CREDIT AGREEMENT
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THIS CREDIT AGREEMENT (this "Agreement"), dated as of March 29, 1999,
is made between Amerigon Incorporated, a California corporation (the "Company"),
and Big Star Investments LLC, a Delaware limited liability company ("Lender").
The Company has requested the Lender to make term loans to the Company
in an aggregate principal amount of up to $1,200,000. The Lender is willing to
make such loans to the Company upon the terms and subject to the conditions set
forth in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings:
"Affiliate" means any Person which, directly or indirectly, controls,
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is controlled by or is under common control with another Person. For purposes
of the foregoing, "control," "controlled by" and "under common control with"
with respect to any Person shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.
"Bridge Loan Warrant" has the meaning set forth in Section 2.11.
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"Budget" means the Company's budget, attached hereto as Exhibit A,
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indicating the proposed uses of the proceeds of the Loans (including the purpose
of expenditure, persons to be paid, amounts, and dates on which payments are
expected to be made), including any subsequent amendments to such budget as may
be approved by the Lender (which approval shall not be unreasonably withheld).
"Business Day" means a day of the year on which commercial banks are
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not required or authorized by law to close in Los Angeles, California.
"Closing Date" means the date upon which the conditions set forth in
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Sections 3.01 and 3.02 are satisfied and the initial Loan hereunder is made.
"Collateral" means the property described in the Collateral Documents,
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and all other property now existing or hereafter acquired which may at any time
be or become subject to a Lien in favor of the Lender pursuant to the Collateral
Documents or otherwise, securing the payment and performance of the Obligations.
"Collateral Documents" means the Security Agreement, the Patent and
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Trademark Security Agreement, any other agreement pursuant to which the Company
provides a Lien on its
assets in favor of the Lender and all filings (including, but not limited to,
all U.C.C. financing statements filed to perfect the security interests granted
in the Security Agreement), documents and agreements made or delivered pursuant
thereto.
"Commitment" means the Term Commitment.
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"Company" has the meaning set forth in the recital of parties to this
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Agreement.
"Default" means an Event of Default or an event or condition which
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with notice or lapse of time or both would constitute an Event of Default.
"Environmental Laws" means all federal, state or local laws, statutes,
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common law duties, rules, regulations, ordinances, judgments and codes, together
with all administrative orders, directives, requests, licenses, authorizations
and permits of, and agreements with (including consent decrees), any
governmental agencies or authorities, in each case relating to or imposing
liability or standards of conduct concerning public health, safety and
environmental protection matters.
"Event of Default" has the meaning set forth in Section 6.01.
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"Final Maturity Date" means the earlier to occur of (i) September 30,
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1999, (ii) the closing of the financing pursuant to the Securities Purchase
Agreement, or (iii) the occurrence of a Trigger Event.
"GAAP" means generally accepted principles in the United States,
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consistently applied.
"Hazardous Substances" means any toxic, radioactive, caustic or other
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hazardous substances, materials, wastes, contaminants or pollutants, including
asbestos, PCBs, petroleum products and byproducts, and any substances defined or
listed as "hazardous substances," "hazardous materials," "hazardous wastes" or
"toxic substances" (or similarly identified or having any constituent substances
displaying any of the foregoing characteristics), regulated under or forming the
basis for liability under any applicable Environmental Law.
"Indebtedness" means, for any Person, (i) all indebtedness or other
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obligations of such Person for borrowed money or for the deferred purchase price
of property or services; (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person; (iv) all
reimbursement and other obligations of such Person in respect of letters of
credit and bankers acceptances and all net obligations in respect of interest
rate swaps, caps, floors and collars, currency swaps, and other similar
financial products; (v) all obligations under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases; and (vi) all
indebtedness of another Person of the types referred to in clauses (i) through
(v) guaranteed directly or indirectly in any manner by the Person for whom
Indebtedness is being determined, or in effect guaranteed directly or indirectly
by such Person through an agreement to purchase or acquire such indebtedness, to
advance or supply funds for the payment or purchase of such indebtedness or
otherwise assure a
2.
creditor against loss, or secured by any Lien upon or in property owned by the
Person for whom Indebtedness is being determined, whether or not such Person has
assumed or become liable for the payment of such indebtedness of such other
Person.
"Investors" shall mean Westar Capital II LLC and Big Beaver
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Investments LLC.
"Lender" has the meaning set forth in the recital of parties to this
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Agreement.
"Lien" means any mortgage, pledge, security interest, assignment,
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deposit arrangement, charge or encumbrance, lien or other type of preferential
arrangement (other than a financing statement filed by a lessor in respect of an
operating lease not intended as security).
"Loan Documents" means this Agreement, the Note, the Collateral
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Documents and all other certificates, documents, agreements and instruments
delivered to the Lender under or in connection with this Agreement.
"Loans" means the Term Loan.
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"Material Adverse Effect" means any event, circumstance or condition
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that, individually or in the aggregate (i) has or could reasonably be expected
to have a material adverse effect on the business, operations, assets,
liabilities (including without limitation contingent liabilities), prospects,
employee relationships, customer or supplier relationships, or the condition
(financial or otherwise) of the Company; (ii) would materially impair the
ability of the Company to perform or observe its obligations under or in respect
of the Loan Documents; or (iii) adversely affects the legality, validity,
binding effect or enforceability of any of the Loan Documents or the perfection
or priority of any Lien granted to the Lender under any of the Collateral
Documents.
"Note" has the meaning set forth in Section 2.03.
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"Obligations" means the indebtedness, liabilities and other
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obligations of the Company to the Lender under or in connection with the Loan
Documents, including all Loans, all interest accrued thereon, all fees due under
this Agreement and all other amounts payable by the Company to the Lender
thereunder or in connection therewith.
"Patent and Trademark Security Agreement" means the Patent and
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Trademark Assignment and Security Agreement between the Company and the Lender,
in form and substance satisfactory to the Lender.
"Permitted Liens" means: (i) Liens in favor of the Lender; (ii) the
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existing Liens (including leases and subleases) listed in Schedule 1 or incurred
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in connection with the extension, renewal or refinancing of the Indebtedness
secured by such existing Liens, provided that any extension, renewal or
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replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or
refinanced does not increase; (iii) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings and which are adequately reserved for in
accordance with GAAP, provided the same does not have priority over any of the
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Lender's Liens and no notice of tax lien has been filed of
3.
record; (iv) Liens of materialmen, mechanics, warehousemen, carriers or
employees or other similar Liens provided for by mandatory provisions of law and
securing obligations either not delinquent or being contested in good faith by
appropriate proceedings and which do not in the aggregate materially impair the
use or value of the property or risk the loss or forfeiture thereof; (v) Liens
consisting of deposits or pledges to secure the performance of bids, trade
contracts, leases, public or statutory obligations, or other obligations of a
like nature incurred in the ordinary course of business (other than for
Indebtedness); (vi) Liens upon or in any equipment acquired or held by the
Company to secure the purchase price of such equipment or Indebtedness incurred
solely for the purpose of financing the acquisition of such equipment; and (vii)
restrictions and other minor encumbrances on real property which do not in the
aggregate materially impair the use or value of such property or risk the loss
or forfeiture thereof.
"Person" means an individual, corporation, partnership, joint venture,
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trust, unincorporated organization or any other entity of whatever nature or any
governmental agency or authority.
"Responsible Officer" means, with respect to any Person, the chief
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executive officer, the president, the chief financial officer or the treasurer
of such Person, or any other senior officer of such Person having substantially
the same authority and responsibility.
"Security Agreement" means a Security Agreement between the Company
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and the Lender, in form and substance satisfactory to the Lender.
"Securities Purchase Agreement" means that certain Securities Purchase
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Agreement of even date herewith between the Company and the Investors.
"Term Commitment" means $1,200,000 or, where the context so requires,
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the obligation of the Lender to make a Term Loan up to such amount on the terms
and conditions set forth in this Agreement.
"Term Loan" has the meaning set forth in Section 2.01(b).
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"Term Loan Availability Period" means the period extending from and
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including the Closing Date through the earliest of : (i) September 1, 1999, (ii)
the occurrence of a Trigger Event, (iii) the date on which the financing
contemplated by the Securities Purchase Agreement is completed, or (iv) the date
upon which the Lender declares an Event of Default.
"Trigger Event" means that the Company (or its Board of Directors)
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shall have authorized, recommended, proposed or publicly announced its intention
to enter into (or has failed to recommend rejection of) any tender or exchange
offer, merger, consolidation, liquidation, dissolution, business combination,
recapitalization, acquisition, or disposition of a material amount of assets or
securities or any comparable transaction which has not been consented to in
writing by the Lender.
SECTION 1.02 Accounting Terms. Unless otherwise defined or the
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context otherwise requires, all accounting terms not expressly defined herein
shall be construed, and all accounting determinations and computations required
under this Agreement or any other Loan Document shall be made, in accordance
with GAAP.
4.
SECTION 1.03 Interpretation. In the Loan Documents, except to the
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extent the context otherwise requires: (i) any reference to an Article, a
Section, a Schedule or an Exhibit is a reference to an article or section
thereof, or a schedule or an exhibit thereto, 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 or any other Loan Document as a whole and not merely to the specific
Article, 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, but only to the extent such amendments and other modifications are not
prohibited by the terms of the Loan Documents; (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 table of contents, captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document; and (viii) in the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding";
and the word "through" means "to and including."
ARTICLE II
THE LOANS
SECTION 2.01 Term Loan. The Lender agrees, subject to the terms
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and conditions of this Agreement, to make term loans (each a "Term Loan") to the
Company on the Closing Date and from time to time during the Term Loan
Availability Period following the Company's compliance with the borrowing
procedure under Section 2.02 below, in the aggregate principal amount up to but
not exceeding the Term Commitment.
SECTION 2.02 Borrowing Procedure. Each Loan shall be made upon
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written notice from the Company to the Lender, which notice shall be received by
the Lender not later than 10:00 A.M. (California time) at least three (3)
Business Days prior to the proposed borrowing date. Each such notice of
borrowing shall be irrevocable and binding on the Company and shall specify the
proposed date of the borrowing (which shall be a Business Day), the amount of
the borrowing (which shall be at least $200,000 or a greater amount which is an
integral multiple of $50,000), and payment instructions with respect to the
funds to be made available to the Company. Each such notice shall also be
accompanied by the Budget (updated to reconcile the use of the proceeds of any
prior Loans). Upon fulfillment of the applicable conditions set forth in Article
III hereof, the Lender shall make the Loan available to the Company in same day
funds, or such other funds as shall separately be agreed upon by the Company and
the Lender, in accordance with the payment instructions provided to the Lender
as set forth in the borrowing request delivered pursuant hereto.
SECTION 2.03 Evidence of Indebtedness. At the request of the
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Lender, the Company shall execute and deliver for account of the Lender a
promissory note (the "Note"), in
5.
a form reasonably acceptable to the Lender ,as additional evidence of the
Indebtedness of the Company to the Lender resulting from each Term Loan.
SECTION 2.04 Interest. The Company hereby promises to pay interest
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on the unpaid principal amount of each Loan from the date of such Loan until the
maturity thereof, at a rate equal to 10% per annum, on the date of any
prepayment of any such Loan and at maturity.
SECTION 2.05 Computations. All computations of fees and interest
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hereunder shall be made on the basis of a year of 360 days for the actual number
of days occurring in the period for which any such interest or fee is payable.
SECTION 2.06 Highest Lawful Rate. Anything herein to the contrary
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notwithstanding, if during any period for which interest is computed hereunder,
the applicable interest rate, together with all fees, charges and other payments
which are treated as interest under applicable law, as provided for herein or in
any other Loan Document, would exceed the maximum rate of interest which may be
charged, contracted for, reserved, received or collected by the Lender in
connection with this Agreement under applicable law (the "Maximum Rate"), the
Company shall not be obligated to pay, and the Lender shall not be entitled to
charge, collect, receive, reserve or take, interest in excess of the Maximum
Rate, and during any such period the interest payable hereunder shall be limited
to the Maximum Rate.
SECTION 2.07 Termination of the Commitment. Upon the earlier to
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occur of (i) September 30, 1999, (ii) the occurrence of a Trigger Event, (iii)
the closing of the financing pursuant to the Securities Purchase Agreement, or
(iv) the Lender's declaration of an Event of Default, any unused portion of the
Term Commitment shall terminate. After the Term Commitment terminates under this
Section 2.07 it may not be reinstated.
SECTION 2.08 Repayment of the Loan. The Company hereby promises to
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pay to the Lender the principal amount of the Term Loans and any accrued
interest thereon in full on the Final Maturity Date.
SECTION 2.09 Prepayments of the Loans.
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(a) Optional Prepayments. The Company may, upon prior notice to the
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Lender, prepay the outstanding amount of the Loans in whole or in part, without
premium or penalty.
(b) Notice; Application. The notice given of any prepayment shall
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specify the date and amount of the prepayment. If the notice of prepayment is
given, the Company shall make such prepayment and the prepayment amount
specified in such notice shall be due and payable on the date specified therein,
with accrued interest to such date on the amount prepaid.
SECTION 2.10 Payments.
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(a) Payments. The Company shall make each payment under the Loan
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Documents, unconditionally in full without deduction, set-off, counterclaim or,
to the extent permitted by applicable law, other defense, and free and clear of,
and without reduction for or on
6.
account of, any present and future taxes or withholdings (other than a tax on
the overall net income of the Lender), and all liabilities with respect thereto.
Each payment shall be made not later than 11:00 A.M. (California time) on the
day when due to the Lender in U.S. dollars and in immediately available funds,
or such other funds as shall be separately agreed upon by the Company and the
Lender, in accordance with the Lender's payment instructions.
(b) Extension. Whenever any payment hereunder shall be stated to be
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due, or whenever any interest payment date or any other date specified hereunder
would otherwise occur, on a day other than a Business Day, then, except as
otherwise provided herein, such payment shall be made, and such interest payment
date or other date shall occur, on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest.
(c) Application. Each payment by or on behalf of the Company
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hereunder shall, unless a specific determination is made by the Lender with
respect thereto, be applied (i) first, to accrued and unpaid interest due the
Lender; and (ii) second, to principal due the Lender.
SECTION 2.11 Bridge Loan Warrant. Concurrently with the execution
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of this Agreement, the Company will issue to the Lender a warrant to purchase
300,000 shares of the Class A Common Stock of the Company on the terms and
conditions set forth in Exhibit B hereto (the "Bridge Loan Warrant").
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ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 Conditions Precedent to the Initial Loan. The
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obligation of the Lender to make its initial Loan on the date of the initial
borrowing hereunder (the "Closing Date") shall be subject to the satisfaction of
each of the following conditions precedent before or concurrently with the
initial Loan:
(a) Fees and Expenses. The Company shall have paid all fees and
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invoiced costs and expenses then due hereunder.
(b) Loan Documents. The Lender shall have received the following Loan
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Documents: (i) this Agreement executed by the Company, (ii) the Note required
hereunder, executed by the Company; and (iii) the Collateral Documents executed
by each of the respective parties thereto.
(c) Documents and Actions Relating to Collateral. The Lender shall
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have received, in form and substance satisfactory to it, results of such Lien
searches as it shall reasonably request, and evidence that all filings,
registrations and recordings have been made in the appropriate governmental
offices, and all other action has been taken, which shall be necessary to
create, in favor of the Lender, a perfected first priority Lien on the
Collateral.
(d) Additional Closing Documents. The Lender shall have received the
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following, in form and substance satisfactory to it: (i) evidence that all (A)
authorizations or
7.
approvals of any governmental agency or authority, and (B) approvals or consents
of any other Person, required in connection with the execution, delivery and
performance of the Loan Documents shall have been obtained; and (ii) a
certificate of the Secretary or other appropriate officer of the Company, dated
the Closing Date, certifying (A) copies of the articles or certificate of
incorporation, and bylaws, of the Company and the resolutions and other actions
taken or adopted by the Company authorizing the execution, delivery and
performance of the Loan Documents, and (B) the incumbency, authority and
signatures of each officer of the Company authorized to execute and deliver the
Loan Documents and act with respect thereto.
(e) Legal Opinion. The Lender shall have received an opinion of legal
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counsel to the Company dated the Closing Date, in the form attached hereto as
Exhibit C.
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(f) Bridge Loan Warrant. The Company shall have delivered to the
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Lender a duly executed Bridge Loan Warrant, in the form attached hereto as
Exhibit B.
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(g) Permit. All evidences of indebtedness issued by the Company
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pursuant to (and including) this Agreement shall have been qualified by permit
filed with and approved by the California Department of Corporations pursuant to
Section 25113 of the California Corporations Code.
(h) Securities Purchase Agreement. The Company shall have executed
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and delivered to the Investors the Securities Purchase Agreement.
SECTION 3.02 Conditions Precedent to All Loans. The obligation of
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the Lender to make each Loan shall be subject to the satisfaction of each of the
following conditions precedent:
(a) Notice. The Company shall have given its notice of borrowing as
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provided in Section 2.02.
(b) Material Adverse Effect. On and as of the date of such Loan,
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there shall have occurred no change or event since the date of this Agreement
(in the case of the initial Loan) or the date of the most recent borrowing (in
the case of any subsequent Loan), as the case may be, that has or could
reasonably be expected to have a Material Adverse Effect.
(c) No Default. On the date of such Loan, both before and after
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giving effect thereto and to the application of proceeds therefrom, no material
Default shall have occurred and be continuing or shall result from the making of
such Loan. The giving of any notice of borrowing and the acceptance by the
Company of the proceeds of each Loan made on or following the Closing Date shall
each be deemed a certification to the Lender that on and as of the date of such
Loan no material Default shall have occurred or shall result from the making of
the Loan.
(d) Budget. The Company shall have provided to the Lender
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certification regarding the use of the proceeds received from any prior Loans as
well as the proposed use of the proceeds of the currently requested Loan, as
such expenditures relate to the Budget. The Company shall have demonstrated to
the reasonable satisfaction of the Lender that the proposed use of the proceeds
of the currently requested Loan is in accordance with the Budget.
8.
(e) Additional Documents. The Lender shall have received, in form and
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substance satisfactory to it, such additional approvals, opinions, documents and
other information as the Lender may reasonably request.
(f) Limitation on Amount. Notwithstanding the satisfaction of the
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other conditions set forth in this Section 3.02, the Lender shall not be
obligated to make any Loan to the Company in an amount that exceeds the
anticipated cash needs of the Company, as determined in the reasonable
discretion of the Lender based on the Budget, for a period of two (2) weeks
following the anticipated date of funding of such Loan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Company. The
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Company represents and warrants to the Lender that, except as set forth in the
Disclosure Letter:
(a) Organization and Powers. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
California, and has all requisite power and authority to execute, deliver and
perform its obligations under the Loan Documents. The Company is qualified to do
business and is in good standing in each jurisdiction in which the failure so to
qualify or be in good standing would result in a Material Adverse Effect and has
all requisite power and authority to own its assets and carry on its business.
(b) Authorization; No Conflict. The execution, delivery and
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performance by the Company of the Loan Documents have been duly authorized by
all necessary corporate action of the Company and do not and will not will not
(i) result in a violation of the Company's Articles of Incorporation or Bylaws,
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any material
agreement, indenture or instrument to which the Company or any of its properties
is subject, or result in a violation of any material law, rule, regulation,
order, judgment or decree (including U.S. federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the
Company is bound or affected, or (iii) except as contemplated by this Agreement,
result in, or require, the creation or imposition of any Lien upon or with
respect to any of the properties, assets or revenues of the Company. The Company
is not in violation of its Articles of Incorporation, Bylaws or other
organizational documents, or of any judgment, order, writ, decree, law, rule or
regulation to which the Company or its properties is subject. The Company is not
in default (and no event has occurred which, with notice or lapse of time or
both, would put the Company in default) under, nor has there occurred any event
giving others (with notice or lapse of time or both) any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company is a party or any of its properties is subject.
9.
(c) Binding Obligation. The Loan Documents constitute, or when
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delivered under this Agreement, will constitute, legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms.
(d) Consents. No authorization, consent, approval, license, exemption
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of, or filing or registration with, any governmental agency or authority, or
approval or consent of any other Person, is required for the due execution,
delivery or performance by the Company of any of the Loan Documents, except for
such approvals as have been obtained or as set forth in Schedule 2 hereto.
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(e) Litigation. There is no action, suit, proceeding or investigation
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pending, or to the Company's knowledge, currently threatened against the
Company, except as which individually or in the aggregate would not have a
Material Adverse Effect. The Company is not a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. Except as set forth on the Disclosure Letter, there
is no material action, suit, proceeding or investigation by the Company
currently pending or that the Company intends to initiate.
(f) Patents and Trademarks. The Company owns or licenses from another
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person all inventions, patents, patent rights, computer software, trademarks,
trademark rights, service marks, service xxxx rights, trade names, trade name
rights and copyrights (collectively, the "Intellectual Property") necessary for
its business without any conflict with or infringement of the valid rights of
others and the lack of which could materially and adversely affect the
operations or condition, financial or otherwise, of the Company, and the Company
has not received any notice of infringement upon or conflict with the asserted
rights of others. The Disclosure Letter contain a complete list of all such
patents, patent rights, registered trademarks, registered service marks,
registered copyrights, all agreements related to the foregoing, and all
agreements pursuant to which the Company licenses Intellectual Property from or
to a third party (excluding "shrink wrap" license agreements relating solely to
off the shelf software which is not material to the Company's business). All
Intellectual Property owned by the Company is owned free and clear of all liens,
adverse claims, encumbrances, or restrictions, except for restrictions contained
in the terms of the licenses listed in the Disclosure Letter. All Intellectual
Property licensed by the Company is the subject of a license agreement which is
legal, valid, binding and enforceable and in full force and effect. The
consummation of the transactions contemplated hereby will not result in the
termination or impairment of the Company's ownership of, or right to use, any
Intellectual Property. The Company has a valuable body of trade secrets,
including know-how, concepts, business plans, and other technical data (the
"Proprietary Information") for the development, manufacture and sale of its
products. The Company has the right to use the Proprietary Information free and
clear of any rights, liens, encumbrances or claims of others. The Company is not
aware, after reasonable investigation, that any of its employees is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interests of the Company or that would conflict with the
Company's business.
(g) Title to Properties; Liens. The Company has good and marketable
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title to, or valid and subsisting leasehold interests in, their properties and
assets, including all property
10.
forming a part of the Collateral, and there is no Lien upon or with respect to
any of such properties or assets, including any of the Collateral, except for
Permitted Liens.
(h) SEC Documents and Financial Statements. Since January 1, 1997,
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the Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Securities and Exchange Commission
("SEC") pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (all of the foregoing and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, with amendments read together with underlying
documents, are referred to herein as the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
U.S. generally accepted accounting principles, consistently applied, during the
periods involved and fairly and accurately present in all material respects the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the
most recent audited balance sheet provided to the Lender, the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to the date of such financial statements
and (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting
principles to be reflected in such financial statements, which, individually or
in the aggregate, are not material to the financial condition or operating
results of the Company. Except as disclosed in such financial statements, the
Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
(i) Bridge Loan Warrant. The Bridge Loan Warrant is duly authorized
-------------------
and, upon issuance in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable, and will be free of liens, claims,
encumbrances and restrictions on transfer, other than restrictions on transfer
under applicable state and federal securities laws. The shares of Class A Common
Stock issuable upon exercise of the Bridge Loan Warrant are duly authorized and
reserved for issuance, and, upon exercise of the Bridge Loan Warrant in
accordance with the terms thereof, will be validly issued, fully paid and
nonassessable, and will be free of liens, claims, encumbrances and restrictions
on transfer, other than restrictions on transfer under applicable state and
federal securities laws.
(j) Tax Returns. The Company has timely filed all tax returns
-----------
(federal, state and local) required to be filed by it and such tax returns are
true and correct in all material respects. In addition, (i) the Company has not
requested any extension of time within which to file any tax returns in respect
of any fiscal year which have not since been filed and no request
11.
for waivers of the time to assess any taxes are pending or outstanding, (ii) no
claim for taxes has become a lien against the property of the Company or is
being asserted against the Company other than liens for taxes not yet due and
payable, (iii) no audit of any tax return of the Company is being conducted by a
tax authority, (iv) no extension of the statute of limitations on the assessment
of any taxes has been granted to, by or applied for by, the Company and is
currently in effect, and (v) there is no agreement, contract or arrangement to
which the Company is a party that may result in the payment of any amount that
would not be deductible by reason of Sections 280G, 162 or 404 of the Internal
Revenue Code.
(k) Permits. The Company has all material franchises, permits,
-------
licenses and any similar authority necessary for the conduct of its business
("Permits"). The Company is not in default under any of such Permits.
(l) Environmental and Safety Laws. The Company is not in violation of
-----------------------------
any applicable material statute, law or regulation relating to the environment
or occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.
SECTION 4.02 Representations and Warranties of the Lender. The
--------------------------------------------
Lender represents and warrants to the Company that:
(a) Investment Representations. The Lender: (i) will acquire the
--------------------------
Note, Bridge Loan Warrant and shares underlying the Bridge Loan Warrant for its
own account for investment and not with a view to any resale or other
distribution (other than to affiliates) of the Note in a transaction
constituting a public offering or otherwise requiring registration under the
U.S. Securities Act of 1933, as amended (the "Securities Act") or in a
transaction that would result in noncompliance with applicable state securities
laws; (ii) has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and the risks of its acquisition of
the Note , the Bridge Loan Warrant (and shares underlying the Bridge Loan
Warrant) and credit extensions to the Company, (iii) is an accredited investor
as such term is defined in Rule 501 of Regulation D under the Securities Act,
and (iv) understands that the Note, the Bridge Loan Warrant and the shares
underlying the Bridge Loan Warrant have not been registered under the Securities
Act or any state securities laws.
(b) Organization and Powers. The Lender is a limited liability
-----------------------
company duly organized, validly existing and in good standing under the laws of
the State of Delaware, and has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement.
(c) Authorization; Binding Obligation. The execution, delivery and
---------------------------------
performance by the Lender of this Agreement has been duly authorized by all
necessary organizational action of the Lender. This Agreement constitutes a
legal, valid and binding obligation of the Lender, enforceable against the
Lender in accordance with its terms.
(d) Financial Capacity. The Lender has access to adequate capital to
------------------
enable it to satisfy its obligations to make the Loan contemplated hereby.
12.
ARTICLE V
COVENANTS
SECTION 5.01 Reporting Covenants. So long as any of the
-------------------
Obligations shall remain unpaid or the Lender shall have any Commitment, the
Company agrees that:
(a) Financial Statements and Other Reports. The Company will furnish
--------------------------------------
to the Lender: (i) on Monday of each week, a statement of cash flow for the
prior week and projected cash flow for the following two weeks; (ii) as soon as
available and in any event within 10 days after the end of a month, monthly
agings (aged from invoice date) of accounts receivable, payables reports, and
unaudited financial statements (including a balance sheet, income statement and
statement of cash flows) with respect to that month prepared on a basis
consistent with such statements prepared in prior months and otherwise in
accordance with GAAP and certified by a Responsible Officer as being prepared in
accordance with GAAP; and (iii) as soon as available and in any event within 45
days after the end of each fiscal quarter, its quarterly consolidated and, if
requested by the Lender, consolidating financial statements (including a balance
sheet, income statement and statement of cash flows), prepared in accordance
with GAAP, together with a certificate of a Responsible Officer of the Company
stating that such financial statements fairly present in all material respects
the financial condition of the Company as at such date and the results of
operations of the Company for the period ended on such date and have been
prepared in accordance with GAAP, subject to changes resulting from normal,
year-end audit adjustments and except for the absence of notes.
(b) Additional Information. The Company will furnish to the Lender:
----------------------
(i) promptly after the Company has knowledge or becomes aware thereof, notice of
the occurrence of any Default; (ii) prompt written notice of all actions, suits
and proceedings before any governmental agency or authority or arbitrator
pending, or to the best of the Company's knowledge, threatened against or
affecting the Company; (iii) prompt written notice of any other condition or
event which has resulted, or that could reasonably be expected to result, in a
Material Adverse Effect; (iv) promptly after the same are released, copies of
all press releases; (v) promptly after the giving, sending or filing thereof,
copies of all reports and financial information, if any, which the Company sends
to the holders of its capital stock or other securities, and the holders, if
any, of any other Indebtedness, and of all reports or filings, if any, by the
Company with the Securities and Exchange Commission or any national securities
exchange; and (vi) such other information respecting the operations, properties,
business or condition (financial or otherwise) of the Company (including with
respect to the Collateral) as the Lender may from time to time reasonably
request. Each notice pursuant to claims (i) through (iii) of this subsection (b)
shall be accompanied by a written statement by a Responsible Officer of the
Company setting forth details of the occurrence referred to therein.
(c) Certain Contracts. Upon the Lender's reasonable request, and at
-----------------
least twice monthly after the date of this Agreement, the Company shall provide
reports to the Lender concerning the status of all programs with major
customers, in such detail as Lender may reasonably request.
SECTION 5.02 Affirmative Covenants. So long as any of the
---------------------
Obligations shall remain unpaid or the Lender shall have any Commitment, the
Company agrees that:
13.
(a) Preservation of Existence, Etc. The Company will, maintain and
-------------------------
preserve its corporate existence, its rights to transact business and all other
material rights, franchises and privileges necessary or desirable in the normal
course of its business and operations and the ownership of its properties,
except in connection with any transactions expressly permitted by Section 5.03.
(b) Payment of Taxes, Etc. The Company will pay and discharge all
---------------------
taxes, fees, assessments and governmental charges or levies imposed upon it or
upon its properties or assets prior to the date on which penalties attach
thereto, and all lawful claims for labor, materials and supplies which, if
unpaid, might become a Lien upon any properties or assets of the Company prior
to the date on which penalties attach thereto except to the extent such taxes,
fees, assessments or governmental charges or levies, or such claims, are being
contested in good faith by appropriate proceedings and are adequately reserved
against in accordance with GAAP.
(c) Maintenance of Insurance. The Company will carry and maintain in
------------------------
full force and effect, at its own expense and with financially sound and
reputable insurance companies, insurance in such amounts, with such deductibles
and covering such risks as is is consistent with the Company's past practices.
(d) Keeping of Records and Books of Account. The Company will keep
---------------------------------------
adequate records and books of account to permit preparation of financial
statements in accordance with GAAP.
(e) Inspection Rights. The Company will at any reasonable time during
-----------------
regular business hours and from time to time permit the Lender or any of its
agents or representatives to visit and inspect any of the properties of the
Company and to examine the records and books of account of the Company, and to
discuss the business affairs, finances and accounts of the Company with any of
the officers, employees or accountants of the Company, provided that the Company
may designate one or more individuals who will be present during such
discussions.
(f) Compliance with Laws. The Company will comply in all material
--------------------
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental agency or authority, including all Environmental
Laws.
(g) Maintenance of Properties, Etc. The Company will maintain and
------------------------------
preserve all of its material properties necessary or useful in the proper
conduct of its business in good working order and condition in accordance with
the general practice of other corporations of similar character and size,
ordinary wear and tear excepted.
(h) Licenses. The Company will obtain and maintain all licenses,
--------
authorizations, consents, filings, exemptions, registrations and other
governmental approvals of any governmental agency or authority necessary in
connection with the execution, delivery and performance of the Loan Documents,
the consummation of the transactions therein contemplated or the operation and
conduct of its business and ownership of its properties, except where the
failure to do so would not have a Material Adverse Effect.
14.
(i) Use of Proceeds. The Company will use the proceeds of the Loans
---------------
solely in accordance with the Budget. No amount of the proceeds of the Loans may
be used in connection with the Company's electric vehicle business.
(j) Further Assurances and Additional Acts. The Company will execute,
--------------------------------------
acknowledge, deliver, file, notarize and register at its own expense all such
further agreements, instruments, certificates, documents and assurances and
perform such acts as the Lender shall deem necessary or appropriate to
effectuate the purposes of the Loan Documents, and promptly provide the Lender
with evidence of the foregoing satisfactory in form and substance to the Lender.
SECTION 5.03 Negative Covenants. So long as any of the Obligations
------------------
shall remain unpaid or the Lender shall have any Commitment, the Company agrees
that without the consent of Lender, which consent will not be unreasonably
withheld:
(a) Liens; Negative Pledges. (i) The Company will not create, incur,
-----------------------
assume or suffer to exist any Lien upon or with respect to any of its
properties, revenues or assets, whether now owned or hereafter acquired, other
than Permitted Liens. (ii) The Company will not enter into any agreement (other
than this Agreement or any other Loan Document) prohibiting the creation or
assumption of any Lien upon any of its properties, revenues or assets, whether
now owned or hereafter acquired.
(b) Change in Nature of Business. The Company will not engage in any
----------------------------
material line of business substantially different from those lines of business
carried on by it at the date hereof.
(c) Restrictions on Fundamental Changes. The Company will not merge
-----------------------------------
with or consolidate into, or acquire all or substantially all of the assets of,
any Person, or sell, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets.
(d) Sales of Assets. The Company will not sell, lease, transfer, or
---------------
otherwise dispose of, or part with control of (whether in one transaction or a
series of transactions) any assets (including any shares of stock in any other
Person), except: (i) sales or other dispositions of inventory, and the license,
sublicense and grant of distribution and similar rights, in the ordinary course
of business; (ii) sales or other dispositions of assets in the ordinary course
of business which have become worn out or obsolete or which are promptly being
replaced; (iii) sales or other dispositions of assets (other than accounts
receivable) outside the ordinary course of business not exceeding in the
aggregate $25,000 in any fiscal year; and (iv) a sale of 15% of the outstanding
capital stock of AEVT Incorporated to Xxx Xxxx upon Xx. Xxxx'x payment of
$88,000 to the Company.
(e) Distributions. The Company will not declare or pay any dividends
-------------
in respect of the Company's capital stock, or purchase, redeem, retire or
otherwise acquire for value any of its capital stock now or hereafter
outstanding, return any capital to its shareholders as such, except that the
Company may: (A) declare and deliver dividends and distributions payable only in
common stock of the Company; (B) purchase, redeem, retire, or otherwise acquire
shares
15.
of its capital stock with the proceeds received from a substantially concurrent
issue of new shares of its capital stock; and (C) repurchase shares of Class B
Common Stock as contemplated by the Securities Purchase Agreement.
(f) Loans and Investments. The Company will not purchase or otherwise
---------------------
acquire the capital stock, assets (constituting a business unit), obligations or
other securities of or any interest in any Person, or otherwise extend any
credit to or make any additional investments in any Person, other than in
connection with: (i) extensions of credit in the nature of accounts receivable
or notes receivable arising from the sales of goods or services in the ordinary
course of business; (ii) short term, investment grade money market instruments,
in accordance with the Company's usual and customary treasury management
policies.
(g) Transactions with Related Parties. The Company will not enter
---------------------------------
into any transaction, including the purchase, sale or exchange of property or
the rendering of any services, with any Affiliate, any officer or director
thereof or any Person which beneficially owns or holds 5% or more of the equity
securities, or 5% or more of the equity interest, thereof (a "Related Party"),
or enter into, assume or suffer to exist, any employment or consulting contract
with any Related Party, except (i) a transaction or contract which is in the
ordinary course of the Company's business and which is upon fair and reasonable
terms not less favorable to the Company than it would obtain in a comparable
arm's length transaction with a Person not a Related Party (ii) the transactions
and agreements contemplated by the Securities Purchase Agreement, and (iii)
loans from Xxx Xxxx to the Company at interest rates not exceeding 10% per annum
and upon fair and reasonable terms not less favorable to the Company than it
would obtain in a comparable arm's length transaction with a Person not a
Related Party.
SECTION 5.04 Confidentiality. The Lender will hold in confidence
---------------
all, and not disclose to others for any reason whatsoever any, non-public
information received by it from the Company in connection with this Agreement,
except that the Lender may provide such confidential information in response to
legal process or applicable governmental regulations provided that the Lender
forthwith notifies the Company of its obligation to provide such confidential
information and fully cooperates with the Company to protect the confidentiality
of such information.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default. Any of the following events which
-----------------
shall occur shall constitute an "Event of Default":
(a) Payments. The Company shall fail to pay when due any amount of
--------
principal of, or interest on, any Loan or Note, or any fee or other amount
payable under any of the Loan Documents.
(b) Representations and Warranties. Any representation or warranty by
------------------------------
the Company under or in connection with the Loan Documents shall prove to have
been incorrect in any material respect when made or deemed made.
16.
(c) Failure by Company to Perform Certain Covenants. The Company
-----------------------------------------------
shall fail to perform or observe any term, covenant or agreement contained in
Section 5.03 or Subsections (a) or (i) of Section 5.02.
(d) Failure by Company to Perform Other Covenants. The Company shall
---------------------------------------------
fail to perform or observe any term, covenant or agreement, other than those
specified in Section 6.01(c), contained in any Loan Document on its part to be
performed or observed, and any such failure shall continue for a period of 10
days from the occurrence thereof (unless the Lender determines that such failure
is not capable of remedy).
(e) Insolvency. (i) The Company shall (A) make a general assignment
----------
for the benefit of creditors or (B) be dissolved, liquidated, wound up or cease
its corporate existence; or (ii) the Company (A) shall file a voluntary petition
in bankruptcy or a petition or answer seeking reorganization, to effect a plan
or other arrangement with creditors or any other relief under the Bankruptcy
Reform Act of 1978 (the "Bankruptcy Code") or under any other state or federal
law relating to bankruptcy or reorganization granting relief to debtors, whether
now or hereafter in effect, or (B) shall file an answer admitting the
jurisdiction of the court and the material allegations of any involuntary
petition filed against the Company pursuant to the Bankruptcy Code or any such
other state or federal law; or (iii) the Company shall be adjudicated a
bankrupt, or shall make an assignment for the benefit of creditors, or shall
apply for or consent to the appointment of any custodian, receiver or trustee
for all or any substantial part of the Company's property, or shall take any
action to authorize any of the actions or events set forth above in this
subsection; or (iv) an involuntary petition seeking any of the relief specified
in this subsection shall be filed against the Company and not dismissed within
60 days; or (v) any order for relief shall be entered against the Company, in
any involuntary proceeding under the Bankruptcy Code or any such other state or
federal law referred to in this subsection.
(f) Dissolution, Etc. The Company shall (i) liquidate, wind up or
----------------
dissolve (or suffer any liquidation, wind-up or dissolution), (ii) discontinue
its operations, or (iii) take any corporate action to authorize any of the
actions or events set forth above in this subsection (f).
(g) Judgments. (i) A final judgment or order for the payment of money
---------
in excess of $50,000 (or its equivalent in another currency) which is not fully
covered by third-party insurance shall be rendered against the Company (or its
equivalent in another currency); or (ii) any non-monetary judgment or order
shall be rendered against the Company which has or would reasonably be expected
to have a Material Adverse Effect; and in each case there shall be any period of
15 consecutive days during which such judgment continues unsatisfied or during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
(h) Material Adverse Effect. Any circumstance, condition, or event
-----------------------
shall have occurred which has or could reasonably be expected to have a Material
Adverse Effect.
(i) Collateral Documents. Any "Event of Default" as defined in the
--------------------
Collateral Documents shall have occurred; or any of the Collateral Documents
after delivery thereof shall for any reason be revoked or invalidated, or
otherwise cease to be in full force and effect, or the Company or any other
Person shall contest in any manner the validity or
17.
enforceability thereof, or the Company or any other Person shall deny that it
has any further liability or obligation thereunder; or any of the Collateral
Documents for any reason, except to the extent permitted by the terms thereof,
shall cease to create a valid and perfected first priority Lien subject only to
Permitted Liens in any of the Collateral purported to be covered thereby.
SECTION 6.02 Effect of Event of Default. If any Event of Default
--------------------------
shall occur, the Lender may, by notice to the Company, declare the Commitment to
be terminated, whereupon the same shall forthwith terminate. If any Event of
Default under Section 6.01(e) shall occur, the Lender may declare the entire
unpaid principal amount of the Loans and the Note, all interest accrued and
unpaid thereon and all other Obligations to be forthwith due and payable,
whereupon the Loans and the Note, all such accrued interest and all such other
Obligations shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Company. In addition, if any Event of Default under Section
6.01(a) or Section 6.01(e) shall occur, the Lender may exercise any or all of
the Lender's rights and remedies under the Collateral Documents and proceed to
enforce all other rights and remedies available to the Lender under the Loan
Documents and applicable law.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Amendments and Waivers. No amendment to any provision
----------------------
of the Loan Documents shall be effective unless it is in writing and has been
signed by the Lender and the Company, and no waiver of any provision of any Loan
Document, or consent to any departure by the Company therefrom, shall be
effective unless it is in writing and has been signed by the Lender. Any such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 7.02 Notices. All notices and other communications
-------
provided for hereunder and under the other Loan Documents shall, unless
otherwise stated herein, be in writing (including by facsimile transmission) and
mailed, sent or delivered to the respective parties hereto at or to their
respective addresses or facsimile numbers set forth below their names on the
signature pages hereof, or at or to such other address or facsimile number as
shall be designated by any party in a written notice to the other party hereto.
All such notices and communications shall be effective (i) if delivered by hand,
when delivered; (ii) if sent by mail, upon the earlier of the date of receipt or
five Business Days after deposit in the mail, first class, postage prepaid; and
(iii) if sent by facsimile transmission, when sent; provided, however, that
-------- -------
notices and communications to the Lender pursuant to Article II shall not be
effective until received.
SECTION 7.03 No Waiver; Cumulative Remedies. No failure on the
------------------------------
part of the Lender to exercise, no delay in exercising, and no course of dealing
with respect to, any right, remedy, power or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, remedy, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
18.
The rights and remedies under the Loan Documents are cumulative and not
exclusive of any rights, remedies, powers and privileges that may otherwise be
available to the Lender.
SECTION 7.04 Costs and Expenses; Indemnity.
-----------------------------
(a) Costs and Expenses. The Company agrees to pay on demand: (i) the
------------------
reasonable out-of-pocket costs and expenses of the Lender and any of its
Affiliates, and the reasonable fees and disbursements of counsel to the Lender
and its Affiliates, in connection with the negotiation, preparation, execution,
delivery and administration of the Loan Documents and any amendments,
modifications or waivers of the terms thereof (but not in excess of $50,000) and
(ii) all reasonable costs and expenses of the Lender and its Affiliates, and
fees and disbursements of counsel, in connection with (A) any Default, (B) the
enforcement or attempted enforcement of, and preservation of any rights or
interests under, the Loan Documents, (C) any out-of-court workout or other
refinancing or restructuring or any bankruptcy or insolvency case or proceeding,
and (D) the preservation of and realization upon any of the Collateral.
(b) Indemnification. Whether or not the transactions contemplated
---------------
hereby shall be consummated, the Company hereby agrees to indemnify the Lender,
any Affiliate thereof and their respective directors, officers, employees,
agents, counsel and other advisors (each an "Indemnified Person") against, and
hold each of them harmless from, any and all liabilities, obligations, losses,
claims, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including the reasonable fees
and disbursements of counsel to an Indemnified Person, which may be imposed on,
incurred by, or asserted against any Indemnified Person, (i) in any way relating
to or arising out of any of the Loan Documents, the use or intended use of the
proceeds of the Loans or the transactions contemplated hereby or thereby, (ii)
with respect to any investigation, litigation or other proceeding relating to
any of the foregoing, irrespective of whether the Indemnified Person shall be
designated a party thereto, or (iii) in any way relating to or arising out of
the use, generation, manufacture, installation, treatment, storage or presence,
or the spillage, leakage, leaching, migration, dumping, deposit, discharge,
disposal or release, at any time, of any Hazardous Substances on, under, at or
from any properties of the Company, including any personal injury or property
damage suffered by any Person, and any investigation, site assessment,
environmental audit, feasibility study, monitoring, clean-up, removal,
containment, restoration, remedial response or remedial work undertaken by or on
behalf of the any Indemnified Person at any time, voluntarily or involuntarily,
with respect to the Premises (the "Indemnified Liabilities"); provided that the
--------
Company shall not be liable to any Indemnified Person for any portion of such
Indemnified Liabilities to the extent they are found by a final decision of a
court of competent jurisdiction to have resulted from such Indemnified Person's
gross negligence or willful misconduct. If and to the extent that the foregoing
indemnification is for any reason held unenforceable, the Company agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 7.05 Survival. All covenants, agreements, representations
--------
and warranties made in any Loan Documents shall, except to the extent otherwise
provided therein, survive the execution and delivery of this Agreement, the
making of the Loans and the execution and delivery of the Note, and shall
continue in full force and effect so long as the Lender has any Commitment, any
Loans remain outstanding or any other Obligations remain unpaid or any
19.
obligation to perform any other act hereunder or under any other Loan Document
remains unsatisfied. Without limiting the generality of the foregoing, the
obligations of the Company under Section 7.04, and all similar obligations under
the other Loan Documents (including all obligations to pay costs and expenses
and all indemnity obligations), shall survive the repayment of the Loans and the
termination of the Commitments.
SECTION 7.06 Benefits of Agreement. The Loan Documents are entered
---------------------
into for the sole protection and benefit of the parties hereto and their
successors and assigns, and no other Person shall be a direct or indirect
beneficiary of, or shall have any direct or indirect cause of action or claim in
connection with, any Loan Document.
SECTION 7.07 Binding Effect; Assignment. This Agreement shall
--------------------------
become effective when it shall have been executed by the Company and the Lender
and thereafter shall be binding upon, inure to the benefit of and be enforceable
by the Company, the Lender and their respective successors and assigns. The
Company shall not have the right to assign its rights and obligations hereunder
or under the other Loan Documents or any interest herein or therein without the
prior written consent of the Lender. The Lender reserves the right to sell,
assign, transfer or grant participations in all or any portion of the Lender's
rights and obligations hereunder and under the other Loan Documents (i) to one
or more Affiliates of the Lender and/or (ii) with the prior consent of the
Company (which consent shall not be unreasonably withheld) to any other Person.
In the event of any such assignment, the assignee shall be deemed a "Lender" for
all purposes of the Loan Documents with respect to the rights and obligations
assigned to it, and the obligations of the Lender so assigned shall thereupon
terminate. The Company shall, from time to time upon request of the Lender,
enter into such amendments to the Loan Documents and execute and deliver such
other documents as shall be necessary to effect any such grant or assignment.
The Company agrees that in connection with any such grant or assignment, the
Lender may deliver to the prospective participant or assignee financial
statements and other relevant information relating to the Company (subject to
such Person entering into a confidentiality agreement with the Company on terms
reasonably satisfactory to the Company).
SECTION 7.08 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
-------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
SECTION 7.09 Waiver of Jury Trial. THE COMPANY AND THE LENDER EACH
--------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE COMPANY AND THE LENDER EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM
20.
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION 7.10 Entire Agreement. The Loan Documents reflect the
----------------
entire agreement between the Company and the Lender with respect to the matters
set forth herein and therein and supersede any prior agreements, commitments,
drafts, communication, discussions and understandings, oral or written, with
respect thereto.
SECTION 7.11 Severability. Whenever possible, each provision of
------------
the Loan Documents shall be interpreted in such manner as to be effective and
valid under all applicable laws and regulations. If, however, any provision of
any of the Loan Documents shall be prohibited by or invalid under any such law
or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of such Loan Document, or the validity or effectiveness
of such provision in any other jurisdiction.
SECTION 7.12 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.
21.
IN WITNESS WHEREOF, the parties hereto have duly executed this Credit
Agreement, as of the date first above written.
THE COMPANY
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AMERIGON INCORPORATED, a
California corporation
By /s/ Xxx X. Xxxx
Title: Chief Executive Officer
Address:
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Attn.:
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Fax No.
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THE LENDER
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BIG STAR INVESTMENTS LLC
By /s/ Xxxx Xxxxx
Title:
Address:
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Attn.:
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Fax No.
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22.
