COMMERCIAL CREDIT AGREEMENT
This Commercial Credit Agreement ("Agreement") is made and entered
into this 3 day of March 1997 by and between SANWA BANK CALIFORNIA
(the "Bank") and APPLIED SIGNAL TECHNOLOGY, INC. (the "Borrower").
SECTION I
DEFINITIONS
1.01. Certain Defined Terms. Unless elsewhere defined in this
Agreement the following terms shall have the following meanings (such
meanings to be generally applicable to the singular and plural forms
of the terms defined):
A. "Advance" shall mean an advance to the Borrower under any
line of credit facility or similar facility provided for in Section
II of this Agreement which provides for draws by the Borrower against
an established credit line.
B. "Business Day" shall mean a day, other than a Saturday or
Sunday, on which commercial banks are open for business in
California.
C. "Collateral" shall mean any personal or real property in
which the Bank may be granted a lien or security interest to secure
payment of the Obligations.
D. "Debt" shall mean all liabilities of the Borrower less
Subordinated Debt.
E. "Effective Tangible Net Worth" shall mean the Borrower's
stated net worth plus Subordinated Debt but less all intangible
assets of the Borrower (i.e., goodwill, trademarks, patents,
copyrights, organization expense and similar intangible items).
F. "Environmental Claims" shall mean all claims, however
asserted, by any governmental authority or other person alleging
potential liability or responsibility for violation of any
Environmental Law or for release or injury to the environment or
threat to public health, personal injury (including sickness, disease
or death), property damage, natural resources damage, or otherwise
alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other
type of relief, resulting from or based upon (i) the presence,
placement, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden,
accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Materials at, in, or from
property owned, operated or controlled by the Borrower, or (ii) any
other circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
G. "Environmental Laws" shall mean all federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties,
requests, licenses, authorizations and permits of, and agreements
with, any governmental authorities, in each case relating to
environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("CERCLA"), the Clean Air Act, the Federal Water Pollution
Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Emergency Planning and Community Right-to-Know Act, the
California Hazardous Waste Control Law, the California Solid Waste
Management, Resource, Recovery and Recycling Act, the California
Water Code and the California Health and Safety Code.
H. "Equipment" shall mean, in connection with the Equipment
Purchase Facility contained in Section II of this Agreement,
equipment as defined in the California Uniform Commercial Code.
I. "Equipment Value" shall mean, in connection with the
Equipment Purchase Facility contained in Section II of this
Agreement, the lesser of: (i) the invoice cost of the Equipment
(excluding taxes, license fees, transportation costs, insurance
premiums and installation and connection expenses, fees and costs);
(ii) the book value of the Equipment; or (iii) the liquidation value
of the Equipment as determined by the Bank.
J. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, including (unless the
context otherwise requires) any rules or regulations promulgated
thereunder.
K. "Event of Default" shall have the meaning set forth in the
section herein entitled "Events of Default".
L. "Hazardous Materials" shall mean all those substances which
are regulated by, or which may form the basis of liability under any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste,
hazardous constituent, special waste, hazardous substance, hazardous
material, or toxic substance, or petroleum or petroleum derived
substance or waste.
M. "Indebtedness" shall mean, with respect to the Borrower,
(i) all indebtedness for borrowed money or for the deferred purchase
price of property or services in respect of which the Borrower is
liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which the Borrower otherwise assures a
creditor against loss and (ii) obligations under leases which shall
have been or should be, in accordance with generally accepted
accounting principles, reported as capital leases in respect of which
the Borrower is liable, contingently or otherwise, or in respect of
which the Borrower otherwise assures a creditor against loss.
N. "Obligations" shall mean all amounts owing by the Borrower
to the Bank pursuant to this Agreement including, but not limited to,
the unpaid principal amount of Advances.
O. "Permitted Liens" shall mean: (i) liens and security
interests securing indebtedness owed by the Borrower to the Bank;
(ii) liens for taxes, assessments or similar charges either not yet
due or being contested in good faith, provided proper reserves are
maintained therefor in accordance with generally accepted accounting
procedure; (iii) liens of materialmen, mechanics, warehousemen, or
carriers or other like liens arising in the ordinary course of
business and securing obligations which are not yet delinquent; (iv)
purchase money liens or purchase money security interests upon or in
any property acquired or held by the Borrower in the ordinary course
of business to secure Indebtedness outstanding on the date hereof or
permitted to be incurred pursuant to this Agreement; (v) liens and
security interests which, as of the date hereof, have been disclosed
to and approved by the Bank in writing; and (vi) those liens and
security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of
the Borrower's assets.
P. "Reference Rate" shall mean an index for a variable
interest rate which is quoted, published or announced from time to
time by the Bank as its reference rate and as to which loans may be
made by the Bank at, below or above such reference rate.
Q. "Subordinated Debt" shall mean such liabilities of the
Borrower which have been subordinated to those owed to the Bank in a
manner acceptable to the Bank.
1.02. Accounting Terms. All references to financial statements,
assets, liabilities, and similar accounting items not specifically
defined herein shall mean such financial statements or such items
prepared or determined in accordance with generally accepted
accounting principles consistently applied and, except where
otherwise specified, all financial data submitted pursuant to this
Agreement shall be prepared in accordance with such principles.
1.03. Other Terms. Other terms not otherwise defined shall have the
meanings attributed to such terms in the California Uniform
Commercial Code.
SECTION II
CREDIT FACILITIES
2.01. Commitment to Lend. Subject to the terms and conditions of
this Agreement and so long as no Event of Default occurs, the Bank
agrees to extend to the Borrower the credit accommodations that
follow.
2.02. Line of Credit Facility. The Bank agrees to make loans and
Advances to the Borrower, upon the Borrower's request therefor made
prior to the Expiration Date (as defined below in this Section 2.02),
up to a total principal amount from time to time outstanding of not
more than $6,000,000.00. Within the foregoing limits, the Borrower
may borrow, partially or wholly prepay, and reborrow under this Line
of Credit facility.
A. Purpose. Advances made under this Line of Credit shall be
used for working capital purposes.
B. Interest Rate. Interest shall accrue on the outstanding
principal balance of Advances under this Line of Credit at a variable
rate equal to the Bank's Reference Rate, per annum, as it may change
from time to time. (Such rate is referred to in this Section 2.02 as
the "Variable Rate".) The Variable Rate shall be adjusted
concurrently with any change in the Reference Rate. Interest shall
be calculated on the basis of 360 days per year but charged on the
actual number of days elapsed.
C. Payment of Interest. The Borrower hereby promises and
agrees to pay interest monthly on the first day of each month,
commencing on April 1, 1997.
D. Repayment of Principal. Unless sooner due in accordance
with the terms of this Agreement, on March 1, 1998 the Borrower
hereby promises and agrees to pay to the Bank in full the aggregate
unpaid principal balance of all Advances then outstanding, together
with all accrued and unpaid interest thereon.
Any payment received by the Bank shall, at the Bank's option,
first be applied to pay any late fees or other fees then due and
unpaid, and then to interest then due and unpaid and the remainder
thereof (if any) shall be applied to reduce principal.
E. Late Fee. If any regularly scheduled payment of principal
and/or interest (exclusive of the final payment upon maturity), or
any portion thereof, under this Line of Credit is not paid within ten
(10) calendar days after it is due, a late payment charge equal to
five percent (5%) of such past due payment may be assessed and shall
be immediately payable.
F. Making Line Advances/Notice of Borrowing. Each Advance
made hereunder shall be conclusively deemed to have been made at the
request of and for the benefit of the Borrower (i) when credited to
any deposit account of the Borrower maintained with the Bank or (ii)
when paid in accordance with the Borrower's written instructions.
Subject to any other requirements set forth in this Agreement,
Advances shall be made by the Bank upon telephonic or written notice
received from the Borrower in form acceptable to the Bank, which
notice shall be received not later than 2:00 p.m. (California Time)
on the date specified for such Advance, which date shall be a
Business Day. Requests for Advances received after such time may, at
the Bank's option, be deemed to be a request for an Advance to be
made on the next succeeding Business Day.
G. Non-Usage Fee. The Borrower hereby promises and agrees to
pay the following fees in connection with this facility: The
Borrower shall be assessed and shall pay to the Bank each quarter in
arrears, a fee in an amount equal to 0.25% of the difference (if any)
between $6,000,000.00 and the average daily outstanding principal
balance of Advances under this Line of Credit Facility, and the total
face amount of all Letters of Credit outstanding under the Letter of
Credit Facility contained in section 2.03 of this Agreement during
the preceding quarter.
H. Expiration of the Line of Credit Facility. Unless earlier
terminated in accordance with the terms of this Agreement, the Bank's
commitment to make Advances to the Borrower hereunder shall
automatically expire on March 1, 1998 (the "Expiration Date"), and
the Bank shall be under no further obligation to advance any monies
thereafter.
I. Line Account. The Bank shall maintain on its books a
record of account in which the Bank shall make entries for each
Advance and such other debits and credits as shall be appropriate in
connection with the Line of Credit facility (the "Line Account").
The Bank shall provide the Borrower with a monthly statement of the
Borrower's Line Account, which statement shall be considered to be
correct and conclusively binding on the Borrower unless the Bank is
notified by the Borrower to the contrary within thirty (30) days
after the Borrower's receipt of any such statement which is deemed to
be incorrect.
J. Amounts Payable on Demand. If the Borrower fails to pay on
demand any amount so payable under this Agreement, the Bank may, at
its option and without any obligation to do so and without waiving
any default occasioned by the Borrower's failure to pay such amount,
create an Advance in an amount equal to the amount so payable, which
Advance shall thereafter bear interest as provided under this Line of
Credit facility.
In addition, the Borrower hereby authorizes the Bank, if and to
the extent payment owed to the Bank under this Line of Credit
facility is not made when due, to charge, from time to time, against
any or all of the deposit accounts maintained by the Borrower with
the Bank any amount so due.
2.03. Letter of Credit Facility. The Bank agrees to issue standby
letters of credit (each a "Letter of Credit") on behalf of the
Borrower; provided however, that at no time shall the total face
amount of all Letters of Credit outstanding, including the aggregate
outstanding amount of those Letters of Credit issued under Section
2.02 of the Line of Credit Agreement dated June 10, 1993, and any and
all addenda and riders thereto, (the "Prior Agreement") less any
partial draws paid by the Bank, exceed the sum of $3,000,000.00; and
provided further, that this Letter of Credit facility is a sub-
facility of the above $6,000,000.00 Line of Credit facility and at no
time shall the total amount outstanding under such facility together
with the total face amount of all Letters of Credit outstanding,
including those issued under the Prior Agreement, less any partial
draws paid by the Bank, (plus any amounts outstanding under any other
sub-facilities of the above main facility) exceed the sum of
$6,000,000.00.
A. Issuance Fees, Costs and Commissions. Upon the Bank's
request, the Borrower shall promptly pay to the Bank issuance fees
and such other fees, commissions, costs and any out-of-pocket
expenses charged or incurred by the Bank with respect to any Letter
of Credit.
B. Expiration of Facility. The commitment by the Bank to
issue Letters of Credit shall, unless earlier terminated in
accordance with the terms of this Agreement, automatically terminate
on March 1, 1998 and no Letter of Credit shall expire on a date which
is more than 90 days after such date.
C. Limitations on Letters of Credit. Each Letter of Credit
shall be in form and substance and in favor of beneficiaries
satisfactory to the Bank, provided that the Bank may refuse to issue
a Letter of Credit due to the nature of the transaction or its terms
or in connection with any transaction where the Bank, due to the
beneficiary or the nationality or residence of the beneficiary, would
be prohibited by any applicable law, regulation or order from issuing
such Letter of Credit.
D. Issuance of Letters of Credit. Prior to the issuance of
each Letter of Credit but in no event later than 10:00 a.m.
(California time) on the day such Letter of Credit is to be issued
(which shall be a Business Day), the Borrower shall deliver to the
International Department of the Bank a duly executed form of the
Bank's standard form of application for issuance of a letter of
credit with proper insertions.
2.04. Equipment Purchase Facility. The Bank agrees to make loans
and Advances to the Borrower, upon the Borrower's written request
therefor made prior to the Expiration Date (as defined below in this
Section 2.04), to assist the Borrower in purchasing items of
Equipment. Each Advance made hereunder shall be in an amount not to
exceed 100% of the Value of the items of Equipment being purchased;
provided however, that at no time shall the total aggregate
outstanding principal amount of Advances made under this Equipment
Purchase Facility exceed the sum of $1,000,000.00. This Equipment
Purchase Facility is on a non-revolving basis and any amounts repaid
under the Equipment Purchase Facility may not be reborrowed.
A. Purpose. Advances made under this Equipment Purchase
Facility shall be used for the purchase of equipment by the Borrower
for use in the Borrower's business.
B. Interest Rate. Interest shall accrue on the outstanding
principal balance of Advances under this Equipment Purchase Facility
at a variable rate equal to the Bank's Reference Rate, as it may
change from time to time, plus 0.500% per annum. (Such rate is
referred to in this Section 2.04 as the "Variable Rate".) The
Variable Rate shall be adjusted concurrently with any change in the
Reference Rate. Interest shall be calculated on the basis of 360
days per year but charged on the actual number of days elapsed.
C. Payment of Interest. The Borrower hereby promises and
agrees to pay interest monthly on the first day of each month,
commencing on April 1, 1997.
D. Repayment of Principal. Unless sooner due in accordance
with the terms of this Agreement, on March 1, 1998 the Borrower
hereby promises and agrees to pay to the Bank in full the aggregate
unpaid principal balance of all Advances then outstanding, together
with all accrued and unpaid interest thereon.
Any payment received by the Bank shall, at the Bank's option,
first be applied to pay any late fees or other fees then due and
unpaid, and then to interest then due and unpaid and the remainder
thereof (if any) shall be applied to reduce principal.
E. Fixed Rate Alternative Pricing. In addition to Advances
based upon the Variable Rate ("Variable Rate Advances"), at the
Borrower's election, the Bank hereby agrees to make Advances to the
Borrower under this Equipment Purchase facility at a fixed rate
("Fixed Rate") to be quoted and offered by the Bank from time to time
upon the request of the Borrower. The Bank shall only quote and
offer such Fixed Rate for Advances in the minimum amount of
$100,000.00 and in $100,000.00 increments thereafter and for such
period of time (each an "Interest Period") as the Bank may quote and
offer, provided that the Interest Period shall be for a minimum of at
least 30 days and provided further that any Interest Period shall not
extend beyond the Expiration Date (as defined below) of this
facility. Advances based upon the Fixed Rate are hereinafter
referred to as "Fixed Rate Advances".
Interest on any Fixed Rate Advance shall be computed on the
basis of 360 days per year but charged on the actual number of days
elapsed.
The Borrower hereby promises and agrees to pay the Bank
interest on any Fixed Rate Advance on the basis described above with
respect to the Variable Rate. If interest is not paid as and when it
is due, the amount of such unpaid interest shall bear interest, until
paid in full, at a rate of interest equal to the Variable Rate.
(i) Repayment of Fixed Rate Advances. Unless sooner due
in accordance with other terms of this Agreement, or unless adjusted
at the end of the relevant Interest Period as described below, the
Borrower hereby promises and agrees to pay the Bank the principal
amount of each Fixed Rate Advance, together with accrued and unpaid
interest thereon, on the last day of the Interest Period pertaining
to such Fixed Rate Advance.
(ii) Notice of Election to Adjust Interest Rate. Upon
telephonic notice which shall be received by the Bank at or before
11:00 am (California time) on a Business Day, the Borrower may elect:
(a) That interest on a Variable Rate Advance shall be
adjusted to accrue at a quoted and offered Fixed Rate; provided,
however, that such notice shall be received by the Bank no later than
two business days prior to the day (which shall be a business day) on
which the Borrower requests that interest be adjusted to accrue at
the Fixed Rate.
(b) That interest on a Fixed Rate Advance shall continue
to accrue at a newly quoted Fixed Rate or shall be adjusted to
commence to accrue at the Variable Rate; provided however, that such
notice shall be received by the Bank no later than two business days
prior to the last day of the Interest Period pertaining to such Fixed
Rate Advance. If the Bank shall not have received notice as
prescribed herein of the Borrower's election that interest on any
Fixed Rate Advance shall continue to accrue at the Fixed Rate, the
Borrower shall be deemed to have elected that interest thereon shall
be adjusted to accrue at the Variable Rate upon the expiration of the
Interest Period pertaining to such Advance.
(iii) PROHIBITION AGAINST PREPAYMENT OF FIXED RATE
ADVANCES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT,
NO PREPAYMENT SHALL BE MADE ON ANY FIXED RATE ADVANCE EXCEPT ON A DAY
WHICH IS THE LAST DAY OF THE INTEREST PERIOD PERTAINING THERETO. IF
THE WHOLE OR ANY PART OF ANY FIXED RATE ADVANCE IS PREPAID BY REASON
OF ACCELERATION OR OTHERWISE, THE BORROWER SHALL, UPON THE BANK'S
REQUEST, PROMPTLY PAY TO AND INDEMNIFY THE BANK FOR ALL COSTS AND ANY
LOSS (INCLUDING INTEREST) ACTUALLY INCURRED BY THE BANK AND ANY LOSS
(INCLUDING LOSS OF PROFIT RESULTING FROM THE RE-EMPLOYMENT OF FUNDS)
SUSTAINED BY THE BANK AS A CONSEQUENCE OF SUCH PREPAYMENT.
(iv) Indemnification for Fixed Rate Costs. During any
period of time in which interest on any Advance is accruing on the
basis of a Fixed Rate, the Borrower shall, upon the Bank's request,
promptly pay to and reimburse the Bank for all costs incurred and
payments made by the Bank by reason of any future assessment,
reserve, deposit or similar requirements or any surcharge, tax or fee
imposed upon the Bank or as a result of the Bank's compliance with
any directive or requirement of any regulatory authority pertaining
or relating to funds used by the Bank in quoting and determining the
Fixed Rate.
(v) Involuntary Conversion from Fixed Rate to Variable
Rate. In the event that the Bank shall at any time determine that
the accrual of interest on the basis of the Fixed Rate (a) is
infeasible because the Bank is unable to determine the Fixed Rate due
to the unavailability of U.S. dollar deposits, contracts or
certificates of deposit in an amount approximately equal to the
amount of the relevant Advance and for a period of time approximately
equal to the relevant Interest Period; or (b) is or has become
unlawful or infeasible by reason of the Bank's compliance with any
new law, rule, regulation, guideline or order, or any new
interpretation of any present law, rule, regulation, guideline or
order, then the Bank shall give telephonic notice thereof (confirmed
in writing) to the Borrower, in which event any Fixed Rate Advance
shall be deemed to be a Variable Rate Advance and interest shall
thereupon immediately accrue at the Variable Rate.
F. Making Line Advances/Notice of Borrowing. Each Advance
made hereunder shall be conclusively deemed to have been made at the
request of and for the benefit of the Borrower (i) when credited to
any deposit account of the Borrower maintained with the Bank or (ii)
when paid in accordance with the Borrower's written instructions.
Subject to any other requirements set forth in this Agreement,
Advances shall be made by the Bank upon written notice received from
the Borrower in form acceptable to the Bank, which notice shall be
received by the Bank at or before 11:00 am (California time) on a
Business Day. The Borrower may borrow under this Equipment Purchase
Facility by requesting either:
(i) A Variable Rate Advance. A Variable Rate Advance
may be made on the day notice is received by the Bank; provided
however, that if the Bank shall not have received notice at or before
11:00 am (California time) on the day such Advance is requested to be
made, such Variable Rate Advance may be made, at the Bank's option,
on the next Business Day.
(ii) A Fixed Rate Advance. The Borrower may elect that
an Advance be made as a Fixed Rate Advance by requesting the Bank to
provide a quote as to the rate which would apply for a designated
Interest Period and concurrently with receiving such quote, giving
the Bank irrevocable notice of the Borrower's acceptance of the rate
quoted, provided such notice shall be given to the Bank not later
than 10:00 a.m. (California time) on a date (which shall be a
Business Day) at least two days prior to the first day of the
requested Interest Period. Any telephonic or oral quote or offer by
the Bank of a Fixed Rate for a given Interest Period may be confirmed
in writing by the Bank upon the election (as provided herein) of the
Borrower to accept such terms and such confirmation shall be deemed
conclusive as to the terms quoted and offered.
G. Security Interest in Equipment. Upon the Bank's request,
the Borrower shall execute and deliver to the Bank, prior to the
making of any Advance under this Equipment Purchase Facility, such
documents and instruments (in form and substance satisfactory to the
Bank) which the Bank may require with respect to such Advance and the
perfection of the Bank's security interest in the Equipment
pertaining to such Advance.
H. Late Fee. If any regularly scheduled payment of principal
and/or interest (exclusive of the final payment upon maturity), or
any portion thereof, under this Equipment Purchase Facility is not
paid within ten (10) calendar days after it is due, a late payment
charge equal to five percent (5%) of such past due payment may be
assessed and shall be immediately payable.
I. Conversion to Term Loan. It is hereby agreed that the
Borrower may, by giving written notice to the Bank at least one (1)
day prior to March 1, 1998, convert the principal balance outstanding
under the Equipment Purchase facility as of March 1, 1998 to be
payable on a term loan basis. The term loan (the "Converted Term
Loan") shall be in the amount of such outstanding principal balance
and shall be evidenced by a promissory note or credit agreement (the
"Term Agreement") containing the following payment terms: Interest
shall be paid concurrently with principal. Principal shall be paid
in equal monthly installments based upon a maximum of 60 equally
amortized payments of the principal amount outstanding at the time of
conversion. Accrued and unpaid interest under the Equipment Purchase
facility shall be paid to the Bank concurrently with the Borrower's
execution of the Term Agreement. Interest shall accrue and principal
and interest shall be paid in accordance with the terms and
provisions of the Term Agreement.
J. Non-Usage Fee. The Borrower shall be assessed and shall
pay to the Bank each quarter, a fee in an amount equal to 0.250% of
the difference (if any) between $1,000,000.00 and the average daily
outstanding principal balance of Advances under this Equipment
Purchase facility during the preceding quarter.
K. Expiration of the Equipment Purchase Facility. Unless
earlier terminated in accordance with the terms of this Agreement,
the Bank's commitment to make Advances to the Borrower hereunder
shall automatically expire on March 1, 1998 (the "Expiration Date").
L. Line Account. The Bank shall maintain on its books a
record of account in which the Bank shall make entries for each
Advance and such other debits and credits as shall be appropriate in
connection with this Equipment Purchase Facility (the "Line
Account"). The Bank shall provide the Borrower with a monthly
statement of the Borrower's Line Account, which statement shall be
considered to be correct and conclusively binding on the Borrower
unless the Bank is notified by the Borrower to the contrary within
thirty (30) days after the Borrower's receipt of any such statement
which is deemed to be incorrect.
M. Amounts Payable on Demand. If the Borrower fails to pay on
demand any amount so payable under this Agreement, the Bank may, at
its option and without any obligation to do so and without waiving
any default occasioned by the Borrower's failure to pay such amount,
create an Advance in an amount equal to the amount so payable, which
Advance shall thereafter bear interest as provided under this
Equipment Purchase Facility.
In addition, the Borrower hereby authorizes the Bank, if and to
the extent payment owed to the Bank under this Equipment Purchase
Facility is not made when due, to charge, from time to time, against
any or all deposit accounts maintained with the Bank by the Borrower
any amount so due.
SECTION III
CONDITIONS PRECEDENT
3.01. Conditions Precedent to the Initial Extension of Credit and/or
First Advance. The obligation of the Bank to make the initial
extension of credit and/or the first Advance hereunder is subject to
the conditions precedent that the Bank shall have received before the
date of such extension of credit and/or the first Advance all of the
following, in form and substance satisfactory to the Bank:
A. Authority to Borrow. Evidence relating to the duly given
approval and authorization of the execution, delivery and performance
of this Agreement, all other documents, instruments and agreements
required under this Agreement and all other actions to be taken by
the Borrower hereunder or thereunder.
B. Loan Fees. Evidence that any required loan fees and
expenses as set forth above with respect to each credit facility have
been paid or provided for by the Borrower.
C. Audit. The opportunity to conduct an audit of the
Borrower's books, records and operations and the Bank shall be
satisfied as to the condition thereof.
D. Miscellaneous Documents. Such other documents,
instruments, agreements and opinions as are necessary, or as the Bank
may reasonably require, to consummate the transactions contemplated
under this Agreement, all fully executed.
3.02. Conditions Precedent to All Extensions of Credit and/or
Advances. The obligation of the Bank to make any extensions of
credit and/or each Advance to or on account of the Borrower
(including the initial extension of credit and/or the first Advance)
shall be subject to the further conditions precedent that, as of the
date of each extension of credit or Advance and after the making of
such extension of credit or Advance:
A. Representations and Warranties. The representations and
warranties set forth in the Section entitled "Representations and
Warranties" herein and in any other document, instrument, agreement
or certificate delivered to the Bank hereunder are true and correct.
B. Event of Default. No event has occurred and is continuing
which constitutes, or, with the lapse of time or giving of notice or
both, would constitute an Event of Default.
C. Subsequent Approvals, Etc. The Bank shall have received
such supplemental approvals, opinions or documents as the Bank may
reasonably request.
3.03. Reaffirmation of Statements. For the purposes hereof, the
Borrower's acceptance of the proceeds of any extension of credit and
the Borrower's execution of any document or instrument evidencing or
creating any Obligation hereunder shall each be deemed to constitute
the Borrower's representation and warranty that the statements set
forth above in this Section are true and correct.
SECTION IV
REPRESENTATIONS AND WARRANTIES
The Borrower hereby makes the following representations and
warranties to the Bank, which representations and warranties are
continuing:
4.01. Status. The Borrower is a corporation duly organized and
validly existing under the laws of the State of California and is
properly licensed, qualified to do business and in good standing in,
and, where necessary to maintain the Borrower's rights and
privileges, has complied with the fictitious name statute of every
jurisdiction in which the Borrower is doing business.
4.02. Authority. The execution, delivery and performance by the
Borrower of this Agreement and any instrument, document or agreement
required hereunder have been duly authorized and do not and will not:
(i) violate any provision of any law, rule, regulation, writ,
judgment or injunction presently in effect affecting the Borrower;
(ii) require any consent or approval of the stockholders of the
Borrower or violate any provision of the articles of incorporation or
by-laws of the Borrower; or (iii) result in a breach of or
constitute a default under any material agreement to which the
Borrower is a party or by which it or its properties may be bound or
affected.
4.03. Legal Effect. This Agreement constitutes, and any document,
instrument or agreement required hereunder when delivered will
constitute, legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective
terms.
4.04. Fictitious Trade Styles. The Borrower currently uses no
fictitious trade styles in connection with its business operations.
The Borrower shall notify the Bank within thirty (30) days of the use
of any fictitious trade style at any future date, indicating the
trade style and state(s) of its use.
4.05. Financial Statements. All financial statements, information
and other data which may have been and which may hereafter be
submitted by the Borrower to the Bank are true, accurate and correct
and have been and will be prepared in accordance with generally
accepted accounting principles consistently applied and accurately
represent the Borrower's financial condition and, as applicable, the
other information disclosed therein. Since the most recent
submission of any such financial statement, information or other data
to the Bank, the Borrower represents and warrants that no material
adverse change in the Borrower's financial condition or operations
has occurred which has not been fully disclosed to the Bank in
writing.
4.06. Litigation. Except as have been disclosed to the Bank in
writing, there are no actions, suits or proceedings pending or, to
the knowledge of the Borrower, threatened against or affecting the
Borrower or the Borrower's properties before any court or
administrative agency which, if determined adversely to the Borrower,
would have a material adverse effect on the Borrower's financial
condition or operations.
4.07. Title to Assets. The Borrower has good and marketable title
to all of its assets and the same are not subject to any security
interest, encumbrance, lien or claim of any third person except for
Permitted Liens.
4.08. ERISA. If the Borrower has a pension, profit sharing or
retirement plan subject to ERISA, such plan has been and will
continue to be funded in accordance with its terms and otherwise
complies with and continues to comply with the requirements of ERISA.
4.09. Taxes. The Borrower has filed all tax returns required to be
filed and paid all taxes shown thereon to be due, including interest
and penalties, other than taxes which are currently payable without
penalty or interest or those which are being duly contested in good
faith.
4.10. Environmental Compliance. The operations of the Borrower
comply, and during the term of this Agreement will at all times
comply, in all respects with all Environmental Laws; the Borrower has
obtained licenses, permits, authorizations and registrations required
under any Environmental Law ("Environmental Permits") and necessary
for its ordinary operations, all such Environmental Permits are in
good standing, and the Borrower is in compliance with all material
terms and conditions of such Environmental Permits; neither the
Borrower nor any of its present properties or operations are subject
to any outstanding written order from or agreement with any
governmental authority nor subject to any judicial or docketed
administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material; there are no Hazardous
Materials or other conditions or circumstances existing, or arising
from operations prior to the date of this Agreement, with respect to
any property of the Borrower that would reasonably be expected to
give rise to Environmental Claims; provided however, that with
respect to property leased from an unrelated third party, the
foregoing representation is made to the best knowledge of the
Borrower. In addition, (i) the Borrower does not have or maintain
any underground storage tanks which are not properly registered or
permitted under applicable Environmental Laws or which are leaking or
disposing of Hazardous Materials off-site, and (ii) the Borrower has
notified all of its employees of the existence, if any, of any health
hazard arising from the conditions of their employment and have met
all notification requirements under Title III of CERCLA and all other
Environmental Laws.
SECTION V
COVENANTS
The Borrower covenants and agrees that, during the term of this
Agreement, and so long thereafter as the Borrower is indebted to the
Bank under this Agreement, the Borrower shall, unless the Bank
otherwise consents in writing:
5.01. Preservation of Existence; Compliance with Applicable Laws.
Maintain and preserve its existence and all rights and privileges now
enjoyed; not liquidate or dissolve, merge or consolidate with or
into, or acquire any other business organization; and conduct its
business in accordance with all applicable laws, rules and
regulations.
5.02. Maintenance of Insurance. Maintain insurance in such amounts
and covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Borrower operates and maintain such other
insurance and coverages as may be required by the Bank. All such
insurance shall be in form and amount and with companies satisfactory
to the Bank. With respect to insurance covering properties in which
the Bank maintains a security interest or lien, such insurance shall
be in an amount not less than the full replacement value thereof, at
the Bank's request, shall name the Bank as loss payee pursuant to a
loss payable endorsement satisfactory to the Bank and shall not be
altered or canceled except upon ten (10) days' prior written notice
to the Bank. Upon the Bank's request, the Borrower shall furnish the
Bank with the original policy or binder of all such insurance.
5.03. Maintenance of Properties. The Borrower shall maintain and
preserve all its properties in good working order and condition in
accordance with the general practice of other businesses of similar
character and size, ordinary wear and tear excepted.
5.04. Location and Maintenance of Equipment.
A. Location. The Equipment shall at all times be in the
Borrower's physical possession, shall not be held for sale or lease
and shall be kept only at the following location(s): 000 Xxxxxxxx
Xxx, Xxxxxxxxx, XX 00000.
The Borrower shall not secrete, abandon or remove, or permit
the removal of, the Equipment, or any part thereof, from the
location(s) shown above or remove or permit to be removed any
accessories now or hereafter placed upon the Equipment.
B. Equipment Schedules. Upon the Bank's demand, the Borrower
shall immediately provide the Bank with a complete and accurate
description of the Equipment including, as applicable, the make,
model, identification number and serial number of each item of
Equipment. In addition, the Borrower shall immediately notify the
Bank of the acquisition of any new or additional Equipment or the
replacement of any existing Equipment and shall supply the Bank with
a complete description of any such additional or replacement
Equipment.
C. Maintenance of Equipment. The Borrower shall, at the
Borrower's sole cost and expense, keep and maintain the Equipment in
a good state of repair and shall not destroy, misuse, abuse,
illegally use or be negligent in the care of the Equipment or any
part thereof. The Borrower shall not remove, destroy, obliterate,
change, cover, paint, deface or alter the name plates, serial
numbers, labels or other distinguishing numbers or identification
marks placed upon the Equipment or any part thereof by or on behalf
of the manufacturer, any dealer or rebuilder thereof, or the Bank.
The Borrower shall not be released from any liability to the Bank
hereunder because of any injury to or loss or destruction of the
Equipment. The Borrower shall allow the Bank and its representatives
free access to and the right to inspect the Equipment at all times
and shall comply with the terms and conditions of any leases covering
the real property on which the Equipment is located and any orders,
ordinances, laws, regulations or rules of any federal, state or
municipal agency or authority having jurisdiction of such real
property or the conduct of business of the persons having control or
possession of the Equipment.
D. Fixtures. The Equipment is not now and shall not at any
time hereafter be so affixed to the real property on which it is
located as to become a fixture or a part thereof. The Equipment is
now and shall at all times hereafter be and remain personal property
of the Borrower.
5.05. Payment of Obligations and Taxes. Make timely payment of all
assessments and taxes and all of its liabilities and obligations
including, but not limited to, trade payables, unless the same are
being contested in good faith by appropriate proceedings with the
appropriate court or regulatory agency. For purposes hereof, the
Borrower's issuance of a check, draft or similar instrument without
delivery to the intended payee shall not constitute payment.
5.06. Inspection Rights. At any reasonable time and from time to
time permit the Bank or any representative thereof to examine and
make copies of the records and visit the properties of the Borrower
and to discuss the business and operations of the Borrower with any
employee or representative thereof. If the Borrower now or at any
time hereafter maintains any records (including, but not limited to,
computer generated records and computer programs for the generation
of such records) in the possession of a third party, the Borrower
hereby agrees to notify such third party to permit the Bank free
access to such records at all reasonable times and to provide the
Bank with copies of any records it may request, all at the Borrower's
expense, the amount of which shall be payable immediately upon
demand.
5.07. Reporting Requirements. Deliver or cause to be delivered to
the Bank in form and detail satisfactory to the Bank:
A. Annual Statements. Not later than 90 days after the end of
each of the Borrower's fiscal years, a copy of the annual financial
report of the Borrower for such year, which report shall be CPA
audited and certified by an officer of the corporation.
B. Annual 10K Reports. Not later than 10 days after filing
with the Securities Exchange Commission ("SEC"), a copy of the
Borrower's annual 10K report.
C. Interim Statements. Not later than 45 days after the end
of each quarter, the Borrower's financial statement as of the end of
such quarter, certified by an officer of the corporation.
D. Quarterly 10Q Reports. Not later than 10 days after filing
with the SEC, a copy of the Borrower's quarterly 10Q report.
E. Other Information. Promptly upon the Bank's request, such
other information pertaining to the Borrower or any Guarantor as the
Bank may reasonably request.
5.08. Payment of Dividends. The Borrower shall not declare or pay
any dividends on any class of its stock now or hereafter outstanding
except dividends payable solely in the corporation's capital stock.
5.09. Redemption or Repurchase of Stock. The Borrower shall not
redeem or repurchase any class of its corporate stock now or
hereafter outstanding in excess of $2,000,000.00 in any one fiscal
year.
5.10. Liens and Encumbrances. Not create, assume or permit to exist
any security interest, encumbrance, mortgage, deed of trust or other
lien (including, but not limited to, a lien of attachment, judgment
or execution) affecting any of the Borrower's properties, or execute
or allow to be filed any financing statement or continuation thereof
affecting any such properties, except for Permitted Liens or as
otherwise provided in this Agreement.
5.11. Transfer Assets. Not sell, contract for sale, transfer,
convey, assign, lease or sublet any assets of the Borrower except in
the ordinary course of business as presently conducted by the
Borrower, and then, only for full, fair and reasonable consideration.
5.12. Change in the Nature of Business. Not make any material
change in the Borrower's financial structure or in the nature of the
Borrower's business as existing or conducted as of the date of this
Agreement.
5.13. Financial Condition. Maintain at all times:
A. Net Worth. A minimum Effective Tangible Net Worth of not
less than $33,000,000.00.
B. Current Ratio. A ratio of current assets to current
liabilities of not less than 2.00 to 1.00.
C. Minimum Net Income. A minimum net profit after tax of
$1.00 on a quarterly basis.
D. Debt Service Coverage Ratio. A Debt Service Coverage ratio
(which is defined herein as the sum of net profit plus depreciation
divided by the current portion of long term debt) of not less than
2.00 to 1.00.
5.14. Environmental Compliance. The Borrower shall:
A. Conduct the Borrower's operations and keep and maintain all
of its properties in compliance with all Environmental Laws.
B. Give prompt written notice to the Bank, but in no event
later than 10 days after becoming aware, of the following: (i) any
enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Borrower or
any of its affiliates or any of its respective properties pursuant to
any applicable Environmental Laws, (ii) all other Environmental
Claims, and (iii) any environmental or similar condition on any real
property adjoining or in the vicinity of the property of the Borrower
or its affiliates that could reasonably be anticipated to cause such
property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of such property under
any Environmental Laws.
C. Upon the written request of the Bank, the Borrower shall
submit to the Bank, at its sole cost and expense, at reasonable
intervals, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue
identified in any notice required pursuant to this Section.
D. At all times indemnify and hold harmless the Bank from and
against any and all liability arising out of any Environmental
Claims.
5.15. Notice. Give the Bank prompt written notice of any and all
(i) Events of Default; (ii) litigation, arbitration or
administrative proceedings to which the Borrower is a party and in
which the claim or liability exceeds $1,000,000.00; and (iii) other
matters which have resulted in, or might result in a material adverse
change in the financial condition or business operations of the
Borrower.
SECTION VI
EVENTS OF DEFAULT
Any one or more of the following described events shall constitute an
event of default under this Agreement:
6.01. Non-Payment. The Borrower shall fail to pay any Obligations
within 10 days of when due.
6.02. Performance Under This and Other Agreements. The Borrower
shall fail in any material respect to perform or observe any term,
covenant or agreement contained in this Agreement or in any document,
instrument or agreement evidencing or relating to any indebtedness of
the Borrower (whether owed to the Bank or third persons), and any
such failure (exclusive of the payment of money to the Bank under
this Agreement or under any other document, instrument or agreement,
which failure shall constitute and be an immediate Event of Default
if not paid when due or when demanded to be due) shall continue for
more than 30 days after written notice from the Bank to the Borrower
of the existence and character of such Event of Default.
6.03. Representations and Warranties; Financial Statements. Any
representation or warranty made by the Borrower under or in
connection with this Agreement or any financial statement given by
the Borrower or any Guarantor shall prove to have been incorrect in
any material respect when made or given or when deemed to have been
made or given.
6.04. Insolvency. The Borrower or any Guarantor shall: (i) become
insolvent or be unable to pay its debts as they mature; (ii) make an
assignment for the benefit of creditors or to an agent authorized to
liquidate any substantial amount of its properties or assets; (iii)
file a voluntary petition in bankruptcy or seeking reorganization or
to effect a plan or other arrangement with creditors; (iv) file an
answer admitting the material allegations of an involuntary petition
relating to bankruptcy or reorganization or join in any such
petition; (v) become or be adjudicated a bankrupt; (vi) apply for or
consent to the appointment of, or consent that an order be made,
appointing any receiver, custodian or trustee for itself or any of
its properties, assets or businesses; or (vii) any receiver,
custodian or trustee shall have been appointed for all or a
substantial part of its properties, assets or businesses and shall
not be discharged within 30 days after the date of such appointment.
6.05. Execution. Any writ of execution or attachment or any
judgment lien shall be issued against any property of the Borrower
and shall not be discharged or bonded against or released within 30
days after the issuance or attachment of such writ or lien.
6.06. Revocation or Limitation of Guaranty. Any Guaranty shall be
revoked or limited or its enforceability or validity shall be
contested by any Guarantor, by operation of law, legal proceeding or
otherwise or any Guarantor who is a natural person shall die.
6.07. Suspension. The Borrower shall voluntarily suspend the
transaction of business or allow to be suspended, terminated, revoked
or expired any permit, license or approval of any governmental body
necessary to conduct the Borrower's business as now conducted.
6.08. Change in Ownership. There shall occur a sale, transfer,
disposition or encumbrance (whether voluntary or involuntary), or an
agreement shall be entered into to do so, with respect to more than
10% of the issued and outstanding capital stock of the Borrower.
SECTION VII
REMEDIES ON DEFAULT
Upon the occurrence of any Event of Default, the Bank may, at its
sole election, without demand and upon only such notice as may be
required by law:
7.01. Acceleration. Declare any or all of the Borrower's
indebtedness owing to the Bank, whether under this Agreement or under
any other document, instrument or agreement, immediately due and
payable, whether or not otherwise due and payable.
7.02. Cease Extending Credit. Cease making Advances or otherwise
extending credit to or for the account of the Borrower under this
Agreement or under any other agreement now existing or hereafter
entered into between the Borrower and the Bank.
7.03. Termination. Terminate this Agreement as to any future
obligation of the Bank without affecting the Borrower's obligations
to the Bank or the Bank's rights and remedies under this Agreement or
under any other document, instrument or agreement.
7.04. Letters of Credit. In addition to any other remedies
available to the Bank under this Agreement or otherwise, the Bank may
require the Borrower to pay immediately to the Bank, for application
against any drawings under any outstanding Letters of Credit, the
outstanding principal amount of any such Letters of Credit which have
not expired. Any portion of the amount so paid to the Bank which is
not applied to satisfy draws under any such Letters of Credit or any
other obligations of the Borrower to the Bank shall be repaid to the
Borrower without interest.
7.05. Non-Exclusivity of Remedies. Exercise one or more of the
Bank's rights set forth herein or seek such other rights or pursue
such other remedies as may be provided by law, in equity or in any
other agreement now existing or hereafter entered into between the
Borrower and the Bank, or otherwise.
SECTION VIII
MISCELLANEOUS PROVISIONS
8.01. Default Interest Rate. If an Event of Default has occurred
and is continuing, the Bank, at its option, may require the Borrower
to pay to the Bank interest on any Indebtedness or amount payable
under this Agreement at a rate which is 3% in excess of the rate or
rates otherwise then in effect under this Agreement.
8.02. Reimbursement of Certain Costs in Connection With Letters of
Credit. The Borrower shall, upon the Bank's request, promptly pay to
and reimburse the Bank for all costs incurred and payments made by
the Bank by reason of any future assessment, reserve, deposit or
similar requirement or any surcharge, tax or fee imposed upon the
Bank or as a result of the Bank's compliance with any directive or
requirement of any regulatory authority pertaining or relating to any
Letters of Credit.
8.03. Reliance. Each warranty, representation, covenant and
agreement contained in this Agreement shall be conclusively presumed
to have been relied upon by the Bank regardless of any investigation
made or information possessed by the Bank and shall be cumulative and
in addition to any other warranties, representations, covenants or
agreements which the Borrower shall now or hereafter give, or cause
to be given, to the Bank.
8.04. Dispute Resolution.
A. Disputes. It is understood and agreed that, upon the
request of any party to this Agreement, any dispute, claim or
controversy of any kind, whether in contract or in tort, statutory or
common law, legal or equitable, now existing or hereinafter arising
between the parties in any way arising out of, pertaining to or in
connection with: (i) this Agreement, or any related agreements,
documents or instruments, (ii) all past and present loans, credits,
accounts, deposit accounts (whether demand deposits or time
deposits), safe deposit boxes, safekeeping agreements, guarantees,
letters of credit, goods or services, or other transactions,
contracts or agreements of any kind, (iii) any incidents, omissions,
acts, practices, or occurrences causing injury to any party whereby
another party or its agents, employees or representatives may be
liable, in whole or in part, or (iv) any aspect of the past or
present relationships of the parties, shall be resolved through a
two-step dispute resolution process administered by the Judicial
Arbitration & Mediation Services, Inc. ("JAMS") as follows:
B. Step I - Mediation. At the request of any party to the
dispute, claim or controversy, the matter shall be referred to the
nearest office of JAMS for mediation, which is an informal, non-
binding conference or conferences between the parties in which a
retired judge or justice from the JAMS panel will seek to guide the
parties to a resolution of the case.
C. Step II - Arbitration (Contracts Not Secured By Real
Property). Should any dispute, claim or controversy remain
unresolved at the conclusion of the Step I Mediation Phase, then
(subject to the restriction at the end of this subparagraph) all such
remaining matters shall be resolved by final and binding arbitration
before a different judicial panelist, unless the parties shall agree
to have the mediator panelist act as arbitrator. The hearing shall
be conducted at a location determined by the arbitrator in Los
Angeles, California (or such other city as may be agreed upon by the
parties) and shall be administered by and in accordance with the then
existing Rules of Practice and Procedure of JAMS and judgement upon
any award rendered by the arbitrator may be entered by any State or
Federal Court having jurisdiction thereof. The arbitrator shall
determine which is the prevailing party and shall include in the
award that party's reasonable attorneys' fees and costs. This
subparagraph shall apply only if, at the time of the submission of
the matter to JAMS, the dispute or issues involved do not arise out
of any transaction which is secured by real property collateral or,
if so secured, all parties consent to such submission.
As soon as practicable after selection of the arbitrator, the
arbitrator, or the arbitrator's designated representative, shall
determine a reasonable estimate of anticipated fees and costs of the
arbitrator, and render a statement to each party setting forth that
party's pro-rata share of said fees and costs. Thereafter, each
party shall, within 10 days of receipt of said statement, deposit
said sum with the arbitrator. Failure of any party to make such a
deposit shall result in a forfeiture by the non-depositing party of
the right to prosecute or defend the claim which is the subject of
the arbitration, but shall not otherwise serve to xxxxx, stay or
suspend the arbitration proceedings.
D. Step II - Trial By Court Reference (Contracts Secured By
Real Property). If the dispute, claim or controversy is not one
required or agreed to be submitted to arbitration, as provided in the
above subparagraph, and has not been resolved by Step I mediation,
then any remaining dispute, claim or controversy shall be submitted
for determination by a trial on Order of Reference conducted by a
retired judge or justice from the panel of JAMS appointed pursuant to
the provisions of Section 638(1) of the California Code of Civil
Procedure, or any amendment, addition or successor section thereto,
to hear the case and report a statement of decision thereon. The
parties intend this general reference agreement to be specifically
enforceable in accordance with said section. If the parties are
unable to agree upon a member of the JAMS panel to act as referee,
then one shall be appointed by the Presiding Judge of the county
wherein the hearing is to be held. The parties shall pay in advance,
to the referee, the estimated reasonable fees and costs of the
reference, as may be specified in advance by the referee. The
parties shall initially share equally, by paying their proportionate
amount of the estimated fees and costs of the reference. Failure of
any party to make such a fee deposit shall result in a forfeiture by
the non-depositing party of the right to prosecute or defend any
cause of action which is the subject of the reference, but shall not
otherwise serve to xxxxx, stay or suspend the reference proceeding.
E. Provisional Remedies, Self Help and Foreclosure. No
provision of, or the exercise of any rights under any portion of this
Dispute Resolution provision, shall limit the right of any party to
exercise self help remedies such as set off, foreclosure against any
real or personal property collateral, or the obtaining of provisional
or ancillary remedies, such as injunctive relief or the appointment
of a receiver, from any court having jurisdiction before, during or
after the pendency of any arbitration. At the Bank's option,
foreclosure under a deed of trust or mortgage may be accomplished
either by exercise of power of sale under the deed of trust or
mortgage, or by judicial foreclosure. The institution and
maintenance of an action for provisional remedies, pursuit of
provisional or ancillary remedies or exercise of self help remedies
shall not constitute a waiver of the right of any party to submit the
controversy or claim to arbitration.
8.05. Waiver of Jury. The Borrower and the Bank hereby expressly
and voluntarily waive any and all rights, whether arising under the
California constitution, any rules of the California Code of Civil
Procedure, common law or otherwise, to demand a trial by jury in any
action, matter, claim or cause of action whatsoever arising out of or
in any way related to this Agreement or any other agreement, document
or transaction contemplated hereby.
8.06. Restructuring Expenses. In the event the Bank and the
Borrower negotiate for, or enter into, any restructuring,
modification or refinancing of the Indebtedness under this Agreement
for the purposes of remedying an Event of Default, The Bank, may
require the Borrower to reimburse all of the Bank's costs and
expenses incurred in connection therewith, including, but not limited
to reasonable attorneys' fees and the costs of any audit or
appraisals required by the Bank to be performed in connection with
such restructuring, modification or refinancing.
8.07. Attorneys' Fees. In the event of any suit, mediation,
arbitration or other action in relation to this Agreement or any
document, instrument or agreement executed with respect to,
evidencing or securing the indebtedness hereunder, the prevailing
party, in addition to all other sums to which it may be entitled,
shall be entitled to reasonable attorneys' fees.
8.08. Notices. All notices, payments, requests, information and
demands which either party hereto may desire, or may be required to
give or make to the other party shall be given or made to such party
by hand delivery or through deposit in the United States mail,
postage prepaid, or by Western Union telegram, addressed to the
address set forth below such party's signature to this Agreement or
to such other address as may be specified from time to time in
writing by either party to the other.
8.09. Waiver. Neither the failure nor delay by the Bank in
exercising any right hereunder or under any document, instrument or
agreement mentioned herein shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder or under
any document, instrument or agreement mentioned herein preclude other
or further exercise thereof or the exercise of any other right; nor
shall any waiver of any right or default hereunder or under any other
document, instrument or agreement mentioned herein constitute a
waiver of any other right or default or constitute a waiver of any
other default of the same or any other term or provision.
8.10. Conflicting Provisions. To the extent that any of the terms
or provisions contained in this Agreement are inconsistent with those
contained in any other document, instrument or agreement executed
pursuant hereto, the terms and provisions contained herein shall
control. Otherwise, such provisions shall be considered cumulative.
8.11. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the Borrower and the Bank and their
respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein
without the Bank's prior written consent. The Bank may sell, assign
or grant participations in all or any portion of its rights and
benefits hereunder. The Borrower agrees that, in connection with any
such sale, grant or assignment, the Bank may deliver to the
prospective buyer, participant or assignee financial statements and
other relevant information relating to the Borrower and any
guarantor.
8.12. Jurisdiction. This Agreement, any notes issued hereunder, and
any documents, instruments or agreements mentioned or referred to
herein shall be governed by and construed according to the laws of
the State of California, to the jurisdiction of whose courts the
parties hereby submit.
8.13. Headings. The headings set forth herein are solely for the
purpose of identification and have no legal significance.
8.14. Entire Agreement. This Agreement and all documents,
instruments and agreements mentioned herein constitute the entire and
complete understanding of the parties with respect to the
transactions contemplated hereunder. All previous conversations,
memoranda and writings between the parties or pertaining to the
transactions contemplated hereunder that are not incorporated or
referenced in this Agreement or in such documents, instruments and
agreements are superseded hereby.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first hereinabove written.
BANK:
SANWA BANK CALIFORNIA
By: /s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, Authorized Officer
Address:
San Xxxx Commercial Banking Center
000 Xxxxxxx Xxxx.
Xxx Xxxx, XX 00000
BORROWER:
APPLIED SIGNAL TECHNOLOGY, INC.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx, Chief Executive Officer and President
By: /s/ Xxxxx Offi
Xxxxx Offi, Chief Financial Officer
Address:
000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
