CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of September 24, 2002,
is made between Amerigon Incorporated, a California corporation (the "Company"),
and Big Beaver Investments LLC, a Delaware limited liability company (the
"Lender").
The Company has requested the Lender to make a term loan to the Company in
an aggregate principal amount of up to One Million Dollars ($1,000,000) as
provided herein. The Lender is willing to make such loan upon the terms and
subject to the conditions set forth in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" means any Person which, directly or indirectly, controls, is
controlled by or is under common control with another Person. For purposes of
the foregoing, "control," "controlled by" and "under common control with" with
respect to any Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.
"BUSINESS DAY" means a day of the year on which commercial banks are not
required or authorized by law to close in Los Angeles, California.
"CHARTER DOCUMENTS" means the Company's articles of incorporation, bylaws
and other organizational documents, each as may be amended, modified or restated
from time to time.
"CLOSING DATE" means the date upon which the conditions set forth in
Sections 3.01 and 3.02 are satisfied and the Lender makes the Loan Advance to
the Company.
"COLLATERAL" means the property described in one or more of the Collateral
Documents, and all other property now existing or hereafter acquired which may
at any time be or become subject to a Lien in favor of the Lender pursuant to
one or more of the Collateral Documents or otherwise, securing the payment and
performance of the Obligations.
"COLLATERAL DOCUMENTS" means the Security Agreement any other agreement
pursuant to which the Company provides a Lien on its assets in favor of the
Lender, and all filings (including, but not limited to, all U.C.C. financing
statements filed to perfect the security interests granted in the Security
Agreement), documents and agreements made or delivered pursuant thereto.
"COMMITMENT" means the Lender's obligation to make the Loan on the terms
and conditions set forth in this Agreement.
"DEFAULT" means an Event of Default or an event or condition which with
notice or lapse of time or both would constitute an Event of Default.
"ENVIRONMENTAL LAWS" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances, judgments and codes, together
with all administrative orders, directives, requests, licenses, authorizations
and permits of, and agreements with (including consent decrees), any
governmental agencies or authorities, in each case relating to or imposing
liability or standards of conduct concerning public health, safety and/or
environmental protection matters, including Hazardous Substances.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"FINAL MATURITY DATE" means the earlier to occur of (i) the 60 day
anniversary of the Closing Date, or (ii) acceleration of the Loan pursuant to
Section 6.02.
"GAAP" means generally accepted accounting principles in the United
States, consistently applied.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or other
hazardous substances, materials, wastes, contaminants or pollutants, including
asbestos, PCBs, petroleum products and byproducts, and any substances defined or
listed as "hazardous substances," "hazardous materials," "hazardous wastes" or
"toxic substances" (or similarly identified or having any constituent substances
displaying any of the foregoing characteristics), regulated under or forming the
basis for liability under any applicable Environmental Law.
"INDEBTEDNESS" means, for any Person: (i) all indebtedness or other
obligations of such Person for borrowed money or for the deferred purchase price
of property or services which purchase price is (a) due more than six (6) months
from the date of incurrence of the obligation in respect thereof, or (b)
evidenced by a note or similar written instrument, but excluding trade payables
incurred in the ordinary course of business; (ii) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets or
businesses described in clause (i) above; (iii) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person; (iv) all reimbursement and other
obligations of such Person in respect of letters of credit and bankers
acceptances and all net obligations in respect of interest rate swaps, caps,
floors and collars, currency swaps, and other similar financial products; (v)
all obligations under leases which shall have been or should be, in accordance
with GAAP, recorded as capital leases; and/or (vi) all indebtedness of another
Person of the types referred to in clauses (i) through (v) guaranteed directly
or indirectly in any manner by the Person for whom indebtedness is being
determined, or in effect guaranteed directly or indirectly by such Person
through an agreement to purchase or acquire such indebtedness, to advance or
supply funds for the payment or purchase of such indebtedness or otherwise
assure a creditor against loss, or secured by any Lien upon or in property owned
by the Person for whom indebtedness is being determined, whether or not such
Person has assumed or become liable for the payment of such indebtedness of such
other Person.
"LIEN" means any mortgage, pledge, security interest, assignment, deposit
arrangement, charge or encumbrance, lien or other type of preferential
arrangement (other than a financing statement filed by a lessor in respect of an
operating lease in the ordinary course of business not intended as security).
"LOAN ADVANCE" has the meaning set forth in Section 2.01.
"LOAN DOCUMENTS" means this Agreement, the Note, the Collateral Documents
and all other certificates, documents, agreements and instruments delivered to
the Lender under or in connection with this Agreement or the Loan.
"LOAN" has the meaning set forth in Section 2.01.
"MATERIAL ADVERSE EFFECT" means any event, circumstance or condition that,
individually or in the aggregate: (i) has or could reasonably be expected to
have a material adverse effect on the business, operations, assets, liabilities
(including without limitation contingent liabilities), prospects, employee
relationships, customer or supplier relationships, or the condition (financial
or otherwise) of the Company; (ii) would materially impair the ability of the
Company to perform or observe its obligations under or in respect of any of the
Loan Documents; or (iii) adversely affects the legality, validity, binding
effect or enforceability of any of the Loan Documents or the perfection or
priority of any Lien granted to the Lender under any of the Collateral
Documents.
"NOTE" has the meaning set forth in Section 2.03.
"OBLIGATIONS" means the indebtedness, liabilities and other obligations of
the Company to the Lender under or in connection with the Loan Documents,
including the Loan, all interest accrued thereon, all fees due under this
Agreement and all other amounts payable by the Company to the Lender thereunder
or in connection therewith.
"PERMITTED LIENS" means: (i) Liens in favor of the Lender; (ii) the
existing Liens (including leases and subleases) listed in Section 4.01(g) of the
Disclosure Letter or incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by such existing Liens, PROVIDED that
any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase; (iii) Liens for taxes,
fees, assessments or other governmental charges or levies, either not delinquent
or being contested in good faith by appropriate proceedings and which are
adequately reserved for in accordance with GAAP, PROVIDED the same does not have
priority over any of the Lender's Liens and no notice of tax lien has been filed
of record; (iv) Liens of materialmen, mechanics, warehousemen, carriers or
employees or other similar Liens provided for by mandatory provisions of law and
securing obligations either not delinquent or being contested in good faith by
appropriate proceedings and which do not in the aggregate materially impair the
use or value of the property or risk the loss or forfeiture thereof; (v) Liens
consisting of deposits or pledges to secure the performance of bids, trade
contracts, leases, public or statutory obligations, or other obligations of a
like nature incurred in the ordinary course of business (other than for
Indebtedness); (vi) Liens upon or in any equipment acquired or held by the
Company to secure the purchase price of such equipment, or Indebtedness incurred
solely for the purpose of financing the acquisition of such equipment; and (vii)
restrictions and other minor encumbrances on real property which do not in the
aggregate materially impair the use or value of such real property or risk the
loss or forfeiture thereof.
"PERSON" means an individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization or any other entity
of whatever nature, or any governmental agency or authority.
"RESPONSIBLE OFFICER" means, with respect to any Person, the chief
executive officer, the president, the chief financial officer or the treasurer
of such Person, or any other senior officer of such Person having substantially
the same authority and responsibility.
"SECURITY AGREEMENT" means the Security Agreement between the Company and
the Lender, in form and substance satisfactory to the Lender.
SECTION 1.02 ACCOUNTING TERMS. Unless otherwise defined or the context
otherwise requires, all accounting terms not expressly defined herein shall be
construed, and all accounting determinations and computations required under
this Agreement or any other Loan Document shall be made, in accordance with
GAAP.
SECTION 1.03 INTERPRETATION. In the Loan Documents, except to the extent
the context otherwise requires: (i) any reference to an Article, a Section, a
Schedule or an Exhibit is a reference to an article or section thereof, or a
schedule or an exhibit thereto, respectively, and to a subsection or a clause
is, unless otherwise stated, a reference to a subsection or a clause of the
Section or subsection in which the reference appears; (ii) the words "hereof,"
"herein," "hereto," "hereunder" and the like mean and refer to this Agreement or
any other Loan Document as a whole and not merely to the specific Article,
Section, subsection, paragraph or clause in which the respective word appears;
(iii) the meaning of defined terms shall be equally applicable to both the
singular and plural forms of the terms defined; (iv) the words "including,"
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; (v) references to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are not
prohibited by the terms of the Loan Documents; (vi) references to statutes or
regulations are to be construed as including all statutory and regulatory
provisions consolidating, amending or replacing the statute or regulation
referred to; (vii) any table of contents, captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document; and (viii) in the computation of periods
of time from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but excluding";
and the word "through" means "to and including."
ARTICLE II
THE LOAN
SECTION 2.01 LOAN. Subject to the terms and conditions of this Agreement,
including satisfaction of the conditions set forth under Article III, the Lender
agrees to make a term loan to the Company in an aggregate principal amount of up
to One Million Dollars ($1,000,000) (the "Loan") as provided herein, to be
advanced to the Company in two (2) installments as follows (each a "Loan
Advance"): (i) the first distribution of five hundred thousand dollars
($500,000) is to be advanced on the Closing Date (the "First Loan Advance");
(ii) the second distribution of five hundred thousand dollars ($500,000) is to
be advanced on or after October 15, 2002 (the "Second Loan Advance"). Whenever
any Loan Advance hereunder shall be stated to be made on a day other than a
Business Day, then such Loan Advance shall be made on the next succeeding
Business Day.
SECTION 2.02 [INTENTIONALLY OMITTED]
SECTION 2.03 EVIDENCE OF INDEBTEDNESS. The Company shall execute and
deliver for account of the Lender a promissory note (the "Note"), in a form
reasonably acceptable to the Lender, as additional evidence of the Indebtedness
of the Company to the Lender resulting from the Loan.
SECTION 2.04 INTEREST. The Company hereby promises to pay interest on the
unpaid principal amount of the Loan from the date of each Loan Advance until
maturity thereof, at a rate equal to twelve percent (12%) per annum, on the
first day of each month commencing on the first such date after the date of the
Loan Advance, on the date of any prepayment of the Loan and at the Final
Maturity Date.
Upon the occurrence and continuation of an Event of Default, any principal
under the Loan shall thereafter bear interest (including post-petition interest
in any proceeding under applicable bankruptcy laws) payable on demand, at a rate
which is five percent (5%) per annum in excess of the interest rate otherwise
payable under this Agreement for the Loan. Payment or acceptance of the
increased rates of interest provided for in this paragraph is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of the Lender.
SECTION 2.05 COMPUTATIONS. All computations of fees and interest hereunder
shall be made on the basis of a year of three hundred sixty (360) days for the
actual number of days occurring in the period for which any such interest or fee
is payable.
SECTION 2.06 HIGHEST LAWFUL RATE. Anything herein to the contrary
notwithstanding, if during any period for which interest is computed hereunder,
the applicable interest rate, together with all fees, charges and other payments
which are treated as interest under applicable law, as provided for herein or in
any other Loan Document, would exceed the maximum rate of interest which may be
charged, contracted for, reserved, received or collected by the Lender in
connection with this Agreement under applicable law (the "Maximum Rate"), the
Company shall not be obligated to pay, and the Lender shall not be entitled to
charge, collect, receive, reserve or take, interest in excess of the Maximum
Rate, and during any such period the interest payable hereunder shall be limited
to the Maximum Rate.
SECTION 2.07 [INTENTIONALLY OMITTED]
SECTION 2.08 REPAYMENT OF THE LOAN. The Company hereby promises to pay to
the Lender the outstanding principal amount of the Loan and any accrued interest
thereon in full on the Final Maturity Date.
SECTION 2.09 PREPAYMENTS OF THE LOANS.
(a) OPTIONAL PREPAYMENTS. The Company may, upon prior notice to the Lender,
prepay the outstanding amount of the Loan in whole or in part, without premium
or penalty, however, should an optional prepayment be made prior to the Second
Loan Advance, the Lender shall no longer be required to make the Second Loan
Advance.
(b) MANDATORY PREPAYMENTS. On the date of funding of any Indebtedness for
borrowed money the Company shall prepay the Loan in full. Additionally, the net
proceeds from any issuance of equity of the Company will be used to prepay the
Loan to the extent of such proceeds. Furthermore, the net proceeds from the
exercise of any warrants outstanding on the date hereof shall be used to prepay
the Loan to the extent of such proceeds.
(c) NOTICE; APPLICATION. The notice given of any prepayment shall specify the
date and amount of the prepayment. If the notice of prepayment is given, the
Company shall make such prepayment and the prepayment amount specified in such
notice shall be due and payable on the date specified therein, with accrued
interest to such date. Each prepayment by or on behalf of the Company hereunder
shall, unless a specific determination is made by the Lender with respect
thereto, be applied (i) first, to accrued and unpaid interest due the Lender,
and (ii) second, to principal due the Lender.
SECTION 2.10 PAYMENTS.
(a) PAYMENTS. The Company shall make each payment under the Loan Documents,
unconditionally in full without deduction, set-off, counterclaim or, to the
extent permitted by applicable law, other defense, and free and clear of, and
without reduction for or on account of, any present or future taxes or
withholdings (other than a tax on the overall net income of the Lender), and all
liabilities with respect thereto. Each payment shall be made not later than
11:00 A.M. (California time) on the day when due to the Lender in U.S. dollars
and in immediately available funds, or such other funds as shall be separately
agreed upon in writing by the Company and the Lender, in accordance with the
Lender's payment instructions.
(b) EXTENSION. Whenever any payment hereunder shall be stated to be due, or
whenever any interest payment date or any other date specified hereunder would
otherwise occur, on a day other than a Business Day, then, except as otherwise
provided herein, such payment shall be made, and such interest payment date or
other date shall occur, on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of accrued
interest.
(c) APPLICATION. Each payment by or on behalf of the Company hereunder shall,
unless a specific determination is made by the Lender with respect thereto, be
applied (i) first, to accrued and unpaid interest due the Lender, and (ii)
second, to principal due the Lender.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT TO THE LOAN AND THE FIRST LOAN ADVANCE.
The obligation of the Lender to make the Loan and the First Loan Advance shall
be subject to the satisfaction of each of the following conditions precedent
before or concurrently on the Closing Date:
(a) FEES AND EXPENSES. The Company shall have paid all fees and invoiced
costs and expenses then due hereunder, including fees, costs and expenses set
forth in Section 7.04(a).
(b) LOAN DOCUMENTS. The Lender shall have received the following Loan
Documents: (i) this Agreement executed by the Company; (ii) the Note
executed by the Company; and (iii) the Collateral Documents executed by the
Company.
(c) DOCUMENTS AND ACTIONS RELATING TO COLLATERAL. The Lender shall have
received, in form and substance satisfactory to it, results of such Lien
searches as it shall reasonably request, and evidence that all filings,
registrations and recordings have been made in the appropriate governmental
offices, and all other action has been taken, which shall be necessary to
create, in favor of the Lender, a perfected first priority Lien on the
Collateral, subject only to Permitted Liens.
(d) ADDITIONAL CLOSING DOCUMENTS. The Lender shall have received the following,
in form and substance satisfactory to it: (i) evidence that all (A)
authorizations or approvals of any governmental agency or authority, and (B)
approvals or consents of any other Person, required in connection with the
execution, delivery and performance of the Loan Documents shall have been
obtained; and (ii) a certificate of the Secretary or other appropriate officer
of the Company, dated the Closing Date, certifying (A) copies of its Charter
Documents and the resolutions and other actions taken or adopted by the Company
authorizing the execution, delivery and performance of the Loan Documents, and
(B) the incumbency, authority and signatures of each officer of the Company
authorized to execute and deliver the Loan Documents and act with respect
thereto.
(e) LEGAL OPINION. The Lender shall have received an opinion of legal
counsel to the Company dated the Closing Date, in the form attached hereto as
Exhibit A.
SECTION 3.02 ADDITIONAL CONDITIONS PRECEDENT TO THE LOAN AND ALL LOAN
ADVANCES.
The obligation of the Lender to make the Loan and each Loan Advance shall be
subject to the satisfaction of each of the following conditions precedent before
or concurrently on the date of the Loan and each Loan Advance:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the
Company contained in this Agreement and the other Loan Documents, or in any
certificate or document delivered pursuant to the provisions hereof or in
connection with the transactions contemplated hereby, shall be true on and as of
the date of the Loan and each Loan Advance as though such representations and
warranties were made at and as of such date(s).
(b) COMPLIANCE. The Company shall have performed and complied with all
agreements and conditions required by this Agreement and the other Loan
Documents to be performed or complied with by it.
(c) OFFICER'S CERTIFICATE. The Lender shall have received certificates duly
executed by the Chief Executive Officer or the Chief Financial Officer of the
Company dated the date of the Loan and each Loan Advance certifying in such
detail as the Lender may reasonably request to the fulfillment of the conditions
specified in Sections 3.02(a) and 3.02(b).
(d) MATERIAL ADVERSE EFFECT. On and as of the date of each Loan Advance, there
shall have occurred no change or event since the date of this Agreement that has
or could reasonably be expected to have a Material Adverse Effect.
(e) NO DEFAULT. On the date of each Loan Advance, both before and after giving
effect thereto and to the application of proceeds therefrom, no Default shall
have occurred and be continuing or shall result from the making of such Loan
Advance. The acceptance by the Company of the proceeds of each Loan Advance
shall be deemed a certification to the Lender that on and as of the date of each
Loan Advance no material Default shall have occurred or shall result from the
making of each Loan Advance.
(f) ADDITIONAL DOCUMENTS. The Lender shall have received, in form and
substance satisfactory to it, such additional approvals, opinions, documents
and other information as the Lender may reasonably request.
SECTION 3.03 CONDITIONS PRECEDENT TO THE SECOND LOAN ADVANCE. The
obligation of the Lender to make the Second Loan Advance shall be subject to the
satisfaction by the Company of all conditions set forth in Sections 3.01 and
3.02 before or concurrently on the date of the Second Loan Advance.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
specifically set forth in the Disclosure Letter, with each disclosure to
reference the Section or Sections hereof to which it relates, the Company
represents and warrants to the Lender that the following statements are true and
correct on and as of the date of this Agreement and will be true and correct on
and as of the date of each Loan Advance as if made on such date(s):
(a) ORGANIZATION AND POWERS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of California,
and has all requisite power and authority to execute, deliver and perform its
Obligations under the Loan Documents. The Company is qualified to do business
and is in good standing in each jurisdiction in which the failure so to qualify
or be in good standing would result in a Material Adverse Effect and has all
requisite power and authority to own its assets and carry on its business.
(b) AUTHORIZATION; NO CONFLICT. The execution, delivery and performance by the
Company of the Loan Documents have been duly authorized by all necessary
corporate action of the Company and do not and will not (i) result in a
violation of any of its Charter Documents, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, indenture or instrument
to which the Company or any of its properties is subject, or result in a
violation of any material law, rule, regulation, order, judgment or decree
(including U.S. federal and state securities laws and regulations, including
NASDAQ rules or other rules of any exchange) applicable to the Company or by
which any property or asset of the Company is bound or affected, and (iii)
except as contemplated by this Agreement, result in, or require, the creation or
imposition of any Lien upon or with respect to any of the properties, assets or
revenues of the Company. The Company is not in violation of any of its Charter
Documents, or of any judgment, order, writ, decree, law, rule or regulation to
which the Company or its properties is subject in any material respect. The
Company is not in default (and no event has occurred which, with notice or lapse
of time or both, would put the Company in default) under, nor has there occurred
any event giving others (with notice or lapse of time or both) any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
indenture or instrument to which the Company is a party or any of its properties
is subject in any material respect.
(c) BINDING OBLIGATION. The Loan Documents constitute, or when delivered under
this Agreement, will constitute, legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
(d) CONSENTS. No authorization, consent, approval, license, exemption of, or
filing or registration with, any governmental agency or authority, or approval
or consent of any other Person, is required for the due execution, delivery or
performance by the Company of any of the Loan Documents, except for such
approvals as have been obtained or as set forth in 4.01(d) of the Disclosure
Letter hereto.
(e) LITIGATION. There is no action, suit, proceeding or investigation pending,
or to the Company's knowledge, currently threatened against the Company, except
as which individually or in the aggregate would not have a Material Adverse
Effect. The Company is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality. Except as set forth on the Disclosure Letter, there is no
material action, suit, proceeding or investigation by the Company currently
pending or that the Company intends to initiate.
(f) PATENTS AND TRADEMARKS. The Company owns or licenses from another person all
inventions, patents, patent rights, computer software, trademarks, trademark
rights, service marks, service mark rights, trade names, trade name rights and
copyrights (collectively, the "Intellectual Property") necessary for its
business without any conflict with or infringement of the valid rights of others
and the lack of which could materially and adversely affect the operations or
condition, financial or otherwise, of the Company. The consummation of the
transactions contemplated hereby will not result in the termination or
impairment of the Company's ownership of, or right to use, any Intellectual
Property. The Company has a valuable body of trade secrets, including know-how,
concepts, business plans, and other technical data (the "Proprietary
Information") for the development, manufacture and sale of its products. The
Company has the right to use the Proprietary Information free and clear of any
material rights, Liens, encumbrances or claims of others.
(g) TITLE TO PROPERTIES; LIENS. The Company has good and marketable title to, or
valid and subsisting leasehold interests in, its properties and assets,
including all property forming a part of the Collateral, in all material
respects, and there is no Lien upon or with respect to any of such properties or
assets, including any of the Collateral, except for Permitted Liens.
(h) SEC DOCUMENTS AND FINANCIAL STATEMENTS. Since January 1, 1997, the Company
has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Securities and Exchange Commission ("SEC")
pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (all of the foregoing and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein, with amendments read together with underlying
documents, are referred to herein as the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
GAAP during the periods involved and fairly and accurately present in all
material respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). Except as
set forth in the most recent balance sheet provided to the Lender or the
Disclosure Letter, the Company has no liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to the date of such financial statements and (ii) obligations under
contracts and commitments incurred in the ordinary course of business and not
required under GAAP to be reflected in such financial statements, which,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company. Except as disclosed in such financial
statements or in the Disclosure Letter, the Company is not a guarantor or
indemnitor of any Indebtedness of any other Person.
(i) TAX RETURNS. The Company has timely filed all tax returns (federal, state
and local) required to be filed by it and such tax returns are true and correct
in all material respects. In addition, (i) the Company has not requested any
extension of time within which to file any tax returns in respect of any fiscal
year which have not since been filed and no request for waivers of the time to
assess any taxes are pending or outstanding, (ii) no claim for taxes has become
a Lien against the property of the Company or is being asserted against the
Company other than liens for taxes not yet due and payable, (iii) no audit of
any tax return of the Company is being conducted by a tax authority, (iv) no
extension of the statute of limitations on the assessment of any taxes has been
granted to, by or applied for by, the Company and is currently in effect, and
(v) there is no agreement, contract or arrangement to which the Company is a
party that may result in the payment of any amount that would not be deductible
by reason of Sections 280G, 162 or 404 of the Internal Revenue Code.
(j) PERMITS. The Company has all material franchises, permits, licenses and any
similar authority necessary for the conduct of its business ("Permits"). The
Company is not in default in any material respect under any of such Permits.
(k) ENVIRONMENTAL AND SAFETY LAWS. The Company is not in violation of any
applicable material statute, law or regulation relating to the environment or
occupational health and safety or Hazardous Substances, and no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
(l) ORGANIZATION AND POWERS OF BSST. BSST LLC is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware. BSST is qualified to do business and is in good standing in
each jurisdiction in which the failure so to qualify or be in good standing
would result in a material adverse effect on BSST or its business or operations,
and has all requisite limited liability power and authority to own its assets
and carry on its business.
(m) VALID SENIOR LOAN. The Loan and the Obligations under the Loan Documents
constitute a valid senior secured debt of the Company owed to the Lender,
negotiated and consummated at arm's length, and in no respects constitutes
equity or an equity contribution to the Company or its Affiliates on the part of
the Lender or its Affiliates. The Company hereby forever waives any and all
rights and claims to characterize the Loan or any Obligation as equity or equity
contribution by the Lender or its Affiliates.
(n) NO USURY. The Loan Documents and the Obligations are in compliance
with California Corporations Code Section 25118, and do not violate any usury
laws of the State of California or the United States.
(o) WAIVER OF PARTICIPATION RIGHTS. Special Situations Funds and MicroCapital
Funds have waived any and all rights and claims to characterize the Loan as
equity or equity contribution by the Lender or its Affiliates and have waived
all participation rights in the Loan.
SECTION 4.02 REPRESENTATIONS AND WARRANTIES OF THE LENDER. The Lender
represents and warrants to the Company that:
(a) INVESTMENT REPRESENTATIONS. The Lender: (i) will acquire the Note for
its own account for investment and not with a view to any resale or other
distribution (other than to Affiliates) of the Note in a transaction
constituting a public offering or otherwise requiring registration under the
Securities Act, or in a transaction that would result in noncompliance with
applicable state securities laws; (ii) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
the risks of its acquisition of the Note and credit extensions to the
Company; (iii) is an accredited investor as such term is defined in Rule 501
of Regulation D under the Securities Act; and (iv) understands that the Note
has not been registered under the Securities Act or any state securities laws.
(b) ORGANIZATION AND POWERS. The Lender is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement.
(c) AUTHORIZATION; BINDING OBLIGATION. The execution, delivery and performance
by the Lender of this Agreement has been duly authorized by all necessary
organizational action of the Lender. This Agreement constitutes a legal, valid
and binding obligation of the Lender, enforceable against the Lender in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies.
(d) FINANCIAL CAPACITY. The Lender has access to adequate capital to
enable it to satisfy its obligations to make the Loan contemplated hereby.
ARTICLE V
COVENANTS
SECTION 5.01 REPORTING COVENANTS. So long as any of the Obligations
shall remain unpaid or the Lender shall have any Commitment, the Company
agrees that:
(a) FINANCIAL STATEMENTS AND OTHER REPORTS. The Company will furnish to the
Lender: (i) as soon as available and in any event within ten (10) days after the
end of a month, monthly agings (aged from invoice date) of accounts receivable,
payables reports, and unaudited financial statements (including a balance sheet,
income statement and statement of cash flows) with respect to that month
prepared on a basis consistent with such statements prepared in prior months and
otherwise in accordance with GAAP and certified by a Responsible Officer as
being prepared in accordance with GAAP; and (ii) as soon as available and in any
event within forty-five (45) days after the end of each fiscal quarter, its
quarterly consolidated and, if requested by the Lender, consolidating financial
statements (including a balance sheet, income statement and statement of cash
flows), prepared in accordance with GAAP, together with a certificate of a
Responsible Officer of the Company stating that such financial statements fairly
present in all material respects the financial condition of the Company as at
such date and the results of operations of the Company for the period ended on
such date and have been prepared in accordance with GAAP, subject to changes
resulting from normal, year-end audit adjustments and except for the absence of
notes.
(b) ADDITIONAL INFORMATION. The Company will furnish to the Lender: (i) promptly
after the Company has knowledge or becomes aware thereof, notice of the
occurrence of any Default; (ii) prompt written notice of all actions, suits and
proceedings before any governmental agency or authority or arbitrator pending,
or to the best of the Company's knowledge, threatened against or affecting the
Company; (iii) prompt written notice of any other condition or event which has
resulted, or that could reasonably be expected to result, in a Material Adverse
Effect; (iv) promptly after the same are released, copies of all press releases;
(v) promptly after the giving, sending or filing thereof, copies of all reports
and financial information, if any, which the Company sends to the holders of its
capital stock or other securities, and the holders, if any, of any other
Indebtedness, and of all reports or filings, if any, by the Company with the SEC
or any national securities exchange; and (vi) such other information respecting
the operations, properties, business or condition (financial or otherwise) of
the Company (including with respect to the Collateral) as the Lender may from
time to time reasonably request. Each notice pursuant to clauses (i) through
(iii) of this subsection (b) shall be accompanied by a written statement by a
Responsible Officer of the Company setting forth details of the occurrence
referred to therein.
(c) OTHER INFORMATION. Upon the Lender's reasonable request, and at least twice
monthly after the date of this Agreement, the Company shall provide reports to
the Lender concerning the status of all programs with major customers and such
other information requested by Lender, in such detail as Lender may reasonably
request.
SECTION 5.02 AFFIRMATIVE COVENANTS. So long as any of the Obligations
shall remain unpaid or the Lender shall have any Commitment, the Company
agrees that:
(a) PRESERVATION OF EXISTENCE, ETC. The Company will maintain and preserve its
corporate existence, its rights to transact business and all other material
rights, franchises and privileges necessary or desirable in the normal course of
its business and operations and the ownership of its properties, except in
connection with any transactions expressly permitted by Section 5.03.
(b) PAYMENT OF TAXES, ETC. The Company will pay and discharge all taxes, fees,
assessments and governmental charges or levies imposed upon it or upon its
properties or assets prior to the date on which penalties attach thereto, and
all lawful claims for labor, materials and supplies which, if unpaid, might
become a Lien upon any properties or assets of the Company prior to the date on
which penalties attach thereto except to the extent such taxes, fees,
assessments or governmental charges or levies, or such claims, are being
contested in good faith by appropriate proceedings and are adequately reserved
against in accordance with GAAP.
(c) MAINTENANCE OF INSURANCE. The Company will carry and maintain in full force
and effect, at its own expense and with financially sound and reputable
insurance companies, insurance in such amounts, with such deductibles and
covering such risks as is consistent with the Company's past practices.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company will keep
adequate records and books of account to permit preparation of financial
statements in accordance with GAAP.
(e) INSPECTION RIGHTS. The Company will at any reasonable time during regular
business hours and from time to time permit the Lender or any of its agents or
representatives to visit and inspect any of the properties of the Company and to
examine the records and books of account of the Company, and to discuss the
business affairs, finances and accounts of the Company with any of the officers,
employees or accountants of the Company, provided that the Company may designate
one or more individuals who will be present during such discussions.
(f) COMPLIANCE WITH LAWS. The Company will comply in all material respects with
the requirements of all applicable laws, rules, regulations and orders of any
governmental agency or authority, including all Environmental Laws.
(g) MAINTENANCE OF PROPERTIES, ETC. The Company will maintain and preserve all
of its material properties necessary or useful in the proper conduct of its
business in good working order and condition in accordance with the general
practice of other corporations of similar character and size, ordinary wear and
tear excepted.
(h) LICENSES. The Company will obtain and maintain all licenses, authorizations,
consents, filings, exemptions, registrations and other governmental approvals of
any governmental agency or authority necessary in connection with the execution,
delivery and performance of the Loan Documents, the consummation of the
transactions therein contemplated or the operation and conduct of its business
and ownership of its properties, except where the failure to do so would not
have a Material Adverse Effect.
(i) USE OF PROCEEDS. The Company will use the proceeds of the Loan for its
general corporate purposes.
(j) FURTHER ASSURANCES AND ADDITIONAL ACTS. The Company will execute,
acknowledge, deliver, file, notarize and register at its own expense all such
further agreements, instruments, certificates, documents and assurances and
perform such acts as the Lender shall deem necessary or appropriate to
effectuate the purposes of the Loan Documents, and promptly provide the Lender
with evidence of the foregoing satisfactory in form and substance to the Lender.
SECTION 5.03 NEGATIVE COVENANTS. So long as any of the Obligations shall
remain unpaid or the Lender shall have any Commitment, the Company agrees that
without the consent of Lender:
(a) LIENS; NEGATIVE PLEDGES. (i) The Company will not create, incur, assume or
suffer to exist any Lien upon or with respect to any of its properties, revenues
or assets, whether now owned or hereafter acquired, other than Permitted Liens.
(ii) The Company will not enter into any agreement (other than this Agreement or
any other Loan Document) prohibiting the creation or assumption of any Lien upon
any of its properties, revenues or assets, whether now owned or hereafter
acquired.
(b) CHANGE IN NATURE OF BUSINESS. The Company will not engage in any
material line of business substantially different from those lines of
business carried on by it at the date hereof.
(c) RESTRICTIONS ON FUNDAMENTAL CHANGES. The Company will not merge with or
consolidate into, or acquire all or substantially all of the assets of, any
Person, or sell, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets.
(d) SALES OF ASSETS. The Company will not sell, lease, transfer, or otherwise
dispose of, or part with control of (whether in one transaction or a series of
transactions) any assets (including any shares of stock in any other Person),
except: (i) sales or other dispositions of inventory, and the license,
sublicense and grant of distribution and similar rights, in the ordinary course
of business; (ii) sales or other dispositions of assets in the ordinary course
of business which have become worn out or obsolete or which are promptly being
replaced; or (iii) sales or other dispositions of assets (other than accounts
receivable) outside the ordinary course of business not exceeding in the
aggregate Twenty-Five Thousand Dollars ($25,000) in any fiscal year.
(e) DISTRIBUTIONS. The Company will not declare or pay any dividends in respect
of the Company's capital stock, or purchase, redeem, retire or otherwise acquire
for value any of its capital stock now or hereafter outstanding, return any
capital to its shareholders as such, except that the Company may: (A) declare
and deliver dividends and distributions payable only in common stock of the
Company; and (B) purchase, redeem, retire, or otherwise acquire shares of its
capital stock with the proceeds received from a substantially concurrent issue
of new shares of its capital stock.
(f) LOANS AND INVESTMENTS. The Company will not purchase or otherwise acquire
the capital stock, assets (constituting a business unit), obligations or other
securities of or any interest in any Person, or otherwise extend any credit to
or make any additional investments in any Person, other than in connection with:
(i) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sales of goods or services in the ordinary course of
business; and (ii) short term, investment grade money market instruments, in
accordance with the Company's usual and customary treasury management policies.
(g) TRANSACTIONS WITH RELATED PARTIES. The Company will not enter into any
transaction, including the purchase, sale or exchange of property or the
rendering of any services, with any Affiliate, any officer or director thereof
or any Person which beneficially owns or holds five percent (5%) or more of the
equity securities, or five percent (5%) or more of the equity interest, thereof
(a "Related Party"), or enter into, assume or suffer to exist, any employment or
consulting contract with any Related Party, except a transaction or contract
which is in the ordinary course of the Company's business and which is upon fair
and reasonable terms not less favorable to the Company than it would obtain in a
comparable arm's length transaction with a Person not a Related Party.
(h) INDEBTEDNESS. The Company will not incur any additional Indebtedness for
borrowed money except for the Loans and Indebtedness that is immediately used to
repay the Loans.
SECTION 5.04 CONFIDENTIALITY. The Lender will hold in confidence all, and
not disclose to others for any reason whatsoever any, material non-public
information received by it from the Company in connection with this Agreement,
except that the Lender may provide such confidential information in response to
legal process or applicable governmental regulations provided that the Lender
forthwith notifies the Company of its obligation to provide such confidential
information and fully cooperates (to the extent permitted by law) with the
Company to protect the confidentiality of such information.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 EVENTS OF DEFAULT. Any of the following events which
shall occur shall constitute an "Event of Default":
(a) PAYMENTS. The Company shall fail to pay when due any amount of principal of,
or interest on, the Loan or the Note, or any fee or other amount payable under
any of the Loan Documents.
(b) REPRESENTATIONS AND WARRANTIES. Any representation or warranty by the
Company under or in connection with the Loan Documents shall prove to have been
incorrect in any material respect when made or deemed made.
(c) FAILURE BY COMPANY TO PERFORM CERTAIN COVENANTS. The Company shall
fail to perform or observe any term, covenant or agreement contained in
Section 5.03 or Subsections (a), (i) or (j) of Section 5.02.
(d) FAILURE BY COMPANY TO PERFORM OTHER COVENANTS. The Company shall fail to
perform or observe any term, covenant or agreement, other than those specified
in Section 6.01(c), contained in any Loan Document on its part to be performed
or observed, and any such failure shall continue for a period of ten (10) days
from the occurrence thereof (unless the Lender determines that such failure is
not capable of remedy).
(e) INSOLVENCY. (i) The Company shall (A) make a general assignment for the
benefit of creditors or (B) be dissolved, liquidated, wound up or cease its
corporate existence; or (ii) the Company (A) shall file a voluntary petition in
bankruptcy or a petition or answer seeking reorganization, to effect a plan or
other arrangement with creditors or any other relief under the Bankruptcy Reform
Act of 1978 (the "Bankruptcy Code") or under any other state or federal law
relating to bankruptcy or reorganization granting relief to debtors, whether now
or hereafter in effect, or (B) shall file an answer admitting the jurisdiction
of the court and the material allegations of any involuntary petition filed
against the Company pursuant to the Bankruptcy Code or any such other state or
federal law; or (iii) the Company shall be adjudicated a bankrupt, or shall make
an assignment for the benefit of creditors, or shall apply for or consent to the
appointment of any custodian, receiver or trustee for all or any substantial
part of the Company's property, or shall take any action to authorize any of the
actions or events set forth above in this subsection; or (iv) an involuntary
petition seeking any of the relief specified in this subsection shall be filed
against the Company and not dismissed within sixty (60) days; or (v) any order
for relief shall be entered against the Company, in any involuntary proceeding
under the Bankruptcy Code or any such other state or federal law referred to in
this subsection (e).
(f) DISSOLUTION, ETC. The Company shall (i) liquidate, wind up or dissolve (or
suffer any liquidation, wind-up or dissolution), (ii) discontinue its
operations, or (iii) take any corporate action to authorize any of the actions
or events set forth above in this subsection (f).
(g) JUDGMENTS. (i) A final judgment or order for the payment of money in excess
of Fifty Thousand Dollars ($50,000) (or its equivalent in another currency)
which is not fully covered by third-party insurance shall be rendered against
the Company (or its equivalent in another currency); or (ii) any non-monetary
judgment or order shall be rendered against the Company which has or would
reasonably be expected to have a Material Adverse Effect; and in each case there
shall be any period of fifteen (15) consecutive days during which such judgment
continues unsatisfied or during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect.
(h) MATERIAL ADVERSE EFFECT. Any circumstance, condition, or event shall
have occurred which has or could reasonably be expected to have a Material
Adverse Effect.
(i) COLLATERAL DOCUMENTS. Any "Event of Default" as defined in the Collateral
Documents shall have occurred; or any of the Collateral Documents after delivery
thereof shall for any reason be revoked or invalidated, or otherwise cease to be
in full force and effect, or the Company or any other Person shall contest in
any manner the validity or enforceability thereof, or the Company or any other
Person shall deny that it has any further liability or obligation thereunder; or
any of the Collateral Documents for any reason, except to the extent permitted
by the terms thereof, shall cease to create a valid and perfected first priority
Lien subject only to Permitted Liens in any of the Collateral purported to be
covered thereby.
SECTION 6.02 EFFECT OF EVENT OF DEFAULT. If any Event of Default shall
occur, the Lender may, by notice to the Company, declare the Commitment to be
terminated, whereupon the same shall forthwith terminate, and cease to make the
Loan and all or any Loan Advances. If any Event of Default under Section 6.01(e)
shall occur, the Lender may declare the entire unpaid principal amount of the
Loan and the Note, all interest accrued and unpaid thereon and all other
Obligations to be forthwith due and payable, whereupon the Loan and the Note,
all such accrued interest and all such other Obligations shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Company. In
addition, if any Event of Default under Section 6.01(a) or Section 6.01(e) shall
occur, the Lender may exercise any or all of the Lender's rights and remedies
under the Collateral Documents and proceed to enforce all other rights and
remedies available to the Lender under the Loan Documents and applicable law.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 AMENDMENTS AND WAIVERS. No amendment to any provision of the
Loan Documents shall be effective unless it is in writing and has been signed by
the Lender and the Company, and no waiver of any provision of any Loan Document,
or consent to any departure by the Company therefrom, shall be effective unless
it is in writing and has been signed by the Lender. Any such amendment, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 7.02 NOTICES. All notices and other communications provided for
hereunder and under the other Loan Documents shall, unless otherwise stated
herein, be in writing (including by facsimile transmission) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth below their names on the signature pages hereof,
or at or to such other address or facsimile number as shall be designated by any
party in a written notice to the other party hereto. All such notices and
communications shall be effective: (i) if delivered by hand, when delivered;
(ii) if sent by mail, upon the earlier of the date of receipt or five (5)
Business Days after deposit in the mail, first class, postage prepaid; or (iii)
if sent by facsimile transmission, when sent; PROVIDED, HOWEVER, that notices
and communications to the Lender pursuant to Article II shall not be effective
until received.
SECTION 7.03 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of the
Lender to exercise, no delay in exercising, and no course of dealing with
respect to, any right, remedy, power or privilege under any Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, remedy, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights and remedies under the Loan Documents are cumulative and not exclusive of
any rights, remedies, powers and privileges that may otherwise be available to
the Lender.
SECTION 7.04 COSTS AND EXPENSES; INDEMNITY.
(a) COSTS AND EXPENSES. The Company agrees to pay on demand: (i) the reasonable
out-of-pocket costs and expenses of the Lender and any of its Affiliates, and
the reasonable fees and disbursements of counsel to the Lender and its
Affiliates, in connection with the Loan, including the negotiation, preparation,
execution, delivery and administration of the Loan Documents and any amendments,
modifications or waivers of the terms thereof, and (ii) all reasonable costs and
expenses of the Lender and its Affiliates, and fees and disbursements of
counsel, in connection with (A) any Default, (B) the enforcement or attempted
enforcement of, and preservation of any rights or interests under, the Loan
Documents, (C) any out-of-court workout or other refinancing or restructuring or
any bankruptcy or insolvency case or proceeding, and (D) the preservation of and
realization upon any of the Collateral. Without limiting the foregoing, the
costs and reasonable fees of counsel to the Lender and its Affiliates incurred
or reasonably expected to be incurred in connection with the Loan will be
automatically deducted from the disbursement of the Loan Advance and,
accordingly, the amount of the Loan Advance actually disbursed to the Company
will be less of such fees and costs.
(b) INDEMNIFICATION. Whether or not the transactions contemplated hereby shall
be consummated, the Company hereby agrees to indemnify the Lender, any Affiliate
thereof and their respective directors, officers, employees, agents, counsel and
other advisors (each an "Indemnified Person") against, and hold each of them
harmless from, any and all liabilities, obligations, losses, claims, damages,
demands, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including the reasonable fees and
disbursements of counsel to an Indemnified Person, which may be imposed on,
incurred by, or asserted against any Indemnified Person, (i) in any way relating
to or arising out of any of the Loan Documents, the use or intended use of the
proceeds of the Loan or the transactions contemplated hereby or thereby, (ii)
with respect to any investigation, litigation or other proceeding relating to
any of the foregoing, irrespective of whether the Indemnified Person shall be
designated a party thereto, and/or (iii) in any way relating to or arising out
of the use, generation, manufacture, installation, treatment, storage or
presence, or the spillage, leakage, leaching, migration, dumping, deposit,
discharge, disposal or release, at any time, of any Hazardous Substances on,
under, at or from any properties of the Company, including any personal injury
or property damage suffered by any Person, and any investigation, site
assessment, environmental audit, feasibility study, monitoring, clean-up,
removal, containment, restoration, remedial response or remedial work undertaken
by or on behalf of any Indemnified Person at any time, voluntarily or
involuntarily, with respect to the Premises (the "Indemnified Liabilities");
PROVIDED that the Company shall not be liable to any Indemnified Person for any
portion of such Indemnified Liabilities to the extent they are found by a final
decision of a court of competent jurisdiction to have resulted from such
Indemnified Person's gross negligence or willful misconduct. If and to the
extent that the foregoing indemnification is for any reason held unenforceable,
the Company agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 7.05 SURVIVAL. All covenants, agreements, representations and
warranties made in any Loan Document shall, except to the extent otherwise
provided therein, survive the execution and delivery of this Agreement, the
making of the Loan, and the making of all Loan Advances, and the execution and
delivery of the Note, and shall continue in full force and effect so long as the
Lender has any Commitment, the Loan remains outstanding or any other Obligations
remain unpaid or any obligation to perform any other act hereunder or under any
other Loan Document remains unsatisfied. Without limiting the generality of the
foregoing, the obligations of the Company under Section 7.04, and all similar
obligations under the other Loan Documents (including all obligations to pay
costs and expenses and all indemnity obligations), shall survive the repayment
of the Loans and the termination of the Commitment.
SECTION 7.06 BENEFITS OF AGREEMENT. The Loan Documents are entered into for
the sole protection and benefit of the parties hereto and their permitted
successors and permitted assigns, and no other Person shall be a direct or
indirect beneficiary of, or shall have any direct or indirect cause of action or
claim in connection with, any Loan Document.
SECTION 7.07 BINDING EFFECT; ASSIGNMENT. This Agreement shall become
effective when it shall have been executed by the Company and the Lender and
thereafter shall be binding upon, inure to the benefit of and be enforceable by
the Company, the Lender and their respective permitted successors and permitted
assigns. The Company shall not have the right to assign its rights or
Obligations or any interest herein or therein without the prior written consent
of the Lender. The Lender reserves the right freely to sell, assign, transfer or
grant participations in all or any portion of the Lender's rights and
obligations hereunder and under the other Loan Documents (i) to one or more
Affiliates of the Lender and/or (ii) with the prior consent of the Company
(which consent shall not be unreasonably withheld) to any other Person. In the
event of any such assignment, the assignee shall be deemed a "Lender" for all
purposes of the Loan Documents with respect to the rights and obligations
assigned to it, and the obligations of the Lender so assigned shall thereupon
terminate. The Company shall, from time to time upon request of the Lender,
enter into such amendments to the Loan Documents and execute and deliver such
other documents as shall be necessary to effect any such grant or assignment.
The Company agrees that in connection with any such grant or assignment, the
Lender may deliver to the prospective participant or assignee financial
statements and other relevant information relating to the Company (subject to
such Person entering into a confidentiality agreement with the Company on terms
reasonably satisfactory to the Company).
SECTION 7.08 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF MICHIGAN.
SECTION 7.09 WAIVER OF JURY TRIAL. THE COMPANY AND THE LENDER EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. THE COMPANY AND THE LENDER EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION 7.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF MICHIGAN. BY
EXECUTING AND DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT
TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDER RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE
COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 7.10 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER MICHIGAN LAW OR OTHERWISE
SECTION 7.11 ENTIRE AGREEMENT. The Loan Documents reflect the entire
agreement between the Company and the Lender with respect to the matters set
forth herein and therein and supersede any prior agreements, commitments,
drafts, communication, discussions and understandings, oral or written, with
respect thereto.
SECTION 7.12 SEVERABILITY. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of any of the
Loan Documents shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of such Loan Document, or the validity or effectiveness
of such provision in any other jurisdiction.
SECTION 7.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Credit
Agreement, as of the date first above written.
THE COMPANY:
AMERIGON INCORPORATED, a California
corporation
By: /s/ O.B. Marx, III
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Name: O.B. Marx, III
Its: Chairman
Address:
500 Town Center Drive, Suite 200
Dearborn, MI 48126
Attn: Oscar B. Marx, III
with copy to:
Amerigon Incorporated
5462 Irwindale Avenue
Irwindale, California 91706
Attn: Sandra L. Grouf
THE LENDER:
BIG BEAVER INVESTMENTS LLC, a Delaware
limited liability company
By: /s/ L.M. Luke
-----------------
Name: L. M. Luke
Title: President
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Address:
801 W. Big Beaver Road, Suite 201
Troy, Michigan 48084