Exhibit 10.4
Bank of America [LOGO]
PROMISSORY NOTE
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Borrower: Newport Corporation Lender: Bank of America, N.A.
0000 Xxxxx Xxxxxx XXXX-Xxxxxxxxxx Xxxxxxx (XX)
Xxxxxx, XX 00000 CA9-703-11-11
000 Xxxxx Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxxxxx, XX 00000-0000
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Principal Amount: $5,000,000.00 Date of Note: September 25, 2002
PROMISE TO PAY. Newport Corporation ("Borrower") promises to pay to Bank of
America, N.A. ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00)
or so much as may be outstanding, together with interest on the unpaid
outstanding principal balance of each advance. Interest shall be calculated from
the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on September 1, 2003. In addition, Borrower
will pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning October 1, 2002, with all subsequent interest payments
to be due on the same day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any unpaid
collection costs and any late charges, then to any unpaid interest, and any
remaining amount to principal. The annual interest rate for this Note is
computed on a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender's address shown above or at such other
place as Lender may designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is the rate of interest
publicly announced from time to time by the Lender as its Prime Rate. The Prime
Rate is set by the Lender based on various factors, including the Lender's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans. The Lender may price loans to its
customers at above, or below the Prime Rate. Any change in the Prime Rate shall
take effect at the opening of business on the day specified in the public
announcement of a change in the Lender's Prime Rate (the "Index"). The Index is
not necessarily the lowest rate charged by Lender on its loans and is set by
Lender in its sole discretion. If the Index becomes unavailable during the term
of this loan, Lender may designate a substitute index after notifying Borrower.
Lender will tell Borrower the current Index rate upon Borrowers request. The
interest rate change will not occur more often than each date of such change in
the index. Borrower understands that Lender may make loans based on other rates
as well. The interest rate to be applied to the unpaid principal balance of this
Note will be at a rate equal to the Index. NOTICE: Under no circumstances will
the interest rate on this Note be more than the maximum rate allowed by
applicable law.
PREPAYMENT FEE. Upon prepayment of this Note, Lender is entitled to the
following prepayment fee: Prepayments may be made in whole or in part at any
time on any loan or advance outstanding under this Note for which the Rate is
based on the Prime Rate or any other fluctuating Rate or Index which may change
daily. No prepayment of any loan or advance outstanding hereunder bearing
Interest at any other Rate shall be permitted without the prior written consent
of Lender. Notwithstanding such prohibition, if there is a prepayment of any
such loan or advance hereunder, whether by consent of Lender, or because of
acceleration or otherwise, Borrower shall, within 15 days of any request by
Lender, pay to Lender any loss or expense, including any loss of anticipated
profits, which Lender may incur or sustain as a result of such prepayment. For
the purposes of calculating the amounts owed only, it shall be assumed that
Lender actually funded or committed to fund the loan or advance through the
purchase of an underlying deposit in an amount and for a term comparable to the
loan or advance. Any such determination by Lender shall be conclusive, absent a
manifest error in computation. All prepayments of principal shall be applied in
the inverse order of maturity, or in such other order as Lender shall determine
in its sole discretion. Except for the foregoing, Borrower may pay all or a
portion of the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation
to continue to make payments of accrued unpaid interest. Rather, early payments
will reduce the principal balance due. Borrower agrees not to send Lender
payments marked "paid in full", "without recourse", or similar language. If
Borrower sends such a payment, Lender may accept it without losing any of
Lender's rights under this Note, and Borrower will remain obligated to pay any
further amount owed to Lender. All written communications concerning disputed
amounts, including any check or other payment instrument that indicates that the
payment constitutes "payment in full" of the amount owed or that is tendered
with other conditions or limitations or as full satisfaction of a disputed
amount must be mailed or delivered to: Bank of America, N.A., CA9-703-11-11,333
Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxxxxx, XX 00000-0000.
LATE CHARGE: If a payment is 15 days or more late, Borrower will be charged
4.000% of the unpaid portion of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon Borrower's failure to pay all amounts declared due
pursuant to this section, including failure to pay upon final maturity, Lender,
as its option may, if permitted under applicable law, increase the variable
interest rate on this Note to 6.000 percentage points over the Index.
DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this Note:
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrower's ability to repay
this Note or perform Borrower's obligations under this Note or any of the
related documents.
False Statements. Any warranty, representation or statement made or furnished
to Lender by Borrower or on Borrower's behalf under this Note or the related
documents is false or misleading in any material respect, either now or at
the time made or furnished or becomes false or misleading at any time
thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any
part of Borrower's property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor or Borrower or by any governmental agency
against any collateral securing the loan. This includes a garnishment of any
of Borrower's accounts, including deposit accounts, with Lender. However,
this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis
of the creditor or forfeiture proceeding
PROMISSORY NOTE
(Continued) Page 2
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and if Borrower gives Lender written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in
its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this Note.
Change In Ownership. Any change in ownership of twenty-five percent (25%)
or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of
this Note is impaired.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.
ATTORNEY'S FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, including
attorneys' fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. Borrower also
will pay any court costs, in addition to all other sums provided by law.
JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.
GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of California. This Note
has been accepted by Lender in the State of California.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of any County, State of California.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any XXX or Xxxxx accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions for payment from Borrower's accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing.
Borrower agrees to be liable for all either: (A) advanced in accordance with the
instructions of an authorized person or (B) credited to any of Borrower's
accounts with Lender. The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this note or by Lender's internal
records, including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (A) Borrower or any guarantor is in default
under the terms of this Note or any agreement that Borrower or any guarantor has
with Lender, including any agreement made in connection with the signing of this
Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; or (D)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender.
ARBITRATION. (a) This paragraph concerns the resolution of any controversies or
claims between the parties, whether arising in contract, tort or by statute,
including but not limited to controversies or claims that arise out of or relate
to: (i) this agreement (including any renewals, extensions or modifications); or
(ii) any document related to this agreement; (collectively a "Claim").
(b) At the request of any party to this agreement, any Claim shall be resolved
by binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S. Code) (the "Act"). The Act will apply even though this agreement provides
that it is governed by the law of a specified state.
(c) Arbitration proceedings will be determined in accordance with the Act, the
applicable rules and procedures for the arbitration of disputes of JAMS or any
successor thereof ("JAMS"), and the terms of this paragraph. In the event of any
inconsistency, the terms of this paragraph shall control.
(d) The arbitration shall be administered by JAMS and conducted, unless
otherwise required by law, in any U.S. state where real or tangible personal
property collateral for this credit is located or if there is no such
collateral, in the state specified in the governing law section of this
agreement. All Claims shall be determined by one arbitrator; however, if Claims
exceed $5,000,000, upon the request of any party, the Claims shall be decided by
three arbitrators. All arbitration hearings shall commence within 90 days of the
demand for arbitration and close within 90 days of commencement and the award of
the arbitrator(s) shall be issued within 30 days of the close of the hearing.
However, the arbitrator(s), upon a showing of good cause, may extend the
commencement of the hearing for up to an additional 60 days. The arbitrator(s)
shall provide a concise written statement of reasons for the award. The
arbitration award may be submitted to any court having jurisdiction to be
confirmed and enforced.
(e) The arbitrator(s) will have the authority to decide whether any Claim is
barred by the statute of limitations and, if so, to dismiss the arbitration on
that basis. For purposes of the application of the statute of limitations, the
service on JAMS under applicable JAMS rules of a notice of Claim is the
equivalent of the filing of a lawsuit. Any dispute concerning this arbitration
provision or whether a Claim is arbitratable shall be determined by the
arbitrator(s). The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this agreement.
(f) This paragraph does not limit the right of any party to: (i) exercise
self-help remedies, such as but not limited to, setoff; (ii) initiate judicial
or nonjudicial foreclosure against any real or personal property collateral;
(iii) exercise any judicial or power of sale rights, or (iv) act in a court of
law to obtain an interim remedy, such as but not limited to, injunctive relief,
writ of possession or appointment of a receiver, or additional or supplementary
remedies.
(g) The filing of a court action is not intended to constitute a waiver of the
right of any party, including the suing party, thereafter to require submittal
of the Claim to arbitration.
(h) all obligations, debts and liabilities, including any swap, option or
forward obligations, plus interest thereon, of Borrower to Lender, or any one or
more of them, as well as all claims by Lender against Borrower or any other
party to this Agreement or any one or more of them, whether now existing or
hereafter arising, whether related to the purpose of the Note, whether voluntary
or otherwise, whether due or not due, direct or indirect, absolute or
contingent, liquidated or unliquidated and whether Borrower or any other party
to this Agreement may be liable individually or jointly with others, whether
obligated as guarantor, surety, accommodation party or otherwise, and whether
recovery upon such amounts may be or hereafter may become barred by any statute
of limitations, and whether the obligation to repay such amounts may be or
hereafter may become otherwise unenforceable. Unless the Borrower and any other
party to this Agreement shall have otherwise agreed in writing or received
written notice thereof, this Agreement shall not secure any obligation owing to
Lender which constitutes "consumer credit" subject to the disclosure
requirements of the Federal Truth in Lending Act and any regulations promulgated
thereunder.
ADDITIONAL DEFAULTS.
PROMISSORY NOTE
(Continued) Page 3
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Each of the following shall constitute an event of default ("Event of Default")
under this Note:
Event of Default Under Related Documents. A default or event of default occurs
under the terms of any promissory note, guaranty, pledge agreement, security
agreement or other agreement or instrument executed by Borrower or any
guarantor, pledgor, accommodation party or other obligor in connection with or
relating to this Note.
Judgment. The entry of a judgment against any Borrower or guarantor, pledgor,
accommodation party or other obligor which Lender deems to be of a material
nature, in Lender's sole discretion.
Default by Affiliates. Any affiliate of Borrower defaults under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of Lender or any other creditor.
Adverse Government Action. Any governmental authority (including, without
limitation, any nation, state or other political subdivision thereof, any
central bank, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions, and any corporation or other entity
owned or controlled by any of the foregoing) takes or institutes action, which,
in the opinion of Lender, will adversely affect Borrower's financial condition
or ability to pay or perform Borrower's obligations under this Note or any
instrument or agreement required under, or executed in connection with, this
Note.
SALE OF NOTE. Assignment. Lender may sell or offer to sell this Note, together
with any and all documents guaranteeing, securing or executed in connection with
this Note, to one or more assignees without notice to or consent of Borrower.
Lender is hereby authorized to share any information it has pertaining to the
loan evidenced by this Note, including without limitation credit information on
the undersigned, any of its principals, or any guarantors of this Note, to any
such assignee or prospective assignee.
COUNTERPART SIGNATURES. This Note may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
TERMINATION OF AUTOMATIC PAYMENTS. In the event that Borrower terminates the
Automatic Payment arrangement with Lender, Borrower agrees that the interest
rate under the Note will increase, at the discretion of the Lender, by one-half
percentage point (0.50%) per annum over the rate of interest stated in the Note,
and the amount of each interest installment will be increased accordingly. The
effective rate of interest under the Note shall not in any event exceed the
maximum rate permitted by law.
ADDITIONAL INTEREST AFTER DEFAULT. Upon any event of Default under this Note,
Lender, at its option, may, if permitted under applicable law, increase the
interest rate on this Note to the interest rate specified in the paragraph above
entitled "Interest After Default".
UNUSED COMMITMENT FEE. Borrower agrees to pay a fee on any difference between
the maximum principal amount available under this Note and the amount of credit
it actually uses, determined by the weighted average credit outstanding during
the specified period. The fee will be calculated at .25% per year. The
calculation of credit outstanding shall include the undrawn amount of letters of
credit. This fee is due on December 31, 2002 and on the last day of each
following quarter until the expiration of the availability of advances under
this Note.
AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct
from Borrower's account numbered 14592-06005 the amount of any loan payment. If
the funds in the account are insufficient to cover any payment, Lender shall not
be obligated to advance funds to cover the payment. At any time and for any
reason, Borrower or Lender may voluntarily terminate Automatic Payments.
PRE BILLING. If the Borrower and Lender elect to use pre-billing calculation,
for each payment date (the "Due Date") the amount of each payment debit will be
determined as follows: On the "Billing Date" Lender will prepare and mail to
Borrower an invoice of the amounts that will be due on that Due Date ("Billed
Amount"). (The "Billing Date" will be a date that is a specified number of
calendar days prior to the Due Date, which number of days will be mutually
agreed from time to time by Lender and Borrower.) The calculation of the Billed
Amount will be made on the assumption that no new extensions of credit or
payments will be made between the Billing Date and the Due Date, and that there
will be no changes in the applicable interest rate. On the Due Date Lender will
debit the Designated Account for the Billed Amount, regardless of the actual
amount due on that date ("Accrued Amount"). If the Due Date does not fall on a
Business Day, Lender shall debit the Designated Account on the first Business
Day following the Due Date. For purposes of this Agreement, "Business Day" means
a day other than Saturday, Sunday or other day on which commercial banks are
authorized to close or are in fact closed in the state where the Lender's
lending office is located. If the Billed Amount debited to the Designated
Account differs from the Accrued Amount, the difference will be treated as
follows: If the Billed Amount is less than the Accrued Amount, the Billed Amount
for the following Due Date will be increased by the amount of the underpayment.
Borrower will not be in default by reason of any such underpayment. If the
Billed Amount is more than the Accrued Amount, the Billed Amount for the
following Due Date will be decreased by the amount of the overpayment.
Regardless of any such difference, interest will continue to accrue based on the
actual amount of principal outstanding without compounding. Lender will not pay
interest on any overpayment.
AUTOMATIC PAYMENT. Borrower has elected to authorize Lender to effect payment of
sums due under this Note by means of debiting Borrower's account number
14592-06005. This authorization shall not affect the obligation of Borrower to
pay such sums when due, without notice, if there are insufficient funds in such
account to make such payment in full on the due date thereof, or if Lender fails
to debit the account.
CLOSING FEE. Borrower agrees to pay to Lender a loan fee in the amount of
$7,500. This fee is due at closing.
EXHIBIT TO NOTE. An exhibit, titled "EXHIBIT TO NOTE," is attached to this Note
and by this reference is made a part of this Note just as if all the provisions,
terms and conditions of the Exhibit had been fully set forth in this Note.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive any
applicable statute of limitations, presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made. The obligations under this Note are joint
and several.
PROMISSORY NOTE
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PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
NEWPORT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxx, VP of Finance Xxxxxxx X. Xxxxx, VP & General
& Treasurer of Newport Corporation Counsel of Newport Corporation
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EXHIBIT TO NOTE
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Borrower: Newport Corporation Lender: Bank of America, N.A.
0000 Xxxxx Xxxxxx XXXX-Xxxxxxxxxx Xxxxxxx (XX)
Xxxxxx, XX 00000 CA9-703-11-11
000 Xxxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
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This EXHIBIT TO NOTE is attached to and by this reference is made a part of
the Promissory Note, dated September 25, 2002, and executed in connection
with a loan or other financial accommodations between BANK OF AMERICA, N.A.
and Newport Corporation.
1. OPTIONAL INTEREST RATES
1.1 Optional Rates. In addition to the interest rate specified in the
Note, on the terms and subject to the conditions set forth below, Borrower
will be able to select, from one of the following optional rates, an
interest rate which will be applicable to a particular dollar increment of
amounts outstanding, or to be disbursed, under the Note, during interest
periods agreed to by Lender and Borrower. Any principal amount bearing
interest at an optional rate is referred to as a "Portion":
(a) the LIBOR Rate plus 1.50 percentage points.
1.2 Rate Terms. Each optional interest rate is a rate per year.
Interest will be paid on the last day of each interest period, and on the
first day of each month during the interest period. No Portion will be
converted to a different interest rate during the applicable interest
period. If any principal amount bearing interest at an optional interest
rate is repaid during an interest period (other than a scheduled principal
payment), such repayment will be considered a prepayment subject to any
prepayment fee as described in the Note. Upon the occurrence of an event of
default under the Note or any other loan document, Lender may terminate the
availability of optional interest rates for interest periods commencing
after the default occurs. No interest period may extend beyond the maturity
date of the Note. At the end of any interest period, the interest rate will
revert to the rate specified in the Note, unless Borrower has designated
another optional interest rate for the Portion.
1.3 LIBOR Rate. The election of LIBOR Rates shall be subject to the
following terms and requirements:
(a) The interest period during which the LIBOR Rate will be in effect
will be one, two or three months. The first day of the interest period must
be a day other than a Saturday, or a Sunday on which Lender is open for
business in New York and London and dealing in offshore dollars (a "LIBOR
Banking Day"). The last day of the interest period and the actual number of
days during the interest period will be determined by Lender using the
practices of the London inter-bank market.
(b) Each LIBOR Rate Portion will be for an amount not less than One
Hundred Thousand Dollars ($100,000).
(c) The "LIBOR Rate" means the interest rate determined by the
following formula, rounded upward to the nearest 1/100 of one percent. (All
amounts in the calculation will be determined by Lender as of the first day
of the interest period.)
LIBOR Rate = London Inter-Bank Offered Rate
(1.00 - Reserve Percentage)
Where,
(i) "London Inter-Bank Offered Rate" means the average per annum
interest rate at which U.S. dollar deposits would be offered for the
applicable interest period by major banks in the London inter-bank market,
as shown on the Telerate Page 3750 (or any successor page) at approximately
11:00 a.m. London time two (2) London Banking Days before the commencement
of the interest period. If such rate does not appear on the Telerate Page
3750 (or any successor page), the rate for that interest period will be
determined by such alternate method as reasonably selected by Lender. A
"London Banking Day" is a day on which Lender's London Banking Center is
open for business and dealing in offshore dollars.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member banks
of the Federal Reserve System for Eurocurrency Liabilities, as defined in
Federal Reserve Board Regulation D, rounded upward to the nearest 1/100 of
one percent. The percentage will be expressed as a decimal, and will
include, but not be limited to, marginal, emergency, supplemental, special,
and other reserve percentages.
(d) Borrower shall irrevocably request a LIBOR Rate Portion no later
than 12:00 noon time in the LIBOR Banking Day preceding the day on which
the London Inter-Bank Offered Rate will be set, as specified above. For
example, if there are no intervening holidays or weekend days in any of the
relevant locations, the request must be made at least three days before the
LIBOR Rate takes effect.
(e) Lender will have no obligation to accept an election for a LIBOR
Rate Portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods equal to
the interest period, of a LIBOR Rate Portion are not available in the
London inter-bank market; or
(ii) the LIBOR Rate does not accurately reflect the cost of a LIBOR
Rate Portion.
1.4 Notices; Authority to Act. Lender may accept requests by Borrower for
optional interest rates made by telephone. Borrower acknowledges and agrees
that the agreement of Lender herein to receive certain notices by telephone
is solely for the convenience of Borrower. Lender shall be entitled to rely
on the authority of the person purporting to be a person authorized by
Borrower to give such notice, and Lender shall have no liability to
Borrower on account of any action taken by Lender in reliance upon such
telephonic notice. The obligation of Borrower to repay all sums owing under
the Note shall not be affected in any way or to any extent by any failure
by Lender to receive written confirmation of any telephonic notice or the
receipt by Lender of a confirmation which is at variance with the terms
understood by Lender to be contained in the telephonic notice.
1.5 Exceptions to Default.
(a) The paragraph entitled "Payment Default", under DEFAULT, is
amended to read as follows;
"Payment Default. Borrower fails to make any payment when due under
this Note within five (5) business days of the date due."
(b) The paragraph entitled "Other Defaults", under DEFAULT, is amended
to read as follows:
"Other Defaults. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in any of
the related documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower, and does not cure such failure within thirty (30) days following
notice from Lender of such failure."
(c) The paragraph entitled "Default in Favor of Third Parties", under
DEFAULT, is amended to read as follows:
"Default in Favor of Third Parties. Borrower or any Grantor defaults
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect Borrower's ability to repay this Note or perform
EXHIBIT TO NOTE
(Continued) Page 2
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Borrower's obligations under this Note or any of the related documents, and
does not cure such failure within thirty (30) days following receipt of
notice of such default."
(d) The paragraph entitled "Change in Ownership", under DEFAULT, is
intentionally deleted.
1.6 Exceptions to Choice of Venue.
(a) The paragraph entitled "Choice of Venue" is amended to read as
follows:
"CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Orange County, State
of California."
1.7 Exceptions to Arbitration.
(a) Subparagraph (d) of the paragraph entitled "Arbitration" is
amended to read as follows:
"(d) The arbitration shall be administered by JAMS and conducted,
unless otherwise required by law, in Orange County, California. All claims
shall be determined by one arbitrator; however, if Claims exceed
$5,000,000, upon the request of any party, the Claims shall be decided by
three arbitrators. All arbitration hearings shall commence within 90 days
of the demand for arbitration and close within 90 days of commencement and
the award of the arbitrator(s) shall be issued within 30 days of the close
of the hearing. However, the arbitrator(s), upon a showing of good cause,
may extend the commencement of the hearing for up to an additional 60 days.
The arbitrator(s) shall provide a concise written statement of reasons for
the award. The arbitration award may be submitted to any court having
jurisdiction to be confirmed and enforced".
THIS EXHIBIT TO NOTE IS EXECUTED ON SEPTEMBER 25, 2002.
BORROWER:
NEWPORT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxx, VP of Finance & Treasurer of
Newport Corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxx, VP & General Counsel of Newport
Corporation
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