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EXHIBIT 10.26
LINE OF CREDIT AGREEMENT
THIS LINE OF CREDIT AGREEMENT (the "Agreement") is made and entered
into as of this 31 day of January, 1997 by and between SANWA BANK CALIFORNIA
(the "Bank") and XXXXXXX TECHNOLOGIES, INC. (the "Borrower").
SECTION I
AGREEMENT TO LEND
1.01 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.
1.02 LINE OF CREDIT. The Bank agrees to make loans and advances
("Advances") to the Borrower, upon the Borrower's request therefor made prior to
the Expiration Date, up to a total principal amount from time to time
outstanding of not more than $10,000,000 (the "Line of Credit"); provided that
any sums repaid under the Line of Credit may be reborrowed.
A. PURPOSE. Advances made under the Line of Credit shall be
used for general corporate purposes and for working capital.
B. INTEREST. Interest shall accrue from the date of each
Advance under the Line of Credit at one of the following rates, as quoted by the
Bank and as elected by the Borrower below:
1. A variable rate per annum equivalent to an index for a
variable interest rate which is quoted, published or announced from time to time
by the Bank as its reference rate (the "Reference Rate") and as to which loans
may be made by the Bank at, below or above such Reference Rate (the "Variable
Rate"). Interest shall be adjusted concurrently with any change in the Reference
Rate. An Advance based upon the Variable Rate is hereinafter referred to as a
"Variable Rate Advance".
2. A fixed rate quoted by the Bank for 14 to 180 days or
for such other period of time that the Bank may quote and offer (provided that
any such period of time does not extend beyond the Expiration Date) [the
"Eurodollar Interest Period"] for Advances in the minimum amount of $100.000.
Such interest rate shall be a percentage approximately equivalent to 1.75% in
excess of the rate which the Bank's Treasury Desk determines as being the
approximate rate at which the Bank could purchase offshore U.S. dollar deposits
(adjusted for any and all assessments, surcharges and reserve requirements
pertaining to the purchase by the Bank of such U.S. dollar deposits) in an
amount approximately equal to the amount of the relevant Advance and for a
period of time approximately equal to the relevant Eurodollar Interest Period
[the "Eurodollar Rate"]. An Advance based upon the Eurodollar Rate is
hereinafter referred to as a "Eurodollar Advance".
Interest on any Advance shall be computed on the basis of
360 days per year, but charged on the actual number of days elapsed.
Interest on Variable Rate Advances shall be paid in
monthly installments commencing on the last day of the month following the date
of the first such Advance and continuing on the last day of each month
thereafter.
Interest on any Eurodollar Advance with an Interest Period
of 90 days or less on the last day of the relevant Eurodollar Interest Period.
The Borrower further promises and agrees to pay the Bank interest on any
Eurodollar Advance with an Interest Period in excess of 90 days on a quarterly
basis (i.e., on the last day of each 90-day period occurring in such Eurodollar
Interest Period) and on the last day of the relevant Eurodollar Interest Period.
If interest is not paid as and when it is due, it shall be
added to the principal, become and be treated as a part thereof, and shall
thereafter bear like interest.
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C. NOTICE OF BORROWING: Upon telephonic notice which shall be
received by the Bank at or before 2:00 p.m. (California time) on a business day,
the Borrower may borrow under the Line of Credit by requesting:
1. 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 2:00 p.m. on the day such
Advance is requested to be made, such Variable Rate Advance may, at the Bank's
option, be made on the next business day.
2. A Eurodollar Advance. Notice of any Eurodollar Advance
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 such Eurodollar
Advance to be made.
D. NOTICE OF ELECTION TO ADJUST INTEREST RATE: Upon telephonic
notice which shall be received by the Bank at or before 2:00 p.m. (California
time) on a business day, the Borrower may elect:
1. That interest on a Variable Rate Advance shall be
adjusted to accrue at the Eurodollar 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 Eurodollar Rate.
2. That interest on a Eurodollar Advance shall continue to
accrue at a newly quoted Eurodollar 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 Eurodollar Interest Period pertaining to such Eurodollar Advance. If the
Bank shall not have received notice (as prescribed herein) of the Borrower's
election that interest on any Eurodollar Advance shall continue to accrue at the
newly quoted Eurodollar 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.
E. PREPAYMENT: The Borrower may prepay any Advance in whole or
in part, at any time and without penalty, provided, however, that: (i) any
partial prepayment shall first be applied, at the Bank's option, to accrued and
unpaid interest and next to the outstanding principal balance; and (ii) during
any period of time in which interest is accruing on any Advance on the basis of
the Eurodollar Rate, no prepayment shall be made on any Advance bearing interest
at the Eurodollar Rate except on a day which is the last day of the Interest
Period pertaining thereto. If the whole or any part of any Eurodollar 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, expenses
and any loss (including loss of future interest income) actually incurred by the
Bank and any loss (including loss of profit resulting from the re-employment of
funds) deemed sustained by the Bank as a consequence of such prepayment.
The Bank shall be entitled to fund all or any portion of its Advances
in any manner it may determine in its sole discretion, but all calculations and
transactions hereunder shall be conducted as though the Bank actually funded all
Advances through the purchase of dollar deposits in the Eurodollar Interbank
Market in the amount of the relevant Advance and in maturities corresponding to
the then applicable Interest Period.
F. INDEMNIFICATION FOR EURODOLLAR RATE COSTS: During any
period of time in which interest on any Advance is accruing on the basis of the
Eurodollar 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 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 funds used by the Bank in quoting and determining the
Eurodollar Rate.
G. CONVERSION FROM EURODOLLAR 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 Eurodollar Rate (i) is infeasible because the Bank is unable to
determine the Eurodollar Rate due to the unavailability of U.S. dollar deposits,
contracts of certificates of deposit in an amount approximately equal to the
amount of the relevant Advance and for a period of time approximately equal to
relevant Interest Period or (ii) 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 the Advance bearing interest at the
Eurodollar Rate shall be deemed to be a Variable Rate Advance and interest shall
thereupon immediately accrue at the Variable Rate.
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H. PRINCIPAL. Unless sooner due in accordance with the terms
of this Agreement, on the Expiration Date, the Borrower hereby promises and
agrees to pay to the Bank in full the aggregate unpaid principal amount of all
Advances then outstanding, together with all accrued and unpaid interest
thereon.
I. EXPIRATION OF LINE OF CREDIT. 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 January 31,
1999 (the "Expiration Date").
J. COMMITMENT FEE. Borrower agrees to pay to Bank a
commitment fee of.125% per annum on the unused portion of the Line of Credit,
payable quarterly in arrears on the last day of each January, April, July and
October and computed on a year of 360 days for actual days elapsed.
K. LINE ACCOUNT:
1. 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
(the "Line Account"). The Bank shall provide the Borrower with a monthly
statement of the Borrower's Line Account upon the Borrower's request therefor
from time to time, which statement shall be considered to be correct and
conclusively binding on the Borrower unless the Borrower notifies the Bank to
the contrary within 30 days after the Borrower's receipt of any such statement
which it deems to be incorrect.
2. The Borrower hereby authorizes the Bank, if and to the
extent payment owed to the Bank under this Agreement is not made when due, to
charge, from time to time, against any or all of the Borrower's deposit accounts
with the Bank any amount so due.
3. If any payment required to be made by the Borrower
hereunder becomes due and payable on a day other than a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the then applicable rate during such extension. All
payments required to be made hereunder shall be made to the office of the Bank
designated for the receipt of notices herein or such other office as Bank shall
from time to time designate.
L. LATE PAYMENT: In addition to any other rights the Bank may
have hereunder, if any payment of principal (other than a principal payment due
pursuant to Section 1.02H.) or interest, or any portion thereof, under this
Agreement is not paid when due, a late payment charge equal to five percent (5%)
of such past due payment may be assessed and shall be immediately payable.
M. DISBURSEMENT OF PROCEEDS FROM ADVANCES. Any Advance made
hereunder shall be conclusively presumed to have been made to and for the
Borrower's benefit when the proceeds of such Advance are disbursed in accordance
with the Borrower's instructions or deposited into a checking account of the
Borrower maintained at the Bank.
1.03 LETTER OF CREDIT SUB-FACILITY: Subject to the terms of the
Agreement and those contained herein, the Bank agrees to issue commercial and
standby letters of credit (each a "Letter of Credit") on behalf of the Borrower
for general corporate purposes. At no time, however, shall the total face amount
of all Letters of Credit outstanding, less any partial draws paid by the Bank,
exceed the sum of $10,000,000 and, together with the total principal amount of
all Advances and the aggregate settlement price of all Foreign Exchange
Contracts outstanding, exceed the Line of Credit.
A. Upon the Bank's request, the Borrower shall promptly pay to
the Bank issuance fees of 1.50% per annum for standby letters of credit
and standard fees as quoted by the Bank in its sole discretion from
time to time for commercial letters of credit 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. The commitment by the Bank to issue Letters of Credit
shall, unless earlier terminated in accordance with the terms of the
Agreement, automatically terminate on the Expiration Date and no Letter
of Credit shall expire on a date which is 365 days after the Expiration
Date.
C. Each Letter of Credit shall be in form and substance
satisfactory to the Bank 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
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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. 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 Bank a duly executed form of the Bank's standard
form of application for issuance of a Letter of Credit with proper
insertions.
E. 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
Letter of Credit.
In the event that Borrower fails to pay any drawing under any
Letter of Credit or the balances in the depository account or accounts
maintained by the Borrower with Bank are insufficient to pay such drawing,
without limiting the rights of Bank hereunder or waiving any Event of Default
caused thereby, Bank may, and Borrower hereby authorizes Bank to create an
Advance bearing interest at the rate provided in Section 1.02 hereof to pay such
drawing.
1.04 FOREIGN EXCHANGE SUB-FACILITY. Borrower may from time to time
request Bank to purchase or sell foreign currency in a specified amount, at a
fixed price, and for delivery at a future date no greater than 365 days from the
date of purchase (each a "Foreign Exchange Contract"). At no time, however,
shall 15% of the aggregate settlement price of all Foreign Exchange Contracts
outstanding exceed $200,000 as determined by Bank at the time of entering into
each Foreign Exchange Contract and, together with the total principal amount of
all Advances and the total face amount of all Letters of Credit outstanding,
less any partial draws paid by the Bank, exceed the Line of Credit.
A. REQUESTS FOR FOREIGN EXCHANGE CONTRACTS. Each request for a
Foreign Exchange Contract shall be made by telephone or rapifax, confirmed in
writing (each a "Request"). Each Request shall be delivered or communicated to
the Bank no later than 3:00 p.m. (California time) on the day (which shall be a
Business Day) on which the Foreign Exchange Contract is requested. By making any
such Request, Borrower agrees that all matters relating to each such Foreign
Exchange Contract shall be governed by this Agreement and Borrower restates all
warranties and representations made by Borrower herein as if made on the date
the Foreign Exchange Contract is entered into.
B. EXPIRATION DATE. The commitment by the Bank to enter into
Foreign Exchange Contracts shall, unless earlier terminated in accordance with
this Agreement, automatically terminate on the Expiration Date and no Foreign
Exchange Contract shall expire on a date which is after the Expiration Date.
C. AVAILABILITY. Bank may refuse to enter into a Foreign
Exchange Contract with the Borrower where the Bank, in its sole discretion,
determines that such foreign currency is unavailable, or where Bank would be
prohibited by any applicable law, regulation or order from purchasing such
foreign currency.
D. PURPOSE. The Foreign Exchange Contract shall be used to
hedge foreign exchange exposure and/or risk.
E. PAYMENT. Payment is due on the settlement date of any
Foreign Exchange Contract (the "Payment Date"). Bank is hereby authorized by
Borrower to charge the full settlement price of any Foreign Exchange Contract
against the depository account or accounts maintained by the Borrower with Bank
on the Payment Date.
F. ASSESSMENTS. 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 assessment, reserve, deposit, capital maintenance
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 Foreign Exchange Contract.
1.05 EXISTING TERM LOANS. The Borrower is presently indebted to the
Bank under a certain promissory note dated May 28, 1992 in the original
principal sum of $2,000,000.00 (the "Existing Term Notes"). It is hereby
understood and agreed that the Existing Term Notes shall be and are subject to
the terms and conditions of this Agreement.
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SECTION II
CONDITIONS PRECEDENT
2.01 CONDITIONS PRECEDENT TO FIRST ADVANCE. Prior to the first Advance
or disbursement of the Term Loan hereunder, the Borrower shall deliver or cause
to be delivered to the Bank, 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 DOCUMENTS. All other documents, instruments and
agreements required or necessary to consummate the transactions contemplated
under this Agreement (collectively the "Loan Documents"), all fully executed.
C. GUARANTIES. Continuing guaranty(ies) in favor of the Bank
executed by I-Bus, Inc., Xxxxxxx Federal Division, Inc., Xxxxxxx Information
Systems, Inc., Xxxxxxx Business Systems, Inc., Xxxxxxx Energy Products, Inc.,
and PurePulse Technologies, Inc., together with evidence that the execution,
delivery and performance by a guarantor has been duly authorized.
D. MISCELLANEOUS DOCUMENTS. Such other documents and opinions
as the Bank may require with respect to the transactions described in this
Agreement.
2.02 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of the Bank
to make each Advance (including the first Advance) is subject to the further
conditions precedent that, as of the date of each Advance and after the making
of such Advance:
A. REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Section IV hereof 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 as defined in Section VI hereof.
For the purposes hereof, the Borrower's acceptance of the proceeds of
any Advance shall be deemed to constitute the Borrower's representation and
warranty that the statements set forth in sections 3.02 A. and 3.02 B. above are
true and correct.
SECTION III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby makes the following representations and warranties
to the Bank, which representations and warranties are continuing:
3.01 STATUS. The Borrower is a corporation duly organized and validly
existing under the laws of the State of Delaware 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.
3.02 AUTHORITY. The execution, delivery and performance by the Borrower
of this Agreement and the Loan Documents 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) 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 of affected;
(iii) require any consent or approval of its stockholders or violate any
provision of its articles of incorporation or by-laws.
3.03 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.
3.04 FICTITIOUS TRADE STYLES. There are no fictitious trade styles used
by the Borrower in connection with its business operations. The Borrower shall
notify the Bank not less than 30 days prior to effecting any change in the
matters described herein or prior to using any other fictitious trade style at
any future date, indicating the trade style and state(s) of its use.
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3.05 FINANCIAL STATEMENTS. All financial statements, information and
other data which may have been or which may hereafter be submitted by the
Borrower to the Bank are true, accurate and correct and have been or will be
prepared in accordance with generally accepted accounting principles
consistently applied and accurately represent the Borrower's financial condition
or, 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.
3.06 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.
3.07 TITLE TO ASSETS; PERMITTED LIENS. 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 other than:
(i) liens for taxes, assessments or similar charges either not yet due or being
duly contested in good faith; (ii) liens of mechanics, materialmen, warehousemen
or other like liens arising in the ordinary course of business and securing
obligations which are not yet delinquent; (iii) liens and security interests
which, as of the date of this Agreement, have been disclosed to and approved by
the Bank in writing; (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 hereunder; and (v) 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
(collectively "Permitted Liens").
3.08 ERISA. If the Borrower has a pension, profit sharing or retirement
plan subject to the Employee Retirement Income Security Act of 1974, as amended
from time to time, including any rules and regulations promulgated thereunder
("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.
3.09 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.
3.10 ENVIRONMENTAL COMPLIANCE. The Borrower has implemented and com-
plied in all material respects with all applicable federal, state and local
laws, ordinances, statutes and regulations with respect to hazardous or toxic
wastes, substances or related materials, industrial hygiene or environmental
conditions. There are no suits, proceedings, claims or disputes pending or, to
the knowledge of the Borrower, threatened against or affecting the Borrower or
its property claiming violations of any federal, state or local law, ordinance,
statute or regulation relating to hazardous or toxic wastes, substances or
related materials.
SECTION IV
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:
4.01 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.
4.02 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.
4.03 PAYMENT OF OBLIGATIONS AND TAXES. Make timely payment of all
assessments and taxes and all of its liabilities and obligations unless the same
are being contested in good faith.
4.04 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
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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.
4.05 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 120 days after the end of
each of the Borrower's fiscal years, a copy of the annual audited financial
report and Securities Exchange Commission Form 10-K of the Borrower for such
year, which report shall be prepared by a firm of certified public accountants
acceptable to Bank and not later than 60 days after the end of each of the
Borrower's fiscal years, a copy of the Borrower's financial projections for the
succeeding year.
B. INTERIM STATEMENTS. Not later than 45 days after the end of
each fiscal quarter, the Borrower's financial statement and Securities Exchange
Commission Form 10-Q as of the end of such quarter.
C. SEMI-ANNUAL REPORTS. Not later than 60 days after the end
of each January and July of each year, a copy of the Borrower's status report on
its fixed price contracts in excess of $500,000.00 and on its existing and new
reserves established by Borrower in connection with Borrower's business
operations and/or financial performance, such listing and summary to contain
such additional information as may be required by Bank from time to time.
D. COMPLIANCE CERTIFICATE. Concurrently with the delivery of
the financial reports required hereunder, a compliance certificate stating that
the Borrower is in compliance with all covenants contained herein and that no
Event of Default or potential Event of Default has occurred or is continuing,
and certified to by the chief financial officer of the Borrower.
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, including but not limited to all public documents and
notices filed with any federal or state agency.
4.06 REDEMPTION OR REPURCHASE OF STOCK. Not redeem or repurchase any
class of the Borrower's stock now or hereafter outstanding.
4.07 PAYMENT OF DIVIDENDS: Not declare or pay any dividends on any
class of stock now or hereafter outstanding except dividends payable solely in
the Borrower's capital stock.
4.08 ADDITIONAL INDEBTEDNESS. Without prior Bank approval, not, after
the date hereof, create, incur or assume, directly or indirectly, any liability
or Indebtedness other than (i) indebtedness owed or to be owed to the Bank or
(ii) indebtedness to trade creditors incurred in the ordinary course of the
Borrower's business or (iii) indebtedness incurred in the ordinary course of
business as purchase money financing for the purchase of equipment or
subordinated debt of up to $2,000,000 in the aggregate.
4.09 LOANS. Not make any loans or advances or extend credit to any
third person, including, but not limited to, directors, officers, shareholders,
partners, employees, affiliated entities or subsidiaries of the Borrower other
than the guarantors hereunder, except for credit extended in the ordinary course
of the Borrower's business as presently conducted.
4.10 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 and as otherwise provided in this Agreement.
4.11 TRANSFER ASSETS. Not sell, contract for sale, transfer, convey,
assign, lease or sublet any of its assets except for the sale of the Borrower's
real property and except in the ordinary course of business as presently
conducted by the Borrower, and then, only for full, fair and reasonable
consideration.
4.12 CHANGE IN THE NATURE OF BUSINESS. Not make any material change in
its financial structure or in the nature of its business as existing or
conducted as of the date of this Agreement.
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4.13 FINANCIAL CONDITION. Maintain at all times:
A. NET WORTH. A minimum effective tangible net worth of not
less than $23,000,000.00.
B. DEBT TO NET WORTH RATIO. A debt to effective tangible net
worth ratio of not more than 1.5 to 1.
C. PROFITABILITY. A minimum net profit after tax of at least
$1.00 at the end of each fiscal quarter.
D. QUICK RATIO. A ratio of the sum of cash, cash equivalents
and accounts receivable to outstanding Advances under the Line of Credit of not
less than 1.30 to 1.
For purposes of the foregoing, the term "effective tangible net worth"
shall mean the Borrower's stated net worth less all its intangible assets (i.e.,
goodwill, trademarks, patents, copyrights, organization expense and similar
intangible items) but including leaseholds and leasehold improvements and plus
indebtedness subordinated (by its terms or by written agreement) to indebtedness
owed by the Borrower to the Bank and plus non-majority-owned equity investments
and the term "debt" shall mean all of the Borrower's direct or contingent
liabilities excluding indebtedness subordinated (by its terms or by written
agreement) to indebtedness owed by the Borrower to the Bank.
4.14 NOTICES. Give prompt written notice to the Bank 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.
4.15 CAPITAL EXPENSE. Without prior Bank approval, not make any fixed
capital expenditure or any commitment therefor, including, but not limited to,
incurring liability for leases which would be, in accordance with generally
accepted accounting principles, reported as capital leases, or purchase any real
or personal property in an aggregate amount exceeding $5,000,000 in any one
fiscal year.
4.16 ENVIRONMENTAL COMPLIANCE. The Borrower shall:
A. Implement and comply in all material respects with all
applicable federal, state and local laws, ordinances, statutes and regulations
with respect to hazardous or toxic wastes, substances or related materials,
industrial hygiene or to environmental conditions.
B. Give prompt written notice of any discovery of or suit,
proceeding, claim, dispute, threat, inquiry or filing respecting hazardous or
toxic wastes, substances or related materials.
C. At all times indemnify and hold harmless Bank from and
against any and all liability arising out of the use, generation, manufacture,
storage, handling, treatment, disposal or presence of hazardous or toxic wastes,
substances or related materials.
SECTION V
EVENTS OF DEFAULT
Any one or more of the following described events shall constitute an
event of default (an "Event of Default") under this Agreement:
5.01 NON-PAYMENT. The Borrower shall fail to pay any payment of
principal or interest or any other sum referred to in this Agreement within 5
days of when due.
5.02 PERFORMANCE UNDER THIS AGREEMENT: 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 relating to this
Agreement and any such failure shall continue unremedied for more than 30 days
after the occurrence thereof.
5.03 OTHER AGREEMENTS: If there is a default under any agreement to
which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness.
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5.04 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.
5.05 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.
5.06 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.
5.07 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.
5.08 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.
5.09 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 VI
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:
6.01 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.
6.02 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.
6.03 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.
6.04 LETTERS OF CREDIT. Require the Borrower to pay immediately to the
Bank, for application against 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.
6.05 FOREIGN EXCHANGE CONTRACTS: Require the Borrower to pay
immediately to the Bank, for application against the future settlement price
under any outstanding Foreign Exchange Contracts, the outstanding face amount of
any such Foreign Exchange Contracts which have not matured or settled and
Borrower hereby grants to Bank a security interest in and to such funds. Any
portion of the amount so paid to the Bank which is not subsequently applied to
satisfy repayment on any such
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matured Foreign Exchange Contracts or any other obligations of the Borrower to
the Bank shall be repaid to the Borrower without interest.
6.06 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 VII
MISCELLANEOUS PROVISIONS
7.01 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 the Line of Credit.
7.02 DEFAULT INTEREST RATE: If an Event of Default, or an event which,
with notice or passage of time could become an Event of Default, has occurred
or is continuing, the Borrower shall 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 then in effect under this Agreement.
7.03 DISPUTE RESOLUTION. 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: (1) this Agreement, or any
related agreements, documents, or instruments, (2) 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, (3) any
incidents, omissions, acts, practices, or occurrences causing injury to either
party whereby the other party or its agents, employees or representatives may be
liable, in whole or in part, or (4) any aspect of the past or present
relationships of the parties, shall be resolved through a two-step dispute
resolution process administered by Judicial Arbitration & Mediation Services,
Inc. ("J-A-M-S") as follows:
a) Step I - Mediation: At the request of any party to the
dispute, claim or controversy of the matter shall be referred to the
nearest office of J-A-M-S for mediation, that is, an informal,
non-binding conference or conferences between the parties in which a
retired judge or justice for the J-A-M-S panel will seek to guide the
parties to a resolution of the case.
b) Step II - Unsecured Contracts - Arbitration: Should any
dispute, claim or controversy remain unresolved at the conclusion of
the Step I Mediation Phase then 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 San Diego County and shall be
administered by and in accordance with the then existing Rules of
Practice and Procedure of Judicial Arbitration & Mediation Services,
Inc., 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 (b) shall apply only if, at the time of the
submission of the matter to J-A-M-S, the dispute(s) or issue(s) do(es)
not arise out of a transaction(s) which is/are 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 his/her 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, out shall not
otherwise serve to xxxxx, stay or suspend the arbitration proceedings.
c) Step II - Contracts Secured By Real Estate - Trial by Court
Reference [Section 638 (1)] Code of Civil Procedure): If the dispute,
claim or controversy is not one required or agreed to be submitted to
arbitration as provided by subparagraph (b) 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 J-A-M-S
appointed pursuant to the provisions of California Code of Civil
Procedure Section 638(l) or any
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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
J-A-M-S 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 the cause(s) of action which is(are) the subject of the
reference, but shall not otherwise serve to xxxxx, stay or suspend the
reference proceeding.
d) Provisional Remedies, Self Help and Foreclosure: No provision of, or
the exercise of any right(s) under subparagraph (b), nor any other
provision of this Dispute Resolution Provision, shall limit the right
of any party to exercise self help remedies such as set off, to
foreclose against any real or personal property collateral, or obtain
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 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 excercise of self help remedies shall not
constitute a waiver of the right of any party, including the plaintiff,
to submit the controversy or claim to arbitration.
7.04 WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
BORROWER AND THE BANK EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
7.05 ACCOUNTING AND OTHER TERMS. All references to financial
statements, assets, liabilities and similar accounting terms not specifically
defined in this Agreement shall mean such financial statements prepared and such
terms determined in accordance with generally accepted accounting principles
consistently applied. Except where otherwise specified in this Agreement, all
financial data submitted or to be submitted to the Bank pursuant to this
Agreement shall be prepared in accordance with generally accepted accounting
principles consistently applied. Terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the California Uniform
Commercial Code.
7.06 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.
7.07 ATTORNEYS' FEES. Borrower shall pay to the Bank all costs and
expenses, including but not limited to reasonable attorneys fees, incurred by
Bank in connection with the administration, enforcement, including any
bankruptcy, appeal or the enforcement of any judgment or any refinancing or
restructuring of this Agreement or any document, instrument or agreement
executed with respect to, evidencing or securing the indebtedness hereunder.
7.08 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.
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7.09 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.
7.10 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.
7.11 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.
7.12 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.
7.13 HEADINGS. The headings set forth herein are solely for the purpose
of identification and have no legal significance.
7.14 ENTIRE AGREEMENT. This Agreement and the Loan Documents shall
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 incorporate or referenced in this Agreement or the Loan
Documents are superseded hereby.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first hereinabove written.
BANK: BORROWER:
SANWA BANK CALIFORNIA XXXXXXX TECHNOLOGIES, INC.
BY:/s/ Xxxxxx X. Xxxx By:/s/ Xxx Xxxxxxxxx
------------------------- ---------------------------------
Xxxxxx X. Xxxx, AVP Xxx Xxxxxxxxx/Pres.& C.E.O.
(Name/Title) (Name/Title)
Address: 0000 Xxxxxx Xxxxxx By:/s/ Xxxx Xxxxxxxx
Xxx Xxxxx, XX 00000 ---------------------------------
Xxxx Xxxxxxxx/V.P. & C.F.O.
(Name/Title)
Address: 0000 XXXXXX XXXXXX
XXX XXXXX, XXXXX. 00000
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13
AMENDMENT TO LINE OF CREDIT AGREEMENT
This 5th Amendment to Line of Credit Agreement (the "Amendment") is
made and entered into this 31 day of January, 1997, by and between SANWA
BANK CALIFORNIA (the "Bank") and XXXXXXX TECHNOLOGIES, INC. (the "Borrower")
with respect to the following:
This Amendment shall be deemed to be a part of and subject to that
certain Line of Credit Agreement dated as of February 4, 1994, as it may be
amended from time to time, and any and all addenda and riders thereto
(collectively the "Agreement"). Unless otherwise defined herein, all terms used
in this Amendment shall have the same meanings as in the Agreement. To the
extent that any of the terms or provisions of this Amendment conflict with those
contained in the Agreement, the terms and provisions contained herein shall
control.
WHEREAS, the Borrower and the Bank mutually desire to extend and/or
modify the Agreement.
NOW THEREFORE, for value received and hereby acknowledged, the Borrower
and the Bank agree as follows:
1. COMPLIANCE CERTIFICATE. A new Section 4.05 E. is added to
the Agreement as follows:
"D. COMPLIANCE CERTIFICATE. Concurrently with the
delivery of the financial reports required hereunder,
a compliance certificate stating that the Borrower is
in compliance with all covenants contained herein and
that no Event of Default or potential Event of
Default has occurred or is continuing, and certified
to by the chief financial officer of the Borrower".
2. CHANGE IN ADDITIONAL INDEBTEDNESS. Section 4.07 of the
Agreement is deleted in its entirety and the following is substituted in lieu
thereof:
"4.07 ADDITIONAL INDEBTEDNESS. Without prior Bank
approval, not, after the date hereof, create, incur
or assume, directly or indirectly, any liability or
Indebtedness other than (i) indebtedness owed or to
be owed to the Bank or (ii) indebtedness to trade
creditors incurred in the ordinary course of the
Borrower's business or (iii) indebtedness incurred in
the ordinary course of business as purchase money
financing for the purchase of equipment or
subordinated debt of up to $2,000,000 in the
aggregate".
3. MODIFICATION OF LOANS. Section 4.08 of the Agreement is
deleted in its entirety and the following is substituted in lieu thereof:
"4.08 LOANS. Not make any loans or advances or extend
credit to any third person, including, but not
limited to, directors, officers, shareholders,
partners, employees, affiliated entities or
subsidiaries of the Borrower other than the
guarantors hereunder, except for credit extended in
the ordinary course of the Borrower's business as
presently conducted".
4. CHANGE IN ASSET SALES. Section 4.10 of the Agreement is
deleted in its entirety and the following is substituted in lieu thereof:
"4.10 TRANSFER ASSETS. Not sell, contract for sale,
transfer, convey, assign, lease or sublet any of its
assets except for the sale of the Borrower's real
property and except in the ordinary course of
business as presently conducted by the Borrower, and
then, only for full, fair and reasonable
consideration".
5. CHANGE IN FINANCIAL CONDITION. Section 4.12 of the
Agreement is deleted in its entirety and the following is substituted in lieu
thereof:
"4.13 FINANCIAL CONDITION. Maintain at all times:
A. NET WORTH. A minimum effective tangible
net worth of not less than $23,000,000.00.
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14
B. DEBT TO NET WORTH RATIO. A debt to
effective tangible net worth ratio of not
more than 1.5 to 1.
C. PROFITABILITY. A minimum net profit after
tax of at least $1.00 at the end of each
fiscal quarter.
D. QUICK RATIO. A ratio of the sum of cash,
cash equivalents and accounts receivable to
outstanding Advances under the Line of
Credit of not less than 1.30 to 1".
6. REMOVAL OF CONSECUTIVE LOSS AND ADDITION OF CAPITAL
EXPENDITURES. Section 4.14 of the Agreement is deleted in its entirety and a new
Section 4.14 is added as follows:
"4.14 CAPITAL EXPENSE. Without prior Bank approval,
not make any fixed capital expenditure or any
commitment therefor, including, but not limited to,
incurring liability for leases which would be, in
accordance with generally accepted accounting
principles, reported as capital leases, or purchase
any real or personal property in an aggregate amount
exceeding $5,000,000 in any one fiscal year".
7. RESTRICTION ON DIVIDENDS. A new Section 4.16 is added as
follows:
"4.16 PAYMENT OF DIVIDENDS: Not declare or pay any
dividends on any class of stock now or hereafter
outstanding except dividends payable solely in the
Borrower's capital stock".
8. CONFIRMATION OF OTHER TERMS AND CONDITIONS OF THE
AGREEMENT. Except as specifically provided in this Amendment, all other terms,
conditions and covenants of the Agreement unaffected by this Amendment shall
remain unchanged and shall continue in full force and effect and the Borrower
hereby covenants and agrees to perform and observe all terms, covenants and
agreements provided for in the Agreement, as hereby amended.
IN WITNESS WHEREOF, this Amendment has been executed by the parties
hereto as of the date first hereinabove written.
BANK BORROWER:
SANWA BANK CALIFORNIA XXXXXXX TECHNOLOGIES, INC.
By:/s/ Xxxxxx X. Xxxx By:/s/ Xxxx Xxxxxxxx
--------------------------- -------------------------------
Xxxxxx X. Xxxx, AVP Xxxx Xxxxxxxx/V.P. & C.F.O.
(Name/Title) (Name/Title)
By:
-------------------------------
----------------------------------
(Name/Title)
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