EXHIBIT 10.5
PROMISSORY NOTE
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(REVOLVING CREDIT)
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$3,000,000.00 August 15, 2006
FOR VALUE RECEIVED, BEST CIRCUIT BOARDS, INC., a Texas corporation,
INTEGRATED PERFORMANCE SYSTEMS, INC., a New York corporation and GLOBAL
INNOVATION CORP., a Delaware corporation (whether one or more, "Borrower"),
having an address at 901 Hensley Lane, Wylie, Texas 75098, hereby promises
to pay to the order of AMEGY BANK N.A., a national banking association
(together with its successors and assigns and any subsequent holders of this
Promissory Note, the "Lender"), as hereinafter provided, the principal sum
of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00) or so much thereof as
may be advanced by Lender from time to time hereunder to or for the benefit
or account of Borrower, together with interest thereon at the Note Rate (as
hereinafter defined), and otherwise in strict accordance with the terms and
provisions hereof.
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Promissory Note, the
following terms shall have the following meanings:
Applicable LIBOR Margin: One and one-half percent (1.50%).
Applicable Rate: LIBOR plus the Applicable LIBOR Margin.
Base Rate: For any day, a rate of interest equal to the Prime Rate for
such day.
Borrower: As identified in the introductory paragraph of this Note.
Business Day: A weekday, Monday through Friday, except a legal holiday
or a day on which banking institutions in Dallas, Texas are authorized or
required by law to be closed. Unless otherwise provided, the term "days"
when used herein shall mean calendar days.
Change: (i) any change after the date of this Note in the risk-based
capital guidelines applicable to Lender or (ii) any adoption of or change in
any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of
law) after the date of this Note that affects capital adequacy or the amount
of capital required or expected to be maintained by Lender or any entity
controlling Lender.
Charges: All fees, charges and/or any other things of value, if any,
contracted for, charged, taken, received or reserved by Lender in connection
with the transactions relating to this Note and the other Loan Documents,
which are treated as interest under applicable law.
Debtor Relief Laws: Title 11 of the United States Code, as now or
hereafter in effect, or any other applicable law, domestic or foreign, as
now or hereafter in effect, relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement or composition, extension or
adjustment of debts, or similar laws affecting the rights of creditors.
Deed of Trust: The Deed of Trust, Assignment of Rents, Security
Agreement, and Fixture Filing dated as of the date hereof, executed by Best
Circuit Boards, Inc., as grantor, to John G. Lingor, as trustee, for the
benefit of Lender, as beneficiary, relating to the Mortgaged Property. The
indebtedness evidenced by this Note and the obligations created hereby are
secured by, among other things, the Deed of Trust and the other Loan
Documents.
Default Interest Rate: A rate per annum equal to the Applicable Rate
plus four percent (4%), but in no event in excess of the Maximum Lawful
Rate.
Event of Default: Any event or occurrence described under Section 3.1
hereof.
Lender: As identified in the introductory paragraph of this Note.
LIBOR Banking Day: Any day on which commercial banks in the City of
London, England are open for business and dealing in offshore dollars.
LIBOR Determination Date: A day that is three LIBOR Banking Days prior
to the beginning of the relevant LIBOR Interest Period.
LIBOR Interest Period: A period of one, two or three months. The
first day of the interest period must be a LIBOR Banking Day. The last day
of the interest period and the actual number of days during the interest
period will be determined by Lender using the practices of the London
inter-bank market.
LIBOR: With respect to each LIBOR Interest Period, the rate (expressed
as a percentage per annum and adjusted as described in the last sentence of
this definition of LIBOR) for deposits in United States Dollars that appears
on Telerate Page 3750 (or the successor thereto) as of 11:00 a.m., London,
England time, on the related LIBOR Determination Date. If such rate does
not appear on such screen or service, or such screen or service shall cease
to be available, LIBOR shall be determined by Lender to be the offered rate
on such other screen or service that displays an average British Bankers
Association Interest Settlement Rate for deposits in United States Dollars
(for delivery on the first day of such LIBOR Interest Period) for a term
equivalent to such LIBOR Interest Period as of 11:00 a.m. on the relevant
LIBOR Determination Date. If the rates referenced in the two preceding
sentences are not available, LIBOR for the relevant LIBOR Interest Period
will be determined by such alternate method or reasonably selected by
Lender. LIBOR shall be adjusted from time to time in Lender's sole
discretion for then-applicable reserve requirements, deposit insurance
assessment rates, marginal emergency, supplemental, special and other
reserve percentages, and other regulatory costs.
Loan Agreement: The Loan Agreement of even date herewith executed by
Lender and Borrower.
Loan Documents: This Note, the Deed of Trust, the Loan Agreement, the
Environmental Indemnity Agreement, any assignment of rents, any financing
statements, and such other agreements, documents and instruments now or
hereafter governing, securing or guaranteeing any portion of the
indebtedness evidenced by this Note, and/or the Related Indebtedness or
executed by Borrower or any other person or entity in connection with the
loan evidenced by this Note or in connection with the payment of the
indebtedness evidenced by this Note or the Related Indebtedness or the
performance and discharge of the obligations related hereto or thereto,
together with any and all renewals, modifications, amendments, restatements,
consolidations, substitutions, replacements, extensions and supplements
hereof or thereof.
Maturity Date: August 14, 2007.
Maximum Lawful Rate: The maximum lawful rate of interest which may be
contracted for, charged, taken, received or reserved by Lender in accordance
with the applicable laws of the State of Texas (or applicable United States
federal law to the extent that such law permits Lender to contract for,
charge, take, receive or reserve a greater amount of interest than under
Texas law), taking into account all Charges made in connection with the
transaction evidenced by this Note and the other Loan Documents.
Mortgaged Property: That certain real property located in Collin
County, Texas, as more particularly described in the Deed of Trust, together
with certain other rights, estates, interests, collateral and benefits now
or at any time hereafter securing the payment of the indebtedness evidenced
by this Note or the Related Indebtedness, whether by virtue of the Loan
Documents or otherwise.
Note: This Promissory Note.
Note Rate: The rate equal to the lesser of (a) the Maximum Lawful Rate
or (b) the Applicable Rate.
Payment Date: The fifteenth (15th) day of each and every calendar
month during the term of this Note and the last day of each LIBOR Interest
Period.
Prime Rate: The rate of interest announced from time to time by
Lender as its "base" or "prime" rate of interest, which Borrower hereby
acknowledges and agrees may not be the lowest interest rate charged by
Lender and is set by Lender in its sole discretion, changing when and as
said prime rate changes.
Related Indebtedness: Any and all indebtedness paid or payable by
Borrower to Lender pursuant to the Loan Documents or any other communication
or writing by or between Borrower and Lender related to the transaction or
transactions that are the subject matter of the Loan Documents, except such
indebtedness which has been paid or is payable by Borrower to Lender under
this Note.
Any capitalized term used in this Note and not otherwise defined herein
shall have the meaning ascribed to each such term in the Loan Agreement.
All terms used herein, whether or not defined in Section 1.1 hereof, and
whether used in singular or plural form, shall be deemed to refer to the
object of such term whether such is singular or plural in nature, as the
context may suggest or require.
ARTICLE II
PAYMENT TERMS
Section 2.1 PAYMENT OF PRINCIPAL AND INTEREST. All accrued but
unpaid interest on the principal balance of this Note outstanding from time
to time shall be payable on each Payment Date commencing September 15, 2006.
The then outstanding principal balance of this Note and all accrued but
unpaid interest thereon shall be due and payable on the Maturity Date.
Borrower may from time to time during the term of this Note borrow,
partially or wholly repay its outstanding borrowings, and reborrow, subject
to all of the limitations, terms and conditions of this Note and of the Loan
Documents; provided however, that the total outstanding borrowings under
this Note shall not at any time exceed the principal amount stated above.
The unpaid principal balance of this Note at any time shall be the total
amounts advanced hereunder by Lender less the amount of principal payments
made hereon by or for Borrower, which balance may be endorsed hereon from
time to time by Lender or otherwise noted in Lender's records, which
notations shall be, absent manifest error, conclusive evidence of the
amounts owing hereunder from time to time.
Section 2.2 APPLICATION. Except as expressly provided herein to the
contrary, all payments on this Note shall be applied in the following order
of priority: (i) the payment or reimbursement of any expenses, costs or
obligations (other than the outstanding principal balance hereof and
interest hereon) for which either Borrower shall be obligated or Lender
shall be entitled pursuant to the provisions of this Note or the other Loan
Documents, (ii) the payment of accrued but unpaid interest hereon, and
(iii) the payment of all or any portion of the principal balance hereof then
outstanding hereunder, in the direct order of maturity. If an Event of
Default exists under this Note or under any of the other Loan Documents,
then Lender may, at the sole option of Lender, apply any such payments, at
any time and from time to time, to any of the items specified in
clauses (i), (ii) or (iii) above without regard to the order of priority
otherwise specified in this Section 2.2 and any application to the
outstanding principal balance hereof may be made in either direct or inverse
order of maturity.
Section 2.3 PAYMENTS. All payments under this Note made to Lender
shall be made in immediately available funds at 1807 Ross Avenue, Suite 400,
Dallas, Texas 75201 (or at such other place as Lender, in Lender's sole
discretion, may have established by delivery of written notice thereof to
Borrower from time to time), without offset, in lawful money of the United
States of America, which shall at the time of payment be legal tender in
payment of all debts and dues, public and private. Payments by check or
draft shall not constitute payment in immediately available funds until the
required amount is actually received by Lender in full. Payments in
immediately available funds received by Lender in the place designated for
payment on a Business Day prior to 11:00 a.m. Dallas, Texas time at said
place of payment shall be credited prior to the close of business on the
Business Day received, while payments received by Lender on a day other than
a Business Day or after 11:00 a.m. Dallas, Texas time on a Business Day
shall not be credited until the next succeeding Business Day. If any
payment of principal or interest on this Note shall become due and payable
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day. Any such extension of time for payment shall be
included in computing interest which has accrued and shall be payable in
connection with such payment.
Section 2.4 RATE, ETC. Subject to the terms and conditions set
forth below, the unpaid principal of this Note shall bear interest at the
Note Rate. Borrower shall designate each LIBOR Interest Period by giving
Lender written notice of its selection before 11:00 a.m. (Dallas, Texas
time) on the LIBOR Determination Date, which selection shall be irrevocable,
for each LIBOR Interest Period. No LIBOR Interest Period may extend beyond
the Maturity Date. If Borrower shall fail to select a LIBOR Interest Period
the unpaid principal balance of this Note shall bear interest at LIBOR plus
the Applicable LIBOR Margin for successive LIBOR Interest Periods of one
month each until Borrower selects another LIBOR Interest Period in
accordance with the terms hereof. If an Event of Default has occurred and
is continuing, the option to select LIBOR Interest Periods shall terminate,
and this Note shall bear interest in accordance with Section 2.9 of this
Note. The determination by Lender of the Note Rate shall, in the absence of
manifest error, be conclusive and binding in all respects. Notwithstanding
anything contained herein to the contrary, if (i) at any time, Lender
determines (which determination shall be conclusive in the absence of
manifest error) that any applicable law or regulation or any change therein
or the interpretation or application thereof or compliance therewith by
Lender (A) prohibits, restricts or makes impossible the charging of interest
based on LIBOR or (B) shall make it unlawful for Lender to make or maintain
the indebtedness evidenced by this Note in eurodollars, or (ii) at the time
of or prior to the determination of LIBOR, Lender determines (which
determination shall be conclusive in the absence of manifest error) that by
reason of circumstances affecting the London interbank market generally, (A)
deposits in United States Dollars in the relevant amounts and of the
relevant maturity are not available to Lender in the London interbank
market, (B) LIBOR does not adequately and fairly reflect the cost to Lender
of making or maintaining the loan, due to changes in administrative costs,
fees, tariffs and taxes and other matters outside of Lender's reasonable
control, or (C) adequate and fair means do not or will not exist for
determining LIBOR as set forth in this Note, then Lender shall give Borrower
prompt notice thereof, and this Note shall bear interest, and continue to
bear interest until Lender determines that the applicable circumstance
described in the foregoing clauses (i) (A) or (B) or (ii) (A), (B) or (C) no
longer pertains, at the Base Rate (adjusted as may be necessary by Lender to
correspond as closely as possible to the Applicable Rate existing on the
date of Lender's determination set forth in (i) or (ii) above), which Base
Rate shall adjust from time to time as and when the Prime Rate changes.
Section 2.5 COMPUTATION PERIOD. Interest on the indebtedness
evidenced by this Note shall be computed on the basis of a three hundred
sixty (360) day year and shall accrue on the actual number of days elapsed
for any whole or partial month in which interest is being calculated. In
computing the number of days during which interest accrues, the day on which
funds are initially advanced shall be included regardless of the time of day
such advance is made, and the day on which funds are repaid shall be
included unless repayment is credited prior to the close of business on the
Business Day received as provided in Section 2.3 hereof.
Section 2.6 PREPAYMENT. Borrower shall have the right to prepay, at
any time and from time to time without fee, premium or penalty (except as
noted below), all or any portion of the outstanding principal balance
hereof, provided, however, that such prepayment shall also include any and
all accrued but unpaid interest on the amount of principal being so prepaid
through and including the date of prepayment, plus any other sums which have
become due to Lender under the other Loan Documents on or before the date of
prepayment, but which have not been fully paid.
Section 2.7 UNCONDITIONAL PAYMENT. Borrower is and shall be
obligated to pay all principal, interest and any and all other amounts which
become payable under this Note or under any of the other Loan Documents
absolutely and unconditionally and without any abatement, postponement,
diminution or deduction whatsoever and without any reduction for
counterclaim or setoff whatsoever. If at any time any payment received by
Lender hereunder shall be deemed by a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under any Debtor
Relief Law, then the obligation to make such payment shall survive any
cancellation or satisfaction of this Note or return thereof to Borrower and
shall not be discharged or satisfied with any prior payment thereof or
cancellation of this Note, but shall remain a valid and binding obligation
enforceable in accordance with the terms and provisions hereof, and such
payment shall be immediately due and payable upon demand.
Section 2.8 PARTIAL OR INCOMPLETE PAYMENTS. Remittances in payment
of any part of this Note other than in the required amount in immediately
available funds at the place where this Note is payable shall not,
regardless of any receipt or credit issued therefor, constitute payment
until the required amount is actually received by Lender in full in
accordance herewith and shall be made and accepted subject to the condition
that any check or draft may be handled for collection in accordance with the
practice of the collecting bank or banks. Acceptance by Lender of any
payment in an amount less than the full amount then due shall be deemed an
acceptance on account only, and the failure to pay the entire amount then
due shall be and continue to be an Event of Default in the payment of this
Note.
Section 2.9 DEFAULT INTEREST RATE, ETC. For so long as any Event of
Default exists under this Note or under any of the other Loan Documents,
regardless of whether or not there has been an acceleration of the
indebtedness evidenced by this Note, and at all times after the maturity of
the indebtedness evidenced by this Note (whether by acceleration or
otherwise), and in addition to all other rights and remedies of Lender
hereunder, interest shall accrue on the outstanding principal balance hereof
at the Default Interest Rate, and such accrued interest shall be immediately
due and payable. Borrower acknowledges that it would be extremely difficult
or impracticable to determine Lender's actual damages resulting from any
late payment or Event of Default, and such late charges and accrued interest
are reasonable estimates of those damages and do not constitute a penalty.
ARTICLE III
EVENT OF DEFAULT AND REMEDIES
Section 3.1 EVENT OF DEFAULT. The occurrence or happening, at any
time and from time to time, of any event or condition which constitutes an
Event of Default under the Loan Agreement shall immediately constitute an
"Event of Default" under this Note.
Section 3.2 REMEDIES. Upon the occurrence of an Event of Default,
Lender shall have the immediate right, at the sole discretion of Lender and
without notice, demand, presentment, notice of nonpayment or nonperformance,
protest, notice of protest, notice of intent to accelerate, notice of
acceleration, or any other notice or any other action (ALL OF WHICH BORROWER
HEREBY EXPRESSLY WAIVES AND RELINQUISHES) (i) to declare the entire unpaid
balance of the indebtedness evidenced by this Note (including, without
limitation, the outstanding principal balance hereof, including all sums
advanced or accrued hereunder or under any other Loan Document, and all
accrued but unpaid interest thereon) at once immediately due and payable
(and upon such declaration, the same shall be at once immediately due and
payable) and may be collected forthwith, whether or not there has been a
prior demand for payment and regardless of the stipulated date of maturity,
(ii) to foreclose any liens and security interests securing payment hereof
or thereof (including, without limitation, any liens and security interests
covering any portion of the Mortgaged Property), and (iii) to exercise any
of Lender's other rights, powers, recourses and remedies under this Note,
under any other Loan Document, or at law or in equity, and the same
(w) shall be cumulative and concurrent, (x) may be pursued separately,
singly, successively, or concurrently against Borrower or others obligated
for the repayment of this Note or any part hereof, or against any one or
more of them, or against the Mortgaged Property, at the sole discretion of
Lender, (y) may be exercised as often as occasion therefor shall arise, it
being agreed by Borrower that the exercise, discontinuance of the exercise
of or failure to exercise any of the same shall in no event be construed as
a waiver or release thereof or of any other right, remedy, or recourse, and
(z) are intended to be, and shall be, nonexclusive. All rights and remedies
of Lender hereunder and under the other Loan Documents shall extend to any
period after the initiation of foreclosure proceedings, judicial or
otherwise, with respect to the Mortgaged Property or any portion thereof.
Without limiting the provisions of Section 4.18 hereof, if this Note, or any
part hereof, is collected by or through an attorney-at-law, Borrower agrees
to pay all reasonable costs and expenses of collection, including, but not
limited to, reasonable Lender's attorneys' fees, whether or not any legal
action shall be instituted to enforce this Note. This Note is also subject
to acceleration as provided in the Loan Agreement.
ARTICLE IV
GENERAL PROVISIONS
Section 4.1 NO WAIVER; AMENDMENT. No failure to accelerate the
indebtedness evidenced by this Note by reason of an Event of Default
hereunder, acceptance of a partial or past due payment, or indulgences
granted from time to time shall be construed (i) as a novation of this Note
or as a reinstatement of the indebtedness evidenced by this Note or as a
waiver of such right of acceleration or of the right of Lender thereafter to
insist upon strict compliance with the terms of this Note, or (ii) to
prevent the exercise of such right of acceleration or any other right
granted under this Note, under any of the other Loan Documents or by any
applicable laws. Borrower hereby expressly waives and relinquishes the
benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in
conflict with the foregoing. The failure to exercise any remedy available
to Lender shall not be deemed to be a waiver of any rights or remedies of
Lender under this Note or under any of the other Loan Documents, or at law
or in equity. No extension of the time for the payment of this Note or any
installment due hereunder, made by agreement with any person now or
hereafter liable for the payment of this Note, shall operate to release,
discharge, modify, change or affect the original liability of Borrower under
this Note, either in whole or in part, unless Lender specifically,
unequivocally and expressly agrees otherwise in writing. This Note may not
be changed orally, but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, or modification is sought.
Section 4.2 WAIVERS. EXCEPT AS SPECIFICALLY PROVIDED IN THE LOAN
DOCUMENTS TO THE CONTRARY, BORROWER AND ANY ENDORSERS OR GUARANTORS HEREOF
SEVERALLY WAIVE AND RELINQUISH PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF
NONPAYMENT OR NONPERFORMANCE, PROTEST, NOTICE OF PROTEST, NOTICE OF INTENT
TO ACCELERATE, NOTICE OF ACCELERATION OR ANY OTHER NOTICES OR ANY OTHER
ACTION. BORROWER AND ANY ENDORSERS OR GUARANTORS HEREOF SEVERALLY WAIVE AND
RELINQUISH, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO THE
BENEFITS OF ANY MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE,
VALUATION, STAY, EXTENSION, REDEMPTION, APPRAISEMENT, EXEMPTION AND
HOMESTEAD NOW OR HEREAFTER PROVIDED BY THE CONSTITUTION AND LAWS OF THE
UNITED STATES OF AMERICA AND OF EACH STATE THEREOF, BOTH AS TO ITSELF AND IN
AND TO ALL OF ITS PROPERTY, REAL AND PERSONAL, AGAINST THE ENFORCEMENT AND
COLLECTION OF THE OBLIGATIONS EVIDENCED BY THIS NOTE OR BY THE OTHER LOAN
DOCUMENTS.
Section 4.3 INTEREST PROVISIONS.
(a) Savings Clause. It is expressly stipulated and agreed to be
the intent of Borrower and Lender at all times to comply strictly with
the applicable Texas law governing the maximum rate or amount of
interest payable on the indebtedness evidenced by this Note and the
Related Indebtedness (or applicable United States federal law to the
extent that it permits Lender to contract for, charge, take, reserve or
receive a greater amount of interest than under Texas law). If the
applicable law is ever judicially interpreted so as to render usurious
any amount (i) contracted for, charged, taken, reserved or received
pursuant to this Note, any of the other Loan Documents or any other
communication or writing by or between Borrower and Lender related to
the transaction or transactions that are the subject matter of the Loan
Documents, (ii) contracted for, charged, taken, reserved or received by
reason of Lender's exercise of the option to accelerate the maturity of
this Note and/or the Related Indebtedness, or (iii) Borrower will have
paid or Lender will have received by reason of any voluntary prepayment
by Borrower of this Note and/or the Related Indebtedness, then it is
Borrower's and Lender's express intent that all amounts charged in
excess of the Maximum Lawful Rate shall be automatically canceled, ab
initio, and all amounts in excess of the Maximum Lawful Rate
theretofore collected by Lender shall be credited on the principal
balance of this Note and/or the Related Indebtedness (or, if this Note
and all Related Indebtedness have been or would thereby be paid in
full, refunded to Borrower), and the provisions of this Note and the
other Loan Documents shall immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced,
without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder and thereunder; provided,
however, if this Note has been paid in full before the end of the
stated term of this Note, then Borrower and Lender agree that Lender
shall, with reasonable promptness after Lender discovers or is advised
by Borrower that interest was received in an amount in excess of the
Maximum Lawful Rate, either refund such excess interest to Borrower
and/or credit such excess interest against this Note and/or any Related
Indebtedness then owing by Borrower to Lender. Borrower hereby agrees
that as a condition precedent to any claim seeking usury penalties
against Lender, Borrower will provide written notice to Lender,
advising Lender in reasonable detail of the nature and amount of the
violation, and Lender shall have sixty (60) days after receipt of such
notice in which to correct such usury violation, if any, by either
refunding such excess interest to Borrower or crediting such excess
interest against this Note and/or the Related Indebtedness then owing
by Borrower to Lender. All sums contracted for, charged, taken,
reserved or received by Lender for the use, forbearance or detention of
any debt evidenced by this Note and/or the Related Indebtedness shall,
to the extent permitted by applicable law, be amortized or spread,
using the actuarial method, throughout the stated term of this Note
and/or the Related Indebtedness (including any and all renewal and
extension periods) until payment in full so that the rate or amount of
interest on account of this Note and/or the Related Indebtedness does
not exceed the Maximum Lawful Rate from time to time in effect and
applicable to this Note and/or the Related Indebtedness for so long as
debt is outstanding. In no event shall the provisions of Chapter 346
of the Texas Finance Code (which regulates certain revolving credit
loan accounts and revolving triparty accounts) apply to this Note
and/or any of the Related Indebtedness. Notwithstanding anything to
the contrary contained herein or in any of the other Loan Documents, it
is not the intention of Lender to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
(b) Ceiling Election. To the extent that Lender is relying on
Chapter 303 of the Texas Finance Code to determine the Maximum Lawful
Rate payable on the Note and/or any other portion of the Indebtedness,
Lender will utilize the weekly ceiling from time to time in effect as
provided in such Chapter 303, as amended. To the extent United States
federal law permits Lender to contract for, charge, take, receive or
reserve a greater amount of interest than under Texas law, Lender will
rely on United States federal law instead of such Chapter 303 for the
purpose of determining the Maximum Lawful Rate. Additionally, to the
extent permitted by applicable law now or hereafter in effect, Lender
may, at its option and from time to time, utilize any other method of
establishing the Maximum Lawful Rate under such Chapter 303 or under
other applicable law by giving notice, if required, to Borrower as
provided by applicable law now or hereafter in effect.
Section 4.4 USE OF FUNDS. Borrower hereby warrants, represents and
covenants that (i) the loan evidenced by this Note is made to Borrower
solely for the purpose of acquiring or carrying on a business or commercial
enterprise, (ii) all proceeds of this Note shall be used only for business
and commercial purposes, and (iii) no funds disbursed hereunder shall be
used for personal, family, agricultural or household purposes.
Section 4.5 FURTHER ASSURANCES AND CORRECTIONS. From time to time,
at the request of Lender, Borrower will (i) promptly correct any defect,
error or omission which may be discovered in the contents of this Note or in
any other Loan Document or in the execution or acknowledgment thereof;
(ii) execute, acknowledge, deliver, record and/or file (or cause to be
executed, acknowledged, delivered, recorded and/or filed) such further
documents and instruments (including, without limitation, further deeds of
trust, security agreements, financing statements, continuation statements
and assignments of rents) and perform such further acts and provide such
further assurances as may be necessary, desirable, or proper, in Lender's
opinion, (A) to carry out more effectively the purposes of this Note and the
Loan Documents and the transactions contemplated hereunder and thereunder,
(B) to confirm the rights created under this Note and the other Loan
Documents, (C) to protect and further the validity, priority and
enforceability of this Note and the other Loan Documents and the liens and
security interests created thereby, and (D) to subject to the Loan Documents
any property of Borrower intended by the terms of any one or more of the
Loan Documents to be encumbered by the Loan Documents; and (iii) pay all
costs in connection with any of the foregoing.
Section 4.6 WAIVER OF JURY TRIAL. BORROWER, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY KNOWINGLY, INTENTIONALLY, IRREVOCABLY,
UNCONDITIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT
COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THIS NOTE OR ANY CONDUCT, ACT OR OMISSION OF LENDER OR BORROWER,
OR ANY OF THEIR DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR
ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH LENDER OR BORROWER, IN EACH
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
Section 4.7 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Note is
executed and delivered as an incident to a lending transaction negotiated
and consummated in Dallas County, Texas, and shall be governed by and
construed in accordance with the laws of the State of Texas. Borrower, for
itself and its successors and assigns, hereby irrevocably (i) submits to the
nonexclusive jurisdiction of the state and federal courts in Texas,
(ii) waives, to the fullest extent permitted by law, any objection that it
may now or in the future have to the laying of venue of any litigation
arising out of or in connection with this Note or any Loan Document brought
in the District Court of Dallas County, Texas, or in the United States
District Court for the Northern District of Texas, (iii) waives any
objection it may now or hereafter have as to the venue of any such action or
proceeding brought in such court or that such court is an inconvenient
forum, and (iv) agrees that any legal proceeding against any party to any of
the Loan Documents arising out of or in connection with any of the Loan
Documents may be brought in one of the foregoing courts. Borrower hereby
agrees that service of process upon Borrower may be made by certified or
registered mail, return receipt requested, at its address specified herein.
Nothing herein shall affect the right of Lender to serve process in any
other manner permitted by law or shall limit the right of Lender to bring
any action or proceeding against Borrower or with respect to any of
Borrower's property in courts in other jurisdictions. The scope of each of
the foregoing waivers is intended to be all encompassing of any and all
disputes that may be filed in any court and that relate to the subject
matter of this transaction, including, without limitation, contract claims,
tort claims, breach of duty claims, and all other common law and statutory
claims. Borrower acknowledges that these waivers are a material inducement
to Lender's agreement to enter into the agreements and obligations evidenced
by the Loan Documents, that Lender has already relied on these waivers and
will continue to rely on each of these waivers in related future dealings.
The waivers in this Section 4.7 are irrevocable, meaning that they may not
be modified either orally or in writing, and these waivers apply to any
future renewals, extensions, amendments, modifications, or replacements in
respect of any and all of the applicable Loan Documents. In connection with
any litigation, this Note may be filed as a written consent to a trial by
the court.
Section 4.8 COUNTING OF DAYS. If any time period referenced
hereunder ends on a day other than a Business Day, such time period shall be
deemed to end on the next succeeding Business Day.
Section 4.9 RELATIONSHIP OF THE PARTIES. Notwithstanding any prior
business or personal relationship between Borrower and Lender, or any
officer, director or employee of Lender, that may exist or have existed, the
relationship between Borrower and Lender is solely that of debtor and
creditor, Lender has no fiduciary or other special relationship with
Borrower, Borrower and Lender are not partners or joint venturers, and no
term or condition of any of the Loan Documents shall be construed so as to
deem the relationship between Borrower and Lender to be other than that of
debtor and creditor.
Section 4.10 SUCCESSORS AND ASSIGNS. The terms and provisions hereof
shall be binding upon and inure to the benefit of Borrower and Lender and
their respective heirs, executors, legal representatives, successors,
successors-in-title and assigns, whether by voluntary action of the parties,
by operation of law or otherwise, and all other persons claiming by, through
or under them. The terms "Borrower" and "Lender" as used hereunder shall be
deemed to include their respective heirs, executors, legal representatives,
successors, successors-in-title and assigns, whether by voluntary action of
the parties, by operation of law or otherwise, and all other persons
claiming by, through or under them.
Section 4.11 JOINT AND SEVERAL LIABILITY. If Borrower consists of
more than one person or entity, each shall be jointly and severally liable
to perform the obligations of Borrower under this Note.
Section 4.12 TIME IS OF THE ESSENCE. Time is of the essence with
respect to all provisions of this Note and the other Loan Documents.
Section 4.13 HEADINGS. The Article, Section, and Subsection
entitlements hereof are inserted for convenience of reference only and shall
in no way alter, modify, define, limit, amplify or be used in construing the
text, scope or intent of such Articles, Sections, or Subsections or any
provisions hereof.
Section 4.14 CONTROLLING AGREEMENT. In the event of any conflict
between the provisions of this Note and the Deed of Trust, it is the intent
of the parties hereto that the provisions of the Loan Agreement shall
control. In the event of any conflict between the provisions of this Note
and any of the other Loan Documents (other than the Loan Agreement), it is
the intent of the parties hereto that the provisions of this Note shall
control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution
of this Note and the other Loan Documents and that this Note and the other
Loan Documents shall not be subject to the principle of construing their
meaning against the party which drafted same.
Section 4.15 NOTICES. All notices or other communications required
or permitted to be given pursuant to this Note shall be in writing and shall
be considered as properly given if (i) mailed by first class United States
mail, postage prepaid, registered or certified with return receipt
requested, (ii) by delivering same in person to the intended addressee,
(iii) by delivery to a reputable independent third party commercial delivery
service for same day or next day delivery and providing for evidence of
receipt at the office of the intended addressee, or (iv) by prepaid
telegram, telex, telecopier or telefacsimile transmission to the addressee.
Notice so mailed shall be effective upon its deposit with the United States
Postal Service or any successor thereto; notice sent by such a commercial
delivery service shall be effective upon delivery to such commercial
delivery service; notice given by personal delivery shall be effective only
if and when received by the addressee; and notice given by other means shall
be effective only if and when received at the office or designated place or
machine of the intended addressee. For purposes of notice, the addresses of
the parties shall be as set forth herein; provided, however, that either
party shall have the right to change its address for notice hereunder to any
other location within the continental United States by the giving of
thirty (30) days' prior notice to the other party in the manner set forth
herein.
Section 4.16 SEVERABILITY. If any provision of this Note or the
application thereof to any person or circumstance shall, for any reason and
to any extent, be invalid or unenforceable, then neither the remainder of
this Note nor the application of such provision to other persons or
circumstances nor the other instruments referred to herein shall be affected
thereby, but rather shall be enforced to the greatest extent permitted by
applicable law.
Section 4.17 RIGHT OF SETOFF. In addition to all liens upon and
rights of setoff against the money, securities, or other property of
Borrower given to Lender that may exist under applicable law, Lender shall
have and Borrower hereby grants to Lender a lien upon and a right of setoff
against all money, securities, and other property of Borrower, now or
hereafter in possession of or on deposit with Lender, whether held in a
general or special account or deposit, for safe-keeping or otherwise, and
every such lien and right of setoff may be exercised without demand upon or
notice to Borrower. No lien or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender, or by any neglect to
exercise such right of setoff or to enforce such lien, or by any delay in so
doing, and every right of setoff and lien shall continue in full force and
effect until such right of setoff or lien is specifically waived or released
by an instrument in writing executed by Lender.
Section 4.18 COSTS OF COLLECTION. If any holder of this Note retains
an attorney-at-law in connection with any Event of Default or at maturity or
to collect, enforce, or defend this Note or any part hereof, or any other
Loan Document in any lawsuit or in any probate, reorganization, bankruptcy
or other proceeding, or if Borrower sues any holder in connection with this
Note or any other Loan Document and does not prevail, then Borrower agrees
to pay to each such holder, in addition to the principal balance hereof and
all interest hereon, all reasonable costs and expenses of collection or
incurred by such holder or in any such suit or proceeding, including, but
not limited to, reasonable attorneys' fees.
Section 4.19 GENDER. All personal pronouns used herein, whether used
in the masculine, feminine or neuter gender, shall include all other
genders; the singular shall include the plural and vice versa.
Section 4.20 STATEMENT OF UNPAID BALANCE. At any time and from time
to time, Borrower will furnish promptly, upon the request of Lender, a
written statement or affidavit, in form satisfactory to Lender, stating the
unpaid balance of the indebtedness evidenced by this Note and the Related
Indebtedness and that there are no offsets or defenses against full payment
of the indebtedness evidenced by this Note and the Related Indebtedness and
the terms hereof, or if there are any such offsets or defenses, specifying
them.
Section 4.21 ENTIRE AGREEMENT. THIS NOTE AND THE OTHER LOAN
DOCUMENTS CONTAIN THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND ALL PRIOR AGREEMENTS,
WHETHER WRITTEN OR ORAL, RELATIVE HERETO AND THERETO WHICH ARE NOT CONTAINED
HEREIN OR THEREIN ARE SUPERSEDED AND TERMINATED HEREBY, AND THIS NOTE AND
THE OTHER LOAN DOCUMENTS MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
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IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has
duly executed this Note as of the day and year first written above.
BORROWER:
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BEST CIRCUIT BOARDS, INC.
a Texas corporation
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
INTEGRATED PERFORMANCE SYSTEMS, INC.,
a New York corporation
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
GLOBAL INNOVATION CORP.,
a Delaware corporation
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
Address of Lender for purposes
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of notice hereunder:
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1807 Ross Avenue, Suite 400
Dallas, Texas 75201