Document:

exv10w12

 

EXHIBIT 10.12

REVOLVING LINE OF CREDIT NOTE

			
	$50,000,000
	 	Los Angeles, California
	 
	 	March 26, 2007

     FOR VALUE RECEIVED, the undersigned VIRCO MFG. CORPORATION (“Borrower”) promises to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at 333
South Grand Avenue, Suite 940, Los Angeles, California 90071, 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 the Maximum Line of Credit Amount, 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.

     This Revolving Line of Credit Note (this “Note”) replaces the Revolving Line of Credit
Note originally issued on December 6, 2005 pursuant to the Amended and Restated Credit Agreement
dated as of January 27, 2004 (as amended, restated, supplemented or otherwise modified, the
“Credit Agreement”) between Borrower and Bank. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined. Reference hereby is made to the
Loan Documents for a description of the assets in which a Lien has been granted, the nature and
extent of the security and the guaranties, the terms and conditions upon which the Liens and each
guaranty were granted and the rights of the holder of this Note in respect thereof.

     DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after each, and any
other term defined in this Note shall have the meaning set forth at the place defined:

     (a) “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 rates 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 this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) at a fluctuating rate per annum
equal to the Prime Rate in effect from time to time plus 0.50%. Each change in the Prime Rate
shall become effective on the date such change is announced within Bank.

     (b) Payment of Interest. Interest accrued on this Note shall be payable on the first
day of each month, commencing April 1, 2007.

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     (c) 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 four percent
(4%) above the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

     (a) 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 governing this Note; provided however, that the total outstanding borrowings under this Note
shall not at any time exceed the principal amount set forth above or such lesser amount as shall at
any time be available hereunder, as set forth in the Credit Agreement. 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 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 Line of Credit Termination Date.

     (b) Advances. Advances hereunder, to the total amount of the principal sum stated
above, may be made by the holder at the oral or written request of (i) Robert A. Virtue, Robert
Dose, Doug Virtue or Bassey Yau, any one of them 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 Borrower, which advances,
when so deposited, shall be conclusively presumed to have been made to or for the benefit of
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 Borrower.

     (c) Application of Payments. Each payment made on this Note shall be credited first,
to any interest then due and second, to the outstanding principal balance hereof.

PREPAYMENT:

     (a) Borrower may prepay principal on any portion of this Note at any time, in any amount and
without penalty.

     (b) The principal Indebtedness evidenced hereby shall be payable as follows and without set
off, counterclaim or reduction of any kind:

     (i) the amount, if any, by which the LC Usage Amount at any time exceeds the lesser of
the Maximum Line of Credit Amount or the Borrowing Base at such date shall be payable
immediately; and

     (ii) the principal Indebtedness evidenced hereby shall be payable on the Line of Credit
Termination Date.

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EVENTS OF DEFAULT:

     Any default in the payment or performance of any obligation under this Note, or any defined
event of default under the Credit Agreement, shall constitute an “Event of Default” under this
Note.

MISCELLANEOUS:

     (a) 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.

     (b) Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of California.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

	 	 	 	 	 	 	 	 	 
	 	 	VIRCO MFG. CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert E. Dose	 	 
	 

	 	 	 	Title:
	 	Vice President — Finance, Secretary and	 	 
	 

	 	 	 	 	 	Treasurerexv10w13

 

EXHIBIT 10.13

TERM NOTE

			
	$20,000,000
	 	Los Angeles, California
	 
	 	March 26, 2007

     FOR VALUE RECEIVED, the undersigned VIRCO MFG. CORPORATION (“Borrower”) promises to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at 333
South Grand Avenue, Suite 940, Los Angeles, California 90071, 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 the Original Term Loan (as defined in the Credit Agreement referred to
below) and, if advanced, the Incremental Term Loan (as defined in the Credit Agreement referred to
below), in each case with interest thereon as set forth herein.

     This Term Note (this “Note”) evidences the Original Term Loan and the Incremental Term
Loan and replaces the Term Note originally issued on December 6, 2005 pursuant to the Amended and
Restated Credit Agreement dated as of January 27, 2004 (as amended, restated, supplemented or
otherwise modified, the “Credit Agreement”) between Borrower and Bank. Terms defined in
the Credit Agreement and not otherwise defined herein are used herein as therein defined.
Reference hereby is made to the Loan Documents for a description of the assets in which a Lien has
been granted, the nature and extent of the security and the guaranties, the terms and conditions
upon which the Liens and each guaranty were granted and the rights of the holder of this Note in
respect thereof.

DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after each, and any
other term defined in this Note shall have the meaning set forth at the place defined:

     (a) “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 rates 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 this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) at a fluctuating rate per annum
equal to the Prime Rate in effect from time to time plus 0.50%. Each change in the Prime Rate
shall become effective on the date such change is announced within Bank.

     (b) Payment of Interest. Interest accrued on this Note shall be payable on the first
day of each month, commencing April 1, 2007.

     (c) 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

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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 four percent
(4%) above the rate of interest from time to time applicable to this Note.

REPAYMENT AND PREPAYMENT:

     (a) Repayment. The Term Loan evidenced hereby shall be payable as follows and without
set off, counterclaim or reduction of any kind:

     (i) on or before October 15, 2007, not less than $10,000,000 aggregate principal amount
of the principal Indebtedness evidenced hereby shall have been repaid;

     (ii) after October 15, 2007 and on or before October 15, 2008, not less than an
incremental $5,000,000 aggregate principal amount of the principal Indebtedness evidenced
hereby shall have been repaid;

     (iii) on the date of the consummation of any disposition of any assets of Borrower or
any of its Subsidiaries (other than a disposition permitted by Section 5.6 of the Credit
Agreement), an amount of the cash proceeds received in connection such disposition equal to
the excess, if any, of the aggregate cash proceeds received in connection with all
dispositions of assets (other than those permitted by Section 5.6 of the Credit Agreement)
less (A) any fees, costs, commissions and expenses reasonably incurred in connection with
such dispositions and (B) the taxes actually paid or to be payable by Borrower (as estimated
by the chief financial officer of Borrower, giving effect to the overall tax position of
Borrower), over $500,000, shall be payable in respect of the Indebtedness evidenced hereby;
such payment shall be applied in the inverse order of the maturities due hereunder (and,
Borrower acknowledges that nothing contained in this subclause (ii) shall permit Borrower or
any of its Subsidiaries to sell or otherwise dispose of any assets other than in accordance
with Section 5.6 of the Credit Agreement); and

     (iv) the principal Indebtedness evidenced hereby shall be payable on the Term Loan
Termination Date.

     (b) Application of Payments. Each payment made on this Note shall be credited first,
to any interest then due and second, to the outstanding principal balance hereof.

     (c) Prepayment. Borrower may prepay principal on any portion of this Note at any
time, in any amount and without penalty. Any such prepayment shall be applied in the inverse order
of the maturities due hereunder.

EVENTS OF DEFAULT:

     Any default in the payment or performance of any obligation under this Note, or any defined
Event of Default under the Credit Agreement, shall constitute an “Event of Default” under this
Note.

MISCELLANEOUS:

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     (a) 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.

     (b) Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of California.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

	 	 	 	 	 	 	 	 	 
	 	 	VIRCO MFG. CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert E. Dose	 	 
	 

	 	 	 	Title:
	 	Vice President — Finance, Secretary and	 	 
	 

	 	 	 	 	 	Treasurer

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