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EXHIBIT 10.15
COMMERCIAL CREDIT AGREEMENT
This Commercial Credit Agreement ("Agreement") is made and entered into this 3rd
day of March 1997 by and between SANWA BANK CALIFORNIA (the "Bank") and APPLIED
SIGNAL TECHNOLOGY, INC. (the "Borrower").
SECTION I
DEFINITIONS
1.01. CERTAIN DEFINED TERMS. Unless elsewhere defined in this Agreement the
following terms shall have the following meanings (such meanings to be generally
applicable to the singular and plural forms of the terms defined):
A. "ADVANCE" shall mean an advance to the Borrower under any line of
credit facility or similar facility provided for in Section II of this
Agreement which provides for draws by the Borrower against an established
credit line.
B. "BUSINESS DAY" shall mean a day, other than a Saturday or Sunday, on
which commercial banks are open for business in California.
C. "COLLATERAL" shall mean any personal or real property in which the Bank
may be granted a lien or security interest to secure payment of the
Obligations.
D. "DEBT" shall mean all liabilities of the Borrower less Subordinated
Debt.
E. "EFFECTIVE TANGIBLE NET WORTH" shall mean the Borrower's stated net
worth plus Subordinated Debt but less all intangible assets of the
Borrower (i.e., goodwill, trademarks, patents, copyrights, organization
expense and similar intangible items).
F. "ENVIRONMENTAL CLAIMS" shall mean all claims, however asserted, by any
governmental authority or other person alleging potential liability or
responsibility for violation of any Environmental Law or for release or
injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type
of relief, resulting from or based upon (i) the presence, placement,
discharge, emission or release (including intentional and unintentional,
negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spills, leaks, discharges, emissions or
releases) of any Hazardous Materials at, in, or from property owned,
operated or controlled by the Borrower, or (ii) any other circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law.
G. "ENVIRONMENTAL LAWS" shall mean all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
governmental authorities, in each case relating to environmental, health,
safety and land use matters; including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air
Act, the Federal Water Pollution Control Act of 1972, the Solid Waste
Disposal Act, the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the California Hazardous Waste Control Law, the
California Solid Waste Management, Resource, Recovery and Recycling Act,
the California Water Code and the California Health and Safety Code.
H. "EQUIPMENT" shall mean, in connection with the Equipment Purchase
Facility contained in Section II of this Agreement, equipment as defined
in the California Uniform Commercial Code.
I. "EQUIPMENT VALUE" shall mean, in connection with the Equipment Purchase
Facility contained in Section II of this Agreement, the lesser of: (i) the
invoice cost of the Equipment (excluding taxes, license fees,
transportation costs, insurance premiums and installation and connection
expenses, fees and costs); (ii) the book value of the Equipment; or (iii)
the liquidation value of the Equipment as determined by the Bank.
J. "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, including (unless the context otherwise
requires) any rules or regulations promulgated thereunder.
K. "EVENT OF DEFAULT" shall have the meaning set forth in the section
herein entitled "Events of Default".
L. "HAZARDOUS MATERIALS" shall mean all those substances which are
regulated by, or which may form the basis of liability under any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or
toxic substance, or petroleum or petroleum derived substance or waste.
M."INDEBTEDNESS" shall mean, with respect to the Borrower, (i) all
indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which the Borrower is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which the Borrower otherwise assures a creditor against loss
and (ii) obligations under leases which shall have been or should be, in
accordance with generally accepted accounting principles, reported as
capital leases in respect of which the Borrower is liable, contingently or
otherwise, or in respect of which the Borrower otherwise assures a
creditor against loss.
N. "OBLIGATIONS" shall mean all amounts owing by the Borrower to the Bank
pursuant to this Agreement including, but not limited to, the unpaid
principal amount of Advances.
O. "PERMITTED LIENS" shall mean: (i) liens and security interests securing
indebtedness owed by the Borrower to the Bank; (ii) liens for taxes,
assessments or similar charges either not yet due or being contested in
good faith, provided proper reserves are maintained therefor in accordance
with generally accepted accounting procedure; (iii) 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; (iv) purchase money liens or purchase money security interests
upon or in any property acquired or held by the Borrower in the ordinary
course of business to secure Indebtedness outstanding on the date hereof
or permitted to be incurred pursuant to this Agreement; (v) liens and
security interests which, as of the date hereof, have been disclosed to
and approved by the Bank in writing; and (vi) those liens and security
interests
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which in the aggregate constitute an immaterial and insignificant monetary
amount with respect to the net value of the Borrower's assets.
P. "REFERENCE RATE" shall mean an index for a variable interest rate which
is quoted, published or announced from time to time by the Bank as its
reference rate and as to which loans may be made by the Bank at, below or
above such reference rate.
Q. "SUBORDINATED DEBT" shall mean such liabilities of the Borrower which
have been subordinated to those owed to the Bank in a manner acceptable to
the Bank.
1.02. ACCOUNTING TERMS. All references to financial statements, assets,
liabilities, and similar accounting items not specifically defined herein shall
mean such financial statements or such items prepared or determined in
accordance with generally accepted accounting principles consistently applied
and, except where otherwise specified, all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.
1.03. OTHER TERMS. Other terms not otherwise defined shall have the meanings
attributed to such terms in the California Uniform Commercial Code.
SECTION II
CREDIT FACILITIES
2.01. COMMITMENT TO LEND. Subject to the terms and conditions of this Agreement
and so long as no Event of Default occurs, the Bank agrees to extend to the
Borrower the credit accommodations that follow.
2.02. LINE OF CREDIT FACILITY.
The Bank agrees to make loans and Advances to the Borrower, upon the Borrower's
request therefor made prior to the Expiration Date (as defined below in this
Section 2.02), up to a total principal amount from time to time outstanding of
not more than $6,000,000.00. Within the foregoing limits, the Borrower may
borrow, partially or wholly prepay, and reborrow under this Line of Credit
facility.
A. PURPOSE. Advances made under this Line of Credit shall be used for
working capital purposes.
B. INTEREST RATE. Interest shall accrue on the outstanding principal
balance of Advances under this Line of Credit at a variable rate equal to
the Bank's Reference Rate, per annum, as it may change from time to time.
(Such rate is referred to in this Section 2.02 as the "Variable Rate".)
The Variable Rate shall be adjusted concurrently with any change in the
Reference Rate. Interest shall be calculated on the basis of 360 days per
year but charged on the actual number of days elapsed.
C. PAYMENT OF INTEREST. The Borrower hereby promises and agrees to pay
interest monthly on the first day of each month, commencing on April 1,
1997.
D. REPAYMENT OF PRINCIPAL. Unless sooner due in accordance with the terms
of this Agreement, on March 1, 1998 the Borrower hereby promises and
agrees to pay to the Bank in full the aggregate unpaid principal balance
of all Advances then outstanding, together with all accrued and unpaid
interest thereon. Any payment received by the Bank shall, at the Bank's
option, first be applied to pay any late fees or other fees then due and
unpaid, and then to interest then due and unpaid and the remainder thereof
(if any) shall be applied to reduce principal.
E. LATE FEE. If any regularly scheduled payment of principal and/or
interest (exclusive of the final payment upon maturity), or any portion
thereof, under this Line of Credit is not paid within ten (10) calendar
days after it is due, a late payment charge equal to five percent (5%) of
such past due payment may be assessed and shall be immediately payable.
F. MAKING LINE ADVANCES/NOTICE OF BORROWING. Each Advance made hereunder
shall be conclusively deemed to have been made at the request of and for
the benefit of the Borrower (i) when credited to any deposit account of
the Borrower maintained with the Bank or (ii) when paid in accordance with
the Borrower's written instructions. Subject to any other requirements set
forth in this Agreement, Advances shall be made by the Bank upon
telephonic or written notice received from the Borrower in form acceptable
to the Bank, which notice shall be received not later than 2:00 p.m.
(California Time) on the date specified for such Advance, which date shall
be a Business Day. Requests for Advances received after such time may, at
the Bank's option, be deemed to be a request for an Advance to be made on
the next succeeding Business Day.
G. NON-USAGE FEE. The Borrower hereby promises and agrees to pay the
following fees in connection with this facility: The Borrower shall be
assessed and shall pay to the Bank each quarter in arrears, a fee in an
amount equal to 0.25% of the difference (if any) between $6,000,000.00 and
the average daily outstanding principal balance of Advances under this
Line of Credit Facility, and the total face amount of all Letters of
Credit outstanding under the Letter of Credit Facility contained in
section 2.03 of this Agreement during the preceding quarter.
H. EXPIRATION OF THE LINE OF CREDIT FACILITY. Unless earlier terminated in
accordance with the terms of this Agreement, the Bank's commitment to make
Advances to the Borrower hereunder shall automatically expire on March 1,
1998 (the "Expiration Date"), and the Bank shall be under no further
obligation to advance any monies thereafter.
I. LINE ACCOUNT. The Bank shall maintain on its books a record of account
in which the Bank shall make entries for each Advance and such other
debits and credits as shall be appropriate in connection with the Line of
Credit facility (the "Line Account"). The Bank shall provide the Borrower
with a monthly statement of the Borrower's Line Account, which statement
shall be considered to be correct and conclusively binding on the Borrower
unless the Bank is notified by the Borrower to the contrary within thirty
(30) days after the Borrower's receipt of any such statement which is
deemed to be incorrect.
J. AMOUNTS PAYABLE ON DEMAND. If the Borrower fails to pay on demand any
amount so payable under this Agreement, the Bank may, at its option and
without any obligation to do so and without waiving any default occasioned
by the Borrower's failure to pay such amount, create an Advance in an
amount equal to the amount so payable, which Advance shall thereafter bear
interest as provided under this Line of Credit facility.
In addition, the Borrower hereby authorizes the Bank, if and to the extent
payment owed to the Bank under this Line of Credit facility is not made
when due, to charge, from time to time, against any or all of the deposit
accounts maintained by the Borrower with the Bank any amount so due.
2.03. LETTER OF CREDIT FACILITY. The Bank agrees to issue standby letters of
credit (each a "Letter of Credit") on behalf of the Borrower; provided however,
that at no time shall the total face amount of all Letters of Credit
outstanding, including the aggregate outstanding amount of those Letters of
Credit issued under Section 2.02 of the Line of Credit Agreement dated June 10,
1993, and any and all addenda and riders thereto, (the "Prior Agreement") less
any partial draws paid by the Bank, exceed the sum of $3,000,000.00; and
provided further, that this Letter of Credit facility is a sub-facility of the
above $6,000,000.00 Line of Credit facility
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and at no time shall the total amount outstanding under such facility together
with the total face amount of all Letters of Credit outstanding, including those
issued under the Prior Agreement, less any partial draws paid by the Bank, (plus
any amounts outstanding under any other sub-facilities of the above main
facility) exceed the sum of $6,000,000.00.
A. ISSUANCE FEES, COSTS AND COMMISSIONS. Upon the Bank's request, the
Borrower shall promptly pay to the Bank issuance fees and such other fees,
commissions, costs and any out-of-pocket expenses charged or incurred by
the Bank with respect to any Letter of Credit.
B. EXPIRATION OF FACILITY. The commitment by the Bank to issue Letters of
Credit shall, unless earlier terminated in accordance with the terms of
this Agreement, automatically terminate on March 1, 1998 and no Letter of
Credit shall expire on a date which is more than 90 days after such date.
C. LIMITATIONS ON LETTERS OF CREDIT. Each Letter of Credit shall be in
form and substance and in favor of beneficiaries satisfactory to the Bank,
provided that the Bank may refuse to issue a Letter of Credit due to the
nature of the transaction or its terms or in connection with any
transaction where the Bank, due to the beneficiary or the nationality or
residence of the beneficiary, would be prohibited by any applicable law,
regulation or order from issuing such Letter of Credit.
D. ISSUANCE OF LETTERS OF CREDIT. Prior to the issuance of each Letter of
Credit but in no event later than 10:00 a.m. (California time) on the day
such Letter of Credit is to be issued (which shall be a Business Day), the
Borrower shall deliver to the International Department of the Bank a duly
executed form of the Bank's standard form of application for issuance of a
letter of credit with proper insertions.
2.04. EQUIPMENT PURCHASE FACILITY. The Bank agrees to make
loans and Advances to the Borrower, upon the Borrower's written request therefor
made prior to the Expiration Date (as defined below in this Section 2.04), to
assist the Borrower in purchasing items of Equipment. Each Advance made
hereunder shall be in an amount not to exceed 100% of the Value of the items of
Equipment being purchased; provided however, that at no time shall the total
aggregate outstanding principal amount of Advances made under this Equipment
Purchase Facility exceed the sum of $1,000,000.00. This Equipment Purchase
Facility is on a non-revolving basis and any amounts repaid under the Equipment
Purchase Facility may not be reborrowed.
A. PURPOSE. Advances made under this Equipment Purchase Facility shall be
used for the purchase of equipment by the Borrower for use in the
Borrower's business.
B. INTEREST RATE. Interest shall accrue on the outstanding principal
balance of Advances under this Equipment Purchase Facility at a variable
rate equal to the Bank's Reference Rate, as it may change from time to
time, plus 0.500% per annum. (Such rate is referred to in this Section
2.04 as the "Variable Rate".) The Variable Rate shall be adjusted
concurrently with any change in the Reference Rate. Interest shall be
calculated on the basis of 360 days per year but charged on the actual
number of days elapsed.
C. PAYMENT OF INTEREST. The Borrower hereby promises and agrees to pay
interest monthly on the first day of each month, commencing on April 1,
1997.
D. REPAYMENT OF PRINCIPAL. Unless sooner due in accordance with the terms
of this Agreement, on March 1, 1998 the Borrower hereby promises and
agrees to pay to the Bank in full the aggregate unpaid principal balance
of all Advances then outstanding, together with all accrued and unpaid
interest thereon. Any payment received by the Bank shall, at the Bank's
option, first be applied to pay any late fees or other fees then due and
unpaid, and then to interest then due and unpaid and the remainder thereof
(if any) shall be applied to reduce principal.
E. FIXED RATE ALTERNATIVE PRICING. In addition to Advances based upon the
Variable Rate ("Variable Rate Advances"), at the Borrower's election, the
Bank hereby agrees to make Advances to the Borrower under this Equipment
Purchase facility at a fixed rate ("Fixed Rate") to be quoted and offered
by the Bank from time to time upon the request of the Borrower. The Bank
shall only quote and offer such Fixed Rate for Advances in the minimum
amount of $100,000.00 and in $100,000.00 increments thereafter and for
such period of time (each an "Interest Period") as the Bank may quote and
offer, provided that the Interest Period shall be for a minimum of at
least 30 days and provided further that any Interest Period shall not
extend beyond the Expiration Date (as defined below) of this facility.
Advances based upon the Fixed Rate are hereinafter referred to as "Fixed
Rate Advances".
Interest on any Fixed Rate Advance shall be computed on the basis of 360 days
per year but charged on the actual number of days elapsed.
The Borrower hereby promises and agrees to pay the Bank interest on any Fixed
Rate Advance on the basis described above with respect to the Variable Rate. If
interest is not paid as and when it is due, the amount of such unpaid interest
shall bear interest, until paid in full, at a rate of interest equal to the
Variable Rate.
(i) REPAYMENT OF FIXED RATE ADVANCES. Unless sooner due in
accordance with other terms of this Agreement, or unless adjusted at
the end of the relevant Interest Period as described below, the
Borrower hereby promises and agrees to pay the Bank the principal
amount of each Fixed Rate Advance, together with accrued and unpaid
interest thereon, on the last day of the Interest Period pertaining
to such Fixed Rate Advance.
(ii) NOTICE OF ELECTION TO ADJUST INTEREST RATE. Upon telephonic
notice which shall be received by the Bank at or before 11:00 am
(California time) on a Business Day, the Borrower may elect:
(a) That interest on a Variable Rate Advance shall be adjusted
to accrue at a quoted and offered Fixed Rate; provided,
however, that such notice shall be received by the Bank no
later than two business days prior to the day (which shall be
a business day) on which the Borrower requests that interest
be adjusted to accrue at the Fixed Rate.
(b) That interest on a Fixed Rate Advance shall continue to
accrue at a newly quoted Fixed Rate or shall be adjusted to
commence to accrue at the Variable Rate; provided however,
that such notice shall be received by the Bank no later than
two business days prior to the last day of the Interest Period
pertaining to such Fixed Rate Advance. If the Bank shall not
have received notice as prescribed herein of the Borrower's
election that interest on any Fixed Rate Advance shall
continue to accrue at the Fixed Rate, the Borrower shall be
deemed to have elected that interest thereon shall be adjusted
to accrue at the Variable Rate upon the expiration of the
Interest Period pertaining to such Advance.
(iii) PROHIBITION AGAINST PREPAYMENT OF FIXED RATE ADVANCES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT, NO
PREPAYMENT SHALL BE MADE ON ANY FIXED RATE ADVANCE EXCEPT ON A DAY
WHICH IS THE LAST DAY OF THE INTEREST PERIOD PERTAINING THERETO. IF
THE WHOLE OR ANY PART OF ANY FIXED RATE ADVANCE IS PREPAID BY REASON
OF ACCELERATION OR OTHERWISE, THE BORROWER SHALL, UPON THE BANK'S
REQUEST, PROMPTLY PAY TO AND INDEMNIFY THE BANK FOR ALL COSTS AND
ANY LOSS (INCLUDING INTEREST) ACTUALLY INCURRED BY THE BANK AND ANY
LOSS (INCLUDING LOSS OF PROFIT RESULTING FROM THE RE-EMPLOYMENT OF
FUNDS) SUSTAINED BY THE BANK AS A
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CONSEQUENCE OF SUCH PREPAYMENT.
(iv) INDEMNIFICATION FOR FIXED RATE COSTS. During any period of time
in which interest on any Advance is accruing on the basis of a Fixed
Rate, the Borrower shall, upon the Bank's request, promptly pay to
and reimburse the Bank for all costs incurred and payments made by
the Bank by reason of any future assessment, reserve, deposit or
similar requirements or any surcharge, tax or fee imposed upon the
Bank or as a result of the Bank's compliance with any directive or
requirement of any regulatory authority pertaining or relating to
funds used by the Bank in quoting and determining the Fixed Rate.
(v) INVOLUNTARY CONVERSION FROM FIXED RATE TO VARIABLE RATE. In the
event that the Bank shall at any time determine that the accrual of
interest on the basis of the Fixed Rate (a) is infeasible because
the Bank is unable to determine the Fixed Rate due to the
unavailability of U.S. dollar deposits, contracts or certificates of
deposit in an amount approximately equal to the amount of the
relevant Advance and for a period of time approximately equal to the
relevant Interest Period; or (b) is or has become unlawful or
infeasible by reason of the Bank's compliance with any new law,
rule, regulation, guideline or order, or any new interpretation of
any present law, rule, regulation, guideline or order, then the Bank
shall give telephonic notice thereof (confirmed in writing) to the
Borrower, in which event any Fixed Rate Advance shall be deemed to
be a Variable Rate Advance and interest shall thereupon immediately
accrue at the Variable Rate.
F. MAKING LINE ADVANCES/NOTICE OF BORROWING. Each Advance made hereunder
shall be conclusively deemed to have been made at the request of and for
the benefit of the Borrower (i) when credited to any deposit account of
the Borrower maintained with the Bank or (ii) when paid in accordance with
the Borrower's written instructions. Subject to any other requirements set
forth in this Agreement, Advances shall be made by the Bank upon written
notice received from the Borrower in form acceptable to the Bank, which
notice shall be received by the Bank at or before 11:00 am (California
time) on a Business Day. The Borrower may borrow under this Equipment
Purchase Facility by requesting either:
(i) A VARIABLE RATE ADVANCE. A Variable Rate Advance may be made on
the day notice is received by the Bank; provided however, that if
the Bank shall not have received notice at or before 11:00 am
(California time) on the day such Advance is requested to be made,
such Variable Rate Advance may be made, at the Bank's option, on the
next Business Day.
(ii) A FIXED RATE ADVANCE. The Borrower may elect that an Advance be
made as a Fixed Rate Advance by requesting the Bank to provide a
quote as to the rate which would apply for a designated Interest
Period and concurrently with receiving such quote, giving the Bank
irrevocable notice of the Borrower's acceptance of the rate quoted,
provided such notice shall be given to the Bank not later than 10:00
a.m. (California time) on a date (which shall be a Business Day) at
least two days prior to the first day of the requested Interest
Period. Any telephonic or oral quote or offer by the Bank of a Fixed
Rate for a given Interest Period may be confirmed in writing by the
Bank upon the election (as provided herein) of the Borrower to
accept such terms and such confirmation shall be deemed conclusive
as to the terms quoted and offered.
G. SECURITY INTEREST IN EQUIPMENT. Upon the Bank's request, the Borrower
shall execute and deliver to the Bank, prior to the making of any Advance
under this Equipment Purchase Facility, such documents and instruments (in
form and substance satisfactory to the Bank) which the Bank may require
with respect to such Advance and the perfection of the Bank's security
interest in the Equipment pertaining to such Advance.
H. LATE FEE. If any regularly scheduled payment of principal and/or
interest (exclusive of the final payment upon maturity), or any portion
thereof, under this Equipment Purchase Facility is not paid within ten
(10) calendar days after it is due, a late payment charge equal to five
percent (5%) of such past due payment may be assessed and shall be
immediately payable.
I. CONVERSION TO TERM LOAN. It is hereby agreed that the Borrower may, by
giving written notice to the Bank at least one (1) day prior to March 1,
1998, convert the principal balance outstanding under the Equipment
Purchase facility as of March 1, 1998 to be payable on a term loan basis.
The term loan (the "Converted Term Loan") shall be in the amount of such
outstanding principal balance and shall be evidenced by a promissory note
or credit agreement (the "Term Agreement") containing the following
payment terms: Interest shall be paid concurrently with principal.
Principal shall be paid in equal monthly installments based upon a maximum
of 60 equally amortized payments of the principal amount outstanding at
the time of conversion. Accrued and unpaid interest under the Equipment
Purchase facility shall be paid to the Bank concurrently with the
Borrower's execution of the Term Agreement. Interest shall accrue and
principal and interest shall be paid in accordance with the terms and
provisions of the Term Agreement.
J. NON-USAGE FEE. The Borrower shall be assessed and shall pay to the Bank
each quarter, a fee in an amount equal to 0.250% of the difference (if
any) between $1,000,000.00 and the average daily outstanding principal
balance of Advances under this Equipment Purchase facility during the
preceding quarter.
K. EXPIRATION OF THE EQUIPMENT PURCHASE FACILITY. Unless earlier
terminated in accordance with the terms of this Agreement, the Bank's
commitment to make Advances to the Borrower hereunder shall automatically
expire on March 1, 1998 (the "Expiration Date").
L. LINE ACCOUNT. The Bank shall maintain on its books a record of account
in which the Bank shall make entries for each Advance and such other
debits and credits as shall be appropriate in connection with this
Equipment Purchase Facility (the "Line Account"). The Bank shall provide
the Borrower with a monthly statement of the Borrower's Line Account,
which statement shall be considered to be correct and conclusively binding
on the Borrower unless the Bank is notified by the Borrower to the
contrary within thirty (30) days after the Borrower's receipt of any such
statement which is deemed to be incorrect.
M. AMOUNTS PAYABLE ON DEMAND. If the Borrower fails to pay on demand any
amount so payable under this Agreement, the Bank may, at its option and
without any obligation to do so and without waiving any default occasioned
by the Borrower's failure to pay such amount, create an Advance in an
amount equal to the amount so payable, which Advance shall thereafter bear
interest as provided under this Equipment Purchase Facility.
In addition, the Borrower hereby authorizes the Bank, if and to the extent
payment owed to the Bank under this Equipment Purchase Facility is not
made when due, to charge, from time to time, against any or all deposit
accounts maintained with the Bank by the Borrower any amount so due.
SECTION III
CONDITIONS PRECEDENT
3.01. CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT AND/OR FIRST
ADVANCE. The obligation of the Bank to make the initial extension of credit
and/or the first Advance hereunder is subject to the conditions precedent that
the Bank shall have received before the date of such extension of credit and/or
the first Advance
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all of the following, in form and substance satisfactory to the Bank:
A. AUTHORITY TO BORROW. Evidence relating to the duly given approval and
authorization of the execution, delivery and performance of this
Agreement, all other documents, instruments and agreements required under
this Agreement and all other actions to be taken by the Borrower hereunder
or thereunder.
B. LOAN FEES. Evidence that any required loan fees and expenses as set
forth above with respect to each credit facility have been paid or
provided for by the Borrower.
C. AUDIT. The opportunity to conduct an audit of the Borrower's books,
records and operations and the Bank shall be satisfied as to the condition
thereof.
D. MISCELLANEOUS DOCUMENTS. Such other documents, instruments, agreements
and opinions as are necessary, or as the Bank may reasonably require, to
consummate the transactions contemplated under this Agreement, all fully
executed.
3.02. CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT AND/OR ADVANCES. The
obligation of the Bank to make any extensions of credit and/or each Advance to
or on account of the Borrower (including the initial extension of credit and/or
the first Advance) shall be subject to the further conditions precedent that, as
of the date of each extension of credit or Advance and after the making of such
extension of credit or Advance:
A. REPRESENTATIONS AND WARRANTIES. The representations and warranties set
forth in the Section entitled "Representations and Warranties" herein and
in any other document, instrument, agreement or certificate delivered to
the Bank hereunder are true and correct.
B. EVENT OF DEFAULT. No event has occurred and is continuing which
constitutes, or, with the lapse of time or giving of notice or both, would
constitute an Event of Default.
C. SUBSEQUENT APPROVALS, ETC. The Bank shall have received such
supplemental approvals, opinions or documents as the Bank may reasonably
request.
3.03. REAFFIRMATION OF STATEMENTS. For the purposes hereof, the Borrower's
acceptance of the proceeds of any extension of credit and the Borrower's
execution of any document or instrument evidencing or creating any Obligation
hereunder shall each be deemed to constitute the Borrower's representation and
warranty that the statements set forth above in this Section are true and
correct.
SECTION IV
REPRESENTATIONS AND WARRANTIES
The Borrower hereby makes the following representations and warranties to the
Bank, which representations and warranties are continuing:
4.01. STATUS. The Borrower is a corporation duly organized and validly existing
under the laws of the State of California and is properly licensed, qualified to
do business and in good standing in, and, where necessary to maintain the
Borrower's rights and privileges, has complied with the fictitious name statute
of every jurisdiction in which the Borrower is doing business.
4.02. AUTHORITY. The execution, delivery and performance by the Borrower of this
Agreement and any instrument, document or agreement required hereunder have been
duly authorized and do not and will not: (i) violate any provision of any law,
rule, regulation, writ, judgment or injunction presently in effect affecting the
Borrower; (ii) require any consent or approval of the stockholders of the
Borrower or violate any provision of the articles of incorporation or by-laws of
the Borrower; or (iii) result in a breach of or constitute a default under any
material agreement to which the Borrower is a party or by which it or its
properties may be bound or affected.
4.03. LEGAL EFFECT. This Agreement constitutes, and any document, instrument or
agreement required hereunder when delivered will constitute, legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
4.04. FICTITIOUS TRADE STYLES. The Borrower currently uses no fictitious trade
styles in connection with its business operations. The Borrower shall notify the
Bank within thirty (30) days of the use of any fictitious trade style at any
future date, indicating the trade style and state(s) of its use.
4.05. FINANCIAL STATEMENTS. All financial statements, information and other data
which may have been and which may hereafter be submitted by the Borrower to the
Bank are true, accurate and correct and have been and will be prepared in
accordance with generally accepted accounting principles consistently applied
and accurately represent the Borrower's financial condition and, as applicable,
the other information disclosed therein. Since the most recent submission of any
such financial statement, information or other data to the Bank, the Borrower
represents and warrants that no material adverse change in the Borrower's
financial condition or operations has occurred which has not been fully
disclosed to the Bank in writing.
4.06. LITIGATION. Except as have been disclosed to the Bank in writing, there
are no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or the Borrower's
properties before any court or administrative agency which, if determined
adversely to the Borrower, would have a material adverse effect on the
Borrower's financial condition or operations.
4.07. TITLE TO ASSETS. The Borrower has good and marketable title to all of its
assets and the same are not subject to any security interest, encumbrance, lien
or claim of any third person except for Permitted Liens.
4.08. ERISA. If the Borrower has a pension, profit sharing or retirement plan
subject to ERISA, such plan has been and will continue to be funded in
accordance with its terms and otherwise complies with and continues to comply
with the requirements of ERISA.
4.09. TAXES. The Borrower has filed all tax returns required to be filed and
paid all taxes shown thereon to be due, including interest and penalties, other
than taxes which are currently payable without penalty or interest or those
which are being duly contested in good faith.
4.10. ENVIRONMENTAL COMPLIANCE. The operations of the Borrower comply, and
during the term of this Agreement will at all times comply, in all respects with
all Environmental Laws; the Borrower has obtained licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for its ordinary operations, all such
Environmental Permits are in good standing, and the Borrower is in compliance
with all material terms and conditions of such Environmental Permits; neither
the Borrower nor any of its present properties or operations are subject to any
outstanding written order from or agreement with any governmental authority nor
subject to any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material; there are no
Hazardous Materials or other conditions or circumstances existing, or arising
from operations prior to the date of this Agreement, with respect to any
property of the Borrower that would reasonably be expected to give rise to
Environmental Claims; provided however, that with respect to property
(5)
6
leased from an unrelated third party, the foregoing representation is made to
the best knowledge of the Borrower. In addition, (i) the Borrower does not have
or maintain any underground storage tanks which are not properly registered or
permitted under applicable Environmental Laws or which are leaking or disposing
of Hazardous Materials off-site, and (ii) the Borrower has notified all of its
employees of the existence, if any, of any health hazard arising from the
conditions of their employment and have met all notification requirements under
Title III of CERCLA and all other Environmental Laws.
SECTION V
COVENANTS
The Borrower covenants and agrees that, during the term of this Agreement, and
so long thereafter as the Borrower is indebted to the Bank under this Agreement,
the Borrower shall, unless the Bank otherwise consents in writing:
5.01. PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS. Maintain and
preserve its existence and all rights and privileges now enjoyed; not liquidate
or dissolve, merge or consolidate with or into, or acquire any other business
organization; and conduct its business in accordance with all applicable laws,
rules and regulations.
5.02. MAINTENANCE OF INSURANCE. Maintain insurance in such amounts and covering
such risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
operates and maintain such other insurance and coverages as may be required by
the Bank. All such insurance shall be in form and amount and with companies
satisfactory to the Bank. With respect to insurance covering properties in which
the Bank maintains a security interest or lien, such insurance shall be in an
amount not less than the full replacement value thereof, at the Bank's request,
shall name the Bank as loss payee pursuant to a loss payable endorsement
satisfactory to the Bank and shall not be altered or canceled except upon ten
(10) days' prior written notice to the Bank. Upon the Bank's request, the
Borrower shall furnish the Bank with the original policy or binder of all such
insurance.
5.03. MAINTENANCE OF PROPERTIES. The Borrower shall maintain and preserve all
its properties in good working order and condition in accordance with the
general practice of other businesses of similar character and size, ordinary
wear and tear excepted.
5.04. LOCATION AND MAINTENANCE OF EQUIPMENT.
A. LOCATION. The Equipment shall at all times be in the Borrower's
physical possession, shall not be held for sale or lease and shall be kept
only at the following location(s): 000 Xxxxxxxx Xxx, Xxxxxxxxx, XX 00000.
The Borrower shall not secrete, abandon or remove, or permit the removal
of, the Equipment, or any part thereof, from the location(s) shown above
or remove or permit to be removed any accessories now or hereafter placed
upon the Equipment.
B. EQUIPMENT SCHEDULES. Upon the Bank's demand, the Borrower shall
immediately provide the Bank with a complete and accurate description of
the Equipment including, as applicable, the make, model, identification
number and serial number of each item of Equipment. In addition, the
Borrower shall immediately notify the Bank of the acquisition of any new
or additional Equipment or the replacement of any existing Equipment and
shall supply the Bank with a complete description of any such additional
or replacement Equipment.
C. MAINTENANCE OF EQUIPMENT. The Borrower shall, at the Borrower's sole
cost and expense, keep and maintain the Equipment in a good state of
repair and shall not destroy, misuse, abuse, illegally use or be negligent
in the care of the Equipment or any part thereof. The Borrower shall not
remove, destroy, obliterate, change, cover, paint, deface or alter the
name plates, serial numbers, labels or other distinguishing numbers or
identification marks placed upon the Equipment or any part thereof by or
on behalf of the manufacturer, any dealer or rebuilder thereof, or the
Bank. The Borrower shall not be released from any liability to the Bank
hereunder because of any injury to or loss or destruction of the
Equipment. The Borrower shall allow the Bank and its representatives free
access to and the right to inspect the Equipment at all times and shall
comply with the terms and conditions of any leases covering the real
property on which the Equipment is located and any orders, ordinances,
laws, regulations or rules of any federal, state or municipal agency or
authority having jurisdiction of such real property or the conduct of
business of the persons having control or possession of the Equipment.
D. FIXTURES. The Equipment is not now and shall not at any time hereafter
be so affixed to the real property on which it is located as to become a
fixture or a part thereof. The Equipment is now and shall at all times
hereafter be and remain personal property of the Borrower.
5.05. PAYMENT OF OBLIGATIONS AND TAXES. Make timely payment of all assessments
and taxes and all of its liabilities and obligations including, but not limited
to, trade payables, unless the same are being contested in good faith by
appropriate proceedings with the appropriate court or regulatory agency. For
purposes hereof, the Borrower's issuance of a check, draft or similar instrument
without delivery to the intended payee shall not constitute payment.
5.06. INSPECTION RIGHTS. At any reasonable time and from time to time permit the
Bank or any representative thereof to examine and make copies of the records and
visit the properties of the Borrower and to discuss the business and operations
of the Borrower with any employee or representative thereof. If the Borrower now
or at any time hereafter maintains any records (including, but not limited to,
computer generated records and computer programs for the generation of such
records) in the possession of a third party, the Borrower hereby agrees to
notify such third party to permit the Bank free access to such records at all
reasonable times and to provide the Bank with copies of any records it may
request, all at the Borrower's expense, the amount of which shall be payable
immediately upon demand.
5.07. REPORTING REQUIREMENTS. Deliver or cause to be delivered to the Bank in
form and detail satisfactory to the Bank:
A. ANNUAL STATEMENTS. Not later than 90 days after the end of each of the
Borrower's fiscal years, a copy of the annual financial report of the
Borrower for such year, which report shall be CPA audited and certified by
an officer of the corporation.
B. ANNUAL 10K REPORTS. Not later than 10 days after filing with the
Securities Exchange Commission ("SEC"), a copy of the Borrower's annual
10K report.
C. INTERIM STATEMENTS. Not later than 45 days after the end of each
quarter, the Borrower's financial statement as of the end of such quarter,
certified by an officer of the corporation.
D. QUARTERLY 10Q REPORTS. Not later than 10 days after filing with the
SEC, a copy of the Borrower's quarterly 10Q report.
E. OTHER INFORMATION. Promptly upon the Bank's request, such other
information pertaining to the Borrower or any Guarantor as the Bank may
reasonably request.
(6)
7
5.08. PAYMENT OF DIVIDENDS. The Borrower shall not declare or pay any dividends
on any class of its stock now or hereafter outstanding except dividends payable
solely in the corporation's capital stock.
5.09. REDEMPTION OR REPURCHASE OF STOCK. The Borrower shall not redeem or
repurchase any class of its corporate stock now or hereafter outstanding in
excess of $2,000,000.00 in any one fiscal year.
5.10. LIENS AND ENCUMBRANCES. Not create, assume or permit to exist any security
interest, encumbrance, mortgage, deed of trust or other lien (including, but not
limited to, a lien of attachment, judgment or execution) affecting any of the
Borrower's properties, or execute or allow to be filed any financing statement
or continuation thereof affecting any such properties, except for Permitted
Liens or as otherwise provided in this Agreement.
5.11. TRANSFER ASSETS. Not sell, contract for sale, transfer, convey, assign,
lease or sublet any assets of the Borrower except in the ordinary course of
business as presently conducted by the Borrower, and then, only for full, fair
and reasonable consideration.
5.12. CHANGE IN THE NATURE OF BUSINESS. Not make any material change in the
Borrower's financial structure or in the nature of the Borrower's business as
existing or conducted as of the date of this Agreement.
5.13. FINANCIAL CONDITION. Maintain at all times:
A. NET WORTH. A minimum Effective Tangible Net Worth of not less than
$33,000,000.00.
B. CURRENT RATIO. A ratio of current assets to current liabilities of not
less than 2.00 to 1.00.
C. MINIMUM NET INCOME. A minimum net profit after tax of $1.00 on a
quarterly basis.
D. DEBT SERVICE COVERAGE RATIO. A Debt Service Coverage ratio (which is
defined herein as the sum of net profit plus depreciation divided by the
current portion of long term debt) of not less than 2.00 to 1.00.
5.14. ENVIRONMENTAL COMPLIANCE. The Borrower shall:
A. Conduct the Borrower's operations and keep and maintain all of its
properties in compliance with all Environmental Laws.
B. Give prompt written notice to the Bank, but in no event later than 10
days after becoming aware, of the following: (i) any enforcement, cleanup,
removal or other governmental or regulatory actions instituted, completed
or threatened against the Borrower or any of its affiliates or any of its
respective properties pursuant to any applicable Environmental Laws, (ii)
all other Environmental Claims, and (iii) any environmental or similar
condition on any real property adjoining or in the vicinity of the
property of the Borrower or its affiliates that could reasonably be
anticipated to cause such property or any part thereof to be subject to
any restrictions on the ownership, occupancy, transferability or use of
such property under any Environmental Laws.
C. Upon the written request of the Bank, the Borrower shall submit to the
Bank, at its sole cost and expense, at reasonable intervals, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice required
pursuant to this Section.
D. At all times indemnify and hold harmless the Bank from and against any
and all liability arising out of any Environmental Claims.
5.15. NOTICE. Give the Bank prompt written notice of any and all (i) Events of
Default; (ii) litigation, arbitration or administrative proceedings to which the
Borrower is a party and in which the claim or liability exceeds $1,000,000.00;
and (iii) other matters which have resulted in, or might result in a material
adverse change in the financial condition or business operations of the
Borrower.
SECTION VI
EVENTS OF DEFAULT
Any one or more of the following described events shall constitute an event of
default under this Agreement:
6.01. NON-PAYMENT. The Borrower shall fail to pay any Obligations within 10 days
of when due.
6.02. PERFORMANCE UNDER THIS AND OTHER AGREEMENTS. The Borrower shall fail in
any material respect to perform or observe any term, covenant or agreement
contained in this Agreement or in any document, instrument or agreement
evidencing or relating to any indebtedness of the Borrower (whether owed to the
Bank or third persons), and any such failure (exclusive of the payment of money
to the Bank under this Agreement or under any other document, instrument or
agreement, which failure shall constitute and be an immediate Event of Default
if not paid when due or when demanded to be due) shall continue for more than 30
days after written notice from the Bank to the Borrower of the existence and
character of such Event of Default.
6.03. REPRESENTATIONS AND WARRANTIES; FINANCIAL STATEMENTS. Any representation
or warranty made by the Borrower under or in connection with this Agreement or
any financial statement given by the Borrower or any Guarantor shall prove to
have been incorrect in any material respect when made or given or when deemed to
have been made or given.
6.04. INSOLVENCY. The Borrower or any Guarantor shall: (i) become insolvent or
be unable to pay its debts as they mature; (ii) make an assignment for the
benefit of creditors or to an agent authorized to liquidate any substantial
amount of its properties or assets; (iii) file a voluntary petition in
bankruptcy or seeking reorganization or to effect a plan or other arrangement
with creditors; (iv) file an answer admitting the material allegations of an
involuntary petition relating to bankruptcy or reorganization or join in any
such petition; (v) become or be adjudicated a bankrupt; (vi) apply for or
consent to the appointment of, or consent that an order be made, appointing any
receiver, custodian or trustee for itself or any of its properties, assets or
businesses; or (vii) any receiver, custodian or trustee shall have been
appointed for all or a substantial part of its properties, assets or businesses
and shall not be discharged within 30 days after the date of such appointment.
6.05. EXECUTION. Any writ of execution or attachment or any judgment lien shall
be issued against any property of the Borrower and shall not be discharged or
bonded against or released within 30 days after the issuance or attachment of
such writ or lien.
6.06. REVOCATION OR LIMITATION OF GUARANTY. Any Guaranty shall be revoked or
limited or its enforceability or validity shall be contested by any Guarantor,
by operation of law, legal proceeding or otherwise or any Guarantor who is a
natural person shall die.
(7)
8
6.07. SUSPENSION. The Borrower shall voluntarily suspend the transaction of
business or allow to be suspended, terminated, revoked or expired any permit,
license or approval of any governmental body necessary to conduct the Borrower's
business as now conducted.
6.08. CHANGE IN OWNERSHIP. There shall occur a sale, transfer, disposition or
encumbrance (whether voluntary or involuntary), or an agreement shall be entered
into to do so, with respect to more than 10% of the issued and outstanding
capital stock of the Borrower.
SECTION VII
REMEDIES ON DEFAULT
Upon the occurrence of any Event of Default, the Bank may, at its sole
election, without demand and upon only such notice as may be required by law:
7.01. ACCELERATION. Declare any or all of the Borrower's indebtedness owing to
the Bank, whether under this Agreement or under any other document, instrument
or agreement, immediately due and payable, whether or not otherwise due and
payable.
7.02. CEASE EXTENDING CREDIT. Cease making Advances or otherwise extending
credit to or for the account of the Borrower under this Agreement or under any
other agreement now existing or hereafter entered into between the Borrower and
the Bank.
7.03. TERMINATION. Terminate this Agreement as to any future obligation of the
Bank without affecting the Borrower's obligations to the Bank or the Bank's
rights and remedies under this Agreement or under any other document, instrument
or agreement.
7.04. LETTERS OF CREDIT. In addition to any other remedies available to the Bank
under this Agreement or otherwise, the Bank may require the Borrower to pay
immediately to the Bank, for application against any drawings under any
outstanding Letters of Credit, the outstanding principal amount of any such
Letters of Credit which have not expired. Any portion of the amount so paid to
the Bank which is not applied to satisfy draws under any such Letters of Credit
or any other obligations of the Borrower to the Bank shall be repaid to the
Borrower without interest.
7.05. NON-EXCLUSIVITY OF REMEDIES. Exercise one or more of the Bank's rights set
forth herein or seek such other rights or pursue such other remedies as may be
provided by law, in equity or in any other agreement now existing or hereafter
entered into between the Borrower and the Bank, or otherwise.
SECTION VIII
MISCELLANEOUS PROVISIONS
8.01. DEFAULT INTEREST RATE. If an Event of Default has occurred and is
continuing, the Bank, at its option, may require the Borrower to pay to the Bank
interest on any Indebtedness or amount payable under this Agreement at a rate
which is 3% in excess of the rate or rates otherwise then in effect under this
Agreement.
8.02. REIMBURSEMENT OF CERTAIN COSTS IN CONNECTION WITH LETTERS OF CREDIT. The
Borrower shall, upon the Bank's request, promptly pay to and reimburse the Bank
for all costs incurred and payments made by the Bank by reason of any future
assessment, reserve, deposit or similar requirement or any surcharge, tax or fee
imposed upon the Bank or as a result of the Bank's compliance with any directive
or requirement of any regulatory authority pertaining or relating to any Letters
of Credit.
8.03. RELIANCE. Each warranty, representation, covenant and agreement contained
in this Agreement shall be conclusively presumed to have been relied upon by the
Bank regardless of any investigation made or information possessed by the Bank
and shall be cumulative and in addition to any other warranties,
representations, covenants or agreements which the Borrower shall now or
hereafter give, or cause to be given, to the Bank.
8.04. DISPUTE RESOLUTION.
A. DISPUTES. It is understood and agreed that, upon the request of any
party to this Agreement, any dispute, claim or controversy of any kind,
whether in contract or in tort, statutory or common law, legal or
equitable, now existing or hereinafter arising between the parties in any
way arising out of, pertaining to or in connection with: (i) this
Agreement, or any related agreements, documents or instruments, (ii) all
past and present loans, credits, accounts, deposit accounts (whether
demand deposits or time deposits), safe deposit boxes, safekeeping
agreements, guarantees, letters of credit, goods or services, or other
transactions, contracts or agreements of any kind, (iii) any incidents,
omissions, acts, practices, or occurrences causing injury to any party
whereby another party or its agents, employees or representatives may be
liable, in whole or in part, or (iv) any aspect of the past or present
relationships of the parties, shall be resolved through a two-step dispute
resolution process administered by the Judicial Arbitration & Mediation
Services, Inc. ("JAMS") as follows:
B. STEP I - MEDIATION. At the request of any party to the dispute, claim
or controversy, the matter shall be referred to the nearest office of JAMS
for mediation, which is an informal, non-binding conference or conferences
between the parties in which a retired judge or justice from the JAMS
panel will seek to guide the parties to a resolution of the case.
C. STEP II - ARBITRATION (CONTRACTS NOT SECURED BY REAL PROPERTY). Should
any dispute, claim or controversy remain unresolved at the conclusion of
the Step I Mediation Phase, then (subject to the restriction at the end of
this subparagraph) all such remaining matters shall be resolved by final
and binding arbitration before a different judicial panelist, unless the
parties shall agree to have the mediator panelist act as arbitrator. The
hearing shall be conducted at a location determined by the arbitrator in
Los Angeles, California (or such other city as may be agreed upon by the
parties) and shall be administered by and in accordance with the then
existing Rules of Practice and Procedure of JAMS and judgement upon any
award rendered by the arbitrator may be entered by any State or Federal
Court having jurisdiction thereof. The arbitrator shall determine which is
the prevailing party and shall include in the award that party's
reasonable attorneys' fees and costs. This subparagraph shall apply only
if, at the time of the submission of the matter to JAMS, the dispute or
issues involved do not arise out of any transaction which is secured by
real property collateral or, if so secured, all parties consent to such
submission.
As soon as practicable after selection of the arbitrator, the arbitrator,
or the arbitrator's designated representative, shall determine a
reasonable estimate of anticipated fees and costs of the arbitrator, and
render a statement to each party setting forth that party's pro-rata share
of said fees and costs. Thereafter, each party shall, within 10 days of
receipt of said statement, deposit said sum with the arbitrator. Failure
of any party to make such a deposit shall result in a forfeiture by the
non-depositing party of the right to prosecute or defend the claim which
is the subject of the arbitration, but shall not otherwise serve to xxxxx,
(8)
9
stay or suspend the arbitration proceedings.
D. STEP II - TRIAL BY COURT REFERENCE (CONTRACTS SECURED BY REAL
PROPERTY). If the dispute, claim or controversy is not one required or
agreed to be submitted to arbitration, as provided in the above
subparagraph, and has not been resolved by Step I mediation, then any
remaining dispute, claim or controversy shall be submitted for
determination by a trial on Order of Reference conducted by a retired
judge or justice from the panel of JAMS appointed pursuant to the
provisions of Section 638(1) of the California Code of Civil Procedure, or
any amendment, addition or successor section thereto, to hear the case and
report a statement of decision thereon. The parties intend this general
reference agreement to be specifically enforceable in accordance with said
section. If the parties are unable to agree upon a member of the JAMS
panel to act as referee, then one shall be appointed by the Presiding
Judge of the county wherein the hearing is to be held. The parties shall
pay in advance, to the referee, the estimated reasonable fees and costs of
the reference, as may be specified in advance by the referee. The parties
shall initially share equally, by paying their proportionate amount of the
estimated fees and costs of the reference. Failure of any party to make
such a fee deposit shall result in a forfeiture by the non-depositing
party of the right to prosecute or defend any cause of action which is the
subject of the reference, but shall not otherwise serve to xxxxx, stay or
suspend the reference proceeding.
E. PROVISIONAL REMEDIES, SELF HELP AND FORECLOSURE. No provision of, or
the exercise of any rights under any portion of this Dispute Resolution
provision, shall limit the right of any party to exercise self help
remedies such as set off, foreclosure against any real or personal
property collateral, or the obtaining of provisional or ancillary
remedies, such as injunctive relief or the appointment of a receiver, from
any court having jurisdiction before, during or after the pendency of any
arbitration. At the Bank's option, foreclosure under a deed of trust or
mortgage may be accomplished either by exercise of power of sale under the
deed of trust or mortgage, or by judicial foreclosure. The institution and
maintenance of an action for provisional remedies, pursuit of provisional
or ancillary remedies or exercise of self help remedies shall not
constitute a waiver of the right of any party to submit the controversy or
claim to arbitration.
8.05. WAIVER OF JURY. The Borrower and the Bank hereby expressly and voluntarily
waive any and all rights, whether arising under the California constitution, any
rules of the California Code of Civil Procedure, common law or otherwise, to
demand a trial by jury in any action, matter, claim or cause of action
whatsoever arising out of or in any way related to this Agreement or any other
agreement, document or transaction contemplated hereby.
8.06. RESTRUCTURING EXPENSES. In the event the Bank and the Borrower negotiate
for, or enter into, any restructuring, modification or refinancing of the
Indebtedness under this Agreement for the purposes of remedying an Event of
Default, The Bank, may require the Borrower to reimburse all of the Bank's costs
and expenses incurred in connection therewith, including, but not limited to
reasonable attorneys' fees and the costs of any audit or appraisals required by
the Bank to be performed in connection with such restructuring, modification or
refinancing.
8.07. ATTORNEYS' FEES. In the event
of any suit, mediation, arbitration or other action in relation to this
FAgreement or any document, instrument or agreement executed with respect to,
evidencing or securing the indebtedness hereunder, the prevailing party, in
addition to all other sums to which it may be entitled, shall be entitled to
reasonable attorneys' fees.
8.08. NOTICES. All notices, payments, requests, information and demands which
either party hereto may desire, or may be required to give or make to the other
party shall be given or made to such party by hand delivery or through deposit
in the United States mail, postage prepaid, or by Western Union telegram,
addressed to the address set forth below such party's signature to this
Agreement or to such other address as may be specified from time to time in
writing by either party to the other.
8.09. WAIVER. Neither the failure nor delay by the Bank in exercising any right
hereunder or under any document, instrument or agreement mentioned herein shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder or under any document, instrument or agreement mentioned herein
preclude other or further exercise thereof or the exercise of any other right;
nor shall any waiver of any right or default hereunder or under any other
document, instrument or agreement mentioned herein constitute a waiver of any
other right or default or constitute a waiver of any other default of the same
or any other term or provision.
8.10. CONFLICTING PROVISIONS. To the extent that any of the terms or provisions
contained in this Agreement are inconsistent with those contained in any other
document, instrument or agreement executed pursuant hereto, the terms and
provisions contained herein shall control. Otherwise, such provisions shall be
considered cumulative.
8.11. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the Borrower and the Bank and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the Bank's prior written consent. The
Bank may sell, assign or grant participations in all or any portion of its
rights and benefits hereunder. The Borrower agrees that, in connection with any
such sale, grant or assignment, the Bank may deliver to the prospective buyer,
participant or assignee financial statements and other relevant information
relating to the Borrower and any guarantor.
8.12. JURISDICTION. This Agreement, any notes issued hereunder, and any
documents, instruments or agreements mentioned or referred to herein shall be
governed by and construed according to the laws of the State of California, to
the jurisdiction of whose courts the parties hereby submit. 8.13. HEADINGS. The
headings set forth herein are solely for the purpose of identification and have
no legal significance.
8.14. ENTIRE AGREEMENT. This Agreement and all documents, instruments and
agreements mentioned herein constitute the entire and complete understanding of
the parties with respect to the transactions contemplated hereunder. All
previous conversations, memoranda and writings between the parties or pertaining
to the transactions contemplated hereunder that are not incorporated or
referenced in this Agreement or in such documents, instruments and agreements
are superseded hereby.
(9)
10
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of
the date first hereinabove written.
BANK: BORROWER:
SANWA BANK CALIFORNIA APPLIED SIGNAL TECHNOLOGY, INC.
BY: [SIG] BY: [SIG]
--------------------------------- -----------------------------------
XXXXXXX XXXXXX, AUTHORIZED OFFICER XXXX X. XXXXXX, CHIEF EXECUTIVE OFFICER
AND PRESIDENT
ADDRESS: BY: [SIG]
-----------------------------------
San Xxxx Commercial Banking Center XXXXX OFFI, CHIEF FINANCIAL OFFICER
000 Xxxxxxx Xxxx.
Xxx Xxxx, XX 00000
ADDRESS:
000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
(10)
