EXHIBIT 10.35
REVOLVING LINE OF CREDIT NOTE
$1,000,000.00 Angeles, California
June 30, 1999
FOR VALUE RECEIVED, the undersigned AUTO-GRAPHICS, INC.
(Borrower) promises to pay to the order of WELLS FARGO BANK,
NATIONAL ASSOCIATION (Bank) at its office at 333 South Grand
Avenue, 9th Floor, Los Angeles, CA 90071, or at such other place
as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the
principal sum of One Million Dollars ($1,000,000.00), or so much
thereof as may be advanced and be outstanding, with interest
thereon, to be computed on each advance from the date of its
disbursement as set forth herein.
INTEREST:
(a) Interest. The outstanding principal balance of this
Note shall bear interest (computed on the basis of a 360-day
year, actual days elapsed) for the designated periods at a rate
per annum equal to the corresponding percentages above the Prime
Rate in effect from time to time, as follows:
Period % Above Prime Rate
- ------------------------------- ----------------------
June 30, 1999 to and including
September 29, 1999 One Percent (1.00%)
September 30, 1999 to and One and One-Quarter Percent
including December 30, 1999 (1.25%)
December 31, 1999 to and One and One-Half Percent
including March 30, 2000 (1.50%)
On and after March 31, 2000 One and Three-Quarters
Percent (1.75%)
Notwithstanding the foregoing, should Borrower deliver evidence
satisfactory to Bank in its sole discretion that Borrower has
received New Capital (defined below) at the times and in the
cumulative amounts shown below, the outstanding principal balance
of this Note shall bear interest (computed on the basis of a
360-day year, actual days elapsed) for the designated periods at
a rate per annum equal to the corresponding percentages above the
Prime Rate in effect from time to time, as follows:
Deadline for Cumulative Period % Above Prime
Receipt of New Amount of New Rate
Capital Capital
- -------------- ------------- ------------- --------------
September 30, $250,000.00 September 30, One Percent
1999 (the First 1999 to and (1%)
Milestone) including
December 30,
1999
December 31, $350,000.00 December 31, One Percent
1999 (the Second 1999 to and (1%) if
Milestone) including Borrower met
March 30, 2000 the First
Milestone
One and One-
Quarter
Percent
(1.25%)if
Borrower did
not meet the
First
Milestone
March 31, 2000 $1,000,000.00 On and after One Percent
March 31, 2000 (1%) if
Borrower met
both
the First
Milestone and
the Second
Milestone
One and One-
Quarter
Percent
(1.25%)if
Borrower met
either the
First
Milestone or
the Second
Milestone, but
not both
One and One-
Half Percent
(1.50%) if
Borrower
received
neither the
First
Milestone nor
the Second
Milestone
As used herein, New Capital shall mean cash and cash
equivalents received and deposited by Borrower on or after June
30, 1999 in the form of a capital contribution in immediately
available funds (prior to the deduction of any and all selling
commissions and other costs and expenses, including legal fees
attributable to the offering). The Prime Rate is a base rate
that Bank from time to time establishes and which serves as the
basis upon which effective rates of interest are calculated for
those loans making reference thereto. Each change in the rate of
interest hereunder shall become effective on the date each Prime
Rate change is announced within Bank.
(b) Payment of Interest. Interest accrued on this Note
shall be payable on the last day of each month, commencing July
31, 1999.
(c) Default Interest. From and after the maturity date
of this Note, or such earlier date as all principal owing
hereunder becomes due and payable by acceleration or otherwise,
the outstanding principal balance of this Note shall bear interest
until paid in full at an increased rate per annum (computed on
the basis of a 360-day year, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time
applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to
time during the term of this Note borrow, partially or wholly
repay its outstanding borrowings, and reborrow, subject to all
of the limitations, terms and conditions of this Note and of any
document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under
this Note shall not at any time exceed the principal amount
stated above. The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon
by or for any Borrower, which balance may be endorsed hereon from
time to time by the holder. The outstanding principal balance of
this Note shall be due and payable in full on June 1, 2000.
(b) Advances. Advances hereunder, to the total amount of
the principal sum stated above, may be made by the holder at the
oral or written request of (i) DANIEL E. LUEBBEN or ROBERT S.
COPE, any one acting alone, who are authorized to request
advances and direct the disposition of any advances until written
notice of the revocation of such authority is received by the
holder at the office designated above, or (ii) any person, with
respect to advances deposited to the credit of any account of any
Borrower with the holder, which advances, when so deposited,
shall be conclusively presumed to have been made to or for the
benefit of each Borrower regardless of the fact that persons
other than those authorized to request advances may have
authority to draw against such account. The holder shall have no
obligation to determine whether any person requesting an advance
is or has been authorized by any Borrower.
(c) Application of Payments. Each payment made on this
Note shall be credited first, to any interest then due and
second, to the outstanding principal balance hereof.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms
and conditions of that certain Credit Agreement between Borrower
and Bank dated as of May 12, 1997, as amended from time to time
(the Credit Agreement). Any default in the payment or
performance of any obligation under this Note, or any defined
event of default under the Credit Agreement, shall constitute
an Event of Default under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default,
the holder of this Note, at the holder's option, may declare all
sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice
of nonperformance, notice of protest, protest or notice of
dishonor, all of which are expressly waived by each Borrower, and
the obligation, if any, of the holder to extend any further
credit hereunder shall immediately cease and terminate. Each
Borrower shall pay to the holder immediately upon demand the full
amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys' fees (to include outside counsel
fees and all allocated costs of the holder's in-house counsel),
expended or incurred by the holder in connection with the
enforcement of the holder's rights and/or the collection of any
amounts which become due to the holder under this Note, and the
prosecution or defense of any action in any way related to this
Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person)
relating to any Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one
person or entity sign this Note as a Borrower, the obligations of
each such Borrower shall be joint and several.
(c) Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
This Note replaces and supersedes in its entirety that
certain promissory note executed by Borrower in favor of Bank in
the original principal amount of $1,250,000.00 and dated as of
May 12, 1997, which is hereby cancelled.
IN WITNESS WHEREOF, the undersigned has executed this Note
as of the date first written above.
AUTO-GRAPHICS, INC.
By: ss/Robert S. Cope
Robert S. Cope
Title: President/CEO