Exhibit 10.29
BANK OF AMERICA NT&SA
BUSINESS LOAN AGREEMENT
-----------------------
This Agreement dated as of April 12, 1999 is between Bank of America NT&SA
(the "Bank") and Advanced Machine Vision Corporation (the "Borrower").
1. FACILITY NO. 1 LINE OF CREDIT AMOUNT AND TERMS
1.1 Line of Credit Amount.
(a) During the availability period described below, the Bank will provide a
line of credit to the Borrower. The amount of the line of credit (the
"Commitment") is Two Million Dollars ($2,000,000).
(b) This is a revolving line of credit. During the availability period, the
Borrower may repay principal amounts and reborrow them.
(c) The Borrower agrees not to permit the outstanding principal balance of
the line of credit to exceed the Facility No. 1 Commitment.
1.2 Availability Period. The line of credit is available between the date
of this Agreement and April 30, 2000 (the "Facility No. 1 Expiration Date")
unless the Borrower is in default.
1.3 Interest Rate.
(a) Unless the Borrower elects an Optional interest rate as described
below, the interest rate is the Reference Rate plus .50 percentage point.
(b) The Reference Rate is the rate of interest publicly announced from time
to time by Bank as its Reference Rate. The Reference Rate is set based on
various factors, including Bank's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans. The Bank may price loans to its customers at, above, or below the
Reference Rate. Any change in the Reference Rate shall take effect at the
opening of business on the day specified in the public announcement of a change
in the Reference Rate.
1.4 Repayment Terms.
(a) The Borrower will pay interest on May 30, 1999, and then monthly
thereafter until payment in full of any principal outstanding under this line of
credit.
(b) The Borrower will repay in full all principal and any unpaid interest
or other charges outstanding under this line of credit no later than the
Facility No. 1 Expiration Date.
1.5 Optional Interest Rates. Instead of the interest rate based on the
Reference Rate, the Borrower may elect to have all or portions of the line of
credit (during the availability period) bear interest at the rate(s) described
below during an interest period agreed to by the Bank and the Borrower. Each
interest rate is a rate per year. Interest will be paid on the last day of every
month and on the last day of each interest period. At the end of any interest
period, the interest rate will revert to the rate based on the Reference Rate,
unless the Borrower has designated another optional interest rate for the
portion.
1.6 Offshore Rate. The Borrower may elect to have all or portions of the
principal balance of the line of credit bear interest at the Offshore Rate plus
2.35 percentage points.
Designation of an Offshore Rate portion is subject to the following
requirements:
(a) The interest period during which the Offshore Rate will be in effect
will be no shorter than 30 days and no longer than 360 days. The last day of the
interest period will be determined by the Bank using the practices of the
offshore dollar inter-bank market.
(b) Each Offshore Rate portion will be for an amount not less than Five
Hundred Thousand Dollars ($500,000).
(c) The "Offshore Rate" means the interest rate determined by the following
formula, rounded upward to the nearest 1/100th of one percent. (All amounts in
the calculation will be determined by the Bank as of the first day of the
interest period.)
Offshore Rate = Grand Cayman Rate
---------------------------
(1.00 - Reserve Percentage)
Where,
(i) "Grand Cayman Rate" means the interest rate (rounded upward to
the nearest 1/16th of one percent) at which the Bank's Grand
Cayman Branch, Grand Cayman, British West Indies, would offer
U. S. dollar deposits for the applicable interest period to
other major banks in the offshore dollar inter-bank market.
(ii) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency
Liabilities, as defined in the Federal Reserve Board Regulation
D, rounded upward to the nearest 1/100th of one percent. The
percentage will be expressed as a decimal, and will include, but
not be limited to, marginal, emergency, supplemental, special
and other reserve percentages.
(d) The Borrower may not elect an Offshore Rate with respect to any portion
of the principal balance of the line of credit which is scheduled to be repaid
before the last day of the applicable interest period.
(e) Any portion of the principal balance of the line of credit already
bearing interest at the Offshore Rate will not be converted to a different rate
during its interest period.
(f) Each prepayment of an Offshore Rate portion, whether voluntary, by
reason of acceleration or otherwise, will be accompanied by the amount of
accrued interest on the amount prepaid, and a prepayment fee equal to the amount
(if any) by which
(i) the additional interest which would have been payable on the
amount prepaid had it not been paid until the last day of the
interest period, exceeds
(ii) the interest which would have been recoverable by the Bank by
placing the amount prepaid on deposit in the offshore dollar
market for a period starting on the date on which it was prepaid
and ending on the last day of the interest period for such
portion.
(g) The Bank will have no obligation to accept an election for an Offshore
Rate portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods equal
to the interest period, of an Offshore Rate portion are not
available in the offshore dollar inter-bank market; or
(ii) the Offshore Rate does not accurately reflect the cost of an
Offshore Rate portion.
2. FACILITY NO. 2 LETTERS OF CREDIT.
2.1 At the request of Borrower, between the date of this Agreement and
April 30, 2000 (the "Facility No. 2 Expiration Date"), the Bank will issue
standby letters of credit with a maximum maturity of 365 days but not to extend
365 days beyond the Facility No. 2 Expiration Date; provided, however, that the
maturity date may be automatically extended each year for an additional year
unless the Bank gives written notice to the contrary.
2.2 Amount. The amount of the letters of credit (including the drawn and
unreimbursed amounts of the letters of credit) may not exceed Five Hundred
Thousand Dollars ($500,000).
2.3 Other Terms. The Borrower agrees:
(a) if there is a default under this Agreement, to immediately prepay and
make the Bank whole for any outstanding letters of credit.
(b) the issuance of any letter of credit is subject to the Bank's express
approval and must be in form and content satisfactory to the Bank and in favor
of a beneficiary acceptable to the Bank.
(c) to sign the Bank's form Application and Agreement for Standby Letter of
Credit.
(d) to pay any issuance and/or other fees that the Bank notifies the
Borrower will be charged for issuing and processing letters of credit for the
Borrower.
(e) to allow the Bank to automatically charge its checking account for
applicable fees, discounts and other charges.
3. FEES AND EXPENSES
3.1 Loan Fee. The Borrower agrees to pay a Two Thousand Five Hundred Dollar
($2,500) fee due upon execution of this Agreement.
3.2 Expenses.
(a) The Borrower agrees to immediately repay the Bank for expenses that
include, but are not limited to, filing, recording and search fees, appraisal
fees, title report fees and documentation fees.
(b) The Borrower agrees to reimburse the Bank for any expenses it incurs in
the preparation of this Agreement and any agreement or instrument required by
this Agreement. Expenses include, but are not limited to, reasonable attorneys'
fees, including any allocated costs of the Bank's in-house counsel.
(c) The Borrower agrees to reimburse the Bank for the cost of periodic
audits and appraisals of the personal property collateral securing this
Agreement, at such intervals as the Bank may reasonably require. The audits and
appraisals may be performed by employees of the Bank or by independent
appraisers.
4. COLLATERAL
4.1 Facility No. 1 Personal Property. The Borrower's obligations to the
Bank under Facility No. 1 will be secured by personal property the Borrower now
owns or will own in the future as listed below. The collateral is further
defined in security agreement(s) executed by the Borrower. In addition, all
personal property collateral securing this Agreement shall also secure all other
present and future obligations of the Borrower to the Bank (excluding any
consumer credit covered by the Federal Truth in Lending law, unless the Borrower
has otherwise agreed in writing). All personal property collateral securing any
other present or future obligations of the Borrower to the Bank shall also
secure this Agreement.
(a) Machinery, equipment and fixtures.
(b) Inventory.
(c) Receivables.
4.2 Lent Collateral. The Borrower's obligations to the Bank under Facility
No. 1 will be secured by personal property now owned or owned in the future by
Ventek, Inc. and SRC Vision, Inc. as listed below. The collateral is further
defined in security agreement(s) executed by Ventek, Inc. and SRC Vision, Inc.
(a) Machinery, equipment and fixtures.
(b) Inventory.
(c) Receivables.
4.3 Facility No. 2 Personal Property. The Borrower's obligations to the
Bank under Facility No. 2 will be secured by personal property the Borrower now
owns or will own in the future as listed below. The collateral is further
defined in security agreement(s) executed by the Borrower. In addition, all
personal property collateral securing this Agreement shall also secure all other
present and future obligations of the Borrower to the Bank (excluding any
consumer credit covered by the Federal Truth in Lending law, unless the Borrower
has otherwise agreed in writing). All personal property collateral securing any
other present or future obligations of the Borrower to the Bank shall also
secure this Agreement. If at any time the outstanding balance of Facility No. 2
is less than the Commitment, securities pledged under Section 4.3 may be
released from pledge upon request by Borrower, so long as the loan value of the
remaining securities equals or exceeds the outstanding principal balance of the
line of credit.
(a) Marketable securities.
Regulation U of the Board of Governors of the Federal Reserve System places
certain restrictions on loans secured by margin stock (as defined in the
Regulation). If any of the collateral is margin stock, the Borrower shall
provide to the Bank a Form U-1 Purpose Statement, confirming that none of the
proceeds of the loan will be used to buy or carry any margin stock. If the
Borrower has any other loan made for the purpose of buying or carrying margin
stock (purpose loan), then the collateral securing this loan shall not secure
the purpose loan, and the collateral securing the purpose loan shall not secure
this loan.
5. DISBURSEMENTS, PAYMENTS AND COSTS
5.1 Requests for Credit. Each request for an extension of credit will be
made in writing in a manner acceptable to the Bank, or by another means
acceptable to the Bank.
5.2 Disbursements and Payments. Each disbursement by the Bank and each
payment by the Borrower will be:
(a) made at the Bank's branch (or other location) selected by the Bank from
time to time;
(b) made for the account of the Bank's branch selected by the Bank from
time to time;
(c) made in immediately available funds, or such other type of funds
selected by the Bank;
(d) evidenced by records kept by the Bank. In addition, the Bank may, at
its discretion, require the Borrower to sign one or more promissory notes.
5.3 Telephone Authorization.
(a) The Bank may honor telephone instructions for advances and repayments
or for the designation of optional interest rates given by the individual
signer(s) of this Agreement or a person or persons authorized by the signer(s)
of this Agreement.
(b) Advances will be deposited in and repayments will be withdrawn from the
Borrower's account number 2801300995, or such other accounts with the Bank as
designated in writing by the Borrower.
(c) The Borrower indemnifies and excuses the Bank (including its officers,
employees and agents) for, from and against all liability, loss and costs in
connection with any act resulting from telephone instructions it reasonably
believes are made by a signer of this Agreement or a person authorized by a
signer. This indemnity and excuse will survive this Agreement's termination.
5.4 Direct Debit (Pre-Billing)
(a) The Borrower agrees that the Bank will debit the Borrower's deposit
account number 2801300995 (the "Designated Account") on the date each payment of
principal and interest and any fees from the Borrower becomes due (the "Due
Date"). If the Due Date is not a banking day, the Designated Account will be
debited on the next banking day.
(b) Approximately 1 day prior to each Due Date, the Bank will mail to the
Borrower a statement of the amounts that will be due on that Due Date (the
"Billed Amount"). The calculation will be made on the assumption that no new
extensions of credit or payments will be made between the date of the billing
statement and the Due Date, and that there will be no changes in the applicable
interest rate.
(c) The Bank will debit the Designated Account for the Billed Amount,
regardless of the actual amount of principal due and interest accrued
(collectively, the "Accrued Amount").
If the Billed Amount debited to the Designated Account differs from the
Accrued Amount, the discrepancy will be treated as follows:
(i) If the Billed Amount is less than the Accrued Amount, the
Billed Amount for the following Due Date will be increased by
the amount of the discrepancy. The Borrower will not be in
default by reason of any such discrepancy.
(ii) If the Billed Amount is more than the Accrued Amount, the Billed
Amount for the following Due Date will be decreased by the
amount of the discrepancy.
Regardless of any such discrepancy, interest will continue to accrue based
on the actual amount of principal outstanding without compounding. The Bank will
not pay the Borrower interest on any overpayment.
(d) The Borrower will maintain sufficient funds in the Designated Account
to cover each debit. If there are insufficient funds in the Designated Account
on the date the Bank enters any debit authorized by this Agreement, the debit
will be reversed.
5.5 Banking Days. Unless otherwise provided in this Agreement, a banking
day is a day other than a Saturday or a Sunday on which the Bank is open for
business in Oregon and banks are open for business in California. For amounts
bearing interest at an offshore rate (if any), a banking day is a day other than
a Saturday or a Sunday on which the Bank is open for business in Oregon and the
Bank is dealing in offshore dollars. All payments and disbursements which would
be due on a day which is not a banking day will be due on the next banking day.
All payments received on a day which is not a banking day will be applied to the
credit on the next banking day.
5.6 Taxes. The Borrower will not deduct any taxes from any payments it
makes to the Bank. If any government authority imposes any taxes or charges on
any payments made by the Borrower, the Borrower will pay the taxes or charges.
Upon request by the Bank, the Borrower will confirm that it has paid the taxes
by giving the Bank official tax receipts (or notarized copies) within 30 days
after the due date. However, the Borrower will not pay the Bank's net income
taxes.
5.7 Additional Costs. The Borrower will pay the Bank, on demand, for the
Bank's costs or losses arising from any statute or regulation, or any request or
requirement of a regulatory agency. The costs and losses will be allocated to
the loan in a manner determined by the Bank, using any reasonable method. The
costs include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Bank's assets and commitments
for credit.
5.8 Interest Calculation. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year and
the actual number of days elapsed. This results in more interest or a higher fee
than if a 365-day year is used.
5.9 Interest on Late Payments. At the Bank's sole option in each instance,
any amount not paid when due under this Agreement (including interest) shall
bear interest from the due date at the Reference Rate. This may result in
compounding of interest.
5.10 Default Rate. Upon the occurrence and during the continuation of any
default under this Agreement, advances under this Agreement will, at the option
of the Bank, bear interest at a rate per annum which is 2.0 percentage points
higher than the rate of interest otherwise provided under this Agreement. This
will not constitute a waiver of any event of default.
6. CONDITIONS
The Bank must receive the following items, in form and content acceptable
to the Bank, before it is required to extend any credit to the Borrower under
this Agreement:
6.1 Authorizations. Evidence that the execution, delivery and performance
by the Borrower and each guarantor or subordinating creditor of this Agreement
and any instrument or agreement required under this Agreement have been duly
authorized.
6.2 Security Agreements. Signed original security agreements, financing
statements and fixture filings (together with collateral in which the Bank
requires a possessory security interest), which the Bank requires.
6.3 Evidence of Priority. Evidence that security interests and liens in
favor of the Bank are valid, enforceable and prior to all others' rights and
interests, except those the Bank consents to in writing.
6.4 Insurance. Evidence of insurance coverage, as required in the
"Covenants" section of this Agreement.
6.5 Environmental Questionnaire. A completed Bank form Environmental
Questionnaire and Disclosure Statement, together with an environmental site
assessment concerning any potential toxic or hazardous condition.
6.6 Guaranties. Guaranties signed by Ventek, Inc. and SRC Vision, Inc.,
each in the amount of Two Million Dollars ($2,000,000).
6.7 Subordination Agreements. Subordination agreements in favor of the Bank
signed by Veneer Technology, Inc.
6.8 Other Items. Any other items that the Bank reasonably requires.
7. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until the Bank is repaid in
full, the Borrower makes the following representations and warranties. Each
request for an extension of credit constitutes a renewed representation:
7.1 Organization of Borrower. The Borrower is a corporation duly formed and
existing under the laws of the state where organized.
7.2 Authorization. This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's powers, have been duly authorized, and do
not conflict with any of its organizational papers.
7.3 Enforceable Agreement. This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable.
7.4 Good Standing. In each state in which the Borrower does business, it is
properly licensed, in existence and in good standing, and, where required, in
compliance with fictitious name statutes.
7.5 No Conflicts. This Agreement does not conflict with any law, agreement
or obligation by which the Borrower is bound.
7.6 Financial Information. All financial and other information that has
been or will be supplied to the Bank, including the Borrower's financial
statement dated as of December 31, 1998, is:
(a) sufficiently complete to give the Bank accurate knowledge of the
Borrower's financial condition.
(b) In form and content required by the Bank.
(c) in compliance with all government regulations that apply.
Since the date of the financial statement specified above, there has been
no material adverse change in the assets or the financial condition of the
Borrower.
7.7 Lawsuits. There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as have been disclosed
in writing to the Bank.
7.8 Collateral. All collateral required in this Agreement is owned by the
grantor of the security interest free of any title defects or any liens or
interests of others.
7.9 Permits, Franchises. The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged without conflict with the rights
of others.
7.10 Other Obligations. The Borrower is not in default on any obligation
for borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
7.11 Income Tax Returns. The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year, except as have been
disclosed in writing to the Bank.
7.12 No Event of Default. There is no event which is, or with notice or
lapse of time or both would be, a default under this Agreement.
7.13 ERISA Plans.
(a) The Borrower has fulfilled its obligations, if any, under the minimum
funding standards of ERISA and the Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions of
ERISA and the Code, and has not incurred any liability with respect to any Plan
under Title IV of ERISA.
(b) No reportable event has occurred under Section 4043(b) of ERISA for
which the PBGC requires 30-day notice.
(c) No action by the Borrower to terminate or withdraw from any Plan has
been taken, and no notice of intent to terminate a Plan has been filed under
Section 4041 of ERISA.
(d) No proceeding has been commenced with respect to a Plan under Section
4042 of ERISA, and no event has occurred or condition exists which might
constitute grounds for the commencement of such a proceeding.
(e) The following terms have the meanings indicated for purposes of this
Agreement:
(i) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(ii) "ERISA" means the Employee Retirement Income Act of 1974, as
amended from time to time.
(iii) "PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
(iv) "Plan" means any employee pension benefit plan maintained or
contributed to by the Borrower and insured by the Pension
Benefit Guaranty Corporation under Title IV of ERISA.
Year 2000 Compliance. On the basis of a comprehensive review and assessment
of Borrower's systems and equipment and inquiry made of Borrower's material
suppliers, vendors and customers, Borrower reasonably believes that the "Year
2000 problem" (that is, the inability of computers, as well as embedded
microchips in non-computing devices, to perform properly date-sensitive
functions with respect to certain dates prior to and after December 31, 1999),
including costs of remediation, will not result in a material adverse change in
the operations, business, properties, condition (financial or otherwise) or
prospects of Borrower. Borrower has developed feasible contingency plans
adequately to ensure uninterrupted and unimpaired business operation in the
event of failure of its own or a third party's systems or equipment due to the
Year 2000 problem, including those of vendors, customers and suppliers, as well
as a general failure of or interruption in its communications and delivery
infrastructure.
8. COVENANTS
The Borrower agrees, so long as credit is available under this Agreement
and until the Bank is repaid in full:
8.1 Use of Proceeds. To use the proceeds of the credit only for short-term
working capital.
8.2 Financial Information. To provide the following financial information
and statements and such additional information as requested by the Bank from
time to time:
(a) Within 120 days of the Borrower's fiscal year-end, the Borrower's
annual financial statements. These financial statements must be audited by a
Certified Public Accountant ("CPA") acceptable to the Bank.
(b) Within 45 days of the period's end, the Borrower's quarterly financial
statements. These financial statements may be Borrower-prepared.
(c) Within 45 days of period's end, the Borrower's quarterly accounts
receivable aging.
8.3 Total Liabilities to Tangible Net Worth. To maintain a ratio of total
liabilities to tangible net worth, calculated on a fiscal-quarter basis, not
exceeding the amounts indicated for each period specified below:
Period Ratio
------------------------------- --------
From the date of this Agreement
Through December 30, 1999 2.20:1.0
December 31, 1999 through
December 30, 2000 1.65:1.0
December 31, 2000 through
December 30, 2001 1.25:1.0
"Total liabilities" means the sum of current liabilities plus long-term
liabilities, excluding debt subordinated to the Borrower's obligations to the
Bank in a manner acceptable to the Bank, using the Bank's standard form.
"Tangible net worth" means the gross book value of the Borrower's assets
(excluding goodwill, patents, trademarks, trade names, organization expense,
treasury stock, unamortized debt discount and expense, deferred research and
development costs, deferred marketing expenses, and other like intangibles, and
monies due from affiliates, officers, directors or shareholders of the
Borrower), plus liabilities subordinated to the Bank in a manner acceptable to
the Bank (using the Bank's standard form), less total liabilities, including but
not limited to, accrued and deferred income taxes, and any reserves against
assets.
8.4 Minimum Trading Asset Ratio. To maintain a minimum trading asset ratio,
calculated on a fiscal-quarter basis, of at least 2.65:1.0.
"Minimum Trading Asset Ratio" means the ratio of Accounts Receivable plus
Inventory divided by Accounts Payable plus Short-Term Bank Debt.
8.5 Cash Flow Ratio. To maintain a cash flow ratio, calculated on a fiscal
year-end basis, of at least 1.20:1.0.
"Cash Flow Ratio" means the ratio of Cash Flow to Current Portion of
Long-Term Debt plus Interest Expense plus Income Taxes plus Dividends plus
Capital Expenditures. "Cash Flow" is defined as Earnings before Interest
Expense, Income Taxes, Depreciation and Amortization. This ratio will be
calculated at the end of each fiscal year. The current portion of long-term debt
will exclude the Notes to Veneer Technology, Inc.
8.6 Other Debts. Not to have outstanding or incur any direct or contingent
debts (other than those to the Bank and its affiliates), or become liable for
the debts of others without the Bank's written consent. This does not prohibit:
(a) Acquiring goods, supplies or merchandise on a normal trade credit.
(b) Endorsing negotiable instruments received in the usual course of
business.
(c) Obtaining surety bonds in the usual course of business.
(d) Additional debts and lease obligations for the acquisition of fixed or
capital assets, to the extent permitted elsewhere in this Agreement.
(e) Additional debts and lease obligations for business purposes, which,
together with the debts permitted under subparagraphs (a) through (d) above, do
not exceed a total principal amount of Five Hundred Thousand Dollars ($500,000).
(f) Accrual of normal expenses incurred in the ordinary course of business,
including but not limited to, payroll, payroll taxes and deferred taxes.
8.7 Other Liens. Not to create, assume or allow any security interest or
lien (including judicial liens) on property the Borrower now or later owns,
except:
(a) Deeds of trust and security agreements in favor of the Bank and its
affiliates.
(b) Liens for taxes not yet due.
(c) Liens outstanding on the date of this Agreement disclosed in writing to
the Bank.
(d) Additional purchase money security interests in personal or real
property acquired after the date of this Agreement if the principal amount of
debts secured by such liens does not exceed Five Hundred Thousand Dollars
($500,000) at any one time.
8.8 Notices to Bank. To promptly notify the Bank in writing of:
(a) any lawsuit over One Million Dollars ($1,000,000) against the Borrower.
(b) any substantial dispute between the Borrower and any government
authority.
(c) any failure to comply with this Agreement.
(d) any material adverse change in the Borrower's financial condition or
operations.
(e) any change in the Borrower's name, address or legal structure.
8.9 Books and Records. To maintain adequate books and records.
8.10 Audits. To allow the Bank and its agents to inspect the Borrower's
properties and examine, audit and make copies of books and records at any
reasonable time. If any of the Borrower's properties, books or records are in
the possession of a third party, the Borrower authorizes that third party to
permit the Bank or its agents to have access to perform inspections or audits
and to respond to the Bank's requests for information concerning such
properties, books and records.
8.11 Compliance with Laws. To comply with the laws (including any
fictitious name statute), regulations and orders of any government body with
authority over the Borrower's business.
8.12 Maintenance of Properties. To make any repairs, renewals or
replacements to keep the Borrower's properties in good working condition.
8.13 Perfection of Liens. To help the Bank perfect and protect its security
interests and liens, and reimburse it for related costs it incurs to protect its
security interests and liens.
8.14 Cooperation. To take any action requested by the Bank to carry out the
intent of this Agreement.
8.15 Insurance.
(a) Insurance Covering Collateral. To maintain all risk property damage
insurance policies covering the tangible property comprising the collateral.
Each insurance policy must be in an amount acceptable to the Bank.
(b) General Business Insurance. To maintain insurance as is usual for the
business it is in.
(c) Evidence of Insurance. Upon the request of the Bank, to deliver to the
Bank a copy of each insurance policy, or, if permitted by the Bank, a
certificate of insurance listing all insurance in force.
8.16 Additional Negative Covenants. Not to, without the Bank's written
consent:
(a) engage in any business activities substantially different from the
Borrower's present business.
(b) liquidate or dissolve the Borrower's business.
(c) enter into any consolidation, merger, pool, joint venture, syndicate or
other combination.
(d) acquire or purchase a business or its assets for a consideration,
including assumption of debt, in excess of Two Million Dollars ($2,000,000) in
any fiscal year.
(e) sell or otherwise dispose of any assets for less than fair market
value, or enter into any sale and leaseback agreement covering any of its fixed
or capital assets.
8.17 ERISA Plans. to give prompt written notice to the Bank of:
(a) The occurrence of any reportable event under Section 4043(b) of ERISA
for which the PBGC requires 30-days notice.
(b) Any action by the Borrower to terminate or withdraw from a Plan or the
filing of any notice of intent to terminate under Section 4041 of ERISA.
(c) Any notice of non-compliance made with respect to a Plan under Section
4041(b) of ERISA.
(d) The commencement of any proceeding with respect to a Plan under Section
4042 of ERISA.
9. HAZARDOUS WASTE INDEMNIFICATION
The Borrower will indemnify and hold harmless the Bank for, from and
against any loss or liability directly or indirectly arising out of the use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of a hazardous substance. This indemnity will
apply whether the hazardous substance is on, under or about the Borrower's
property or operations or property leased to the Borrower. The indemnity
includes, but is not limited to, attorneys' fees (including the reasonable
estimate of the allocated cost of in-house counsel and staff). The indemnity
extends to the Bank, its parent, subsidiaries and all of their directors,
officers, employees, agents, successors, attorneys and assigns. For these
purposes, the term "hazardous substances" means any substance which is or
becomes designated as "hazardous" or "toxic" under any federal, state or local
law, or any petroleum products, including crude oil and any product derived
directly or indirectly from, or any fraction or distillate of, crude oil. This
indemnity will survive repayment of the Borrower's obligations to the Bank.
10. DEFAULT
If any of the following events occur, the Bank may do one or more of the
following: declare the Borrower in default, stop making additional credit
available to the Borrower, and require the Borrower to repay its entire debt
immediately and without prior notice. If a bankruptcy petition is filed with
respect to the Borrower, the entire debt outstanding under this Agreement will
automatically become due immediately.
Failure to Pay. The Borrower fails to make a payment under this Agreement
when due.
10.2 Non-compliance. The Borrower fails to meet the condition of, or fails
to perform any obligation under:
(a) this Agreement,
(b) any other agreement made in connection with this loan, or
(c) any other agreement the Borrower has with the Bank or any affiliate of
the Bank.
10.3 Cross-default. Any default occurs under any agreement and is not cured
in any applicable cure period in connection with any credit the Borrower or any
guarantor has obtained from anyone else or which the Borrower or any guarantor
has guaranteed.
10.4 Lien Priority. The Bank fails to have an enforceable first lien
(except for any prior liens to which the Bank has consented in writing) on or
security interest in any property given as security for this loan.
10.5 False Information. The Borrower has given the Bank false or misleading
information or representations.
10.6 Bankruptcy. The Borrower files a bankruptcy petition, a bankruptcy
petition is filed against the Borrower, or the Borrower makes a general
assignment for the benefit of creditors.
10.7 Receivers. A receiver or similar official is appointed for the
Borrower's business, or the business is terminated.
10.8 Judgments. Any judgments or arbitration awards are entered against the
Borrower or any guarantor; or the Borrower or any guarantor enters into any
settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of One Million Dollars ($1,000,000) or more in excess of any
insurance coverage and any such judgment is not discharged, vacated or reversed,
or its execution stayed pending appeal, within 60 days of entry, or is not
discharged within 60 days after the expiration of such stay.
10.9 Government Action. Any government authority takes action that the Bank
believes materially adversely affects the Borrower's or any guarantor's
financial condition or ability to repay.
10.10 Default under Guaranty or Subordination Agreement. Any guaranty,
subordination agreement, security agreement, deed of trust or other document
required by this Agreement is violated or no longer in effect.
10.11 Material Adverse Change. A material adverse change occurs, or is
reasonably likely to occur, in the Borrower's or any guarantor's business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit.
10.12 ERISA Plans. The occurrence of any one or more of the following
events with respect to the Borrower, provided such event or events could
reasonably be expected, in the judgment of the Bank, to subject the Borrower to
any tax, penalty or liability (or any combination of the foregoing) which, in
the aggregate, could have a material adverse effect on the financial condition
of the Borrower with respect to a Plan:
(a) A reportable event shall occur with respect to a Plan, which is, in the
reasonable judgment of the Bank, likely to result in the termination of such
Plan for purposes of Title IV of ERISA.
(b) Any Plan termination (or commencement of proceedings to terminate a
Plan) or the Borrower's full or partial withdrawal from a Plan.
11. ENFORCING THIS AGREEMENT; MISCELLANEOUS
11.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.
11.2 Oregon Law. This Agreement is governed by Oregon law.
11.3 Successors and Assigns. This Agreement is binding on the Borrower's
and the Bank's successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees. If a
participation is sold or the loan is assigned, the purchaser will have the right
of set-off against the Borrower.
11.4 Arbitration.
(a) This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Bank, including, but not limited to, those that
arise from:
(i) This Agreement (including any renewals, extensions or
modifications of this Agreement);
(ii) Any document, agreement or procedure related to or delivered
in connection with this Agreement;
(iii) Any violation of this Agreement; or
(iv) Any claims for damages resulting from any business conducted
between the Borrower and the Bank, including claims for injury
to persons, property or business interests (torts).
(b) At the request of the Borrower or the Bank, any such controversies or
claims will be settled by arbitration in accordance with the United States
Arbitration Act. The United States Arbitration Act will apply even though this
Agreement provides that it is governed by Oregon law.
(c) Arbitration proceedings will be administered by the American
Arbitration Association and will be subject to its commercial rules of
arbitration.
(d) For purposes of the application of the statute of limitations, the
filing of an arbitration pursuant to this paragraph is the equivalent of the
filing of a lawsuit, and any claim or controversy which may be arbitrated under
this paragraph is subject to any applicable statute of limitations. The
arbitrators will have the authority to decide whether any such claim or
controversy is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis.
(e) If there is a dispute as to whether an issue is arbitrable, the
arbitrators will have the authority to resolve any such dispute.
(f) The decision that results from an arbitration proceeding may be
submitted to any authorized court of law to be confirmed and enforced.
(g) This provision does not limit the right of the Borrower or the Bank to:
(i) exercise self-help remedies such as setoff;
(ii) foreclose against or sell any real or personal property
collateral; or
(iii) act in a court of law before, during or after the arbitration
proceeding to obtain:
(A) a provisional or interim remedy; and/or
(B) additional or supplementary remedies.
(h) The pursuit of or a successful action for provisional, interim,
additional or supplementary remedies, or the filing of a court action, does not
constitute a waiver of the right of the Borrower or the Bank, including the
suing party, to submit the controversy or claim to arbitration if the other
party contests the lawsuit.
(i) If the Bank forecloses against any real property securing this
Agreement, the Bank has the option to exercise the power of sale under the deed
of trust or mortgage, or to proceed by judicial foreclosure.
11.5 Severability; Waivers. If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced. The Bank retains all
rights, even if it makes a loan after default. If the Bank waives a default, it
may enforce a later default. Any consent or waiver under this Agreement must be
in writing.
11.6 Costs. If the Bank incurs any expenses in connection with enforcing
this Agreement or administering this Agreement (including in connection with
extending, amending, renewing or modifying this Agreement), or if the Bank takes
collection action under this Agreement, it is entitled to costs and reasonable
attorneys' fees, including any allocated costs of in-house counsel.
11.7 Attorneys' Fees. In the event of a lawsuit or arbitration proceeding,
the prevailing party is entitled to recover costs and reasonable attorneys' fees
(including any allocated costs of in-house counsel) incurred in connection with
the lawsuit or arbitration proceeding, as determined by the court or arbitrator
(and not by a jury). Such costs and attorneys' fees shall include, without
limitation, those incurred on any appeal, as determined by the appellate court,
and any anticipated costs and attorneys' fees to pursue or collect any
judgement.
11.8 One Agreement. This Agreement and any related security or other
agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements between the Bank
and the Borrower concerning this credit; and
(b) replace any prior oral or written agreements between the Bank and the
Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final, complete and
exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other
agreements required by this Agreement, this Agreement will prevail.
11.9 Exchange of Information. The Borrower agrees that the Bank may
exchange financial information about the Borrower with BankAmerica Corporation
affiliates and other related entities.
11.10 Notices. All notices required under this Agreement shall be
personally delivered or sent by first class mail, postage prepaid, to the
addresses on the signature page of this Agreement, or to such other addresses as
the Bank and the Borrower may specify from time to time in writing.
11.11 Headings. Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.
11.12 Counterparts. This Agreement may be executed in as many counterparts
as necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an original but
all such counterparts shall constitute but one and the same agreement.
11.3 Written Agreements. Under Oregon Law, most agreements, promises and
commitments made by the Bank after October 3, 1989, concerning loans and other
credit extensions which are not for personal, family or household purposes or
secured solely by the borrower's residence must be in writing, express
consideration and be signed by that Bank to be enforceable.
This Agreement is executed as of the date stated at the top of the first
page.
BANK OF AMERICA NT&SA ADVANCED MACHINE VISION CORPORATION
/s/ ▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
x-------------------------------- x---------------------------------------
By: ▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President Title: Chairman, President and CEO
Address where notices to the Bank /s/ ▇▇▇▇ ▇. Steel
are to be sent: x---------------------------------------
P. O. Box 768 By: ▇▇▇▇ ▇. Steel
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Title: Vice President, Finance and CFO
Address where notices to the Borrower
are to be sent:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇