EXHIBIT 10.19
LOAN AGREEMENT
by and among
▇▇▇▇-▇▇▇▇▇ CORPORATION
(the "BORROWER"),
and
FIRST INTERSTATE BANK OF ARIZONA, N.A.
(the "Bank")
January 31, 1996
TABLE OF CONTENTS
Page
SECTION 1. RECITALS 1
SECTION 2. DEFINITIONS 1
2.1 Definitions 1
2.2 Accounting Terms 1
SECTION 3. THE REVOLVING CREDIT FACILITY 2
3.1 Revolving Loan Commitment 2
3.2 Manner of Borrowing 2
(a) Request for Advance 2
(b) Notice Irrevocable 2
3.3 Apportionment of the Revolving Credit Loan 3
3.4 Commitment Fee 3
3.5 Reduction of Revolving Credit Commitment 3
(a) Reduction 3
(b) Effect 3
3.6 The Revolving Credit Note 3
3.7Principal Payment and Prepayment
on the Revolving Credit Loan 4
(a) Mandatory Payments 4
(b) Optional Prepayments 4
3.8 Payment of Interest Under the Revolving Credit Loan 4
SECTION 4. [Intentionally omitted.] 5
SECTION 5.GENERAL PAYMENT TERMS; DESIGNATION OF APPLICABLE INTEREST RATE 5
5.1 Payments 5
5.2Designations and Conversions of the Applicable Interest Rate 5
5.3 Computations 6
5.4 Setoff 7
5.5 Increased Capital Requirements 7
5.6 Special Provisions for LIBO Rate Advances 7
(a) Inadequacy of Eurodollar Pricing 7
(b) Illegality 7
(c) Increased Costs for LIBO Rate Advances 8
5.7 Indemnity for Consequential Loss 9
SECTION 6. CONDITIONS PRECEDENT 9
6.1 Conditions Precedent to Effectiveness 9
6.2 Advances 11
SECTION 7. REPRESENTATIONS AND WARRANTIES 11
7.1 Corporate Existence and Power 11
7.2Corporate and Governmental Authorization; Contravention 11
7.3 Enforceability 12
7.4 Litigation 12
7.5 Compliance with ERISA 12
7.6 Taxes 12
7.7 Subsidiaries 13
7.8 No Default 13
7.9 Use of Proceeds; Margin Stock 13
7.10 No Financing of Certain Corporate Takeovers 13
7.11 Compliance with Law 13
7.12 Financial Condition 13
7.13 No Liens 14
7.14 Material Agreements 14
7.15 Principal Office 14
7.16 Full Disclosure 14
7.17 Representations and Warranties 14
7.18 Survival of Representations, Etc. 14
SECTION 8. AFFIRMATIVE COVENANTS 15
8.1 Financial Statements, Reports and Documents 15
(a) Quarterly Statements 15
(b) Annual Statements 15
(c) Financial Projections 16
(d) SEC and Other Reports 16
(e) Compliance Certificate 16
(f) Notice of Other Events 17
(g) Other Information 17
8.2 Payment of Taxes and Other Indebtedness 17
8.3 Insurance and Maintenance of Properties 17
8.4 Corporate Existence 18
8.5 Use of Proceeds 18
8.6 Books and Records; Access 18
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8.7 Compliance with Laws 18
8.8 Authorizations and Approvals 19
8.9 Further Assurances 19
SECTION 9. NEGATIVE COVENANTS 19
9.1 Sales of Stock and Indebtedness of Subsidiaries 19
9.2 Merger and Sale of Assets 19
9.3 Limitation on Net Worth 20
9.4 Total Debt Limitation 20
9.5 Restriction on Liens 20
9.6 Debt Service Ratio 20
9.7 Lines of Business 20
9.8 Certain Transfers of Property 20
9.9 Independence of Covenants 21
SECTION 10. DEFAULTS 21
10.1 Events of Default 21
10.2 Remedies Upon Event of Default 24
SECTION 11. MISCELLANEOUS 24
11.1 Entirety 24
11.2 Notices 24
11.3 Expenses; Indemnification 25
11.4 Confidentiality 25
11.5 Amendments, Waivers, Etc. 25
11.6 Assignments and Participation; Transferees 26
11.7 Invalid Provisions 26
11.8 Headings 26
11.9 No Third Party Beneficiary 26
11.10 Multiple Counterparts 26
11.11 Governing Law 26
11.12 Arbitration 27
(a) Binding Arbitration 27
(b) Governing Rules 27
(c) No Waiver,Preservation of Remedies,
Multiple Parties 27
(d) Arbitrator Powers and Qualifications;
Awards 28
(e) Miscellaneous 28
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11.13Choice of Forum; Consent to Service of Process; Jurisdiction;
Waiver of Jury Trial 29
SCHEDULES
7.4 Litigation
7.7 List of Subsidiaries and
Significant Subsidiaries of Borrower
7.14 List of Defaults under Material
Agreements
EXHIBITS
A Form of Revolving Credit Note
B Matters to be Covered by Opinion
of Counsel to Borrower at Closing
C Permitted Liens
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Loan Agreement" or
"Agreement") is made and entered into as of January
31, 1996, by and among ▇▇▇▇-▇▇▇▇▇ CORPORATION, a
Delaware corporation (the "Borrower") and FIRST
INTERSTATE BANK OF ARIZONA, N.A. (the "Bank").
RECITALS.
Borrower, the Bank and Bank One, Arizona,
N.A. ("Bank One") are all of the parties to a Loan
Agreement dated as of July 25, 1994, pursuant to
which First Interstate and Bank One provided Borrower
with a revolving credit facility in the aggregate
maximum principal amount of $15,000,000.00 and single-
advance term loans in the aggregate principal amount
of $8,500,000.00, which term loans had been repaid
prior to the date of this Loan Agreement (as
heretofore amended, the "Existing Loan Facility").
Borrower has applied to the Bank for a
revolving credit facility in the maximum principal
amount of $15,000,000.00, to replace the Existing
Loan Facility and to provide funds to be used for
Borrower's general corporate and working capital
purposes.
The Bank is willing to provide the
requested revolving credit facility, upon the terms
and subject to the conditions hereinafter set forth.
Accordingly, the parties agree as follows:
DEFINITIONS.
Definitions. Although terms may also be
defined elsewhere in this Agreement, capitalized
terms used herein (unless the context requires
otherwise) shall have the meanings set forth in Annex
I attached hereto and incorporated herein by this
reference and shall be equally applicable to both the
singular and the plural forms of the terms therein
defined. References to "Loan Agreement," "this
Agreement," "herein," "hereof," "hereunder," or other
like words mean this Loan Agreement as amended,
supplemented, restated or otherwise modified and in
effect from time to time.
Accounting Terms. Except as expressly
provided to the contrary herein, all accounting terms
shall be interpreted and all accounting
determinations shall be made in accordance with GAAP.
To the extent any change in GAAP affects any
computation or determination required to be made
pursuant to this Loan Agreement, such computation or
determination shall be made as if such change in GAAP
had not occurred unless Borrower and the Bank agree
in writing on an adjustment to such computation or
determination to account for such change in GAAP.
THE REVOLVING CREDIT FACILITY.
Revolving Loan Commitment. Upon the terms
and subject to the conditions of this Loan Agreement,
during the period beginning on the Closing Date and
ending on the Termination Date (the "Revolving
Period"), the Bank agrees to lend to Borrower, at
such times as Borrower shall request, on a revolving
basis in one or more Advances (the aggregate Advances
made by the Bank pursuant to this subsection 3.1 and
at any time outstanding are herein referred to as the
"Revolving Credit Loan"), the amount requested by the
Borrower (the "Requested Amount") in each Request for
Advance, up to an aggregate principal amount at any
time outstanding equal to the Revolving Credit
Commitment Amount. During the Revolving Period,
within the limits of this subsection 3.1, Borrower
may borrow, repay and reborrow subject to the
following limitations: (a) no Advance shall be in an
amount less than $100,000.00 or integral multiples
thereof; and (b) the Bank shall not be obligated
under any circumstances to fund an Advance that would
cause the Revolving Credit Loan to exceed the
Revolving Credit Commitment Amount.
Manner of Borrowing.
Request for Advance. Borrower
shall give the Bank notice of each request
for an Advance (a "Request for Advance"),
and each such request shall specify the
Requested Amount, and shall also set forth
all information required to be specified in
a Notice of Interest Rate Designation.
Each Request for Advance shall be made by
an Authorized Person and may be in writing
(including telex and telecopy) or oral,
confirmed promptly in writing. Each
Request for Advance shall be received by
the Bank:
If the Applicable
Interest Rate for the Advance is
to be the Prime Rate or the LIBO
Rate--not later than 11:00 a.m.
(Phoenix, Arizona time) on the
requested date of the Advance;
and
If the Applicable
Interest Rate for the Advance is
to be the Bid Rate--not later
than 9:00 a.m. (Phoenix, Arizona
time) on the requested date of
the Advance.
Notice Irrevocable. Each Request
for Advance shall be irrevocable and
binding on Borrower upon receipt thereof by
the Bank; provided that each such Request
for Advance at the Bid Rate shall become
irrevocable and binding in the manner and
at the time that the Notice of Interest
Rate Designation with respect thereto
becomes irrevocable and binding upon
Borrower in accordance with subsection 5.2
below. Borrower shall indemnify the Bank
against any cost, loss or expense incurred
as a result of Borrower's failure to
fulfill, on or before
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the date specified for an Advance in
any Request for Advance, the conditions to
such Advance set forth herein, including
any cost, loss or expense incurred by
reason of the liquidation or reemployment
of deposits or other funds acquired by the
Bank to fund such Advance when such
Advance, as a result of such failure, is
not made on the date so specified. The
Bank in any request for payment under this
subsection 3.2(b) shall provide Borrower
with a written calculation itemizing in
reasonable detail the components of such
payment.
Apportionment of the Revolving Credit Loan.
The outstanding principal amount of the Revolving
Credit Loan shall consist of, as Borrower shall from
time to time elect (subject to the terms and
conditions of this Agreement), one or more Advances
with respect to which interest shall accrue under
interest rate options determined pursuant to
subsection 5.2 below, provided that no Advance shall
be created or permitted to continue in an amount less
than $100,000.00 (the "Minimum Amount Limitation").
Commitment Fee. In addition to payments
provided for elsewhere herein, Borrower shall pay to
the Bank a commitment fee of three-eights of one
percent (0.375%) on the average daily amount of the
Revolving Credit Commitment that was unused during
the calendar quarter (or portion thereof). Such
commitment fee shall be accrued through the last day
of each calendar quarter and the Termination Date and
be due and payable quarterly on the fifteenth day of
the next succeeding calendar quarter and on the
Termination Date.
Reduction of Revolving Credit Commitment.
Reduction. Borrower shall have
the right at any time upon at least seven
days' prior written notice to the Bank to
reduce the aggregate amount of the
Revolving Credit Commitment; provided, that
the amount of each such reduction shall be
in a minimum aggregate amount of $1,000,000
or an integral aggregate multiple of
$500,000 in excess thereof, that no such
reduction shall reduce the amount of the
Revolving Credit Commitment to less than
the unpaid principal balance of the
Revolving Credit Loan.
Effect. Any reduction in the
amount of the Revolving Credit Commitment
may not be reinstated without the mutual
prior written consent of the Borrower and
the Bank.
The Revolving Credit Note. The Revolving
Credit Loan shall be evidenced by Borrower's
promissory note in the form of Exhibit A attached
hereto (together with any promissory note
subsequently executed and delivered by Borrower to
evidence the Revolving Credit Loan, a "Note") which
shall be dated the Closing Date and shall be made
payable to the order of the Bank in an amount equal
to the Revolving Credit Commitment Amount. The
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aggregate amount of the Advances made by the
Bank less all repayments of principal thereof shall
be the principal amount owing and unpaid on the Note
and the Revolving Credit Loan. The principal amount
of the Revolving Credit Loan and all principal
payments and prepayments thereof may be noted by the
Bank on a schedule attached to the Note and shall be
entered by the Bank on its ledgers and computer
records; provided, that the failure of the Bank to
make such notations or entries shall not affect the
principal amount owing and unpaid on the Note. The
entries made by the Bank on its ledgers and computer
records and any notations made by the Bank on any
such schedule annexed to the Revolving Credit Note
shall be presumed to be accurate until the contrary
is established.
Principal Payment and Prepayment on the
Revolving Credit Loan. Borrower shall pay the
principal of the Revolving Credit Loan as follows:
Mandatory Payments. The entire
principal amount of each Bid Rate Advance
shall be due and payable on the last
Business Day of the Interest Period
applicable thereto. The entire unpaid
principal balance of the Revolving Credit
Loan, together with accrued but unpaid
interest thereon, shall be due and payable
on the Termination Date.
Optional Prepayments. Borrower
shall have the right to prepay the
outstanding principal balance of the
Revolving Credit Loan in whole or in part
at any time and from time to time;
provided, however, that, unless permitted
under subsection 5.6(b), Borrower may not
prepay any principal portion of any Advance
that bears interest at the LIBO Rate or the
Bid Rate on a day other than the last day
of the Interest Period applicable thereto
unless Borrower shall have given Bank
thirty (30) days prior, written notice of
Borrower's intent to do so.
Payment of Interest Under the Revolving
Credit Loan.
The principal amount of each Advance outstanding
under the Revolving Credit Loan shall bear interest
at the respective Applicable Interest Rate in effect
for such Advance from day to day until paid in full.
If the Applicable Interest Rate is the LIBO Rate or
the Bid Rate, all accrued interest shall be due and
payable on the last day of the corresponding Interest
Period unless the Interest Period is longer than
ninety (90) days with respect to the Bid Rate or six
(6) months with respect to the LIBO Rate, in which
event interest accrued through the end of each
calendar quarter shall be payable on the first
Business Day of the next calendar quarter and all
interest accrued after such calendar quarter shall be
due and payable on the last day of such Interest
Period. If the Applicable Interest Rate is the Prime
Rate, interest accrued through the end of each
calendar month shall be payable on the first Business
Day of the next calendar month. All past due
principal of, and interest on, each Revolving Credit
Loan (or any portion thereof) shall bear
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interest until paid at the Default Rate. All
payments of interest on the Revolving Credit Loan
shall be made to the Bank as provided in subsection
5.1.
[Intentionally omitted.]
GENERAL PAYMENT TERMS; DESIGNATION OF
APPLICABLE INTEREST RATE.
Payments.
Except as provided in subsection
5.1(b), all payments and prepayments by the
Borrower of principal of and interest on
the Revolving Credit Loan, and all fees,
expenses and other Obligations payable to
the Bank in connection with the Revolving
Credit Loan (including without limitation
any fees payable pursuant to subsection
3.4), shall be made in Dollars in
Immediately Available Funds to the Bank not
later than 2:00 p.m. (Phoenix, Arizona
time) on the dates called for under this
Agreement, at the main office of the Bank
in Phoenix. Funds received after such hour
shall be deemed to have been received by
the Bank on the next Business Day.
Any Interest Period that would
otherwise end on a day that is not a
Business Day shall be extended to the next
succeeding Business Day, and interest shall
accrue at the Applicable Interest Rate
during such extension.
Any amount not received on or
before the date payment of such is due
shall bear interest at the Default Rate
from the date due through the date received
or deemed received.
Designations and Conversions of the
Applicable Interest Rate. Subject to the terms and
conditions set forth herein, Borrower may elect to
have any of the Prime Rate, the LIBO Rate or the Bid
Rate apply to the calculation of the interest
accruing with respect to the outstanding principal
amount of the Revolving Credit Loan or any Advance or
portion thereof, subject to the Minimum Amount
Limitation. Each interest rate duly selected by
Borrower shall be the "Applicable Interest Rate" for
the Revolving Credit Loan or any Advance or portion
thereof, as the case may be. For example, in the
case of a $200,000 Advance, the Borrower may elect to
have one Applicable Interest Rate apply to the
calculation of the interest on the entire Advance, or
have different Applicable Interest Rates apply to
$100,000 portions of the Advance.
For each such interest option designation (each
an "Interest Rate Designation"), an Authorized Person
shall give the Bank written (including by
telefacsimile) or oral notice confirmed promptly in
writing (a "Notice of Interest Rate Designation") (a)
specifying the
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effective date of such Interest Rate Designation (the
"Designation Date"), (b) specifying whether the
Applicable Interest Rate is to be the Prime Rate or
the LIBO Rate or, alternatively, requesting that the
Bank quote a Bid Rate to be the Applicable Interest
Rate with respect to an Advance of the Revolving
Credit Loan, and (c) specifying the applicable
Interest Period if the Applicable Interest Rate is to
be the LIBO Rate or a Bid Rate; provided that
Borrower shall not specify the LIBO Rate or request
that the Bank quote a Bid Rate in any Notice of
Interest Rate Designation if, at the time of the
giving of said notice, any Default shall have
occurred and be continuing.
Each Notice of Interest Rate Designation
designating the Prime Rate or the LIBO Rate as the
Applicable Interest Rate shall be irrevocable and
effective upon receipt thereof by the Bank. The
interest rate specified in each such notice shall be
the Applicable Interest Rate with respect to the
Advance that is the subject matter thereof (and, if
the Applicable Interest Rate is the LIBO Rate, such
Applicable Interest Rate shall be in effect for the
Interest Period specified therein).
In the event that the Borrower requests that the
Bank quote a Bid Rate with respect to an Advance, the
following provision shall apply. After receiving a
Notice of Interest Rate Designation or a Request for
Advance requesting that the Bank quote a Bid Rate to
be the Applicable Interest Rate (a "Bid Rate
Request") in the manner provided herein, the Bank
may, but shall have no obligation to, quote Borrower
(orally or in writing) a proposed interest rate (the
"Bid Rate") by communicating such quote to the
Borrower not later than 11:00 a.m. on the date its
receipt of the Bid Rate Request (Phoenix, Arizona
time). The Bid Rate Request shall be irrevocable and
effective two (2) hours after the Bank quotes the Bid
Rate to Borrower (the "Bid Rate Acceptance Time")
unless Borrower objects to the Bid Rate, quoted in
writing (including by telefacsimile) or orally to the
Bank, prior to the Bid Rate Acceptance Time. The Bid
Rate quoted in response to each Bid Rate Request that
becomes irrevocable and effective shall be the
Applicable Interest Rate with respect to the full
amount of the Advance that is the subject matter
thereof for the Interest Period specified therein,
commencing on the Designation Date specified therein.
With respect to each Bid Rate Request that does not
become irrevocable and effective, Borrower shall
designate in writing, prior to the Bid Rate
Acceptance Time, whether the Prime Rate or the LIBO
Rate shall apply (and, if the latter, specifying the
Interest Period therefor).
If at any time Borrower shall fail to duly
designate the Applicable Interest Rate for any
Advance, then Borrower shall be deemed to have duly
designated the Prime Rate to be the Applicable
Interest Rate therefor. Notwithstanding the
foregoing, while any Default shall be continuing the
Applicable Interest Rate for the Revolving Credit
Loan shall be the Prime Rate, commencing on the first
day after the end of the respective Interest
Period(s) in effect after the date of such Default.
Computations. Commitment fees and interest
on the Note shall be computed on the basis of actual
days elapsed and a year of 360 days.
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Setoff. Whenever an Event of Default shall
have occurred and be continuing, the Borrower hereby
irrevocably authorizes the Bank to set off the
Obligations against all deposits and credits of
Borrower with, and any and all claims of Borrower
against, the Bank, excluding deposits of Borrower
with the Bank which Borrower holds in escrow or in
trust for the benefit of third parties, whether or
not the Obligations, or any part thereof, shall be
then due.
Increased Capital Requirements. In the
event that, as a result of any Regulatory Change,
compliance by the Bank with any applicable law or
governmental rule, requirement, regulation, guideline
or order (whether or not having the force of law)
regarding capital adequacy has or would have the
effect of reducing the rate of return on the Bank's
capital as a consequence of or with reference to the
Revolving Credit Commitment or amounts outstanding
under the Note to a level below that which the Bank
could have achieved but for such change or compliance
(taking into consideration the policies of the Bank
with respect to capital adequacy), then from time to
time Borrower shall pay to the Bank such additional
amount or amounts as will compensate the Bank for
such reduction. The Bank shall deliver to Borrower a
written certificate which states the additional
amount(s) due and payable, showing in reasonable
detail the calculation of such amount and provide
evidence to substantiate the Bank's claim for such
amount(s).
Special Provisions for LIBO Rate Advances.
Inadequacy of Eurodollar Pricing.
If with respect to an Interest Period to
which the LIBO Rate is to apply, the Bank
determines that, by reason of circumstances
affecting the eurodollar market generally,
adequate and fair means do not exist for
ascertaining an Interbank Offered Rate, the
Bank shall forthwith give notice thereof to
Borrower, whereupon until the Bank notifies
Borrower that the circumstances giving rise
to such suspension no longer exist, (i) the
obligation of the Bank to make or maintain
any Advance for which the Applicable
Interest Rate is the LIBO Rate shall be
suspended and (ii) interest shall thereupon
accrue on the principal balance outstanding
under the Note at the Prime Rate.
Illegality. If, after the date
of this Agreement, the adoption of any
applicable law, rule or regulation, or any
change therein, or any change in the
interpretation or administration thereof by
any Governmental Authority, central bank or
comparable authority charged with the
interpretation or administration thereof,
or compliance by the Bank with any request
or directive (whether or not having the
force of law) of any such authority,
central bank or comparable authority, shall
make it unlawful or impossible for the Bank
to make, maintain or fund Eurocurrency
Liabilities (as defined in Regulation D, or
under any similar or successor regulation),
the Bank shall forthwith give notice
thereof to Borrower.
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Upon receipt of such notice,
Borrower shall either (i) repay in full and
without penalty the then outstanding
principal amount of all Advances as to
which the Applicable Interest Rate is the
LIBO Rate, together with accrued interest
thereon, or (ii) elect that the Applicable
Interest Rate with respect to such Advances
shall be the Prime Rate either (a) from and
after the last day of the then current
Interest Period if the Bank may lawfully
continue to maintain and fund such Advances
at the LIBO Rate to such day or (b)
immediately if the Bank may not lawfully
continue to fund and maintain such Advances
at the LIBO Rate to such day.
Increased Costs for LIBO Rate
Advances. Upon notice from the Bank, the
Borrower shall promptly reimburse the Bank
for any increase in the Bank's costs, which
costs shall include but not be limited to
taxes (other than taxes imposed on the
overall net income of the Bank), fees,
charges, and/or reserve requirements due
to:
any law, regulation or
the interpretation thereof by any
governmental or other authority
(whether or not having the force
of law);
the application of any
existing law, regulation or the
interpretation thereof by any
governmental or other authority
(whether or not having the force
of law);
compliance by the Bank
with any request or directive
(whether or not having the force
of law) of any monetary or fiscal
agency or authority;
violations by the
Borrower of the terms of this
Loan Agreement; or
any other circumstances
relating to the interbank
eurodollar market.
The amount of such costs shall be determined solely
by the Bank based upon the assumption that the Bank
funded one hundred percent (100%) of each LIBO Rate
Advance in the London interbank eurodollar market for
that LIBO Rate Advance. In attributing the Bank's
general costs relating to its eurocurrency operations
to any transaction under this Loan Agreement, or
averaging any costs over a period of time, the Bank
may use any reasonable attribution and/or averaging
methods which it deems appropriate and practical.
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Indemnity for Consequential Loss. The
Borrower shall indemnify the Bank, upon demand,
against any Consequential Loss (defined below) which
the Bank shall sustain or incur with respect to
payment of all or any portion of a LIBO Rate Advance
on any day prior to the last day of its respective
Interest Period. "Consequential Loss" shall mean an
amount computed as follows:
If the principal amount so repaid
is less than $50,000, the Consequential
Loss shall be conclusively presumed to be
one percent (1%) of the principal amount
repaid.
If the principal amount so repaid
is $50,000 or more, then Consequential Loss
shall be the difference (if a positive
amount) between (i) the interest that but
for the repayment would have accrued on the
repaid amount from (but excluding) the date
of repayment to (and including) the last
day of the respective Interest Period and
(ii) interest on the same amount for the
same period at a rate of interest per annum
equal to the LIBO Rate determined on the
Business Day prior to the date of repayment
for an Interest Period equal in length to
the Interest Period of the Advance being
repaid (whether repaid in whole or in
part).
CONDITIONS PRECEDENT.
Conditions Precedent to Effectiveness.
This Agreement shall become effective and the
obligation of the Bank to make the initial Advance of
the Revolving Credit Loan is subject to the prior
satisfaction of the conditions that each and all of
the following documents, certificates and opinions,
each in form and substance satisfactory to the Bank
and its counsel, shall have been delivered to the
Bank:
Note. The duly completed and
executed Note;
Officers' Certificate. A
certificate dated as of the Closing Date
and signed by a duly authorized officer of
Borrower, stating that (to the best
knowledge and belief of such officer, after
reasonable and due investigation and review
of matters pertinent to the subject matter
of such certificate): (i) all of the
representations and warranties contained in
Section 7 hereof and in the other Loan
Documents are true and correct as of the
date of the certificate; and (ii) no event
or condition has occurred and is continuing
which constitutes a Default or an Event of
Default;
Resolutions of Borrower.
Resolutions of Borrower approving the
execution, delivery and performance of this
Loan Agreement, the Note, the other Loan
Documents and the transactions contemplated
herein and therein, duly
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adopted by Borrower's Board of
Directors and accompanied by a certificate
of the Secretary of Borrower dated the date
of this Loan Agreement and stating that
such resolutions are true and correct, have
not been altered or repealed and are in
full force and effect;
Incumbency Certificate. (A) A
signed certificate of the Secretary of
Borrower dated the date of this Loan
Agreement and certifying the name(s) of the
officer(s) of Borrower duly authorized to
sign each of the Loan Documents and the
other documents and (B) a certificate or
letter executed by the President and Chief
Executive Officer of the Borrower and dated
the date of this Loan Agreement, certifying
the names of the officers or other
employees of Borrower duly authorized to
sign notices or certificates to be
delivered pursuant to the Loan Documents by
Borrower, and which shall designate the
"Authorized Persons," together with the
true signatures of each such Authorized
Person. Unless otherwise stated thereon,
each individual named on such certificate
shall be an "Authorized Person," and the
Bank may conclusively rely on such
certificates until the Bank shall receive a
further certificate of the respective
Secretary or other writing satisfactory to
the Bank canceling or amending the prior
certificate and submitting the signatures
of the individuals named in such further
certificate;
Certificates. A recently dated
certificate of existence and good standing
(or other similar instruments) for Borrower
issued by the Secretary of State of the
State of Delaware and a recently dated
certificate of good standing for Borrower
issued by the Secretary of State of the
State of Arizona;
Charter and Bylaws. A copy of
the certificate of incorporation of
Borrower, and all amendments thereto, and a
copy of the bylaws of Borrower, and all
amendments thereto, all certified by the
Secretary of Borrower as being true,
correct and complete as of the date of this
Loan Agreement;
Legal Opinion of Borrower's
Counsel. A favorable legal opinion of
counsel to Borrower addressed to the Bank,
as to the matters set forth on Exhibit B
hereto; and
Termination of Existing Loan Facility.
The Bank shall have received evidence
satisfactory to it that the Existing Loan
Facility has been terminated (or will terminate
simultaneously with the initial Advance
hereunder) and that no amounts are outstanding
for the account of Borrower under the Existing
Loan Facility (or that all such amounts
outstanding will be paid using all or a portion
of the proceeds of the initial Advance
hereunder).
-10-
Advances. The obligation of the Bank to
make each Advance (including the initial Advance) is
subject to each and all of the following additional
conditions:
the Bank shall have received a
timely and properly completed notice under
subsection 3.2(b);
there shall not have been any
Regulatory Change after the date of the
Loan Agreement which would render the
transactions contemplated hereby unlawful
or which would impose a cost on or increase
the cost to the Bank for making or
maintaining the Revolving Credit Loan or
which would reduce any amount payable to
the Bank under this Agreement or the Note;
no Default or Event of Default
shall have occurred and be continuing or
will exist upon making the requested
Advance;
all the representations and
warranties set forth in Section 7 shall be
true and correct in all material respects
as though made on and as of the applicable
borrowing date;
no Material Adverse Event shall
have occurred and no occurrence or event
which is likely to have a material adverse
effect on the rights and remedies of the
Bank shall have occurred; and
no proceeding or case under the
United States Bankruptcy Code shall have
been commenced by or against Borrower or
any Significant Subsidiary.
REPRESENTATIONS AND WARRANTIES.
To induce the Bank to enter into this Loan
Agreement and to make the Revolving Credit Loan,
Borrower represents and warrants to the Bank that:
Corporate Existence and Power. Borrower
and each Subsidiary is a corporation duly
incorporated, validly existing and in good standing
under the laws of the state or country of its
incorporation, and has all corporate power and all
material governmental licenses, authorizations,
consents and approvals required to carry on its
business as now conducted and proposed to be
conducted, to enter into each Loan Document to which
it is a party and to carry out the transactions
contemplated hereby and thereby.
Corporate and Governmental Authorization;
Contravention. The execution, delivery and
performance by Borrower of the Loan Documents
(including the issuance, delivery and payment of the
Note) are within the corporate power of Borrower,
have been duly authorized
-11-
by all necessary corporate action, require no
action by or in respect of, or filing with, any
Governmental Authority and neither the execution and
delivery thereof nor the consummation of the
transactions contemplated thereby nor compliance by
Borrower with any, nor Borrower's performance of all,
of the terms and provisions of the Loan Documents
will contravene any Law applicable to Borrower or
conflict with, result in any breach of, or constitute
any default under, the corporate charter or bylaws
(both as amended to date) or conflict with, result in
any breach of, or constitute default under, or result
in the creation of a Lien under, or require one
consent of any trustee or creditor pursuant to, any
material indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, lease, bank
loan or credit agreement to which Borrower is a party
or by which it or its assets are bound.
Enforceability. This Loan Agreement has
been duly executed and delivered by Borrower, and
this Loan Agreement and each other Loan Document
(including, without limitation, the Note) to which
Borrower is or will be a party, upon execution and
delivery thereby, will constitute the legal, valid
and binding obligations thereof, enforceable in
accordance with the respective terms of such Loan
Documents, except as limited by bankruptcy,
insolvency or other laws or equitable principles of
general application relating to the enforcement of
creditors' rights.
Litigation. There is no action, suit,
proceeding or arbitration pending, or to the
knowledge of Borrower threatened, against or
affecting Borrower or any Significant Subsidiary
before any court or arbitrator or any governmental
body, agency or official, except as disclosed by
Borrower on Schedule 7.4 hereto, and none of the
matters listed on such schedule would, if adversely
determined, have a material and adverse effect on the
Borrower's ability to perform its obligations under
the Loan Documents.
Compliance with ERISA. Borrower and each
member of the Controlled Group have fulfilled their
known obligations under the minimum funding standards
of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the
presently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC
or a Plan under Title IV of ERISA.
Taxes. As of the date of this Loan
Agreement, United States Federal income tax returns
of Borrower and the Subsidiaries with respect to
which such income tax returns are required to be
filed have been filed through the fiscal year ended
December 31, 1994 and audited through the fiscal year
ended December 31, 1987. Borrower and the
Subsidiaries have filed all United States Federal
income tax returns and all other material tax returns
which are required to be filed by them and have paid
all taxes and assessments payable by it which have
become due, other than those not yet delinquent. No
material tax Liens have been filed and, to Borrower's
knowledge, no material claims or assessments are
being asserted or will be asserted with respect to
any such taxes or other charges.
-12-
Subsidiaries. Borrower's Subsidiaries,
including its Significant Subsidiaries, are correctly
identified on Schedule 7.7 hereto. The consolidated
financial statements of Borrower do not reflect the
properties or operations of any business association
other than Borrower and the Subsidiaries.
No Default. No event or condition has
occurred and is continuing that constitutes a
Default.
Use of Proceeds; Margin Stock. The
proceeds of the Revolving Credit Loan will be used by
Borrower solely for the purposes specified in the
recitals of this Loan Agreement. None of such
proceeds will be used for the purpose of purchasing
or carrying any "margin stock" as defined in
Regulation U, Regulation X or Regulation G, or for
the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry a
"margin stock" or for any other purpose which might
constitute this transaction a "purpose credit" within
the meaning of such Regulation U, X or G. Borrower
is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin
stocks. Neither Borrower nor any Person acting on
behalf of Borrower has taken or will take any action
which might cause this Loan Agreement or the Notes to
violate Regulations U, X or G or any other
regulations of the Board of Governors of the federal
Reserve System or to violate Section 7 of the
Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect.
Borrower and the Subsidiaries own no "margin stock."
No Financing of Certain Corporate
Takeovers. No proceeds of the Revolving Credit Loan
will be used to acquire any security in any
transaction which is subject to Section 13 or 14 of
the Securities Exchange Act of 1934, including
particularly (but without limitation) Sections 13(d)
and 14(d) thereof.
Compliance with Law. Borrower and the
Subsidiaries are in substantial compliance with all
material domestic Laws that are applicable to
Borrower or any Subsidiary, or its or their
Properties. Borrower does not know, or have reason
to know, that Borrower or any Subsidiary is not in
substantial compliance with all material foreign Laws
that are applicable to Borrower or any Subsidiary, or
its or their Properties.
Financial Condition. Borrower has
delivered to the Bank copies of the consolidated
balance sheet of Borrower and the Subsidiaries as of
December 31 each of 1994, 1993 and 1992, and has
delivered to the Bank the related consolidated
statements of operations and cash flows for the
fiscal year ended on each such date, certified by
Borrower's independent certified public accountants,
and the interim consolidated balance sheet of
Borrower and the Subsidiaries as at September 30,
1995, and the related consolidated statement of
operations and cash flows for the nine-month period
then ended; all such financial statements are
complete and correct and fairly present the financial
condition of Borrower and its consolidated
Subsidiaries
-13-
as of the respective dates and have been
prepared in accordance with GAAP applied on a basis
consistent with that of prior periods; and since the
date of the consolidated financial statements of
Borrower most recently delivered to the Bank
hereunder, there has been no material adverse change
in the condition (financial or otherwise), business
or operations of the Borrower or any Subsidiary
which, in accordance with GAAP, would be required to
be reflected in the consolidated financial statements
of Borrower next scheduled to be prepared. There are
no liabilities of Borrower or any Subsidiary, fixed
or contingent, which are material but are not
reflected in the financial statements or in the notes
thereto, other than liabilities arising in the
ordinary course since the date of such financial
statements.
No Liens. Except for the Permitted Liens,
all of the Property of Borrower and the Subsidiaries
is free and clear of all Liens and other adverse
claims of any nature, and such Persons have good and
marketable title to their respective Property.
Material Agreements. Except as set forth
on Schedule 7.14, neither Borrower nor, to the best
of Borrower's knowledge, any Subsidiary is in default
in any material respect under any contract, lease,
loan agreement, indenture, mortgage, security
agreement or other material agreement or obligation
to which it is a party or by which any of its
Property is bound, and no condition exists which,
with the giving of notice or the lapse of time or
both, would institute such a default.
Principal Office. The principal office,
chief executive office and principal place of
business of Borrower is at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, Arizona. Borrower maintains its
principal records and books at such address.
Full Disclosure. There is no material fact
that Borrower has not disclosed to the Bank that
could have a material and adverse effect on the
properties, business, prospects or condition
(financial or otherwise) of Borrower and the
Subsidiaries, taken as a whole. Neither the
financial statements referenced in subsection 7.12
hereof, nor any certificate or statement delivered
herewith or heretofore by Borrower to the Bank in
connection with negotiations of this Agreement,
contains any untrue statement of a material fact or
omits to state any material fact necessary to keep
the statements contained herein or therein from being
misleading.
Representations and Warranties. Each
Request for Advance shall constitute, without the
necessity of containing a specific written statement,
a representation and warranty by Borrower that no
Default exists and that all representations and
warranties contained in this Section 7 are true and
correct on and as of the date the requested Advance
is to be made, except such as has been waived in
writing by the Bank.
Survival of Representations, Etc. Except
as otherwise provided herein, all agreements,
representations and warranties made herein shall
survive the execution and delivery
-14-
of this Agreement, the making of the Advances
and the execution and delivery of the Note, provided,
however, that upon payment in full of all of
Borrower's obligations hereunder and under the other
Loan Documents (including, without limitation, all
principal, interest and any other costs and fees
payable hereunder), or upon expiration by its terms,
this Agreement and all agreements, representations
and warranties made herein shall terminate. Any
investigation at any time made by or on behalf of the
Bank shall not diminish the Bank's right to rely on
the representations and warranties by Borrower
herein.
AFFIRMATIVE COVENANTS.
So long as the Revolving Credit Commitment is in
effect and thereafter so long as any Obligation shall
remain unpaid, the Borrower covenants that, unless
the Bank shall otherwise consent in writing, it will
perform all the covenants set forth in this Section
8:
Financial Statements, Reports and
Documents. The Borrower shall deliver to the Bank
each of the following:
Quarterly Statements. As soon as
available, and in any event within
forty-five (45) days after the end of each
quarterly fiscal period (except the last)
of each fiscal year of Borrower, copies of
the consolidated balance sheet of Borrower
as of the end of such fiscal period, and
consolidated statements of income and cash
flows of Borrower for that quarterly fiscal
period and for the portion of the fiscal
year ending with such period, in each case
setting forth in comparative form the
figures for the corresponding period of the
preceding fiscal year, all in reasonable
detail and fairly stated, subject to
year-end audit and adjustments;
Annual Statements. As soon as
available and in any event within ninety
(90) days after the close of each fiscal
year of Borrower, copies of the
consolidated balance sheet of Borrower as
of the close of such fiscal year and
consolidated statements of income, retained
earnings and cash flows of Borrower for
such fiscal year, in each case setting
forth in comparative form the figures for
the preceding fiscal year, all in
reasonable detail and accompanied by an
opinion thereon (which shall not be
qualified by reason of any limitation
imposed by Borrower) of an independent
public accountant of recognized national
standing selected by Borrower to the effect
that such financial statements have been
prepared in accordance with GAAP
consistently maintained and applied (except
for changes in which such accountants
concur) and that the examination of such
accounts in connection with such financial
statements has been made in accordance with
generally accepted auditing standards and,
accordingly, includes such tests of
-15-
the accounting records and such other
auditing procedures as were considered
necessary in the circumstances;
Financial Projections. Within
forty-five (45) days after each request by
the Bank (which requests, absent the
continuance of a Default, shall not be made
more frequently than once in each period of
ninety consecutive days), and in any event
within ninety (90) days after the close of
each fiscal year of Borrower, copies of all
plans, budgets, reports, memoranda and
other documents (collectively, the
"Financial Projections") that accurately
and completely reflect, in reasonable
detail, Borrower's anticipated income, cash
flow, expenditures, retained income and
financial position for such period as the
Bank may reasonably request (it being
agreed than any request shall be deemed
reasonable with respect to any period that
does not extend beyond twenty-four (24)
months after the date of this Agreement).
SEC and Other Reports. Promptly
upon their becoming available, one copy of
each financial statement, report, notice or
proxy statement sent by Borrower to
stockholders generally, any order issued by
any Governmental Authority in any
proceeding to which Borrower is a party
that are likely to have a material and
adverse effect on the financial condition,
operations or prospects of Borrower and the
Subsidiaries taken as a whole and, if any
of the following filings are made, each
regular or periodic report, registration
statement or prospectus filed by Borrower
with any securities exchange or the
Securities and Exchange Commission or any
successor agency;
Compliance Certificate.
Simultaneously with the financial
statements referred to in subsections
8.1(a) and 8.1(b) hereof, a certificate
executed by the treasurer, chief financial
officer, chief executive officer or chief
operating officer of Borrower, stating that
a review of the activities of the Borrower
during such fiscal quarter or year has been
made under his supervision, that the
Borrower, to the best of his knowledge
after due diligence, has observed,
performed and fulfilled its obligations and
covenants contained herein and that no
Default or Event of Default has occurred
or, if any Default or Event of Default
shall have occurred, specifying the nature
and status thereof, and stating that all
financial statements of the Borrower
delivered to the Bank during the respective
period pursuant to subsection 8.1(a) and
(b) hereof are fairly stated and have been
prepared in accordance with GAAP, subject
only to normal year end audit adjustments,
and setting forth a computation in
reasonable detail as of the end of the
period covered by such statements, of
compliance with Sections 9.3, 9.4, and 9.6
hereof;
-16-
(f) Notice of Other Events.
Promptly, and in any event, within five
Business Days after their occurrence,
notice of each of the following events:
the commencement of any
action, suit, proceeding or
arbitration against the Borrower
or any of its Significant
Subsidiaries, or any material
development in any action, suit,
proceeding or arbitration pending
against the Borrower or any of
its Significant Subsidiaries, or
the commencement by any
Governmental Authority of a
formal or informal investigation
of the Borrower or any of its
Subsidiaries, or any of their
respective directors or officers,
(A) in which the aggregate
uninsured amount claimed is more
than $250,000, (B) which would,
if decided in a manner adverse to
the Borrower or any of its
Significant Subsidiaries,
constitute a Material Adverse
Event or (C) which relates to
this Loan Agreement or any other
Loan Document;
any Default or Event of
Default; and
notice of any other
Material Adverse Event; and
(g) Other Information. Such other
information concerning the business,
Properties and financial condition of the
Borrower as the Bank shall reasonably
request.
Payment of Taxes and Other Indebtedness.
Borrower shall, and shall cause each Subsidiary to,
pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all
Taxes levied or imposed upon it or upon its income,
profits or properties and (ii) all lawful claims for
labor, materials and supplies which, if unpaid, might
by law become a Lien upon its Property; provided that
neither Borrower nor any Subsidiary shall be required
to pay or discharge or cause to be paid or discharged
any such Tax whose amount, applicability or validity
is being contested in good faith by appropriate
proceedings and with respect to which adequate
reserves are being maintained (to the extent such
reserves are required by GAAP).
Insurance and Maintenance of Properties.
Borrower shall, and shall cause each Subsidiary to,
maintain workmen's compensation insurance, liability
insurance and insurance on its and its Subsidiaries'
Property and business, whether now owned or hereafter
acquired, in such manner and to such extent as is
customary in business enterprises in the same or
similar businesses, and will cause all Property used
or useful in the conduct of such businesses to be
maintained and kept in good condition, repair and
working order and supplied with all necessary
equipment and will cause to be made all necessary
repairs, renewals and replacements thereof, all as in
the judgment of the respective corporate officials
duly charged with oversight of such
-17-
matters may be necessary so that the business
carried on in connection therewith may be properly
conducted at all times; provided that nothing herein
shall prevent Borrower or any Subsidiary from
discontinuing the operation and maintenance of any of
its Property if such discontinuance is, in the
judgment of the board of directors of such
corporation, desirable in the conduct of its business
and is not disadvantageous in any material respect to
the Bank.
Corporate Existence. Subject to
subsections 9.1 and 9.2, Borrower shall, and shall
cause each Subsidiary to, do or cause to be done all
things necessary to preserve and keep in full force
and effect its corporate existence, rights and
franchises; provided that Borrower shall not be
required to preserve the corporate existence of any
of the Subsidiaries or any right or franchise if the
board of directors of Borrower shall determine that
the preservation thereof is no longer desirable in
the conduct of the business of Borrower or such
Subsidiary unless the loss thereof is disadvantageous
in any material respect to the Bank. Borrower shall
timely notify the Bank of all additions to and
changes in corporate identity of the Subsidiaries
from that identified on Schedule 7.7 hereto.
Use of Proceeds. The proceeds of the
Revolving Credit Loan shall be used for general
corporate purposes, including working capital for
Borrower and the Subsidiaries. None of such proceeds
shall be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate,
of purchasing or carrying any "margin stock," within
the meaning of Regulation U of the Board of Governors
of the Federal Reserve System. Borrower shall not
engage principally, or as one of its important
activities, in the business of extending credit for
the purpose of purchasing or carrying any such margin
stock within the meaning of such Regulation U.
Books and Records; Access. Borrower will,
and will cause each of its Subsidiaries to, permit
any Person designated by the Bank in writing, at the
Bank's expense, to visit and inspect any of the
properties, corporate books and financial records of
the Borrower and discuss its affairs and finances
with the principal officers of the Borrower and its
independent public accountants, all at such times as
the Bank may reasonably request. Borrower shall, and
shall cause each of the Subsidiaries to, maintain
complete and accurate books and records of its
transactions in accordance with good accounting and
business practices so as to permit the preparation of
financial reports in accordance with GAAP.
Compliance with Laws. Borrower shall
comply with all applicable Laws and all final,
nonappealable orders of any Governmental Authority
applicable to it or any of its Property, business
operations or transactions, a breach of which could
have a material and adverse effect on the financial
condition, operations or prospects of Borrower and
the Subsidiaries taken as a whole.
-18-
Authorizations and Approvals. Borrower
shall, and shall cause each Subsidiary to, promptly
obtain, from time to time at its own expense, all
such governmental licenses, authorizations, consents,
permits and approvals as may be required to enable it
to comply with its obligations hereunder and under
the other Loan Documents and to operate its
businesses as presently or hereafter duly conducted.
Further Assurances. The Borrower will, and
will cause each of its Subsidiaries to, take all such
further actions and execute all such further
documents and instruments as the Bank may at any time
reasonably determine in its sole discretion to be
necessary or advisable to further carry out and
consummate the transactions contemplated by the Loan
Documents and to perfect or protect the Liens of the
Bank granted under any Loan Document.
NEGATIVE COVENANTS.
So long as the Revolving Credit Commitment is in
effect and thereafter so long as any Obligation
remains unpaid, the Borrower covenants that, unless
the Bank shall otherwise consent in writing:
Sales of Stock and Indebtedness of
Subsidiaries. Except as provided in subsection 9.2,
Borrower shall not, and shall not permit any
Subsidiary to, sell or otherwise dispose of, or part
with control of, any shares of stock or Indebtedness
of any Subsidiary, except to Borrower or another
Subsidiary, and except that all shares of stock and
Indebtedness of any Subsidiary at the time owned by
or owed to Borrower and any other Subsidiary may be
sold as an entirety to any Person for a consideration
which represents fair value (as determined in good
faith by the Board of Directors of Borrower) at the
time of such sale, subject to the 7% aggregate
limitation and other provisions of subsection 9.2,
and provided that, at the time of such sale, such
Subsidiary shall not own, directly or indirectly, any
shares of stock or Indebtedness of any other
Subsidiary or of Borrower (unless all of the shares
of stock and Indebtedness of such other Subsidiary
owned, directly or indirectly, by Borrower and all
Subsidiaries are simultaneously being sold as
permitted by this subsection 9.1).
Merger and Sale of Assets. Borrower shall
not, and shall not permit any Subsidiary, to merge
with or into or consolidate with any other Person or
sell, lease or transfer or otherwise dispose of
Property that, in accumulation with Property
transferred as described in subsection 9.9 hereof
(but without duplication), constitutes more than 7%
of the Consolidated Total Assets of Borrower and the
Subsidiaries, on a cumulative basis during the period
from July 1, 1995 through the Termination Date, and
thereafter until all Obligations are paid in full, to
any Person, except that:
-19-
any Subsidiary may merge with
Borrower (provided that Borrower shall be
the continuing or surviving corporation) or
with any one or more other Subsidiaries,
any Subsidiary may sell, lease,
transfer or otherwise dispose of any of its
assets to Borrower or another Subsidiary,
any Subsidiary may be sold or all
or substantially all of its assets may
otherwise be disposed of, subject to the
conditions specified in subsection 9.1, and
Borrower may merge with any other
corporation, provided that (i) Borrower
shall be the continuing or surviving
corporation, (ii) immediately after and
giving effect to such merger, no Default or
Event of Default shall exist and Borrower
shall be in full compliance with each
covenant herein contained and (iii) on the
effective date of such merger Borrower
shall deliver to the Bank an officer's
certificate and, if reasonably requested by
the Bank, an opinion of counsel acceptable
to the Bank, each to the foregoing effect.
Limitation on Net Worth. Borrower will not
permit its Consolidated Tangible Net Worth to be less
than $140,000,00.00 plus seventy-five percent (75%)
of positive Consolidated Net Income for each fiscal
quarter commencing with the quarter ended September
30, 1995.
Total Debt Limitation. Borrower shall not
permit the ratio of Consolidated Total Liabilities to
Consolidated Tangible Net Worth, as of the last day
of any fiscal quarter, to exceed 0.60 to 1.0.
Restriction on Liens. Borrower shall not,
and shall not permit any Subsidiary to, offer a
pledge of any of its Property or any other assets to
any Person, nor create, assume or suffer to exist any
Lien of any kind on or with respect to any of its
Property or other assets, whether now owned or
hereafter acquired, except for Permitted Liens.
Debt Service Ratio. The Borrower shall not
permit the Debt Service Ratio to be less than 2.0 to
1 as of the last day of any fiscal quarter of
Borrower.
Lines of Business. Borrower shall not, and
shall not permit any Subsidiary to, directly or
indirectly, engage in any business other than those
generally similar to those in which it and its
Subsidiaries are engaged on the date hereof.
Certain Transfers of Property. Borrower
shall not transfer, directly or indirectly, any of
its Property to any Subsidiary other than in exchange
for the contemporaneous receipt of
-20-
the fair market value thereof in money or
readily marketable Property (excluding equity
securities and debt instruments) and except for
Property that, in accumulation with Property of
Borrower and the Subsidiaries sold, leased,
transferred or otherwise disposed of to any Person
(but without duplication), does not exceed 7% of the
Consolidated Total Assets of Borrower and the
Subsidiaries, on a cumulative basis during the period
from October 1, 1995 through the Termination Date,
and thereafter until all Obligations are paid in
full. With respect to such transfers of Property of
Borrower of book value in excess of $500,000.00, the
determination of the contemporaneous receipt by
Borrower of fair market value for purposes of the
exception stated in the preceding sentence shall be
made in good faith by Borrower's board of directors
and a written copy of such determination, certified
as true, complete and current by the Secretary of
Borrower, shall be delivered to the Bank prior to the
effective date of such transfer.
Independence of Covenants. All covenants
hereunder shall be given independent effect so that
if a particular action or condition is not permitted
by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within
the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if
such action is taken or condition exists.
DEFAULTS.
Events of Default. The occurrence of any
one or more of the following events or conditions
shall constitute an "Event of Default" under this
Loan Agreement:
Borrower shall fail to pay (i)
any principal or interest under the Note,
or any fees pursuant to subsection 3.4,
within three (3) Business Days after the
date on which such payment is due, or (ii)
any other payment required hereunder or
under any other Loan Document when due and
such failure to pay such other payment
shall continue for more than ten (10)
Business Days after receipt of notice of
such failure;
Borrower or any Subsidiary shall
fail to comply with any agreement,
covenant, condition, provision or term
contained in subsections 8.4, 8.9 or
Section 9 hereof;
Borrower shall fail to comply
with any other agreement, covenant,
condition, provision or term contained in
this Loan Agreement (other than those set
forth in subsection 10.1(b) hereinabove)
and such failure is not remedied within 30
days after the Bank has given Borrower
notice of the occurrence thereof;
Any representation, warranty,
certification or statement made by Borrower
in this Loan Agreement or any other Loan
Document or in any
-21-
certificate, financial statement or
other document delivered pursuant to or in
connection with any Loan Document shall be
incorrect in any material respect when
made;
Borrower or any Subsidiary
defaults (whether as primary obligor or as
guarantor or other surety) in any payment
of principal of or premium or interest on
any Indebtedness other than the Notes
beyond any period of grace provided with
respect thereto, or Borrower or any
Subsidiary fails to perform or observe any
other agreement, term or condition
contained in any agreement under which any
such obligation is created (or any other
event thereunder or under any such
agreement occurs and is continuing) and the
effect of such failure or other event is to
cause, or to permit the holder or holders
of such obligation (or a trustee on behalf
of such holder or holders) to cause, such
obligation to become due (or to be
repurchased by the Borrower or any
Subsidiary) prior to any stated maturity,
provided that the aggregate amount of all
Indebtedness or other obligations as to
which such a payment default shall occur
and be continuing or such a failure or
other event causing or permitting
acceleration (or resale to Borrower or any
Subsidiary) shall occur and be continuing
exceeds $1,000,000.00);
Borrower or any Significant
Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation,
reorganization or other relief with respect
to itself or its debts under any
bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the
appointment of a trustee, receiver,
liquidator, custodian or other similar
official of it or any substantial part of
its property, or shall consent to any such
relief or to the appointment of or taking
possession by any such official in an
involuntary case or other proceeding
commenced against it, or shall make a
general assignment for the benefit of
creditors, or shall fail generally to pay
its debts as they become due, or shall take
any corporate action to authorize any of
the foregoing;
An involuntary case or other
proceeding shall be commenced against
Borrower or any Significant Subsidiary
seeking liquidation, reorganization or
other relief with respect to it or its
debts under any bankruptcy, insolvency or
other similar law now or hereafter in
effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or
other similar official of it or any
substantial part of its property, and such
involuntary case or other proceeding shall
remain undismissed and unstayed for a
period of 60 days; or an order for relief
shall be entered against Borrower or any
Significant Subsidiary under the federal
bankruptcy laws as now or hereafter in
effect;
-22-
Borrower or any member of the
Controlled Group shall fail to pay when due
an amount or amounts aggregating in excess
of $250,000.00 which it shall have become
liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having
aggregate unfunded vested liabilities in
excess of $250,000.00 shall be filed under
Title IV of ERISA by the Borrower, any
member of the Controlled Group, any plan
administrator or any combination of the
foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to
terminate or to cause a trustee to be
appointed to administer any such Plan or
Plans or a proceeding shall be instituted
by a fiduciary of any such Plan or Plans
against Borrower or any member of the
Controlled Group to enforce Section 515 of
ERISA and such proceeding shall remain
undismissed and unstayed for a period of 60
days; or a condition shall exist by reason
of which the PBGC would be entitled to
obtain a decree adjudicating that any such
Plan or Plans must be terminated;
Any final judgment(s) (excluding
those the enforcement of which is suspended
pending appeal) for the payment of money in
excess of the sum of $1,000,000.00 in the
aggregate (other than any judgment covered
by insurance where coverage has been
acknowledged by the insurer) shall be
rendered against Borrower or any Subsidiary
and such judgment or judgments shall not be
satisfied or discharged at least ten (10)
days prior to the date on which any of its
assets could be lawfully sold to satisfy
such judgment;
Any levy or execution upon, or
judicial seizure of, any Property of
Borrower or any Subsidiary that has a fair
market value in excess of $1,000,000.00
that is not bonded or released within
thirty (30) days;
Any one or more of the Loan
Documents shall, except solely by any
action or inaction of the Bank, cease to be
legal, valid, binding agreements
enforceable against Borrower in accordance
with the respective terms thereof, or shall
in any way be terminated or become or be
declared ineffective or inoperative, so as
to deny the Bank the substantial benefits
contemplated by such Loan Document or Loan
Documents;
The insolvency of Borrower; or
the execution by Borrower of any assignment
for the benefit of creditors; or the
failure of Borrower to pay its debts as
they mature; or if Borrower is generally
not paying its debts as they mature;
The liquidation, termination or
dissolution of Borrower;
-23-
Borrower incurs a net loss in its
business operations in any two consecutive
fiscal quarters as reflected in the
financial statements delivered to the Bank
pursuant to Subsections 8.1(a) or 8.1(b) of
this Agreement; or
The occurrence of any event of
default under any document or instrument
given by Borrower in connection with any
other Indebtedness of Borrower to the Bank.
Remedies Upon Event of Default. If an
Event of Default shall have occurred and be
continuing, then the Bank, at its sole option, may do
any one or more of the following, all of which shall
be deemed cumulative, and not alternative remedies:
(i) declare the Revolving Credit Commitment
terminated, whereupon the Revolving Credit Commitment
shall be terminated, (ii) declare the Obligations (or
any portion thereof) to be forthwith due and payable,
whereupon the Obligations (or any such portion
thereof) shall immediately become due and payable, in
each case without presentment, demand, protest or
other notice of any kind, all of which are hereby
expressly waived, anything in this Agreement or in
any other Loan Document to the contrary
notwithstanding, (iii) declare that interest shall
accrue on the principal amount of the Obligations at
the Default Rate, whereupon interest shall so accrue
notwithstanding any contrary provision of this
Agreement, and all accrued and unpaid interest shall
be compounded with principal monthly, as of the end
of each month, and (iv) enforce its rights under any
one or more of the Loan Documents; provided, however,
that if any Event of Default specified in subsections
10.1(g) or (h) shall occur, the Revolving Credit
Commitment shall automatically terminate, the
Obligations shall automatically become due and
payable, and interest thereafter shall automatically
accrue on the principal amount of the Obligations at
the Default Rate, compounded monthly as aforesaid.
MISCELLANEOUS.
Entirety. The Loan Documents embody the
entire agreement between the parties and supersede
all prior agreements and understandings, including,
without limitation, the Existing Loan Facilities,
relating to the subject matter hereof and thereof.
Notices. Except as otherwise specifically
provided for herein, all notices and other
communications provided for herein shall be in
writing (including telefacsimile communication) and,
unless otherwise required herein or by law, shall be
teletransmitted, mailed (certified or registered
mail, return receipt requested) or delivered to the
intended recipient at the "Address for Notices"
specified below its name on the signature pages
hereof, or, as to any party, at such other address as
shall be designated by such party in a notice to the
other parties. All notices and other communications
hereunder shall be effective when transmitted by
telecopier, delivered or, in the case of a mailed
notice or notice sent by overnight courier, upon
receipt thereof as conclusively evidenced by the
signed receipt therefor, in each case given or
addressed as aforesaid
-24-
except that notices to the Bank under the
provisions of Sections 3 or 5 shall not be effective
until received by the Bank.
Expenses; Indemnification. The Borrower
agrees to pay on demand: (a) the reasonable fees and
expenses of ▇▇▇▇▇ & ▇▇▇▇, P.A., special counsel to
the Bank, in connection with the negotiation,
preparation, approval, execution and delivery of the
Loan Documents; (b) the reasonable fees and expenses
of counsel for the Bank in connection with any
amendment, modification or waiver of any of the terms
of any Loan Document; and (c) in any applicable case
in which the Bank is the prevailing party (and if the
concept of prevailing party is not applicable, then
in every case), all reasonable costs and expenses of
the Bank (including reasonable counsel's fees) in
connection with the enforcement through legal
proceedings of this Agreement, the Note and/or any of
the other Loan Documents.
The Borrower hereby agrees to indemnify the Bank
and its directors, officers, agents and employees
from and hold each of them harmless against any and
all losses, liabilities, claims, damages or expenses
incurred by any of them arising out of or by reason
of any investigation, litigation or other proceedings
related to any use made or proposed to be made by the
Borrower of the proceeds of the Revolving Credit Loan
or the operations of the Borrower's business,
including, without limitation, the reasonable fees
and disbursements of counsel incurred in connection
with any such investigation, litigation or other
proceedings (but excluding any such losses,
liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct
of the Person to be indemnified).
Confidentiality. Any information which the
Bank receives from the Borrower shall not be
disclosed to any Person other than the Bank, if such
information is not otherwise in the public domain,
other than (a) to its independent accountants,
financial advisors or consultants and legal counsel,
(b) pursuant to statutory or regulatory requirements,
(c) pursuant to any mandatory court order or (d) to
any participant in or assignee of, or prospective
participant in or assignee of, this Agreement or any
Note. With respect to those Persons set forth in (a)
and (d) hereinabove, all such Persons shall agree to
be bound by the terms of this subsection or be under
a professional obligation to do so. The Bank agrees
to give Borrower notice of any subpoena, court or
governmental order or other legal process served upon
the Bank and involving Borrower unless such notice is
prohibited by the issuer of such process or by its
terms. The provisions of this subsection shall
survive the repayment of all Obligations hereunder
and/or the termination of this Loan Agreement.
Amendments, Waivers, Etc. Any provision of
this Agreement or any other Loan Document may be
amended or modified only by an instrument or
instruments in writing signed by the Bank and the
Borrower. No waiver of any provision of this
Agreement or any other Loan Document or consent to
any departure by the Borrower therefrom shall in any
event be effective
-25-
unless the same shall be in writing and signed
by the Bank and then such waiver or consent shall be
effective only in the specific instance and for the
purpose for which given.
Assignments and Participation; Transferees.
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may
not assign its rights or obligations hereunder, under
the Note or under any other Loan Document without the
prior written consent of the Bank.
Invalid Provisions. If any provision of
any Loan Document is held to be illegal, invalid or
unenforceable under present or future laws during the
term of this Loan Agreement, such provision shall be
fully severable; such Loan Document shall be
construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of
such Loan Document; and the remaining provisions of
such Loan Document shall remain in full force and
effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its
severance from such Loan Document. Furthermore, in
lieu of each such illegal, invalid or unenforceable
provision there shall be added as part of such Loan
Document a provision mutually agreeable to Borrower
and the Bank as similar in terms to such illegal,
invalid or unenforceable provision as may be possible
and be legal, valid and enforceable.
Headings. Section and subsection headings
are for convenience of reference only and shall in no
way affect the interpretation of this Loan Agreement.
No Third Party Beneficiary. The parties do
not intend the benefits of this Loan Agreement to
inure to any third party, nor shall this Loan
Agreement be construed to make or render the Bank
liable to any materialman, supplier, contractor,
subcontractor, purchaser or lessee of any property
owned by Borrower, or for debts or claims accruing to
any such persons against Borrower. Notwithstanding
anything contained herein or in the Note, or in any
other Loan Document, or any conduct or course of
conduct by any or all of the parties hereto, before
or after signing this Loan Agreement or any of the
other Loan Documents, neither this Agreement nor any
other Loan Document shall be construed as creating
any right, claim or cause of action against the Bank,
or any of its respective officers, directors, agents
or employees, in favor of any materialman, supplier,
contractor, subcontractor, purchaser or lessee of any
property owned by Borrower, nor to any other person
or entity other than Borrower.
Multiple Counterparts. This Agreement may
be executed in any number of counterparts, all of
which taken together shall constitute one and the
same agreement.
Governing Law. This Loan Agreement has
been prepared, is being executed and delivered, and
is intended to be performed in the State of Arizona.
The substantive laws of the State of Arizona and the
applicable federal laws of the United States of
America shall govern the
-26-
validity, construction, enforcement and
interpretation of this Loan Agreement and all of the
other Loan Documents without regard to Arizona
principles of conflict of laws.
Arbitration.
(a) Binding Arbitration. Upon the demand
of Borrower or the Bank, whether made before the
institution of any judicial proceeding or not more
than 60 days after service of a complaint, third
party complaint, cross-claim or counterclaim or any
answer thereto or any amendment to any of the above,
any Dispute (as defined below) shall be resolved by
binding arbitration in accordance with the terms of
this arbitration clause. A "Dispute" shall include
any action, dispute, claim, or controversy of any
kind, whether founded in contract, tort, statutory or
common law, equity, or otherwise, now existing or
hereafter occurring between the parties arising out
of, pertaining to or in connection with this
Agreement or any Loan Document. The parties
understand that by this Agreement they have decided
that the Disputes may be submitted to arbitration
rather than being decided through litigation in court
before a judge or jury and that once decided by an
arbitrator the claims involved cannot be brought,
filed or pursued in court.
(b) Governing Rules. Arbitrations
conducted pursuant to this Agreement, including
selection of arbitrators, shall be administered by
the American Arbitration Association
("Administrator") pursuant to the Commercial
Arbitration rules of the Administrator. Arbitrations
conducted pursuant to the terms hereof shall be
governed by the provisions of the Federal Arbitration
Act (Title 9 of the United States Code), and to the
extent the foregoing are inapplicable, unenforceable
or invalid, the laws of the State of Arizona.
Judgment upon any award rendered hereunder may be
entered in any court having jurisdiction; provided,
however, that nothing contained herein shall be
deemed to be a waiver by the Bank of the protections
afforded to it under 12 U.S.C. 91 or similar
governing state law. Any party who fails to submit
to binding arbitration following a lawful demand by
the opposing party shall bear all costs and expenses,
including reasonable attorney's fees, incurred by the
opposing party in compelling arbitration of any
Dispute.
(c) No Waiver, Preservation of Remedies,
Multiple Parties. No provision of, nor the exercise
of any rights under, this arbitration clause shall
limit the right of any party to (1) foreclose against
any real or personal property collateral or other
security, (2) exercise self-help remedies (including
repossession and setoff rights) or (3) obtain
provisional or ancillary remedies such as injunctive
relief, sequestration, attachment, replevin,
garnishment, or the appointment of a receiver from a
court having jurisdiction. Such rights can be
exercised at any time except to the extent such
action is contrary to a final award or decision in
any arbitration proceeding. The institution and
maintenance of an action as described above shall not
constitute a waiver of the right of any party,
including the plaintiff, to submit the Dispute to
arbitration, nor render inapplicable the compulsory
arbitration provisions hereof. Any claim or Dispute
related
-27-
to exercise of any self-help, auxiliary or other
exercise of rights under this section (c) shall be a
Dispute hereunder.
(d) Arbitrator Powers and Qualifications;
Awards. Arbitrator(s) shall resolve all Disputes in
accordance with the applicable substantive law.
Arbitrator(s) may make an award of attorneys' fees
and expenses if permitted by law or the agreement of
the parties. All statutes of limitation applicable
to any Dispute shall apply to any proceeding in
accordance with this arbitration clause. Any
arbitrator selected to act as the only arbitrator in
a Dispute shall be required to be a practicing
attorney with not less than 10 years practice in
commercial law in the State of Arizona. With respect
to a Dispute in which the claims or amounts in
controversy do not exceed five hundred thousand
dollars ($500,000), a single arbitrator shall be
chosen and shall resolve the Dispute. In such case
the arbitrator shall have authority to render an
award up to but not to exceed five hundred thousand
dollars ($500,000) including all damages of any kind
whatsoever, costs, fees and expenses. Submission to
a single arbitrator shall be a waiver of all parties'
claims to recover more than five hundred thousand
dollars ($500,000). A Dispute involving claims or
amounts in controversy exceeding five hundred
thousand dollars ($500,000) shall be decided by a
majority vote of a panel of three arbitrators
("Arbitration Panel"). An Arbitration Panel shall be
composed of one arbitrator who would be qualified to
sit as a single arbitrator in a Dispute decided by
one arbitrator, one who has at least ten years
experience in commercial lending and one who has at
least ten years experience in the semiconductor
industry. Arbitrator(s) may, in the exercise of
their discretion, at the written request of a party
in any Dispute, (1) consolidate in a single
proceeding any multiple party claims that are
substantially identical and all claims arising out of
a single loan or series of loans including claims by
or against borrower(s) guarantors, sureties and or
owners of collateral if different from the borrower,
and (2) administer multiple arbitration claims as
class actions in accordance with Rule 23 of the
Federal Rules of Civil Procedure. The arbitrator(s)
shall be empowered to resolve any dispute regarding
the terms of this Agreement or the arbitrability of
any Dispute or any claim that all or any part
(including this provision) is void or voidable but
shall have no power to change or alter the terms of
this Agreement. The award of the arbitrator(s) shall
be in writing and shall specify the factual and
legal basis for the award.
(e) Miscellaneous. To the maximum extent
practicable, the Administrator, the arbitrator(s) and
the parties shall take any action necessary to
require that an arbitration proceeding hereunder be
concluded within 180 days of the filing of the
Dispute with the Administrator. The arbitrator(s)
shall be empowered to impose sanctions for any
party's failure to proceed within the times
established herein. Arbitration proceedings
hereunder shall be conducted in Arizona at a location
determined by the Administrator. In any such
proceeding a party shall state as a counterclaim any
claim which arises out of the transaction or
occurrence or is in any way related to the Documents
which does not require the presence of a third party
which could not be joined as a party in the
proceeding. The provisions of this arbitration
clause shall survive any termination, amendment, or
expiration of the Loan Documents and repayment
-28-
in full of sums owed to Banks by Borrower unless the
parties otherwise expressly agree in writing. Each
party agrees to keep all Disputes and arbitration
proceedings strictly confidential, except for
disclosures of information required in the ordinary
course of business of the parties or as required by
applicable law or regulation.
Choice of Forum; Consent to Service of
Process; Jurisdiction; Waiver of Jury Trial. Any
suit, action or proceeding against Borrower with
respect to this Loan Agreement, the Note, or any
judgment entered by any court in respect thereof, may
be brought in any of the courts of the State of
Arizona, County of Maricopa or Pima County, or in the
United States courts located in the State of Arizona
as the Bank in its sole discretion may elect, and
Borrower hereby submits to the nonexclusive
jurisdiction of such courts for the purpose of any
such suit, action or proceeding. Borrower hereby
irrevocably waives any objections which it may now or
hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to
this Loan Agreement, the Note or any other Loan
Document brought in any of the courts located in the
State of Arizona, County of Maricopa or Pima.
BORROWER AND THE BANK HEREBY IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTER-CLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the day and year first
above written.
▇▇▇▇-▇▇▇▇▇ CORPORATION
By G. ▇▇▇▇▇ ▇▇▇▇▇
Its Treasurer
Addresses for Notices:
▇▇▇▇-▇▇▇▇▇ CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (602)
746-1111
Telefacsimile: (602)
746-7752
Attention: Chief
Financial Officer
-29-
FIRST INTERSTATE BANK
OF ARIZONA, N.A.
By ▇▇▇▇ ▇▇▇▇▇▇▇
Its Vice President
Addresses for Notices:
FIRST INTERSTATE BANK
OF ARIZONA, N.A.
Corporate Banking
Division #741
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (602)
528-6634
Telefacsimile No: (602)
229-4409
Attention: ▇▇. ▇▇▇▇ ▇.
▇▇▇▇▇▇▇
-30-
SCHEDULE 7.7
BORROWER'S SUBSIDIARIES
▇▇▇▇-▇▇▇▇▇ INTERNATIONAL HOLDING CORPORATION, Tucson,
AZ
▇▇▇▇-▇▇▇▇▇ LIMITED, Scotland
▇▇▇▇-▇▇▇▇▇ INTERNATIONAL LIMITED, United Kingdom
▇▇▇▇-▇▇▇▇▇ JAPAN, LIMITED, Japan
▇▇▇▇-▇▇▇▇▇ INTERNATIONAL, S.A., France
▇▇▇▇-▇▇▇▇▇ INTERNATIONAL, S.R.L., Italy
▇▇▇▇-▇▇▇▇▇ INTERNATIONAL, B.V., Netherlands
▇▇▇▇-▇▇▇▇▇ INTERNATIONAL, GmbH, Germany
▇▇▇▇-▇▇▇▇▇ RESEARCH, GesmbH, Austria
▇▇▇▇-▇▇▇▇▇, ▇.▇., Switzerland
▇▇▇▇-▇▇▇▇▇ FOREIGN SALES CORPORATION, Barbados
Intelligent Instrumentation, Inc.
Power Convertibles Corporation
SCHEDULE 7.14
CONTRACTS OF BORROWER/SUBSIDIARIES
WHICH ARE IN DEFAULT
None
ANNEX I
TO
LOAN AGREEMENT
by and among
▇▇▇▇-▇▇▇▇▇ CORPORATION
(the "BORROWER")
and
FIRST INTERSTATE BANK OF ARIZONA, N.A.
(the "Bank")
The following terms, as used in the Loan
Agreement, have the meanings assigned to them in this
Annex I (which is incorporated into and constitutes a
part of the Loan Agreement for all purposes thereof):
"Advance" means a disbursement of proceeds of
the Revolving Credit Loan.
"Agreement" or "Loan Agreement" means this Loan
Agreement, as amended, supplemented, restated or
otherwise modified and in effect from time to time.
"Applicable Interest Rate" means, with respect
to any Advance, the Prime Rate, the LIBO Rate or the
Bid Rate, as from time to time selected by Borrower
and as applicable to such Advance pursuant to
subsections 3.2, 3.3 and 5.2 of the Loan Agreement.
"Authorized Person" means the officers or other
employees of Borrower from time to time duly
certified to the Bank by appropriate corporate action
as authorized to request Advances and make
designations of the Applicable Interest Rates.
"Bid Rate": See subsection 5.2.
"Bid Rate Acceptance Time": See subsection 5.2.
"Bid Rate Request": See subsection 5.2.
"Borrowing Date" means the Business Day on which
the proceeds of an Advance are disbursed to or for
the benefit of Borrower.
"Business Day" means any day other than a
Saturday, Sunday or other day on which commercial
banks in Phoenix, Arizona are required or authorized
to close.
"Capital Expenditures" means, for any specified
period, the aggregate for all gross expenditures
during such period for any assets, or for
improvements, replacements, substitutions
or additions therefor or thereto, which are
capitalized on the consolidated balance sheet of the
Borrower, including the balance sheet amount of any
Capital Leases incurred during such period.
"Capital Lease" means any obligation to pay rent
and other amounts under a lease of (or other
agreement conveying the right to use) Property which
obligation is required to be classified and accounted
for as a capital lease on a balance sheet of the
lessee in accordance with GAAP, and for the purposes
hereof the amount of each obligation shall be the
capitalized amount thereof, determined in accordance
with GAAP.
"Closing Date" means the date upon which all of
the conditions precedent set forth in subsection 6.1
of the Loan Agreement have been fully satisfied and
fully-executed copies of the Loan Documents have been
delivered to and accepted by the Bank.
"Code" means the Internal Revenue Code of 1986,
as amended.
"Consequential Loss": See subsection 5.7.
"Consolidated Net Income" means, with respect to
any period, consolidated net earnings (after income
taxes) of Borrower and the Subsidiaries for such
period, determined in accordance with GAAP, but
excluding (i) any gain or loss arising from the sale
of capital assets, (ii) any gain arising from any
write-up of assets (other than the write-up of
current assets as a result of realignment of
currencies), (iii) earnings of any other Person,
substantially all of the assets of which have been
acquired by Borrower or a Subsidiary in any manner,
to the extent that such earnings were realized by
such other Person prior to the date of such
acquisition, (iv) net earnings of any Person (other
than a Subsidiary) in which Borrower or a Subsidiary
has an ownership interest, unless such earnings have
been actually received by Borrower or such Subsidiary
in the form of cash distributions, (v) any deferred
credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost
of the investment in such Subsidiary, and (vi) any
gain arising from the acquisition of any securities
of Borrower or a Subsidiary.
"Consolidated Tangible Net Worth" means, at any
date, the total stockholder's equity (including
capital stock, additional paid in capital and
retained earnings after deducting treasury stock)
which would appear on a consolidated balance sheet of
Borrower and the Subsidiaries prepared as of such
date in accordance with GAAP, less the aggregate book
value of Intangible Assets shown on such balance
sheet.
"Consolidated Total Assets" means, at any date,
all assets of Borrower and its Subsidiaries that
would appear as such on a consolidated balance sheet
of Borrower and its Subsidiaries prepared as of that
date in accordance with GAAP.
-2-
"Consolidated Total Liabilities" means, at any
date, all liabilities of Borrower and the
Subsidiaries that would appear as such on a
consolidated balance sheet of Borrower and the
Subsidiaries prepared as of that date in accordance
with GAAP.
"Controlled Group" means, severally and
collectively, the members of the group controlling,
controlled by and/or in common control of Borrower,
within the meaning of Section 4001(b) of ERISA.
"Debt Service Ratio" means the result of the
following calculation, expressed as a percentage, as
at the end of any fiscal quarter of Borrower:
the sum of Borrower's
Consolidated Net Income, interest expense,
depreciation expense, amortization of
intangibles expense, as measured over the
preceding four fiscal quarters of Borrower;
divided by
the sum of interest expense, as
measured over the preceding four fiscal
quarters of Borrower plus the current
maturities of long-term indebtedness as of
the end of the given fiscal quarter.
All calculations and amounts shall be determined in
accordance with GAAP. "Interest expense," as used
hereinabove, shall include all gross interest expense
amounts incurred by Borrower and the Subsidiaries.
"Default" means an Event of Default or an event
which, upon the giving of notice or the lapse of time
or both, would constitute an Event of Default.
"Default Rate" shall mean the rate per annum
equal to the Prime Rate plus three percent (3%) per
annum, changing in conformity with each change in the
Prime Rate.
"Designation Date": See subsection 5.2.
"Dollars" and the sign "$" each means lawful
money of the United States of America.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, together with all
rules and regulations issued pursuant thereto.
"Eurodollar Business Day" means a Business Day
on which dealings in Dollars are carried out in the
London interbank market.
"Event of Default" has the meaning specified in
Section 10.1 of the Loan Agreement.
-3-
"Existing Loan Facility": See subsection 1.1.
"GAAP" means generally accepted accounting
principles and practices consistently applied as in
effect within the United States from time to time,
which shall include the official interpretations
thereof by the Financial Accounting Standards Board,
or any successor board or organization. All
accounting terms not otherwise defined in the Loan
Agreement or another Loan Document shall have the
meaning assigned to such terms in accordance with
GAAP.
"Governmental Authority" means any government
(or any political subdivision or jurisdiction
thereof), court, bureau, agency or other governmental
authority having jurisdiction over Borrower or a
Subsidiary or any of its or their business,
operations or Properties.
"Immediately Available Funds" means funds with
good value on the day and in the city in which
payment is received.
"Indebtedness" means, with respect to any Person
at any time, without duplication, all indebtedness,
obligations and liabilities of such Person which, in
accordance with GAAP, consistently applied, should be
classified as liabilities on an unconsolidated
balance sheet of such Person, but in any event shall
include: (a) all obligations for borrowed money,
including interest or fees of any nature related to
the borrowing of money accrued but unpaid, (b) all
obligations evidenced by bonds, debentures, notes or
other similar instruments, (c) all obligations,
actual or contingent, under letters of credit, bills
of exchange or bankers acceptances, (d) all
obligations representing the deferred purchase price
of Property or services, (e) all obligations, whether
or not assumed by or with recourse to such Person,
secured by Liens upon, or payable out of the proceeds
of or production from, asset owned by such Person,
(f) all rental obligations under Capital Leases, (g)
all obligations of any partnership or joint venture
as to which such Person is or may become personally
liable, and (h) any contract, agreement or
understanding pursuant to which such Person
guarantees, or in effect guarantees, any Indebtedness
of another Person, whether directly or indirectly.
"Intangible Assets" of any Person shall mean
those assets of such Person that are (i) deferred
assets, other than prepaid insurance and prepaid
taxes; (ii) patents, copyrights, trademarks, trade
names, franchises, goodwill, experimental expenses
and other similar assets which would be classified as
intangible assets on a balance sheet of such Person,
prepared in accordance with GAAP; and (iii)
unamortized debt discount and expense.
"Interbank Offered Rate" means, with respect to
an Interest Period, the prevailing rate of interest
per annum at which deposits in immediately available
funds in Dollars are offered at approximately 11:00
a.m., London time, two (2) Eurodollar Business Days
prior to the first day of such Interest Period by
major financial institutions active in the London
interbank eurodollar market to first class banks in
the London interbank eurodollar market for delivery
on the first day
-4-
of such Interest Period, such deposits being for a
period of time equal or comparable to such Interest
Period and in an amount comparable to the principal
amount of the applicable Advance, as such prevailing
rate of interest is determined by the Bank at such
time from reasonably available sources. The Bank
shall notify Borrower of its determination of the
Interbank Offered Rate as soon as practicable
following such determination. Each determination of
the Interbank Offered Rate by the Bank, in the
absence of manifest error, shall be conclusive and
binding.
"Interest Period" means, with respect to the
LIBO Rate, a period commencing on a Designation Date
and ending, with respect to the LIBO Rate, one, two,
three or six months thereafter and, with respect to
the Bid Rate, some number of days thereafter not to
exceed thirty (30), in each case as Borrower shall
specify in the applicable Notice of Interest Rate
Designation; provided, however, that any Interest
Period which would otherwise end on a day which is
not a Business Day shall be extended to the next
succeeding Business Day, and no Interest Period shall
extend beyond the Termination Date.
"Interest Rate Designation": See subsection
5.2.
"Laws" means all ordinances, statutes, rules,
regulations, orders, injunctions, writs, or decrees
or any Governmental Authority.
"LIBO Rate," with respect to any Interest
Period, means the sum of (a) the Interbank Offered
Rate for that Interest Period plus (b) 1.25%.
"Lien" means any lien, mortgage, security
interest, charge, tax lien, pledge, encumbrance,
title retention agreement or analogous instrument,
in, of or on any of the Properties or assets, now
owned or hereafter acquired, of any Person, whether
arising by agreement or operation of law or
otherwise, and whether voluntarily or involuntarily
created.
"Loan Agreement" and "Agreement" means this Loan
Agreement, as amended, supplemented, restated or
otherwise modified and in effect from time to time.
"Loan Documents" means the Loan Agreement, the
Note (including any renewals, extensions and
refundings thereof), and all other agreements,
instruments, certificates or other documents executed
and delivered pursuant to or in connection therewith,
as the same may be supplemented, amended or otherwise
amended from time to time.
"Material Adverse Event" means any occurrence of
whatsoever nature (including, without limitation, any
adverse determination in any litigation, arbitration
or governmental investigation or proceeding) which
materially adversely affects the present or
reasonably foreseeable prospective financial
condition or operations of the Borrower or any
Significant Subsidiary or
-5-
materially impairs the ability of the Borrower to
perform its obligations under the Loan Documents.
"Minimum Amount Limitation": See subsection
3.3.
"Note": See subsection 3.6.
"Notice of Interest Rate Designation": See
subsection 5.2.
"Obligations" means all obligations of the
Borrower to the Bank now existing or hereafter
existing under any Loan Document, whether for
principal, interest, fees, expenses, indemnification
or otherwise.
"PBGC" means the Pension Benefit Guaranty
Corporation created by Section 4002(a) of ERISA, or
any Governmental Authority succeeding to the
functions thereof.
"Permitted Liens" means (a) Liens granted to the
Bank to secure any obligations of Borrower to the
Bank, (b) Liens described on Exhibit C to the Loan
Agreement, (c) Liens to secure Indebtedness of
Borrower or any Subsidiary that are taken or retained
by the seller of all of the Property subject to that
Lien to secure all or part of the purchase price
thereof, which Liens shall include, but not be
limited to, interests of such seller pursuant to
title retention agreements, conditional sale
contracts or Capital Leases, (d) Liens in any
Property existing (whether or not assumed) at the
time, after the date of the Loan Agreement, that such
Property was acquired by Borrower or any Subsidiary,
(e) pledges or deposits made to secure payment of
Workers' Compensation, unemployment insurance,
pensions or social security programs, (f)
construction Liens on new or existing facilities of
Borrower for which material or labor bonds are in
force or Liens imposed by mandatory provisions of Law
such as for materialmen's, mechanics', warehousemen's
and other similar Liens arising in the ordinary
course of business securing indebtedness whose
payment is not yet due, (g) Liens for Taxes imposed
on a Person or upon such Person's income or profits
or property, if the same are not yet due and payable
or if the same are being contested in good faith and
as to which adequate reserves have been provided by
such Person, (h) good faith deposits in connection
with tenders, leases, real estate bids or contracts
(other than contracts involving the borrowing of
money), pledges or deposits to secure public or
statutory obligations, deposits to secure (or in lieu
of) surety, stay, appeal or customs bonds and
deposits to secure the payment of taxes, assessments,
customs duties or other similar charges or deposits
or bonds to secure performance of governmental
contracts, or (i) encumbrances consisting of zoning
restrictions, easements, or other similar
restrictions on the use of real property, provided
that such do not impair the use or value of such
property for the uses intended, and none of which is
violated by existing or proposed structures or land
use.
-6-
"Person" means any individual, corporation,
partnership, limited liability company, joint
venture, association, joint stock company, trust,
unincorporated organization or government or any
agency or political subdivision thereof.
"Plan" means (a) with respect to Borrower, any
plan described in Section 4021(a) of ERISA and not
excluded pursuant to Section 4021(b) thereof, under
which Borrower or any Subsidiary has contributed, and
(b) with respect to any other Person, any employee
benefit plan or other plan established or maintained
by such Person for the benefit of such Person's
employees and to which Title IV of ERISA applies.
"Prime Rate" means the rate of interest
designated by the Bank as its "prime rate" and
publicly announced by the Bank from time to time,
which may be a rate at, above or below that at which
the Bank lends to other Persons. Each change in the
Prime Rate shall become effective without prior
notice to Borrower automatically as of the opening of
business on the date of such public announcement of a
change in the Prime Rate.
"Property" means all types of real, personal,
tangible, intangible or mixed property.
"Regulation G" means Regulation G of the Board
of Governors of the Federal Reserve System 12 C.F.R.
Part 207 or any other regulation hereafter
promulgated by said Board to replace the prior
Regulation G and having substantially the same
function, and any regulations, interpretation or
ruling thereunder.
"Regulation U" means Regulation U of the Board
of Governors of the Federal Reserve System, 12 C.F.R.
Part 221, or any other regulation hereafter
promulgated by said Board to replace the prior
Regulation U and having substantially the same
function, and any regulations, interpretations or
rulings thereunder.
"Regulation X" means Regulation X of the Board
of Governors of the Federal Reserve System, 12 C.F.R.
Part 224, or any other regulation hereafter
promulgated by said Board to replace the prior
Regulation X and having substantially the same
function, and any regulations, interpretations or
rulings thereunder.
"Regulatory Change" means any change after the
date of the Loan Agreement in United States federal,
state or foreign laws or regulations or the adoption
or making after such date of any interpretations,
directives or requests applying to a class of banks
including the Banks under any United States federal,
state or foreign Laws (whether or not having the
force of law) by any governmental or monetary
authority charged with interpretation or
administration thereof.
"Reportable Event" means, any event set forth in
Section 4043(b) of ERISA or the regulations
thereunder, a withdrawal from a Plan described in
Section 4063 of ERISA or a cessation of operations
described in Section 4062(e) of ERISA.
-7-
"Request for Advance": See subsection 3.2.
"Revolving Credit Commitment" means the
obligation of the Bank to make the Revolving Credit
Loan (or any Advance thereof) pursuant to subsection
3.1.
"Revolving Credit Commitment Amount" means
Fifteen Million Dollars ($15,000,000.00) (as the same
may be (i) reduced pursuant to subsection 3.5 or (ii)
changed as a result of an assignment pursuant to
subsection 12.6).
"Revolving Credit Loan" means the outstanding
balance of Advances made by the Bank to the Borrower
pursuant to subsection 3.1.
"Revolving Period": See subsection 3.1.
"Significant Subsidiary" means any Subsidiary
whose tangible net worth (as calculated in accordance
with GAAP) is equal to or greater than ten percent
(10%) of Consolidated Tangible Net Worth at the time
of any determination.
"Subsidiary" means any corporation of which the
Borrower owns or controls, directly or indirectly,
more than fifty percent (50%) of the outstanding
stock having by its terms ordinary voting power to
elect a majority of the Board of Directors of the
corporation.
"Taxes" means taxes, assessments, levies,
imposts, deductions, charges or withholdings or
whatsoever kind or nature, and all liabilities with
respect thereto.
"Termination Date" means the earlier of the
following: (a) the Business Day immediately
preceding the date that is the second annual
anniversary date of the Loan Agreement; or (b) the
date on which the Revolving Credit Commitment is
terminated pursuant to subsection 10.2.
Other Definitional Provisions. All terms
defined in the Loan Agreement shall have the above-
defined meanings when used in any other Loan
Document. The words "hereof," "herein," "hereunder"
and similar terms when used in the Loan Agreement
shall refer to the Loan Agreement as a whole and not
to any particular provision of the Loan Agreement.
Defined terms used in the singular shall import the
plural and vice versa. The word "including" shall
not import any limitation of the preceding general
description to or by the listed specific terms which
follow. References to "Section," "section" and
"subsection" are, unless the context otherwise
requires or otherwise specified, to sections and
subsections of the Loan Agreement.
-8-
EXHIBIT A
TO
LOAN AGREEMENT
REVOLVING CREDIT NOTE
$15,000,000.00 January , 1996
Phoenix, Arizona
FOR VALUE RECEIVED, ▇▇▇▇-▇▇▇▇▇ CORPORATION, a
Delaware corporation (hereinafter called "Maker"),
hereby promises to pay to the order of First
Interstate Bank of Arizona, N.A. (the "Bank") at the
main office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (Attention: Corporate Banking Division, #741),
in Dollars in immediately available funds, the
principal sum of FIFTEEN MILLION DOLLARS
($15,000,000.00) or the aggregate unpaid principal
amount of all Advances (as such term and each other
capitalized term used herein are defined in the Loan
Agreement hereinafter referred to) made by the Bank
pursuant to the Loan Agreement, whichever is less,
and to pay interest in like funds from the date
hereof on the unpaid balance thereof at the rates of
interest per annum and at the times specified in the
Loan Agreement.
Principal hereof shall be payable in the amounts
and at the times set forth in the Loan Agreement.
This note is the Revolving Credit Note referred
to in that certain Loan Agreement dated of even date
herewith among Maker and the Bank (as the same may be
amended, modified or restated from time to time, the
"Loan Agreement"). All of the terms, conditions and
covenants of the Loan Agreement are expressly made a
part of this Note by reference in the same manner and
with the same effect as if set forth herein at length
and any holder of this Note is entitled to the
benefits of and remedies provided in the Loan
Agreement and any other agreements by and between
Maker and Bank. Reference is made to the Loan
Agreement for the maturity, payment, prepayment and
acceleration of the indebtedness evidenced hereby.
After maturity, including maturity upon
acceleration, all unpaid amounts of this Note shall
bear interest at that rate that is three percent (3%)
above the Prime Rate. Maker agrees to pay all
collection expenses, including reasonable attorneys'
fees and court costs, incurred in the collection or
enforcement of all or any part of this Note in which
the holder hereof is the prevailing party. In the
event of any court proceedings, court costs and
attorneys' fees shall be set by the court and not by
jury and shall be included in any judgment obtained
by the holder hereof.
Failure of the holder to exercise any option
hereunder shall not constitute a waiver of the right
to exercise same in the event of any subsequent
default, or in the event of continuance of any
existing default after demand for strict performance
hereof.
This Note shall be binding upon Maker and its
successors and assigns and shall inure to the benefit
of the payee hereof, and any subsequent holders of
this Note, and their successors and assigns.
This Note shall be governed by and construed
according to the laws of the State of Arizona.
IN WITNESS WHEREOF, Maker has caused this Note
to be executed by its duly authorized corporate agent
as of the day and year first above written.
▇▇▇▇-
▇▇▇▇▇ CORPORATION,
a Delaware
corporation
By
Its
Maker's Tax
Identification
Number: ▇▇-▇▇▇▇▇▇▇
-2-
EXHIBIT B
TO
LOAN AGREEMENT
MATTERS TO BE COVERED BY THE LEGAL OPINION OF
BORROWER'S COUNSEL
The Borrower is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of Delaware, and has all
corporate power and all material governmental
licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
Each Subsidiary identified in Schedule 7.7
of the Loan Agreement is a corporation duly
incorporated, validly existing, and in good standing
under the laws of the jurisdiction of its
incorporation, and has all corporate power and all
material governmental licenses, authorizations,
consents and approvals to carry on its business as
now conducted.
The execution, delivery and performance by
the Borrower of the Loan Agreement, the Note and any
other Loan Documents are within Borrower's corporate
power, have been duly authorized by all necessary
corporate action, and require no action by or in
respect of, or filing with, any Governmental
Authority and neither the execution and delivery
thereof nor the consummation of the transactions
contemplated thereby nor compliance by the Borrower
with any, nor the Borrower's performance of all, of
the terms and provisions of the Loan Agreement, the
Note and any other Loan Document will contravene any
Law applicable to it or conflict with, result in any
breach of, or constitute any default under, its
certificate of incorporation or by-laws (both as
amended to date) or conflict with, result in any
breach of, or constitute default under, or result in
the creation of a Lien under, or require the consent
of any trustee or creditor pursuant to, any
indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, bank loan or
credit agreement to which the Borrower is a party or
by which it or its assets are bound, known to us.
The Loan Agreement and the Note each has
been duly authorized and delivered by the Borrower,
and is the legal, valid and binding obligation of the
Borrower, enforceable against it in accordance with
its terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency or other
laws or equitable principles of general application
relating to the enforcement of creditors' rights.
To the best knowledge of such counsel after
due inquiry, there are no actions, suits or
proceedings pending or threatened in any court or
before any regulatory commission, board or other
administrative or other governmental entity against
or affecting the Borrower which could reasonably be
expected to have a material adverse effect on its
ability to enter into or perform its obligations
under the Loan Agreement or the Note or on the
condition
(financial or otherwise), operations, business
or prospects of the Borrower, except those described
in the Borrower's report on Form 10-K for the fiscal
year ended December 31, 1994 or described on Schedule
7.4 to the Loan Agreement.
No consent, approval, waiver, license or
authorization or other action by or filing with any
governmental authority is required in connection with
the execution and delivery by the Borrower of any
Loan Documents to which it is a party except for
those which have already been obtained and are in
full force and effect.
The Borrower is not an "investment company"
nor a company "controlled" by an "investment
company", within the meaning of the Investment
Company Act of 1940, as amended.
-2-
EXHIBIT C
TO
LOAN AGREEMENT
PERMITTED LIENS
Financing Statements filed with the Arizona
Secretary of State as follows:
Filing Date File Number Secured
Party
08-05-88 540820 Norwest
Bank Arizona, NA1
07-11-90 628294 Ellco
Leasing Corp.
07-11-90 628295 Ellco
Leasing Corp.
[02-04-91 91019122 Orix Credit
Alliance Inc.]
09-05-91 678173 Hewlett-
Packard CO.
10-23-91 683136 Airnetics
Engineering
01-15-92 691754 Xerox Corp.
01-15-92 691755 Xerox Corp.
01-15-92 691757 Xerox Corp.
01-15-92 691758 Xerox Corp.
09-03-92 716920 AT&T
Commercial Finance
09-03-92 716921 AT&T
Commercial Finance
09-17-92 718302 AT&T
Commercial Finance2
11-08-93
764866
Siemens
Nixdorf
Printing
Sys.
(Boca
Raton, FL)
01-26-94 773287 ▇▇▇▇
Atlantic TriCon Leasing
(Paramus,
NJ)
02-08-94
774763
CIT/Equipme
nt
Financing,
Inc.
(Tempe, AZ)
04-25-94 783970 Amplicon,
Inc.3
12-15-94
812631
AT&T
Capital
Services
(DF
Airport, TX)
[FN]
1 Power Convertibles Corporation as debtor, Venture
of ▇▇▇▇-▇▇▇▇▇ Corporation
2 Any liens arising out of the AT&T Documents, as
defined in the Loan Agreement
3 Power Convertibles Corporation as debtor, Venture
of ▇▇▇▇-▇▇▇▇▇ Corporation
REVOLVING CREDIT NOTE
$15,000,000.00 January 31, 1996
Phoenix, Arizona
FOR VALUE RECEIVED, ▇▇▇▇-▇▇▇▇▇ CORPORATION, a
Delaware corporation (hereinafter called "Maker"),
hereby promises to pay to the order of First
Interstate Bank of Arizona, N.A. (the "Bank") at the
main office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (Attention: Corporate Banking Division, #741),
in Dollars in immediately available funds, the
principal sum of FIFTEEN MILLION DOLLARS
($15,000,000.00) or the aggregate unpaid principal
amount of all Advances (as such term and each other
capitalized term used herein are defined in the Loan
Agreement hereinafter referred to) made by the Bank
pursuant to the Loan Agreement, whichever is less,
and to pay interest in like funds from the date
hereof on the unpaid balance thereof at the rates of
interest per annum and at the times specified in the
Loan Agreement.
Principal hereof shall be payable in the amounts
and at the times set forth in the Loan Agreement.
This note is the Revolving Credit Note referred
to in that certain Loan Agreement dated as of January
31, 1996 among Maker and the Bank (as the same may be
amended, modified or restated from time to time, the
"Loan Agreement"). All of the terms, conditions and
covenants of the Loan Agreement are expressly made a
part of this Note by reference in the same manner and
with the same effect as if set forth herein at length
and any holder of this Note is entitled to the
benefits of and remedies provided in the Loan
Agreement and any other agreements by and between
Maker and Bank. Reference is made to the Loan
Agreement for the maturity, payment, prepayment and
acceleration of the indebtedness evidenced hereby.
After maturity, including maturity upon
acceleration, all unpaid amounts of this Note shall
bear interest at that rate that is three percent (3%)
above the Prime Rate. Maker agrees to pay all
collection expenses, including reasonable attorneys'
fees and court costs, incurred in the collection or
enforcement of all or any part of this Note in which
the holder hereof is the prevailing party. In the
event of any court proceedings, court costs and
attorneys' fees shall be set by the court and not by
jury and shall be included in any judgment obtained
by the holder hereof.
Failure of the holder to exercise any option
hereunder shall not constitute a waiver of the right
to exercise same in the event of any subsequent
default, or in the event of continuance of any
existing default after demand for strict performance
hereof.
This Note shall be binding upon Maker and its
successors and assigns and shall inure to the benefit
of the payee hereof, and any subsequent holders of
this Note, and their successors and assigns.
This Note shall be governed by and construed
according to the laws of the State of Arizona.
IN WITNESS WHEREOF, Maker has caused this Note
to be executed by its duly authorized corporate agent
as of the day and year first above written.
▇▇▇▇-
▇▇▇▇▇ CORPORATION,
a Delaware
corporation
By G.▇▇▇▇▇ ▇▇▇▇▇
Its TREASURER
Maker's Tax
Identification
Number: ▇▇-▇▇▇▇▇▇▇
