Exhibit 10.20
TERM NOTE
$4,000,000.00 August 9, 2002
Walla Walla, Washington
FOR VALUE RECEIVED, the undersigned, KEY TECHNOLOGY, INC., an Oregon
corporation (the "Borrower"), hereby promises to pay to the order of BANNER
BANK, a Washington banking corporation (the "Lender") on July 31, 2007 (the
"Term Loan Maturity Date") the unpaid principal balance of the Term Loan made by
Lender in the initial amount of Four Million Dollars ($4,000,000) evidenced by
this Note, together with interest thereon from the date hereof until maturity at
a per annum rate equal to one percent (1%) above the Prime Rate (changing as
such Prime Rate changes); provided, however, that after the occurrence and
during the continuation of an Event of Default, interest shall accrue at a per
annum rate equal to three percent (3%) above the Prime Rate (changing as such
Prime Rate changes). Notwithstanding anything herein to the contrary, interest
shall not accrue at a rate in excess of the maximum rate permitted by applicable
law.
Xxxxxxxx further agrees as follows:
1. All payments of principal and interest on this Note shall be made by
paying the same in United States Dollars and in immediately available funds to
Lender in accordance with wire transfer instructions as may be provided to
Borrower from time to time, at its main office, Walla Walla, Washington, not
later than 2:00 p.m. (Walla Walla time) on the date on which such payment shall
become due. If such payment is received after 2:00 p.m., then it will be deemed
received on the next Business Day.
2. Borrower shall repay to Lender the principal amount of the Term Loan
evidenced by this Note in consecutive quarterly installments commencing on
November 1, 2002 and continuing on the first Business Day of each February, May,
August and November thereafter in the amount of Two Hundred Thousand Dollars
($200,000) and shall repay the balance of the principal outstanding of the Term
Loan on the Term Loan Maturity Date.
3. Accrued but unpaid interest on the Term Loan shall be paid in arrears
on the first Business Day of each February, May, August and November and at the
Term Loan Maturity Date. Accrued interest on the Term Loan shall be payable on
demand after the occurrence of an Event of Default.
4. This Note is issued under and is subject to the terms of that certain
Loan Agreement dated as of August 9, 2002, by and between Borrower and Xxxxxx
(as amended from time to time, the "Loan Agreement"). Capitalized terms not
defined herein have the meanings set forth in the Loan Agreement.
5. It is expressly provided that if any of the Events of Default described
in Section 7.1(g) or Section 7.1(h) of the Loan Agreement shall occur, the
entire unpaid balance of
the principal and interest hereunder shall be immediately due and payable in
accordance with the terms of the Loan Agreement. It is also expressly provided
that upon the occurrence of any other Event of Default, the entire remaining
unpaid balance of the principal and interest may be declared by Xxxxxx to be
immediately due and payable in accordance with the terms of the Loan Agreement.
6. Borrower may the Term Loan at any time without penalty or premium.
7. The unpaid principal balance of the Term Loan evidenced by this Note
shall be the face amount of this Note, less the amount of the principal payments
made hereon. Lender is hereby authorized to record the date and amount of each
payment of principal and interest on the Term Loan evidenced by this Note on a
schedule annexed hereto and constituting a part of this Note or maintained in
connection herewith. Any such recordation by Xxxxxx shall constitute prima facie
evidence of the accuracy of the information so recorded; provided, however, that
the failure to make any such recordation or any error in any such recordation
shall not affect the obligations of Borrower hereunder.
8. Each maker, surety, guarantor and endorser of this Note expressly
waives all notices, demands for payment, presentations for payment, notices of
intention to accelerate the maturity, protest and notice of protest.
9. In the event this Note is placed in the hands of an attorney for
collection, or suit is brought on the same, or the same is collected through
bankruptcy or other judicial proceedings, Xxxxxxxx agrees and promises to pay
reasonable attorneys' fees and collection costs, including all out-of-pocket
expenses and the allocated costs and disbursements of internal counsel, incurred
by Xxxxxx.
10. This Note has been executed and delivered in and shall be governed by
and construed in accordance with the laws of the State of Washington, excluding
its conflict of laws rules. Borrower hereby irrevocably submits to the
non-exclusive jurisdiction of any state or federal court sitting in the City of
Walla Walla, Walla Walla County, Washington, in any action or proceeding brought
to enforce or otherwise arising out of or relating to this Note and hereby
waives any objection to venue in any such court and any claim that such forum is
an inconvenient forum.
BORROWER: KEY TECHNOLOGY, INC., an Oregon
corporation
By /s/ Xxx X. Xxxxx
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Its C.F.O.
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