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Hypercom - REVOLVING LINE OF CREDIT LOAN AGREEMENT
REVOLVING LINE OF CREDIT
LOAN AGREEMENT
(ACCOUNTS RECEIVABLE AND INVENTORY)
This Agreement is entered into by and between HYPERCOM, INC., an Arizona corporation & HYPERCOM LATINO AMERICA, INC., an Arizona corporation & HYPERCOM MANUFACTURING RESOURCES, INC., an Arizona corporation ("Borrower") and Bank One, Arizona, NA ("Bank"). RECITALS: Borrower desires to obtain from Bank a revolving line of credit ("Loan") and Bank is willing to make the Loan, but only on the terms and conditions hereinafter set forth. NOW, THEREFORE in consideration of the premises and the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. LOAN. 1.1 REVOLVING LINE OF CREDIT. Subject to the terms and conditions contained herein and in the other documents, instruments and agreements executed in connection with the Loan and the security therefor ("Loan Documents"), Bank will establish for Borrower the Loan as a revolving line of credit against which Bank will make advances ("Advances") from time to time for the purpose of providing working capital to Borrower. Subject to the terms hereof, Borrower shall have the right to obtain Advances, repay Advances and obtain additional Advances; however, all of the Advances hereunder shall be viewed as a single loan. At no time shall the unpaid principal balance of the Loan exceed the amount set forth in Section 13 hereof ("Maximum Amount") and all Advances of the Loan shall be made on or before the date set forth in Section 13 hereof. 1.2 ADVANCES. Subject to the terms and conditions hereof, Advances of the Loan will be made in amounts not to exceed the amount ("Borrowing Base") calculated in accordance with the formula set forth in the Borrowing Base Certificate, attached hereto as Exhibit A and by this reference incorporated herein. In calculating the Borrowing Base, the percentage set forth in Section 13 hereof of the amount of Total Eligible Accounts Receivable and the percentage set forth in Section 13 hereof of the amount (determined on the basis of the lower of cost or market value) of Total Eligible Inventory shall be used. "Eligible Account Receivable" is an amount owing to Borrower, as determined by Bank in its sole and absolute discretion, which has arisen from the delivery and/or shipment of products previously made and from services rendered for which an invoice has been issued by Borrower to its customer ("Customer") (a) which amount is not subject to any offset, counterclaim or defense asserted by the Customer, (b) which amount is subject to a perfected security interest in favor of Bank and is not subject to any other security interest, lien, claim or encumbrances, (c) which amount has not remained unpaid for more than the number of days set forth in Section 13 after the date due under the terms of the related invoice, (d) where not more than fifteen percent (15%) of the total amount owing from the Customer has remained unpaid for more than the number of days set forth in Section 13 after the date due under the terms of the related invoice, (e) which amount is not an uninsured amount owing from a Customer located in a foreign country and (f) which amount is not owing from the United States of America or any agency, department or subdivision thereof, unless a properly executed assignment of claims has been received by Bank. "Eligible Inventory" is the inventory of Borrower (consisting of those items within the categories set forth in Section 13), as determined by Bank in its sole and absolute discretion, to be (a) in good condition and salable in the ordinary course of Borrower's business, (b) owned by Borrower free and clear of any mortgages, liens, security interests, claims, encumbrances or rights of others, excepting only the security interests in favor of Bank, (c) located at a location identified in a Security Agreement (hereinafter defined), (d) subject to a perfected security interest in favor of Bank, (e) not subject to any consignment to any Customer and (e) not acquired by Borrower in or as part of a bulk transfer of sale or assets unless Borrower has complied with all applicable bulk sales or bulk transfer laws. 1.3 NOTE. The Loan shall be evidenced by a promissory note ("Note") of even date herewith in a form prepared and approved by Bank in the Maximum Amount, payable in accordance with the terms thereof. Interest on the principal amount outstanding from time to time shall be charged as provided in the Note and should such rate of interest as calculated thereunder exceed that allowed by law, the applicable rate of interest will be the maximum rate of interest allowed by applicable law. 1.4 PREPAYMENTS. If for any reason the aggregate principal amount of the Loan outstanding at any time shall exceed the maximum amount permitted to be borrowed in accordance with Section 1.2 hereof, Borrower, without notice or demand, shall immediately make a principal payment to Bank in an amount equal to such excess plus accrued and unpaid interest hereon. Borrower may from time to time, prepay all or part of the outstanding principal balance of the Loan. 1.5 REMITTANCE ACCOUNT. If so indicated in Section 13 hereof, the proceeds received by Borrower from its inventory and collection of accounts receivable, which, pursuant to the Security Agreements (hereinafter defined), are required to be transmitted to Bank, shall be handled and administered by Bank in and through a remittance account in accordance with the provisions of the Security Agreements. 2. SECURITY 2.1 SECURITY AGREEMENTS. As security for the payment of the Note, the Loan, and all other liabilities and obligations of Borrower to Bank, now existing or hereafter created, Borrower shall grant to Bank a security interest in all of Borrower's inventory, accounts receivable, rights to payment and such other property ("Property"), as more particularly described in one or more security agreements ("Security Agreements") executed by Borrower and delivered to Bank in form and substance satisfactory to Bank, in its sole and absolute discretion. The Security Agreements shall grant to Bank a first and prior security interest in and to the Property, except as otherwise expressly provided therein. 2.2 ADDITIONAL DOCUMENTS. Borrower shall execute from time to time upon the request of Bank, such financing statements or the documents reasonably required by Bank to perfect or continue Bank's security interests described herein. 3. ADVANCES. 3.1 CONDITIONS PRECEDENT TO ADVANCES. Bank shall have no obligation to make any Advance until the conditions set forth in the following subparagraphs and elsewhere herein have been satisfied at the expense of Borrower, as determined by Bank in its sole and absolute discretion:
(a) Borrower shall have delivered to Bank, in form and substance
satisfactory to Bank, this Agreement, the Note, the Security Agreements
and such other documents, instruments, financing statements, certificates
and agreements as Bank may reasonably request;
(b) If Borrower is a corporation or a partnership, Borrower shall have
delivered to Bank, in form and substance satisfactory to Bank in its sole
and absolute discretion certified copies of resolutions of Borrower's
board of directors or partners, as the case may be, authorizing Borrower
to execute, deliver, honor and perform the Loan Documents and to grant the
security interest in the Property as provided in the Security Agreements
and certifying the names and signatures of the officers or partners, as
the case may be, of Borrower authorized to sign the Loan Documents;
(c) All of Bank's liens and security interests securing the Loan, shall
have been validly perfected;
(d) No material adverse change shall have occurred in the business or
financial condition of Borrower or any guarantor since the date of the
latest financial statements given to Bank by on behalf of Borrower or
such guarantor;
(e) Each of the warranties and representations made by Borrower in the
Loan Documents shall be true and correct as of the date of each Advance
and;
(f) Borrower shall have kept and performed the various covenants,
obligations and agreements on its part to be kept and performed under the
Loan Documents and no Event of Default, or act or event which with the
giving of notice or the passage of time, or both, would constitute an
Event of Default hereunder or under any of the other Loan Documents, shall
have occurred and be continuing. 3.2 REQUESTS FOR ADVANCES. Advances may be made by Bank at the oral or written request of the persons named in Section 13 hereof, either one acting alone, who are authorized to request Advances and direct disposition of any such Advances until written notice of the revocation of such authority is received from Borrower by Bank. Each request by Borrower for an Advance shall constitute a reaffirmation, as of the date of such request, of all of the representations and warranties of Borrower contained in this Agreement and in the other Loan Documents. 3.3 NO WAIVER. No Advance shall constitute a waiver of any of the conditions to any further Advances nor, in the event Borrower is unable to satisfy any such condition, shall any such Advance have the effect of precluding Bank from thereafter declaring such inability to be an Event of Default (as hereinafter define).
4. FEES.
4.1 FEES. As additional consideration for Bank's commitment to make Advances, Borrower agrees to pay the Bank the following fees, which shall be non-refundable to Borrower, shall be held and retained by Bank as its sole property and shall not be applied to any payments due under the Loan Documents other than this Section 4:
(a) a commitment fee in the amount set forth in Section 13 hereof, payable
on or before the date hereof;
(b) a non-utilization fee computed at the rate per annum set forth in
Section 13 hereof on the unused portion of the Maximum Amount and payable
quarterly in arrears to be calculated from the date hereof, where the
phrase "unused portion of the Maximum Amount" means the average difference
between (i) the Maximum Amount and (ii) the outstanding principal balance
of the Loan on each day during such period; and
(c) an inspection fee in the amount per inspection set forth in Section 13
hereof, payable within ten (10) days of Borrower being billed therefor by
5. REPRESENTATIONS AND WARRANTIES.
5.1 REPRESENTATIONS AND WARRANTIES. Borrower makes the following representations and warranties to Bank, which representations and warranties shall survive the execution of this Agreement:
(a) Legal Status. Borrower, if a corporation, partnership, trust, or other
legal entity, has been duly organized and is validly existing under the
laws of its State of Incorporation or formation, as the case may be, and is
qualified to transact business, and has made all filings and is in good
standing, in the State of Arizona and in every other jurisdiction in which
the nature of its business requires such qualifies;
(b) No Violation. The making and performance of Borrower of the Loan
Documents does not violate any provision of law, nor any provision of
Borrower's formation documents, including, without limitation, Articles of
Incorporation or any partnership or trust agreement, or result in a breach
of, or constitute a default under, any agreement, indenture or other
instrument to which Borrower is a party or by which Borrower may be bound;
(c) Authorization. This Agreement and the other Loan Documents have been
duly authorized, executed and delivered, and are legal, valid and binding
agreements of Borrower enforceable against Borrower in accordance with
their terms, except as enforceability may be limited by bankruptcy,
solvency, reorganization, moratorium or similar laws effecting creditors'
rights generally and by general principles of equity;
(d) Financial Statements. All financial statements and reports that have
heretofor been presented to Bank in conjunction with the transaction which
is the subject of this Agreement, have been prepared in conformity with
generally accepted accounting principals consistently applied, fairly and
accurately present the financial condition and income of the subject
thereof, as of the date given, and neither contain any untrue statement of
a material fact nor fail to state a material fact required in order to make
such financial statements not misleading. Since the date of such financial
statements, there has been no material adverse change in the financial
condition or operations of the subject thereof.
(e) Consent and Licenses. No consent, approval or authorization of, or
registration or filing with, any governmental body or authority, or any
other person, firm or entity not a party hereto, is or will be required as
a condition to the valid execution, delivery, performance or enforceability
of the Loan Documents, or the transactions contemplated hereby or thereby,
or to the conduct of Borrower's business;
(f) Litigation. There is no litigation either pending or, to the best of
its knowledge, threatened against Borrower before any court or
administrative agency, or before any arbitrator, which may have a material
adverse effect on the assets, business, financial conditions or operations
of Borrower, or which would prevent or hinder the performance of Borrower's
obligations under the Loan Documents, and, furthermore, Borrower has not
violated any law and, to the best of its knowledge, is not the subject of
any investigation by a governmental agency that could result in an
indictment or a forfeiture or seizure of any of its assets;
(g) Environmental Matters. Borrower, to the best of its knowledge after due
investigation, is in compliance in all material respects with all
applicable environmental, health and safety statutes and regulations and
Borrower does not have any material contingent liability in connection with
any improper treatment, storage, disposal or release into the environment
of any hazardous or toxic waste or substance;
(h) Margin Securities. Borrower will not directly or indirectly invest all
or any part of the proceeds of the Loan in any security subject to the
margin requirements of Regulations G, T, U, or X of the Board of Governors
of the Federal Reserve System or use all or any part of proceeds of the
Loan to reduce or retire any indebtedness which was originally incurred to
purchase any margin securities or for any other purpose which would violate
any of the margin regulations of the Board of Governors of the Federal
Reserve System;
(i) ERISA. Borrower is in compliance with the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the regulations and
published interpretations thereunder, and no Reportable Event (as defined
in ERISA) has occurred with respect to any plan subject thereto. Borrower
has not incurred any material funding deficiency within the meaning of
ERISA and has not incurred any material liability to the Pension Benefit
Guarantee Corporation in connection with any such plan established or
maintained by Borrower; and
(j) Investment Company Act. Borrower is not, and is not directly or
indirectly controlled by, or acting on behalf of, any person which is, an
"Investment Company" within the meaning of the Investment Company Act of
1940, as amended.
6. COVENANTS OF BORROWER.
6.1 COVENANTS. Until the payment in full of the Loan and until the fulfillment of all of its obligations hereunder and under the other Loan Documents, Borrower shall comply with the following covenants:
(a) Books and Records. Borrower shall at all times keep accurate and
complete books, records and accounts of all of Borrower's business
activities, prepared in accordance with generally accepted accounting
principles consistently applied, and Borrower shall permit Bank, or any
persons designated by Bank, at any reasonable time, to inspect, audit and
examine such books, records and accounts and to make copies or extracts
thereof;
(b) Statements and Reports. Borrower shall furnish to Bank;
(i) within the number of days set forth in Section 13 hereof after the
end of each fiscal year of Borrower, financial statements of Borrower,
which shall include a balance sheet, an income statement showing the
results of operations for such a fiscal year and a change in financial
position statement for such fiscal year, together, in each case, with
the comparable figures for the immediately preceding fiscal year, all in
reasonable detail and prepared in accordance with generally accepted
accounting principles, consistently applied, which statements shall
contain the certification requirements set forth in Section 13 hereof;
(ii) within the number of days set forth in Section 13 hereof after the
end of each of the fiscal periods of Borrower set forth in Section 13
hereof, financial reports of Borrower, which shall include a balance
sheet, an income statement showing the results of operations for such
fiscal period and a change in financial position statement for such
fiscal period, together, in each case, with the comparable figures for
the immediately preceding corresponding fiscal period, all in reasonable
detail and prepared in accordance with generally accepted accounting
principles, consistently applied, and containing the certifications
required pursuant to Section 13 hereof;
(iii) with each such set of financial statements, a certificate prepared
as at the end of the period covered by such financial statements,
showing the computation as of such date of each of the financial
covenants contained in Section 6.1(a);
(iv) within twenty (20) days after the end of each month a Borrowing
Base Certificate in the form attached hereto as Exhibit A, to which
shall be attached the following reports:
(A) An aging and listing of all accounts receivable prepared in
accordance with generally accepted accounting principles which
itemizes each account debtor by name and address and which states the
total amount payable to Borrower and contains a breakdown indicating
future amounts due and when due, current amounts due, amounts thirty
(30) days past due, sixty (60) days past due, and ninety (90) or more
days past due, and reflecting any credit adjustments, returns and
allowances;
(B) An aging and listing of all accounts payable-trade prepared in a
similar manner;
(C) A complete and detailed description of all inventory containing a
breakdown into the categories referenced in Section 1.2 hereof and
set forth in Section 13 hereof;
(v) promptly, from time to time, upon request of Bank, such other
information concerning the financial condition, business and affairs of
Borrower as shall be reasonably requested by Bank;
(c) Notices. Borrower shall promptly notify Bank in writing of the
occurrence of any Event of Default under any of the Loan Documents or any
act or event which, with the giving of notice or the passage of time, or
both, would be such an Event of Default and of any legal action, proceeding
or investigation threatened or instituted against Borrower that might have
a material adverse effect upon the operations, financial condition or
business of Borrower or Borrower's ability to repay the Loan, or Bank's
security interest in the Property, and from time to time, at Bank's
request, Borrower will furnish to Bank a summary of the status of all such
actions, proceedings or investigation;
(d) Financial Covenants. Except as otherwise noted, all capitalized terms
referred to in the following financial covenants shall be determined in
accordance with generally accepted accounting principles, consistently
applied:
(i) a minimum Tangible Net Worth shall be maintained in the amount set
forth in Section 13 hereof, where "Tangible Net Worth" shall mean the
sum of the following: Capital, Capital Surplus and Retained Earnings,
less the sum of the value on Borrower's books of all intangible
assets, including, but not limited to, goodwill, patents, franchises,
trademarks, copyrights and the write-up in the book value of any
assets resulting therefrom after acquisition;
(ii) a minimum Owner's Equity shall be maintained of the percentage
set forth in Section 13 hereof, where "Owner's Equity" shall mean the
results obtained by dividing (A) Tangible Net Worth by (B) Borrower's
Total Assets less Intangibles;
(iii) a minimum current ratio, calculated by dividing Borrower's
Current Assets by Borrower's Current Liabilities, shall be maintained
at the ratio set forth in Section 13 hereof;
(iv) a minimum Working Capital shall be maintained in the amount set
forth in Section 13 hereof, where "Working Capital" shall mean
Borrower's Current Assets less Borrower's Current Liabilities; and
(v) a minimum interest coverage ratio calculated by dividing
Borrower's Total Earnings before interest and taxes by Borrower's
Total Interest Expense shall be maintained at the ratio set forth in
Section 13 hereof;
(e) Maintain Business. Borrower shall maintain in full force and effect all
licenses, permits, authorizations, bonds, franchises and other rights
necessary or desirable to the profitable conduct of its business, shall
continue in, and limit its operations to, the same general lines of
business as are presently conducted and shall comply with all applicable
laws, orders, regulations and ordinances of all governmental authorities,
and, if a corporation or partnership, shall maintain its corporate or
partnership existence;
(f) Mergers, Sale of Assets. Borrower will not, without Bank's prior
written consent: (i) sell, lease, transfer or dispose of substantially all
of its assets to another entity; or (ii) consolidate with or merge into
another entity, permit any other entity to merge into it or consolidate
with it, or permit any transfer of the ownership of, or power to control,
Borrower;
(g) Dividends and Other Distributions. If so indicated in Section 13
hereof, Borrower (if a corporation or a partnership) will not, without
Bank's prior written consent, declare, order, pay or make, directly or
indirectly: (i) any dividend or other distribution on or on account of any
shares of any class of stock or any other partnership interest of Borrower
now or hereafter outstanding, except a dividend payable solely in shares of
Borrower's common stock; (ii) any management fee; (iii) any loans to
shareholders or partners of Borrower; or (iv) any redemption, retirement,
purchase or other acquisition of any shares of any class of stock or
partnership interest of Borrower now or hereafter outstanding or of any
warrants or rights to purchase any such stock or partnership interest,
except (if Borrower is a corporation) to the extent that the consideration
paid for any such redemption, retirement, purchase or acquisition consists
of shares of Borrower's common stock;
(h) Capital Expenditures. Borrower will not, without Bank's prior written
consent, in any twelve (12) month period, purchase, invest in or otherwise
acquire additional fixed assets, which in the aggregate cost Borrower more
than the amount set forth in Section 13 hereof;
(i) Leases. Borrower will not, without Bank's prior written consent, enter
into any lease of personal property which would cause Borrower's total
rental obligations in any fiscal year to exceed the amount set forth in
Section 13 hereof;
(j) Indebtedness. Borrower will not, without Bank's prior written consent:
(i) incur, create, assume or permit to exist any obligation or
indebtedness, except (A) existing indebtedness disclosed on financial
statements previously delivered to Bank, (B) the Loan and (C) other
indebtedness and trade obligations and normal accruals in the ordinary
course of business not yet due and payable; (ii) become liable, directly or
indirectly, as guarantor or otherwise, for any obligation of any person or
entity, except existing obligations of such kind previously disclosed to
Bank in writing, in excess of the amount set forth in Section 13;
(k) Insurance. Borrower shall maintain and keep in force insurance of the
types and amounts customarily carried in its lines of business, including,
without limitation, fire, public liability, product liability, property
damage and workers' compensation, such insurance to be carried with
companies and in amounts satisfactory to Bank, in its reasonable
discretion, and Borrower shall deliver to Bank from time to time as Bank
may request, schedules setting forth all insurance then in effect and
copies of the policies; and
(l) Environmental Matters. Borrower will take all reasonable actions to
prevent the occurrence of any material violation of any applicable
environmental, health and safety statutes and regulations, or any order or
judgment of any court with respect to environmental pollution or
contamination, hazardous waste disposal or any other environmental matter
and Borrower shall promptly give written notice to Bank of the following
occurrences and of the steps being taken by Borrower, with respect thereto:
(i) notice that Borrower's operations are not in full compliance with the
requirements of applicable environmental, health and safety statutes and
regulations; (ii) notice that Borrower is subject to a governmental
investigation evaluating whether any remedial action is needed to respond
to the release of any hazardous or toxic waste or substance into the
environment; or (iii) notice that any properties or assets of Borrower are
subject to any environmental lien.
7. EVENTS OF DEFAULT.
7.1 Events of Default. The occurrence of one or more of the following events shall constitute an Event of Default under this Agreement:
(a) There shall occur an event of default under a Security Agreement;
(b) Borrower fails to observe or perform any of the covenants, conditions
and agreements on the part of Borrower contained herein or in any of the
other Loan Documents other than Security Agreements;
(c) If any representation or warranty made by Borrower to Bank contained
herein or in any of the other Loan Documents proves to have been untrue in
any material respect when made; or
(d) Borrower shall be in default in the payment or performance of any
material obligation under any indenture, contract, mortgage, deed of trust
or other agreement or instrument to which Borrower is a party or by which
it is bound.
8. REMEDIES OF BANK UPON DEFAULT.
8.1 Remedies. At any time after any Event of Default has occurred, Bank may, without presentment, demand, protest or further notice of any kind (all of which are hereby expressly waived) and, notwithstanding the provisions contained in any other document or instrument executed or to be executed by Borrower to Bank hereunder or contained in any other agreement, take any one or more of the following actions:
(a) Declare the entire principal and any accrued interest on the Loan,
together with all costs and expenses, to be immediately due and payable,
and to enforce payment thereof by any means permitted by law or in equity;
(b) Without accelerating payment, enforce the payment of sums of principal
and interest then due (including any penalty interest or late payment
charges);
(c) Require Borrower to take or refrain from taking any action which may be
necessary to cure such Event of Default and to obtain affirmative or
negative injunctions or restraining orders with respect thereto;
(d) Obtain the appointment of a receiver of the business and assets of
Borrower;
(e) File suit for any sums owing or for damages; and
(f) Exercise any other remedy or right provided in law or in equity or
permitted under this Agreement, the Security Agreements or any of the other
Loan Documents.
8.2 Remedies Cumulative. Any and all remedies conferred upon Bank shall be deemed cumulative with, and nonexclusive of any other remedy conferred hereby or by law, and Bank in the exercise of any one remedy shall not be precluded from the exercise of any other.
9. ATTORNEYS' FEES AND EXPENSES.
In addition to interest on principal as stated in the Note, Borrower shall pay all costs of closing the Loan and all expenses of Bank with respect thereto, including, but not limited to, inspection fees and in-house and outside legal fees (including legal fees incurred by Bank subsequent to the closing of the Loan in connection with the disbursement and administration of the Loan), filing fees and similar items. Said attorneys' fees and costs may, at Bank's option, be deducted from the disbursements of Loan proceeds hereunder. In addition to any liability Borrower may have under Arizona Revised Statutes 12-341.01, Borrower shall pay Bank's attorneys' fees and costs incurred in the collection of any indebtedness hereunder, or in enforcing this Agreement, whether or not suit is brought, and any attorneys' fees and costs incurred by Bank in any proceeding under the Federal Bankruptcy Code in order to collect any indebtedness hereunder or to preserve, protect or realize upon any security for such indebtedness.
10. WAIVER.
Any waiver of any of the terms of this Agreement by Bank shall not be construed as a waiver of any other terms of this Agreement, and no waiver shall be effective unless made in writing. The failure of Bank to exercise any right with respect to the declaration of any default shall not be deemed or construed to constitute a waiver by, or to preclude Bank from exercising any right with respect to such default at a later date or with respect to any subsequent default by Borrower.
11. NOTICES.
Any notices required or permitted to be given pursuant to the Loan Documents shall be in writing and shall be given by personal delivery or by mailing the same by United States mail, postage prepaid, to the address set forth in Section 13 hereof. Any such notice shall be deemed received for purposes of this Agreement upon delivery if given by personal delivery or 3 days after the mailing thereof if given by mail. If either party desires to change the address to which notices are to be sent it shall do so in writing and deliver the same to the other party in accordance with the notice provisions set forth above.
12. MISCELLANEOUS.
12.1 Parties. This Agreement is made solely between Borrower and Bank, no other person shall have any right of action hereunder. The parties expressly agree that no person shall be a third-party beneficiary to this Agreement.
12.2 Indemnity. Borrower agrees to and shall indemnify, hold harmless and defend Bank from any liability, claims or losses resulting from the disbursement of the proceeds of the Loan or from the condition of the Property whether arising during or after the term of the Loan. This provision shall survive repayment of the Loan and shall continue in full force and effect so long as the possibility of such liability, claims or losses exists.
12.3 Entire Agreement. This Agreement (including, if so indicated in Section 13 hereof, the Addendum attached hereto and by this reference incorporated herein), together with all other Loan Documents, constitutes the entire agreement of the parties hereto and thereto, and no prior agreement or understanding with respect to the Loan, whether written or oral and including, but not limited to, any loan commitment issued by Bank to Borrower, shall be of any further force or effect, all such other prior agreements and commitments having been superseded in their entirety by the Loan Documents.
12.4 Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective executors, administrators, heirs, successors and assigns; provided, however, that neither this Agreement nor any rights or obligations hereunder shall be assignable by Borrower without the prior express written consent of Bank first had any obtained, and any purported assignment made in contravention hereof shall be void. Bank may assign any part of or all of the Loan and its rights and obligations hereunder at any time in its sole discretion. Bank may participate all or any portion of the Loan to such other party or parties as Bank shall select.
12.5 Governing Law. This Agreement and each of the Loan Documents shall be construed in accordance with and governed by the internal law, and not the law of conflicts, of the State of Arizona.
12.6 Time. Time is of the essence hereof.
12.7 Survival. The representations and warranties hereunder shall survive the closing of the Loan and Bank may enforce such representations and warranties at any time. Borrower's covenants shall survive the closing of the Loan and shall be performed fully and faithfully by Borrower at all times. The indemnities of Borrower shall survive repayment of the Loan.
12.8 Severability. If any term or provision of this Agreement of any other Loan Document, or the application thereof to any circumstance, shall be invalid, illegal or unenforceable to any extent, such term or provision shall not invalidate or render unenforceable any other term or provision of this Agreement or any other Loan Document, or the application of such term or provision to any other circumstance. To the extent permitted by law, the parties hereto hereby waive any provision of law that renders any term or provision hereof invalid or unenforceable in any respect.
13. STATEMENT OF TERMS.
1.1 Maximum Amount: $10,000,000.00 1.1 Expiration Date: 12/5/97 1.2 Eligible Receivables 1.2 Eligible Inventory
Percentage: 80% Percentage: 35% 1.2(c) No. of Days 1.2(d) No. of Days
Past Due 89 Past Due: NA 1.2 Inventory Categories: Raw Materials X yes __ no
Work in Process __ X no
Finished Goods X yes __ no 1.5 Remittance Account __ is X is not required 3.2 Persons Authorized to Request Advances
GEORGE R. WALLNER OR ALBERT IRATO OR SCOTT TSUJITA 4.1(a) Commitment Fee: $30,000.00, inclusive of document preparation fee 4.1(b) Non-Utilization Fee: NA % per annum 4.1(c) Inspection Fee: NA % per inspection 6.1(b)(i) Statements due within 120 days of each fiscal year
Certification Requirements Independent certified public accountant
satisfactory to Bank to review financial statements 6.1(b)(ii) Statements due within 45 days of each month end
Certification Requirements company prepared on a consolidated basis 6.1(d)(i) Minimum Tangible Net Worth: $ * 6.1(d)(ii) Owner's Equity: * % 6.1(d)(iii) Current Ratio: * :1.0 6.1(d)(iv) Minimum Working Capital: $ * 6.1(d)(v) Interest Coverage Ratio: * :1.0 6.1(g) Dividends and Other Distributions * are * are not permitted 6.1(h) Capital Expenditures: $ * 6.1(i) Leases: $ * 6.1(j) Indebtedness: $ NA
11. Address for Notices H...
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