AMENDED AND RESTATED LOAN AGREEMENT
THIS AGREEMENT is executed effective the 15th day of April, 2003, between
EXCALIBUR HOLDINGS, INC., a Texas corporation ("Borrower"), EXCALIBUR
INDUSTRIES, INC.a Delaware corporation ("Industries"), EXCALIBUR STEEL, INC., an
Oklahoma corporation ("Steel"), EXCALIBUR AEROSPACE, INC., an Oklahoma
corporation ("Aerospace") EXCALIBUR SERVICES, INC., an Oklahoma corporation
("Services"), XXXXXXX MACHINE WORKS, INC., a Texas corporation ("Xxxxxxx"),
XXXXXXX XXXXXXXX, an individual ("Xxxxxxxx"), XXXXXXX X. XXXXXX, an individual
("Stuart") and STILLWATER NATIONAL BANK AND TRUST COMPANY, a national banking
association (the "Lender"). Industries, Steel, Aerospace, Services, Xxxxxxx,
Xxxxxxx and Xxxxxx are sometimes referred to hereafter, both individually and
collectively, as "Guarantor" or "Guarantors."
R E C I T A L S:
WHEREAS, the Borrower is currently indebted to the Lender by virtue of
prior loans and advances as evidenced by the following notes:
Lender Original
Note No. Date Amount Principal Interest
--------- ---------- ---------- ------------- ----------
5195800 06/27/2002 2,500,000 $2,500,000.00 56,951.54
5198300 06/27/2002 2,500,000 $2,222,353.04 52,081.69
The above described indebtedness is referred to hereafter as the "Prior Debt."
WHEREAS, the Prior Debt and agreements thereto are evidenced by various
loan agreements, promissory notes, security agreements, guaranties and other
instruments and agreements, all of which, collectively, are referred to
hereafter as the "Prior Loan Documents."
WHEREAS, there presently exist certain defaults under the terms of the
Prior Loan Documents;
WHEREAS, the Borrower is attempting to raise additional capital through a
private placement offering which includes preferred stock paying an annual
dividend;
WHEREAS, the Prior Loan Documents prohibit the declaration of dividends
without the Lender's consent;
WHEREAS, the Lender is willing to waive the existing defaults and consent
to the payment of certain dividends subject to the terms and conditions of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements between the
parties and the funds to be advanced to the Borrower, it is agreed as follows:
1. LENDING AGREEMENT. Subject to the terms and conditions hereinafter set
forth, Lender agrees to lend to Borrower, and the Borrower agrees to
borrow from the Lender, a sum not to exceed FIVE MILLION DOLLARS
($5,000,000).
2. BORROWER'S NOTES. The indebtedness shall be evidenced by the following
credit facilities:
2.1 Term Note I. Promissory Note of even date herewith in the principal
face amount of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS
($3,500,000.00) ("Term Note I"), which will be in form and substance
and payable on the terms approved by Lender. Interest only will be
paid monthly on the 15th day of each month commencing May 15, 2003,
and ending on August 15, 2003. Thereafter, the Borrower will make 31
equal monthly payments on the 15th day of each month in an amount
sufficient to fully amortize principal and interest on Term Note I
over 72 months. Term Note I shall mature and become due on April 15,
2006, at which time, the Borrower will make a balloon payment of the
entire outstanding principal balance together with all accrued
interest and other charges, if any.
2.2 Term Note II. Promissory Note of even date herewith in the principal
face amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) ("Term
Note II"), which will be in form and substance and payable on the
terms approved by Lender. Interest only will be paid monthly on the
15th day of each month commencing May 15, 2003, and ending on March
15, 2004. Term Note II shall mature and become due on the earlier of
receipt by the Borrower of proceeds from the Private Offering in an
amount equal to or greater than $1,000,000 or April 15, 2004. At
maturity, the Borrower will pay the entire outstanding principal
balance together with all accrued interest and other charges, if
any.
2.3 Revolving Line of Credit. The Lender will provide the Borrower a
revolving line of credit as follows:
2.3.1 Note. Promissory Note of even date herewith in the principal
face amount of ONE MILLION DOLLARS ($1,000,000.00) (the
"Revolving Note"), which will be in form and substance and
payable on the terms approved by Lender. It is specifically
agreed that the aggregate of advances made during the term of
the Revolving Note may exceed the face amount thereof, but the
unpaid principal balance due on the Revolving Note will not
exceed the lesser of (i) the Borrowing Base; or (ii) the face
amount of the Revolving Note.
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2.3.2 Advances. Advances under the Revolving Note will be limited to
the Borrowing Base. The Borrowing Base shall be determined on
a monthly basis upon the submission of a signed "Monthly
Borrowing Base Certificate" in form acceptable to the Lender.
Each Monthly Borrowing Base Certificate will be supported by a
current accounts receivable aging, and such other
documentation that may reasonably required by the Lender to
determine the Borrowing Base. After determination of the
Borrowing Base for any given month, Borrower may obtain
advances by submitting an "Advance Request" in form acceptable
to the Lender.
2.3.3 Maturity. Notwithstanding anything herein to the contrary the
Revolving Note will mature and become fully due and payable on
April 15, 2004.
2.4 Interest. Interest on each of Term Note I, Term Note II and the
Revolving Note will be paid at the interest rate equal to the Prime
Rate plus two percent (2 %) per annum, adjusted on each day on which
a change in the Prime Rate occurs (the "Interest Rate"). "Prime
Rate" means the prime rate as published in the "Money Rates Section"
of the Wall Street Journal, which rate is not necessarily the lowest
rate of interest charged by the Lender. All interest on the Term
Note will be calculated for the actual number of days elapsed at a
per diem charge based on a year consisting of 360 days.
2.5 Notation of Advances. The Lender shall have the right (acting at its
sole discretion with or without the consent of the Borrower) from
time make notations of advances by it to the Borrower and payments
to it by the Borrower on any liability ledger records maintained by
or for the Lender as to indebtedness of Borrower, and such ledger
shall be presumed correct until the contrary is established by
Borrower. Upon demand by the Lender at any time or from time to
time, the Borrower will confirm and admit by signed writing the
exact amount of indebtedness for principal and interest then
outstanding under this Agreement. Any billing statement or
accounting rendered by or for the Lender shall be conclusive and
fully binding on Borrower unless specific written notice of
exception is given to the Lender by Borrower within thirty (30) days
thereafter.
2.6 Authority to Request Advances. The Lender may make loans in any
amount and in any manner requested orally or in writing by any
officer or agent of the Borrower or by any person reasonably
believed by the Lender to be an officer or agent of the Borrower.
Loan proceeds may be disbursed by deposit in any deposit account of
the Borrower, by an instrument payable to Borrower.
2.7 Prepayment. The Borrower may prepay Term Note I, Term Note II or the
Revolving Note at any time, without premium or penalty. Each
prepayment will be applied by the Lender first to the payment of
unpaid fees and expenses, then to accrued interest on the Revolving
Note and then to the payment of principal. If at any time the
aggregate outstanding principal balance of the debt under the
Revolving Note exceeds the then amount of the Borrowing Base, the
Borrower shall immediately, without notice or demand, prepay the
Revolving Note in an amount equal to the excess.
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2.8 Use of Proceeds. The Borrower will use the proceeds of all loans
under this Agreement solely for lawful and authorized corporate
purposes in furtherance of the business presently conducted by the
Borrower.
2.9 Lending Restrictions. Notwithstanding any other provision of this
Agreement or the other Loan Documents, any advance herein provided
for will not be required to be made by the Lender: (a) if after
making such advance, the Lender would, as determined in the sole
discretion of the Lender, exercised in good faith, be in violation
of any regulatory requirements imposed by any branch of government
of the United States of America or any state thereof; (b) if any
event of Default has occurred and has not been cured by the Borrower
or waived by the Lender; (c) if, since the Closing Date and up to
the date of the advance request, any litigation or governmental
proceeding has been instituted against the Borrower, the Guarantor
or any of the Collateral, which, if decided adversely, will, in the
reasonable opinion of the Lender, adversely affect to a material
extent, the financial condition or continued operation of the
Borrower; or (d) if, since the Closing Date and up to the date of
the advance request, any loss, destruction, liens, claims or
encumbrances against any of the Collateral (other than those in
favor of the Lender) have occurred, been made or filed and have not
been removed or settled to the satisfaction of the Lender.
2.10 Prior Notes. The Prior Notes are hereby extinguished and replace by
Term Note I, term Note II and the Revolving Note and Term Note I,
Term Note II and the Revolving Note constitute the only indebtedness
currently owed to Lender.
3. RECOURSE. The indebtedness will be full recourse to the Borrower and the
Guarantors.
4. BORROWING BASE. "Borrowing Base" means, as of any given date, the sum of
the following: (1) eighty percent (80%),or at the Lender's sole discretion
any lesser percentage designated upon sixty (60) days notice, of Eligible
Trade Accounts Receivable of Debtor; plus (2) fifty percent (50%) of the
value of the inventory of Debtor, up to a maximum of One Million and
No/100 Dollars ($1,000,000.00) and subject to the following:
4.1 "Trade Accounts Receivable" means, as of any given date, all
accounts receivable of Debtor and the corporate Guarantors for goods
sold and delivered and services rendered by Debtor and the corporate
Guarantors in the ordinary course of the business presently
conducted by each of them and representing amounts then invoiced and
due and owing. A Trade Account Receivable shall be an "Eligible
Trade Account Receivable", and shall be included in the Borrowing
Base, only if and so long as it meets each and all of the following
requirements:
4.1.1 It is a valid, genuine and legally enforceable obligation,
subject to no defense, set off or counter-claim, of the
account debtor or other obligor named herein or in the records
of Borrower or the corporate Guarantors pertaining thereto,
and that neither the Borrower nor any corporate Guarantor has
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received from the account debtor or other obligor any
notification repudiating such obligation or asserting that
such obligation is subject to any defense, set off or
counterclaim; and
4.1.2 It is owned by the Borrower or any of the corporate Guarantors
free and clear of all interests, liens, attachments,
encumbrances and security interests except the security
interest granted to the Lender pursuant to this Agreement; and
4.1.3 The Account debtor or other obligor is located in the United
States; and
4.1.4 Not more than ninety (90) days have expired since the date of
invoice; or, if the Lender in its sole discretion accepts as
eligible a Trade Account Receivable which is due on a date
stated in the invoice, not more than thirty (30) days have
expired since the date stated; and
4.1.5 Neither the Borrower nor any of the corporate Guarantors has
received notice from the Lender that the credit of the account
debtor is not satisfactory to the Lender for any reason; and
4.1.6 The account debtor is not an entity in which the Borrower or
any corporate Guarantors has a controlling interest; and
4.1.7 Eligible Trade Accounts Receivable shall not include any
account receivable of the same account debtor to the Borrower
or any corporate Guarantors in excess of fifteen percent (15%)
of the then Eligible Trade Accounts Receivable calculated
after ineligible accounts; and
4.1.8 The entire receivable of one account debtor becomes ineligible
if more than ten percent (10%) of the total due is over ninety
(90) days past due, unless the ten percent (10%) over ninety
(90) days is attributable to an isolated dispute over a
specific invoice.
4.2 The value of Inventory used in determining the Borrowing Base shall
equal the value of raw material plus the value of finished product
and shall not include the value of any work in progress.
5. COLLATERAL SECURITY. The performance of all covenants and agreements
contained in this Loan Agreement and in the other documents executed or
delivered as a part of this transaction and the payment of the Note and
all renewals, amendments and modifications thereof shall be secured by the
following:
5.1 Security Agreement. The Borrower and the Guarantors will grant to
the Lender a security interest covering the following:
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5.1.1 Accounts. All of the Borrower's and Guarantors' accounts and
contracts receivable of any kind whether now existing or
hereafter arising (herein called the "Accounts"); all chattel
papers, documents and instruments relating to the Accounts;
and all rights now or hereafter existing in and to all
security agreements, leases, and other contracts securing or
otherwise relating to any Accounts or any such chattel papers,
documents and instruments;
5.1.2 Furniture, Fixtures, and Equipment. All of the Borrower's and
Guarantors' furniture, fixtures and equipment in all of its
forms whether now owned or hereafter acquired and wherever
located (herein called the "Equipment"); all parts thereof and
all accessions or additions thereto, whether now owned or
hereafter acquired;
5.1.3 General Intangibles. All of the Borrower's and Guarantors'
general intangibles of any kind whether now existing or
hereafter arising (herein called the "General Intangibles");
all chattel papers, documents and instruments relating to the
General Intangibles; and all rights now or hereafter existing
in and to all security agreements, leases, licenses, permits,
patents, distribution agreements and contracts securing or
otherwise relating to any General Intangibles or any such
chattel papers, documents and instruments and all of the
Borrower's and Guarantors' lien rights against other persons
whether statutory, contractual or by common law with respect
to the leases, Inventory or other collateral described in this
Agreement;
5.1.4 Inventory. All of the Borrower's and Guarantors' inventory in
all of its forms whether now owned or hereafter acquired and
wherever located (herein called the "Inventory"), and all
accessions or additions thereto and products thereof, whether
now owned or hereafter acquired;
5.1.5 Other. Without in any way limiting or modifying the foregoing
in any respect, all of the Borrower's and Guarantors' goods,
chattels, business records, contracts, contract rights,
advertising agreements, tax refunds, documents of title,
fixtures, insurance policies and proceeds, patents,
trademarks, service marks, logos, trade names, copyrights and
applications therefor, licenses, licensing fees, permits,
approvals, consents, certificates, stock, surveys, engineering
reports, tools, landscaping, machinery, furniture, furnishing,
business machines, appliances, vehicles, trailers, rolling
stock, deposits, security deposits, money, securities, claims,
demands, causes of action, refunds, rebates, income and all
other tangible and intangible real, personal or mixed property
whether now owned or hereafter acquired;
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5.1.6 Additional Property. Any additional Property from time to time
delivered to or deposited with Secured Party as security
pursuant to the terms of this Agreement; and
5.1.7 Proceeds. All proceeds, products, additions to, replacements
of, substitutions for and accessions of any and all Property
described above.
5.2 Guaranty Agreements. The Guarantors shall provide unconditional,
unlimited guaranties to guarantee the Indebtedness and all other
extensions of credit from the Lender to the Borrower or any of the
Guarantors.
5.3 Lockbox Agreement. The Lender and Borrower agree that (i) Lender
will establish a lockbox account (the "Lockbox") for the receipt of
payments on account and accounts receivable of the Borrower and the
Guarantors; (ii) the Borrower and the Guarantors will cooperate with
Lender to assure that all account debtors of the Borrower are
notified to make payments on account to the Lockbox; and (iii)
without limiting the requirement that all account debtors make
payment only to the Lockbox, any payments received directly by
Borrower or the Guarantors will be deposited before 11:00 a.m. the
following business day into the Lockbox. The Lockbox will be swept
by the Lender on a daily basis and the funds therein will be applied
to the principal balance on the Revolving Note, provided however,
that, on or about the 15th day of each month, the funds swept from
the lockbox will be applied first to pay the outstanding interest on
the Revolving Note and then to principal balance.
6. CONDITIONS OF LENDING. The obligation of the Lender to perform this
Agreement and to make the initial or any future advances under any of the
notes executed pursuant to the Agreement is subject to the continued
performance by the Borrower of the following conditions precedent:
6.1 Loan Documents; Collateral. The Loan Documents and all other
instruments and documents incidental to the transactions
contemplated hereby shall have been duly executed, acknowledged
(where appropriate) and delivered to the Lender by the Borrower and
the Guarantors, all in form and substance satisfactory to the
Lender.
6.2 Prohibitive Orders. No order, writ or injunction of any court or
administrative agency is in effect or is being sought prohibiting
the transactions contemplated by this Agreement or the other Loan
Documents.
6.3 Authority. The Lender shall have received a Certificate of
Incorporation, Certificate of Good Standing, a certified copy of the
Bylaws and certified copies of corporate resolutions and other
documents reasonably required to authorize the execution, delivery
and performance of the Loan Documents by the Borrower, all in form
and substance satisfactory to the Lender.
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6.4 No Default. The representations and warranties set forth in this
Agreement shall be true and correct on and as of the date of the
initial advance and each additional advance with the same effect as
if such representations and warranties had been made on and as of
such date and there shall have occurred and be continuing no
Default.
6.5 Opinion of Counsel. The Lender shall have received an opinion of
counsel for the Borrower and the Guarantors stating that:
6.5.1 Organization and Existence. The Borrower and corporate
Guarantors are corporations duly formed and validly existing
under the laws of their respective states of organization and
failure to qualify as a domesticated corporation in any state
in which the Borrower or Guarantors conducts business will not
impair the business of the Borrower or Guarantors;
6.5.2 Power and Authority. The Borrower and the Guarantors have the
power and have been duly authorized to execute, deliver and
perform this Agreement and the other Loan Documents;
6.5.3 Validity. The Loan Documents, when executed and delivered,
will be valid and legally binding indebtedness of the Borrower
and the Guarantors;
6.5.4 No Violations. Compliance by the Borrower and the Guarantors
with the Loan Documents will not violate any law, including,
without limitation, applicable usury laws, securities laws,
orders of public authorities, the Certificate of Incorporation
or Bylaws of the Borrower or Guarantors or any other
agreements or instruments binding on the Borrower or the
Guarantors; and
6.5.5 Collateral. The Loan Documents are entitled to the benefit of
the collateral security therein described and the Loan
Documents are enforceable in accordance with their respective
terms against the collateral security to which they relate,
except as limited by applicable bankruptcy, insolvency and
debtor relief laws.
6.6 Representations and Warranties. Each representation and
warranty set forth in this Agreement shall be true and correct
as of the date of borrowing, except for changes subsequent to
the date of this Agreement caused by transactions permitted
under the terms of this Agreement; and
6.7 No Default. There shall not exist any Event of Default under
this Agreement or any event which, with the giving of notice
or the lapse of time (or both) would become an Event of
Default thereunder; and
6.8 Deliveries. The Borrower and the Guarantors shall have
delivered to the Lender:
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6.8.1 Term Note I. Term Note I duly executed by the Borrower;
6.8.2 Term Note II. Term Note II duly executed by the Borrower;
6.8.3 Revolving Note. The Revolving Note duly executed by Borrower;
6.8.4 Security Agreement. A Security Agreement duly executed by the
Borrower and the Guarantors, in form and substance satisfactory to
the Lender, granting the Lender a security interest in all present
and future equipment, inventory, and accounts receivable of the
Debtor and the Guarantors;
6.8.5 Resolutions. Copies of resolutions of the board of directors of the
Borrower and each of the corporate Guarantors authorizing the
execution, delivery and performance of this Agreement, the Revolving
Note and the Security Agreement by the Borrower and the guaranties
by each of the corporate Guarantors;
6.8.6 Articles and Certificate. A copy of the articles of incorporation of
the Borrower and each corporate Guarantor and a certificate of good
standing as to the Borrower and each corporate Guarantor issued by
the secretary of state of the appropriate state;
6.8.7 Schedules. All collateral schedules, financing statements, security
interest, subordination agreements, releases and termination
statements which the Lender may request to assure the creation,
perfection and priority of the security interests created by the
Security Agreement.
6.8.8 Lock Box Agreement. Lock Box Agreement duly executed by the Borrower
and the Guarantors in form and substance satisfactory to the Lender,
defining how payments of accounts receivable are to be paid and
accounted for.
6.8.9 Appraisal. An appraisal of the Borrower's and Guarantors' equipment
which is satisfactory to the Lender.
6.8.10Guaranties. Guaranty Agreements in form and substance satisfactory
to the Lender executed by each of the Guarantors; and
6.8.11UCC Financing Statements. UCC Financing Statements describing the
collateral securing the repayment of the Indebtedness and UCC
Financing Statements for the Borrower and each of the corporate
Guarantors.
7. REPRESENTATIONS AND WARRANTIES. To induce the Lender to enter into this
Agreement and to make advances to the Borrower pursuant hereto, the
Borrower and the Guarantors jointly and severally represent and warrant to
the Lender that:
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7.1 Existence and Power. The Borrower and corporate Guarantors are and
will continue to be corporations duly formed and validly existing in
good standing under the laws of their respective states of
organization and are authorized and qualified to do business in each
state where, because of the nature of the activities or assets, such
qualification is required, except those states where failure to so
qualify will not have a material adverse effect; the Borrower and
the corporate Guarantors have adequate power, authority and legal
right to own, operate and hold the Collateral; the Borrower and the
corporate Guarantors are or will be at the time of acquisition, duly
authorized, qualified and licensed under all applicable laws,
regulations, ordinances or orders of public authorities to carry on
their business in the operation and ownership of the Collateral; the
Borrower and the corporate Guarantors have adequate authority, power
and legal right to enter into, execute, deliver and perform the
terms of the Loan Documents, to borrow money and to give security
for borrowings as contemplated by the Loan Documents and to
consummate the transactions contemplated thereby, and in doing so,
neither the Borrower nor the corporate Guarantors will violate any
law or the provisions of any articles, charter or bylaws or any
other agreement or instrument binding upon the Borrower, the
corporate Guarantors or the Collateral. The Loan Documents, upon
their execution and delivery, will constitute valid, legal and
binding Indebtedness of the Borrower and the Guarantors, enforceable
in accordance with their terms, subject only to applicable
bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditor's rights. The Borrower owns one hundred
percent (100%) of the issued and outstanding capital stock of each
of the corporate Guarantors.
7.2 No Usury. The transaction evidenced by this Agreement does not
violate any usury law or other law relating to the payment of
interest on loans.
7.3 Regulatory Compliance. The authorization, execution, delivery and
performance of this Agreement, Term Note I, Term Note II, the
Revolving Note, the Security Agreement and the Guaranties are not
and will not be subject to the jurisdiction, approval or consent of,
or to any requirement of registration with or notification to, any
federal, state or local regulatory body or administrative agency;
7.4 Financial Statements. Financial statements furnished to the Lender
by the Borrower and each of the Guarantors were prepared in
accordance with generally accepted accounting principles
consistently applied, except as expressly therein set forth. They
present fairly the financial condition of the Borrower and each of
the Guarantors as of the dates thereof. The annual reports disclose
fully all liabilities of the Borrower whether or not contingent,
with respect to any pension plan. Since the date of the most recent
financial statement, there has been no material adverse change in
the financial condition of the Borrower or any of the Guarantors;
7.5 Liabilities. Neither the Borrower nor any of the Guarantor has any
material liabilities, direct or contingent, except those to Lender
and those disclosed to the Lender;
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7.6 Full Disclosure. Neither this Agreement, the other Loan Documents
nor any statement or documents referred to herein or delivered to
the Lender by the Borrower, the Guarantors or any other party on
their behalf contains any untrue statement or omits to state a
material fact necessary to make the statements herein or therein not
misleading;
7.7 Litigation. Except as disclosed in writing to the Lender, to the
knowledge of the Borrower and the Guarantors, there is no action,
suit proceeding or investigation pending, or threatened against the
Borrower or the Guarantors which, if adversely determined, would
adversely affect the Borrower or the Guarantors or impair the
ability of the Borrower or the Guarantors to carry on their
businesses substantially as now conducted or contemplated or result
in any substantial liability not adequately covered by insurance;
7.8 No Default. The making and performance by the Borrower and the
Guarantors of this Agreement will not violate any provision or
constitute a default under any indenture, agreement or instrument to
which the Borrower or any of the Guarantors may be a party or by
which the Borrower, the Guarantors or any of the Collateral is bound
or affected;
7.9 Ownership of Collateral. The Borrower and/or the Guarantors have or
will acquire good and marketable title to the Collateral;
7.10 No Encumbrances. All assets of the Borrower and Guarantors are free
and clear of all liens, security interests and encumbrances, except
those specifically permitted by Lender. All pledged assets of the
corporate Guarantors are free and clear of all liens, security
interests and encumbrances, except interests, if any, specifically
approved by the Lender in writing, including the prior security
interest in certain equipment vested in Mr. Xxxxx Worth or his
affiliates;
7.11 Priority. When the financing statements delivered pursuant to this
Agreement are filed in the proper office where the Borrowers or
Guarantors are incorporated, the Lender will have a valid and
perfected first security interest in the Collateral described in the
Security Agreement, subject to no prior security interest,
assignment, lien or encumbrance except interests, if any,
specifically approved by the Lender in writing, including the prior
security interest in certain equipment vested in Mr. Xxxxx Worth or
his affiliates;
7.12 Permits. The Borrower and the Guarantors have, or will obtain, all
governmental and private permits, certificates, consents and
franchises which are material to the business, property, assets,
operations or condition, financial or otherwise, of the Borrower and
the Guarantors, to carry on their businesses as now being conducted.
All such governmental and private permits, certificates, consents
and franchises are, or will be, valid and subsisting, and there is
no existing violation thereof;
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7.13 Taxes. The Borrower and the Guarantor have filed all foreign,
federal, state and local tax returns which are required to be filed
and have paid or made provisions for payment of all taxes which have
or may become due pursuant to said returns or pursuant to any
assessment. Neither the Borrower nor the Guarantors know of any
basis for the assessment of any deficiency taxes;
7.14 Location of Business Records. The Borrower and the Guarantors will
give the Lender written notice of each location of the Borrower or
the Guarantors at which inventory and records of the Borrower and
the Guarantors pertaining to Collateral are kept. Except as such
notice is given, all records of the Borrower and the Guarantors
pertaining to the Collateral are and will continue to be kept at the
Borrower's and Guarantors' addresses as they appear at the beginning
of this Agreement, or at such other address as the Borrower or the
Guarantors designate for such purpose in a written notice to the
Lender.
7.15 ERISA. Each qualified retirement plan of the Borrower or the
Guarantors presently conforms and is administered in a manner
consistent with the Employee Retirement Income Security Act of 1974.
7.16 Survival of Representations. All representations and warranties made
by the Borrower and the Guarantors herein will survive the delivery
of the Loan Documents and the making of the loans evidenced thereby,
and any investigation at any time made by or on behalf of the Lender
will not diminish the Lender's right to rely thereon. All statements
contained in any certificate or other instrument delivered by or on
behalf of the Borrower or the Guarantors under or pursuant to this
Agreement or in connection with the transactions contemplated hereby
will constitute representations and warranties made by the Borrower
and the Guarantors hereunder.
8. AFFIRMATIVE COVENANTS. Until payment in full of the Indebtedness, the
Borrower and the Guarantors jointly and severally agree that, unless the
Lender otherwise consents in writing, the Borrower and the Guarantors will
perform or cause to be performed the following agreements:
8.1 Performance of Obligations. The Borrower and the Guarantors will
promptly and punctually perform all of the obligations hereunder and
under the Loan Documents, and under all other instruments executed
or delivered pursuant thereto;
8.2 Maintenance of Collateral. Maintain their properly in good working
order and condition; make all needful and proper repairs,
replacements, additions and improvements thereto.
8.3 Financial Reports and Condition. The Borrower and the Guarantors
will furnish or cause to be furnished to the Lender, prepared in
accordance with generally accepted accounting principles and
certified as to truth and accuracy by either the chief executive
officer or chief financial officer of the Borrower or Guarantor the
following:
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8.3.1 Weekly Borrowing Base Certificate. On a weekly basis, the Borrower
will provide a Weekly Borrowing Base Certificate in a form
acceptable to the Lender for reporting purposes only. For the
purposes of determining credit availability, the Borrowing Base is
determined on a monthly basis as provided above.
8.3.2 Annual Financial Statements. The Borrower and Guarantors will
furnish to the Lender their audited annual financial statement on or
before March 1st of each year.
8.3.3 Income Tax Returns. The Borrower and the Guarantors will furnish to
the Lender copies of their respective federal income tax returns and
requests for an extension of time in which to file within fifteen
(15) days after filing of same.
8.3.4 Monthly Financial Reports. Within fifteen (15) days after the close
of each month commencing with the month ending May 31, 2003, the
Borrower and Guarantors will furnish to the Lender the following:
1. Accounts Receivable Aging/Listings. A current aging of
accounts receivable of the Borrower and each corporate
Guarantor;
2. Inventory. A current listing of the inventory of the Borrower
and each corporate Guarators.
3. Balance Sheet. A balance sheet which demonstrates a "Liquidity
Ratio" of 1.0 to 1.0. The Borrower will provide the Lender
with within forty-five (45) days after the close of each of
its fiscal year's quarter information reasonably needed by the
Lender to determine the Liquidity Ratio. As used herein,
Liquidity Ratio shall be defined as the ratio of the
Borrower's current assets to the Borrower's current
liabilities. Notwithstanding anything herein to the contrary,
failure to obtain the stated Liquidity Ratio shall not be an
event of default until December 31, 2003.
4. Income Statement. An income statement which demonstrates a
"Debt Service Ratio" of not less than 1.25 to 1.0. As used
herein, Debt Service Ratio shall be defined as the ratio of
the Borrower's earnings before interest, taxes and
depreciation to Borrower's debt service. Notwithstanding
anything herein to the contrary, failure to obtain the stated
Debt Service Ratio shall not be an event of default until
December 31, 2003.
-10-
5. Cash Flow Statements. A statement of changes in cash and a
cash flow statement of the Borrower in form satisfactory to
the Lender
8.3.5 Other Information. At the Lender's request from time to time,
the Borrower and the Guarantors will provide the Lender with
such other information as the Lender may reasonably request
regarding the business affairs or financial condition of the
Borrower or the Guarantors and the Borrower will provide
access to the Lender at all reasonable times to all
agreements, purchase and sale contracts, maintenance
agreements and all other documents and information relating to
the Collateral.
8.4 Taxes. All taxes which hereafter become due and assessments,
governmental charges and levies which are hereafter imposed on the
Borrower, the Guarantors or their respective assets, income and
profits will be paid prior to the date on which penalties attach
thereto; provided that the Borrower will not be required to pay any
such charge which is being contested in good faith by proper
proceedings as to which adequate reserves have been established.
8.5 Tax on Indebtedness. The Borrower and the Guarantors hereby agree to
pay any and all taxes which may be levied or assessed directly or
indirectly on the Note, the Mortgage, any of the Loan Documents, or
the debt secured thereby, without regard to any law which may be
hereafter enacted imposing payment of the whole or any part thereof
upon the Lender, its successors or assigns; and, upon violation of
this agreement, or upon the rendering by any court of competent
jurisdiction of a decision that such an agreement by a Borrower or
Guarantor is legally inoperative, or if the rate of said tax, when
added to the rate of interest provided for in the Note, shall exceed
the then legal rate of interest, then, and in any such event, the
debt hereby secured, without deduction, shall, at the option of the
Lender, become immediately due and payable, anything contained in
the Loan Documents notwithstanding; provided that the Borrower's
obligation to pay such taxes shall exclude United States franchise
taxes and United States taxes imposed on or measured by Lender's net
income or net receipts;
8.6 Access. Permit any officer, employee, attorney or accountant for the
Lender or for any participant designated by the Lender, to inspect
the Collateral or to review, make extracts from, or copy any and all
of its corporate and financial books, records and properties of the
Borrower and the Guarantors at all times during ordinary business
hours.
8.7 Title; Pledge. The Borrower and the Guarantors agree to grant to the
Lender first perfected security interests covering all or any part
of the Collateral. The Borrower and the Guarantors will maintain and
defend good and marketable title to the Collateral free and clear of
all claims, liens or encumbrances except those in favor of the
Lender.
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8.8 Qualification; Licenses. The Borrower and the Guarantors will take
such actions or cause such actions to be taken as might be required
to maintain the Borrower's and the corporate Guarantors' corporate
existence and all governmental and private permits, licenses and
authorities of the Borrower and corporate Guarantors necessary or
desirable to the continuation of their businesses and will comply
with all statutes and governmental regulations.
8.9 Notices. The Borrower and the Guarantors will promptly give written
notice to the Lender of: (a) any litigation commenced against or
affecting the Borrower, the Guarantors or the Collateral; (b) any
dispute which exists between the Borrower or the Guarantors and any
governmental regulatory body or law enforcement authority relating
to any federal or state laws that could reasonably be expected to
have a material adverse effect on (i) the financial condition or
results of operations of the Borrower or the Guarantors, or (ii) the
ability of the Borrower or the Guarantors to perform their
obligations hereunder or under any other Loan Documents; (c) any
event of Default; (d) any change in the senior management of the
Borrower or the corporate Guarantors regardless of the reason for
such change (i.e. action by stockholders, board of directors, death
or retirement); and (e) any other matter which has resulted or could
be expected to result in a material adverse change in (i) the
financial condition or results of operations of the Borrower or the
Guarantors or (ii) the ability of the Borrower or the Guarantors to
perform under this Agreement or any of the Loan Documents.
8.10 Additional Documents. At any time and from time to time, upon
written request of the Lender, the Borrower and the Guarantors agree
to furnish any additional information and to execute any and all
additional documents, not inconsistent with the provisions of this
Agreement, which may be required by the Lender in connection with or
pursuant to any provision set forth in this Agreement or the Loan
Documents;
8.11 Compliance with Applicable Law. The Borrower and the Guarantors will
continuously comply with all applicable regulations, rules,
ordinances or orders of the United States of America, any state, or
any other jurisdiction, or of any agency of federal state and local
taxing authority or other agency which might materially and
adversely affect the business, operations or financial condition of
the Borrower or the Guarantors;
8.12 Books and Records. The Borrower and the Guarantors will keep and
maintain accurate books and records in accordance with sound
accounting practices consistently applied;
8.13 Insurance. Maintain property, liability, xxxxxxx'x compensation and
other forms of insurance in amounts designated at any time or from
time to time by the Lender;
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8.14 Notice to Existing Account Debtors. The Borrower and the Guarantors
shall provide notice in accordance with the Lockbox Agreement to all
existing account debtors;
8.15 Notice to New Account Debtors. The Borrower and the Guarantors shall
insert language into all new contracts notifying the contract party
that the Borrower's or Guarantors' right to payment under the
contract is pledged to the Lender and shall instruct the account
debtor to make such payments to the Lockbox; and
8.16 Operating Accounts. The Borrower and the Guarantors will conduct
their banking business through accounts established or to be
established with the Lender for all accounts, cash and cash
equivalents.
9. NEGATIVE COVENANTS. Until payment in full of the Indebtedness, the
Borrower and the Guarantors jointly and severally agree that unless the
Lender otherwise consents in writing, neither the Borrower nor the
Guarantors will perform or permit to be performed any of the following
acts:
9.1 Use of Loan Proceeds. Neither the Borrowers nor the Guarantors shall
permit any funds advanced to Borrower under this Loan Agreement to
be used for any purposes other than financing the businesses of the
Borrower and the corporate Guarantors;
9.2 Other Debt. Neither the Borrowers nor the Guarantors shall become or
remain liable in any manner in respect of any indebtedness or
contractual liability (including, without limitation, notes, bonds,
debentures, loans, guaranties, and pension liabilities, whether or
not contingent and whether or not subordinated), except indebtedness
arising under this Agreement, presently outstanding unsecured
indebtedness, if any, to the extent disclosed in the financial
statements, unsecured indebtedness, other than for money borrowed or
for the purchase of a capital asset, incurred in the ordinary course
of its business, which becomes due and must be fully satisfied
within twelve (12) months after the date on which it is incurred,
unsecured indebtedness subordinated in right of payment to all
indebtedness owed to the Lender pursuant to a debt subordination
agreement accepted or approved in writing by the Lender;
9.3 Insider Debt. Permit funds to be owing to the Borrower by the
directors or shareholders of the Borrower or the Guarantors, or
members of their families, on account of any loan, credit sale or
other transaction or event;
9.4 Contingent Liabilities. Neither the Borrower nor the Guarantors will
assume, guarantee, endorse or otherwise become contingently liable
for the indebtedness of any other person, firm or corporation,
except by the endorsement of negotiable instruments for deposit or
collection or other similar transactions in the ordinary course of
their business;
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9.5 Senior Debt. Neither the Borrower nor the Guarantors will take or
permit to be taken any action which would or might impair the senior
position of the Lender under the Loan Documents;
9.6 Creation of Liens. Neither the Borrowers nor the Guarantors shall
create, assume or suffer to exist any mortgage, pledge, lien, charge
or encumbrance on any of the Collateral excluding only encumbrances
to the Lender contemplated by this Agreement, except the security
interests created by the Security Agreement, liens for taxes or
assessments not yet due or contested in good faith by appropriate
proceedings, security interests approved by the Lender in writing,
at its sole discretion, and other liens, charges and encumbrances
incidental to the conduct of their business or the ownership of
their property which were not incurred in connection with the
borrowing of money or the purchase of property on credit and which
do not in the aggregate materially detract from the value of their
property or materially impair the use thereof in their business;
9.7 Disposition of Collateral. Neither the Borrowers nor the Guarantors
shall sell, convey, assign, transfer or otherwise dispose of any of
the Collateral or any other assets of the Borrower or the Guarantors
except for the use of inventory in the ordinary course of business.
In addition, neither the Borrowers nor the Guarantors shall enter
into a management agreement or similar agreement with any person
without the prior written consent of Lender;
9.8 Liquidation or Merger. Neither the Borrowers nor the Guarantors
shall liquidate, dissolve or enter into any consolidation, merger,
joint venture, syndicate, pool, management agreement or other
combination and neither the Borrowers nor the Guarantors shall
discontinue or substantially alter the normal operation of their
respective businesses.
9.9 Distribution. Neither the Borrowers nor the Guarantors shall: (a)
declare or pay any dividends, stock bonuses or any other
distributions to any stockholder or any other person; or (b)
authorize or make any other distribution to any stockholder,
subsidiary, affiliate or person of any of the assets or business of
the Borrower or the Guarantors;
9.10 Stock Redemption. Neither the Borrowers nor the Guarantors shall
purchase, acquire, redeem, retire or call or make any commitment to
purchase, acquire, redeem, retire or call any of the capital stock
or other equity instruments of the Borrower or the Guarantors.
Neither the Borrowers nor the Guarantors shall sell, transfer or
otherwise dispose of any of the capital stock of the Borrower or
Guarantors;
9.11 Excessive Compensation. Neither the Borrowers nor the Guarantors
shall pay excessive or unreasonable salaries, bonuses, fees,
commissions or other compensation;
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9.12 Investments. Neither the Borrowers nor the Guarantors shall purchase
stock or securities of, extend credit to or make investments in,
become liable as surety for, or guarantee or endorse any obligation
of, any person, firm or corporation, except direct obligations of
the United States and commercial lender deposits;
9.13 Margin Stock. Neither the Borrowers nor the Guarantors shall use any
of the proceeds received from the Lender for the purpose of
purchasing or carrying margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System;
9.14 Purchase of Property. Neither the Borrowers nor the Guarantors shall
expend or contract to expend funds for the purchase or lease of any
property, whether real, personal or mixed, except current assets
purchased in the ordinary course of business;
9.15 Default. Neither the Borrowers nor the Guarantors shall permit any
default or event of default to occur under any note, loan agreement,
lease, mortgage, contract for deed, security agreement or other
contractual obligation binding upon Borrower or the Guarantors;
9.16 Other Agreements. Neither the Borrowers nor the Guarantors shall
enter into any agreement that limits or restricts the ability of the
Borrower or the Guarantors to comply with the terms of the Loan
Documents.
10. EVENTS OF DEFAULT. Unless consented to by the Lender, the occurrence of
any of the following events will constitute a "Default" under the Loan
Documents:
10.1 Nonpayment of Note. Default in payment when due of any interest or
principal of any of the notes when and such failure shall continue
for five (5) calendar days.
10.2 Other Nonpayment. Default in payment when due of any other
indebtedness payable to the Lender under the terms of the Loan
Documents and such failure shall continue for five (5) calendar
days;
10.3 Breach of Agreement. Default by the Borrower or the Guarantors in
the performance or observance of any covenant contained in the Loan
Documents or under the terms of any other instrument delivered to
the Lender in connection with any of the Loan Documents when such
failure continues for a period of ten (10) calendar days;
10.4 Representations and Warranties. Any representation, statement,
certificate, schedule or report made or furnished to the Lender on
behalf of the Borrower or the Guarantors proves to be false or
erroneous in any material respect at the time of the making thereof
or any warranty ceases to be complied with in any material respect;
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10.5 Default on Substantial Obligations. The Borrower or any of the
Guarantors shall fail to pay when due any substantial liability or
liabilities owed to persons other than the Lender; or the maturity
of any such liability or liabilities shall be accelerated; or any
breach, default or event of default shall occur under any indenture,
loan agreement, note or agreement pertaining to any such liability,
entitling a creditor or representative of creditors of the Borrower
or the Guarantors, acting with or without the consent or concurrence
of other creditors and with or without notice or a period of grace,
to accelerate the maturity of or demand payment of any such
liability, whether such breach, default or event of default is
waived by the creditor so entitled. "Substantial" for these
purposes, means in excess of Twenty-Five Thousand and No/100 Dollars
($25,000);
10.6 Insolvency. The making of an assignment for the benefit of the
creditors of the Borrower or the Guarantors;
10.7 Bankruptcy. The institution of bankruptcy, reorganization,
liquidation or receivership proceedings by or against the Borrower
or the Guarantors under the Bankruptcy Code, as amended, or under
any other laws, whether state or federal, for the relief of Borrower
or Guarantors, now or hereafter existing;
10.8 Receivership. The appointment of a receiver or trustee for the
Borrower, the Guarantors or for any substantial part of the
Collateral, or the discontinuance of business or a material adverse
change in the nature of the business of the Borrower or the
Guarantors or in the financial condition of the Borrower or the
Guarantors;
10.9 Benefit Plan Insecurity. Any event or reportable event which the
Lender in good faith determines to constitute potential grounds for
the termination of any employee benefit plan or other plan
maintained for employees of the Borrower or the Guarantors, or for
the appointment of a trustee to administer any such plan, shall have
occurred and be continuing thirty (30) calendar days after written
notice to such effect shall have been given by the Lender to the
Borrower or the Guarantors; or any such plan shall be terminated, or
a trustee shall be appointed to administer any such plan; or the
Pension Benefit Guaranty Corporation shall institute proceedings to
terminate any such plan or to appoint a trustee to administer any
such plan;
10.10 Judgment. Entry by any court of a final judgment against the
Borrower or any of the Guarantors or an attachment of any portion of
the Collateral;
10.11 Termination of Corporate Existence. The cessation by the Borrower or
the corporate Guarantors to be a validly existing corporation under
the laws of their respective states of organization; or
10.12 Failure of Liens. Failure of the Lender's security interests
covering the Collateral to constitute first and prior liens on any
of the Collateral.
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11. REMEDIES. On the occurrence of an event of Default which has not been
timely cured, the Lender may terminate all Indebtedness of the Lender
under the Loan Documents, including, without limitation, any obligation to
make advances under the Revolver, and may exercise any one or more of the
following options:
11.1 Termination of Lender Obligations. The Lender may terminate the
obligations of the Lender under this Agreement.
11.2 Acceleration. The Lender may declare the Indebtedness evidenced to
be immediately due and payable, and the same shall thereupon be
immediately due and payable, without notice or presentment or other
demand, and the Lender thereupon may exercise and enforce all rights
and remedies available to it to collect the Indebtedness;
11.3 Selective Enforcement. In the event the Lender elects to selectively
and successively enforce the Lender's rights under any one or more
of the instruments securing payment of the Indebtedness, such action
will not be deemed a waiver or discharge of any other lien or
encumbrance securing payment of the Indebtedness until such time as
the Lender has been paid in full all sums advanced by the Lender;
11.4 Waiver of Event of Default. The Lender may, by an instrument in
writing signed by the Lender, waive any event of Default that has
occurred and any of the consequences of such event of Default; and
in such event, the Lender, the Borrower and the Guarantors will be
restored to their respective former positions, rights and
Indebtedness under the Loan Documents. Any event of Default so
waived will, for all purposes of this Agreement, be deemed to have
been cured and not to be continuing, but no such waiver will extend
to any subsequent or other event of Default or impair any
consequence of such subsequent or other event of Default. The rights
and remedies of the Lender shall be cumulative and the exercise or
enforcement of any one right or remedy shall neither be a condition
to nor bar the exercise and enforcement of any other;
11.5 Performance by Lender. In the event the Borrower or the Guarantors
fail to cure any Default in the time provided by the Lender, the
Lender will at any time thereafter have the right (but not the
obligation) to pay any claim or lien (whether prior or subordinate
to liens held by the Lender) affecting the Collateral and to take
possession of the Collateral in such manner as the Lender
determines. The Borrower and the Guarantors hereby authorize the
Lender to increase the indebtedness owing by the Borrower to the
Lender by the cost of satisfying claims against the Collateral and
the cost of repossession of the Collateral and agrees that the Loan
Documents will evidence and secure payment of such costs whether or
not the total funds advanced exceed the face amount of the Loan
Documents;
11.6 Cumulative Remedies. No failure on the part of the Lender to
exercise and no delay in exercising any right hereunder will operate
as a waiver thereof, nor will any single or partial exercise by the
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Lender of any right hereunder preclude any other or further right of
exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not alternative; and
11.7 Setoff. Regardless of the adequacy of any other Collateral held by
the Lender, any deposits or other sums credited by or due from the
Lender to the Borrower or any of the Guarantors will at all times
constitute collateral security for all of the Indebtedness of the
Borrower and the Guarantors and may be set off against any and all
liabilities, direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of the Borrower or
the Guarantors to the Lender. The rights granted by this paragraph
will be in addition to the rights of the Lender under any statutory
lien.
12. RELEASE. Borrower and Guarantors hereby jointly and severally release,
acquit and forever discharge the Lender and the Lender's subsidiaries,
affiliates, officers, directors, shareholders, agents, employees,
servants, attorneys and representatives, as well as the respective heirs,
personal representatives, successors and assigns of any and all of them
(hereafter collectively called the "Released Lender Parties") from any and
all claims, demands, debts, actions, causes of action, suits, contracts,
agreements, obligations, accounts, defenses, offsets against indebtedness
and liabilities of any kind or character whatsoever, known or unknown,
suspected or unsuspected, in contract or in tort, at law or in equity,
including without implied limitation, such claims and defenses as fraud,
mistake, duress and usury, which the Borrower or Guarantor ever had, now
have, or might hereafter have against the Released Lender Parties, jointly
or severally, for or by reason of any matter, cause or thing whatsoever
occurring prior to the date of this Agreement, whether or not related in
whole or in part, directly or indirectly to the Borrower's or Guarantor's
indebtedness. In addition, the Borrower and Guarantor agree not to
commence, join in, prosecute or participate in any suit or other
proceeding in a position which is adverse to any of the Released Lender
Parties arising directly or indirectly from any of the foregoing matters.
13. MISCELLANEOUS. It is further agreed as follows:
13.1 Recitals. The recitals are hereby acknowledged by the parties to be
true and correct and are adopted and incorporated herein as material
terms of this Agreement.
13.2 Fees. In partial consideration of the extension of credit
contemplated under this Agreement, the Borrower shall pay to the
Lender origination fees in the amount of 1.5% of the original
principal balances of Term Note I and the Revolving Note and of .5%
of the original principal balance of Term Note II. The Borrower
shall also pay a fee of $5,000 in partial consideration of the
Lender's waiver of financial covenant defaults in connection with
the Prior Loan Documents and of the Lender's consent to future
distributions.
-18-
13.3 Hold Harmless. The Borrower and the Guarantors hereby agree to
indemnify and hold the Lender harmless from all liability, loss,
damage or expense, including reasonable attorney's fees, whether
incurred under retainer, salary or otherwise, that the Lender may
incur in good faith in compliance with or the enforcement of the
terms of this Agreement or any of the Loan Documents.
13.4 Expenses. The Borrower will pay all reasonable expenses (including
legal expenses and attorney's fees) of every kind resulting from any
future modification or enforcement of the Loan Documents.
13.5 Supersession. It is agreed and understood between the Borrower, the
Guarantors and the Lender that: (a) except to the extent the Prior
Loans Documents are amended hereby, the Prior Loans will remain in
full force and effect; (b) the Borrower and Guarantor hereby adopt,
confirm and reaffirm each and every promise, representation,
warranty and covenant set forth in each of the Prior Loan Documents
as fully as if each of such matters were restated and set forth in
this Agreement; and (c) the execution of this Agreement will not
discharge, interrupt, impair, xxxxx or otherwise modify the priority
or the validity of any lien or security interest securing payment of
the indebtedness evidenced by the Prior Loan Documents.
13.6 Notices. All notices, requests and demands will be served by first
class or express mail, postage prepaid, or sent by telex, telegram,
telecopy or other similar form of rapid transmission confirmed by
mailing written confirmation at substantially the same time as such
rapid transmission, as follows:
The Borrower and
the Guarantors- 00000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: CFO
Fax: (000) 000-0000
With a copy to- Xxxxxx X. XxXxxxxxx
Xxxxxx & Xxxxx, LLP
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
The Lender - Stillwater National Lender and Trust Company
0000 X. Xxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Executive Vice President
Fax: (000) 000-0000
With a copy to - Xxxxx X. Xxxxx
Xxxxxx & Xxxxxxx, P.C.
000 X. Xxxxxxxx
0000 Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
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or at such other address as any party designates for such purpose in
a written notice to the other parties. Notices will be deemed to
have been given on the date notice is sent by rapid transmission or
three business days after notice is placed in the mail, properly
addressed, postage prepaid.
13.7 Construction. Nothing contained in this Agreement will be construed
to constitute the Lender as a joint venturer with the Borrower or
the Guarantors or to constitute a partnership. The descriptive
headings of the paragraphs of this Agreement are for convenience
only and are not to be used in the construction of the content of
this Agreement. This Agreement may be executed in multiple
counterparts, each of which will be an original instrument, but all
of which will constitute one agreement.
13.8 Venue. This Agreement and the documents issued hereunder are
executed and delivered as an incident to a lending transaction
negotiated and to be performed in Tulsa, Tulsa County, Oklahoma. The
Loan Documents are intended to constitute a contract made under the
laws of the State of Oklahoma and to be construed in accordance with
the internal laws of said state. The Borrower, the Guarantors and
the Lender hereby waive all objections and consent to the
jurisdiction and venue of any state or federal court sitting in
Tulsa County, Oklahoma.
13.9 Severability. In case any one or more of the provisions contained in
the Loan Documents should be invalid, illegal or unenforceable in
any respect in any jurisdiction, the validity, legality and
enforceability of such provision or provisions will not in any way
be affected or impaired thereby in any other jurisdiction; and the
validity, legality and enforceability of the remaining provisions
contained herein and therein will not in any way be affected or
impaired thereby.
13.10 No Oral Modification. This Agreement may not be amended, altered,
modified or changed verbally, but only by an agreement in writing
signed by the party against whom enforcement of any amendment,
waiver, change, modification or discharge is sought.
13.11 Extension of Loan Term. It is understood that the Lender is under no
obligation to extend the term of this Agreement beyond the maturity
of any of the notes and that any such extension will be made at the
Lender's sole discretion. Any such extension will be evidenced by
the acceptance by the Lender of a promissory note renewing and
extending the time of payment of any of the notes on terms
acceptable to the Lender.
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13.12 No Waiver. No advance of loan proceeds under any of the Loan
Documents will constitute a waiver of any of the representations,
warranties, conditions or covenants of the Borrower or the
Guarantors under the Loan Documents. In the event the Borrower or
the Guarantors are unable to satisfy any warranty, condition or
covenant contained in the Loan Documents, no advance of loan
proceeds will preclude the Lender from thereafter declaring such
inability to be an event of Default.
13.13 Exclusive Benefit. All provisions of the Loan Documents are for the
sole and exclusive benefit of the Lender, the Borrower and the
Guarantors and no other person will have standing to require
satisfaction of the provisions thereof or be entitled to assume that
advances thereunder will not be made by the Lender in the absence of
strict compliance with the provisions of the Loan Documents. Any and
all provisions of the Loan Documents may be waived by the Lender in
whole or in part at any time if, in the sole discretion of the
Lender, it is advisable to do so.
13.14 Application of Loan Proceeds. The Lender may apply the loan proceeds
under Term Note I, Term Note II or the Revolving Note to the
satisfaction of any condition, warranty or covenant of the Borrower
under any of the Loan Documents, and any proceeds so applied will be
considered as a part of the loan proceeds advanced under Term Note
I, Term Note II or the Revolving Note will be secured by the Loan
Documents.
13.15 Binding Effect. This Agreement will be binding on the Borrower, the
Guarantors and their successors and permitted assigns and will inure
to the benefit of the Lender and the Lender's successors and
assigns.
13.16 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be an original instrument, but all
of which will constitute one agreement.
IN WITNESS WHEREOF, the Borrower, the Guarantors and the Lender have duly
executed this Agreement effective the date first above written.
EXCALIBUR HOLDINGS, INC.,
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
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EXCALIBUR INDUSTRIES, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
EXCALIBUR STEEL INC.,
an Oklahoma corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
EXCALIBUR AEROSPACE, INC.
an Oklahoma corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
EXCALIBUR SERVICES, INC.
an Oklahoma corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
XXXXXXX MACHINE WORKS, INC.
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
XXXXXXX XXXXXXXX, individually
-22-
/s/ Xxxxxxx X.X. Xxxxxx
-----------------------
XXXXXXX X. XXXXXX, individually
STILLWATER NATIONAL BANK AND
TRUST COMPANY, a national
banking association
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
(the "Lender")
-23-
