Exhibit 10.10
Loan Number: ▇▇▇▇▇▇-▇▇▇▇▇▇▇
REVOLVING NOTE
(Prime/LIBOR)
Date: June 30, 1997
Principal Amount: $3,500,000.00
Interest Rate: Variable Rate or LIBO Fixed Rate
Maturity Date: September 5, 1998
Borrower: PACIFIC AEROSPACE & ELECTRONICS, INC.
1. PROMISE TO PAY. PACIFIC AEROSPACE & ELECTRONICS, INC. ("Borrower")
promises to pay to KEYBANK NATIONAL ASSOCIATION, Wenatchee-Moses Lake Commercial
Banking Office, Wenatchee, Washington ("Lender"), or order, in lawful money of
the United States of America, the principal amount set forth above 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.
2. PAYMENT. Borrower will pay this loan on demand, or if no demand is made,
on the Maturity Date set forth above. In addition, ▇▇▇▇▇▇▇▇ will pay regular
monthly payments of accrued unpaid interest, beginning August 1, 1997, and
continuing 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, times the outstanding
principal balance, times the actual number of days the principal balance is
outstanding. Borrower will pay Lender at ▇▇▇▇▇▇'s 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.
3. INTEREST RATE. This Note shall bear interest at the Variable Rate,
unless Borrower elects to have an Advance bear interest at a LIBO Fixed Rate, as
described below. Advances may bear interest at different rates.
(a) Variable Rate. Unless Borrower elects to have an advance bear
interest at a Fixed Rate, amounts outstanding hereunder shall bear interest
from the date of advance at a floating rate equal to the Prime Rate plus
zero percent (0.000%) (the "Variable Rate"). "Prime Rate" means the
floating commercial loan rate announced
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from time to time by Lender as its "prime rate," and is not necessarily the
lowest rate offered by Lender. Changes in the Variable Rate will be
effective on the date the Prime Rate changes.
(b) LIBO Fixed Rate. Borrower may elect to have one or more advances
(each a "Fixed Rate Advance") bear interest for a term of 30, 60, 90, 120
or 180 days (the "Advance Period") at a fixed rate of interest equal to the
then-current LIBO Quote for the requested Advance Period, plus 2.50 percent
(2.500%) (the "LIBO Fixed Rate"). "LIBO Quote" means a rate calculated by
Lender acting in good faith, which Lender determines with reference to, but
which may be different from, its LIBOR or Eurodollar based costs of funds,
on the date of the advance request for the Advance Period selected by
▇▇▇▇▇▇▇▇. The formula used by ▇▇▇▇▇▇ in determining the LIBO Quote is
within its absolute discretion and may be changed from time to time.
Borrower may not select an Advance Period that extends beyond the Maturity
Date of the Note. Upon expiration of the applicable Advance Period,
Borrower may elect to roll the advance to a new LIBO Fixed Rate, to pay the
advance off, or have the advance bear interest thereafter at the Variable
Rate. If ▇▇▇▇▇▇▇▇ fails to elect any of these options, the advance will
thereafter bear interest at the Variable Rate until Borrower selects a new
LIBO Fixed Rate.
4. PREPAYMENT. ▇▇▇▇▇▇▇▇ 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. This Note evidences a revolving line, which may be
borrowed, repaid, and re-borrowed from time until maturity or earlier
termination. Principal payments shall first be applied to reduce principal
bearing interest at the Variable Rate, then to Fixed Rate Advances. If Borrower
prepays a Fixed Rate Advance prior to the last day of the applicable Advance
Period, Borrower shall also pay a Prepayment Premium, calculated as set forth
below. Lender will be entitled to receive the Prepayment Premium regardless of
whether prepayment is voluntary or involuntary, (including a demand on the Note
at a time when Borrower is in default hereunder) but not in the event of a
demand by Lender prior to the stated Termination Date in the absence of default
under this Note. Borrower acknowledges that Lender may or may not, in any
particular case, match-fund a Fixed Rate Advance and Borrower agrees that ▇▇▇▇▇▇
will be entitled to receive the Prepayment Premium irrespective of
match-funding. Early payments will not, unless agreed to by ▇▇▇▇▇▇ in writing,
relieve ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇'s obligation to continue to make payments of
accrued unpaid interest. Rather, they will reduce the principal balance due.
5. LATE CHARGE. If a payment is ten days or more late, Borrower will be
charged 5.000% of the regularly scheduled payment or $10.00, whichever is
greater.
6. 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
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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) 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. (▇) ▇▇▇▇▇▇▇▇ becomes insolvent, a
receiver is appointed for any part of ▇▇▇▇▇▇▇▇'s property, ▇▇▇▇▇▇▇▇ 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. (e) Any
creditor tries to take any of ▇▇▇▇▇▇▇▇'s property on or in which ▇▇▇▇▇▇ has a
lien or security interest. This includes a garnishment of any of ▇▇▇▇▇▇▇▇'s
accounts with ▇▇▇▇▇▇. (f) Any of the events described in this default section
occurs with respect to any guarantor of this Note. (f) A material adverse change
occurs in Borrower's financial conditions, or ▇▇▇▇▇▇ believes the prospect of
payment or performance of the Indebtedness is impaired. If any default, other
than a default in payment, is curable and if Borrower has not been given a
notice of a breach of the same provision of this Note within the preceding
twelve (12) months, it may be cured (and no event of default will have occurred)
if Borrower, after receiving written notice from Lender demanding cure of such
default: (a) cures the default within fifteen (15) days; or (b) if the cure
requires more than fifteen (15) days, immediately initiates steps which Lender
deems in ▇▇▇▇▇▇'s sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
7. LENDER'S RIGHTS. Upon default, ▇▇▇▇▇▇ may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately due,
without notice, and then Borrower must pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also increase the
interest rate on this Note to a floating rate equal to the Prime Rate plus 5.00%
per annum. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. ▇▇▇▇▇▇▇▇ also will pay Lender that amount. This includes,
subject to any limits under applicable law, court costs, ▇▇▇▇▇▇'s attorneys'
fees and ▇▇▇▇▇▇'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. This Note has been delivered to
and accepted by ▇▇▇▇▇▇ in the State of Washington. If there is a lawsuit,
▇▇▇▇▇▇▇▇ agrees upon ▇▇▇▇▇▇'s request to submit to the jurisdiction of the
courts of King or ▇▇▇▇▇▇ County, State of Washington. This Note shall be
governed by and construed in accordance with the laws of the State of
Washington.
8. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $10.00 if
Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.
9. LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note may be requested orally by Borrower or as provided in this
paragraph.
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Lender may, but need not, require that all oral requests be confirmed in
writing. All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to ▇▇▇▇▇▇'s office shown above. The
following party or parties are authorized as provided in this paragraph to
request advances under the line of credit until ▇▇▇▇▇▇ receives from Borrower at
▇▇▇▇▇▇'s address shown above written notice of revocation of their authority:
▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇. ▇▇▇▇▇▇▇▇ agrees to be liable for all sums either
advanced in accordance with the instructions of an authorized person or credited
to any of ▇▇▇▇▇▇▇▇'s accounts with ▇▇▇▇▇▇. The unpaid principal balance owing on
this Note at any time may be evidenced by endorsements on this Note or by
▇▇▇▇▇▇'s 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 with 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.
10. PREPAYMENT PREMIUM. If for any reason Borrower shall prepay all or a
portion of the principal amount of any Fixed Rate Advance prior to the
expiration of the applicable Advance Period, Borrower shall also pay Lender a
Prepayment Premium. The Prepayment Premium will be qual to the present value, at
the time of prepayment (the "Prepayment Date"), of the excess of (i) the
interest that would have been payable on the amount prepaid at the interest rate
applicable to the Advance(s) from the Prepayment Date to the expiration date of
the Advance Period applicable to such Advance, over (ii) the interest that would
be chargeable on a note equal to the amount prepaid at a New Rate. The "New
Rate" shall be equal to the United States Treasury Security yield on a security
with a current remaining term to maturity the same as the Advance at the
Prepayment Date, plus the comparable interest rate spread as the Advance had to
the United States Treasury Security yield with the same maturity. The present
value shall be computed using 1/12th of the New Rate as the monthly discount
rate. If there is no U.S. Treasury Security with a comparable maturity, Lender
will determine the appropriate yield by interpolating between maturities.
11. SWAP PROVISIONS. If Borrower and Lender are entering or subsequently
enter into an interest rate swap agreement related to this Note (a "Swap"), then
the following provisions shall apply: This Note shall be deemed to be modified
so that interest will accrue during the period of time the Swap is in effect at
a Fixed Rate equal to the rate designated in the Confirmation issued by Lender
applicable to such Swap, and calculated in accordance with the procedures and
quotation sources used in connection with the Swap. Upon a termination of the
Swap that does not constitute a default under this Note, the interest and
payment provisions under this Note shall, at ▇▇▇▇▇▇'s sole and exclusive option,
revert to what they would have been absent the Swap. If this Note is prepaid,
the Lender shall have the right in its sole and absolute discretion to terminate
the Swap upon or at any time after
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such prepayment. In addition to any premium that may be due under this Note upon
prepayment, Borrower will pay any amounts that may be due to Lender upon Early
Termination (as defined in the 1991 ISDA Definitions published by the
International Swap Dealers Association, Inc.) of the Swap.
12. ADDITIONAL PROVISIONS. Any advance that Lender in its sole discretion
may permit after the final payment date provided in this Note will be due on
demand and otherwise subject to the terms of this Note. If there is a statutory
change in state or federal law (including without limitation, a change related
to required reserves under applicable bank regulatory law or a change in any
provision of the Internal Revenue Code), or any regulation or interpretation
issued thereunder, that lowers Lender's effective yield on this Note, Lender
shall notify Borrower in writing of the change, and Borrower shall pay as
additional interest on this Note, the amount necessary to compensate Lender for
the amount by which Lender's effective yield was reduced.
13. GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights and 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, each 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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇ may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT
OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
KEYBANK NATIONAL BORROWER:
ASSOCIATION PACIFIC AEROSPACE & ELECTRONICS,
INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇ BY:
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Authorized Officer
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Pres/CEO
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