EXHIBIT 10.4
UNCOMMITTED AND REVOLVING CREDIT LINE AGREEMENT
THIS UNCOMMITTED AND REVOLVING CREDIT LINE AGREEMENT dated as
of May 10, 2002 between SUMITOMO MITSUI BANKING CORPORATION, having its offices
at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000 (the "BANK") and
SYNETICS SOLUTIONS INC., a corporation organized under the laws of Oregon,
having its offices at 00000 XX Xxxxxxxxx Xxxxxxx, Xxxxxxxx, XX 00000 (the
"BORROWER"). The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINED TERMS. As used in this AGREEMENT, the following terms have
the following meanings (terms defined in the singular to have the same meaning
when used in the plural and vice versa);
"AGREEMENT" means this UNCOMMITTED AND REVOLVING CREDIT LINE AGREEMENT,
as amended, supplemented, or modified from time to time.
"APPLICABLE INTEREST RATE" shall mean, with respect to any LOAN, the
interest rate per annum quoted by the BANK and agreed to by the BORROWER at the
time of making each LOAN.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or other
day on which commercial banks in the City of New York, New York or the City of
San Francisco, California are authorized or required to close.
"CHANGE OF CONTROL" with respect to the BORROWER will occur if the
PARENT ceases to directly own, free and clear of liens or encumbrances, more
than 50% of the issued and outstanding voting stock of the BORROWER.
"CREDIT LINE" means a discretionary and uncommitted line of credit
which the BANK establishes for the BORROWER pursuant to SECTION 2.01 hereof up
to the amount referred to therein but which may be terminated in whole or
reduced in part pursuant to SECTION 2.02 hereof. This CREDIT LINE shall not be
construed as the commitment of the BANK to make any LOAN or extension of credit.
"DEFAULT" or "EVENT OF DEFAULT" shall mean any of the events specified
in SECTION 7.01 hereof, whether or not any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been satisfied.
"DEFAULT RATE" shall have the meaning assigned to such term in SECTION
2.04(b) hereof.
"DOLLARS", "U.S. DOLLARS", "U.S.$", and "$" shall mean the lawful
currency of the United States of America at any relevant time hereunder.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally accepted
accounting principles as in effect from time to time, including, without
limitation, applicable statements, bulletins and interpretations issued by the
Financial Accounting Standards Board and bulletins, opinions, interpretations
and statements issued by the American Institute of Certified Public Accountants
or its committees.
"GOVERNMENTAL BODY" means any court, department, commission, board,
bureau, agency, public authority or instrumentality of the United States or any
country, any state or any political subdivision thereof.
"LAST DRAWDOWN DATE" shall mean May 30, 2003.
"LIEN" means (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest, (b) the interest of a
vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to the
asset subject to such interest and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.
"LOAN" or "LOANS" shall have the meaning assigned to such term in
SECTION 2.01 hereof.
"LOAN DOCUMENTS" (individually, a "LOAN DOCUMENT") means this
AGREEMENT, the NOTE and any other agreements, instruments, certificates and
documents executed in connection with the LOANS.
"NET WORTH" shall mean the difference between the assets and
liabilities of the BORROWER, each as computed in accordance with GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.
"NOTE" shall have the meaning assigned to such term in SECTION 2.05
hereof.
"PARENT" means Yaskawa Electric Corporation, a Japanese corporation.
"PROPERTY" means all types of real or personal property, including
without limitation, tangible, intangible or mixed property.
"REGULATIONS T, U and X" shall mean REGULATIONS T, U and X of the Board
of Governors of the Federal Reserve System as from time to time in effect
related to margin stock transactions.
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01. REVOLVING CREDIT. The BANK may, upon request from BORROWER, in the
BANK's sole and absolute discretion upon the terms hereinafter set forth, make
one or more loans (the "LOANS") to the BORROWER from time to time during the
period from the date of this AGREEMENT up to and including the LAST DRAWDOWN
DATE in an aggregate amount not to exceed at any time outstanding FOUR MILLION
DOLLARS ($4,000,000.00); such amount may be reduced pursuant to SECTION 2.02
hereof (the "CREDIT LINE"). LOANS may have a maturity of from one day to six (6)
months from the date of borrowing, as requested by the BORROWER in accordance
with SECTION 2.03 and agreed to by the BANK. Within the limits of the CREDIT
LINE, the BORROWER may borrow pursuant to SECTION 2.03 hereof, and pay pursuant
to SECTION 2.07 hereof, and re-borrow and pay under SECTIONS 2.03 and 2.07
hereof, respectively. The availability of the CREDIT LINE hereunder shall not be
construed as the commitment of the BANK to make any LOAN.
Section 2.02. REDUCTION AND TERMINATION OF CREDIT LINE. The BANK shall have the
unrestricted right in its sole and absolute discretion, upon notice to the
BORROWER, to immediately terminate in whole or reduce in part the unused portion
of the CREDIT LINE.
Section 2.03. NOTICE AND MANNER OF BORROWING. Not later than 11:00 a.m., San
Francisco time, the BORROWER shall give the BANK telephonic application for a
LOAN under this AGREEMENT to the BANK's customer desk (or such other contact as
the BANK may inform the BORROWER from time to time), which may or may not be
accepted by the BANK, specifying (1) the date of such LOAN; (2) the amount of
such LOAN; and (3) the requested maturity date for the LOAN. The BANK will send
written confirmation of the LOAN to the BORROWER at the facsimile number listed
in SECTION 8.06 hereof. The BORROWER will acknowledge the information shown in
the confirmation by promptly returning it to the BANK's New York Branch by
facsimile at (000) 000-0000. Not later than 4:00 p.m., New York time (1:00 p.m.
San Francisco time), on the date of such LOAN and upon fulfillment of the
applicable conditions set forth in ARTICLE III hereof, the BANK will, subject to
its sole and absolute discretion and subject to the provisions of SECTION 2.01
hereof, make such LOAN available to the BORROWER in immediately available funds
by crediting the amount thereof to the BORROWER's account with the BANK. All
notices given under this SECTION 2.03 shall be irrevocable. The failure to give
any confirmation referred to herein shall not release or diminish any of the
BORROWER's obligations hereunder.
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SECTION 2.04. INTEREST.
(a) The BORROWER shall pay interest to the BANK on the outstanding
and unpaid principal amount of each of the LOANS made under this AGREEMENT at
the APPLICABLE INTEREST RATE. Interest shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed. Interest shall be paid
in immediately available funds on the maturity of each LOAN.
(b) To the extent permitted by applicable law, any amount of
principal of any LOAN and interest thereon which is not paid when due, whether
at stated maturity, acceleration or otherwise, shall bear interest, payable on
demand, at an interest rate per annum equal to 2% per annum above the rate of
interest announced by the New York Branch of Sumitomo Mitsui Banking Corporation
from time to time as the BANK's prime rate (the "DEFAULT RATE") until paid in
full.
SECTION 2.05. NOTE. All the LOANS made by the BANK under this AGREEMENT shall be
evidenced by, and repaid with interest in accordance with, a single grid
promissory note of the BORROWER in substantially the form of EXHIBIT "A"
attached hereto duly completed, in the maximum principal amount of the CREDIT
LINE, dated the date of this AGREEMENT, payable to the BANK (the "NOTE"). The
BANK is hereby authorized by the BORROWER to endorse on the schedule attached to
the NOTE or attach a form designated by the BANK indicating the amount,
APPLICABLE INTEREST RATE, maturity date and other relevant terms of each LOAN
and of each repayment of principal received by the BANK on account of the LOANS
(such endorsement or form may be by means of a computer printout), which
endorsement/form shall, in the absence of manifest error, be conclusive as to
the outstanding balance of the LOANS made by the BANK; provided, that the
failure to make such notation with respect to any LOAN or payment thereof shall
not limit or otherwise affect the obligations of the BORROWER under this
AGREEMENT or the NOTE. Any calculation made by the BANK of interest and any
other amount payable under this AGREEMENT shall, in the absence of manifest
error, be conclusive and final.
SECTION 2.06. FUNDING LOSS, INDEMNIFICATION; CAPITAL ADEQUACY AND OTHER CHARGES
AND COSTS.
(a) BORROWER hereby agrees to indemnify and hold BANK free and
harmless from all losses, costs and expenses which BANK may incur, to the extent
not mitigated by the redeployment of deposits or other funds, as a result of (1)
a DEFAULT by BORROWER in payment when due of the principal of or interest on any
LOAN, (2) BORROWER's failure (other than due solely to a failure attributable to
a default by BANK) to make a borrowing or continuation with respect to any LOAN
after making a request therefor, (3) a prepayment (whether mandatory or
otherwise, including but not limited to, acceleration of the LOANS by the BANK
pursuant to SECTION 7.01 hereof) of any LOAN before a scheduled payment date for
interest or principal, and (4) any DEFAULT by BORROWER under this AGREEMENT or
any demand for payment of any LOAN by BANK permitted hereunder or under any LOAN
DOCUMENT.
(b) If the BANK determines at any time that any applicable law or
governmental rule, regulation, guideline or order concerning capital adequacy,
reserves or similar requirements, or any change in interpretation or
administration thereof by any GOVERNMENTAL BODY, central bank or comparable
agency, will have the effect of increasing the cost to the BANK or the amount of
capital required or expected to be maintained by the BANK as a result of the
making or continuance of the LOANS, then the BORROWER agrees to pay to the BANK,
upon its written demand therefor, such additional amounts as shall be required
to compensate the BANK for the increased cost to the BANK as a result of such
increase of capital, reserves or similar requirements. The BANK, upon
determining that any additional amounts will be payable to the BANK pursuant to
this paragraph will give prompt written notice thereof to the BORROWER which
notice shall show in reasonable detail the basis for calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of the BORROWER's obligations to pay additional amounts
pursuant to this paragraph.
(c) If any present or future applicable law, rule or regulation or
any change therein or in the interpretation or administration thereof by any
GOVERNMENTAL BODY, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by BANK with any request
or directive of any such
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GOVERNMENTAL BODY, central bank or comparable agency, whether or not having the
force of law, results in an increase of the cost to BANK of making, renewing or
maintaining any LOAN, or reduce the amount of any sum receivable by BANK under
any LOAN, in the reasonable judgment of BANK, then, upon demand by BANK,
BORROWER agrees to pay to BANK such additional amount or amounts as would
compensate BANK for such increased cost or reduction. BANK's computation of such
amount or amounts shall be binding on BORROWER absent manifest error.
SECTION 2.07. METHOD OF PAYMENT. The BORROWER shall make each payment of
principal or interest of the LOANS under this AGREEMENT and under the NOTE not
later than 3:00 p.m., New York time, on the date when due with respect to the
principal and on the maturity date of each LOAN, as case may be, in lawful money
of the United States to the BANK in immediately available funds to the BANK's
account at Citibank, N.A. New York, ABA No. 000000000, for the account of
Sumitomo Mitsui Banking Corporation, account no. 00000000, (Attention: BCDAD,
Reference: Synetics Solutions, Inc.). The BORROWER hereby authorizes the BANK,
if and to the extent payment is not made when due under this AGREEMENT or under
the NOTE, to charge from time to time against any account of the BORROWER with
the BANK any amount so due. The BORROWER may, with the BANK's prior consent, and
on not less than five days' notice, prepay the principal and interest of each
LOAN, in whole or in part but only on condition that the prepayment is
accompanied by payment of any and all additional costs the BANK may incur, as
determined by the BANK, as a result of such prepayment, including without
limitation, the breaking of any deposit, the redeployment of funds released by
any prepayment, the termination of any swap or hedging contract, or otherwise.
SECTION 2.08. PAYMENTS ON NON-BUSINESS DAYS. Whenever payment shall fall due on
a day which is not a BUSINESS DAY, payment shall be made on the next succeeding
BUSINESS DAY, unless such BUSINESS DAY falls in the following calendar month, in
which case payment shall be due on the next preceding BUSINESS DAY.
SECTION 2.09. USE OF PROCEEDS. The BORROWER will not, directly or indirectly,
use any part of the LOAN proceeds for the purpose of purchasing or carrying any
margin stock within the meaning of REGULATIONS T, U and X of the Board of the
Governors of the Federal Reserve System or to extend credit to any person for
the purpose of purchasing or carrying any such margin stock.
SECTION 2.10. SECURITY INTEREST.
(a) Upon the determination by BANK in its reasonable discretion
that collateral, additional collateral, a guarantee or an additional guarantee
is necessary to preserve BANK's rights as against the LOANS, BORROWER shall upon
demand furnish to BANK such collateral or additional collateral or such
guarantee or additional guarantees as may be required by BANK.
(b) Any collateral (excepting any California real property) which
has been or shall be furnished to BANK by BORROWER as collateral for LOANS shall
constitute collateral that covers and secures not only such LOANS, but also any
and all other obligations which BORROWER owes, or in the future may owe, BANK.
SECTION 2.11. ADMINISTRATION FEE. As compensation for the costs of documenting,
maintaining and administering the CREDIT LINE, the BORROWER will pay a
nonrefundable upfront fee in the amount of U.S.$5,000.00 (the "ADMINISTRATION
FEE") on or before May 10, 2002, payable in the manner provided in SECTION 2.07
hereof. Notwithstanding the payment of the ADMINISTRATION FEE by the BORROWER,
the CREDIT LINE will remain an uncommitted line, and at no time will the BANK be
obligated to make any LOAN hereunder.
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ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL AND ALL LOANS.
The BANK may in its sole and absolute discretion make LOANS available to the
BORROWER, subject to the conditions precedent that:
(a) on or before the day of the initial LOAN, the BANK shall have
received each of the following, in form and substance satisfactory to the BANK:
(1) AGREEMENT AND NOTE. This AGREEMENT and the NOTE duly
executed by the BORROWER;
(2) EVIDENCE OF ALL CORPORATE ACTION BY THE BORROWER.
Certified copies of the unanimous written consent of the Board of Directors of
the BORROWER, or a certified copy of the resolutions, duly adopted by the Board
of Directors, satisfactory to the BANK, authorizing the execution, delivery and
performance of the LOAN DOCUMENTS to which it is a party and each other document
to be delivered pursuant to this AGREEMENT;
(3) INCUMBENCY AND SIGNATURE CERTIFICATE OF THE BORROWER.
A certificate of the President or Vice President (or other appropriate officer)
of the BORROWER, satisfactory to the BANK, certifying the names and true
signatures of the officers of the BORROWER authorized, pursuant to the Board of
Directors' resolutions referred to in paragraph (2) above, to sign the LOAN
DOCUMENTS to which it is a party and the other documents to be delivered by the
BORROWER under this AGREEMENT;
(4) LETTER OF GUARANTEE. A letter of guarantee duly
executed and delivered by the PARENT and in form and substance satisfactory to
the BANK (the "GUARANTEE"); and
(5) EVIDENCE OF ALL CORPORATE ACTION AND AUTHORIZATION
AND EXECUTION BY THE PARENT. Certified copies of all corporate or other
organizational action taken by the PARENT, including resolutions of its Board of
Directors or other governing body, satisfactory to the BANK, authorizing the
execution, delivery and performance of the GUARANTEE and each other document to
be delivered pursuant to this AGREEMENT; and evidence satisfactory to the BANK
of the due execution and delivery of the GUARANTEE.
(b) ADMINISTRATION FEE. On or before the day of the initial LOAN,
the BORROWER shall have paid the ADMINISTRATION FEE as provided in SECTION 2.11
hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
BORROWER hereby represents and warrants to BANK as follows at each time it makes
an application for a LOAN:
SECTION 4.01. DUE INCORPORATION; GOOD STANDING. BORROWER is a corporation, duly
organized and validly existing under the laws of the state of its incorporation,
and is properly licensed and in good standing in, and where necessary to
maintain BORROWER's rights and privileges, has complied with the fictitious name
statute of, every jurisdiction in which BORROWER is doing business.
SECTION 4.02. CORPORATE POWER; AUTHORIZATION. The execution, delivery and
performance of this AGREEMENT, the NOTE or any other LOAN DOCUMENTS are within
BORROWER's powers, have been duly authorized, and are not in conflict with the
terms of its certificate of incorporation and by-laws (or such other
organizational and governing documents as may be applicable) or any agreement,
instrument or document to which BORROWER is a party or by which BORROWER or any
of its PROPERTY is bound or affected.
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SECTION 4.03. GOVERNMENT ACTION. No approval, consent, exemption or other action
by, or notice to or filing with, any GOVERNMENTAL BODY is necessary in
connection with the execution, delivery, performance or enforcement of this
AGREEMENT, the NOTE or any other LOAN DOCUMENTS, except as may have been
obtained and certified copies of which have been delivered to BANK.
SECTION 4.04. NO LEGAL BAR. There is no law, rule or regulation, nor is there
any judgment, decree or order of any court or GOVERNMENTAL BODY binding on
BORROWER which would be contravened by the execution, delivery, performance or
enforcement of this AGREEMENT, the NOTE or any other LOAN DOCUMENTS.
SECTION 4.05. ENFORCEABLE OBLIGATION. This AGREEMENT is a legal, valid and
binding agreement of BORROWER, enforceable against BORROWER in accordance with
its terms, and the NOTE and/or any other LOAN DOCUMENTS, when executed and
delivered (and as endorsed from time to time), will be similarly legal, valid,
binding and enforceable.
SECTION 4.06. LITIGATION. There are no suits, proceedings, claims or disputes
pending or, to the knowledge of BORROWER, threatened against or affecting
BORROWER, or its respective PROPERTIES, the adverse determination of which could
affect BORROWER's financial condition or operations or could impair BORROWER's
ability to perform its obligations hereunder, under the NOTE or any other LOAN
DOCUMENTS.
SECTION 4.07. NO DEFAULT. No event has occurred and is continuing or would
result from the incurring of obligations by BORROWER under this AGREEMENT, the
NOTE or any other LOAN DOCUMENTS which is a default under any agreement or
document to which BORROWER is a party, or is, or with the passing of time or
giving of notice or both would become, a default under such document.
SECTION 4.08. NO CONFLICTING AGREEMENTS. BORROWER is not in default under any
agreement to which it is a party or by which it or any of its PROPERTY is bound
the effect of which could have a material adverse effect on the business or
operations of BORROWER, or could impair BORROWER's ability to perform its
obligations hereunder, under the NOTE or any other LOAN DOCUMENTS, except as
disclosed in writing to BANK.
SECTION 4.09. TAXES. BORROWER has filed or caused to be filed all tax returns
required to be filed, and has paid, or has made adequate provision for the
payment of, all taxes shown to be due and payable on said returns or in any
assessments made against it, and no tax liens have been filed and no claims are
being asserted with respect to such taxes which are required to be reflected in
the financial statements of BORROWER and are not so reflected therein.
SECTION 4.10. COMPLIANCE WITH APPLICABLE LAWS. BORROWER is not in violation with
respect to any judgment, order, writ, injunction, decree or decision of any
GOVERNMENTAL BODY which violation could have a material adverse affect on the
financial condition, operations or PROPERTY of BORROWER, or could impair
BORROWER's ability to perform its obligations hereunder, under the NOTE or any
other LOAN DOCUMENTS, except as disclosed in writing to BANK. BORROWER is
complying in all material respects with all applicable statutes and regulations,
including applicable occupational, safety and health and other labor laws and
applicable environmental laws, of all GOVERNMENTAL BODIES, a violation of which
could have a material adverse affect on the financial condition, operations or
PROPERTY of BORROWER, or could impair BORROWER's ability to perform its
obligations hereunder, under the NOTE or any of the LOAN DOCUMENTS except as
otherwise disclosed in writing to BANK.
SECTION 4.11. NO MISREPRESENTATION. No representation or warranty contained
herein or in any other LOAN DOCUMENTS and no certificate, notice, report,
financial statement or document furnished to date or to be furnished by BORROWER
in connection with the transactions contemplated hereby, contains or will
contain a misstatement of material fact, or omits or will omit to state a
material fact required to be stated in order to make the statements herein or
therein contained (taken as a whole) not misleading in the light of the
circumstances under which made.
SECTION 4.12. RANKING OF LOAN; LIENS. The obligations of the BORROWER hereunder
and under the NOTE rank and will rank at least pari passu in priority of payment
and security with all other unsecured indebtedness of the BORROWER for borrowed
money or for the unsecured deferred purchase price of property or services.
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ARTICLE V
AFFIRMATIVE COVENANTS
BORROWER covenants and agrees to, so long as any obligation or
indebtedness to BANK remains outstanding unless BANK waives compliance in
writing:
SECTION 5.01. FINANCIAL AND OTHER INFORMATION. Deliver to BANK as soon as
available but no later than 120 days after the end of each fiscal year, a
complete copy of the annual financial statements of BORROWER which shall include
at least the balance sheet of BORROWER as of the close of such year, and the
statement of income and retained earnings and of changes in cash flows of
BORROWER for such year fairly presenting BORROWER's financial position and
results of operations, prepared in accordance with GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES and fairly presenting BORROWER's financial position and results of
operations, audited by an independent public accounting firm of recognized
national standing selected by BORROWER and satisfactory to BANK and, if
available, unaudited semiannual financial statements, prepared as stated above
except that semiannual financial statements shall be delivered to the BANK no
later than 90 days after the end of each semiannual reporting period and shall
be certified by a responsible financial officer of the BORROWER.
SECTION 5.02. PROMPT NOTICE. Immediately give written notice to BANK of:
(1) all litigation affecting BORROWER or PARENT as a
defendant and where the amount claimed in a single litigation action is in
excess of $100,000 or when the aggregate amount claimed in all litigation
actions is in excess of $500,000;
(2) any substantial dispute which may exist between
BORROWER or PARENT and any GOVERNMENTAL BODY;
(3) any DEFAULT which, with the passing of time, giving
of notice, or both would become an EVENT OF DEFAULT or any event of default
under any documents to which BORROWER is a party; and
(4) any other matter which has resulted or might result
in a material adverse change in BORROWER's or PARENT'S financial condition or
operations or impairment of BORROWER's or PARENT's ability to perform its
obligations hereunder, under the NOTE or any other LOAN DOCUMENTS.
SECTION 5.03. PAYMENT OF OBLIGATIONS. Pay all obligations, including taxes, when
due, except such as may be contested in good faith by appropriate proceedings
and for which BORROWER has established reserves on its books which are
reasonable and adequate.
SECTION 5.04. COMPLIANCE WITH LEGAL REQUIREMENTS. At all times comply with all
laws, rules, regulations, orders and directions of any GOVERNMENTAL BODY having
jurisdiction over it or its business.
SECTION 5.05. MAINTAIN EXISTENCE; PROPERTY. Maintain and preserve (a) its
existence and all rights, privileges and franchises now enjoyed; and (b) all of
its PROPERTIES that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
SECTION 5.06. BOOKS AND RECORDS. Maintain adequate books, accounts and records,
all in accordance with GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, and permit
employees or agents of BANK at any reasonable time and as often as may
reasonably be desired to inspect its PROPERTIES, and to examine or audit its
books, accounts and records and make copies thereof and to discuss the business,
operations, PROPERTIES and financial and other conditions of BORROWER with
officers of BORROWER.
SECTION 5.07. INSURANCE. To the extent there exists any real property security
interest, maintain and keep in force, on all of its property such insurance as
is normal for the industry in which BORROWER conducts its business and is
satisfactory to BANK as to amount, nature and carrier, covering fire damage
(including use and occupancy), public liability, product liability, property
damage and workers' compensation, and deliver to BANK upon request a schedule
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certified to be correct by a responsible officer of BORROWER setting forth all
insurance in force as of the date of such schedule.
SECTION 5.08. FURTHER ASSURANCES. BORROWER will from time to time perform any
and all acts and execute any and all additional document as may be reasonably
requested by BANK to give effect to the purposes of this AGREEMENT, the NOTE or
any other LOAN DOCUMENTS.
ARTICLE VI
NEGATIVE COVENANTS
BORROWER covenants and agrees that, until full and final payment of all
indebtedness hereunder and/or under the NOTE, without the prior written consent
of BANK:
SECTION 6.01. LIMITATIONS ON FUNDAMENTAL CHANGES. BORROWER will not consummate
any transaction of merger or consolidation, reorganize, spin-off, liquidate,
dissolve or wind up (or suffer any reorganization, liquidation, dissolution or
winding up) or convey, sell, lease, license or otherwise dispose of, in one or a
series of related transactions, all or substantially all of the PROPERTY, assets
or business of BORROWER.
SECTION 6.02. NEGATIVE PLEDGE. BORROWER will not create, incur, assume or permit
to exist any LIEN on any PROPERTY now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(a) LIENS imposed by law for taxes that are not yet due;
carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like
LIENS imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days; pledges and deposits made
in the ordinary course of business in compliance with workers' compensation,
unemployment insurance and other social security laws or regulations; deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case in the ordinary course of business; and easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
BORROWER; or
(b) any LIEN existing on any PROPERTY prior to the acquisition
thereof by the BORROWER; provided that (i) such LIEN is not created in
contemplation of or in connection with such acquisition, (ii) such LIEN shall
not apply to any other property or assets of the BORROWER and (iii) such LIEN
shall secure only those obligations which it secures on the date of such
acquisition.
SECTION 6.03. NET WORTH. The BORROWER will not permit or suffer its NET WORTH to
be less than U.S.$0.00 as of any time of determination.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an EVENT OF DEFAULT under this AGREEMENT and the NOTE:
(1) BORROWER shall fail to pay any principal when due
under this AGREEMENT or the NOTE, whether at maturity, on demand, upon
acceleration or otherwise; or
(2) BORROWER shall fail to pay, when due, any amount of
interest, fees, expenses, indemnity payments or any other amount payable by
BORROWER under this AGREEMENT, the NOTE or any other LOAN DOCUMENTS within ten
(10) days of the date when such amounts are due, whether at maturity, on a
specified date, on demand, upon acceleration or otherwise; or
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(3) Any representation or warranty hereunder or in this
AGREEMENT and any other LOAN DOCUMENTS or any financial statement furnished to
BANK shall prove to have been false or misleading in any material respect when
made or when deemed to have been made; or
(4) BORROWER or PARENT shall fail to pay its debts
generally as they come due, or shall file any petition or action for relief
under any bankruptcy, reorganization, insolvency or moratorium law, or any other
law or laws for the relief of, or relating to, debtors; or
(5) An involuntary petition shall be filed under any
bankruptcy, reorganization, insolvency, moratorium or similar statute against
BORROWER or PARENT or a custodian, receiver, trustee, assignee for the benefit
of creditors (or other similar official) shall be appointed to take possession,
custody or control of any PROPERTY of BORROWER or PARENT unless such petition or
appointment is set aside or withdrawn or ceases to be in effect within 30 days
from the date of said filing or appointment; or
(6) Any judgment or order for the payment of money in
excess of $50,000 is rendered against BORROWER or PARENT and such judgment or
order is not satisfied, and either (i) enforcement proceedings are commenced by
any creditor upon such judgment or order or (ii) there is any period of ten (10)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, is not in effect; or
(7) All, or such as in the opinion of BANK constitutes
substantially all, of the PROPERTIES of BORROWER or PARENT shall be condemned,
seized or appropriated; or
(8) BORROWER shall breach, or default under, any other
term, condition, provision or covenant contained in any of the LOAN DOCUMENTS;
or
(9) BORROWER shall be in breach of or default under any
term, condition, provision or covenant contained in any agreement to which it is
a party relating to borrowed money; or
(10) A CHANGE OF CONTROL of the BORROWER shall occur
without the prior written consent of the BANK; or
(11) The GUARANTEE delivered in satisfaction of SECTION
3.01 hereof, any replacement of such GUARANTEE or any other guarantee, letter of
awareness or other document issued in support of the obligations of the BORROWER
to the BANK shall expire without renewal, be disclaimed or disavowed, or, in the
case of a guarantee, shall cease to be the valid, binding and enforceable
obligation of the guarantor thereunder; or
(12) The occurrence of any event which BANK believes could
have a material adverse effect upon BORROWER, or could impair BORROWER's ability
to perform its obligations hereunder, under the NOTE or any other LOAN
DOCUMENTS.
SECTION 7.02. REMEDIES. Upon the occurrence of any EVENT OF DEFAULT, BANK may in
its sole and absolute discretion declare the LOANS (with accrued interest
thereon) and all other amounts owing under this AGREEMENT and/or the NOTE to be
due and payable forthwith whereupon the same will immediately become due and
payable (except that in the case of an EVENT OF DEFAULT under 7.01(4) or 7.01(5)
above, such acceleration shall be automatic), without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in any LOAN DOCUMENT to the contrary
notwithstanding. The foregoing remedy is in addition to any and all other
remedies available to BANK under the NOTE, at law or in equity. The BORROWER
hereby agrees to indemnify the BANK and save the BANK harmless from and against
any and all costs, losses or expenses incurred by the BANK as a result of the
occurrence of an EVENT OF DEFAULT or the repayment of any amount hereunder or
under the NOTE other than on the date or dates originally due (including without
limitation such as are incurred in connection with the reemployment or
liquidation of funds acquired from third parties by the BANK in order to
maintain any amount theretofore outstanding hereunder or under the NOTE, the
termination of any hedging contract or swap or other arrangement relating to the
funding of the LOANS).
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. INDEMNITY. BORROWER agrees to indemnify, defend, reimburse and
hold harmless BANK and each of its affiliates, and all the directors, officers,
employees, agents, legal counsel and advisors of BANK (each, an "INDEMNIFIED
PARTY") from and against all claims, actions, proceedings, suits, damages,
losses, liabilities, costs and expenses, including the fees and out-of-pocket
expenses of counsel which may be incurred by or asserted against any INDEMNIFIED
PARTY in connection with, or arising out of, or relating to any transaction or
proposed transaction (whether or not consummated), contemplated by this
AGREEMENT or any LOAN DOCUMENT.
SECTION 8.02. PARTICIPATIONS. BANK may at any time sell, assign, grant
participations in, or otherwise transfer to any other person all or part of the
indebtedness of BORROWER outstanding under this AGREEMENT and/or any LOAN
DOCUMENT.
SECTION 8.03. ENTIRE AGREEMENT. This AGREEMENT and the LOAN DOCUMENT integrate
all the terms and conditions mentioned herein or incidental hereto, and
supersede all oral negotiations and prior writings with respect to the subject
matter hereof.
SECTION 8.04. COUNTERPARTS. This AGREEMENT and any amendments, waivers, consents
or supplements may be executed in as many counterparts as may be deemed
necessary or convenient, and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same agreement.
SECTION 8.05. AMENDMENTS, ETC. No amendment, modification, termination, or
waiver of any provision of any LOAN DOCUMENT to which the BORROWER is a party,
nor consent to any departure by the BORROWER from any LOAN DOCUMENT to which it
is a party, shall in any event be effective unless the same shall be in writing
and signed by the BANK, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.
SECTION 8.06. NOTICES, ETC. All notices and other communications provided for
under this AGREEMENT and under the other LOAN DOCUMENTS to which the BORROWER is
a party shall be in writing, delivered in person, sent by certified mail
(postage prepaid), or sent by telecopier and promptly confirmed by letter. Any
such notice shall be effective when so given,
If to the BORROWER: Synetics Solutions Inc.
00000 XX Xxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention: Mr. Hiroshi Yoshio
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the BANK: Sumitomo Mitsui Banking Corporation
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: CBDA-1
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this SECTION 8.06. All such notices and communications shall, when mailed or
telecopied, be effective when deposited in the mails or telecopied,
respectively, addressed as aforesaid, except that notices to the BANK pursuant
to the provisions of ARTICLE II hereof shall not be effective until received by
the BANK.
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SECTION 8.07. NO WAIVER; REMEDIES. No failure on the part of the BANK to
exercise, and no delay in exercising, any right, power, or remedy under any LOAN
DOCUMENT shall operate as waiver thereof; nor shall any single or partial
exercise of any right under any LOAN DOCUMENT preclude any other or further
exercise thereof or exercise of any other right. The remedies provided in the
LOAN DOCUMENTS are cumulative and not exclusive of any remedies provided by law.
SECTION 8.08. SUCCESSORS AND ASSIGNS. 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 may not assign or transfer any
of its rights under any LOAN DOCUMENT to which the BORROWER is a party without
the prior written consent of the BANK.
SECTION 8.09. COSTS, EXPENSES, AND TAXES. The BORROWER agrees to pay on demand
all costs and expenses in connection with the preparation, execution, delivery,
filing, recording, and administration of any of the LOAN DOCUMENTS, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the BANK, and local counsel who may be retained by said counsel, with
respect thereto and with respect to advising the BANK as to its rights and
responsibilities under any of the LOAN DOCUMENTS, and all costs and expenses, if
any, in connection with enforcement of any of the LOAN DOCUMENTS, including,
without limitation, "work-out," insolvency or bankruptcy proceedings. In
addition, the BORROWER shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing, and recording of any of the LOAN DOCUMENTS and the other documents to be
delivered under any of the LOAN DOCUMENTS, and agrees to save the BANK harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
SECTION 8.10. DEDUCTIONS. All payments by the BORROWER to the BANK under this
AGREEMENT are to be made net and free of any and all taxes (except for taxes
based upon the overall net income of the BANK), duties, imposts, fees,
withholdings or deductions (the "DEDUCTIONS") of any nature now or hereafter
imposed. If any DEDUCTION is, by law, required to be made from any payment
hereunder, then the BORROWER shall pay to the BANK such additional amount as
will result in receipt by the BANK of a net amount equal to the amount the BANK
would have received hereunder had no such DEDUCTION been required. In such event
the BORROWER shall, as soon as practical, deliver to the BANK a receipt issued
by the relevant taxing authority evidencing the amount of such DEDUCTION and its
payment. If the BORROWER is required to pay an additional amount on account of
any such DEDUCTION, the BORROWER shall have the right, on not less than three
BUSINESS DAYS' prior written notice to the BANK, to repay the applicable LOAN.
SECTION 8.11. RIGHT OF SET OFF. Upon the occurrence and during the continuance
of any EVENT OF DEFAULT the BANK is hereby authorized at any time and from time
to time, without notice to the BORROWER (any such notice being expressly waived
by the BORROWER), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held, and other indebtedness
at any time owing by the BANK to or for the credit or the account of the
BORROWER against any and all of the obligations of the BORROWER now or hereafter
existing under the AGREEMENT or the NOTE or any other LOAN DOCUMENT,
irrespective of whether or not the BANK shall have made any demand under this
AGREEMENT or such other LOAN DOCUMENT and although such obligations may be
unmatured. The BANK agrees promptly to notify the BORROWER after any such set
off and application, provided that the failure to give such notice shall not
affect the validity of such set off and application. The lights of the BANK
under this SECTION 8.11 are in addition to other rights and remedies (including,
without limitation, other rights of set off) which the BANK may have.
SECTION 8.12. GOVERNING LAW; CONSENT TO JURISDICTION. This AGREEMENT and the
NOTE shall be governed by and construed in accordance with the laws of the State
of California. Any legal action or proceedings with respect to this AGREEMENT
against the BORROWER may be brought in the courts of the United States of
America or the State of California as the BANK may elect, and, by execution and
delivery of this AGREEMENT, the BORROWER hereby (i) accepts for itself,
generally and unconditionally, the non-exclusive jurisdiction of the aforesaid
courts, (ii) irrevocably agrees to be bound by any judgment of any such court
with respect to this AGREEMENT or the NOTE and (iii) irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceedings with respect to
this AGREEMENT brought in any court of the United States of America or the State
of California located in the City of San Francisco, and further irrevocably
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waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. In the case of the courts of
the United States of America and State of California the BORROWER hereby agrees
to receive service of process in any legal action or proceedings with respect to
this AGREEMENT at its offices set forth in SECTION 8.06. Nothing herein shall
affect the right to serve process in any other manner permitted by the law. The
BORROWER hereby agrees that the mailing of such process to the BORROWER shall be
deemed personal service and accepted by the BORROWER for any legal action or
proceedings with respect to this AGREEMENT.
SECTION 8.13. SEVERABILITY OF PROVISIONS. Any provision of any LOAN DOCUMENT
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such LOAN
DOCUMENT or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 8.14. HEADINGS. ARTICLE and SECTION headings in this AGREEMENT are for
the convenience of reference only and shall not constitute a part of the
applicable LOAN DOCUMENTS for any other purpose.
SECTION 8.15. WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER MUTUALLY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SYNETICS SOLUTIONS INC.
By: XXXX XXXXXXXX
------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman & CEO
SUMITOMO MITSUI BANKING CORPORATION
By: XXXXXXX XXXXX
------------------------------
Name: Xxxxxxx Xxxxx
Title: General Manager
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EXHIBIT "A"
UNCOMMITTED REVOLVING CREDIT NOTE
U.S.$4,000,000.00 May 10, 2002
(maximum amount) San Francisco, California
FOR VALUE RECEIVED, the undersigned SYNETICS SOLUTIONS INC. (the
"BORROWER"), HEREBY PROMISES TO PAY to the order of SUMITOMO MITSUI BANKING
CORPORATION (the "BANK"), in lawful money of the United States and in
immediately available funds, the principal amount of each LOAN advanced and
listed on the schedule attached to this NOTE (the "GRID") or any similar form
designated by the BANK in its sole and absolute discretion from time to time
pursuant to the LINE AGREEMENT (as defined below), on the due date corresponding
to such LOAN on the GRID, respectively, and to pay interest (computed on the
basis of a year of 360 days and actual number of days elapsed) from the date
made until the repayment date therefor at the rate per annum set forth for such
LOAN on the GRID. Interest shall be payable by the BORROWER to the BANK on the
due date of each such LOAN.
Notwithstanding any of the foregoing to the contrary, the outstanding
principal balance of this NOTE shall at no time exceed FOUR MILLION DOLLARS
($4,000,000.00), and the duration of each LOAN under the NOTE shall in no event
exceed six (6) months from the date of advance pursuant to the LINE AGREEMENT.
Any amount of principal hereof which is not paid when due, whether at stated
maturity, by acceleration, or otherwise, shall bear interest from the date when
due until said principal amount is paid in full, payable on demand, at the
DEFAULT RATE.
The BORROWER hereby authorizes the BANK to endorse on the GRID or a
similar form all LOANS made to the BORROWER and all payments of principal
amounts in respect of such LOANS, which endorsements shall, in absence of
manifest error, be conclusive as to the outstanding principal amounts of all
LOANS; provided, that the failure to make such notation with respect to any LOAN
or payment thereof shall not limit or otherwise affect the obligations of the
BORROWER under the LINE AGREEMENT and this NOTE.
This NOTE is the NOTE referred to in the UNCOMMITTED AND REVOLVING
CREDIT LINE AGREEMENT dated as of May 10, 2002, between the BORROWER and the
BANK (the "LINE AGREEMENT"). The LINE AGREEMENT, among other things, contains
provisions for acceleration of the maturity of this NOTE upon the happening of
certain stated events and also for payment on account of the principal amounts
of this NOTE prior to the maturity of this NOTE upon the terms and conditions
specified in the LINE AGREEMENT. Unless otherwise defined herein, terms defined
in the LINE AGREEMENT are used herein as therein defined.
The BORROWER hereby waives presentment, demand, protest or notice of
any kind with respect to this NOTE.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.
SYNETICS SOLUTIONS INC.
By: XXXX XXXXXXXX
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman & CEO
