Exhibit 10.59
CROSS GUARANTY AND COLLATERAL AGREEMENT
This Agreement is entered into between CAPCO Financial Company, a division
of Cupertino National Bank ("CAPCO"), and Pacific Aerospace & Electronics, Inc.
("Pacific") and its wholly owned subsidiaries, Cashmere Manufacturing Co., Inc.,
Northwest Technologies, Inc., and Pacific Coast Technologies, Inc. (collectively
"Subsidiaries").
WHEREAS Pacific and the Subsidiaries have requested that CAPCO provide
funding and other services to them collectively under which CAPCO would purchase
accounts receivable generated and owned by each of the Subsidiaries and other
assets owed by Pacific and the Subsidiaries; and
WHEREAS Pacific and the Subsidiaries desire that the receivables and other
assets purchased by CAPCO be pooled on a collective basis in order to create a
single large base against which advances will be made to Pacific and who in turn
may provide advances to the Subsidiaries;
CAPCO is willing to provide these services on the terms and conditions set
forth below, and in addition to the terms and conditions set forth in other
agreements between CAPCO and the parties of even date, now, therefore, the
parties agree as follows:
1. Each Subsidiary shall transfer, sell and assign its eligible invoices
and other assets ("Assets") to CAPCO pursuant to the terms set forth in
respective agreements between it and CAPCO.
2. For the purpose of calculating the advances to be made available as a
result of purchased Assets, CAPCO shall be pool all Assets purchased from
Pacific or any Subsidiary into
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one account and shall calculate the borrowing base in the aggregate without
regard to the identity of the seller of each Asset.
3. CAPCO shall make all advances that are available as a result of the
purchased Assets payable to Pacific, and Pacific shall have the sole discretion
and authority as to the distribution of the advances.
4. In order to induce CAPCO into entering into this arrangement Pacific
and each of its subsidiaries agree that they shall be jointly and severally
liable for the following:
a. All advances made by CAPCO to Pacific;
b. All fees earned by CAPCO against outstanding advances;
c. All collection costs incurred by CAPCO;
d. All attorneys' fees as may be incurred by CAPCO in collecting any
account;
e. Any and all such further charges as Pacific or any of its
subsidiaries shall be liable for pursuant to the terms of their respective
agreements with CAPCO; and
f. CAPCO shall not be obligated to notify Pacific or any Subsidiary
of a default by any other party.
5. Pacific and each of its subsidiaries hereby acknowledge receipt of
copies of all lending documents between CAPCO and Pacific and/or CAPCO and each
subsidiary.
6. Neither Pacific nor any of its subsidiaries shall be permitted to
terminate this Agreement without the written consent of CAPCO, and CAPCO may
condition its agreement to terminate upon immediate payment in full of all sums
due and owing to CAPCO.
7. This Agreement shall be construed according to the laws of the State of
Washington.
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8. If any suit is commenced to enforce this Agreement suit shall be
brought in the Superior Court of King County Washington, and the prevailing
party shall be entitled to reasonable attorneys' fees.
DATED this ____ day of February, 2003.
CAPCO Financial Company, a division of
Cupertino National Bank.
By
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Its
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Pacific Aerospace & Electronics, Inc.
By
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Its
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Cashmere Manufacturing Co., Inc.
By
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Its
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Northwest Technologies, Inc.
By
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Its
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Pacific Coast Technologies, Inc.
By
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Its
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