Document:

Prepared by MERRILL CORPORATION

 

Exhibit 10.4

 

CHANGE OF CONTROL AGREEMENT

 

                THIS CHANGE OF CONTROL AGREEMENT

(the "Agreement") is made as of August 23, 2001 between DOT HILL SYSTEMS CORP., a [Delaware]

corporation (the "Company"), and Dana Kammersgard

("Employee").

 

                WHEREAS, in order to

provide an incentive for Employee to participate actively in the affairs and

maximize the value of the Company, the Company is willing to provide Employee

with certain benefits on the terms and conditions set forth below.

 

                NOW THEREFORE, for

good and valuable consideration, the sufficiency of which is hereby

acknowledged, Employee and the Company (each, a "Party," and

collectively, the "Parties") agree as follows:

 

1.             BENEFITS IN THE EVENT OF A CHANGE

OF CONTROL.  If

(i) a Change of Control (defined below) occurs and (ii) during the period

beginning two (2) months prior to the effective date of such Change of Control

and ending twenty-four (24) months after the effective date of such Change of

Control, Employee's employment with the Company is terminated either (A) by the

Company for reasons other than Cause (defined below) or for no reason or (B) by

Employee for Good Reason (defined below), then, without further action by

Employee or the Company, Employee shall be entitled to the benefits set forth

below:

 

                (a)           The

vesting applicable to all options to purchase shares of the Company's capital

stock ("Options") and all shares of the Company's capital stock which

are subject to the company's right to repurchase such shares ("Restricted

Stock") held by Employee as of the effective date of such termination

shall be accelerated in full such that Employee shall have the right to

exercise in accordance with the terms thereof all or any portion of such

Options (notwithstanding any vesting schedule set forth in such Options) and

any such Company repurchase rights with respect to such Restricted Stock shall

lapse in full; and

 

                (b)           Employee

shall be entitled to a lump sum cash payment in an amount equal to one hundred

twenty-five percent (125%) of Employee's annual base salary in effect as of the

date of such termination (the "Lump Sum Payment"), subject to

applicable withholdings as required by applicable law, payable on the Effective

Date specified in a Release delivered by Employee to the Company following such

Change of Control in the form attached to Employee's Employment Agreement with

the Company dated August 2, 1999 (the "Employment Agreement"). The

Lump Sum Payment provided for in this Section 1(a)(ii) shall be reduced by the

amount of any cash severance payment made to Employee by the Company pursuant

to paragraph 10 of the Employment Agreement. Any payments made pursuant to

paragraph 10 of the Employment Agreement shall be reduced by the amount of any

cash payments made hereunder.

 

2.             DEFINITIONS.  For purposes of this Agreement, capitalized

terms used herein shall have the following meanings:

 

                (a)           "Cause"

shall be limited to the occurrence of any of the following events, as set forth

in a written resolution duly adopted by a majority of the Board: (i) Employee

continuing to engage in conduct which causes material harm to the Company after

having been given thirty (30) days written notice of such determination by the

Board, (ii) Employee's indictment for violation of any Law constituting a

felony (including the Foreign Corrupt Practices Act of 1977) or the foreign

equivalent thereof, (iii) Employee's continuing failure to perform the lawful

directives of the Board (consistent with the Employment Agreement) or

Employee's employment duties and responsibilities to the Company, in each case

in all material respects and after having been given thirty (30) days written

notice of such determination by the Board which written notice shall

specifically identify the directive alleged not to have been followed or the

employment duties which it is alleged Employee has continually failed to

substantially perform, the basis for the Board's determination thereof and the

specific corrective action that the Board proposes that Employee take, and (iv)

Employee's incurable breach of any material element of the Company's

Confidential Information and Inventions Agreement.  In no event shall Employee's death or Disability constitute Cause

or the basis for any termination therefor.

 

                (b)           "Change

of Control" shall mean: (1) a dissolution or liquidation of the Company;

(2) any sale or transfer of all or substantially all of the assets of the

Company; (3) any merger, consolidation or similar transaction in which the

holders of the Company's outstanding voting securities immediately prior to

such transaction do not hold, immediately following such transaction,

securities representing fifty percent (50%) or more of the combined voting

power of the outstanding securities of the surviving entity; or (4) the

acquisition by any person (within the meaning of Section 13(d)(3) or Section

14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange

Act"), in a single transaction or series of related transactions, of

beneficial ownership (within the meaning of Rule 13d-3 or any successor rule or

regulation promulgated under the Exchange Act) of securities representing fifty

percent (50%) or more of the combined voting power of the then-outstanding

securities of the Company, excluding in any case shares of capital stock of the

Company purchased from the Company in a transaction the principal purpose of

which is to raise capital for the Company.

 

                (c)           "Good

Reason" shall mean: (i) a reduction in Employee's annual base salary, (ii)

the relocation of Employee's full-time office to a location other than within

sixty (60) miles of Carlsbad, California, or (iii) a violation or breach by the

Company, in any material respect, of any of its obligations to Employee so long

as Employee has given the Company thirty (30) days notice of such breach and the

Company has not cured the breach during that thirty (30) day period.

 

                (d)           "Disability"

shall mean Employee's failure or inability, for reasons of health, to perform

Employee's usual and customary duties on behalf of the Company in the usual and

customary manner for a total of more than ninety (90) consecutive business days

(excluding Saturdays, Sundays and Holidays (days during which the Company is

closed due to a recognized holiday)).

 

3.             GOLDEN PARACHUTE TAXES.  In the event that any payment or distribution

by the Company, or the grant of any benefit by the Company, to or for the

benefit of Employee (whether paid or payable, distributed or distributable or

granted or to be granted pursuant to the terms of this Agreement or otherwise)

(collectively, "Benefits") would be nondeductible by the Company for

federal income tax purposes because of Section 280G of the Internal Revenue

Code (the "Code") and/or would cause Employee to be liable for an

excise tax pursuant to Section 4999 of the Code, then the Benefits paid,

distributed or granted to Employee under this Agreement shall equal (i) the

full amount of such Benefits or (ii) the Reduced Amount (as defined below),

whichever of the foregoing amounts is determined by the Company to result, on

an after-tax basis, in the receipt by Employee of the greatest amount of such

Benefits, notwithstanding that all or some portion of the Benefits may be

taxable under Section 4999 of the Code. In making its determination pursuant to

the preceding sentence, the Company shall take into account all applicable

Federal, state, and local employment and income taxes, as well as the excise

tax imposed by Section 4999 of the Code. For purposes of this Section 4, the

"Reduced Amount" shall be the maximum amount payable to Employee that

would result in no portion of the Benefits being (i) nondeductible by the

Company under Section 280G of the Code or (ii) subject to an excise tax

liability under Section 4999 of the Code. Notwithstanding the foregoing and any

other provision contained herein, in the event (as a result of Benefits to be

received under this Agreement or any other plan or arrangement between the

Employee and the Company) of any required reduction, as a result of Section

4999 of the Code, of Benefits to be received by Employee, reduction shall be

made from such other plan or arrangement prior to any reduction relating to

Benefits to be received by Employee under this Agreement.

 

4.             GENERAL PROVISIONS.

 

                (a)           This Agreement shall be governed by

the laws of the State of California (without regard to principles of conflict

of laws).

 

                (b)           Any

notice, demand or request required or permitted to be given by either the

Company or Employee pursuant to the terms of this Agreement shall be in writing

and shall be deemed given when delivered personally or deposited in the U.S.

mail, First Class with postage prepaid, and addressed to the parties at such

addresses as have been previously furnished by the Parties or such other

address as a Party may request by notifying the other in writing.

 

                (c)           The

rights and obligations of Employee under this Agreement may not be transferred

or assigned without the prior written consent of the Company.

 

                (d)           This

Agreement is meant to supplement the terms of stock option agreement(s) or

other agreement(s) pursuant to which Employee acquired the Options, as well as

any written employment agreement between the Company and Employee. To the

extent that the terms and conditions of this Agreement are inconsistent with

those found in such stock option agreement(s) or other agreement(s) (employment

or otherwise), the terms and conditions of this Agreement shall be controlling.

 

                (e)           Any

Party's failure to enforce any provision or provisions of this Agreement shall

not in any way be construed as a waiver of any such provision or provisions,

nor prevent any Party from thereafter enforcing each and every other provision

of this Agreement. The rights granted the Parties herein are cumulative and

shall not constitute a waiver of any Party's right to assert all other legal remedies

available to it under the circumstances.

 

                (f)            Employee agrees upon request to

execute any further documents or instruments necessary or desirable to carry

out the purposes or intent of this Agreement.

 

                (g)           In

case any provision of this Agreement shall be invalid, illegal or

unenforceable, the validity, legality and enforceability of the remaining

provisions shall not in any way be affected or impaired.

 

                (h)           This Agreement, in whole or in part,

may be modified, waived or amended upon the written consent of the Company and

Employee.

 

                (i)            Notwithstanding

anything to the contrary herein, nothing contained in this Agreement shall in

any way alter Employee's rights under the Employment Agreement except for the

last sentence of paragraph 1(b) above.

 

                (j)            This Agreement may be executed in

one or more counterparts, each of which shall be deemed an original, but all of

which shall constitute one instrument.

 

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY

LEFT BLANK]

 

IN

WITNESS WHEREOF, the undersigned have set their hand

as of the date first above written.

 

 

	

  EMPLOYEE

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  DOT HILL SYSTEMS CORP.

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  /s/ Dana

  Kammersgard

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  /s/ James L.

  Lambert

  
	

  Dana

  Kammersgard

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  By: James L.

  Lambert

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  President

  and Chief Executive OfficerPrepared by MERRILL CORPORATION

Exhibit 10.30

 

 

WELLS FARGO BANK                                                                                                    REVOLVING

LINE OF CREDIT NOTE

 

$3,000,000.00

San Jose, 

California

 

August

10, 2001

 

FOR VALUE

RECEIVED, the undersigned Fiberstars, Inc. (“Borrower”) promises to

pay to the order of WELLS FARGO BANK, NATINAL ASSOCIATION (“Bank”) at its

office at Santa

Clara Valley RCBO, 121 Park Center Plaza 3rd Flr, San Jose, CA  95113, or at such other place as

the holder hereof may designate, in lawful money of the United States of

America and in immediately available funds, the principal sum of $3,000,000.00,

or so much thereof as may be advanced and be outstanding, with interest

thereon, to be computed on each advance from the date of its disbursement as

set forth herein.

 

DEFINITIONS:

 

As used herein, the

following terms shall have the meanings set forth after each, and any other tem

defined in this Note shall have the meaning set forth at the place defined:

 

(a)       “Business

Day” means any day except a Saturday, Sunday or any other day on which

commercial banks in California are authorized or required by law to close.

 

(b)       “Fixed

Rate Term” means a period commencing on a Business Day and continuing for 1, 2, or 3

months, as designated by Borrower, during which all or a portion of

the outstanding principal balance of this Note bears interest determined in

relation to LIBOR; provided however, that no Fixed Rate Term may be selected

for a principal amount less than $100,000.00; and provided further, that no

Fixed Rate Term shall extend beyond the scheduled maturity date hereof.  If any Fixed Rate Term would end on a day

which is not a Business Day, then such Fixed Rate Term shall be extended to the

next succeeding Business Day.

 

(c)       “LIBOR”

means the rate per annum (rounded upward, if necessary, to the nearest whole

1/8 of 1%) determined by dividing Base LIBOR by a percentage equal to 100% less

any LIBOR Reserve Percentage.

 

(i)            “Base LIBOR” means

the rate per annum for United States dollar deposits quoted by Bank as the

Inter-Bank Market Offered Rate, with the understanding that such rate is quoted

by Bank for the purpose of calculating effective rates of interest for loans

making reference thereto, on the first day of a Fixed Rate Term for delivery of

funds on said date for a period of time approximately equal to the number of

days in such Fixed Rate Term and in an amount approximately equal to the

principal amount to which such Fixed Rate Term applies.  Borrower understands and agrees that Bank

may base its quotation of the Inter-Bank Market Offered Rate upon such offers

or other marked indicators of the Inter-Bank Market as Bank in its discretion

deems appropriate including, but not limited to, the rate offered for U.S.

dollar deposits on the London Inter-Bank Market.

 

(ii)           “LIBOR Reserve

Percentage” mans the reserve percentage prescribed by the Board of Governors of

the Federal Reserve System (or any successor) for “Eurocurrency Liabilities”

(as defined in Regulation D of the Federal Reserve Board, as amended), adjusted

by Bank for expected changes in such reserve percentage during the applicable

Fixed Rate Term

 

(d)       “Prime Rate” means at any time the rate

of interest most recently announced within Bank at its principal office as its

Prime Rate, with the understanding that the Prime Rate is one of Bank’s base

rates and serves as the basis upon which effective rate of interest are

calculated for those loans making reference thereto, and is evidenced by the

recording thereof after its announcement in such internal publication or

publications as Bank may designate.

 

INTEREST:

 

(a)       Interest.  The outstanding principal balance of Note

shall bear interest (computed on the basis of a 360-day year, actual days

elapsed) either (I) at a fluctuating rate per annum equal to the Prime Rate in

effect from time to time, or (ii) at a fixed rate per annum determined by Bank

to be 1.75000%

above LIBOR in effect on the first day of the applicable Fixed Rate Term.  When interest is determined in relation to

the Prime Rate, each change in the rate of interest hereunder shall become

effective on the date each Prime Rate change is announced within Bank.  With respect to each LIBOR selection

hereunder, Bank is hereby authorized to note the date, principal amount,

interest rate and Fixed Rate Term applicable thereto and any payments made

thereon on Bank’s books and records (either manually or by electronic entry)

and/or on any schedule attached to this Note, which notations shall be prima

facie evidence of the accuracy of the information noted.

 

(b)       Selection of Interest Rate Options.  At any time any portion of this Note bears

interest determined in relation to LIBOR, it may be continued by Borrower at

the end of the Fixed Rate Term applicable thereto so that all or a portion

thereof bears interest determined in relation to the Prime Rate or to LIBOR for

a new Fixed Rate Term designated by Borrower. 

At any time any portion of this Note bears interest determined in

relation to the Prime Rate, Borrower may convert all or a portion thereof so

that it bears interest determined in relation to LIBOR for a Fixed Rate Term designated

by Borrower.  At such time as Borrower

requests an advance hereunder or wishes to select a LIBOR option for all or a

portion of the outstanding principal balance hereof, and at the end of each

Fixed Rate Term, Borrower shall give Bank notice specifying: (I) the interest

rate option selected by Borrower, (ii) the principal amount subject thereto;

and (iii) for each LIBOR selection, the length of the applicable Fixed Rate

Term.  Any such notice may be given by

telephone (or such other electronic methods Bank may permit) so long as, with

respect to each LIBOR selection, (A) if requested by Bank, Borrower provides to

Bank written confirmation thereof not later than three (3) Business Days after

such notice is given, and (B) such notice is given to Bank prior to 10:00 a.m.

on the first day of the Fixed Rate Term, or at a later time during any Business

Day if Bank, at it’s sole option by without obligation to do so, accepts

Borrower’s notice and quotes a fixed rate to Borrower.  If Borrower does not immediately accept a

fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent

LIBOR request from Borrower shall be subject to a redetermination by Bank of

the applicable fixed rate.  If no

specific designation of interest is made at the time any advance is requested

hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to

have made a Prime Rate interest selection for such advance or the principal

amount to which such Fixed Rate Term applied.

 

(c)       Taxes and Regulatory Costs.  Borrower shall pay to Bank immediately upon

demand, in addition to any other amounts due or to become due hereunder, any

and all (i) withholdings, interest equalization taxes, stamp taxes or other

taxes (except income and franchise taxes) imposed by any domestic or foreign

governmental authority and related in any manner to LIBOR, and (ii) future,

supplemental, emergency or other changes in the LIBOR Reserve Percentage,

assessment rates imposed by the Federal Deposit Insurance Corporation, or

similar requirements or costs imposed by any domestic or foreign governmental

authority or resulting from compliance by Bank with any request or directive

(whether or not having the force of law) from any central bank or other

governmental authority and related in any manner to LIBOR to the extent they

are not included in the calculation of LIBOR. 

In determining which of the foregoing are attributable to any LIBOR

option available to Borrower hereunder, any reasonable allocation made by Bank

among its operations shall be conclusive and binding upon Borrower.

 

(d)      Payment of Interest.  Interest accrued on this Note shall be

payable on the 28th day of each month, commencing August 28,

2001.

 

(e)       Default Interest.  From and after the maturity date of this

Note, or such earlier date as all principal owing hereunder becomes due and

payable by acceleration or otherwise, the outstanding principal balance of this

Note shall bear interest until paid in full at an increased rate per annum

(computed on the basis of a 360-day year, actual days elapsed) equal to 4%

above the rate of interest from time to time applicable to this Note.

 

(f)        Commitment Fee.  Prior to the initial extension of credit

under this Note, Borrower shall pay to Bank a non-refundable commitment fee of $500.00.

 

(g)       Collection of Payments.  Borrower authorizes Bank to collect all

interest and fees due hereunder by charging Borrower’s deposit account number 4496-813031

with Bank, or any other deposit account maintained by any Borrower with Bank,

for the full amount thereof.  Should

there be insufficient funds in any such deposit account to pay all such sums

when due, the full amount of such deficiency shall be immediately due and

payable by Borrower.

 

SIGHT COMMERCIAL AND STANDBY LETTER OF CREDIT SUBFEATURE:

 

(a)       Letter

of Credit Subfeature.  As a

subfeature under this Note, Bank agrees from time to time during the term

hereof to issue or cause an affiliate to issue standby letters of credit for

the account of Borrower to finance guarantee lease payments of their German facility

and/or sight commercial letters of credit for the account of Borrower to

finance Borrower’s inventory purchases (each, a “Letter of Credit” and

collectively, “Letters of Credit”); provided however, that the aggregate

undrawn amount of all outstanding Letters of Credit shall not at any time

exceed $400,000.00.  The form and substance of each Letter of

Credit shall be subject to approval by Bank, in its sole discretion.  Each standby Letter of Credit shall be

issued for a term not to exceed 365 days, and each commercial Letter of

Credit shall be issued for a term not to exceed 180 days, as designated by

Borrower; provided however, that no standby Letter of Credit shall have an

expiration date more than 90 days beyond the maturity date of this Note.  The undrawn amount of all Letters of Credit

shall be reserved under this Note and shall not be available for borrowings

hereunder.  Each Letter of Credit shall

be subject to the additional terms and conditions of the Letter of Credit

agreements, applications and any related documents required by Bank in

connection with the issuance thereof. 

Each draft paid under a Letter of Credit shall be deemed an advance

under this Note and shall be repaid by Borrower in accordance with the terms

and conditions of this Note; provided however, that if advances hereunder are

not available, for any reason, at the time any draft is paid, then Borrower

shall immediately pay to Bank the full amount of such draft, together with

interest thereon from the date such draft is paid to the date such amount is

fully repaid by Borrower, at the rate of interest applicable to advances

hereunder.  In such even Borrower agrees

that Bank, in its sole discretion, may debit any deposit account maintained by

Borrower with Bank for the amount of any such draft.

 

(b)       Letter

of Credit Fees.  Borrower shall pay

to Bank fees upon the issuance of each Letter of Credit, upon the payment or

negotiation of each draft under any Letter of Credit and upon the occurrence of

any other activity with respect to any Letter of Credit (including without

limitation, the transfer, amendment or cancellation of any Letter of Credit)

determined in accordance with Bank’s standard fees and charges then in effect

for such activity.

 

CLEAN ACCEPTANCE SUBFEATURE:

 

(a)       Acceptance

Subfeature.  As a subfeature under

this Note, Bank agrees from time to time during the term hereof to create

bankers’ acceptances (each, an “Acceptance” and collectively, “Acceptances”)

for the account of Borrower by accepting drafts drawn on Bank By Borrower for

the purpose of financing Borrower’s importation of good into the United States;

provided however, that the aggregate amount of all outstanding Acceptances

shall not at any time exceed $400,000.00.  The form and substance of each Acceptance shall be subject to

approval by Bank, in its sole discretion. 

Each Acceptance shall be in the minimum amount of $5,000.00.  Each Acceptance shall be subject to the

additional terms and conditions of an Acceptance Agreement in form and

substance satisfactory to Bank.  Each

Acceptance shall be created for a term not to exceed the lesser of 365

days, as designated by Borrower, or such period of time as may be necessary to

comply with the terms of the Acceptance Agreement; provided however, that no

Acceptance shall mature more than 90 days beyond the maturity date of this

Note.  The outstanding amount of all

Acceptances shall be reserved under this Note and shall not be available for

borrowings hereunder.  The amount of

each Acceptance which matures shall be deemed an advance under this Note and

shall be repaid by Borrower in accordance with the terms and conditions of this

Note; provided however, that if advances hereunder are not available, for any

reason, at the time any Acceptance matures, then Borrower shall immediately pay

to Bank the full amount of such matured Acceptance, together with interest

thereon form the date such Acceptance matures to the date such amount is fully

repaid by Borrower, at the rate of interest applicable to advances hereunder.  In such event Borrower agrees that Bank, in

its sole discretion may debit any deposit account maintained by Borrower with

Bank for the amount of any such Acceptance. 

All Acceptances created hereunder shall be discounted with Bank.

 

(b)       Acceptance

Fees.  For each Acceptance created

hereunder, Borrower shall pay to Bank on the data such Acceptance is created an

acceptance fee determined in accordance with Bank’s standard fees and charges

then in effect for the creation of Acceptances.

 

BORROWING

AND REPAYMENT:

 

(a)       Use

of Proceeds.  Advances under this

Note shall be available solely to finance working capital requirements.

 

(b)       Borrowing

and Repayment.  Borrower may from

time to time during the term of this Note borrow, partially or wholly repay its

outstanding borrowings, and reborrow, subject to all of the limitations, terms

and conditions of this Note and of any document executed in connection with, or

at any time as a supplement to, this Note; provided however, that the total

outstanding borrowings under this Note shall not at any time exceed the

principal amount stated above; and provided further, that Borrower shall

maintain a zero balance on advances under this Note for a period of at lease 30

consecutive days during each fiscal year. 

All payments credited to principal shall be applied first, tot the

outstanding principal balance of this Note which bears interest determined in

relation to the Prime Rate, if any, and second, to the outstanding principal

balance of this Note which bears interest determined in relation to LIBOR, with

such payments applied to the oldest Fixed Rate Term first.  The unpaid principal balance of this

obligation at any time shall be the total amounts advanced hereunder by the

holder hereof less the amount of any principal payments made hereon by or for

any Borrower, which balance may be endorsed hereon from time to time by the

holder.  The outstanding principal

balance of this Note shall be due and payable in full on October 15, 2001;

except with respect to any draft paid under a commercial Letter of Credit and

any Acceptance which matures subsequent to said date, the full amount of which

shall be due and payable by Borrower immediately upon payment or at such

maturity as applicable.

 

(c)       Advances.  Advances hereunder, to the total amount of

the principal sum available hereunder, may be made by the holder at the oral or

written request of (i) David N. Ruckert or Roland Dennis or Bob Connors,

any one acting alone, who are authorized to request advances and direct the

disposition of any advances until written notice of the revocation of such

authority is received by the holder at the office designated above, or (ii) any

person, with respect to advances deposited to the credit of any deposit account

of any Borrower, which advances, when so deposited, shall be conclusively

presumed to have been made to or for the benefit of each Borrower regardless of

the fact that persons other than those authorized to request advances may have

authority to draw against such account. 

The holder shall have no obligation to determine whether any person

requesting an advance is or has been authorized by any Borrower.

 

PREPAYMENT:

 

(a)       Prime

Rate.  Borrower may prepay principal

on any portion of this Note which bears interest determined in relation to the

Prime Rate at any time, in any amount and without penalty.

 

(b)       LIBOR.  Borrower may prepay principal on any portion

of this Note which bears interest determined in relation to LIBOR at any time

and in the minimum amount of $100,000.00; provided however, that if the

outstanding principal balance of such portion of this Note is less than said

amount, the minimum prepayment amount shall be the entire outstanding principal

balance thereof.  In consideration of

Bank providing this prepayment option to Borrower, or if any such portion of

this Note shall become due and payable at any time prior to the last day of

Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall

pay to Bank immediately upon demand a fee which his the sum of the discontinued

monthly differences for each month from the month of prepayment through the

month in which such Fixed Rate term matures, calculated as follows for each

such month:

 

(i)            Determine the amount of

interest which would have accrued each month on the amount prepaid at the

interest rate applicable to such amount had it remained outstanding until the

last day of the Fixed Rate Term applicable thereto.

 

(ii)           Subtract from the amount

determined in (i) above the amount of interest which would have accrued for the

same month on the amount prepaid for the remaining term of such Fixed Rate Term

at LIBOR in effect o the date of prepayment for new loans made for such term

and in a principal amount equal to the amount prepaid.

 

(iii)          If the result

obtained in (ii) for any month is greater than zero, discount that difference

by LIBOR used in (ii) above.

 

Each Borrower acknowledges that prepayment of such

amount may result in Bank incurring additional costs, expenses and/or

liabilities, and that it is difficult to ascertain the full extent of such

costs, expenses and/or liabilities. 

Each Borrower, therefore, agrees to pay the above-described prepayment

fee and agrees that said amount 

represents a reasonable estimate of the prepayment costs, expenses

and/or liabilities of Bank.  If Borrower

fails to pay any prepayment fee when due, the amount of such prepayment fee

shall thereafter bear interest until paid at a rate per annum 2.000% above the

Prime Rate in effect from time to time (computed on the basis of a 360-day

year, actual days elapsed).  Each change

in the rate of interest on any such past due prepayment fee shall become

effective on the date each Prime Rate change is announced within Bank.

 

COLLATERAL:

 

   As security

for the payment and performance of all obligations of Borrower under this Note,

Borrower grants to Bank security interests of first priority (except as agreed

otherwise by Bank in writing) in the following property of Borrower, now owned

or at any time hereafter acquired: all accounts receivable, other rights to

payment and general intangibles; all inventory, together with security

interests in all other personal property of Borrower now or at any time

hereafter pledged to Bank as collateral for any other commercial credit

accommodation granted by Bank to Borrower. 

All of the foregoing shall be evidenced by a subject to the terms of

such security agreements, financing statements and other documents as Bank

shall reasonably require, all in form and substance satisfactory to Bank.  Borrower shall reimburse Bank immediately

upon demand for all costs and expenses incurred by Bank in connection with any

of the foregoing security, including without limitation, filing fees and

allocated costs of collateral audits.

 

EVENTS

OF DEFAULT:

 

   Any default

in the payment or performance of any obligation under this Note, or any defined

event of default under any loan agreement now or at any time hereafter in

effect between Borrower and Bank (whether executed prior to, concurrently with

or at any time after this Note), shall constitute an “Event of Default” under

this Note.

 

MISCELLANEOUS:

 

(a)       Remedies.  Upon the occurrence of any Event of Default,

the holder of this Note, at the holder’s option, may declare all sums of

principal, interest, fees and charges outstanding hereunder to be immediately

due and payable without presentment, demand, notice of nonperformance, notice

of protest, protest or notice of dishonor, all of which are expressly waived by

each Borrower, and the obligation, if any of the holder to extend any further

credit hereunder shall immediately cease and terminate.  Each Borrower shall pay to the holder

immediately upon demand the full amount of all payments, advances, charges,

costs and expenses, including reasonable attorneys’ fees (to include outside

counsel fees and all allocated costs of the holder’s in-house counsel),

expended or incurred by the holder in connection with the enforcement of the

holder’s rights and/or the collection of any amounts which become due to the

holder under this Note, and the prosecution or defense of any action in any way

related to this Note, including without limitation, any action for declaratory

relief, whether incurred at the trial or appellate level, in an arbitration

proceeding or otherwise, and including any of the foregoing incurred in

connection with any bankruptcy proceeding (including without limitation, any

adversary proceeding, contested matter or motion brought by Bank or any other

person) relating to any Borrower or any other person or entity.

 

(b)       Obligations Joint and

Several.  Should more than one

person or entity sign this Note as a Borrower, the obligations of each such

Borrower shall be joint and several.

 

(c)       Governing Law.  This note shall be governed by and construed

in accordance with the laws of the State of California.

 

IN WITNESS WHEREOF, the

undersigned has executed this Note as of the date first written above.

 

	

  Fiberstars, Inc.

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Robert A.

  Connors

  	

   

  
	

  Title:

  	

  Chief Financial

  Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]