1
EXHIBIT 10.11
LOAN AGREEMENT
between
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION,
a Delaware corporation
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
Executed as of December __, 2000
2
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.....................................................................1
1.1 DEFINED TERMS...................................................................1
1.2 EXHIBITS INCORPORATED...........................................................2
ARTICLE 2. LOAN............................................................................2
2.1 LOAN............................................................................2
2.2 LOAN FEE........................................................................3
2.3 LOAN DOCUMENTS..................................................................3
2.4 EFFECTIVE DATE..................................................................3
2.5 MATURITY DATE...................................................................3
2.6 CREDIT FOR PRINCIPAL PAYMENTS...................................................3
2.7 INTENTIONALLY OMITTED...........................................................3
2.8 INTENTIONALLY OMITTED...........................................................3
2.9 FULL REPAYMENT AND RECONVEYANCE.................................................3
2.10 LIMITATION ON BORROWER'S LIABILITY.............................................3
ARTICLE 3. DISBURSEMENT....................................................................4
3.1 CONDITIONS PRECEDENT............................................................4
3.2 ACCOUNT, PLEDGE AND ASSIGNMENT, AND DISBURSEMENT AUTHORIZATION..................4
ARTICLE 4. INTENTIONALLY OMITTED...........................................................4
ARTICLE 5. INSURANCE.......................................................................5
5.1 TITLE INSURANCE.................................................................5
5.2 PROPERTY INSURANCE..............................................................5
5.3 FLOOD HAZARD INSURANCE..........................................................5
5.4 LIABILITY INSURANCE.............................................................5
5.5 GENERAL.........................................................................5
ARTICLE 6. REPRESENTATIONS AND WARRANTIES..................................................5
6.1 AUTHORITY/ENFORCEABILITY........................................................5
6.2 BINDING OBLIGATIONS.............................................................5
6.3 FORMATION AND ORGANIZATIONAL DOCUMENTS..........................................5
6.4 NO VIOLATION....................................................................5
6.5 COMPLIANCE WITH LAWS............................................................6
6.6 INTENTIONALLY OMITTED...........................................................6
6.7 FINANCIAL CONDITION.............................................................6
6.8 INTENTIONALLY OMITTED...........................................................6
6.9 ACCURACY........................................................................6
6.10 AMERICANS WITH DISABILITIES ACT COMPLIANCE.....................................6
6.11 BUSINESS LOAN..................................................................6
ARTICLE 7. HAZARDOUS MATERIALS.............................................................6
7.1 SPECIAL REPRESENTATIONS AND WARRANTIES..........................................6
(a) Hazardous Materials.........................................................6
(b) Hazardous Materials Laws....................................................7
(c) Hazardous Materials Claims..................................................7
7.2 HAZARDOUS MATERIALS COVENANTS...................................................7
(a) No Hazardous Activities.....................................................7
(b) Compliance..................................................................7
(c) Notices.....................................................................7
(d) Remedial Action.............................................................7
7.3 INSPECTION BY LENDER............................................................7
7.4 INTENTIONALLY OMITTED...........................................................7
7.5 LEGAL EFFECT OF SECTION.........................................................8
ARTICLE 8. COVENANTS OF BORROWER...........................................................8
8.1 EXPENSES........................................................................8
8.2 ERISA COMPLIANCE................................................................8
8.3 LEASING.........................................................................8
8.4 APPROVAL OF LEASES..............................................................8
8.5 INTENTIONALLY OMITTED...........................................................8
8.6 INTENTIONALLY OMITTED...........................................................8
8.7 INTENTIONALLY OMITTED...........................................................8
8.8 OPINION OF LEGAL COUNSEL........................................................8
8.9 FURTHER ASSURANCES..............................................................9
8.10 ASSIGNMENT.....................................................................9
8.11 MANAGEMENT OF PROPERTY.........................................................9
8.12 SECURITY DEPOSITS...........................................................9
ARTICLE 9. REPORTING COVENANTS.............................................................9
9.1 FINANCIAL INFORMATION...........................................................9
9.2 BOOKS AND RECORDS...............................................................9
ARTICLE 10. DEFAULTS AND REMEDIES.........................................................10
10.1 DEFAULT.......................................................................10
(a) Monetary..................................................................10
(b) Performance of Obligations................................................10
(c) Use.......................................................................10
(d) Condemnation; Attachment..................................................10
(e) Representations and Warranties............................................10
(f) Voluntary Bankruptcy; Insolvency; Dissolution.............................10
(g) Involuntary Bankruptcy....................................................10
(h) Loss of Priority..........................................................10
(i) Hazardous Materials.......................................................10
10.2 ACCELERATION UPON DEFAULT; REMEDIES...........................................10
10.3 DISBURSEMENTS TO THIRD PARTIES................................................11
10.4 REPAYMENT OF FUNDS ADVANCED...................................................11
10.5 RIGHTS CUMULATIVE, NO WAIVER..................................................11
10.6 POST-DEFAULT ACCESS.........................................................11
ARTICLE 11. MISCELLANEOUS PROVISIONS......................................................11
11.1 INDEMNITY.....................................................................11
11.2 FORM OF DOCUMENTS.............................................................12
11.3 NO THIRD PARTIES BENEFITED....................................................12
11.4 NOTICES.......................................................................12
11.5 ATTORNEY-IN-FACT..............................................................12
11.6 ACTIONS.......................................................................12
11.7 RIGHT OF CONTEST..............................................................12
11.8 RELATIONSHIP OF PARTIES.......................................................12
11.9 DELAY OUTSIDE LENDER'S CONTROL................................................12
11.10 ATTORNEYS' FEES AND EXPENSES; ENFORCEMENT....................................13
11.11 IMMEDIATELY AVAILABLE FUNDS..................................................13
11.12 LENDER'S CONSENT.............................................................13
11.13 LOAN SALES AND PARTICIPATION; DISCLOSURE OF INFORMATION......................13
11.14 CAPITAL ADEQUACY.............................................................13
11.15 LENDER'S AGENTS..............................................................13
11.16 TAX SERVICE..................................................................14
11.17 ARBITRATION..................................................................14
(a) Arbitration...............................................................14
(b) Governing Rules...........................................................14
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure................14
(d) Arbitrator Qualifications and Powers; Awards..............................14
(e) Judicial Review...........................................................15
(f) Real Property Collateral; Judicial Reference..............................15
(g) Miscellaneous.............................................................15
11.18 WAIVER OF RIGHT TO TRIAL BY JURY.............................................15
11.19 SEVERABILITY.................................................................16
11.20 HEIRS, SUCCESSORS AND ASSIGNS................................................16
11.21 TIME.........................................................................16
11.22 HEADINGS.....................................................................16
11.23 GOVERNING LAW................................................................16
11.24 INTEGRATION; INTERPRETATION..................................................16
11.25 JOINT AND SEVERAL LIABILITY..................................................16
11.26 COUNTERPARTS.................................................................16
EXHIBIT A - DESCRIPTION OF PROPERTY........................................................19
EXHIBIT B - DOCUMENTS......................................................................20
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Loan No. 1440
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is executed as of December __, 2000, by and
between COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware
corporation ("Borrower"), and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("Lender").
R E C I T A L S
A. Borrower owns or will own certain real property described in Exhibit A
hereto and all improvements now or hereafter existing thereon
(collectively, the "Property").
B. Borrower desires to borrow from Lender, and Lender agrees to loan to
Borrower, the amounts described below.
NOW, THEREFORE, Borrower and Lender agree as follows:
ARTICLE 1. DEFINITIONS
1.1 DEFINED TERMS. The following capitalized terms generally used in this
Agreement shall have the meanings defined or referenced below. Certain
other capitalized terms used only in specific sections of this
Agreement are defined in such sections.
"Account" - means an account with Lender, account number #4518-100995,
in the name of Borrower or Borrower's designee into which Loan
proceeds will be deposited.
"ADA" - means the Americans with Disabilities Act, 42 U.S.C. Sections
12101, et. seq. as now or hereafter amended or modified.
"Agreement" - shall have the meaning ascribed to such term in the
preamble hereto.
"Applicable LIBO Rate" - shall have the meaning ascribed to such term
in the Note.
"Bankruptcy Code" - means the Bankruptcy Reform Act of 1978 (11 USC
Section 101-1330) as now or hereafter amended or recodified.
"Border Zone Property" - means any property designated as "border zone
property" under the provisions of California Health and Safety Code,
Sections 25220 et seq., or any regulation adopted in accordance
therewith.
"Borrower" - means COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, a Delaware corporation.
"Business Day" - means a day of the week (but not a Saturday, Sunday
or holiday) on which the offices of Lender are open to the public for
carrying on substantially all of Lender's business functions. Unless
specifically referenced in this Agreement as a Business Day, all
references to "days" shall be to calendar days.
"Deed of Trust" - means that certain Deed of Trust with Absolute
Assignment of Leases and Rents, Security Agreement and Fixture Filing
of even date herewith executed by Borrower, as Trustor, to American
Securities Company, a California corporation, as Trustee, for the
benefit of Lender, as Beneficiary, as hereafter amended, supplemented,
replaced or modified.
"Default" - shall have the meaning ascribed to such term in Section
10.1.
"Effective Date" - means the date the Deed of Trust is recorded in the
Office of the County Recorder of the county where the Property is
located.
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"Hazardous Materials" - shall have the meaning ascribed to such term
in Section 7.1 (a).
"Hazardous Materials Claims" - shall have the meaning ascribed to such
term in Section 7.1 (c).
"Hazardous Materials Laws" - shall have the meaning ascribed to such
term in Section 7.1 (b).
"Lender" - means ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION.
"LIBO Rate" - shall have the meaning ascribed to such term in the
Note.
"Loan" - means the principal sum that Lender agrees to lend and
Borrower agrees to borrow pursuant to the terms and conditions of this
Agreement: EIGHTEEN MILLION AND NO/100THS DOLLARS ($18,000,000.00).
"Loan Documents" - means those documents, as hereafter amended,
supplemented, replaced or modified, properly executed and in
recordable form, if necessary, listed in Exhibit B as Loan Documents.
"Loan-to-Value Percentage" - shall have the meaning ascribed to such
term in Section 2.7.
"Maturity Date" - means June 1, 2002.
"Non-Borrower Trustor" - not applicable.
"Note" - means that certain Promissory Note Secured by Deed of Trust
of even date herewith, in the original principal amount of the Loan,
executed by Borrower and payable to the order of Lender, as hereafter
amended, supplemented, replaced or modified.
"Original Maturity Date" - means the Maturity Date.
"Other Related Documents" - means those documents, as hereafter
amended, supplemented, replaced or modified from time to time,
properly executed and in recordable form, if necessary, listed in
Exhibit B as Other Related Documents.
"Participant" - shall have the meaning ascribed to such term in
Section 11.13.
"Property" - shall have the meaning ascribed to such term in Recital
A.
"Reserve Percentage" - shall have the meaning ascribed to such term in
the Note.
"Secured Obligations" - shall have the meaning ascribed to such term
in the Deed of Trust.
"Title Policy" - means the ALTA Lender's Policy of Title Insurance as
issued by First American Title Company.
1.2 EXHIBITS INCORPORATED. Exhibits A and B, attached hereto, are hereby
incorporated into this Agreement.
ARTICLE 2. LOAN
2.1 LOAN. Subject to the terms of this Agreement, Lender agrees to lend to
Borrower and Borrower agrees to borrow from Lender the principal sum
of EIGHTEEN MILLION AND NO/100THS DOLLARS ($18,000,000.00); said sum
to be evidenced by the Note of even date herewith. The Note shall be
secured, in part, by the Deed of Trust, of even date herewith,
encumbering certain real property and improvements as legally defined
therein. Amounts disbursed to or on behalf of Borrower pursuant to the
Note shall be used for financing purposes.
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2.2 LOAN FEE. Borrower shall pay to Lender, at Loan closing, a loan fee in
the amount of $225,000.
2.3 LOAN DOCUMENTS. Borrower shall deliver to Lender concurrently with
this Agreement each of the documents, properly executed and in
recordable form, as applicable, described in Exhibit B as Loan
Documents, together with those documents described in Exhibit B as
Other Related Documents.
2.4 EFFECTIVE DATE. The date of the Loan Documents is for reference
purposes only. The Effective Date of delivery and transfer to Lender
of the security under the Loan Documents and of Borrower's and
Lender's obligations under the Loan Documents is the date the Deed of
Trust is recorded in the Office of the County Recorder of the county
where the Property is located.
2.5 MATURITY DATE. The Maturity Date of the Loan shall be June 1, 2002, at
which time all sums due and owing under this Agreement and the other
Loan Documents shall be repaid in full. All payments due to Lender
under this Agreement, whether at the Maturity Date or otherwise, shall
be paid in immediately available funds.
2.6 CREDIT FOR PRINCIPAL PAYMENTS. Any payment made upon the outstanding
principal balance of the Loan shall be credited as of the Business Day
received, provided such payment is received by Lender no later than
11:00 a.m. (Pacific Standard Time or Pacific Daylight Time, as
applicable) and constitutes immediately available funds. Any principal
payment received after said time or which does not constitute
immediately available funds shall be credited upon such funds having
become unconditionally and immediately available to Lender.
2.7 INTENTIONALLY OMITTED.
2.8 INTENTIONALLY OMITTED.
2.9 FULL REPAYMENT AND RECONVEYANCE. Upon receipt of all sums owing and
outstanding under the Loan Documents, Lender shall issue a full
reconveyance of the Property from the lien of the Deed of Trust, and
all related documents of record evidencing the lien of the Deed of
Trust shall be terminated; provided, however, that all of the
following conditions shall be satisfied at the time of, and with
respect to, such reconveyance: (a) Lender shall have received all
reasonable out-of-pocket escrow, closing and recording costs, the
costs of preparing and delivering such reconveyance and any sums then
due and payable under the Loan Documents; and (b) Lender shall have
received a written release satisfactory to Lender of any set aside
letter, letter of credit or other form of undertaking which Lender has
issued to any surety, governmental agency or any other party in
connection with the Loan and/or the Property. Lender's obligation to
make further disbursements under the Loan shall terminate as to any
portion of the Loan undisbursed as of the date of issuance of such
release or reconveyance, and any commitment of Lender to lend any
undisbursed portion of the Loan shall be canceled.
2.10 LIMITATION ON BORROWER'S LIABILITY. Lender's recovery against Borrower
under the Loan Documents shall be limited solely to the collateral
given to Lender as security for Borrower's performance under the Loan
Documents and such recovery shall not be a lien, or the basis of a
claim of lien or levy of execution, against the general assets of
Borrower. Notwithstanding the foregoing, Borrower and the general
assets of Borrower shall be fully liable to Lender to the same extent
that Borrower would be liable absent the foregoing limitation of this
paragraph for: (a) fraud or willful misrepresentation; (b) waste; (c)
failure to pay income taxes or other taxes, assessments or other
charges attributable to Borrower which can create liens on any portion
of the Property (to the full extent of any such taxes, assessments or
other charges); (d) the amount of any money or value of any property
distributed to any partner of Borrower as a distribution of earnings
or income from the Property if such distribution was prohibited under
the terms of this Agreement (to the full extent of such distribution);
or (e) any breach by Borrower of any covenant under Article 7,
entitled HAZARDOUS MATERIALs, any representation or warranty of
Borrower under such Article proving to have been untrue when made, or
the presence of any significant Hazardous Materials in, on or about
the Property which are discovered subsequent to the Effective Date. In
addition, the limitations hereof shall not be deemed to limit: (i) any
right Lender might otherwise have to obtain injunctive relief against
Borrower; (ii) any suit or action in connection with the preservation,
enforcement or foreclosure of the liens, mortgages, assignments and
security interests now or at any time hereafter securing the payment
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and performance of all sums and obligations under this Agreement or
any of the Loan Documents; or (iii) the collection of amounts which
may become owing or payable under or on account of insurance,
condemnation awards or damages for other public actions or surety
bonds maintained or provided by Borrower; provided, however, that the
assertion by Lender of any such right, suit, action or collection of
amounts shall not result in a monetary claim upon the general assets
of Borrower except as otherwise provided herein.
ARTICLE 3. DISBURSEMENT
3.1 CONDITIONS PRECEDENT. Lender's obligation to make any disbursements or
take any other action under the Loan Documents shall be subject at all
times to satisfaction of each of the following conditions precedent:
(a) There exists no Default, as defined in this Agreement, or Default
as defined in any of the other Loan Documents or in the Other
Related Documents, or event, omission or failure of condition
which would constitute a Default after notice or lapse of time,
or both;
(b) Lender shall have received all Loan Documents, other documents,
instruments, policies, and forms of evidence or other materials
requested by Lender under the terms of this Agreement or any of
the other Loan Documents;
(c) The Deed of Trust is a valid lien upon the Property and is prior
and superior to all other liens and encumbrances thereon except
those approved by Lender in writing;
(d) Lender shall have received a written appraisal prepared in
conformance with the requirements of the Comptroller of the
Currency confirming to the satisfaction of Lender that the Loan
amount as a percentage of the fair market value of the Property
(after adjustment for senior liens and regular and special tax
assessments) does not exceed sixty percent (60%) ("Loan-to-Value
Percentage"); The valuation date of such appraisal shall be
within thirty (30) days of the date hereof. Any principal balance
reduction shall reduce Lender's commitment by a like amount;
(e) There are no claims, actions, suits, or proceedings pending, or
to Borrower's knowledge, threatened against Borrower or affecting
the Property; and
(f) There has been no material adverse change in the financial
condition of Borrower since the dates of the latest financial
statements furnished to Lender and, except as otherwise disclosed
to Lender in writing, Borrower has not entered into any material
transaction which is not disclosed in such financial statements.
3.2 ACCOUNT, PLEDGE AND ASSIGNMENT, AND DISBURSEMENT AUTHORIZATION. The
proceeds of the Loan, when qualified for disbursement, shall be
deposited into the Account or otherwise disbursed to or for the
benefit or account of Borrower under the terms of this Agreement;
provided, however, that any direct disbursements from the Loan which
are made by means of wire transfer, shall be subject to the provisions
of any funds transfer agreement which is identified in Exhibit B
hereto. Disbursements hereunder may be made by Lender upon the written
request of any person who has been authorized by Borrower to request
such disbursements until such time as written notice of Borrower's
revocation of such authority is received by Lender at the address
herein. As additional security for Borrower's performance under the
Loan Documents, Borrower hereby irrevocably pledges and assigns to
Lender all monies at any time deposited in the Account.
ARTICLE 4. INTENTIONALLY OMITTED
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ARTICLE 5. INSURANCE
Borrower shall, while any obligation of Borrower remains outstanding, maintain
at Borrower's sole expense, with licensed insurers approved by Lender, the
following policies of insurance in form and substance satisfactory to Lender:
5.1 TITLE INSURANCE. A Title Policy, together with any endorsements which
Lender may require, insuring Lender, in the principal amount of the
Loan, of the validity and the priority of the lien of the Deed of
Trust upon the Property, subject only to matters approved by Lender in
writing.
5.2 PROPERTY INSURANCE. A Casualty Insurance policy, in form and substance
reasonably acceptable to Lender, including, without limitation, any
endorsement Lender may reasonably require, insuring Lender against
damage to the Property in an amount acceptable to Lender. Lender shall
be named on the policy under a Lender's Loss Payable Endorsement (form
#438BFU or equivalent).
5.3 FLOOD HAZARD INSURANCE. A policy of flood insurance, as required by
applicable governmental regulations, or as deemed necessary by Lender.
5.4 LIABILITY INSURANCE. A policy of comprehensive general liability
insurance with limits as required by Lender, insuring against
liability for injury and/or death to any person and/or damage to any
property occurring on the Property and/or in from any cause
whatsoever. No liability or other insurance required to be maintained
hereunder by Borrower shall be required to provide coverage with
respect to Hazardous Materials, Hazardous Materials Laws or Hazardous
Materials Claims.
5.5 GENERAL. Borrower shall provide to Lender certificates evidencing the
existence of all required insurance policies, or other evidence of
insurance acceptable to Lender. All insurance policies shall provide
that the insurance shall not be cancelable or materially changed
without ten (10) days prior written notice to Lender. Lender shall be
named under a Lender's Loss Payable Endorsement (form #438BFU or
equivalent) on all insurance policies which Borrower actually
maintains with respect to the Property. Borrower shall provide to
Lender evidence of any other hazard insurance Lender may deem
necessary at any time during the Loan.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES
As a material inducement to Lender's entry into this Agreement, Borrower
represents and warrants to Lender as of the Effective Date and continuing
thereafter that:
6.1 AUTHORITY/ENFORCEABILITY. Borrower is in material compliance with all
laws and regulations applicable to its organization, existence and
transaction of business and has all necessary rights and powers to
own, improve and operate the Property as contemplated by the Loan
Documents.
6.2 BINDING OBLIGATIONS. Borrower is authorized to execute, deliver and
perform its obligations under the Loan Documents, and such obligations
shall be valid and binding obligations of Borrower.
6.3 FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has delivered to
Lender all formation and organizational documents of Borrower and all
such formation and organizational documents remain in full force and
effect and have not been amended or modified since they were delivered
to Lender. Borrower shall immediately provide Lender with copies of
any amendments or modifications of the formation or organizational
documents.
6.4 NO VIOLATION. Borrower's execution, delivery, and performance under
the Loan Documents do not: (a) require any consent or approval not
heretofore obtained under any partnership agreement, operating
agreement, articles of incorporation, bylaws or other document; (b)
materially violate any governmental requirement applicable to the
Property or any other statute, law, regulation or ordinance or any
order or ruling of any court or governmental entity; (c) materially
conflict with, or constitute a breach or default or permit the
acceleration of obligations under any agreement, contract, lease, or
other document by which
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the Borrower is or the Property is bound or regulated; or (d)
materially violate any statute, law, regulation or ordinance, or any
order of any court or governmental entity.
6.5 COMPLIANCE WITH LAWS. Borrower has, and at all times shall have
obtained, all material permits, licenses, exemptions, and approvals
necessary to occupy, operate and market the Property, and shall
maintain material compliance with all governmental requirements
applicable to the Property and all other applicable statues, laws,
regulations and ordinances necessary for the transaction of its
business. The Property is a legal parcel lawfully created in full
compliance with all subdivision laws and ordinances.
6.6 INTENTIONALLY OMITTED.
6.7 FINANCIAL CONDITION. All financial statements and information
heretofore and hereafter delivered to Lender by Borrower, including,
without limitation, information relating to the financial condition of
Borrower, the Property, the partners, joint venturers or members of
Borrower, and/or any Guarantors, fairly and accurately represent the
financial condition of the subject thereof and have been prepared
(except as noted therein) in accordance with generally accepted
accounting principles consistently applied. Borrower acknowledges and
agrees that Lender may request and obtain additional information from
third parties regarding any of the above, including, without
limitation, credit reports.
6.8 INTENTIONALLY OMITTED.
6.9 ACCURACY. All reports, documents, instruments, information and forms
of evidence delivered to Lender concerning the Loan or security for
the Loan or required by the Loan Documents are accurate, correct and
complete in all material respects and do not contain any material
misrepresentation or omission.
6.10 AMERICANS WITH DISABILITIES ACT COMPLIANCE. Borrower represents and
warrants to Lender that, except as previously disclosed to Lender, the
Property shall be hereafter maintained in full and strict compliance
with the requirements and regulations of the Americans With
Disabilities Act, of July 26, 1990, Pub. L. ▇▇. ▇▇▇-▇▇▇, ▇▇▇ ▇▇▇▇.
▇▇▇, ▇▇ ▇.▇.▇. Section 12191, et seq., as hereafter amended. At
Lender's written request from time to time, Borrower shall provide
Lender with written evidence of such compliance satisfactory to
Lender. Borrower shall be solely responsible for all such ADA costs of
compliance and reporting.
6.11 BUSINESS LOAN. The Loan is a business loan transaction in the stated
amount solely for the purpose of carrying on the business of Borrower
and none of the proceeds of the Loan will be used for the personal,
family or agricultural purposes of the Borrower.
ARTICLE 7. HAZARDOUS MATERIALS
7.1 SPECIAL REPRESENTATIONS AND WARRANTIES. This Article 7 contains the
exclusive representations and warranties of Borrower to Lender with
respect to Hazardous Materials, Hazardous Materials Laws and Hazardous
Materials Claims on, about or under the Property. Borrower hereby
specially represents and warrants to the best of Borrower's knowledge
as of the date of this Agreement as follows:
(a) HAZARDOUS MATERIALS. Except as previously disclosed to Lender in
that certain Expanded Phase I Environmental Site Assessment
report dated October 6, 2000, the Property is not and has not
been a site for the use, generation, manufacture, storage,
treatment, release, threatened release, discharge, disposal,
transportation or presence of any oil, flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials,
hazardous wastes, toxic or contaminated substances or similar
materials, including, without limitation, any substances which
are "hazardous substances," "hazardous wastes," "hazardous
materials," "toxic substances," "wastes," "regulated substances,"
"industrial solid wastes," or "pollutants" under the Hazardous
Materials Laws, as described below, and/or other applicable
environmental laws, ordinances and regulations (collectively, the
"Hazardous Materials"). "Hazardous Materials" shall not include
commercially reasonable amounts of such materials used in the
ordinary course of operation of the Property
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which are used and stored in accordance with all applicable
environmental laws, ordinances and regulations.
(b) HAZARDOUS MATERIALS LAWS. Except as previously disclosed to
Lender in that certain Expanded Phase I Environmental Site
Assessment report dated October 6, 2000, the Property is in
compliance with all laws, ordinances and regulations relating to
Hazardous Materials ("Hazardous Materials Laws"), including,
without limitation: the Clean Air Act, as amended, 42 U.S.C.
Section 7401 et seq.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. Section 1251 et seq.; the Resource
Conservation and Recovery Act of 1976, as amended, 42 U.S.C.
Section 6901 et seq.; the Comprehensive Environment Response,
Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"),
42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act,
as amended, 15 U.S.C. Section 2601 et seq.; the Occupational
Safety and Health Act, as amended, 29 U.S.C. Section 651, the
Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe
Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.;
and all comparable state and local laws, laws of other
jurisdictions or orders and regulations.
(c) HAZARDOUS MATERIALS CLAIMS. Except as previously disclosed to
Lender in that certain Expanded Phase I Environmental Site
Assessment report dated October 6, 2000, there are no claims or
actions ("Hazardous Materials Claims") pending or threatened
against Borrower by any governmental entity or agency or by any
other person or entity relating to Hazardous Materials or
pursuant to the Hazardous Materials Laws.
7.2 HAZARDOUS MATERIALS COVENANTS. Borrower agrees as follows:
(a) NO HAZARDOUS ACTIVITIES. Except as previously disclosed to Lender
in that certain Expanded Phase I Environmental Site Assessment
report dated October 6, 2000, Borrower shall not cause or permit
the Property to be used as a site for the use, generation,
manufacture, storage, treatment, release, discharge, disposal,
transportation or presence of any Hazardous Materials.
(b) COMPLIANCE. Except as previously disclosed to Lender, Borrower
shall comply and cause the Property to comply with all Hazardous
Materials Laws in all material respects.
(c) NOTICES. Other than as has been previously disclosed to Lender,
Borrower shall immediately notify Lender in writing of: (i) the
discovery of any material amounts of Hazardous Materials on,
under or about the Property; (ii) any knowledge by Borrower that
the Property does not comply with any Hazardous Materials Laws in
all material respects; and (iii) any Hazardous Materials Claims
against Borrower.
(d) REMEDIAL ACTION. In response to the presence of any Hazardous
Materials on, under or about the Property, other than those
previously disclosed to Lender in that certain Expanded Phase I
Environmental Site Assessment report dated October 6, 2000,
Borrower shall immediately take, at Borrower's sole expense, all
remedial action required by any Hazardous Materials Laws or any
judgment, consent decree, settlement or compromise in respect to
any Hazardous Materials Claims.
7.3 INSPECTION BY LENDER. Upon a reasonable suspicion that a violation
exists, and upon reasonable prior notice to Borrower, Lender, its
employees and agents, may (whether before or after the commencement of
a nonjudicial or judicial foreclosure proceeding) enter and inspect
the Property for the purpose of determining the existence, location,
nature and magnitude of any past or present release or threatened
release of any Hazardous Materials into, onto, beneath or from the
Property. Absent the existence of a Default or an emergency, Lender
shall be limited to entering the Property for the foregoing purposes
to one time a year.
7.4 INTENTIONALLY OMITTED.
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7.5 LEGAL EFFECT OF SECTION. Borrower and Lender agree that: (a) this
Article 7 is intended as Lender's written request for information (and
Borrower's response) concerning the environmental condition of the
real property security as required by California Code of Civil
Procedure Section 726.5; and (b) each provision in this Article
(together with any indemnity applicable to a breach of any such
provision) with respect to the environmental condition of the real
property security is intended by Lender and Borrower to be an
"environmental provision" for purposes of California Code of Civil
Procedure Section 736, and as such it is expressly understood that
Borrower's duty to indemnify Lender hereunder shall survive: (a) any
judicial or non-judicial foreclosure under the Deed of Trust, or
transfer of the Property in lieu thereof, (b) the release and
reconveyance or cancellation of the Deed of Trust; and (c) the
satisfaction of all of Borrower's obligation under the Loan Documents.
ARTICLE 8. COVENANTS OF BORROWER
8.1 EXPENSES. Borrower shall immediately pay Lender upon demand all
reasonable out-of-pocket costs and expenses incurred by Lender in
connection with: (a) the preparation of this Agreement, all other Loan
Documents and Other Related Documents contemplated hereby; (b) the
administration of this Agreement, the other Loan Documents and Other
Related Documents for the term of the Loan; and (c) the enforcement or
satisfaction by Lender of any of Borrower's obligations under this
Agreement, the other Loan Documents or the Other Related Documents.
For all purposes of this Agreement, Lender's costs and expenses shall
include, without limitation, all reasonable out-of-pocket appraisal
fees, cost engineering and inspection fees, legal fees and expenses,
accounting fees, environmental consultant fees, auditor fees, and the
cost to Lender of any title insurance premiums, title surveys,
reconveyance and notary fees.
8.2 ERISA COMPLIANCE. Borrower shall at all times comply in all material
respects with the provisions of ERISA with respect to any retirement
or other employee benefit plan to which it is a party as employer, and
as soon as possible after Borrower knows, or has reason to know, that
any Reportable Event (as defined in ERISA) with respect to any such
plan of Borrower has occurred, it shall furnish to Lender a written
statement setting forth details as to such Reportable Event and the
action, if any, which Borrower proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event furnished
to the Pension Benefit Guaranty Corporation.
8.3 LEASING. Borrower shall keep the current lease with Communications &
Power Industries, Inc. as tenant in full force and effect and shall
not terminate or amend said lease without the prior written consent of
Lender, which consent shall not be unreasonably withheld.
8.4 APPROVAL OF LEASES. All leases of all or any part of the Property,
other than the lease with Communications & Power Industries, Inc.,
shall: (a) be upon terms and with tenants approved by Lender prior to
Borrower's execution of any such lease, such approval not to be
unreasonably withheld; and (b) include estoppel, subordination,
attornment and mortgagee protection provisions reasonably satisfactory
to Lender. All standard lease forms and any material deviation from
any form, shall be approved by Lender prior to execution of any lease
using such form. All amendments to leases and any termination of
leases shall not be made without Lender's prior written consent.
8.5 INTENTIONALLY OMITTED.
8.6 INTENTIONALLY OMITTED.
8.7 INTENTIONALLY OMITTED.
8.8 OPINION OF LEGAL COUNSEL. Borrower shall provide, at Borrower's
expense, an opinion of legal counsel in form and content satisfactory
to Lender to the effect that: (a) upon due authorization, execution
and recordation or filing as may be specified in the opinion, each of
the Loan Documents shall be legal, valid and binding instruments,
enforceable against the makers thereof in accordance with their
respective terms, subject to customary exceptions and assumptions; (b)
upon the consummation of a properly conducted non-judicial foreclosure
sale under the Deed of Trust, all rights of redemption of Borrower
shall be extinguished; and (c) the interest rate terms do not violate
any applicable usury laws.
Page 8
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8.9 FURTHER ASSURANCES. Upon Lender's reasonable request and at Borrower's
sole cost and expense, Borrower shall execute, acknowledge and deliver
any other instruments and perform any other acts necessary, desirable
or proper, as reasonably determined by Lender, to carry out the
purposes of this Agreement and the other Loan Documents or to perfect
and preserve any liens created by the Loan Documents. Furthermore,
Borrower agrees (i) to keep Lender fully informed of any and all
developments relating to that certain Stock Sale Agreement by and
between Varian Associates, Inc. and Communications & Power Industries
Holding Corporation, dated as of June 9, 1995, as amended, including
without limitation, those certain rights under Section 10.2 thereof
(the "Indemnity Agreement"), solely, however, as such Indemnity
Agreement relates to the Property, and (ii) to consider in good faith
any suggestion made by Lender with respect to such Indemnity
Agreement, solely as it pertains to the Property.
8.10 ASSIGNMENT. Without the prior written consent of Lender, Borrower
shall not assign Borrower's interest under any of the Loan Documents,
or in any monies due or to become due thereunder, and any assignment
without such consent shall be void.
8.11 MANAGEMENT OF PROPERTY. Without the prior written consent of Lender,
Borrower shall not enter into any agreement providing for the
management, leasing or operation of the Property.
8.12 SECURITY DEPOSITS. To the extent applicable, Borrower shall maintain
all deposits, security deposits, letters of credit, lease bonds,
substitute deposits, credit enhancements and other like items
("Security Deposits") under or relating to Leases in a separately
designated account ("Security Deposit Account") with Lender or
Lender's agent, under Lender's sole dominion and control. Borrower
shall cause tenants who have delivered Security Deposits in the form
of letters of credit, lease bonds or like items to have such letters
of credit, lease bonds or like items amended to provide for Lender as
beneficiary thereunder. Lender or Lender's agent may cause all such
letters of credit, lease bonds or like items to be held during the
term of the Loan by Lender, by Lender's agent or any other Person
requested by Lender. Borrower agrees that all future Security Deposits
shall be deposited in the Security Deposit Account if in cash or
delivered to Lender or Lender's designee in the form of a letter of
credit, lease bonds or like items (with Lender named as the sole
beneficiary thereunder). Borrower agrees that the Security Deposits
and all other tenant Security Deposits placed in the Security Deposit
Account (i) shall be maintained as required by the applicable legal
requirements and (ii) shall be returned if and when required by the
applicable Leases and legal requirements, provided that, Borrower
shall be solely responsible for compliance with the terms of the
applicable Lease and legal requirements and Lender and Lender's agent
shall in no event be liable for any failure of Borrower to so comply.
All Security Deposits received by Borrower with respect to new Leases
or existing Leases (if not already so deposited) shall promptly be
deposited into the Security Deposit Account if in cash, or delivered
to Lender or Lender's designee if in the form of a letter of credit,
lease bonds or like items (with Lender named as sole beneficiary
thereunder). Borrower shall hereafter direct all tenants to make all
additional cash Security Deposit payments directly to the Security
Deposit Account.
ARTICLE 9. REPORTING COVENANTS
9.1 FINANCIAL INFORMATION. Borrower shall deliver to Lender, as soon as
available, but in no event later than one hundred twenty (120) days
after Borrower's fiscal year end, a current financial statement
(including, without limitation, an income and expense statement and
balance sheet) signed by the Chief Financial Officer of Borrower
together with any Securities and Exchange Commission filings for the
following entities:
Borrower, and
Communications & Power Industries, Inc.
9.2 BOOKS AND RECORDS. Borrower shall maintain complete books of account
and other records for the Property and for disbursement and use of the
proceeds of the Loan, and the same shall be available for inspection
and copying by Lender upon reasonable prior notice.
Page 9
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ARTICLE 10. DEFAULTS AND REMEDIES
10.1 DEFAULT. The occurrence of any one or more of the following shall
constitute an event of default ("Default") under this Agreement and
the other Loan Documents:
(a) MONETARY. Borrower's failure to pay when due any sums payable
under the Note or any of the other Loan Documents; or
(b) PERFORMANCE OF OBLIGATIONS. Borrower's failure to perform any
obligation in addition to those in Section 10.1 (a) above under
any of the Loan Documents; provided, however, that if a cure
period is provided for the remedy of such failure, Borrower's
failure to perform will not constitute a Default until such date
as the specified cure period expires; or
(c) USE. The prohibition, enjoining or interruption of Borrower's
right to occupy, use or lease the Property for a continuous
period of more than sixty (60) days; or
(d) CONDEMNATION; ATTACHMENT. (i) The condemnation, seizure or
appropriation of, or occurrence of an uninsured casualty with
respect to any material portion of the Property; or (ii) the
sequestration or attachment of, or any levy or execution upon any
of the Property, any other collateral provided by Borrower under
any of the Loan Documents, or any substantial portion of the
other assets of Borrower, which sequestration, attachment, levy
or execution is not released, expunged or dismissed prior to the
earlier of sixty (60) days thereafter or the sale of the assets
affected thereby; or
(e) REPRESENTATIONS AND WARRANTIES. (i) The failure of any
representation or warranty of Borrower in any of the Loan
Documents and the continuation of such failure for more than ten
(10) days after written notice to Borrower from Lender requesting
that Borrower cure such failure; or
(f) VOLUNTARY BANKRUPTCY; INSOLVENCY; DISSOLUTION. (i) The filing of
a petition by Borrower for relief under the Bankruptcy Code, or
under any other present or future state or federal law regarding
bankruptcy, reorganization or other debtor relief law; (ii) the
filing of any pleading or an answer by Borrower in any
involuntary proceeding under the Bankruptcy Code or other debtor
relief law which admits the jurisdiction of the court or the
petition's material allegations regarding Borrower's insolvency;
(iii) a general assignment by Borrower for the benefit of
creditors; or (iv) Borrower applying for, or the appointment of,
a receiver, trustee, custodian or liquidator of Borrower or any
of its property; or
(g) INVOLUNTARY BANKRUPTCY. The failure of Borrower to effect a full
dismissal of any involuntary petition under the Bankruptcy Code
or under any other debtor relief law that is filed against
Borrower or in any way restrains or limits Borrower or Lender
regarding the Loan or the Property, prior to the earlier of the
entry of any court order granting relief sought in such
involuntary petition, or sixty (60) days after the date of filing
of such involuntary petition; or
(h) LOSS OF PRIORITY. The failure at any time of the Deed of Trust to
be a valid first lien upon the Property or any portion thereof,
other than as a result of any release or reconveyance of the Deed
of Trust with respect to all or any portion of the Property
pursuant to the terms and conditions of this Agreement; or
(i) HAZARDOUS MATERIALS. The discovery of any new significant
Hazardous Materials in, on or about the Property subsequent to
the Effective Date that were not previously disclosed to Lender.
Any such Hazardous Materials shall be "significant" for this
purpose if said Hazardous Materials, in Lender's sole, but
reasonable, discretion, have a materially adverse impact on the
value of the Property.
10.2 ACCELERATION UPON DEFAULT; REMEDIES. Upon the occurrence and during
the continuation of a Default specified in Section 10.1(f) or
Obligations shall automatically become immediately due and payable,
without presentment, demand,
Page 10
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protest, notice or other requirements of any kind, all of which are
hereby expressly waived by Borrower. Upon the occurrence and during
the continuation of any Default specified in this Article, other than
a Default under Section 10.1(f) or Section 10.1(g), Lender may, at its
sole option, declare all sums owing to Lender under the Note, this
Agreement and the other Loan Documents immediately due and payable.
Upon such acceleration, Lender may, in addition to all other remedies
permitted under this Agreement and the other Loan Documents and at law
or equity, apply any sums in the Account to the sums owing under the
Loan Documents and any and all obligations of Lender to fund further
disbursements under the Loan shall terminate.
10.3 DISBURSEMENTS TO THIRD PARTIES. Upon the occurrence and during the
continuation of a Default occasioned by Borrower's failure to pay
money to a third party as required by this Agreement, Lender may but
shall not be obligated to make such payment from the Loan proceeds or
other funds of Lender. If such payment is made from proceeds of the
Loan, Borrower shall immediately deposit with Lender, upon written
demand, an amount equal to such payment. If such payment is made from
funds of Lender, Borrower shall immediately repay such funds upon
written demand of Lender. In either case, the Default with respect to
which any such payment has been made by Lender shall not be deemed
cured until such deposit or repayment (as the case may be) has been
made by Borrower to Lender.
10.4 REPAYMENT OF FUNDS ADVANCED. Any funds expended by Lender in the
exercise of its rights or remedies under this Agreement and the other
Loan Documents shall be payable to Lender upon demand, together with
interest at the rate applicable to the principal balance of the Note
from the date the funds were expended.
10.5 RIGHTS CUMULATIVE, NO WAIVER. All Lender's rights and remedies
provided in this Agreement and the other Loan Documents, together with
those granted by law or at equity, are intended to be cumulative and
may, to the full extent permitted by law, be exercised by Lender at
any time. Lender's exercise of any right or remedy shall not
constitute a cure of any Default unless all sums then due and payable
to Lender under the Loan Documents are repaid and Borrower has cured
all other Defaults. No waiver shall be implied from any failure of
Lender to take, or any delay by Lender in taking, action concerning
any Default or failure of condition under the Loan Documents, or from
any previous waiver of any similar or unrelated Default or failure of
condition. Any waiver or approval under any of the Loan Documents must
be in writing and shall be limited to its specific terms.
10.6 POST-DEFAULT ACCESS. Upon the commencement of a nonjudicial or
judicial foreclosure, Foothill Capital Corporation, as agents for the
lender to Communications & Power Industries, Inc. ("Tenant's Lender"),
shall have up to sixty (60) calendar days in which to enter the
Property and remove the personal property of Communications & Power
Industries, Inc., but not that of Borrower, provided that Tenant's
Lender (i) pays rent to Lender at a fair market rate for its occupancy
of the Property on a pro rated daily basis; (ii) agrees to defend,
indemnify and hold harmless Lender, it's directors, officers,
employees, agents, successors and assigns from and against any and all
direct losses, claims, damages and liabilities (excluding
consequential or incidental damages) which Lender may incur as a
result of Tenant's Lender's actions or omissions while in occupancy;
and (iii) immediately repairs and restores, at its sole cost and
expense, any and all damage caused by the removal of said personal
property.
ARTICLE 11. MISCELLANEOUS PROVISIONS
11.1 INDEMNITY. SUBJECT TO THE PROVISIONS OF SECTION 2.10 CONTAINED HEREIN,
BORROWER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER,
ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS
FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS,
ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND EXPENSES) WHICH
LENDER MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF: (A) THE
PURPOSE TO WHICH BORROWER APPLIES THE LOAN PROCEEDS; (B) THE FAILURE
OF BORROWER TO PERFORM ANY OBLIGATIONS AS AND WHEN REQUIRED BY THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; (C) ANY FAILURE AT ANY
TIME OF ANY OF BORROWER'S REPRESENTATIONS OR WARRANTIES TO BE TRUE AND
CORRECT; OR (D) ANY ACT OR OMISSION BY BORROWER, CONSTITUENT PARTNER
OR MEMBER OF BORROWER, ANY
Page 11
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CONTRACTOR, SUBCONTRACTOR OR MATERIAL SUPPLIER, ENGINEER, ARCHITECT OR
OTHER PERSON OR ENTITY WITH RESPECT TO ANY OF THE PROPERTY. SUBJECT TO
THE PROVISIONS OF SECTION 2.10 CONTAINED HEREIN, BORROWER SHALL
IMMEDIATELY PAY TO LENDER UPON DEMAND ANY AMOUNTS OWING UNDER THIS
INDEMNITY, TOGETHER WITH INTEREST FROM THE DATE THE INDEBTEDNESS
ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE TO THE PRINCIPAL
BALANCE OF THE NOTE.
11.2 FORM OF DOCUMENTS. The form and substance of all documents,
instruments, and forms of evidence to be delivered to Lender under the
terms of this Agreement and any of the other Loan Documents shall be
subject to Lender's approval and shall not be modified, superseded or
terminated in any respect without Lender's prior written approval.
11.3 NO THIRD PARTIES BENEFITED. No person other than Lender and Borrower
and their permitted successors and assigns shall have any right of
action under any of the Loan Documents.
11.4 NOTICES. All notices, demands, or other communications under this
Agreement and the other Loan Documents shall be in writing and shall
be delivered to the appropriate party at the address set forth on the
signature page of this Agreement (subject to change from time to time
by written notice to all other parties to this Agreement). All
notices, demands or other communications shall be considered as
properly given if delivered personally or sent by first class United
States Postal Service mail, postage prepaid, except that notice of
Default may be sent by certified mail, return receipt requested, or by
Overnight Express Mail or by overnight commercial courier service,
charges prepaid. Notices so sent shall be effective three (3) days
after mailing, if mailed by first class mail, and otherwise upon
receipt; provided, however, that non-receipt of any communication as
the result of any change of address of which the sending party was not
notified or as the result of a refusal to accept delivery shall be
deemed receipt of such communication.
11.5 ATTORNEY-IN-FACT. Borrower hereby irrevocably appoints and authorizes
Lender, as Borrower's attorney-in-fact, which agency is coupled with
an interest, to execute and/or record in Lender's or Borrower's name
any notices, instruments or documents that Lender deems appropriate to
protect Lender's interest under any of the Loan Documents.
11.6 ACTIONS. Borrower agrees that Lender, in exercising the rights, duties
or liabilities of Lender or Borrower under the Loan Documents, may
commence, appear in or defend any action or proceeding purporting to
affect the Property, or the Loan Documents and Borrower shall
immediately reimburse Lender upon demand for all reasonable
out-of-pocket expenses so incurred or paid by Lender, including,
without limitation, reasonable out-of-pocket attorneys' fees and
expenses and court costs.
11.7 RIGHT OF CONTEST. Borrower may contest in good faith any claim,
demand, levy or assessment by any person other than Lender which would
constitute a Default if: (a) Borrower pursues the contest diligently,
in a manner which Lender determines is not prejudicial to Lender, and
does not impair the rights of Lender under any of the Loan Documents;
and (b) Borrower deposits with Lender any funds or other forms of
assurance which Lender in good faith determines from time to time
appropriate to protect Lender from the consequences of the contest
being unsuccessful. Borrower's compliance with this Section shall
operate to prevent such claim, demand, levy or assessment from
becoming a Default.
11.8 RELATIONSHIP OF PARTIES. The relationship of Borrower and Lender under
the Loan Documents is, and shall at all times remain, solely that of
borrower and lender, and Lender neither undertakes nor assumes any
responsibility or duty to Borrower or to any third party with respect
to the Property, except as expressly provided in this Agreement and
the other Loan Documents.
11.9 DELAY OUTSIDE LENDER'S CONTROL. Lender shall not be liable in any way
to Borrower or any third party for Lender's failure to perform or
delay in performing under the Loan Documents if such failure to
perform or delay in performing results directly or indirectly from, or
is based upon, the action, inaction, or purported action, of any
governmental or local authority, or because of war, rebellion,
insurrection, strike, lock-out, boycott or blockade (whether presently
in effect, announced or in the reasonable judgment of Lender deemed
probable), or from any Act of God or other cause or event beyond
Lender's control.
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11.10 ATTORNEYS' FEES AND EXPENSES; ENFORCEMENT. If any attorney is engaged
by Lender to enforce or defend any provision of this Agreement, any of
the other Loan Documents or Other Related Documents, or as a
consequence of any Default under the Loan Documents, with or without
the filing of any legal action or proceeding, and including, without
limitation, any reasonable out-of-pocket fees and expenses incurred in
any bankruptcy proceeding of the Borrower, then Borrower shall
immediately pay to Lender, upon demand, the amount of all reasonable
out-of-pocket attorneys' fees and expenses and all reasonable
out-of-pocket costs incurred by Lender in connection therewith,
together with interest thereon from the date of such demand until paid
at the rate of interest applicable to the principal balance of the
Note as specified therein.
11.11 IMMEDIATELY AVAILABLE FUNDS. Unless otherwise expressly provided for
in this Agreement, all amounts payable by Borrower to Lender shall be
payable only in United States currency, immediately available funds.
11.12 LENDER'S CONSENT. Wherever in this Agreement there is a requirement
for Lender's consent and/or a document to be provided or an action
taken "to the satisfaction of Lender", it is understood by such phrase
that Lender shall exercise its consent, right or judgment in a
reasonable manner given the specific facts and circumstance applicable
at the time.
11.13 LOAN SALES AND PARTICIPATION; DISCLOSURE OF INFORMATION. Borrower
agrees that Lender may elect, at any time, to sell, assign or grant
participation in all or any portion of its rights and obligations
under the Loan Documents, and that any such sale, assignment or
participation may be to one or more financial institutions, private
investors, and/or other entities, at Lender's sole discretion
("Participant"). Borrower further agrees that Lender may disseminate
to any such actual or potential purchaser(s), assignee(s) or
participant(s) all documents and information (including, without
limitation, all financial information) which has been or is hereafter
provided to or known to Lender with respect to: (a) the Property and
its operation; (b) any party connected with the Loan (including,
without limitation, the Borrower, any partner of Borrower, any
constituent partner or member of Borrower; and/or (c) any lending
relationship other than the Loan which Lender may have with any party
connected with the Loan. In the event of any such sale, assignment or
participation, Lender and the parties to such transaction shall share
in the rights and obligations of Lender as set forth in the Loan
Documents only as and to the extent they agree among themselves. In
connection with any such sale, assignment or participation, Borrower
further agrees that the Loan Documents shall be sufficient evidence of
the obligations of Borrower to each purchaser, assignee, or
participant, and upon written request by Lender, Borrower shall enter
into such amendments or modifications to the Loan Documents as may be
reasonably required in order to evidence any such sale, assignment or
participation. The indemnity obligations of Borrower under the Loan
Documents shall also apply with respect to any purchaser, assignee or
participant.
11.14 CAPITAL ADEQUACY. If Lender or any Participant in the Loan, or either
of them, determines that compliance with any law or regulation or with
any guideline or request from any central bank or other governmental
agency (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by
Lender or such Participant, or any corporation controlling Lender or
such Participant, as a consequence of, or with reference to, Lender's
or such Participant's or such corporation's commitments or its making
or maintaining advances below the rate which Lender or such
Participant or such corporation controlling Lender could have achieved
but for such compliance (taking into account the policies of Lender or
such Participant or corporation with regard to capital), then Borrower
shall, from time to time, within thirty (30) calendar days after
written demand by Lender or such Participant, pay to Lender or such
Participant additional amounts sufficient to compensate Lender or such
Participant or such corporation controlling Lender to the extent that
Lender determines such increase in capital is allocable to Lender's
obligations hereunder, provided that such demand is made of similar
borrowers under loan documents containing similar provisions as those
contained in the Loan Documents. A certificate as to such amounts,
submitted to Borrower by Lender or such Participant, shall be
conclusive and binding for all purposes, absent manifest error.
11.15 LENDER'S AGENTS. Lender may designate an agent or independent
contractor to exercise any of Lender's rights under this Agreement and
any of the other Loan Documents. Any reference to Lender in any of the
Loan Documents shall include Lender's agents, employees or independent
contractors.
Page 13
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Borrower shall pay the costs of such agent or independent contractor
either directly to such person or to Lender in reimbursement of such
costs, as applicable.
11.16 TAX SERVICE. Lender is authorized to secure, at Borrower's expense, a
tax service contract with a third party vendor which shall provide tax
information on the Property satisfactory to Lender.
11.17 ARBITRATION.
(a) ARBITRATION. Upon the demand of any party, any dispute shall be
resolved by binding arbitration (except as set forth in
Paragraphs 11.17(e) and 11.17(f) below) in accordance with the
terms of this Agreement. A "Dispute" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or
tort, statutory or common law, legal or equitable, now existing
or hereafter arising under or in connection with, or in any way
pertaining to, this Agreement and each other document, contract
and instrument required hereby or now or hereafter delivered to
Lender in connection herewith, or any past, present or future
extensions of credit and other activities, transactions or
obligations of any kind related directly or indirectly to any of
the foregoing documents, including without limitation, any of the
foregoing arising in connection with the exercise of any
self-help, ancillary or other remedies pursuant to any of the
foregoing documents. Any party may by summary proceedings bring
an action in court to compel arbitration of a Dispute. Any party
who fails or refuses to submit to arbitration following a lawful
demand by any other party shall bear all costs and expenses
incurred by such other party in compelling arbitration of any
Dispute.
(b) GOVERNING RULES. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other
administrator as the parties shall mutually agree upon in
accordance with the AAA Commercial Arbitration Rules. All
Disputes submitted to arbitration shall be resolved in accordance
with the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in
any of the foregoing documents. The arbitration shall be
conducted at a location in California selected by the AAA or
other administrator. If there is any inconsistency between the
terms hereof and any such rules, the terms and procedures set
forth herein shall control. All statutes of limitation applicable
to any Dispute shall apply to any arbitration proceeding. All
discovery activities shall be expressly limited to matters
directly relevant to the Dispute being arbitrated. Judgment upon
any award rendered in an arbitration may be entered in any court
having jurisdiction; provided however, that nothing contained
herein shall be deemed to be a waiver by any party that is a bank
of the protections afforded to it under Section 91 of Title 12 of
the United States Code or any similar applicable state law.
(c) NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise
self-help remedies such as setoff, foreclosure against or sale of
any real or personal property collateral or security, or to
obtain provisional or ancillary remedies, including without
limitation, injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver from a court of
competent jurisdiction before, after or during the pendency of
any arbitration or other proceeding. The exercise of any such
remedy shall not waive the right of any party to compel
arbitration or reference hereunder.
(d) ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS. Arbitrators must be
active members of the California State Bar or retired judges of
the state or federal judiciary of California, with expertise in
the substantive law applicable to the subject matter of the
Dispute. Arbitrators are empowered to resolve Disputes by summary
rulings in response to motions filed prior to the final
arbitration hearing. Arbitrators (i) shall resolve all Disputes
in accordance with the substantive law of the State of
California, (ii) may grant any remedy or relief that a court of
the State of California could order or grant within the scope
hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award
recovery of all costs and fees, to impose sanctions and to take
such other actions as they deem necessary to the same extent a
judge could pursuant to the Federal Rules of Civil Procedure, the
California Rules of Civil Procedure or other applicable law. Any
Dispute in which the amount in controversy is $5,000,000 or less
shall be decided by a single arbitrator who shall not render an
award of greater than $5,000,000 (including damages, costs, fees
and expenses). By submission to a single arbitrator, each party
expressly waives any right or
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claim to recover more than $5,000,000. Any Dispute in which the
amount in controversy exceeds $5,000,000 shall be decided by
majority vote of a panel of three arbitrators; provided however,
that all three arbitrators must actively participate in all
hearings and deliberations.
(e) JUDICIAL REVIEW. Notwithstanding anything herein to the contrary,
in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific,
written findings of fact and conclusions of law. In such
arbitrations (i) the arbitrators shall not have the power to make
any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon
the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous
under the substantive law of the State of California, and (iii)
the parties shall have in addition to the grounds referred to in
the Federal Arbitration Act for vacating, modifying or correcting
an award the right to judicial review of (1) whether the findings
of fact rendered by the arbitrators are supported by substantial
evidence, and (2) whether the conclusions of law are erroneous
under the substantive law of the State of California. Judgment
confirming an award in such a proceeding may be entered only if a
court determines the award is supported by substantial evidence
and not based on legal error under the substantive law of the
State of California.
(f) REAL PROPERTY COLLATERAL; JUDICIAL REFERENCE. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to
arbitration if the Dispute concerns indebtedness secured directly
or indirectly, in whole or in part, by any real property unless
(i) the holder of the mortgage, lien or security interest
specifically elects in writing to proceed with the arbitration,
or (ii) all parties to the arbitration waive any rights or
benefits that might accrue to them by virtue of the single action
rule statute of California, thereby agreeing that all
indebtedness and obligations of the parties, and all mortgages,
liens and security interests securing such indebtedness and
obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall
be referred to a referee in accordance with California Code of
Civil Procedure Section 638 et seq., and this general reference
agreement is intended to be specifically enforceable in
accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected
pursuant to the AAA's selection procedures. Judgment upon the
decision rendered by a referee shall be entered in the court in
which such proceeding was commenced in accordance with California
Code of Civil Procedure Sections 644 and 645.
(g) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to
conclude any arbitration proceeding within 180 days of the filing
of the Dispute with the AAA. No arbitrator or other party to an
arbitration proceeding may disclose the existence, content or
results thereof, except for disclosures of information by a party
required in the ordinary course of its business, by applicable
law or regulation, or to the extent necessary to exercise any
judicial review rights set forth herein. If more than one
agreement for arbitration by or between the parties potentially
applies to a Dispute, the arbitration provision most directly
related to the foregoing documents or the subject matter of the
Dispute shall control. This Agreement may be amended or modified
only in writing signed by Lender and Borrower. If any provision
of this Agreement shall be held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or any remaining
provisions of this Agreement. This arbitration provision shall
survive termination, amendment or expiration of any of the
foregoing documents or any relationship between the parties.
11.18 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION
THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE
LOAN DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR
THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY
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AGREES AND CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.
11.19 SEVERABILITY. If any provision or obligation under this Agreement and
the other Loan Documents shall be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable, that provision
shall be deemed severed from the Loan Documents and the validity,
legality and enforceability of the remaining provisions or obligations
shall remain in full force as though the invalid, illegal, or
unenforceable provision had never been a part of the Loan Documents,
provided, however, that if the rate of interest or any other amount
payable under the Note or this Agreement or any other Loan Document,
or the right of collectibility therefore, are declared to be or become
invalid, illegal or unenforceable, Lender's obligations to make
advances under the Loan Documents shall not be enforceable by
Borrower.
11.20 HEIRS, SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
under the terms and conditions of this Agreement, the terms of the
Loan Documents shall bind and inure to the benefit of the heirs,
successors and assigns of the parties.
11.21 TIME. Time is of the essence of each and every term of this
Agreement.
11.22 HEADINGS. All article, section or other headings appearing in this
Agreement and any of the other Loan Documents are for convenience of
reference only and shall be disregarded in construing this Agreement
and any of the other Loan Documents.
11.23 GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with the laws of the State of California,
except to the extent preempted by federal laws. Borrower and all
persons and entities in any manner obligated to Lender under the Loan
Documents consent to the jurisdiction of any federal or state court
within the State of California having proper venue and also consent to
service of process by any means authorized by California or federal
law.
11.24 INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior
negotiations or agreements, written or oral. The Loan Documents shall
not be modified except by written instrument executed by all parties.
Any reference to the Loan Documents includes any amendments, renewals
or extensions now or hereafter approved by Lender in writing.
11.25 JOINT AND SEVERAL LIABILITY. The liability of all persons and
entities obligated in any manner under this Agreement and any of the
Loan Documents shall be joint and several.
11.26 COUNTERPARTS. To facilitate execution, this document may be executed
in as many counterparts as may be convenient or required. It shall not
be necessary that the signature of, or on behalf of, each party, or
that the signature of all persons required to bind any party, appear
on each counterpart. All counterparts shall collectively constitute a
single document. It shall not be necessary in making proof of this
document to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, each of the
parties hereto. Any signature page to any counterpart may be detached
from such counterpart without impairing the legal effect of the
signatures thereon and thereafter attached to another counterpart
identical thereto except having attached to it additional signature
pages.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the
date appearing on the first page of this Agreement.
"LENDER"
▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION
By:
-------------------------------------
Name:
-----------------------------------
Its:
------------------------------------
Lender's Address With a copy to:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
Real Estate Group (AU# 2034) Disbursement and Operations Center
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
"BORROWER"
COMMUNICATIONS & POWER INDUSTRIES
HOLDING CORPORATION,
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Its:
------------------------------------
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Borrower's Address:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, CFO
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Annick
With a copy to:
Irell & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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EXHIBIT A
Loan No. 1440
EXHIBIT A - DESCRIPTION OF PROPERTY
Exhibit A to LOAN AGREEMENT between COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, a Delaware corporation, as "Borrower", and ▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION, as "Lender", dated as of December __, 2000.
The land referred to herein is situated in the County of San Mateo, State of
California, and is described as follows:
All that certain real property located in the City of ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, all of Parcel 1 as shown on the Parcel Map recorded
in Volume 20 of Parcel Maps at page 23 in the Records of said County, described
in metes as follows:
Beginning at Northerly corner of said Parcel; thence through the following
numbered courses:
1) South 37 degrees 56' 04" East 739.82 feet to a curve to the right with a
radius of 447.00 feet
2) along said curve through a central angle of 33 degrees 54' 48" an arc
distance of 264.58 feet
3) South 04 degrees 01' 16" East 182.93 feet to a curve to the left with a
radius of 553.00 feet
4) along said curve through a central angle of 02 degrees 38' 43" an arc
distance of 25.53 feet
5) South 46 degrees 51' 36" West 476.39 feet
6) North 42 degrees 08' 24" West 1153.65 feet
7) North 47 degrees 51' 36" East 752.91 feet to the point of beginning.
A.P. No.: ▇▇▇-▇▇▇-▇▇▇ JPN 046 005 051 02 A
▇▇▇-▇▇▇-▇▇▇ 046 005 051 07 A
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EXHIBIT B
Loan No. 1440
EXHIBIT B - DOCUMENTS
Exhibit B to LOAN AGREEMENT between COMMUNICATIONS & POWER INDUSTRIES HOLDING
CORPORATION, a Delaware corporation, as "Borrower", and ▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION, as "Lender", dated as of December __, 2000.
1. Loan Documents. The documents listed below, numbered 1.1 through 1.5,
inclusive, and amendments, modifications and supplements thereto which have
received the prior written consent of Lender, together with any documents
executed in the future that are approved by Lender and that recite that
they are "Loan Documents" for purposes of this Agreement are collectively
referred to herein as the Loan Documents.
1.1 This Agreement.
1.2 The Promissory Note Secured by Deed of Trust of even date herewith in
the original principal amount of the Loan made by Borrower payable to
the order of Lender.
1.3 The Deed of Trust with Absolute Assignment of Leases and Rents,
Security Agreement and Fixture Filing of even date herewith executed
by Non-Borrower Trustor, as Trustor, to American Securities Company, a
California corporation, as Trustee, for the benefit of Lender, as
Beneficiary.
1.4 Uniform Commercial Code - National Financing Statement - Form UCC-1,
dated December __, 2000, executed by Borrower as Debtor and Lender as
Secured Party.
1.5 Corporate Resolution authorizing borrowing and hypothecation of
property of even date herewith certified by the Secretary of
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION, a Delaware
corporation.
Other Related Documents (Which Are Not Loan Documents):
i. Funds Transfer Agreement for Disbursement of Loan Proceeds dated
December __, 2000, executed by and between Borrower and ▇▇▇▇▇ Fargo
Bank, National Association.
ii. Agreement For Disbursement Prior To Recording And Amendment To Note of
even date herewith executed by and between Borrower and Lender.
iii. Unsecured Hazardous Materials Indemnity Agreement dated December __,
2000 executed by and between Borrower and Lender.
iv. Opinion of Borrower's Legal Counsel dated December __, 2000, executed
by Irell & ▇▇▇▇▇▇▇ LLP.
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