BANK1ONE
August 19, 1998
Mr. Xxx Xxxxx
VARI-L Company, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxx:
This confirmation sets out the terms and conditions of the Interest Rate
Swap entered into between us on the Trade Date specified below. This
constitutes a Confirmation as referred to in the ISDA Master Agreement
dated as of August 1, 1998, ("the "Agreement") between, VARI-L Company,
Inc., ("VARI-L Company") and Bank One, Colorado, N.A. ("Bank One").
THIS FACSIMILE TRANSMISSION WILL BE THE ONLY WRITTEN COMMUNICATION
REGARDING THIS SWAP TRANSACTION EXCHANGED BETWEEN US AND WILL BE DEEMED
FOR ALL PURPOSES AN ORIGINAL DOCUMENT, UNLESS YOU REQUEST THAT WE SIGN
HARD COPY VERSIONS OF THIS CONFIRMATION. PLEASE CONTACT THE INDIVIDUAL
INDICATED IN THE LAST PARAGRAPH OF THIS LETTER TO RECEIVE SUCH COPIES.
1. The definitions and provisions contained in the 1991 ISDA Definitions
(as published by the International Swap Dealers Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency
between those definitions and provisions and this Confirmation, this
Confirmation will govern. This Confirmation shall supplement, form part
of, and be subject to the Agreement.
Each party hereto represents and warrants to the other party hereto that,
in connection with the Transaction, (i) it has and will continue to
consult with its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent it deems necessary, and it
has and will continue to make its own investment, hedging and trading
decisions (including without limitations decisions regarding the
appropriateness and/or suitability of the Transaction) based upon its own
judgment and upon any advice from such advisors as it deems necessary, and
not in reliance upon the other party hereto or any of its branches,
subsidiaries or affiliates or any of their respective officers, directors
or employees, or any view expressed by any of them, (ii) it has evaluated
and it fully understands all the terms, conditions and risks of the
Transaction, and it is willing to assume (financially and otherwise) all
such risks, (iii) it has and will continue to act as principal, and not
agent of any person, and the other party hereto and its branches,
subsidiaries and affiliates have not and will not be acting as a fiduciary
or financial, investment, commodity trading or other advisor to it and
(iv) it is entering into the Transaction for purposes of hedging its
assets or liabilities or in connection with a line of business, and not
for the purpose of speculation.
2. The terms of this particular transaction to which this Confirmation
relates are as follows:
Notional Amount: USD 4,228,723 (See Exhibit "A")
Trade Date: August 19, 1998
Effective Date: August 24, 1998
Termination Date: January 24, 2002, subject to adjustment in accordance
with the Modified Following Business Day Convention.*
Fixed Amounts:
Fixed Rate Payer: VARI-L Company
Fixed Rate Payer
Payment Dates: The 24th day of each month of each year,
commencing on September 24, 1998, up to and
including the Termination Date, subject to
adjustment in accordance with the Modified
Following Business Day Convention.*
Fixed Rate: 7.75%
Fixed Rate Day
Count Fraction: Actual/360
Fixed Rate Period
End Dates: The 24th day of each month of each year,
commencing on September 24, 1998, up to and
including the Termination Date, subject to
adjustment in accordance with the Modified
Following Business Day Convention.*
Floating Amounts
Floating Rate Payer: Bank One
Floating Rate Payer
Payment Dates: The 24th day of each month of each year,
commencing on September 24, 1998, up to and
including the Termination Date, subject to
adjustment in accordance with the Modified
Following Business Day Convention.*
Floating Rate
Option: USD-LIBOR-BBA
Floating Rate
Designated
Maturity: One Month
Floating Rate
Spread: Plus 150 Basis Points
Floating Rate
Reset Dates: The first day of each Calculation Period.
Floating Rate Day
Count Fraction: Actual/360
Floating Rate Period
End Dates: The 24th day of each month of each year,
commencing on September 24, 1998, up to and
including the Termination Date, subject to
adjustment in accordance with the Modified
Following Business Day Convention.*
Floating Initial
Rate: To Be Determined
Method of Averaging: Not Applicable
Compounding: Not Applicable
Business Days: New York and London
Calculation Agent: Bank One
Governing Law: Laws of New York
3. Account Details:
Payments to VARI-L Company: Norwest Bank Colorado, N.A.
Account #: ----------
ABA #: --------
Payments to Bank One: Wire Transfer to:
Bank One, N.A.
ABA#: ------------
Account #: ---------
Atten: Swap Operations
5. Offices:
(a) The Office of Bank One, Colorado, N.A,, for this transaction is
000 X. Xxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxx 00000-0000.
(b) The Office of VARI-L Company, Inc. for this transaction is 0000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000.
Please confirm that the foregoing correctly sets out the terms and
conditions of our agreement by responding within one (1) business day by
returning via facsimile an executed copy of this Confirmation on (614) 248-
1241, Attention: Xxxxxxx Xxxxxx, telephone: (000) 000-0000. Failure to
respond within such period shall not affect the validity or enforceability
of this transaction, and shall be deemed to be an affirmation of the terms
and conditions contained herein, absent manifest error.
Banc One Corporation signing on For on behalf of
behalf of Bank One, Colorado, N.A. VARI-L Company, Inc.
/s/ Xxxxx X. Xxxxx /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Vice President Title: President
Date: August 19, 1998 Date: August 19, 1998
Banc One Corporation signing on
behalf of Bank One, [Insert Affiliate], N.A.
/s/ Xxxxxx X. Xxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxx
Vice President
Date: August 19,1998
*Modified Following is specified, that date will be the first following
day that is a Business Day unless that day falls in the next calendar
month, in which case that date will be the first preceding day that is a
Business Day.
PROMISSORY NOTE
SHADED AREA BEGINS
Principal Loan Date Maturity Loan No.
$4,228,723.63 08-21-1998
Call Collateral Account Officer Initials
092989 327 0933159571 00152
SHADED AREA ENDS
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
Borrower: VARI-L COMPANY, INC., A Lender: Bank One, Colorado, NA
COLORADO CORPORATION Denver Banking Center
0000 Xxxxxx Xxxxxx 0000 00xx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
==========================================================================
Principal Amount: $4,228,723.63 Date of Note: August 21, 1998
PROMISE TO PAY. For value received, VARI-L COMPANY, INC., A COLORADO
CORPORATION ("Borrower") promises to pay to Bank One, Colorado, NA
("Lender"), or order, in lawful money of the United States of America, the
principal amount of Four Million Two Hundred Twenty Eight Thousand Seven
Hundred Twenty Three & 63/100 Dollars ($4,228,723.63), together with
interest on the unpaid principal balance from the data advanced until paid
in full.
PAYMENT. Borrower will pay this loan In accordance with the following
payment schedule:
Borrower shall make monthly payments as follows: commencing on
September 24, 1998, and continuing on the same day of each
calendar month thereafter until the maturity date, Borrower
shall pay to Lender monthly installments each in the sum of: (A)
the amount of principal set forth opposite the respective due
date in Exhibit "A" attached hereto, plus (B) accrued interest.
A final payment shall be due and payable on February 24, 2002 in
the amount of the outstanding principal balance of this Note,
plus all accrued but unpaid interest and any other unpaid
amounts due under this Note.
The annual interest rate for this Note is computed on a 365/360 basis;
that is, by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding. Borrower
will pay Lender at the address designated by Xxxxxx from time to time in
writing. If any payment of principal of or interest on this Note shall
become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day. As used herein, the term
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which national banking associations are authorized to be
closed. Unless otherwise agreed to, in writing, or otherwise required by
applicable law, payments will be applied first to accrued, unpaid
interest, then to principal, and any remaining amount to any unpaid
collection costs, late charges and other charges, provided, however, upon
delinquency or other default, Lender reserves the right to apply payments
among principal, interest, late charges, collection costs and other
charges at its discretion. The books and records of Xxxxxx shall be prima
facie evidence of all outstanding principal of and accrued but unpaid
interest on this Note. This Note may be executed in connection with a
loan agreement. Any such loan agreement may contain additional rights,
obligations and terms.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
fluctuation based upon the LIBOR Rate of interest in effect from time to
time (the "Index"). "LIBOR Rate" shall mean with respect to each Interest
Period, the offered rate for U.S. Dollar deposits of not less than
$1,000,000.00 as of 11:00 A.M. City of London, England time two London
Business Days prior to the first date of each Interest Period of this Note
as shown on the display designated as "British Bankers Assoc. Interest
Settlement Rates" on the Telerate System ("Telerate"), Page 3750 or Page
3740, or such other page or pages as may replace such pages on Telerate
for the purpose of displaying such rate. Provided, however, that if such
rate is not available on Telerate then such offered rate shall be
otherwise independently determined by Lender from an alternate,
substantially similar independent source available to Lender or shall be
calculated by Lender by a substantially similar methodology as that
theretofore used to determine such offered rate in Telerate. "London
Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions are generally authorized or obligated by law or
executive order to close in the City of London, England. Each change in
the rate to be charged on this Note will become effective without notice
on the commencement of each Interest Period based upon the Index then in
effect. "Interest Period" means each consecutive one month period (the
first of which shall commence on the date of this Note) effective as of
the first day of each Interest Period and ending on the last day of each
Interest Period, provided that if any Interest Period is scheduled to end
on a date for which there is no numerical equivalent to the date on which
the Interest Period commenced, then it shall end instead of the last day
of such calendar month. "Borrower" may prepay all or any portion of the
principal amount of this Note bearing interest at a LIBOR Rate, provided
that if Borrower makes any such prepayment other than on the last day of
an Interest Period, Borrower shall pay all accrued interest on the
principal amount prepaid with such prepayment and, on demand, shall
reimburse Lender and hold Lender harmless from all losses and expenses
incurred by Lender as a result of such prepayment, including, without
limitation, any losses and expenses arising from the liquidation or
reemployment of deposits acquired to fund or maintain the principal amount
prepaid. Such reimbursement shall be calculated as though Lender funded
the principal amount prepaid through the purchase of U.S. Dollar deposits
in the London, England interbank market having a maturity corresponding to
such Interest Period and bearing an interest rate equal to the LIBOR Rate
for such Interest Period, whether in fact that is the case or not.
Xxxxxx's determination of the amount of such reimbursement shall be
conclusive in the absence of manifest error.. Except as otherwise provided
herein, the unpaid principal balance of this Note will accrue interest at
a rate per annum which will from time to time be equal to the sum of the
Index, plus 1.500%. NOTICE: Under no circumstances will the interest rate
on this Note be more than the maximum rate allowed by applicable law.
Whenever increases occur in the interest rate, Lender, at its option, may
do one or more of the following: (a) increase Borrower's payments to
ensure Borrower's loan will pay off by its original final maturity date,
(b) increase Borrower's payments to cover accruing interest, (c) increase
the number of Borrower's payments, and (d) continue Borrower's payments at
the same amount and increase Borrower's final payment.
PREPAYMENT. Borrower may pay without fee all or a portion of the
principal amount owed hereunder earlier than it is due. All prepayments
shall be applied to the indebtedness owing hereunder in such order and
manner as Xxxxxx may from time to time determine in its sole discretion.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged 5.000% of the regularly scheduled payment or $25.00, whichever is
greater, up to the maximum amount of $250.00 per late charge.
DEFAULT. Xxxxxxxx will be in default if any of the following happens: (a)
Borrower falls to make any payment of principal or interest when due under
this Note or any other indebtedness owing now or hereafter by Borrower to
Lender; (b) failure of Borrower or any other party to comply with or
perform any term, obligation, covenant or condition contained in this Note
or in any other promissory note, credit agreement, loan agreement,
guaranty, security agreement, mortgage, deed of trust or any other
instrument, agreement or document, whether now or hereafter existing,
executed in connection with this Note (the Note and all such other
instruments, agreements, and documents shall be collectively known herein
as the "Related Documents"); (c) Any representation or statement made or
furnished to Lender herein, in any of the Related Documents or in
connection with any of the foregoing is false or misleading in any
material respect; (d) Borrower or any other party liable for the payment
of this Note, whether as maker, endorser, guarantor, surety or otherwise,
becomes insolvent or bankrupt, has a receiver or trustee appointed for any
part of its property, makes an assignment for the benefit of its
creditors, or any proceeding is commenced either by any such party or
against it under any bankruptcy or insolvency laws; (e) the occurrence of
any event of default specified in any of the other Related Documents or in
any other agreement now or hereafter arising between Borrower and Lender;
(f) the occurrence of any event which permits the acceleration of the
maturity of any indebtedness owing now or hereafter by Borrower to any
third party; or (g) the liquidation, termination, dissolution, death or
legal incapacity of Borrower or any other party liable for the payment of
this Note, whether as maker, endorser, guarantor, surety, or otherwise.
LENDER'S RIGHTS. Upon default, Lender may at its option, without further
notice or demand (i) declare the entire unpaid principal balance on this
Note, all accrued unpaid interest and all other costs and expenses for
which Borrower is responsible for under this Note and any other Related
Document immediately due, (ii) refuse to advance any additional amounts
under this Note, (iii) foreclose all liens securing payment hereof, (iv)
pursue any other rights, remedies and recourses available to the Lender,
including without limitation, any such rights, remedies or recourses under
the Related Documents, at law or in equity, or (v) pursue any combination
of the foregoing. Upon default, including failure to pay upon final
maturity, Lender, at its option, may also, if permitted under applicable
law, do one or both of the following: (a) increase the variable interest
rate on this Note to 4.500 percentage points over the Index, and (b) add
any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Note (including any
increased rate). The interest rate will not exceed the maximum rate
permitted by applicable law. Xxxxxx may hire an attorney to help collect
this Note if Borrower does not pay and Borrower will pay Xxxxxx's
reasonable attorneys' fees and all other costs of collection, unless
prohibited by applicable law. This Note has been delivered to Lender and
accepted by Xxxxxx in the State of Colorado. Subject to the provisions on
arbitration, this Note shall be governed by and construed in accordance
with the laws of the State of Colorado without regard to any conflict of
laws or provisions thereof.
PURPOSE. Xxxxxxxx agrees that no advances under this Note shall be used
for personal, family, or household purposes and that all advances
hereunder shall be used solely for business, commercial, agricultural or
other similar purposes.
JURY WAIVER. THE BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN BORROWER AND LENDER ARISING OUT OF OR
IN ANY WAY RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS. THIS
PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
EVIDENCED BY THIS NOTE.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if
Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render
a nontaxable account taxable, Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns, conveys, delivers,
pledges, and transfers to Lender all Borrower's right, title and interest
in and to, Xxxxxxxx's accounts with Lender (whether checking, savings, or
any other account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the future.
Borrower authorizes Xxxxxx, to the extent permitted by applicable law, and
to the extent an event of default as defined under the Business Loan
Agreement shall have occurred, to charge or setoff all sums owing on this
Note against any and all such accounts.
ARBITRATION. Xxxxxx and Xxxxxxxx agree that upon the written demand of
either party, whether made before or after the institution of any legal
proceedings, but prior to the rendering of any judgment in that
proceeding, all disputes, claims and controversies between them, whether
individual, joint, or class in nature, arising from this Note, any Related
Document or otherwise, including without limitation contract disputes and
tort claims, shall be arbitrated pursuant to the Commercial Rules of the
American Arbitration Association. Any arbitration proceeding held
pursuant to this arbitration provision shall be conducted in the city
nearest the Borrower's address having an AAA regional office, or at any
other place selected by mutual agreement of the parties. No act to take
or dispose of any collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This
arbitration provision shall not limit the right of either party during any
dispute, claim or controversy to seek, use, and employ ancillary,
provisional or preliminary rights and/or remedies, judicial or otherwise,
for the purposes of realizing upon, preserving, protecting, foreclosing
upon or proceeding under forcible entry and detainer for possession of,
any real or personal property, and any such action shall not be deemed an
election of remedies. This includes, without limitation, obtaining
injunctive relief or a temporary restraining order, invoking a power of
sale under any deed of trust or mortgage, obtaining a writ of attachment
or imposition of a receivership, or exercising any rights relating to
personal property, including taking or disposing of such property with or
without judicial process pursuant to Article 9 of the Uniform Commercial
Code. Any disputes, claims, or controversies concerning the lawfulness or
reasonableness of any act, or exercise of any right or remedy, concerning
any collateral, including any claim to rescind, reform, or otherwise
modify any agreement relating to the collateral, shall also be arbitrated;
provided however that no arbitrator shall have the right or the power to
enjoin or restrain any act of either party. Judgment upon any award
rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this arbitration provision shall preclude either
party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver, laches and
similar doctrines which would otherwise be applicable in an action brought
by a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement
of any action for these purpose. The Federal Arbitration Act (Title 9 of
the United States Code) shall apply to the construction, interpretation,
and enforcement of this arbitration provision.
RENEWAL AND EXTENSION. This Note is given in replacement, renewal and/or
extension of, but not extinguishing the indebtedness evidenced by, that
promissory note dated August 13, 1997 executed by Xxxxxxxx in the original
principal amount of $4,700,000.00, and is not a novation thereof. All
interest evidenced by the note being replaced, renewed, and/or extended by
this instrument shall continue to be due and payable until paid.
ADDITIONAL PROVISION REGARDING LATE CHARGES. The "Late Charge" provision
set forth above in this Note is hereby deleted and the following provision
shall apply to this Note: Borrower agrees that if a payment is 10 days or
more late, Borrower will be charged 5.000% of the regularly scheduled
payment or Twenty Five Dollars ($25.00), whichever is greater, up to the
maximum amount of One Thousand Five Hundred Dollars ($1,500.00).
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this Note, or release any party or
guarantor or collateral; or unjustifiably impair, fail to realize upon or
perfect Xxxxxx's security interest in the collateral; and take any other
action deemed necessary by Xxxxxx without the consent of or notice to
anyone. All such parties also agree that Xxxxxx may modify this Note
without the consent of or notice to anyone other than the party with whom
the modification is made.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
XXXXXXXX AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE NOTE.
BORROWER:
VARI-L COMPANY, INC., A COLORADO CORPORATION
VARI-L COMPANY, INC., A COLORADO CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President/Chief Executive Officer
