Exhibit 10-1
LINE OF CREDIT
LOAN AGREEMENT
In consideration of the covenants and conditions hereafter contained,
BANK ONE, UTAH, NA ("Bank" hereafter) and SKYHOOK TECHNOLOGIES, INC.
("Borrower" hereafter), agree as follows:
1. REPRESENTATIONS.
A. To fund current operations and growth, Borrower has requested that
Bank extend to Borrower a revolving line of credit (hereinafter "Line of
Credit").
B. Bank desires to lend to Borrower, on a revolving line of credit
basis, the amount set forth herein as the Line of Credit Limit, pursuant to
the terms and conditions of this Agreement and pursuant to the Loan Documents
executed in connection herewith.
C. All advances made to Borrower under this Line of Credit shall be
secured by the Collateral described herein or in a Security Agreement executed
in connection herewith.
2. DEFINITIONS AND ACCOUNTING TERMS.
A. Defined Terms. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have the
same meaning when used in the plural and vice versa):
"Accounts" means "accounts" as defined in the Utah Uniform Commercial
Code adopted in the state of Utah.
"Advance" means a borrowing under this Agreement.
"Affiliated" means any Person, (1) which directly or indirectly
controls, or is controlled by, or is under common control with the Borrower or
a subsidiary; (2) which directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of the Borrower or any
Subsidiary; or (3) five percent (5%) or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Borrower or a
Subsidiary. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by contract,
or otherwise.
"Agreement" means this Line of Credit Loan Agreement, as amended,
supplemented, or modified from time to time.
"Authorized Agent" means the Person or Persons authorized to execute and
deliver this Agreement or any instrument or agreement required hereunder on
behalf of the Borrower, as well as the Person or Persons authorized to obtain
Advances on behalf of Borrower as described in this Agreement.
"Business Day" means any day other than a Saturday, Sunday, or other day
on which commercial banks in Salt Lake City, Utah are authorized or required
to close under the laws of the State of Utah.
"Collateral" means all property which is subject to the Lien granted by
a Security Agreement or any other lien instrument.
"Debt" means (1) indebtedness or liability for borrowed money;
(2) obligations evidenced by bonds, debentures, notes, or other
similar instruments; (3) obligations for the deferred purchase price of
property or services (including trade obligations); (4) obligations as lessee
under capital leases; (5) current liabilities in respect of unfunded vested
benefits under Plans covered by ERISA; (6) obligations under letters of
credit; (7) obligations under acceptable facilities; and (8) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business), and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or entity, or otherwise to
assure a creditor against loss; and, (9) obligations secured by any Liens,
whether or not the obligations have been assumed.
"Default" means any of the events specified in this Agreement under
"Events of Default; Remedies," whether or not any requirement for the giving
of notice, the lapse of time, or both, or any other condition, has been
satisfied.
"Event of Default" means any of the events specified in this Agreement
under "Events of Default; Remedies", provided that any requirement for the
giving of notice, the lapse of time, or both, or any other condition, has been
satisfied.
"GAAP" means generally accepted accounting principles in the United
States.
"Guarantor" means ▇▇▇▇▇▇▇ ▇. Fresh and Magellan Technology, Inc.
"Guaranty" means the Guaranty to be delivered by the Guarantors under
the terms of this Agreement.
"Inventory" means "inventory" as defined in the Uniform Commercial Code,
adopted in the State of Utah.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory
or other) , or preference, priority, or other security agreement or
preferential arrangement, charge, or encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention
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agreement, any financing lease having substantially the same economic effect
as any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction to evidence any
of the foregoing).
"Line of Credit Limit" means $750,000.00.
"Loan Document" means this Agreement, any Security Agreement, Guaranty,
or hypothecation or other document executed in connection with this Agreement.
"Loan Index Rate" means the rate per annum charged and announced by
Bank One, Columbus, NA, or its successors, from time to time as its "prime
rate", which rate is not intended to be the lowest rate of interest charged by
the Bank to its borrowers. The Loan Index Rate will change on each day that
the "prime rate" changes.
"Loan Interest Rate" means a variable interest rate which shall at all
times during the term of this Agreement be equal to the total of the Loan
Index Rate plus the applicable Margin as defined herein.
"Margin" means the percentage points added to the Loan Index Rate to
determine the Loan Interest Rate pursuant to this Agreement. The Margin is
set forth above the signatures to this Agreement.
"Maturity Date" means December 15, 1997.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"Security Agreement" means the Security Agreement to be delivered by the
Borrower under the terms of this Agreement.
"Subsidiary" means, as to the Borrower, a other corporation of which
shares of stock having ordinary voting power (other than stock having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by the Borrower.
B. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the financial
statements and all financial data
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submitted pursuant to this Agreement shall be prepared in accordance with such
principles.
3. TERMS OF LINE OF CREDIT.
A. Bank agrees to lend and Advance to Borrower f rom the date hereof
amounts which do not exceed the Line of Credit Limit. Borrower agrees to
repay all amounts borrowed and advanced in accordance with the terms described
herein. The Line of Credit Limit is the maximum amount Bank may be required
to advance to Borrower under this Agreement.
B. It is understood that the amount available to Borrower will vary
in accordance with Advances to Borrower and payments by Borrower.
C. All funds available to Borrower under this Line of Credit will be
advanced on oral or written demand of Borrower or
Authorized Agent, and Bank shall not have the right to deny any such Advance
unless this Agreement has been terminated prior to an Advance request. If
indicated above the signatures to this Agreement, Borrower shall obtain
Advances solely by delivering to Bank a written ADVANCE REQUEST FORM in a form
approved by Bank.
D. Borrower may obtain Advances on the Line of Credit asfollows:
(1) Bank will maintain a written or computerized ledger which
will reflect all Advances, charges and payments made on the Line of
Credit.
(2) All of Borrower's transactions on the Line of Credit shall
be executed solely through Authorized Agents. These are the only
persons authorized to execute transactions for Borrower under this
Agreement and Borrower shall cause these Authorized Agents to provide a
specimen of their signatures. Borrower shall revoke the authority of
its Authorized Agents or appoint other Authorized Agents only upon
written notice to Bank given in accordance with this Agreement. Two (2)
Authorized Agents are required are required to execute transactions for
the Borrower.
(3) All Advances made to Borrower under the Line of Credit shall
be deposited immediately, but in no event later than the next regular
banking day, into the deposit account designated by Borrower above the
signatures to this Agreement.
E. Loan Interest Rate. Borrower shall pay to Bank interest on the
outstanding principal balance of all Advances obtained under the Line of
Credit. The interest rate shall be the Loan Interest Rate. The Loan Interest
Rate may change from time to time and the
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interest payable on the outstanding principal balance will fluctuate with
changes in the Loan Interest Rate. Interest shall be computed daily on the
basis of a 360 day year and charged on the number of actual days Advances are
outstanding.
F. Interest Payments. Bank will ▇▇▇▇ Borrower each month for
interest due for the preceding month on total outstanding Advances
from the Line of Credit. Interest will be due in arrears and the
interest due must be paid to Bank on the due date shown on each billing
statement. If payment is not received within ten (10) Business Days after the
due date shown on the billing statement, Borrower authorizes Bank to charge
the Line of Credit for the amount of the interest due for the preceding month
so long as such charge does not cause the outstanding principal balance to
exceed the Line of Credit Limit or the Borrowing Base, whichever is less.
Bank, in failing to render an interest statement, does not waive its right to
receive or collect interest payments.
G. Principal Payments. Until Bank declares a termination of the Line
of Credit following the occurrence and during the continuance of an Event of
Default, or otherwise notifies Borrower in writing, Borrower may make payments
on the principal balance of Advances outstanding on the Line of Credit in
amounts and at such times as Borrower, in its sole discretion, determines.
There shall be no pre-payment penalty.
H. Origination and Amendment Fee. At the time of closing this
Agreement, Borrower shall pay to Bank a loan origination fee of $1,875.00. All
other fees and costs of documenting this Agreement, will be paid for by
Borrower at the time of closing.
I. Other Fees. Borrower shall pay to Bank a reasonable fee,
including outside attorneys' fees, to amend the Loan Agreement or any of the
Loan Documents. A reasonable fee may also be charged for Bank's review of any
request by the Borrower to modify or waive any restrictive covenants. A fee
charged to modify or waive a restrictive covenant does not imply that Bank
consented to the modification or waiver, but is only to reimburse Bank for its
time and effort in reviewing the request by Borrower. Bank shall issue a
statement for these fees. If the fees are not paid by the 15th day of the
following month, Borrower directs Bank to add the amount to the principal
balance of the Loan. Failing to render a statement does not waive the right
to receive or collect these fees.
4. COLLATERAL.
A. The Collateral for all Advances made to Borrower under the Line of
Credit and all accrued interest, costs and fees shall be all of the Borrower's
Inventory and all rights to payment of money including but not limited to
Accounts, contract rights,
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chattel paper, instruments, general intangibles and choses in action now owned
or hereafter acquired and as further described in a Security Agreement or
other lien instrument executed at any time prior to or in connection with this
Agreement. In enforcing the terms of any Security Agreement, following
Borrower's default, Bank shall not be required to liquidate the Collateral in
any particular order. The Collateral is provided in consideration of the
availability of funds under this Agreement, and no security interest shall be
released or be deemed released until this Agreement has been terminated and
all amounts Advanced have been paid in full. No junior Lien on any of Bank's
Collateral shall affect the priority of any Advance made to Borrower under
this Agreement.
5. TERMINATION.
A. Termination by Borrower. Borrower may terminate this Agreement at
any time by furnishing Bank with a written notice that this Agreement 'is
terminated and coincidentally therewith paying all Advances, including
interest, fees and charges, outstanding under the Line of Credit.
B. Termination by Bank. In the event of Borrower's Default, and
following notice and failure by Borrower to cure as required herein, Bank may
terminate its obligation to make further Advances under this Agreement.
Borrower's default is not waived by any action of Bank other than by a written
waiver of Default.
6. MATURITY.
Notwithstanding any provision herein to the contrary, all outstanding
Advances together with accrued and unpaid interest, fees and charges shall
mature and be due and payable in full on the Maturity Date.
7. PLEDGE.
Borrower does hereby pledge to Bank and grant to Bank a security
interest, perfected by possession, on all of Borrower's accounts, credits,
assets or things of value that from time to time are in the possession and/or
control of Bank. In the event of Default, as defined herein, and Borrower's
failure to cure the Default, Bank may exercise its rights under the pledge and
apply the pledged property to the outstanding balance of Advances due to
Bank.
8. CONDITIONS PRECEDENT.
A. Condition Precedent to the Loan. The obligation of Bank to make
the Line of Credit Loan to Borrower is subject to the condition
precedent that the Bank shall have received on or before
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the date of such Line of Credit each of the following, in form and substance
satisfactory to Bank and its counsel:
(i) Agreement. This Agreement duly executed by the Borrower.
(ii) Security Agreement. A Security Agreement, duly executed
by the Borrower, together with acknowledged copies of Financing
Statements (UCC-1) duly filed under the Uniform Commercial Code of all
jurisdictions necessary or, in the opinion of the Bank, desirable to
perfect the security interest created by the Security Agreement.
(iii) Evidence of all corporate action by the Borrower.
Certified (as of the date of this Agreement) copies of all corporate
action taken by the Borrower, including resolutions of its Board of
Directors, authorizing the execution, delivery, and performance of
this Agreement and each other document to be delivered pursuant to
this Agreement.
(iv) Evidence of all corporate action by the Guarantor.
Certified (as of the date of this Agreement) copies of all corporate
action taken by the Guarantor, including resolutions of its Board of
Directors, authorizing the execution, delivery, and performance of the
Guaranty.
(v) Arbitration Agreement. An Arbitration Agreement duly
executed by Borrower and the Guarantors.
(vi) Guaranty, Guarantees duly executed by theGuarantors.
(vii) Insurance and Landlord's Waiver. Evidence of insurance
covering the Collateral in amounts and form acceptable to Bank and an
executed Landlord's Waiver withregard to Inventory.
(viii) Fees. All costs and fees required in connection with
this Agreement have been paid.
(ix) Additional Documentation. The Bank shall have received
such other approvals, opinions, or documents as the Bank may
reasonably request.
9. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Bank that:
A. Incorporation, Good Standing and Due Qualification. The
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Borrower and each of its Subsidiaries is a corporation duly incorporated,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation; has the corporate power and authority to own its assets and
to transact the business in which it is now engaged or proposed to be engaged
in; and is duly qualified as a foreign corporation and in good standing under
the laws of each other jurisdiction in which such qualification is required.
B. Corporate Power and Authority. The execution, delivery, and
performance by the Borrower of this Agreement have been duly authorized by all
necessary action and do not and will not (1) require any consent or approval
of the stockholders of Borrower; (2) contravene Borrower's charter or bylaws;
(3) violate any provision of any law, rule, regulation (including, without
limitation, Regulations U and X of the Board of Governors of the Federal
Reserve System) , order, writ, judgment, injunction, decree, determination, or
award presently in effect having applicability to Borrower; (4) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease, or instrument to which Borrower is a
party or by which it or its properties -may be bound or affected; (5) result
in, or require, the creation or imposition of any Lien, upon or with respect
to any of the properties now owned or hereafter acquired by Borrower; and, (6)
cause Borrower to be in default under any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination, or award or any such
indenture, agreement, lease, or instrument.
C. Legally Enforceable Agreement. This Agreement is, and each of
the other Loan Documents when delivered under this Agreement will be, legal,
valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except to the extent
that such enforcement may be limited by applicable bankruptcy, insolvency,
and other similar laws affecting creditors' rights generally.
D. Financial Statements. The balance sheet of the Borrower and its
Subsidiaries as of December 31, 1995, and the related statements of income
and retained earnings of the Borrower and its Subsidiaries for the fiscal
year then ended, copies of which have been furnished to the Bank, are
complete and correct and fairly present the financial condition of the
Borrower and its Subsidiaries as at such dates and the results of the
operations of the Borrower and its Subsidiaries for the periods covered by
such statements, all in accordance with GAAP consistently applied (subject
to year-end adjustments in the case of the interim financial statements),
and since October 31, 1996, there has been no material adverse change in the
condition (financial, or otherwise), business, or operations of the Borrower
or any Subsidiary. Except as stated above, there are no liabilities of
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the Borrower or any Subsidiary, fixed or contingent, which are material but
are not reflected in the financial statements or in the notes thereto, other
than liabilities arising in the ordinary course of business. No information,
exhibit, or report furnished by the Borrower to the Bank in connection with
the negotiation of this Agreement contained any material misstatement of f act
or omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading.
E. Other Agreements. Neither the Borrower, nor any Subsidiary, is
a party to any indenture, loan, or credit agreement, or to any lease or
other agreement or instrument, or subject to any charter or corporate
restriction which could have a material adverse effect on the business,
properties, assets, operations or conditions, financial or otherwise, of the
Borrower or any Subsidiary, or the ability of the Borrower to carry out its
obligations under this Agreement. Neither the Borrower nor any Subsidiary
is in default in any respect in the performance, observance, or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a party.
F. Litigation. There is no pending or threatened action or
proceeding against or affecting the Borrower or any of its Subsidiaries
before any court, governmental agency, or arbitrator, which may, in any one
case or in the aggregate, materially adversely affect the financial
condition, operations, properties, or business of the Borrower to perform
its obligation under this
Agreement.
G. No Defaults on Outstanding Judgments or Orders. The
Borrower and its Subsidiaries have satisfied all judgments, and
neither the Borrower nor any Subsidiary is in default with respect to any
judgment, writ, injunction, decree, rule, or regulation of any court,
arbitrator, or federal, state, municipal, or other governmental authority,
commission, board, bureau, agency, or instrumentality, domestic or foreign.
H. Ownership and Liens. The Borrower and each Subsidiary have
title to, or valid leasehold interests in, all of their properties and
assets, real and personal, including the properties and assets and leasehold
interest reflected in the financial statements referred to herein (other
than any properties or assets disposed of in the ordinary course of
business), and none of the properties and assets owned by the Borrower or
any Subsidiary and none of their leasehold interests is subject to any Lien,
except such as may be permitted pursuant to this Agreement.
I. Operation of Business. The Borrower and its Subsidiaries
possess all licenses, permits, franchises, patents, copyrights, trademarks,
and trade names, or rights thereto, to conduct their
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respective businesses substantially as now conducted and as presently proposed
to be conducted, and the Borrower and its subsidiaries are not in violation of
any valid rights of others with respect to any of the foregoing.
J. Taxes. The Borrower and each of its Subsidiaries have filed all
tax returns (federal, state and local) required to be filed and have paid all
taxes, assessments, and governmental charges and levies thereon to be due,
including interest and penalties.
10. AFFIRMATIVE COVENANTS.
So long as this Agreement shall remain in effect, the Borrower will:
A. Maintenance of Existence. Preserve and maintain, and cause each
Subsidiary to preserve and maintain, its corporate existence and good standing
in the jurisdiction of its incorporation, and qualify and remain qualified,
and cause each Subsidiary to qualify and remain qualified, as a foreign
corporation in each jurisdiction in which such qualification is required.
B. Maintenance of Records. Keep, and cause each Subsidiary to keep,
adequate records and books of account, in which complete entries will be made
in accordance with GAAP consistently applied, reflecting all financial
transactions of the Borrower and its Subsidiaries.
C. Maintenance of Properties. Maintain, keep, and preserve, and
cause each Subsidiary to maintain, keep, and preserve, all of its properties
(tangible and intangible) necessary or useful in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted.
D. Conduct of Business. Continue, and cause each Subsidiary to
continue, to engage in an efficient and economical manner in a business of the
same general type as now conducted by it on the date of this Agreement.
E. Maintenance of Insurance. Maintain, and cause each Subsidiary to
maintain, insurance with financially sound and reputable insurance companies
or associations in such amounts and covering such risks as are usually carried
by companies engaged in the same or a similar business and similarly situated,
which insurance may provide for reasonable deductibility from coverage
thereof.
F. Compliance with Laws. Comply, and cause each Subsidiary to
comply, in all respects with all applicable laws, rules,
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regulations, and orders, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments, and
governmental charges imposed upon it or upon its property.
G. Right of Inspection. At any reasonable time and f rom time to
time, permit the Bank or any agent or representative thereof to examine and
make copies of and abstracts f rom the records and books of account of, and
visit the properties of, the Borrower and any Subsidiary, and to discuss the
affairs, finances, and accounts of the Borrower and any Subsidiary with any of
their respective officers and directors and the Borrower I s independent
accountants.
H. Reporting Requirements. Furnish to the Bank:
(1) Annual financial statements of Borrower. As soon as
available and in any event within 90 days after the end of each fiscal
year of the Borrower, balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal year and statements of income
and retained earnings of the Borrower and its Subsidiaries for such
fiscal year and statements of cash flows of the Borrower and its
Subsidiaries for such fiscal year, all in reasonable detail and stating
in comparative form the respective figures for the corresponding date
and period in the prior fiscal year and all prepared in accordance with
GAAP consistently applied and certified correct by an officer of the
Borrower.
(2) Annual financial statements of Magellan. As soon as
available and in any event within 90 days after the end of each fiscal
year of the Borrower, balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal year and statements of income
and retained earnings of the Borrower and its Subsidiaries for such
fiscal year and statements of cash flows of the Borrower and its
Subsidiaries for such fiscal year, all in reasonable detail and stating
in comparative form the respective figures for the corresponding. date
and period in the prior fiscal year and all prepared in accordance with
GAAP consistently applied and as to the consolidated statements
accompanied by an opinion thereon acceptable to the Bank by certified
public accountants selected by the Borrower and acceptable to the Bank.
(3) Financial Statements and Tax Returns of Fresh. Annual
financial statements of ▇▇▇▇▇▇▇ ▇. Fresh and a copy of his prior year's
federal income tax return within 30 days of filing said tax return.
(4) Notice of litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any court
or governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, affecting the Borrower or any
Subsidiary which, if determined adversely to the Borrower or such
Subsidiary, could have a material adverse effect on the financial
condition, properties, or operations of the Borrower or such Subsidiary.
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(5) Notice of Default and Events of Default. As soon as possible
and in any event within fifteen (15) days after the occurrence of each
Default or Event of Default, a written notice setting forth the details
of such Default or Event of Default and the action which is proposed to
be taken by the Borrower with respect thereto.
(6) General information. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower or any
Subsidiary as the Bank may from time to time reasonably request.
I. Environment. Be and remain, and cause each Subsidiary to be and
remain, in compliance with the provisions of all federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules
and regulations issued thereunder, notify the Bank immediately of any notice
of a hazardous discharge or environmental complaint received from any
governmental agency or any other party; notify the Bank immediately of any
hazardous discharge from or affecting its premises; immediately contain and
remove the same, in compliance with all applicable laws; promptly pay any fine
or penalty assessed in connection therewith; permit the Bank to inspect the
premises, to conduct tests thereon, and to inspect all books, correspondence,
and records pertaining thereto; and at the Bank's request, and at the
Borrower's expense, provide a report of a qualified environmental engineer,
satisfactory in scope, form, and content to the Bank, and such other and
further assurances reasonably satisfactory to the Bank that the condition has
been corrected.
11. NEGATIVE COVENANTS.
So long as any Advance shall remain unpaid or the Bank shall have any
Commitment under this Agreement, the Borrower will not:
A. Liens. Create, incur, assume, or suffer to exist, or permit any
subsidiary to create, incur, assume, or suffer to exist, any Lien upon or with
respect to any of its properties, now owned or hereafter acquired, except:
(1) Liens in favor of the Bank;
(2) Liens for taxes and assessments or other governmental
charges or levies if not yet due and payable or,
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if due and payable, if they are being contested in good faith by appropriate
proceedings and f or which appropriate reserves are maintained;
(3) Liens imposed by law, such as mechanics', materialmen's,
landlord's, warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than ninety (90) days or which are being contested in good
faith in appropriate proceedings and for which appropriate reserves have been
established;
(4) Liens under workers' compensation, unemployment insurance, Social
Security, or similar legislation;
(5) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money),
leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance, or
other similar bonds, or other similar obligations arising in the
ordinary course of business;
(6) Liens existing as of the date of this Agreement.
(7) Judgment and other similar Liens arising in connection with
Court proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings;
(8) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with
the occupation, use, and enjoyment by the Borrower or any Subsidiary of
the property or assets encumbered thereby in the normal course of its
business or materially impair the value of the property subject thereto;
(9) Liens securing obligations of a Subsidiary to the Borrower
or another subsidiary.
B. Debt. Create, incur, assume, or suffer to exist, or permit any
Subsidiary to create, incur, assume, or suffer to exist, any Debt, except:
(1) Debt of the Borrower under this Agreement;
(2) Debt as of the date of this Agreement as shown on the financial
statement dated October 31, 1996;
(3) Debt of the Borrower subordinated on terms
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satisfactory to the Bank to the Borrower's obligations under this
Agreement;
(4) Debt of the Borrower to any subsidiary or of any Subsidiary
to the Borrower or another subsidiary;
(5) Accounts payable to trade creditors for goods or services
which are acquired in the ordinary course of Borrower's and Subsidiaries
business.
C. Mergers, Etc. wind up, liquidate or dissolve itself, reorganize,
merge or consolidate with or into, or convey, sell, assign, transfer, lease,
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person, or acquire all or substantially all of the
assets or the business of any Person, or permit any Subsidiary to do so,
except that (1) any Subsidiary may merge into or transfer assets to the
Borrower and (2) any Subsidiary may merge into or consolidate with or transfer
assets to any other Subsidiary.
D. Leases. Create, incur, assume, or suffer to exist, or permit
any subsidiary to create, incur, assume, or suffer to exist, any obligation
as lessee f or the rental or hire of any real or personal property, except:
(1) leases existing on the date of this Agreement and any extensions or
renewals thereof; (2) leases which do not in the aggregate require the
Borrower and its Subsidiaries on a consolidated basis to make payments
(including taxes, insurance, maintenance, and similar expenses which the
Borrower or any subsidiary is required to pay under the terms of any lease)
in any fiscal year of the Borrower in excess of $60,000; and, (3) leases
between the Borrower and any Subsidiary or between any Subsidiaries.
E. Sale and Leaseback. Sell, transfer, or otherwise dispose of, or
permit any subsidiary to sell, transfer, or otherwise dispose of, any real
or personal property to any Person and thereafter directly or indirectly
lease back the same or similar property.
F. Dividends. Declare or pay any dividends; or purchase, redeem,
retire, or otherwise acquire for value any of its capital stock now or
hereafter outstanding; or make any distribution of assets to its
stockholders as such whether in cash, assets, or obligations of the
Borrower; or allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption, or retirement
of any shares of its capital stock; or make any other distribution by
reduction of capital or otherwise in respect of any shares of its capital
stock; or permit any of its Subsidiaries to purchase or otherwise acquire
for value any stock of the Borrower or another Subsidiary, except
-14-
that the Borrower (1) may declare and deliver dividends and make distributions
payable solely in common stock of the Borrower and (2) may purchase or
otherwise acquire shares of its capital stock by exchange for or out of the
proceeds received from a substantially concurrent issue of new shares of its
capital stock.
G. Sale of Assets. Sell, lease, assign, transfer, or otherwise
dispose of, or permit any Subsidiary to sell, lease, assign, transfer or
otherwise dispose of, any of its now owned or hereafter acquired assets
(including, without limitation, shares of stock and indebtedness of
Subsidiaries, receivables, and leasehold interests), except: (1) inventory
disposed of in the ordinary course of business; (2) the sale or other
disposition of assets no longer used or useful in the conduct of its
business; and (3) that any Subsidiary may sell, lease, assign, or otherwise
transfer its assets to the Borrower.
H. Investments. Make, or permit any Subsidiary to make, any loan
or advance to any Person, or purchase or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire, any capital stock, assets,
obligations, or other securities of, make any capital contribution to, or
otherwise invest in or acquire any interest in any Person, or participate as
a partner or joint venturer with any other Person, except: (1) direct
obligations of the United States or any agency thereof with maturities of
one year or less from the date of acquisition; (2) commercial paper of a
domestic issuer rated at least "A-111 by Standard & Poor's Corporation or
"P-111 by ▇▇▇▇▇'▇ Investors Service, Inc.; (3) certificates of deposit with
maturities of one year or less from the date of acquisition issued by any
commercial bank having capital and surplus in excess of Fifty Million
Dollars $50,000,000); and, (4) stock, obligations, or securities received in
settlement of debts (created in the ordinary course of business) owing to
the Borrower or any subsidiary.
I. Guaranties, Etc. Assume, guaranty, endorse, or otherwise be or
become directly or contingently responsible or liable, or permit any
Subsidiary to assume, guaranty, endorse, or otherwise be or become directly
or contingently responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods, or services, or
an agreement to maintain or cause such Person to maintain a minimum working
capital or net work, or otherwise to assure the creditors of any Person
against loss) for obligations of any Person, except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business.
J. Transactions With Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property
or the rendering of any service, with any Affiliate, or permit any
Subsidiary to enter into any transaction, including,
-15-
without limitation, the purchase, sale, or exchange of property or the
rendering of any service, with any Affiliate, except in the ordinary course of
and pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than would obtain in a comparable arm's length
transaction with a Person not an Affiliate.
12. EVENTS OF DEFAULT; REMEDIES.
If one or more of the following events shall occur ("Events of Default"
or an "Event of Default"):
A. Borrower shall default in the due and punctual payment of
principal or interest on the Line of Credit or any other of its obligations
due to Bank or any part thereof, when the same become due and payable, whether
at maturity or otherwise; or
B. Borrower shall fail to pay any other of its debts or fail to
perform or observe any other of the terms, provisions, covenants,
restrictions, agreements or obligations to be performed by it under this
Agreement, or under agreements or instruments given under this Agreement; or
C. Any representation or warranty made in writing by or on behalf of
Borrower herein or pursuant hereto or otherwise in any report, certificate or
other instrument furnished in connection with this Agreement shall prove to
have been inaccurate or incomplete in any material respect on the date which
it was made; or
D. Borrower shall be adjudicated bankrupt or insolvent, or generally
not pay its debts as they become due, or make an assignment for the benefit of
creditors; or Borrower shall apply for or consent to the appointment of a
custodian, receiver, trustee, or similar officer for it or for all or
substantially all of its property.
THEN, Bank, upon the occurrence of any Event(s) of Default, may
terminate this Agreement and, in addition, without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived by
Borrower:
(a) declare the unpaid principal balance, and all-interest
thereon and all other amounts payable under this Agreement immediately
due and payable.
(b) immediately, without expiration of any further period of
grace, enforce payment of all obligations of Borrower to Bank under this
Agreement and under agreements executed in connection herewith and may
exercise any and all
-16-
other remedies granted to Bank at law, in equity or otherwise.
(c) exercise all of Bank's rights under the terms of any
security agreement, assignment, trust deed, pledge or other lien
document executed in connection herewith.
E. Borrower agrees that after the exercise by Bank of the remedies
specified above and both before and after judgment, the obligations due
hereunder shall accrue interest until paid at the rate of eighteen percent
(18%) per annum.
F. After default, Borrower agrees to pay all reasonable expenses and
fees including reasonable attorney's fees and court costs incurred in the
collection of the obligations and/or incurred in any bankruptcy or insolvency
proceedings or in any arbitration proceedings.
13. MISCELLANEOUS.
A. Amendments, Etc. No amendment, modification, termination, or
waiver of any provision of any Loan Document to which the Borrower is a party,
nor consent to any departure by the Borrower from any Loan Document to which
it is a party, shall in any event be effective unless the same shall be in
writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and f or the specific purpose f or
which given.
B. Notices, Etc. All notices and other communications
provided for under this Agreement and under the other Loan Documents
to which the Borrower is a party shall be in writing (including telegraphic,
telex, and facsimile transmissions) and mailed or transmitted or delivered,
if to the Borrower, at its address shown above the signatures to this
Agreement, and if to the Bank, at its address shown above the signatures to
this Agreement; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other party complying as
to delivery with the terms of this Section. Except as otherwise provided in
this Agreement, all such notices and communications shall be effective when
deposited in the mails or delivered to the telegraph company, or sent,
answerback received, respectively, addressed as aforesaid.
C. No Waiver. No failure or delay on the part of the Bank in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy hereunder. The rights and remedies provided
herein are cumulative, and are not exclusive of any other rights, powers,
privileges, or remedies, now or hereafter existing, at law or in equity or
otherwise.
-17-
D. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower may not assign or transfer
any of its rights under this Agreement or document to which the Borrower is a
party without the prior written consent of the Bank.
E. Costs and Expenses. The Borrower agrees to pay on demand all
costs and expenses incurred by the Bank in connection with the preparation,
execution, delivery, filing, and administration of this Agreement, and of any
amendment, modification, or supplement to this Agreement, including, without
limitation, the fees and out-of-pocket expenses of counsel for the Bank
incurred in connection with advising the Bank as to its rights and
responsibilities hereunder. The Borrower also agrees to pay all such costs
and expenses, including court costs, incurred in connection with enforcement
of this Agreement, or any amendment, modification, or supplement thereto,
whether by negotiation, legal proceedings, or otherwise.
F. Integration. This Agreement contains the entire agreement between
the parties relating to the subject matter, hereof and supersedes all oral
statements and prior writings with respect thereto.
G. Indemnity. The Borrower hereby agrees to defend, indemnify, and hold
the Bank harmless from and against any and all claims, damages, judgments,
penalties, costs and expenses (including attorney fees and court costs now or
hereafter arising from the aforesaid enforcement of this clause) arising
directly or indirectly from the activities of the Borrower and its
subsidiaries', its predecessors in interest, or third parties with whom it
has a contractual relationship, or arising directly or indirectly from the
violation of any environmental protection, health, or safety law, whether
such claims are asserted by any governmental agency or other person.
This indemnity shall survive termination of this Agreement.
H. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah.
I. Severability of Provisions. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any.
other jurisdiction.
J. Jury Trial Waiver. THE BANK AND THE BORROWER HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR
-18-
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER OF
THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.
The Agents authorized to act for Borrower under this Agreement are:
NAME SIGNATURE
---- ---------
▇▇▇▇▇▇▇ ▇. Fresh /s/ ▇▇▇▇▇▇▇ ▇. Fresh
------------------------ --------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------ --------------------------
The additional percentage points ("Margin") to be added to the Loan Index
Rate are 1.5 percentage points. The initial Loan Interest Rate payable on
Advances made under the Line of Credit is 9.75% per annum.
A written Advance Request Form shall be required: X Yes ___ No. Signatures
of two (2) agents required.
All advances on the Line of Credit shall be deposited into Account No.
1368-7673.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by authority duly given as of this 27th day of December, 1996.
BANK: BORROWER:
BANK ONE, UTAH, NA SKYHOOK TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------ -------------------------
Title: V.P. Title: President & COO
---------------------- ----------------------
Address: Address:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇▇ 1216 South ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
-19-
Exhibit 10-2
STRATEGIC ALLLIANCE
BETWEEN
SKYHOOK TECHNOLOGIES, INC. AND TRACOR AEROSPACE, INC.
I
This Strategic Alliance (herein referred to as the "AGREEMENT") is made
and entered into as of 18 September 1996 between SkyHook Technologies, Inc.
(herein referred to as "STI"), a Utah corporation, and Tracor Aerospace, Inc.
(herein referred to as "TRACOR'), a Texas corporation, who are the PARTIES
(each being a PARTY) to this AGREEMENT. The companies desire to enter into a
long-term business relationship wherein TRACOR will manufacture STI's multi-
hook Cargo Management System (CMS) for delivery to domestic and foreign
customers. In consideration of the mutual promises contained herein, the
parties agree as follows:
I . STRATEGIC TEAM RESPONSIBILITIES.
(a) STI has completed the design of the PRODUCT (as defined in
Paragraph 2 below) in its present, form and will continue to be responsible
for the engineering development of the PRODUCT to meet customer needs and to
respond to competitive considerations. The engineering function will include
hardware and software development and configuration management. STI will be
responsible for marketing the PRODUCT to foreign and domestic customers.
(b) TRACOR will be the manufacturer and installer of the PRODUCT and
will make its expertise in this area available to STI to optimize such
activities. TRACOR may provide sales and marketing assistance to STI for
domestic and foreign sales. Such assistance may include development of
strategic marketing plans, identification of potential customers, distribution
of sales literature, introduction of STI sales personnel to potential
customers and recommending other strategic sales and marketing activities.
2. PRODUCT DEFINED.
The PRODUCT to be manufactured by TRACOR for STI is STI's proprietary,
patented Cargo Management System (CMS). It is a multi-hook helicopter cargo
transport device consisting of hardware, software and electronics. The PRODUCT
is currently offered in three and six hook configurations. TRACOR shall be
provided with updated engineering drawings, specifications and any other
pertinent information prior to commencing the manufacture of the PRODUCT. STI
represents and warrants that such engineering drawings, specifications and
other pertinent information are sufficiently complete and accurate so as to
enable a reasonably skilled manufacturer of the type of equipment delineated
therein to manufacture the PRODUCT in accordance with the specifications
applicable thereto. In the event any discrepancies or shortcomings in such
documents come to light STI will promptly take appropriate action to
correct or supplement such documents; TRACOR will assist in such corrective
actions as required. STI will maintain configuration control and shall be
responsible for configuration management of the PRODUCT.
3. PROCUREMENT PROCEDURE.
The PARTIES will develop a format for a purchase order to be issued by STI
to TRACOR for each batch of PRODUCT to be manufactured and/or installed. Each
purchase order will provide all of the information required to manufacture
and/or install the PRODUCT.
4. PRICING.
Initial prices will be those quoted by TRACOR in its "SkyHook CMS Pricing"
quote dated 8/2/96 at 3:36 PM (see Exhibit A), plus or minus any adjustments
made for final design changes, test requirements and scope changes, as
required. Price adjustments will be made following the same pricing
methodology used by TRACOR to price the original quote shown in Attachment A.
The price for other PRODUCT configurations will be calculated by TRACOR
following the same pricing methodology used by TRACOR to price the three-hook
unit. Once the prices have been adjusted as defined above and agreed to by
the PARTIES, those prices shall remain in effect for a period of eighteen (I8)
months. Prices shall be renegotiated by the PARTIES from time to time
thereafter in good faith, consistent with the original pricing methodology.
5. LEAD TIME.
TRACOR will make the first shipment of PRODUCT 90 days after receipt of
order, but will use its best efforts to reduce this delivery time. The
PARTIES will mutually agree on the delivery rate for subsequent deliveries on
each purchase order placed by STI.
6. PAYMENT TERMS.
During the first 18 month period of this AGREEMENT, STI will pay TRACOR the
net amount due ninety days ("Net 90") from the date TRACOR ships PRODUCT.
Payment terms on subsequent deliveries will be determined by mutual agreement
of the PARTIES, consistent with business conditions and customer payment terms.
7. FOB POINT AND SHIPPING.
The FOB point is TRACOR's plant. On the day TRACOR ships PRODUCT, it win
fax to STI the shipping information, including cost, and STI will ▇▇▇▇
the customer for shipping costs. TRACOR will drop-ship PRODUCT to any non-
restricted country, per Purchase Order instructions. STI will abide by any
export restrictions placed upon it by any United States government entity with
export jurisdiction.
2
8. EXPORT/IMPORT.
TRACOR will assist STI with all domestic and foreign export/import
requirements, with details to be worked out between the PARTIES as soon as
possible. As seller of the PRODUCT, STI will retain primary responsibility
for export/import requirements.
9. WARRANTY.
As the manufacturer of the PRODUCT, TRACOR provides a one-year warranty
on materials and workmanship. The standard warranty is attached hereto as
Exhibit B.
10. ADDITIONAL INSURED.
TRACOR shall name STI as additional insured under its product liability
insurance with respect to that portion of the PRODUCT manufactured by TRACOR,
with liability limits per occurrence of $ 10 million.
11. QTP AND ATP.
TRACOR shall fabricate and test the PRODUCT in accordance with test
procedures to be jointly developed and approved by STI and TRACOR. The
PARTIES anticipate that one standard QTP (to be defined by the PARTIES)
will apply to all or most PRODUCT manufactured, and a standard ATP
(to be defined by the PARTIES) will apply to each customer's order. However,
the PARTIES recognize that unique tests may be required by some customers, and
that customer-specific ATP's will be developed in such circumstances.
12. CONFIDENTIALITY.
On 2 August 1996, the PARTIES hereto signed an "Agreement for Non-
Disclosure of Proprietary Information (Mutual Exchange)" which is made a part
of this AGREEMENT by reference. Terms of this Non-Disclosure Agreement shall
remain in effect for two years after the termination of this AGREEMENT.
13. ASSIGNMENT.
The PARTIES shall not assign, contract, grant a license or otherwise
transfer any or all of their rights or obligations arising under this
AGREEMENT without the prior written consent of the other PARTY, except that
either PARTY may subcontract work to its affiliated companies.
3
14. INTELLECTUAL PROPERTY RIGHTS
(a) STI hereby establishes TRACOR as the exclusive manufacturer and
installer of the PRODUCT throughout the term of this Agreement and consents to
TRACOR's use of the engineering drawings, specifications and other documents
referred to in paragraph 2 of this Agreement in the manufacture and
installation of the PRODUCT. TRACOR shall not be required to make any payment
to STI for the use of such documents. Except for the right to manufacture and
install the PRODUCT, TRACOR shall not acquire any intellectual property rights
to the PRODUCT or enhancements thereto existing on the date of this AGREEMENT
PRODUCT modifications resulting after the date of this Agreement from the
normal process of re-engineering shall be the sole and exclusive property of
STI, regardless of whether STI or TRACOR recommends such modifications.
(b) In the event TRACOR offers technology to STI for use in connection
with the PRODUCT and STI wishes to utilize such technology, the PARTIES will
jointly determine an equitable basis for compensating TRACOR for the use of
such technology prior to its implementation by STI.
15. ATTORNEYS FEES.
In the event that either PARTY hereto shall be found in default or breach
of this AGREEMENT by a court of competent jurisdiction, said PARTY shall be
liable to pay all reasonable attorneys' fees, court costs and other related
collection costs and expenses incurred by the non-defaulting or non-breaching
PARTY in prosecuting its rights hereunder.
16. GOVERNING LAW AND DISPUTES.
This AGREEMENT, and all matters relating hereto, including any matter
or dispute arising out of the AGREE , shall be interpreted, governed and
enforced according to the laws of the State of Utah. The PARTIES shall use
their best efforts to resolve any disputes regarding the performance of this
AGREE by good faith mutual consultation. If both PARTIES agree, disputes may
be submitted for determination by arbitration, mediation or other means of
alternative dispute resolution.
17. AMENDMENT
This AGREEMENT may be amended at any time upon agreement of the
PARTIES hereto, which amendment(s) must be reduced to writing and signed by
both PARTIES in order to become effective.
4
18. SEVERABILITY.
In the event that any provision of this AGREEMENT, or any operation
contemplated hereunder, is found by a court of competent jurisdiction to be
inconsistent with, or contrary to any law, ordinance or regulation, the latter
shall be deemed to control and the A shall be regarded as modified accordingly
and, in any event, the remainder of this AGREEMENT shall continue in full
force and effect.
19. ENTIRE AGREEMENT.
This AGREEMENT constitutes and represents the entire AGREEMENT of the
parties hereto with respect to the subject matter hereof, and all other prior
agreements, covenants, promises and conditions verbal or written between these
parties are incorporated herein. No PARTY hereto has relied upon any other
pronuse, representation or warranty, other than those contained herein, in
executing this AGREEMENT.
20. TERM AND TERMINATION.
The initial term of this Agreement shall be three years, and it shall
automatically renew for successive three-year periods thereafter unless either
PARTY shall have given the other written notice of cancellation at least
twelve months prior to the renewal date. During the period after either PARTY
shall have given such notice of cancellation both PARTIES shall continue to
fulfill their obligations hereunder.
21. NOTICE AND REPRESENTATIVES.
Any notice required by this AGREEMENT to be given in writing shall be
sent via facsimile transmission with receipt confirmed by telephone, or sent
by registered mail, return receipt requested, using the phone and fax numbers
and addresses listed below:
SkyHook Technologies, Inc. Tracor Aerospace,Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
Routine written and verbal correspondence between the PARTIES shall be
directed to the following individuals or to their designated representative:
FOR STI: ▇▇▇▇ ▇▇▇▇▇, Manufacturing Manager
FOR TRACOR: ▇▇▇▇▇ ▇▇▇▇, Program Manager
5
22. BINDING EFFECT.
This AGREEMENT shall be binding upon and inure to the benefit of the
PARTIES hereto, their successors and permitted assigns.
The individuals signing below in their official capacities warrant that
they are fully authorized by the Articles, Bylaws and/or board resolutions of
their respective corporations to execute this AGREEMENT for and in behalf of
their respective corporations, and that said corporations are fully bound
thereby.
SKYHOOK TECHNOLOGIES, INC. TRACOR AEROSPACE, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- ----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President Title: President
Date: 26 Sept 96 Date: 26 Sept. 96
------------------------------ ---------------------------
6
EXHIBIT A
SKYHOOK CMS PRICING
Quantity Unit Price
-------- ----------
5 $39,000
10-15 $36,000
16-25 $33,000
26-50 $28,000
51-100 $26,000
101-200 $22,000
201-500 $20,000
EXHIBIT B
---------
Warranty
--------
TRACOR warrants that each PRODUCT manufactured by TRACOR will be new and
unused and will be delivered free from defects in material and workmanship and
will satisfy the requirements specified in the PRODUCT specifications. This
warranty will be effective for one year from the date of receipt by STI or
STI's customer, whichever occurs earlier. If a defect appears in the PRODUCT
within one year from the date of delivery by TRACOR and STI notifies TRACOR
within such one year period plus 15 days and returns the defective equipment
or part thereof with transportation charges prepaid, TRACOR shall thereupon
correct any defect, including nonconformance with the specifications, at its
option, either by repairing or replacing any defective part or parts, and
shall deliver the repaired or replaced part to STI with transportation charges
prepaid.
The foregoing warranty shall not apply to any PRODUCT that has been subject to
misuse, neglect, accident, improper application, or exposure to an environment
beyond the limits described in the specification, nor to any product that has
been altered or repaired outside of TRACOR's factory without TRACOR's written
consent, nor to any product component that is consumed in ordinary use such
as, but not limited to, lamps, knobs, and gaskets. Nor shall the warranty
extend to anyone other than STI and STI's immediate customer.
THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE AND ANY WARRANTY AGAINST INFRINGEMENT, AND ALL SUCH OTHER
WARRANTIES ARE HEREBY DISCLAIMED AND EXCLUDED BY TRACOR.
All failures caused by and attributed to normal wear and tear or improper
maintenance, use or repairs by STI or third parties are not defects and are
excluded from the warranty.
In no event shall TRACOR be liable for consequential damages of any nature.