CHANGE IN TERMS AGREEMENT
Exhibit 10.10
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Principal $2,250,000.00 |
Loan Date 04-25-2012 |
Maturity 04-25-2013 |
Loan No. 67777 |
Call / Coll | Account |
Officer JMW |
Initials |
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References in the boxes above are for Lender’s use only and do not limit the applicability of the documents to any particular loan or item. Any items above containing “***” has been omitted due to text length limitations. | |||||||
| Borrower: | American Power Group, Inc. 0000 Xxxx Xxxxxx Xxxxxx, XX 00000 |
Lender: | Iowa State Bank Main Office 0 X. Xxxx Xx. Xxxxxx XX, 00000 |
THIS BUSINESS LOAN AGREEMENT dated April 25, 2012, Is made and executed between American Power Group, Inc. ("Borrower") and Iowa State Bank ("Lender") on the following terms and conditions. Borrower has received prior commercial loans from Lender 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. Xxxxxxxx understands and agrees that: (A) In granting, renewing, or extending any Loan, Lender Is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion: and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Xxxxxx's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents,
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document.
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 Borrower's state of incorporation. 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 a\ 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 Xxxx Xxxxxx, Xxxxxx, 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 Xxxxxxxx'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 Xxxxxxxx'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 not conflict with, result in a violation of, or constitute a default under (1) any provision of (a} Borrower's articles of incorporation or organization, or bylaws, or (b) 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.
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 Xxxxxxxx's financial statements or in writing to Lender and as accepted by Xxxxxx, 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 Xxxxxxxx's properties are titled in Borrower‘s legal name, and Xxxxxxxx has not used or filed a financing statement under any other name for at least the fast five (5) years.
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including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, 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 1S financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Xxxxxx in writing.
Taxes. To the best of Xxxxxxxx's knowledge, all of Xxxxxxxx's tax returns and reports that are or were required to be tiled, have been filed, and all taxes, assessments and 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, Xxxxxxxx has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower’s Loan and Note, that would be prior or that may in any way be superior to Xxxxxx's Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements lit any), and all Related Documents are binding upon the signors 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 Xxxxxx in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial Statements. Furnish Lender with the following:
Annual Statements. As soon as available, but in no event later than thirty (30) days after the end of each fiscal year, Xxxxxxxx's balance sheet and income statement for the year ended, prepared by Xxxxxxxx.
Interim Statements. As soon as available, but in no event later than thirty (30} days after the end of each month, Xxxxxxxx's balance sheet and profit and loss statement for the period ended, prepared by Xxxxxxxx.
Tax Returns. As soon as available, but in no event later than thirty (30) days after the applicable filing date for the tax reporting period ended, Xxxxxxxx's Federal and other governmental tax returns 1 prepared by a certified public accountant satisfactory to Lender.
Additional Requirements. Sea Commitment letter dated March 21, 2012.
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 Xxxxxx may request from time to time.
Additional Requirements. See Commitment letter dated March 21, 2012 for financial covenants.
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 Xxxxxx, 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 ten 110) 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. !n 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 Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) 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 than annually), Borrower will have an 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 and 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 Xxxxxxxx's business operations, unless specifically consented to the contrary by Xxxxxx in writing.
Taxes, Charges and Liens. Pay and 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-s, 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. Provided however, Xxxxxxxx will not be required to pay and discharge any such assessment, tax, charge, xxxx, xxxx or claim so long as 111 the legality of the same shall be contested in good faith by appropriate proceedings, and (2} Borrower shall have established on Xxxxxxxx's books adequate reserves with respect to such contested assessment tax, charge, levy, lien, or claim in accordance with GAAP.
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.
Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings 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 law, rule, regulation, order or directive, at or affecting 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 to doing so and so long as, in Xxxxxx's sole opinion, Xxxxxx‘s interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Xxxxxx'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 Xxxxxxxx's other properties and to examine or audit Xxxxxxxx'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, Xxxxxxxx, 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.
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environment and/or other natural resources.
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.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). 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 IRA or Xxxxx accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Xxxxxx, to the extent permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such accounts.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Xxxxxxxx fails to make any payment when due under the Loan.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement 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.
lnsolvency. The dissolution or termination of Xxxxxxxx's existence as a going business, the insolvency of Xxxxxxxx, the appointment of a receiver for any part of Xxxxxxxx'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 or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Xxxxxxxx's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Xxxxxxxx as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Xxxxxx written notice of the creditor or forfeiture proceeding and deposits with lender monies or a surety bond tor 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.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
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 Xxxxxxxx's financial condition, or Xxxxxx believes the prospect of payment or performance of the Loan is impaired.
Insecurity. Lender in good faith believes itself insecure.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Consent to Loan Participation. Xxxxxxxx agrees and consents to Xxxxxx's sale or transfer, whether now or later, of one or more participation interests in the Loan 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 all notices of any repurchase of such participation interests. Xxxxxxxx also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan 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 Xxxxxxxx's obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Xxxxxxxx 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 Xxxxxx,
Governing Law. This Agreement will be governed by federal law applicable to Lander and, to the extent not preempted by federal law, the
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laws of the State of Iowa without regard to its conflicts of law provisions. This Agreement has been accepted by Xxxxxx in the State of Iowa.
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 of this Agreement. Any party may change its address tor notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Xxxxxxxx agrees to keep Xxxxxx informed at all times of Xxxxxxxx's current address. Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by lender to any Borrower is deemed to be notice given to all Borrowers.
Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower’s successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign 8orrower 1s rights under this Agreement or any interest therein, without the prior written consent of Lender.
Time is of the Essence. Time is of the essence in the performance of this Agreement.
Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement,
Collateral, The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real 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, deed 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 Of 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,
Environmental Laws. The words '1 Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"). the Superfund Amendments and Reauthorization Act of 1986, Pub, L. No. 99-499 ("XXXX"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto,
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
Guarantor. The word "Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan,
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.
Lender. The word "Lender" means Iowa State Bank, its successors and assigns,
Loan. The word "Loan11 means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, Including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time-.
Related Documents. The words "Related Documents 11 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 or hereafter existing, executed in connection with the Loan.
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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 types 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.
XXXXXXXX ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND XXXXXXXX AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED APRIL 25, 2012.
XXXXXXXX ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS BUSINESS LOAN AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.
BORROWER:
AMERICAN POWER GROUP, INC.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, President of American Power Group, Inc.
LENDER:
IOWA STATE BANK,
By: /s/ Xxxxx Xxxxxxx, V.P.
Xxxxx Xxxxxxx, Vice President