ELECTRONIC FAB TECHNOLOGY CORP.
EQUITY INCENTIVE PLAN
as amended and restated January 20, 1997
ELECTRONIC FAB TECHNOLOGY CORP.
EQUITY INCENTIVE PLAN
ARTICLE I
INTRODUCTION
1.1 Establishment. Effective December 22, 1993, Electronic Fab
Technology Corp., a Colorado corporation (hereinafter referred to,
together with its Affiliated Corporations (as defined in subsection
2.1(a)) as the "Company" except where the context otherwise requires),
established the Electronic Fab Technology Corp. Equity Incentive Plan
(the "Plan") for certain key employees of the Company. Article XVI of
the Plan provides that the Board may amend the Plan from time to time.
The Plan is hereby amended and restated, effective January 20, 1997,
subject to shareholder approval (the "Effective Date"). The Plan
permits the grant of stock options, restricted stock awards, stock
appreciation rights, stock units and other stock grants to certain key
employees of the Company.
1.2 Purposes. The purposes of the Plan are to provide the key
employees selected for participation in the Plan with added incentives
to continue in the service of the Company and to create in such
employees a more direct interest in the future success of the operations
of the Company by relating incentive compensation to the achievement of
long-term corporate economic objectives, so that the income of the key
employees is more closely aligned with the income of the Company's
shareholders. The Plan is also designed to attract key employees and
to retain and motivate participating employees by providing an
opportunity for investment in the Company.
ARTICLE II
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
(a) "Affiliated Corporation" means any corporation or other
entity (including but not limited to a partnership) that is affiliated
with Electronic Fab Technology Corp. through stock ownership or otherwise
and is treated as a common employer under the provisions of Sections
414(b) and (c) of the Code, together with any parent or subsidiary of
the Company as defined in Section 424 of the Code.
(b) "Award" means an Option, a Restricted Stock Award, a Stock
Appreciation Right, a Stock Unit, grants of Stock pursuant to Article
XI or other issuances of Stock hereunder.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Committee" means a committee consisting of members of the
Board who are empowered hereunder to take actions in the administration
of the Plan. The Committee shall be so constituted at all times as to
permit the Plan to comply with Section 162(m) of the Code and Rule 16b-3
or any successor rule promulgated under the Securities Exchange Act of
1934 (the "1934 Act"). Members of the Committee shall be appointed from
time to time by the Board, shall serve at the pleasure of the Board and
may resign at any time upon written notice to the Board.
(f) "Disabled" or "Disability" shall have the meaning given
to such terms in Section 22(e)(3) of the Code.
(g) "Eligible Employees" means those key employees (including,
without limitation, officers and directors who are also employees) of the
Company or any division thereof, upon whose judgment, initiative and
efforts the Company is, or will become, largely dependent for the
successful conduct of its business.
(h) "Fair Market Value" of a share of Stock shall be the last
reported sale price of the Stock on the Nasdaq National Market on the day
the determination is to be made, or if no sale took place on such day,
the average of the closing bid and asked prices of the Stock on the Nasdaq
National Market on such day, or if the market is closed on such day, the
last day prior to the date of determination on which the market was open
for the transaction of business, as reported by Nasdaq. If, however, the
Stock should be listed or admitted for trading on a national securities
exchange, the Fair Market Value of a share of the Stock shall be the
last sales price, or if no sales took place, the average of the closing
bid and asked prices on the day the determination is to be made, or if
the market is closed on such day, the last day prior to the date of
determination on which the market was open for the transaction of
business, as reported in the principal consolidated transaction
reporting system for the principal national securities exchange on which
the Stock is listed or admitted for trading. If the Stock is not listed
or traded on NASDAQ or on any national securities exchange, the Fair
Market Value for purposes of the grant of Options under the Plan shall
be determined by the Committee in good faith in its sole discretion.
(i) "Incentive Option" means an Option designated as such and
granted in accordance with Section 422 of the Code.
(j) "Non-Qualified Option" means any Option other than an
Incentive Option.
(k) "Option" means a right to purchase Stock at a stated or
formula price for a specified period of time. Options granted under the
Plan shall be either Incentive Options or Non-Qualified Options.
(l) "Option Certificate" shall have the meaning given to such
term in Section 7.2 hereof.
(m) "Option Holder" means a Participant who has been granted one
or more Options under the Plan.
(n) "Option Price" means the price at which shares of Stock
subject to an Option may be purchased, determined in accordance with
subsection 7.2(b).
(o) "Participant" means an Eligible Employee designated by the
Committee from time to time during the term of the Plan to receive one or
more of the Awards provided under the Plan.
(p) "Restricted Stock Award" means an award of Stock granted to a
Participant pursuant to Article VIII that is subject to certain
restrictions imposed in accordance with the provisions of such Section.
(q) "Share" means a share of Stock.
(r) "Stock" means the common stock of the Company.
(s) "Stock Appreciation Right" means the right, granted by the
Committee pursuant to the Plan, to receive a payment equal to the
increase in the Fair Market Value of a Share of Stock subsequent to the
grant of such Award.
(t) "Stock Unit" means a measurement component equal to the Fair
Market Value of one share of Stock on the date for which a determination is
made pursuant to the provisions of this Plan.
2.2 Gender and Number. Except when otherwise indicated by the
context, the masculine gender shall also include the feminine gender,
and the definition of any term herein in the singular shall also include
the plural.
ARTICLE III
PLAN ADMINISTRATIONARTICLE IIIPLAN ADMINISTRATION
The Plan shall be administered by the Committee. In accordance with the
provisions of the Plan, the Committee shall, in its sole discretion, select
the Participants from among the Eligible Employees, determine the
Awards to be made pursuant to the Plan, the number of Stock Units, Stock
Appreciation Rights or shares of Stock to be issued thereunder and the
time at which such Awards are to be made, fix the Option Price, period
and manner in which an Option becomes exercisable, establish the duration
and nature of Restricted Stock Award restrictions, establish the terms
and conditions applicable to Stock Units, and establish such other terms
and requirements of the various compensation incentives under the Plan as
the Committee may deem necessary or desirable and consistent with the
terms of the Plan. The Committee shall determine the form
or forms of the agreements with Participants that shall evidence the
particular provisions, terms, conditions, rights and duties of the
Company and the Participants with respect to Awards granted pursuant to
the Plan, which provisions need not be identical except as may be
provided herein. The Committee may from time to time adopt such
rules and regulations for carrying out the purposes of the Plan as it may
deem proper and in the best interests of the Company. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in
the Plan or in any agreement entered into hereunder in the manner and
to the extent it shall deem expedient and it shall be the sole and
final judge of such expediency. No member of the Committee shall be
liable for any action or determination made in good faith. The
determinations, interpretations and other actions of the Committee
pursuant to the provisions of the Plan shall be binding and conclusive
for all purposes and on all persons.
ARTICLE IV
STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. The number of shares of Stock that are
authorized for issuance under the Plan in accordance with the provisions of
the Plan and subject to such restrictions or other provisions as the
Committee may from time to time deem necessary shall not exceed 995,000.
This authorization may be increased from time to time by approval of the
Board and by the shareholders of the Company if, in the opinion of counsel
for the Company, shareholder approval is required. Shares of Stock that
may be issued upon exercise of Options, or Stock Appreciation Rights, that
are issued as Restricted Stock Awards, that are issued with respect to
Stock Units, and that are issued as incentive compensation or other stock
grants under the Plan shall be applied to reduce the maximum number of
shares of Stock remaining available for use under the Plan. The
Company shall at all times during the term of the Plan and while any
Options or Stock Units are outstanding retain as authorized and
unissued Stock at least the number of shares from time to time required
under the provisions of the Plan, or otherwise assure itself of its
ability to perform its obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are subject to
an Option that expires, or that is forfeited or for any reason is
terminated unexercised, and any shares of Stock withheld for the payment
of taxes or received by the Company as payment of the exercise price of
an Option shall automatically become available for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the
Company shall at any time increase or decrease the number of its
outstanding shares of Stock or change in any way the rights and privileges
of such shares by means of the payment of a stock dividend or any other
distribution upon such shares payable in Stock, or through a stock split,
subdivision, consolidation, combination, reclassification or
recapitalization involving the Stock, then in relation to the Stock that
is affected by one or more of the above events, the numbers, rights and
privileges of the following shall be increased, decreased or changed in
like manner as if they had been issued and outstanding, fully paid and
nonassessable at the time of such occurrence: (i) the shares of Stock as to
which Awards may be granted under the Plan and (ii) the shares of the Stock
then included in each outstanding Award granted hereunder.
4.4 Other Distributions and Changes in the Stock. If
(a) the Company shall at any time distribute with respect to the Stock
assets or securities of persons other than the Company (excluding cash or
distributions referred to in Section 4.3), or
(b) the Company shall at any time grant to the holders of its Stock
rights to subscribe pro rata for additional shares thereof or for any other
securities of the Company, or
(c) there shall be any other change (except as described in Section
4.3) in the number or kind of outstanding shares of Stock or of any stock or
other securities into which the Stock shall be changed or for which it
shall have been exchanged,
and if the Committee shall in its discretion determine that the event
described in subsection (a), (b), or (c) above equitably requires an
adjustment in the number or kind of shares subject to an Option or other
Award, an adjustment in the Option Price or the taking of any other action by
the Committee, including without limitation, the setting aside of any
property for delivery to the Participant upon the exercise of an Option
or the full vesting of an Award, then such adjustments shall be made, or
other action shall be taken, by the Committee and shall be effective
for all purposes of the Plan and on each outstanding Option or Award that
involves the particular type of stock for which a change was effected.
Notwithstanding the foregoing provisions of this Section 4.4, pursuant
to Section 8.3 below, a Participant holding Stock received as a Restricted
Stock Award shall have the right to receive all amounts, including cash and
property of any kind, distributed with respect to the Stock upon the
Participant's becoming a holder of record of the Stock.
4.5 General Adjustment Rules. No adjustment or substitution
provided for in this Article IV shall require the Company to sell a fractional
share of Stock under any Option, or otherwise issue a fractional share of
Stock, and the total substitution or adjustment with respect to each Option
and other Award shall be limited by deleting any fractional share. In the
case of any such substitution or adjustment, the total Option Price for the
shares of Stock then subject to an Option shall remain unchanged but the
Option Price per share under each such Option shall be equitably adjusted
by the Committee to reflect the greater or lesser number of shares of Stock
or other securities into which the Stock subject to the Option may have been
changed, and appropriate adjustments shall be made to other Awards to reflect
any such substitution or adjustment.
4.6 Determination by the Committee, Etc. Adjustments under this
Article IV shall be made by the Committee, whose determinations with regard
thereto shall be final and binding upon all parties thereto.
ARTICLE V
CORPORATE REORGANIZATION
5.1 Reorganization. Upon the occurrence of any of the following
events, if the notice required by Section 5.2 shall have first been given,
the Plan and all Options then outstanding hereunder shall automatically
terminate and be of no further force and effect whatsoever, and other
Awards then outstanding shall be treated as described in Sections 5.2 and
5.3, without the necessity for any additional notice or other action by the
Board or the Company: (a) the merger or consolidation of the Company with
or into another corporation or other reorganization (other than a
reorganization under the United States Bankruptcy Code) of the Company
(other than a consolidation, merger, or reorganization in which the Company
is the continuing corporation and which does no result in any
reclassification or change of outstanding shares of Stock); or (b) the sale
or conveyance of the property of the Company as an entirety or
substantially as an entirety (other than a sale or conveyance in which the
Company continues as holding company of an entity or entities that conduct
the business or business formerly conducted by the Company); or (c) the
dissolution or liquidation of the Company.
5.2 Required Notice. At least 30 days' prior written notice
of any event described in Section 5.1 shall be given by the Company to each
Option Holder and Participant unless (a) in the case of the events described
in clauses (a) or (b) of Section 5.1, the Company, or the successor or
purchaser, as the case may be, shall make adequate provision for the
assumption of the outstanding Options or the substitution of new options
for the outstanding Options on terms comparable to the outstanding Options
except that the Option Holder shall have the right thereafter to purchase
the kind and amount of securities or property or cash receivable upon
such merger, consolidation, other reorganization, sale or conveyance by a
holder of the number of Shares that would have been receivable upon
exercise of the Option immediately prior to such merger, consolidation,
sale or conveyance (assuming such holder of Stock failed to exercise any
rights of election and received per share the kind and amount received per
share by a majority of the non-electing shares), or (b) the Company, or the
successor or purchaser, as the case may be, shall make adequate provision for
the adjustment of outstanding Awards (other than Options) so that such
Awards shall entitle the Participant to receive the kind and amount
of securities or property or cash receivable upon such merger,
consolidation, other reorganization, sale or conveyance by a holder of the
number of Shares that would have been receivable with respect to such Award
immediately prior to such merger, consolidation, other reorganization,
sale or conveyance (assuming such holder of Stock failed to exercise any
rights of election and received per share the kind and amount received per
share by a majority of the non-electing shares). The provisions of this
Article V shall similarly apply to successive mergers, consolidations,
reorganizations, sales or conveyances. Such notice shall be deemed to have
been given when delivered personally to a Participant or when mailed to
a Participant by registered or certified mail, postage prepaid, at
such Participant's address last known to the Company.
5.3 Acceleration of Exercisability. Participants notified in
accordance with Section 5.2 may exercise their Options at any time before
the occurrence of the event requiring the giving of notice (but subject to
occurrence of such event), regardless of whether all conditions of exercise
relating to length of service, attainment of financial performance goals
or otherwise have been satisfied. Upon the giving of notice in accordance
with Section 5.2, all restrictions with respect to Restricted Stock and
other Awards shall lapse immediately, all Stock Units shall become payable
immediately and all Stock Appreciation Rights shall become exercisable.
Any Options, Stock Appreciation Rights or Stock Units that are not assumed or
substituted under clauses (a) or (b) of Section 5.2 that have not been
exercised prior to the event described in Section 5.1 shall automatically
terminate upon the occurrence of such event.
5.4 Limitation on Payments. If the provisions of this Article V
would result in the receipt by any Participant of a payment within the
meaning of Section 280G of the Code and the regulations promulgated
thereunder and if the receipt of such payment by any Participant would, in
the opinion of independent tax counsel of recognized standing selected by
the Company, result in the payment by such Participant of any excise tax
provided for in Sections 280G and 4999 of the Code, then the amount of
such payment shall be reduced to the extent required, in the opinion of
independent tax counsel, to prevent the imposition of such excise tax;
provided, however, that the Committee, in its sole discretion, may authorize
the payment of all or any portion of the amount of such reduction to the
Participant.
ARTICLE VI
PARTICIPATION
Participants in the Plan shall be those Eligible Employees who, in the
judgment of the Committee, are performing, or during the term of their
incentive arrangement will perform, vital services in the management,
operation and development of the Company or an Affiliated Corporation, and
significantly contribute, or are expected to significantly contribute, to
the achievement of long-term corporate economic objectives. Participants
may be granted from time to time one or more Awards; provided, however,
that the grant of each such Award shall be separately approved by the
Committee, and receipt of one such Award shall not result in automatic
receipt of any other Award. Upon determination by the Committee that an
Award is to be granted to a Participant, written notice shall be given
to such person, specifying the terms, conditions, rights and duties
related thereto. Each Participant shall, if required by the Committee,
enter into an agreement with the Company, in such form as the Committee
shall determine and which is consistent with the provisions of the
Plan, specifying such terms, conditions, rights and duties. Awards shall
be deemed to be granted as of the date specified in the grant resolution
of the Committee, which date shall be the date of any related agreement
with the Participant. In the event of any inconsistency between the
provisions of the Plan and any such agreement entered into hereunder,
the provisions of the Plan shall govern.
ARTICLE VII
OPTIONS
7.1 Grant of Options. Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more Options.
The Committee in its sole discretion shall designate whether an Option is an
Incentive Option or a Non-Qualified Option. The Committee may grant both
an Incentive Option and a Non-Qualified Option to an Eligible Employee at
the same time or at different times. Incentive Options and Non-Qualified
Options, whether granted at the same time or at different times, shall be
deemed to have been awarded in separate grants and shall be clearly
identified, and in no event shall the exercise of one Option affect the right
to exercise any other Option or affect the number of shares for which any
other Option may be exercised, except as provided in subsection 7.2(j).
An Option shall be considered as having been granted on the date specified
in the grant resolution of the Committee.
7.2 Stock Option Certificates. Each Option granted under the Plan
shall be evidenced by a written stock option certificate (an "Option
Certificate"). An Option Certificate shall be issued by the Company in
the name of the Participant to whom the Option is granted (the "Option
Holder") and in such form as may be approved by the Committee. The Option
Certificate shall incorporate and conform to the conditions set forth in this
Section 7.2 as well as such other terms and conditions that are not
inconsistent as the Committee may consider appropriate in each case.
(a) Number of Shares. Each Option Certificate shall state that
it covers a specified number of shares of Stock, as determined by the
Committee. Notwithstanding any other provision of this Plan, the maximum
number of shares of Stock to be granted subject to Options to any one
Participant during the term of this Plan shall be 300,000 shares of Stock.
(b) Price. The price at which each share of Stock covered by an
Option may be purchased shall be determined in each case by the Committee
and set forth in the Option Certificate, but in no event shall the price be
less than 100 percent of the Fair Market Value of the Stock on the date the
Option (both Incentive and Non-Qualified) is granted.
(c) Duration of Options; Restrictions on Exercise. Each Option
Certificate shall state the period of time, determined by the Committee,
within which the Option may be exercised by the Option Holder (the "Option
Period"). The Option Period must end, in all cases, not more than ten
years from the date the Option is granted. The Option Certificate shall
also set forth any installment or other restrictions on Option exercise during
such period, if any, as may be determined by the Committee; however, no
Option may be exercised for at least six months after the date of grant. Each
Option shall become exercisable (vest) over such period of time, if any, or
upon such events, as determined by the Committee.
(d) Termination of Employment, Death, Disability, Etc. The
Committee may specify the period, if any, after which an Option may be
exercised following termination of the Option Holder's employment. The
effect of this subsection 7.2(d) shall be limited to determining the
consequences of a termination and nothing in this subsection 7.2(d) shall
restrict or otherwise interfere with the Company's discretion with respect
to the termination of any individual's employment. If the Committee does
not otherwise specify, the following shall apply:
(i) If the employment of the Option Holder terminates for any
reason other than death or Disability within six months after the date the
Option is granted or if the employment of the Option Holder is terminated
within the Option Period for "cause", as determined by the Company, the
Option shall thereafter be void for all purposes. As used in this
subsection 7.2(d), "cause" shall mean a gross violation, as determined by the
Company, of the Company's established policies and procedures.
(ii) If the Option Holder becomes Disabled, the Option may be
exercised by the Option Holder, or in the case of death by the persons
specified in subsection (iii) of this subsection 7.2(d), within one year
following his or her Disability (provided that such exercise must occur
within the Option Period), but not thereafter. In any such case, the Option
may be exercised only as to the shares as to which the Option had become
exercisable on or before the date of the Option Holder's termination of
employment because of Disability.
(iii) If the Option Holder dies during the Option Period
while still employed or within the one year period referred to in (ii) above
or the three-month period referred to in (iv) below, the Option may be
exercised by those entitled to do so under the Option Holder's will or by
the laws of descent and distribution within one year following the Option
Holder's death, (provided that such exercise must occur within the Option
Period), but not thereafter. In any such case, the Option may be exercised
only as to the shares as to which the Option had become exercisable on
or before the date of the Option Holder's death.
(iv) If the employment of the Option Holder by the Company is
terminated (which for this purpose means that the Option Holder is no longer
employed by the Company or by an Affiliated Corporation) within the Option
Period for any reason other than cause, Disability or the Option Holder's
death, and such termination occurs more than six months after the Option
is granted, the Option may be exercised by the Option Holder within three
months following the date of such termination (provided that such exercise
must occur within the Option Period), but not thereafter. In any such
case, the Option may be exercised only as to the shares as to which the
Option had become exercisable on or before the date of termination of
employment.
(e) Transferability. Each Option shall not be transferable by
the Option Holder except by will or pursuant to the laws of descent and
distribution. Each Option is exercisable during the Option Holder's
lifetime only by him or her, or in the event of disability or incapacity, by
his or her guardian or legal representative.
(f) Consideration for Grant of Option. Each Option Holder agrees
to remain in the employment of the Company, at the pleasure of the Company, for
a continuous period of at least one year after the date the Option is
granted, at the salary rate in effect on the date of such agreement or at
such changed rate as may be fixed, from time to time, by the Company. Nothing
in this paragraph shall limit or impair the Company's right to terminate the
employment of any employee.
(g) Exercise, Payments, Etc.
(i) Manner of Exercise. The method for exercising each Option
granted hereunder shall be by delivery to the Company of written notice
specifying the number of Shares with respect to which such Option is
exercised. The purchase of such Shares shall take place at the principal
offices of the Company within thirty days following delivery of such notice,
at which time the Option Price of the Shares shall be paid in full by any of
the methods set forth below or a combination thereof. Except as set forth
in the next sentence, the Option shall be exercised when the Option Price
for the number of shares as to which the Option is exercised is paid to the
Company in full. If the Option Price is paid by means of a broker's loan
transaction described in subsection 7.2(g)(ii)(D), in whole or in part, the
closing of the purchase of the Stock under the Option shall take place (and
the Option shall be treated as exercised) on the date on which, and only if,
the sale of Stock upon which the broker's loan was based has been closed
and settled, unless the Option Holder makes an irrevocable written election,
at the time of exercise of the Option, to have the exercise treated as fully
effective for all purposes upon receipt of the Option Price by the Company
regardless of whether or not the sale of the Stock by the broker is closed
and settled. A properly executed certificate or certificates representing
the Shares shall be delivered to or at the direction of the Option Holder
upon payment therefor. If Options on less than all shares evidenced by an
Option Certificate are exercised, the Company shall deliver a new Option
Certificate evidencing the Option on the remaining shares upon delivery of
the Option Certificate for the Option being exercised.
(ii) The exercise price shall be paid by any of the following
methods or any combination of the following methods at the election of the
Option Holder, or by any other method approved by the Committee upon the
request of the Option Holder:
(A) in cash;
(B) by certified, cashier's check or other check acceptable
to the Company, payable to the order of the Company;
(C) by delivery to the Company of certificates representing
the number of shares then owned by the Option Holder, the Fair Market Value of
which equals the purchase price of the Stock purchased pursuant to the Option,
properly endorsed for transfer to the Company; provided however, that no
Option may be exercised by delivery to the Company of certificates
representing Stock, unless such Stock has been held by the Option Holder for
more than six months; for purposes of this Plan, the Fair Market Value of any
shares of Stock delivered in payment of the purchase price upon exercise
of the Option shall be the Fair Market Value as of the exercise date; the
exercise date shall be the day of delivery of the certificates for the Stock
used as payment of the Option Price; or
(D) by delivery to the Company of a properly executed notice
of exercise together with irrevocable instructions to a broker to deliver to
the Company promptly the amount of the proceeds of the sale of all or a portion
of the Stock or of a loan from the broker to the Option Holder required to
pay the Option Price.
(h) Date of Grant. An Option shall be considered as having been
granted on the date specified in the grant resolution of the Committee.
(i) Withholding.
(i) Non-Qualified Options. Upon exercise of an Option, the
Option Holder shall make appropriate arrangements with the Company to provide
for the amount of additional withholding required by Sections 3102 and 3402 of
the Code and applicable state income tax laws, including payment of such
taxes through delivery of shares of Stock or by withholding Stock to be
issued under the Option, as provided in Article XV.
(ii) Incentive Options. If an Option Holder makes a disposition
(as defined in Section 424(c) of the Code) of any Stock acquired pursuant to
the exercise of an Incentive Option prior to the expiration of two years from
the date on which the Incentive Option was granted or prior to the
expiration of one year from the date on which the Option was exercised,
the Option Holder shall send written notice to the Company at its principal
office in Greeley, Colorado (Attention: Corporate Secretary) of the date of
such disposition, the number of shares disposed of, the amount of proceeds
received from such disposition and any other information relating to such
disposition as the Company may reasonably request. The Option Holder shall,
in the event of such a disposition, make appropriate arrangements with the
Company to provide for the amount of additional withholding, if any, required
by Sections 3102 and 3402 of the Code and applicable state income tax laws.
(j) Issuance of Additional Option. If an Option Holder pays all
or any portion of the exercise price of an Option with Stock, or pays all or
any portion of the applicable withholding taxes with respect to the exercise
of an Option with Stock that has been held by the Option Holder for more
than a period, not shorter than six months, to be determined by the
Committee, the Committee may, in its sole discretion, grant to such Option
Holder a new Option covering the number of shares of Stock used to pay
such exercise price and/or withholding tax. The new Option shall have an
Option Price per share equal to the Fair Market Value of a share of Stock on
the date of the exercise of the Option and shall have the same terms and
provisions as the exercised Option, except as otherwise determined by the
Committee in its sole discretion.
7.3 Restrictions on Incentive Options.
(a) Initial Exercise. The aggregate Fair Market Value of the
Shares with respect to which Incentive Options are exercisable for the first
time by an Option Holder in any calendar year, under the Plan or otherwise,
shall not exceed $100,000. For this purpose, the Fair Market Value of the
Shares shall be determined as of the date of grant of the Option.
(b) Ten Percent Shareholders. Incentive Options granted to an
Option Holder who is the holder of record of 10% or more of the outstanding
Stock of the Company shall have an Option Price equal to 110% of the Fair
Market Value of the Shares on the date of grant of the Option and the Option
Period for any such Option shall not exceed five years.
7.4 Shareholder Privileges. No Option Holder shall have any rights
as a shareholder with respect to any shares of Stock covered by an Option
until the Option Holder becomes the holder of record of such Stock, and no
adjustments shall be made for dividends or other distributions or
other rights as to which there is a record date preceding the date such Option
Holder becomes the holder of record of such Stock, except as provided in
Article IV.
ARTICLE VIII
RESTRICTED STOCK AWARDS
8.1 Grant of Restricted Stock Awards. Coincident with or following
designation for participation in the Plan, the Committee may grant a
Participant one or more Restricted Stock Awards consisting of Shares of
Stock. The number of Shares granted as a Restricted Stock Award shall be
determined by the Committee.
8.2 Restrictions. A Participant's right to retain a Restricted
Stock Award granted to him under Section 8.1 shall be subject to such
restrictions, including but not limited to his continuous employment by the
Company or an Affiliated Corporation for a restriction period specified by the
Committee or the attainment of specified performance goals and objectives,
as may be established by the Committee with respect to such Award. The
Committee may in its sole discretion require different periods of employment
or different performance goals and objectives with respect to different
Participants, to different Restricted Stock Awards or to separate, designated
portions of the Stock shares constituting a Restricted Stock Award. In the
event of the death or Disability of a Participant, or the retirement of a
Participant in accordance with the Company's established retirement policy,
all employment period and other restrictions applicable to Restricted Stock
Awards then held by him shall lapse with respect to a pro rata part of each
such Award based on the ratio between the number of full months of employment
completed at the time of termination of employment from the grant of each
Award to the total number of months of employment required for such Award to
be fully nonforfeitable, and such portion of each such Award shall become
fully nonforfeitable. The remaining portion of each such Award shall
be forfeited and shall be immediately returned to the Company. In the event
of a Participant's termination of employment for any other reason, any
Restricted Stock Awards as to which the employment period or other
restrictions have not been satisfied (or waived or accelerated as provided
herein) shall be forfeited, and all shares of Stock related thereto shall
be immediately returned to the Company.
8.3 Privileges of a Shareholder, Transferability. A Participant
shall have all voting, dividend, liquidation and other rights with respect
to Stock in accordance with its terms received by him as a Restricted Stock
Award under this Article VIII upon his becoming the holder of record of such
Stock; provided, however, that the Participant's right to sell, encumber, or
otherwise transfer such Stock shall be subject to the limitations of Section
13.2.
8.4 Enforcement of Restrictions. The Committee shall cause a
legend to be placed on the Stock certificates issued pursuant to each
Restricted Stock Award referring to the restrictions provided by Sections
8.2 and 8.3 and, in addition, may in its sole discretion require one or more
of the following methods of enforcing the restrictions referred to in
Sections 8.2 and 8.3:
(a) Requiring the Participant to keep the Stock certificates,
duly endorsed, in the custody of the Company while the restrictions remain
in effect; or
(b) Requiring that the Stock certificates, duly endorsed, be
held in the custody of a third party while the restrictions remain in effect.
ARTICLE IX
STOCK UNITS
A Participant may be granted a number of Stock Units determined by the
Committee. The number of Stock Units, the goals and objectives to be
satisfied with respect to each grant of Stock Units, the time and manner
of payment for each Stock Unit, and the other terms and conditions applicable
to a grant of Stock Units shall be determined by the Committee.
ARTICLE X
STOCK APPRECIATION RIGHTS
RIGHTS
10.1 Persons Eligible. The Committee, in its sole discretion, may
grant Stock Appreciation Rights to Eligible Employees.
10.2 Grant. The Committee shall determine at the time of the
grant of a Stock Appreciation Right the time period during which the Stock
Appreciation Right may be exercised, which period may not commence until
six months after the date of grant.
10.3 Exercise. A Stock Appreciation Right shall entitle a
Participant to receive a number of shares of Stock (without any payment to
the Company, except for applicable withholding taxes), cash, or Stock and cash,
as determined by the Committee in accordance with Section 10.4 below. If a
Stock Appreciation Right is issued in tandem with an Option, except as may
otherwise be provided by the Committee, the Stock Appreciation Right shall
be exercisable during the period that its related Option is exercisable.
A Participant desiring to exercise a Stock Appreciation Right shall give
written notice of such exercise to the Company, which notice shall state the
proportion of Stock and cash that the Participant desires to receive pursuant
to the Stock Appreciation Right exercised. Upon receipt of the notice from
the Participant, the Company shall deliver to the person entitled thereto
(i) a certificate or certificates for Stock and/or (ii) a cash payment, in
accordance with Section 10.4 below. The date the Company receives written
notice of such exercise hereunder is referred to in this Article X as the
"exercise date". The delivery of Stock or cash received pursuant to such
exercise shall take place at the principal offices of the Company within 30
days following delivery of such notice.
10.4 Number of Shares or Amount of Cash. Subject to the discretion
of the Committee to substitute cash for Stock, or Stock for cash, the amount
of Stock which may be issued pursuant to the exercise of a Stock
Appreciation Right shall be determined by dividing: (a) the total number of
shares of Stock as to which the Stock Appreciation Right is exercised,
multiplied by the amount by which the Fair Market Value of the Stock on the
exercise date exceeds the Fair Market Value of a share of Stock on the date
of grant of the Stock Appreciation Right, by (b) the Fair Market Value of the
Stock on the exercise date; provided, however, that fractional shares shall
not be issued and in lieu thereof, a cash adjustment shall be paid. In
lieu of issuing Stock upon the exercise of a Stock Appreciation Right, the
Committee in its sole discretion may elect to pay the cash equivalent of the
Fair Market Value of the Stock on the exercise date for any or all of the
shares of Stock that would otherwise be issuable upon exercise of the Stock
Appreciation Right.
10.5 Effect of Exercise. If a Stock Appreciation Right is issued
in tandem with an Option, the exercise of the Stock Appreciation Right or the
related Option will result in an equal reduction in the number of
corresponding Options or Stock Appreciation Rights which were granted in
tandem with such Stock Appreciation Rights and Options.
10.6 Termination of Employment. Upon the termination of employment
of a Participant, any Stock Appreciation Rights then held by such
Participant shall be exercisable within the time periods, and upon the same
conditions with respect to the reasons for termination of employment, as are
specified in Section 7.2(d) with respect to Options.
ARTICLE XI
OTHER COMMON STOCK GRANTS
From time to time during the duration of this Plan, the Board may, in
its sole discretion, adopt one or more incentive compensation arrangements for
Participants pursuant to which the Participants may acquire shares of Stock,
whether by purchase, outright grant, or otherwise. Any such arrangements
shall be subject to the general provisions of this Plan and all shares of
Stock issued pursuant to such arrangements shall be issued under this Plan.
ARTICLE XII
CHANGE IN CONTROL
12.1 In General. Upon a change of control in the Company as
defined in Section 12.2, then (a) all options shall become immediately
exercisable in full during the remaining term thereof, and shall remain so,
whether or not the Participants to whom such Options have been granted
remain employees of the Company or an Affiliated Corporation; (b) all
restrictions with respect to outstanding Restricted Stock Awards shall
immediately lapse; (c) all Stock Units shall become immediately payable; and
(d) all other Awards shall immediately become exercisable or shall vest, as
the case may be, without any further action or passage of time.
12.2 Definition. For purposes of this Plan, a "change in control"
shall be deemed to have occurred if (a) a person (as such term is used in
Section 13(d) of the 1934 Act) becomes the beneficial owner (as defined
in Rule 13d-3 under the 1934 Act) of shares of the Company or the Company's
successor having 30% or more of the total number of votes that may be cast
for the election of directors of the Company without the prior approval
of at least a majority of the members of the Company's Board of Directors
unaffiliated with such person (unless such person beneficially owns shares
with at least 15% of such votes on the Effective Date), or (b) individuals
who constitute the directors of the Company at the beginning of a 24-month
period cease to constitute at least two-thirds of all directors at any time
during such period, unless the election of any new or replacement directors
was approved by a vote of at least a majority of the members of the Company's
Board of Directors in office immediately prior to such period and of the new
and replacement directors so approved.
ARTICLE XIII
RIGHTS OF EMPLOYEES; PARTICIPANTS
13.1 Employment. Nothing contained in the Plan or in any Award
granted under the Plan shall confer upon any Participant any right with
respect to the continuation of his employment by the Company or any Affiliated
Corporation, or interfere in any way with the right of the Company or any
Affiliated Corporation, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Participant from the rate in
existence at the time of the grant of an Award. Whether an authorized leave
of absence, or absence in military or government service, shall constitute a
termination of employment shall be determined by the Committee at the time.
13.2 Nontransferability. No right or interest of any Participant in
an Option, a Stock Appreciation Right, a Restricted Stock Award (prior to
the completion of the restriction period applicable thereto), a Stock Unit,
or other Award granted pursuant to the Plan, shall be assignable or
transferable during the lifetime of the Participant, either voluntarily or
involuntarily, or subjected to any lien, directly or indirectly, by
operation of law, or otherwise, including execution, levy, garnishment,
attachment, pledge or bankruptcy. In the event of a Participant's death,
a Participant's rights and interests in Options, Stock Appreciation Rights,
Restricted Stock Awards, other Awards, and Stock Units shall, to the extent
provided in Articles VII, VIII, IX, X and XI, be transferable by will or the
laws of descent and distribution, and payment of any amounts due under the
Plan shall be made to, and exercise of any Options may be made by, the
Participant's legal representatives, heirs or legatees. If in the opinion
of the Committee a person entitled to payments or to exercise rights with
respect to the Plan is disabled from caring for his affairs because of
mental condition, physical condition or age, payment due such person may be
made to, and such rights shall be exercised by, such person's guardian,
conservator or other legal personal representative upon furnishing the
Committee with evidence satisfactory to the Committee of such status.
13.3 No Plan Funding. Obligations to Participants under the Plan
will not be funded, trusteed, insured or secured in any manner. The
Participants under the Plan shall have no security interest in any assets
of the Company or any Affiliated Corporation, and shall be only general
creditors of the Company.
ARTICLE XIV
GENERAL RESTRICTIONS
14.1 Investment Representations. The Company may require any person
to whom an Option, Stock Appreciation Right, Restricted Stock Award, Stock
Unit, or Stock is granted, as a condition of exercising such Option or Stock
Appreciation Right, or receiving such Restricted Stock Award, Stock Unit, or
Stock, to give written assurances in substance and form satisfactory to the
Company and its counsel to the effect that such person is acquiring the
Stock for his own account for investment and not with any present intention
of selling or otherwise distributing the same, and to such other effects as
the Company deems necessary or appropriate in order to comply with Federal
and applicable state securities laws.
14.2 Compliance with Securities Laws. Each Option, Stock
Appreciation Right, Restricted Stock Award, Stock Unit, and Stock grant
shall be subject to the requirement that, if at any time counsel to the
Company shall determine that the listing, registration or qualification of
the shares subject to such Option, Stock Appreciation Right, Restricted
Stock Award, Stock Unit, or Stock grant upon any securities exchange or
under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or
in connection with, the issuance or purchase of shares thereunder, such
Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit or Stock
grant may not be accepted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee. Nothing
herein shall be deemed to require the Company to apply for or to obtain
such listing, registration or qualification.
14.3 Changes in Accounting Rules. Notwithstanding any other
provision of the Plan to the contrary, if, during the term of the Plan,
any changes in the financial or tax accounting rules applicable to Options,
Stock Appreciation Rights, Restricted Stock Awards, Stock Units or other
Awards shall occur which, in the sole judgment of the Committee, may have a
material adverse effect on the reported earnings, assets or liabilities of
the Company, the Committee shall have the right and power to modify as
necessary, any then outstanding and unexercised Options, Stock Appreciation
Rights, outstanding Restricted Stock Awards, outstanding Stock Units and
other outstanding Awards as to which the applicable employment or other
restrictions have not been satisfied.
ARTICLE XV
OTHER EMPLOYEE BENEFITS
The amount of any compensation deemed to be received by a Participant
as a result of the exercise of an Option or Stock Appreciation Right, the
sale of shares received upon such exercise, the vesting of any Restricted
Stock Award, distributions with respect to Stock Units, or the grant of Stock
shall not constitute "earnings" or "compensation" with respect to which any
other employee benefits of such employee are determined, including without
limitation benefits under any pension, profit sharing, life insurance or
salary continuation plan.
ARTICLE XVI
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or
modify the Plan provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
shareholders if shareholder approval is required to enable the Plan to
satisfy any applicable statutory or regulatory requirements, or if the
Company, on the advice of counsel, determines that shareholder approval is
otherwise necessary or desirable.
No amendment, modification or termination of the Plan shall in any
manner adversely affect any Options, Stock Appreciation Rights, Restricted
Stock Awards, Stock Units, Stock or other Award theretofore granted under
the Plan, without the consent of the Participant holding such Options, Stock
Appreciation Rights, Restricted Stock Awards, Stock Units, Stock or other
Awards.
ARTICLE XVII
WITHHOLDING
17.1 Withholding Requirement. The Company's obligations to deliver
shares of Stock upon the exercise of any Option, or Stock Appreciation Right,
the vesting of any Restricted Stock Award, payment with respect to Stock
Units, or the grant of Stock shall be subject to the Participant's
satisfaction of all applicable federal, state and local income and other
tax withholding requirements.
17.2 Withholding With Stock. At the time the Committee grants an
Option, Stock Appreciation Right, Restricted Stock Award, Stock Unit, other
Award, or Stock, it may, in its sole discretion, grant the Participant an
election to pay all such amounts of tax withholding, or any part thereof,
by electing to transfer to the Company, or to have the Company withhold from
shares otherwise issuable to the Participant, shares of Stock having a
value equal to the amount required to be withheld or such lesser amount as
may be elected by the Participant. All elections shall be subject to the
approval or disapproval of the Committee. The value of shares of Stock to
be withheld shall be based on the Fair Market Value of the Stock on
the date that the amount of tax to be withheld is to be determined (the
"Tax Date"). Any such elections by Participants to have shares of Stock
withheld for this purpose will be subject to the following restrictions:
(a) All elections must be made prior to the Tax Date.
(b) All elections shall be irrevocable.
(c) If the Participant is an officer or director of the Company
within the meaning of Section 16 of the 1934 Act ("Section 16"), the
Participant must satisfy the requirements of such Section 16 and any
applicable Rules thereunder with respect to the use of Stock to satisfy such
tax withholding obligation.
ARTICLE XVIII
REQUIREMENTS OF LAW
18.1 Requirements of Law. The issuance of Stock and the payment of
cash pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
18.2 Federal Securities Law Requirements. If a Participant is an
officer or director of the Company within the meaning of Section 16, Awards
granted hereunder shall be subject to all conditions required under Rule
16b-3, or any successor rule promulgated under the 1934 Act, to qualify the
Award for any exception from the provisions of Section 16(b) of the 1934 Act
available under that Rule. Such conditions shall be set forth in the
agreement with the Participant which describes the Award or other document
evidencing or accompanying the Award.
18.3 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of
Colorado.
ARTICLE XIX
DURATION OF THE PLAN
Unless sooner terminated by the Board of Directors, the Plan shall
terminate on December 21, 2003 and no Option, Stock Appreciation Right,
Restricted Stock Award, Stock Unit, other Award or Stock shall be granted,
or offer to purchase Stock made, after such termination. Options, Stock
Appreciation Rights, Restricted Stock Awards, other Awards, and Stock Units
outstanding at the time of the Plan termination may continue to be
exercised, or become free of restrictions, or paid, in accordance with their
terms.
Dated: January 20, 1997
ELECTRONIC FAB TECHNOLOGY CORP.
ATTEST:
By: Lloyd McConnell By: Jack Calderon
Secretary President and Chief Executive Officer
TABLE OF CONTENTS
Page
ARTICLE I - INTRODUCTION 1
1.1 Establishment 1
1.2 Purposes 1
ARTICLE II - DEFINITIONS 1
2.1 Definitions 1
2.2 Gender and Number 3
ARTICLE III - PLAN ADMINISTRATION 3
ARTICLE IV - STOCK SUBJECT TO THE PLAN 4
4.1 Number of Shares 4
4.2 Other Shares of Stock 4
4.3 Adjustments for Stock Split, Stock Dividend, Etc. 4
4.4 Other Distributions and Changes in the Stock 5
4.5 General Adjustment Rules 5
4.6 Determination by the Committee, Etc. 5
ARTICLE V - CORPORATE REORGANIZATION 6
5.1 Reorganization 6
5.2 Required Notice 6
5.3 Acceleration of Exercisability 6
5.4 Limitation on Payments 7
ARTICLE VI - PARTICIPATION 7
ARTICLE VII - OPTIONS 8
7.1 Grant of Options 8
7.2 Stock Option Certificates 8
7.3 Restrictions on Incentive Options 11
7.4 Shareholder Privileges 12
ARTICLE VIII - RESTRICTED STOCK AWARDS 12
8.1 Grant of Restricted Stock Awards 12
8.2 Restrictions 12
8.3 Privileges of a Shareholder, Transferability 12
8.4 Enforcement of Restrictions 13
ARTICLE IX - STOCK UNITS 13
ARTICLE X - STOCK APPRECIATION RIGHTS 13
10.1 Persons Eligible 13
10.2 Grant 13
10.3 Exercise 13
10.4 Number of Shares or Amount of Cash 14
10.5 Effect of Exercise 14
10.6 Termination of Employment 14
ARTICLE XI - OTHER COMMON STOCK GRANTS 14
ARTICLE XII - CHANGE IN CONTROL 15
12.1 In General 15
12.2 Definition 15
ARTICLE XIII - RIGHTS OF EMPLOYEES; PARTICIPANTS 15
13.1 Employment 15
13.2 Nontransferability 15
13.3 No Plan Funding 16
ARTICLE XIV - GENERAL RESTRICTIONS 16
14.1 Investment Representations 16
14.2 Compliance with Securities Laws 16
14.3 Changes in Accounting Rules 16
ARTICLE XV - OTHER EMPLOYEE BENEFITS 17
ARTICLE XVI - PLAN AMENDMENT, MODIFICATION AND TERMINATION 17
ARTICLE XVII - WITHHOLDING 17
17.1 Withholding Requirement 17
17.2 Withholding With Stock 18
ARTICLE XVIII - REQUIREMENTS OF LAW 18
18.1 Requirements of Law 18
18.2 Federal Securities Law Requirements 18
18.3 Governing Law 18
ARTICLE XIX - DURATION OF THE PLAN 18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<TEXT>
ELECTRONIC FAB TECHNOLOGY CORP.
STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
as amended and restated January 20, 1997
ELECTRONIC FAB TECHNOLOGY CORP.
STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
The Board of Directors (the "Board") of Electronic Fab Technology
Corp., a Colorado Corporation (the "Company"), established the Electronic
Fab Technology Corp. Stock Option Plan for Non-Employee Directors (the
"Plan"), effective December 22, 1993. Section 5.2 of the Plan provides
that the Board may amend the Plan from time to time. The Plan is hereby
amended and restated, effective January 20, 1997, subject to shareholder
approval (the "Effective Date").
PURPOSES
The purposes of the Plan are to provide to certain directors of the
Company who are not also employees of the Company added incentive to
continue in the service of the Company and a more direct interest in the
future success of the operations of the Company by granting to such
directors options ("Options") to purchase shares of the common stock (the
"Stock") of the Company upon the terms and conditions described below.
ARTICLE I
GENERAL
1.1 Definition. For purposes of the Plan and as used herein, a
"non-employee director" is an individual who (a) is a member of the Board
and (b) is not an employee of the Company. For purposes of the Plan, an
employee is an individual whose wages are subject to the withholding
of federal income tax under section 3401 of the Internal Revenue Code of
1986, as amended from time to time (the "Code"). A non-employee director
to whom an Option is granted is referred to herein as a "Holder."
1.2 Nature of Options. The Options granted hereunder shall be
options that do not satisfy the requirements of section 422 of the Code.
ARTICLE II
OPTIONS
2.1 Participation. Each non-employee director on the Effective
Date and each non-employee director elected thereafter shall be eligible
to receive Options to purchase Stock in accordance with Section 2.2 on
the terms and conditions herein described.
2.2 Grant.
(a) Grant. The Board, in its sole discretion, may grant Options
to individual non-employee directors. The Board shall have full discretion
as to the number and date of the grant of Options and may grant Options
covering different numbers of shares of Stock to different directors.
(b) Date of Grant. The date on which a non-employee director
receives an Option hereunder is referred to as the date of grant of such
Option.
(c) Option Certificates. Each Option granted under the Plan
shall be evidenced by a written stock option certificate (an "Option
Certificate") issued in the name of the non-employee director to whom the
Option is granted. The Option Certificate shall incorporate and conform
to the terms and conditions set forth herein.
2.3 Terms. Options issued pursuant to the Plan shall have the
following terms and conditions in addition to those set forth elsewhere
herein:
(a) Number. Each non-employee director shall receive under the
Plan Options to purchase the number of shares of Stock determined by the
Board, subject to adjustment as provided in Article III. Such grants shall
be effective at the times specified in Section 2.2.
(b) Price. The price at which each share of Stock covered by the
Option may be purchased by each non-employee director shall be the Fair
Market Value (as defined in Section 5.5) of the Stock on the date of
grant, subject to adjustment as provided in Article III.
(c) Duration of Options. The period within which each Option may
be exercised shall expire ten years from the date the Option is granted (the
"Option Period"), unless terminated sooner pursuant to subsection (d)
below or fully exercised prior to the end of such period.
(d) Termination of Service, Death, Etc. The Option shall
terminate in the following circumstances if the Holder ceases to be a
director of the Company:
(i) If the Holder is removed as a director of the Company during
the Option Period for cause, the Option shall be void thereafter for all
purposes.
(ii) If the Holder ceases to be a director of the Company on
account of disability within the meaning of Section 22(e)(3) of the Code,
the Option may be exercised by the Holder (or, in case of death thereafter,
by the persons specified in Section 2.3(d)(iii)) within one year
following the date on which the Holder ceased to be a director (if
otherwise within the Option Period), but not thereafter. In any such
case, the Option may be exercised as to all shares of Stock specified
therein, notwithstanding Section 2.3(g).
(iii) If the Holder dies during the Option Period while still
serving as a director or within the three-month period referred to in
Section 2.3(d)(iv) below, the Option may be exercised by those entitled to
do so under the Holder's will or by the laws of descent and distribution
within one year following the Holder's death (if otherwise within the Option
Period), but not thereafter. In any such case, the Option may be
exercised as to all shares of Stock specified therein, notwithstanding
Section 2.3(g).
(iv) If the Holder ceases to be a director within the Option
Period for any reason other than removal for cause, disability or death,
the Option may be exercised by the Holder within three months following
the date of such termination (if otherwise within the Option Period),
but not thereafter. In any such case, the Option may be exercised only as
to the shares as to which the Option had become exercisable on or before
the date the Holder ceased to be a director.
(e) Transferability, Exercisability. Each Option granted under
the Plan shall not be transferable by a Holder other than by will or the laws
of descent and distribution and shall be exercisable during the Holder's
lifetime only by the Holder or, in the event of disability or incapacity,
by the Holder's guardian or legal representative. Notwithstanding any other
provision of the Plan, no Option may be exercised unless and until the
Plan is approved by the shareholders of the Company in accordance with
Section 5.4.
(f) Exercise, Payments, Etc.
(i) The method for exercising each Option granted shall be by
delivery to the Company of written notice specifying the number of shares
with respect to which the Option is exercised. The purchase of Stock
pursuant to the Option shall take place at the principal office of the
Company within thirty days following delivery of such notice, at which
time the purchase price of the Stock shall be paid in full by any of the
methods set forth in Section 2.3(f)(ii) or a combination thereof. If the
purchase price is paid by means of a broker's loan transaction as
described in clause(C) of Section 2.3(f)(ii), in whole or in part, the
closing of the purchase of the Stock under the Option shall take place on
the date on which, and only if, the sale of Stock upon which the broker's
loan was based has been closed and settled, unless the Holder makes an
irrevocable written election, at the time of exercise of the Option, to
have the exercise treated as fully effective for all purposes upon receipt
of the purchase price by the Company regardless of whether or not the sale
of the Stock by the broker is closed and settled. A properly executed
certificate or certificates representing the Stock shall be delivered to
the Holder upon payment therefor. If Options on less than all shares
evidenced by an Option Certificate are exercised, the Company shall deliver
a new Option Certificate evidencing the Option on the remaining shares on
delivery of the outstanding Option Certificate for the Option being
exercised.
(ii) The exercise price shall be paid by any of the following
methods or any combination of such methods, at the option of the Holder:
(A) cash; (B) certified, cashier's or other check acceptable to the Company,
payable to the order of the Company; or (C) delivery to the Company of
irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds required to pay the purchase price of
the Stock; or (D) delivery to the Company of certificates representing the
number of shares of Stock then owned by the Holder, the Fair Market Value
of which (determined as of the date the notice of exercise is delivered
to the Company) equals the price of the Stock to be purchased pursuant to
the Option, properly endorsed for transfer to the Company. No Option may
be exercised by delivery to the Company of certificates representing Stock
that has been held by the Option Holder for less than six months or such
other period as shall be sufficient for the Company to avoid, if possible,
the recognition of expense with respect to the Option for accounting
purposes.
(g) Service Required for Exercise. Except as set forth in
Sections 2.3(d), 4.3, 4.4 and 5.4, each Option shall become exercisable in
increments after each month of continuous service by the Holder as a
non-employee director of the Company commencing with the twelfth month
of continuous service from the date of grant. The number of shares as to all
or part of which the Option may be exercised after twelve months of
continuous service as a non-employee director after the date of grant shall
be 1/4 (12/48) of the total number of shares covered by the Option, with an
additional 1/48 being exercisable after each additional month of continuous
service as a non-employee director through the 48th month of continuous
service. Except as set forth in Sections 2.3(d), 4.3 and 4.4, the Option
shall not be exercisable as to any shares as to which the continuous
service requirement has not been satisfied, regardless of the circumstances
under which the Holder ceased to be a director. The number of shares as to
which the Option may be exercised shall be cumulative, so that once the
Option becomes exercisable as to any shares it shall continue to be
exercisable as to those shares until expiration or termination of the Option
as provided in the Plan.
ARTICLE III
AUTHORIZED STOCK
3.1 The Stock. The total number of shares of Stock as to which
Options may be granted pursuant to the Plan shall be 160,000 in the
aggregate. The number of shares of Stock authorized for grant hereunder
shall be adjusted in accordance with the provisions of Section 3.2.
Shares of Stock underlying expired or cancelled and unexercised Options shall
again be available for grant under the Plan. The Company shall at all
times reserve a sufficient number of shares of Stock, or otherwise
assure itself of its ability to perform its obligations hereunder.
3.2 Adjustments for Stock Split, Stock Dividend, Etc. If the
Company shall at any time increase or decrease the number of its outstanding
Shares by means of payment of a stock dividend or any other distribution
upon such Shares payable in Stock, or through a stock split, subdivision,
consolidation, combination, reclassification or recapitalization involving
the Stock, or change in any way the rights and privileges of such Shares,
then the numbers, rights and privileges of the following shall be
increased, decreased or changed in like manner as if the corresponding
Shares had been issued and outstanding, fully paid and nonassessable at the
time of such occurrence: (a) the Shares as to which Options may be granted
under the Plan; and (b) the Shares then subject to each outstanding Option.
Upon any occurrence described in this Section 3.2, the total Option Price
under each then outstanding Option shall remain unchanged but shall be
apportioned ratably over the increased or decreased number of Shares
subject to the Option.
3.3 Adjustments for Certain Distributions of Property. If the
Company shall at any time distribute with respect to its Stock assets or
securities of other persons (excluding cash dividends or distributions
payable out of capital surplus and dividends or other distributions
referred to in Sections 3.2 or 3.4), then the Option Price of outstanding
Options shall be adjusted to reflect the fair market value of the assets
or securities distributed, the Company shall provide for the delivery upon
exercise of such Options of cash in an amount equal to the fair market
value of the assets or securities distributed or a combination of such
actions shall be taken, all as determined by the Committee in its
discretion. Fair market value of the assets or securities distributed for
this purpose shall be as determined by the Committee.
3.4 Distributions of Capital Stock and Indebtedness. If the Company
shall at any time distribute with respect to its Stock shares of its capital
stock (other than Stock) or evidences of indebtedness, then a proportionate
part of such capital stock and evidences of indebtedness shall be set aside
for each outstanding Option and, upon the exercise of such Option,
delivered to the Option Holder.
3.5 No Rights as Shareholder. An Option Holder shall have none of
the rights of a shareholder with respect to the Shares subject to an Option
until such Shares are transferred to the Option Holder upon the exercise of
such Option. Except as provided in this Article III, no adjustment shall
be made for dividends, rights or other property distributed to shareholders
(whether ordinary or extraordinary) for which the record date is prior to
the date such Shares are so transferred.
3.6 Fractional Shares. No adjustment or substitution provided for in
this Article III shall require the Company to issue a fractional share.
The total substitution or adjustment with respect to each Option shall
be limited by deleting any fractional share.
ARTICLE IV
CORPORATE REORGANIZATION; CHANGE OF CONTROL
4.1 Reorganization. Upon the occurrence of any of the following
events, if the notice required by Section 4.2 shall have first been given,
the Plan and all Options then outstanding hereunder shall automatically
terminate and be of no further force and effect whatsoever, without the
necessity for any additional notice or other action by the Board or the
Company: (a) the merger or consolidation of the Company with or into
another corporation (other than a consolidation or merger in which
the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Stock); or (b) the
sale or conveyance of the property of the Company as an entirety or
substantially as an entirety (other than a sale or conveyance in which
the Company continues as a holding company of an entity or entities that
conduct the business or businesses formerly conducted by the Company); or
(c) the dissolution or liquidation of the Company.
4.2 Required Notice. At least 30 days' prior written notice of any
event described in Section 4.1 shall be given by the Company to each Holder,
unless in the case of the events described in clauses (a) or (b) of Section
4.1, the Company, or the successor or purchaser, as the case may be, shall
make adequate provision for the assumption of the outstanding Options or
the substitution of new options for the outstanding Options on terms
comparable to the outstanding Options except that the Holder of each Option
then outstanding shall have the right thereafter to purchase the kind and
amount of shares of stock or other securities or property or cash
receivable upon such merger, consolidation, sale or conveyance by a holder
of the number of shares of Stock that would have been receivable upon
exercise of the Option immediately prior to such merger, consolidation,
sale or conveyance (assuming such holder of Stock failed to exercise any
rights of election and received per share the kind and amount received per
share by a majority of the non-electing shares). The provisions of this
Article IV shall similarly apply to successive mergers, consolidations, sales
or conveyances. Such notice shall be deemed to have been given when
delivered personally to a Holder or when mailed to a Holder by registered
or certified mail, postage prepaid, at such Holder's address last known to the
Company.
4.3 Acceleration of Exercisability. Subject to Section 5.4,
Holders notified in accordance with Section 4.2 may exercise their Options at
any time before the occurrence of the event requiring the giving of notice
(but subject to occurrence of such event), regardless of whether all
conditions of exercise relating to length of service as a director have
been satisfied.
4.4 Change of Control. If a Change in Control (as defined below)
occurs, all Options shall become exercisable in full, regardless of whether
all conditions of exercise relating to continuous service have been
satisfied. A "Change in Control" is deemed to have occurred if (a) a
person (as such term is used in Section 13(d) of the Securities Exchange Act
of 1934 (the "Exchange Act")) becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of shares of the Company or the
Company's successor having 30% or more of the total number of votes that
may be cast for the election of directors of the Company without the prior
approval of at least a majority of the members of the Board unaffiliated
with such person (unless such person beneficially owns shares with at least
15% of such votes on the Effective Date), or (b) individuals who
constitute the directors of the Company at the beginning of a 24-month
period cease to constitute at least two-thirds of all directors at any time
during such period, unless the election of any new or replacement directors
was approved by a vote of at least a majority of the members of the Board in
office immediately prior to such period and of the new and replacement
directors so approved. Notwithstanding anything to the contrary in this
Section 4.4, no Option will become exercisable by virtue of the occurrence of
a Change in Control if the Holder of that Option or any group of which that
Holder is a member is the person whose acquisition constituted the Change
in Control.
ARTICLE V
GENERAL PROVISIONS
5.1 Expiration. The Plan shall terminate whenever the Board adopts
a resolution to that effect. After termination, no additional Options shall
be granted under the Plan, but the Company shall continue to recognize
Options previously granted.
5.2 Amendments, Etc. The Board may from time to time amend, modify,
suspend or terminate the Plan. Nevertheless, no such amendment,
modification, suspension or termination shall impair any Option
theretofore granted under the Plan or deprive any Holder of any shares of
Stock that he may have acquired through or as a result of the Plan without
the consent of the Holder. The Company shall obtain the approval of
shareholders to any amendment or modification of the Plan to the extent
required by Rule 16b-3 under the Exchange Act ("Rule 16b-3") (or any
successor applicable rule) or by the listing requirements of the National
Association of Securities Dealers, Inc. or any stock exchange on which the
Company's securities are quoted or listed for trading.
5.3 Treatment of Proceeds. Proceeds from the sale of Stock
pursuant to Options granted under the Plan shall constitute general funds of
the Company.
5.4 Effectiveness. This Plan shall be effective on the Effective
Date, subject to approval by the shareholders of the Company in accordance
with applicable law within 12 months before or after the Effective Date.
If the shareholders of the Company do not approve the Plan as specified
above, the Plan as in effect prior to this amendment and restatement shall
remain in effect.
5.5 Fair Market Value. The "Fair Market Value" of a share of Stock
shall be the last reported sale price of the Stock on the NASDAQ National
Market System on the day the determination is to be made, or if no sale
took place on such day, the average of the closing bid and asked prices of
the Stock on the NASDAQ National Market System on such day, or if the market
is closed on such day, the last day prior to the date of determination on
which the market was open for the transaction of business, as reported by
NASDAQ. If, however, the Stock should be listed or admitted for trading on
a national securities exchange, the Fair Market Value of a share of the Stock
shall be the last sales price, or if no sales took place, the average of
the closing bid and asked prices on the day the determination is to be made,
or if the market is closed on such day, the last day prior to the date of
determination on which the market was open for the transaction of business,
as reported in the principal consolidated transaction reporting system for
the principal national securities exchange on which the Stock is listed or
admitted for trading. If the Stock is not listed or traded on NASDAQ or on
any national securities exchange, the Fair Market Value for purposes of the
grant of Options under the Plan shall be determined by the Committee in
good faith in its sole discretion.
5.6 Section Headings. The Section headings are included herein
only for convenience, and they shall have no effect on the interpretation of
the Plan.
5.7 Severability. If any article, section, subsection or specific
provision is found to be illegal or invalid for any reason, such illegality
or invalidity shall not affect the remaining provisions of the Plan, and the
Plan shall be construed and enforced as if such illegal and invalid provision
had never been set forth in the Plan.
5.8 Rule 16b-3. This Plan is intended to comply with the
requirements of Rule 16b-3 and any successor applicable rule so that grants
under the Plan will not affect the status of non-employee directors as
disinterested persons for purposes of Rule 16b-3 and that such grants will
otherwise satisfy the requirements of Rule 16b-3. To the extent the Plan
does not conform to such requirements, it shall be deemed amended to so
conform without any further action on the part of the Board of Directors or
shareholders.
Amended and restated as of January 20, 1997.
ELECTRONIC FAB TECHNOLOGY CORP.
By: Jack Calderon
President and Chief Executive Officer
TABLE OF CONTENTS
Page
ARTICLE I - GENERAL 1
1.1 Definition 1
1.2 Nature of Options 1
ARTICLE II - OPTIONS 1
2.1 Participation 1
2.2 Grant 2
2.3 Terms 2
ARTICLE III - AUTHORIZED STOCK 4
3.1 The Stock 4
3.2 Adjustments for Stock Split, Stock Dividend, Etc. 4
3.3 Adjustments for Certain Distributions of Property 5
3.4 Distributions of Capital Stock and Indebtedness 5
3.5 No Rights as Shareholder 5
3.6 Fractional Shares 5
ARTICLE IV - CORPORATE REORGANIZATION; CHANGE OF CONTROL 5
4.1 Reorganization 5
4.2 Required Notice 6
4.3 Acceleration of Exercisability 6
4.4 Change of Control 6
ARTICLE V - GENERAL PROVISIONS 7
5.1 Expiration 7
5.2 Amendments, Etc. 7
5.3 Treatment of Proceeds 7
5.4 Effectiveness 7
5.5 Fair Market Value 7
5.6 Section Headings 7
5.7 Severability 8
5.8 Rule 16b-3 8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>4
<TEXT>
PROMISSORY NOTE
Principal $15,000,000.00 Loan Date 02-24-1997 Maturity 06-05-1998
Loan No Call collateral Account 2755863331 Officer 309 Initials
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item
Borrower: ELECTRONIC FAB TECHNOLOGY CORP., COLORADO
CORPORATION
7251 WEST 4TH STREET
GREELEY, CO 80634
Lender: BANK ONE, COLORADO, N.A.
DOWNTOWN GREELEY BANKING CENTER
2696 SOUTH COLORADO BLVD.
DENVER, CO 80222
Principal Amount: $15,000,000.00 Initial Rate: 8.500% Date of Note:
February 24, 1997
PROMISE TO PAY. ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
( Borrower ) promises to pay to BANK ONE, COLORADO, N.A. ( Lender ), or
order, In lawful money of the United States of America, the principal
amount of Fifteen Million & 00/100 Dollars ($15,000,000.00) or so much
as may be outstanding, together with Interest on the unpaid outstanding
principal balance of each advance. Interest shall be calculated from the
date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan In one payment of all outstanding
principal plus all accrued unpaid interest on June 5,1998. In addition,
Borrower will pay regular monthly payments of accrued unpaid Interest
beginning April 5, 1997, and all subsequent Interest payments are due on
the same day of each month after that Interest on this Note is computed
on a 365/360 simple interest basis; that is, by applying the ratio of
the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days
the principal balance is outstanding. Borrower will pay Lender at
Lenders address shown above or at such other place as Lender may
designate in writing. Unless otherwise agreed or required by applicable
law, payments will be applied first to accrued unpaid interest, then to
principal, and any remaining amount to any unpaid collection costs and
late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on changes in an index which is the
LENDER S PRIME RATE (the index). PRIME RATE IS THE LENDER S BASE
LENDING
RATE AS ANNOUNCED BY THE LENDER FROM TIME TO TIME AT ITS
SOLE
DISCRETION. AT ANY GIVEN TIME, THE LENDER MAY MAKE LOANS, AT,
ABOVE, OR
BELOW ITS PRIME RATE. Lender will tell Borrower the current Index rate
upon Borrowers request. Borrower understands that Lender may make loans
based on other rates as well. The interest rate change will not occur
more often than each DAY. The Index currently Is 8250% per annum. The
Interest rate to be applied to the unpaid principal balance of this Note
will be at a rate of 0.250 percentage points over the Index, resulting
In an Initial rate of 8.500% per annum. NOTICE: Under no circumstances
will the interest rate on this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan
fees
and other prepaid finance charges are earned fully as of the date of the
loan and will not be subject to refund upon early payment (whether
voluntary or as a result of default), except as otherwise required by
law. In any event, even upon full prepayment of this Note, Borrower
understands that Lender is entitled to a minimum interest charge of
$25.00. Other than Borrower s obligation to pay any minimum interest
charge, Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to
by Lender in writing, relieve Borrower of Borrowers obligation to
continue to make payments of accrued unpaid interest. Rather, they will
reduce the principal balance due.
DEFAULT. Borrower will be in default if any of the following happens:
(a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or
to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any
other agreement or loan Borrower has with Lender. (c) Borrower defaults
under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, In favor of any other creditor
or person that may materially affect any of Borrower s property or
Borrower s ability to repay this Note or perform Borrower s obligations
under this Note or any of the Related Documents. (d) Any representation
or statement made or furnished to Lender by Borrower or on Borrower s
behalf is false or misleading in any material respect either now or at
the time made or furnished. (e) Borrower becomes insolvent, a receiver
is appointed for any part of Borrowers property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (f) Any creditor tries to take any of Borrowers
property on or in which Lender has a lien or security interest. This
includes a garnishment of any of Borrower s accounts with Lender. (g)
Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrowers financial condition, or
Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
LENDER S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, without notice, and then Borrower will pay that amount.
Upon default, including failure to pay upon final maturity, Lender, at
its option, may also, il permitted under applicable law, do one or both
of the following: (a) increase the variable interest rate on this Note
to 25.000% per annum, and (b) add any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid at the
rate provided in this Note (including any increased rate). The interest
rate will not exceed the maximum rate permitted by applicable law.
Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower also will pay Lender that amount. This
includes, subject to any limits under applicable law, Lenders attorneys
fees and Lender s legal expenses whether or not there is a lawsuit,
including attorneys fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. If not prohibited by applicable law, Borrower also will pay
any court costs, in addition to all other sums provided by law. This
Note has been delivered to Lender and accepted by Lender In the State of
Colorado. It there Is a lawsuit, Borrower agrees upon Lender s request
to submit to the jurisdiction of the courts of WELD County, the State of
Colorado. Lender and Borrower hereby waive the right to any jury trial
tn any action, proceeding, or counterclaim brought by either Lender or
Borrower against the other. This Note shall be governed by and construed
In accordance with the laws of the State of Colorado.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges,
and transfers to Lender all Borrowers right, title and interest in and
to, Borrowers accounts with Lender (whether checking, savings, or some
other account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the future,
excluding however all IRA and Keogh accounts, and all trust accounts for
which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law,
to charge or setoff all sums owing on this Note against any and all such
accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note, as well as directions for payment from Borrowers
accounts, may be requested orally or In writing by Borrower or by an
authorized person. Lender may, but need not, require that all oral
requests be confirmed in writing. Borrower agrees to be liable for all
sums either: (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Borrowers accounts with
Lender. The unpaid principal balance owing on this Note at any time may
be evidenced by endorsements on this Note or by Lenders internal
records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of this Note or any agreement
that Borrower or any guarantor has with Lender, including any agreement
made in connection with the signing of this Note; (b) Borrower or any
guarantor ceases doing business or is insolvent- (c) any guarantor
seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor s guarantee of this Note or any other loan with Lender; or (d)
Borrower has applied funds provided pursuant to this Note for purposes
other than those authorized by Lender.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Nob, and unless
otherwise expressly stated in writing, no party who signs this Note,
whether as maker guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan, or release any
party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender s security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with
whom the modification is made.
02-24-1997 PROMISSORY NOTE Page 2
Loan No (Continued)
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD
ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO CORPORATION
By: JACK CALDERON
JACK CALDERON, PRESIDENT & CEO
By: STUART W. FUHLENDORF
STUART W. FUHLENDORF, CFO & TREASURER
PROMISSORY NOTE
Principal $4,900,000.00 Loan Date 02-24-1997 Maturity 05-24-1997 Loan
No Call collateral Account 2755863331 Officer 309 Initials
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item
Borrower: ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
7251 WEST 4TH STREET
GREELEY, CO 80634
Lender: BANK ONE, COLORADO, N.A.
DOWNTOWN GREELEY BANKING CENTER
2696 SOUTH COLORADO BLVD.
DENVER, CO 80222
Principal Amount: $4,900,000.00 Initial Rate: 8.500% Date of Note:
February 24, 1997
PROMISE TO PAY. ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
( Borrower ) promises to pay to BANK ONE, COLORADO, N.A. ( Lender ), or
order, In lawful money of the United States of America, the principal
amount of Four Million Nine Hundred Thousand & 00/100 Dollars
($4,900,000.00), together with Interest on the unpaid outstanding
principal balance from February 24, 1997, until paid in full.
PAYMENT. Borrower will pay this loan In one principal payment of
$4,900,000.00 plus interest on May 24, 1997. This payment due May 24,
1997, will be for all principal and accrued interest not yet paid.
Interest on this Note is computed on a 365/360 simple interest basis;
that is, by applying the ratio of the annual interest rate over a year
of 360 days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is outstanding.
Borrower will pay Lender at Lenders address shown above or at such other
place as Lender may designate in writing. Unless otherwise agreed or
required by applicable law, payments will be applied first to accrued
unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on changes in an index which is the
LENDER S PRIME RATE (the index). PRIME RATE IS THE LENDER S BASE
LENDING
RATE AS ANNOUNCED BY THE LENDER FROM TIME TO TIME AT ITS
SOLE
DISCRETION. AT ANY GIVEN TIME, THE LENDER MAY MAKE LOANS, AT,
ABOVE, OR
BELOW ITS PRIME RATE. Lender will tell Borrower the current Index rate
upon Borrowers request. Borrower understands that Lender may make loans
based on other rates as well. The interest rate change will not occur
more often than each DAY. The Index currently Is 8.250% per annum. The
Interest rate to be applied to the unpaid principal balance of this Note
will be at a rate of 0.250 percentage points over the Index, resulting
In an Initial rate of 8.500% per annum. NOTICE: Under no circumstances
will the interest rate on this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full
prepayment of this Note, Borrower understands that Lender is entitled to
a minimum interest charge of $25.00. Other than Borrower s obligation to
pay any minimum interest charge, Borrower may pay without penalty all or
a portion of the amount owed earlier than it is due. Early payments will
not, unless agreed to by Lender in writing, relieve Borrower of
Borrowers obligation to continue to make payments under the payment
schedule. Rather, they will reduce the principal balance due.
DEFAULT. Borrower will be in default if any of the following happens:
(a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or
to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any
other agreement or loan Borrower has with Lender. (c) Borrower defaults
under any Ioan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, In favor of any other creditor
or person that may materially affect any of Borrower s property or
Borrower s ability to repay this Note or perform Borrower s obligations
under this Note or any of the Related Documents. (d) Any representation
or statement made or furnished to Lender by Borrower or on Borrower s
behalf is false or misleading in any material respect either now or at
the time made or furnished. (e) Borrower becomes insolvent, a receiver
is appointed for any part of Borrowers property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (f) Any creditor tries to take any of Borrowers
property on or in which Lender has a lien or security interest. This
includes a garnishment of any of Borrower s accounts with Lender. (g)
Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrowers financial condition, or
Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
LENDER S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, without notice, and then Borrower will pay that amount.
Upon default, including failure to pay upon final maturity, Lender, at
its option, may also, il permitted under applicable law, do one or both
of the following: (a) increase the variable interest rate on this Note
to 25.000% per annum, and (b) add any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid at the
rate provided in this Note (including any increased rate). The interest
rate will not exceed the maximum rate permitted by applicable law.
Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower also will pay Lender that amount. This
includes, subject to any limits under applicable law, Lenders attorneys
fees and Lender s legal expenses whether or not there is a lawsuit,
including attorneys fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated postjudgment collection
services. If not prohibited by applicable law, Borrower also will pay
any court costs, in addition to all other sums provided by law. This
Note has been delivered to Lender and accepted by Lender In the State of
Colorado. If there Is a lawsuit, Borrower agrees upon Lender s request
to submit to the jurisdiction of the courts of WELD County, the State of
Colorado. Lender and Borrower hereby waive the right to any jury trial
to any action, proceeding, or counterclaim brought by either Lender or
Borrower against the other. This Note shall be governed by and construed
In accordance with the laws of the State of Colorado.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges,
and transfers to Lender all Borrowers right, title and interest in and
to, Borrowers accounts with Lender (whether checking, savings, or some
other account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the future,
excluding however all IRA and Keogh accounts, and all trust accounts for
which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law,
to charge or setoff all sums owing on this Note against any and all such
accounts.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker guarantor, accommodation maker or endorser, shall
be released from liability. All such parties agree that Lender may renew
or extend (repeatedly and for any length of time) this loan, or release
any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender s security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with
whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD
ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO CORPORATION
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, CFO & TREASURER
PROMISSORY NOTE
Principal $1,800,000.00 Loan Date 02-24-1997 Maturity 04-05-2002 Loan
No Call collateral Account 2755863331 Officer 309 Initials
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item
Borrower: ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
7251 WEST 4TH STREET
GREELEY, CO 80634
Lender: BANK ONE, COLORADO, N.A.
DOWNTOWN GREELEY BANKING CENTER
2696 SOUTH COLORADO BLVD.
DENVER, CO 80222
Principal Amount: $1,800,000.00 Initial Rate: 8.950% Date of Note:
February 24, 1997
PROMISE TO PAY. ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
( Borrower ) promises to pay to BANK ONE, COLORADO, N.A. ( Lender ), or
order, In lawful money of the United States of America, the principal
amount of One Million Eight Hundred Thousand & 00/100 Dollars
($1,800,000.00), together with Interest on the unpaid outstanding
principal balance from February 24, 1997, until paid in full.
PAYMENT. Subject to any payment changes resulting from changes in the
index, Borrower willpay this loan in 60 regualr payments of $36,983.00
each and one irregular last payment estimated at $41,346.99. Borrower's
first payment is due April 5, 1997, and all subsequent payments are due
on the same day of each month after that. Borrowr's final payment due
April 5, 2002, will be for all principal and all accrued interest not
yet paid. Payments include principal and interest. Interest on this
Note is computed on a 365/360 simple interest basis; that is, by
applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding. Borrower
will pay Lender at Lenders address shown above or at such other place as
Lender may designate in writing. Unless otherwise agreed or required by
applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid
collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on changes in an independent index which
is the Weekly Average Yield on United States Treasury Securities
adjusted to a constant maturity of (5) five years, as made available by
the Federal Reserve Board (the "Index"). The Index is not necessarily
the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loand, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower
the current Index rate upon Borrower's request. Borrower understands
that Lender may make loans based on other rates as well. The interest
rate change will not occur more often than each Five years. The Index
currently is 6.200% per annum. The interest rate to be applied to the
unpaid principal balance of this Note will be at a rate of 2.750
percentage points over the Index, resulting in an initial rate of 8.950%
per annum. NOTICE: Under no circumstances will the interest rate on this
Note be more than the maximum rate allowed by applicable law. Whenever
increases occur in the interest rate, Lender, at its option, may do one
or more of the following: (a) increase Borrower's payments to ensure
Borrower's loan will pay off by its original final maturity date, (b)
increase Borrower's payments to cover accruing interest, (c) increase
the number of Borrower's payments, and (d) continue Borrower's payments
at the same amount and increase Borrower's final payment.
PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan
fees
and other prepaid finance charges are earned fully as of the date of the
loan and will not be subject to refund upon early payment(whether
voluntary or as a result of default), except as other wise required by
law. In any event, even upon full prepayment of this Note, Borrower
understands that Lender is entitled to a minimum interest charge of
$25.00. Other than Borrower s obligation to pay any minimum interest
charge, Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to
by Lender in writing, relieve Borrower of Borrowers obligation to
continue to make payments under the payment schedule. Rather, they will
reduce the principal balance due and may result in Borrower making fewer
payments.
DEFAULT. Borrower will be in default if any of the following happens:
(a) Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or
to perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any
other agreement or loan Borrower has with Lender. (c) Borrower defaults
under any Ioan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, In favor of any other creditor
or person that may materially affect any of Borrower s property or
Borrower s ability to repay this Note or perform Borrower s obligations
under this Note or any of the Related Documents. (d) Any representation
or statement made or furnished to Lender by Borrower or on Borrower s
behalf is false or misleading in any material respect either now or at
the time made or furnished. (e) Borrower becomes insolvent, a receiver
is appointed for any part of Borrowers property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (f) Any creditor tries to take any of Borrowers
property on or in which Lender has a lien or security interest. This
includes a garnishment of any of Borrower s accounts with Lender. (g)
Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrowers financial condition, or
Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
LENDER S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, without notice, and then Borrower will pay that amount.
Upon default, including failure to pay upon final maturity, Lender, at
its option, may also, if permitted under applicable law, do one or both
of the following: (a) increase the variable interest rate on this Note
to 25.000% per annum, and (b) add any unpaid accrued interest to
principal and such sum will bear interest therefrom until paid at the
rate provided in this Note (including any increased rate). The interest
rate will not exceed the maximum rate permitted by applicable law.
Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower also will pay Lender that amount. This
includes, subject to any limits under applicable law, Lenders attorneys
fees and Lender s legal expenses whether or not there is a lawsuit,
including attorneys fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated postjudgment collection
services. If not prohibited by applicable law, Borrower also will pay
any court costs, in addition to all other sums provided by law. This
Note has been delivered to Lender and accepted by Lender In the State of
Colorado. If there Is a lawsuit, Borrower agrees upon Lender s request
to submit to the jurisdiction of the courts of WELD County, the State of
Colorado. Lender and Borrower hereby waive the right to any jury trial
to any action, proceeding, or counterclaim brought by either Lender or
Borrower against the other. This Note shall be governed by and construed
In accordance with the laws of the State of Colorado.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges,
and transfers to Lender all Borrowers right, title and interest in and
to, Borrowers accounts with Lender (whether checking, savings, or some
other account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the future,
excluding however all IRA and Keogh accounts, and all trust accounts for
which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law,
to charge or setoff all sums owing on this Note against any and all such
accounts.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker guarantor, accommodation maker or endorser, shall
be released from liability. All such parties agree that Lender may renew
or extend (repeatedly and for any length of time) this loan, or release
any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender s security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with
whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD
ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO CORPORATION
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, CFO & TREASURER
COMMERCIAL SECURITY AGREEMENT
Principal Loan date 02-24-1997 Maturity 05-24-1997 Loan No Call
collateral Account 2755863331
Officer 309 Initials
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
Borrower: ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
7251 WEST 4TH STREET
GREELEY, CO 80634
Lender: BANK ONE, COLORADO, N.A.
DOWNTOWN GREELEY BANKING CENTER
2696 SOUTH COLORADO BLVD.
DENVER, CO 80222
Grantor: ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO
CORPORATION,
CURRENT ELECTRONICS (WASHINGTON), INC., A WASHINGTON
CORPORATION and CURRENT ELECTRONICS, INC., AN OREGON
CORPORATION f/k/a CURRENT MERGER CORP.
THIS COMMERCIAL SECURITY AGREEMENT 15 entered Into among
ELECTRONIC FAB
TECHNOLOGY CORP., A COLORADO CORPORATION (referred to below as
"Borrower"); ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO
CORPORATION,
CURRENT ELECTRONICS (WASHINGTON), INC., A WASHINGTON
CORPORATION and
CURRENT ELECTRONICS, INC., AN OREGON CORPORATION f/k/a
CURRENT MERGER
CORP. (referred to below Individually and collectively as "Grantor");
and BANK ONE, COLORADO, N.A. {referred to below as "Lender"). For
valuable consideration, Grantor grants to Lender a security Interest In
the Collateral to secure the Indebtedness and agrees that Lender shall
have tho rights stated In this Agreement with respect to the Collateral,
In addition to all other rights which Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when
used In this Agreement. Terms not otherwise defined In this Agreement
shall have the meanings attributed to such terms in the Uniform
Commercial Code. All references to dollar amounts shall mean amounts in
lawful money of the United States of America.
Agreement. The word "Agreement means this Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from
time to time, together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time.
Borrower. The word "borrower" means each and every person or entity
signing the Note, including without limitation ELECTRONIC FAB
TECHNOLOGY
CORP., A COLORADO CORPORATION.
Collateral. The word "Collateral means the following described property
of Grantor, whether now owned or hereafter acquired, whether now
existing or hereafter arising, and wherever located:
All Inventory, chattel paper, accounts, equipment, general Intangibles
and fixtures, together with the following specifically described
property: INCLUDING ALL CONTRACT RIGHTS
In addition, the word "Collateral" includes all the following, whether
now owned or hereafter acquired, whether now existing or hereafter
arising, and wherever located:
(a) All attachments, accessions, accessories, tools, parts, supplies,
increases, and additions to and all replacements of and substitutions
for any property described above.
(b) All products and produce of any of the property described in this
Collateral section.
(c) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral section.
(d) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property described
In this Collateral section.
(e) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and Interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
Fixtures are and will be located on the following described real estate:
SEE THE ATTACHED EXHIBIT "B" FOR COMPLETE LEGAL DESCRIPTION
OF FIXTURES.
The record owners of the real property are HEWITSON 1 PROPERTIES, INC.,
HHH PROPERTIES, INC. and D & D SCHMITZ INVESTMENTS, INC.,,
Event of Default. The words event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled events of Default."
Grantor. The word "Grantor" means ELECTRONIC FAB TECHNOLOGY
CORP., A
COLORADO CORPORATION, CURRENT ELECTRONICS (WASHINGTON),
INC., A
WASHINGTON CORPORATION and CURRENT ELECTRONICS, INC., AN
OREGON
CORPORATION f/k\a CURRENT MERGER CORP.. Any Grantor who signs this
Agreement, but does not sign the Note, is signing this Agreement only to
grant a security interest in Grantor's Interest in the Collateral to
Lender and is not personally liable under the Note except as otherwise
provided by contract or law (e.g., personal liability under a guaranty
or as a surety).
Guarantor. The word wGuarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness
Indebtedness. The word lndebtedness" means the indebtedness evidenced by
the Note, including all principal and interest, together with all other
indebtedness and costs and expenses for which Grantor or Borrower is
responsible under this Agreement or under any of the Related Documents.
In addition, the word "Indebtedness" includes all other obligations,
debts and liabilities, plus interest thereon, of Borrower, w any one or
more of them, to Lender, as well as all claims by Lender against
Borrower, or any one or more of them, whether existing now or later;
whether they are voluntary or involuntary, due or not due, direct or
indirect, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable Individually or Jointly with others; whether
Borrower may be obligated as guarantor, surety accommodation party or
otherwise whether recovery upon such indebtedness may be or hereafter
may become barred by any statute of limitations; and whether such
indebtedness may be or hereafter may become otherwise unenforceable.
Lender. The word "lender" means BANK ONE, COLORADO, NA., its
successors
and assigns.
Note. The word "Note" means the note or credit agreement dated February
24, 1997, In the principal amount of $4,900,000.00 from Borrower to
Lender, together with all renewals of, extensions of, modifications of,
refinancing of, consolidations of and substitutions for the nob or
credit agreement.
Related Documents. The words rRelated Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other Instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
BORROWER'S WAIVERS AND RESPONSIBILITIES. Except as otherwise
required
under this Agreement or by applicable law, (a) Borrower agrees that
Lender need not tell Borrower about any action or inaction Lender takes
In connection with this Agreement; (b) Borrower assumes the
responsibility for being and keeping Informed about the Collateral; and
(c) Borrower waives any defenses that may arise because of any action or
inaction of Lender, including without limitation any failure of Lender
to realize upon the Collateral or any delay by Lender in realizing upon
the Collateral; and Borrower agrees to remain liable under the Note no
matter what action Lender takes or fails to take under this Agreement.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants
that: (a)
this Agreement is executed at Borrower's request and not at the request
of Lender; (b) Grantor has the full right, power and authority to enter
into this Agreement and to pledge the Collateral to Lender; (c) Grantor
has established adequate means of obtaining from Borrower on a
continuing basis Information about Borrower's financial condition; and
(d) Lender has made no representation to Grant about Borrower or
Borrower's creditworthiness.
GRANTOR'S WAIVERS. Grantor waives all requirements of presentment,
protest, demand, and notice of dishonor or non-payment to Grantor
Borrower, or any other party to the Indebtedness or the Collateral.
Lender may do any of the following with respect to any obligation of any
Borrower without first obtaining the consent of Grantor: (a) grant any
extension of time for any payment, (b) grant any renewal, (c) permit any
modification of payment terms or other terms, or (d) exchange or release
any Collateral or other security. No such act or failure to act shall
affect Lender's rights against Grantor or the Collateral.
02-24-1997 COMMERCIAL SECURITY AGREEMENT Page 2 Loan No
(Continued)
If now or hereafter (a) Borrower shall be or become insolvent, and (b)
the Indebtedness shall not at all times until paid be fully secured by
collateral pledged by Borrower, Grantor hereby forever waives and
relinquishes in favor of Lender and Borrower, and their respective
successors, any claim or right to payment Grantor may now have or
hereafter have or acquire against Borrower, by subrogation or otherwise,
so that at no time shall Grantor be or become a creditor" of Borrower
within the meaning of 11 U.S.C. section 547(b), or any successor
provision of the Federal bankruptcy laws.
RIGHT OF SETOFF. Grantor hereby grants Lender a contractual possessory
security interest in and hereby assigns, conveys, delivers, pledges, and
transfers all of Grantor s right, title and interest in and to Grantor s
accounts with Lender (whether checking, savings, or some other account),
including all accounts held jointly with someone else and all accounts
Grantor may open in the future, excluding, however, all IRA and Keogh
accounts, and all trust accounts for which the grant of a security
interest would be prohibited by law. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all Indebtedness
against any and all such accounts.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as
follows:
Perfection of Security Interest. Grantor agrees to execute such
financing statements and to take whatever other actions are requested by
Lender to perfect and continue Lenders security interest In the
Collateral. Upon request of Lender, Grantor will deliver to Lender any
and all of the documents evidencing or constituting the Collateral, and
Grantor will note Lenders interest upon any and all chattel paper if not
delivered to Lender for possession by Lender. Grantor hereby appoints
Lender as its irrevocable attorney-in-fact for the purpose of executing
any documents necessary to perfect or to continue the security interest
granted in this Agreement. Lender may at any time, and without further
authorization from Grantor, file a carbon, photographic or other
reproduction of any financing statement or of this Agreement for use as
a financing statement. Grantor will reimburse Lender for all expenses
for the perfection and the continuation of the perfection of Lender s
security interest In the Collateral. Grantor promptly will notify Lender
before any change in Grantors name including any change to the assumed
business names of Grantor. This Is a continuing Security Agreement and
will continue In effect even though all or any part of the Indebtedness
Is paid In full and even though for a period of time Borrower may not be
Indebted to Lender.
No Violation. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is a
party, and its articles or agreements relating to entity incorporation,
organization or existence do not prohibit any term or condition of this
Agreement.
Enforceability of Collateral. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with
applicable laws concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral
have authority and capacity to contract and are in fact obligated as
they appear to be on the Collateral. At the time any account becomes
subject to a security interest in favor of Lender, the account shall be
a good and valid account representing an undisputed, bona fide
indebtedness incurred by the account debtor, for merchandise held
subject to delivery instructions or theretofore shipped or delivered
pursuant to a contract of sale, or for services theretofore performed by
Grantor with or for the account debtor; there shall be no setoffs or
counterclaims against any such account; and no agreement under which any
deductions or discounts may be claimed shall have been made with the
account debtor except those disclosed to Lender in writing.
Location of the Collateral. Grantor, upon request of Lender, will
deliver to Lender in form satisfactory to Lender a schedule of real
properties and Collateral locations relating to Grantors operations,
including without limitation the following: (a) all real property owned
or being purchased by Grantor; (b) all real property being rented or
leased by Grantor; (c) all storage facilities owned, rented, leased, or
being used by Grantor; and (d) all other properties where Collateral is
or may be located. Except in the ordinary course of its business,
Grantor shall not remove the Collateral from its existing locations
without the prior written consent of Lender.
Removal of Collateral. Grantor shall keep the Collateral (or to the
extent the Collateral consists of intangible property such as accounts
the records concerning the Collateral) at Grantor s address shown above,
or at such other locations as are acceptable to Lender. Some or all of
the Collateral may be located at the real property described above.
Except in the ordinary course of its business, including the sales of
inventory, Grantor shall not remove the Collateral from its existing
locations without the prior written consent of Lender. To the extent
that the Collateral consists of vehicles, or other titled property,
Grantor shall not take or permit any action which would require
application for certificates of title for the vehicles outside the State
of Colorado, without the prior written consent of Lender.
Transactions Involving Collateral. Except for inventory sold or accounts
collected in the ordinary course of Grantor s business, Grantor shall
not sell, offer to sell, or otherwise transfer or dispose of the
Collateral. While Grantor Is not in default under this Agreement,
Grantor may sell inventory, but only in the ordinary course of its
business and only to buyers who qualify as a buyer in the ordinary
course of business. A sale in the ordinary course of Grantors business
does not include a transfer in partial or total satisfaction of a debt
or any bulk sale. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien, security
Interest, encumbrance, or charge, other than the security interest
provided for in this Agreement, without the prior written consent of
Lender. This includes security interests even If Junior in right to the
security interests granted under this Agreement. Unless waived by
Lender, all proceeds from any disposition of the Collateral (for
whatever reason) shall be held in trust for Lender and shall not be
commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other disposition.
Upon receipt, Grantor shall immediately deliver any such proceeds to
Lender.
Title. Grantor represents and warrants to Lender that it holds good and
marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing
statement covering any of the Collateral is on file in any public office
other than those which reflect the security Interest created by this
Agreement or to which Lender has specifically consented. Grantor shall
defend Lender s rights in the Collateral against the claims and demands
of all other persons.
Collateral Schedules and Locations. As often as Lender shall require,
and insofar as the Collateral consists of accounts and general
intangibles, Grantor shall deliver to Lender schedules of such
Collateral, including such Information as Lender may require, including
without limitation names and addresses of account debtors and agings of
accounts and general intangibles. Insofar as the Collateral consists of
inventory and equipment, Grantor shall deliver to Lender, as often as
Lender shall require, such lists, descriptions, and designations of such
Collateral as Lender may require to identify the nature, extent, and
location of such Collateral. Such information shall be submitted for
Grantor and each of its subsidiaries or related companies.
Maintenance and Inspection of Collateral. Grantor shall maintain all
tangible Collateral in good condition and repair. Grantor will not
commit or permit damage to or destruction of the Collateral or any part
of the Collateral. Lender and its designated representatives and agents
shall have the right at all reasonable times to examine, inspect, and
audit the Collateral wherever located. Grantor shall immediately notify
Lender of all cases involving the return, rejection, repossession, loss
or damage of or to any Collateral; of any request for credit or
adjustment or of any other dispute arising with respect to the
Collateral; and generally of all happenings and events affecting the
Collateral or the value or the amount of the Collateral.
Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the
Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor is
in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender s interest in the Collateral is
not Jeopardized in Lenders sole opinion. If the Collateral is subjected
to a lien which is not discharged within fifteen (15) days, Grantor
shall deposit with Lender cash, a sufficient corporate surety bond or
other security satisfactory to Lender in an amount adequate to provide
for the discharge of the lien plus any interest, costs, attorneys fees
or other charges that could accrue as a result of foreclosure or sale of
the Collateral. In any contest Grantor shall defend itself and Lender
and shall satisfy any final adverse Judgment before enforcement against
the Collateral. Grantor shall name Lender as an additional obligee under
any surety bond furnished in the contest proceedings.
Compliance With Governmental Requirements. Grantor shall comply promptly
with all laws, ordinances, rules and regulations of all governmental
authorities, now or hereafter in effect, applicable to the ownership,
production, disposition, or use of the Collateral. Grantor may contest
In good faith any such law, ordinance or regulation and withhold
compliance during any proceeding, including appropriate appeals, so long
as Lenders Interest in the Collateral, in Lenders opinion, is not
jeopardized.
Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used for the generation, manufacture,
storage, transportation, treatment, disposal, release or threatened
release of any hazardous waste or substance, as those terms are defined
in the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No 90-499
( SARA ), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or Federal laws, rules,
or regulations adopted pursuant to any of the foregoing. The terms
"hazardous waste" and "hazardous substance" shall also include, without
limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos. The representations and warranties contained herein are
based on Grantors due diligence in investigating the Collateral for
hazardous wastes and substances. Grantor hereby (a) releases and waives
any future claims against Lender for indemnity or contribution in the
event Grantor becomes liable for cleanup or other costs under any such
laws, and (b) agrees to indemnify and hold harmless Lender against any
and alt claims and losses resulting from a breach of this provision of
this Agreement. This obligation to indemnify shall survive the payment
of the Indebtedness and the satisfaction of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other Insurance as Lender may
require with respect to the Collateral, In form, amounts, coverages and
basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon request of
Lender,02-24-1997 COMMERCIAL SECURITY AGREEMENT Page 3
Loan No (Continued)
will deliver to Lender from time to time the policies or certificates of
insurance in form satisfactory to Lender, Including stipulations that
coverages will not be cancelled or diminished without at least ten (10)
days' prior written notice to Lender and not including any disclaimer of
the insurer's liability for failure to give such a notice. Each
insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act,
omission or default of Grantor or any other person. In connection with
all policies covering assets in which Lender holds or is offered a
security interest, Grantor will provide Lender with such loss payable or
other endorsements as Lender may require. If Grantor at any time fails
to obtain or maintain any insurance as required under this Agreement,
Lender may (but shall not be obligated to) obtain such insurance as
Lender deems appropriate, including if it so chooses "single interest
insurance," which will cover only Lender's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify Lender
of any loss or damage to the Collateral. Lender may make proof of loss
if Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds
thereon, shall be held by Lender as part of the Collateral. It Lender
consents to repair or replacement of the damaged or destroyed
Collateral, Lender shall, upon satisfactory proof of expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration. If Lender does not consent to repair or replacement of the
Collateral, Lender shall retain a sufficient amount of the proceeds to
pay all of the Indebtedness, and shall pay the balance to Grantor. Any
proceeds which have not been disbursed within six (6) months after their
receipt and which Grantor has not committed to the repair or restoration
of the Collateral shall be used to prepay the Indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be
created by monthly payments from Grantor of a sum estimated by Lender to
be sufficient to produce, at least fifteen (15) days before the premium
due date, amounts at least equal to the insurance premiums to be paid.
If fifteen (15) days before payment is due, the reserve funds are
insufficient, Grantor shall upon demand pay any deficiency to Lender.
The reserve funds shall be held by Lender as a general deposit and shall
constitute a noninterest-bearing account which Lender may satisfy by
payment of the insurance premiums required to be paid by Grantor as they
become due. Lender does not hold the reserve funds in trust for Grantor,
and Lender is not the agent of Grantor for payment of the insurance
premiums required to be paid by Grantor. The responsibility for the
payment of premiums shall remain Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(a) the name of the insurer; (b) the risks Insured; (c) the amount of
the policy, (d) the property insured, (e) the then current value on the
basis of which insurance has been obtained and the manner of determining
that value; and (f) the expiration date of the policy. In addition,
Grantor shall upon request by Lender (however not more often than
annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the
Collateral.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until
default and
except as otherwise provided below with respect to accounts, Grantor may
have possession of the tangible personal property and beneficial use of
all the Collateral and may use it in any lawful manner not inconsistent
with this Agreement or the Related Documents, provided that Grantor's
right to possession and beneficial use shall not apply to any Collateral
where possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral. Until otherwise
notified by Lender, Grantor may collect any of the Collateral consisting
of accounts. At any time and even though no Event of Default exists,
Lender may exercise its rights to collect the accounts and to notify
account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any
Collateral. whether before or after an Event of Default, Lender shall be
deemed to have exercised reasonable care in the custody and preservation
of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall
deem appropriate under the circumstances, but failure to honor any
request by Grantor shall not of Itself be deemed to be a failure to
exercise reasonable care. Lender shall not be required to take any steps
necessary to preserve any rights in the Collateral against prior
parties, nor to protect, preserve or maintain any security interest
given to secure the Indebtedness.
EXPENDITURES BY LENDER. if not discharged or paid when due, Lender
may
(but shall not be obligated to) discharge or pay any amounts required to
be discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may
(but shall not be obligated to) pay all costs for insuring, maintaining
and preserving the Collateral. All such expenditures incurred or paid by
Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses shall become a part of the
Indebtedness and at Lender's option, will (a) be payable on demand, (b)
be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (i)
the term of any applicable insurance policy or (ii) the remaining term
of the Note, or (c) be treated as a balloon payment which will be due
and payable at the Note's maturity. This Agreement also will secure
payment of these amounts. Such right shall be in addition to all other
rights and remedies to which Lender may be entitled upon the occurrence
of an Event of Default.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
Default on Indebtedness. Failure of Borrower to make any payment when
due on the Indebtedness.
Other Defaults. Failure of Grantor or Borrower to comply with or to
perform any other term, obligation, covenant or condition contained in
this Agreement or in any of the Related Documents or failure of Borrower
to comply with or to perform any term, obligation, covenant or condition
contained in any other agreement between Lender and Borrower.
Default In Favor of Third Parties. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of the
Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor or Borrower under this
Agreement, the Note or the Related Documents is false or misleading in
any material respect, either now or at the time made or furnished.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any collateral documents to create a valid and perfected security
interest or lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor or Borrower's
existence as a going business, the insolvency of Grantor or Borrower,
the appointment of a receiver for any part of Grantor or Borrower's
properly, any assignment for the benefit of creditors, any type of
creditor workout or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Grantor or Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding self-help
repossession or any other method, by any creditor of Grantor or Borrower
or by any governmental agency against the Collateral or any other
collateral securing the Indebtedness. This includes a garnishment of any
of Grantor or Borrower's deposit accounts with Lender.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or such Guarantor
dies or becomes incompetent.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under
this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Colorado Uniform Commercial Code. In addition
and without limitation, Lender may exercise any one or more of the
following rights and remedies:
Accelerate Indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Borrower would be required to
pay, Immediately due and payable, without notice.
Assemble Collateral. Lender may require Grantor to deliver to Lender all
or any portion of the Collateral and any and all certificates of title
and other documents relating to the Collateral. Lender may require
Grantor to assemble the Collateral and make it available to Lender at a
place to be designated by Lender. Lender also shall have full power to
enter upon the property of Grantor to take possession of and remove the
Collateral. If the Collateral contains other goods not covered by this
Agreement at the time of repossession, Grantor agrees Lender may take
such other goods, provided that Lender makes reasonable efforts to
return them to Grantor after repossession.
Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
its own name or that of Grantor. Lender may sell the Collateral at
public auction or private sale. Unless the Collateral threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, Lender will give Grantor reasonable notice of the
time after which any private sale or any other Intended disposition of
the Collateral is to be made. The requirements of reasonable notice
shall be met If such notice is given at least ten (10) days before the
time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the expenses
of retaking, holding, insuring, preparing for sale and selling the
Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with Interest at the Note rate
from date of expenditure until repaid.
Appoint Receiver. To the extent permitted by applicable law, Lender
shall have the following rights and remedies regarding the appointment
of a receiver: (a) Lender may haw a receiver appointed as a maker of
right, (b) the receiver may be an employee of Lender and may serve
without bond, and (c) all fees of the receiver and his or her attorney
shall become part of the Indebtedness secured by this Agreement and
shall be payable on demand, with interest at the Note rate from date of
expenditure until repaid. The receiver may be appointed by a court of
competent jurisdiction upon ex parte application and without notice,
notice being expressly waived.
02-24-1997 COMMERCIAL SECURITY AGREEMENT
Loan No (Continued)
Page 4
Collect Revenues Apply Accounts. Lender either itself or through a
receiver may collect the payments rents income and revenues from the
Collateral. Lender may at any time in its discretion transfer any
Collateral into its own name or that of its nominee and receive the
payments rents income and revenues therefrom and hold the same as
security for the Indebtedness or apply it to payment of the Indebtedness
in such order of preference as Lender may determine. Insofar as the
Collateral consists of accounts general intangibles insurance policies
instruments chattel paper choses in action or similar property Lender
may demand collect receipt for settle compromise adjust sue for
foreclose or realize on the Collateral as Lender may determine whether
or not Indebtedness or Collateral is then due. For these purposes Lender
may on behalf of and in the name of Grantor receive open and dispose of
mail addressed to Grantor- change any address to which mail and payments
are to be sent; and endorse notes checks drafts money orders documents
of title instruments and items pertaining to payment shipment or storage
of any Collateral. To facilitate collection Lender may notify account
debtors and obligors on any Collateral to make payments directly to
Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the
Collateral Lender may obtain a Judgment against Borrower for any
deficiency remaining on the Indebtedness due to Lender after application
of all amounts received from the exercise of the rights provided in this
Agreement Borrower shall be liable for a deficiency even if the
transaction described In this subsection is a sale of accounts or
chattel paper.
Other Rights and Remedies. Lender shall have all the rights and remedies
of a secured creditor under the provisions of the Uniform Commercial
Code as may be amended from time to time. tn addition Lender shall have
and may exercise any or all other rights and remedies it may have
available at law in equity or otherwise.
Cumulative Remedies. All of Lenders rights and remedies whether
evidenced by this Agreement or the Related Documents or by any other
writing shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy and an election to make expenditures or to
take action to perform an obligation of Grantor or Borrower under this
Agreement after Grantor or Borrower s failure to perform shall not
affect Lender s right to declare a default and to exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are
a
part of this Agreement:
Amendments. This Agreement together with any Related Documents
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
Applicable Law. This Agreement has been delivered to Lender and accepted
by Lender in the State of Colorado. If there is a lawsuit Grantor and
Borrower agree upon Lender s request to submit to the Jurisdiction of
the courts of the State of Colorado. Lender Grantor and Borrower hereby
waive the right to any Jury trial in any action proceeding or
counterclaim brought by either Lender Grantor or Borrower against the
other This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado.
Attorneys Fees; Expenses. Grantor and Borrower agree to pay upon demand
all of Lenders costs and expenses including attorneys fees and Lenders
legal expenses incurred in connection with the enforcement of this
Agreement. Lender may pay someone else to help enforce this Agreement
and Grantor and Borrower shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender s attorneys fees and
legal expenses whether or not there is a lawsuit including attorneys
fees and legal expenses for bankruptcy proceedings (and including
efforts to modify or vacate any automatic stay or injunction) appeals
and any anticipated post-Judgment collection services. Grantor and
Borrower also shall pay all court costs and such additional fees as may
be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Multiple Parties; Corporate Authority. All obligations of Grantor and
Borrower under This Agreement shall be Joint and several and all
references lo Borrower shall mean each and every Borrower and all
references to Grantor shall mean each and every Grantor. This means that
each of the Borrowers signing below is responsible for all obligations
in this Agreement.
Notices. All notices required to be given under this Agreement shall be
given in writing may be sent by telefacsimilie and shall be effective
when actually delivered or when deposited with a nationally recognized
overnight courier or deposited in the United States mail flrst class
postage prepaid addressed to the party to whom the notice is to be given
at The address shown above. Any party may change its address for notices
under this Agreement by giving formal written notice to the other
parties specifying that the purpose of the notice is to change the
partys address. To the extent permitted by applicable law if there is
more than one Grantor or Borrower notice to any Grantor or Borrower will
constitute notice to all Grantor and Borrowers. For notice purposes
Grantor and Borrower will keep Lender informed at all times of Grantor
and Borrower s current address(es).
Power of Attorney. Grantor hereby appoints Lender as its true and lawful
attorney-in-fact Irrevocably with full power of substitution to do the
following: (a) to demand collect receive receipt for sue and recover all
sums of money or other property which may now or hereafter become due
owing or payable from the Collateral; (b) to execute sign and endorse
any and all claims instruments receipts checks drafts or warrants issued
in payment for the Collateral; (c) to settle or compromise any and all
claims arising under the Collateral and in the place and stead of
Grantor to execute and deliver its release and settlement for the claim;
and (d) to file any claim or claims or to take any action or institute
or take part in any proceedings either in its own name or in the name of
Grantor or otherwise which In the discretion of Lender may seem to be
necessary or advisable. This power is given as security for the
Indebtedness and the authority hereby conferred is and shall be
irrevocable and shall remain in full force and effect until renounced by
Lender.
Severability. If a court of competent Jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance such finding shall not render that provision Invalid or
unenforceable as to any other persons or circumstances. If feasible any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however if the offending provision
cannot be so modified it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
Successor Interests. subject to the limitations set forth above on
transfer of the Collateral this Agreement shall be binding upon and
inure to the benefit of the parties their successors and assigns.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender
of a provision of this Agreement shall not prejudice or constitute a
waiver of Lender s right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by
Lender nor any course of dealing between Lender and Grantor shall
constitute a waiver of any of Lenders rights or of any of Grantors
obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement the granting of such consent by
Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required and in all cases
such consent may be granted or withheld in the sole discretion of
Lender.
EXHIBIT B . An exhibit titled exhibit B is attached to this Agreement
and by this reference is made a part of this Agreement Just as if all
the provisions terms and conditions of the Exhibit had been fully set
forth in this Agreement.
02-24 1997 COMMERCIAL SECURITY AGREEMENT Page 5
Loan No (Continued)
BORROWER AND GRANTOR ACKNOWLEDGE HAVING READ ALL THE
PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT, AND BORROWER AND GRANTOR
AGREE TO ITS
TERMS. THIS AGREEMENT IS DATED FEBRUARY 24,1997.
BORROWER:
ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO CORPORATION
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, CFO & TREASURER
GRANTOR:
ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO CORPORATION
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, CFO & TREASURER
CURRENT ELECTRONICS (WASHINGTON), INC., A WASHINGTON
CORPORATION
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, VICE PRESIDENT
CURRENT ELECTRONICS AN OREGON CORPORATION f/k/a CURRENT
MERGER CORP.
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, VICE PRESIDENT
EXHIBIT "B"
Principal $ Loan Date 02-24-1997 Maturity 05-24-1997 Loan
No Call Collateral Account 2755863331 Officer 309 Initials
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
Borrower: ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
7251 WEST 4TH STREET
GREELEY, CO 80634
Lender: BANK ONE, COLORADO, N.A.
DOWNTOWN GREELEY BANKING CENTER
2696 SOUTH COLORADO BLVD.
DENVER, CO 80222
This EXHIBIT "B" Is attached to and by this reference Is made a part of
each Security Agreement, dated February 24,1997, and executed In
connection with a loan or other financial accommodations between BANK
ONE, COLORADO, N.A. and ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO
CORPORATION.
ADDRESS OF LOCATION LEGAL PROPERTY DESCRIPTION
1) 101 N. ELLIOTT LOT 7, BLOCK 1, FLIGHTWAY INDUSTRIAL PARK
NEWBERG, OREGON 97132 TO THE CITY OF
NEWBERG, YAMHILL COUNTY,
OREGON
2) 120 S. ELLIOTT LOT 6, BLOCK 2, FLIGHTWAY INDUSTRIAL PARK
NEWBERG, OR 97132 TO THE CITY OF NEWBERG, YAMHILL COUNTY,
OREGON
3) 125 S. ELLIOTT LOT 9, BLOCK 1, FLIGHTWAY INDUSTRIAL PARK
NEWBERG, OR 97132 TO THE CITY OF NEWBERG, YAMHILL COUNTY,
OREGON
4) 115 S. ELLIOTT LOT 8, BLOCK 1, FLIGHTWAY INDUSTRIAL PARK
NEWBERG, OR 97132 TO THE CITY OF NEWBERG, YAMHILL COUNTY,
OREGON
5) 7966 ANDREWS STREET NE
MOSES LAKE, WA 98837
THIS EXHIBIT "B" IS EXECUTED ON FEBRUARY 24, 1997.
X Jack Calderon X Stuart W. Fuhlendorf
LENDER:
BANK ONE, COLORADO, N.A.
By: Sam Leeper
Authorized Officer
LASEP. PR0, Reg. U.S. Pat. S T.M. Olt., Ver. 3.22b (c) 1997 CFI
ProServices, Iric. All rights reserved. {CO-a80 F3.22 ELE2_KB2.LN C3.0VL
BUSINESS LOAN AGREEMENT
Principal $ Loan Date 02-24-1997 Maturity 06-05-1998 Loan No Call
Collateral Account 2755863331 Officer
309 Initials
References in the shaded area are For Lender's use only and do not limit
the applicability of this document to any particular loan or Item.
Borrower: ELECTRONIC FAB TECHNOLOGY CORP., A
COLORADO CORPORATION
7251 WEST 4TH STREET
GREELEY, CO 80634
Lender: BANK ONE, COLORADO, N.A.
DOWNTOWN GREELEY BANKING CENTER
2696 SOUTH COLORADO BLVD.
DENVER, CO 80222
THIS BUSINESS LOAN AGREEMENT between ELECTRONIC FAB
TECHNOLOGY CORP., A
COLORADO CORPORATION ( Borrower ) and BANK ONE, COLORADO, N.A.
("Lender)
Is made and executed on the following terms and conditions. Borrower has
received prior commercial loans from Lender or has applied to Lender tor
a commercial loan or loans and other financial accommodations, Including
those which may be described on any exhibit or schedule attached to this
Agreement. All such loans and financial accommodations, together with
all future loans and financial accommodations from Lender lo Borrower,
are referred to In this Agreement Individually as the Loan and
collectively as the Loans. Borrower understands and agrees that: (a) In
granting, renewing, or extending any Loan, Lender Is relying upon
Borrower s representations, warranties, and agreements, as sel forth In
this Agreement; (b) the granting, renewing, or extending of any Loan by
Lender at all times shall be subject to Lender s sole judgment and
discretion; and (c) all such Loans shall be and shall remain subject to
the following terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of February 24,1997, and
shall continue thereafter until all Indebtedness of Borrower to Lender
has been performed in full and the parties terminate this Agreement in
writing.
DEFINITIONS. The following words shall have the following meanings when
used in this Agreement. Terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms In the Uniform
Commercial Code. All references to dollar amounts shall mean amounts in
lawful money of the United States of America.
Agreement. The word "Agreement" means this Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this Business
Loan Agreement from time to time.
Borrower. The word "Borrower" means ELECTRONIC FAB TECHNOLOGY
CORP., A
COLORADO CORPORATION. The word "Borrower also includes, as
applicable,
all subsidiaries and affiliates of Borrower as provided below in the
paragraph titled Subsidiaries and Affiliates."
CERCLA. The word "CERCLA means the Comprehensive Environmental
Response,
Compensation, and Liability Act of 1980, as amended.
Cash Flow. The words "Cash Flow" mean net income after taxes, and
exclusive of extraordinary gains and income, plus depreciation and
amortization.
Collateral. The word "Collateral means and includes without limitation
all property and assets granted as collateral security for a Loan,
whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in
the form of a security interest, mortgage, deed of trust, assignment,
pledge, chattel mortgage, chattel trust, factors lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any
other security or lien interest whatsoever, whether created by law,
contract, or otherwise.
Debt. The word debt means all of Borrowers liabilities excluding
Subordinated Debt.
ERISA. The word "ERISA"" means the Employee Retirement Income Security
Act of 1974, as amended.
Event of Default. The words "Event of Default mean and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT.
Grantor. The word Grantor means and includes without limitation each and
all of the persons or entities granting a Security Interest in any
Collateral for the Indebtedness, Including without limitation all
Borrowers granting such a Security Interest.
Guarantor. The word Guarantor means and Includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with any Indebtedness.
Indebtedness. The word Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them;
whether now or hereafter existing, voluntary or involuntary, due or not
due, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or Jointly with others; whether
Borrower may be obligated as a guarantor, surety, or otherwise; whether
recovery upon such Indebtedness may be or hereafter may become barred by
any statute of limitations; and whether such Indebtedness may be or
hereafter may become otherwise unenforceable.
Lender. The word "Lender" means BANK ONE, COLORADO, N A., its
successors
and assigns.
Liquid Assets. The words "Liquid Assets" mean Borrower s cash on hand
plus Borrower s readily marketable securities.
Loan. The word "Loan" or "Loans means and includes without limitation
any and all commercial loans and financial accommodations from Lender to
Borrower, whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to
this Agreement from time to time.
Note. The word Note means and includes without limitation Borrower s
promissory note or notes, if any, evidencing Borrower s Loan obligations
In flavor of Lender, as well as any substitute, replacement or
refinancing note or notes therefor.
Permitted Liens. The words "Permitted Liens mean: (a) liens and security
interests securing Indebtedness owed by Borrower to Lender; (b) liens
for taxes, assessments, or similar charges either not yet due or being
contested in good faith; (c) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary
course of business and securing obligations which are not yet
delinquent; (d) purchase money liens or purchase money security
Interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure Indebtedness outstanding on the
date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled Indebtedness and Liens; (e) liens and security
interests which, as of the date of this Agreement, have been disclosed
to and approved by the Lender in writing; and (f) those liens and
security interests which in the aggregate constitute an immaterial and
insignificant monetary amount with respect to the net value of Borrower
s assets.
Related Documents. The words "Related Documents mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages,
deeds of trust, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
Indebtedness.
Security Agreement. The words Security Agreement mean and include
without limitation any agreements, promises, covenants, arrangements
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.
Security Interest. The words "Security Interest mean and include without
limitation any type of collateral security, whether in the form of a
lien, charge, mortgage, deed of trust, assignment, pledge, chattel
mortgage, chattel trust, factor s lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
SARA. The word Sara means the Superfund Amendments and Reauthorization
Act of 1986 as now or hereafter amended.
Subordinated Debt. The words Subordinated Debt mean indebtedness and
liabilities of Borrower which have been subordinated by written
agreement to Indebtedness owed by Borrower to Lender in form and
substance acceptable to Lender.
Tangible Net Worth. The words "Tangible Net Worth mean Borrowers total
assets excluding all intangible assets (I.e., goodwill, trademarks,
patents, copyrights, organizational expenses, and similar Intangible
Items, but including leaseholds and leasehold improvements) less total
Debt.
Working Capital. The words Working Capital mean Borrower s current
assets, excluding prepaid expenses, less Borrower s current liabilities.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lenders obligation to make
the
Initial Loan Advance and each subsequent Loan Advance under this
Agreement shall be subject to the fulfillment to Lenders satisfaction of
all of the conditions set forth In this Agreement and In the Related
Documents.
Loan Documents. Borrower shall provide to Lender in form satisfactory to
Lender the following documents for the Loan: (a) the Note, (b)
Security Agreements granting to Lender security interests in the
Collateral, (c) Financing Statements perfecting Lenders Security
Interests, (d)
02-24-1997 BUSINESS LOAN AGREEMENT
Loan No (Continued)
Page 2
evidence of insurance as required below; and (e) any other documents
required under this Agreement or by Lender or its counsel Including
without limitation any guaranties described below.
Borrowers Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions duly
authorizing the execution and delivery of this Agreement the Note and
the Related Documents and such other authorizations and other documents
and instruments as Lender or its counsel in their sole discretion may
require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all
fees charges and other expenses which are then due and payable as
specified in this Agreement or any Related Document.
Representations and Warranties. The representations and warranties set
forth in this Agreement in the Related Documents and in any document or
certificate delivered to Lender under this Agreement are true and
correct.
No Event of Default. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this
Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to
Lender as of the date of this Agreement as of the date of each
disbursement of Loan proceeds as of the date of any renewal extension or
modification of any Loan and at all times any Indebtedness exists:
Organization. Borrower is a corporation which is duly organized validly
existing and in good standing under the laws of the State of Colorado
and is validly existing and in good standing in all states in which
Borrower is doing business. Borrower has the full power and authority to
own its properties and to transact the businesses in which It is
presently engaged or presently proposes to engage. Borrower also is duly
qualified as a foreign corporation and is in good standing in all states
in which the failure to so qualify would have a material adverse effect
on its businesses or financial condition.
Authorization. The execution, delivery and performance of this Agreement
and all Related Documents by Borrower to the extent to be executed
delivered or performed by Borrower have been duly authorized by all
necessary action by Borrower; do not require the consent or approval of
any other person regulatory authority or governmental body; and do not
conflict with result in a violation of or constitute a default under (a)
any provision of its articles of incorporation or organization or bylaws
or any agreement or other Instrument binding upon Borrower or (b) any
law governmental regulation court decree or order applicable to
Borrower.
Financial Information. Each financial statement of Borrower supplied to
Lender truly and completely disclosed Borrowers financial condition as
of the date of the statement and there has been no material adverse
change in Borrowers financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed In such financial
statements.
Legal effect. THIS Agreement constitutes and any instrument or agreement
required hereunder to be given by Borrower when delivered will
constitute legal valid and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower s financial statements or in writing to Lender and
as accepted by Lender and except for property tax liens for taxes not
presently due and payable Borrower owns and has good title to all of
Borrowers properties free and clear of all Security Interests and has
nol executed any security documents or financing statements relating to
such properties. All of Borrower s properties are titled In Borrower s
legal name and Borrower has not used or filed a financing statement
under any other name for at least the last five (5) years.
Hazardous Substances. The terms hazardous waste hazardous substance
disposal release and threatened release as used in this Agreement shall
have the same meanings as set forth in the "CERCLA SARA the Hazardous
Materials Transportation Act 49 U.S.C. Section 1801 et seq. the Resource
Conservation and Recovery Act 42 U.S.C. Section 6901 et seq. or other
applicable slate or Federal laws rules or regulations adopted pursuant
to any of the foregoing. Except as disclosed to and acknowledged by
Lender In writing Borrower represents and warrants that: (a) During the
period of Borrowers ownership of the properties there has been no use
generation manufacture storage treatment disposal release or threatened
release of any hazardous waste or substance by any person on under about
or from any of the properties. (b) Borrower has no knowledge of or
reason to believe that there has been (i) any use generation manufacture
storage treatment disposal release or threatened release of any
hazardous waste or substance on under about or from the properties by
any prior owners or occupants of any of the properties or (li) any
actual or threatened litigation or claims of any kind by any person
relating to such matters. (c) Neither Borrower nor any tenant contractor
agent or other authorized user of any of the properties shall use
generate manufacture store treat dispose of or release any hazardous
waste or substance on under about or from any of the properties; and any
such activity shall be conducted in compliance with all applicable
federal state and local laws regulations and ordinances including
without limitation those laws regulations and ordinances described
above. Borrower authorizes Lender and its agents to enter upon the
properties to make such inspections and tests as Lender may deem
appropriate to determine compliance of the properties with this section
of the Agreement. Any inspections or tests made by Lender shall be at
Borrower s expense and for Lender s purposes only and shall not be
construed to create any responsibility or liability on the part of
Lender to Borrower or to any other person. The representations and
warranties contained herein are based on Borrowers due diligence in
~~investigating the properties for hazardous waste and hazardous
substances. Borrower hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws and (b)
agrees to indemnify and hold harmless Lender against any and all claims
losses liabilities damages penalties and expenses which Lender may
directly or indirectly sustain or suffer resulting from a breach of this
section of the Agreement or as a consequence of any use generation
manufacture storage disposal release or threatened release occurring
prior to Borrower s ownership or interest in the properties whether or
not the same was or should have been known to Borrower. The provisions
of this section of the Agreement including The obligation lo indemnify
shall survive the payment of the Indebtedness and the termination or
expiration of this Agreement and shall not be affected by Lenders
acquisition of any interest in any of the properties whether by
foreclosure or otherwise.
Litigation and Claims. No litigation claim investigation administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened and no other event has occurred which
may materially adversely affect Borrowers financial condition or
properties other than litigation claims or other events if any that have
been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower s knowledge all tax returns and reports
of Borrower that are or were required to be filed have been filed and
all taxes assessments and other governmental charges have been paid in
full except those presently being or to be contested by Borrower In good
faith in the ordinary course of business and for which adequate reserves
have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in
writing Borrower has not entered into or granted any Security Agreements
or permitted the filing or attachment of any Security Interests on or
affecting any of the Collateral directly or indirectly securing
repayment of Borrowers Loan and Note that would be prior or that may in
any way be superior to Lenders Security Interests and rights in and to
such Collateral.
Binding Effect. This Agreement the Note all Security Agreements directly
or indirectly securing repayment of Borrower s Loan and Note and all of
the Related Documents are binding upon Borrower as well as upon
Borrowers successors representatives and assigns and are legally
enforceable in accordance with their respective terms.
Commercial Purposes. Borrower intends to use the Loan proceeds solely
for business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations and (i) no Reportable
Event nor Prohibited Transaction (as defined In ERISA) has occurred with
respect to any such plan (ii) Borrower has not withdrawn from any such
plan or initiated steps to do so (iii) no steps have been taken to
terminate any such plan and (iv) there are no unfunded liabilities other
than those previously disclosed to Lender In writing.
Location of Borrower s Offices and Records. Borrower s place of business
or Borrower s Chief executive office if Borrower has more than one place
of business Is located at 7251 WEST 4TH STREET GREELEY CO 80634.
Unless
Borrower has designated otherwise in writing this location Is also the
office or offices where Borrower keeps its records concerning The
Collateral.
Information. All Information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is and all
Information hereafter furnished by or on behalf of Borrower to Lender
will be true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
Information is or will be incomplete by omitting to state any material
fact necessary to make such Information not misleading.
Survival of Representations and Warranties. Borrower understands and
agrees that Lender without independent Investigation is relying upon the
above representations and warranties in extending Loan Advances lo
Borrower. Borrower further agrees that the foregoing representations and
warranties shall be continuing in nature and shall remain in full force
and effect until such time as Borrowers Indebtedness shall be paid in
full or until this Agreement shall be terminated In the manner provided
above whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that
while this Agreement is in effect Borrower will:
Litigation. Promptly Inform Lender in writing of (a) all material
adverse changes In Borrowers financial condition and (b) all existing
and all threatened litigation claims Investigations administrative
proceedings or similar actions affecting Borrower or any Guarantor which
could materially affect the financial condition of Borrower or the
financial condition of any Guarantor.
Financial Records. Maintain its books and records In accordance with
generally accepted accounting principles applied on a consistent basis,
02 24-1997 BUSINESS LOAN AGREEMENT
Loan No (Continued)
Page 3
and permit Lender to examine and audit Borrower s books and records at
all reasonable times.
Additional Information. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrowers financial condition and business
operations as Lender may request from time to time. S
Financial Covenants and Ratios. Comply with the following covenants and
ratios: Except as provided above, all computations made to determine
compliance with the requirements contained in this paragraph shall be
made in accordance with generally accepted accounting principles,
applied on a consistent basis, and certified by Borrower as being true
and correct.
Insurance. Maintain fire and other risk insurance, public liability
Insurance, and such other insurance as Lender may require with respect
to Borrowers properties and operations, in form, amounts, coverages and
with insurance companies reasonably acceptable to Lender. Borrower, upon
request of Lender, will deliver to Lender from time to time the policies
or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be canceled or diminished without
at least ten (10) days prior written notice to Lender. Each insurance
policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or
default of Borrower or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security interest
for the Loans, Borrower will provide Lender with such loss payable or
other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the
policy; (d) the properties insured; (e) the then current property values
on the basis of which insurance has been obtained, and the manner of
determining those values; and (f) the expiration date of the policy. In
addition, upon request of Lender (however not more often than annually)
Borrower will have an independent appraiser satisfactory to Lender
determine, as applicable, the actual cash value or replacement cost of
any Collateral. The cost of such appraisal shall be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, on Lender s forms, and in
the amounts and by the guarantors named below:
Guarantors Amounts
CURRENT ELECTRONICS (WASHINGTON), INC., A WASHINGTON
CORPORATION Unlimited
CURRENT ELECTRONICS, INC., AN OREGON CORPORATION
f/k/a CURRENT MERGER CORP. Unlimited
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrowers business
operations, unless specifically consented to the contrary by Lender in
writing.
Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitations all
assessments taxes, governmental charges, levies and liens, of every kind
and nature, imposed upon Borrower or its properties, income, or profits,
prior to the date on which penalties would attach, and all lawful claims
that, if unpaid, might become a lien or charge upon any of Borrowers
properties, income, or profits. Provided however, Borrower will not be
required to pay and discharge any such assessment, tax, charge, levy,
lien or claim so long ss (a) the legality of the same shall be contested
in good faith by appropriate proceedings, and (b) Borrower shall have
established on its books adequate reserves with respect to such
contested assessment, tax, charge, levy, lien, or claim in accordance
with generally accepted accounting practices. Borrower, upon demand of
Lender, will furnish to Lender evidence of payment of the assessments,
taxes, charges, levies, liens and claims and will authorize the
appropriate governmental official to deliver to Lender at any time a
written statement of any assessments, taxes, charges, levies, liens and
claims against Borrower s properties, income, or profits.
Performance. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in a
timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under this
Agreement or under any of the Related Documents.
Operations. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender of
any change in executive and management personnel; conduct its business
affairs In a reasonable and prudent manner and in compliance with all
applicable federal, state and municipal laws, ordinances, rules and
regulations respecting its properties, charters, businesses and
operations, including without limitation, compliance with the Americans
With Disabilities Act and with all minimum funding standards and other
requirements of ERISA and other Iaws applicable to Borrowers employee
benefit plans.
Inspection. Permit employees or agents of Lender at any reasonable time
to inspect any and all Collateral for the Loan or Loans and Borrowers
other properties and to examine or audit Borrowers books, accounts, and
records and to make copies and memoranda of Borrowers books, accounts,
and records. If Borrower now or at any time hereafter maintains any
records (including without limitation computer generated records and
computer software programs for the generation of such records) in the
possession of a third party, Borrower, upon request of Lender, shall
notify such party to permit Lender free access to such records at all
reasonable times and to provide Lender with copies of any records it may
request, all at Borrower s expense.
Compliance Certificate. Unless waived in writing by Lender, provide
Lender at least annually and at the time of each disbursement of Loan
proceeds with a certificate executed by Borrowers chief financial
officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement are
true and correct ss of the date of the certificate and further
certifying that, as of the date of the certificate, no Event of Default
exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or omission
on its part or on the part of any third party. on property owned and/or
occupied by Borrower, any environmental activity where damage may result
to the environment, unless such environmental activity is pursuant to
and in compliance with the conditions of a permit issued by the
appropriate federal, state or local governmental authorities; shall
furnish to Lender promptly and in any event within thirty (30) days
after receipt thereof a copy of any notice, summons, lien, citation,
directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or
omission on Borrowers part in connection with any environmental activity
whether or not there is damage to the environment and/or other natural
resources.
Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that
while
this Agreement is in effect, Borrower shall not, without the prior
written consent of Lender:
Indebtedness and Liens. (a) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume indebtedness for borrowed money,
including capital leases, (b) except as allowed as a Permitted Lien,
sell transfer, mortgage, assign, pledge, lease, grant a security
Interest in, or encumber any of Borrowers assets, or (c) sell with
recourse any of Borrowers accounts, except to Lender.
Continuity of Operations. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire w
consolidate with any other entity, change ownership, change Its name,
dissolve or transfer or sell Collateral out of the ordinary course of
business, (c) pay any dividends on Borrower s stock (other than
dividends payable in its stock) provided, however that notwithstanding
the foregoing, but only so long as no Event of Default has occurred and
is continuing or would result from the payment of dividends, if Borrower
is a Subchapter S Corporation (ss defined in the Internal Revenue Code
of 1986, ss amended), Borrower may pay cash dividends on its stock to
its shareholders from time to Time in amounts necessary to enable the
shareholders to pay income taxes and make estimated income tax payments
to satisfy their liabilities under federal and state law which arise
solely from their status ss Shareholders of a Subchapter S Corporstion
because of their ownership of shares of stock of Borrower, or (d)
purchase or Retire any of Borrower s outstanding shares or alter or
amend Borrowers capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, Invest in or advance money
or assets, (b) purchase, create or acquire any interest in any other
enterprise or entity, or (c) incur any obligation as surety or guarantor
other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make
any
Loan to Borrower, whether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan Advances or to
disburse Loan proceeds if: (a) Borrower or any Guarantor is in default
under the terms of this Agreement or any of the Related Documents or any
other agreement that Borrower or any Guarantor has with Lender; (b)
Borrower or any Guarantor becomes Insolvent, hies a petition in
bankruptcy or similar proceedings, or is adjudged a bankrupt; (c) there
occurs a material adverse change in Borrowers financial condition, In
the financial condition of any Guarantor, or In the value of any
Collateral securing any Loan; or (d) any Guarantor seeks, claims or
otherwise attempts to limit, modify, or revoke such Guarantor s guaranty
of the Loan or any other loan with Lender.
02-24-1997 BUSINESS LOAN AGREEMENT
Loan No (Continued)
Page 4
EXHIBIT A . An exhibit, titled "EXHIBIT A"," Is attached to this
Agreement and by this reference is made a part of this Agreement just as
if all the provisions, terms and conditions of the Exhibit had been
fully set forth in this Agreement.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security Interest In, and hereby assigns, conveys, delivers, pledges,
and transfers to Lender all Borrowers right, title and interest in and
to, Borrowers accounts with Lender (whether checking, savings, or some
other account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the future,
excluding however ail IRA and Keogh accounts, and all trust accounts for
which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law,
to charge or setoff all sums owing on the Indebtedness against any and
all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
Default on Indebtedness. Failure of Borrower to make any payment when
due on the Loans.
Other Defaults. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
Default In Favor of Third Parties. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrowers
property or Borrowers or any Grantors ability to repay the Loans or
perform their respective obligations under this Agreement or any of the
Related Documents.
False# Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in any
material respect at the time made or furnished, or becomes false or
misleading at any time thereafter.
Detective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.
Insolvency. The dissolution or termination of Borrower s existence as a
going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrowers property, any assignment for the
benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency. This includes a
garnishment, attachment, or levy on or of any of Borrower s deposit
accounts with Lender.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.
Change In Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs In Borrowers financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related
Documents, all commitments and obligations of Lender under this
Agreement or the Related Documents or any other agreement immediately
will terminate (including any obligation to make Loan Advances or
disbursements), and, at Lenders option, all indebtedness immediately
will become due and payable, all without notice of any kind to Borrower,
except that in the case of an Event of Default of the type described in
the "Insolvency subsection above, such acceleration shall be automatic
and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in
equity, or otherwise. Except as may be prohibited by applicable law, all
of Lender s rights and remedies shalt be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy
shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Borrower or
of any Grantor shall not affect Lender s right to declare a default and
to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are
a
part of this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
Applicable Law. This Agreement has been delivered to Lender and accepted
by Lender In the State of Colorado. If there Is a lawsuit, Borrower
agrees upon Lender s request to submit to the jurisdiction of the courts
of Weld County, the State of Colorado. Lender and Borrower hereby waive
the right to any jury trial In any action, proceeding, or counterclaim
brought by either Lender or Borrower against the other. This Agreement
shall be governed by and construed In accordance with The laws of the
State of Colorado.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Multiple Parties; Corporate Authority. All obligations of Borrower under
this Agreement shall be joint and several, and all references to
Borrower shall mean each and every Borrower. This means that each of the
Borrowers signing below Is responsible for all obligations In this
Agreement.
Consent lo Loan Participation. Borrower agrees and consents to Lenders
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any
other matter relating lo The Loan, and Borrower hereby waives any rights
to privacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such
participation Interests. Borrower also agrees that the purchasers of any
such participation interests will be considered as the absolute owners
of such interests In the Loans and will have all the rights granted
under the participation agreement or agreements governing the sale of
such participation interests. Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Borrowers obligation under the Loans irrespective of the failure or
insolvency of any holder of any Interest in the Loans. Borrower further
agrees that the purchaser of any such participation interests may
enforce its interests Irrespective of any personal claims or defenses
that Borrower may have against Lender.
Costs and Expenses. Borrower agrees to pay upon demand all of Lenders
expenses, Including without limitation attorneys fees, incurred in
connection with the preparation, execution, enforcement, modification
and collection of this Agreement or in connection with the Loans made
pursuant to this Agreement. Lender may pay someone else to help collect
the Loans and to enforce this Agreement, and Borrower will pay that
amount. This includes, subject to any limits under applicable law,
Lender s attorneys fees and Lender s legal expenses, whether or not
there is a lawsuit, including attorneys fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated postjudgment collection
services. Borrower also will pay any court costs, in addition to all
other sums provided by law.
Notices. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimilie, and shall be effective
when actually delivered or when deposited with a nationally recognized
overnight courier or deposited in the United States mail, first class,
postage prepaid, addressed to the party to whom the notice is to be
given at the address shown above. Any party may change its address for
notices under this Agreement by giving formal written notice to the
other parties, specifying that the purpose of the notice is to change
the party s address. To the extent permitted by applicable law, if there
is more than one Borrower, notice to any Borrower will constitute notice
to all Borrowers. For notice purposes, Borrower will keep Lender
informed at all times of Borrower s current address(es).
Severability. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, If The offending
provision cannot be so modified, it shall be stricken and all other
provisions of this Agreement in all other respects shall remain valid
and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the context of
any provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word
""Borrower" as used herein shall include all subsidiaries and affiliates
of Borrower. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to
make any Loan or other financial accommodation to any subsidiary or
affiliate of Borrower.
Successors and Assigns. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall,
inure to the benefit of Lender, Its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any Interest therein, without the prior written consent of
Lender.
Survival. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other Instrument
delivered by Borrower to Lender under this Agreement shall be considered
to have been relied upon by Lender and will survive the making of the
loan and delivery to Lender of the Related Documents, regardless of any
investigation made by Lender or on Lender s behalf.
02-24-1997 BUSINESS LOAN AGREEMENT
Loan No
Page 5
(continued)
Time is of the Essence. Time Is of The essence In The performance of
this Agreement.
Waiver. Lender shall nol be deemed lo have waived any rights under This
Agreement unless such waiver Is given in writing and signed by Lender.
No delay or omission on The part of Lender In exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender
of a provision of this Agreement shall not prejudice or constitute a
waiver of Lender s right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by
Lender nor any course of dealing between Lender and Borrower or between
Lender and any Grantor shall constitute a waiver of any of Lenders
rights or of any obligations of Borrower or of any Grantor as lo any
future transactions. Whenever the consent of Lender Is required under
This Agreement The granting of such consent by Lender In any Instance
shall not constitute continuing consent in subsequent Instances where
such consent is required and In all cases such consent may be granted or
withheld In The sole discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF
THIS BUSINESS
LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS
AGREEMENT IS DATED
AS OF FEBRUARY 24 1997.
BORROWER(S):
ELECTRONIC FAB TECHNOLOGY CORP., A COLORADO CORPORATION
By: Jack Calderon
JACK CALDERON, PRESIDENT AND CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, CFO & TREASIRER
CURRENT ELECTRONICS (WASHINGTON) INC., A WASHINGTON
CORPORATION
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, VICE PRESIDENT
CURRENT ELECTRONICS, INC., AN OREGON CORPORATION f/k/a/
CURRENT MERGER
CORP.
By: Jack Calderon
JACK CALDERON, PRESIDENT & CEO
By: Stuart W. Fuhlendorf
STUART W. FUHLENDORF, VICE PRESIDENT
LENDER:
BANK ONE, COLORADO, N.A.
By: Sam Leeper
Authorized Officer
LASERPRO,Reg.U.S.Pal.&T.M.Oll.,Ver.3.22bp)1997CFIProServlcer,lnc.
Allrlghlarererved.lCO-C40F3.22ELE1_KB2,LNC3.0VLl
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.14
<SEQUENCE>5
<TEXT>
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), dated as of February
24, 1997, is between ELECTRONIC FAB TECHNOLOGY CORP., a Colorado
corporation ("Parent"), ____________, an Oregon corporation ("Vendor")
and _______ Hewitson ("Initial Consultant").
RECITAL
Parent, Current Merger Corp., an Oregon corporation, and Current
Electronics, Inc., an Oregon corporation, have entered into the
Agreement and Plan of Merger, dated January 15, 1997, pursuant to which
Current Electronics, Inc. was merged with and into Current Merger Corp.
This Agreement is executed and delivered pursuant to Article VIII of
that agreement and sets forth the terms on which Parent engages Vendor
to provide the services of Consultant.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:
A. Definitions. The following terms shall have the
following meanings as used in this Agreement:
"Company" means Parent, its successors and assigns, and any
of its present or future subsidiaries, and persons controlled by,
controlling or under common control with it.
"Consultant" means the person approved by Parent that has
been assigned by Vendor to perform the services hereunder.
"Vendor" has the meaning set forth in the opening statement
to this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations
of the Securities and Exchange Commission thereunder.
"Expiration Date" has the meaning set forth in Section 5.
"Parent" has the meaning set forth in the opening statement
to this Agreement.
"Participate In" means directly or indirectly, for his own
benefit or for, with or through any other person or entity, own, manage,
operate, control, lend money to or participate in the ownership,
management, operation or control of, or be connected as a director,
officer, employee, partner, consultant, agent, independent contractor or
otherwise with, or acquiesce in the use of his name in.
"Proprietary Information" means information disclosed to or
known or developed by Vendor or Consultant about the Company's plans,
strategies, prospects, products, processes and services, including
information and materials relating to the Company's products,
manufacturing procedures and techniques and information relating to the
Company's research, development, inventions, manufacture, purchasing,
accounting, engineering, marketing, merchandising and selling, but
excluding information that Vendor or Consultant establishes, by
competent proof, (i) was known, other than under an obligation of
confidentiality or binder of secrecy, to Vendor or Consultant prior to
the engagement of Vendor by the Company to provide the services of
Consultant or as a result of Consultant's employment by Current
Electronics, Inc. or Current Electronics (Washington), Inc.; (ii) has
passed into the public domain prior to or after its development by or
for the Company other than through acts or omissions attributable to
Vendor or Consultant; or (iii) was subsequently obtained other than
under an obligation of confidentiality or binder of secrecy from a third
party not acquiring the information under an obligation of
confidentiality from the disclosing party.
A. Representations and Warranties of Vendor.
(a) Vendor is a corporation duly organized and validly
existing under the laws of its state of incorporation, has full
corporate power to own its properties and to carry on its business as
now being conducted and as proposed to be conducted and is duly
qualified to do business and is in good standing in each jurisdiction in
which the failure to do so would have a material adverse effect on
Vendor. Vendor is not in violation of any of the provisions of its
articles of incorporation or bylaws or equivalent organizational
documents.
(b) Vendor has the full corporate power and authority to
enter into this Agreement and take all actions contemplated hereby. The
execution and delivery of this Agreement and all actions contemplated
hereby have been duly authorized by all necessary corporate action on
the part of Vendor. This Agreement has been duly executed and delivered
by Vendor and constitutes the valid and binding obligation of Vendor
enforceable against Vendor in accordance with its terms. The execution
and delivery of this Agreement by Vendor does not, and the actions
contemplated hereby will not, conflict with or violate any provision of
the articles of incorporation or bylaws of the Vendor.
A. Engagement; Duties. The Company and Vendor
hereby agree that Vendor will provide the services of Consultant who
will faithfully and to the best of his ability perform such services and
duties for the Company as the Chief Executive Officer of the Company
reasonably may request. For the Initial Consultant, Consultant's
services and duties for which compensation is to be paid to the Vendor
under Section 4 will not include services deemed by the Company to be
part of his participation or services as a member of the Company's board
of directors. Consultant will devote sufficient working time, attention
and energies to the business of the Company necessary to perform the
services to be provided hereunder, but in any event not in excess of 80%
of the equivalent of being engaged on a full time basis. Neither Vendor
nor Consultant will at any time discredit the Company or any of its
products and services. Vendor and Consultant acknowledge that Vendor
has been engaged by the Company as an independent contractor and that,
as such, Vendor will be responsible for making appropriate filings and
payments to the Internal Revenue Service and state taxing authorities.
Except for involvement in personal investments, provided such
involvement does not require any significant personal services, Vendor
will cause Consultant not to engage, and Consultant agrees not to
engage, in any other business activity or activities that require
significant personal services by Consultant or that, in the judgment of
the Company, may conflict with the proper performance of Vendor's duties
hereunder and Vendor agrees to require Consultant to similarly limit his
or her activities.
A. Compensation; Benefits; Expenses.
(a) As compensation for Consultant's services hereunder,
the Company will pay Vendor $159,300 per year (prorated for partial
years) for each year during the term of this Agreement, payable monthly
in arrears or as the parties hereto may otherwise agree.
(b) The Company will reimburse Vendor for the reasonable
out-of-pocket expenses incurred by Consultant at the request of the
Company in the performance of his duties hereunder and such other
expenses as may be approved by the Company, in each case upon
presentation to the Company of an itemized accounting of such expenses
with reasonable supporting data.
A. Term. This Agreement shall be effective on the
date hereof and, unless earlier terminated in accordance with Section 6,
shall expire five years from the date hereof (the "Expiration Date").
If this Agreement terminates or expires, this Agreement shall forthwith
become void and there shall be no liability or obligation on the part of
the parties hereto, except as otherwise provided herein and except the
provisions of this Section 5 and Sections 7, 8, 9 and 10 will remain in
full force and effect and survive any termination or expiration of this
Agreement.
A. Termination.
(a) If the Initial Consultant or any successor Consultant
dies and a replacement Consultant acceptable to Parent is not appointed
promptly, the Company will pay Vendor the compensation that would
otherwise have been payable to him for the month in which the
Consultant's death occurs, and this Agreement will be deemed terminated
on the last day of such month.
(b) If the Initial Consultant or any successor Consultant
is prevented from performing his duties by reason of illness or
incapacity for the period set forth in Schedule A and a replacement
Consultant acceptable to Parent is not appointed promptly, the Company
may suspend the payment of compensation to Vendor during the period
Consultant is so prevented from performing his duties and may terminate
this Agreement if his condition is determined to be permanent.
(c) The Company may terminate this Agreement at any time,
with cause, by giving written notice of termination to Vendor, with a
copy of such notice to Consultant. For purposes of this Agreement,
"cause" means any one or more of the following: (i) gross negligence or
willful misconduct that is materially injurious to the Company; (ii)
conduct on the part of Consultant or Vendor that would constitute a
felony or other crime of moral turpitude where committed; (iii) material
failure by Consultant to perform assigned services and duties under this
Agreement, which failure continues for at least 30 days after notice in
writing thereof is given by the Company; or (iv) breach or threatened
breach by Consultant or Vendor of any provision of Section 7 or 8.
(d) (i) The Company may terminate this Agreement at any
time, without cause, by giving written notice of termination to
Vendor and Consultant. In connection with any termination by the
Company pursuant to this Section 6(d), except as set forth below
in clauses (ii) of this Section 6(d), the Company will not be
obligated to pay any amount to Vendor other than the amounts
specified in Section 4(a) that have accrued through the date of
termination. The Company will make a termination payment to
Vendor in connection with a termination under this Section 6(d) if
and only if the conditions set forth below in Section 6(d)(ii) are
satisfied, in which event the amount of termination payments will
be determined pursuant to Section 6(d)(ii).
(ii) In order to receive termination payments under
this Section 6(d), Vendor and Consultant must sign releases, in
form and substance reasonably satisfactory to the Company, fully
releasing the Company (and its officers, directors, shareholders,
employees and agents) from any claim or cause of action that
Vendor or Consultant may have against the Company or such other
persons relating in any way to this Agreement or the consulting
relationship of Vendor and Consultant with the Company, through
the date of such releases. If applicable, the releases will be
signed at such times as are reasonably requested by the Company in
order for the releases to be fully effective under state and
federal age discrimination laws and other laws that may impose
similar requirements, and, except to the extent that Consultant
may exercise his rights as a shareholder of the Company or
Consultant's obligations as a director of the Company may
otherwise require, will prohibit Consultant and Vendor from making
any communications or taking other acts that may injure the
business, goodwill or reputation of the Company or its officers,
directors, shareholders, employees or agents. The Company will
then begin making termination payments at such time as any
revocation period set forth in the release will have expired. The
amount of the termination payments payable under this Section 6(d)
will equal the amounts that Vendor would have received had this
Agreement remained in effect through the Expiration Date. Any
payments pursuant to this Section 6(d) will be paid in equal
monthly installments through the Expiration Date.
Non-Disclosure of Information.
(a) Except as specifically permitted by the Company in
writing and as is required for Consultant to perform his services and
duties hereunder, Vendor and Consultant will not, during or prior to two
years after the term of this Agreement, disclose any Proprietary
Information to any person or entity for any purpose or use or permit the
use of any Proprietary Information. In addition, Vendor and Consultant
will not, during and for two years after the termination or expiration
hereof, undertake on behalf of any other person or entity any commercial
project, employment or consultancy that would result in use or
disclosure of Proprietary Information or that would appear to involve
such use or disclosure unless the Company shall have consented in
writing to such undertaking, employment or consultancy. The Company may
require that Vendor and Consultant and any person or entity proposing to
engage Vendor or Consultant in such a capacity provide appropriate
written assurances regarding the avoidance of any such conflict.
(b) Upon the termination or expiration of this Agreement,
Vendor and Consultant will deliver to the Company all notes, letters,
prints, drawings, records, forms, contracts, studies, reports,
appraisals, financial data, lists of names or other customer data, and
any other articles or papers, computer tapes and materials that have
come into their possession by reason of Vendor's engagement by the
Company to provide the services of Consultant or Consultant's prior
employment by the Company's subsidiaries, whether or not prepared by
him, and Vendor and Consultant will not retain memoranda or copies of
any of those items.
(c) Vendor and Consultant acknowledges that Proprietary
Information of the Company is unique and a valuable asset of the
Company, the loss or unauthorized disclosure or use of which would cause
the Company irreparable harm.
A. Covenants Not to Compete or Interfere.
(a) In view of the unique and valuable services of
Consultant which Vendor has been engaged by the Company to provide to
the Company and Consultant's and Vendor's current and future knowledge
of the Company's Proprietary Information, Vendor and Consultant will
not, (i) during the term hereof and (ii) for two years after the
termination or expiration hereof (or, if this Agreement is terminated
under Section 6(d) and Vendor receives termination payments, during the
period such payments are received), Participate In the electronic
contract manufacturing business and any other business in which the
Company is engaged, or has taken material steps to be engaged, at the
time of such termination or expiration. Notwithstanding the foregoing,
Vendor or Consultant will not be deemed to Participate In a business
merely because Vendor or Consultant owns less than 5% of the outstanding
stock of a corporation (measured in voting power or equity), if, at the
time of its acquisition by Vendor or Consultant, such stock is listed on
a national securities exchange or is reported on the Nasdaq National
Market.
(b) During the period specified in Section 8(a) and in no
event less than two years after any termination or expiration of this
Agreement, Vendor and Consultant will not (i) directly or indirectly
cause or attempt to cause any employee of the Company to leave the
employ of the Company; (ii) in any way interfere with the relationship
between the Company and any of its employees, customers or suppliers;
(iii) directly or indirectly hire any employee of the Company to work
for any entity of which Consultant is an officer, director, employee,
consultant, independent contractor or owner of an equity or other
financial interest; or (iv) interfere or attempt to interfere with any
transaction in which the Company was involved during the term of this
Agreement.
(c) If any restriction contained in this Section 8 is
deemed to be invalid, illegal or unenforceable by a court of competent
jurisdiction by reason of its duration, geographical scope or otherwise,
then such provision will be deemed reduced in extent, duration,
geographical scope or otherwise by the minimum reduction necessary to
cause the restriction to be enforceable.
Injunctive Relief. Vendor and Consultant acknowledge that
the breach or threatened breach by Vendor or Consultant of any of the
provisions of Section 7 or 8 would cause the Company irreparable harm.
Upon the breach or threatened breach of any of the provisions of Section
7 or 8, the Company will be entitled to an injunction, without bond,
restraining Vendor or Consultant from committing such breach. This
right shall not be construed to limit the Company's ability to obtain
any other remedies available to it for such breach or threatened breach,
including the recovery of damages.
General Provisions.
(a) Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy. No
failure or delay on the part of any party hereto in the exercise of any
right hereunder shall impair such right or be construed to be a waiver
of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such
right preclude other or further exercise thereof or of any other right.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado (without regard to the
principles of conflicts of law thereof). Except as otherwise provided
herein, in the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so
as reasonably to effect the intent of the parties hereto. Except as
otherwise provided herein, the parties hereto further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable
provision.
(c) All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by
commercial delivery service, or mailed by registered or certified mail,
return receipt requested, or sent via facsimile, with confirmation of
receipt, to the parties hereto at the following address or at such other
address for a party hereto as shall be specified by notice hereunder:
(i) if to the Company, to:
Electronic Fab Technology Corp.
7241 West 4th Street
Greeley, Colorado 80634
Attention: Stuart W. Fuhlendorf
Facsimile No.: (303) 892-4306
with a copy to:
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Attention: Francis R. Wheeler
Facsimile No.: (303) 866 0200
(ii) If to Vendor:
(iii) If to Consultant:
(d) Except as otherwise provided herein, no party hereto
may assign its rights or delegate its obligations under this Agreement.
The Company may assign its rights and delegate its obligations under
this Agreement to any affiliate of the Company or to any person or
entity that acquires all or substantially all of the business of the
Company whether through merger, purchase of assets, purchase of stock or
otherwise. This Agreement will be binding upon and inure to the benefit
of the parties and their respective legal representatives, heirs, and
permitted successors and assigns.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and
oral, among the parties hereto with respect to the subject matter hereof
(f) This Agreement may be amended or modified in writing
by the parties hereto.
(g) When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The words "include," "includes" and "including"
when used herein shall be deemed in each case to be followed by the
words "without limitation." The Section headings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms.
(h) The parties hereto acknowledge that they have been
represented by counsel during the negotiation, preparation and execution
of this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities
in an agreement or other document will be construed against the party
drafting such agreement or document.
(i) This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties hereto and delivered to the other
parties hereto, it being understood that all parties hereto need not
sign the same counterpart.
(j) In the event of any proceeding to enforce this
Agreement, the prevailing party shall be entitled to receive from the
losing party all reasonable costs and expenses, including the reasonable
fees of attorneys, accountants and other experts, incurred by the
prevailing party in investigating and prosecuting (or defending) such
action at trial or upon any appeal.
(k) Any successor Consultant to the Initial Consultant
shall execute a copy of this Agreement agreeing to be bound by the terms
hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Consultant's Agreement as of the date first written above.
Parent:
ELECTRONIC FAB TECHNOLOGY CORP.
By: _______________________________
Vendor:
[NAME]
By: ______________________________
Initial Consultant:
_____________________________________
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>6
<TEXT>
EMPLOYMENT AGREEMENT
This Agreement is entered into as of July 10, 1996, between
Electronic Fab Technology Corp., a Colorado corporation (the "Company"),
and Jack Calderon ("Executive"), to be effective upon commencement of
Executive's employment by the Company on August 5, 1996.
The parties agree as follows:
A. Employment. The Company agrees to employ
Executive and Executive agrees to be employed by the Company on the
terms set forth in this Agreement.
A. Capacity and Duties. Executive shall be
employed by the Company as its Chief Executive Officer or in such other
executive capacity as the board of directors shall determine. During
his employment, Executive shall perform the duties and bear the
responsibilities commensurate with his position and shall serve the
Company faithfully and to the best of his ability, under the direction
of the Company's board of directors. Executive shall devote his entire
working time, attention and energies to the business of the Company.
His actions shall at all times be such that they do not discredit the
Company or its products and services. Except for his involvement in
personal investments, provided such involvement does not require any
significant services on his part, Executive shall not engage in any
other business activity or activities that require significant personal
services by Executive or that, in the judgment of the board of
directors, may conflict with the proper performance of Executive's
duties hereunder.
A. Compensation.
1. Salary. For all services rendered by
Executive, the Company shall pay Executive during the term of this
Agreement a salary of at least $200,000 per annum, payable in arrears in
the same manner as the Company generally pays its employees' salaries.
The amount of the salary may be increased at the discretion of the
Company's board of directors, although Executive shall not have any
right to an increase.
1. Bonus. Executive may also receive a bonus
of up to 50% of Executive's annual salary as described in Section 3(a)
based upon performance criteria to be established by the board of
directors with respect to each calendar year. If this Agreement is
terminated (other than under Section 5(c) or 5(d)), Executive shall
receive, within 90 days after the end of the calendar year in which such
termination occurs, a pro rata portion of such bonus, if any, that
accrues with respect to such calendar year based on the period during
such year that the Executive was employed by the Company prior to
termination.
1. Benefits. The Company also shall provide
Executive, during the term of this Agreement, with the benefits of such
life and medical insurance plans, profit sharing plans and other
employee fringe benefit plans as shall be provided generally to
employees of the Company and for which Executive may be eligible under
the terms of such plans. Nothing in this Agreement shall require the
Company to adopt or maintain any such employee benefit plans.
1. Stock Options. The Company shall grant to
Executive non-qualified stock options to purchase 200,000 shares of
Company common stock with an exercise price equal to the last closing
sale price of the Company's stock on the Nasdaq National Market on the
business day preceding the date of this Agreement. The vesting schedule
of the options shall be as follows:
a. 50,000 shares shall vest upon the
date Executive's employment commences;
a. 25,000 shares shall vest when the
price of the Company's stock averages $6.00 per share or higher
for 20 out of the last 30 trading days;
a. 25,000 shares shall vest when the
price of the Company's stock averages $8.00 per share or higher
for 20 out of the last 30 trading days;
a. 50,000 shares shall vest when the
price of the Company's stock averages $10.00 per share or higher
for 20 out of the last 30 trading days; and
a. 50,000 shares shall vest when the
price of the Company's stock averages $12.00 per share or higher
for 20 out of the last 30 trading days.
Notwithstanding the vesting schedule set forth above, all options shall
fully vest in the event of a Change in Control, as defined in Section
5(d), or if Executive remains employed with the Company, at the end of
seven years of continuous employment. If employment of the Executive is
terminated for reasons other than set forth in Section 5(c), Executive
or those entitled under his will or by the laws of descent may exercise
the options within three months following the date of termination but
not thereafter. Only options that had become exercisable on or before
the date of termination may be exercised within the three month period.
The stock options granted hereby shall be evidenced by such stock option
certificates or agreements that incorporate provisions of the Company's
stock option plan not inconsistent with the foregoing as the Company
determines to be appropriate. To the extent that the foregoing grants
under the Company's stock option plan require shareholder approval, the
Company shall use its best efforts to obtain such approval at the
Company's next annual meeting of shareholders.
1. Sick Leave, Vacation. During the term of
this Agreement, except as otherwise provided in Section 5(b), Executive
shall be entitled to sick leave consistent with the Company's customary
sick leave policy and to four weeks vacation per year, which shall be
taken at times mutually satisfactory to the Company and Executive.
1. Company Car. The Company shall provide to
Executive for his use during the term of this Agreement a car having a
purchase price not to exceed $35,000. The Company shall pay all
registration and licensing fees and maintenance and insurance costs for
such car.
1. Relocation. Executive shall reside in
Greeley, Colorado while employed with the Company. The Company shall
pay Executive $20,000 as a one-time lump sum payment to defer the costs
of Executive moving to Greeley. Executive shall repay this amount if
Executive is employed by the Company for a period less than one year and
voluntarily resigned from the Company.
1. Expenses. During the term of this
Agreement, the Company shall reimburse Executive for all reasonable
out-of-pocket expenses incurred by Executive in connection with the business
of the Company and in the performance of his duties under this Agreement
upon presentation to the Company of an itemized accounting of such
expenses with reasonable supporting data.
A. Term.
1. General. Unless sooner terminated in
accordance with Section 5, this Agreement shall have a two year term
after the effective date of this Agreement. This Agreement shall
continue thereafter from three-month period to three-month period until
either party gives notice to the other at least 30 days prior to the end
of the original or then current renewal term of his or its intention
that this Agreement shall terminate at the end of such term.
Sections 6, 7, 8 and 9 shall remain in full force and effect for the
periods specified in such sections notwithstanding the termination of
this Agreement.
1. Severance. If this Agreement terminates
(other than due to a termination under Section 5), and (i) the parties
do not enter into a new employment agreement and (ii) Executive does not
remain as an employee of the Company for at least six months after such
termination, then the Company shall (x) pay Executive severance
compensation consisting of a six months' base salary and (y) continue
for six months after termination of Executive's employment by the
Company, to the extent possible under the Company's then-existing
benefit plans, all other benefits that were in place at the time of the
expiration of this Agreement.
A. Termination.
1. Death. If Executive dies during the term
of this Agreement, the Company shall pay his estate the compensation
that would otherwise have been payable to him for the month in which his
death occurs, and this Agreement shall terminate on the last day of such
month.
1. Disability. If during the term of this
Agreement Executive is prevented from performing his duties by reason of
illness or incapacity for a continuous period of 120 days, the Company
may terminate this Agreement on 30 days' prior notice to Executive or
his duly appointed legal representative. For purposes of this
Section 5(b), a period of illness or incapacity shall be deemed
"continuous" notwithstanding Executive's performance of his duties
during such period for continuous periods of less than 15 days in
duration.
1. Cause. The Company may terminate this
Agreement at any time, with notice simultaneous with the termination,
for cause, with the prior approval of the Company's board of directors.
For purposes of this Agreement, cause shall be defined as one or more of
the following:
a. willful misconduct that is
materially injurious to the Company as determined by a majority of
the Company's board of directors (excluding if Executive is then a
director);
a. conduct that would constitute a
felony or other crime of moral turpitude where committed;
a. failure to perform material required
duties and obligations of the Company under this Agreement, which
failure materially, adversely affects the Company and continues
for at least 30 days after notice in writing thereof is given by
the board of directors (excluding Executive); and
a. a material breach by Executive
during the term of this Agreement of Section 6, 7 or 8 below.
1. At the Company's Election. The Company
may terminate this Agreement at any time with the prior approval of the
board of directors, without cause, by giving 30 days' written notice of
termination to Executive. On the effective date of any termination
pursuant to this Section 5(d), the Company shall pay Executive a
severance payment equal to the amount that Executive would have received
had this Agreement remained in effect for the Severance Period (as
defined below) and shall allow Executive to participate during the
Severance Period, at the Company's expense, in such employee welfare
plans as are generally made available during such period to the
Company's employees. The Company shall be deemed to have terminated
Executive's employment pursuant to this Section 5(d) if Executive
terminates such employment after a material reduction of his
responsibilities, other benefits or the facilities or assistance at his
disposal (other than a reduction that is part of an overall change for
the Company's employees, is not disproportionately detrimental to
Executive and occurs before any Change in Control (as defined below)) or
a change of more than 15 miles in location of the principal executive
offices of the Company or of Executive's primary office.
a. In order to receive a severance
payment under this Section 5(d), the Executive must (A) resign
from the Board of Directors, if he is then a member of it, and
(B) sign a release, in form and substance reasonably satisfactory
to the Company, fully releasing the Company (and its officers,
directors, shareholders, employees and agents) from any claim or
cause of action that the employee may have against the Company or
such other persons relating in any way to this Agreement, the
Executive's employment by the Company or any other aspect of the
Executive's relationship with the Company, through the date of
such release. The release shall be signed at such times as are
reasonably requested by the Company in order for the release to be
fully effective under state and federal age discrimination laws
and other laws that may impose similar requirements, and shall
prohibit Executive from making any communications or taking other
acts that may injure the business, goodwill or reputation of the
Company or its officers, directors, shareholders, employees or
agents. The Company may defer making severance payments until
such time as any revocation periods set forth in the release have
expired.
a. For purposes of this Section 5(d):
(A) if no Change in Control (as defined below)
shall have occurred before a termination under this Section 5(d),
the Severance Period shall be the greater of one year or what
would have been the remaining term of this Agreement had it not
been terminated; and
(B) if a Change in Control shall have occurred
before a termination under this Section 5(d), then the Severance
Period shall be the greater of one year or what would have been
the remaining term of this Agreement had it not been terminated.
A "Change of Control" shall be deemed to have occurred if
(i) a person (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) becomes the
beneficial owner (as defined in Rule 13d-3 under the 1934 Act) of shares
of the Company or the Company's successor having 30% or more of the
total number of votes that may be cast for the election of directors of
the Company without the prior approval of at least a majority of the
members of the Company's board of directors unaffiliated with such
person (unless such person beneficially owned shares with at least 15%
of such votes on the date of this Agreement), or (ii) individuals who
constitute the directors of the Company at the beginning of a 24-month
period cease to constitute at least 2/3 of all directors at any time
during such period, unless the election of any new or replacement
directors was approved by a vote of at least a majority of the members
of the Company's board of directors in office immediately prior to such
period and of the new and replacement directors so approved.
Notwithstanding the foregoing, no Change in Control will be deemed to
have occurred if Executive or any group of which Executive is a member
is the person whose acquisition constituted the Change in Control.
1. General Provisions Regarding Severance.
Any payment pursuant to Section 4(b) or 5(d) shall be paid, at the
Company's election, either in equal monthly installments over a six-month
period (for a payment under Section 4(b)) or the Severance Period
(for a payment under Section 5(d)) or in one lump sum (in which case the
Company shall pay to Executive in a lump sum its estimated cost of
providing employee benefits over the remaining period and the Company's
obligation to provide such benefits under Section 4(b) shall terminate).
Any such payment shall be "grossed up," if necessary, so that Executive
is left after the payment of any excise tax imposed under Sections 280G
and 4999 of the Internal Revenue Code of 1986 (or any successor statute)
in connection with any benefits received upon termination with the
amount he would have had if such excise tax had not been imposed on
Executive.
A. Confidential Information.
1. Confidentiality. Executive acknowledges
that the trade secrets, know-how and proprietary processes of the
Company and its confidential business plans, strategies, concepts,
prospects and financial data (collectively, "Confidential Information")
are valuable, unique assets of the Company. Executive shall not, during
or after the term of this Agreement, disclose any of the Confidential
Information (unless already generally known to and available for use by
the public other than as a result of a violation by Executive of this
Section 6 or as required by law) to any person or entity for any
purpose, nor shall Executive use or permit the use of any Confidential
Information except, in either case, as is required for Executive to
perform his duties as an employee of the Company.
1. Surrender or Destruction. Executive will,
upon termination of his employment with the Company, deliver to the
Company all records, forms, contracts, studies, reports, appraisals,
financial data, lists of names or other customer data, and any other
articles or papers, computer tapes and materials that have come into his
possession by reason of his employment with the Company, whether or not
prepared by him, and he shall not retain memoranda or copies of any of
those items.
A. Covenants Not to Compete or Interfere.
1. Scope. In view of the unique and valuable
executive services that Executive has been retained to render to the
Company and Executive's current and future knowledge of the customers,
trade secrets and other proprietary information relating to the business
of the Company and its customers and suppliers, Executive agrees that
during the period he is an employee of the Company and for one year
after any termination of this Agreement by the Company for cause or any
voluntary termination by Executive of his employment by the Company, he
will not Participate In (as defined below) the business of electronic
contract manufacturing within the United States of America.
1. Definition. For purposes of this
Section 7, "Participate In"means "directly or indirectly, for his own
benefit or for, with or through any other person, firm or corporation,
own, manage, operate, control, lend money to or participate in the
ownership, management, operation or control of, or be connected as a
director, officer, employee, partner, consultant, agent, independent
contractor or otherwise with, or acquiesce in the use of his name in."
Notwithstanding the foregoing, Executive shall not be deemed to
Participate In a business merely because he owns less than 5% of the
outstanding stock of a corporation (measured in voting power or equity),
if, at the time of its acquisition by Executive, such stock is listed on
a national securities exchange or is reported on Nasdaq. If any
restriction contained in this Section 7 is deemed to be invalid, illegal
or unenforceable by reason of its duration, geographical scope or
otherwise, then such provision shall be deemed reduced in extent,
duration, geographical scope or otherwise by the minimum reduction
necessary to cause the restriction to be enforceable.
1. Noninterference. During the period
specified in Section 7(a) of this Agreement, Executive shall not
(i) directly or indirectly cause or attempt to cause any employee of the
Company to leave the employ of the Company, (ii) in any way interfere
with the relationship between the Company and any employee, customer or
supplier, (iii) directly or indirectly hire any employee of the Company
to work for any organization of which Executive is an officer, director,
employee, consultant, independent contractor or owner of an equity or
other financial interest, or (iv) interfere or attempt to interfere with
any transaction in which the Company was involved during the term of
this Agreement or his employment.
1. Executive Representation. Executive
represents to the Company that at this time he is not a party to any
other employment agreement and is not subject to any other covenant not
to compete.
A. Intellectual Property.
1. Executive agrees to assign to the Company,
or to any person or entity designated by the Company, the entire right,
title and interest of the Executive in and to all inventions, ideas,
discoveries and improvements (collectively, "Inventions"), whether
patented or unpatented, and material subject to copyright, made or
conceived by the Executive, solely or jointly, that arise out of or are
related to research conducted by, for or under the direction of the
Company, or that relate to methods, apparatuses, designs, products,
processes or devices, sold, leased, used or under consideration or
development by the Company at the time of such Invention. Executive
further acknowledges that all copyrightable materials developed or
produced by Executive within the scope of his employment by the Company
constitute works made for hire.
1. Executive shall communicate promptly and
disclose to the Company, in such form as the Company may reasonably
request, all information, details and data pertaining to any such
inventions, ideas, discoveries and improvements described in
paragraph 5(a) above.
A. Injunctive Relief. Upon an actual or threatened
breach by Executive of Section 6 or Section 7 of this Agreement, the
Company shall be entitled to an injunction restraining Executive from
such breach. Nothing in this Agreement shall limit the Company's
ability to obtain any other remedies, including damages for such actual
or threatened breach.
A. Waiver of Breach. A waiver by the Company of a
breach of any provision of this Agreement by Executive shall not be
construed as a waiver of any breach of another provision or subsequent
breach of the same provision.
A. Severability. The invalidity or
unenforceability in any application of any provision in this Agreement
will not affect the validity or enforceability of any other provision or
of such provision in any other application.
A. Notices. All communications, requests, consents
and other notices provided for in this Agreement shall be in writing and
shall be deemed given if and when delivered personally by hand, sent by
facsimile at the appropriate number indicated below with electronic
confirmation of receipt, or mailed by first class mail, postage prepaid,
addressed as follows:
a. If to the Company:
Electronic Fab Technology Corp.
7251 West Fourth Street
Greeley, Colorado 80634-9763
Facsimile No. (303) 893-5009
with a copy to:
Holme Roberts & Owen LLC
1700 Lincoln
Suite 4200
Denver, Colorado 80203
Attn: John F. Knoeckel, Esq.
Facsimile No. (303) 866-0200
a. If to Executive:
or to such other address or facsimile number as either party may
designate by notice pursuant to this Section 12.
A. Governing Law. This Agreement shall be governed
by Colorado law.
A. Assignment. The Company may assign its rights
and delegate its obligations under this Agreement to any affiliate of
the Company or to any acquirer of substantially all of the business of
the Company whether through merger, purchase of assets, purchase of
stock or otherwise. Otherwise, neither party may assign any rights or
delegate any duties under this Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective legal representatives, heirs, and permitted successors and
assigns.
A. Entire Agreement. This Agreement sets forth the
entire agreement and understanding of the parties and supersedes all
prior understandings, agreements or representations by the parties,
written or oral, that relate to the subject matter of this Agreement.
A. Amendments. No provision of this Agreement may
be amended or waived except by an instrument in writing signed by the
party sought to be charged with the amendment or waiver.
Executed as of the date set forth on page 1.
ELECTRONIC FAB TECHNOLOGY CORP.
By Stuart W. Fuhlendorf
Jack Calderon
Jack Calderon
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>7
<TEXT>
CONSULTING AGREEMENT
This Consulting Agreement is entered into as of August 23,
1996, between Electronic Fab Technology Corp., a Colorado corporation
(the "Company"), and Gerald J. Reid (the "Consultant").
The parties agree as follows:
A. Engagement. The Company hereby agrees to engage
Consultant and the Consultant hereby accepts such engagement on the
terms and conditions set forth in this Agreement.
A. Duties.
(a) Consultant shall provide technical assistance
and personal services to the Company from time to time as requested by
the Chief Executive Officer of the Company. The Consultant shall be
available for up to 40 hours a week to provide such services, but shall
provide only such services as are requested by the Chief Executive
Officer of the Company and are reasonably acceptable to the Consultant.
(b) Consultant agrees not to provide any services
for or on behalf of the Company except those explicitly described above
or those specifically requested by the Chief Executive Officer of the
Company. Consultant will not represent to any third parties that he has
any other ability to act for or on behalf of the Company.
(c) Consultant shall provide all office space and
equipment as necessary to fulfill his duties under this Agreement.
Consultant shall perform his obligations under this Agreement as an
independent contractor, not as an employee. Consultant shall be
responsible for all tax withholding and estimated tax or other tax
payments attributable to this Agreement.
A. Term. The initial term of this Agreement shall
begin on the date of this Agreement and shall terminate one year from
the date of this Agreement. The Consultant may extend the term of this
Agreement for up to three additional consecutive one-year periods by
giving written notice of extension to the Company at least 15 days
before the end of the previous one-year period. Notwithstanding the
foregoing, this Agreement shall be terminated as of the date set forth
below upon the occurrence of any of the following events:
1. immediately if the Consultant dies (except
as specified in Section 4(d));
1. six months after such time as the closing
sale price of the Company's common stock on the NASDAQ trading system
shall be $8 per share or higher for at least 20 of any 30 consecutive
trading days;
1. 30 days after the aggregate number of
shares of the Company's common stock sold by Consultant or his wife
after the date of this Agreement shall equal or exceed 500,000; or
1. such time as any person or group (as
defined in Section 13(d) under the Securities Exchange Act of 1934),
excluding the Consultant and his spouse, shall acquire beneficial
ownership of shares with a majority of the voting power of the Company's
outstanding stock entitled to vote generally in elections of directors.
For these purposes, the term "group" shall be defined, and beneficial
ownership shall be determined, as provided in Section 13(d) of the
Securities Exchange Act of 1934 and regulations of the Securities and
Exchange Commission under such section.
A. Compensation. Consultant shall receive the
following compensation for his availability and services hereunder:
1. Simultaneously with and as consideration
for the execution and delivery of this Agreement, the Company is
(i) making a one-time payment to Consultant of $100,000 cash and
(ii) transferring and assigning to Consultant the Jeep Grand Cherokee
owned by the Company that has been made available previously for
Consultant's use. All costs of insuring, maintaining and operating that
vehicle will be at the Consultant's expense.
1. The Company shall pay to Consultant fees
of $100,000 per year. This amount shall be paid biweekly in arrears.
If at any time the total number of shares of the Company's common stock
sold by Consultant and his wife on or after the date of this Agreement
exceeds 100,000, then the compensation due Consultant under this Section
4(a) shall be reduced by the amount of all proceeds received by
Consultant or his wife from the sale of such shares in excess of 100,000
(net of all sales commissions and other selling expenses). Such
reduction shall be effected by withholding any payments until the total
amount withheld equals such excess proceeds. If more shares are then
sold, further compensation will be withheld on each occasion in the same
manner. However, under no circumstances will Consultant be required to
return any compensation already paid to him.
1. Throughout the term of this Agreement,
Consultant will continue to receive health, dental and vision insurance
as is generally made available by the Company to its employees, at no
expense to Consultant. This insurance shall cover both Consultant and
his wife. If Consultant dies, his wife will still be entitled as a
third-party beneficiary to receive such health insurance through the
fourth anniversary of the date of this Agreement.
1. The Company shall reimburse Consultant for
all expenses reasonably incurred by the Consultant in performing his
duties under this Agreement, as such duties are approved by the
Company's Chief Executive Officer.
A. Confidential Information. Consultant
acknowledges that the trade secrets, know-how and proprietary processes
of the Company and its confidential business plans, strategies,
concepts, prospects and financial data (collectively, "confidential
information") are valuable, unique assets of the Company. Consultant
shall not, during or after the term of this Agreement, disclose any of
the confidential information (unless already generally known to and
available for use by the public other than as a result of a violation by
Consultant of this Section 6 or as required by law) to any person or
entity for any purpose, nor shall Consultant use or permit the use of
any confidential information except, in either case, as is required for
Consultant to perform his duties under this Agreement.
A. Covenants Not to Compete or Interfere.
1. Scope. In view of the unique and valuable
consulting services that Consultant has been retained to render to the
Company and Consultant's current and future knowledge of the customers,
trade secrets and other proprietary information relating to the business
of the Company and its customers and suppliers, Consultant agrees that
during the term of this Agreement and for one year thereafter, he will
not Participate In (as defined below) the business of electronic
contract manufacturing.
1. Definition. For purposes of this
Section 6, "Participate In"means "directly or indirectly, for his own
benefit or for, with or through any other person, firm or corporation,
own, manage, operate, control, lend money to or participate in the
ownership, management, operation or control of, or be connected as a
director, officer, employee, partner, Consultant, agent, independent
contractor or otherwise with, or acquiesce in the use of his name in."
Notwithstanding the foregoing, Consultant shall not be deemed to
Participate In a business merely because he owns less than 5% of the
outstanding stock of a corporation (measured in voting power or equity),
if, at the time of its acquisition by Consultant, such stock is listed
on a national securities exchange or is reported on NASDAQ. In
addition, Consultant's ownership of stock of the Company will not
violate this Section 6. If any restriction contained in this Section 6
is deemed to be invalid, illegal or unenforceable by reason of its
duration, geographical scope or otherwise, then such provision shall be
deemed reduced in extent, duration, geographical scope or otherwise by
the minimum reduction necessary to cause the restriction to be
enforceable.
1. Noninterference. During the period
specified in Section 6(a) of this Agreement, Consultant shall not
(i) directly or indirectly cause or attempt to cause any employee of the
Company to leave the employ of the Company, (ii) in any way interfere
with the relationship between the Company and any employee, customer or
supplier, (iii) directly or indirectly hire any employee of the Company
to work for any organization of which Consultant is an officer,
director, employee, Consultant, independent contractor or owner of an
equity or other financial interest, or (iv) interfere or attempt to
interfere with any transaction in which the Company was involved during
the term of this Agreement or his employment.
A. Intellectual Property.
1. Consultant agrees to assign to the
Company, or to any person or entity designated by the Company, the
entire right, title and interest of the Consultant in and to all
inventions, ideas, discoveries and improvements (collectively,
"Inventions"), whether patented or unpatented, and material subject to
copyright, made or conceived by the Consultant, solely or jointly, that
arise out of or are related to research conducted by, for or under the
direction of the Company, or that relate to methods, apparatuses,
designs, products, processes or devices, sold, leased, used or under
consideration or development by the Company at the time of such
Invention. Consultant further acknowledges that all copyrightable
materials developed or produced by Consultant within the scope of his
employment by the Company constitute works made for hire.
1. Consultant shall communicate promptly and
disclose to the Company, in such form as the Company may reasonably
request, all information, details and data pertaining to any such
inventions, ideas, discoveries and improvements described in
paragraph 7(a) above.
A. Injunctive Relief. Upon an actual or threatened
breach by Consultant of Section 5, 6 or 7 of this Agreement, the Company
shall be entitled to an injunction restraining Consultant from such
breach. Nothing in this Agreement shall limit the Company's ability to
obtain any other remedies, including damages for such actual or
threatened breach.
A. Waiver of Breach. A waiver by the Company of a
breach of any provision of this Agreement by Consultant shall not be
construed as a waiver of any breach of another provision or subsequent
breach of the same provision.
A. Severability. The invalidity or
unenforceability in any application of any provision in this Agreement
will not affect the validity or enforceability of any other provision or
of such provision in any other application.
A. Notices. All communications, requests, consents
and other notices provided for in this Agreement shall be in writing and
shall be deemed given if and when delivered personally by hand, sent by
telecopy at the appropriate number indicated below with electronic
confirmation of receipt, or mailed by first class mail, postage prepaid,
addressed as follows:
a. If to the Company:
Electronic Fab Technology Corp.
7251 West Fourth Street
Greeley, Colorado 80634-9763
Facsimile No. (303) 893-5009
with a copy to:
Holme Roberts & Owen LLC
1700 Lincoln
Suite 4200
Denver, Colorado 80203
Attn: John F. Knoeckel, Esq.
Facsimile No. (303) 866-0200
a. If to Consultant:
Gerald J. Reid
2150 Reservoir Road
Greeley, Colorado 80631
or to such other address or telecopy number as either party may
designate by notice pursuant to this Section 11.
A. Governing Law. This Agreement shall be governed
by Colorado law.
A. Assignment. The Company may assign its rights
and delegate its obligations under this Agreement to any affiliate of
the Company or to any acquirer of substantially all of the business of
the Company whether through merger, purchase of assets, purchase of
stock or otherwise. Otherwise, neither party may assign any rights or
delegate any duties under this Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective legal representatives, heirs, and permitted successors and
assigns.
A. Entire Agreement. This Agreement sets forth the
entire agreement and understanding of the parties and supersedes all
prior understandings, agreements or representations by the parties,
written or oral, that relate to the subject matter of this Agreement.
In particular, the parties hereby terminate Consultant's Employment
Agreement with the Company dated as of February 28, 1994, and Consultant
shall not be entitled to any severance or other payments or benefits,
and shall have no obligations, under such terminated agreement.
Consultant hereby resigns all positions he may hold with the Company
other than his membership on the Board of Directors, his position as
Chairman of the Board and the position as outside consultant described
in Section 2.
A. Amendments. No provision of this Agreement may
be amended or waived except by an instrument in writing signed by the
party sought to be charged with the amendment or waiver.
Executed as of the date set forth on page 1.
ELECTRONIC FAB TECHNOLOGY CORP.
By Stuart W. Fuhlendorf
Gerald J. Reid
Gerald J. Reid
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>8
<TEXT>
Consent of Independent Auditors
The Board of Directors
Electronic Fab Technology Corp.:
We consent to the incorporation by reference in the registration
statements (Nos. 33-77938 and 33-92418) on Form S-8 of Electronic Fab
Technology Corp. of our report dated January 20, 1997, except as to note
12, which is as of February 24, 1997, relating to the balance sheets of
Electronic Fab Technology Corp. as of December 31, 1996 and 1995, and the
related statements of operations, shareholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1996, which
report appears in the 1996 annual report on Form 10-K of Electronic Fab
Technology Corp.
KPMG Peat Marwick LLP
Denver, Colorado
March 24, 1997
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.1
<SEQUENCE>9
<TEXT>
POWER OF ATTORNEY
Each person whose signature appears below appoints Stuart W. Fuhlendorf,
his or her attorney-in-fact, with full power of substitution, for him or
her in any and all capacities, to sign an annual report to be filed with
the Securities and Exchange Commission (the "Commission") on Form
10-K for the year ended December 31, 1996, by Electronic Fab Technology,
Corp., a Colorado corporation , and all amendments thereto, and to file the
same, with all exhibits thereto, with the Commission; granting unto said
attorney-in-fact full power and authority to perform any other act on
behalf of the undersigned required to be done in the premises, hereby
ratifying and confirming all that said attorney-in-fact may lawfully do
or cause to be done by virtue hereof.
Date: March 27, 1997 Gerald J. Reid
Gerald J. Reid
Date: March 27, 1997 Jack Calderon
Jack Calderon
Date: March 27, 1997 Lloyd A. McConnell
Lloyd A. McConnell
Date: March 27, 1997 Stuart W. Fuhlendorf
Stuart W. Fuhlendorf
Date: March 27, 1997 Brent L. Hofmeister
Brent L. Hofmeister
Date: March 27, 1997 Lucille A. Reid
Lucille A. Reid
Date: March 27, 1997 David W. Van Wert
David W. Van Wert
Date: March 27, 1997 Darrayl Cannon
Darrayl Cannon
Date: March 27, 1997 Masoud S. Shirazi
Masoud S. Shirazi
Date: March 27, 1997 Robert McNamara
Robert McNamara
Date: March 27, 1997 James A. Doran
James A. Doran
Date: March 27, 1997 Richard L. Monfort
Richard L. Monfort
Date: March 27, 1997 Charles Hewitson
Charles Hewitson
Date: March 27, 1997 Gregory Hewitson
Gregory Hewitson
Date: March 27, 1997 Matthew Hewitson
Matthew Hewitson
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>10
<TEXT>
<ARTICLE> 5
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 123882
<SECURITIES> 0
<RECEIVABLES> 3886991
<ALLOWANCES> 20000
<INVENTORY> 9146505
<CURRENT-ASSETS> 14250044
<PP&E> 12392267
<DEPRECIATION> 3872443
<TOTAL-ASSETS> 22869641
<CURRENT-LIABILITIES> 5741555
<BONDS> 2890000
<PREFERRED-MANDATORY> 0
<PREFERRED> 0
<COMMON> 39427
<OTHER-SE> 13882800
<TOTAL-LIABILITY-AND-EQUITY> 22869641
<SALES> 56880067
<TOTAL-REVENUES> 56880067
<CGS> 53980067
<TOTAL-COSTS> 53980067
<OTHER-EXPENSES> 4921653
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 525854
<INCOME-PRETAX> (2465079)
<INCOME-TAX> (872114)
<INCOME-CONTINUING> (1592965)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1592965)
<EPS-PRIMARY> (.40)
<EPS-DILUTED> (.40)