Document:

Exhibit No. 10.2

 

FORM OF WAIVER

 

In
consideration for the benefits I will receive as a result of the participation
of [                                        ] (together with its subsidiaries and affiliates, the “Company”)
in the United States Department of the Treasury’s (the “Treasury”)
Capital Purchase Program, Community Development Capital Initiative and/or any
other economic stabilization program implemented by the Treasury under the
Emergency Economic Stabilization Act of 2008 (as amended, supplemented, or
otherwise modified, the “EESA”) (any such program, including the Capital
Purchase Program and the Community Development Capital Initiative, a “Program”), I
hereby voluntarily waive any claim against the United States (and each of its
departments and agencies) or the Company or any of its directors, officers,
employees and agents for any changes to my compensation or benefits that are
required to comply with the executive compensation and corporate governance
requirements of Section 111 of the EESA, as implemented by any guidance or
regulations issued and/or to be issued thereunder, including without limitation
the provisions for the Capital Purchase Program, as implemented by any guidance
or regulation thereunder, including the rules set forth in 31 C.F.R. Part 30,
or any other guidance or regulations under the EESA and the applicable
requirements of the Exchange Agreement by and among the Company and the
Treasury dated as of
              
    , 2010, as amended (such requirements, the “Limitations”).

 

I
acknowledge that the Limitations may require modification or termination of the
employment, compensation, bonus, incentive, severance, retention and other
benefit plans, arrangements, policies and agreements (including so-called “golden
parachute” agreements), whether or not in writing, that I may have with the
Company or in which I may participate as they relate to the period the United
States holds any equity or debt securities of the Company acquired through a
Program or for any other period applicable under such Program or Limitations,
as the case may be, and I hereby consent to all such modifications.

 

This
waiver includes all claims I may have under the laws of the United States or
any other jurisdiction (whether or not in existence as of the date hereof)
related to the requirements imposed by the Limitations, including without
limitation, a claim for any compensation or other payments or benefits I would
otherwise receive, any challenge to the process by which the Limitations are or
were adopted and any tort or constitutional claim about the effect of these
Limitations on my employment relationship and I hereby agree that I will not at
any time initiate, or cause or permit to be initiated on my behalf, any such
claim against the United States, the Company or its directors, officers,
employees or agents in or before any local, state, federal or other agency,
court or body.

 

I
agree that, in the event and to the extent that the Compensation Committee of
the Board of Directors of the Company or similar governing body (the “Committee”)
reasonably determines that any compensatory payment and benefit provided to me,
including any bonus or incentive compensation based on materially inaccurate
financial statements or performance criteria, would cause the Company to fail
to be in compliance with the Limitations (such payment or benefit, an 

 

1

 

“Excess
Payment”), upon notification from the Company, I shall repay such
Excess Payment to the Company within 15 business days. In addition, I
agree that the Company shall have the right to postpone any such payment or
benefit for a reasonable period of time to enable the Committee to determine
whether such payment or benefit would constitute an Excess Payment.

 

I
understand that any determination by the Committee as to whether or not,
including the manner in which, a payment or benefit needs to be modified,
terminated or repaid in order for the Company to be in compliance with
Section 111 of the EESA and/or the Limitations shall be a final and
conclusive determination of the Committee which shall be binding upon me. I
further understand that the Company is relying on this letter from me in
connection with its participation in a Program.

 

2Exhibit 10.1

 

 

REVOLVING
CREDIT AGREEMENT

 

This Revolving Credit Agreement (the “Agreement”) is made and entered into by
and between the undersigned borrower (the “Borrower”)
and the undersigned bank (the “Bank”) as of
the date set forth on the last page of this Agreement.

 

ARTICLE I.
LOANS

 

1.1 Revolving Credit Loans. From time to
time prior to JUNE 30, 2011 (the “Maturity Date”) or the earlier termination hereof, the Borrower may borrow from
the Bank for working capital purposes up to the aggregate principal amount
outstanding at any one time of the lesser of (i) $ 5,000,000.00 (the “Loan Amount”),  less letters of
credit issued by the Bank, or (ii) if applicable, the Borrowing Base (defined below). All
revolving loans hereunder will be evidenced by a single promissory note of the
Borrower payable to the order of the Bank in the principal amount of the Loan
Amount (the “Note”). Although the Note will be expressed
to be payable in the full Loan Amount, the Borrower will be obligated to pay
only the amounts actually disbursed hereunder, together with accrued interest
on the outstanding balance at the rates and on the dates specified therein and
such other charges provided for herein. In the event that the principal amount
outstanding under the Note exceeds the Borrowing Base at any time, the Borrower
will immediately, without request, prepay an amount sufficient to eliminate
such excess.

 

1.2 Borrowing
Base. The Borrowing Base, if any, will be as set forth in an
addendum to this Agreement.

 

1.3 Advances After
Maturity or In Excess of Maximum Loan Amount. The Bank shall have no
obligation whatsoever, and the Bank has no present intention, to make any
advance after the Maturity Date or which would cause the principal amount
outstanding under this Agreement to exceed the maximum loan amount or any other
limitations on advances stated in this Agreement. Notwithstanding the
foregoing, the Bank may from time to time, in its sole and absolute discretion,
agree to make an advance after the Maturity Date or which would cause the
principal amount of advances outstanding under this Agreement to exceed the
maximum loan amount or any of the other limitations on advances. The Borrower
is and shall be and remain unconditionally liable to the Bank for the amount of
all advances, including, without limitation, advances in excess of the maximum
loan amount or any other limitation on advances and advances made after the
Maturity Date. Immediately upon the Bank’s demand, the Borrower shall pay to
the Bank the amount of any advances made after the Maturity Date or in excess
of the maximum loan amount or any other limitation on advances contained in
this Agreement, together with interest on the principal amount of such excess
advances, for so long as such advances are outstanding, at the highest interest
rate from time to time in effect for such advances. Any such advances shall not
be deemed an extension of this Agreement nor an increase in the maximum loan
amount available for borrowing under this Agreement.

 

1.4 Advances and
Paying Procedure. The Bank is authorized and directed to credit any
of the Borrower’s accounts with the Bank (or to the account the Borrower
designates in writing) for all loans made hereunder, and the Bank is authorized
to debit such account or any other account of the Borrower with the Bank for
the amount of any principal, interest or expenses due under the Note or other
amount due hereunder on the due date with respect thereto. If, upon any request
by the Borrower to the Bank to issue a wire transfer, there is an inconsistency
between the name of the recipient of the wire and its identification number as
specified by the Borrower, the Bank may, without liability, transmit the
payment via wire based solely upon the identification number.

 

1.5 Closing Fee. The Borrower will pay the Bank
a one-time closing fee of $ n/a
contemporaneously with execution of this Agreement. This fee is in addition to
all other fees, expenses and other amounts due hereunder.

 

1.6 Loan Facility
Fee. The Borrower will pay a loan facility fee equal to:

 

o $ n/a  per
annum, payable annually in advance; (or)

 

o n/a%
per annum of the Loan Amount, payable annually in advance; (or)

 

x 0.250% per
annum of the difference between the Loan Amount and the actual daily unpaid
principal amount of the Note outstanding from time to time, payable quarterly,
in arrears, on the last business day of each third calendar month, and at
maturity; (or)

 

o n/a%  per annum of the actual daily
unpaid principal amount of the Note outstanding from time to time, payable quarterly,
in arrears, on the last business day of each third calendar month, and at
maturity.

 

The loan facility fee is payable for the entire period that this
Agreement is in effect, regardless of whether any amounts are outstanding
hereunder at any given time.

 

1.7 Expenses and
Attorneys’ Fees. Upon demand, the Borrower will immediately
reimburse the Bank and any participant in the Obligations (defined below) (“Participant”)
for all attorneys’ fees and all other costs, fees and out-of-pocket
disbursements incurred by the Bank or any Participant in connection with the
preparation, execution, delivery, administration, defense and enforcement of
this Agreement or any of the other Loan Documents (defined below), including
attorneys’ fees and all other costs and fees (a) incurred before or after
commencement of litigation or at trial, on appeal or in any other proceeding,
(b) incurred in any bankruptcy proceeding and (c) related to any
waivers or amendments with respect thereto (examples of costs and fees include
but are not limited to fees and costs for: filing, perfecting or confirming the
priority of the Bank’s lien, title searches or insurance, appraisals,
environmental audits and other reviews related to the Borrower, any collateral
or the loans, if requested by the Bank). The Borrower will also reimburse the
Bank and any Participant for all costs of collection, including all attorneys’
fees, before and after judgment, and the costs of preservation and/or
liquidation of any collateral.

 

1.8 Compensating
Balances. The Borrower will maintain on deposit with the  Bank in non-interest bearing accounts
average daily collected balances, in excess of that required to support account
activity and other credit facilities extended to the Borrower by the Bank, an
amount at least equal to the sum of (i) $ n/a  and (ii) n/a%  of
the Loan Amount as computed

 

1

 

on a monthly basis. If the Borrower fails to keep and maintain such
balances, it will pay a deficiency fee, payable within five days after receipt
of a statement therefor calculated on the amount by which the Borrower’s
average daily balances are less than the requirements set forth above, computed
at a rate equal to the rate set forth in the Note.

 

1.9 Conditions to
Borrowing. The Bank
will not be obligated to make (or continue to make) advances hereunder unless
(i) the Bank has received executed originals of the Note and all other
documents or agreements applicable to the loans described herein, including but
not limited to the documents specified in Article III (collectively with
this Agreement the “Loan Documents”),
in form and content satisfactory to the Bank; (ii) if the loan is secured,
the Bank has received confirmation satisfactoryto it that the Bank has a
properly perfected security interest, mortgage or lien, with the proper
priority; (iii) the Bank has received certified copies of the Borrower’s
governance documents and certification of entity status satisfactoryto the Bank
and all other relevant documents; (iv) the Bank has received a certified
copy of a resolution or authorization in form and content satisfactoryto the
Bank authorizing the loan and all acts contemplated by this Agreement and all
related documents, and confirmation of proper authorization of all guaranties
and other acts of third parties contemplated hereunder; (v) if required by
the Bank, the Bank has been provided with an Opinion of the Borrower’s counsel
in form and content satisfactory to the Bank confirming the matters outlined in
Section 2.2 and such other matters as the Bank requests; (vi) no
default exists under this Agreement or under any other Loan Documents, or under
any other agreements by and between the Borrower and the Bank; and
(vii) all proceedings taken in connection with the transactions
contemplated by this Agreement (including any required environmental
assessments), and all instruments, authorizations and other documents
applicable thereto, are satisfactory to the Bank and its counsel.

 

ARTICLE II.
WARRANTIES AND COVENANTS

 

While any part of the credit granted to the Borrower under this
Agreement or the other Loan Documents is available or any obligations under any
of the Loan Documents are unpaid or outstanding, the Borrower continuously
warrants and agrees as follows:

 

2.1 Accuracy of
Information. All information, certificates or statements given to
the Bank pursuant to this Agreement and the other Loan Documents will be true
and complete when given.

 

2.2 Organization
and Authority; Litigation. This Agreement and the other Loan Documents
are the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their terms. The execution, delivery
and performance of this Agreement and all other Loan Documents to which the
Borrower is a party (i) are within the borrower’s power; (ii) have
been duly authorized by all appropriate entity action; (iii) do not
require the approval of any governmental agency; and (iv) will not violate
any law, agreement or restriction by which the Borrower is bound. If the
Borrower is not an individual, the Borrower is validly existing and in good
standing under the laws of its state of organization, has all requisite power
and authority and possesses all licenses necessaryto conduct its business and
own its properties. There is no litigation or administrative proceeding
threatened or pending against the Borrower which would, if adversely
determined, have a material adverse effect on the Borrower’s financial
condition or its property.

 

2.3 Existence;
Business Activities; Assets; Change of Control. The Borrower will
(i) preserve its existence, rights and franchises; (ii) not make any
material change in the nature or manner of its business activities;
(iii) not liquidate, dissolve, acquire another entity or merge or
consolidate with or into another entity or change its form of organization;
(iv) not amend its organizational documents in any manner that may
conflict with any term or condition of the Loan Documents; and (v) not
sell, lease, transfer or otherwise dispose of all or substantially all of its
assets. Other than the transfer to a trust beneficially controlled by the
transferor, no event shall occur which causes or results in a transfer of
majority ownership of the Borrower while any Obligations are outstanding or
while the Bank has any obligation to provide funding to the Borrower.

 

2.4 Use of
Proceeds; Margin Stock; Speculation. Advances by the Bank hereunder
will be used exclusively by the Borrower for working capital and other regular
and valid purposes. The Borrower will not, without the prior written consent of
the Bank, redeem, purchase, or retire any of the capital stock or declare or
pay any dividends, or make any other payments or distributions of a similar
type or nature including withdrawal distributions. The Borrower will not use
any of the loan proceeds to purchase or carry “margin” stock (as defined in
Regulation U of the Board of Governors of the Federal Reserve System). No part
of any of the proceeds will be used for speculative investment purposes, including,
without limitation, speculating or hedging in the commodities and/or futures
market.

 

2.5 EnvironmentalMatters.
Except as disclosed in a written schedule attached to this Agreement
(if no schedule is attached, there are no exceptions), there exists no
uncorrected violation by the Borrower of any federal, state or local laws
(including statutes, regulations, ordinances or other governmental restrictions
and requirements) relating to the discharge of air pollutants, water pollutants
or process waste water or otherwise relating to the environment or Hazardous
Substances as hereinafterdefined, whether such laws currently exist or are
enacted in the future (collectively “EnvironmentalLaws”). The term “Hazardous Substances” will mean any hazardous or toxic wastes,
chemicals or other substances, the generation, possession or existence of which
is prohibited or governed by any Environmental Laws. The Borrower is not
subject to any judgment, decree, order or citation, or a party to (or
threatened with) any litigation or administrative proceeding, which asserts that
the Borrower (i) has violated any Environmental Laws; (ii) is
required to clean up, remove or take remedial or other action with respect to
any Hazardous Substances (collectively “Remedial Action”);or  (iii) is
required to pay all or a portion of the cost of any Remedial Action, as a
potentially responsible party. Except as disclosed on the Borrower’s
environmental questionnaire provided to the Bank, there are not now, nor to the
Borrower’s knowledge after reasonable investigation have there ever been, any
Hazardous Substances (or tanks or other facilities for the storage of Hazardous
Substances) stored, deposited, recycled or disposed of on, under or at any real
estate owned or occupied by the Borrower during the periods that the Borrower
owned or occupied such real estate, which if present on the real estate or in
soils or ground water, could require Remedial Action. To the Borrower’s
knowledge, there are no proposed or pending changes in Environmental Laws which
would adversely affect the Borrower or its business, and there are no
conditions existing currently or likely to exist while the Loan Documents are
in effect which would subject the Borrower to Remedial Action or other
liability. The Borrower currently complies with and will continue to timely
comply with all applicable Environmental Laws; and will provide the Bank,
immediately upon receipt, copies of any correspondence, notice, complaint,
order or other document from any source asserting or alleging any circumstance
or condition which requires or may require a financial contribution by the
Borrower or Remedial Action or other response by or on the part of the Borrower
under Environmental Laws, or which seeks damages or civil, criminal or punitive
penalties from the Borrower for an alleged violation of Environmental Laws.

 

2

 

2.6 Compliance
with Laws. The Borrower has complied with all laws applicable to its
business and its properties, and has all permits, licenses and approvals
required by such laws, copies of which have been provided to the Bank.

 

2.7 Restriction on
Indebtedness. The Borrower will not create, incur, assume or have
outstanding any indebtedness for borrowed money (including capitalized leases)
except (i) any indebtedness owing to the Bank and its affiliates, and
(ii) any other indebtedness outstanding on the date hereof, and shown on the  Borrower’s financial statements delivered
to the Bank prior to the date hereof, provided that such other indebtedness
will not be increased.

 

2.8 Restriction on
Liens. The Borrower will not create, incur, assume or permit to
exist any mortgage, pledge, encumbrance or other lien or levy upon or security
interest in any of the Borrower’s property now owned or hereafteracquired,
except (i) taxes and assessments which are either not delinquent or which
are being contested in good faith with adequate reserves provided;
(ii) easements, restrictions and minor title irregularities which do not,
as a practical matter, have an adverse effect upon the ownership and use of the
affected property; (iii) liens in favor of the Bank and its affiliates;
and (iv) other liens disclosed in writing to the Bank prior to the date
hereof.

 

2.9 Restriction on
Contingent Liabilities. The Borrower will not guarantee or become a
surety or otherwise contingently liable for any obligations of others, except
pursuant to the deposit and collection of checks and similar matters in the
ordinary course of business.

 

2.10 Insurance. The
Borrower will maintain insurance to such extent, covering such risks and with
such insurers as is usual and customary for businesses operating similar
properties, and as is satisfactory to the Bank, including insurance for fire
and other risks insured against by extended coverage, public liability
insurance and workers’ compensation insurance; and will designate the Bank as
loss payee with a “Lender’s Loss Payable” endorsement on any casualty policies
and take such other action as the Bank may reasonably request to ensure that
the Bank will receive (subject to no other interests) the insurance proceeds on
the Bank’s collateral.

 

2.11 Taxes and
Other Liabilities. The Borrower will pay and discharge, when due,
all of its taxes, assessments and other liabilities, except when the payment
thereof is being contested in good faith by appropriate procedures which will
avoid foreclosure of liens securing such items, and with adequate reserves
provided therefor.

 

2.12 Financial
Statements and Reporting. The financial statements and other
information previously provided to the Bank or provided to the Bank in the
future are or will be complete and accurate and prepared in accordance with
generally accepted accounting principles. There has been no material adverse
change in the Borrower’s financial condition since such information was
provided to the Bank. The Borrower will (i) maintain accounting records in
accordance with generally recognized and accepted principles of accounting
consistently applied throughout the accounting periods involved;
(ii) provide the Bank with such information concerning its business
affairs and financial condition (including insurance coverage) as the Bank may
request; and (iii) without request, provide the Bank with such specific
financial statements, certifications and/or information as may be set forth in
an addendum to this Agreement.

 

2.13 Inspection of
Properties and Records; Fiscal Year. The Borrower will permit
representatives of the Bank to visit and inspect any of the properties and
examine any of the books and records of the Borrower at any reasonable time and
as often as the Bank may reasonably desire. The Borrower will not change its
fiscal year.

 

2.14 Financial
Status. Financial Covenants, if any, will be as set forth in an
addendum to this Agreement.

 

2.15 Paid-In-Full Period. o  If checked here, all revolving loans under this Agreement and the Note
must be paid in full for a period of at least n/a consecutive days during each fiscal year.

 

ARTICLE III. COLLATERAL
AND GUARANTIES

 

3.1 Collateral. This
Agreement and the Note are secured by any and all security interests, pledges,
mortgages/deeds of trust (except any mortgage/deed of trust expressly limited
by its terms to a specific obligation of Borrower to Bank) or liens now or
hereafter in existence granted to the Bank to secure indebtedness of the
Borrower to the Bank, including without limitation as described in the
following documents:

 

o Real Estate
Mortgage(s)/Deed(s) of Trust dated                                                                                    
covering real estate located at 

                                                      

o Security
Agreement(s) dated                                                                                                                                                                     

o Possessory Collateral
Pledge Agreement(s) dated                                                                                                                                    

o Other                                                                                                                                                                                                          

 

3.2 Guaranties. This
Agreement and the Note are guarantied by each and every guaranty now or
hereafter in existence guarantying the indebtedness of the Borrower to the Bank
(except for any guaranty expressly limited by its terms to a specific separate
obligation of Borrower to the Bank) including, without limitation, the
following:                                                                                                       

 

 

 

3

 

3.3 Credit
Balances; Setoff. As additional security for the payment of the
obligations described in the Loan Documents and any other obligations of the
Borrower to the Bank of any nature whatsoever (collectively the “Obligations”), the Borrower hereby grants to the Bank a
security interest in, a lien on and an express contractual right to set off
against all depository account balances, cash and any other property of the
Borrower now or hereafter in the possession of the Bank and the right to refuse
to allow withdrawals from any account (collectively “Setoff”). The
Bank may, at any time upon the occurrence of a default hereunder
(notwithstanding any notice requirements or grace/cure periods under this or
other agreements between the Borrower and the Bank) Setoff against the
Obligations whether or not the Obligations
(including future installments) are then due or have been accelerated, all
without any advance or contemporaneous notice or demand of any kind to the
Borrower, such notice and demand being expressly waived.

 

The omission of any reference to an agreement in
Sections 3.1 and 3.2 above will not affect the validity or enforceability
thereof. The rights and remedies of the Bank outlined in this Agreement and the
documents identified above are intended to be cumulative.

 

ARTICLE IV.
DEFAULTS

 

4.1 Defaults.
Notwithstandingany cure periods described below, the Borrowerwill immediately
notify the Bank in writing when the Borrower obtains knowledge of the
occurrence of any default specified below. Regardless of whether the
Borrower has given the required notice, the occurrence of one or more of the
following will constitute a default:

 

(a)   Nonpayment. The Borrower
shall fail to pay (i) any interest due on the Note or any fees, charges,
costs or expenses under the Loan Documents by 5 days after the same becomes
due; or (ii) any principal amount of the Note when due.

 

(b)   Nonperformance. The Borrower or
any guarantor of Borrower’s Obligations to the Bank (“Guarantor”) shall  fail to perform or observe any
agreement, term, provision, condition, or covenant (other than a default
occurring under (a), (c), (d), (e), (f) or (g) of this
Section 4.1) required to be performed or observed by the Borrower or any
Guarantor hereunder or under any other Loan Document or other agreement with or
in favor of the Bank.

 

(c)   Misrepresentation. Any financial
information, statement, certificate, representation or warranty given to the
Bank by the Borrower or any Guarantor (or any of their representatives) in
connection with entering into this Agreement or the other Loan Documents and/or
any borrowing thereunder, or required to be furnished under the terms thereof,
shall prove untrue or misleading in any material respect (as determined by the
Bank in the exercise of its judgment) as of the time when given.

 

(d)   Default on Other Obligations. The Borrower or
any Guarantor shall be in default under the terms of any loan agreement,
promissory note, lease, conditional sale contract or other agreement, document
or instrument evidencing, governing or securing any indebtedness owing by the
Borrower or any Guarantor to the Bank or any indebtedness in excess of $10,000
owing by the Borrower to any third party, and the period of grace, if any, to
cure said default shall have passed.

 

(e)   Judgments. Any judgment
shall be obtained against the Borrower or any Guarantor which, together with
all other outstanding unsatisfied judgments against the Borrower (or such
Guarantor), shall exceed the sum of $10,000 and shall remain unvacated,
unbonded or unstayed for a period of 30 days following the date of entry
thereof.

 

(f)    Inability to Perform; Bankruptcy/Insolvency.
(i) The Borrower or any Guarantor shall die or cease to exist; or
(ii) any Guarantor shall attempt to revoke any guaranty of the Obligations
described herein, or any guaranty becomes unenforceable in whole or in part for
any reason; or (iii) any bankruptcy, insolvency or receivership
proceedings, or an assignment for the benefit of creditors, shall be commenced
under any Federal or state law by or against the Borrower or any Guarantor; or
(iv) the Borrower or any Guarantor shall become the subject of any
out-of-court settlement with its creditors; or (v) the Borrower or any
Guarantor is unable or admits in writing its inability to pay its debts as they
mature; or (vi) if the Borrower is a limited liability company, any member
thereof shall withdraw or otherwise become disassociated from the Borrower.

 

(g)   Adverse Change; Insecurity. (i) There
is a material adverse change in the business, properties, financial condition
or affairs of the Borrower or any Guarantor, or in any collateral securing the
Obligations; or (ii) the Bank in good faith deems itself insecure.

 

4.2 Termination of
Loans; Additional Bank Rights. Upon the Maturity Date or the
occurrence of any of the events identified in Section 4.1, the Bank may at
any time (notwithstanding any notice requirements or grace/cure periods under
this or other agreements between the Borrower and the Bank)
(i) immediately terminate its obligation, if any, to make additional loans
to the Borrower; (ii) Setoff; and/or (iii) take such other steps to
protect or preserve the Bank’s interest in any collateral, including without
limitation, notifying account debtors to make payments directly to the Bank,
advancing funds to protect any collateral and insuring collateral at the
Borrower’s expense; all without demand or notice of any kind, all of which are
hereby waived.

 

4.3 Acceleration
of Obligations. Upon the Maturity Date or the occurrence of any of
the events identified in Sections 4.1(a) through 4.1(e) and 4.1(g), and the
passage of any applicable cure periods, the Bank may at any time thereafter, by
written notice to the Borrower, declare the unpaid principal balance of any
Obligations, together with the interest accrued thereon and other amounts
accrued hereunder and under the other Loan Documents, to be immediately due and
payable; and the unpaid balance will thereupon be due and payable, all without
presentation, demand, protest or further notice of any kind, all of which are
hereby waived, and notwithstanding anything to the contrary contained herein or
in any of the other Loan Documents. Upon the occurrence of any event under
Section 4.1(f), the unpaid principal balance of any Obligations, together
with all interest accrued thereon and other amounts accrued hereunder and under
the other Loan Documents, will thereupon be immediately due and payable, all
without presentation, demand, protest or notice of any kind, all of which are
hereby waived, and notwithstanding anything to the contrary contained herein or
in any of the other Loan Documents. Nothing
contained in Section 4.1, Section 4.2 or this section will limit the
Bank’s right to Setoff as provided in Section 3.3 or otherwise in this
Agreement.

 

4

 

4.4 Other
Remedies. Nothing in this Article IV is intended to restrict
the Bank’s rights under any of the Loan Documents or at law, and the Bank may
exercise all such rights and remedies as and when they are available.

 

ARTICLE V.
OTHER TERMS

 

5.1 Additional
Terms; Addendum/Supplements. The warranties, covenants, conditions
and other terms described in this Section and/or in the Addendum and/or
other attached document(s) referenced in this Section are
incorporated into this Agreement:

 

	
   

  
	
   

   

  
	
   

  
	
   

  

 

ARTICLE VI.
MISCELLANEOUS

 

6.1 Delay;
Cumulative Remedies. No delay on the part of the Bank in exercising
any right, power or privilege hereunder or under any of the other Loan
Documents will operate as a waiver thereof, nor will any single or partial
exercise of any right, power or privilege hereunder preclude other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein specified are cumulative and are not exclusive of
any rights or remedies which the Bank would otherwise have.

 

6.2 Relationship to
Other Documents. The warranties, covenants and other obligations of
the Borrower (and the rights and remedies of the Bank) that are outlined in
this Agreement and the other Loan Documents are intended to supplement each
other. In the event of any inconsistencies in any of the terms in the Loan
Documents, all terms will be cumulative so as to give the Bank the most
favorable rights set forth in the conflicting documents, except that if there
is a direct conflict between any preprinted terms and specifically negotiated
terms (whether included in an addendum or otherwise), the specifically
negotiated terms will control.

 

6.3 Successors. The
rights, options, powers and remedies granted in this Agreement and the other
Loan Documents shall be binding upon the Borrower and the Bank and their
respective successors and assigns, and shall inure to the benefit of the
Borrower and the Bank and the successors and assigns of the Bank, including
without limitation any purchaser of any or all of the rights and obligations of
the Bank under the Note and the other Loan Documents. The Borrower may not
assign its rights or obligations under this Agreement or any other Loan
Documents without the prior written consent of the Bank.

 

6.4 Disclosure. The
Bank may, in connection with any sale or potential sale of all or any interest
in the Note and other Loan Documents, disclose any financial information the
Bank may have concerning the Borrower to any purchaser or potential purchaser.
From time to time, the Bank may, in its discretion and without obligation to
the Borrower, any Guarantor or any other third party, disclose information
about the Borrower and this loan to any Guarantor, surety or other
accommodation party. This provision does not obligate the Bank to supply any
information or release the Borrower from its obligation to provide such
information, and the Borrower agrees to keep all Guarantors, sureties or other
accommodation parties advised of its financial condition and other matters
which may be relevant to their obligations to the Bank.

 

6.5 Indemnification.
Except for harm arising from the Bank’s willful misconduct, the
Borrower hereby indemnifies and agrees to defend and hold the Bank harmless
from any and all losses, costs, damages, claims and expenses of any kind
suffered by or asserted against the Bank relating to claims by third parties
arising out of the financing provided under the Loan Documents or related to
any collateral (including, without limitation, the Borrower’s failure to
perform its obligations relating to Environmental Matters described in
Section 2.5 above). This indemnification and hold harmless provision will
survive the termination of the Loan Documents and the satisfaction of the
Obligations due the Bank.

 

6.6 Notice of
Claims Against Bank; Limitation of Certain Damages. In order to
allow the Bank to mitigate any damages to the Borrower from the Bank’s alleged
breach of its duties under the Loan Documents or any other duty, if any, to the
Borrower, the Borrower agrees to give the Bank immediate written notice of any
claim or defense it has against the Bank, whether in tort or contract, relating
to any action or inaction by the Bank under the Loan Documents, or the
transactions related thereto, or of any defense to payment of the Obligations
for any reason. The requirement of providing timely notice to the Bank
represents the parties’ agreed-to standard of performance regarding claims
against the Bank. Notwithstanding any claim that the Borrower may have against
the Bank, and regardless of any notice the Borrower may have given the Bank, the Bank will not be liable to the Borrower for
consequential and/or special damages arising therefrom, except those damages
arising from the Bank’s willful misconduct.

 

6.7 Notices. Notice
of any record shall be deemed delivered when the record has been
(a) deposited in the United States Mail, postage pre-paid,
(b) received by overnight delivery service, (c) received by telex,
(d) received by telecopy, (e) received through the internet, or
(f) when personally delivered.

 

6.8 Payments. Payments
due under the Note and other Loan Documents will be made in lawful money of the
United States. All payments may be applied by the Bank to principal, interest
and other amounts due under the Loan Documents in any order which the Bank elects.

 

5

 

6.9 Applicable Law
and Jurisdiction; Interpretation; Joint Liability; Severability. This
Agreement and all other Loan Documents will be governed by and interpreted in
accordance with the internal laws of the State of California, except to
the extent superseded by Federal law. THE BORROWER  HEREBY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED
IN THE COUNTY OR FEDERAL JURISDICTION OF
THE BANK’S BRANCH WHERE THE
LOAN WAS ORIGINATED, AND WAIVESANY OBJECTION BASED ON FORUM NON CONVENIENS,
WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS
AGREEMENT, THE NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY
TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF
THE FOREGOING. Nothing herein will affect the Bank’s rights to serve process in
any manner permitted by law, or limit the Bank’s right to bring proceedings
against the Borrower in the competent courts of any other jurisdiction or jurisdictions. This Agreement, the
other Loan Documents and any amendments hereto (regardless of when executed)
will be deemed effective and accepted only upon the Bank’s receipt of the
executed originals thereof. If there is more than one Borrower, the liability
of the Borrowers will be joint and several, and the reference to “Borrower”
will be deemed to refer to all Borrowers. Invalidity of any provision of this
Agreement shall not affect the validity of any other provision.

 

6.10 Copies;
Entire Agreement; Modification. The Borrower hereby acknowledges the
receipt of a copy of this Agreement and all other Loan Documents. This
Agreement is a “transferable record” as defined in applicable law relating to
electronic transactions. Therefore, the holder of this Agreement may, on behalf
of Borrower, create a microfilm or optical disk or other electronic image of
this Agreement that is an authoritative copy as defined in such law. The holder
of this Agreement may store the authoritative copy of such Agreement in its
electronic form and then destroy the paper original as part of the holder’s
normal business practices. The holder, on its own behalf, may control and
transfer such authoritative copy as permitted by such law.

 

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING,
EXPRESSING CONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER
TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE
LEGALLY ENFORCED. THE TERMS OF THIS AGREEMENT MAY ONLY BE CHANGED BY
ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO
ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK. A
MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND
THE BANK, WHICH OCCURS AFTER RECEIPT BY BORROWER OF THIS NOTICE, MAY BE
MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED MODIFICATIONS TO SUCH
CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON.

 

6.11 Waiver of
Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK HEREBY
JOINTLY AND SEVERALLYWAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER,
ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM
OR CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER
THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

 

6.12 Attachments.
All documents attached hereto, including any appendices, schedules, riders, and
exhibits to this Agreement, are hereby expressly incorporated by reference.

 

IN WITNESSWHEREOF, the undersigned have executed this REVOLVING CREDIT AGREEMENT
as of JUNE 30, 2010.

 

	
  (Individual Borrower)

  	
   

  	
  SRS Labs, Inc.

  
	
   

  	
   

  	
  Borrower Name (Organization)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a

  	
  Delaware Corporation

  
	
   

  	
   

  	
   

  
	
  Borrower Name

  	
  N/A

  	
   

  	
  By 

  	
  /s/ Ulrich Gottschling

  
	
   

  	
   

  	
  Name and Title

  	
  Ulrich Gottschling CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
  Borrower Name

  	
  N/A

  	
   

  	
  Name and Title

  	
   

  
	
   

  	
   

  	
  U.S. Bank
  N.A.,                  

  	
   (Bank)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
  /s/ Ian Baird

  
	
   

  	
   

  	
  Name and Title

  	
  Ian Baird, Vice President

  
										

 

	
  Borrower Address:

  	
  2909 Daimler Street, Santa Ana, CA 92705

  	
   

  	
   

  	
   

  
	
  Borrower Telephone No.:

  	
   

  	
   

  	
   

  	
   

  
						

 

6

 

 

	
   

  	
  For Bank Use Only

  	
  Reviewed by

  
	
   

  	
   

  	
   

  
	
   

  	
  Due JUNE 30, 2011

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Customer # 6517459625

  	
  Loan #

  
				

 

REVOLVING
CREDIT NOTE

 

	
  $ 5,000,000.00

  	
   

  	
   

  	
  JUNE 30, 2010

  

 

FOR  VALUE RECEIVED, the
undersigned borrower (the “Borrower”),
promises to pay to the order of U.S.
BANK N.A. (the “Bank”), the principal sum of FIVE MILLION AND NO/100 Dollars ($5,000,000.00),
payable JUNE 30, 2011 (the “Maturity Date”).

 

Interest.

 

The unpaid principal
balance will bear interest at an annual rate described in the Interest Rate
Rider attached to this Note.

 

Payment Schedule.

 

Interest is payable
beginning AUGUST 1, 2010, and on the same date of each consecutive month
thereafter (except that if a given month does not have such a date, the last
day of such month), plus a final interest payment with the final payment of
principal.

 

Interest will be computed for the actual number of
days principal is unpaid, using a daily factor obtained by dividing the stated
interest rate by 360.

 

Notwithstanding any provision of this Note to the
contrary, upon any default or at any time during the continuation thereof
(including failure to pay upon maturity), the Bank may, at its option and
subject to applicable law, increase the interest rate on this Note to a rate of
5% per annum plus the interest rate otherwise payable hereunder.
Notwithstanding the foregoing and subject to applicable law, upon the
occurrence of a default by the Borrower or any guarantor involving bankruptcy,
insolvency, receivership proceedings or an assignment for the benefit of
creditors, the interest rate on this Note shall automatically increase to a
rate of 5% per annum plus the rate otherwise payable hereunder.

 

In no event will the interest rate hereunder exceed
that permitted by applicable law. If any interest or other charge is finally
determined by a court of competent jurisdiction to exceed the maximum amount
permitted by law, the interest or charge shall be reduced to the maximum
permitted by law, and the Bank may credit any excess amount previously
collected against the balance due or refund the amount to the Borrower.

 

Subject to applicable law, if any payment is not
made on or before its due date, the Bank may collect a delinquency charge of 5.00%
of the unpaid amount. Collection of the late payment fee shall not be deemed to
be a waiver of the Bank’s right to declare a default hereunder.

 

Without affecting the liability of any Borrower,
endorser, surety or guarantor, the Bank may, without notice, renew or extend
the time for payment, accept partial payments, release or impair any collateral
security for the payment of this Note, or agree not to sue any party liable on
it.

 

This Revolving Credit Note constitutes the Note
issued under a Revolving Credit Agreement dated as of the date hereof between
the Borrower and the Bank, to which Agreement reference is hereby made for a
statement of the terms and conditions under which loans evidenced hereby were
or may be made and a description of the terms and conditions upon which the
maturity of this Note may be accelerated, and for a description of the
collateral securing this Note.

 

 

This Note is a “transferablerecord” as defined in
applicable law relating to electronic transactions. Therefore, the holder of
this Note may, on behalf of Borrower, create a microfilm or optical disk or
other electronic image of this Note that is an authoritative copy as defined in
such law. The holder of this Note may store the authoritative copy of such Note
in its electronic form and then destroy the paper original as part of the
holder’s normal business practices. The holder, on its own behalf, may control
and transfer such authoritative copy as permitted by such law.

 

All documents attached
hereto, including any appendices, schedules, riders, and exhibits to this
Revolving Credit Note, are hereby expressly incorporated by reference.

 

The Borrower hereby acknowledges the receipt of a copy of this Note.

 

 

	
  (Individual Borrower)

  	
   

  	
  SRS Labs, Inc.

  
	
   

  	
   

  	
  Borrower Name (Organization)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a

  	
   Delaware Corporation

  
	
   

  	
   

  	
   

  
	
  Borrower Name

  	
  N/A

  	
   

  	
  By 

  	
  /s/ Ulrich Gottschling

  
	
   

  	
   

  	
  Name and Title

  	
  Ulrich Gottschling CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
  Borrower Name

  	
  N/A

  	
   

  	
  Name and Title

  	
   

  
									

 

 

 

INTEREST RATE RIDER

 

This Rider is made part of the Revolving Credit  Note (the “Note”) in the original amount of $5,000,000.00
by the undersigned borrower (the “Borrower”) in
favor of U.S. BANK N.A.  (the “Bank”)
as of the date identified below. The following interest rate description is
hereby added to the Note:

 

Interest Rate Options. Interest on each advance hereunder shall accrue
at one of the following per annum rates selected by the Borrower (“n/a”
indicates rate option is not available, but Prime Rate Loan option must always
be selected) (i) upon notice to the Bank, -1.000% plus the prime rate
announced by the Bank from time to time, as and when such rate changes (a
“Prime Rate Loan”); (ii) upon a minimum of two New York Banking Days prior
notice, 2.000% plus the 1, 2, 3, 6 or 12 month LIBOR rate quoted by the Bank
from Reuters Screen LIBOR01 Page or any successor thereto (which shall be
the LIBOR rate in effect two New York Banking Days prior to commencement of the
advance), adjusted for any reserve requirement and any subsequent costs arising
from a change in government regulation (a “LIBOR Rate Loan”); or
(iii) upon notice to the Bank, n/a  % plus the rate, determined solely
by the Bank, at which the Bank would be able to borrow funds of comparable
amounts in the Money Markets for a 1, 2, 3, 6 or 12 month period, adjusted for
any reserve requirement and any subsequent costs arising from a change in
government regulation (a “Money Market Rate Loan”). The term “New York Banking
Day” means any day (other than a Saturday or Sunday) on which commercial banks
are open for business in New York, New York. The term “Money Markets” refers to
one or more wholesale funding markets available to the Bank, including
negotiable certificates of deposit, commercial paper, eurodollar deposits, bank
notes, federal funds, interest rate swaps or others. No LIBOR Rate Loan or
Money Market Rate Loan may extend beyond the maturity of this Note. In any
event, if the Loan Period for a LIBOR Rate Loan or Money Market Rate Loan should
happen to extend beyond the maturity of this Note, such loan must be prepaid at
the time this Note matures. If a LIBOR Rate Loan or Money Market Rate Loan is
prepaid prior to the end of the Loan Period for such loan, whether voluntarily
or because prepayment is required due to the Note maturing or due to
acceleration of this Note upon default or otherwise, the Borrower agrees to pay
all of the Bank’s costs, expenses and Interest Differential (as determined by
the Bank) incurred as a result of such prepayment. The term “Loan Period” means
the period commencing on the advance date of the applicable LIBOR Rate Loan or
Money Market Rate Loan and ending on the numerically corresponding day 1, 2, 3,
6 or 12 months thereafter matching the interest rate term selected by the
Borrower; provided, however, (a) if any Loan Period would otherwise end on
a day which is not a New York Banking Day, then the Loan Period shall end on
the next succeeding New York Banking Day unless the next succeeding New York
Banking Day falls in another calendar month, in which case the Loan Period
shall end on the immediately preceding New York Banking Day; or (b) if any
Loan Period begins on the last New York Banking Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of the Loan Period), then the Loan Period shall end on the last New
York Banking Day of the calendar month at the end of such Loan Period. The term
“Interest Differential” shall mean that sum equal to the greater of zero or the
financial loss incurred by the Bank resulting from prepayment, calculated as
the difference between the amount of interest the Bank would have earned (from
like investments in the Money Markets as of the first day of the LIBOR Rate Loan
or Money Market Rate Loan) had prepayment not occurred and the interest the
Bank will actually earn (from like investments in the Money Markets as of the
date of prepayment) as a result of the redeployment of funds from the
prepayment. Because of the short-term nature of this facility, the Borrower
agrees that the Interest Differential shall not be discounted to its present
value. Any prepayment of a LIBOR Rate Loan or Money Market Rate Loan shall be
in an amount equal to the remaining entire principal balance of such loan.

 

In the event the Borrower does not timely select another interest rate
option at least two New York Banking Days before the end of the Loan Period for
a LIBOR Rate Loan or Money Market Rate Loan, the Bank may at any time after the
end of the Loan Period convert the LIBOR Rate Loan or Money Market Rate Loan to
a Prime Rate Loan, but until such conversion, the funds advanced under the
LIBOR Rate Loan or Money Market Rate Loan shall continue to accrue interest at
the same rate as the interest rate in effect for such LIBOR Rate Loan or Money
Market Rate Loan prior to the end of the Loan Period.

 

The Bank’s internal records of applicable interest rates shall be
determinative in the absence of manifest error. Each LIBOR Rate Loan and each Money
Market Rate Loan shall be in a minimum principal amount of $100,000.

 

	
  Dated as of:

  	
  JUNE 30, 2010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SRS Labs, Inc.

  
	
  (Individual Borrower)

  	
   

  	
  Borrower Name (Organization)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a

  	
  Delaware Corporation

  
	
   

  	
   

  	
   

  
	
  Borrower Name

  	
  N/A

  	
   

  	
  By 

  	
  /s/ Ulrich Gottschling

  
	
   

  	
   

  	
  Name and Title

  	
  Ulrich Gottschling CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
	
  Borrower Name

  	
  N/A

  	
   

  	
  Name and Title

  	
   

  
									

 

 

ADDENDUM TO
REVOLVING CREDIT AGREEMENT AND NOTE

 

This Addendum is made part of the Revolving Credit Agreement and Note
(the “Agreement”) made and entered into by and between the undersigned borrower
(the “Borrower”) and the undersigned bank (the “Bank”) as of the date
identified below. The warranties, covenants and other terms described below are
hereby added to the Agreement.

 

Financial Information and Reporting. This provision
replaces in its entirety the provision of the Agreement titled “Financial
Information and Reporting”. Financial terms used herein which are not
specifically defined herein shall have the meanings ascribed to them under
generally accepted accounting principles. For any Borrower who does not have a
separate fiscal year end for tax reporting purposes, the fiscal year will be
deemed to be the calendar year. The financial statements and other information
previously provided to Bank or provided to Bank in the future are or will be
complete and accurate and prepared in accordance with generally accepted
accounting principles. There has been no material adverse change in Borrower’s
financial condition since such information was provided to Bank. Borrower will
(i) maintain accounting records in accordance with generally recognized
and accepted principles of accounting consistently applied throughout the
accounting periods involved; (ii) provide Bank with such information
concerning its business affairs and financial condition (including insurance
coverage) as Bank may request; and (iii) without request, provide to Bank
the following financial information, in form and content acceptable to Bank,
pertaining to Borrower:

 

Annual Financial Statements: Not later than 120 days
after the end of each fiscal year, annual financial statements, audited by a
certified public accounting firm acceptable to Bank.

 

Interim Financial Statements: Not later than
45 days after the end of each fiscal quarter, interim financial statements,
reviewed by a certified public accounting firm acceptable to Bank.

 

Financial Covenants. Financial terms used herein
which are not specifically defined herein shall have the meanings ascribed to
them under generally accepted accounting principles. For any Borrower who does
not have a separate fiscal year end for tax reporting purposes, the fiscal year
will be deemed to be the calendar year. Borrower (herein referred to as the “Subject Party”) will maintain the following:

 

Fixed Charge Coverage Ratio as of the end
of each fiscal quarter for the four (4) fiscal quarters then ended of at
least 1.25 to 1.

 

“Fixed Charge Coverage Ratio” shall mean (a) EBITDAR
minus cash taxes, cash dividends, cash distributions and Maintenance Capital
Expenditures divided by (b) the sum of all required principal payments (on
short and long term debt and capital leases), interest and rental or lease
expense.

 

“EBITDAR” shall mean net income, plus
interest expense, plus income tax expense, plus depreciation expense plus
amortization expense plus rent or lease expense.

 

“Maintenance Capital Expenditures” shall mean 50%
of the Subject Party’s depreciation expense for the period specified. 

 

Liquid assets at all times having a value
of at least $10,150,000.00.

 

“Liquid assets” shall mean unencumbered
assets deemed by Bank in its sole discretion to be liquid.

 

 

	
  Dated as of

  	
  June 30, 2010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Individual)

  	
   

  	
  (Non-Individual)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SRS Labs, Inc.

  
	
  Borrower Name  n/a

  	
   

  	
  a/an

  	
     Delaware Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas C.K. Yuen  Chairman, CEO & President

  
	
  Borrower Name  n/a

  	
   

  	
  Name and Title  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Ulrich Gottschling  CFO

  
	
   

  	
   

  	
  Name and Title 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Agreed to:

  
	
   

  	
   

  	
  U.S. Bank N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian Baird

  
	
   

  	
   

  	
  Name and Title:  Ian Baird,
  Vice President

  
						

 

 

 

CALIFORNIA
JUDICIAL REFERENCE AGREEMENT

 

This California Judicial Reference Agreement (“Agreement”) is entered into in connection with any existing
financing (other than consumer purpose financing) (“Financing”)
provided by U. S. BANK N. A. (“Bank”) to SRS Labs, Inc.  (“Borrower”) evidenced, secured and/or
supported by one or more promissory notes, loan agreements, security
agreements, mortgages/deeds of trust, guaranties and/or other documents signed
by the undersigned parties (said promissory note and such other agreements,
together with amendments, modifications, substitutions and replacements
thereto, are hereinafter referred to as the “Loan
Documents”).

 

For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto (collectively, the “Parties”) agree as follows:

 

1.              Any and all disputes, claims
and controversies arising out of the Loan Documents or the transactions
contemplated thereby (including, but not limited to, actions arising in
contract or tort and any claims by a Party against Bank related in any way to
the Financing) (individually, a “Dispute”) that are brought before a forum in
which pre-dispute waivers of the right to trial by jury are invalid under
applicable law shall be subject to the terms of this Agreement in lieu of the
jury trial waivers otherwise provided in the Loan Documents.

 

2.              Any and all Disputes shall
be heard by a referee and resolved by judicial reference pursuant to California
Code of Civil Procedure Sections 638 et seq.

 

3.              The referee shall be a
retired California state court judge or an attorney licensed to practice law in
the State of California with at least ten (10) years’ experience
practicing commercial law. The Parties shall not seek to appoint a referee that
may be disqualified pursuant to California Code of Civil Procedure
Section 641 or 641.2 without the prior written consent of all Parties.

 

4.              If the Parties are unable to
agree upon a referee within ten (10) calendar days after one Party serves
a written notice of intent for judicial reference upon the other Party or
Parties, then the referee will be selected by the court in accordance with
California Code of Civil Procedure Section 640(b).

 

5.              The referee shall render a
written statement of decision and shall conduct the proceedings in accordance
with the California Code of Civil Procedure, the Rules of Court, and
California Evidence Code, except as otherwise specifically agreed by the
parties and approved by the referee. The referee’s statement of decision shall
set forth findings of fact and conclusions of law. The decision of the referee
shall be entered as a judgment in the court in accordance with the provisions
of California Code of Civil Procedure Sections 644 and 645. The decision of the
referee shall be appealable to the same extent and in the same manner that such
decision would be appealable if rendered by a judge of the superior court.

 

6.              Nothing in this Agreement
shall be deemed to apply to or limit the right of Bank (a) to exercise
self help remedies such as (but not limited to) setoff, or (b) to
foreclose judicially or nonjudicially against any real or personal property
collateral, or to exercise judicial or nonjudicial power of sale rights,
(c) to obtain from a court provisional or ancillary remedies (including,
but not limited to, injunctive relief, a writ of possession, prejudgment
attachment, a protective order or the appointment of a receiver), or
(d) to pursue rights against a Party in a third-party proceeding in any
action brought against Bank (including actions in bankruptcy court). Bank may
exercise the rights set forth in the foregoing clauses (a) through (d),
inclusive, before, during or after the pendency of any judicial reference
proceeding. Neither the exercise of self help remedies nor the institution or
maintenance of an action for foreclosure or provisional or ancillary remedies
or the opposition to any such provisional remedies shall constitute a waiver of
the right of any Party, including, but not limited to, the claimant in any such
action, to require submission to judicial reference the merits of the Dispute
occasioning resort to such remedies. No provision in the Loan Documents
regarding submission to jurisdiction and/or venue in any court is intended or
shall be construed to be in derogation of the provisions in any Loan Document
for judicial reference of any of Dispute.

 

7.              If a Dispute includes
multiple claims, some of which are found not subject to this Agreement, the
Parties shall stay the

proceedings of the Disputes or part or parts thereof not subject to this
Agreement until all other Disputes or parts thereof are resolved in accordance
with this Agreement. If there are Disputes by or against multiple parties, some
of which are not subject to this Agreement, the Parties shall sever the
Disputes subject to this Agreement and resolve them in accordance with this
Agreement.

 

1

 

8.              During the pendency of any
Dispute which is submitted to judicial reference in accordance with this
Agreement, each of the Parties to such Dispute shall bear equal shares of the
fees charged and costs incurred by the referee in performing the services
described in this Agreement. The compensation of the referee shall not exceed
the prevailing rate for like services. The prevailing party shall be entitled
to reasonable court costs and legal fees, including customary attorney fees,
expert witness fees, paralegal fees, the fees of the referee and other
reasonable costs and disbursements charged to the party by its counsel, in such
amount as is determined by the Referee.

 

9.              In the event of any
challenge to the legality or enforceability of this Agreement, the prevailing
Party shall be entitled to recover the costs and expenses from the
non-prevailing Party, including reasonable attorneys’ fees, incurred by it in
connection therewith.

 

10.       THIS AGREEMENT CONSTITUTES A
“REFERENCE AGREEMENT” BETWEEN OR AMONG THE PARTIES WITHIN THE MEANING OF AND
FOR PURPOSES OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638.

 

 

	
  Dated as of: 

  	
   JUNE 30, 2010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK N.A.

  	
   

  	
   

  
	
  (Bank)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ian Baird

  	
   

  	
   

  
	
  Ian Baird

  	
   

  	
   

  
	
  Name and Title:

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SRS LABS, INC.

  
	
  (Individual)

  	
   

  	
  Name (Organization)

  
	
   

  	
   

  	
  a

  	
  DELAWARE CORPORATION

  
	
  Printed Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ulrich Gottschling

  
	
  (Individual)

  	
   

  	
  Name and Title:

  	
  Ulrich Gottschling CFO

  
	
   

  	
   

  	
   

  
	
  Printed Name:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name and Title:

  	
   

  
	
  (Individual)

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
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  Name and Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  (Individual)

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name and Title:

  	
   

  
	
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  By:

  	
   

  
	
  (Individual)

  	
   

  	
   

  	
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2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]