BUSINESS LOAN AGREEMENT
EXHIBIT
10.70
| Principal | Loan Date | Maturity | Loan No. | Call/Coll | Account | Officer | Initials | |||||||
| $17,800,000.00 | 06-26-2007 | 01-07-2008 | Line 111928 | 510/0011 | 000000 | XXX | /x/ XX |
References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or
item. |
Any item above containing “***” has been omitted due to text length limitations. |
Borrower:
|
Syntax Groups Corporation | Lender: | Preferred Bank | |||
| Syntax Corporation | City of Industry Office | |||||
| 00000 X. Xxxxxxxx Xxxxxxx | 00000 Xxxxxx Xxxx | |||||
| Xxxx xx Xxxxxxxx, XX 00000 | City of Industry, CA 91748 |
THIS BUSINESS LOAN AGREEMENT dated June 26, 2007, is made and executed between Syntax Groups
Corporation and Syntax Corporation (“Borrower”) and Preferred Bank (“Lender”) on the following
terms and conditions. Borrower has received prior commercial loans from Lender or has applied to
Lender for a commercial loan or loans or other financial accommodations, including those which may
be described on any exhibit or schedule attached to this Agreement (“Loan”). Borrower understands
and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower’s representations, warranties, and agreements as set forth in this Agreement; (B) the
granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s
sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and
conditions of this Agreement.
TERM. This Agreement shall be effective as of June 26, 2007, and shall continue in full force and
effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full,
including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or
until such time as the parties may agree in writing to terminate this Agreement.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each
subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s
satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1)
the Note; (2) Security Agreements granting to Lender security interests in the Collateral;
(3) financing statements and all other documents perfecting Lender’s Security Interests; (4)
evidence of insurance as required below; (5) together with all such Related Documents as
Lender may require for the Loan; all in form and substance satisfactory to Lender and
Lender’s counsel.
Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to
Lender properly certified resolutions, duly authorizing the execution and delivery of this
Agreement, the Note and the Related Documents. In addition, Borrower shall have provided
such other resolutions, authorizations, documents and instruments as Lender or its counsel,
may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and
other expenses which are then due and payable as specified in this Agreement or any Related
Document.
Representations and Warranties. The representations and warranties set forth in this
Agreement, in the Related Documents, and in any document of certificate delivered to Lender
under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement or under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this
Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal,
extension or modification of any Loan, and at all times any indebtedness exists:
Organization. Syntax Groups Corporation is a corporation for profit which is, and at all
times shall be, duly organized, validly existing, and in good standing under and by virtue
of the laws of the State of California. Syntax Groups Corporation is duly authorized to
transact business in all other states in which Syntax Groups Corporation is doing business,
having obtained all necessary filing, governmental licenses
and approvals for each state in
which Syntax Groups Corporation is doing business. Syntax Groups Corporation maintains an
office at 00000 X. Xxxxxxxx Xxxxxxx, Xxxx xx Xxxxxxxx, XX 00000. Unless Syntax Groups
Corporation has designated otherwise in writing, the principal office is the office at which
Syntax Groups Corporation keeps its books and records including its records concerning the
Collateral. Syntax Groups Corporation will notify Lender prior to any change in the
location of Syntax Groups Corporation’s state of organization or any change in Syntax Groups
Corporation’s name.
Syntax Corporation is a corporation for profit which is, and at all times shall be, duly
organized, validly existing, and in good standing under any virtue of the laws of the State
of Nevada. Syntax Corporation is duly authorized to transact business in all other states
in which Syntax Corporation is doing business, having obtained all necessary filings,
governmental licenses and approvals for each state in which Syntax Corporation is doing
business. Syntax Corporation maintains an office at 00000 X. Xxxxxxxx Xxxxxxx, Xxxx xx
Xxxxxxxx, XX 00000. Unless Syntax Corporation has designated otherwise in writing, the
principal office is the office at which Syntax Corporation keeps its books and records
including its records concerning the Collateral. Syntax Corporation will notify Lender
prior to any change in the location of Syntax Corporation’s state of organization or any
change in Syntax Corporation’s name.
Assumed Business Names. Borrower has filed or recorded all documents or filings required by
law relating to all assumed business names used by Borrower. Excluding the name of
Borrower, the following is a complete list of all assumed business names under which
Borrower does business: None.
Authorization. Borrower’s execution, delivery, and performance of this Agreement and all
the Related Documents have been duly authorized by all necessary action by Borrower and do
not conflict with, result in a violation of, or constitute a default under (1) any provision
of (a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement
or other instrument binding upon Borrower or (2) any law, governmental regulation, court
decree, or order applicable to Borrower or to Borrower’s properties.
Properties. Except as contemplated by this Agreement or as previously disclosed in
Borrower’s financial statements or in writing to Lender and as accepted by Lender, and
except for property tax liens for taxes not presently due and payable, Borrower owns and has
good title to all of Borrower’s properties free and clear of all liens and security
interests, and has not executed any security documents or financing statements relating to
such properties. All of Borrower’s properties are titled in Borrower’s legal name, and
Borrower has not used or filed a financing statement under any other name for at least the
last five (5) years.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material
adverse changes in Borrower’s financial condition, and (2) all existing and all threatened
litigation, claims, investigations, administrative proceedings or similar actions affecting
Borrower or any Guarantor which could materially affect the financial condition of Borrower
or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with accounting principles
acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times.
Financial Statements. Furnish Lender with such financial statements and other related
information at such frequencies and in such detail as Lender may reasonably request.
Loan Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless
specifically consented to the contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations, including without limitation all assessments, taxes, governmental charges,
levies and liens, of every kind and nature, imposed upon Borrower or its properties, income,
or profits, prior to the date on which penalties would attach, and all lawful claims that,
if unpaid, might become a lien or charge upon any of Borrower’s properties, income, or
profits.
Performance. Perform and comply, in a timely manner, with all terms, conditions, and
provisions set forth in this Agreement, in the Related Documents, and in all other
instruments and agreements between
Borrower and Lender. Borrower shall notify Lender
immediately in writing of any default in connection with any agreement.
Operations. Maintain executive and management personnel with substantially the same
qualifications and experience as the present executive and management personnel; provide
written notice to Lender of any change in executive and management personnel; conduct its
business affairs in a reasonable and prudent manner.
Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations, now or hereafter in effect, of all governmental authorities applicable to the
conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of
the Collateral, including without limitation, the Americans With Disabilities Act. Borrower
may contest in good faith any such law, ordinance, or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Borrower has notified
Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s
interest in the Collateral are not jeopardized. Lender may require Borrower to post
adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s
interest.
Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and
all Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit
Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s
books, accounts, and records. If Borrower now or at any time hereafter maintains any
records (including without limitation computer generated records and computer software
programs for the generation of such records) in the possession of a third party, Borrower,
upon request of Lender, shall notify such party to permit Lender free access to such records
at all reasonable times and to provide Lender with copies of any records it may request, all
at Borrower’s expense.
RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law, rule, regulation or
guideline; or the interpretation or application of any thereof by any court or administrative or
governmental authority (including any request or policy not having the force of law) shall impose,
modify or make applicable any taxes (except federal, state or local income or franchise taxes
imposed on Lender), reserve requirements, capital adequacy requirements or other obligations which
would (A) increase the cost to Lender for extending or maintaining the credit facilities to which
this Agreement relates, (B) reduce the amounts payable to Lender under this Agreement or the
Related Documents, or (C) reduce the rate of return on Lender’s capital as a consequence of
Lender’s obligations with respect to the credit facilities to which this Agreement relates, then
Borrower agrees to pay Lender such additional amounts as will compensate Lender therefor, within
five (5) days after Lender’s written demand for such payment, which demand shall be accompanied by
an explanation of such imposition or charge and a calculation in reasonable detail of the
additional amounts payable by Borrower, which explanation and calculations shall be conclusive in
the absence of manifest error.
LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or
pay when due any amounts Borrower is required to discharge or pay under this Agreement or any
Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action
that Lender deems appropriate on any Collateral and paying all costs for insuring, maintaining and
preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will
then bear interest at the rate charged under the Note from the date incurred or paid by Lender to
the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and,
at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due during either (1) the
term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated
as a balloon payment which will be due and payable at the Note’s maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in
effect, Borrower shall not, without the prior written consent of Lender:
Continuity of Operations. (1) Engage in any business activities substantially different
than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge,
transfer, acquire or consolidate with any other entity, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business, or (3) pay any dividends
on Borrower’s stock (other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has occurred and is
continuing or would result from the payment of dividends, if Borrower is a “Subchapter S
Corporation” (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay
cash dividends on its stock to its shareholders from time to time in amounts necessary to
enable the shareholders to pay income taxes and make estimated income tax payments to
satisfy their liabilities under federal and state law which arise solely from their status
as Shareholders of a Subchapter S Corporation because of their ownership of shares of
Borrower’s Stock, or purchase or retire any of Borrower’s outstanding shares or alter or
amend Borrower’s capital structure.
Agreements. Borrower will not enter into any agreement containing any provisions which
would be violated or breached by the performance of Borrower’s obligations under this
Agreement or in connection herewith.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether
under this Agreement or under any other agreement, Lender shall have no obligation to make Loan
advances or to disburse Loan proceeds if: (A) Borrower or any guarantor is in default under the
terms of this Agreement or any other agreement that Borrower or any guarantor has with Lender; (B)
Borrower or any guarantor dies, becomes incompetent or becomes insolvent, files a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower’s financial condition, in the financial condition of any guarantor, or in the
value of any collateral securing any Loan; or (D) any guarantor seeks, claims or otherwise attempts
to limit, modify or revoke such guarantor’s guaranty of the Loan or any other loan with Lender; or
(E) Lender in good xxxxx xxxxx itself insecure, even though no Event of Default shall have
occurred.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Borrower fails to make any payment when due under the Loan.
Other Default. Borrower fails to comply with any other term, obligation, covenant or
condition contained in this Agreement or in any of the Related Documents.
False Statements. Any representation or statement made by Borrower to Lender is false in
any material respect.
Insolvency. The dissolution or termination of Borrower’s existence as a going business, the
insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property,
any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, by any creditor
of Borrower or by any governmental agency against any collateral securing the Loan.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any
Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or
revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
In the event of a death, Lender, at its option, may, but shall not be required to, permit
the Guarantor’s estate to assume unconditionally the obligations arising under the guaranty
in a manner satisfactory to Lender, and, in doing so, cure any Event of Default.
Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the
common stock of Borrower.
Insecurity. Lender in good faith believes itself insecure.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise
provided in this Agreement or the Related Documents, all commitments and obligations of Lender
under this Agreement immediately will terminate (including any obligation to make further Loan
Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will become due
and payable, all without notice of any kind to Borrower, except that in the case of an Event of
Default of the type described in the “Insolvency” subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and remedies provided in
the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by
applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of
any other remedy, and an
election to make expenditures or to take action to perform an obligation
of Borrower or of any Grantor shall not affect Lender’s right to declare a default and to exercise
its rights and remedies.
BORROWER’S FINANCIAL REPORTING REQUIREMENTS. Borrower hereby agrees to provide to Lender the
following financial information as requested: 1. Updated financial statements, to be submitted
annually or upon Lender’s request. 2. Copies of Borrower’s Federal Income Tax Returns, including
extensions if applicable, to be submitted within 30 days of filing, or upon Lender’s request.
CASH COLLATERAL. Lender and Borrower hereby agree that there may be simultaneous reductions of the
cash collateral account in an amount equal to the paydown of the loan.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used
in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts
shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. According words and terms not otherwise
defined in this Agreement shall have the meanings assigned to them in accordance with generally
accepted accounting principles as in effect on the date of this Agreement:
Advance. The word “Advance” means a disbursement of Loan funds made, or to be made, to
Borrower or on Borrower’s behalf on a line of credit or multiple advance basis under the
terms and conditions of this Agreement.
Agreement. The word “Agreement” means this Business Loan Agreement, as this Business Loan
Agreement may be amended or modified from time to time, together with all exhibits and
schedules attached to this Business Loan Agreement from time to time.
Borrower. The word “Borrower” means Syntax Groups Corporation and Syntax Corporation and
includes all co-signers and co-makers signing the Note and all their successors and assigns.
Collateral. The word “Collateral” means all property and assets granted as collateral
security for a Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in the form of a
security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop
pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
Event of Default. The words “Event of Default” mean any of the events of default set forth
in this Agreement in the default section of this Agreement.
Grantor. The word “Grantor” means each and all of the persons or entities granting a
Security Interest in any Collateral for the Loan, including without limitation all Borrowers
granting such a Security Interest.
Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any
or all of the Loan.
Guaranty. The word “Guaranty” means the guaranty from Guarantor to Lender, including
without limitation a guaranty of all or part of the Note.
Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or
Related Documents, including all principal and interest together with all other indebtedness
and costs and expenses for which Borrower is responsible under this Agreement or under any
of the Related Documents.
Lender. The word “Lender’ means Preferred Bank, its successors and assigns.
Loan. The word “Loan” means any and all loans and financial accommodations from Lender to
Borrower whether now or hereafter existing, and however evidenced, including without
limitation those loans and financial accommodations described herein or described on any
exhibit or schedule attached to this Agreement from time to time.
Note. The word “Note” means the Note executed by Syntax Groups Corporation and Syntax
Corporation in the principal amount of $17,800,000.00 dated June 26, 2007, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.
Related Documents. The words “Related Documents” mean all promissory notes, credit
agreements, loan agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the
Loan.
Security Agreement. The words “Security Agreement” mean and include without limitation any
agreements, promises, covenants, arrangements, understandings or other agreements, whether
created by law, contract, or otherwise, evidencing, governing, representing, or creating a
Security Interest.
Security Interest. The words “Security Interest” mean, without limitation, any and all
types of collateral security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien interest whatsoever
whether created by law, contract, or otherwise.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER
AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JUNE 26, 2007.
BORROWER:
| SYNTAX GROUPS CORPORATION | ||||
By:
|
/s/ Xxxxxx Man Kit Xxxx | |||
| Xxxxxx Man Kit Chow, Chief Financial Officer of | ||||
| Syntax Groups Corporation | ||||
| SYNTAX CORPORATION | ||||
By:
|
/s/ Xxxxxx Man Kit Xxxx | |||
| Xxxxxx Man Kit Chow, Secretary of Syntax | ||||
| Corporation | ||||
LENDER:
| PREFERRED BANK | ||||
By:
|
/s/ Phanglin Lin | |||
| Phanglin Lin, Senior Vice President | ||||
Syntax Groups Corporation and Syntax Corporation (“Borrower”) jointly and severally promise to pay
to Preferred Bank (“Lender”), or order, in lawful money of the United States of America, the
principal amount of Seventeen Million Eight Hundred Thousand & 00/100 Dollars ($17,800,000.00) or
so much as may be outstanding, together with interest on the unpaid outstanding principal balance
of each advance. Interest shall be calculated from the date of each advance until repayment of
each advance.
/s/ Xxxxxx Man Kit Chow
|
/s/ Xxxxxx Man Kit Chow | |
Syntax Groups Corporation
|
Syntax Corporation |
