BANK1ONE
BUSINESS LOAN AGREEMENT (ASSET BASED)
Borrower: Engineered Wire Products, Inc. Lender: Bank One, N A with its main office at Columbus, Ohio
1200 North Warpole Street Lima Business Xxxxxxx XXX
Xxxxx Xxxxxxxx, XX 00000 000 X Xxxx Xxxxxx. 0xx Xxxxx
Xxxx, XX 00000
THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated January 5, 2004, is made and
executed between Engineered Wire Products, Inc ("Borrower") and Bank One, N A
with its main office at Columbus, Ohio ('Lender") on the following terms and
conditions, Borrower has received prior commercial loans from Lander or has
applied to Lender for a commercial loan or loans or other financial
accommodations, Including those which may be described on any exhibit or
schedule attached to this Agreement ("Loan"). Borrower understands and agrees
that: (A) in granting, renewing, or extending any Loan, Lander Is relying upon
Borrower's representations, warranties, and agreements as set forth In this
Agreement, and (B) all such Loans shall be and remain subject to the terms and
conditions of this Agreement.
TERM. This Agreement shall be effective as of January 5, 2004, and shall
continue in full force and effect until such time as all of Borrower's Loans in
favor of Lender have been paid in full, in principal, interest, coats, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement
LINE OF CREDIT Lender agrees to make Advances to Borrower from time to time from
the date of this Agreement to the Expiration Date, provided the aggregate amount
of such Advances outstanding at any time does not exceed the Borrowing Base
Within the foregoing limits, Borrower may borrow, partially or wholly prepay,
and reborrow under this Agreement as follows
Conditions Precedent to Each Advance. Lender's obligation to make any
Advance to or for the account of Borrower under this Agreement is subject
to the following conditions precedent, with all documents, instruments,
opinions, reports, and other items required under this Agreement to be in
form and substance satisfactory to Lender:
(1) Lander shall have received evidence that this Agreement and all
Related Documents have been duly authorized, executed, and delivered
by Borrower to Lender.
(2) Lender shall have received such opinions of counsel, supplemental
opinions, and documents as Lender may request
(3) The security interests in the Collateral shall have been duly
authorized, created, and perfected with first lien priority and shall
be in full force and effect
(4) All guaranties required by Lender for the credit facility(ies) shall
have been executed by each Guarantor, delivered to Lender, and be in
full force and effect
(5) Lender, at its option and for its sole benefit, shall have conducted
an audit of Borrower's Accounts, Inventory, books, records, and
operations, and Lender shall be satisfied as to their condition
(6) Borrower shall have paid to Lender all fees, costs, and expenses
specified in this Agreement and the Related Documents as are then due
and payable
(7) There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement, and
Borrower shall have delivered to Lender the compliance certificate
called for in the paragraph below titled "Compliance Certificate "
Making Loan Advances. Advances under this credit facility, as well as
directions for payment from Borrower's accounts, may be requested orally or
in writing by authorized persons Lender may, but need not, require that all
oral requests be confirmed in writing. Each Advance shall be conclusively
deemed to have been made at the request of and for the benefit of Borrower
(1) when credited to any deposit account of Borrower maintained with Lander
or (2) when advanced in accordance with the instructions of an authorized
person Lender, et its option, may set a cutoff time, after which all
requests for Advances will be treated as having been requested on the next
succeeding Business Day
Mandatory Loan Repayments. If at any time the aggregate principal amount of
the outstanding Advances shall exceed the applicable Borrowing Base.
Borrower, immediately upon written or oral notice from Lender, shall pay to
Lender an amount equal to the difference between the outstanding principal
balance of the Advances and the Borrowing Base On the Expiration Date,
Borrower shall pay to Lender in full the aggregate unpaid principal amount
of all Advances then outstanding and all accrued unpaid interest, together
with all other applicable fees, costs and charges, if any, not yet paid
Loan Account. Lender shall maintain on its books a record of account in
which Lender shall make entries for each Advance and such other debits and
credits as shall be appropriate in connection with the credit facility
Lender shall provide Borrower with periodic statements of Borrower's
account, which statements shall be considered to be correct and
conclusively binding on Borrower unless Borrower notifies Lender to the
contrary within thirty (30) days after Borrower's receipt of any such
statement which Borrower deems to be incorrect
COLLATERAL. To secure payment of the Primary Credit Facility and performance of
all other Loan, obligations and duties owed by Borrower to Lender, Borrower (end
others, it required) shall grant to Lender Security interests in such property
and assets as Lender may require Lender's Security Interests in the Collateral
shall be continuing hens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance With
respect to the Collateral, Borrower agrees and represents and warrants to
Lender:
Perfection of Security interests, Borrower agrees to execute financing
statements and all documents perfecting Lender's Security Interest and to
take whatever other actions era requested by Lender to perfect and continue
Lender's Security Interests in the Collateral. Upon request of Lender,
Borrower will deliver to Lender any and oil of the documents evidencing or
constituting the Collateral, and Borrower will note Lender's interest upon
any and all chattel paper and instruments if not delivered to Lender for
possession by Lender Contemporaneous with the execution of this Agreement,
Borrower will execute one or more UCC financing statements and any similar
statements as may be required by applicable law, and Lender will file such
financing statements and all such similar statements in the appropriate
location or locations. Borrower hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect or to continue any Security Interest Lender may at any time, and
without further authorization from Borrower, file a carbon, photograph,
facsimile, or other reproduction of any financing statement for use as a
financing statement Borrower will reimburse Lender for all expenses for the
perfection, termination, and the continuation of the perfection of Lender's
security interest in the Collateral. Borrower promptly will notify Lender
before any change in Borrower's name including any change to the assumed
business names of Borrower. Borrower also promptly will notify Lender
before any change in Borrower's Social Security Number or Employer
Identification Number. Borrower further agrees to notify Lender in writing
prior to any change in address or location of Borrower's principal
governance office or should Borrower merge or consolidate with any other
entity
Collateral Records. Borrower does now, and at all times hereafter shall,
keep correct and accurate records of the Collateral, all of which records
shall be available to Lender or Lender's representative upon demand for
inspection and copying at any reasonable time. With respect to the
Accounts, Borrower agrees to keep and maintain such records as Lender may
require, including without limitation information concerning Eligible
Accounts and Account balances and agings Records related to Accounts
(Receivables) are or will be located at Borrower's headquarters. With
respect to the inventory, Borrower agrees to keep and maintain such records
as Lender may require, including without limitation information concerning
Eligible inventory and records itemizing and describing the kind, type,
quality, and quantity of Inventory, Borrower's Inventory costs and selling
prices, and the daily withdrawals and additions to Inventory Records
related to Inventory are or will be located at Borrower's headquarters The
above is an accurate and complete list of all locations at which Borrower
keeps or maintains business records concerning Borrower's collateral
Collateral Schedules. Concurrently with the execution and delivery of this
Agreement, Borrower shall execute and deliver to Lender schedules of
Accounts and Inventory and schedules of Eligible Accounts and Eligible
Inventory in form and substance satisfactory to the Lender. Thereafter
supplemental schedules shall be delivered according to the following
schedule With respect to Eligible Accounts, schedules shall be delivered
with the Borrowing Base certificate With respect to Eligible Inventory,
schedules shall be delivered with the Borrowing Base certificate
Representations and Warranties Concerning Accounts. With respect to the
Accounts, Borrower represents and warrants to Lender (1) Each Account
represented by Borrower to be an Eligible Account for purposes of this
Agreement conforms to the requirements of the definition of an Eligible
Account, (2) All Account information listed on schedules delivered to
Lander will be true and correct, subject to immaterial variance; and (3)
Lender, its assigns, or agents shall have the right at any time end at
Borrower's expense to inspect, examine, and audit Borrower's records end to
confirm with Account Debtors the accuracy of such Accounts
Representations and Warranties Concerning Inventory. With respect to the
Inventory, Borrower represents and warrants to Lender (1) All Inventory
represented by Borrower to be Eligible Inventory for purposes of this
Agreement conforms to the requirements of the definition of Eligible
Inventory, (2) All inventory values listed on schedules delivered to Lander
will be true and correct, subject to immaterial variance;
(3) The value of the Inventory will be determined on a consistent
accounting basis, 14) Except as agreed to the contrary by Lender in
writing, all Eligible Inventory is now and at all times hereafter will be
in Borrower's physical possession and shall not be held by others on
consignment, sale on approval, or sale or return; (5) Except as reflected
in the Inventory schedules delivered to Lender, all Eligible Inventory is
now and at all times hereafter will be of good and merchantable quality,
free from defects, (6) Eligible Inventory is not now and will not at any
time hereafter be stored with a belles, warehouseman, or similar party
without Lender's prior written consent, and, in such event, Borrower will
concurrently at the time of bailment cause any such belles, warehouseman,
or similar party to issue and deliver to Lender, in form acceptable to
Lender, warehouse receipts in Lender name evidencing the storage of
Inventory; and 171 Lender, Its assigns, or agents shall have the right at
any time and at Borrower's expense to inspect and examine the Inventory and
to check and test the same as to quality, quantity, value, and condition.
CONDITIONS PRECEDENT TD EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following documents
for the Loan: (1) the Note; 12) Security Agreements granting to Lender
security interests in the Collateral, (31 financing statements perfecting
Lender's Security Interests; 14) evidence of insurance as required below;
(5) together with all such Related Documents as Lender may require for the
Loan, all in form and substance satisfactory to Lender and Lender's counsel
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents. In addition, Borrower shall have provided such other
resolutions, authorizations, documents and instruments as Lender Or its
Counsel, may require.
Fees and Expenses. Under This Agreement Borrower shall have paid to Lender
all fees, costs, and expenses specified in this Agreement and the Related
Documents as are then due and payable
Representations and Warranties. The representations and warranties set
forth in this Agreement, In the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct
No Event of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement
or under any Related Document
REPRESENTATIONS AND WARRANTIES Borrower represents and warrants to , and
covenants and agrees with, Lender that, as of the date of this Agreement, as of
the date of each Advance, as of the date of any renewal, extension or
modification, and at all times any Indebtedness exists
Organization. Borrower is a corporation for profit which is, and at all
times shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of the State of Ohio Borrower is duly
authorized to transact business in all other states in which Borrower is
doing business, having obtained all necessary filings, governmental
licenses and approvals for each state in which Borrower is doing business
Specifically, Borrower is, and at all times shall be, duly qualified as a
foreign corporation in all states in which the failure to so qualify would
have a material adverse effect on its business or financial condition.
Borrower has the full power and authority to own its properties and to
transact the business in which it is presently engaged or presently
proposes to engage. Borrower maintains an office at 0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx Xxxxxxxx, XX 00000 Unless Borrower has designated otherwise
in writing, the principal office is the office at which Borrower keeps its
books and records including its records concerning the Collateral Borrower
will notify Lender prior to any change in the location of Borrower's state
of organization or any change in Borrower's name Borrower shall do all
things necessary to preserve and to keep in full force and effect its
existence, rights and privileges, and shall comply with all regulations,
rules, ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to Borrower and Borrower's
business activities
Authorization Borrower's execution, delivery, and performance of this
Agreement and all the Related Documents have been duly authorized by all
necessary action by Borrower and do riot conflict with, result in a
violation of, or constitute a default under 11) any provision of Borrower's
articles of incorporation or organization, or bylaws, code of regulations,
or any agreement or other instrument binding upon Borrower or (2) any law,
governmental regulation, court decree, or order applicable to Borrower or
to Borrower's properties. Borrower has the power and authority to execute
and deliver the Note and the Related Documents and, if applicable, to grant
Collateral as security for the Indebtedness
Financial Information, Each of Borrower's financial statements supplied to
Lender truly and completely disclosed Borrower's financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender Borrower has no material contingent
obligations except as disclosed in such financial statements
Legal Effect. This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not
presently due and payable. Borrower owns and has good title to all of
Borrower's properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such
properties All of Borrower's properties are titled in Borrower's legal
name, and Borrower has not used or filed a financing statement under any
other name for at least the last five (5) years.
Environmental Matters end Indemnity. Except as disclosed to Lender in
writing prior to the execution of this Agreement, Borrower represents and
warrants that (1) During the period of ownership, use or control of the
Assets (which term, for all purposes of this section, shall include all
plants, sites and facilities presently or formerly owned, operated,
controlled or leased by the Borrower or any Grantor), Is) there has been no
violation of any Environmental Laws, and (b) there has been no use,
generation, manufacture, storage, treatment, refinement, transportation,
disposal, release or threatened release of any Hazardous Substance by any
person on, under, about or from any of the Assets, (2) Borrower has no
knowledge of, or reason to believe that, during the period prior to the
ownership, use or control of any of the Assets lair defined in clause 11)
above) by Borrower or any Grantor, there has been (a) any breach or
violation of any Environmental Laws by any prior owners or occupants of any
of the Assets, or (b) any use, generation, manufacture, storage, treatment,
refinement, transportation, disposal, release or threatened release of any
Hazardous Substance by any person on, under, about or from any of the
Assets, and (3) neither Borrower nor any Grantor have received any notice
of, nor have any knowledge of, any actual or threatened claim, legal
proceeding or investigation regarding Borrower, any Grantor or any of the
Assets (as defined in clause (1) above) related to Environmental Laws The
representations and warranties, contained herein are based on Borrower's
due diligence in investigating all of the Assets for Hazardous Substances
Borrower hereby (1) releases and waives any future claims against any
indemnified Party for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any Environmental Laws, and
12) agrees to defend, indemnify and hold harmless each Indemnified Party
against any and all obligations, actions, judgments, suits, claims, losses,
liabilities, damages, penalties, disbursements, costs and expenses
(including, without limitation, reasonable attorneys' and consultants'
fees), of any kind or nature, which any Indemnified Party may directly or
indirectly sustain or suffer resulting from, relating to, arising Out of or
arising as a consequence of Is) any breach of this section or the
'Environmental Compliance and Reports' section below, (b) any use,
generation, manufacture, storage, treatment, refinement, transportation,
disposal, release, or threatened release of any Hazardous Substance on,
under, about or from any of the Assets, whether occurring during or prior
to Borrower's or any Grantor's ownership of any of the Assets, and whether
or not the same was or should have been known to Borrower, (c) any
investigatory or remedial action involving any of the Assets, the
operations conducted at any of the Assets or any other operations of
Borrower, any Grantor or any occupant at any of the Assets that is required
by any Environmental Laws and (d) the contamination of any of the Assets by
any Hazardous Substances, by any means whatsoever (including, without
limitation, any migration of any Hazardous Substances onto any of the
Assets, present or future) BORROWER SHALL INDEMNIFY THE RESPECTIVE
INDEMNIFIED PARTY REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS,
CIRCUMSTANCE OR CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED
IN WHOLE DR IN PART BY THE RESPECTIVE INDEMNIFIED PARTY'S SIMPLE (BUT NOT
GROSS) NEGLIGENCE The provisions of this section, including the obligation
to indemnify, shall survive the payment of the Indebtedness and the
termination, expiration or satisfaction of this Agreement and shall rot be
affected by Lender's or any other Indemnified Party's acquisition of any
interest in any of the Assets, whether by foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which
may materially adversely affect Borrower's financial condition or
properties, other than litigation, Claims, or other events, if any, that
have been disclosed to and acknowledged by Lender in writing
Use of Loan Proceeds. No portion of any Advance or Loan shall be used
directly or indirectly to purchase ineligible securities, as defined by
applicable regulations of the Federal Reserve Board, underwritten by any
affiliate BANK ONE CORPORATION during the underwriting period and for 30
days thereafter
Taxes. To the best of Borrowers knowledge, all of Borrower's tax returns
and reports that are or were required to be filed, have been filed, and all
taxes, assessments end other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith
in the ordinary course of business and for which adequate reserves have
been provided.
Lien Priority Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or
effecting any of the Collateral directly or indirectly securing repayment
of Borrower's Indebtedness
Binding Effect. This Agreement, the Note, all Security Agreements (if any),
and all Related Documents are binding upon the signers thereof, as well as
upon their successors, representatives and assigns, and are legally
enforceable in accordance with their respective terms
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will
Notices of Claims and Litigation. Promptly inform Lender in writing of Ill
all material adverse changes in Borrower's financial condition, and (2) all
existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions effecting Borrower or any
Guarantor which could materially affect the financial condition of Borrower
or the financial condition of any Guarantor
Financial Records. Maintain its books and records in accordance with GAAP,
applied on a consistent basis, and permit Lender to examine and audit
Borrower's books and records at all reasonable times
Financial Statements. Furnish Lender with the following
Interim Statements As soon as available, but in no event later than
thirty (30) days after the end of each month, Borrower's balance sheet
and profit and loss statement for the period ended, prepared by
Borrower.
Additional Requirements. Borrowing Base Documents. Deliver to Lender a
Borrowing Base certificate, Accounts aging report, and such other
supporting documentation as Lender may request from time to time, all
in form and detail satisfactory to Lender, within 30 days after the
end of each calendar month
Reports. Deliver to Lender an Asset Based Lending Audit report and
such other supporting documentation as Lender may request from time to
time, all in form and detail satisfactory to Lender, no later than
September 30th of each calendar year.
Consolidated Financial Reports. Borrower shall cause Keystone
Consolidated Industries Inc to provide each of the foregoing financial
reports to be prepared on a consolidated basis for Keystone
Consolidated Industries Inc
Financial Statements Annual financial statements, including a balance
sheet, income statement, statement of changes in financial position
and consolidating information for the Borrower that is included in the
consolidated financial statement of Keystone Consolidated Industries
Inc for the year ended, of Keystone Consolidated Industries Inc within
one hundred twenty 1120) days after the end of Its fiscal year end,
such financial statements to be audited by certified public
accountant(s) reasonably acceptable to Lender)
All financial reports required to be provided under this Agreement
shall be prepared in accordance with GAAP, applied on a consistent
basis, and certified by Borrower as being true and correct
Additional Information. Furnish such additional information and
statements, as Lender may request from lime to time.
Financial Covenants and Ratios. Comply with the following covenants and ratios
Working Capital Requirements Other Working Capital requirements are as
follows: Current Ratio. Maintain a Currant Ratio of not less than 1 50
to 1.00 The "Current Ratio" means current assets, excluding prepaid
expenses, divided by current liabilities. This ratio will be evaluated
as of each month end.
Minimum Income and Cash flow Requirements. Other Cash Flow
requirements are as follows Debt Service Coverage Ratio. Maintain a
Debt Service Covers" Ratio of not leas than 1.50 to 1 00. The "Debt
Service Coverage Ratio" means ratio of (a) not income, after taxes,
plus amortization, depreciation and Interest, minus any distributions
or dividends, for the twelve month period then ending, divided by (b)
current maturities of long term debt, plus interest and current
maturities of capital leases for the some such twelve month period.
This ratio will be evaluated as of each year end
Tangible Net Worth Requirements. Other Net Worth requirements are as
follows Unsubordinated Debt To Tangible Not Worth Ratio. Maintain en
Unsubordinated Debt to Tangible Not Worth Ratio of less than 2 25 to
1.00. The "Unsubordinated Debt to Tangible Not Worth Ratio" means a
ratio of (a) total liabilities, excluding Subordinated Debt, divided
by (b) Tangible Net Worth. This ratio will be evaluated as of each
month end.
Other Requirements. Commencement of Evaluation of Ratios and Covenants
Each of the foregoing covenants end ratios will be evaluated for the
first time based on the financial reports required herein for the
period ending December 31. 2003 and thereafter shall be periodically
evaluated as provided in each such covenant or ratio. .
Except as provided above, all computations made to determine
compliance with the requirements contained in this paragraph shall be
made in accordance with generally accepted accounting principles,
applied on a consistent basis, and certified by Borrower as being true
and correct
Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect
to Borrower's properties and operations, in form, amounts, coverages
and with insurance companies acceptable to Lender. Borrower, upon
request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or
diminished without at least thirty (30) days prior written notice to
Lender Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any
way by any act, omission or default of Borrower or any other person in
connection with all policies covering assets in which Lender holds or
is offered a security interest for the Loans, Borrower will provide
Lender with such lender's loss payable or other endorsements as Lender
may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lander
may reasonably request, including without limitation the following:
(1) the name of the insurer, (2) the risks Insured, 13) the amount of
the policy; (4) the properties Insured; (5) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values, and (6) the expiration date of the
policy In addition, upon request of Lender (however not more often
then annually). Borrower will have en independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value
or replacement cost of any Collateral The cost of such appraisal shall
be paid by Borrower.
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower end
any other party and notify Lender Immediately in writing of any
default in connection with any other such agreements
Loan Proceeds. Use all Loan proceeds solely for the following specific
purposes Pay off intercompany debt In an amount not to exceed
$5,750.000 00
Taxes. Charges end Liens. Pay end discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits.
Performance. Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the Related
Documents, and in all other instruments and agreements between
Borrower and Lender Borrower shall notify Lender immediately in
writing of any default in connection with any agreement.
Operations. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel, provide written notice to Lender
of any change in executive and management personnel, conduct no
business affairs in a reasonable and prudent manner.
Environmental Studies Promptly conduct and complete, at Borrower's
expense, all such investigations, studies, samplings and testing$ as
may be requested by Lender or any governmental authority relative to
any substance, or any waste or by-product of any substance defined as
toxic or a hazardous substance under applicable federal, state, or
local low, rule, regulation, order or directive, at or effecting any
property or any facility owned, leased or used by Borrower.
Compliance with Governmental Requirements. Comply with all laws,
ordinances, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the conduct of Borrower's
properties, businesses and operations, and to the use or occupancy of
the
Collateral, including without limitation, the Americans With
Disabilities Act Borrower may contest in good faith any such law,
ordinance. or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Borrower has
notified Lender in writing prior 10 doing so and so long as, in
Lender's sole opinion, Lender's interests in the Collateral are not
jeopardized. Lender may require Borrower to poet adequate security or
a surety bond, reasonably satisfactory to Lender, to protect Lender's
interest.
Inspection. Permit employees or agents of Lender at any reasonable
time to inspect any and all Collateral for the Loan or Loans and
Borrower's other Assets and to examine or audit Borrower's books,
accounts, and records and to make copies and memoranda of Borrower's
books, accounts, and records If Borrower now or at any time hereafter
maintains any records (including without limitation computer generated
records and computer software programs for the generation of such
records) In the possession of a third party, Borrower, upon request of
Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of
any records it may request, all at Borrower's expense.
Compliance Certificates. Unless waived in writing by Lender, provide
Lender within thirty (30) days after the end of each month, with a
certificate executed by Borrower's chief financial officer, or other
officer or person acceptable to Lender, certifying that the
representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying
that, as of the date of the certificate, no Event of Default exists
under this Agreement.
Environmental Compliance and Reports. Neither Borrower, nor any
Grantor, tenant, contractor, agent or other authorized user of any of
the Assets shall use, generate, manufacture, store, treat, refine.
transport, dispose of, or release any Hazardous Substance on, under,
about or from any of the Assets Borrower will at all times comply, and
will cause any Grantor to comply, with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it
may be subject including, without limitation, all Environmental Laws.
Borrower will furnish to Lender as soon as possible and in any event
within 10 days after receipt by the Borrower or any Grantor, a copy of
lei any notice or claim to the effect that Borrower or any Grantor is
or may be liable to any person as a result of the release by Borrower
or any Grantor or any other person of any Hazardous Substance Into the
environment and (b) any notice alleging any violation of any
Environmental Law by Borrower or any Grantor Borrower will permit, and
will cause any Grantor to permit, Lender, by its representatives and
agents. to enter upon end test any of the Assets, and inspect any of
Borrower's or any Grantor's books and records, all at such reasonable
times end intervals as Lender may designate, in order to determine
Borrower's and any Grantor's compliance with both this section and the
"Environmental Matters and Indemnity' section above. Any such
inspections or tests made by Lender shall be at Borrower's expense and
for Lender's purposes only and shall not be construed to create any
responsibility or liability of the part of Lender to Borrower, any
Grantor, or any other person.
Change of Location. Immediately notify Lender in writing of any
additions to or changes in location of Borrower's businesses,
principal office. or Collateral, other than in the ordinary course of
business.
Title to Assets and Property, Maintain good and marketable title to all of
Borrower's Assets and property.
Other Information. From time to time Borrower will provide Lender with
such other information as Lender may reasonably request.
Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
assignments, financing statements, Instruments, documents and other
agreements as Lender or its attorneys may reasonably request to
evidence and secure the Loans and to perfect all Security Interests.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower fads to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower All such expenses will become a part
of the Indebtedness and, et Lender's option, will (A) be payable on demand, (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy. (2) the remaining term of the Note, or (3) be
treated as a balloon payment which will be due and payable at the Note's
maturity Any Collateral also will secure payment of these amounts, Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default
NEGATIVE COVENANTS Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender.
Capital Expenditures Make or contract to make capital expenditures,
including leasehold improvements, in any fiscal year in excess of
$800,000.00 or incur liability for rentals of property (including both real
and personal property) in an amount which, together with capital
expenditures, shall in any fiscal year exceed such sum
Debts and Indebtedness. (1) Except for trade debt incurred in the normal
course of business and Indebtedness to Lender, create, incur or assume
indebtedness for borrowed money, including capital bases, (2) sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of Borrower's Assets (except as allowed as Permitted Liens),
or 13) sell with or without recourse any of Borrower's accounts, except to
Lender.
Additional Financial Restrictions. Primary Deposit Relationship, Fail to
establish and maintain its primary depository relationship for its
operating accounts with Lender.
Affiliate Transactions. Enter into any transaction, including without
limitation, the purchase, sale or exchange or property or rendering of
services with any Affiliate, except in the ordinary course of and pursuant
to the reasonable requirements of Borrower's business and upon fair and
reasonable terms no less favorable then would be obtained in a comparable
arms length transaction with a person or entity not an Affiliate of
Borrower, As used herein the term 'Affiliate" means any individual or
entity directly or indirectly under common ownership or control with
Borrower
Continuity of Operations. (1) Engage in any business activities
substantially different then those in which Borrower is presently engaged,
(2) cease operations, liquidate, merge, transfer, acquire or consolidate
with any other entity, change its name. dissolve or transfer or sell
Collateral out of the ordinary course of business, 131 pay any dividends or
make any other distributions on Borrower's stock (other then dividends
payable in its stock), provided, however that notwithstanding the
foregoing, but only so long as no Event of Default has occurred and is
continuing or would result from the payment of dividends, if Borrower is a
'Subchapter S Corporation' (as defined in the Internal Revenue Code of
1986, as amended), Borrower may pay cash dividends on its stock to Its
shareholders from time to time in amounts necessary to enable the
shareholders to pay income taxes and make estimated income tax payments to
satisfy their liabilities under federal and state law which arise solely
from their status as Shareholders of a Subchapter S Corporation because of
their ownership of shares of Borrower's stock, (4) purchase, redeem or
retire any of Borrower's outstanding shares , or (5) alter or amend
Borrower's capital structure
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or
assets. (2) purchase, create or acquire any Interest in any other
enterprise or entity, or 13) incur any obligation as surety or guarantor
other than in the ordinary course of business.
RIGHT OF SETOFF. Borrower grants to Lender a security interest in, as well as a
right of setoff against, and hereby assigns, conveys, delivers, pledges and
transfers to Lender, as security for repayment of the Indebtedness, all
Borrower's right, title and interest in and to all Borrower's accounts (whether
checking, savings, or some other account) with Lender or any subsidiary or
affiliate of BANK ONE CORPORATION (each hereinafter referred to as a 'Lender
Affiliate') end all other obligations at any time owing by Lender or any Lender
Affiliate to Borrower. This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the future However, this does
not include any XXX or Xxxxx accounts, or any trust accounts for which the grant
of a security interest would be prohibited by law Borrower authorizes Lender,
without prior notice to Borrower and irrespective of (i) whether or not Lender
has made any demand under the Note or the Related Documents or (ii) whether such
Indebtedness is contingent, matured or unmatured, to the extent permitted by
law, to collect, charge and/or setoff all sums owing on the Indebtedness against
any and all such account& and other obligations, and, at Lender's option, to
administratively freeze or direct a Lender Affiliate to administratively freeze
all such accounts and other obligations to allow Lender to protect Lender's
security interest, collection, charge and setoff rights provided in this
paragraph.
DEFAULT Each of the following shall constitute an Event of Default under this
Agreement.
Payment Default. Borrower fails to make any payment when due under the
Loan,
Other Defaults Borrower fails to comply with or to pay or perform any other
term, obligation, covenant or condition contained in this Note or in any of
the Related Documents or to comply with or to pay or perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower or between Borrower and any affiliate of BANK ONE
CORPORATION
Transfer of Assets, Borrower leases. sells, or otherwise conveys, or agrees
to lease, sell, or otherwise convey, a material part of its Assets or
business outside of the ordinary course of business.
Defaults with Respect to Third Parties Borrower fails to make any payment
when due or fails to comply with or perform any term, obligation, covenant
or condition contained in any agreement between any other person and
Borrower
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Agreement, the Note, or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter
Judgments or Decrees. One or more judgments or decrees shall be entered
against the Borrower and such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal.
Insolvency The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason, Creditor or Forfeiture Proceedings. Commencement
of foreclosure, replevin, repossession, attachment, levy, execution, or
forfeiture proceedings, whether by judicial proceeding, self-help, or any
other method, by any creditor of Borrower, or by any governmental agency
against the Collateral or any assets of Borrower This includes a
garnishment of any of Borrower's accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good
faith dispute by Borrower as to the validity or reasonableness of the claim
which is the basis of the creditor or forfeiture proceeding and if Borrower
gives Lender written notice of the creditor or forfeiture proceeding and
deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as
being an adequate reserve or bond for the dispute
Failure to Comply with Laws Borrower fells to comply with all applicable
statutes, laws, ordinances and governmental rules, regulations and orders
to which it is subject or which are applicable to its business, property
and assets Change in Ownership. Any change in ownership of twenty-five
percent (25%) or more of the common stock of Borrower
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Loan is impaired
Events Affecting Guarantor. Any of the proceeding Events of Default occurs
with respect to any guarantor of the Indebtedness as if the word
'guarantor' were substituted for the word 'Borrower' in such Event of
Default, or any guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty
Insecurity. Lender in good faith believes itself insecure
EFFECT OF AN EVENT OF DEFAULT If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender's option, all
indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the 'Insolvency' subsection above, such acceleration shall be
automatic and not optional in addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative end may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shell not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.
ARBITRATION. Undersigned and Lender agree that all disputes, claims and
controversies between them whether individual, joint, or class in nature,
arising from this document or otherwise, Including without limitation contract
and tort disputes, shall be arbitrated pursuant to the Rules of the American
Arbitration Association in effect at the time the claim is filed, upon request
of either party. No act to take or dispose of any Collateral or Property (as
defined herein or in any Related Document) securing this document shall
constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement This includes, without limitation, obtaining injunctive
relief or a temporary restraining order; invoking a power of sale under any deed
of trust or mortgage: obtaining a writ of attachment or imposition of a
receiver, or exercising any rights relating to personal property, including
taking or disposing of such property with or without judicial process pursuant
to applicable law Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of any act, or exercise of any right, concerning
any Collateral or Property securing this document, including any claim to
rescind, reform, or otherwise modify any agreement relating to the Collateral or
Property securing this document, shall also be arbitrated, provided however that
no arbitrator shall have the right or the power to enjoin or restrain any act of
any party Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction Nothing in this document shall preclude any party
from seeking equitable relief from a court of competent jurisdiction. The
statute of limitations, estoppel, waiver, laches, and similar doctrines which
would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, end the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these purposes. The
Federal Arbitration Act shell apply to the construction, interpretation, and
enforcement of this arbitration provision
JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN
ANY WAY RELATED TO THIS DOCUMENT, THE RELATED DOCUMENTS, OR ANY RELATIONSHIP
BETWEEN OR AMONG THE UNDERSIGNED AND LENDER THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING EVIDENCED BY THIS DOCUMENT AND THE
RELATED DOCUMENTS
EXCLUSION FROM LOAN AGREEMENT Lender and Borrower hereby agree that, in addition
to any loan or financial accommodation described on any Exhibit attached to this
Agreement, if any, the following types of loans or financial accommodations,
whether now existing or hereafter arising, are excluded from this Agreement (i)
any loon evidenced by a promissory note payable to Lender which is the subject
of a U S Small Business Administration guaranty, and (e) any construction loon
governed by a construction loan agreement
LOAN AGREEMENT APPLICABLE TO AFFILIATE BANK. Notwithstanding any other provision
in this Agreement, Borrower and Lender agrees that Borrower may now or In the
future have a borrowing relationship with Bank One, NA with its main office in
Columbus, Ohio ('Bank Affiliate") Lender and Borrower intend that only one
agreement In the nature of a loan or credit agreement be applicable to the
Borrower's relationship with Lender and/or the Bank Affiliate, except for the
exclusion of those certain loans or categories of loans specifically described
in this Agreement Borrower agrees as follows a) the terms, covenants,
conditions, warranties end obligations of Borrower contained in this Agreement
replace those in any loan or credit agreement, if any, presently in existence
between Borrower and the Bank Affiliate, b) any reference to "Lender" in this
Agreement shall mean the Lender named in this Agreement and the Bank Affiliate.
provided however that only the holder of any Note is responsible for any
obligation related to funding any Advance on such Note; and c) this Agreement
shall continue in full force and effect until all Indebtedness payable to Lender
and to the Bank Affiliate is paid in full.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of
Lender's costs and expenses, including Lender's attorneys' fees and
Lender's legal expenses, incurred in connection with the enforcement of
this Agreement. Lender may hire or pay someone else to help enforce this
Agreement, and Borrower shall pay the costs and expenses of such
enforcement. Costs and expenses include Lender's attorneys' fees and legal
expenses whether or not there is a lawsuit, including attorneys' fees and
legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services, Borrower also shall pay all court costs
and such additional fees as may be directed by the court
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement
Consent to Loan Participation. Borrower agrees and consents to Lender's
sale or transfer, whether now or later. of one or more participation
interests in the Loon to one or more purchasers, whether related or
unrelated to Lender Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or
knowledge Lender may have about Borrower or about any other matter relating
to the Loan, and Borrower hereby waives any rights to privacy Borrower may
have with respect to such matters Borrower additionally waives any and all
notices of sale of participation interests, as well as ell notices of any
repurchase of such participation interests Borrower also agrees that the
purchasers of any such participation interests will be considered as the
absolute owners of such interests In the Loon and will have all the rights
granted under the participation agreement or agreements governing the sale
of such participation interests Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce Borrower's
obligation under the Loan irrespective of the failure or insolvency of any
holder of any interest in the Loan Borrower further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have
against Lender
Governing Law. This Agreement will be governed by, construed and enforced
in accordance with federal law and the Iowa of the State of Ohio. This
Agreement has been accepted by Lender In the State of Ohio.
Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Xxxxx County, State
of Ohio
Indemnification. Borrower agrees to indemnity, defend and hold each of the
Indemnified Parties harmless from end against any and all liabilities,
obligations, claims, losses, damages, penalties, fines, forfeitures,
actions, judgments, suits, costs, expenses, and disbursements of any kind
or nature (including, without limitation, Lender's attorneys' fees)
(collectively, "Claims') which may be imposed upon, incurred by or assessed
against any Indemnified Party (whether or not caused by any Indemnified
Party's sole, concurrent, or contributory negligence) arising in connection
with this Agreement, any Related Document, or any of the Assets (including,
without limitation, the enforcement of this Agreement and the Related
Documents and the defense of any Indemnified Party's action or inaction in
connection with this Agreement and the Related Documents) or in connection
with the Borrower's failure to perform all of Borrower's obligations under
this Agreement or any Related Document, except to the limited extent that
the claims against any such Indemnified Party are proximately caused by
such Indemnified Party's gross negligence or willful misconduct. The
Indemnification provided for in this section shall survive the termination
of this Agreement and shall extend to and continue to benefit each
individual or entity who is or has at any time been en Indemnified Party.
Borrower's indemnity obligations under this section shall riot in any way
be affected by the presence or absence of covering insurance, or insurance
policy or policies affecting the Assets and/or Borrower's business
activities. Should any claim, action or proceeding be made or brought
against any Indemnified Party by reason of any event as to which Borrower's
indemnification obligations apply, then, upon such Indemnified Party's
demand, Borrower, at its sole cost and expense, shall defend such claim,
action or proceeding in Borrower's name, if necessary, by the attorneys for
Borrower's insurance carrier (if such claim, action or proceeding is
covered by insurance), or otherwise by such attorneys as such Indemnified
Party shall approve. Lender may also elect to engage is own attorneys at
its reasonable discretion to defend Borrower or any Indemnified Party and
to assist in their defense, and Borrower agrees to pay the fees and
disbursements of such attorneys upon Lender's request
No Waiver by Lender. Lender shall not be deemed to have waived any rights
under this Agreement unless such waiver is given in writing end signed by
Lender. No delay or omission on the pert of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Agreement No prior waiver by
Lender, nor any course of dealing between Lender and Borrower, or between
Lender and any Grantor, shell constitute a waiver of any of Lender's rights
or of any of Borrower's or any Grantor's, obligations as to any future
transactions Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shell not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
Notices Any notice required to be given under this Agreement shall be given
in writing, and shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or. if mailed,
when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the
beginning 0f this Agreement Any party may change its address for notices
under this Agreement by giving formal written notice to the other panes,
specifying that the purpose of the notice is to change the party's address.
For notice purposes, Borrower agrees to keep Lender informed at all times
of Borrower's current address Unless otherwise provided or required by law,
if there is more then one Borrower, any notice given by Lender to any
Borrower is deemed to be notice given to all Borrowers
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement Unless otherwise required
by law, the illegality, invalidity, or unenforceability of any provision of
this Agreement shall not affect the legality, validity or enforceability of
any other provision of this Agreement.
Successors and Assigns All covenants and agreements contained by or on
behalf of Borrower shall bind Borrower's successors and assigns and shall
Inure to the benefit of Lender, its successors end assigns. Borrower shall
not, however, have the right to assign Borrower's rights under this
Agreement or any interest therein, without the prior written consent of
Lender.
Survival of Representations and Warranties Borrower understands and agrees
that in extending Loan Advances, Lender is relying on all representations,
warranties, end covenants made by Borrower in this Agreement or in any
certificate or other instrument delivered by Borrower to Lender under this
Agreement or the Related Documents. Borrower further agrees that regardless
of any investigation made by Lender, all such representations, warranties
and covenants will survive the extension of Loan Advances and delivery to
Lender of the Related Documents, shall be continuing in nature, shall be
deemed made and redated by Borrower at the time each Loan Advance is made,
and shall remain in full force end effect until such time as Borrower's
Indebtedness shall be paid in full, or until this Agreement shall be
terminated in the manner provided above, whichever is the last to occur.
Time Is of the Essence Time is of the essence in the performance of this
Agreement
DEFINITIONS The following capitalized words and terms shall have the following
meanings when used in this Agreement Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, end the plural shall include the singular, as the context may require
Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Ohio Uniform Commercial Code Accounting words
and terms not otherwise defined In this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement'
Account. The word "Account" means a trade account, account receivable,
other receivable, or other right to payment for goods sold or services
rendered owing to Borrower (or to a third party grantor acceptable to
Lender)
Advance. The word "Advance" means a disbursement of loan funds made, or to
be made, to or for the benefit of Borrower and, if applicable, includes the
issuance by or on behalf of Lender of any letters of credit for the account
of Borrower and the extension of any loans or other credit accommodations
by Lender to Borrower,
Advance. The word "Advance" means a disbursement of loan funds made, or to
be made, to or for the benefit of Borrower and, if applicable, includes the
issuance by or on behalf of Lender of any letters of credit for the account
of Borrower and the extension of any loans or other credit accommodations
by Lender to Borrower
Agreement. The word "Agreement" means this Business Loan Agreement (Asset
Based), as this Business Loan Agreement (Asset Based) may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Business Loan Agreement (Asset Based) from time to time
Assets. The word "Asset" means any property or interest in property of any
kind or description of Borrower or any Grantor, or any property or interest
in property of any Grantor which is subject to a security interest in favor
of Lender, whether such assets are real, personal, tangible, intangible, or
mixed, and whether such assets are owned, leased or operated by Borrower,
or any such Grantor.
Borrower The word "Borrower" means Engineered Wire Products, Inc., and all
other persons and entities signing the Note in whatever Capacity
Borrowing Base. The words 'Borrowing Base' mean , as determined by Lender
from time to time, the lesser of (1) 87,000,000 00 or (2) the sum of (a)
76% of the aggregate amount of Eligible Accounts, plus (b) 50% of the
aggregate amount of Eligible Inventory (not to exceed in corresponding Loan
amount based on Eligible Inventory 84,000,000 00), provided further, the
Borrowing Base shall be reduced by an additional $2,000,000.00
Business Day The words "Business Day" mean a day on which commercial banks
are open in the State of Ohio.
Collateral, The word "Collateral" means all property and assets granted as
collateral security for a Loan, whether reel or personal property, whether
granted directly or Indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, dead of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any other
security or lien interest whatsoever, whether created by law, contract, or
otherwise The word Collateral also includes without limitation all
collateral described in the Collateral section of this Agreement
Default. The word "Default" means the Default set forth in this Agreement
in the section titled "Default".
Eligible Accounts. The words "Eligible Accounts" mean at any time, all of
Borrower's Accounts which contain selling terms and conditions acceptable
to Lender The net amount of any Eligible Account against which Borrower may
borrow shall exclude all returns, discounts, credits, and offsets of any
nature Unless otherwise agreed to by Lender in writing, Eligible Accounts
do not include'
(1) Accounts with respect to which the Account Debtor is employee or
agent of Borrower
(2) Accounts with respect to which the Account Debtor is a subsidiary
of, or affiliated with Borrower or its shareholders, officers, or
directors
(3) Accounts with respect to which goods are placed on consignment,
guaranteed sale, or other terms by reason of which the payment by
the Account Debtor may be conditional
(4) Accounts with respect to which the Account Debtor is not a
resident of the United States, except to the extent such Accounts
are supported by insurance, bonds or other assurances
satisfactory to Lender.
(5) Accounts with respect to which Borrower is or may become liable
to the Account Debtor for goods sold or services rendered by the
Account Debtor to Borrower.
(6) Accounts which are subject to dispute, counterclaim, or setoff.
(7) Accounts with respect to which the goods have not been shipped or
delivered, or the services have not been rendered, to the Account
Debtor.
(8) Accounts with respect to which Lender, In its sole discretion,
deems the creditworthiness or financial condition of the Account
Debtor to be unsatisfactory.
(9) Accounts of any Account Debtor who has filed or has had filed
against it a petition in bankruptcy or an application for relief
under any provision of any state or federal bankruptcy,
insolvency, or debtor-in-relief acts, or who has had appointed a
trustee, custodian, or receiver for the assets of such Account
Debtor; or who has made an assignment for the benefit of
creditors or has become insolvent or fails generally to pay its
debts (including its payrolls) as such debts become due.
(10) Accounts with respect to which the Account Debtor is the United
States government or any department or agency of the United
States
(11) Accounts which have not been paid in full within 90 days from the
invoice date. The entire balance of any Account of any single
Account Debtor will be ineligible whenever the portion of the
Account which has not been paid within 90 days from the invoice
date is in excess of 50.000% of the total amount outstanding on
the Account
(12) That portion of Accounts which constitute retainage
(13) Accounts which arise from projects which are bonded.
Eligible Inventory. The words "Eligible Inventory" mean at any time, all of
Borrower's Inventory as defined below except
(1) Inventory which Is not owned by Borrower free and clear of all
security interests, liens, encumbrances, and claims of third
parties.
(2) Inventory which Lender, in its sole discretion, deems to be
obsolete, unsalable, damaged, defective, or unfit for further
processing.
(3) Work in progress
Environmental Laws. The words "Environmental Laws" mean any and all
federal, state, local and foreign statutes, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees. plans,
injunctions, permits, concessions, grants, franchises, licenses. agreements
and other governmental restrictions relating to (i) the protection of the
environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof
Event of Default The words "Event of Default" mean any of the events set
forth in the section of this Agreement entitled "Default" Expiration Date.
The words "Expiration Date" mean the date of termination of Lender's
commitment to lend under this Agreement. GAAP. The word "GAAP" means
generally accepted accounting principles.
Grantor. The word "Grantor" means each and all of the persons or entities
granting a Security Interest in any Collateral for the Loan, including
without limitation all Borrowers granting such a Security Interest
Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Loan
Hazardous Substances. The words "Hazardous Substances" mean all explosive
or radioactive substances or wastes and all hazardous or toxic substances,
wastes or other pollutants, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon
gas, infectious or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Low
Indebtedness. The word "Indebtedness" means all principal, Interest, and
other amounts, costs and expenses payable under the Note or Related
Documents, together with all renewals of, extensions of, modifications of,
consolidations of and substitutions for the Note or Related Documents,
together with interest on such amounts as provided in this Note, and all
obligations, debts and liabilities, plus interest thereon, of Borrower, or
any one or more of them. to Lender, as well as claims by Lender against
Borrower or any one or more of them, whether now existing or hereafter
arising, whether related or unrelated to the purpose of the Note, whether
voluntary or otherwise, whether due or not due, direct or indirect,
absolute or contingent, liquidated or unliquidated and whether Borrower may
be liable Individually or jointly with others, whether obligated as
guarantor, surety, accommodation party or otherwise, and whether recovery
upon such amounts may be hereafter may become barred by any statute of
limitations, and whether the obligation to repay such amount may be or
hereafter may become otherwise unenforceable, and further includes, without
limitation, all principal, interest, and other amounts, costs and expenses
payable under the Related Documents, whether executed by the Borrower or by
any other person or entity, together with all renewals of, extensions of,
modifications of, consolidations of and substitutions for the Related
Documents, together with the interest thereon as provided in the Related
Documents
Indemnified Parties. The words "Indemnified Parties" mean the Lender and
each of its affiliates, and each of their respective shareholders,
directors, offices, employees and agents
Inventory. The word "Inventory" means all of Borrower's raw materials, work
in process, finished goods, merchandise, parts and supplies, of every kind
and description, and goods held for sale or lease or furnished under
contracts of service in which Borrower now has or hereafter acquires any
right, whether held by Borrower or others, and all documents of title,
warehouse receipts, bills of lading, and all other documents of every type
covering all or any pert of the foregoing. Inventory includes inventory
temporarily out of Borrower's custody or possession and all returns on
Accounts
Lender, The word "Lender" means Bank One, N A. with its main office at
Columbus, Ohio, its successors and assigns
Note. The word "Note" means any and all promissory note or notes which
evidence Borrower's Loans in favor of Lender, as well as any amendment.
modification, renewal and replacement thereof.
Permitted Liens The words "Permitted Liens" mean (1) liens and security
interests securing Indebtedness owed by Borrower to Lender, (2) liens for
taxes, assessments, or similar charges either not yet due or being
contested in good faith, (3) liens of materialmen, mechanics, warehousemen,
or carriers, or other like liens arising in the ordinary course of business
and securing obligations which are not yet delinquent; (4) purchase money
liens or purchase money security interests upon or In any property acquired
or held by Borrower in the ordinary course of business to secure
indebtedness outstanding on the data of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled "Indebtedness and
Liens", and (5) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in writing
Primary Credit Facility. The words "Primary Credit Facility' mean the
credit facility described in the Line of Credit section of this Agreement
Related Documents. The words "Related Documents" mean all promissory notes.
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages. and all other instruments, agreements and documents, whether now
existing or hereafter arising, executed in connection with the
Indebtedness.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements,
understandings or other agreements. whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.
Security Interest. The words "Security Interest" mean, without limitation,
any and all typos of collateral security, present and future, whether in
the form of a lien, charge, encumbrance, mortgage, deed of trust, security
deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional sale,
trust receipt, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest
whatsoever whether created by law, contract, or otherwise
Subordinated Debt. The words 'Subordinated Debt" mean all present and
future obligations, liabilities, claims, rights and demands of any kind
which may be owing from Borrower to any creditor. other than Lender, to
include, without limitation, principal, interest, costs, attorney's fees,
sums paid for protecting the rights of a holder of security, all contingent
obligations (such as a guaranty? and all other obligations of any nature
whatsoever owed to such a creditor, which have been subordinated in all
respects to the Indebtedness owed to Lender by written agreement acceptable
to Lender to include, without limitation, deferral of any payment of
principal to the creditor, deferral of interest payments upon occurrence of
any Event of Default, and subordination of any Security Interest of such
creditor until all Indebtedness is paid
Tangible Net Worth. The words 'Tangible Net Worth' mean Borrower's total
assets excluding all intangible assets (i.e. goodwill, trademarks, patents,
copyrights, organizational expenses, and similar intangible items, but
including leaseholds and leasehold improvements) less total liabilities
excluding Subordinated Debt.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) IS DATED JANUARY 5, 2004
BORROWER
ENGINEERED WIRE PRODUCTS, INC.
By: Xxxx X. Xxxxxxx, Xx.,
Vice President/Treasurer of Engineered Wire Products, Inc.
LENDER.
BANK ONE, N.A. WITH ITS MAIN OFFICE AT COLUMBUS. OHIO
By: Xxxxxxx X. Xxxxxxxx
Authorized Signature
