Exhibit 10.31
SUPPLEMENTAL LOAN AGREEMENT
THIS AGREEMENT is executed effective the 30th day of October, 2003,
between EXCALIBUR HOLDINGS, INC., a Texas corporation ("Holdings"), EXCALIBUR
INDUSTRIES, INC. , a Delaware corporation ("Industries"), EXCALIBUR STEEL, INC.,
an Oklahoma corporation ("Steel"), EXCALIBUR AEROSPACE, INC., an Oklahoma
corporation ("Aerospace") EXCALIBUR SERVICES, INC., an Oklahoma corporation
("Services"), XXXXXXX MACHINE WORKS, INC., a Texas corporation ("Xxxxxxx"),
XXXXXXX XXXXXXXX, an individual ("Xxxxxxxx"), XXXXXXX X. XXXXXX, an individual
("Stuart") and STILLWATER NATIONAL BANK AND TRUST COMPANY, a national banking
association (the "Lender").
R E C I T A L S:
WHEREAS, Holdings, Industries, Steel, Aerospace, Services, Xxxxxxx,
Xxxxxxxx and Xxxxxx are currently indebted to the Lender by virtue of that
certain Amended and Restated Loan Agreement effective as of April 30, 2003 (the
"Existing Debt");
WHEREAS, the Existing Debt and agreements thereto are evidenced by various
loan agreements, promissory notes, security agreements, guaranties and other
instruments and agreements (collectively, the "Existing Loan Documents");
WHREREAS, additional borrowing is needed for working capital and other
expenses;
NOW, THEREFORE, in consideration of the mutual agreements between the
parties and the funds to be advanced to the Borrower, it is agreed as follows:
1. LENDING AGREEMENT. Subject to the terms and conditions hereinafter set
forth, Lender agrees to lend to Industries and Xxxxxxx the amounts set
forth below.
2. TERM NOTE. Industries will execute and deliver to the Lender a Promissory
Note of even date herewith in the principal face amount of FIVE HUNDRED
FIFTY THOUSAND DOLLARS ($550,000.00) (the "Industries Note"), which will
be in form and substance and payable on the terms approved by Lender. The
Industries Note shall mature and become due on December 15, 2003, at which
time, the Borrower will pay the entire outstanding principal balance
together with all accrued interest and other charges, if any.
3. XXXXXXX REVOLVER. The Lender will provide Xxxxxxx and Industries a
revolving line of credit as follows:
3.1 Note. Promissory Note of even date herewith in the principal face
amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000.00) (the
"Xxxxxxx Note"), which will be in form and substance and payable on
the terms approved by Lender. It is specifically agreed that the
aggregate of advances made during the term of the Xxxxxxx Note may
exceed the face amount thereof, but the unpaid principal balance due
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on the Xxxxxxx Note will not exceed the lesser of (i) the Borrowing
Base; or (ii) the face amount of the Xxxxxxx Note.
3.2 Advances. Advances under the Xxxxxxx Note will be limited to the
Borrowing Base. The Borrowing Base shall be determined twice
monthly, on the 15th day of each month and the last day of each
month, on submission of a signed "Monthly Borrowing Base
Certificate" in the same form as provided by the Existing Loan
Documents. Each Monthly Borrowing Base Certificate will be supported
by a current accounts receivable aging, and such other documentation
that may reasonably required by the Lender to determine the
Borrowing Base. After determination of the Borrowing Base for any
given month, Borrower may obtain advances by submitting an "Advance
Request" in the form required by the Existing Loan Documents.
3.3 Maturity. Notwithstanding anything herein to the contrary the
Xxxxxxx Note will mature and become fully due and payable on October
28, 2004.
4. INTEREST. Interest on the Industries Note and the Xxxxxxx Revolver will be
paid at the interest rate equal to the Prime Rate plus two percent (2 %)
per annum, adjusted on each day on which a change in the Prime Rate occurs
(the "Interest Rate"). "Prime Rate" means the prime rate as published in
the "Money Rates Section" of the Wall Street Journal, which rate is not
necessarily the lowest rate of interest charged by the Lender. All
interest on the Term Note will be calculated for the actual number of days
elapsed at a per diem charge based on a year consisting of 360 days.
5. RECOURSE. The indebtedness will be full recourse to the Borrower and the
Guarantors.
6. BORROWING BASE. "Borrowing Base" means, as of any given date, eighty
percent (80%),or at the Lender's sole discretion any lesser percentage
designated upon sixty (60) days notice, of Eligible Trade Accounts
Receivable of Xxxxxxx subject to the following:
6.1 "Trade Accounts Receivable" means, as of any given date, all
accounts receivable of Xxxxxxx (which shall be excluded from the
Borrowing Base under the Existing Loan Documents) for goods sold and
delivered and services rendered by Xxxxxxx in the ordinary course of
the business presently conducted by Xxxxxxx representing amounts
then invoiced and due and owing. A Trade Account Receivable shall be
an "Eligible Trade Account Receivable", and shall be included in the
Borrowing Base, only if and so long as it meets each and all of the
following requirements:
6.1.1 It is a valid, genuine and legally enforceable obligation,
subject to no defense, set off or counter-claim, of the
account debtor or other obligor named herein or in the records
of Xxxxxxx pertaining thereto, and that Xxxxxxx has received
from the account debtor or other obligor any notification
repudiating such obligation or asserting that such obligation
is subject to any defense, set off or counterclaim; and
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6.1.2 It is owned by Xxxxxxx free and clear of all interests, liens,
attachments, encumbrances and security interests except the
security interests granted to the Lender; and
6.1.3 The Account debtor or other obligor is located in the United
States; and
6.1.4 Not more than ninety (90) days have expired since the date of
invoice; or, if the Lender in its sole discretion accepts as
eligible a Trade Account Receivable which is due on a date
stated in the invoice, not more than thirty (30) days have
expired since the date stated; and
6.1.5 Xxxxxxx has not received notice from the Lender that the
credit of the account debtor is not satisfactory to the Lender
for any reason; and
6.1.6 The account debtor is not an entity in which Xxxxxxx or any of
the guarantors has a controlling interest; and
6.1.7 Eligible Trade Accounts Receivable shall not include any
account receivable of the same account debtor to Xxxxxxx in
excess of fifteen percent (15%) of the then Eligible Trade
Accounts Receivable calculated after ineligible accounts; and
6.1.8 The entire receivable of one account debtor becomes ineligible
if more than ten percent (10%) of the total due is over ninety
(90) days past due, unless the ten percent (10%) over ninety
(90) days is attributable to an isolated dispute over a
specific invoice.
6.2 The value of Inventory used in determining the Borrowing Base shall
equal the value of raw material plus the value of finished product
and shall not include the value of any work in progress.
7. COLLATERAL SECURITY. The performance of all covenants and agreements
contained in this Loan Agreement and in the other documents executed or
delivered as a part of this transaction and the payment of the Note and
all renewals, amendments and modifications thereof shall be secured by the
collateral set forth in the Existing Loan Documents. Industries, Holdings,
Steel, Services, Aerospace and Xxxxxxx acknowledge that the Security
Agreement executed effective April 15, 2003, covers and applies to the
extension of credit contemplated herein.
8. CONDITIONS OF LENDING. In addition to the conditions set forth in the
Existing Loan Documents, the extension of credit contemplated herein shall
be conditioned upon payment of the Lender's expenses in connection
herewith.
9. GUARANTOR ACKNOWLEDGMENTS. Holdings, Steel, Services, Aerospace, Xxxxxxxx
and Stuart acknowledge and agree that their guaranties executed effective
April 15, 2003, cover and apply to the extension of credit contemplated
herein.
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10. EXISTING LOAN DOCUMENTS. Except to the extent supplemented herein, all
terms of the Existing Loan Documents shall apply to the extensions of
credit made under this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
effective the date first above written.
EXCALIBUR HOLDINGS, INC.,
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
EXCALIBUR INDUSTRIES, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
EXCALIBUR STEEL INC.,
an Oklahoma corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
EXCALIBUR AEROSPACE, INC.
an Oklahoma corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
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EXCALIBUR SERVICES, INC.
an Oklahoma corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
XXXXXXX MACHINE WORKS, INC.
a Texas corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
XXXXXXX XXXXXXXX, individually
/s/ Xxxxxxx X.X. Xxxxxx
-----------------------------
XXXXXXX X. XXXXXX, individually
STILLWATER NATIONAL BANK AND TRUST
COMPANY, a national banking association
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
(the "Lender")
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