REVOLVING CREDIT NOTE
| Due NOVEMBER 30, 2010 | |
| Customer # Loan # |
REVOLVING
CREDIT NOTE
|
$ 2,500,000.00
|
______________ |
NOVEMBER 4,
2009
|
______________ |
FOR VALUE RECEIVED, the undersigned
borrower (the 'Borrower"),
promises to pay to the
order of ___ U.
S . BANK
N.A.
(the
'Bank"), the principal
sum of TWO
MILLION FIVE HUNDRED THOUSAND AND NO/100
|
|
Dollars
($ 2,500,
000.00 ________), payableNOVEMBER
30,
2010 ____(the "Maturity Date").
Interest.
The
unpaid principal balance will bear interest at an annual rate
described in the Interest Rate Rider attached to this Note.
Payment
Schedule.
Interest
is payable beginning NOVEMBER 30, 2009, and on the same date of each consecutive
month thereafter (except that if a given month does not have such a date, the
last day of such month), plus a final interest payment with the final payment of
principal.
Interest
will be computed for the actual number of days principal is unpaid, using a
daily factor obtained by dividing the stated interest
rate by 360.
Notwithstanding
any provision of this Note to the contrary, upon any default or at any time
during the continuation thereof (including failure to pay upon maturity), the
Bank may, at its option and subject to applicable law, increase the interest
rate on this Note to a rate of 5% per annum plus the interest rate otherwise
payable hereunder. Notwithstanding the foregoing and subject to applicable law,
upon the occurrence of a default by the Borrower or any guarantor involving
bankruptcy, insolvency, receivership proceedings or an assignment for the
benefit of creditors, the interest rate on this Note shall automatically
increase to a rate of 5% per annum plus the rate otherwise payable
hereunder.
In no
event will the interest rate hereunder exceed that permitted by applicable law.
If any interest or other charge is finally determined by a court of competent
jurisdiction to exceed the maximum amount permitted by law, the interest or
charge shall be reduced to the maximum permitted by law, and the Bank may credit
any excess amount previously collected against the balance due or refund the
amount to the Borrower.
Subject
to applicable law, if any payment is not made on or before its due date, the
Bank may collect a delinquency charge of 5 .00
% of the unpaid amount. Collection of the late payment fee shall not be
deemed to be a waiver of the Bank's right to declare a default
hereunder.
Without
affecting the liability of any Borrower, endorser, surety or guarantor, the Bank
may, without notice, renew or extend the time for payment, accept partial
payments, release or impair any collateral security for the payment of this
Note, or agree not to sue any party liable on it.
This
Revolving Credit Note constitutes the Note issued under a Revolving Credit
Agreement dated as of the date hereof between the Borrower and the Bank, to
which Agreement reference is hereby made for a statement of the terms and
conditions under which loans evidenced hereby were or may be made and a
description of the terms and conditions upon which the maturity of this Note may
be accelerated, and for a description of
the collateral securing this Note.
This Note
is a "transferable
record" as defined in applicable law relating to electronic transactions.
Therefore, the holder of this Note may, on behalf of Xxxxxxxx, create a
microfilm or optical disk or other electronic image of this Note that is an
authoritative copy as defined in such law. The holder of this Note may store the
authoritative copy of such Note in its electronic form and then destroy the
paper
original as part of the holder's normal business practices. The holder, on its
own behalf, may control and transfer such authoritative copy as permitted by
such law.
All
documents attached hereto, including any appendices, schedules, riders, and
exhibits to this Revolving Credit Note, are hereby expressly incorporated by
reference.
The Borrower hereby acknowledges the receipt of a copy of this Note.
| (Individual Borrower) | ITEX Corporation | |||
| Borrower Name (Organization) | ||||
| Borrower Name | N/A | |||
| /s/ Xxxxxx Xxxxx | ||||
| Name and Title Xxxxxx X. Xxxxx, Chairman of the Board | ||||
| By | ||||
| Borrower Name | N/A | Name and Title | ||
INTEREST
RATE RIDER
This
Rider is made part
of
the ___________________ Revolving
Credit _______ Note (the "Note") in the original amount of $2.5 0 0,00
0.0 0 ___________
by the undersigned borrower (the 'Borrower") in favor of U.S. BANK
N.A. ___(the "Bank") as of the date
identified below. The following interest rate description is hereby added to the
Note:
Interest
on each advance hereunder shall accrue at an annual rate equal to 2.000% plus
the one-month LIBOR rate quoted by Bank from Reuters Screen LIBORO1 Page or any
successor thereto, which shall be that one-month LIBOR rate in effect and reset
each New York Banking Day, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation, such rate
rounded up to the nearest one-sixteenth
percent. The term 'New York Banking Day' means any day (other than a
Saturday or Sunday) on which commercial banks are open for business in New York,
New York. Bank's internal records of applicable interest rates shall be
determinative in the absence of manifest error.
| Dated as of: __ NOVEMBER 4, 2009 | ||||
| (Individual Borrower) | ITEX Corporation Borrower Name (Organization) | |||
| a Nevada Corporation | ||||
| /s/ Xxxxxx Xxxxx | ||||
| Borrower Name | N/A | Name and Title Xxxxxx X. Xxxxx. Chairman of the Board | ||
This
Revolving Credit Agreement (the "Agreement") is made and
entered into by and between the undersigned borrower (the "Borrower") and the
undersigned bank (the "Bank")
as of the date set forth on the last page of this Agreement.
ARTICLE
I. LOANS
1.1 Revolving Credit Loans.
From time to time prior to __ NOVEMER
30,
2010
(the "Maturity
Date") or the earlier
termination hereof, the Borrower may borrow from the Bank for working capital
purposes up to the aggregate principal amount outstanding at any one time of the
lesser of (i)$2,500,000.00 (the
"Loan Amount"), less
letters of credit issued by the Bank, or (ii) if applicable, the Borrowing Base (defined
below). All revolving loans hereunder will be evidenced by a single
promissory note of the Borrower payable to the order of the Bank in the
principal amount of the Loan Amount (the "Note"). Although the Note
will be expressed to be payable in the full Loan Amount, the Borrower will be
obligated to pay only the amounts actually disbursed hereunder, together with
accrued interest on the outstanding balance at the rates and on the dates
specified therein and such other charges provided for herein. In the event that
the principal amount outstanding under the Note exceeds the Borrowing Base at
any time, the Borrower will immediately, without request, prepay an amount
sufficient to eliminate such excess.
1.2 Borrowing Base. The Borrowing
Base, if any, will
be as set forth in an addendum to this Agreement.
1.3 Advances After Maturity or In Excess
of Maximum Loan Amount. The Bank shall have no obligation whatsoever, and
the Bank has no present intention, to make any advance after the Maturity Date
or which would cause the principal amount outstanding under this Agreement to
exceed the maximum loan amount or any other limitations on advances stated in
this Agreement. Notwithstanding the foregoing, the Bank may from time to time,
in its sole and absolute discretion, agree to make an advance after the Maturity
Date or which would cause the principal amount of advances outstanding under
this Agreement to exceed the maximum loan amount or any of the other limitations
on advances. The Borrower is and shall be and remain unconditionally liable to
the Bank for the amount of all advances, including, without limitation, advances
in excess of the maximum loan amount or any other limitation on advances and
advances made after the Maturity Date. Immediately upon the Bank's demand, the
Borrower shall pay to the Bank the amount of any advances made after the
Maturity Date or in excess of the maximum loan amount or any other limitation on
advances contained in this Agreement, together with interest on the principal
amount of such excess advances, for so long as such advances are outstanding, at
the highest interest rate from time to time in effect for such advances. Any
such advances shall not be deemed an extension of this Agreement nor an increase
in the maximum loan amount available for borrowing under this
Agreement.
1.4 Advances and Paying Procedure.
The Bank is authorized and directed to credit any of the Borrower's
accounts with the Bank (or to the account the Borrower designates in writing)
for all loans made hereunder, and the Bank is authorized to debit such account
or any other account of the Borrower with the Bank for the amount of any
principal, interest or expenses due under the Note or other amount due hereunder
on the due date with respect thereto. If, upon any request by the Borrower to
the Bank to issue a wire transfer, there is an inconsistency between the name of
the recipient of the wire and its identification number as specified by the
Borrower, the Bank may, without liability, transmit the payment via wire based
solely upon the identification number.
1.5 Closing Fee. The Borrower will
pay the Bank a one-time closing fee of $ n/a contemporaneously
with execution
of this Agreement. This fee is in addition to all other fees, expenses and other
amounts due hereunder.
1.6 Loan Facility Fee. The
Borrower will pay a loan facility fee equal to:
$ n/a per
annum, payable annually in advance; (or)
n/a % per annum of the
Loan Amount, payable annually in advance; (or)
n/a % per annum of the
difference between the Loan Amount and the actual daily unpaid principal amount
of the Note outstanding from time to time, payable quarterly, in arrears, on the
last business day of each third calendar month, and at maturity;
(or)
n/a To
per annum of the actual daily unpaid principal amount of the Note outstanding
from time to time,
payable quarterly, in arrears, on the last business day of each third calendar
month, and at maturity.
The loan
facility fee is payable
for the entire period that this Agreement is in effect, regardless of whether
any amounts are outstanding hereunder at any given time.
1.7 Expenses and Attorneys' Fees.
Upon demand, the Borrower will immediately reimburse the Bank and any
participant in the Obligations (defined below) ("Participant") for all
attorneys' fees and all other costs, fees and out-of-pocket disbursements
incurred by the Bank or any Participant in connection with the preparation,
execution, delivery, administration, defense and enforcement of this Agreement
or any of the other Loan Documents (defined below), including attorneys' fees
and all other costs and fees (a) incurred before or after commencement of
litigation or at trial, on appeal or in any other proceeding, (b) incurred in
any bankruptcy proceeding and (c) related to any waivers or amendments with
respect thereto (examples of costs and fees include but are not limited to fees
and costs for: filing, perfecting or confirming the priority of the Bank's lien,
title searches or insurance, appraisals, environmental audits and other reviews
related to the Borrower, any collateral or the loans, if requested by the Bank).
The Borrower will also reimburse the Bank and any Participant for all costs of
collection, including all attorneys' fees, before and after judgment, and the
costs of preservation and/or liquidation of any collateral.
1.8 Compensating Balances. The
Borrower will maintain on deposit with the Bank in non-interest bearing accounts
average daily
collected balances, in excess of that required to support account activity and
other credit facilities extended to the Borrower by the Bank, an amount at least
equal to the sum of (i) $___ n/aand
(ii)
n/a % of the Loan
Amount as computed on a
monthly basis. If the Borrower fails to keep and maintain such balances, it will
pay a deficiency fee, payable within five days after receipt of a statement
therefor calculated on the amount by which the Borrower's average daily balances
are less than the requirements set forth above, computed at a rate equal to the
rate set forth in the Note.
1.9 Conditions to Borrowing. The
Bank will not be obligated to make (or continue to make) advances hereunder
unless (i) the Bank has received executed originals of the Note and all other
documents or agreements applicable to the loans described herein, including but
not limited to the documents specified in Article III (collectively with this
Agreement the "Loan
Documents"), in form and content satisfactory to the Bank; (ii) if the
loan is secured, the Bank has received confirmation satisfactory to it that the
Bank has a properly perfected security interest, mortgage or lien, with the
proper priority; (iii) the Bank has received certified copies of the Borrower's
governance documents and certification of entity status satisfactory to the Bank
and all other relevant documents; (iv) the Bank has received a certified copy of
a resolution or authorization in form and content satisfactory to the Bank
authorizing the loan and all acts contemplated by this Agreement and all related
documents, and confirmation of proper authorization of all guaranties and other
acts of third parties contemplated hereunder; (v) if required by the Bank, the
Bank has been provided with an Opinion of the Borrower's counsel in form and
content satisfactory to the Bank confirming the matters outlined in Section 2.2
and such other matters as the Bank requests; (vi) no default exists under this
Agreement or under any other Loan Documents, or under any other agreements by
and between the Borrower and the Bank; and (vii) all proceedings taken in
connection with the transactions contemplated by this Agreement (including any
required environmental assessments), and all instruments, authorizations and
other documents applicable thereto, are satisfactory to the Bank and its
counsel.
ARTICLE
II. WARRANTIES AND COVENANTS
While any
part of the credit granted to the Borrower under this Agreement or the other
Loan Documents is available or any obligations under any of the Loan Documents
are unpaid or outstanding, the Borrower continuously warrants and agrees as
follows:
2.1 Accuracy of Information. All
information, certificates or statements given to the Bank pursuant to this
Agreement and the other Loan Documents will be true and complete when
given.
2.2 Organization and Authority;
Litigation. This Agreement and the other Loan Documents are the legal,
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their terms. The execution, delivery and performance of this
Agreement and all other Loan Documents to which the Borrower is a parry (i) are
within the borrower's power; (ii) have been duly authorized by all appropriate
entity action; (iii) do not require the approval of any governmental agency; and
(iv) will not violate any law, agreement or restriction by which the Borrower is
bound. If the Borrower is not an individual, the Borrower is validly existing
and in good standing under the laws of its state of organization, has all
requisite power and authority and possesses all licenses necessary to conduct
its business and own its properties. There is no litigation or administrative
proceeding threatened or pending against the Borrower which would, if adversely
determined, have a material adverse effect on the Borrower's financial condition
or its property.
2.3 Existence; Business Activities;
Assets; Change of Control. The Borrower will (i) preserve its existence,
rights and franchises; (ii) not make any material change in the nature or manner
of its business activities; (iii) not liquidate, dissolve, acquire another
entity or merge or consolidate with or into another entity or change its form of
organization; (iv) not amend its organizational documents in any manner that may
conflict with any term or condition of the Loan Documents; and (v) not sell,
lease, transfer or otherwise dispose of all or substantially all of its assets.
Other than the transfer to a trust beneficially controlled by the transferor, no
event shall occur which causes or results in a transfer of majority ownership of
the Borrower while any Obligations are outstanding or while the Bank has any
obligation to provide funding to the Borrower.
2.4 Use of Proceeds; Margin Stock;
Speculation. Advances by the Bank hereunder will be used exclusively by
the Borrower for working capital and other regular and valid purposes. The
Borrower will not, without the prior written consent of the Bank, redeem,
purchase, or retire any of the capital stock or declare or pay any dividends, or
make any other payments or distributions of a similar type or nature including
withdrawal distributions. The Borrower will not use any of the loan proceeds to
purchase or carry "margin" stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System). No part of any of the proceeds will be
used for speculative investment purposes, including, without limitation,
speculating or hedging in the commodities and/or futures market.
2.5 Environmental Matters. Except
as disclosed in a written schedule attached to this Agreement (if no schedule is
attached, there are no exceptions), there exists no uncorrected violation by the
Borrower of any federal, state or local laws (including statutes, regulations,
ordinances or other governmental restrictions and requirements) relating to the
discharge of air pollutants, water pollutants or process waste water or
otherwise relating to the environment or Hazardous Substances as hereinafter
defined, whether such laws currently exist or are enacted in the future
(collectively "Environmental
Laws"). The term "Hazardous Substances" will
mean any hazardous or toxic wastes, chemicals or other substances, the
generation, possession or existence of which is prohibited or governed by any
Environmental Laws. The Borrower is not subject to any judgment, decree, order
or citation, or a parry to (or threatened with) any litigation or administrative
proceeding, which asserts that the Borrower (i) has violated any Environmental
Laws; (ii) is required to clean up, remove or take
remedial or other action with respect to any Hazardous Substances (collectively
"Remedial Action"); or
(iii) is required to pay all or a portion of the cost of any Remedial Action, as
a potentially responsible party. Except as disclosed on the Borrower's
environmental questionnaire provided to the Bank, there are not now, nor to the
Borrower's knowledge after reasonable investigation have there ever been, any
Hazardous Substances (or tanks or other facilities for the storage of Hazardous
Substances) stored, deposited, recycled or disposed of on, under or at any real
estate owned or occupied by the Borrower during the periods that the Borrower
owned or occupied such real estate, which if present on the real estate or in
soils or ground water, could require Remedial Action. To the Borrower's
knowledge, there are no proposed or pending changes in Environmental Laws which
would adversely affect the Borrower or its business, and there are no conditions
existing currently or likely to exist while the Loan Documents are in effect
which would subject the Borrower to Remedial Action or other liability. The
Borrower currently complies with and will continue to timely comply with all
applicable Environmental Laws; and will provide the Bank, immediately upon
receipt, copies of any correspondence, notice, complaint, order or other
document from any source asserting or alleging any circumstance or condition
which requires or may require a financial contribution by the Borrower or
Remedial Action or other response by or on the part of the Borrower under
Environmental Laws, or which seeks damages or civil, criminal or punitive
penalties from the Borrower for an alleged violation of Environmental
Laws.
2.6 Compliance with Laws. The
Borrower has complied with all laws applicable to its business and its
properties, and has all permits, licenses and approvals required by such laws,
copies of which have been provided to the Bank.
2.7 Restriction on Indebtedness.
The Borrower will not create, incur, assume or have outstanding any
indebtedness for borrowed money (including capitalized leases) except (i) any
indebtedness owing to the Bank and its affiliates, and (ii) any other
indebtedness outstanding on the date hereof, and shown on the Borrower's
financial statements delivered to the Bank prior to the date hereof, provided
that such her indebtedness will not be increased.
2.8 Restriction on Liens. The
Borrower will not create, incur, assume or permit to exist any mortgage, pledge,
encumbrance or other lien or levy upon or security interest in any of the
Borrower's property now owned or hereafter acquired, except (i) taxes and
assessments which are either not delinquent or which are being contested in good
faith with adequate reserves provided; (ii) easements, restrictions and minor We
irregularities which do not, as a practical matter, have an adverse effect upon
the ownership and use of the affected property; (iii) liens in favor of the Bank
and its affiliates; and (iv) other liens disclosed in writing to the Bank prior
to the date hereof.
2.9 Restriction on Contingent
Liabilities. The Borrower will not guarantee or become a surety or
otherwise contingently liable for any obligations of others, except pursuant to
the deposit and collection of checks and similar matters in the ordinary course
of business.
2.10
Insurance. The Borrower
will maintain insurance to such extent, covering such risks and with such
insurers as is usual and customary for businesses operating similar properties,
and as is satisfactory to the Bank, including insurance for fire and other risks
insured against by extended coverage, public liability insurance and workers'
compensation insurance; and will designate the Bank as loss payee with a
'Lender's Loss Payable' endorsement on any casualty policies and take such other
action as the Bank may reasonably request to ensure that the Bank will receive
(subject to no other interests) the insurance proceeds on the Bank's
collateral.
2.11
Taxes and Other Liabilities.
The Borrower will pay and discharge, when due, all of its taxes,
assessments and other liabilities, except when the payment thereof is being
contested in good faith by appropriate procedures which will avoid foreclosure
of liens securing such items, and with adequate reserves provided
therefor.
2.12
Financial Statements and
Reporting. The financial statements and other information previously
provided to the Bank or provided to the Bank in the future are or will be
complete and accurate and prepared in accordance with generally accepted
accounting principles. There has been no material adverse change in the
Borrower's financial condition since such information was provided to the Bank.
The Borrower will (i) maintain accounting records in accordance with generally
recognized and accepted principles of accounting consistently applied throughout
the accounting periods involved; (ii) provide the Bank with such information
concerning its business affairs and financial condition (including insurance
coverage) as the Bank may request; and (iii) without request, provide the Bank
with such specific financial statements, certifications and/or information as
may be set forth in an addendum to this Agreement.
2.13
Inspection of Properties and
Records; Fiscal Year. The Borrower will permit representatives of the
Bank to visit and inspect any of the properties and examine any of the books and
records of the Borrower at any reasonable time and as often as the Bank may
reasonably desire. The Borrower will not change its fiscal year.
2.14
Financial Status.
Financial Covenants, if any, will be as set forth in an addendum to this
Agreement.
2.15 Paid-In-Full
Period. ______If checked here, all revolving loans under this
Agreement and the Note must be paid in full for a period of at
least
n/a consecutive
days during each fiscal year.
ARTICLE
III. COLLATERAL AND GUARANTIES
3.1 Collateral. This Agreement and
the Note are secured by any and all security interests, pledges, mortgages/deeds
of trust (except any mortgage/deed of trust expressly limited by its terms to a
specific obligation of Borrower to Bank) or liens now or hereafter in existence
granted to the Bank to secure indebtedness of the Borrower to the Bank,
including without limitation as described in the following
documents:
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o Real
Estate Mortgage(s)/Deed(s) of Trust dated
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covering
real estate located at
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x Security
Agreement(s) dated 06 /27 /0
5
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o Possessory Collateral Pledge
Agreement(s) dated
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o Other
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3.2 Guaranties. This Agreement and
the Note are guaranteed by each and every guaranty now or hereafter in existence
guarantying the indebtedness of the Borrower to the Bank (except for any
guaranty expressly limited by its terms to a specific separate obligation of
Borrower to the Bank) including, without limitation, the following:
3.3 Credit Balances; Setoff. As
additional security for the payment of the obligations described in the Loan
Documents and any other obligations of the Borrower to the Bank of any nature
whatsoever (collectively the "Obligations"), the Borrower
hereby grants to the Bank a security interest in, a lien on and an express
contractual right to set off against all depository account balances, cash and
any other property of the Borrower now or hereafter in the possession of the
Bank and the right to refuse to allow withdrawals from any account (collectively
"Setoff"). The Bank may,
at any time upon the occurrence of a default hereunder (notwithstanding any
notice requirements or grace/cure periods under this or other agreements between
the Borrower and the Bank) Setoff against the Obligations whether or not the Obligations (including future
installments) are then due or have been accelerated, all without any advance or
contemporaneous notice or demand of any kind to the Borrower, such notice and
demand being expressly waived.
The
omission of any reference to an agreement in Sections 3.1 and 3.2 above will not
affect the validity or enforceability thereof. The rights and remedies of the
Bank outlined in this Agreement and the documents identified above are intended
to be cumulative.
ARTICLE
IV. DEFAULTS
4.1 Defaults. Notwithstanding any
cure periods described below, the Borrower will immediately notify the Bank in
writing when the Borrower obtains knowledge of the occurrence of any default
specified below. Regardless of whether the Borrower has given the
required notice, the occurrence of one or more of the following will constitute
a default:
| (a) | Nonpayment. The Borrower shall fail to pay (i) any interest due on the Note or any fees, charges, costs or expenses under the Loan Documents by 5 days after the same becomes due; or (ii) any principal amount of the Note when due. | |
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(b)
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Nonperformance. The
Borrower or any guarantor of Borrower's Obligations to the Bank ("Guarantor") shall fail
to perform or observe any agreement, term, provision, condition, or
covenant (other than a default occurring under (a), (c), (d), (e), (f) or
(g) of this Section 4.1) required to be performed or observed by the
Borrower or any Guarantor hereunder or under any other Loan Document or
other agreement with or in favor of the
Bank.
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(c)
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Misrepresentation. Any
financial information, statement, certificate, representation or warranty
given to the Bank by the Borrower or any Guarantor (or any of their
representatives) in connection with entering into this Agreement or the
other Loan Documents and/or any borrowing thereunder, or required to be
furnished under the terms thereof, shall prove untrue or misleading in any
material respect (as determined by the Bank in the exercise of its
judgment) as of the time when
given.
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(d)
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Default on her Obligations.
The Borrower or any Guarantor shall be in default under the terms
of any loan agreement, promissory note, lease, conditional sale contract
or other agreement, document or instrument evidencing, governing or
securing any indebtedness owing by the Borrower or any Guarantor to the
Bank or any indebtedness in excess of $10,000 owing by the Borrower to any
third party, and the period of grace, if any, to cure said default shall
have passed.
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(e)
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Judgments. Any judgment
shall be obtained against the Borrower or any Guarantor which, together
with all other outstanding unsatisfied judgments against the Borrower (or
such Guarantor), shall exceed the sum of
$10,000 and shall remain unvacated, unbonded or unstayed for a period of
30 days following the date of entry thereof.
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(f)
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Inability to Perform;
Bankruptcy/Insolvency. (I) The Borrower or any Guarantor shall die
or cease to exist; or (ii) any Guarantor shall attempt to revoke any
guaranty of the Obligations described herein, or any guaranty becomes
unenforceable in whole or in part for any reason; or (iii) any bankruptcy,
insolvency or receivership proceedings, or an assignment for the benefit
of creditors, shall be commenced under any Federal or state law by or
against the Borrower or any Guarantor; or (iv) the Borrower or any
Guarantor shall become the subject of any out-of-court settlement with its
creditors; or (v) the Borrower or any Guarantor is unable or admits in
writing its inability to pay its debts as they mature; or (vi) if the
Borrower is a limited liability company, any member thereof shall withdraw
or otherwise become disassociated from the
Borrower.
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(g)
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Adverse Change; Insecurity.
(i) There is a material adverse change in the business, properties,
financial condition or affairs of the Borrower or any Guarantor, or in any
collateral securing the Obligations; or (ii) the Bank in good xxxxx xxxxx
itself insecure.
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4.2 Termination of Loans; Additional Bank
Rights. Upon the Maturity Date or the occurrence of any of the events
identified in Section 4.1, the Bank may at any time (notwithstanding any notice
requirements or grace/cure periods under this or other agreements between the
Borrower and the Bank) (i) immediately terminate its obligation, if any, to make
additional loans to the Borrower; (ii) Setoff; and/or (iii) take such other
steps to protect or preserve the Bank's interest in any collateral, including
without limitation, notifying account debtors to make payments directly to the
Bank, advancing funds to protect any collateral and insuring collateral at the
Borrower's expense; all without demand or notice of any kind, all of which are
hereby waived.
4.3 Acceleration of Obligations.
Upon the Maturity Date or the occurrence of any of the events identified
in Sections 4.1(a) through 4.1(e) and 4.1(g), and the passage of any applicable
cure periods, the Bank may at any time thereafter, by written notice to the
Borrower, declare the unpaid principal balance of any Obligations, together with
the interest accrued thereon and other amounts accrued hereunder and under the
other Loan Documents, to be immediately due and payable; and the unpaid balance
will thereupon be due and payable, all without presentation, demand, protest or
further notice of any kind, all of which are hereby waived, and notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents.
Upon the occurrence of any event under Section 4.1(f), the unpaid principal
balance of any Obligations, together with all interest accrued thereon and other
amounts accrued hereunder and under the other Loan Documents, will thereupon be
immediately due and payable, all without presentation, demand, protest or notice
of any kind, all of which are hereby waived, and notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents. Nothing contained in Section 4.1,
Section 4.2 or this section will limit the Bank's right to Setoff as provided in
Section 3.3 or otherwise in this Agreement.
4.4 Other Remedies.
Nothing in this Article IV is intended to restrict the Bank's rights
under any of the Loan Documents or at law, and the Bank may exercise all such
rights and remedies as and when they are available.
ARTICLE
V. OTHER TERMS
5.1 Additional Terms;
Addendum/Supplements. The warranties, covenants, conditions and other
terms described in this Section and/or in the Addendum and/or other attached
document(s) referenced in this Section are incorporated into this
Agreement:
ARTICLE VI.
MISCELLANEOUS
6.1 Delay; Cumulative Remedies. No
delay on the part of the Bank in exercising any right, power or privilege
hereunder or under any of the other Loan Documents will operate as a waiver
thereof, nor will any single or partial exercise of any right, power or
privilege hereunder preclude other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein specified
are cumulative and are not exclusive of any rights or remedies which the Bank
would otherwise have.
6.2 Relationship to her Documents.
The warranties, covenants and other obligations of the Borrower (and the
rights and remedies of the Bank) that are outlined in this Agreement and the
other Loan Documents are intended to supplement each other. In the event of any
inconsistencies in any of the terms in the Loan Documents, all terms will be
cumulative so as to give the Bank the most favorable rights set forth in the
conflicting documents, except that if there is a direct conflict between any
preprinted terms and specifically negotiated terms (whether included in an
addendum or otherwise), the specifically negotiated terms will
control.
6.3 Successors. The rights,
options, powers and remedies granted in this Agreement and the other Loan
Documents shall be binding upon the Borrower and the Bank and their respective
successors and assigns, and shall inure to the benefit of the Borrower and the
Bank and the successors and assigns of the Bank, including without limitation
any purchaser of any or all of the rights and obligations of the Bank under the
Note and the other Loan Documents. The Borrower may not assign its rights or
obligations under this Agreement or any other Loan Documents without the prior
written consent of the Bank.
6.4 Disclosure. The Bank may, in
connection with any sale or potential sale of all or any interest in the Note
and other Loan Documents, disclose any financial information the Bank may have
concerning the Borrower to any purchaser or potential purchaser. From time to
time, the Bank may, in its discretion and without obligation to the Borrower,
any Guarantor or any other third party, disclose information about the Borrower
and this loan to any Guarantor, surety or other accommodation party. This
provision does not obligate the Bank to supply any information or release the
Borrower from its obligation to provide such information, and the Borrower
agrees to keep all Guarantors, sureties or other accommodation parties advised
of its financial condition and other matters which may be relevant to their
obligations to the Bank.
6.5 Indemnification. Except for
harm arising from the Bank's willful misconduct, the Borrower hereby indemnifies
and agrees to defend and hold the Bank harmless from any and all losses, costs,
damages, claims and expenses of any kind suffered by or asserted against the
Bank relating to claims by third parties arising out of the financing provided
under the Loan Documents or related to any collateral (including, without
limitation, the Borrower's failure to perform its obligations relating to
Environmental Matters described in Section 2.5 above). This indemnification and
hold harmless provision will survive the termination of the Loan Documents and
the satisfaction of the Obligations due the Bank.
6.6 Notice of Claims Against Bank;
Limitation of Certain Damages. In order to allow the Bank to mitigate any
damages to the Borrower from the Bank's alleged breach of its
duties under the Loan Documents or any other duty, if any, to the
Borrower, the Borrower agrees to give the Bank immediate written notice of any
claim or defense it has against the Bank, whether in tort or contract, relating
to any action or inaction by the Bank under the Loan Documents, or the
transactions related thereto, or of any defense to payment of the Obligations
for any reason. The requirement of providing timely notice to the Bank
represents the parties' agreed-to standard of performance regarding claims
against the Bank. Notwithstanding any claim that the Borrower may have against
the Bank, and regardless of any notice the Borrower may have given the Bank,
the Bank will not be liable to
the Borrower for consequential and/or special damages arising therefrom,
except those damages arising from the Bank's willful
misconduct.
6.7 Notices. Notice of any record
shall be deemed delivered when the record has been (a) deposited in the United
States Mail, postage pre-paid, (b) received by overnight delivery service, (c)
received by telex, (d) received by telecopy, (e) received through the
intern, or (l when personally delivered.
6.8 Payments. Payments due
under the Note and other Loan Documents will be made in lawful money of the
United States. All payments may be applied by the Bank to principal, interest
and other amounts due under the Loan Documents in any order which the Bank
elects.
6.9 Applicable Law and Jurisdiction;
Interpretation; Joint Liability; Severability. This Agreement and all
other Loan Documents will be governed by and interpreted in accordance with the
internal laws of the State of Oregon except to the
extent superseded by Federal law. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR FEDERAL
JURISDICTION OF THE BANK'S BRANCH WHERE THE LOAN WAS ORIGINATED, AND WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS,
WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS
AGREEMENT, THE NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY
TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF
THE FOREGOING. Nothing herein will
affect the Bank's rights to serve process in any manner permitted by law, or
limit the Bank's right to bring proceedings against the Borrower in the
competent courts of any other jurisdiction or jurisdictions. This Agreement, the
other Loan Documents and any amendments hereto (regardless of when executed)
will be deemed effective and accepted only upon the Bank's receipt of the
executed originals thereof. If there is more than one Borrower, the liability of
the Borrowers will be joint and several, and the reference to 'Borrower will be
deemed to refer to all Borrowers. Invalidity of any provision of this Agreement
shall not affect the validity of any other provision.
6.10
Copies; Entire Agreement;
Modification. The Borrower hereby acknowledges the receipt of a copy of
this Agreement and all other Loan Documents. This Agreement is a 'transferable
record" as defined in applicable law relating to electronic transactions.
Therefore, the holder of this Agreement may, on behalf of Xxxxxxxx, create a
microfilm or optical disk or other electronic image of this Agreement that is an
authoritative copy as defined in such law. The holder of this Agreement may
store the authoritative copy of such Agreement in its electronic form and then
destroy the paper original as part of the holder's normal business practices.
The holder, on its own behalf, may control and transfer such authoritative copy
as permitted by such law.
IMPORTANT:
READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY
BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND SIGNED BY THE
PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS
WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS AGREEMENT MAY ONLY
BE CHANGED BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL ALSO BE EFFECTIVE
WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND
THE BANK. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT
BETWEEN BORROWER AND THE BANK, WHICH OCCURS AFTER RECEIPT BY BORROWER OF THIS
NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED
MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE
RELIED UPON.
6.11 Waiver of Jury Trial. TO THE EXTENT
PERMITTED BY LAW, THE BORROWER AND THE BANK HEREBY JOINTLY AND SEVERALLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO ANY
OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE
OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR
CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
6.12 Attachments. All documents attached
hereto, including any appendices, schedules, riders, and exhibits to this
Agreement, are hereby expressly incorporated by reference.
IN WITNESS WHEREOF, the undersigned
have executed this REVOLVING CREDIT AGREEMENT as of NOVEMBER
4, 2009
| (Individual Borrower) | ITEX Corporation | |||
| Borrower Name (Organization) | ||||
| /s/ Xxxxxx Xxxxx | ||||
| Name and Title Xxxxxx X. Xxxxx, Chairman of the Board | ||||
| By | ||||
| Borrower Name | N/A | Name and Title | ||
|
(Bank)
|
||||
| U.S. BANK N.A. | ||||
| /s/ Xxxxxxx X Xxxxx | ||||
| Name and Title | Xxxxxxx X. Xxxxx. Vice President | |||
Borrower
Address 0000 000xx
Xxxxxx XX. Suite 200. Bellevue. WA 98006
ADDENDUM
TO REVOLVING CREDIT
AGREEMENT AND NOTE
This
Addendum is made part of the Revolving Credit Agreement and Note (the
"Agreement") made and entered into by and between the undersigned borrower (the
"Borrower") and the
undersigned bank (the "Bank") as of the date identified below. The warranties,
covenants and other terms described below are hereby added to the
Agreement.
Amended and Restated Note.
This Amended and Restated Note (this "Note") is issued (i) as an
amendment and restatement of, but not in payment of, Xxxxxxxx's promissory note
dated December 2, 2004, payable to the order of the Bank in the original
principal amount of $750,000.00, as amended, supplemented, extended or otherwise
modified (the "Original Note"), and (ii) to evidence an increase of
$1,750,000.00 in the aggregate amount that may be advanced under this Note,
subject to the terms of this Note and any loan agreement related to this Note.
All interest accrued but unpaid on the Original Note shall be due and payable in
full on the first interest payment date under this Note. All agreements and
documents evidencing, securing, guarantying and otherwise related to the
Original Note or the indebtedness evidenced thereby, whether or not identified
in this Note, continue in full force and effect, except to the extent that any
such agreement or document may have been wholly or partially released in a
writing signed by the Bank. Any and all references to the Replaced Note in any
agreement or document are hereby amended to refer to this Note.
Amended and Restated Agreement.
This Amended and Restated Agreement (this "Restated Agreement") is issued
as an amendment and restatement of the loan agreement or credit agreement
between Borrower and Bank dated December 2, 2004 pertaining to a loan facility
in the original principal amount of $750,000.00, as amended, supplemented,
extended or otherwise modified (the "Original Agreement"). This
Restated Agreement also evidences an increase of $1,750,000.00 in the aggregate
amount that may be advanced under the Original Agreement, subject to the terms
of this Restated Agreement. All agreements and documents evidencing, securing,
guarantying and otherwise related to the Original Agreement or the indebtedness
evidenced thereby, whether or not identified in this Restated Agreement,
continue in full force and effect, except to the extent that any such agreement
or document may have been wholly or partially released in a writing signed by
Bank. Any and all references to the Original Agreement in any agreement or
document are hereby amended to refer to this Restated Agreement.
Financial Information and Reporting.
This provision replaces in its entirety the provision of the Agreement
titled "Financial Information and Reporting". Financial terms used herein which
are not specifically defined herein shall have the meanings ascribed to them
under generally accepted accounting principles. For any Borrower who does not
have a separate fiscal year end for tax reporting purposes, the fiscal year wi11
be deemed to be the calendar year. The financial statements and other
information previously provided to Bank or provided to Bank in the future are or
will be complete and accurate and prepared in accordance with generally accepted
accounting principles. There has been no material adverse change in Borrower's
financial condition since such information was provided to Bank. Borrower will
(i) maintain accounting records in accordance with generally recognized and
accepted principles of accounting consistently applied throughout the accounting
periods involved; (ii) provide Bank with such information concerning its
business affairs and financial condition (including insurance coverage) as Bank
may request; and (iii) without request, provide to Bank the following financial
information, in form and content acceptable to Bank, pertaining to
Borrower:
Annual Financial Statements:
Not later than 90 days after the end of each fiscal year, annual
financial statements, audited by a certified public accounting firm acceptable
to Bank.
Interim Financial Statements:
Not later than 30 days after the end of each fiscal quarter, interim financial
statements, prepared by Xxxxxxxx.
Financial Covenants. Financial
terms used herein which are not specifically defined herein shall have the
meanings ascribed to them under generally accepted accounting principles. For
any Borrower who does not have a separate fiscal year end for tax reporting
purposes, the fiscal year will be deemed to be the calendar year. Borrower
(herein referred to as the "Subject Party") will maintain
the following:
Fixed Charge Coverage Ratio as
of the end of each fiscal quarter for the four (4) fiscal quarters then ended of
at least 1.50 to 1.
"Fixed Charge Coverage Ratio"
shall mean (a) EBITDAR minus cash taxes, cash dividends, cash
distributions and Maintenance Capital Expenditures divided by (b) the sum of all
required principal payments (on short and long term debt and capital leases),
interest and rental or lease expense.
"EBITDAR" shall mean net
income, plus interest expense, plus income tax expense, plus depreciation
expense plus amortization expense plus rent or lease expense.
"Maintenance Capital Expenditures"
shall mean 50% of the Subject Party's depreciation expense for the period
specified.
Tangible Net Worth at all
times in the amount of at least $7,000,000.00.
"Tangible Net Worth" shall mean the total of
all assets properly appearing on the balance sheet of the Subject Xxxxx in
accordance with generally accepted accounting principles, less the sum of the
following:
|
(i)
|
the
book amount of all such assets which would be treated as intangibles under
generally accepted accounting principles, including, without limitation,
all such items as goodwill, trademarks, trademark rights, trade names,
trade name rights, brands, copyrights, patents, patent rights, licenses,
deferred charges and unamortized debt discount and
expense;
|
|
(ii)
|
any
write-up in the book value of any such assets resulting from a revaluation
thereof subsequent to the date of the
Agreement;
|
|
(iii)
|
all
reserves, including reserves for depreciation, obsolescence, depletion,
insurance, and inventory valuation, but excluding contingency reserves not
allocated for any particular purpose and not deducted from
assets;
|
|
(iv)
|
the
amount, if any, at which any shares of stock of the Subject Party appear
on the asset side of such balance
sheet;
|
|
(v)
|
all
liabilities of the Subject Party shown on such balance
sheet;
|
|
(vi)
|
all
investments in foreign affiliates and non-consolidated domestic
affiliates; and
|
|
(vii)
|
all
accounts or notes due to the Subject Party from any shareholder, director,
officer, employee or affiliate of the Subject Party or from any relative
of such party.
|
Dated as
of November 4,
2009
|
ITEX
Corporation
a
Nevada corporation
|
|
| /s/ Xxxxxx Xxxxx | |
| Name and Title: Xxxxxx X. Xxxxx, Chairman of the Board | |
|
Agreed
to:
U.S.
Bank N.A.
|
|
| /s/ Xxxxxxx X. Xxxxx | |
| Name and Title: Xxxxxxx X. Xxxxx, Vice President | |
NOTICE
OF FORCED PLACED INSURANCE
WARNING
Unless
you provide us with evidence of the insurance coverage as required by our
contract or loan agreement, we may purchase insurance at your expense to protect
our interest. This insurance may, but need not, also protect your interest. If
the collateral becomes damaged, the coverage we purchase may not pay any claim
you make or any claim made against you. You may later cancel this coverage by
providing evidence that you have obtained property coverage
elsewhere.
You are
responsible for the cost of any insurance purchased by us. The cost of this
insurance may be added to your contract or loan balance. If the cost is added to
your contract or loan balance, the interest rate on the underlying contract or
loan will apply to this added amount. The effective date of coverage may be the
date your prior coverage lapsed or the date you failed to provide proof of
coverage.
The
coverage we purchase may be considerably more expensive than insurance you can
obtain on your own and may not satisfy any need for property damage coverage or
any mandatory liability insurance requirements imposed by applicable
law.
For purposes of this warning, "you"
means any of the undersigned borrower(s) or grantor(s)/mortgagor(s)/debtor(s),
and "we" or "us" means U.S. BANK
N.A. ___
Receipt
of this notice is acknowledged as of NOVEMBER
4 , 2 00 s
