to such policies as Foothill deems prudent. Any such amounts paid by Foothill shall constitute Foothill Expenses. Any such payments made by Foothill shall not constitute an agreement by Foothill to make similar payments in the future or a waiver by Foothill of any Event of Default under this Agreement. Foothill need not inquire as to, or contest the validity of, any such expense, tax, or Lien and the receipt of the usual official notice for the payment thereof shall be conclusive evidence that the same was validly due and owing. 11. WAIVERS; INDEMNIFICATION. 11.1 Demand; Protest; etc. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Foothill on which Borrower may in any way be liable. 11.2 Foothill's Liability for Collateral. So long as Foothill complies with its obligations, if any, under Section 9207 of the Code, Foothill shall not in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person. All risk of loss, damage, or destruction of the Collateral shall be borne by Borrower. 11.3 Indemnification. Borrower shall pay, indemnify, defend, and hold Foothill, each Participant, and each of their respective officers, directors, employees, counsel, agents, and attorneys-in-fact (each, an "Indemnified Person") harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, and damages, and all reasonable attorneys fees and disbursements and other costs and expenses actually incurred in connection therewith (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them in connection with or as a result of or related to the execution, delivery, enforcement, performance, and administration of this Agreement and any other Loan Documents or the transactions contemplated herein, and with respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event or circumstance in any manner related thereto (all the foregoing, collectively, the "Indemnified Liabilities"). Borrower shall have no obligation to any Indemnified Person under this Section 11.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement and the repayment of the Obligations. 12. NOTICES. Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, or telefacsimile to Borrower or to Foothill, as the case may be, at its address set forth below: If to Borrower: INTERGRAPH CORPORATION One Madison Industrial Park Huntsville, Alabama 35894 Attn: Mr. Larry J. Laster Fax No. 205.730.2164 with copies to: BALCH & BINGHAM 1710 Sixth Avenue North Birmingham, Alabama 35201 Attn: John F. Mandt, Esq. Fax No. 205.226.8799 If to Foothill: FOOTHILL CAPITAL CORPORATION 11111 Santa Monica Boulevard Suite 1500 Los Angeles, California 90025-3333 Attn: Business Finance Division Manager Fax No. 310.478.9788 with copies to: BROBECK, PHLEGER & HARRISON LLP 550 South Hope Street Los Angeles, California 90071 Attn: John Francis Hilson, Esq. Fax No. 213.745.3345 The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other. All notices or demands sent in accordance with this Section 12, other than notices by Foothill in connection with Sections 9504 or 9505 of the Code, shall be deemed received on the earlier of the date of actual receipt or 3 days after the deposit thereof in the mail. Borrower acknowledges and agrees that notices sent by Foothill in connection with Sections 9504 or 9505 of the Code shall be deemed sent when deposited in the mail or personally delivered, or, where permitted by law, transmitted telefacsimile or other similar method set forth above. 13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN AN ANOTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF BORROWER AND FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13. BORROWER AND FOOTHILL HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF BORROWER AND FOOTHILL REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 14. DESTRUCTION OF BORROWER'S DOCUMENTS. All documents, schedules, invoices, agings, or other papers delivered to Foothill may be destroyed or otherwise disposed of by Foothill 4 months after they are delivered to or received by Foothill, unless the applicable Borrower requests, in writing, the return of said documents, schedules, or other papers and makes arrangements, at Borrower's expense, for their return. 15. GENERAL PROVISIONS. 15.1 Effectiveness. This Agreement shall be binding and deemed effective when executed by Borrower and Foothill. 15.2 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however, that Borrower may not assign this Agreement or any rights or duties hereunder without Foothill's prior written consent and any prohibited assignment shall be absolutely void. No consent to an assignment by Foothill shall release Borrower from its Obligations. Foothill may assign this Agreement and its rights and duties hereunder and no consent or approval by Borrower is required in connection with any such assignment. Foothill reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any part of, or any interest in Foothill's rights and benefits hereunder. In connection with any such assignment or participation, Foothill may disclose all documents and information which Foothill now or hereafter may have relating to Borrower or Borrower's business, but such documents and information shall be subject to the confidentiality provisions of Section 15.10. To the extent that Foothill assigns its rights and obligations hereunder to a third Person, Foothill thereafter shall be released from such assigned obligations to the relevant Borrower and such assignment shall effect a novation between the relevant Borrower and such third Person. 15.3 Section Headings. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each section applies equally to this entire Agreement. 15.4 Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Foothill or Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto. 15.5 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision. 15.6 Amendments in Writing. This Agreement can only be amended by a writing signed by both Foothill and Borrower. 15.7 Counterparts; Telefacsimile Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. 15.8 Revival and Reinstatement of Obligations. If the incurrence or payment of the Obligations by Borrower or any guarantor of the Obligations or the transfer by either or both of such parties to Foothill of any property of either or both of such parties should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors' rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences, and other voidable or recoverable payments of money or transfers of property (collectively, a "Voidable Transfer"), and if Foothill is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Foothill is required or elects to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of Foothill related thereto, the liability of Borrower or such guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made. 15.9 Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof. 15.10 Confidentiality. Foothill agrees to treat all material, non-public information regarding Borrower and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner; it being understood and agreed by Borrower that in any event Foothill may make disclosures (a) to counsel for and other advisors, accountants, and auditors to Foothill, (b) reasonably required by any bona fide potential or actual assignee, transferee, or participant in connection with any contemplated or actual assignment or transfer by Foothill of an interest herein or any participation interest in Foothill's rights hereunder, (c) of information that has become public by disclosures made by Persons other than Foothill, or (d) as required or requested by any court, governmental or administrative agency, pursuant to any subpoena or other legal process, or by any law, statute, regulation, or court order; provided, however, that, unless prohibited by applicable law, statute, regulation, or court order, Foothill shall notify Borrower of any request by any court, governmental or administrative agency, or pursuant to any subpoena or other legal process for disclosure of any such non-public material information concurrent with, or where practicable, prior to the disclosure thereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in Los Angeles, California. INTERGRAPH CORPORATION, a Delaware corporation By___________________________ Title:_______________________ FOOTHILL CAPITAL CORPORATION, a California corporation By___________________________ Title:_______________________ SCHEDULE E-1 INTERGRAPH CORPORATION Eligible Domestic Inventory Locations STATE CITY STREET ADDRESS - ----- ---- -------------- ALABAMA HUNTSVILLE Building 21 ALABAMA HUNTSVILLE Building 5A & 5B ALABAMA HUNTSVILLE Building 25 ALABAMA HUNTSVILLE Redstone Arsenal ARIZONA PHOENIX 4742 N 24th Street CALIFORNIA IRVINE 26 Technology CALIFORNIA LA (ENCINO) 15821 Ventura Blvd. CALIFORNIA SAN DIEGO 9988 Hibert Street CALIFORNIA SACRAMENTO 777 Campus Commons CALIFORNIA MTNVIEW 381 E Evelyn COLORADO ENGLEWOOD 7400 E. Orchard Rd FLORIDA TAMPA 5423 Beaumont Center FLORIDA KENNEDYSPACE JF Kennedy Space Ctr GEORGIA SMYRNA 3300 Highlands HAWAII HONOLULU 840 Kawalahao ILLINOIS ARLINGTON 85 West Algonquin INDIANA INDIANAPOLIS 5881 E 82nd Street KANSAS LENEXA 14839 W 95th St KENTUCKY LOUISVILLE 12700 Shelbyville LOUISIANA METAIRIE 3545 N. I-10 Service Rd MASSACHUSETTS WESTBOROUGH 1800 W Park Dr MICHIGAN SOUTHFIELD 28411 NW Hwy MINNESOTA MENDOTA HTS 1355 Mendota Heights MISSOURI ST LOUIS 11116 S. Town Sq MISSOURI ST. LOUIS 3200 S. Second ST. N CAROLINA CHARLOTTE 9731 J S. Pine N JERSEY E. RUTHERFORD 1 Meadowland NEW YORK ROCHESTER 120 Corporate Woods OHIO MASON 4900 Parkway OHIO VALLEY VIEW 9885 Rockside PENNSYLVANIA K. OR PRUSSIA 1018 W 9th Avenue PENNSYLVANIA PITTSBURGH 500 Business Center PENNSYLVANIA RADNOR 100 Matson Ford Rd. S CAROLINA GREENVILLE 201 Brookfield TENNESSEE NASHVILLE 5211 Linbar Drive TEXAS HOUSTON 675 Bering Drive TEXAS DALLAS 8111 LBJ Freeway TEXAS AUSTIN 9420 Research Blvd TEXAS SAN ANTONIO 8930 4 Winds Drive VIRGINIA RESTON 12347-B Sunrise WASHINGTON BELLEVUE 11130 NE 33rd Place WISCONSIN WAUKESHA 20725 Watertown SCHEDULE P-1 INTERGRAPH CORPORATION PERMITTED LIENS as of November 30, 1996 Secured Party Jurisdiction Collateral Description - ------------- ------------ ---------------------- Amplicon, Inc. AL Specific pieces of equipment pursuant to lease Amplicon, Inc. AL Specific pieces of equipment pursuant to Lease Agreement Amplicon, Inc. AL Specific pieces of equipment pursuant to Lease Agreement Amplicon, Inc. AL Specific pieces of equipment pursuant to Lease Agreement Amplicon, Inc. AL Specific pieces of equipment pursuant to Lease Agreement Amplicon, Inc. AL Specific pieces of equipment Amplicon, Inc. AL Specific pieces of equipment pursuant to Lease Agreement Amplicon, Inc. AL Specific pieces of property and equipment pursuant to Lease Agreement Amplicon, Inc. AL Specific pieces of property and equipment pursuant to Lease Agreement Amplicon, Inc. AL Specific pieces of leased property and equipment pursuant to Lease Agreement Amplicon, Inc. CA Specific pieces of leased property and equipment Amplicon, Inc. CA Specific pieces of leased property and equipment Amplicon, Inc. CA Specific pieces of leased property and equipment Amplicon, Inc. CA Specific pieces of leased equipment pursuant to Lease Agreement Amplicon, Inc. CO Specific pieces of leased property and equipment pursuant to lease Amplicon, Inc. CO Specific pieces of equipment pursuant to Lease Agreement Amplicon, Inc. CO Specific pieces of equipment pursuant to Lease Agreement Amplicon, Inc. FL Specific pieces of leased property and equipment Amplicon, Inc. FL Specific pieces of leased property and equipment Amplicon, Inc. FL Specific pieces of leased property and equipment Amplicon, Inc. IL Specific pieces of leased equipment pursuant to the attached Lease Agreement Amplicon, Inc. MD Leased property and equipment pursuant to Lease Agreement Amplicon, Inc. MI Specific pieces of leased property and equipment Amplicon, Inc. OH Specific pieces of leased property and equipment Amplicon, Inc. OH Specific pieces of leased property and equipment Amplicon, Inc. OH Specific pieces of leased property and equipment Amplicon, Inc. OH Specific pieces of leased property and equipment Amplicon, Inc. OH Specific pieces of leased property and equipment Amplicon, Inc. OH Specific pieces of leased property and equipment Amplicon, Inc. TX Specific pieces of leased property and equipment Amplicon, Inc. TX Specific pieces of leased property and equipment Amplicon, Inc. TX Specific pieces of leased property and equipment Amplicon, Inc. VA Specific pieces of leased property and equipment pursuant to lease Amplicon, Inc. VA Specific pieces of leased property and equipment pursuant to lease Amplicon, Inc. VA Specific pieces of leased property and equipment pursuant to lease Amplicon, Inc. VA Specific pieces of leased property and equipment pursuant to Lease Agreement Amplicon, Inc. WA Leased property and equipment Amplicon, Inc.-ASSIGNEE: GE Capital 6/27/95 95-06287801 VA Specific pieces of leased property and equipment and equipment Amplicon, Inc.-ASSIGNEE: GE Capital 6/27/95 95-06287801 VA Specific pieces of leased property and equipment Amplicon, Inc.-ASSIGNEE: GE Capital 7/10/95 95-07107393 VA Specific pieces of leased property and equipment Amplicon, Inc.-ASSIGNEE: GE Capital 8/15/95 95-08157052 VA Specific pieces of leased property and equipment BellSouth Financial Services Corporation AL Specific pieces of equipment Capital Associates MO Specific pieces of equipment per Lease Agreement dated 8/24/95 Capital Associates International, Inc. AL Specific pieces of equipment pursuant to Lease Agreement dated 8/24/95 Capital Associates International, Inc. AL Specific pieces of equipment pursuant to Lease Agreement dated 8/24/95 Capital Associates International, Inc. CA Specific pieces of leased equipment pursuant to Lease Agreement dated 8/24/95 Capital Associates International, Inc. CA Specific pieces of leased equipment per Lease Agreement dated 8/24/95 Capital Associates International, Inc. CO Specific pieces of equipment pursuant to Lease Agreement Capital Associates International, Inc. CO Specific pieces of equipment pursuant to Lease Agreement dated 8/24/95 Capital Associates International, Inc. MD Specific pieces of equipment per Lease Agreement dated 8/24/95 Capital Associates International, Inc. MI Specific pieces of equipment pursuant to Lease Agreement dated 8/24/95 Capital Associates International, Inc. MI Specific pieces of equipment pursuant to Lease Agreement dated 8/24/95 SCHEDULE P-1 INTERGRAPH CORPORATION PERMITTED LIENS as of November 30, 1996 Secured Party Jurisdiction Collateral Description - ------------- ------------ ---------------------- Capital Associates International, Inc. NY Specific pieces of equipment pursuant to Lease Agreement Capital Associates International, Inc. TX Specific pieces of equipment pursuant to Lease Agreement dated 8/24/95 Capital Associates International, Inc. WA Specific pieces of equipment pursuant to the Lease Agreement dated 8/24/95 Capital Associates International, Inc. - ASSIGNEE: USL Capital VA Specific pieces of equipment pursuant to lease Agreement dated 8/24/95 Capital Preferred Yield Fund-III LP FL Specific pieces of equipment per Lease Agreement dated 8/24/95 Copelco Capital, Inc. AL Specific piece of equipment Copelco Capital, Inc. AL Specific pieces of equipment Copelco Capital, Inc. AL Specific pieces of equipment Copelco Capital, Inc. AL Specific pieces of equipment covered by Lease Agreement Copelco Capital, Inc. AL Specific piece of equipment Copelco Capital, Inc. AL Specific pieces of equipment Copelco Capital, Inc AL Specific piece of equipment Copelco Capital, Inc. AL Specific piece of equipment Copelco Capital, Inc. AL Specific pieces of equipment Copelco Capital, Inc. AL Specific piece of equipment Copelco Capital, Inc. AL Specific pieces of equipment Copelco Capital, Inc. AL Specific piece of equipment Copelco Capital, Inc. AL Specific piece of equipment Digital Financial Services AL Specific pieces of equipment Hewlett-Packard Company AL Specific Hewlett-Packard equipment pursuant to lease agreement Hewlett-Packard Company AL Specific pieces of equipment Hewlett-Packard Company AL Specific pieces of equipment Hewlett-Packard Company AL Specific pieces of equipment Hewlett-Packard Company Finance CA Specific pieces of Hewlett-packard equipment pursuant to attached equipment schedule Master Lease Div of Tokai Financial AL Specific pieces of equipment Morton International, Dynachem AL Specific piece of equipment Morton International, Dynachem AL Specific piece of equipment Optrotech, Inc. AL Specific piece of equipment Orbotech, Inc. AL Specific pieces of equipment Sun Microsystems Finance, Inc. AL Specific pieces of equipment pursuant to lease Sun Microsystems Finance, Inc. CA Specific pieces of equipment Sun Microsystems Finance, Inc. FL Specific pieces of equipment per lease Sun Microsystems Finance, Inc. IL Specific pieces of equipment pursuant to lease Sun Microsystems Finance, Inc. KS Specific pieces of equipment per lease Sun Microsystems Finance, Inc. MA Specific AT&T and Audix equipment Sun Microsystems Finance, Inc. MA Specific pieces of equipment per lease Sun Microsystems Finance, Inc. MI Specific pieces of equipment pursuant to lease Sun Microsystems Finance, Inc. NY Specific pieces of equipment pursuant to lease Sun Microsystems Finance, Inc. NY Specific pieces of leased equipment pursuant to lease Sun Microsystems Finance, Inc. PA Specific pieces of equipment pursuant to Lease Agreement Sun Microsystems Finance, Inc. PA Lease of specific pieces of equipment Sun Microsystems Finance, Inc. TX Specific pieces of equipment per lease Sun Microsystems Finance, Inc. VA Specific pieces of equipment pursuant to lease Sun Microsystems Finance, Inc. VA Specific pieces of leased agreement Williams Telecommunications Systems, Inc. AL Specific pieces of equipment * United National Bank FL Blanket * This UCC is filed on a company other than the Borrower Intergraph Corporation Schedule P-2 Permitted Other Investments Book Ownership Value Percentage 11/30/96 ---------- ----------- Bentley Systems, Inc. 50.00% $12,116,683 Centric Engineering Systems 4.60% 0 (1) Dover Systems Corp. 37.00% 0 (1) Loxley Intergraph Co. LTD 10.00% 119,048 NeoVista Solutions, Inc. 0.11% 0 (1) Transcend (2) 1,000 TRIFID Corporation 17.98% 109,324 Versant Object Technology Corp. 4.50% 7,640,731 (3) Waferscale 3.50% 0 (1) SunPro, Inc. Convertible Note 10.00% 400,000 (4) ----------- $20,386,786 =========== (1) The Company has written off the carrying value of these investments. (2) The Company has warrants to purchase 50,000 shares of Transcend stock at an exercise price of $.10 per share. (3) Investment is marked-to-market at the end of each month in accordance with GAAP. Represents market value at November 30, 1996 on this public company. (4) Transaction to be executed and delivered on December 31, 1996. SCHEDULE "R-1" ATTACHED TO AND MADE A PART OF THAT CERTAIN LOAN AND SECURITY AGREEMENT DATED AS OF DECEMBER 20, 1996 TRACT I ------- (Foothill) All that part of Sections 21, 27, 28 and 33, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at a concrete monument at the center of the East boundary of Section 21, Township 4 South, Range 2 West; thence from the point of true beginning, South 01 degrees 24 minutes 39 seconds West 2657.77 feet to a concrete monument at the Southeast corner of said Section 21; thence South 01 degree 31 minutes 20 seconds West, 1204.68 feet to a concrete monument; thence South 88 degrees 46 minutes 04 seconds East, 1259.91 feet to a concrete monument; thence South 18 degrees 56 minutes 51 seconds East, 140.57 feet to a concrete monument; thence South 88 degrees 25 minutes 56 seconds East, 2.83 feet to a concrete monument at the Northeast corner of the Southwest Quarter of the Northwest Quarter of Section 27, Township 4 South, Range 2 West; thence along the East boundary of said Quarter- Quarter Section, South 01 degrees 51 minutes 00 seconds West, 1329.29 feet to a concrete monument at the Southeast corner of the Southwest Quarter of the Northwest Quarter of said Section 27; thence along the Quarter-Section line, South 88 degrees 24 minutes 49 seconds East, 2132.29 feet to a concrete monument at the Northwest corner of a Huntsville Utilities lot; thence along the west boundary of said lot, South 01 degrees 35 minutes 11 seconds West, 250.00 feet to a concrete monument; thence South 88 degrees 24 minutes 49 seconds East, 230.00 feet to a concrete monument; thence North 1 degrees 35 minutes 11 seconds East, 250.00 feet to a concrete monument on the Quarter Section line; thence along the Quarter-Section line, South 88 degrees 24 minutes 49 seconds East, 1515.51 feet to a concrete monument on the Westerly margin of Zierdt Road; thence along the westerly margin of Zierdt Road, South 02 degrees 17 minutes 01 seconds West, 1760.18 feet to a concrete monument at the Northeast corner of the University of Alabama-Huntsville Property; thence along the North boundary of said property, North 88 degrees 19 minutes 37 seconds West, 1901.00 feet to a concrete monument; thence South 02 degrees 17 minutes 01 seconds West, 900.00 feet to a concrete monument on the South boundary of Section 27, Township 4 South, Range 2 West; thence along the South boundary of said Section 27, North 88 degrees 19 minutes 37 seconds West, 3245.75 feet to an unmonumented Southwest corner of Section 27, Southeast corner Section 28, Northeast Corner of Section 33 and Northwest corner of Section 34 all in Township 4 South, Range 2 West; thence along the Easterly boundary of Section 33, South 03 degrees 31 minutes 04 seconds West 1330.88 feet to a concrete monument at the center of the Easterly boundary of Section 33, South 03 degrees 31 minutes 04 seconds West 1330.88 feet to a concrete monument at the center of the East boundary of the Northeast Quarter of said Section 33, Township 4 South, Range 2 West; thence along the South boundary of the North one-half of the Northeast Quarter of Section 33, North 88 degrees 52 minutes 27 seconds West, 2121.77 feet to a concrete monument; thence North 2 degrees 15 minutes 55 seconds East, 79.92 feet to a concrete monument; thence North 85 degrees 29 minutes 04 seconds West, 550.00 feet to a concrete monument on the Westerly margin of Old Jim Williams Road; thence North 02 degrees 15 minutes 55 seconds East 614.78 feet to a point; thence continuing along the Westerly margin of said road, around a curve to the left, with a radius of 846.72 feet and a chord bearing and distance of North 05 degrees 10 minutes 18 seconds East, 219.21 feet to a concrete monument on the North-South Quarter Section line of said Section 33; thence along the Quarter-Section line, North 02 degrees 23 minutes 03 seconds East, 383.29 feet to a concrete monument at the center of the North boundary of Section 33; thence along the North boundary of said Section 33, South 88 degrees 54 minutes 24 seconds East, 2728.16 feet to the unmonumented Northeast corner of Section 33, Northwest corner of Section 34, Southeast corner of Section 28 and the Southwest corner of Section 27; thence from the Southwest corner of Section 27, North 01 degrees 31 minutes 20 seconds East, 2652.19 feet to a concrete monument at the center of the East boundary of Section 28; thence along the Quarter Section line of said Section 28, North 88 degrees 53 minutes 06 seconds West 970.05 feet to a concrete monument at the Southeast corner of a Huntsville Utilities Lot; thence along the East boundary of said lot, North 01 degrees 47 minutes 39 seconds East 225.00 feet to a concrete monument at the Northeast corner of said lot; thence along the North boundary of the Huntsville Utilities lot, North 88 degrees 53 minutes 06 seconds West, 387.22 feet to a concrete monument on the North-South Quarter-Quarter Section line; thence North 01 degrees 47 minutes 39 seconds East, along said Quarter-Quarter Section line, 803.83 feet to a concrete monument at the TRACT I (Continued) ------------------- (Foothill) intersection of said Quarter-Quarter Section line with the centerline of Dunlop Boulevard; thence continuing North 01 degrees 47 minutes 39 seconds East along said Quarter-Quarter line 60.00 feet to a concrete monument on the North margin of Dunlop Boulevard; thence along the North margin of Dunlop Boulevard, North 89 degrees 01 minutes 20 seconds West, 10.00 feet to a concrete monument at the intersection of the Northerly margin of Dunlop Boulevard with the Easterly margin of the Southern Railway Systems Right-of-way; thence along the Easterly margin of said railway right-of-way, North 01 degrees 47 minutes 39 seconds East, 1569.13 feet to an iron stake on the South boundary of Section 21; thence along said boundary North 88 degrees 54 minutes 55 seconds West, 1.00 feet to an iron stake; thence North 43 degrees 33 minutes 26 seconds West, 5.62 feet to an iron stake; thence North 01 degrees 53 minutes 36 seconds East, 39.65 feet to an iron stake and the P.C. of a curve to the left; thence around said curve with a radius of 1180.00 feet and a chord bearing and distance of North 12 degrees 25 minutes 34 seconds West, 583.27 feet to an iron stake at the point of tangency; thence North 26 degrees 43 minutes 33 seconds West, 1927.34 feet to a concrete monument at the intersection of the Easterly margin of the Southern Railway right-of-way with the Southerly margin of Lime Quarry Road right-of-way; thence along the Southerly margin of said road right-of-way North 64 degrees 04 minutes 39 seconds East, 447.53 feet to a concrete monument; thence continuing along said right-of-way, North 83 degrees 24 minutes 23 seconds East, 219.35 feet to a concrete monument; thence continuing along said right-of-way, South 87 degrees 57 minutes 53 seconds East, 248.49 feet to a concrete monument; thence continuing along said right-of-way, North 51 degrees 55 minutes 25 seconds East, 130.76 feet to a concrete monument; thence North 02 degrees 02 minutes 07 seconds East, 50.00 feet to a concrete monument on the East-West Quarter Section line of Section 21, Township 4 South, Range 2 West, and the termination of Lime Quarry Road Right-of-way; thence South 88 degrees 08 minutes 47 seconds East, along said Quarter Section line, 1442.99 feet to the point of true beginning and containing 591.495 acres, more or less. TRACT II: --------- (Foothill) All that part of the South one-half of Section 21 and the North one-half of Section 28, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at a concrete monument at the intersection of the Southerly margin of Lime Quarry Road with the Westerly margin of the Southern Railway Systems right-of-way; said point of true beginning is further described as being North 88 degrees 08 minutes 47 seconds West 1442.99 feet, South 02 degrees 02 minutes 07 seconds West, 50.00 feet, South 51 degrees 55 minutes 25 seconds West, 130.76 feet, North 87 degrees 57 minutes 53 seconds West, 248.49 feet, South 83 degrees 24 minutes 23 seconds West, 219.35 feet and South 64 degrees 04 minutes 39 seconds West, 517.53 feet from the center of the East boundary of Section 21, Township 4 South, Range 2 West; thence from the point of true beginning, South 26 degrees 43 minutes 33 seconds East, along the Westerly margin of the Southern Railway right-of-way, 1928.33 feet to an iron stake at the P.C. of a curve to the right; thence around said curve to the right, with a radius of 1110.00 feet and a chord bearing and distance of South 12 degrees 25 minutes 34 seconds East, 548.67 feet to an iron stake at the point of tangency; thence South 01 degrees 53 minutes 36 seconds West, 44.63 feet to an iron stake on the South boundary line of Section 21; thence along said boundary line, North 88 degrees 54 minutes 55 seconds West, 5.00 feet to an iron stake; thence South 01 degrees 47 minutes 39 seconds West, along the westerly margin of the Southern Railway right-of-way, 1569.27 feet to a concrete monument at the intersection of the North margin of Dunlop Boulevard with the West margin of the Southern Railway right-of- way; thence along the North margin of Dunlop Boulevard, North 89 degrees 01 minutes 20 seconds West, 1455.77 feet to a concrete monument; thence North 02 degrees 14 minutes 47 seconds East, 402.10 feet to a concrete monument; thence North 88 degrees 56 minutes 13 seconds West, 436.00 feet to a concrete monument; thence North 02 degrees 14 minutes 47 seconds East, 400.00 feet to a concrete monument on the South margin of Cochran Road Right- of-way; thence along the South margin of said road, South 88 degrees 56 minutes 13 seconds East, 633.47 feet to a concrete monument; thence North 01 degrees 03 minutes 47 seconds East, 70.00 feet to a concrete monument on the North margin of Cochran Road; thence continuing North 01 degrees 03 minutes 47 seconds East 699.86 feet to a concrete monument on the South boundary of Section 21; thence along the South boundary of said Section 21, North 88 degrees 56 minutes 13 seconds West, 425.00 feet to a concrete monument; thence South 01 degrees 03 minutes 47 seconds West, 699.86 feet to a concrete monument on the North margin of Cochran Road; thence along the North margin of Cochran Road, North 88 degrees 56 minutes 13 seconds West, 986.53 feet to a concrete monument ; thence North 02 degrees 14 minutes 45 seconds East, 175.08 feet to a concrete monument at the P.C. of a curve to the right; thence around said curve to the right with a radius of 503.295 feet and a chord bearing and distance of North 34 degrees 27 minutes 28 seconds East, 536.60 feet to a concrete monument at the P.T. of the curve; thence North 02 degrees 14 minutes 46 seconds East, 76.81 feet to a concrete monument on the South boundary of Section 21; thence along the South boundary of said Section 21, North 88 degrees 56 minutes 13 seconds West, 1434.36 feet to a concrete monument at the intersection of the South boundary of Section 21 with the East margin of the Wall- Triana East Bound Ramp - Right-of-Way to Interstate Highway I- 565; thence along said right-of-way line, North 00 degrees 48 minutes 05 seconds East, 687.98 feet to a concrete monument; thence continuing along said ramp right-of-way, North 46 degrees 22 minutes 04 seconds East, 1198.33 feet to a concrete monument on the Southerly right-of-way of I-565; thence continuing along said I-565 southerly right-of-way, North 65 degrees 14 minutes 22 seconds East, 1050.10 feet to a concrete monument; thence continuing along said right-of-way line, North 64 degrees 27 minutes 16 seconds East, 113.00 feet to a concrete monument; thence continuing along said right-of-way South 30 degrees 04 minutes 26 seconds East 244.93 feet to a concrete monument; thence continuing along said right-of-way, North 32 degrees 00 minutes 09 seconds East, 80.99 feet to a concrete monument; thence continuing along said right-of-way, North 55 degrees 22 minutes 38 seconds East, 28.53 feet to a concrete monument; thence continuing along said right-of-way, North 30 degrees 04 minutes 26 seconds West, 196.83 feet to a concrete monument; thence continuing along said right-of-way, North 64 degrees 27 minutes 16 seconds East, 810.29 feet to a concrete monument at the intersection of I-565 southerly right-of-way with the Westerly margin of Southern Railway Systems Right-of-way; thence along the Westerly margin of the Southern Railway right-of-way around a curve to the left, with a radius of 1467.692 feet and a chord bearing and distance of South 23 degrees 41 minutes 00 seconds East, 155.50 feet to a concrete monument; thence along said railway right-of-way, South 26 degrees 43 minutes 33 seconds East, 24.69 feet to the point of beginning and containing 208.150 acres, more or less. TRACT II (Continued) -------------------- (Foothill) LESS AND EXCEPT that certain property located in the Southwest Quarter of Section 21, Township 4 South, Range 2 West, Madison County, Alabama more particularly described as follows: Commencing at a point that is South 87 degrees 30 minutes West 146.17 feet; thence North 2 degrees 47 minutes 20 seconds West 688.41 feet; thence North 42 degrees 46 minutes 39 seconds East 1,198.30 feet and North 61 degrees 38 minutes 54 seconds East 153.58 feet from the Southwest corner of Section 21, Township 4 South, Range 2 West, said point being the true point of beginning; thence from the point of true beginning North 61 degrees 38 minutes 54 seconds East 216.26 feet to a point; thence South 01 degree 33 minutes 06 seconds East 98.12 feet to a point; thence South 88 degrees 37 minutes 54 seconds West 193.03 feet to the point of beginning. PROVIDED, HOWEVER, THAT WITH RESPECT TO THE PARCELS OF TRACT II DESCRIBED BELOW THE INTEREST OF THE MORTGAGOR IS AS LESSEE UNDER THE FOLLOWING DESCRIBED LEASES AND WITH RESPECT TO THE PROPERTY DESCRIBED BELOW FOR EACH SUCH LEASE, AND WITH RESPECT TO SUCH PROPERTIES THE MORTGAGE SHALL BE A LEASEHOLD MORTGAGE: 1. INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN LEASE AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MADISON, INC. AND SCHAEFER-ALABAMA CORPORATION DATED JUNE 12, 1973 AND RECORDED IN DEED BOOK 479, PAGE 19, JUDGE OF PROBATE, AND AS ASSIGNED TO WELBILT CORPORATION PURSUANT TO MEMORANDUM OF ASSIGNMENT OF LESSEE'S INTEREST IN LEASE DATED OCTOBER 21, 1982 AND RECORDED IN DEED BOOK 607, PAGE 37, AND AS ASSIGNED TO INTERGRAPH CORPORATION PURSUANT TO THAT CERTAIN ASSIGNMENT OF ASSUMPTION OF LEASE DATED NOVEMBER 1, 1983, RECORDED IN DEED BOOK 624, PAGE 113, IN THE OFFICE OF THE JUDGE OF PROBATE, MADISON COUNTY, ALABAMA AND COVERING THE FOLLOWING DESCRIBED REAL PROPERTY: All that part of the South one-half of Section 21, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at a concrete monument on the East margin of the Madison-Triana Road and at the Northwest corner of the U.S. Corrugated Fibre Box Company site, said point of true beginning is further described as being North 87 degrees 30 minutes east, 50.0 feet from the Southwest corner of Section 21, Township 4 South, Range 2 west. Thence from the point of true beginning, along the East margin of the Madison- Triana Road, North 01 degrees 22 minutes 06 seconds West 900 feet to a point; thence North 87 degrees 30 minutes East, 2418.17 feet to a point in the center of a drainage ditch; thence South 01 degrees 15 minutes 57 seconds East 950.34 feet to a concrete monument in the center of said drainage ditch and on the projected North boundary of the U.S. Corrugated Fibre Box Company site; thence South 87 degrees 30 minutes West, along the projected and North boundary of said U.S. Corrugated Fibre Box Company site 2741.67 feet to the point of true beginning and containing 53.29 acres, more or less. AND ALSO - -------- 2. INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN LEASE AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE AND INTERGRAPH CORPORATION DATED AS OF MAY 1, 1983 AND AS OF RECORD IN DEED BOOK 616, PAGE 809, IN THE OFFICE OF THE JUDGE OF PROBATE OF MADISON COUNTY, ALABAMA AND COVERING THE FOLLOWING DESCRIBED PROPERTY: TRACT II (Continued) -------------------- (Foothill) 2. (Continued) All that part of the northeast quarter of Section 28, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at an iron stake at the northwest corner of the tract herein described; said point of true beginning is further described as being North 87 degrees 30 minutes East, 2691.67 feet from the Northwest corner of Section 28, Township 4 South, Range 2 West. Thence from the point of true beginning North 87 degrees 30 minutes 52 seconds East, 1261.66 feet to an iron stake on the west margin of the 80.00 foot Southern Railway Company Right-of-Way; thence along the margin of said Right-of-way, South 01 degree 48 minutes 36 seconds East, 1569.25 feet to an iron stake on the north margin of the 120.00 foot Right- of-Way for Dunlop Boulevard; thence along the north margin of said Right-of-way, South 87 degrees 24 minutes 30 seconds West 444.86 feet to an iron stake; thence North 2 degrees 35 minutes 30 seconds West, 100.00 feet to the P.C. of a curve to the left; thence around said curve, having a radius of 672.63 feet, with a chord bearing and distance of North 25 degrees 33 minutes 59 seconds West, 525.09 feet to the P.T. of said curve; thence North 48 degrees 32 minutes 27 seconds West, 27.03 feet to the P.C. of a curve to the left; thence around said curve, having a radius of 708.29 feet, with a chord bearing and distance of North 70 degrees 31 minutes 14 seconds West, 530.19 feet to the P.T. of said curve; thence South 87 degrees 30 minutes West, 80.77 feet to a point on the south margin of the 70.00 foot Right-of-Way for Cochran Road; thence North 2 degrees 30 minutes West, 70.00 feet to an iron stake on the north margin of the Right-of-way for Cochran Road and the southeast corner of the Harris Pine Mills property; thence along the east boundary of said Harris Pine Mills site, North 2 degrees 30 minutes West, 699.85 feet to the point of true beginning and containing 33.00 acres, more or less. TOGETHER WITH: All that part of the northeast quarter of Section 28, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at an iron stake on the east margin of the 80.00 foot Southern Railway Company Right-of-way; said point of true beginning is further described as being North 87 degrees 30 minutes East, 4033.33 feet from the northwest corner of Section 28, Township 4 South, Range 2 West. Thence from the point of true beginning North 87 degrees 30 minutes 52 seconds East, 10.00 feet to a concrete monument at the center of the north boundary of the northeast quarter of Section 28, Township 4 South, Range 2 West; thence along the quarter-quarter section line, South 01 degree 48 minutes 36 seconds East, 1569.08 feet to an iron stake on the north margin of the 120.00 foot Right-of-way for Dunlop Boulevard; thence along the north margin of said Right-of-way South 87 degrees 24 minutes 30 seconds West, 10.00 feet to an iron stake on the east margin of the 80.00 foot Southern Railroad Company Right-of-way; thence along the east margin of said Right-of-way, North 01 degrees 48 minutes 36 seconds West, 1569.10 feet to the point of true beginning and containing 0.36 acres more or less. TRACT III: ---------- (Foothill) INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN LEASE AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE AND THE H. D. LEE COMPANY, INC. DATED SEPTEMBER 1, 1973 AND RECORDED IN DEED BOOK 484, PAGE 437, JUDGE OF PROBATE, AND AS ASSIGNED FROM THE H.D.LEE COMPANY, INC. TO THE LEE APPAREL COMPANY, INC. DATED FEBRUARY 14, 1983 AND RECORDED IN MORTGAGE BOOK 1459, PAGE 264, JUDGE OF PROBATE, AND ASSIGNED AND ASSUMED BY INTERGRAPH CORPORATION BY THAT CERTAIN ASSIGNMENT AND ASSUMPTION OF LEASE DATED NOVEMBER 14, 1986 AND RECORDED IN MORTGAGE BOOK 1459, PAGE 267, JUDGE OF PROBATE AND COVERING THE FOLLOWING DESCRIBED REAL PROPERTY: All that part of the Southwest Quarter of Section 28, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at a concrete monument at the intersection of the North margin of the 70.00 foot right-of-way for the old Jim Williams Road, with the Easterly margin of the right-of-way for Martin Road; said point of true beginning is described as being North 02 degrees 15 minutes 24 seconds East, 70.03 feet and North 86 degrees 01 minutes 06 seconds East, 47.15 feet from the Southwest corner of Section 28, Township 4 South, Range 2 West; thence from the point of true beginning, along the Easterly margin of Martin Road around a curve to the right, having a radius of 2980.71 feet and a chord bearing and distance of North 00 degrees 19 minutes 42 seconds West, 268.82 feet to a concrete monument at the P.T. of the curve; thence continuing along the Easterly margin of Martin Road, North 02 degrees 15 minutes 24 seconds East, 412.83 feet to a concrete monument at the intersection of the Easterly margin of said Martin Road with the Southerly margin of Kellner Road; thence along said Southerly margin of Kellner Road, North 48 degrees 02 minutes 50 seconds East, 132.49 feet to a concrete monument on the South margin of a 120.00 foot right-of-way for Kellner Road; thence South 89 degrees 10 minutes 36 seconds East, along the South margin of Kellner Road; 1070.20 feet to a concrete monument; thence South 25 degrees 34 minutes 36 seconds East, 884.12 feet to a concrete monument on the North margin of Old Jim Williams Road; thence along the North margin of Old Jim Williams Road, North 89 degrees 05 minutes 25 seconds West, 1013.28 feet to a concrete monument at the P.C. of a curve to the right; thence continuing along the North margin of Old Jim Williams Road, around said curve to the right, having a radius of 2931.22 feet and a chord bearing and distance of North 86 degrees 46 minutes 31 seconds West, 236.97 feet to a concrete monument at the point of a reverse curve; thence continuing along the North margin of said road, around a curve to the left, having a radius of 2777.05 feet, and a chord bearing and distance of North 86 degrees 57 minutes 43 seconds West, 242.83 feet to a concrete monument at the P.T. of the curve; thence continuing along the North margin of said road, North 89 degrees 28 minutes 22 seconds West, 72.80 feet to the point of true beginning and containing 24.629 acres, more or less. TRACT IV: --------- (Foothill) All that part of Madison Industrial Park as recorded in Plat Book 6, Page 21, Probate Records of Madison County, Alabama, and further described as being a part of the Southwest Quarter of Section 15, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at a concrete monument on the Easterly boundary of Research Boulevard; said point of true beginning is further described as being North 01 degrees 57 minutes 26 seconds East, 1538.11 feet and South 64 degrees 35 minutes 25 seconds West, 955.28 feet from the Southeast corner of the Southwest Quarter of Section 15, Township 4 South, Range 2 West; thence from the point of true beginning North 25 degrees 24 minutes 35 seconds West, 300.00 feet to a concrete monument at the intersection of a ninety degree corner of Research Boulevard; thence along the Southerly margin of said Boulevard North 64 degrees 35 minutes 25 seconds East, 561.92 feet to a concrete monument at the P.C. of a curve to the left; thence around said curve to the left with a radius of 160.00 feet and a chord bearing and distance of 18.92 feet to a concrete monument at a point on the curve; thence continuing around said curve and along the Easterly margin of Research Boulevard, with a radius of 160.00 feet and a chord bearing and distance of North 29 degrees 52 minutes 50 seconds East, 149.86 feet to a concrete monument at the P.T. of the curve; thence South 88 degrees 02 minutes 34 seconds East, 164.01 feet to a concrete monument; thence South 01 degrees 57 minutes 26 seconds West, 181.36 feet to a concrete monument; thence South 64 degrees 35 minutes 25 seconds West, 185.49 feet to a concrete monument; thence South 25 degrees 24 minutes 35 seconds East, 150.01 feet to a concrete monument; thence South 64 degrees 35 minutes 25 seconds West, 580.80 feet to the point of beginning and containing 5.00 acres, more or less. TRACT V: -------- (Foothill) INTERGRAPH CORPORATION'S RIGHTS UNDER THAT CERTAIN LEASE AGREEMENT BETWEEN THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MADISON, INC. AND INTERGRAPH CORPORATION DATED AS OF SEPTEMBER 1, 1982 AND AS OF RECORD IN DEED BOOK 609, PAGE 636 OF THE JUDGE OF PROBATE AND COVERING THE FOLLOWING DESCRIBED REAL PROPERTY: All that part of Madison Industrial Park as recorded in Plat Book 6, Page 21, Probate Records of Madison County, Alabama, and further described as being a part of the Southwest Quarter of Section 15, Township 4 South, Range 2 West of the Huntsville Meridian, Madison County, Alabama. Particularly described as beginning at a concrete monument on the Westerly Boundary of Research Boulevard; said point of true beginning is further described as being North 01 degrees 57 minutes 26 seconds East 1765.79 feet and North 88 degrees 02 minutes 34 seconds West, 460.80 feet to a concrete monument at the P.C. of a curve on the Westerly margin of Research Boulevard; thence along the Westerly margin of said Boulevard, around a curve to the right, with a radius of 90.00 feet and chord bearing and distance of South 33 degrees 16 minutes 33 seconds West, 103.95 feet to a concrete monument at the P.T. of the curve; thence continuing along the Northerly margin of Research Boulevard, South 64 degrees 35 minutes 25 seconds West, 741.94 feet to a concrete monument at the P.C. of a curve to the right; thence around said curve to the right with a radius of 25.00 feet and a chord bearing and distance of North 70 degrees 24 minutes 06 seconds West, 35.36 feet to a concrete monument at the P.T. of the curve; thence North 25 degrees 24 minutes 38 seconds West, 123.48 feet to a concrete monument at the P.C. of a curve to the right; thence around said curve to the right, and continuing along the Easterly margin of Research Boulevard with a radius of 176.84 feet and a chord bearing and distance of North 11 degrees 49 minutes 25 seconds West, 83.11 feet to a concrete monument at the P.T. of the curve; thence continuing along the Easterly margin of Research Boulevard, North 01 degrees 45 minutes 35 seconds East, 584.53 feet to a concrete monument at the P.C. of a curve to the right; thence around said curve to the right, with a radius of 100.00 feet and a chord bearing and distance of North 46 degrees 46 minutes 03 seconds East, 141.44 feet to a concrete monument at the P.T. of the curve; thence South 88 degrees 13 minutes 34 seconds East, along the Southerly margin of Research Boulevard, 625.21 feet to a concrete monument at the P.C. of a curve to the right; thence around said curve to the right, with a radius of 100.00 feet and a chord bearing and distance of South 43 degrees 08 minutes 06 seconds East, 141.65 feet to a concrete monument at the P.T. of the curve; thence along the Westerly margin of Research Drive, South 01 degrees 57 minutes 26 seconds East, 358.11 feet to the point of beginning and containing 13.495 acres, more or less. Schedule R-1 - -------------------------------------------------------------------------- FACILITY ADDRESS CITY COUNTY STATE FOOTHILL NAME AMOUNT - -------- ------- ---- ------ ----- -------- ---- ------ NAME AND ZIP LEIN OF OF PRIOR - ---- ------- ---- -- -------- CODE POSITION PRIOR LIEN ---- -------- ----- ---- LIENOR ------ - -------------------------------------------------------------------------- Huntsville One Huntsville Madison Alabama First n/a n/a Campus Madison Industrial Park - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Schedule 5.8 Shares of Intergraph Corporation Direct and Indirect Subsidiaries
Owner Issuer Number Class Cert. Former Owner's Juris- Total Borrower's Composition of of # Name, Percen diction Assets Investment Subsidiaries' Assets Shares if any tage of at in Subsidiary in Owner- Organi- 11/30/96 which ship of zation Securities Other Certif- Total of Other Operat- icate Issued For- Subs of ing Issued & Out- eign Borrower Assets standing Shares - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,000 Common 1 100% Delaware $152,662,063 $152,654,468 X(*) Corporation Delaware, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph M&S 1,000 Common 6 100% Delaware $191,584,960 $25,120,978 X Corporation Computing Invest- ments,Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph InterCAP 1,000 Common 3 100% Delaware $5,510,749 $4,769,769 X Corporation Graphics Systems, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Bestinfo, 1,000 Common C19 100% Delaware $971,114 ($17,317,649) X Corporation Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Scansys- 1,000 Common 1 100% Delaware Inactive Inactive Inactive Corporation tems, Inc. Inc. - ----------------------------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 1,000 Common 1 100% Delaware $1,232,000 ($1,123,000) X Corporation Asia Pacific, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Veribest, 1,000 Common 1 Intergraph 100% Delaware $5,836,816 ($3,960,182) X Corporation Inc, ** Electronics Holdings, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,000 Common 1 100% Delaware $3,148,599 $605,780 X Corporation Services Company, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 3,000 Common 1 100% Delaware $30,212,000 $30,212,000 X(*) Delaware, DISC,Inc. Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,000 Common 2 100% Delaware Inactive Inactive Inactive Corporation DC Corporation- Subsidiary 3 - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph N/A N/A N/A 90% Delaware $29,165,000 $23,892,000 X Corporation European LLC Manufact- uring, LLC - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph N/A N/A N/A 10% Delaware Included Include Included in IEM, LLC Computing European LLC in IEM, in IEM, above Investments,Manufact- LLC above LLC above Inc. uring LLC - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph N/A N/A N/A 95% Delaware $15,197,000 $4,233,000 X Corporation (Middle LLC East), LLC - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph N/A N/A N/A 5% Delaware Included Included Included in IME, LLC Computing (Middle LLC in in above Investments,East), LLC IME, LLC IME, LLC Inc. above above - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph N/A N/A N/A 5% Delaware $10,063,000 $(2,239,000) X Corporation (Italia), LLC LLC - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph N/A N/A N/A 79% Delaware Included Included Included in IA, LLC Computing (Italia), LLC in in above Investments,LLC IA, LLC IA, LLC Inc. above above - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph N/A N/A N/A 16% Delaware Included Included Included in IA, LLC DC (Italia), LLC in IA, LLC in IA, LLC above Corporation LLC above above - - Subsidiary 3 - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,000 Common 1 100% Delaware Inactive Inactive Inactive Corportion DC Corporation- Subsidiary 8 - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph INTS, LLC N/A N/A N/A Intergraph 95% Delaware Inactive Inactive Inactive Corporation Technical Services, LLC - ------------------------------------------------------------------------------------------------------------------------------------ M&S INTS, LLC N/A N/A N/A Intergraph 5% Delaware Computing Technical Investments, Services, Inc. LLC - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,000 Common 1 100% Delaware Inactive Inactive Inactive Corporation Vietnam, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Inter- 1,000 Common 1 100% Delaware $0 $0 Operational in Q1 1997 Corporation national Public Safety, Inc. ** - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 100 Common 1 100% Delaware $441,000 ($151,000) X Corporation China, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ M&S Worldwide 1,000 Common 1 Intergraph 100% Delaware $518,334 $800,085 X Computing Services, Europe, Investments,Inc. Inc. Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,000 Common 1 100% Delaware $2,687,000 ($86,000) X Corporation Express, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 25,000 Class A AC-20 100% Canada Corporation Canada Voting Ltd. Common - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 739,051 Class B BC-150 100% Canada Corporation Canada, Non- Ltd. Voting Common - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 2,799,000 Capital 1 97% England Corporation (UK), Ltd. Stock - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph 1 Capital Less England Computing (UK), Ltd. Stock than Investments, 1% Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 100,000 Capital 3% England DC (UK), Ltd. Stock Corporation - - Subsidiary 3 - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 3,353,999 Ordinary 5 100% Hong Kong Corporation Hong Kong Limited - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph 1 Ordinary Less Hong Kong Computing Hong Kong than Investments,Limited 1% Inc. - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph 30,595 Common 1,2,3,4 93% Spain Computing Espana,S.A. Investments, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 2,156 Common 7% Spain Corporation Espana,S.A - ----------------------------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 100 Common 001-100 100% Sweden Corporation (Sverige) 100 Common 101-200 100 Common 201-300 100 Common 301-400 100 Common 401-500 4,500 Common 501-5000 150,000 Common 5001- 155000 - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph 260 Common 6 100% Switzer- Computing (Switzer- land Investments,land) AG Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,000 Common 2 100% United Delaware, Virgin States Inc. Islands Virgin Corporation Islands - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph 279,994 Common 96% France Computing France SA Investments, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 11,000 Common 4% France DC France SA Corporation - - Subsidiary 3 - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1 Common Less France Corporation France SA than 1% - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph N/A N/A N/A 100% Germany Corporation Holding GmbH - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 5,350 Common 1,874- 100% The Nether- Corporation Benelux B.V. 5,350 lands - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,125 Common 75% Saudi Corporation Saudi Arabia Arabia, Ltd. (a/k/a Saudi Arabian Intergraph Ltd.) - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph 4,889,610 Common 8 99% Singa- Computing Systems pore Investments,Singapore Inc. Pte Ltd. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 49,390 Common 1% Singa- Corporation Systems pore Singapore Pte Ltd. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 1,065 Common 100% Japan Corporation Japan K.K. - ------------------------------------------------------------------------------------------------------------------------------------ Intergraph Intergraph 591,482 100% Korea Corporation Korea, Ltd - ------------------------------------------------------------------------------------------------------------------------------------ M&S Intergraph 9,500 Common 100% Finland Computing Finland Investments, Oy Inc. - ------------------------------------------------------------------------------------------------------------------------------------
Note: This Schedule 5.8 excludes foreign subsidiaries for which shares were not pledged. * Also includes intercompany receivables. ** Employees and directors of each Company have been granted stock options for common shares of stock in each respective Company. SCHEDULE 5.10 Litigation The presentation and schedule inclusion of these matters is based upon their contingent nature and potential materiality, and the uncertainty inherent in the litigation process; it should not be deemed to constitute an acknowledgment that these matters, either individually or in the aggregate, are presently viewed by management to be material to Borrower. In each case, Borrower is pursuing appropriate corrective action and/or vigorously defending its interests where litigation or arbitration is pending. 1. In 1990, Adage, Inc. of Billerica, Mass., indicated that, in its view, Intergraph Corporation may be in violation of two patents owned by Adage covering Z-buffer technology used to display three dimensional images on video display screens. Adage attorneys have offered Intergraph a license and have identified other companies already licensed. This matter is under investigation by Intergraph patent counsel. 2. In 1992, Optronics, a division of Intergraph answered a Second Request for Information letter from the United States Environmental Protection Agency (EPA). The EPA is investigating the source of released hazardous waste at the 60 acre Iron Horse Pike Site, Shaffer Landfill, Billerica, Massachusetts. Optronics has informed the EPA that small quantifies of 1,1,1- trichloroethane, a common industrial solvent, were deposited in the garbage dumpster approximately every two months during an unspecified period. Optronics has entered into a PRP (Potentially Responsible Party) agreement to work with 30 other PRP's to design and implement a remedy for the landfill. In January, 1995, EPA filed suit against ten of the PRP's, but did not file suit against Optronics. Consultants to the PRP group have identified Optronics as a de minimis participant, and the current structure of the PRP operating relationship confirms that, as of the date of this disclosure, the reviewing PRPs consider Optronics to be a de minimis party. 3. During 1995, Intergraph asserted three of its patents against a number of IBM's computer systems. During 1996, Intergraph expanded the scope of its assertions to cover additional IBM computer systems. IBM asserted additional patents against Intergraph and made a pro forma denial which Intergraph patent counsel continues to analyze. Negotiations will likely extend well into 1997. 4. In 1993, CADTRAK, Inc. of Sunnyvale, California, as patent licensing agent for Tektronics, Inc. of Beaverton, Oregon sent a letter to Intergraph alleging infringement by Intergraph of three patents related to computer display monitor technology. CADTRAK thereafter withdrew its original charge of patent infringement and has asserted patent infringement by Intergraph of two different Tektronix patents. This new charge related to software methods used in Mode/View and in MicroStation software. Intergraph has responded by letter denying infringement. Negotiations seem to be dormant at the present time. 5. In 1993 Intergraph received a letter from Raytheon Company of Lexington, Massachusetts alleging the infringement of U.S. Patent 4,069,511 relating to a digital memory system. This appears to be one of several hundred similar letters distributed widely by Raytheon to manufacturers in the electronics industry. The patent expired January 17, 1995. This matter remains under investigation by Intergraph patent counsel. 6. In 1993 suit was filed against Intergraph in Jefferson County Court, Birmingham, Alabama, in the style of Randolph C. Marks d/b/a Historical Architecture Resource Planning v. Intergraph Corporation, CV9309764. Claims allege breach of contract, breach of warranty, fraud and misrepresentation for an architectural system H.A.R.P. purchased in 1988 and operated with borrowed mechanical design software. The amount originally demanded is alleged to exceed the $10,000 jurisdictional minimum. The trial originally scheduled for December, 1996 has been postponed for health reasons by the Plaintiff. 7. Charles Braine v. Intergraph Corporation. An employee of Consolidated Edison sued Intergraph alleging that Intergraph negligently configured a system, which resulted in injury. Intergraph did not supply, install or maintain the system at issue. A Motion for Summary Judgment is being prepared by local counsel. 8. Daniel C. Borden v. Apple Computers, Inc. and Intergraph Corporation, Supreme Court, State of New York, County of Kings, Case Number 38890/94. This matter involves a lawsuit against Intergraph in New York State. The suit alleges that Intergraph's keyboard caused repetitive stress injuries to the Plaintiff. Intergraph's insurance carrier has assumed the defense of this action. The case was removed to Federal Court in New York. Intergraph filed a Motion for Summary Judgment on Plaintiff's Complaint. Summary judgment was granted in favor of Intergraph. 9. Theresa Sibley, wife of Lenard Sibley v. Intergraph Corporation, Ergotron, Inc. and/or Ergotronic, LLC., ABC Insurance Company and XYZ Insurance Company, Case NO. 94-0740 U.S. District Court, Eastern District of Louisiana. Sibley is a Chevron employee in New Orleans who filed suit, alleging that Intergraph's system configuration caused him personal injury. He alleged permanent injury to his hand and wrist, as a result of a fall from a stand which occurred while attempting to turn on a power strip. The case was referred to Intergraph's insurance carrier who retained local counsel. Neither the surge protector nor the stand were manufactured by Intergraph. The jury awarded the Plaintiff approximately $468,000.00. The matter is presently on appeal to the Circuit Court of Appeals for the Fifth Circuit. 10. Attorneys representing Lemelson Medical, Educational and Research Foundation allege infringement by Intergraph of three U.S. patents concerning technology used in personal computers. This matter is under investigation by Intergraph patent counsel. 11. Intergraph Corp. v. Zydex, Inc., Case No. CV95-U-2147 in the United States District Court for the Northern District of Alabama, in which Intergraph Corporation has filed an equitable action seeking dissolution of Intergraph's joint venture relationship with Zydex, Inc., a Houston based engineering and consulting firm. Zydex has filed a counterclaim for breach of contract, breach of fiduciary duty and fraud, claiming compensatory and punitive damages claimed to be in excess of $300,000,000. 12. Intergraph Corporation & Subsidiaries v. Commissioner of Internal Revenue. Issue of whether a deduction in the amount of $978,567 is allowable, for federal tax purposes, for foreign exchange loss and accrued interest upon repayment of a yen- denominated loan in 1987. The United States Tax Court rendered its opinion, holding in favor of the government, in the matter of Intergraph v. Commissioner of Internal Revenue, Docket No. 21286 in May, 1996. Intergraph has appealed to the United States Court of Appeals for the Eleventh Circuit, Case No. 96-6821. 13. Miscellaneous Tax Matters. * Intergraph Korea Ltd. Appeal of decision by the Korean Tax Authorities, the National Tax Tribunal, to the Seoul High Court regarding $15,000 in withholding tax for 1992 (subsequent years have not yet been addressed) on sales of application software to Korean customers. * Intergraph Espana, S.A. Appeal of decision by the Technical Bureau of the Spanish Tax Authority to the regular Spanish Courts of an issue related to transfer pricing for spare parts and spare repair costs. Amount at issue is nominally $1.5 million. A cash collateral bond in the amount of $2 million has been provided. The Company has been advised that this case will take several years to resolve, but expects to prevail. 14. Intergraph v. Commonwealth of Pennsylvania, Docket No. 32 FR 95. This is an appeal from an order of the Board of Finance and Revenue reported as BR&R Docket No. 25319. The issue is whether a gain from the sale of shares of Cadence Design Systems, Inc. should be treated as a taxable gain by the State of Pennsylvania. The amount in controversy is approximately $20,000 exclusive of interest and costs. 15. Spanish Tax Audit. The audit period covers fiscal years 1986-1989. The tax auditors challenged three major issues: deductibility for tax of repair cost of spare parts; deductibility for tax of entertainment expenses; and deductibility for tax of a devaluation of spares inventory. The cumulative disallowed expenses related to the three items above amount to PTA 184,447,251 which, at a tax rate of 35%, corresponds with additional taxes due of PTA 64,556,188. In August of 1994, Intergraph Espana was assessed with the additional taxes described above, plus a 100% penalty (150% for 1986), plus interest, for a combined total of PTA 160,272,337. Intergraph Spain challenged this assessment and brought the issues for the Regional Administrative Court, which is expected to rule before the end of this year. It is not expected that the tax authorities will appeal a ruling in favor of Intergraph. The Company expects to prevail, except for entertainment expenses and a portion of the Inventory devaluation, representing a total cash tax exposure of approximately PTA 6 million, excluding penalties and interest. This opinion is supported by Ernst & Young. If the Regional Administrative Court rules unfavorably, the appeals process could take as long as ten years. Until a court decision is taken which is accepted by the Spanish tax authorities, Intergraph Espana was forced to issue a guarantee to the local tax authorities for the taxes, penalties and interest due in an amount of PTA 160 million. The guarantee is collateralized by a cash deposit. On the amount of the guarantee further interest accrues until the moment when a court decision is taken. Since the further interest due is calculated at a higher rate than the interest which is received on the deposit, a PTA 200 million cash deposit had to be made at Caja de Madrid, which is the bank that issued the guarantee. 16. Intergraph v. Arthur Andersen, CV95-2302-JLB, Circuit Court, Madison County, Alabama. This is an action filed by Intergraph seeking an injunction against the issuance of a final audit report and damages for Andersen's negligence in conducting an audit. On September 4, 1995 Intergraph Corporation received a letter from Arthur Andersen on behalf of Bentley Systems, Inc. (BSI), an affiliate of, and supplier to, Intergraph, reporting the results of an audit conducted by Arthur Andersen on behalf of BSI. In conducting the audit, Arthur Andersen reviewed certain Intergraph records relating to royalty payments made by Intergraph to BSI for fiscal years 1993 and 1994. The letter alleges royalty underpayments for those periods in an aggregate amount of $10,400,000. Intergraph has initiated its own review of the audit, and based on the preliminary results of this review, is of the opinion that the audit results are based on factual omissions and faulty assumptions in methodology (including, for example, a failure to take into consideration Intergraph's right to an unlimited number of royalty-free internal use licenses). Accordingly, Intergraph believes the actual amount of the underpayments (if any) to be nominal and, in any event, immaterial to the Company and its operations. 17. John Osland v. Intergraph, CV95-2172-JLB, Circuit Court, Madison County, Alabama. Suit by former Intergraph employee for claimed unpaid compensation, fraud, and tortious interference with contractual relations seeking damages in the amount of $5 million. The plaintiff has also filed another action in Colorado state court seeking the same allegedly unpaid compensation at issue in the Alabama action, together with statutory penalties of up to 50%. The Colorado action has been stayed by agreement of the parties pending the outcome of the Alabama case. 18. CSP Arbitration. Case No. 14-117-0038295 B/K, American Arbitration Asso., Philadelphia, PA. Arbitration brought by Bentley Systems, Inc. under a May, 1994 contract relating to the sale of software maintenance services. Bentley asserts that Intergraph did not use its "best efforts" to market Bentley's maintenance CSP services to Intergraph customers as required under the contract. Hearings are under way and scheduled to continue during January and February. 19. Software License Agreement Arbitration. Case No. 30Y- 117-00094-96, American Arbitration Asso., Huntsville, AL. Arbitration brought by Bentley System, Inc. under a 1987 Software License Agreement for unpaid licensing fees. These are the fees that were allegedly found by Arthur Andersen in the matter discussed above. Discovery is underway and hearing is scheduled for June 1997. 20. On September 27, 1996, a Mr. Haken Lans sent Intergraph notice of his U. S. patent no. 4,303,986 related to computer graphics technology and offered a license. This matter is under investigation by Intergraph patent counsel. 21. On September 24, 1996, U. S. Phillips as licensing agent for Gilbert P. Hyatt sent Intergraph a letter offering to license nine patents in various computer-related technologies. This matter is under investigation by Intergraph patent counsel. 22. Intergraph v. Mesa Solutions, CV-96-N-1918-NE. This matter involves a suit alleging that former Intergraph employees misappropriated trade secrets, stole hardware, infringed Intergraph copyrights and tortuously interfered with Intergraph's business relationships. The suit is pending in US District Court in Birmingham before Judge Nelson. Initially, Intergraph succeeded in obtaining a temporary restraining order against Mesa, prohibiting the defendants from using Intergraph technology. Intergraph's Motion for Preliminary Injunction remains under submission. Mesa has filed a counterclaim in which it alleges that Intergraph violated Section 1 of the Sherman Act and misused its copyright on certain proprietary software. The counterclaim seeks treble damages, costs and attorney's fees but does not specify any compensatory damages. The case is presently set for trial in April 1997. 23. Smith v. Intergraph, CV-96-630-CA, 19th Judicial Circuit Court, Martin County, Florida. This matter involves a lightning strike to an operator of an Intergraph E911 dispatch system. The case is pending in Martin County, Florida. Intergraph's carrier has engaged local counsel to defend the action. A Motion to Dismiss, Answer and initial discovery requests have been filed. Intergraph's Motion to Dismiss is under submission. 24. Goldfield v. Intergraph, CV-761419, Superior Court for County of Orange. This is a suit brought against Intergraph and Optronics in Orange County, California, alleging breach of warranty. Intergraph has filed an Answer, together with a Counter Claim and initial discovery. 25. Melanie Vaughn, CV-96-752-CA, 19th Judicial Circuit Court, Martin County, Florida. This is the second lightning strike case to the Stuart, Florida E911 system. The incident occurred in 1994. An Answer to Plaintiff's Complaint is being prepared by local counsel. 26. Charles Costa v. Intergraph, CV96-1395-JWB, Circuit Court for Madison County, Alabama. This case involves allegations of commissions due to a salesman of consulting services. The Plaintiff has alleged a violation of a state compensation statute, which could result in the award of treble damages. The Plaintiff has alleged that he is owed a total of $72,000 in commissions, plus statutory damages. 27. Those matters disclosed on Schedule 5.14 to the Loan Agreement. Intergraph Corporation Schedule 5.13 Benefit Plans Intergraph Corporation SavingsPlus Plan Intergraph Corporation Stock Bonus Plan Group Long-Term Disability Plan Intergraph Corporation Health Care Plan (Medical and Dental) Intergraph Corporation Prescription Drug Plan Intergraph Corporation Life Insurance and Accidental Death and Dismemberment Plan Intergraph Corporation Travel Accident Insurance Plan Intergraph Corporation Severance Plan SCHEDULE 5.14 ------------- Summons, citations, notices or directives received in connection with: - The Shaffer Landfill at the Iron Horse Park Superfund Site, Billerica, Massachusetts. - Discharges to a Septic Tank/Field at the Optronics Facility, Chelmsford, Massachusetts. - The Enterprise Recovery Systems Superfund Site, Marshall County, Mississippi. Also, in regard to environmental conditions, and as requested by Foothill, Borrower is providing Foothill at Closing a draft of an updated Phase I Environmental Site Assessment of the Intergraph Corporation, Huntsville, Alabama ("Huntsville Report") prepared by Environmental Strategies Corporation. The Huntsville Report discusses environmental conditions which may affect the Intergraph facility covered by the report. Within thirty days post-closing, Borrower will provide Foothill with a final copy of the Huntsville Report. SCHEDULE 6.12 INTERGRAPH CORPORATION LOCATION OF EQUIPMENT STATE CITY STREET ADDRESS - ----- ---- -------------- ALABAMA HUNTSVILLE Building 1 ALABAMA HUNTSVILLE Building 2 ALABAMA HUNTSVILLE Building 3 ALABAMA HUNTSVILLE Building 4 ALABAMA HUNTSVILLE Building 5A & 5B ALABAMA HUNTSVILLE Building 7 ALABAMA HUNTSVILLE Building 8 ALABAMA HUNTSVILLE Building 10 ALABAMA HUNTSVILLE Building 11 ALABAMA HUNTSVILLE Building 12 ALABAMA HUNTSVILLE Building 14 ALABAMA HUNTSVILLE Building 15 ALABAMA HUNTSVILLE Building 16 ALABAMA HUNTSVILLE Building 17A - D ALABAMA HUNTSVILLE Building 19 ALABAMA HUNTSVILLE Building 20 ALABAMA HUNTSVILLE Building 21 ALABAMA HUNTSVILLE Building 23A & B ALABAMA HUNTSVILLE Building 24A - C ALABAMA HUNTSVILLE Building 25 ALABAMA HUNTSVILLE Building 26 ALABAMA HUNTSVILLE Building 27 ALABAMA HUNTSVILLE Building 28 ALABAMA HUNTSVILLE Building 29 ALABAMA HUNTSVILLE Building 30 ALABAMA HUNTSVILLE 6767 Madison Pike ALABAMA HUNTSVILLE Cad Caravan #1 ALABAMA HUNTSVILLE Cad Caravan #2 ALABAMA HUNTSVILLE Hsv. Int'l Airport ALABAMA HUNTSVILLE Redstone Arsenal ALABAMA BIRMINGHAM 300 Vestavia Parkway ARIZONA PHOENIX 6080 N. 40TH ST. ARIZONA PHOENIX 4742 N 24th Street CALIFORNIA IRVINE 26 Technology CALIFORNIA LA (ENCINO) 15821 Ventura Blvd. CALIFORNIA SAN DIEGO 9988 Hilbert Street CALIFORNIA SACRAMENTO 777 Campus Commons CALIFORNIA MTNVIEW 381 E Evelyn COLORADO LITTLETON 10499 Bradford Road COLORADO BOULDER 6101 Lookout Rd COLORADO ENGLEWOOD 6041 Syracuse WAY COLORADO ENGLEWOOD 7400 E. Orchard Rd FLORIDA BOCA RATON 931 Clint Moore Rd FLORIDA JUPITER BEACH 19750 Beach Rd FLORIDA TAMPA 5423 Beaumont Center FLORIDA KENNEDYSPACE JF Kennedy Space Ctr GEORGIA SMYRNA 3300 Highlands HAWAII HONOLULU 840 Kawaiahao ILLINOIS ARLINGTON 85 West Algonquin INDIANA INDIANAPOLIS 5881 E 82nd Street KANSAS LENEXA 14839 W 95th St KENTUCKY LOUISVILLE 12700 Shelbyville KENTUCKY LEXINGTON 2570 Wilhite Dr LOUISIANA METAIRIE 3545 N. 1-10 Service Rd MASSACHUSETTS WESTBOROUGH 1800 W Park Dr MASSACHUSETTS CHELMSFORD 21 Alpha MARYLAND COLUMBIA MARYLAND TOWSON 8500 LaSalle Road MICHIGAN KENTWOOD 3680 44th St MICHIGAN SOUTHFIELD 28411 NW Hwy MINNESOTA MENDOTA HTS 1355 Mendota Heights SCHEDULE 6.12 INTERGRAPH CORPORATION LOCATION OF EQUIPMENT STATE CITY STREET ADDRESS - ----- ---- -------------- MISSOURI ST LOUIS 11116 S. Town Sq MISSOURI ST. LOUIS 3200 S. Second ST. N CAROLINA CARY 2000 Regency N CAROLINA CHARLOTTE 9731 JS. Pine N JERSEY E. RUTHERFORD 1 Meadowland NEW YORK ROCHESTER 120 Corporate Woods OHIO MASON 4900 Parkway OHIO VALLEY VIEW 9885 Rockside PENNSYLVANIA K. OF PRUSSIA 1018 W 9th Avenue PENNSYLVANIA PITTSBURGH 500 Business Center PENNSYLVANIA RADNOR 100 Matson Ford Rd. S CAROLINA GREENVILLE 201 Brookfield TENNESSEE NASHVILLE 5211 Linbar Drive TEXAS HOUSTON 675 Bering Drive TEXAS DALLAS 8111 LBJ Freeway TEXAS AUSTIN 9420 Research Blvd TEXAS SAN ANTONIO 8930 4 Winds Drive VIRGINIA RESTON 12347-B Sunrise WASHINGTON BELLEVUE 11130 NE 33rd Place WISCONSIN WAUKESHA 20725 Watertown SCHEDULE 7.1 INTERGRAPH CORPORATION INDEBTEDNESS as of November 30, 1996 Book Value ------------ 7.1(b)(i) Guarantees of indebtedness on behalf of Borrower's Subsidiaries - ------------------------------------------------- Subsidiary Bank Beneficiary Amount ---------- ------ ----------- ------ BELG ABN BRIZTON ZAVENTEM S.A. $62,474 BELG ABN DISTRIGAZ 62,210 BELG ABN DISTRIGAZ 21,617 BELG ABN ASLK 15,900 IMEL ABN GOVT OF ABU DHABI 11,853 IMEL ABN DUBAI LANDS DEPT 6,499 USA AMS HUNTSVILLE UTILITIES 300,000 IMEL AMS GOV'T OF THE ARAB REPUBLIC 69,990 IMEL AMS GOVERNMENT OF EGYPT 24,600 IMEL AMS GOVERNMENT OF EGYPT 9,000 AUST ANZ STATE AUTHORITIES SUPER. 118,961 AUST ANZ SYDNEY WATERBOARD 16,270 AUST ANZ STATE RAIL AUTHORITY 10,388 AUST ANZ VLB PARTNERSHIP 9,237 AUST ANZ HUNTER WATER CORP. LTD. 8,120 AUST ANZ WIDE BAY BURNETT 5,278 SPAIN AYR INSTITUTO GEOGRAFICO 2,950 SPAIN AYR TELEVISION ESPANOLA S.A. 2,078 SPAIN AYR GOBIERNO DE NAVARRA 1,662 SPAIN AYR CUARTEL GEN'L DE LA ARMADA 1,179 SPAIN AYR GOBIERNO DE NAVARRA 903 SPAIN AYR GOBIERNO DE NAVARRA 386 SPAIN AYR AYTO. DE LEGANES 131 SPAIN BANCO ENDESA 33,156 SPAIN BANCO DIRECCION REGIONAL DE NAVEGAC. 1,704 SPAIN BANCO DIRECCION REGIONAL DE NAV. 1,615 SPAIN BANCO GOVIERNO DE ANDORRA 1,558 ITAL BCI BANCA COMMERCIAL ITALIANA at Lira 2,000,000,000 1,310,000 FRAN BFCE SMESI - MAROC 12,911 SPAIN BS AENA 949 GERM BV STAEDT. WERKE MAGDEBURG 922,255 GERM BV TECHNOPARK GEWERBEBAU 501,508 GERM BV TECHNOPARK GEWERBEBAU 437,946 GERM BV DEUTSCHE BAHN AG, HALLE 265,625 GERM BV CASSELLA 156,863 GERM BV HORST MAIBURG 107,149 GERM BV DESPA IMMOBILIEN 98,039 GERM BV FIDES GMBH 68,700 GERM BV SKF LINEARSYSTEMS 43,137 GERM BV DVKB 19,608 GERM BV ITAG IMMOBILIEN-TREUHAND 19,608 GERM BV GOTHAER VERSICHERUNG 19,200 GERM BV KAAL-PETER RECC STUTTGART 16,340 GERM BV ITAG IMMOBILIEN-TREUHAND 15,686 GERM BV RAFFINERIESES. VOHBURS 13,072 GERM BV KARL-PETER RECK, STUTTGART 12,265 GERM BV ICEM SYS. GMBH, HANNOVER 9,359 GERM BV KARL-PETER RECK, STUTTGART 7,843 GERM BV NORDRHEIN AERZIFVERSORGING 4,941 GERM BV KARL-PETER KECK,STUTGART 4,931 IMEL CASH ISTANBUL MUNICIPALITY 1,976 INDIA CITI JANAKI RAMA 1,384,055 UK CITI H.M. CUSTOMS & EXCISE 625,000 ITAL CITI MINISTERO DIFESA 262,433 IMEL CITI GOV'T OF ABU DHABI 86,841 IMEL CITI AL AIN TOWN PLANNING DEPT. 81,916 ITAL CITI ARTESIA S.P.A. 72,825 GRE CITI MINISTRY OF AGRICULTURE 33,854 IMEL CITI HONEYWELL, KUWAIT 32,330 BELG CITI CITIBANK BELGIUM 31,800 PORT CITI CAMARA MUNICIPAL DE SINTRA 28,817 GRE CITI MINISTRY OF AGRICULTURE 28,681 IMEL CITI MIN OF DEF & AVIATION 26,667 GRE CITI PUBLIC TELEPHONE COMPANY 25,930 IMEL CITI GEN'L ORGAN. OF REMOTE SENSING 25,252 IMEL CITI ETISALAT, ABU DHABI 23,399 IMEL CITI KARAYOLLARI GENEL 20,800 ITAL CITI MINISTERO DELLA DIFESA 16,074 IMEL CITI MIN OF NATL DEF., ANKARA 15,000 IMEL CITI KING ABDULAZIZ CITY FOR SCIENCE 11,335 GRE CITI HELL AEROSPACE INDUSTRY 11,188 GRE CITI PUBLIC PETROLEUM COMPANY 10,372 GRE CITI PUBLIC ELECTR. COMPANY 10,071 IMEL CITI INTERGRAPH TURKEY 10,000 GRE CITI MIN OF TWON & PLAN 9,051 IMEL CITI MINISTRY OF DEFENSE-LEBANON 9,000 IMEL CITI ABU DHABI CO FOR ON-SHORE 8,853 IMEL CITI TURKISH TOURISM AUTH 8,721 PORT CITI INSTITUTO PORTUGUES 7,559 IMEL CITI ABU DHABI NATIONAL OIL CO. 6,311 GRE CITI PUBLIC GAS COMPANY 6,240 GRE CITI MUN OF KOZANI 4,352 GRE CITI PUBLIC PETROLEUM COMPANY 4,149 SPAIN CITI MINIST.ECONOMI.HACIEND. 3,115 IMEL CITI REPUBLIC OF TURKEY 2,700 GRE CITI MUN. OF KOZANI 2,178 GRE CITI PUBLIC GAS COMPANY 1,962 ITAL CITI MINISTERO POSTE COMUNIC 1,640 IMEL CITI GOV'T OF AUB DHABI 717 SPAIN CITI MINISTERIO HACIENDA 469 AUST CITIUS NAT'L AUSTRALIA BANK LTD 8,120,179 ITAL CITIUS CITIBANK - ITALY 3,600,000 IMEL CITIUS CITIBANK - DUBAI 1,500,000 INDIA CITIUS CITIBANK - INDIA 1,491,000 BENE CITIUS CITIBANK - BENELUX 1,000,000 PORT CITIUS CITIBANK, PORTUGAL, S.A. 993,582 HKONG CITIUS HONGKONG ELECTRIC CO., LTD 727,343 GRE CITIUS CITIBANK - GREECE 500,000 KOREA CITIUS INTERGRAPH KOREA 500,000 IMEL CITIUS MINISTRY OF DEFENCE & AVIATION 387,000 USA CITIUS NAT'L UNION FIRE INS. 320,000 USA CITIUS NATIONAL UNION INSURANCE 320,000 USA CITIUS NAT'L FIRE INS. CO. OF PITT 318,900 ISRA CITIUS BANK LEUMI LE ISRAEL 300,000 BELG CITIUS CITIBANK, BRUSSELS 198,773 DENM CITIUS UNIBANK A/S 170,602 RUSSIA CITIUS ROSNIC ZEMLYA 150,000 BRAZ CITIUS INSTITUTO NACIONAL 130,000 IMEL CITIUS MINISTRY OF DEFENCE & AVIATION 129,000 IMEL CITIUS CITIBANK ANKARA 100,270 POL CITIUS CITIBANK WARSAW-POLAND 100,000 KOREA CITIUS MINISTRY OF NAT'L DEFENSE 91,768 BENE CITIUS BEIGISCHE STRYDYRACHTEN 78,652 NORW CITIUS ANS NEOSOYVEIEN 4 77,651 AUS CITIUS CITIBANK - AUSTRIA 50,000 USA CITIUS FRITZ COMPANIES, INC. 49,623 IMEL CITIUS GOVERNMENT OF EQYPT 31,500 IMEL CITIUS GOV'T/EGYPT 29,906 KOREA CITIUS OFFICE OF SUPPLY 2,397 SPAIN CRED CUARTEL GENERAL DE LA 24,924 SPAIN CRED MINISTERIO DE DEFENSA 21,731 SPAIN CRED DIRECCION GEN'L DEL PATRIMONIO 15,578 SPAIN CRED PATRIMONIO DEL ESTADO 15,578 SPAIN CRED PATRIMONIO DEL ESTADO 15,578 SPAIN CRED SERVICIO GEOGRAFICO DEL EJERCITO 10,593 SPAIN CRED INSTITUTO CARTOGRAFICO 8,987 SPAIN CRED EJERC 8,548 SPAIN CRED AYUNTAMIENTO DE CACERES 7,789 SPAIN CRED GENERALITAT DE CATALUNA 7,166 SPAIN CRED EJRCITO DEL AIRE 6,449 SPAIN CRED MINISTEREO DE DEFENSA 6,332 SPAIN CRED GOBIERNO VASCO, DPTO 6,231 SPAIN CRED MINISTERIO DE DEFENSA 5,608 SPAIN CRED EJERCITO DELAIRE 5,139 SPAIN CRED AYUNTAMIENTO DE BADAJOZ 4,873 SPAIN CRED MINISTERIO DE DEFENSA 4,741 SPAIN CRED CUARTEL GEN'L DEL EJERCITO 4,720 SPAIN CRED UNIVERSIDAD DE VALENCIA 4,673 SPAIN CRED GENERALITAT DE CATALUNA 4,661 SPAIN CRED GENERALITAT DE CATALUNA 4,482 SPAIN CRED MINISTERIO DE DEFENSA 4,362 SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 4,270 SPAIN CRED EJERCITO DEL AIRE 4,173 SPAIN CRED INSTITUTO GEOGRAFICO (IGN) 4,045 SPAIN CRED GENERALITAT DE CAPALUNA 3,967 SPAIN CRED EJERCITO DEL AIRE 3,957 SPAIN CRED AYUNTAMIENTO DE CACERES 3,894 SPAIN CRED DIRECCION GENERAL DEL PATR. 3,894 SPAIN CRED DIRECCION GENERAL DEL PATR. 3,894 SPAIN CRED EJERCITO DEL AIRE 3,698 SPAIN CRED CUARTEL GENERAL DEL EJER. 3,232 SPAIN CRED CONSEJERID POLITICA 3,116 SPAIN CRED SERVICEO VASCO DE SALVD 3,116 SPAIN CRED CONSEJERIA DE POLITICA TERRIT. 3,090 SPAIN CRED DIPUTACION PROVINCIAL 3,084 SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 3,072 SPAIN CRED EJERCITO DEL AIRE 3,051 SPAIN CRED INSTITUTO CARTOGRAFICO DE CAT. 3,050 SPAIN CRED INSTITUTO CARTOGRAFICO 2,971 SPAIN CRED MINISTERIO DE DEFENSA 2,966 SPAIN CRED EJERCITYO DEL AIRE 2,661 SPAIN CRED MINISTERIO DE DEFENSA 2,492 SPAIN CRED SERVICIO GEOGRAFICO DEL EJERCITO 2,492 SPAIN CRED SERVICIO VASCO DE SALVD 2,492 SPAIN CRED CPT - COMUNIDAD DE MADRID 2,426 SPAIN CRED UNIVERSIDAD POLITENCNICA 2,337 SPAIN CRED AYUNTAMIENTO DE HOSP. 2,181 SPAIN CRED CISC 2,141 SPAIN CRED DIRECCION GENERAL DE TRAFICO 2,112 SPAIN CRED EJERCITO DEL AIRE 2,086 SPAIN CRED DIPUTACION DE LA CORUNA 2,069 SPAIN CRED UNIVERSIDAD DE MURCIA 2,025 SPAIN CRED GENERALITAT DE CATALUNA 1,947 SPAIN CRED EJERCITO DEL AIRE 1,714 SPAIN CRED MINISTERIO DE DEFENSA 1,714 SPAIN CRED CONSGJERIA DE POLITICA 1,587 SPAIN CRED EJERCITYO DEL AIRE 1,562 SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 1,479 SPAIN CRED EJERCITO DEL AIRE 1,448 SPAIN CRED GENERALIDAT DE CAPALUNA 1,432 SPAIN CRED AYUNTAMIENTO DE HOSPITALET 1,402 SPAIN CRED CONSEJERIA DE POLITICA 1,387 SPAIN CRED SEVICIO GEOGRAFICO DEL EJERCITO 1,246 SPAIN CRED CPT-CONUNIDAD DE MADRID 1,220 SPAIN CRED INSTITUTO GEOGRAFICO NACIONAL 1,198 SPAIN CRED COMUNIDAD DE MURCIA 1,181 SPAIN CRED UNIVERSIDAD POLITECNICA 1,134 SPAIN CRED AYTO.DE LAS PALMAS 1,125 SPAIN CRED EJERCITO DEL AIRE 1,123 SPAIN CRED C.P.T. COMUNIDAD DE MADRID 1,090 SPAIN CRED AYUNTAMIENTO DE GIJON 1,071 SPAIN CRED DIPUTACION DE LA CORUNA 1,034 SPAIN CRED AYUNTAMIENTO DE LEGANES 1,028 SPAIN CRED EJERCITO DEL AIRE 1,014 SPAIN CRED M.O.P.T. 998 SPAIN CRED AYUNMMIENTO DE LEGANES 974 SPAIN CRED INSTITUTO HIDROGRAFICO DE LA 931 SPAIN CRED AYRO DE HOSPITALIT 902 SPAIN CRED MINISTERIO DE DEFENSA 857 SPAIN CRED COMUNIDAD FORAL DE NAV. 840 SPAIN CRED GOBIERNO BALEAR 826 SPAIN CRED MINISTERIO OBRAS PUBLICAS 821 SPAIN CRED INSTITUTO GEOGRAFICO NAC'L 783 SPAIN CRED CONSEJERIA DE POLITICA 779 SPAIN CRED MINISTERIO DE DEFENSA 763 SPAIN CRED AYTO TORRENT 748 SPAIN CRED AYUNMMIENTO DE LEGANES 654 SPAIN CRED AYUNTAMIENTO DE LEGANES 632 SPAIN CRED MINISTERIO DEFENSA 623 SPAIN CRED EJERCITO DEL AIRE 562 SPAIN CRED CPT COMUNIDAD DE MADRID 530 SPAIN CRED INTITUTO GEOGRAFICO NAC'L 471 SPAIN CRED INSTITUTO GEOGRAFICO 468 SPAIN CRED COMUNIDAD AUTONOMA 467 SPAIN CRED COMUNIDAD FORAL DE NAV. 452 SPAIN CRED DIPUTACION DE BARCELONA 439 SPAIN CRED COMUNIDADDE MADRID 403 SPAIN CRED AUUNTAMIENTO DE IRUN 398 SPAIN CRED MINISTERIO OBRAS PUBLICAS 308 SPAIN CRED INSTITUTO GEOGRAFICO 269 SPAIN CRED AYUNTAMIENTO DE LEGANES 243 SPAIN CRED AYUNTAMIENTO DE SIERO 132 SPAIN CRED AYUNTAMIENTO DE GIJON 126 IMEL EBIL ABV ROCK, SAUDI 731,543 IMEL EBIL DIRECTOR GENERAL DEFENSE PROC. 240,000 IMEL EBIL BURSA WATER & SEWERAGE ADMN 228,000 IMEL EBIL ABV ROCK, SAUDI 133,333 IMEL EBIL GHQ ARMED FORCES, AUB DHA 130,790 IMEL EBIL BURSA WATER & SEWERAGE ADMN 100,000 IMEL EBIL TCK GENEL MUDURLUGU 75,000 IMEL EBIL ARMED FORCES OPERATIONS, SAUDI 49,700 IMEL EBIL ARMED FORCES OPERATIONS, SAUDI 49,233 IMEL EBIL MINISTRY OF DEFENSE, ANKARA 45,000 IMEL EBIL GOV'T OF ABU DHABI 27,248 IMEL EBIL IBN ZAHR, SAUDI 26,133 IMEL EBIL RIYADH MUNICIPALITY 24,681 IMEL EBIL ETISALAT, ABU DHABI 23,151 IMEL EBIL RIYADH WATER & SEWER DEPT 18,667 IMEL EBIL SHARJAH MUNICIPALITY 17,694 IMEL EBIL ERDEMIR, T.A.S. ANKARA 10,000 IMEL EBIL UAE ARMED FORCES 8,038 IMEL EBIL DEWA 5,450 IMEL EBIL GOVT OF ABU DHABI 4,619 IMEL EBIL SCECO (EAST), SAUDI 4,000 IMEL EBIL GOVT OF ABU DHABI 3,676 IMEL EBIL RUWAIS FERTILIZER INDUSTRIES 2,725 IMEL EBIL QATAR NATIONAL BANK 2,225 IMEL EBIL ETISALAT, ABU DHABI 2,044 IMEL EBIL RIYADH WATER & SEWER DEPT 1,733 IMEL EBIL GOV'T OF ABU DHABI 1,642 IMEL EBIL GOV'T OF ABU DHABI 1,635 IMEL EBIL GOVT OF ABU DHABI 1,520 IMEL EBIL GOV'T OF ABU DHABI 763 HKONG HKB HONG KONG ELECTRIC 604,087 HKONG HKB HONG KONG ELECTRIC 604,087 SING HKB TELEKOM MALAYSIA BERHAD 453,187 SING HKB PUBLIC WORKS DEPARTMENT 214,364 HKONG HKB HONG KONG ELECTRIC 118,088 SING HKB PUBLIC WORKS DEPT 113,431 SING HKB PUBLIC WORKS DEPARTMENT 86,576 APH HKB CHINA NATIONAL TECHNICAL 81,239 SING HKB MINISTRY OF DEFENCE 72,102 APH HKB SHANGHAI INTERN'L TENDERING 50,000 SING HKB IMATERA DIGITAL IMAGE SERV 48,749 SING HKB PUBLIC WORKS DEPT 46,188 SING HKB NAVAL ANALYSIS SUBSYSTEM 38,130 HKONG HKB HONG KONG ELECTRIC 36,393 SING HKB MINISTRY OF THE ENVIRONMENT 25,548 SING HKB JURONG TOWN CORPORATION 19,225 APH HKB CMC INT'L TENDERING CO 19,100 SING HKB JURONG TOWN CORPORATION 17,563 SING HKB JURONG TOWN CORPORATION 16,687 SING HKB JURONG TOWN CORPORATION 11,742 SING HKB MINISTRY OF DEFENCE 11,067 SING HKB PETRONAS NASIONAL BERHAD 11,052 SING HKB PUBLIC WORKS DEPT 10,638 SING HKB PORT OF SINGAPORE AUTH. 9,508 SING HKB MINISTRY OF ENVIRONMENT 9,375 SING HKB FOSTER WHEELER EASTERN 9,213 SING HKB MIN. OF THE ENVIRONMENT 8,864 SING HKB PUBLIC WORKS DEPT 8,511 SING HKB MINISTRY OF DEFENSE 8,107 SING HKB FOSTER WHEELER EASTERN PRIVATE 7,034 SING HKB NAVAL ANALYSIS SUBSYSTEM 6,596 SING HKB MINISTRY OF DEFENSE 5,921 SING HKB MINISTRY OF DEFENSE 5,868 SING HKB FOSTER WHEELER EASTERN PRIVATE 5,630 SING HKB LAND TRANSPORT AUTHORITY 4,451 SING HKB PORT OF SINGAPORE AUTH. 3,921 SING HKB FOSTER WHEELER EASTERN PRIVATE 3,758 SING HKB HOUSING & DEV. BOARD 3,472 SING HKB PUBLIC WORKS DEPARTMENT 3,348 SING HKB PUBLIC WORKS DEPARTMENT 3,003 SING HKB URBAN REDEVELOPMENT AUTH 2,843 SING HKB PORT OF SINGAPORE AUTH. 2,837 SING HKB MARITIME & PORT AUTH. OF SING. 2,470 SING HKB JURONG TOWN CORPORATION 2,284 SING HKB FOSTER WHEELER EASTERN PRIVATE 2,092 SING HKB PORT OF SINGAPORE AUTH. 507 APH HSB CHINA NATIONAL INSTRUMENTS 418,490 UK NATWES BRISTOL CHAMBER OF COMMERCE 9,358 IMEL NBK MINISTRY OF DEFENSE, KUWAIT 2,000,000 IMEL NBK KUWAIT UNIVERSITY 6,667 IMEL NKU MINISTRY OF ELECTRIC & WATER 8,267 IMEL NKU KUWAIT MUNICIPALITY 1,533 IEM RAB DISTRICT ARNHEM 150,622 CAN RBC ROYAL BANK OF CANADA 1,015,000 IMEL SAB SAUDI CONSOLIDATED ELEC CO 7,113 SWE SEB SKANDINAVISKA ENSKILDA BANKEN at 3mm SEK 439,000 SPAIN SEG PATRIMONIO DEL ESTADO 46,733 SPAIN SEG AYUNTAMIENTO DE SANTO 13,085 SPAIN SEG DYUNTAMIENTO DE HOSPITALET 11,683 SPAIN SEG RADIO Y TELEVISION 7,020 SPAIN SEG YUNTOIENTO DE SANTA CRUZ 6,543 SPAIN SEG COMUNIDAD DE MADUD 3,583 SPAIN SEG XUNTA DE GALICIA 2,804 SPAIN SEG AYUNTAMIENTO DE GVADAGAJORD 2,337 SPAIN SEG XUNIA DE GALICIA 2,337 SPAIN SEG AYUNTAMIENTO DE HOSPIT. 2,150 SPAIN SEG MINISTERIO DE DEFENSA 1,869 SPAIN SEG COMUNIDAD DE MADRID 1,587 SPAIN SEG AYUNTAMIENTO DE LAS PALMAS 1,540 SPAIN SEG UNIVER. SEVILLA 1,260 SPAIN SEG AYUNNAMIENTO HOSPITALET 1,184 SPAIN SEG INSTITUTO GEOGRAFICO NACIO 1,120 SPAIN SEG M.O.P.T. 966 SPAIN SEG AYUNTAMIENTO DE LAS 935 SPAIN SEG AYUNTAMIENTO DEHOSPITALET 919 SPAIN SEG AYUNTAMIENTO DE VIGO 456 SPAIN SEG AYUNTAMIENTO DE VIGO 362 SPAIN SEG AYTO DE ZARAGOZA 304 SPAIN SEG DIPUTACION DE LA CORUNA 265 SPAIN SEG AYUNTAMIENTO DE VIGO 125 SPAIN SEG SERVICIO GEOGRAFICO DEL EJE 116 TAIW SINO MOI 4,001 TAIW SINO TPW 2,001 TAIW SINO TPW/UD 1,291 US STRUST SOUTHTRUST BANK 10,000 UK ULST INTERGRAPH IRELAND 312,500 ---------- 38,862,516 Borrower (Finova - Unsecured Financing) 665,000 ---------- TOTAL ALL CATEGORIES 39,527,516 ========== AIRCRAFT SECURITY AGREEMENT --------------------------- THIS AIRCRAFT SECURITY AGREEMENT ("this Agreement"), is entered into as of December 20, 1996 between INTERGRAPH CORPORATION, a Delaware corporation ("Debtor"), with its chief executive office located at One Madison Industrial Park, Huntsville, Alabama 35894, and FOOTHILL CAPITAL CORPORATION, a California corporation ("Secured Party"), with a place of business located at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90025-3333, with reference to the following facts: RECITALS -------- WHEREAS, Debtor and Secured Party have entered into a Loan and Security Agreement, dated as of December 20, 1996 (as amended, restated, modified, renewed, or extended from time to time, the "Loan Agreement"); WHEREAS, Debtor is the sole owner of the Aircraft described and identified in Schedule 1 attached hereto and incorporated herein by reference, subject only to the liens and rights of Secured Party granted herein. (Unless the context clearly requires otherwise, the term "Aircraft" as used hereinafter shall be deemed to mean the aircraft identified in Schedule 1, together with the engines attached or belonging thereto and any and all components, appliances, equipment, accessories, avionics, instruments, parts, manuals, books and records, and other property installed in, appurtenant to or delivered with or in respect of each such aircraft. Furthermore, capitalized words used herein but not otherwise defined herein shall have the respective meanings assigned to them in the Loan Agreement.); WHEREAS, Secured Party wishes to obtain and Debtor wishes to provide Secured Party with security for the repayment of all of the Obligations owing by Debtor to Secured Party (hereinafter collectively referred to as the "Secured Obligations"); and WHEREAS, pursuant to the Loan Agreement and as one of the conditions thereof precedent to the obligations of Secured Party under the Loan Agreement, Debtor has agreed to execute and deliver this Agreement to Secured Party. GRANT OF SECURITY INTEREST AND MORTGAGE --------------------------------------- NOW, THEREFORE, in order to secure prompt payment and performance of all present and future Secured Obligations, Debtor does hereby assign and grant a security interest in and mortgage to Secured Party the following described personal property (hereinafter sometimes collectively referred to as the "Mortgaged Property"): (1) The Aircraft identified in Schedule 1; (2) All appurtenances, accessions, appliances, spare parts, instruments, avionics, accessories or other equipment or parts related to each Aircraft, whether now or hereafter belonging to Debtor and part of, installed on or attached to any of the Aircraft; (3) All property constituting replacements of or additions to any of the property described above, in the event that any such replacements or additions shall become the property of Debtor; (4) All right, title and interest of Debtor in and to any lease, rental agreement or charter agreement respecting the Aircraft, including without limitation the right to receive either directly or indirectly from any party or person any rents or other payments due under such agreement(s); (5) All log books, records and other documents maintained by Debtor with respect to the foregoing items (1) through (4); and (6) All the proceeds and products of the foregoing items (1) through (4), including without limitation, all accounts, instruments, documents, contract rights, general intangibles, money, deposit accounts, goods, inventory, equipment and machinery and other tangible and intangible assets of Debtor arising out of or resulting from the sale or other disposition of any of the foregoing items and the proceeds of such proceeds, and the proceeds of insurance policies issued with respect to the foregoing and with respect to the use and operation of the Aircraft. IT IS HEREBY COVENANTED AND AGREED by and between Secured Party and Debtor that the terms, provisions and conditions upon which the Mortgaged Property is to be held and disposed of are as follows: ARTICLE I REPRESENTATIONS AND WARRANTIES AND ---------------------------------- COVENANTS OF DEBTOR ------------------- Section 1.1 - Title to Mortgaged Property Debtor represents and warrants that it has good and clear title to the Mortgaged Property free of all Liens, other than Permitted Liens. ARTICLE 2 EVENTS OF DEFAULT AND REMEDIES ------------------------------ Section 2.1 - Rights and Remedies Upon Default Upon the occurrence and during the continuance of any Event of Default, Secured Party shall have the right, to the extent provided under the Loan Agreement, to declare all or any portion of the Secured Obligations immediately due and payable and to terminate any commitment by Secured Party to make Revolving Advances or to issue L/Cs or L/C Guaranties to Debtor under the Loan Agreement. Secured Party shall have all other rights, powers, privileges and remedies available to a secured party under the UCC, at law or in equity, or otherwise. Section 2.2 - Exercise of Remedies Each right, power and remedy herein granted Secured Party is cumulative and in addition to every other right, power and remedy herein specifically given or now or hereafter existing under or by virtue of the provisions of any other agreement between Debtor and Secured Party or in equity, at law or by virtue of statute or otherwise. No failure to exercise, and no delay in exercising, any right, power or remedy held by Secured Party hereunder or otherwise, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy held hereunder or otherwise, preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Section 2.3 - Replacements and Additions Secured Party acknowledges that Debtor may, from time to time, replace portions, repair, or make additions to, the Aircraft, provided that the value of such Aircraft is not thereby impaired. Any such replacement property or additions which may become the property of Debtor shall immediately upon the acquisition thereof be and become subject to the lien of the security interest and mortgage created, granted and conveyed pursuant to this Agreement. Debtor shall execute such documents as are reasonably necessary to grant to Secured Party a security interest in or perfect Secured Party's security interest in said replacements or additions. ARTICLE 3 MISCELLANEOUS PROVISIONS ------------------------ Section 3.1 - Entire Agreement This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof. This Agreement cannot be changed or terminated orally. Section 3.2 - Notices Unless otherwise specifically provided in this Agreement, any notice or other communication relating to this Agreement or any other agreement entered into in connection therewith shall be in writing and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, or by prepaid telex, TWX, telefacsimile, or telegram (with messenger delivery specified) to Debtor or to Secured Party in the manner set forth in the Loan Agreement Section 3.3 - Loan Document This Agreement is a Loan Document. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the day and year first written above. INTERGRAPH CORPORATION, a Delaware corporation By ------------------------------------ Title: -------------------------------- FOOTHILL CAPITAL CORPORATION, a California corporation By ------------------------------------ Title: -------------------------------- SCHEDULE 1 TO AIRCRAFT SECURITY AGREEMENT ----------------------------------------- This Schedule 1 is attached to and incorporated by reference into that certain Aircraft Security Agreement (the "Agreement"), dated as of December 20, 1996, between INTERGRAPH CORPORATION ("Debtor") and FOOTHILL CAPITAL CORPORATION ("Secured Party"). In accordance with the terms and conditions of the Agreement, Debtor hereby assigns and grants a security interest in and mortgages to Secured Party the following Aircraft: 1. AIRCRAFT MAKE AND MODEL: ----------------------- British Aerospace, Model HS125 Series F400B MANUFACTURER'S SERIAL NUMBER: 25270 ---------------------------- U.S. FAA REGISTRATION NUMBER: N270AV ---------------------------- ENGINES Allied Signal ------- model TSE 731-3R-1H serial numbers: P84419, P84422 EXHIBIT C-1 (Form of Compliance Certificate) [on Borrower's letterhead] To: Foothill Capital Corporation 11111 Santa Monica Boulevard, Suite 1500 Los Angeles, California 90025-3333 Attn: Business Finance Division Manager Re: Compliance Certificate dated ____________, 199__ Ladies and Gentlemen: Reference is made to that certain Loan and Security Agreement, dated as of December 20, 1996 (as the same may from time to time be amended, modified, supplemented or restated, the "Loan Agreement") between Intergraph Corporation, a Delaware corporation ("Borrower") and Foothill Capital Corporation ("Foothill"). The initially capitalized terms used in this Compliance Certificate have the meanings set forth in the Loan Agreement unless specifically defined herein. Pursuant to Section 6.3 of the Loan Agreement, the undersigned officer of Borrower hereby certifies that: 1. The financial information of Borrower furnished in Schedule 1 attached hereto, has been prepared in accordance with GAAP (except for year-end adjustments and the lack of footnotes, in the case of financial statements delivered under Section 6.3(a) of the Loan Agreement) and fairly presents the financial condition of Borrower. 2. Such officer has reviewed the terms of the Loan Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and condition of Borrower during the accounting period covered by financial statements delivered pursuant to Section 6.3 of the Loan Agreement. 3. Such review has not disclosed the existence on and as of the date hereof, and the undersigned does not have knowledge of the existence as of the date hereof of any event or condition that constitutes a Default or Event of Default, except for such conditions or events listed on Schedule 2 attached hereto, specifying the nature and period of existence thereof and what action Borrower has taken, is taking or proposes to take with respect thereto. 4. Borrower is in timely compliance with all representations, warranties, and covenants set forth in the Loan Agreement and the other Loan Documents, except as set forth on Schedule 2 attached hereto. Without limiting the generality of the foregoing, Borrower is in compliance with the covenants contained in Sections 7.20 and 7.21 of the Loan Agreement as demonstrated on Schedule 3 hereof. IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this _____ day of _______________, ________. Intergraph Corporation, a Delaware corporation By: ________________________ Name: Title: SCHEDULE 1 ---------- (INTENTIONALLY LEFT BLANK) SCHEDULE 2 ---------- (INTENTIONALLY LEFT BLANK) SCHEDULE 3 ---------- 1. Current Ratio. (a) The ratio of Borrower's Consolidated Current Assets divided by Consolidated Current Liabilities, as of the last day of the fiscal quarter ending ___________, 19__, is calculated as follows: (i) Consolidated Current Assets of Borrower: $_________________ (ii) Consolidated Current Liabilities of Borrower: $_________________ Item (i) divided by Item (ii): ________ : 1.0 (b) The ratio set forth above [is/is not] less than [_______]: 1.0. 2. Minimum Net Worth. (a) The Net Worth of Borrower, as of the last day of the fiscal quarter ending ___________, 19__, is calculated as follows: (i) Borrower's total stockholder equity: $_________________ Item (i) (= Net Worth): $_________________ (b) The Net Worth set forth above [is/is not] less than [$___________]. 4. Capital Expenditures. (a) The aggregate amount of capital expenditures made or committed to be made to date in the current fiscal year is $________________. (b) The aggregate amount set forth above [is/is not] in excess of [$_______________]. COPYRIGHT SECURITY AGREEMENT This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of December 20, 1996 is made by INTERGRAPH CORPORATION, a Delaware corporation ("Debtor"), in favor of FOOTHILL CAPITAL CORPORATION, a California corporation ("Secured Party"). RECITALS A. Debtor and Secured Party have entered into that certain Loan and Security Agreement, dated as of the date hereof (as amended, modified, renewed or extended from time to time, the "Loan Agreement"), pursuant to which Secured Party has agreed to make certain financial accommodations to Debtor, and Debtor has granted to Secured Party a security interest in (among other things) certain of the general intangibles of Debtor. B. Pursuant to the Loan Agreement and as one of the conditions precedent to the obligations of Secured Party under the Loan Agreement, Debtor has agreed to execute and deliver this Agreement to Secured Party for filing with the United States Copyright Office and with any other relevant recording systems in any domestic or foreign jurisdiction, and as further evidence of and to effectuate Secured Party's existing security interests in the copyrights and other general intangibles described herein. ASSIGNMENT NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is hereby acknowledged, Debtor hereby agrees in favor of Secured Party as follows: II. Definitions; Interpretation. A. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Copyright Collateral" has the meaning set forth in Section 2. "Copyrights" has the meaning set forth in Section 2. "Lien" means any pledge, security interest, assignment, charge or encumbrance, lien (statutory or other), or other prefer ential arrangement (including any agreement to give any security interest). "Secured Obligations" means all liabilities, obligations, or undertakings owing by Debtor to Secured Party of any kind or description arising out of or outstanding under, advanced or issued pursuant to, or evidenced by the Loan Agreement, the other Loan Documents, or this Agreement, irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, voluntary or involuntary, whether now existing or hereafter arising, and including all interest (including interest that accrues after the filing of a case under the Bankruptcy Code) and any and all costs, fees (including attorneys fees), and expenses which Debtor is required to pay pursuant to any of the foregoing, by law, or otherwise. "UCC" means the Uniform Commercial Code as in effect from time to time in the State of California. "United States" and "U.S." each mean the United States of America. B. Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings ascribed to them in the UCC. C. Interpretation. In this Agreement, except to the extent the context otherwise requires: (i) Any reference to a Section or a Schedule is a reference to a section hereof, or a schedule hereto, respectively, and to a subsection or a clause is, unless otherwise stated, a reference to a subsection or a clause of the Section or subsection in which the reference appears. (ii) The words "hereof," "herein," "hereto," "hereunder" and the like mean and refer to this Agreement as a whole and not merely to the specific Section, subsection, paragraph or clause in which the respective word appears. (iii) The meaning of defined terms shall be equally applicable to both the singular and plural forms of the terms defined. (iv) The words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation." (v) References to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto. (vi) References to statutes or regulations are to be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation referred to. (vii) Any captions and headings are for convenience of reference only and shall not affect the construction of this Agreement. (viii) Capitalized words not otherwise defined herein shall have the respective meanings ascribed to them in the Loan Agreement. (ix) In the event of a direct conflict between the terms and provisions of this Agreement and the Loan Agreement, it is the intention of the parties hereto that both such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of the Loan Agreement shall control and govern; provided, however, that the inclusion herein of additional obligations on the part of Debtor and supplemental rights and remedies in favor of Secured Party (whether under California law or applicable federal law), in each case in respect of the Copyright Collateral, shall not be deemed a conflict with the Loan Agreement. III. Security Interest. A. Assignment and Grant of Security. As security for the payment and performance of the Secured Obligations, Debtor hereby grants, assigns, transfers and conveys to Secured Party a continuing security interest in all of Debtor's right, title and interest in, to and under the following property, whether now existing or hereafter acquired or arising or in which Debtor now has or hereafter acquires or develops an interest and wherever the same may be located (the "Copyright Collateral"): (i) all copyrights, rights, titles and interests in and to published and unpublished works of authorship that Debtor owns or uses in its business or will in the future adopt and so use, and all copyrights in any original or derivative works of authorship and all works protectable by copyright that are presently, or in the future may be, owned, created, authored (as a work for hire), acquired or used (whether pursuant to a license or otherwise) by Debtor, in whole or in part (collectively, the "Copyrights"), all copyright registrations and applications for copyright registration that have heretofore been or may hereafter be issued thereon or applied for in the United States or throughout the world, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office (the "Registrations"), all common law and other rights in and to the Copyrights throughout the world, including all copyright licenses (collectively, the "Copyright Rights"), and all renewals and extensions thereof, throughout the world, including all proceeds thereof (such as, by way of example and not by limitation, license royalties and proceeds of infringement suits), the right (but not the obligation) to renew and extend such Copyrights, Registrations and Copyright Rights and to register works protectable by copyright and the right (but not the obligation) to sue or bring opposition or cancellation proceedings in the name of Debtor or in the name of Secured Party for past, present and future infringements or violations of the Copyrights, Registrations and Copyright Rights, and recover damages for past, present and future infringements or violations thereof, and all rights corresponding thereto throughout the world, including: (A) all of Debtor's right, title and interest in and to all copyrights or rights or interests in copyrights registered or recorded in the United States Copyright Office, including the Registrations listed on Schedule A attached hereto, as the same may be amended or supplemented pursuant hereto from time to time; (B) all of Debtor's right, title and interest in and to all renewals and extensions of any such copyrights, including renewals or extensions of the Registrations listed on Schedule A attached hereto, that may be secured under the law now or hereafter in force and effect; (C) all of Debtor's right, title and interest to make and exploit all derivative works based on or adopted from all works covered by any of the Copyright Collateral; and (D) all of Debtor's right, title and interest pursuant to or under licensing or other contracts in favor of Debtor pertaining to copyrights and works protectable by copyright presently or in the future owned or used by third parties; (ii) all inventions, designs, patents, patent applications, registrations, trade secrets, proprietary rights, corporate or other business records, computer programs, source codes, object codes, data bases and all other intangible personal property at any time used in connection with the businesses of Debtor (referred to herein as "Proprietary Rights"); (iii) all general intangibles (as defined in the UCC) and all intangible intellectual or other similar property of Debtor of any kind or nature, whether now owned or hereafter acquired or developed, associated with or arising out of any of the Copyrights, Registrations, Copyright Rights or Proprietary Rights and not otherwise described above; and (iv) all proceeds of any and all of the foregoing Copyright Collateral (including license royalties, rights to payment, accounts receivable and proceeds of infringement suits) and, to the extent not otherwise included, all payments under insurance (whether or not Secured Party is the loss payee thereof) or any indemnity, warranty or guaranty payable by reason of loss or damage to or otherwise with respect to the foregoing Copyright Collateral. For purposes of this Agreement, the term "proceeds" includes whatever is receivable or received when Copyright Collateral or proceeds are sold, licensed, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes, without limitation, all rights to payment, including returned premiums, with respect to any insurance relating thereto. B. Certain Exclusions from Grant of Security Interest. Anything in this Agreement and the other Loan Documents to the contrary notwithstanding, the foregoing grant, assignment, transfer, and conveyance of a security interest shall not extend to, and the term "Copyright Collateral" shall not include, any item of Copyright Collateral described in Section 2(a) above that is now or hereafter held by Debtor as licensee or otherwise, solely in the event and to the extent that: (i) as the proximate result of the foregoing grant, assignment, transfer, or conveyance of a security interest, Debtor's rights in or with respect to such item of Copyright Collateral would be forfeited or would become void, voidable, terminable, or revocable, or if Debtor would be deemed to have breached, violated, or defaulted the underlying license or other agreement that governs such item of Copyright Collateral pursuant to the restrictions in the underlying license or other agreement that governs such item of Copyright Collateral; (ii) any such restriction shall be effective and enforceable under applicable law, including Section 9318(4) of the Code; and (iii) any such forfeiture, voidness, voidability, terminability, revocability, breach, violation, or default cannot be remedied by Debtor using its best efforts (but without any obligation to make any material expenditures of money or to commence legal proceedings); provided, however, that the foregoing grant, assignment, transfer, and conveyance of security interest shall extend to, and the term "Copyright Collateral" shall include, (y) any and all proceeds of such item of Copyright Collateral to the extent that the assignment or encumbering of such proceeds is not so restricted, and (z) upon any such licensor or other applicable party's consent with respect to any such otherwise excluded item of Copyright Collateral being obtained, thereafter such item of Copyright Collateral as well as any proceeds thereof that might theretofore have been excluded from such grant, assignment, transfer, and conveyance of a security interest and the term "Copyright Collateral." C. Continuing Security Interest. Debtor agrees that this Agreement shall create a continuing security interest in the Copyright Collateral which shall remain in effect until terminated in accordance with Section 17. D. Incorporation into Loan Agreement. This Agreement shall be fully incorporated into the Loan Agreement and all understandings, agreements and provisions contained in the Loan Agreement shall be fully incorporated into this Agreement. Without limiting the foregoing, the Copyright Collateral described in this Agreement shall constitute part of the Collateral in the Loan Agreement. E. Licenses. Anything in the Loan Agreement or this Agreement to the contrary notwithstanding, Debtor may grant non- exclusive licenses of the Copyright Collateral (subject to the security interest (if any) of Secured Party therein) in the ordinary course of business consistent with past practice. IV. Representations and Warranties. Debtor represents and warrants to Secured Party and for the benefit of Secured Party the following: (a) True and Complete List. Set forth in Schedule A is a true and complete list of all Copyrights, Registrations in the United States Copyright Office, and applications for Registrations in the United States Copyright Office owned by Debtor or held (whether pursuant to a license or otherwise) or used in conducting its business, in whole or in part; (b) Powers. Debtor has full power, authority and legal right to pledge and to grant to Secured Party a security interest in all of the Copyright Collateral pursuant to this Agreement, and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person except as already obtained; (c) Validity. Each of the Copyrights referred to in Schedule A is valid, subsisting and enforceable, and Debtor has properly complied with all applicable statutory and regulatory requirements, including all notice requirements, in connection with each of such Copyrights, and, except as set forth on Schedule 5.10 to the Loan Agreement, no claim has been made that the use of any of such Copyrights does or may infringe or otherwise violate the rights of any third Person; (d) Title. Debtor has rights in and good title to the Copyright Collateral shown on the schedules hereto as being owned by it, is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to such Copyright Collateral, free and clear of any Liens (other than Liens in favor of Secured Party), including pledges, agreements, licenses, registered user agreements and covenants by Debtor not to sue third Persons; for any Copyright Collateral for which Debtor is either a licensor or a licensee pursuant to a license or licensing agreement regarding such Copyright Collateral, each such license or licensing agreement is in full force and effect, Debtor is not in default of any of its obligations thereunder and other than the parties to such licenses or licensing agreements, no other Person has any rights in or to any of such Copyright Collateral; (e) No Violation. The execution, delivery and performance by Debtor of this Agreement do not violate any provision of law or the articles of incorporation or by-laws of Debtor or result in a breach of or constitute a default under any contract, obligation, indenture or other instrument to which Debtor is a party or by which Debtor may be bound; (f) Authorization. This Agreement has been duly authorized, executed and delivered, and constitutes a legal, valid and binding agreement of Debtor enforceable in accordance with its terms; and (g) Secrecy. Debtor has taken and will continue to take all reasonable steps to protect the secrecy of all trade secrets relating to any of its unpublished Copyright Collateral and its Proprietary Rights. V. Covenants. Debtor covenants that so long as this Agreement shall be in effect, Debtor shall: (a) Further Acts. On a continuing basis, make, execute, acknowledge and deliver, and file and record in the proper filing and recording places, all such instruments and documents, including appropriate financing and continuation statements and security agreements, and take all such action as reasonably may be necessary or advisable or reasonably may be requested by Secured Party to carry out the intent and purposes of this Agreement, or for assuring, confirming or protecting the grant or perfection of the security interest granted or purported to be granted hereby, to ensure Debtor's compliance with this Agreement or to enable Secured Party to exercise and enforce its rights and remedies hereunder with respect to the Copyright Collateral. Without limiting the generality of the foregoing sentence, Debtor: (i) authorizes Secured Party in its sole discretion after ten (10) days prior notice to Debtor, to modify this Agreement without first obtaining Debtor's approval of or signature to such modification by amending Schedule A hereof to include a reference to any right, title or interest in any existing Copyright, Registration or Copyright Right or any Copyright, Registration or Copyright Right acquired or developed by Debtor after the execution hereof, or to delete any reference to any right, title or interest in any Copyright, Registration or Copyright Right in which Debtor no longer has or claims any right, title or interest; and (ii) hereby authorizes Secured Party, in its sole discretion, to file one or more financing or continuation statements, and after ten (10) days prior notice to Debtor, amendments thereto, relative to all or any portion of the Copyright Collateral without the signature of Debtor where permitted by law; (b) Compliance with Law. Comply, in all material respects, with all applicable statutory and regulatory requirements in connection with any and all of the Copyright Collateral that is the subject of the Registrations and give such notice of copyright, prosecute such material claims, keep such confidentiality and do all other acts and take all other measures which may be necessary or desirable to preserve, protect and maintain such Copyright Collateral and all of Debtor's rights therein, including diligently prosecute any material copyright application pending as of the date of this Agreement or thereafter; (c) Compliance with Agreement. Comply with each of the terms and provisions of this Agreement, and not enter into any agreement (for example, a license agreement) which is inconsistent with the obligations of Debtor under this Agreement without Secured Party's prior written consent; and (d) Lien Protection. Not permit the inclusion in any contract to which Debtor becomes a party of any provision that could or might impair or prevent the creation of a security interest in favor of Secured Party in Debtor's rights and interest in any property included within the definitions of the Copyrights, Registrations and Copyright Rights acquired under such contracts. VI. New Copyrights, Registrations and Copyright Rights. If Debtor shall obtain rights to or develop any new works protectable by copyright, or become entitled to the benefit of any Copyright Rights, Registration or application for Registration not described on the schedules hereto, or any renewals or extension of any Copyright, Copyright Rights or Registration, the provisions of this Agreement shall automatically apply thereto. Debtor shall give Secured Party written notice (a) of any such work or such rights of material value to Debtor or the operation of its businesses and (b) any such Registration, applications for Registration or renewal or extension of any Copyright. Concurrently with or promptly after the filing of an application for any Registration for any Copyright, Debtor shall execute and deliver a Copyright Security Agreement substantially in the form of this Agreement and otherwise in form and substance satisfactory to the Secured Party, pursuant to which Debtor shall grant and reaffirm its grant of a security interest to the extent of its interest in such Registration as provided herein to Secured Party, and Debtor shall cause such agreement to be recorded in the offices and jurisdictions indicated by Secured Party. VII. Copyright Registration, Renewal and Litigation. (a) Registration. Debtor shall have the duty diligently to make any application for Registration on any existing or future unregistered but copyrightable works that are material to Debtor's business or operations and to do any and all acts which are reasonably necessary or desirable to preserve, renew and maintain all rights in all Copyrights, Registrations and Copyright Rights; provided, however, that Debtor shall not be obligated to renew any Copyrights, Registrations or Copyright Rights covering any products that Debtor has not sold, licensed or used in its business for the previous five (5) years and which are of nominal commercial value or covering any products that are immaterial to Debtor's business operations. Any expenses incurred in connection therewith shall be borne solely by Debtor. Except as otherwise permitted in this Section 6(a), Debtor shall not do any act or omit to do any act whereby any of the Copyright Collateral may become abandoned or fall into the public domain or fail to renew any Copyright, Registration or Copyright Right owned by Debtor without the prior written consent of Secured Party. (b) Protection. Except as provided in Section 8 and notwithstanding Section 1, Debtor shall have the right and obligation to commence and diligently prosecute in its own name, as real party in interest, for its own benefit and at its own expense, such suits, proceedings or other actions for infringement or other damage as are in its reasonable business judgment necessary to protect the Copyright Collateral or any of Debtor's rights therein. Debtor shall provide to Secured Party any information with respect thereto requested by Secured Party. Secured Party shall provide at Debtor's expense all necessary cooperation in connection with any such suit, proceeding or action including joining as a nominal party if Secured Party shall have been satisfied that it is not incurring any risk of liability because of such joinder. Debtor shall provide at its expense representation acceptable to Secured Party for the common interest of Debtor and Secured Party with respect to such proceedings. (c) Notice. Debtor shall, promptly upon its becoming aware thereof, notify Secured Party in writing of the institution of, or any adverse determination in, any proceeding, application, suit or action of any kind described in Section 6(a) or 6(b), or regarding Debtor's claim of ownership in any of the Copyrights, Registrations or Copyright Rights, its right to register the same, or its right to keep and maintain such registration, whether before the United States Copyright Office or any United States or foreign court or governmental agency. Debtor shall provide promptly to Secured Party any information with respect thereto requested from time to time by Secured Party. VIII. Events of Default. The occurrence of any "Event of Default" under the Loan Agreement or any other Loan Document shall constitute an Event of Default hereunder. IX. Remedies. Following the occurrence and during the continuation of an Event of Default, Secured Party shall have all rights and remedies available to it under the Loan Agreement and the other Loan Documents and applicable law (which rights and remedies are cumulative) with respect to its security interests in any of the Copyright Collateral or any other collateral. Debtor agrees that such rights and remedies include the right of Secured Party as a secured party to sell or otherwise dispose of its collateral after default, pursuant to UCC Section 9-504. Debtor agrees that Secured Party shall at all times have such royalty free licenses, to the extent permitted by law, for any Copyright, Copyright Rights, Proprietary Right and any other Copyright Collateral that is reasonably necessary to permit the exercise of any of Secured Party's rights or remedies upon or after the occurrence of (and during the occurrence of) an Event of Default with respect to (among other things) any tangible asset of Debtor in which Secured Party has a security interest, including Secured Party's rights to sell inventory, tooling or packaging which is acquired by Debtor (or its successors, permitted assignees, or trustee in bankruptcy). In addition to and without limiting any of the foregoing, upon the occurrence and during the continuance of an Event of Default, Secured Party shall have the right but shall in no way be obligated to bring suit, or to take such other action as Secured Party deems necessary or advisable, in the name of Debtor or Secured Party, to enforce or protect any Copyright, Registration, Copyright Right or Proprietary Right, and any license thereunder, in which event Debtor shall, at the request of Secured Party, do any and all lawful acts and execute any and all documents required by Secured Party in aid of such enforcement. To the extent that Secured Party shall elect not to bring suit to enforce any Copyright, Registration, Copyright Rights, Proprietary Right, or any license thereunder, Debtor agrees to use all reasonable measures and its diligent efforts, whether by action, suit, proceeding or otherwise, to prevent the infringement, misappropriation or violation thereof by others and for that purpose agrees diligently to maintain any action, suit or proceeding against any Person necessary to prevent such infringement, misappropriation or violation. X. Authorization. If Debtor fails to comply with any of its obligations hereunder, Secured Party may do so in Debtor's name or in Secured Party's name, but at Debtor's expense, and Debtor hereby agrees to reimburse Secured Party in full upon demand for all expenses, including attorneys fees, incurred by Secured Party in protecting, defending and maintaining any of the Copyright Collateral or any right, title or interest of Debtor or Secured Party therein. Debtor hereby appoints Secured Party, and authorizes, directs and empowers Secured Party to make, constitute and appoint any officer or agent of Secured Party as Secured Party may select, in its exclusive discretion, as the true and lawful attorney-in-fact of Debtor, with the power, if Debtor refuses or fails to do so timely, (a) to execute in the name of Debtor any financing statement or other instrument and any modification, supplement or amendment to this Agreement or any supplemental Copyright Security Agreement described in Sections 4(a) or 5 hereof, and do such other acts on Debtor's behalf, that Secured Party reasonably may deem necessary or advisable to accomplish the purposes hereof, and (b) upon and after the occurrence and continuation of any Event of Default, (i) to endorse Debtor's name on all applications, documents, papers and instruments reasonably necessary for Secured Party to use any of the Copyright Collateral, and (ii) to grant or issue any exclusive or nonexclusive license under any of the Copyright Collateral to anyone else, or as may be reasonably necessary for Secured Party to assign, pledge, convey or otherwise transfer title in or dispose of any of the Copyright Collateral or any other collateral to anyone else. Debtor hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and is irrevocable until termination of this Agreement. XI. Notices. All notices and other communications hereunder to or from Secured Party and Debtor shall be in writing and shall be mailed, sent or delivered in accordance with the Loan Agreement. XII. GOVERNING LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE ASSIGNMENT AND SECURITY INTERESTS HEREUNDER IN RESPECT OF ANY PROPERTY ARE GOVERNED BY FEDERAL LAW, IN WHICH CASE SUCH CHOICE OF CALIFORNIA LAW SHALL NOT BE DEEMED TO DEPRIVE SECURED PARTY OF SUCH RIGHTS AND REMEDIES AS MAY BE AVAILABLE UNDER FEDERAL LAW. THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF SECURED PARTY, IN ANY OTHER COURT IN WHICH SECURED PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. DEBTOR AND SECURED PARTY WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11. DEBTOR AND SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. DEBTOR AND SECURED PARTY REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. XIII. Entire Agreement; Amendment. This Agreement, together with the Schedules and Exhibits hereto, which are incorporated herein by this reference, contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior drafts and communications relating to such subject matter. Neither this Agreement nor any provision hereof may be modified, amended or waived except by the written agreement of the parties, as provided in the Loan Agreement. Notwithstanding the foregoing, Secured Party may re- execute this Agreement, modify, amend or supplement the Schedules hereto or execute a supplemental Copyright Security Agreement, as provided herein, and the terms of any such modification, amendment, supplement or supplemental Copyright Security Agreement shall be deemed to be incorporated herein by this reference. XIV. Severability. If one or more provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect in any jurisdiction or with respect to any party, such invalidity, illegality or unenforceability in such jurisdiction or with respect to such party shall, to the fullest extent permitted by applicable law, not invalidate or render illegal or unenforceable any such provision in any other jurisdiction or with respect to any other party, or any other provisions of this Agreement. XV. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. XVI. Loan Agreement. Debtor acknowledges that the rights and remedies of Secured Party with respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Loan Agreement, the applicable Security Agreement, and the other Loan Documents and all such rights and remedies are cumulative. XVII. No Inconsistent Requirements. Debtor acknowledges that this Agreement and the other Loan Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and Debtor agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. XVIII. Termination. Upon the satisfaction in full of all Secured Obligations, this Agreement shall terminate and Secured Party shall execute and deliver such documents and instruments and take such further action reasonably requested by Debtor and at Debtor's expense as shall be necessary to evidence termination of the security interest granted by Debtor to Secured Party hereunder. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. INTERGRAPH CORPORATION a Delaware corporation By: -------------------------- Title: ----------------------- FOOTHILL CAPITAL CORPORATION, a California corporation By: -------------------------- Title: ----------------------- STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) On January __, 1997, before me, ______________________________, Notary Public, personally appeared ______________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ------------------------- Signature [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) On January __, 1997, before me, ______________________________, Notary Public, personally appeared ______________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ------------------------- Signature [SEAL] SCHEDULE A to the Copyright Security Agreement [TO BE ATTACHED] SCHEDULE A United States Copyright Applications and Registrations ------------------------------ United States Reg. No. Title Reg. Date - -------- ----- --------- TX3763938 MGE PC-1 1.4 March 17, 1994 TX3727896 DRAFTWORKS 1.3 August 18, 1993 TX3727895 MGE project viewer 1.0 August 18, 1993 TX665498 MGE GRID analyst 1.0 July 26, 1993 TX3653674 DM/librarian July 26, 1993 TX3606160 Siteworks 1.4 August 18, 1993 TX3627540 Frameworks 1.6 August 20, 1993 TX3633622 Designworks 1.2 August 2, 1993 TX3608627 MGE grid analyst-PC 1.0 July 26, 1993 TX3153602 DMANDS/View and September 23, 1991 redline WS 2.3.0.6 TX3156805 DMANDS sponsor September 20, 1991 2.3.0.6 TX3151822 DMANDS view and September 20, 1991 Redline PC 2.3.0.6 TX3151818 DMANDS manager 2.3.0.6 September 20, 1991 TX3150481 Intergraph network file September 18, 1991 manager 2.2 TX3129627 Project layout 3.4 June 5, 1991 TX3140594 HiLib PLD: HILIB-PLD April 4, 1991 1.0; LHIPLD United States Reg. No. Title Reg. Date - -------- ----- --------- TX3132928 MGA (microstation June 18, 1991 graphic environment analyst): MGE analyst 2.02.03.01 TX3104170 Facilities rulebased June 14, 1991 application model management environment 2.2 TX3138321 Intergraph finite element August 21, 1991 modeling 1.4.3 TX3101682 Tigris mapper 2.2.1.7; April 2, 1991 T-mapper TX3100459 AEC shell 3.0 June 5, 1991 TX3100723 AEC Shell 4.00 June 5, 1991 TX3096355 Project architect nucleus 3.4 May 20, 1991 TX3091786 Project architect 4.0: PARCH May 21, 1991 TX3087085 INROADS C-15: April 1, 1991 INROADS 1.0; TDP, transportation design products TX3081167 EEschematic and nucleus 3.04 June 17, 1991 TX3075453 I/RAS 32B: Microstation May 7, 1991 32 binary raster graphic editor 4.0; I/RAS32B TX3072055 MGE imager 2.2.3 April 22, 1991 TX3055827 Automatic test equipment April 1, 1991 nucleus 1.1: LTEST TX3054611 Tigris analyst 2.2.1.2: T- April 2, 1991 analyst TX3054610 Tiger II PCB autorouter 3.0 April 1, 1991 TX3047351 EDIF netlist reader, v. April 1, 1991 3.0.0: LENR200 United States Reg. No. Title Reg. Date - -------- ----- --------- TX3047337 PLDesigner Plus, 1.4 April 1, 1991 TX3047336 Master librarian V.3.0.0 April 1, 1991 TX3047334 LGerber:Gerber formatter 1.1 April 1, 1994 TX3047333 Design engineer PC 2.0 April 1, 1991 TX3047331 EDIF process: EDIF April 1, 1991 schematic interface 3.0; LESI TX3047310 Wire wrap nucleus 1.1: LWRAP April 2, 1991 TX3047309 I/DISP: I/Dispatcher 1.0 April 2, 1991 TX3047308 I/EXEC: I/Executive 1.0 April 2, 1991 TX3047307 LTIGER: Automatic router April 2, 1991 (single user) 3.0 TX3047306 Digital analysis tools 1.0 April 2, 1991 TX3047305 LDRILL: Numerical drill and April 2, 1991 router nucleus 1.1 TX3047304 LINSERT: Numerical April 2, 1991 control component insertion nucleus 1.1 TX3047303 Abel 3.0: Label April 2, 1991 TX3047187 Modelview 2.0 April 1, 1991 TX3047186 CLD-DECOMP: CAM April 1, 1991 engineer version 1.1 TX3047184 GATES.C: GATES 4.1: LGATES April 1, 1991 TX3052999 IP/IPLOT: April 9, 1991 IGDS/InterPlot interface TX3052998 Microstation I/IRAS PC 4.0 April 9, 1991 TX3052997 IP/IGDS metafile interpreter 6.0.0 April 9, 1991 United States Reg. No. Title Reg. Date - -------- ----- --------- TX3049585 TIGRIS IMAGER 5.1; T-IMAGER April 22, 1991 TX3047036 Design Engineer 2.0 April 1, 1991 TX3045747 PLD programmer interface 3.0 April 1, 1991 TX3049507 Automatic placement 3.0 April 1, 1991 TX3049506 IKOS interface 3.0 April 1, 1991 TX3024413 Project architect 3.4.1.2: April 10, 1991 prev. or alternative ti., PARCH TX2959178 Microstation GIS November 16, 1990 environment 1.0 TX2953491 Microstation GIS November 15, 1990 environment 2.0 TX2946963 MicroCat computer-assisted December 29, 1989 language translation system TXu270709 IGDS: Interactive graphics January 16, 1987 design software, version 8.5 TXu270708 IGDS: interactive graphics January 16, 1987 design software, version 8.3 TXu270707 IGDS: Interactive graphics January 16, 1987 design software, version 8.6 TXu270706 IGDS: Interactive graphics January 16, 1987 design software, version 8.4 TXu270705 IGDS: Interactive graphics January 16, 1987 design software, version 8.8 TXu270704 IGDS: Interactive graphics January 16, 1987 design software, version 8.7 TX3782412 Draftworks 1.4 March 21, 1994 TX3727894 ROADWORKS 1.2 August 18, 1993 United States Reg. No. Title Reg. Date - -------- ----- --------- TX3263779 Intergaph/engineering July 23, 1991 modeling system 1.2 PA531865 MicroStation PC/32 June 14, 1991 upgrade training video TX3199508 Intergraph numerical control 1.3.0 September 3, 1991 TX3176591 Microstation 32 continuous April 22, 1991 continuous tone raster display 4.0.2 TX3153460 IMAGESTATION RECTIFY (ISR) September 4, 1991 TX3167618 FABRICATION OPTIMIZER 1.0 April 3, 1991 TX4122609 GEMINI CLIENT VERSION 1.0 October 4, 1995 (Windows) TX4108439 GEMINI CLIENT VERSION 1.0 June 28, 1995 (Unix) TX3673966 GEMINI SERVER VERSION 1.0 June 28, 1995 (Unix) TX3673967 PIXELPRO V.1.0 June 28, 1995 TX4296544 DesignReview 3.0 October 3, 1995 TX4132875 ERMA Data Manager 6.0 September 27, 1995 TX4212375 ERMA Site Geoglist 6.0 February 20, 1996 TX4132876 ERMA Ground Water Manager 6.0 September 27, 1995 TX4157282 MOGLE 2.0 October 3, 1995 TX4111446 MGE PC 2.0 October 2, 1995 TX4130314 DM/Workflow 2.0 October 2, 1995 TX4157280 DM/Server 2.0 October 3, 1995 United States Reg. No. Title Reg. Date - -------- ----- --------- TX4157281 DM/Structure 2.0 October 3, 1995 TX4148244 Photobrowser 5.4 October 2, 1995 TX4296543 InWater 1.0 October 3, 1995 TX4130315 MGE Advanced Imager 6.0 October 2, 1995 TX4130317 MGE Network 6.0 October 2, 1995 TX4141634 Plantgen 5.4 October 2, 1995 TX4087418 PipeGen 1.0 October 17, 1995 TX3100443 Project Layout 4.0 June 5, 1991 TX4197857 DM/View-Redline 2.0 October 17, 1995 TX4197856 Full Text Retrieval October 17, 1995 TX4122804 Voxel Analyst 2.0 November 13, 1995 TX4296910 FRAMME V3.7 August 27, 1996 TX3104170 FRAMME 2.2 June 14, 1991 PATENT SECURITY AGREEMENT ------------------------- THIS PATENT SECURITY AGREEMENT (this "Agreement"), dated as of December 20, 1996 is made by INTERGRAPH CORPORATION, a Delaware corporation ("Debtor"), in favor of FOOTHILL CAPITAL CORPORATION, a California corporation ("Secured Party"). RECITALS -------- A. Debtor and Secured Party have entered into that certain Loan and Security Agreement, dated as of the date hereof (as amended, modified, renewed or extended from time to time, the "Loan Agreement"), pursuant to which Secured Party has agreed to make certain financial accommodations to Debtor, and pursuant to which Debtor has granted to Secured Party a security interest in (among other things) certain of the general intangibles of Debtor. B. Pursuant to the Loan Agreement and as one of the conditions precedent to the obligations of Secured Party under the Loan Agreement, Debtor has agreed to execute and deliver this Agreement to Secured Party for filing with the United States Patent and Trademark Office and with any other relevant recording systems in any domestic or foreign jurisdiction, and as further evidence of and to effectuate Secured Party's existing security interests in the patents and other general intangibles described herein. ASSIGNMENT ---------- NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is hereby acknowledged, Debtor hereby agrees in favor of Secured Party as follows: II. Definitions; Interpretation. A. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C. 101 et seq.), as amended, and any successor statute. "Event of Default" means any Event of Default under the Loan Agreement. "Lien" means any pledge, security interest, assignment, charge or encumbrance, lien (statutory or other), or other prefer- ential arrangement (including any agreement to give any security interest). "Loan Documents" has the meaning assigned to it in the Loan Agreement. "Patent Collateral" has the meaning set forth in Section 2. "Patents" has the meaning set forth in Section 2. "Person" means an individual, corporation, partnership, joint venture, trust, unincorporated organization or any other juridical entity. "Proceeds" means whatever is receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any Patent Collateral, including "proceeds" as defined at UCC Section 9306, and all proceeds of proceeds. Proceeds shall include (i) any and all accounts, chattel paper, instruments, general intangibles, cash and other proceeds, payable to or for the account of Debtor, from time to time in respect of any of the Patent Collateral, (ii) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of Debtor from time to time with respect to any of the Patent Collateral, (iii) any and all claims and payments (in any form whatsoever) made or due and payable to Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Patent Collateral by any Person acting under color of governmental authority, and (iv) any and all other amounts from time to time paid or payable under or in connection with any of the Patent Collateral or for or on account of any damage or injury to or conversion of any Patent Collateral by any Person. "PTO" means the United States Patent and Trademark Office and any successor thereto. "Secured Obligations" means all liabilities, obligations, or undertakings owing by Debtor to Secured Party of any kind or description arising out of or outstanding under, advanced or issued pursuant to, or evidenced by the Loan Agreement, the other Loan Documents, or this Agreement, irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, voluntary or involuntary, whether now existing or hereafter arising, and including all interest (including interest that accrues after the filing of a case under the Bankruptcy Code) and any and all costs, fees (including attorneys fees), and expenses which Debtor is required to pay pursuant to any of the foregoing, by law, or otherwise. "UCC" means the Uniform Commercial Code as in effect from time to time in the State of California. "United States" and "U.S." each mean the United States of America. B. Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings ascribed to them in the UCC. C. Interpretation. In this Agreement, except to the extent the context otherwise requires: (i) Any reference to a Section or a Schedule is a reference to a section hereof, or a schedule hereto, respectively, and to a subsection or a clause is, unless otherwise stated, a reference to a subsection or a clause of the Section or subsection in which the reference appears. (ii) The words "hereof," "herein," "hereto," "hereunder" and the like mean and refer to this Agreement as a whole and not merely to the specific Section, subsection, paragraph or clause in which the respective word appears. (iii) The meaning of defined terms shall be equally applicable to both the singular and plural forms of the terms defined. (iv) The words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation." (v) References to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto. (vi) References to statutes or regulations are to be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation referred to. (vii) Any captions and headings are for convenience of reference only and shall not affect the construction of this Agree- ment. (viii) Capitalized words not otherwise defined herein shall have the respective meanings assigned to them in the Loan Agreement. (ix) In the event of a direct conflict between the terms and provisions of this Agreement and the Loan Agreement, it is the intention of the parties hereto that both such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of the Loan Agreement shall control and govern; provided, however, that the inclusion herein of additional obligations on the part of the Debtor and supplemental rights and remedies in favor of Secured Party (whether under California law or applicable federal law), in each case in respect of the Patent Collateral, shall not be deemed a conflict with the Loan Agreement. III. Security Interest. A. Assignment and Grant of Security Interest. As security for the payment and performance of the Secured Obligations, Debtor hereby grants, assigns, transfers and conveys to Secured Party a continuing security interest in all of Debtor's right, title and interest in, to and under the following property, whether now existing or hereafter acquired or arising (collectively, the "Patent Collateral"): (i) all letters patent of the U.S. or any other country, all registrations and recordings thereof, and all applications for letters patent of the U.S. or any other country, owned, held or used by Debtor in whole or in part, including all existing U.S. patents and patent applications of Debtor which are described in Schedule A hereto, as the same may be amended or supplemented pursuant hereto from time to time, and together with and including all patent licenses held by Debtor, together with all reissues, divisions, continuations, renewals, extensions and continuations-in- part thereof and the inventions disclosed therein, and all rights corresponding thereto throughout the world, including the right to make, use, lease, sell and otherwise transfer the inventions disclosed therein, and all proceeds thereof, including all license royalties and proceeds of infringement suits (collectively, the "Patents"); (ii) all claims, causes of action and rights to sue for past, present and future infringement or unconsented use of any of the Patents and all rights arising therefrom and pertaining thereto; (iii) all general intangibles (as defined in the UCC) and all intangible intellectual or other similar property of Debtor of any kind or nature, whether now owned or hereafter acquired or developed, associated with or arising out of any of the Patents and not otherwise described above; and (iv) all products and Proceeds of any and all of the foregoing. B. Certain Exclusions from Grant of Security Interest. Anything in this Agreement and the other Loan Documents to the contrary notwithstanding, the foregoing grant, assignment, transfer, and conveyance of a security interest shall not extend to, and the term "Patent Collateral" shall not include, any item of Patent Collateral described in Section 2(a) above that is now or hereafter held by Borrower as licensee or otherwise, solely in the event and to the extent that: (i) as the proximate result of the foregoing grant, assignment, transfer, or conveyance of a security interest, Borrower's rights in or with respect to such item of Patent Collateral would be forfeited or would become void, voidable, terminable, or revocable, or if Borrower would be deemed to have breached, violated, or defaulted the underlying license or other agreement that governs such item of Patent Collateral pursuant to the restrictions in the underlying license or other agreement that governs such item of Patent Collateral; (ii) any such restriction shall be effective and enforceable under applicable law, including Section 9318(4) of the Code; and (iii) any such forfeiture, voidness, voidability, terminability, revocability, breach, violation, or default cannot be remedied by Debtor using its best efforts (but without any obligation to make any material expenditures of money or to commence legal proceedings); provided, however, that the foregoing grant, assignment, transfer, and conveyance of security interest shall extend to, and the term "Patent Collateral" shall include, (y) any and all Proceeds of such item of Patent Collateral to the extent that the assignment or encumbering of such Proceeds is not so restricted, and (z) upon any such licensor or other applicable party's consent with respect to any such otherwise excluded item of Patent Collateral being obtained, thereafter such item of Patent Collateral as well as any Proceeds thereof that might theretofore have been excluded from such grant, assignment, transfer, and conveyance of a security interest and the term "Patent Collateral." C. Continuing Security Interest. Debtor agrees that this Agreement shall create a continuing security interest in the Patent Collateral which shall remain in effect until terminated in accordance with Section 16. D. Incorporation into Loan Agreement. This Agreement shall be fully incorporated into the Loan Agreement and all understandings, agreements and provisions contained in the Loan Agreement shall be fully incorporated into this Agreement. Without limiting the foregoing, the Patent Collateral described in this Agreement shall constitute part of the Collateral in the Loan Agreement. E. Licenses. Anything in the Loan Agreement or this Agreement to the contrary notwithstanding, Debtor may grant non- exclusive licenses of the Patent Collateral (subject to the security interest (if any) of Secured Party therein) in the ordinary course of business consistent with past practice. IV. Further Assurances; Appointment of Secured Party as Attorney- in-Fact. Debtor at its expense shall execute and deliver, or cause to be executed and delivered, to Secured Party any and all documents and instruments, in form and substance satisfactory to Secured Party, and take any and all action, which Secured Party may reasonably request from time to time, to perfect and continue perfected, maintain the priority of or provide notice of Secured Party's security interest in the Patent Collateral and to accomplish the purposes of this Agreement. Secured Party shall have the right to, in the name of Debtor, or in the name of Secured Party or otherwise, without notice to or assent by Debtor, and Debtor hereby irrevocably constitutes and appoints Secured Party (and any of Secured Party's officers or employees or agents designated by Secured Party) as Debtor's true and lawful attorney- in-fact with full power and authority, if Debtor refuses or fails to do so timely, (i) to sign the name of Debtor on all or any of such documents or instruments, and perform all other acts, that Secured Party reasonably deems necessary or advisable in order to perfect or continue perfected, maintain the priority or enforceability of or provide notice of Secured Party's security interest in, the Patent Collateral, and (ii) to execute any and all other documents and instruments, and to perform any and all acts and things for and on behalf of Debtor, which Secured Party may deem necessary or advisable to maintain, preserve and protect the Patent Collateral and to accomplish the purposes of this Agreement, including (A) after the occurrence and during the continuance of any Event of Default, to defend, settle, adjust or institute any action, suit or proceeding with respect to the Patent Collateral, (B) during a Triggering Event, to assert or retain any rights under any license agreement for any of the Patent Collateral, including any rights of Debtor arising under Section 365(n) of the Bankruptcy Code, and (C) after the occurrence and during the continuance of any Event of Default, to execute any and all applications, documents, papers and instruments for Secured Party to use the Patent Collateral, to grant or issue any exclusive or non-exclusive license with respect to any Patent Collateral (it being understood that so long as no Event of Default has occurred and is continuing, Debtor may grant or issue licenses in the ordinary course of business with respect to the Patent Collateral), and to assign, convey or otherwise transfer title in or dispose of the Patent Collateral. The power of attorney set forth in this Section 3, being coupled with an interest, is irrevocable so long as this Agreement shall not have terminated in accordance with Section 16. Nothing in this Agreement shall obligate Debtor to commence any suit, proceeding or other action for infringement of any of the Patents that are not material to the business of Debtor. V. Representations and Warranties. Debtor represents and warrants to Secured Party as follows: A. No Other Patents. A true and correct list of all of the existing Patents owned, held (whether pursuant to a license or otherwise) or used by Debtor, in whole or in part, is set forth in Schedule A. B. Validity. Each of the Patents listed on Schedule A is subsisting and has not been adjudged invalid or unenforceable, in whole or in part, all maintenance fees required to be paid on account of any Patents have been timely paid for maintaining such Patents in force, and, to the best of Debtor's knowledge, each of the Patents is valid and enforceable. C. Ownership of Patent Collateral; No Violation. (i) Debtor has rights in and good title to the existing Patent Collateral, (ii) with respect to the Patent Collateral shown on Schedule A hereto as owned by it, Debtor is the sole and exclusive owner thereof, free and clear of any Liens and rights of others (other than the security interest created hereunder), including licenses, shop rights and covenants by Debtor not to sue third persons and (iii) with respect to any Patent for which Debtor is either a licensor or a licensee pursuant to a license or licensee agreement regarding such Patent, each such license or licensing agreement is in full force and effect, Debtor is not in default of any of its obligations thereunder and, other than the parties to such licenses or licensing agreements, no other Person is known by Debtor to have any rights in or to any of the Patent Collateral. To the best of Debtor's knowledge, the past, present and contemplated future use of the Patent Collateral by Debtor has not, does not and will not infringe upon or violate any right, privilege or license agreement of or with any other Person. D. No Infringement. To the best of Debtor's knowledge, no material infringement or unauthorized use presently is being made of any of the Patent Collateral by any Person. E. Powers. Debtor has the unqualified right, power and authority to pledge and to grant to Secured Party a security interest in all of the Patent Collateral pursuant to this Agreement, and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person except as already obtained. VI. Covenants. So long as any of the Secured Obligations remain unsatisfied, Debtor agrees that it will comply with all of the covenants, terms and provisions of this Agreement, the Loan Agreement and the other Loan Documents, and Debtor will promptly give Secured Party written notice of the occurrence of any event that could have a material adverse effect on any of the Patents or the Patent Collateral, including any petition under the Bankruptcy Code filed by or against any licensor of any of the Patents for which Debtor is a licensee. VII. Future Rights. Except as otherwise expressly agreed to in writing by Secured Party, for so long as any of the Secured Obligations shall remain outstanding, or, if earlier, until Secured Party shall have released or terminated, in whole but not in part, its interest in the Patent Collateral, if and when Debtor shall obtain rights to any new patentable inventions, or become entitled to the benefit of any Patent, or any reissue, division, continuation, renewal, extension or continuation-in-part of any Patent or Patent Collateral or any improvement thereof (whether pursuant to any license or otherwise), the provisions of Section 2 shall automatically apply thereto and Debtor shall give to Secured Party prompt notice thereof. Debtor shall do all things deemed necessary or advisable by Secured Party to ensure the validity, perfection, priority and enforceability of the security interests of Secured Party in such future acquired Patent Collateral. In accordance with Section 3 hereof, Debtor hereby authorizes Secured Party to modify, amend or supplement the Schedules hereto and to re- execute this Agreement from time to time on Debtor's behalf and as its attorney-in-fact to include any future patents which are or become Patent Collateral and to cause such re-executed Agreement or such modified, amended or supplemented Schedules to be filed with the PTO. VIII. Remedies. Secured Party shall have all rights and remedies available to it under the Loan Agreement and applicable law (which rights and remedies are cumulative) with respect to the security interests in any of the Patent Collateral or any other Collateral. Debtor agrees that such rights and remedies include the right of Secured Party as a secured party to sell or otherwise dispose of its Collateral after default, pursuant to UCC Section 9504. Debtor agrees that Secured Party shall at all times have such royalty free licenses, to the extent permitted by law, for any Patent Collateral that is reasonably necessary to permit the exercise of any of Secured Party's rights or remedies upon or after the occurrence of an Event of Default with respect to (among other things) any tangible asset of Debtor in which Secured Party has a security interest, including Secured Party's rights to sell inventory, tooling or packaging which is acquired by Debtor (or its successor, assignee or trustee in bankruptcy). In addition to and without limiting any of the foregoing, upon the occurrence and during the continuance of an Event of Default, Secured Party shall have the right but shall in no way be obligated to bring suit, or to take such other action as Secured Party deems necessary or advisable, in the name of Debtor or Secured Party, to enforce or protect any of the Patent Collateral, in which event Debtor shall, at the request of Secured Party, do any and all lawful acts and execute any and all documents required by Secured Party in aid of such enforcement. To the extent that Secured Party shall elect not to bring suit to enforce such Patent Collateral, upon, during, or after the occurrence of an Event of Default, Debtor agrees to use all reasonable measures and its diligent efforts, whether by action, suit, proceeding or otherwise, to prevent the infringement, misappropriation or violations thereof by others and for that purpose agrees diligently to maintain any action, suit or proceeding against any Person necessary to prevent such infringement, misappropriation or violation. IX. Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Debtor and Secured Party and their respective successors and assigns. X. Notices. All notices and other communications hereunder shall be in writing and shall be mailed, sent or delivered in accordance with the Loan Agreement. XI. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, except to the extent that the validity or perfection of the security interests hereunder in respect of any Patent Collateral are governed by federal law, in which case such choice of California law shall not be deemed to deprive Secured Party of such rights and remedies as may be available under federal law. XII. Entire Agreement; Amendment. This Agreement, together with the Schedules hereto, contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior drafts and communications relating to such subject matter. Neither this Agreement nor any provision hereof may be modified, amended or waived except by the written agreement of the parties, as provided in the Loan Agreement. Notwithstanding the foregoing, Secured Party may re-execute this Agreement or modify, amend or supplement the Schedules hereto as provided in Section 6 hereof. XIII. Severability. If one or more provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect in any jurisdiction or with respect to any party, such invalidity, illegality or unenforceability in such jurisdiction or with respect to such party shall, to the fullest extent permitted by applicable law, not invalidate or render illegal or unenforceable any such provision in any other jurisdiction or with respect to any other party, or any other provisions of this Agreement. XIV. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. XV. Loan Agreement. Debtor acknowledges that the rights and remedies of Secured Party with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Loan Agreement and all such rights and remedies are cumulative. XVI. No Inconsistent Requirements. Debtor acknowledges that this Agreement and the other Loan Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and Debtor agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. XVII. Termination. Upon the indefeasible payment in full of the Secured Obligations, including the cash collateralization, expiration, or cancellation of all Secured Obligations, if any, consisting of letters of credit, and the full and final termination of any commitment to extend any financial accommodations under the Loan Agreement, this Agreement shall terminate and Secured Party shall execute and deliver such documents and instruments and take such further action reasonably requested by Debtor and at Debtor's expense as shall be necessary to evidence termination of the security interest granted by Debtor to Secured Party hereunder. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. INTERGRAPH CORPORATION, a Delaware corporation By: ----------------------------- Title: -------------------------- FOOTHILL CAPITAL CORPORATION, a California corporation By: ----------------------------- Title: -------------------------- STATE OF CALIFORNIA ) ) ss COUNTY OF ) On January __, 1997, before me, ______________________________, Notary Public, personally appeared ______________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ------------------------ Signature [SEAL] STATE OF CALIFORNIA ) ) ss COUNTY OF ) On January __, 1997, before me, ______________________________, Notary Public, personally appeared ______________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ------------------------- Signature [SEAL] SCHEDULE A to the Patent Security Agreement [TO BE ATTACHED] SCHEDULE A to the Patent Security Agreement Issued Patents -------------- Patent Number Invention Date Patent Issued - ------------- --------- ------------------ 5,579,222 Distributed License 11/26/96 Administration System Using a Local Policy Server to Communicate with a License Server and Control Execution of Computer Programs 5,579,044 Digital Proofing System 11/26/96 5,560,028 Software Scheduled Superscalar 9/24/96 Computer Architecture 5,555,094 Apparatus and Method for 9/10/96 Interpreting Image Data for Use in a Raster Plotter 5,546,569 Apparatus for Writing Data to and 8/13/96 Reading Data from a MultiPort Ram in a Single Clock Cycle 5,542,088 M & A for Enabling control of 7/30/96 Task Execution 5,534,796 Self-Clocking Pipeline Register 7/9/96 5,526,142 Scanner/Plotter and Rotatable 06/11/96 Drum for Use Therein 5,508,640 Dynamic CMOS Logic Circuit with 4/16/96 Precharge (As amended) 5,504,925 Apparatus and Method for 4/2/96 Implementing Interrupts in Pipelined Processors 5,502,829 Apparatus for Obtaining Data from 3/26/96 a Translation Memory Based on Carry Signal from an Adder, as amended 5,499,445 A Method of Making a Multi-Layer 3/19/96 to Package (As amended from Multi- layer Packaging) 5,487,025 Carry Chain Adder Using 1/23/96 Regenerative Push-pull Differential Logic 5,479,646 Method and Apparatus for 12/26/95 Obtaining Data from a Data Circuit Utilizing Alternating Clock Pulses to Gate the Data to the Output 5,463,750 Method and Apparatus for 10/31/95 Translating Virtual Addresses in a Data Processing System having Multiple Instruction Pipelines 5,461,709 3D Input System for CAD Systems 10/24/95 5,455,528 Improved CMOS Circuit for 10/03/95 Implementing Boolean Functions 5,299,147 Decoder scheme for fully 3/29/94 associative translation look aside buffer in memory system 5,255,384 Virtual-real memory address 10/19/93 translation method for computing system having cache memory couple to processor and main memory 5,212,454 Capacitance measurement method 5/18/93 and apparatus for semiconductor wafers during integrated circuit processing 5,186,377 Apparatus for stiffening circuit 2/16/93 board during soldering RE33783 Multi-camera document scanning 12/31/91 system 4,686,581 Multi-camera document scanning 8/11/87 system 5,426,780 Geographic information system 6/20/95 dynamic segmentation method 5,216,297 MOS circuit for driving emitter 6/1/93 coupled logic receiving differential output 5,191,447 Scanning beam control system for 3/2/93 document scanner 5,274,593 High Speed redundant rows and 12/28/93 columns for semiconductor memories 5,280,370 Apparatus and method for scanning 1/18/94 by means of a rotatable detector array 5,274,473 Reproducing images with rapid 12/28/93 variable angle digital screening 5,383,001 Vacuum drum for mounting media of 1/17/95 different sizes 5,338,970 Multi-layered high frequency IC 8/16/94 package 5,335,046 Clamping mechanism for use on 8/2/94 rotatable plotter drum 5,091,846 Cache address translation and 2/25/92 memory management system architecture 5,075,779 Image data interpreting apparatus 12/24/91 and method for raster plotter 5,047,971 Analogue electronic circuit 9/10/91 simulation 4,985,779 Method and apparatus for 1/15/91 generating half-tone images 4,969,114 Method for determining defined 11/6/90 signal relationship among physical entities 4,992,890 Very high speed laser graphic 2/12/91 plotter and scanner system 4,933,835 Apparatus for maintaining 6/12/90 consistency of cache memory 4,910,685 Video circuit with digital to 3/20/90 analog converter in monitor 4,811,215 Instruction execution accelerator 3/7/89 for pipelined digital machine 4,693,444 Height adjust mechanism for 9/15/87 computer keyboard 4,884,197 Method and apparatus for 11/28/89 addressing a cache memory 4,860,192 Computer integrated cache memory 8/22/89 system 4,595,115 Hidden panel connector for 6/17/86 electronics enclosure 4,556,825 CRT deflection circuit for TV 12/3/85 4,458,330 Banded vector to raster convertor 7/3/84 4,334,124 Floating coordinate system for 6/8/82 computer entry device 4,916,647 Hardwired pipeline processor for 4/10/90 logic simulation 4,718,105 Computer graphic digitizing data 1/5/88 entry system 4,759,075 Method and apparatus for 7/19/86 vectorizing documents and symbol recognition 4,603,431 Method and apparatus for 7/29/86 vectorizing documents and symbol recognition 4,413,286 Method and apparatus involving 11/1/83 digital screen generation 4,464,715 Memory accessing method 8/7/84 4,518,998 Method and apparatus for 5/21/85 producing a time advance output pulse train from an input pulse train 4,533,942 Method and apparatus for 8/6/85 reproducing an image which has a coarser resolution than utilized in scanning of the image 4,533,911 Video display system for 8/6/85 displaying symbol-fragments in different orientations 4,677,433 Two speed clock scheme for co- 6/30/87 processors 4,737,858 Intensity controlled an aperture 4/12/88 defining image generating system 4,751,637 Digital computer for implementing 6/14/88 event driven simulation algorithm 4,814,983 Digital computer for implementing 3/21/89 event driven simulation algorithm 4,872,125 Multiple processor accelerator 10/3/89 for logic simulation 4,873,656 Multiple processor accelerator 10/10/89 for logic simulation D305,756 Design for cursor 1/30/90 5,432,727 Apparatus for computing a sticky 7/11/95 bit for a floating point arithmetic unit 5,446,685 Pulsed ground circuit for CAM and 8/29/95 PAL memories Pending Patent Applications Serial Number Title Filing Date - ------------- ----- ----------- 08/622,942 Universal Vacuum Drum and Mask 3/27/96 60/017,483 Improved Data Access 4/26/96 08/573,116 Scanner/Plotter and Rotatable 12/16/95 Drum for Use Therein 06/018,871 A & M for Improved Airflow 5/31/96 Through a Chassis Not Yet Method and Apparatus for 11/18/96 Assigned Controlling an Instruction Pipeline in a Data Processing System 60/015,349 High-Speed Video Frame Buffer 4/12/96 Using Single Port Memory Chips 08/422,753 Software Scheduled Superscaler 6/20/96 Computer 06/023,795 Hardware Accelerated Photoreal 8/1/96 Rendering (RenderGL) 60/023,513 Hardware Accelerated Photoreal 8/7/96 Rendering (RenderGL) 60/025,061 Graphics Driver Verification 8/23/96 System 60/024,571 System and Method for Data Access 8/26/96 60/026,292 Graphics Processing with 9/10/96 Efficient Clipping 60/027,520 Active Pipeline 10/7/96 Not Yet Variable Mask and Universal 10/21/96 Assigned Vacuum Drum Not Yet Digital Proofing System 11/6/96 Assigned Not Yet Instruction Cache Associative 11/22/96 Assigned Crossbar Switch 08/438,048 Visible Line Processor 5/8/95 08/520,973 Method and Apparatus for Parallel 8/1/95 Access to Consecutive TLB Entries 08/509,847 System for Adding Attributes to 8/1/95 an Object at Run Time in an Object Oriented Computer 29/038,048 Design for a Vertically Oriented 4/26/95 Computing Device 60/011,979 High Availability Super Server 2/20/96 60/011,932 Method and apparatus for Signal 2/20/96 Handling on GTL-Type Buses 08/576,876 Method and apparatus for 12/21/95 Speculative Execution of Instructions 08/544,812 Optimal Projection Design 10/18/95 08/552,812 Method for Object Oriented 11/3/95 Program Using Dynamic Interfaces 60/008,281 Graphics Accelerator for Video 12/6/95 Graphics Controller 60/013,402 Large Scanner Plotter 3/14/96 (Hummingbird) 29/047,791 Vertically Oriented Computing 10/23/95 Device (FWC of 1247/113;29/038,048) 08/573,689 Cursor Positioning Method 12/18/95 60/014,226 Real Time Video Capture Board; 3/27/96 Video Capture and Playback Board for Use in a Computer Graphics System 60/015,258 Removable Circuit Board with 4/10/96 Ducted Cooling 60/016,368 Improved Data Access 4/19/96 08/330,984 RF Generator and Plotter 10/28/94 Incorporating Same 08/372,278 Register File with Bypass 1/12/95 Capability 08/378,251 OLE for Design and Modeling 1/23/95 08/385,496 Pulsed Ground Circuit for CAM and 2/8/95 PAL Memories 08/410,785 Spread Spectral Digital Screening 3/27/95 08/412,130 Variable Mask and Universal 3/28/95 Vacuum Drum 08/431,820 Direct Access to Slave Processor 5/1/95 by Unprotected Application Using Context Saving and Restoring 08/431,821 Video Stream Data Mixing for 3D 5/1/95 Graphics System 08/432,029 Graphics Processing with 5/1/95 Efficient Vector Drawing 08/432,106 Apparatus and Method of a High- 5/1/95 Performance Video Controller 08/432,272 System and Method for Controlling 5/1/95 a Slave Processor 08/432,313 FIFO Logical Addresses for 5/1/95 Control and Error Recovery 08/432,314 Vertex List Management System 5/1/95 08/435,348 Method and Apparatus for 5/5/95 Dynamically Interpreting Drawing Commands 08/435,647 Intelligent Object Selection 5/5/95 08/437,942 Object Relationship Management 5/9/95 System Not Yet Peer to Peer Parallel Processing 12/5/96 Assigned Graphics Accelerator Not Yet Online Testing Procedure 12/6/96 Assigned PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of December 20, 1996, made by the Persons listed on the signature pages hereof (each a "Pledgor" and collectively the "Pledgors"; provided that "Pledgor" shall be deemed to include any other Person that executes and delivers an amendment in the form of Exhibit A hereto agreeing to be bound by the terms and provisions hereof), to Foothill Capital Corporation ("Foothill"). W I T N E S S E T H : - - - - - - - - - - WHEREAS, Intergraph Corporation ("Borrower") and Foothill have entered into that certain Loan and Security Agreement, dated as of even date herewith (as it may be amended, supplemented or otherwise modified from time to time, the "Loan Agreement"; capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Loan Agreement); and WHEREAS, each Pledgor is the legal and beneficial owner of the shares of capital stock or other equity securities described in Schedules I, II, and III hereto (or any addenda thereto) and issued by the respective issuers named therein (collectively, the "Pledged Shares"); and WHEREAS, as used herein, the term "Excluded Equity Interests" shall mean: (i) equity interests in entities that are not corporations or limited liability companies but are strategic alliances, joint marketing ventures, joint development ventures, or other similar joint arrangements entered into by Borrower in the ordinary course of Borrower's business; and (ii) with respect to any Subsidiary, options or other rights to acquire equity securities of that Subsidiary that are issued or granted, in the ordinary course of business and generally consistent with past practice of Borrower's Subsidiaries (other than Foreign Subsidiaries), to officers, directors, employees, or consultants of that Subsidiary in connection with incentive compensation arrangements and that do not in the aggregate, in the case of any single Subsidiary, involve or permit the issuance of more than 15% of the total equity securities of such Subsidiary, and equity securities issued pursuant to the exercise of such rights or options; and WHEREAS, the Pledged Shares identified on Schedule I hereto as of the date hereof (and any addenda thereto as of the date thereof) represent all of the capital stock or other equity securities (other than Excluded Equity Interests) of each direct or indirect Subsidiary of Borrower having total assets of $100,000 or more that is not a Foreign Subsidiary (each, a "Pledged Domestic Issuer"); and WHEREAS, the Pledged Shares identified on Schedule II hereto (and any addenda thereto) represent all of the capital stock or other equity securities (other than the Excluded Foreign Portion) of each Foreign Subsidiary identified thereon (each, a "Pledged Foreign Issuer); and WHEREAS, the Pledged Shares identified on Schedule III hereto (and any addenda thereto) represent all right, title, and interest of Borrower in and to all of the capital stock or other equity interests underlying the Permitted Toehold Investments (the issuers thereof being the "Pledged Toehold Issuers"; the Pledged Domestic Issuers, the Pledged Foreign Issuers, and the Pledged Toehold Issuers being, collectively, the "Issuers"); and WHEREAS, it is a condition precedent under the Loan Agreement to the making of the Advances and the Term Loan and the issuance of Letters of Credit that the Pledgors shall have made the pledge contemplated by this Agreement; NOW, THEREFORE, in consideration of the premises and to induce Foothill to make the Advances and the Term Loan and to cause the issuance of the Letters of Credit, each Pledgor hereby agrees with Foothill as follows: SECTION l. Pledge. Each Pledgor hereby pledges to Foothill, and grants to Foothill a security interest in, all of such Pledgor's right, title, and interest in and to the following (the "Pledged Collateral"): (i) all of the Pledged Shares; (ii) all additional shares of stock or other securities of any Issuer of the Pledged Shares from time to time acquired by such Pledgor in any manner (any such shares being "Additional Shares"); provided, however, that with respect to any Pledged Domestic Issuer, any such Additional Shares shall not include the Excluded Equity Interests; provided further that with respect to any Pledged Foreign Issuer, any such Additional Shares shall not include the Excluded Foreign Portion thereof; (iii) the certificates (if any) representing the shares referred to in clauses (i) and (ii) above; and (iv) all dividends, cash, instruments and other property or proceeds, from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares and/or Additional Shares. SECTION 2. Security for Obligations. This Agreement secures, and the Pledged Collateral is security for, the full and prompt payment by Borrower when due (whether at stated maturity, by acceleration or otherwise) of, and the performance by Borrower of, the Obligations, whether now or hereafter existing and whether for principal, interest, fees, expenses or otherwise, and the performance by each Pledgor of its obligations hereunder (collectively, the "Secured Obligations"). SECTION 3. Delivery of Pledged Collateral. Subject to Section 4.1 and Section 4.2 of the Loan Agreement and only to the extent any such certificates or instruments exist: (a) all certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on behalf of Foothill pursuant hereto (and, in the case of Pledged Shares issued by any Pledged Foreign Issuer, to the extent permitted by applicable foreign law) and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to Foothill; (b) during any Triggering Event, Foothill shall have the right to the extent permitted under any applicable law, at any time in its discretion and without notice to any Pledgor, to transfer to or to register in its name or in the name of any of its nominees any or all of the Pledged Collateral; (c) Foothill shall have the right at any time to exchange certificates representing or evidencing any of the Pledged Collateral for certificates of smaller or larger denominations; and (d) Foothill acknowledges and agrees that, in the case of Pledged Shares issued by any Pledged Foreign Issuer, any Pledgor may deliver to Foothill one or more single certificates representing both Pledged Shares and shares which are not pledged or required to be pledged hereunder (the "Unpledged Shares") and that, upon any Pledgor's written request, Foothill shall cooperate with such Pledgor to permit the exchange of certificates of smaller or larger denominations and shall return to, or permit to be retained by, such Pledgor certificates representing any Unpledged Shares; provided, however, that (i) Foothill shall not be obligated to relinquish possession of any certificates representing (either in whole or in part) Pledged Shares if in the reasonable opinion of Foothill such action would cause the Lien of Foothill with respect to such Pledged Shares to cease to be perfected, and (ii) in no event shall such Pledgor be entitled to the return of certificates representing more than the Excluded Foreign Portion of any Pledged Foreign Issuer. SECTION 4. Representations and Warranties. Each Pledgor makes the following representations: (a) As of the date that the applicable Pledged Shares are pledged hereunder, the Pledged Shares (i) have been duly authorized and validly issued; (ii) are fully paid and non- assessable; and (iii) constitute (x) all of the issued and outstanding capital stock and other equity securities (other than Excluded Equity Interests) of each Pledged Domestic Issuer, (y) all of the issued and outstanding capital stock and other equity securities (other than the Excluded Foreign Portion thereof) of each Pledged Foreign Issuer, and (z) all right, title, and interest of Borrower in and to all of the capital stock or other equity interests underlying the Permitted Toehold Investments (and, as to each Pledged Toehold Issuer, representing the percentage indicated on Schedule III of all of the capital stock and other equity interests issued by such Issuer). (b) Such Pledgor is the legal and beneficial owner of the Pledged Collateral free and clear of any Lien, except for Permitted Liens. (c) Upon compliance with any applicable local law registration requirements, the pledge of the Pledged Shares issued by each Pledged Domestic Issuer pursuant to this Agreement creates a valid, perfected and first priority security interest in such Pledged Collateral, in favor of Foothill. (d) Subject to Section 4.1 of the Loan Agreement and except with respect to any Pledged Collateral relating to any Pledged Foreign Issuer, no consent, authorization, approval, or other action by, and no notice to or filing with, any Governmental Authority is required either (i) for the pledge by such Pledgor of the Pledged Collateral pursuant to this Agreement or for the due execution, delivery or performance of this Agreement by such Pledgor, or (ii) for the exercise by Foothill of the voting or other rights provided for in this Agreement or of the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with the disposition of the Pledged Collateral by laws affecting the offering and sale of securities generally or for any filings necessary to comply with applicable local law registration requirements. SECTION 5. Further Assurances, Etc. (a) Each Pledgor agrees that at any time and from time to time, at the cost and expense of such Pledgor, such Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Foothill may reasonably request, in order to perfect and protect the Lien granted or purported to be granted hereby or to enable Foothill to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral. (b) Each Pledgor agrees to defend the title to the Pledged Collateral and the Lien thereon of Foothill against the claim of any other Person and to maintain and preserve such Lien until indefeasible payment in full of all obligations. SECTION 6. Voting Rights; Dividends; Etc. (a) As long as no Event of Default shall have occurred and be continuing (and, in the case of subsection (a) (i) of this Section 6, as long as no notice thereof shall have been given by Foothill to the Pledgors pursuant to subsection (b) hereof): (i) Each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement or any other Loan Document; provided, however, that such Pledgor shall not exercise or shall refrain from exercising any such right if such action could reasonably be expected to result in a Material Adverse Change; (ii) Each Pledgor shall be entitled to receive and retain (subject to any Lien thereon in favor of Foothill) any and all dividends or distributions paid in respect of the Pledged Collateral, other than any and all: (A) dividends paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Pledged Shares or Additional Pledged Shares in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged Collateral, all of which shall be forthwith delivered to Foothill for deposit in the Lockboxes in the manner set forth in the Loan Agreement, and shall, if received by such Pledgor, be received in trust for the benefit of Foothill, be segregated from the other property or funds of such Pledgor, and be forthwith delivered to Foothill for deposit in the Lockboxes in the same form as so received (with any necessary endorsement); and (iii) Foothill shall execute and deliver (or cause to be executed and delivered) to any Pledgor all such proxies and other instruments as such Pledgor may reasonably request for the purpose of enabling such Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (i) above and to receive the dividends or distributions which it is authorized to receive and retain pursuant to paragraph (ii) above. (b) Upon the occurrence and during the continuance of an Event of Default: (i) Upon notice by Foothill to any Pledgor, all rights of such Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a) (i) above shall cease, and all such rights shall thereupon become vested in Foothill who shall thereupon have the sole right to exercise such voting and other consensual rights. (ii) All rights of any Pledgor to receive the dividends or distributions which it would otherwise be authorized to receive and retain pursuant to Section 6(a) (ii) above shall cease, and all such rights shall thereupon become vested in Foothill who shall thereupon have the sole right to receive and hold as Pledged Collateral such dividends or distributions for deposit in the Lockboxes. (iii) All dividends or distributions which are received by any Pledgor contrary to the provisions of paragraph (ii) of this Section 6(b) shall be received in trust for the benefit of Foothill, shall be segregated from other property or funds of such Pledgor and shall be forthwith delivered to Foothill for deposit in the Lockboxes in the same form as so received (with any necessary endorsement). (iv) Each Pledgor shall, if necessary to permit Foothill to exercise the voting and other rights which it may be entitled to exercise pursuant to Section 6(b)(i) above and to receive all dividends and distributions which it may be entitled to receive under Section 6(b)(ii) above, execute and deliver to Foothill, from time to time and upon written notice of Foothill, appropriate proxies and other instruments as Foothill may reasonably request. The foregoing shall not in any way limit Foothill's power and authority granted pursuant to Section 8 hereof. SECTION 7. Transfers and Other Liens; Additional Shares. (a) Each Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant any option or warrant with respect to, any of the Pledged Collateral except as permitted by the Loan Agreement, or (ii) create or permit to exist any Lien upon or with respect to any of the Pledged Collateral, except for the Lien created pursuant to this Agreement or Liens permitted pursuant to Section 7.2 of the Loan Agreement. (b) Each Pledgor agrees that it will (i) except as permitted by the Loan Agreement, cause each Pledged Domestic Issuer and each Pledged Foreign Issuer of the Pledged Shares not to issue any shares of capital stock or other equity securities in addition to or in substitution for the Pledged Shares (except for, in the case of Pledged Domestic Issuers, any Excluded Equity Interests), (ii) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all Additional Shares, and (iii) promptly (and in any event within three Business Days) deliver to Foothill a Pledge Amendment, duly executed by such Pledgor, in substantially the form of Exhibit A hereto (a "Pledge Amendment"), in respect of the Additional Shares, together with all certificates or other instruments representing or evidencing the same. Each Pledgor hereby (i) authorizes Foothill to attach each Pledge Amendment to this Pledge Agreement, (ii) agrees that all capital stock and other equity securities listed on any Pledge Amendment delivered to Foothill shall for all purposes hereunder constitute Pledged Shares, and (iii) is deemed to have made, upon such delivery, the representations and warranties contained in Section 4 hereof with respect to such Pledged Collateral. SECTION 8. Foothill Appointed Attorney-in-Fact and Proxy. Subject to Section 6 hereof, each Pledgor hereby irrevocably constitutes and appoints Foothill and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact and proxy with full irrevocable power and authority in the place and stead of such Pledgor and in the name of such Pledgor or in its own name, from time to time in Foothill's discretion, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute and deliver any and all documents and instruments which Foothill may deem necessary or advisable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, hereby gives Foothill the power and right, on behalf of such Pledgor, upon the occurrence and during the continuance of an Event of Default, to receive, indorse and collect all instruments made payable to such Pledgor representing any dividend or distribution in respect of the Pledged Collateral or any part thereof, to give full discharge for the same, and to vote or grant any consent in respect of the Pledged Shares authorized by Section 6(b) hereof. Each Pledgor hereby ratifies, to the extent permitted by law, all that any said attorney shall lawfully do or cause to be done by virtue hereof. This power, being coupled with an interest, is irrevocable until, and shall automatically terminate upon, the termination of this Agreement pursuant to Section 17. SECTION 9. Foothill May Perform. If any Pledgor fails to perform any agreement contained herein, Foothill may itself perform, or cause performance of, such agreement, and the expenses of Foothill incurred in connection therewith shall be payable by such Pledgor under Section 12 hereof and constitute Obligations secured hereby. SECTION 10. Reasonable Care. Foothill shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which Foothill accords its own property, it being understood that Foothill shall not have any responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not Foothill has or is deemed to have knowledge of any such matter, or (ii) taking any necessary steps to preserve rights against any Person with respect to any Pledged Collateral. SECTION 11. Remedies upon Default. If any Event of Default shall have occurred and be continuing: (a) Foothill may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party after default under the Code or any other applicable law in effect in the State of California at that time, and Foothill may also, without notice except as specified below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any office of Foothill or elsewhere, for cash, on credit or for future delivery, and upon such other terms as Foothill may deem commercially reasonable. Each Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to such Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. Foothill shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. Foothill may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Pledgor hereby waives any claims against Foothill arising by reason of the fact that the price at which any Pledged Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if Foothill accepts the first offer received and does not offer such Pledged Collateral to more than one offeree. With respect to Pledged Collateral consisting of securities registered under the Securities Act of 1933, as amended (the "Securities Act"), Foothill will comply with applicable securities laws in connection with any foreclosure sale. (b) Each Pledgor recognizes that by reason of certain prohibitions contained in the Securities Act and applicable state securities laws, Foothill may be compelled, with respect to any sale of all or any part of the Pledged Collateral, to limit purchasers to those who will agree, among other things, to acquire such securities for their own account, for investment, and not with a view to the distribution or resale thereof. Each Pledgor acknowledges and agrees that any such sale may result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions and, notwithstanding such circumstances, agrees that any such sale shall be deemed to have been made in a commercially reasonable manner. Foothill shall be under no obligation to delay the sale of any of the Pledged Collateral for the period of time necessary to permit any Pledgor to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Pledgor would agree to do so. (c) If Foothill determines to exercise its right to sell any or all of the Pledged Collateral, upon written request, each Pledgor shall, from time to time, furnish to Foothill all such information as Foothill may request in order to determine the number of shares and other instruments included in the Pledged Collateral which may be sold by Foothill as exempt transactions under the Securities Act and rules of the Securities and Exchange Commission thereunder, as the same are from time to time in effect. SECTION 12. Expenses. Each Pledgor will, jointly and severally, upon demand pay to Foothill the amount of any and all reasonable expenses, including, without limitation, the reasonable fees and expenses of Foothill's counsel and of any experts and agents, which Foothill may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, sale of, collection from, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcement of any of the rights and remedies hereunder of Foothill, or (iv) the failure by any Pledgor to perform or observe any of the provisions hereof. SECTION 13. Security Interest Absolute. All rights of Foothill and obligations of the Pledgors hereunder, and all security interests created or granted hereby, shall be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of any provision of the Loan Agreement or any other Loan Document or any other agreement or instrument relating thereto; (ii) any change in the time, manner or place of payment of, or in any other term of, or any increase in the amount of, all or any of the Secured Obligations, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Loan Agreement or any other Loan Document; (iii) any exchange, release or non-perfection of any Lien on any other collateral, or any release or amendment or waiver of any term of any guaranty of, or consent to departure from any requirement of any guaranty of, all or any of the Secured Obligations; or (iv) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower or any Pledgor. SECTION 14. Amendments, Etc. No amendment or waiver of any provision of this Agreement nor consent to any departure by any Pledgor herefrom shall in any event be effective unless the same shall be in writing and signed by Foothill and each Pledgor affected thereby, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 15. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing (including, without limitation, by telecopy) and mailed by postage prepaid registered mail, return receipt requested, telecopied or delivered by hand, if to any Pledgor, in care of Borrower and in the manner set forth in Section 12 of the Loan Agreement, and if to Foothill, in the manner set forth in Section 12 of the Loan Agreement. SECTION 16. Continuing Security Interest; Transfer of Obligations. This Pledge Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until the termination of this Agreement pursuant to Section 17, (ii) be binding upon each Pledgor, its successors and assigns, and (iii) inure, together with the rights and remedies of Foothill hereunder, to the benefit of and be enforceable by Foothill and its successors, transferees and assigns. SECTION 17. Termination of Security Interest. This Agreement, and the security interests created or granted hereby, shall automatically terminate and be released on the date at which (i) the commitments of Foothill to extend credit to Borrower under the Loan Agreement have been irrevocably terminated, and (ii) all Secured Obligations have been fully and finally paid in cash. In addition, upon any Asset Disposition by any Pledgor of any of the Pledged Collateral to the extent permitted under the Loan Agreement (and the application of the proceeds thereof, if any, in accordance with the Loan Agreement), Foothill shall release the security interest created or granted hereby in respect of the Pledged Collateral (but not the proceeds thereof) that is the subject of such permitted Asset Disposition. Upon any release of the security interest created by this Agreement in any of the Pledged Collateral pursuant to this Section 17, Foothill (without recourse upon, or any representation or warranty whatsoever by, Foothill) shall promptly (i) return, transfer and deliver to the applicable Pledgor all certificates, instruments and other property held by Foothill pursuant to this Agreement representing or evidencing such Pledged Collateral as shall not have been sold or otherwise applied pursuant to the terms hereof, as the case may be, all without recourse upon, or representation or warranty whatsoever by, Foothill, except that the same shall be free and clear of any claims, liens or encumbrances created by or in respect of Foothill, and at the cost and expense of such Pledgor, and (ii) execute and deliver to each Pledgor (at the cost and expense of such Pledgor) such instruments as may be reasonably requested by such Pledgor acknowledging the release of such security interest with respect to such Pledged Collateral. SECTION 18. Amendment of Governing Documents. As soon as practicable and in any event within 90 days after the Closing Date (or, if later, 90 days after the date that such Pledgor becomes a party to this Agreement) and to the extent permitted by applicable law, each Pledgor shall, and shall cause each applicable Pledged Domestic Issuer or Pledged Foreign Issuer whose outstanding common stock is pledged by it hereunder to, take all action necessary to amend the governing documents of each Issuer where such governing documents restrict the assignment of any such shares, so as to allow the enforcement by Foothill of its rights under this Agreement. SECTION 19. Governing Law; Severability. This Agreement shall be governed by, and be construed and interpreted in accordance with, the law of the State of California. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity and without invalidating the remaining provisions of this Agreement. SECTION 20. Waiver of Jury Trial. Each Pledgor waives any right it may have to a trial by jury in respect of any litigation based on, or arising out of, under or in connection with, this Agreement or any other Loan Document, or any course of conduct, course of dealing, verbal or written statement or other action of any loan party or any secured party. SECTION 21. Section Titles. The Section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not part of this Agreement. SECTION 22. Waivers. (a) To the maximum extent permitted by law, each Pledgor hereby waives: (i) notice of acceptance hereof; (ii) notice of any loans or other financial accommodations made or extended under the Loan Agreement, or the creation or existence of any Obligations; (iii) notice of the amount of the Obligations, subject, however, to Section 2.10 of the Loan Agreement and Pledgor's right to make inquiry of Foothill to ascertain the amount of the Obligations at any reasonable time; (iv) notice of any adverse change in the financial condition of Borrower or of any other fact that might increase such Pledgor's risk hereunder; (v) notice of presentment for payment, demand, protest, and notice thereof as to any instrument among the Loan Documents; (vi) notice of any Default or Event of Default under the Loan Agreement; and (vii) all other notices (except if such notice is specifically required to be given to such Pledgor under this Agreement) and demands to which such Pledgor might otherwise be entitled. (b) To the fullest extent permitted by applicable law, each Pledgor waives the right by statute or otherwise to require Foothill to institute suit against Borrower or to exhaust any rights and remedies which Foothill has or may have against Borrower. Each Pledgor further waives any defense arising by reason of any disability or other defense (other than the defense that the Obligations shall have been fully and finally indefeasibly paid) of Borrower or by reason of the cessation from any cause (other than that the Obligations shall have been fully and finally indefeasibly paid) whatsoever of the liability of Borrower in respect thereof. (c) To the maximum extent permitted by law, each Pledgor hereby waives: (i) any rights to assert against Foothill any defense (legal or equitable), set-off, counterclaim, or claim which such Pledgor may now or at any time hereafter have against Borrower or any other party liable to Foothill on account of or with respect to the Obligations; (ii) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future sufficiency, validity, or enforceability of the Obligations; (iii) any defense arising by reason of any claim or defense based upon an election of remedies by Foothill including, to the extent applicable, the provisions of 580d and 726 of the California Code of Civil Procedure, or any similar law of California or any other jurisdiction; (iv) the benefit of any statute of limitations affecting any Pledgor's liability hereunder or the enforcement thereof. (d) To the maximum extent permitted by law, each Pledgor hereby waives any right of subrogation that such Pledgor has or may have as against any other Pledgor with respect to the Obligations. In addition, each Pledgor hereby waives any right to proceed against any other Pledgor, now or hereafter, for contribution, indemnity, reimbursement, or any other suretyship rights and claims (irrespective of whether direct or indirect, liquidated or contingent), with respect to the Obligations. Each Pledgor also hereby waives any right to proceed or to seek recourse against or with respect to any property or asset of any other Debtor. As between any Pledgor and Foothill, each Pledgor hereby agrees that, in light of the waivers contained in this Section, such Pledgor shall not be deemed to be a "creditor" (as that term is defined in the Bankruptcy Code or otherwise) of any other Pledgor, whether for purposes of the application of Sections 547 or 550 of the United States Bankruptcy Code or otherwise. (e) If any of the Secured Obligations at any time are secured by a mortgage or deed of trust upon real property, Foothill may elect, in its sole discretion, upon a default with respect to the Secured Obligations, to foreclose such mortgage or deed of trust judicially or nonjudicially in any manner permitted by law, before or after enforcing this Agreement, without diminishing or affecting the liability of any Pledgor hereunder. Each Pledgor understands that (i) by virtue of the operation of California's antideficiency law applicable to nonjudicial foreclosures, an election by Foothill nonjudicially to foreclose such a mortgage or deed of trust probably would have the effect of impairing or destroying rights of subrogation, reimbursement, contribution, or indemnity of such Pledgor against Borrower or guarantors or sureties, and (ii) absent the waiver given by such Pledgor herein, such an election might estop Foothill from enforcing this Agreement against such Pledgor. Understanding the foregoing, and understanding that each Pledgor is hereby relinquishing a defense to the enforceability of this Agreement, each Pledgor hereby waives any right to assert against Foothill any defense to the enforcement of this Agreement, whether denominated "estoppel" or otherwise, based on or arising from an election by Foothill nonjudicially to foreclose any such mortgage or deed of trust. Each Pledgor understands that the effect of the foregoing waiver may be that such Pledgor may have liability hereunder for amounts with respect to which such Pledgor may be left without rights of subrogation, reimbursement, contribution, or indemnity against Borrower or guarantors or sureties. Each Pledgor also agrees that the "fair market value" provisions of Section 580a of the California Code of Civil Procedure shall have no applicability with respect to the determination of such Pledgor's liability under this Agreement. (f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH PLEDGOR HEREBY WAIVES, TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2838, 2839, 2845, 2848, 2849, AND 2850, TO THE EXTENT APPLICABLE, CALIFORNIA CODE OF CIVIL PROCEDURE 580a, 580b, 580c, 580d, AND 726, AND, TO THE EXTENT APPLICABLE, CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL CODE. [remainder of page intentionally left blank] (g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH PLEDGOR HEREBY WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY FOOTHILL, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY FOR A SECURED OBLIGATION, HAS DESTROYED SUCH PLEDGOR'S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST THE PRINCIPAL BY THE OPERATION OF SECTION 580d OF THE CODE OF CIVIL PROCEDURE OR OTHERWISE. [remainder of page intentionally left blank] IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly executed and delivered by its duly authorized officer on the date first above written. INTERGRAPH CORPORATION By: ------------------------- Name: Title: INTERGRAPH DELAWARE, INC. By: ------------------------- Name: Title: M&S COMPUTING INVESTMENTS, INC. By: ------------------------- Name: Title: Accepted and Acknowledged: FOOTHILL CAPITAL CORPORATION By: ------------------------- Name: Title: EXHIBIT A PLEDGE AMENDMENT This Pledge Amendment, dated ____________, 19___, is delivered pursuant to Section 7 of the Pledge Agreement referred to below. [If this Pledge Amendment is being executed and delivered by a new Pledgor: The undersigned hereby acknowledges each and all of the provisions of the Pledge Agreement and joins in and agrees to be bound thereby as a Pledgor, mutatis mutandis.] The undersigned hereby agrees that: (a) this Pledge Amendment may be attached to the Pledge Agreement, dated as of December 20, 1996, between the Pledgors referred to therein and Foothill Capital Corporation; and (b) that the capital stock and other equity securities listed on this Pledge Amendment shall be and become part of the Pledged Collateral referred to in the Pledge Agreement and Schedule [I / II / III] thereto and shall secure all Secured Obligations. The terms defined in the Pledge Agreement or Loan Agreement are used herein as therein defined. [NAME OF PLEDGOR] By:___________ Name: Title: Pledgor Issuer Number Class Certif- Former Pledgor's Jurisdiction of icate Name, if Percentage of Shares Number(s) any, in Ownership Organization which of Total Certificate Issued and Issued Outstanding represented by Pledged Shares SCHEDULE I Pledged Shares (Domestic Issuers) [TO BE ATTACHED] SCHEDULE II Pledged Shares (Foreign Issuers) [TO BE ATTACHED] Schedule III Pledged Shares (Pledged Toehold Issurers)
Pledgor Pledged Toehold Number of Class Certificate Former Pledgor's Jurisdiction Issuer Shares Number(s) Name, if Percentage of any, in Ownership of Organization which Total Issued and Certificate Outstanding Issued represented by Pledged Shares NONE NONE NONE n/a n/a n/a n/a n/a
Schedule I Domestic Direct and Indirect Subsidiaries Pledged Shares
Pledgor Pledged Number Class Certificate Former Pledgor's Percentage Jurisdiction of Domestic of Number(s) Name, if Ownership of Total Organization Issuer Shares any, in Issued and which Outstanding Certificate Represented by Issued Pledged Shares - -------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 1,000 Common 1 100% Delaware Corporation Delaware, Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph M&S Computing 1,000 Common 6 100% Delaware Corporation Investments, Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph InterCAP Graphics 1,000 Common 3 100% Delaware Corporation Systems, Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph Bestinfo, Inc. 1,000 Common C19 100% Delaware Corporation - -------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Asia 1,000 Common 1 100% Delaware Corporation Pacific, Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph Veribest, Inc. ** 1,000 Common 1 Intergraph 100% Delaware Corporation Electronics Holdings, Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 1,000 Common 1 100% Delaware Corporation Services Company, Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph Intergraph DISC, 3,000 Common 1 100% Delaware Delaware, Inc. Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph International 1,000 Common 1 100% Delaware Corporation Public Safety, Inc.** - -------------------------------------------------------------------------------------------------------------- Intergraph Intergraph China, 1,000 Common 1 100% Delaware Corporation Inc. - -------------------------------------------------------------------------------------------------------------- M&S Computing Worldwide 1,000 Common 1 Intergraph 100% Delaware Investments, Services, Inc. Europe, Inc. Inc. - -------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 1,000 Common 1 100% Delaware Corporation Express, Inc. - --------------------------------------------------------------------------------------------------------------
** Employees and directors of each Company have been granted stock options for common shares of stock in each respective Company. Schedule II Foreign Direct and Indirect Subsidiaries Pledged Shares
Pledgor Pledged Foreign Number Class Certificate Former Pledgor's Jurisdiction Issuer of Numbers(s) Name, if Percentage of Organization Shares any, in Ownership of which Total Issued Certificate and Issued Outstanding Represented by Pledged Shares - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Canada 25,000 Class A AC-20 All but Canada Corporation Ltd. Voting Excluded Common Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Canada 739,051 Class B BC-150 All but Canada Corporation Ltd. Non- Excluded Voting Portion Common - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph (UK), 2,799,000 Capital 1 All but England Corporation Ltd. Stock Excluded Portion - --------------------------------------------------------------------------------------------------------------- M&S Computing Intergraph (UK), 1 Capital All but England Investments, Ltd. Stock Excluded Inc. Portion - --------------------------------------------------------------------------------------------------------------- Intergraph DC Intergraph (UK), 100,000 Capital All but England Corporation - Ltd. Stock Excluded Subsidiary 3 Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Hong 3,353,999 Ordinary 5 All but Hong Kong Corporation Kong Limited Excluded Portion - --------------------------------------------------------------------------------------------------------------- M&S Computing Intergraph Hong 1 Ordinary All but Hong Kong Investments, Kong Limited Excluded Inc. Portion - --------------------------------------------------------------------------------------------------------------- M&S Computing Intergraph 30,595 Common 1,2,3,4 All but Spain Investments, Espana, S.A. Excluded Inc. Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 2,156 Common All but Spain Corporation Espana, S.A. Excluded Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 100 Common 001-100 All but Sweden Corporation (Sverige) AB 100 Common 101-200 Excluded 100 Common 201-300 Foreign 100 Common 301-400 Portion 100 Common 401-500 4,500 Common 501-5000 150,000 Common 5001- 155000 - --------------------------------------------------------------------------------------------------------------- M&S Computing Intergraph 260 Common 6 All but Switzerland Investments, (Switzerland) AG Excluded Inc. Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Virgin 1,000 Common 2 All but United Delaware, Islands Excluded States Inc. Corporation Foreign Virgin Portion Islands - --------------------------------------------------------------------------------------------------------------- M&S Computing Intergraph France 279,994 Common All but France Investments, SA Excluded Inc. Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph DC Intergraph France 11,000 Common All but France Corporation - SA Excluded Subsidiary 3 Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph France 1 Common All but France Corporation SA Excluded Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph N/A N/A N/A All but Germany Corporation Holding GmbH Excluded Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 5,350 Common 1,874- All but The Corporation Benelux B.V. 5,350 Excluded Netherlands Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Saudi 1,125 Common All but Saudi Corporation Arabia, Ltd. Excluded Arabia (a/k/a Saudi Foreign Arabian Portion Intergraph Ltd. ) - --------------------------------------------------------------------------------------------------------------- M&S Computing Intergraph 4,889,610 Common 8 All but Singapore Investments, Systems Singapore Excluded Inc. Pte Ltd. Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph 49,390 Common All but Singapore Corporation Systems Singapore Excluded Pte Ltd. Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Japan 1,065 Common All but Japan Corporation K.K. Excluded Foreign Portion - --------------------------------------------------------------------------------------------------------------- Intergraph Intergraph Korea, 591,482 All but South Korea Corporation Ltd. Excluded Foreign Portion - --------------------------------------------------------------------------------------------------------------- M&S Computing Intergraph 9,500 All but Finland Investments, Finland, Oy Excluded Inc. Foreign Portion - ---------------------------------------------------------------------------------------------------------------
TRADEMARK SECURITY AGREEMENT ---------------------------- This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of December 20, 1996, is made by INTERGRAPH CORPORATION, a Delaware corporation ("Debtor"), in favor of FOOTHILL CAPITAL CORPORATION, a California corporation ("Secured Party"). RECITALS -------- A. Debtor and Secured Party have entered into that certain Loan and Security Agreement, dated as of even date herewith (as amended, restated, modified, renewed or extended from time to time, the "Loan Agreement"), pursuant to which Secured Party has agreed to make certain financial accommodations to Debtor, and Debtor has granted to Secured Party a security interest in (among other things) certain of Debtor's general intangibles. B. Pursuant to the Loan Agreement and as one of the conditions precedent to the obligations of Secured Party under the Loan Agreement, Debtor has agreed to execute and deliver this Agreement to Secured Party for filing with the United States Patent and Trademark Office and with any other relevant recording systems in any domestic or foreign jurisdiction, and as further evidence of and to effectuate Secured Party's existing security interests in the trademarks and other general intangibles described herein. ASSIGNMENT ---------- NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is hereby acknowledged, Debtor hereby agrees in favor of Secured Party as follows: II. Definitions; Interpretation. A. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Event of Default" shall have the meaning ascribed thereto in the Loan Agreement. "Lien" means any pledge, security interest, assignment, charge or encumbrance, lien (statutory or other), or other prefer ential arrangement (including any agreement to give any security interest). "Proceeds" means whatever is receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any Trademark Collateral, including "proceeds" as defined at California UCC Section 9306, all insurance proceeds and all proceeds of proceeds. Proceeds shall include (i) any and all accounts, chattel paper, instruments, general intangibles, cash and other proceeds, payable to or for the account of Debtor, from time to time in respect of any of the Trademark Collateral, (ii) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of Debtor from time to time with respect to any of the Trademark Collateral, (iii) any and all claims and payments (in any form whatsoever) made or due and payable to Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Trademark Collateral by any Person acting under color of governmental authority, and (iv) any and all other amounts from time to time paid or payable under or in connection with any of the Trademark Collateral or for or on account of any damage or injury to or conversion of any Trademark Collateral by any Person. "PTO" means the United States Patent and Trademark Office and any successor thereto. "Secured Obligations" means all liabilities, obligations, or undertakings owing by Debtor to Secured Party of any kind or description arising out of or outstanding under, advanced or issued pursuant to, or evidenced by the Loan Agreement, the other Loan Documents, or this Agreement, irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, voluntary or involuntary, whether now existing or hereafter arising, and including all interest (including interest that accrues after the filing of a case under the Bankruptcy Code) and any and all costs, fees (including attorneys fees), and expenses which Debtor is required to pay pursuant to any of the foregoing, by law, or otherwise. "Trademark Collateral" has the meaning set forth in Sec tion 2. "Trademarks" has the meaning set forth in Section 2. "UCC" means the Uniform Commercial Code as in effect from time to time in the State of California. "United States" and "U.S." each mean the United States of America. B. Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC. C. Interpretation. In this Agreement, except to the extent the context otherwise requires: (i) Any reference to a Section or a Schedule is a reference to a section hereof, or a schedule hereto, respectively, and to a subsection or a clause is, unless otherwise stated, a reference to a subsection or a clause of the Section or subsection in which the reference appears. (ii) The words "hereof," "herein," "hereto," "hereunder" and the like mean and refer to this Agreement as a whole and not merely to the specific Section, subsection, paragraph or clause in which the respective word appears. (iii) The meaning of defined terms shall be equally applicable to both the singular and plural forms of the terms defined. (iv) The words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation." (v) References to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto. (vi) References to statutes or regulations are to be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation referred to. (vii) Any captions and headings are for con- venience of reference only and shall not affect the construction of this Agreement. (viii) Capitalized words not otherwise defined herein shall have the respective meanings assigned to them in the Loan Agreement. (ix) In the event of a direct conflict between the terms and provisions of this Agreement and the Loan Agreement, it is the intention of the parties hereto that both such documents shall be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of the Loan Agreement shall control and govern; provided, however, that the inclusion herein of additional obligations on the part of Debtor and supplemental rights and remedies in favor of Secured Party (whether under California law or applicable federal law), in each case in respect of the Trademark Collateral, shall not be deemed a conflict in the Loan Agreement. III. Security Interest. ----------------- A. Assignment and Grant of Security Interest. To secure the Secured Obligations, Debtor hereby grants, assigns, transfers and conveys to Secured Party a continuing security interest in all of Debtor's right, title and interest in and to the following property, whether now existing or hereafter acquired or arising and whether registered or unregistered (collectively, the "Trademark Collateral"): (i) all state (including common law), federal and foreign trademarks, service marks and trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, together with and including all licenses therefor held by Debtor, and all registrations and recordings thereof, and all applications filed or to be filed in connection therewith, including registrations and applications in the PTO, any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including without limitation any of the foregoing identified on Schedule A hereto (as the same may be amended, modified or supplemented from time to time), and the right (but not the obligation) to register claims under any state or federal trademark law or regulation or any trademark law or regulation of any foreign country and to apply for, renew and extend any of the same, to sue or bring opposition or cancellation proceedings in the name of Debtor or in the name of Secured Party for past, present or future infringement or unconsented use thereof, and all rights arising therefrom throughout the world (collectively, the "Trademarks"); (ii) all claims, causes of action and rights to sue for past, present or future infringement or unconsented use of any Trademarks and all rights arising therefrom and pertaining thereto; (iii) all general intangibles related to or arising out of any of the Trademarks and all the goodwill of Debtor's business symbolized by the Trademarks or associated therewith; and (iv) all products and Proceeds of any and all of the foregoing. B. Certain Exclusions from Grant of Security Interest. Anything in this Agreement and the other Loan Documents to the contrary notwithstanding, the foregoing grant, assignment, transfer, and conveyance of a security interest shall not extend to, and the term "Trademark Collateral" shall not include, any item of Trademark Collateral described in Section 2(a) above that is now or hereafter held by Debtor as licensee or otherwise, solely in the event and to the extent that: (i) as the proximate result of the foregoing grant, assignment, transfer, or conveyance of a security interest, Debtor's rights in or with respect to such item of Trademark Collateral would be forfeited or would become void, voidable, terminable, or revocable, or if Debtor would be deemed to have breached, violated, or defaulted the underlying license or other agreement that governs such item of Trademark Collateral pursuant to the restrictions in the underlying license or other agreement that governs such item of Trademark Collateral; (ii) any such restriction shall be effective and enforceable under applicable law, including Section 9318(4) of the Code; and (iii) any such forfeiture, voidness, voidability, terminability, revocability, breach, violation, or default cannot be remedied by Debtor using its best efforts (but without any obligation to make any material expenditures of money or to commence legal proceedings); provided, however, that the foregoing grant, assignment, transfer, and conveyance of security interest shall extend to, and the term "Trademark Collateral" shall include, (y) any and all Proceeds of such item of Trademark Collateral to the extent that the assignment or encumbering of such Proceeds is not so restricted, and (z) upon any such licensor or other applicable party's consent with respect to any such otherwise excluded item of Trademark Collateral being obtained, thereafter such item of Trademark Collateral as well as any Proceeds thereof that might theretofore have been excluded from such grant, assignment, transfer, and conveyance of a security interest and the term "Trademark Collateral." C. Continuing Security Interest. Debtor agrees that this Agreement shall create a continuing security interest in the Trademark Collateral which shall remain in effect until terminated in accordance with Section 17. D. Incorporation into Loan Agreement. This Agreement shall be fully incorporated into the Loan Agreement and all understandings, agreements and provisions contained in the Loan Agreement shall be fully incorporated into this Agreement. Without limiting the foregoing, the Trademark Collateral described in this Agreement shall constitute part of the Collateral in the Loan Agreement. E. Licenses. Anything in the Loan Agreement or this Agreement to the contrary notwithstanding, Debtor may grant non- exclusive licenses of the Trademark Collateral (subject to the security interest (if any) of Secured Party therein) in the ordinary course of business consistent with past practice. IV. Further Assurances; Appointment of Secured Party as Attorney- in-Fact. Debtor at its expense shall execute and deliver, or cause to be executed and delivered, to Secured Party any and all documents and instruments, in form and substance satisfactory to Secured Party, and take any and all action, which Secured Party may reasonably request from time to time, to perfect and continue perfected, maintain the priority of or provide notice of Secured Party's security interest in the Trademark Collateral and to accomplish the purposes of this Agreement. Secured Party shall have the right, in the name of Debtor, or in the name of Secured Party or otherwise, without notice to or assent by Debtor, and Debtor hereby irrevocably constitutes and appoints Secured Party (and any of Secured Party's officers or employees or agents designated by Secured Party) as Debtor's true and lawful attorney- in-fact with full power and authority, if Debtor refuses or fails to do so timely, (i) to sign the name of Debtor on all or any of such documents or instruments and perform all other acts that Secured Party deems necessary or advisable in order to perfect or continue perfected, maintain the priority or enforceability of or provide notice of Secured Party's security interest in, the Trademark Collateral, and (ii) to execute any and all other documents and instruments, and to perform any and all acts and things, for and on behalf of Debtor, which Secured Party reasonably may deem necessary or advisable to maintain, preserve and protect the Trademark Collateral and to accomplish the purposes of this Agreement, including (A) after the occurrence and during the continuance of any Event of Default, to defend, settle, adjust or institute any action, suit or proceeding with respect to the Trademark Collateral, (B) during a Triggering Event, to assert or retain any rights under any license agreement for any of the Trademark Collateral, and (C) after the occurrence and during the continuance of any Event of Default, to execute any and all applications, documents, papers and instruments for Secured Party to use the Trademark Collateral, to grant or issue any exclusive or non-exclusive license with respect to any Trademark Collateral, and to assign, convey or otherwise transfer title in or dispose of the Trademark Collateral. The power of attorney set forth in this Section 3, being coupled with an interest, is irrevocable so long as this Agreement shall not have terminated in accordance with Section 17. V. Representations and Warranties. Debtor represents and warrants to Secured Party as follows: A. No Other Trademarks. Schedule A sets forth, as of the Closing Date, a true and correct list of all of the existing Trademarks that are registered, or for which any application for registration has been filed with the PTO or any corresponding or similar trademark office of any other U.S. or foreign jurisdiction, and that are owned or held (whether pursuant to a license or otherwise) and used by Debtor. B. Trademarks Subsisting. Each of the Trademarks listed in Schedule A is subsisting and has not been adjudged invalid or unenforceable, in whole or in part, and, to the best of Debtor's knowledge, each of the Trademarks is valid and enforceable. C. Ownership of Trademark Collateral; No Violation. (i) Debtor has rights in and good and defensible title to the existing Trademark Collateral, (ii) with respect to the Trademark Collateral shown on Schedule A hereto as owned by it, Debtor is the sole and exclusive owner thereof, free and clear of any Liens and rights of others (other than the security interest created hereunder), including licenses, registered user agreements and covenants by Debtor not to sue third persons, and (iii) with respect to any Trademarks for which Debtor is either a licensor or a licensee pursuant to a license or licensee agreement regarding such Trademark, each such license or licensing agreement is in full force and effect, Debtor is not in default of any of its obligations thereunder and, other than the parties to such licenses or licensing agreements, no other Person has any rights in or to any of the Trademark Collateral. To the best of Debtor's knowledge, the past, present and contemplated future use of the Trademark Collateral by Debtor has not, does not and will not infringe upon or violate any right, privilege or license agreement of or with any other Person. D. No Infringement. To the best of Debtor's knowledge, no material infringement or unauthorized use presently is being made of any of the Trademark Collateral by any Person. E. Powers. Debtor has the unqualified right, power and authority to pledge and to grant to Secured Party a security interest in all of the Trademark Collateral pursuant to this Agreement, and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person except as already obtained. VI. Covenants. So long as any of the Secured Obligations remain unsatisfied, Debtor agrees that it will comply with all of the covenants, terms and provisions of this Agreement, the Loan Agreement and the other Loan Documents, and Debtor will promptly give Secured Party written notice of the occurrence of any event that could have a material adverse effect on any of the Trademarks or the Trademark Collateral, including any petition under the Bankruptcy Code filed by or against any licensor of any of the Trademarks for which Debtor is a licensee. VII. Future Rights. For so long as any of the Secured Obligations shall remain outstanding, or, if earlier, until Secured Party shall have released or terminated, in whole but not in part, its interest in the Trademark Collateral, if and when Debtor shall obtain rights to any new Trademarks, or any reissue, renewal or extension of any Trademarks, the provisions of Section 2 shall automatically apply thereto and Debtor shall give to Secured Party prompt notice thereof. Debtor shall do all things deemed necessary or advisable by Secured Party to ensure the validity, perfection, priority and enforceability of the security interests of Secured Party in such future acquired Trademark Collateral. In accordance with Section 3 hereof, Debtor hereby authorizes Secured Party to modify, amend or supplement the Schedules hereto and to re-execute this Agreement from time to time on Debtor's behalf and as its attorney-in-fact to include any future Trademarks which are or become Trademark Collateral and to cause such re-executed Agreement or such modified, amended or supplemented Schedules to be filed with the PTO. VIII. Secured Party's Duties. Notwithstanding any provision contained in this Agreement, Secured Party shall have no duty to exercise any of the rights, privileges or powers afforded to it and shall not be responsible to Debtor or any other Person for any failure to do so or delay in doing so. Except for the accounting for moneys actually received by Secured Party hereunder or in connection herewith, Secured Party shall have no duty or liability to exercise or preserve any rights, privileges or powers pertaining to the Trademark Collateral. IX. Remedies. From and after the occurrence and during the continuation of an Event of Default, Secured Party shall have all rights and remedies available to it under the Loan Agreement and applicable law (which rights and remedies are cumulative) with respect to the security interests in any of the Trademark Collateral or any other Collateral. Debtor agrees that such rights and remedies include the right of Secured Party as a secured party to sell or otherwise dispose of its Collateral after default, pursuant to UCC Section 9504. Debtor agrees that Secured Party shall at all times have such royalty-free licenses, to the extent permitted by law, for any Trademark Collateral that is reasonably necessary to permit the exercise of any of Secured Party's rights or remedies upon or after the occurrence of (and during the continuance of) an Event of Default with respect to (among other things) any tangible asset of Debtor in which Secured Party has a security interest, including Secured Party's rights to sell inventory, tooling or packaging which is acquired by Debtor (or its successor, assignee or trustee in bankruptcy). In addition to and without limiting any of the foregoing, upon the occurrence and during the continuance of an Event of Default, Secured Party shall have the right but shall in no way be obligated to bring suit, or to take such other action as Secured Party deems necessary or advisable, in the name of Debtor or Secured Party, to enforce or protect any of the Trademark Collateral, in which event Debtor shall, at the request of Secured Party, do any and all lawful acts and execute any and all documents required by Secured Party in aid of such enforcement. To the extent that Secured Party shall elect not to bring suit to enforce such Trademark Collateral, Debtor agrees to use all reasonable measures and its diligent efforts, whether by action, suit, proceeding or otherwise, to prevent the infringement, misappropriation or violation thereof by others and for that purpose agrees diligently to maintain any action, suit or proceeding against any Person necessary to prevent such infringement, misappropriation or violation. X. Binding Effect. This Agreement shall be binding upon, inure to the benefit of and be enforceable by Debtor and Secured Party and their respective successors and assigns. XI. Notices. All notices and other communications hereunder shall be in writing and shall be mailed, sent or delivered in accordance with the Loan Agreement. XII. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, except to the extent that the validity or perfection of the assignment and security interests hereunder in respect of any Trademark Collateral are governed by federal law, in which case such choice of California law shall not be deemed to deprive Secured Party of such rights and remedies as may be available under federal law. XIII. Entire Agreement; Amendment. This Agreement, together with the Schedules hereto, contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior drafts and communications relating to such subject matter. Neither this Agreement nor any provision hereof may be modified, amended or waived except by the written agreement of the parties as provided in the Loan Agreement. Notwithstanding the foregoing, Secured Party may re-execute this Agreement or modify, amend or supplement the Schedules hereto as provided in Section 6 hereof. XIV. Severability. If one or more provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect in any jurisdiction or with respect to any party, such invalidity, illegality or unenforceability in such jurisdiction or with respect to such party shall, to the fullest extent permitted by applicable law, not invalidate or render illegal or unenforceable any such provision in any other jurisdiction or with respect to any other party, or any other provisions of this Agreement. XV. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counter parts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. XVI. Loan Agreement. Debtor acknowledges that the rights and remedies of Secured Party with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Loan Agreement and all such rights and remedies are cumulative. XVII. No Inconsistent Requirements. Debtor acknowledges that this Agreement and the other Loan Documents may contain covenants and other terms and provisions variously stated regarding the same or similar matters, and Debtor agrees that all such covenants, terms and provisions are cumulative and all shall be performed and satisfied in accordance with their respective terms. To the extent of any conflict between the provisions of this Agreement and the Loan Agreement, however, the provisions of the Loan Agreement shall govern. XVIII. Termination. Upon the indefeasible payment in full of the Secured Obligations, including the cash collateralization, expiration, or cancellation of all Secured Obligations, if any, consisting of letters of credit, and the full and final termination of any commitment to extend any financial accommodations under the Loan Agreement, this Agreement shall terminate, and Secured Party shall execute and deliver such documents and instruments and take such further action reasonably requested by Debtor, at Debtor's expense, as shall be necessary to evidence termination of the security interest granted by Debtor to Secured Party hereunder, including cancellation of this Agreement by written notice from Secured Party to the PTO. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, as of the date first above written. INTERGRAPH CORPORATION, a Delaware corporation By: ----------------------------- Title: ----------------------------- FOOTHILL CAPITAL CORPORATION, a California corporation By: ------------------------------ Title: ------------------------------ STATE OF CALIFORNIA ) )ss COUNTY OF LOS ANGELES ) On January ___, 1997, before me, ____________________________, Notary Public, personally appeared ____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. --------------------------------- Signature [SEAL] STATE OF CALIFORNIA ) )ss COUNTY OF LOS ANGELES) On January ___, 1997, before me, ____________________________, Notary Public, personally appeared ____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. ---------------------------------- Signature [SEAL] SCHEDULE A ---------- to the Trademark Security Agreement [TO BE ATTACHED] SCHEDULE A to the Trademark Security Agreement United States Trademark Applications and Registrations ------------------------------ United States Reg. Mark Reg. Date - ------------------ ---- --------- Serial No. - ---------- 74/597,438 Intervue 10/17/95 74/594,709 Smartsketch 10/10/95 74/553,690 Imagineer pending 74/548,732 Exalt 7/16/96 74/540,647 Geosolutions pending 74/483,556 Geomedia 3/12/96 1,893,800 Geospatial Information 5/9/95 Manager 1,906,354 Veriscope 7/18/95 1,893,549 A/D Link 5/9/95 1,811,902 Modelview 12/21/93 1,775,024 Render A Revelation 6/8/93 Animate A Dream and design 1,727,288 Intergraph and design 10/27/92 1,873,705 TDI 1/17/95 1,846,558 EMS PowerPak 7/26/94 1,771,253 Interplot 5/18/93 1,816,380 Intertrak 1/11/94 74/691,667 Designreview Pending 74/691,666 Pipegen Pending 74/677,633 Mogle 3/19/96 74/677,632 Autogl Pending 74/668,557 Pixel Pro and design Pending 1,624,043 Intergraph 11/20/96 1,579,939 Worksurface 1/30/90 1,172,090 OT (stylized) and 10/6/81 design 74/721,439 Solid Edge Pending 75/111,467 Communicating Pending Geographically 74/691,667 Designreview Pending 74/728,668 Imagescape Pending 75/001,347 Intergraph Imagineer Pending 75/072,383 Interstor Pending 75/007,393 Netcheck & Design Pending 74/668,557 PixelPro Pending 74/094,854 RIS Pending 75/072,375 SmartPlant Pending 75/135,343 TDZ Pending Eagle 4/17/90 InRail 2/28/95 InterAct 12/30/86 InterPro 5/21/85 As of December 20, 1996 Foothill Partners II, L.P. Foothill Partners III, L.P. 11111 Santa Monica Boulevard Suite 1500 Los Angeles, California 90025 Ladies and Gentlemen: This letter will confirm the agreement of Intergraph Corporation, a Delaware corporation ("Borrower") that each of Foothill Partners II, L.P. and Foothill Partners III, L.P. (the "Funds"), in connection with their acquisition of participation interests in debt of the Borrower, will be entitled to the following contractual rights, in addition to the specified rights to certain non-public financial information, inspection rights, and other rights specifically provided to Foothill Capital Corporation ("FCC") and/or its participants under the Loan and Security Agreement, dated as of December 20, 1996 (the "Loan Agreement"): (1) The Funds each shall be permitted to select one representative ("Representatives") to consult with and advise management of Borrower on significant business issues, including such management's proposed annual operating plans, and management of Borrower will make itself available to meet with those Representatives regularly during each year by telephone and/or at Borrower's facility at mutually agreeable times, on reasonable prior written notice, for such consultation and advice and to review progress in achieving such plans. (2) In the event of any material development to or affecting Borrower's business (a) that could reasonably be expected to materially impair Borrower's ability to perform its obligations under the Loan Agreement or of Foothill to enforce the Obligations (as defined in the Loan Agreement) or to realize upon the Collateral (as defined in the Loan Agreement), or (b) that could reasonably be expected to have a material adverse effect on the value of the Collateral or the amount that FCC would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of such Collateral, Borrower shall notify the Representatives and provide the Representatives with the opportunity, on reasonable prior written notice, to consult with and advise Borrower's management of its views with respect thereto. (3) The Representatives may examine the books and records of Borrower and visit and inspect its facilities and may reasonably request information at reasonable times and intervals concerning the general status of Borrower's financial conditions and operations. Foothill Partners II, L.P. Foothill Partners III, L.P. As of December 20, 1996 Page 2 (4) On reasonable prior written notice, the Representatives may discuss the business operations, properties and financial and other conditions of Borrower with Borrower's officers, employees and directors and with Borrower's independent certified accountants and investment bankers. (5) The Funds shall be entitled to request that Borrower provide them when available, with copies of (i) all financial statements, forecasts and projections provided to or approved by its Board of Directors; (ii) all notices, minutes, proxy materials, consents and correspondence and other material that it provides to its Directors and shareholders; (iii) any letter issued to Borrower by its accountants with respect to Borrower's internal controls; (iv) any documents filed by Borrower with the Securities and Exchange Commission; (v) copies of all information, statements and reports provided to FCC under the Loan Agreements; and/or (vi) such other business and financial data as the Representatives reasonably may request in writing from time to time; other than, in each case, any such materials provided by Borrower to its Directors to the extent protected by applicable attorney work-product doctrine and/or attorney-client privilege. The Funds agree that they will not disclose to any third party any information provided to them by Borrower hereunder which is not generally available to the public or which is specifically designated by Borrower as confidential, except with the prior express approval of Borrower or as may otherwise by required by applicable law. The rights described herein shall apply and continue for so long as the Funds continue to hold any amount of indebtedness (or a participation interest therein) of Borrower owned by the Fund as of the closing date under the Loan Agreement. Very truly yours, INTERGRAPH CORPORATION By: ------------------------------- Title: ---------------------------- Foothill Partners II, L.P. Foothill Partners III, L.P. As of December 20, 1996 Page 3 AGREED AND ACCEPTED AS OF THIS 20th DAY OF DECEMBER, 1996. FOOTHILL PARTNERS II, L.P. By: --------------------------- Managing General Partner FOOTHILL PARTNERS III, L.P. By: --------------------------- Managing General Partner AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT This AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT (this "Amendment") is entered into as of January 14, 1997, by and between Foothill Capital Corporation, a California corporation ("Foothill"), on the one hand, and Intergraph Corporation, a Delaware corporation ("Borrower"), with reference to the following facts: A. Foothill and Borrower heretofore have entered into that certain Loan and Security Agreement, dated as of December 20, 1996 (as heretofore amended, supplemented, or otherwise modified, the "Agreement"); B. Borrower has requested Foothill to amend the Agreement to, among other things, permit a subfacility for indemnities in respect of Borrower's Permitted F/X Contracts, as set forth in this Amendment; C. Foothill is willing to so amend the Agreement in accordance with the terms and conditions hereof; and D. All capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Agreement, as amended hereby. NOW, THEREFORE, in consideration of the above recitals and the mutual premises contained herein, Foothill and Borrower hereby agree as follows: 1. Amendments to the Agreement. a. Section 1.1 of the Agreement hereby is amended by adding the following new defined terms in alphabetical order: "First Amendment" means that certain Amendment Number One to Loan and Security Agreement, dated as of January 14, 1997, between Foothill and Borrower. "F/X Bank" means Norwest Bank Minnesota, National Association, or any successor thereto. "F/X Bank Parameters Letter" means that certain letter agreement, dated as of January 14, 1997, between F/X Bank and Borrower, a copy of which is attached hereto as Exhibit F-1, regarding the parameters under which F/X Bank provides foreign exchange currency services to Borrower. "F/X Line" has the meaning set forth in Section 2.4. "F/X Reserve" means, as of any date of determination, a reserve equal to the maximum amount of obligations of Foothill to indemnify F/X Bank against losses or expenses incurred by F/X Bank in connection with Permitted F/X Contracts. As of January 14, 1997, the amount of the F/X Reserve is $3,500,000. "Permitted F/X Contracts" means foreign currency exchange contracts between F/X Bank and Borrower that: (a) are in respect of marked-to-market risk on foreign exchange future trades or options; (b) are entered into by Borrower in the ordinary course of its business; (c) are entered into in connection with the operational needs of Borrower's business and not for speculative purposes; (d) do not have a maturity date that is after the date five (5) Business Days prior to the Maturity Date; and (e) are provided by F/X Bank pursuant to the F/X Bank Parameters Letter. "Permitted Spot Trades" means foreign currency exchange transactions between F/X Bank and Borrower that: (a) are in respect of foreign exchange spot value trades; (b) are entered into by Borrower in the ordinary course of its business; and (c) are entered into in connection with the operational needs of Borrower's business and not for speculative purposes; and (d) are conducted pursuant to the F/X Bank Parameters Letter. b. The following definitions contained in Section 1.1 of the Amendment are amended and restated in their entirety to read as follows: "Availability" means the amount of money that Borrower is entitled to borrow as Advances under Section 2.1, such amount being the difference derived when (a) the sum of the principal amount of Advances then outstanding (including any amounts that Foothill may have paid for the account of Borrower pursuant to any of the Loan Documents and that have not been reimbursed by Borrower) is subtracted from (b) the lesser of (i) the Maximum Revolving Amount less the sum of (y) the Letter of Credit Usage and (z) the F/X Reserve, or (ii) the Borrowing Base less the sum of (y) the Letter of Credit Usage and (z) the F/X Reserve. c. The first sentence of Section 2.1(a) of the Agreement hereby is amended and restated in its entirety to read as follows: Subject to the terms and conditions of this Agreement, Foothill agrees to make advances ("Advances") to Borrower in an amount outstanding not to exceed at any one time the lesser of (i) the Maximum Revolving Amount less the sum of the Letter of Credit Usage and the F/X Reserve, or (ii) the Borrowing Base less the sum of the Letter of Credit Usage and the F/X Reserve. d. The second sentence of Section 2.2(a) of the Agreement hereby is amended and restated in its entirety to read as follows: Foothill shall have no obligation to issue a Letter of Credit if any of the following would result: (i) the Letter of Credit Usage would exceed the Borrowing Base less the sum of the amount of outstanding Advances and the F/X Reserve, or (ii) the Letter of Credit Usage would exceed the lower of (y) the Maximum Revolving Amount less the sum of the amount of outstanding Advances and the F/X Reserve, or (z) $60,000,000, or (iii) the outstanding Obligations (other than under the Term Loan) would exceed the Maximum Revolving Amount. e. Section 2.4 of the Agreement hereby is amended and restated in its entirety to read as follows: 2.4 Subfacility for Borrower's Permitted F/X Contracts (the "F/X Line"). (a) If requested to do so by Borrower, Foothill may, in its sole discretion, enter into agreements with F/X Bank pursuant to which Foothill would indemnify F/X Bank against losses or expenses incurred by F/X Bank in connection with Permitted F/X Contracts, notwithstanding any objections by Borrower as to the amount of such losses or expenses. If Foothill is obligated to advance funds under an F/X Line indemnity, Borrower immediately shall reimburse such amount to Foothill and, in the absence of such reimbursement, the amount so advanced immediately and automatically shall be deemed to be an Advance hereunder and, thereafter, shall bear interest at the rate then applicable to Advances under Section 2.6. If, upon the maturity date of any Permitted F/X Contract, Borrower does not have Availability in an amount sufficient to pay the full amount of Borrower's obligations to F/X Bank under such contract, Foothill may, in its sole discretion, instruct F/X Bank to liquidate such Permitted F/X Contract, at Borrower's sole expense, and to apply any amounts thereunder that would have been payable to Borrower against the amounts owed to F/X Bank by Borrower. Any amounts paid by Foothill to F/X Bank and any other costs or expenses incurred by Foothill in connection with any such Permitted F/X Contracts shall constitute Advances, shall be secured by all of the Collateral, and thereafter shall be payable by Borrower to Foothill together with interest as provided for herein. (b) Borrower hereby agrees to indemnify, save, defend, and hold Foothill harmless from any loss, cost, expense, or liability, including payments made by Foothill, expenses, and reasonable attorneys fees incurred by Foothill arising out of or in connection with any F/X Line indemnity. (c) Any and all charges, commissions, fees, and costs incurred by Foothill relating to Permitted F/X Contracts that are the subject of an F/X Line indemnity by Foothill shall be considered Foothill Expenses for purposes of this Agreement and immediately shall be reimbursable by Borrower to Foothill. (d) Immediately upon the termination of this Agreement, Borrower agrees to either (i) provide cash collateral to be held by Foothill in an amount equal to 105% of the maximum amount of Foothill's obligations under the F/X Line indemnities, or (ii) cause to be delivered to Foothill releases of all of Foothill's obligations under outstanding F/X Line indemnities. At Foothill's discretion, any proceeds of Collateral received by Foothill after the occurrence and during the continuation of an Event of Default may be held as the cash collateral required by this Section 2.4(d). (e) The amount of the F/X Reserve may be reduced from time to time by Foothill upon the receipt and written acceptance by Foothill of an F/X Reserve Reduction Certificate, in the form of that attached hereto as Exhibit F-2, duly executed by both Borrower and F/X Bank, not less than 2 Business Days prior to the requested effective date of such reduction. (f) So long as no Triggering Event has occurred and is continuing or would result therefrom, the amount of the F/X Reserve may be increased from time to time by Foothill in its sole discretion upon the receipt and written acceptance by Foothill of an F/X Reserve Increase Certificate, in the form of that attached hereto as Exhibit F-3, duly executed by both Borrower and F/X Bank, not less than 2 Business Days prior to the requested effective date of such increase. (g) Anything in the Loan Documents to the contrary notwithstanding, Permitted Spot Trades shall be deemed to qualify as Permitted F/X Contracts eligible for coverage under an F/X Line indemnity solely until such time, if ever, as Foothill is obligated to advance funds under an F/X Line indemnity to cover obligations owing but unpaid by Borrower to F/X Bank in respect of Permitted Spot Trades and, thereafter, Permitted Spot Trades shall no longer be deemed to qualify as Permitted F/X Contracts eligible for coverage under an F/X Line indemnity and F/X Line indemnities shall no longer be permitted to be issued in respect of Permitted Spot Trades. f. The first sentence of Section 3.5 of the Agreement hereby is amended and restated in its entirety to read as follows: On the date of termination of this Agreement, all Obligations (including contingent reimbursement obligations of Borrower with respect to any outstanding Letters of Credit or any outstanding F/X Line indemnities) immediately shall become due and payable without notice or demand. g. The preamble to Section 5 of the Agreement hereby is amended and restated in its entirety to read as follows: In order to induce Foothill to enter into this Agreement, Borrower makes the following representations and warranties which shall be true, correct, and complete in all respects as of the Closing Date, and at and as of the date of the making of each Advance or Letter of Credit or F/X Line indemnity made thereafter, as though made on and as of the date of such Advance or Letter of Credit or F/X Line indemnity (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement: h. Section 7.1(a) of the Agreement hereby is amended and restated in its entirety to read as follows: (a) Indebtedness evidenced by this Agreement, together with Indebtedness to issuers of letters of credit that are the subject of L/C Guarantees and Indebtedness to F/X Bank under Permitted F/X Contracts; i. The subsection of Section 7.19 of the Agreement that reads "withdraw, or permit any Subsidiary of Borrower to withdraw, from any Multiemployer Plan where such withdrawal is reasonably likely to result in any liability of any such entity under Title IV of ERISA;" and that is numbered in Section 7.19 of the Agreement as `subsection 7.(yyyy)' hereby is re-numbered as `subsection (h)'. j. A new subsection (n) hereby is added to Section 9.1 of the Agreement in proper numerical order as follows: (n) Foothill may, at its option, require Borrower to deposit with Foothill funds in an amount equal to the F/X Line Reserve (if any), and, if Borrower fails to make such deposit promptly, Foothill may advance such amount as an Advance (whether or not an Overadvance is created thereby). Any such deposit or the proceeds of such Advance shall be held by Lender as a reserve to fund indemnity obligations owing to F/X Bank under the F/X Line. At such time (if ever) as all such indemnity obligations have been paid or terminated, any amounts remaining in such reserve shall be applied against any outstanding Obligations or, if all Obligations have been indefeasibly paid in full, returned to Borrower. 2. Representations and Warranties. Borrower hereby represents and warrants to Foothill that: (a) the execution, delivery, and performance of this Amendment and of the Agreement, as amended by this Amendment, are within its corporate powers, have been duly authorized by all necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the terms of its charter or bylaws, or of any contract or undertaking to which it is a party or by which any of its properties may be bound or affected; (b) this Amendment and the Agreement, as amended by this Amendment, constitute Borrower's legal, valid, and binding obligation, enforceable against Borrower in accordance with its terms; and (c) attached hereto as Exhibit F-1 is a true, correct, and complete copy of the F/X Bank Parameters Letter. 3. Conditions Precedent to Amendment. The satisfaction of each of the following on or before, unless otherwise specified below, the First Amendment Closing Date shall constitute conditions precedent to the effectiveness of this Amendment: a. Foothill shall have received the reaffirmation and consent of each of the Obligors (other than Borrower) attached hereto as Exhibit A, duly executed and delivered by the respective authorized officials thereof; b. Foothill shall have received a certificate from the Secretary of Borrower attesting to the incumbency and signatures of authorized officers of Borrower and to the resolutions of Borrower's Board of Directors authorizing its execution and delivery of this Amendment and the performance of this Amendment and the Agreement as amended by this Amendment, and authorizing specific officers of Borrower to execute and deliver the same; c. Foothill shall have received all required consents of Foothill's participants in the Obligations to Foothill's execution, delivery, and performance of this Amendment; d. The representations and warranties in this Amendment, the Agreement as amended by this Amendment, and the other Loan Documents shall be true and correct in all respects on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date); e. No Event of Default or event which with the giving of notice or passage of time would constitute an Event of Default shall have occurred and be continuing on the date hereof, nor shall result from the consummation of the transactions contemplated herein; f. No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated herein shall have been issued and remain in force by any governmental authority against Borrower, Foothill, or any of their Affiliates; g. The Collateral shall not have declined materially in value from the values set forth in the most recent appraisals or field examinations previously done by Foothill; and h. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered or executed or recorded and shall be in form and substance satisfactory to Foothill and its counsel. 4. Effect on Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate as a waiver of or, except as expressly set forth herein, as an amendment, of any right, power, or remedy of Foothill under the Agreement, as in effect prior to the date hereof. 5. Further Assurances. Borrower shall execute and deliver all agreements, documents, and instruments, in form and substance satisfactory to Foothill, and take all actions as Foothill may reasonably request from time to time, to perfect and maintain the perfection and priority of Foothill's security interests in the Collateral and the Real Property, and to fully consummate the transactions contemplated under this Amendment and the Agreement, as amended by this Amendment. 6. Miscellaneous. a. Upon the effectiveness of this Amendment, each reference in the Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like import referring to the Agreement shall mean and refer to the Agreement as amended by this Amendment. b. Upon the effectiveness of this Amendment, each reference in the Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or words of like import referring to the Agreement shall mean and refer to the Agreement as amended by this Amendment. c. Upon the effectiveness of this Amendment, each reference in the Agreement and the other Loan Documents to Exhibit F-1, Exhibit F-2, or Exhibit F-3 of the Agreement shall mean and refer to Exhibit F-1, Exhibit F-2, or Exhibit F-3 attached hereto, respectively. d. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart. [remainder of page intentionally left blank] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above. FOOTHILL CAPITAL CORPORATION, a California corporation By____________________________ Title:________________________ INTERGRAPH CORPORATION, a Delaware corporation By____________________________ Title:________________________ EXHIBIT A ---------- Reaffirmation and Consent All capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in that certain Amendment Number One to Loan and Security Agreement, dated as of January 14, 1997 (the "Amendment"). Each of the undersigned hereby (a) represents and warrants to Foothill that the execution, delivery, and performance of this Reaffirmation and Consent are within its corporate powers, have been duly authorized by all necessary corporate action, and are not in contravention of any law, rule, or regulation, or any order, judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the terms of its charter or bylaws, or of any contract or undertaking to which it is a party or by which any of its properties may be bound or affected; (b) consents to the amendment of the Agreement by the Amendment; (c) acknowledges and reaffirms its obligations owing to Foothill under the Pledge Agreement and any other Loan Documents to which it is party; and (d) agrees that each of the Pledge Agreement and any other Loan Documents to which it is a party is and shall remain in full force and effect. Although each of the undersigned has been informed of the matters set forth herein and has acknowledged and agreed to same, it understands that Foothill has no obligation to inform it of such matters in the future or to seek its acknowledgement or agreement to future amendments, and nothing herein shall create such a duty. M&S COMPUTING INVESTMENTS, INC., a Delaware corporation By ___________________________ Title:________________________ INTERGRAPH DELAWARE, INC., a Delaware corporation By ___________________________ Title:________________________ Exhibit F-1 ----------- [TO BE ATTACHED] Exhibit F-2 ----------- F/X RESERVE REDUCTION CERTIFICATE Today's date:____________________ (1) FROM INTERGRAPH TO: NORWEST BANK MINNESOTA ATTENTION: Mike Schaefer/Ann Johnson FACSIMILE: (612) 667-0513 (2) FROM NORWEST TO: FOOTHILL CAPITAL CORPORATION ATTENTION: Bryan Hamm FACSIMILE: (617) 722-9485 (3) FROM FOOTHILL TO INTERGRAPH AND NORWEST: Reference hereby is made to that certain Loan and Security Agreement, dated as of December 20, 1996 (as amended, supplemented, and modified, the "Loan Agreement"), between Foothill Capital Corporation ("Foothill") and Intergraph Corporation ("Borrower"). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement. Pursuant to Section 2.4 of the Agreement, Borrower hereby requests a reduction in the F/X Reserve from the current amount of $____________ to the new amount of $_____________, such reduction to become effective on _____________,______. INTERGRAPH CORPORATION FACSIMILE: (205) 730-2742 ATTENTION: Roger Fulton By:_______________________ Its:______________________ NORWEST BANK MINNESOTA, N.A. By:_______________________ Its:______________________ FOOTHILL CAPITAL CORPORATION By:_______________________ Its:______________________ Exhibit F-3 ----------- F/X RESERVE INCREASE CERTIFICATE Today's date:____________________ (1) FROM INTERGRAPH TO: FOOTHILL CAPITAL CORPORATION ATTENTION: Bryan Hamm FACSIMILE: (617) 722-9485 (2) FROM FOOTHILL TO: NORWEST BANK MINNESOTA ATTENTION: Mike Schaefer/Ann Johnson FACSIMILE: (612) 667-0513 (3) FROM NORWEST TO INTERGRAPH AND FOOTHILL: Reference hereby is made to that certain Loan and Security Agreement, dated as of December 20, 1996 (as amended, restated, supplemented, and modified from time to time, the "Loan Agreement"), between Foothill Capital Corporation ("Foothill") and Intergraph Corporation ("Borrower"). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Loan Agreement. Pursuant to Section 2.4 of the Agreement, Borrower hereby requests an increase in the F/X Reserve from the current amount of $____________ to the new amount of $_____________, such increase to become effective on _____________,______. INTERGRAPH CORPORATION FACSIMILE: (205) 730-2742 ATTENTION: Roger Fulton By:_______________________ Its:______________________ FOOTHILL CAPITAL CORPORATION By:_______________________ Its:______________________ NORWEST BANK MINNESOTA, N.A. By:_______________________ Its:______________________ Exhibit F-1 ----------- January 14, 1997 Mr. Bryan Hamm Vice President Foothill Capital Corporation 60 State Street, Suite 1150 Boston, MA 02109 Dear Bryan: Following are facts relating to the foreign exchange line we wish to establish with Norwest Bank Minnesota, N.A.: FACT ONE: Intergraph Corporation ("Intergraph") has previously entered into a Loan and Security Agreement with Foothill Capital Corporation ("Foothill") dated as of December 20, 1996. Intergraph desires to use the service (the "Service") of Norwest Bank Minnesota ("Norwest"), effective immediately, in order to hedge its foreign exchange exposure: FACT THREE: Norwest is willing to perform such Service and establish a foreign exchange line ("the FX Line") on the condition that Foothill shall indemnify Norwest for the mark-to-market exposure ("Exposure Reserve") on the FX line; FACT FOUR: Foothill has agreed to provide such indemnification to Norwest on behalf of Intergraph and to do so effective immediately, subject to Intergraph executing additional documentation in a form acceptable to Foothill; FACT FIVE: Norwest has initially determined that it will require an Exposure Reserve equal to seven and one half percent (7 1/2%) on each foreign exchange trade and that it will only issue trades having a maturity of no more than four months. And Intergraph has agreed to the Norwest Exposure Reserve; NOW THEREFORE the parties hereto agree as follows: Intergraph hereby requests that Foothill reserve from availability on its line of credit with Foothill an amount equal to $3,500,000.00 USD and authorizes Foothill to provide the same amount to Norwest as indemnification for the FX Line. Intergraph agrees that should it fail to settle any trades with Norwest, Foothill will, upon receipt of written notice from Norwest, pay Norwest the mark-to-market amount as determined by Norwest, notwithstanding any objection by Intergraph and Foothill will charge such amount against Intergraph's loan with Foothill. Foothill hereby agrees to indemnify Norwest for the mark-to-market exposure on foreign exchange trades, up to $3,500,000.00 USD. Norwest agrees it will institute the necessary internal procedures to enable Intergraph to execute foreign exchange trades and acknowledges that Foothill's indemnity to Norwest shall be equal to the lesser of $3,500,000.00 USD or the total notional USD amount of all outstanding foreign exchange trades, as determined on the trade date, times seven and one half percent. Foothill reserves the right to terminate this agreement at any time by written notice to both Intergraph and Norwest. Such notice shall be transmitted via facsimile, Certified Mail, courier or by personal delivery. No such termination shall impair the rights of any party with respect to transactions processed prior to the effective date of termination. Sincerely, /s/ Larry J. Laster Larry J. Laster Executive Vice President and Chief Financial Officer AGREED TO AND ACKNOWLEDGED: FOOTHILL CAPITAL CORPORATION /s/ Bryan Hamm - ------------------------------ BY: Bryan Hamm, Vice President /s/ Paz Hernandez - ------------------------------ BY: Paz Hernandez, Vice President/Assistant Treasurer NORWEST BANK MINNESOTA, N.A. /s/ Charles D. White - ------------------------------ BY: Charles D. White, Treasurer -----END PRIVACY-ENHANCED MESSAGE-----