SEAFIRST Bank of America NT & SA dba Seafirst Bank
BUSINESS LOAN AGREEMENT
1. Promissory Note(s). All loans shall be evidenced by promissory notes
in a form and substance satisfactory to Bank.
2. Conditions to Availability of Loan/Line of Credit. Before Bank is
obligated to disburse/make any advance, or at any time thereafter which Bank
deems necessary and appropriate, Bank must receive all of the following, each
of which must be in form and substance satisfactory to Bank ("loan documents"):
2.1 Original, executed promissory note(s);
2.2 Original executed security agreement(s) and/or deed(s) of trust
covering the collateral described in Part A;
2.3 All collateral described in Part A in which Bank wishes to have a
possessory security interest;
2.4 Financing statement(s) executed by Borrower;
2.5 Such evidence that Bank may deem appropriate that the security
interests and liens in favor of Bank are valid, enforceable, and prior to the
rights and interests of others except those consented to in writing by Bank;
2.6 The following guaranty(ies) in favor of the Bank:
2.7 Subordination agreement(s) in favor of Bank executed by:
2.8 Evidence that the execution, delivery, and performance by Borrower of
this Agreement and the execution, delivery, and performance by Borrower and
any corporate guarantor or corporate subordinating creditor of any
instrument or agreement required under this Agreement, as appropriate, have
been duly authorized;
2.9 Any other document which is deemed by the Bank to be required from
time to time to evidence loans or to effect the provisions of this
Agreement;
2.10 If requested by Bank, a written legal opinion expressed to Bank, of
counsel for Borrower as to the matters set forth in sections 3.1 and 3.2, and
to the best of such counsel's knowledge after reasonable investigation, the
matters set forth in sections 3.3, 3.5, 3.6, 3.7, 3.8 and such other matters
as the Bank may reasonably request;
2.11 Pay or reimburse Bank for any out-of-pocket expenses expended in
making or administering the loans made hereunder including without
limitation attorney's fees (including allocated costs of inhouse counsel);
2.12 Other (describe):
3. Representations and Warranties. Borrower represents and warrants to
Bank, except as Borrower has disclosed to Bank in writing, as of the date of
this Agreement and hereafter so long as credit granted under this Agreement
is available and until full and final payment of all sums outstanding under
this Agreement and promissory notes that:
3.1 Borrower is duly organized and existing under the laws of the
state of its organization as a:
General Limited
X Corporation Partnership Partnership
__ Sole Proprietorship
dba
LLC with duration of Borrower is properly licensed and in good standing in each
state in which Borrower is doing business and Borrower has qualified under,
and complied with, where required, the fictitious or trade name statutes
of each state in which Borrower is doing business, and Borrower has obtained
all necessary government approvals for its business activities; the
execution, delivery, and performance of this Agreement and such notes
and other instruments required herein are within Borrower's powers, have
been duly authorized, and, as to Borrower and any guarantor, are not in
conflict with the terms of any charter, bylaw, or other organization papers
of Borrower, and this Agreement, such notes and the loan documents are
valid and enforceable according to their terms;
3.2 The execution, delivery, and performance of this Agreement, the
loan documents and any other instruments are not in conflict with any law or
any indenture, agreement or undertaking to which Borrower is a party or by
which Borrower is bound or affected;
3.3 Borrower has title to each of the properties and assets as
reflected in its financial statements (except such assets which have been
sold or otherwise disposed of in the ordinary course of business), and no
assets or revenues of the Borrower are subject to any lien except as
required or permitted by this Agreement, disclosed in its financial
statements or otherwise previously disclosed to Bank in writing;
3.4 All financial information, statements as to ownership of Borrower and
all other statements submitted by Borrower to Bank, whether previously or
in the future, are and will be true and correct in all material respects
upon submission and are and will be complete upon submission insofar as
may be necessary to give Bank a true and accurate knowledge of the subject
matter thereof;
3.5 Borrower has filed all tax returns and reports as required by law to
be filed and has paid all taxes and assessments applicable to Borrower
or to its properties which are presently due and payable, except those being
contested in good faith;
3.6 There are no proceedings, litigation or claims (including unpaid
taxes) against Borrower pending or, to the knowledge of the Borrower,
threatened, before any court or government agency, and no other event
has occurred which may have a material adverse effect on Borrower's
financial condition;
3.7 There is no event which is, or with notice or lapse of time, or both,
would be, an Event of Default (as defined in Section 7)under this
Agreement;
3.8 Borrower has exercised due diligence in inspecting Borrower's
properties for hazardous wastes and hazardous substances. Except as
otherwise previously disclosed and acknowledged to Bank in writing:
(a) during the period of Borrower's ownership of Borrower's properties,
there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any hazardous waste or hazardous substance
by any person in, on, under or about any of Borrower's properties; (b)
Borrower has no actual or constructive knowledge that there has been
any use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or hazardous substance by any
person in, on, under or about any of Borrower's properties by any prior owner
or occupant of any of Borrower's properties; and (c) Borrower has no
actual or constructive notice of any actual or threatened litigation or claims
of any kind by any person relating to such matters. The terms "hazardous
waste(s),"hazardous substance(s)," "disposal," "release," and "threatened
release" as used in this Agreement shall have the same meanings as set forth
in the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the Superfund
Amendments and Reauthorization Act of 1986, as amended, Pub. L. No.
99-499, the Hazardous Materials Transportation Act, as amended, 49 U.S. C.
Section 1801, et seq., the Resource Conservation and Recovery Act, as
amended, 49 U.S.C. Section 6901, et seq., or other applicable state or
federal laws, rules or regulations adopted pursuant to any of the foregoing.
3.9 Each chief place of business of Borrower, and the office or
offices where Borrower keeps its records concerning any of the
collateral, is located at:
4. Affirmative Covenants. So long as credit granted under this
Agreement is available and until full and final payment of all sums
outstanding under this Agreement and promissory note(s) Borrower will:
4.1 Use the proceeds of the loans covered by this Agreement only in
connection with Borrower's business activities and exclusively for the following
purposes:
4.2 Maintain current assets in an amount at least equal to __1.30_
times current liabilities, and not less than $__1,200,000___ in excess
thereof. Current assets and current liabilities shall be determined in
accordance with generally accepted accounting principles and practices,
consistently applied;
4.3 Maintain a tangible net worth of at least $__2,200,000___and not
permit Borrower's total indebtedness which is not subordinated in a manner
satisfactory to Bank to exceed ___2.30__times Borrower's tangible net
worth. "Tangible net worth" means the excess of total assets over
total liabilities, excluding, however, from the determination of total assets
(a) all assets which should be classified as intangible assets such as
goodwill, patents, trademarks, copyrights, franchises, and deferred charges
(including unamortized debt discount and research and development costs),
(b) treasury stock, (c) cash held in a sinking or other similar fund
established for the purpose of redemption or other retirement of capital
stock, (d) to the extent not already deducted from total assets, reserves
for depreciation, depletion, obsolescence or amortization of properties
and other reserves or appropriations of retained earnings which have been
or should be established in connection with the business conducted by the
relevant corporation, and (e) any revaluation or other write-up in book
value of assets subsequent to the fiscal year - of such corporation last
ended at the date of this Agreement;
4.4 Upon request Borrower agrees to insure and to furnish Bank with
evidence of insurance covering the life of Borrower (if an individual) or the
lives of designated partners or officers of Borrower (if a partnership or
corporation) in the amounts stated below. Borrower shall take such actions as
are reasonably requested by Bank, such as assigning the insurance policies
to Bank or naming Bank as beneficiary and obtaining the insurer's
acknowledgment thereof, to provide that in the event of the death of any of
the named insureds the policy proceeds will be applied to payment of
Borrower's obligations owing to Bank;
Name: ________N/A________Amount: $ ____________
Name: ________N/A________Amount: $ ____________
4.5 Promptly give written notice to Bank of: (a) all litigation and
claims made or threatened affecting Borrower where the amount is
$_100,000___ or more; (b) any substantial dispute which may exist between
Borrower and any governmental regulatory body or law enforcement authority;
(c) any Event of Default under this Agreement or any other agreement with Bank
or any other creditor or any event which become an Event of Default; and (d) any
other matter which has resulted or might result in a material adverse change
in Borrower's financial condition or operations;
4.6 Borrower shall as soon as available, but in any event within
__120__ days following the end of each year and within __45__ days following
the end of each _quarter__ provide to Bank, in a form satisfactory to Bank
(including audited statements if required at any time by Bank), such
financial statements and other information respecting the financial condition
and operations of Borrower as Bank may reasonably request including
"Quarterly Compliance Certificates", as per the attached, and the U.S.
Securities Commission Report 10-K.
4.7 Borrower will maintain in effect insurance with responsible
insurance companies in such amounts and against such risks as is customarily
maintained by persons engaged in businesses similar to that of Borrower and
all policies covering property given as security for the loans shall have
loss payable clauses in favor of Bank. Borrower agrees to deliver to Bank
such evidence of insurance as Bank may reasonably require and, within thirty
(30) days after notice from Bank, to obtain such additional insurance with an
insurer satisfactory to the Bank;
4.8 Borrower will pay all indebtedness taxes and other obligations for
which the Borrower is liable or to which its income or property is subject
before they shall become delinquent, except any which is being contested by the
Borrower in good faith;
4.9 Borrower will continue to conduct its business as presently
constituted, and will maintain and preserve all rights, privileges and
franchises now enjoyed, conduct Borrower's business in an orderly,
efficient and customary manner, keep all Borrowers properties in good working
order and condition, and from time to time make all needed repairs, renewals
or replacements so that the efficiency of Borrower's properties shall be fully
maintained and preserved;
4.10 Borrower will maintain adequate books, accounts and records and
prepare all financial statements required hereunder in accordance with
generally accepted accounting principles and practices consistently
applied, and in compliance with the regulations of any governmental
regulatory body having jurisdiction over Borrower or Borrower's business;
4.11 Borrower will permit representatives of Bank to examine and make
copies of the books and records of Borrower and to examine the
collateral of the Borrower at reasonable times;
4.12 Borrower will perform, on request of Bank, such acts as may be
necessary or advisable to perfect any lien or security interest
provided for herein or otherwise carry out the intent of this
Agreement;
4.13 Borrower will comply with all applicable federal, state and
municipal laws, ordinances, rules and regulations relating to its
properties, charters, businesses and operations, including compliance with
all minimum funding and other requirements related to any of Borrower's
employee benefit plans;
4.14 Borrower will permit representatives of Bank to enter onto
Borrower's properties to inspect and test Borrower's properties as Bank,
in its sole discretion, may deem appropriate to determine Borrower's
compliance with section 5.8 of this Agreement; provided however, that any
such inspections and tests shall be for Bank's sole benefit and shall
not be construed to create any responsibility or liability on the part of
Bank to Borrower or to any third party.
5. Negative Covenants. So long as credit granted under this
Agreement is available and until full and final payment of all sums
outstanding under this Agreement and promissory note(s):
5.1 Borrower will not, during any fiscal year, expend or incur in the
aggregate more than $___N/A___ for fixed assets for FYE 12/97, nor more than
$____N/A___for any single fixed asset whether or not payable that fiscal year or
later under any purchase agreement or lease;
5.2 Borrower will not, without the prior written consent of Bank,
purchase or lease under an agreement for acquisition, incur any other
indebtedness for borrowed money, mortgage, assign, or otherwise
encumber any of Borrower's assets, nor sell, transfer or otherwise
hypothecate any such assets except in the ordinary course of business.
Borrower shall not guaranty, endorse, co-sign, or otherwise become liable
upon the obligations of others, except by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
For purposes of this paragraph, the sale or assignment of accounts
receivable, or the granting of a security interest therein, shall be
deemed the incurring of indebtedness for borrowed money;
5.3 The total of salaries, withdrawals, or other forms of
compensation, whether paid in cash or otherwise, by Borrower shall not exceed
the following amounts for the persons indicated, nor will amounts in excess
of such limits be paid to any other person: Name:
_____________N/A________________________
Monthly/Yearly Amount: $ _________________________
Name: _____________N/A________________________
Monthly/Yearly Amount: $ _________________________
5.4 Borrower will not, without Bank's prior written consent, declare any
dividends on shares of its capital stock, or apply any of its assets to
the purchase, redemption or other retirement of such shares, or otherwise
amend its capital structure; except as shown in Exhibit "A";
5.5 Borrower will not make any loan or advance to any person(s) or
purchase or otherwise acquire the capital stock, assets or obligations of, or
any interest in, any person, except:
(a) commercial bank time deposits maturing within one year, (b)
marketable general obligations of the United States or a State, or marketable
obligations fully guarantied by the United States, (c) short-term commercial
paper with the highest rating of a generally recognized rating service, (d)
other investments related to the Borrower's business which, together with such
other investments now outstanding, do not in the aggregate exceed the sum of
$100,000__ at any time;
5.6 Borrower will not liquidate or dissolve or enter into any
consolidation, merger, pool, joint venture, syndicate or other
combination, or sell, lease, or dispose of Borrower's business assets as a
whole or such as in the opinion of Bank constitute a substantial portion of
Borrower's business or assets;
5.7 Borrower will not engage in any business activities or operations
substantially different from or unrelated to present business activities or
operations; and
5.8 Borrower, and Borrower's tenants, contractors, agents or other
parties authorized to use any of Borrower's properties, will not use,
generate, manufacture, store, treat, dispose of, or release any
hazardous substance or hazardous waste in, on, under or about any of
Borrower's properties, except as previously disclosed to Bank in
writing as provided in section 3.8; and any such activity shall be
conducted in compliance with all applicable federal, state and local
laws, regulations and ordinances, including without limitation those
described in section 3.8.
6. Waiver, Release and Indemnification. Borrower hereby (a) releases
and waives any claims against Bank for indemnity or contribution in
the event Borrower becomes liable for cleanup or other costs under any of
the applicable federal, state or local laws, regulations or ordinances,
including without limitation those described in section 3.8, and (b)agrees
to indemnify and hold Bank harmless from and against any and all claims,
losses, liabilities, damages, penalties and expenses which Bank may
directly or indirectly sustain or suffer resulting from a breach of (i) any
of Borrower's representations and warranties with respect to hazardous
wastes and hazardous substances contained in section 3.8, or (ii) section
5.8. The provisions of this section 6 shall survive the full and final
payment of all sums outstanding under this Agreement and promissory notes
and shall not be affected by Bank's acquisition of any interest in any of
the Borrower's properties, whether by foreclosure or otherwise.
7. Events of Default. The occurrence of any of the following events ("Events of
Default") shall terminate any and all obligations on the part of Bank to make
or continue the loan and/or line of credit and, at the option of Bank, shall
make all sums of interest and principal outstanding under the loan and/or
line of credit immediately due and payable, without notice of default,
presentment or demand for payment, protest or notice of non payment or
dishonor, or other notices or demands of any kind or character, all of which
are waived by Borrower, and Bank may proceed with collection of such
obligations and enforcement and realization upon all security which it may
hold and to the enforcement of all rights hereunder or at law
7.1 The Borrower shall fail to pay when due any amount payable by it
hereunder on any loans or notes executed in connection herewith;
7.2 Borrower shall fail to comply with the provisions of any other
covenant, obligation or term of this Agreement for a period of fifteen (15)
days after the earlier of written notice thereof shall have been given to
the Borrower by Bank or Borrower or any Guarantor has knowledge of an Event
of Default or an event that can become an Event of Default;
7.3 Borrower shall fail to pay when due any other obligation for
borrowed money, or to perform any term or covenant on its part to be
performed under any agreement relating to such obligation or any such other
debt shall be declared to be due and payable and such failure shall
continue after the applicable grace period;
7.4 Any representation or warranty made by Borrower in this Agreement or in
any other statement to Bank shall prove to have been false or misleading in
any material respect when made or Borrower's representations regarding the
"year 2000 problem" shall cease to be true, whether or not true when made,
and as a result Bank reasonably believes that Borrower's financial condition
or its ability to pay its debts as they come due will thereby be materially
impaired;
7.5 Borrower makes an assignment for the benefit of creditors, files a
petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions to
any court for a receiver or trustee for Borrower or any substantial part of
its property, commences any proceeding relating to the arrangement,
readjustment, reorganization or liquidation under any bankruptcy or
similar laws, or if there is commenced against Borrower any such
proceedings which remain undismissed for a period of thirty (30) days or,
if Borrower by any act indicates its consent or acquiescence in any such
proceeding or the appointment of any such trustee or receiver;
7.6 Any judgment attaches against Borrower or any of its properties for an
amount in excess of $_100,000___which remains unpaid, unstayed on appeal,
unbonded, or undismissed for a period of thirty (30) days;
7.7 Loss of any required government approvals, and/or any governmental
regulatory authority takes or institutes action which, in the opinion of
Bank, will adversely affect Borrower's condition, operations or ability to
repay the loan and/or line of credit;
7.8 Failure of Bank to have a legal, valid and binding first lien on, or a
valid and enforceable prior perfected security interest in, any property
covered by any deed of trust or security agreement required under this
Agreement;
7.9 Borrower dies, becomes incompetent, or ceases to exist as a going concern;
7.10 Occurrence of an extraordinary situation which gives Bank reasonable
grounds to believe that Borrower may not, or will be unable to, perform its
obligations under this or any other agreement between Bank and Borrower; or
7.11 Any of the preceding events occur with respect to any guarantor of credit
under this Agreement, or such guarantor dies or becomes incompetent,
unless the obligations arising under the guaranty and related agreements have
been unconditionally assumed by the guarantor's estate in a manner satisfactory
to Bank.
8. Successors; Waivers. Notwithstanding the Events of Default above, this
Agreement shall be binding upon and inure to the benefit of Borrower and
Bank, their respective successors and assigns, except that Borrower may not
assign its rights hereunder. No consent or waiver under this Agreement shall be
effective unless in writing and signed by the Bank and shall not waive or
affect any other default, whether prior or subsequent thereto, and whether
of the same or different type. No delay or omission on the part of the Bank
in exercising any right shall operate as a waiver of such right or any other
right.
9. Arbitration.
9.1 At the request of either Bank or Borrower any controversy or claim between
the Bank and Borrower, arising from or relating to this Agreement or
any Loan Document executed in connection with this Agreement or arising
from any alleged tort shall be settled by arbitration in Spokane County
Washington. The United States Arbitration Act will apply to the
arbitration proceedings which will be administered by the American
Arbitration Association under its commercial rules of arbitration except that
unless the amount of the claim(s) being arbitrated exceeds $5,000,000 there
shall be only one arbitrator. Any controversy over whether an issue is
arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of any action for judicial relief or pursuit of
a provisional or ancillary remedy shall not constitute a waiver of the right
of either party, including plaintiff, to submit the controversy or claim to
arbitration if such action for judicial relief is contested. For
purposes of the application of the statute of limitations the filing of an
arbitration as provided herein is the equivalent of filing a lawsuit and the
arbitrator(s) will have the authority to decide whether any claim or
controversy is barred by the statute of limitations, and if so, to dismiss
the arbitration on that basis. The parties consent to the joinder in the
arbitration proceedings of any guarantor, hypothecator or other party having
an interest related to the claim or controversy being arbitrated
9.2 Notwithstanding the provisions of Section 9.1, no controversy or claim
shall be submitted to arbitration without the consent of all parties if at
the time of the proposed submission, such controversy or claim arises from or
relates to an obligation secured by real property;
9.3 No provision of this Section 9 shall limit the right of the Borrower or
the Bank to exercise self-help remedies such as setoff, foreclosure or sale
of any collateral, or obtaining any ancillary provisional or interim
remedies from a court of competent jurisdiction before, after or during
the pendency of any arbitration proceeding. The exercise of any such
remedy does not waive the right of either party to request arbitration.
At Bank's option foreclosure under any deed of trust may be accomplished
by exercise of the power of sale under the deed of trust or judicial
foreclosure as a mortgage.
10. Collection Activities, Lawsuits and Governing Law. Borrower agrees to
pay Bank all costs and expenses (including reasonable attorney's fees and the
allocated cost for in-house legal services incurred by Bank), to enforce this
Agreement, any notes or any Loan Documents pursuant to this Agreement, whether
or not suit is instituted. If suit is instituted by Bank to enforce this
Agreement or any of these documents, Borrower consents to the personal
jurisdiction of the Courts of the State of Washington and Federal Courts
located in the State of Washington. Borrower further consents to the venue of
this suit, being laid in King County, Washington. This Agreement and any notes
and security agreements entered into pursuant to this Agreement shall be
construed in accordance with the laws of the State of Washington.
11. Additional Provisions. Borrower agrees to the additional provisions set
forth immediately following this Section 11 or on any "Exhibit_A______"
attached to and hereby incorporated into Agreement. This Agreement
supersedes all oral negotiations or agreements between Bank and Borrower
with respect to the subject matter hereof and constitutes the entire
understanding and Agreement of the matters set forth in this Agreement.
11.1 If any provision of this Agreement is held to be invalid or
unenforceable, then (a) such provision shall be deemed modified if
possible, or if not possible, such provision shall be deemed stricken, and
(b) all other provisions shall remain in full force and effect.
11.2 If the imposition of or any change in any law, rule, or regulation
guideline or the interpretation or application of any thereof by any court of
administrative or governmental authority (including any request or policy
whether or not having the force of law) shall impose or modify any taxes
(except U.S. federal, state or local income or franchise taxes imposed on
Bank), reserve requirements, capital adequacy requirements or other
obligations which would: (a) increase the cost to Bank for extending or
maintaining any loans and/or line of credit to which this Agreement relates,
(b) reduce the amounts payable to Bank under this Agreement, such notes and
other instruments, or (c) reduce the rate of return on Bank's capital as a
consequence of Bank's obligations with respect to any loan and/or line of
credit to which this Agreement relates, then Borrower agrees to pay Bank
such additional amounts as will compensate Bank therefor, within five (5)
days after Bank's written demand for such payment, which demand shall be
accompanied by an explanation of such imposition or charge and a
calculation in reasonable detail of the additional amounts payable by
Borrower, which explanation and calculations shall be conclusive, absent
manifest error.
11.3 Bank may sell participations in or assign this loan in whole or in part
without notice to Borrower and Bank may provide information regarding the
Borrower and this Agreement to any prospective participant or assignee. If a
participation is sold or the loan is assigned the purchaser will have the
right of set off against the Borrower and may enforce its interest
in the Loan irrespective of any claims or defenses the Borrower may have
against the Bank.
12.Notices. Any notices shall be given in writing to the opposite party's
signature below or as that party may otherwise specify in writing.
13.ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
This Business Loan Agreement (Parts A and B) executed by the parties on April
13, 1998. Borrower acknowledges having read all of the provisions of this
Agreement and Borrower agrees to its terms.
Eastern Wholesale Team #1
SEAFIRST BANK
(Branch/Office)
By: /S/ Xxxxx X. Xxxx
Title: Vice President
Address: P.O. Box 1446
City, State, Zip: Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
The Coeur d'Alenes Company, Inc. (Borrower Name)
By: /S/ Xxxxxxx X. Xxxxxxxxx
Title: Treasurer/CFO
Address: P.O. Box 2610
City, State, Zip: Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Union Iron Works, Inc. of Spokane (Borrower Name)
By: /S/ Xxxxxxx X. Xxxxxxxxx
Title: Treasurer/CFO
Address: P.O. Box 2610
City, State, Zip: Xxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Form 3082, Rev. 11/93, Word 5.01
Exhibit A
The following modifications are hereby made and incorporated into this
agreement:
Part B, Section 5.4, is hereby modified to read:
"Borrower will not, without Bank's prior written consent, declare any dividends
in excess of 10% of its annual net (after tax) profit on shares of the capital
stock ..."
Part B, Section 9.1 and Section 10:
The venue in both questions is hereby modified to read "Spokane County,
Washington".
Initials
