CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of March 29,
1999, is made between Amerigon Incorporated, a California corporation (the
"Company"), and Big Star Investments LLC, a Delaware limited liability
company ("Lender").
The Company has requested the Lender to make term loans to the
Company in an aggregate principal amount of up to $1,200,000. The Lender is
willing to make such loans to the Company upon the terms and subject to the
conditions set forth in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement,
the following terms shall have the following meanings:
"AFFILIATE" means any Person which, directly or indirectly,
controls, is controlled by or is under common control with another Person.
For purposes of the foregoing, "control," "controlled by" and "under common
control with" with respect to any Person shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
"BRIDGE LOAN WARRANT" has the meaning set forth in Section 2.11.
"BUDGET" means the Company's budget, attached hereto as Exhibit A,
indicating the proposed uses of the proceeds of the Loans (including the
purpose of expenditure, persons to be paid, amounts, and dates on which
payments are expected to be made), including any subsequent amendments to
such budget as may be approved by the Lender (which approval shall not be
unreasonably withheld).
"BUSINESS DAY" means a day of the year on which commercial banks
are not required or authorized by law to close in Los Angeles, California.
"CLOSING DATE" means the date upon which the conditions set forth
in Sections 3.01 and 3.02 are satisfied and the initial Loan hereunder is
made.
"COLLATERAL" means the property described in the Collateral Documents,
and all other property now existing or hereafter acquired which may at any time
be or become subject to a Lien in favor of the Lender pursuant to the Collateral
Documents or otherwise, securing the payment and performance of the Obligations.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Patent and
Trademark Security Agreement, any other agreement pursuant to which the
Company provides a Lien on its
assets in favor of the Lender and all filings (including, but not limited to,
all U.C.C. financing statements filed to perfect the security interests
granted in the Security Agreement), documents and agreements made or
delivered pursuant thereto.
"COMMITMENT" means the Term Commitment.
"COMPANY" has the meaning set forth in the recital of parties to
this Agreement.
"DEFAULT" means an Event of Default or an event or condition which
with notice or lapse of time or both would constitute an Event of Default.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances, judgments and
codes, together with all administrative orders, directives, requests,
licenses, authorizations and permits of, and agreements with (including
consent decrees), any governmental agencies or authorities, in each case
relating to or imposing liability or standards of conduct concerning public
health, safety and environmental protection matters.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"FINAL MATURITY DATE" means the earlier to occur of (i) September
30, 1999, (ii) the closing of the financing pursuant to the Securities
Purchase Agreement, or (iii) the occurrence of a Trigger Event.
"GAAP" means generally accepted principles in the United States,
consistently applied.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or
other hazardous substances, materials, wastes, contaminants or pollutants,
including asbestos, PCBs, petroleum products and byproducts, and any
substances defined or listed as "hazardous substances," "hazardous
materials," "hazardous wastes" or "toxic substances" (or similarly identified
or having any constituent substances displaying any of the foregoing
characteristics), regulated under or forming the basis for liability under
any applicable Environmental Law.
"INDEBTEDNESS" means, for any Person, (i) all indebtedness or other
obligations of such Person for borrowed money or for the deferred purchase price
of property or services; (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person; (iv) all
reimbursement and other obligations of such Person in respect of letters of
credit and bankers acceptances and all net obligations in respect of interest
rate swaps, caps, floors and collars, currency swaps, and other similar
financial products; (v) all obligations under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases; and (vi) all
indebtedness of another Person of the types referred to in clauses (i) through
(v) guaranteed directly or indirectly in any manner by the Person for whom
Indebtedness is being determined, or in effect guaranteed directly or indirectly
by such Person through an agreement to purchase or acquire such indebtedness, to
advance or supply funds for the payment or purchase of such indebtedness or
otherwise assure a
2.
creditor against loss, or secured by any Lien upon or in property owned by
the Person for whom Indebtedness is being determined, whether or not such
Person has assumed or become liable for the payment of such indebtedness of
such other Person.
"INVESTORS" shall mean Westar Capital II LLC and Big Beaver
Investments LLC.
"LENDER" has the meaning set forth in the recital of parties to
this Agreement.
"LIEN" means any mortgage, pledge, security interest, assignment,
deposit arrangement, charge or encumbrance, lien or other type of
preferential arrangement (other than a financing statement filed by a lessor
in respect of an operating lease not intended as security).
"LOAN DOCUMENTS" means this Agreement, the Note, the Collateral
Documents and all other certificates, documents, agreements and instruments
delivered to the Lender under or in connection with this Agreement.
"LOANS" means the Term Loan.
"MATERIAL ADVERSE EFFECT" means any event, circumstance or
condition that, individually or in the aggregate (i) has or could reasonably
be expected to have a material adverse effect on the business, operations,
assets, liabilities (including without limitation contingent liabilities),
prospects, employee relationships, customer or supplier relationships, or the
condition (financial or otherwise) of the Company; (ii) would materially
impair the ability of the Company to perform or observe its obligations under
or in respect of the Loan Documents; or (iii) adversely affects the legality,
validity, binding effect or enforceability of any of the Loan Documents or
the perfection or priority of any Lien granted to the Lender under any of the
Collateral Documents.
"NOTE" has the meaning set forth in Section 2.03.
"OBLIGATIONS" means the indebtedness, liabilities and other
obligations of the Company to the Lender under or in connection with the Loan
Documents, including all Loans, all interest accrued thereon, all fees due
under this Agreement and all other amounts payable by the Company to the
Lender thereunder or in connection therewith.
"PATENT AND TRADEMARK SECURITY AGREEMENT" means the Patent and
Trademark Assignment and Security Agreement between the Company and the
Lender, in form and substance satisfactory to the Lender.
"PERMITTED LIENS" means: (i) Liens in favor of the Lender; (ii) the
existing Liens (including leases and subleases) listed in SCHEDULE 1 or incurred
in connection with the extension, renewal or refinancing of the Indebtedness
secured by such existing Liens, PROVIDED that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or
refinanced does not increase; (iii) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings and which are adequately reserved for in
accordance with GAAP, PROVIDED the same does not have priority over any of the
Lender's Liens and no notice of tax lien has been filed of
3.
record; (iv) Liens of materialmen, mechanics, warehousemen, carriers or
employees or other similar Liens provided for by mandatory provisions of law
and securing obligations either not delinquent or being contested in good
faith by appropriate proceedings and which do not in the aggregate materially
impair the use or value of the property or risk the loss or forfeiture
thereof; (v) Liens consisting of deposits or pledges to secure the
performance of bids, trade contracts, leases, public or statutory
obligations, or other obligations of a like nature incurred in the ordinary
course of business (other than for Indebtedness); (vi) Liens upon or in any
equipment acquired or held by the Company to secure the purchase price of
such equipment or Indebtedness incurred solely for the purpose of financing
the acquisition of such equipment; and (vii) restrictions and other minor
encumbrances on real property which do not in the aggregate materially impair
the use or value of such property or risk the loss or forfeiture thereof.
"PERSON" means an individual, corporation, partnership, joint
venture, trust, unincorporated organization or any other entity of whatever
nature or any governmental agency or authority.
"RESPONSIBLE OFFICER" means, with respect to any Person, the chief
executive officer, the president, the chief financial officer or the
treasurer of such Person, or any other senior officer of such Person having
substantially the same authority and responsibility.
"SECURITY AGREEMENT" means a Security Agreement between the Company
and the Lender, in form and substance satisfactory to the Lender.
"SECURITIES PURCHASE AGREEMENT" means that certain Securities
Purchase Agreement of even date herewith between the Company and the
Investors.
"TERM COMMITMENT" means $1,200,000 or, where the context so
requires, the obligation of the Lender to make a Term Loan up to such amount
on the terms and conditions set forth in this Agreement.
"TERM LOAN" has the meaning set forth in Section 2.01(b).
"TERM LOAN AVAILABILITY PERIOD" means the period extending from
and including the Closing Date through the earliest of : (i) September 1,
1999, (ii) the occurrence of a Trigger Event, (iii) the date on which the
financing contemplated by the Securities Purchase Agreement is completed, or
(iv) the date upon which the Lender declares an Event of Default.
"TRIGGER EVENT" means that the Company (or its Board of Directors)
shall have authorized, recommended, proposed or publicly announced its
intention to enter into (or has failed to recommend rejection of) any tender
or exchange offer, merger, consolidation, liquidation, dissolution, business
combination, recapitalization, acquisition, or disposition of a material
amount of assets or securities or any comparable transaction which has not
been consented to in writing by the Lender.
SECTION 1.02 ACCOUNTING TERMS. Unless otherwise defined or the
context otherwise requires, all accounting terms not expressly defined herein
shall be construed, and all accounting determinations and computations
required under this Agreement or any other Loan Document shall be made, in
accordance with GAAP.
4.
SECTION 1.03 INTERPRETATION. In the Loan Documents, except to
the extent the context otherwise requires: (i) any reference to an Article,
a Section, a Schedule or an Exhibit is a reference to an article or section
thereof, or a schedule or an exhibit thereto, respectively, and to a
subsection or a clause is, unless otherwise stated, a reference to a
subsection or a clause of the Section or subsection in which the reference
appears; (ii) the words "hereof," "herein," "hereto," "hereunder" and the
like mean and refer to this Agreement or any other Loan Document as a whole
and not merely to the specific Article, Section, subsection, paragraph or
clause in which the respective word appears; (iii) the meaning of defined
terms shall be equally applicable to both the singular and plural forms of
the terms defined; (iv) the words "including," "includes" and "include" shall
be deemed to be followed by the words "without limitation;" (v) references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of
the Loan Documents; (vi) references to statutes or regulations are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; (vii) any table
of contents, captions and headings are for convenience of reference only and
shall not affect the construction of this Agreement or any other Loan
Document; and (viii) in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding"; and the word
"through" means "to and including."
ARTICLE II
THE LOANS
SECTION 2.01 TERM LOAN. The Lender agrees, subject to the terms
and conditions of this Agreement, to make term loans (each a "Term Loan") to
the Company on the Closing Date and from time to time during the Term Loan
Availability Period following the Company's compliance with the borrowing
procedure under Section 2.02 below, in the aggregate principal amount up to
but not exceeding the Term Commitment.
SECTION 2.02 BORROWING PROCEDURE. Each Loan shall be made upon
written notice from the Company to the Lender, which notice shall be received
by the Lender not later than 10:00 A.M. (California time) at least three (3)
Business Days prior to the proposed borrowing date. Each such notice of
borrowing shall be irrevocable and binding on the Company and shall specify
the proposed date of the borrowing (which shall be a Business Day), the
amount of the borrowing (which shall be at least $200,000 or a greater amount
which is an integral multiple of $50,000), and payment instructions with
respect to the funds to be made available to the Company. Each such notice
shall also be accompanied by the Budget (updated to reconcile the use of the
proceeds of any prior Loans). Upon fulfillment of the applicable conditions
set forth in Article III hereof, the Lender shall make the Loan available to
the Company in same day funds, or such other funds as shall separately be
agreed upon by the Company and the Lender, in accordance with the payment
instructions provided to the Lender as set forth in the borrowing request
delivered pursuant hereto.
SECTION 2.03 EVIDENCE OF INDEBTEDNESS. At the request of the
Lender, the Company shall execute and deliver for account of the Lender a
promissory note (the "Note"), in
5.
a form reasonably acceptable to the Lender ,as additional evidence of the
Indebtedness of the Company to the Lender resulting from each Term Loan.
SECTION 2.04 INTEREST. The Company hereby promises to pay
interest on the unpaid principal amount of each Loan from the date of such
Loan until the maturity thereof, at a rate equal to 10% per annum, on the
date of any prepayment of any such Loan and at maturity.
SECTION 2.05 COMPUTATIONS. All computations of fees and interest
hereunder shall be made on the basis of a year of 360 days for the actual
number of days occurring in the period for which any such interest or fee is
payable.
SECTION 2.06 HIGHEST LAWFUL RATE. Anything herein to the
contrary notwithstanding, if during any period for which interest is computed
hereunder, the applicable interest rate, together with all fees, charges and
other payments which are treated as interest under applicable law, as
provided for herein or in any other Loan Document, would exceed the maximum
rate of interest which may be charged, contracted for, reserved, received or
collected by the Lender in connection with this Agreement under applicable
law (the "Maximum Rate"), the Company shall not be obligated to pay, and the
Lender shall not be entitled to charge, collect, receive, reserve or take,
interest in excess of the Maximum Rate, and during any such period the
interest payable hereunder shall be limited to the Maximum Rate.
SECTION 2.07 TERMINATION OF THE COMMITMENT. Upon the earlier to
occur of (i) September 30, 1999, (ii) the occurrence of a Trigger Event,
(iii) the closing of the financing pursuant to the Securities Purchase
Agreement, or (iv) the Lender's declaration of an Event of Default, any
unused portion of the Term Commitment shall terminate. After the Term
Commitment terminates under this Section 2.07 it may not be reinstated.
SECTION 2.08 REPAYMENT OF THE LOAN. The Company hereby promises
to pay to the Lender the principal amount of the Term Loans and any accrued
interest thereon in full on the Final Maturity Date.
SECTION 2.09 PREPAYMENTS OF THE LOANS.
(a) OPTIONAL PREPAYMENTS. The Company may, upon prior notice to
the Lender, prepay the outstanding amount of the Loans in whole or in part,
without premium or penalty.
(b) NOTICE; APPLICATION. The notice given of any prepayment shall
specify the date and amount of the prepayment. If the notice of prepayment
is given, the Company shall make such prepayment and the prepayment amount
specified in such notice shall be due and payable on the date specified
therein, with accrued interest to such date on the amount prepaid.
SECTION 2.10 PAYMENTS.
(a) PAYMENTS. The Company shall make each payment under the Loan
Documents, unconditionally in full without deduction, set-off, counterclaim or,
to the extent permitted by applicable law, other defense, and free and clear of,
and without reduction for or on
6.
account of, any present and future taxes or withholdings (other than a tax on
the overall net income of the Lender), and all liabilities with respect
thereto. Each payment shall be made not later than 11:00 A.M. (California
time) on the day when due to the Lender in U.S. dollars and in immediately
available funds, or such other funds as shall be separately agreed upon by
the Company and the Lender, in accordance with the Lender's payment
instructions.
(b) EXTENSION. Whenever any payment hereunder shall be stated to
be due, or whenever any interest payment date or any other date specified
hereunder would otherwise occur, on a day other than a Business Day, then,
except as otherwise provided herein, such payment shall be made, and such
interest payment date or other date shall occur, on the next succeeding
Business Day, and such extension of time shall in such case be included in
the computation of payment of interest.
(c) APPLICATION. Each payment by or on behalf of the Company
hereunder shall, unless a specific determination is made by the Lender with
respect thereto, be applied (i) first, to accrued and unpaid interest due the
Lender; and (ii) second, to principal due the Lender.
SECTION 2.11 BRIDGE LOAN WARRANT. Concurrently with the
execution of this Agreement, the Company will issue to the Lender a warrant
to purchase 300,000 shares of the Class A Common Stock of the Company on the
terms and conditions set forth in EXHIBIT B hereto (the "Bridge Loan
Warrant").
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT TO THE INITIAL LOAN. The
obligation of the Lender to make its initial Loan on the date of the initial
borrowing hereunder (the "Closing Date") shall be subject to the satisfaction
of each of the following conditions precedent before or concurrently with the
initial Loan:
(a) FEES AND EXPENSES. The Company shall have paid all fees and
invoiced costs and expenses then due hereunder.
(b) LOAN DOCUMENTS. The Lender shall have received the following
Loan Documents: (i) this Agreement executed by the Company, (ii) the Note
required hereunder, executed by the Company; and (iii) the Collateral
Documents executed by each of the respective parties thereto.
(c) DOCUMENTS AND ACTIONS RELATING TO COLLATERAL. The Lender
shall have received, in form and substance satisfactory to it, results of
such Lien searches as it shall reasonably request, and evidence that all
filings, registrations and recordings have been made in the appropriate
governmental offices, and all other action has been taken, which shall be
necessary to create, in favor of the Lender, a perfected first priority Lien
on the Collateral.
(d) ADDITIONAL CLOSING DOCUMENTS. The Lender shall have received the
following, in form and substance satisfactory to it: (i) evidence that all
(A) authorizations or
7.
approvals of any governmental agency or authority, and (B) approvals or
consents of any other Person, required in connection with the execution,
delivery and performance of the Loan Documents shall have been obtained; and
(ii) a certificate of the Secretary or other appropriate officer of the
Company, dated the Closing Date, certifying (A) copies of the articles or
certificate of incorporation, and bylaws, of the Company and the resolutions
and other actions taken or adopted by the Company authorizing the execution,
delivery and performance of the Loan Documents, and (B) the incumbency,
authority and signatures of each officer of the Company authorized to execute
and deliver the Loan Documents and act with respect thereto.
(e) LEGAL OPINION. The Lender shall have received an opinion of
legal counsel to the Company dated the Closing Date, in the form attached
hereto as EXHIBIT C.
(f) BRIDGE LOAN WARRANT. The Company shall have delivered to the
Lender a duly executed Bridge Loan Warrant, in the form attached hereto as
EXHIBIT B.
(g) PERMIT. All evidences of indebtedness issued by the Company
pursuant to (and including) this Agreement shall have been qualified by
permit filed with and approved by the California Department of Corporations
pursuant to Section 25113 of the California Corporations Code.
(h) SECURITIES PURCHASE AGREEMENT. The Company shall have
executed and delivered to the Investors the Securities Purchase Agreement.
SECTION 3.02 CONDITIONS PRECEDENT TO ALL LOANS. The obligation
of the Lender to make each Loan shall be subject to the satisfaction of each
of the following conditions precedent:
(a) NOTICE. The Company shall have given its notice of borrowing
as provided in Section 2.02.
(b) MATERIAL ADVERSE EFFECT. On and as of the date of such Loan,
there shall have occurred no change or event since the date of this Agreement
(in the case of the initial Loan) or the date of the most recent borrowing
(in the case of any subsequent Loan), as the case may be, that has or could
reasonably be expected to have a Material Adverse Effect.
(c) NO DEFAULT. On the date of such Loan, both before and after
giving effect thereto and to the application of proceeds therefrom, no
material Default shall have occurred and be continuing or shall result from
the making of such Loan. The giving of any notice of borrowing and the
acceptance by the Company of the proceeds of each Loan made on or following
the Closing Date shall each be deemed a certification to the Lender that on
and as of the date of such Loan no material Default shall have occurred or
shall result from the making of the Loan.
(d) BUDGET. The Company shall have provided to the Lender
certification regarding the use of the proceeds received from any prior Loans
as well as the proposed use of the proceeds of the currently requested Loan,
as such expenditures relate to the Budget. The Company shall have
demonstrated to the reasonable satisfaction of the Lender that the proposed
use of the proceeds of the currently requested Loan is in accordance with the
Budget.
8.
(e) ADDITIONAL DOCUMENTS. The Lender shall have received, in form
and substance satisfactory to it, such additional approvals, opinions,
documents and other information as the Lender may reasonably request.
(f) LIMITATION ON AMOUNT. Notwithstanding the satisfaction of the
other conditions set forth in this Section 3.02, the Lender shall not be
obligated to make any Loan to the Company in an amount that exceeds the
anticipated cash needs of the Company, as determined in the reasonable
discretion of the Lender based on the Budget, for a period of two (2) weeks
following the anticipated date of funding of such Loan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Lender that, except as set forth in
the Disclosure Letter:
(a) ORGANIZATION AND POWERS. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California, and has all requisite power and authority to execute, deliver
and perform its obligations under the Loan Documents. The Company is
qualified to do business and is in good standing in each jurisdiction in
which the failure so to qualify or be in good standing would result in a
Material Adverse Effect and has all requisite power and authority to own its
assets and carry on its business.
(b) AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by the Company of the Loan Documents have been duly authorized by
all necessary corporate action of the Company and do not and will not will
not (i) result in a violation of the Company's Articles of Incorporation or
Bylaws, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture or instrument to which the Company or any
of its properties is subject, or result in a violation of any material law,
rule, regulation, order, judgment or decree (including U.S. federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected, or (iii) except as
contemplated by this Agreement, result in, or require, the creation or
imposition of any Lien upon or with respect to any of the properties, assets
or revenues of the Company. The Company is not in violation of its Articles
of Incorporation, Bylaws or other organizational documents, or of any
judgment, order, writ, decree, law, rule or regulation to which the Company
or its properties is subject. The Company is not in default (and no event
has occurred which, with notice or lapse of time or both, would put the
Company in default) under, nor has there occurred any event giving others
(with notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company is a party or any of its properties is
subject.
9.
(c) BINDING OBLIGATION. The Loan Documents constitute, or when
delivered under this Agreement, will constitute, legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms.
(d) CONSENTS. No authorization, consent, approval, license,
exemption of, or filing or registration with, any governmental agency or
authority, or approval or consent of any other Person, is required for the
due execution, delivery or performance by the Company of any of the Loan
Documents, except for such approvals as have been obtained or as set forth in
SCHEDULE 2 hereto.
(e) LITIGATION. There is no action, suit, proceeding or
investigation pending, or to the Company's knowledge, currently threatened
against the Company, except as which individually or in the aggregate would
not have a Material Adverse Effect. The Company is not a party or subject to
the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality. Except as set forth on the
Disclosure Letter, there is no material action, suit, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate.
(f) PATENTS AND TRADEMARKS. The Company owns or licenses from
another person all inventions, patents, patent rights, computer software,
trademarks, trademark rights, service marks, service xxxx rights, trade
names, trade name rights and copyrights (collectively, the "Intellectual
Property") necessary for its business without any conflict with or
infringement of the valid rights of others and the lack of which could
materially and adversely affect the operations or condition, financial or
otherwise, of the Company, and the Company has not received any notice of
infringement upon or conflict with the asserted rights of others. The
Disclosure Letter contain a complete list of all such patents, patent rights,
registered trademarks, registered service marks, registered copyrights, all
agreements related to the foregoing, and all agreements pursuant to which the
Company licenses Intellectual Property from or to a third party (excluding
"shrink wrap" license agreements relating solely to off the shelf software
which is not material to the Company's business). All Intellectual Property
owned by the Company is owned free and clear of all liens, adverse claims,
encumbrances, or restrictions, except for restrictions contained in the terms
of the licenses listed in the Disclosure Letter. All Intellectual Property
licensed by the Company is the subject of a license agreement which is legal,
valid, binding and enforceable and in full force and effect. The
consummation of the transactions contemplated hereby will not result in the
termination or impairment of the Company's ownership of, or right to use, any
Intellectual Property. The Company has a valuable body of trade secrets,
including know-how, concepts, business plans, and other technical data (the
"Proprietary Information") for the development, manufacture and sale of its
products. The Company has the right to use the Proprietary Information free
and clear of any rights, liens, encumbrances or claims of others. The
Company is not aware, after reasonable investigation, that any of its
employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere
with the use of his or her best efforts to promote the interests of the
Company or that would conflict with the Company's business.
(g) TITLE TO PROPERTIES; LIENS. The Company has good and marketable
title to, or valid and subsisting leasehold interests in, their properties and
assets, including all property
10.
forming a part of the Collateral, and there is no Lien upon or with respect
to any of such properties or assets, including any of the Collateral, except
for Permitted Liens.
(h) SEC DOCUMENTS AND FINANCIAL STATEMENTS. Since January 1,
1997, the Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the Securities and
Exchange Commission ("SEC") pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (all of the
foregoing and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein, with
amendments read together with underlying documents, are referred to herein as
the "SEC Documents"). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act
and the rules and regulations of the SEC promulgated thereunder applicable to
the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with U.S. generally
accepted accounting principles, consistently applied, during the periods
involved and fairly and accurately present in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set
forth in the most recent audited balance sheet provided to the Lender, the
Company has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the
date of such financial statements and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in such
financial statements, which, individually or in the aggregate, are not
material to the financial condition or operating results of the Company.
Except as disclosed in such financial statements, the Company is not a
guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
(i) BRIDGE LOAN WARRANT. The Bridge Loan Warrant is duly
authorized and, upon issuance in accordance with the terms of this Agreement,
will be validly issued, fully paid and nonassessable, and will be free of
liens, claims, encumbrances and restrictions on transfer, other than
restrictions on transfer under applicable state and federal securities laws.
The shares of Class A Common Stock issuable upon exercise of the Bridge Loan
Warrant are duly authorized and reserved for issuance, and, upon exercise of
the Bridge Loan Warrant in accordance with the terms thereof, will be validly
issued, fully paid and nonassessable, and will be free of liens, claims,
encumbrances and restrictions on transfer, other than restrictions on
transfer under applicable state and federal securities laws.
(j) TAX RETURNS. The Company has timely filed all tax returns
(federal, state and local) required to be filed by it and such tax returns are
true and correct in all material respects. In addition, (i) the Company has not
requested any extension of time within which to file any tax returns in respect
of any fiscal year which have not since been filed and no request
11.
for waivers of the time to assess any taxes are pending or outstanding, (ii)
no claim for taxes has become a lien against the property of the Company or
is being asserted against the Company other than liens for taxes not yet due
and payable, (iii) no audit of any tax return of the Company is being
conducted by a tax authority, (iv) no extension of the statute of limitations
on the assessment of any taxes has been granted to, by or applied for by, the
Company and is currently in effect, and (v) there is no agreement, contract
or arrangement to which the Company is a party that may result in the payment
of any amount that would not be deductible by reason of Sections 280G, 162 or
404 of the Internal Revenue Code.
(k) PERMITS. The Company has all material franchises, permits,
licenses and any similar authority necessary for the conduct of its business
("Permits"). The Company is not in default under any of such Permits.
(l) ENVIRONMENTAL AND SAFETY LAWS. The Company is not in
violation of any applicable material statute, law or regulation relating to
the environment or occupational health and safety, and no material
expenditures are or will be required in order to comply with any such
existing statute, law or regulation.
SECTION 4.02 REPRESENTATIONS AND WARRANTIES OF THE LENDER. The
Lender represents and warrants to the Company that:
(a) INVESTMENT REPRESENTATIONS. The Lender: (i) will acquire the
Note, Bridge Loan Warrant and shares underlying the Bridge Loan Warrant for
its own account for investment and not with a view to any resale or other
distribution (other than to affiliates) of the Note in a transaction
constituting a public offering or otherwise requiring registration under the
U.S. Securities Act of 1933, as amended (the "Securities Act") or in a
transaction that would result in noncompliance with applicable state
securities laws; (ii) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and the risks of
its acquisition of the Note , the Bridge Loan Warrant (and shares underlying
the Bridge Loan Warrant) and credit extensions to the Company, (iii) is an
accredited investor as such term is defined in Rule 501 of Regulation D under
the Securities Act, and (iv) understands that the Note, the Bridge Loan
Warrant and the shares underlying the Bridge Loan Warrant have not been
registered under the Securities Act or any state securities laws.
(b) ORGANIZATION AND POWERS. The Lender is a limited liability
company duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement.
(c) AUTHORIZATION; BINDING OBLIGATION. The execution, delivery
and performance by the Lender of this Agreement has been duly authorized by
all necessary organizational action of the Lender. This Agreement
constitutes a legal, valid and binding obligation of the Lender, enforceable
against the Lender in accordance with its terms.
(d) FINANCIAL CAPACITY. The Lender has access to adequate capital
to enable it to satisfy its obligations to make the Loan contemplated hereby.
12.
ARTICLE V
COVENANTS
SECTION 5.01 REPORTING COVENANTS. So long as any of the
Obligations shall remain unpaid or the Lender shall have any Commitment, the
Company agrees that:
(a) FINANCIAL STATEMENTS AND OTHER REPORTS. The Company will
furnish to the Lender: (i) on Monday of each week, a statement of cash flow
for the prior week and projected cash flow for the following two weeks; (ii)
as soon as available and in any event within 10 days after the end of a
month, monthly agings (aged from invoice date) of accounts receivable,
payables reports, and unaudited financial statements (including a balance
sheet, income statement and statement of cash flows) with respect to that
month prepared on a basis consistent with such statements prepared in prior
months and otherwise in accordance with GAAP and certified by a Responsible
Officer as being prepared in accordance with GAAP; and (iii) as soon as
available and in any event within 45 days after the end of each fiscal
quarter, its quarterly consolidated and, if requested by the Lender,
consolidating financial statements (including a balance sheet, income
statement and statement of cash flows), prepared in accordance with GAAP,
together with a certificate of a Responsible Officer of the Company stating
that such financial statements fairly present in all material respects the
financial condition of the Company as at such date and the results of
operations of the Company for the period ended on such date and have been
prepared in accordance with GAAP, subject to changes resulting from normal,
year-end audit adjustments and except for the absence of notes.
(b) ADDITIONAL INFORMATION. The Company will furnish to the
Lender: (i) promptly after the Company has knowledge or becomes aware
thereof, notice of the occurrence of any Default; (ii) prompt written notice
of all actions, suits and proceedings before any governmental agency or
authority or arbitrator pending, or to the best of the Company's knowledge,
threatened against or affecting the Company; (iii) prompt written notice of
any other condition or event which has resulted, or that could reasonably be
expected to result, in a Material Adverse Effect; (iv) promptly after the
same are released, copies of all press releases; (v) promptly after the
giving, sending or filing thereof, copies of all reports and financial
information, if any, which the Company sends to the holders of its capital
stock or other securities, and the holders, if any, of any other
Indebtedness, and of all reports or filings, if any, by the Company with the
Securities and Exchange Commission or any national securities exchange; and
(vi) such other information respecting the operations, properties, business
or condition (financial or otherwise) of the Company (including with respect
to the Collateral) as the Lender may from time to time reasonably request.
Each notice pursuant to claims (i) through (iii) of this subsection (b) shall
be accompanied by a written statement by a Responsible Officer of the Company
setting forth details of the occurrence referred to therein.
(c) CERTAIN CONTRACTS. Upon the Lender's reasonable request, and
at least twice monthly after the date of this Agreement, the Company shall
provide reports to the Lender concerning the status of all programs with
major customers, in such detail as Lender may reasonably request.
SECTION 5.02 AFFIRMATIVE COVENANTS. So long as any of the
Obligations shall remain unpaid or the Lender shall have any Commitment, the
Company agrees that:
13.
(a) PRESERVATION OF EXISTENCE, ETC. The Company will, maintain
and preserve its corporate existence, its rights to transact business and all
other material rights, franchises and privileges necessary or desirable in
the normal course of its business and operations and the ownership of its
properties, except in connection with any transactions expressly permitted by
Section 5.03.
(b) PAYMENT OF TAXES, ETC. The Company will pay and discharge all
taxes, fees, assessments and governmental charges or levies imposed upon it
or upon its properties or assets prior to the date on which penalties attach
thereto, and all lawful claims for labor, materials and supplies which, if
unpaid, might become a Lien upon any properties or assets of the Company
prior to the date on which penalties attach thereto except to the extent such
taxes, fees, assessments or governmental charges or levies, or such claims,
are being contested in good faith by appropriate proceedings and are
adequately reserved against in accordance with GAAP.
(c) MAINTENANCE OF INSURANCE. The Company will carry and maintain
in full force and effect, at its own expense and with financially sound and
reputable insurance companies, insurance in such amounts, with such
deductibles and covering such risks as is is consistent with the Company's
past practices.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company will
keep adequate records and books of account to permit preparation of financial
statements in accordance with GAAP.
(e) INSPECTION RIGHTS. The Company will at any reasonable time
during regular business hours and from time to time permit the Lender or any
of its agents or representatives to visit and inspect any of the properties
of the Company and to examine the records and books of account of the
Company, and to discuss the business affairs, finances and accounts of the
Company with any of the officers, employees or accountants of the Company,
provided that the Company may designate one or more individuals who will be
present during such discussions.
(f) COMPLIANCE WITH LAWS. The Company will comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental agency or authority, including all Environmental
Laws.
(g) MAINTENANCE OF PROPERTIES, ETC. The Company will maintain and
preserve all of its material properties necessary or useful in the proper
conduct of its business in good working order and condition in accordance
with the general practice of other corporations of similar character and
size, ordinary wear and tear excepted.
(h) LICENSES. The Company will obtain and maintain all licenses,
authorizations, consents, filings, exemptions, registrations and other
governmental approvals of any governmental agency or authority necessary in
connection with the execution, delivery and performance of the Loan
Documents, the consummation of the transactions therein contemplated or the
operation and conduct of its business and ownership of its properties, except
where the failure to do so would not have a Material Adverse Effect.
14.
(i) USE OF PROCEEDS. The Company will use the proceeds of the
Loans solely in accordance with the Budget. No amount of the proceeds of the
Loans may be used in connection with the Company's electric vehicle business.
(j) FURTHER ASSURANCES AND ADDITIONAL ACTS. The Company will
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and
assurances and perform such acts as the Lender shall deem necessary or
appropriate to effectuate the purposes of the Loan Documents, and promptly
provide the Lender with evidence of the foregoing satisfactory in form and
substance to the Lender.
SECTION 5.03 NEGATIVE COVENANTS. So long as any of the
Obligations shall remain unpaid or the Lender shall have any Commitment, the
Company agrees that without the consent of Lender, which consent will not be
unreasonably withheld:
(a) LIENS; NEGATIVE PLEDGES. (i) The Company will not create,
incur, assume or suffer to exist any Lien upon or with respect to any of its
properties, revenues or assets, whether now owned or hereafter acquired,
other than Permitted Liens. (ii) The Company will not enter into any
agreement (other than this Agreement or any other Loan Document) prohibiting
the creation or assumption of any Lien upon any of its properties, revenues
or assets, whether now owned or hereafter acquired.
(b) CHANGE IN NATURE OF BUSINESS. The Company will not engage in
any material line of business substantially different from those lines of
business carried on by it at the date hereof.
(c) RESTRICTIONS ON FUNDAMENTAL CHANGES. The Company will not
merge with or consolidate into, or acquire all or substantially all of the
assets of, any Person, or sell, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets.
(d) SALES OF ASSETS. The Company will not sell, lease, transfer,
or otherwise dispose of, or part with control of (whether in one transaction
or a series of transactions) any assets (including any shares of stock in any
other Person), except: (i) sales or other dispositions of inventory, and the
license, sublicense and grant of distribution and similar rights, in the
ordinary course of business; (ii) sales or other dispositions of assets in
the ordinary course of business which have become worn out or obsolete or
which are promptly being replaced; (iii) sales or other dispositions of
assets (other than accounts receivable) outside the ordinary course of
business not exceeding in the aggregate $25,000 in any fiscal year; and (iv)
a sale of 15% of the outstanding capital stock of AEVT Incorporated to Xxx
Xxxx upon Xx. Xxxx'x payment of $88,000 to the Company.
(e) DISTRIBUTIONS. The Company will not declare or pay any
dividends in respect of the Company's capital stock, or purchase, redeem,
retire or otherwise acquire for value any of its capital stock now or
hereafter outstanding, return any capital to its shareholders as such, except
that the Company may: (A) declare and deliver dividends and distributions
payable only in common stock of the Company; (B) purchase, redeem, retire, or
otherwise acquire shares
15.
of its capital stock with the proceeds received from a substantially
concurrent issue of new shares of its capital stock; and (C) repurchase
shares of Class B Common Stock as contemplated by the Securities Purchase
Agreement.
(f) LOANS AND INVESTMENTS. The Company will not purchase or
otherwise acquire the capital stock, assets (constituting a business unit),
obligations or other securities of or any interest in any Person, or
otherwise extend any credit to or make any additional investments in any
Person, other than in connection with: (i) extensions of credit in the nature
of accounts receivable or notes receivable arising from the sales of goods or
services in the ordinary course of business; (ii) short term, investment
grade money market instruments, in accordance with the Company's usual and
customary treasury management policies.
(g) TRANSACTIONS WITH RELATED PARTIES. The Company will not enter
into any transaction, including the purchase, sale or exchange of property or
the rendering of any services, with any Affiliate, any officer or director
thereof or any Person which beneficially owns or holds 5% or more of the
equity securities, or 5% or more of the equity interest, thereof (a "Related
Party"), or enter into, assume or suffer to exist, any employment or
consulting contract with any Related Party, except (i) a transaction or
contract which is in the ordinary course of the Company's business and which
is upon fair and reasonable terms not less favorable to the Company than it
would obtain in a comparable arm's length transaction with a Person not a
Related Party (ii) the transactions and agreements contemplated by the
Securities Purchase Agreement, and (iii) loans from Xxx Xxxx to the Company
at interest rates not exceeding 10% per annum and upon fair and reasonable
terms not less favorable to the Company than it would obtain in a comparable
arm's length transaction with a Person not a Related Party.
SECTION 5.04 CONFIDENTIALITY. The Lender will hold in confidence
all, and not disclose to others for any reason whatsoever any, non-public
information received by it from the Company in connection with this
Agreement, except that the Lender may provide such confidential information
in response to legal process or applicable governmental regulations provided
that the Lender forthwith notifies the Company of its obligation to provide
such confidential information and fully cooperates with the Company to
protect the confidentiality of such information.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 EVENTS OF DEFAULT. Any of the following events
which shall occur shall constitute an "Event of Default":
(a) PAYMENTS. The Company shall fail to pay when due any amount
of principal of, or interest on, any Loan or Note, or any fee or other amount
payable under any of the Loan Documents.
(b) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty by the Company under or in connection with the Loan Documents shall
prove to have been incorrect in any material respect when made or deemed made.
16.
(c) FAILURE BY COMPANY TO PERFORM CERTAIN COVENANTS. The Company
shall fail to perform or observe any term, covenant or agreement contained in
Section 5.03 or Subsections (a) or (i) of Section 5.02.
(d) FAILURE BY COMPANY TO PERFORM OTHER COVENANTS. The Company
shall fail to perform or observe any term, covenant or agreement, other than
those specified in Section 6.01(c), contained in any Loan Document on its
part to be performed or observed, and any such failure shall continue for a
period of 10 days from the occurrence thereof (unless the Lender determines
that such failure is not capable of remedy).
(e) INSOLVENCY. (i) The Company shall (A) make a general
assignment for the benefit of creditors or (B) be dissolved, liquidated,
wound up or cease its corporate existence; or (ii) the Company (A) shall file
a voluntary petition in bankruptcy or a petition or answer seeking
reorganization, to effect a plan or other arrangement with creditors or any
other relief under the Bankruptcy Reform Act of 1978 (the "Bankruptcy Code")
or under any other state or federal law relating to bankruptcy or
reorganization granting relief to debtors, whether now or hereafter in
effect, or (B) shall file an answer admitting the jurisdiction of the court
and the material allegations of any involuntary petition filed against the
Company pursuant to the Bankruptcy Code or any such other state or federal
law; or (iii) the Company shall be adjudicated a bankrupt, or shall make an
assignment for the benefit of creditors, or shall apply for or consent to the
appointment of any custodian, receiver or trustee for all or any substantial
part of the Company's property, or shall take any action to authorize any of
the actions or events set forth above in this subsection; or (iv) an
involuntary petition seeking any of the relief specified in this subsection
shall be filed against the Company and not dismissed within 60 days; or (v)
any order for relief shall be entered against the Company, in any involuntary
proceeding under the Bankruptcy Code or any such other state or federal law
referred to in this subsection.
(f) DISSOLUTION, ETC. The Company shall (i) liquidate, wind up or
dissolve (or suffer any liquidation, wind-up or dissolution), (ii)
discontinue its operations, or (iii) take any corporate action to authorize
any of the actions or events set forth above in this subsection (f).
(g) JUDGMENTS. (i) A final judgment or order for the payment of
money in excess of $50,000 (or its equivalent in another currency) which is
not fully covered by third-party insurance shall be rendered against the
Company (or its equivalent in another currency); or (ii) any non-monetary
judgment or order shall be rendered against the Company which has or would
reasonably be expected to have a Material Adverse Effect; and in each case
there shall be any period of 15 consecutive days during which such judgment
continues unsatisfied or during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in effect.
(h) MATERIAL ADVERSE EFFECT. Any circumstance, condition, or
event shall have occurred which has or could reasonably be expected to have a
Material Adverse Effect.
(i) COLLATERAL DOCUMENTS. Any "Event of Default" as defined in the
Collateral Documents shall have occurred; or any of the Collateral Documents
after delivery thereof shall for any reason be revoked or invalidated, or
otherwise cease to be in full force and effect, or the Company or any other
Person shall contest in any manner the validity or
17.
enforceability thereof, or the Company or any other Person shall deny that it
has any further liability or obligation thereunder; or any of the Collateral
Documents for any reason, except to the extent permitted by the terms
thereof, shall cease to create a valid and perfected first priority Lien
subject only to Permitted Liens in any of the Collateral purported to be
covered thereby.
SECTION 6.02 EFFECT OF EVENT OF DEFAULT. If any Event of Default
shall occur, the Lender may, by notice to the Company, declare the Commitment
to be terminated, whereupon the same shall forthwith terminate. If any Event
of Default under Section 6.01(e) shall occur, the Lender may declare the
entire unpaid principal amount of the Loans and the Note, all interest
accrued and unpaid thereon and all other Obligations to be forthwith due and
payable, whereupon the Loans and the Note, all such accrued interest and all
such other Obligations shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company. In addition, if any Event of Default
under Section 6.01(a) or Section 6.01(e) shall occur, the Lender may exercise
any or all of the Lender's rights and remedies under the Collateral Documents
and proceed to enforce all other rights and remedies available to the Lender
under the Loan Documents and applicable law.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 AMENDMENTS AND WAIVERS. No amendment to any
provision of the Loan Documents shall be effective unless it is in writing
and has been signed by the Lender and the Company, and no waiver of any
provision of any Loan Document, or consent to any departure by the Company
therefrom, shall be effective unless it is in writing and has been signed by
the Lender. Any such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 7.02 NOTICES. All notices and other communications
provided for hereunder and under the other Loan Documents shall, unless
otherwise stated herein, be in writing (including by facsimile transmission)
and mailed, sent or delivered to the respective parties hereto at or to their
respective addresses or facsimile numbers set forth below their names on the
signature pages hereof, or at or to such other address or facsimile number as
shall be designated by any party in a written notice to the other party
hereto. All such notices and communications shall be effective (i) if
delivered by hand, when delivered; (ii) if sent by mail, upon the earlier of
the date of receipt or five Business Days after deposit in the mail, first
class, postage prepaid; and (iii) if sent by facsimile transmission, when
sent; PROVIDED, HOWEVER, that notices and communications to the Lender
pursuant to Article II shall not be effective until received.
SECTION 7.03 NO WAIVER; CUMULATIVE REMEDIES. No failure on the
part of the Lender to exercise, no delay in exercising, and no course of
dealing with respect to, any right, remedy, power or privilege under any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege.
18.
The rights and remedies under the Loan Documents are cumulative and not
exclusive of any rights, remedies, powers and privileges that may otherwise
be available to the Lender.
SECTION 7.04 COSTS AND EXPENSES; INDEMNITY.
(a) COSTS AND EXPENSES. The Company agrees to pay on demand: (i)
the reasonable out-of-pocket costs and expenses of the Lender and any of its
Affiliates, and the reasonable fees and disbursements of counsel to the
Lender and its Affiliates, in connection with the negotiation, preparation,
execution, delivery and administration of the Loan Documents and any
amendments, modifications or waivers of the terms thereof (but not in excess
of $50,000) and (ii) all reasonable costs and expenses of the Lender and its
Affiliates, and fees and disbursements of counsel, in connection with (A) any
Default, (B) the enforcement or attempted enforcement of, and preservation of
any rights or interests under, the Loan Documents, (C) any out-of-court
workout or other refinancing or restructuring or any bankruptcy or insolvency
case or proceeding, and (D) the preservation of and realization upon any of
the Collateral.
(b) INDEMNIFICATION. Whether or not the transactions contemplated
hereby shall be consummated, the Company hereby agrees to indemnify the
Lender, any Affiliate thereof and their respective directors, officers,
employees, agents, counsel and other advisors (each an "Indemnified Person")
against, and hold each of them harmless from, any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
the reasonable fees and disbursements of counsel to an Indemnified Person,
which may be imposed on, incurred by, or asserted against any Indemnified
Person, (i) in any way relating to or arising out of any of the Loan
Documents, the use or intended use of the proceeds of the Loans or the
transactions contemplated hereby or thereby, (ii) with respect to any
investigation, litigation or other proceeding relating to any of the
foregoing, irrespective of whether the Indemnified Person shall be designated
a party thereto, or (iii) in any way relating to or arising out of the use,
generation, manufacture, installation, treatment, storage or presence, or the
spillage, leakage, leaching, migration, dumping, deposit, discharge, disposal
or release, at any time, of any Hazardous Substances on, under, at or from
any properties of the Company, including any personal injury or property
damage suffered by any Person, and any investigation, site assessment,
environmental audit, feasibility study, monitoring, clean-up, removal,
containment, restoration, remedial response or remedial work undertaken by or
on behalf of the any Indemnified Person at any time, voluntarily or
involuntarily, with respect to the Premises (the "Indemnified Liabilities");
PROVIDED that the Company shall not be liable to any Indemnified Person for
any portion of such Indemnified Liabilities to the extent they are found by a
final decision of a court of competent jurisdiction to have resulted from
such Indemnified Person's gross negligence or willful misconduct. If and to
the extent that the foregoing indemnification is for any reason held
unenforceable, the Company agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 7.05 SURVIVAL. All covenants, agreements,
representations and warranties made in any Loan Documents shall, except to
the extent otherwise provided therein, survive the execution and delivery of
this Agreement, the making of the Loans and the execution and delivery of the
Note, and shall continue in full force and effect so long as the Lender has
any Commitment, any Loans remain outstanding or any other Obligations remain
unpaid or any
19.
obligation to perform any other act hereunder or under any other Loan
Document remains unsatisfied. Without limiting the generality of the
foregoing, the obligations of the Company under Section 7.04, and all similar
obligations under the other Loan Documents (including all obligations to pay
costs and expenses and all indemnity obligations), shall survive the
repayment of the Loans and the termination of the Commitments.
SECTION 7.06 BENEFITS OF AGREEMENT. The Loan Documents are
entered into for the sole protection and benefit of the parties hereto and
their successors and assigns, and no other Person shall be a direct or
indirect beneficiary of, or shall have any direct or indirect cause of action
or claim in connection with, any Loan Document.
SECTION 7.07 BINDING EFFECT; ASSIGNMENT. This Agreement shall
become effective when it shall have been executed by the Company and the
Lender and thereafter shall be binding upon, inure to the benefit of and be
enforceable by the Company, the Lender and their respective successors and
assigns. The Company shall not have the right to assign its rights and
obligations hereunder or under the other Loan Documents or any interest
herein or therein without the prior written consent of the Lender. The
Lender reserves the right to sell, assign, transfer or grant participations
in all or any portion of the Lender's rights and obligations hereunder and
under the other Loan Documents (i) to one or more Affiliates of the Lender
and/or (ii) with the prior consent of the Company (which consent shall not be
unreasonably withheld) to any other Person. In the event of any such
assignment, the assignee shall be deemed a "Lender" for all purposes of the
Loan Documents with respect to the rights and obligations assigned to it, and
the obligations of the Lender so assigned shall thereupon terminate. The
Company shall, from time to time upon request of the Lender, enter into such
amendments to the Loan Documents and execute and deliver such other documents
as shall be necessary to effect any such grant or assignment. The Company
agrees that in connection with any such grant or assignment, the Lender may
deliver to the prospective participant or assignee financial statements and
other relevant information relating to the Company (subject to such Person
entering into a confidentiality agreement with the Company on terms
reasonably satisfactory to the Company).
SECTION 7.08 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
SECTION 7.09 WAIVER OF JURY TRIAL. THE COMPANY AND THE LENDER EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE COMPANY AND THE LENDER EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM
20.
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
SECTION 7.10 ENTIRE AGREEMENT. The Loan Documents reflect the
entire agreement between the Company and the Lender with respect to the
matters set forth herein and therein and supersede any prior agreements,
commitments, drafts, communication, discussions and understandings, oral or
written, with respect thereto.
SECTION 7.11 SEVERABILITY. Whenever possible, each provision of
the Loan Documents shall be interpreted in such manner as to be effective and
valid under all applicable laws and regulations. If, however, any provision
of any of the Loan Documents shall be prohibited by or invalid under any such
law or regulation in any jurisdiction, it shall, as to such jurisdiction, be
deemed modified to conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so modified, it shall be
ineffective and invalid only to the extent of such prohibition or invalidity
without affecting the remaining provisions of such Loan Document, or the
validity or effectiveness of such provision in any other jurisdiction.
SECTION 7.12 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the
same agreement.
21.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Credit Agreement, as of the date first above written.
THE COMPANY
AMERIGON INCORPORATED, a California
corporation
By /s/ XXX X. XXXX
----------------------------------------
Title:
Address:
------------------------------------------
------------------------------------------
------------------------------------------
Attn.:
------------------------------------
Fax No.
-----------------------------------
THE LENDER
BIG STAR INVESTMENTS LLC
By: /s/ XXXX X. XXXXX
---------------------------------------
Address:
------------------------------------------
------------------------------------------
------------------------------------------
Attn.:
------------------------------------
Fax No.
-----------------------------------
22.
