FIRST AMENDMENT TO CREDIT AGREEMENT
This Amendment ("Amendment") is made as of the 13th day of August,
1998, by and between Vari-L Company, Inc, a Colorado Corporation, (the
"Borrower") and Bank One, Colorado, NA (the "Bank").
WHEREAS, the Borrower and the Bank entered into a Business Loan
Agreement/Credit Agreement/ dated August 13, 1997, as amended (if
applicable) (the "Credit Agreement"); and
WHEREAS, the parties hereto desire to amend the Credit Agreement as
set forth below:
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized terms not defined herein shall have the meaning
ascribed in the Credit Agreement.
2. Section "AFFIRMATIVE COVENANTS" /The Section bearing the heading
"Loan Fees and Charges" of the Credit Agreement is hereby amended and
restated to read as follows:
In addition to all other agreed upon fees and charges, pay the
following: A fee of .25% of the unused commitment payable quarterly in
arrears, subject to a cap of $1,000.00 per quarter.
3. The Borrower represents and warrants that (a) the representations and
warranties contained in the Credit Agreement are true and correct in all
material respects as of the date of this Amendment, (b) no condition, act
or event which could constitute an Event of Default under the Credit
Agreement exists, and (c) no condition, event, act or omission has
occurred, which, with the giving of notice or passage of time, would
constitute an Event of Default under the Credit Agreement.
4. The Borrower agrees to pay all fees and out-of-pocket
disbursements incurred by the Bank in connection with this Amendment,
including legal fees incurred by the Bank in the preparation,
consummation, administration and enforcement of this Amendment.
5. This Amendment shall become effective only after it is fully
executed by the Borrower and the Bank and the Bank shall have received
from the Borrower the following documents:
Except as amended by this Amendment, the Credit Agreement shall remain in
full force and effect in accordance with its terms.
6. This Amendment is a modification only and not a novation.
Except for the above-quoted modification(s), the Credit Agreement, any
agreement or security document, and all the terms and conditions thereof,
shall be and remain in full force and effect with the changes herein
deemed to be incorporated therein. This Amendment is to be considered
attached to the Credit Agreement and made a part thereof. This Amendment
shall not release or affect the liability of any guarantor, surety or
endorser of the Credit Agreement or release any owner of collateral
securing the Credit Agreement. The validity, priority and enforceability
of the Credit Agreement shall not be impaired hereby. To the extent that
any provision of this Amendment conflicts with any term or condition set
forth in the Credit Agreement, or any agreement or security document
executed in conjunction therewith, the provisions of this Amendment shall
supersede and control. Borrower acknowledges that as of the date of this
Amendment it has no offsets with respect to all amounts owed by Borrower
to Bank and Borrower waives and releases all claims which it may have
against Bank arising under the Credit Agreement on or prior to the date of
this Amendment.
7. The Borrower acknowledges and agrees that this Amendment is
limited to the terms outlined above, and shall not be construed as an
amendment of any other terms or provisions of the Credit Agreement. The
Borrower hereby specifically ratifies and affirms the terms and provisions
of the Credit Agreement. Borrower releases Bank from any and all claims
which may have arisen, known or unknown, in connection with the Credit
Agreement on or prior to the date hereof. This Amendment shall not
establish a course of dealing or be construed as evidence of any
willingness on the Bank's part to grant other or future amendments, should
any be requested.
IN WITNESS WHEREOF, the parties have entered into this Amendment as
of the day and year first above written.
BANK ONE, COLORADO, NA VARI-L COMPANY, INC.
A COLORADO CORPORATION
By:/s/X.X. Xxxx BY:/s/Xxxxx X. Xxxxxxx
XXXXX X. XXXXXXX, PRESIDENT,
CHIEF EXECUTIVE OFFICER
BANK1ONE
PROMISSORY NOTE
SHADED AREA BEGINS
Principal Loan Date Maturity Loan No.
$4,000,000.00 08-13-1998 08-13-1999
SHADED AREA ENDS
Call Collateral Account Officer Initials
092975 327 0933159571 00152
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
Borrower: VARI-L COMPANY, INC., Lender: Bank One, Colorado, NA
A COLORADO CORPORATION Denver Banking Center
0000 Xxxxxx Xxxxxx 0000 00xx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
=========================================================================
PRINCIPAL AMOUNT: $4,000,000.00 DATE OF NOTE: AUGUST 13, 1998
PROMISE TO PAY. FOR VALUE RECEIVED, VARI-L COMPANY, INC., A COLORADO
CORPORATION ("BORROWER") PROMISES TO PAY TO BANK ONE, COLORADO, NA
("LENDER"), OR ORDER, IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE
PRINCIPAL AMOUNT OF FOUR MILLION & 00/100 DOLLARS ($4,000,000.00) ("TOTAL
PRINCIPAL AMOUNT") OR SO MUCH AS MAY BE OUTSTANDING, TOGETHER WITH
INTEREST ON THE UNPAID OUTSTANDING PRINCIPAL BALANCE FROM THE DATE
ADVANCED UNTIL PAID IN FULL.
PAYMENT. THIS NOTE SHALL BE PAYABLE AS FOLLOWS: INTEREST SHALL BE DUE
AND PAYABLE MONTHLY AS IT ACCRUES, COMMENCING ON SEPTEMBER 13, 1998 AND
CONTINUING ON THE SAME DAY OF EACH MONTH THEREAFTER DURING THE TERM OF
THIS NOTE, AND THE OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE, TOGETHER
WITH ALL ACCRUED BUT UNPAID INTEREST, SHALL BE DUE AND PAYABLE ON AUGUST
13, 1999. The annual interest rate for this Note is computed on a 365/360
basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at the address designated by Lender
from time to time in writing. If any payment of principal of or interest
on this Note shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day. As used
herein, the term "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or any other day on which national banking associations are
authorized to be closed. Unless otherwise agreed to, in writing, or
otherwise required by applicable law, payments will be applied first to
accrued, unpaid interest, then to principal, and any remaining amount to
any unpaid collection costs, late charges and other charges, provided,
however, upon delinquency or other default, Lender reserves the right to
apply payments among principal, interest, late charges, collection costs
and other charges at its discretion. The books and records of Lender
shall be prima facie evidence of all outstanding principal of and accrued
but unpaid interest on this Note. This Note may be executed in connection
with a loan agreement. Any such loan agreement may contain additional
rights, obligations and terms.
VARIABLE INTEREST RATE. THE INTEREST RATE ON THIS NOTE IS SUBJECT TO
FLUCTUATION BASED UPON THE PRIME RATE OF INTEREST IN EFFECT FROM TIME TO
TIME (THE "INDEX") (WHICH RATE MAY NOT BE THE LOWEST, BEST OR MOST
FAVORABLE RATE OF INTEREST WHICH LENDER MAY CHARGE ON LOANS TO ITS
CUSTOMERS). "PRIME RATE" SHALL MEAN THE RATE ANNOUNCED FROM TIME TO TIME
BY LENDER AS ITS PRIME RATE. EACH CHANGE IN THE RATE TO BE CHARGED ON
THIS NOTE WILL BECOME EFFECTIVE WITHOUT NOTICE ON THE SAME DAY AS THE
INDEX CHANGES. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE UNPAID PRINCIPAL
BALANCE OF THIS NOTE WILL ACCRUE INTEREST AT A RATE PER ANNUM WHICH WILL
FROM TIME TO TIME BE EQUAL TO THE SUM OF THE INDEX, PLUS 0.250%. NOTICE:
UNDER NO CIRCUMSTANCES WILL THE INTEREST RATE ON THIS NOTE BE MORE THAN
THE MAXIMUM RATE ALLOWED BY APPLICABLE LAW.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. Except for the foregoing,
Borrower may pay without fee all or a portion of the principal amount owed
hereunder earlier than it is due. All prepayments shall be applied to the
indebtedness owing hereunder in such order and manner as Lender may from
time to time determine in its sole discretion.
LATE CHARGE. If a payment is 10 DAYS OR MORE LATE, Borrower will be
charged 5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $25.00, WHICHEVER IS
GREATER, UP TO THE MAXIMUM AMOUNT OF $250.00 PER LATE CHARGE.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment of principal or interest when due under
this Note or any other indebtedness owing now or hereafter by Borrower to
Lender; (b) failure of Borrower or any other party to comply with or
perform any term, obligation, covenant or condition contained in this Note
or in any other promissory note, credit agreement, loan agreement,
guaranty, security agreement, mortgage, deed of trust or any other
instrument, agreement or document, whether now or hereafter existing,
executed in connection with this Note (the Note and all such other
instruments, agreements, and documents shall be collectively known herein
as the "RELATED DOCUMENTS"); (c) Any representation or statement made or
furnished to Lender herein, in any of the Related Documents or in
connection with any of the foregoing is false or misleading in any
material respect; (d) Borrower or any other party liable for the payment
of this Note, whether as maker, endorser, guarantor, surety or otherwise,
becomes insolvent or bankrupt, has a receiver or trustee appointed for any
part of its property, makes an assignment for the benefit of its
creditors, or any proceeding is commenced either by any such party or
against it under any bankruptcy or insolvency laws; (e) the occurrence of
any event of default specified in any of the other Related Documents or in
any other agreement now or hereafter arising between Borrower and Lender;
(f) the occurrence of any event which permits the acceleration of the
maturity of any indebtedness owing now or hereafter by Borrower to any
third party; or (g) the liquidation, termination, dissolution, death or
legal incapacity of Borrower or any other party liable for the payment of
this Note, whether as maker, endorser, guarantor, surety, or otherwise.
LENDER'S RIGHTS. Upon default, Lender may at its option, without further
notice or demand (i) declare the entire unpaid principal balance on this
Note, all accrued unpaid interest and all other costs and expenses for
which Borrower is responsible for under this Note and any other Related
Document immediately due, (ii) refuse to advance any additional amounts
under this Note, (iii) foreclose all liens securing payment hereof, (iv)
pursue any other rights, remedies and recourses available to the Lender,
including without limitation, any such rights, remedies or recourses under
the Related Documents, at law or in equity, or (v) pursue any combination
of the foregoing. Upon default, including failure to pay upon final
maturity, Lender, at its option, may also, if permitted under applicable
law, do one or both of the following: (a) increase the variable interest
rate on this Note to 3.250 percentage points over the Index, and (b) add
any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Note (including any
increased rate). The interest rate will not exceed the maximum rate
permitted by applicable law. Lender may hire an attorney to help collect
this Note if Borrower does not pay and Borrower will pay Lender's
reasonable attorneys' fees and all other costs of collection, unless
prohibited by applicable law. This Note has been delivered to Lender and
accepted by Lender in the State of Colorado. Subject to the provisions on
arbitration, this Note shall be governed by and construed in accordance
with the laws of the State of Colorado without regard to any conflict of
laws or provisions thereof.
PURPOSE. Borrower agrees that no advances under this Note shall be used
for personal, family, or household purposes and that all advances
hereunder shall be used solely for business, commercial, agricultural or
other similar purposes.
JURY WAIVER. THE BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN BORROWER AND LENDER ARISING OUT OF OR
IN ANY WAY RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS. THIS
PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING
EVIDENCED BY THIS NOTE.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if
Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render
a nontaxable account taxable, Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns, conveys, delivers,
pledges, and transfers to Lender all Borrower's right, title and interest
in and to, Borrower's accounts with Lender (whether checking, savings, or
any other account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the future.
Borrower authorizes Lender, to the extent permitted by applicable law, and
to the extent an event of default shall have occurred, as defined under
the Business Loan Agreement, to charge or setoff all sums owing on this
Note against any and all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Borrower
may request advances and make payments hereunder from time to time,
provided that it is understood and agreed that the aggregate principal
amount outstanding from time to time hereunder shall not at any time
exceed the Total Principal Amount. The unpaid principal balance of this
Note shall increase and decrease with each new advance or payment
hereunder, as the case may be. Subject to the terms hereof, Borrower may
borrow, repay and reborrow hereunder. Advances under this Note, as well
as directions for payment from Borrower's accounts, may be requested
orally or in writing by Borrower or by an authorized person. Lender may,
but need not, require that all oral requests be confirmed in writing.
Borrower agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b) credited
to any of Borrower's accounts with Lender.
ARBITRATION. Lender and Borrower agree that upon the written demand of
either party, whether made before or after the institution of any legal
proceedings, but prior to the rendering of any judgment in that
proceeding, all disputes, claims and controversies between them, whether
individual, joint, or class in nature, arising from this Note, any Related
Document or otherwise, including without limitation contract disputes and
tort claims, shall be arbitrated pursuant to the Commercial Rules of the
American Arbitration Association. Any arbitration proceeding held
pursuant to this arbitration provision shall be conducted in the city
nearest the Borrower's address having an AAA regional office, or at any
other place selected by mutual agreement of the parties. No act to take
or dispose of any collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This
arbitration provision shall not limit the right of either party during any
dispute, claim or controversy to seek, use, and employ ancillary,
provisional or preliminary rights and/or remedies, judicial or otherwise,
for the purposes of realizing upon, preserving, protecting, foreclosing
upon or proceeding under forcible entry and detainer for possession of,
any real or personal property, and any such action shall not be deemed an
election of remedies. This includes, without limitation, obtaining
injunctive relief or a temporary restraining order, invoking a power of
sale under any deed of trust or mortgage, obtaining a writ of attachment
or imposition of a receivership, or exercising any rights relating to
personal property, including taking or disposing of such property with or
without judicial process pursuant to Article 9 of the Uniform Commercial
Code. Any disputes, claims, or controversies concerning the lawfulness or
reasonableness of any act, or exercise of any right or remedy, concerning
any collateral, including any claim to rescind, reform, or otherwise
modify any agreement relating to the collateral, shall also be arbitrated;
provided however that no arbitrator shall have the right or the power to
enjoin or restrain any act of either party. Judgment upon any award
rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this arbitration provision shall preclude either
party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver, laches and
similar doctrines which would otherwise be applicable in an action brought
by a party shall be applicable in any arbitration proceeding, and the
commencement of an arbitration proceeding shall be deemed the commencement
of any action for these purpose. The Federal Arbitration Act (Title 9 of
the United States Code) shall apply to the construction, interpretation,
and enforcement of this arbitration provision.
RENEWAL AND EXTENSION. This Note is given in replacement, renewal and/or
extension of, but not extinguishing the indebtedness evidenced by, that
promissory note dated August 13, 1997 executed by Borrower in the original
principal amount of $2,500,000.00, and is not a novation thereof. All
interest evidenced by the note being replaced, renewed, and/or extended by
this instrument shall continue to be due and payable until paid.
ADDITIONAL PROVISION REGARDING LATE CHARGES. The "Late Charge" provision
set forth above in this Note is hereby deleted and the following provision
shall apply to this Note: Borrower agrees that if a payment is 10 days or
more late, Borrower will be charged 5.000% of the regularly scheduled
payment or Twenty Five Dollars ($25.00), whichever is greater, up to the
maximum amount of One Thousand Five Hundred Dollars ($1,500.00).
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this Note, or release any party or
guarantor or collateral; or unjustifiably impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this Note
without the consent of or notice to anyone other than the party with whom
the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE NOTE.
BORROWER:
VARI-L COMPANY, INC., A COLORADO CORPORATION
VARI-L COMPANY, INC., A COLORADO CORPORATION
By:/s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, President/Chief Executive Officer
