BANK1ONE
BUSINESS LOAN AGREEMENT
SHADED AREA BEGINS
Principal Loan Date Maturity Loan No.
$4,700,000.00 08-13-1997 02-13-2001
Call Collateral Account Officer Initials
152
SHADED AREA ENDS
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., A Lender: BANK ONE, COLORADO, N.A.
COLORADO CORPORATION DENVER BANKING CENTER
00000 XXXX 00XX XXXXXX 0000 XXXXX XXXXXXXX XXXX.
DENVER, CO 80239 DENVER, CO 80222
THIS BUSINESS LOAN AGREEMENT between VARI-L COMPANY, INC., A COLORADO
CORPORATION ("Borrower") and BANK ONE, COLORADO, N.A. ("Lender") is made
and executed on the following terms and conditions. Borrower has received
prior commercial loans from Lender or has applied to Lender for a
commercial loan or loans and other financial accommodations, including
those which may be described on any exhibit or schedule attached to this
Agreement. All such loans and financial accommodations, together with all
future loans and financial accommodations from Lender to Borrower, are
referred to in this Agreement individually as the "Loan" and collectively
as the "Loans." Borrower understands and agrees that: (a) in granting,
renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements, as set forth in this
Agreement; (b) the granting, renewing, or extending of any Loan by Lender
at all times shall be subject to Xxxxxx's sole judgment and discretion;
and (c) all such Loans shall be and shall remain subject to the following
terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of August 13, 1997, and shall
continue thereafter until all indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when
used in this Agreement. Terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial
Code. All references to dollar amounts shall mean amounts in lawful money
of the United States of America.
Agreement. The word "Agreement" means this Business Loan Agreement,
as this Business Loan Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time.
Borrower. The word "Borrower" means VARI-L COMPANY, INC., A
COLORADO CORPORATION. The word "Borrower" also includes, as
applicable, all subsidiaries and affiliates of Borrower as provided
below in the paragraph titled "Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
Cash Flow. The words "Cash Flow" mean net income after taxes, and
exclusive of extraordinary gains and income, plus depreciation and
amortization.
Collateral. The word "Collateral" means and includes without
limitation all property and assets granted as collateral security for
a Loan, whether real or personal property, whether granted directly
or indirectly, whether granted now or in the future, and whether
granted in the form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien
or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
Debt. The word "Debt" means all of Borrower's liabilities excluding
Subordinated Debt.
ERISA. The word "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
Event of Default. The words "Event of Default" mean and include
without limitation any of the Events of Default set forth below in
the section titled "EVENTS OF DEFAULT."
Grantor. The word "Grantor" means and includes without limitation
each and all of the persons or entities granting a Security Interest
in any Collateral for the Indebtedness, including without limitation
all Borrowers granting such a Security Interest.
Guarantor. The word "Guarantor" means and includes without
limitation each and all of the guarantors, sureties, and
accommodation parties in connection with any Indebtedness.
Indebtedness. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as
well as all claims by Lender against Borrower, or any one or more of
them; whether now or hereafter existing, voluntary or involuntary,
due or not due, absolute or contingent, liquidated or unliquidated;
whether Borrower may be liable individually or jointly with others;
whether Borrower may be obligated as a guarantor, surety, or
otherwise; whether recovery upon such Indebtedness may be or
hereafter may become barred by any statute of limitations; and
whether such Indebtedness may be or hereafter may become otherwise
unenforceable.
Lender. The word "Lender" means BANK ONE, COLORADO, N.A., its
successors and assigns.
Liquid Assets. The words "Liquid Assets" mean Borrower's cash on
hand plus Borrower's readily marketable securities.
Loan. The word "Loan" or "Loans" means and includes without
limitation any and all commercial loans and financial accommodations
from Lender to Borrower, whether now or hereafter existing, and
however evidenced, including without limitation those loans and
financial accommodations described herein or described on any exhibit
or schedule attached to this Agreement from time to time.
Note. The word "Note" means and includes without limitation
Borrower's promissory note or notes, if any, evidencing Borrower's
Loan obligations in favor of Lender, as well as any substitute,
replacement or refinancing note or notes therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and
security interests securing Indebtedness owed by Borrower to Lender;
(b) liens for taxes, assessments, or similar charges either not yet
due or being contested in good faith; (c) liens of materialmen,
mechanics, warehousemen, or carriers, or other like liens arising in
the ordinary course of business and securing obligations which are
not yet delinquent; (d) purchase money liens or purchase money
security interests upon or in any property acquired or held by
Borrower in the ordinary course of business to secure Indebtedness
outstanding on the date of this Agreement or permitted to be incurred
under the paragraph of this Agreement titled "Indebtedness and
Liens"; (e) liens and security interests which, as of the date of
this Agreement, have been disclosed to and approved by the Lender in
writing; and (f) those liens and security interests which in the
aggregate constitute an immaterial and insignificant monetary amount
with respect to the net value of Xxxxxxxx's assets.
Related Documents. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust, and all other instruments,
agreements and documents, whether now or hereafter existing, executed
in connection with the Indebtedness.
Security Agreement. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
Security Interest. The words "Security Interest" mean and include
without limitation any type of collateral security, whether in the
form of a lien, charge, mortgage, deed of trust, assignment, pledge,
chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien or title retention contract,
lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law,
contract, or otherwise.
XXXX. The word "XXXX" means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
Subordinated Debt. The words "Subordinated Debt" mean Indebtedness
and liabilities of Borrower which have been subordinated by written
agreement to Indebtedness owed by Borrower to Lender in form and
substance acceptable to Lender.
Tangible Net Worth. The words "Tangible Net Worth" mean Borrower's
total assets excluding all intangible assets (i.e., goodwill,
trademarks, patents, copyrights, organizational expenses, and similar
intangible items, but including leaseholds and leasehold
improvements) less total Debt.
Working Capital. The words "Working Capital" mean Borrower's current
assets, excluding prepaid expenses, less Borrower's current
liabilities.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the
Initial Loan Advance and each subsequent Loan Advance under this Agreement
shall be subject to the fulfillment to Lender's satisfaction of all of the
conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender in form
satisfactory to Lender the following documents for the Loan: (a) the
Note, (b) evidence of insurance as required below; and (c) any other
documents required under this Agreement or by Lender or its counsel.
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note
and the Related Documents, and such other authorizations and other
documents and instruments as Lender or its counsel, in their sole
discretion, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all
fees, charges, and other expenses which are then due and payable as
specified in this Agreement or any Related Document.
Representations and Warranties. The representations and warranties
set forth in this Agreement, in the Related Documents, and in any
document or certificate delivered to Lender under this Agreement are
true and correct.
No Event of Default. There shall not exist at the time of any
advance a condition which would constitute an Event of Default under
this Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Lender, as of the date of this Agreement, as of the date of each
disbursement of Loan proceeds, as of the date of any renewal, extension or
modification of any Loan, and at all times any indebtedness exists:
Organization. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of
Colorado and is validly existing and in good standing in all states
in which Borrower is doing business. Borrower has the full power and
authority to own its properties and to transact the businesses in
which it is presently engaged or presently proposes to engage.
Borrower also is duly qualified as a foreign corporation and is in
good standing in all states in which the failure to so qualify would
have a material adverse effect on its businesses or financial
condition.
Authorization. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to be
executed, delivered or performed by Borrower, have been duly
authorized by all necessary action by Borrower; do not require the
consent or approval of any other person, regulatory authority or
governmental body; and do not conflict with, result in a violation
of, or constitute a default under (a) any provision of its articles
of incorporation or organization, or bylaws, or any agreement or
other instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower.
Financial Information. Each financial statement of Xxxxxxxx supplied
to Lender truly and completely disclosed Xxxxxxxx's financial
condition as of the date of the statement, and there has been no
material adverse change in Borrower's financial condition subsequent
to the date of the most recent financial statement supplied to
Lender. Borrower has no material contingent obligations except as
disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or
agreement required hereunder to be given by Xxxxxxxx when delivered
will constitute, legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective
terms.
Properties. Except as contemplated by this Agreement or as
previously disclosed in Xxxxxxxx's financial statements or in writing
to Lender and as accepted by Xxxxxx, and except for property tax
liens for taxes not presently due and payable, Borrower owns and has
good title to all of Borrower's properties free and clear of all
Security Interests, and has not executed any security documents or
financing statements relating to such properties. All of Xxxxxxxx's
properties are titled in Borrower's legal name, and Xxxxxxxx has not
used, or filed a financing statement under, any other name for at
least the last five (5) years.
Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for
unpaid taxes) against Borrower is pending or threatened, and no other
event has occurred which may materially adversely affect Borrower's
financial condition or properties, other than litigation, claims, or
other events, if any, that have been disclosed to and acknowledged by
Xxxxxx in writing.
Taxes. To the best of Xxxxxxxx's knowledge, all tax returns and
reports of Borrower that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental charges have
been paid in full, except those presently being or to be contested by
Borrower in good faith in the ordinary course of business and for
which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in
writing, Xxxxxxxx has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or
indirectly securing repayment of Borrower's Loan and Note, that would
be prior or that may in any way be superior to Xxxxxx's Security
Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements
directly or indirectly securing repayment of Xxxxxxxx's Loan and Note
and all of the Related Documents are binding upon Borrower as well as
upon Xxxxxxxx's successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms.
Commercial Purposes. Borrower intends to use the Loan proceeds
solely for business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to which
Borrower may have any liability complies in all material respects
with all applicable requirements of law and regulations, and (i) no
Reportable Event nor Prohibited Transaction (as defined in ERISA) has
occurred with respect to any such plan, (ii) Borrower has not
withdrawn from any such plan or initiated steps to do so, (iii) no
steps have been taken to terminate any such plan, and (iv) there are
no unfunded liabilities other than those previously disclosed to
Lender in writing.
Location of Xxxxxxxx's Offices and Records. Borrower's place of
business, or Xxxxxxxx's Chief executive office, if Xxxxxxxx has more
than one place of business, is located at 00000 XXXX 00XX XXXXXX,
XXXXXX, XX 00000. Unless Borrower has designated otherwise in
writing this location is also the office or offices where Borrower
keeps its records concerning the Collateral.
Information. All information heretofore or contemporaneously
herewith furnished by Borrower to Lender for the purposes of or in
connection with this Agreement or any transaction contemplated hereby
is, and all information hereafter furnished by or on behalf of
Borrower to Lender will be, true and accurate in every material
respect on the date as of which such information is dated or
certified; and none of such information is or will be, incomplete by
omitting to state any material fact necessary to make such
information not misleading.
Survival of Representations and Warranties. Xxxxxxxx understands and
agrees that Xxxxxx, without independent investigation, is relying
upon the above representations and warranties in making the above
referenced Loan to Borrower. Xxxxxxxx further agrees that the
foregoing representations and warranties shall be continuing in
nature and shall remain in full force and effect until such time as
Borrower's Indebtedness shall be paid in full, or until this
Agreement shall be terminated in the manner provided above, whichever
is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Xxxxxx
that, while this Agreement is in effect, Borrower will:
Litigation. Promptly inform Xxxxxx in writing of (a) all material
adverse changes in Borrower's financial condition, and (b) all
existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower or
any Guarantor which could materially affect the financial condition
of Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent
basis, and permit Xxxxxx to examine and audit Xxxxxxxx's books and
records at all reasonable times.
Financial Statements. Furnish Lender with, as soon as available, but
in no event later than one hundred twenty (120) days after the end of
each fiscal year, Xxxxxxxx's balance sheet and income statement for
the year ended, audited by a certified public accountant satisfactory
to Lender, and, as soon as available, but in no event later than
sixty 60) days after the end of each fiscal quarter, Borrower's
balance sheet and profit and loss statement for the period ended,
prepared and certified as correct to the best knowledge and belief by
Xxxxxxxx's chief financial officer or other officer or person
acceptable to Xxxxxx. All financial reports required to be provided
under this Agreement shall be prepared in accordance with generally
accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables
and payables, inventory schedules, budgets, forecasts, tax returns,
and other reports with respect to Xxxxxxxx's financial condition and
business operations as Lender may reasonably request from time to
time. Specifically, Borrower shall provide Lender as soon as
possible, but no later than ninety (90) days after the end of each
fiscal period, a projected balance sheet and income statement for the
coming fiscal year.
Financial Covenants and Ratios. Comply with the following covenants
and ratios:
Net Worth Ratio. Maintain a ratio of Total Liabilities to
Tangible Net Worth of less than 1.00 to 1.00. Total Liabilities
shall exclude any subordinated debt; tangible net worth shall
include any subordinated debt.
Current Ratio. Maintain a ratio of Current Assets to Current
Liabilities in excess of 1.50 to 1.00. Except as provided above,
all computations made to determine compliance with the
requirements contained in this paragraph shall be made in
accordance with generally accepted accounting principles,
applied on a consistent basis, and certified by Borrower as
being true and correct. Current assets shall exclude any
prepaid expenses and any affiliate or related party receivables.
Insurance. Maintain fire and other risk insurance, public
liability insurance, and such other insurance as Lender may
require with respect to Borrower's properties and operations, in
form, amounts, coverages and with insurance companies reasonably
acceptable to Lender. Borrower, upon request of Xxxxxx, will
deliver to Lender from time to time the policies or certificates
of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished
without at least ten (10) days' prior written notice to Lender.
Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired
in any way by any act, omission or default of Borrower or any
other person. In connection with all policies covering assets
in which Lender holds or is offered a security interest for the
Loans. Borrower will provide Lender with such loss payable or
other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender,
reports on each existing insurance policy showing such information as
Lender may reasonably request, including without limitation the
following: (a) the name of the insurer; (b) the risks insured; (c)
the amount of the policy; (d) the properties insured; and (f) the
expiration date of the policy.
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any
default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Xxxxxxxx's business
operations, unless specifically consented to the contrary by Xxxxxx
in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its
Indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits. Provided however,
Xxxxxxxx will not be required to pay and discharge any such
assessment, tax, charge, xxxx, xxxx or claim so long as (a) the
legality of the same shall be contested in good faith by appropriate
proceedings, and (b) Borrower shall have established on its books
adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
accounting practices. Xxxxxxxx, upon demand of Lender, will furnish
to Lender evidence of payment of the assessments, taxes, charges,
levies, liens and claims and will authorize the appropriate
governmental official to deliver to Lender at any time a written
statement of any assessments, taxes, charges, levies, liens and
claims against Xxxxxxxx's properties, income, or profits.
Performance. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents
in a timely manner, and promptly notify Xxxxxx if Xxxxxxxx learns of
the occurrence of any event which constitutes an Event of Default
under this Agreement or under any of the Related Documents.
Operations. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender
of any change in executive and management personnel; conduct its
business affairs in a reasonable and prudent manner and in compliance
with all applicable federal, state and municipal laws, ordinances,
rules and regulations respecting its properties, charters, businesses
and operations, including without limitation, compliance with the
Americans With Disabilities Act and with all minimum funding
standards and other requirements of ERISA and other laws applicable
to Borrower's employee benefit plans.
Inspection. Permit employees or agents of Lender at any reasonable
time to inspect any and all Collateral for the Loan or Loans and
Xxxxxxxx's other properties and to examine or audit Xxxxxxxx's books,
accounts, and records and to make copies and memoranda of Xxxxxxxx's
books, accounts, and records. If Borrower now or at any time
hereafter maintains any records (including without limitation
computer generated records and computer software programs for the
generation of such records) in the possession of a third party,
Borrower, upon request of Xxxxxx, shall notify such party to permit
Lender free access to such records at all reasonable times and to
provide Lender with copies of any records it may request, all at
Borrower's expense.
Compliance Certificate. Unless waived in writing by Xxxxxx, provide
Lender within sixty (60) days of the end of each fiscal quarter with
a certificate executed by Xxxxxxxx's chief financial officer, or
other officer or person acceptable to Xxxxxx, certifying that the
representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying
that, as of the date of the certificate, no Event of Default exists
under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on its part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection
with any environmental activity whether or not there is damage to the
environment and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while
this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender:
Capital Expenditures. Aggregate capital expenditures in excess of
five million ($5,000,000) during any fiscal year.
Indebtedness and Liens. (a) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed
money, including capital leases, (b) except as allowed as a Permitted
Lien, sell. transfer, mortgage, assign, pledge, lease, grant a
security interest in, or encumber any of Borrower's assets, or (c)
sell with recourse any of Borrower's accounts, except to Lender.
Continuity of Operations. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, change its name,
dissolve or transfer or sell Collateral out of the ordinary course of
business, (c) pay any dividends on Borrower's stock (other than
dividends payable in its stock), or (d) purchase or retire any of
Borrower's outstanding shares or alter or amend Borrower's capital
structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance
money or assets, (b) purchase, create or acquire any interest in any
other enterprise or entity, or (c) incur any obligation as surety or
guarantor other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan
to Borrower, whether under this Agreement or under any other agreement,
Lender shall have no obligation to make Loan Advances or to disburse Loan
proceeds if: (a) Borrower or any Guarantor is in default under the terms
of this Agreement or any of the Related Documents or any other agreement
that Borrower or any Guarantor has with Lender; (b) Borrower or any
Guarantor becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (c) there occurs a material
adverse change in Borrower's financial condition, in the financial
condition of any Guarantor, or in the value of any Collateral securing any
Loan; or (d) any Guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such Guarantor's guaranty of the Loan or any other loan
with Lender.
OTHER RATIO. MAINTAIN A RATIO OF NET INCOME PLUS INTEREST EXPENSE PLUS
DEPRECIATION AND AMORTIZATION DIVIDED BY CURRENT MATURITIES OF LONG TERM
DEBT PLUS INTEREST EXPENSE OF NOT LESS THAN 1.4 TO 1.0. SAID RATIO WILL
BE CALCULATED ON A ROLLING (4) QUARTER BASIS.
EXHIBIT "A". An exhibit, titled "EXHIBIT "A"," is attached to this
Agreement and by this reference is made a part of this Agreement just as
if all the provisions, terms and conditions of the Exhibit had been fully
set forth in this Agreement.
RIGHT OF SETOFF. 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,
Xxxxxxxx's accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly with
someone else and all accounts Borrower may open in the future, excluding
however all IRA and Xxxxx accounts, and all trust accounts for which the
grant of a security interest would be prohibited by law. Borrower
authorizes Xxxxxx, to the extent permitted by applicable law and to the
extent in the event of default as defined herein and in Exhibit A shall
have occurred, to charge or setoff all sums owing on the Indebtedness
against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
Default on Indebtedness. Failure of Borrower to make any payment
when due on the Loans.
Other Defaults. Failure of Borrower or any Grantor to comply with or
to perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
Default in Favor of Third Parties. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of
the Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in any
material respect at the time made or furnished, or becomes false or
misleading at any time thereafter.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest), at any time and for any reason.
Insolvency. The dissolution or termination of Xxxxxxxx's existence
as a going business, the insolvency of Xxxxxxxx, the appointment of a
receiver for any part of Xxxxxxxx's property, any assignment for the
benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency. This includes a
garnishment, attachment, or levy on or of any of Borrower's deposit
accounts with Lender.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness.
Change in Ownership. Any change in ownership of sixty-seven percent
(67%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Xxxxxxxx's
financial condition, or Xxxxxx believes the prospect of payment or
performance of the indebtedness is impaired.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related
Documents, all commitments and obligations of Lender under this Agreement
or the Related Documents or any other agreement immediately will terminate
and, at Lender's option, all Indebtedness immediately will become due and
payable, all without notice of any kind to Borrower, except that in the
case of an Event of Default of the type described in the "Insolvency"
subsection above, such acceleration shall be automatic and not optional.
In addition, Lender shall have all the rights and remedies provided in the
Related Documents or available at law, in equity, or otherwise. Except as
may be prohibited by applicable law, all of Lender's rights and remedies
shall be cumulative and may be exercised singularly or concurrently.
Election by Xxxxxx to pursue any remedy shall not exclude pursuit of any
other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect
Xxxxxx's right to declare a default and to exercise its rights and
remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Applicable Law. This Agreement has been delivered to Lender and
accepted by Lender in the State of Colorado. If there is a lawsuit,
Xxxxxxxx agrees upon Xxxxxx's request to submit to the jurisdiction
of the courts of DENVER County, the State of Colorado. Xxxxxx and
Xxxxxxxx hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Xxxxxx or Borrower
against the other. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
Multiple Parties; Corporate Authority. All obligations of
Borrower under this Agreement shall be joint and several, and all
references to Borrower shall mean each and every Borrower. This
means that each of the Borrowers signing below is responsible for all
obligations in this Agreement.
Costs and Expenses. Xxxxxxxx agrees to pay upon demand all of
Xxxxxx's expenses, including without limitation attorneys' fees,
incurred in connection with the preparation, execution, enforcement,
modification and collection of this Agreement or in connection with
the Loans made pursuant to this Agreement. Xxxxxx may pay someone
else to help collect the Loans and to enforce this Agreement, and
Borrower will pay that amount. This includes, subject to any limits
under applicable law, Xxxxxx's attorneys' fees and Xxxxxx's legal
expenses, whether or not there is a lawsuit, including attorneys'
fees for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Xxxxxxxx also will
pay any court costs, in addition to all other sums provided by law.
Notices. All notices required to be given under this Agreement shall
be given in writing, may be sent by telefacsimile, and shall be
effective when actually delivered or when deposited with a nationally
recognized overnight courier or deposited in the United States mail,
first class, postage prepaid, addressed to the party to whom the
notice is to be given at the address shown above. Any party may
change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of
the notice is to change the party's address. To the extent permitted
by applicable law, if there is more than one Borrower, notice to any
Borrower will constitute notice to all Borrowers. For notice
purposes, Borrower will keep Lender informed at all times of
Xxxxxxxx's current address(es).
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision
invalid or unenforceable as to any other persons or circumstances.
If feasible, any such offending provision shall be deemed to be
modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modified, it shall
be stricken and all other provisions of this Agreement in all other
respects shall remain valid and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the context
of any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used herein shall include all subsidiaries and
affiliates of Borrower. Notwithstanding the foregoing however, under
no circumstances shall this Agreement be construed to require Lender
to make any Loan or other financial accommodation to any subsidiary
or affiliate of Borrower.
Successors and Assigns. All covenants and agreements contained by or
on behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent
of Lender.
Survival. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Xxxxxx and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Xxxxxx or on Xxxxxx's behalf.
Time is of the Essence. Time is of the essence in the performance of
this Agreement.
Waiver. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by
Xxxxxx. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A
waiver by Xxxxxx of a provision of this Agreement shall not prejudice
or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Xxxxxx, nor any course of dealing
between Xxxxxx and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender's rights or of any obligations
of Borrower or of any Grantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not
constitute continuing consent in subsequent instances where such
consent is required, and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
XXXXXXXX ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND XXXXXXXX AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS
OF AUGUST 13, 1997.
BORROWER:
VARI-L COMPANY, INC., A COLORADO CORPORATION
By:/s/ Xxxxx X. Xxxxxxx By:/s/Xxxxxx X. Xxxxx
XXXXX XXXXXXX, PRESIDENT/CEO
CHAIRMAN/CSO/SECRETARY
LENDER:
BANK ONE, COLORADO, N.A.
By:/s/X.X. Xxxx
Authorized Officer
EXHIBIT "A"
SHADED AREA BEGINS
Principal Loan Date Maturity Loan No.
$4,700,000.00 08-13-1997 02-13-2001
Call Collateral Account Officer Initials
152
SHADED AREA ENDS
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., A Lender: BANK ONE, COLORADO, N.A.
COLORADO CORPORATION DENVER BANKING CENTER
00000 XXXX 00XX XXXXXX 0000 XXXXX XXXXXXXX XXXX.
DENVER, CO 80239 DENVER, CO 80222
This EXHIBIT "A" is attached to and by this reference is made a part of
each Business Loan Agreement or Negative Pledge Agreement, dated August
13, 1997, and executed in connection with a loan or other financial
accommodations between BANK ONE, COLORADO, N.A. and VARI-L COMPANY, INC.,
A COLORADO CORPORATION.
Notwithstanding the events which have been defined earlier herein as those
events which shall constitute a default under this Business Loan
Agreement, any of the following shall constitute an Event of Default:
1. Default in any payment of interest or of principal on the Loans when
due and continuance thereof for fifteen (15) days; or
2. Default in the observance or performance of any agreement of the
Borrower herein set forth or in any other agreement between the
Lender and the Borrower and continuance thereof for 20 days after
written notice by Bank to Borrower; or
3. Default by the Borrower in the payment of any other Indebtedness or
in the observance or performance of any term, covenant or agreement
of the Borrower in any agreement relating to any Indebtedness of the
Borrower, the effect of which default is to permit the holder of such
Indebtedness to declare the same due prior to the date fixed for its
payment under the terms thereof and failure to cure such default
within 30 days after written notice by Xxxxxx to Borrower; or
4. Any representation or warranty made by the Borrower herein or in any
statement or certificate furnished by the Borrower hereunder, is
untrue in any material respect; or
5. The occurrence of any litigation or governmental proceeding which is
pending or threatened against Borrower, which could have a material
adverse effect on the Borrower's financial condition or business and
which is not remedied within a reasonable period of time after notice
thereof to the Borrower; or
6. The occurrence of any extraordinary situation which gives the Bank
reasonable grounds to believe that Borrower may not be able to
perform under the notes, the Agreement or any other documents
executed in connection with the Loans;
Then or at any time thereafter, unless such event of default is remedied,
the Bank or the holder of the Notes may, by notice in writing to the
Borrower, declare the Loans to be terminated or the Loans to be due and
payable or both, whereupon the Loans shall immediately terminate or the
Loans shall immediately become due and payable or both, as the case may
be.
THIS EXHIBIT "A" is EXECUTED ON AUGUST 13, 1997.
BORROWER:
VARI-L COMPANY, INC., A COLORADO CORPORATION
By:/s/Xxxxx X. Xxxxxxx By:/s/Xxxxxx X. Xxxxx
XXXXX X. XXXXXXX, PRESIDENT/CEO XXXXXX X. XXXXX,
CHAIRMAN/CSO/SECRETARY
LENDER:
BANK ONE, COLORADO, N.A.
By:/s/X. X. Xxxx
Authorized Officer
PROMISSORY NOTE
SHADED AREA BEGINS
Principal Loan Date Maturity Loan No.
$4,700,000.00 08-13-1997 02-13-2001
SHADED AREA ENDS
Call Collateral Account Officer Initials
152
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., A Lender: BANK ONE, COLORADO, N.A.
COLORADO CORPORATION DENVER BANKING CENTER
00000 XXXX 00XX XXXXXX 0000 XXXXX XXXXXXXX XXXX.
DENVER, CO 80239 DENVER, CO 80222
--------------------------------------------------------------------------
Principal Amount: $4,700,000.00 Interest Rate: 8.010%
Date of Note: August 13, 1997
PROMISE TO PAY. VARI-L COMPANY, INC., A COLORADO CORPORATION ("Borrower")
promises to pay to BANK ONE, COLORADO, N.A. ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Four
Million Seven Hundred Thousand & 00/100 Dollars ($4,700,000.00), together
with interest at the rate of 8.010% per annum on the unpaid principal
balance from August 13, 1997, until paid in full.
PAYMENT. Borrower will pay this loan in 41 regular payments of $73,278.63
each and one irregular last payment estimated at $2,768,401.27.
Xxxxxxxx's first payment is due September 13, 1997, and all subsequent
payments are due on the same day of each month after that. Xxxxxxxx's
final payment due February 13, 2001, will be for all principal and all
accrued interest not yet paid. Payments include principal and interest.
Interest on this Note is computed on a 365/360 simple interest 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 Xxxxxx's address shown above or at such other place as
Lender may designate in writing. Unless otherwise agreed or 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
and late charges.
PREPAYMENT; MINIMUM INTEREST CHARGE. Xxxxxxxx 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.
In any event, even upon full prepayment of this Note, Xxxxxxxx understands
that Lender is entitled to a minimum interest charge of $25.00. Other than
Xxxxxxxx's obligation to pay any minimum interest charge, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is
due. Early payments will not, unless agreed to by Xxxxxx in writing,
relieve Xxxxxxxx of Xxxxxxxx's obligation to continue to make payments
under the payment schedule. Rather, they will reduce the principal
balance due and may result in Borrower making fewer payments.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower falls to comply with or
to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any
other agreement or loan Borrower has with Lender. (c) Borrower defaults
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower's property or Borrower's
ability to repay this Note or perform Borrower's obligations under this
Note or any of the Related Documents. (d) Any representation or statement
made or furnished to Lender by Borrower or on Xxxxxxxx's behalf is false
or misleading in any material respect either now or at the time made or
furnished. (e) Xxxxxxxx becomes insolvent, a receiver is appointed for any
part of Xxxxxxxx's property, Xxxxxxxx makes an assignment for the benefit
of creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Xxxxxxxx's property on or in which Xxxxxx has a lien or
security interest. This includes a garnishment of any of Xxxxxxxx's
accounts with Xxxxxx. (g) Any guarantor dies or any of the other events
described in this default section occurs with respect to any guarantor of
this Note. (h) A material adverse change occurs in Borrower's financial
condition, or Xxxxxx believes the prospect of payment or performance of
the indebtedness is impaired.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately
due, without notice, and then Borrower will pay that amount. 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 interest rate on this Note to 25.000% per
annum, 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 or pay someone
else to help collect this Note if Borrower does not pay. Xxxxxxxx also
will pay Lender that amount. This includes, subject to any limits under
applicable law, Xxxxxx's attorneys' fees and Xxxxxx's legal expenses
whether or not there is a lawsuit, including attorney's fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated post-
judgment collection services. If not prohibited by applicable law,
Xxxxxxxx also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted by
Xxxxxx in the State of Colorado. If there is a lawsuit, Xxxxxxxx agrees
upon Xxxxxx's request to submit to the jurisdiction of the courts of
DENVER County, the State of Colorado. Xxxxxx and Xxxxxxxx hereby waive
the right to any jury trial in any action, proceeding, or counterclaim
brought by either Xxxxxx or Borrower against the other. This Note shall
be governed by and construed in accordance with the laws of the State of
Colorado.
RIGHT OF SETOFF. 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,
Xxxxxxxx's accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly with
someone else and all accounts Borrower may open in the future, excluding
however all IRA and Xxxxx accounts, and all trust accounts for which the
grant of a security interest would be prohibited by law. Borrower
authorizes Xxxxxx, to the extent permitted by applicable law and to the
extent an event of default as defined under the Business Loan Agreement
shall have occurred, to charge or setoff all sums owing on this Note
against any and all such accounts.
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 loan, or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect
Xxxxxx'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 Xxxxxx may modify this loan without the
consent of or notice to anyone other than the party with whom the
modification is made.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE. XXXXXXXX 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
By:/s/Xxxxx X. Xxxxxxx By:/s/Xxxxxx X. Xxxxx
XXXXX X. XXXXXXX, PRESIDENT/CEO XXXXXX X. XXXXX,
CHAIRMAN/CSO/SECRETARY
