EXHIBIT 10.6
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is made and entered into as of March 2,
1995 by and between ILC Technology, Inc., ("Borrower") and UNION BANK, a
California banking corporation ("Bank").
SECTION 1. THE LOAN
1.1.1 THE REVOLVING LOAN. Bank will loan to Borrower an amount not to
exceed Four Million Dollars ($4,000,000) outstanding in the aggregate at any one
time (the "Revolving Loan"). Borrower may borrow, repay and reborrow all or part
of the Revolving Loan in accordance with the terms of the Revolving Note. All
borrowings of the Revolving Loan must be made before January 31, 1997 at which
time all unpaid principal and interest of the Revolving Loan shall be due and
payable. The Revolving Loan shall be evidenced by a promissory note (the
"Revolving Note") on the standard form used by Bank for commercial loans. Bank
shall enter each amount borrowed and repaid in Bank's records and such entries
shall be deemed to be the amount of the Revolving Loan outstanding. Omission of
Bank to make any such entries shall not discharge Borrower of its obligation to
repay in full with interest all amounts borrowed.
1.1.2 REVOLVING EQUIPMENT LOAN. Subject to the terms and conditions hereof,
between the date of the Agreement and January 31, 1996 (the "Revolving Equipment
Loan Termination Date"), so long as no Default or Potential Default has occurred
and is continuing, Bank shall extend to Borrower such loan ("Revolving Equipment
Loan") as Borrower may request from time to time in an aggregate unpaid
principal amount not exceeding at any one time One Million Five Hundred Thousand
Dollars ($1,500,000) (the "Revolving Equipment Credit Commitment"). Within the
limits of time and amount set forth in this Section 1.1.2, Borrower may borrow,
repay and reborrow all or part of the Revolving Equipment Loan. Borrower
authorized Bank to make Revolving Equipment Loan based upon telephonic notice or
upon such other instructions as Bank received from anyone purporting to be an
authorized representative of the Borrower, received within the time prior to the
Banking Day of the proposed Revolving Equipment Loan as set forth in the
Revolving Note, or, if not therein set forth, then by 10:00 a.m. of the Banking
Day of the proposed Revolving Equipment Loan. Such notice shall be given to any
of Bank's commercial banking officers at Bank's Commercial Portfolio
Administration Department ("Bank's Lending Office") and shall be irrevocable.
1.1.3 OTHER LOANS. Bank has extended and will continue to extend, subject
to the terms of this Agreement and the terms of the respective Note, certain
additional facilities each evidenced by a Note described as follows:
A. Obligation #0000000002 dated 2/24/93 in the original principal amount
of $900,000 with a present unpaid principal balance of $270,000.
B. Obligation #002700003 dated 6/21/94 in the original principal amount
of $6,333,333 with a present unpaid principal balance of $5,145,000.
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C. Obligation #0000000003 dated 6/21/94 in the original principal amount
of $360,000 with a present unpaid principal balance of $240,000.
D. Obligation #0001000001 dated 1/5/95 in the original principal amount
of $1,464,000 with a present unpaid principal balance of $1,403,000.
1.2 TERMINOLOGY.
As used herein the word "Loan" shall mean, collectively, all the credit
facilities described above.
As used herein the word "Note" shall mean, collectively, all the promissory
notes described above.
As used herein, the words "Loan Documents" shall mean all documents
executed in connection with this Agreement.
1.3 BORROWING BASE. Notwithstanding any other provisions of this Agreement,
Bank shall not be obligated to advance funds under the Revolving Loan, if at any
time the aggregate of Borrower's obligations to Bank thereunder shall exceed the
sum of seventy-five percent (75%) of Borrower's Eligible Accounts. If at any
time Borrower's obligations to Bank under the above facilities exceed the sum so
permitted, Borrower shall immediately repay to Bank such excess.
1.3.1 ELIGIBLE ACCOUNTS. The term "Accounts" means all presently existing
and hereafter arising accounts receivable, contract rights, chattel paper, and
all other forms of obligations owing to Borrower, payable in United States
Dollars, arising out of the sale or lease of goods, or the rendition of services
by Borrower, whether or not earned by performance, and any and all credit
insurance, guaranties and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower's books and records relating
to any of the foregoing. The term "Eligible Accounts" means those Accounts, net
of finance charges, which are due and payable within Ninety (90) days, or less,
from the date of the invoice, have been validly assigned to Bank and strictly
comply with all of Borrower's warranties and representations to Bank, but
Eligible Accounts shall not include the following:
(a) Any Account with respect to which the account debtor is an officer,
shareholder, director, employee or agent of Borrower;
(b) Any Account with respect to which the account debtor is a subsidiary
of, related to, or affiliated or has common officers or directors with
Borrower;
(c) Any Account relating to goods placed on consignment, guaranteed sale
or other terms by reason of which the payment by the account debtor
may be conditional;
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(d) Any Account with respect to which the account debtor is not a resident
of the United States or Canada;
(e) Any Account with respect to which the account debtor is the United
States or any department, agency or instrumentality of the United
States;
(f) Any Account with respect to which Borrower is or may become liable to
the account debtor for goods sold or services rendered by the account
debtor to Borrower;
(g) Any Account with respect to which there is asserted a defense,
counterclaim, discount or setoff, whether well-founded or otherwise,
except for those discounts, allowances and returns arising in the
ordinary course of Borrower's business;
(h) Any Account with respect to which the account debtor becomes
insolvent, fails to pay its debts as they mature or goes out of
business or is owed by an account debtor which has become the subject
of a proceeding under any provision of the Untied States Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency law,
including, but not limited to, assignments for the benefit of
creditors, formal or informal moratoriums, compositions or extensions
with all or substantially all of its creditors;
(i) Any Account owed by any account debtor with respect to which
twenty-five percent (25%) or more of the aggregate dollar amount of
its Accounts are not paid within ninety (90) days from the due date of
the invoice;
(j) That portion of the Accounts owed by any single account debtor which
exceeds twenty percent (20%) of all of the Accounts; and
1.4 PURPOSE OF LOAN. The proceeds of the Revolving Loan shall be used for
general working capital purposes and the proceeds of the Revolving Equipment
Loan shall be used only for Borrower's Capital Equipment Requirements.
1.5 INTEREST.
(A) Interest on the usage of the Revolving Loan shall be payable monthly
to January 31, 1997 at which time the principal shall be due and
payable. Interest on this loan shall be payable at Bank's Reference
Rate or at the Borrower's option a fixed rate of libor plus 200 basis
points. Twenty four hour notice shall be given if the fixed rate
option is taken.
(B) Interest on the usage of the Revolving Equipment Loan shall be payable
monthly to January 31, 1996 at which time the principal amount then
outstanding will equally amortize over a 24 month period. Interest on
this loan shall be payable at Bank's Reference Rate or at the
Borrower's option a fixed rate of libor plus 200 basis points. Twenty
four hour notice shall be given if the fixed rate option is taken.
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1.6 BALANCES. Borrower shall maintain its major depository accounts with
Bank until the Note and all sums payable pursuant to this Agreement have been
paid in full.
1.7 DISBURSEMENT. Upon execution hereof, Bank shall disburse the proceeds
of the Loan as provided in Bank's standard form Authorization executed by
Borrower.
1.8 SECURITY. Prior to any disbursement of the Loan, Borrower, ILC
Technology, Inc. and Guarantors, Converter Power, Inc. and Precision Lamp, Inc.,
shall have executed a security agreement, on Bank's standard form, and a
financing statement, suitable for filing in the office of the Secretary of State
of the State of California and any other state designated by Bank, granting to
Bank a first priority security interest in such of Borrower's property as is
described in said security agreement. Exceptions to Bank's first priority, if
any, are permitted only as otherwise provided in this Agreement.
1.9 CONTROLLING DOCUMENT. In the event of any inconsistency between the
terms of this Agreement and any Note or any of the other Loan Documents, the
terms of such Note or other Loan Documents will prevail over the terms of this
Agreement.
SECTION 2. CONDITIONS PRECEDENT
Bank shall not be obligated to disburse all or any portion of the proceeds
of the Loan unless at or prior to the time for the making of such disbursement,
the following conditions have been fulfilled to Bank's satisfaction.
2.1 COMPLIANCE. Borrower shall have performed and complied with all terms
and condition required by this Agreement to be performed or complied with by it
prior to or at the date of the making of such disbursement and shall have
executed and delivered to Bank the Note and other documents deemed necessary by
Bank.
2.2 GUARANTIES. Converter Power, Inc., Precision Lamp, Inc. and Q-ARC
Limited ("Guarantors") shall have executed and delivered to Bank their
respective continuing guaranties in form and amount satisfactory to Bank.
Borrower shall cause each Guarantor to submit to Bank not later than Ninety (90)
days after the end of each fiscal year such Guarantor's financial statement in
form satisfactory to Bank.
2.3 BORROWING RESOLUTION. Borrower shall have provided Bank with certified
copies of resolutions duly adopted by the Board of Directors of Borrower,
authorizing this Agreement and the Loan Documents. Such resolutions shall also
designate the persons who are authorized to act on Borrower's behalf in
connection with this Agreement and to do the things required of Borrower
pursuant to this Agreement.
2.4 CONTINUING COMPLIANCE. At the time any disbursement is to be made,
there shall not exist any event, condition or act which constitutes an event of
default under Section 6 hereof or any event, condition or act which with notice,
lapse of time or both would constitute such event of default; nor shall there be
any such event, condition, or act immediately after the disbursement were it to
be made.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
3.1 BUSINESS ACTIVITY. The principal business of Borrower is Manufacturer
of Light Source Products.
3.2 AFFILIATES AND SUBSIDIARIES. Borrower's affiliates and subsidiaries
(those entities in which Borrower has either a controlling interest or at least
25% ownership interest) and their addresses, and the names of Borrower's
principal shareholders, are as provided on a schedule delivered to Bank on or
before the date of this Agreement.
3.3 AUTHORITY TO BORROW. The execution, delivery and performance of this
Agreement, the Note and all other agreements and instruments required by Bank in
connection with the Loan are not in contravention of any of the terms of any
indenture, agreement or undertaking to which Borrower is a party or by which it
or any of its property is bound or affected.
3.4 FINANCIAL STATEMENTS. The financial statements of Borrower, including
both a balance sheet at October 1, 1994, together with supporting schedules, and
an income statement for the Twelve (12) months ended October 1, 1994, have
heretofore been furnished to Bank, and are true and complete and fairly
represent the financial condition of Borrower during the period covered thereby.
Since October 1, 1994, there has been no material adverse change in the
financial condition or operations of Borrower.
3.5 TITLE. Except for assets which may have been disposed of in the
ordinary course of business, Borrower has good and marketable title to all of
the property reflected in its financial statements delivered to Bank and to all
property acquired by Borrower since the date of said financial statements, free
and clear of all liens, encumbrances, security interests and adverse claims
except those specifically referred to in said financial statements.
3.6 LITIGATION. There is no litigation or proceeding pending or threatened
against Borrower or any of its property which is reasonably likely to affect the
financial condition, property or business of Borrower in a materially adverse
manner or result in liability in excess of Borrower's insurance coverage.
3.7 DEFAULT. Borrower is not now in default in the payment of any of its
material obligations, and there exists no event, condition or act which
constitutes an event of default under Section 6 hereof and no condition, event
or act which with notice or lapse of time, or both, would constitute an event of
default.
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3.8 COMPLIANCE WITH LAWS. Borrower is not in violation with respect to any
applicable laws, rules, ordinances or regulations which materially affect the
operations or financial condition of Borrower.
3.9 CONTINUING REPRESENTATIONS. These representations shall be considered
to have been made again at and as of the date of each disbursement of the Loan
and shall be true and correct as of such date or dates.
SECTION 4. AFFIRMATIVE COVENANTS
Until the Note and all sums payable pursuant to this Agreement or any other
of the Loan Documents have been paid in full, unless Bank waives compliance in
writing, Borrower agrees that:
4.1 USE OF PROCEEDS. Borrower will use the proceeds of the Loan only as
provided in subsection 1.4 above.
4.2 PAYMENT OF OBLIGATIONS. Borrower will pay and discharge promptly all
taxes, assessments and other governmental charges and claims levied or imposed
upon it or its property, or any part thereof, provided, however, that Borrower
shall have the right in good faith to contest any such taxes, assessments,
charges or claims and, pending the outcome of such contest, to delay or refuse
payment thereof provided that adequately funded reserves are established by it
to pay and discharge any such taxes, assessments, charges and claims.
4.3 MAINTENANCE OF EXISTENCE. Borrower will maintain and preserve its
existence and assets and all rights, franchises, licenses and other authority
necessary for the conduct of its business and will maintain and preserve its
property, equipment and facilities in good order, condition and repair. Bank
may, at reasonable times, visit and inspect any of the properties of Borrower.
4.4 RECORDS. Borrower will keep and maintain full and accurate accounts and
records of its operations according to generally accepted accounting principles
and will permit Bank to have access thereto, to make examination and photocopies
thereof, and to make audits during regular business hours. Costs for such audits
shall be paid by Borrower.
4.5 INFORMATION FURNISHED. Borrower will furnish to Bank:
(a) Within Forty-Five (45) days after the close of each fiscal quarter,
except for the final quarter of each fiscal year, its unaudited
balance sheet as of the close of such fiscal quarter, its unaudited
income and expense statement with supportive schedules and statement
of retained earnings for that fiscal quarter, prepared in accordance
with generally accepted accounting principles:
(b) Within Ninety (90) days after the close of each fiscal year, a copy of
its statement of financial condition including at least its balance
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sheet as of the close of such fiscal year, its income and expense
statement and retained earnings statement for such fiscal year,
examined and prepared on an audited basis by independent certified
public accountants selected by Borrower and reasonably satisfactory to
Bank, in accordance with generally accepted accounting principles
applied on a basis consistent with that of the previous year;
(c) As soon as available, but in any event within Ninety (90) days
after the close of each fiscal year of Borrower, projections for
the next succeeding fiscal year of corresponding cash flow
statement by Borrower and acceptable to Bank;
d) Such other financialstatements and information as Bank may
reasonably request from time to time;
e) In connection with each financial statement provided hereunder, a
statement executed by Chief Financial Officer of Borrower, certifying
that no default has occurred and no event exists which with notice or
the lapse of time, or both, would result in a default hereunder;
(f) In connection with each fiscal year-end statement required hereunder,
any management letter of Borrower's certified public accountants;
(g) Within Forty-Five (45) days after each fiscal quarter, a certification
of compliance with all covenants under this Agreement, executed by
Borrower's chief financial officer or other duly authorized officer of
Borrower, in form acceptable to Bank;
(h) Prompt written notice to Bank of all events of default under any of
the terms or provisions of this Agreement or of any other agreement,
contract, document or instrument entered, or to be entered into with
Bank; and of any litigation which, if decided adversely to Borrower,
would have a material adverse effect on Borrower's financial
condition; and of any other matter which has resulted in, or is likely
to result in, a material adverse change in its financial condition or
operations; and
(i) Prior written notice to Bank of any changes in Borrower's officers and
other senior management; Borrower's name; and location of Borrower's
assets, principal place of business or chief executive office; and
(j) Within Forty-Five (45) days after each fiscal quarter, a copy of
Borrower's accounts receivable aging.
(k) Within Thirty (30) days after each calendar month end a copy of
Borrower's certificate of compliance with borrowing base described
above, executed by Borrower's Chief Financial Officer or other duly
authorized officer of Borrower, in form acceptable to Bank, which
certificate shall accurately report Borrower's account receivable and
eligible accounts.
4.6 CURRENT RATIO. Borrower will at all times maintain a ratio of current
assets to current liabilities of at least 1.50 : 1.0, as such terms are defined
by generally accepted accounting principles.
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4.7 TANGIBLE NET WORTH. Maintain a Tangible Net Worth of not less than
Twenty Two Million Five Hundred Thousand ($22,500,000) plus 75% of quarterly net
profits after taxes (calculated without giving effect to net losses and
inclusive of extraordinary gains) beginning with the quarter to end March 31,
1995 plus the proceeds of all sales by Borrower of its stock. "Tangible Net
Worth" means the difference between (a) the gross book value of the assets of
Borrower, and (b) the sum of (i) the amount of all intangibles such as goodwill,
patents, trademarks, organization expenses, treasury stock, unamortized debt
discount and expense and deferred charges, (ii) the amount of reserves
established by Borrower for anticipated losses and expenses, and (iii) the
amount of all liabilities and indebtedness of Borrower, including accrued but
deferred income taxes.
4.8 DEBT TO TANGIBLE NET WORTH. Borrower will at all times maintain a ratio
of total liabilities to tangible net worth of not greater than 1:0 : 1.0.
"Tangible Net Worth" shall mean net worth decreased by patents, licenses,
trademarks, trade names, goodwill and other similar intangible assets,
organizational expenses, security deposits, prepaid costs and expenses and
monies due from affiliates (including officers, shareholders and directors).
4.9 PROFITABILITY. Borrower will maintain a net profit, after provision for
income taxes, of any positive amount for any two consecutive fiscal quarters, as
reported at the end of each such fiscal quarter, and maintain a net profit,
after provision for income taxes for its fiscal year end.
4.10 CASH FLOW COVERAGE. Maintain for each Measurement Period, Cash Flow
Coverage of not less than One Hundred Seventy Five Percent (175%), as measured
at the end of each fiscal quarter (each such date being a "Measurement date").
"Measurement Period" means the immediately preceding twelve month period ending
on a given Measurement Date. "Cash Flow Coverage" is a fraction stated as
percentage and computed as the quotient of (i) Borrower's net profit after taxes
for a given Measurement Period, exclusive of nonrecurring income and increased
by depreciation and amortization and other non-cash expenditures (taken in
accordance with GAAP) divided by (ii) the aggregate amount of all principal,
interest (and also including amounts coming due in respect of leases) payable by
Borrower in such Measurement Period.
4.11 INVESTMENT IN YUMEX CORPORATION. Borrower's total investment in Yumex
Corporation as reflected on Borrower's balance sheet, is not to exceed Seven
Hundred Fifty Thousand Dollars ($750,000).
4.12 INSURANCE. Borrower will keep all of its insurable property, real,
personal or mixed, insured by companies and in amounts approved by Bank against
fire and such other risks, and in such amounts, as is customarily obtained by
companies conducting similar business with respect to like properties. Borrower
will furnish to Bank statements of its insurance coverage, will promptly furnish
other or additional insurance deemed necessary by and upon request of Bank to
the extent that such insurance may be available and hereby assigns to Bank, as
security for Borrower's obligations to Bank, the proceeds of any such insurance.
Prior to any disbursement of the Loan, Bank will be named loss payee on all
policies insuring collateral. Borrower will maintain adequate worker's
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compensation insurance and adequate insurance against liability for damage to
persons or property. All policies shall require at least ten (10 days' written
notice to Bank before any policy may be altered or cancelled.
4.13 ADDITIONAL REQUIREMENTS. Borrower will promptly, upon demand by Bank,
take such further action and execute all such additional documents and
instruments in connection with this Agreement as Bank in its reasonable
discretion deems necessary, and promptly supply Bank with such other information
concerning its affairs as Bank may request from time to time.
4.14 LITIGATION AND ATTORNEYS' FEES. Borrower will pay promptly to Bank
upon demand, reasonable attorneys' fees (including but not limited to the
reasonable estimate of the allocated costs and expenses of in-house legal
counsel and legal staff) and all costs and other expenses paid or incurred by
Bank in collecting, modifying or compromising the Loan or in enforcing or
exercising its rights or remedies created by, connected with or provided for in
this Agreement or any of the Loan Documents, whether or not an arbitration,
judicial action or other proceeding is commenced. If such proceeding is
commenced, only the prevailing party shall be entitled to attorneys' fees and
court costs.
4.15 BANK EXPENSES. Borrower will pay or reimburse Bank for all costs,
expenses and fees incurred by Bank in preparing and documenting this Agreement
and the Loan, and all amendment and modifications thereof, including but not
limited to all filing and recording fees, costs of appraisals, insurance and
attorneys' fees, including the reasonable estimate of the allocated costs and
expenses of in-house legal counsel and legal staff.
4.16 REPORTS UNDER PENSION PLANS. Borrower will furnish to Bank, as soon as
possible and in any event within 15 days after Borrower knows or has reason to
know that any event or condition with respect to any defined benefit pension
plans of Borrower described in Section 3 above has occurred, a statement of an
authorized officer of Borrower describing such event or condition and the
action, if any, which Borrower proposes to take with respect thereto.
SECTION 5. NEGATIVE COVENANTS
Until the Note and all other sums payable pursuant to this Agreement or any
other of the Loan Documents have been paid in full, unless Bank waives
compliance in writing, Borrower agrees that:
5.1 ENCUMBRANCES AND LIENS. Except for those already disclosed on its
fiscal year end 10/1/94 financial statement, Borrower will not create, assume or
suffer to exist any mortgage, pledge, security interest, encumbrance, or lien
(other than for taxes not delinquent and for taxes and other items being
contested in good faith) on property of any kind, whether real, personal or
mixed, now owned or hereafter acquired, or upon the income or profits thereof,
except to Bank and except for minor encumbrances and easements on real property
which do not affect its market value, and except for existing liens on
Borrower's personal property and future purchase money security interests
encumbering only the personal property purchased.
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5.2 BORROWINGS. Borrower will not sell, discount or otherwise transfer any
account receivable or any note, draft or other evidence of indebtedness, except
to Bank or except to a financial institution at face value for deposit or
collection purposes only and without any fee other than fees normally charged by
the financial institution for deposit or collection services. Borrower will not
borrow any money, become contingently liable to borrow money, nor enter any
agreement to directly or indirectly obtain borrowed money, except pursuant to
agreements made with Bank.
5.3 SALE OF ASSETS, LIQUIDATION OR MERGER. Borrower will neither liquidate
nor dissolve nor enter into any consolidation, merger, partnership or other
combinations, nor convey, nor sell, nor lease all or the greater part of its
assets or business, nor purchase or lease all or the greater part of the assets
or business of another, without prior written consent from Bank.
5.4 LOANS, ADVANCES AND GUARANTIES. Borrower will not, except in the
ordinary course of business as currently conducted, make any loans or advances,
become a guarantor or surety, pledge its credit or properties in any manner or
extend credit.
5.5 INVESTMENTS. Borrower will not purchase the debt or equity of another
person or entity except for savings accounts and certificates of deposit of
Bank, direct U.S. Government obligations and commercial paper issued by
corporations with the top ratings of Xxxxx'x or Standard & Poor's, provided all
such permitted investments shall mature within one year of purchase.
5.6 PAYMENT OF DIVIDENDS. Borrower will not declare or pay any dividends,
other than a dividend payable in its own common Stock, or authorize or make any
other distribution with respect to any of its stock now or hereafter
outstanding.
5.7 RETIREMENT OF STOCK. Borrower will not acquire or retire any share of
its capital stock for value.
SECTION 6. EVENTS OF DEFAULT
The occurrence of any of the following events ("Events of Default") shall
terminate any obligation on the part of Bank to make or continue the Loan and
automatically, unless otherwise provided under the Note, shall make all sums of
interest and principal and any other amounts owing under the Loan immediately
due and payable, without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or any other notices or demands:
6.1 Borrower shall default in the due and punctual payment of the principal
of or the interest on the Note or any of the other Loan Documents; or 6.2 Any
default shall occur under the Note; or
6.2 Any default shall occur under the Note; or
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6.3 Borrower shall default in the due performance or observance of any
covenant or condition of the Loan Documents;
6.4 Any guaranty or subordination agreementrequired hereunder is breached
or becomes ineffective, or any Guarantor or subordinating creditor dies,
disavows or attempts to revoke or terminate such guaranty or subordination
agreement; or
6.5 There is a change in ownership or control of ten percent (10%) or more
of the issued and outstanding stock of Borrower or any Guarantor.
SECTION 7. MISCELLANEOUS PROVISIONS
7.1 ADDITIONAL REMEDIES. The rights, power and remedies given to Bank
hereunder shall be cumulative and not alternative and shall be in addition to
all rights, powers and remedies given to Bank by law against Borrower or any
other person, including but not limited to Bank's rights of setoff or banker's
lien.
7.2 NONWAIVER. Any forebearance or failure or delay by Bank in exercising
any right, power or remedy hereunder shall not be deemed a waiver thereof and
any single or partial exercise of any right, power or remedy shall not preclude
the further exercise thereof. No waiver shall be effective unless it is in
writing and signed by an officer of Bank.
7.3 INUREMENT. The benefits of this Agreement shall inure to the successor
and assigns of Bank and the permitted successors and assignees of Borrower, and
any assignment of Borrower without Bank's consent shall be null and void.
7.4 APPLICABLE LAW. This Agreement and all other agreements and instruments
required by Bank in connection therewith shall be governed by and construed
according to the laws of the State of California.
7.5 SEVERABILITY. Should any one or more provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions nevertheless
shall be effective.
7.6 INTEGRATION CLAUSE. Except for documents and instruments specifically
referenced herein, this Agreement constitutes the entire agreement between Bank
and Borrower regarding the Loan and all prior communications verbal or written
between Borrower and Bank shall be of no further effect or evidentiary value.
7.7 CONSTRUCTION. The section and subsection headings herein are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
7.8 AMENDMENTS. This Agreement may be amended only in writing signed by all
parties hereto.
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7.9 COUNTERPARTS. Borrower and Bank may execute one or more counterparts to
this Agreement, each of which shall be deemed an original.
SECTION 8. SERVICE OF NOTICES
8.1 Any notices or other communications provided for or allowed hereunder
shall be effective only when given by one of the following methods and addressed
to the respective party at its address given with the signatures at the end of
this Agreement and shall be considered to have been validly given: (a) upon
delivery, if delivered personally; (b) upon receipt, if mailed, first class
postage prepaid, with the United States Postal Service; (c) on the next business
day, if sent by overnight courier service of recognized standing; and (d) upon
telephoned confirmation of receipt, if telecopied.
8.2 The addresses to which notices or demands are to be given may be
changed from time to time by notice delivered as provided above.
(THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK)
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THIS AGREEMENT is executed on behalf of the parties by duly authorized
officers as of the date first above written.
UNION BANK
By:
Title:
By:
Title:
Address:
Attention:
Telecopier:
Telephone:
BORROWER: ILC TECHNOLOGY, INC. GUARANTORS:
Converter Power, Inc.
By: By:
Title: Title:
Q-ARC Limited
By: By:
Title: Title
Precision Lamp, Inc.
Address:
By:
Title:
Attention:
Telecopier:
Telephone:
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