EXHIBIT 10.17
BANK OF AMERICA
BUSINESS LOAN AGREEMENT
This Agreement dated as of February 24, 1997 is between Bank of America
Texas, N.A. (the "Bank") and Mountain Empire Rubber & Specialty Co.,
Inc. (the "Borrower").
1. LINE OF CREDIT AMOUNT AND TERMS.
1.1 Line of Credit Amount. During the availability period described below, the
Bank will provide a line of credit to the Borrower. The amount of the line of
credit (the "Commitment") is Five Hundred Thousand and no/100 Dollars
($500,000.00).
This is a revolving line of credit. During the availability period, the Borrower
may repay principal amounts and reborrow them.
Each advance must be for at least Ten Thousand and no/100 Dollars ($10,000.00),
or for the amount of the remaining available line of credit, if less.
The Borrower agrees not to permit the outstanding principal balance of the line
of credit to exceed the Commitment.
1.2 AVAILABILITY. (a) The line of credit is available between the date of this
Agreement and March 31, 1998 (the "Expiration Date") unless an Event of Default
has occurred and is continuing. (b) At any time and from time to time, the
Borrower may terminate in whole or reduce in part the Commitment, provided that
any such partial reduction shall be in an aggregate amount not less that $25,000
or integral multiples thereof. The amount of any such termination or reduction
may not thereafter be reinstated.
1.3 INTEREST RATE. The interest rate is the lesser of (a) the maximum lawful
rate of interest permitted under applicable usury laws, now or hereafter enacted
(the "Maximum Rate"), or (b) the rate (the "Basic Rate") that is equal to the
sum of the Bank's Reference Rate.
Notwithstanding the foregoing, if at any time the Basic Rate shall exceed the
Maximum Rate and thereafter the Basic Rate shall become less than the Maximum
Rate, the Rate of interest payable shall be the Maximum Rate until the Bank
shall have received the amount of interest it otherwise would have received if
the interest payable had not been limited by the Maximum Rate during the period
of time the Basic Rate exceeded the Maximum Rate.
The Reference Rate is the rate of interest publicly announced from time to time
by the Bank in Irving, Texas, as its Reference Rate. The Reference Rate is set
by the Bank based on various factors, including its costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans. The Bank may price loans to its customers
at, above, or below the Reference Rate. Any change in the Reference Rate will
take effect at the opening of business on the day specified in the public
announcement of a change in the Bank's Reference Rate.
1.4 REPAYMENT TERMS.
(a) The Borrower will pay interest on February 28, 1997 and on the last day of
each month thereafter until payment in full of any principal outstanding under
this line of credit. (b) The Borrower will repay in full all principal and
accrued unpaid interest or other charges outstanding under this line of credit
no later than the Expiration Date.
2. FEES AND EXPENSES.
2.1 Unused Commitment Fee. The Borrower agrees to pay the Bank a fee on any
difference between the and the amount of credit it actually uses, determined by
the weighted average loan balance maintained during the specified period. The
fee will be calculated at 3/8% per year on the last day of each quarter,
starting on February 14, 1997 and continuing through the Expiration Date.
2.2 Reimbursement Cost. (a) The Borrower agrees to immediately repay the Bank
for expenses that include, but are not limited to, filing, recording and search
fees, appraisal fees, and title report fees. (b) The Borrower agrees to
reimburse the Bank for any expenses it incurs in the preparation of this
Agreement and any agreement or instrument required by this Agreement. Expenses
include, but are not limited to, reasonable attorneys' fees. (c) The Borrower
agrees to reimburse the Bank for the cost of periodic audits and appraisals of
the real or personal property collateral securing this Agreement, at such
intervals as the Bank may reasonably require but not to exceed annual except if
any Event of Default has occurred and is continuing. The audits and appraisals
may be performed by employees of the Bank or by independent appraisers.
2.3 No Excess Fees. Notwithstanding anything to the contrary in this Section 2,
in no event shall any sum payable under this Section 2 (to the extent, if any,
constituting interest under any applicable laws), together with all amounts
constituting interest under applicable laws and payable in connection with the
credit evidenced hereby, exceed the Maximum Rate or the maximum amount of
interest permitted to be charged, taken, reserved, received or contracted for
under applicable usury laws.
3. COLLATERAL
3.1 PERSONAL PROPERTY. The Borrower's obligations to the Bank under this
Agreement will be secured by personal property the Borrower now owns or will own
in the future as listed below. The collateral is further defined in security
agreement(s) executed by the Borrower.
(a) Equipment.
(b) Inventory.
(c) Receivables.
4. DISBURSEMENTS, PAYMENTS AND COSTS
4.1 INTEREST CALCULATION. Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 365-day year and
the actual number of days elapsed.
4.2 DEFAULT RATE. Upon the occurrence and during the continuation of any Event
of Default under this Agreement, advances under this Agreement will at the
option of the Bank bear interest at the lesser of (a) the Maximum Rate and (b) a
rate per annum which is 2.00 percentage points higher than the rate of interest
otherwise provided under this Agreement. This will not constitute a waiver of
any default.
5. CONDITIONS The Bank must receive the following items, in form and content
acceptable to the Bank, before it is required to extend any credit to the
Borrower under this Agreement.
5.1 AUTHORIZATIONS. Evidence that the execution, delivery and performance by the
Borrower and each guarantor or subordinating creditor of this Agreement and any
instrument or agreement required under this Agreement have been duly authorized.
5.2 SECURITY AGREEMENTS. Signed original security agreements, assignments,
financing statements and fixture filings (together with collateral in which the
Bank requires a possessory security interest) which the Bank requires.
5.3 EVIDENCE OF PRIORITY. Evidence that security interests and liens in favor of
the Bank are valid, enforceable, and prior to all others' rights and interests,
except those the Bank consents to in writing.
5.4 INSURANCE. Evidence of insurance coverage, as required in the "Covenants"
section of this Agreement.
5.5 GUARANTY. Guaranty signed by Xxxxxx International, Inc. on the
Bank's standard form in an amount as may be acceptable, from time to
time, to the Bank.
5.6 GOOD STANDING. Certificates of good standing for the Borrower from its state
of incorporation and from any other state in which the Borrower is required to
qualify to conduct its business.
6. REPRESENTATIONS AND WARRANTIES When the Borrower signs this Agreement the
Borrower makes the following representations and warranties. Each request for an
extension of credit constitutes a renewed representation. (a) The Borrower is a
corporation duly formed and existing under the laws of the state where
organized. (b) This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's powers, have been duly authorized, and do
not conflict with any of its organizational papers. (c) This Agreement is a
legal, valid and binding agreement of the Borrower, enforceable against the
Borrower in accordance with its terms, and any instrument or agreement required
hereunder, when executed and delivered, will be similarly legal, valid, binding
and enforceable. (d) In each state
1in which the Borrower is required to be licensed or qualified, it is properly
licensed or qualified, in good standing, and, where required in compliance with
assumed name statutes, except where the failure to be so licensed or qualified
or to comply with such statutes would not have a material adverse effect on the
Borrower's business, financial condition, or ability to repay the Loan. (e) This
Agreement does not conflict in any material respect with any law, agreement
concerning or obligating Borrower for more than Ten Thousand and no/100 Dollars
($10,000.00), or obligation by which the Borrower is bound. (f) All financial
and other information that has been or will be supplied to the Bank is: (i)
sufficiently complete to give the Bank accurate knowledge of the Borrower's (and
any guarantor's) financial condition. (ii) in form and content reasonably
required by the Bank, and (iii) in compliance with all government regulations
that apply. (g) There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower, which, if lost, would impair in any material
respect the Borrower's financial condition or ability to repay the loan, except
as have been disclosed in writing to the Bank. (h) All collateral required in
this Agreement is owned by the grantor of the security interest free of any
title defects and any liens or interests of others, except those which have been
approved by the Bank in writing or are permitted in Section 7.8 of this
Agreement or in the Security Agreement. (i) The Borrower possesses all permits,
memberships, franchises, contracts and licenses required and all trademark
rights, trade name rights, patent rights and assumed name rights necessary to
enable it to conduct the business in which it is now engaged (such will not be
considered "necessary to enable Borrower to conduct its business" if the failure
to obtain same would not materially adversely affect Borrower's business
financial condition, or ability to repay the Loan. (j) There is no event which
is, or with notice or lapse of time or both would be, an Event of Default under
this Agreement. (k) All inventory which is included in the Borrowing Base is of
good and merchantable quality and free from defects. (l) The Borrower is in full
compliance with all applicable requirements of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); provided that such will only be
considered out of compliance if the failure to comply could reasonably be
expected to materially adversely affect Borrower's business, financial
condition, or ability to repay the Loan). (m) The Borrower's place of business
(or, if the Borrower has more than one place of business, its chief executive
office) is located at the address listed under the Borrower's signature on this
Agreement.
7. COVENANTS The Borrower agrees, so long as credit is available under this
Agreement and until the Bank is repaid in full:
7.1 USE OF PROCEEDS. To use the proceeds of the credit only for working capital.
7.2 FINANCIAL INFORMATION. To provide the following financial information and
statements and such additional information as reasonably requested by the Bank
from time to time:
(a) Within 120 days of the end of each fiscal year of the Borrower, the
Borrower's annual financial statements. These financial statements must be
reviewed by a Certified Public Accountant ("CPA") reasonably acceptable to
the Bank.
(b) Within 60 days of each period's end, the Borrower's quarterly financial
statements and compliance certificate. These financial statements may be
Borrower prepared.
(c) Guarantor's annual financial statements in form satisfactory to the Bank
within 120 days of the end of each fiscal year of the Borrower. These
financial statements must be audited by a Certified Public Accountant
("CPA") reasonably acceptable to the Bank. The statements shall be
prepared on a consolidated basis. The Borrower will also provide a
consolidating schedule to be submitted with these statements.
7.3 CURRENT RATIO. To maintain a ratio of current assets to current liabilities
of at least 1.50:1.0, measured quarterly.
7.4 TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO. To maintain a ratio of Total
Liabilities to Tangible Net Worth not exceeding 1.25:1.0, measured quarterly.
"Total Liabilities" means the sum of current liabilities plus long term
liabilities. "Tangible net worth" means the gross book value of the Borrower's
assets (excluding goodwill, patents, trademarks, trade names, organization
expense, treasury stock, unamortized debt discount and expense, deferred
research and development costs, deferred marketing expenses, and other like
intangibles) less total liabilities, including but not limited to accrued and
deferred income taxes, and any reserves against assets.
7.5 NET WORTH (GUARANTOR). Guarantor to maintain on a consolidated basis net
worth equal to at least Twelve Million and no/100 Dollars ($12,000,000.00),
measured annually. "Net worth" means the gross book value of the Borrower's
assets less total liabilities, including but not limited to accrued and deferred
income taxes, and any reserves against assets.
7.6 PROFITABILITY (GUARANTOR). Guarantor to maintain on a consolidated basis a
positive net income after taxes and extraordinary items for each annual
accounting period.
7.7 OTHER DEBTS Not to have outstanding or incur any direct or contingent debts
or lease obligations (other than those to the Bank), or become liable for the
debts of others without the Bank's prior written consent. This does not
prohibit: (a) Acquiring goods supplies, or merchandise on normal trade credit.
(b) Endorsing negotiable instruments received in the usual course of business.
(c) Obtaining surety bonds in the usual course of business (d) Debts and lines
of credit in existence on the date of this Agreement disclosed in writing to the
Bank.
7.8 OTHER LIENS. Not to create, assume, or allow any security interest or lien
(including judicial liens) on property the Borrower now or later owns, accept:
(a) Deeds of trust and security agreements in favor of the Bank.
(b) Liens for taxes not year due or remaining payable up to 120 days without
any penalty or that are being contested in good faith.
(c) Liens outstanding on the date of this Agreement disclosed in writing to
the Bank.
(d) Liens imposed by law, such as materialmen's mechanics', carriers',
workmen's and repairmen's liens, and other similar liens arising in the
ordinary course of business securing obligations which are not overdue for
a period of more than 30 days.
(e) Other liens arising in the ordinary course of business which are not
incurred in connection with the borrowing of money or the obtaining of
advances or credit and which do not materially detract from the value of
its property or its assets or materially impair the use thereof in the
operation of its business, including any landlord's liens.
(f) Liens for taxes, assessment or other governmental charges which are not
yet due or which are being actively contested in good faith by appropriate
proceedings.
(g) Liens arising from material adverse legal judgments (including liens in
connection with appeal bonds) not in excess of $200,000 (after taking
insurance coverage into account).
7.9 CHANGE OF OWNERSHIP. Not to cause, permit, or suffer any material change,
direct or indirect, in the Borrower" capital ownership.
7.10 NOTICES TO BANK. Notify the Bank in writing not later than five (5)
business days after the earlier of when Borrower obtains actual knowledge or
receives written notice thereof of: (a) any lawsuit over Two Hundred Thousand
and no/100 Dollars ($200,000.00) against Borrower. (b) any material dispute
between the Borrower and any government authority. (c) any failure to comply
with this Agreement. (d) any change in the Borrower's name, legal structure,
place of business, or chief executive office if the Borrower has more than one
place of business.
7.11 BOOKS AND RECORDS. To maintain adequate books and records.
7.12 AUDITS. To allow the Bank and its agents to inspect Borrower's properties
and to make available to the Bank and its agents for examination, audit, and
copying, books and records of the Borrower, in each case at any reasonable time.
If any of the Borrower's properties, books or records are in the possession of
any third party (other than legal counsel) to permit the Bank or its agents to
have access to and perform inspections or audits of such books or records and to
respond to the Bank's requests for information concerning such properties, books
and records; provided that, the Bank shall have given notice to the Borrower a
reasonable time prior to such an inspection, audit or request for information
and, if a representative of the Borrower is available, shall permit a
representative of the Borrower, at the Borrower's option, to be present at the
time of such inspection, audit or response to request for information.
7.13 COMPLIANCE WITH LAWS. To comply with the laws, (including any assumed name
statute), regulations, and orders of any government body with authority over the
Borrower's business. The Borrower shall comply at all times with all applicable
requirements of ERISA. Borrower will only be considered out of compliance
hereunder if the failure to comply could reasonably be expected to materially
adversely effect Borrower's business, financial condition, or ability to repay
the Loan.
7.14 PRESERVATION OF RIGHTS. To maintain and preserve all rights, privileges,
and franchises the Borrower now has. Borrower will only be considered out of
compliance hereunder if the failure to Maintain or preserve same could
reasonably be expected to materially adversely effect Borrower's business,
financial condition, or ability to repay the Loan.
7.15 MAINTENANCE OF PROPERTIES. To make any necessary repairs, renewals, or
replacements to keep the Borrower's properties that are, in the Borrower's sound
business judgment, necessary for the conduct of the Borrower's business, in good
working condition.
7.16 PERFECTION OF LIENS. To help the Bank perfect and protect its security
interests and liens, and reimburse it for related costs it incurs to protect its
security interests and liens.
7.17 COOPERATION. To take any action reasonably requested by the Bank to carry
out the intent of this Agreement.
7.18 INSURANCE. (a) INSURANCE COVERING COLLATERAL. To maintain all risk property
damage insurance policies covering the tangible property comprising the
collateral and any insurance usual for Borrower's business. Each insurance
policy must be in an amount acceptable to the Bank. The insurance must be issued
by an insurance company reasonably acceptable to the Bank and must include a
lender's loss payable endorsement in favor of the Bank in a form acceptable to
the Bank. (b) GENERAL BUSINESS INSURANCE. To maintain insurance reasonably
satisfactory to the Bank as to amount, nature and carrier covering property
damage (including loss of use and occupancy) to any of the Borrower's
properties, public liability insurance including coverage for contractual
liability, product liability and workers' compensation, and any other insurance
which is usual for the Borrower's business. (c) EVIDENCE OF INSURANCE. Upon the
request of the Bank, to deliver to the Bank a copy of each insurance policy or,
if permitted by the Bank, a certificate of insurance listing all insurance in
force.
7.19 ADDITIONAL NEGATIVE COVENANTS. Not to, without the Bank's written consent:
(a) engage in any business activities substantially different from the
Borrower's present business; (b) liquidate or dissolve the Borrower's business;
(c) enter into any consolidation, merger, pool, joint venture, syndicate, or
other combination; (d) acquire or purchase a business or its assets; or (e) sell
or otherwise dispose of any assets for less than fair market value or enter into
any sale and leaseback agreement covering any of its fixed or capital assets.
8. DEFAULT If any of the following events (each an "Event of Default") occurs,
the Bank may do one or more of the following: (i) declare the Borrower in
default, (ii) stop making any additional credit available to the Borrower, (iii)
exercise any and all rights and remedies as may be available to the Bank under
the terms of any collateral documents, security instruments, debt instruments or
and other document or instrument executed in connection herewith or in any way
related hereto, (iv) exercise any and all rights and remedies as may be
available to the Bank at law or in equity, and (v) declare the entire debt
created and evidence hereby to be immediately due and payable in full, whereupon
the entire unpaid principal indebtedness evidenced hereby, and all accrued
unpaid interest thereon, shall at once mature and become due and payable without
presentment, demand, protest, grace or notice of any kind (including, without
limitation, notice of intent to accelerate, notice of acceleration or notice of
protest), all of which are hereby severally waived by the Borrower. If a
bankruptcy petition is filed with respect to the Borrower, the entire debt
outstanding under this Agreement will automatically become due immediately.
8.1 FAILURE TO PAY. The Borrower fails to make a payment under this Agreement
within 3 days after the date when due.
8.2 NON-COMPLIANCE. The Borrower fails to perform any obligation after Borrower
obtains actual knowledge hereof or receives written notice thereof from the Bank
under: (a) this Agreement and such failure continues for 20 days, (b) any other
agreement made in connection with this loan and such failure continues for 20
days, or (c) any other material agreement the Borrower has with the Bank or any
affiliate of the Bank and such failure continues past any grace or cure period
provided for in such agreement.
8.3 CROSS-DEFAULT. Any default occurs under any agreement in connection with any
credit in excess of Fifty Thousand and no/100 Dollars ($50,000.00) the Borrower
has obtained from anyone else or which the Borrower has guaranteed and such
failure continues after the lapse of any applicable grace or cure period.
8.4 LIEN PRIORITY. The Bank fails to have an enforceable first lien (except for
any liens permitted hereunder and prior liens to which the Bank has consented in
writing) on or security interest in any property given as security for this
loan.
8.5 FALSE INFORMATION. The Borrower has given the Bank materially false or
misleading information or representations that were materially false or
misleading at the time given or made. Borrower will only be considered to have
given materially false or misleading information or representations if same
could reasonably be expected to materially adversely effect Borrower's business,
financial condition, or ability to repay the Loan.
8.6 BANKRUPTCY. The Borrower files a bankruptcy petition, a bankruptcy petition
is filed against the Borrower and such involuntary petition is not dismissed
within 60 days after such filing, or the Borrower makes a general assignment for
the benefit of creditors.
8.7 RECEIVERS. A receiver or similar official is appointed for the Borrower's
business, or the business is terminated.
8.8 JUDGMENTS. Any judgments or arbitration awards are entered against the
Borrower which shall not have been dismissed, discharged, stayed pending appeal
or bonded within 60 days after entry, or the Borrower enters into any settlement
agreements with respect to any litigation or arbitration, in an aggregate amount
of Two Hundred Thousand and no/100 Dollars ($200,000.00) or more in excess of
any insurance coverage.
8.9 GOVERNMENT ACTION. Any government authority takes action with respect to the
Borrower that the Bank reasonably believes materially adversely affects the
Borrower's financial condition or ability to repay.
9. ENFORCING THIS AGREEMENT; MISCELLANEOUS
9.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.
9.2 GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY TEXAS LAW
9.3 SUCCESSORS AND ASSIGNS. This Agreement is binding on the Borrower's and the
Bank's successors and assigns. The Borrower agrees that it may not assign this
Agreement without the Bank's prior written consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees who have
agreed to be bound by the provisions of Section 9.15. If the loan is assigned,
the purchaser will have the right of set-off against the Borrower.
9.4 ARBITRATION (a) This paragraph concerns the resolution of any controversies
or claims between the Borrower and the Bank, including but not limited to those
that arise from: (i) this Agreement (including any renewals, extensions or
modifications of this Agreement); (ii) any document, agreement or procedure
related to or delivered in connection with this Agreement, (iii) any violation
of this Agreement; or (iv) any claims for damages resulting from any business
conducted between the Borrower and the Bank, including claims for injury to
persons, property or business interests (torts). (b) At the request of the
Borrower or the Bank, any such controversies or claims will be settled by
arbitration in accordance with the United States Arbitration Act. THE UNITED
STATES ARBITRATION ACT WILL APPLY EVEN THOUGH THIS AGREEMENT PROVIDES THAT IT IS
GOVERNED BY TEXAS LAW. (c) Arbitration proceedings will be administered by the
American Arbitration Association and will be subject to its commercial rules of
arbitration. (d) For purpose of the application of the statute of limitations,
the filing of an arbitration pursuant to this paragraph is the equivalent of the
filing of a lawsuit, and any claim or controversy which may be arbitrated under
this paragraph is subject to any applicable statutes of limitations. The
arbitrators will have the authority to decide whether any such claim or
controversy is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. (e) If there is a dispute as to whether an issue is
arbitratable, the arbitrators will have the authority to resolve any such
dispute. (f) The decision that results from an arbitration proceeding may be
submitted to an authorized court of law to be confirmed and enforced. (g) This
provision does not limit the right of the Borrower or the Bank to: (i) exercise
self-help remedies such as setoff, (ii) foreclose against or sell any real or
personal property collateral; or (iii) act in a court of law before, during or
after the arbitration proceeding to obtain: (A) an interim remedy; and/or (B)
additional or supplementary remedies. (h) The pursuit of a successful action for
interim, additional or supplementary remedies, or the filing of a court action,
does not constitute a waiver of the right of the Borrower or the Bank, including
the suing party, to submit the controversy or claim to arbitration if the other
party contests the lawsuit.
9.5 SEVERABILITY; WAIVERS. If any part of this Agreement is not enforceable, the
rest of the Agreement may be enforced. The Bank retains all rights, even if it
makes a loan after default. If the Bank waives a default, it may enforce a later
default. Any consent or waiver under this Agreement must be in writing.
9.6 COSTS. If the Bank incurs any expenses in connection with administering or
enforcing this Agreement, or if the Bank takes collection action under this
Agreement, it is entitled to costs and reasonable attorneys' fees, including any
allocated costs of in-house counsel.
9.7 ATTORNEYS' FEES. In the event of a lawsuit or arbitration proceeding, the
prevailing party is entitled to recover costs and reasonable attorneys' fees
(including any allocated costs of in-house counsel) incurred in connection with
the lawsuit or arbitration proceeding, as determined by the court or arbitrator.
9.8 DESTRUCTION OF BORROWER'S DOCUMENTS. The Bank will not be obligated to
return any schedules, invoices, statements, budgets, forecasts, reports or other
papers delivered by the Borrower, other than original documents which the
Borrower is legally required to retain. The Bank will destroy or otherwise
dispose of such materials at such time as the Bank, in its discretion, deems
appropriate.
9.9 RETURNED MERCHANDISE. Until the Bank exercises its rights to collect the
accounts receivable as provided under any security agreement required under this
Agreement, the Borrower may continue its present policies for returned
merchandise and adjustments. Credit adjustments with respect to returned
merchandise shall be made immediately upon receipt of the merchandise by the
Borrower or upon other disposition of the merchandise by the debtor in
accordance with the Borrower's instructions. If a credit adjustment is made with
respect to any Acceptable Receivable, the amount of such adjustment shall no
longer be included in the amount of such Acceptable Receivable in computing the
Borrowing Base.
9.10 VERIFICATION OF RECEIVABLES. The Bank in the Event of Default, either
orally or in writing, request confirmation from any debtor of the current amount
and status of the accounts receivable upon which such debtor is obligated. At
any other time, the Bank may reasonably request confirmation from any other
debtor of the current amount and status of accounts receivable using a third
party acceptable to the Bank, at cost to the Borrower.
9.11 INDEMNIFICATION. The Borrower agrees to indemnify the Bank against, and
hold the Bank harmless from, all claims, actions, losses, costs and expenses
(including attorneys' fees and allocated costs for in-house counsel) incurred by
the Bank and arising from any contention whether well-founded or otherwise, that
there has been a failure to comply with any law regulating the Borrower's sales
or leases to or performance of services for debtors obligated upon the
Borrower's accounts receiveable and disclosures in connection therewith. This
indemnity will survive repayment of the Borrower's obligations to the Bank and
termination of this Agreement.
9.12 NOTICES. All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, to the addresses, or by
telecopy to the telecopier number on the signature page of this Agreement, or to
such other addresses as the Bank and the Borrower may specify from time to time
in writing. In the event of telecopier use, original notices to follow by
personal delivery or first class mail.
9.13 USURY LAWS. It is the intention of the parties hereto to comply with
applicable usury laws; accordingly, it is agreed that notwithstanding any
contrary provision herein or in any note or other agreement or commitment
between Borrower and Bank, whether written or oral, expressed or implied, Bank
shall never be entitled to charge, receive, or collect, nor shall amounts
received by Bank be credited so that Bank shall be paid, as interest a sum
greater than interest at the Maximum Rate. It is the intention of the parties
that this Agreement, and all notes and other instruments evidencing or securing
the payment of the indebtedness outstanding hereunder, or executed or delivered
in connection herewith, shall comply with applicable law. If Bank ever contracts
for, charges, receives or collects anything of value which is deemed to be
interest under applicable law, and if the occurrence of any circumstance or
contingency, whether acceleration of maturity, prepayment, delay in advancing
proceeds, or other event, should cause such interest to exceed the maximum
lawful amount, any amount which exceeds interest ant the Maximum Rate shall be
applied to the reduction of the unpaid principal balance outstanding hereunder
or any other indebtedness owed to Bank by Borrower, and if all such indebtedness
is paid in full, any remaining excess shall be paid to Borrower. In determining
whether the interest hereon exceeds interest at the maximum Rate, the total
amount of interest shall be spread throughout the entire term of such
indebtedness until its payment in full. To the extent that TEX. REV. CIV. STAT.
XXX. art 5069-1.04, as amended (the "Act"), is relevant to the Bank for the
purposes of determining the Maximum Rate, the parties elect to determine the
Maximum Rate under the Act pursuant to the "indicate rate ceiling" from time to
time in effect, as referred to and defined in article 1.04(a)(1) of the Act;
subject, however, to any right the Bank may have subsequently under applicable
law, to change the method of determining the Maximum Rate.
9.14 WAIVERS; RELEASES; ENFORCEMENT. The Borrower and all guarantors of the
indebtedness evidenced by this Agreement severally waive diligence in collecting
and bringing suit against any party, and agree (a) to all extensions and partial
payments, with or without notice, before or after maturity, (b) to any
substitution, exchange or release of any security now or hereafter given for
such indebtedness, and (c) that it shall not be necessary for the Bank in order
to enforce payment of such indebtedness, to first institute or exhaust the
Bank's remedies against the Borrower or any other party liable therefor or
against any security for such indebtedness.
9.15 CONFIDENTIALITY. The Bank agrees to take reasonable precautions and
exercise due care to maintain the confidentiality of all non-public confidential
information provided in connection with this Agreement or any document executed
in connection herewith and agrees that it shall not use any such information for
any purpose or in any manner other than pursuant to the terms contemplated by
this Agreement. The bank may disclose such information (i) to BankAmerica
Corporation affiliated and other related entitles, (ii) at the request of any
Bank regulatory authority or in connection with an examination of the Bank by
any such authority, (iii) pursuant to subpoena or other court process, (iv) when
required to do so in accordance with the provisions of any applicable law or
regulation, (v) at the express direction of any agency of any State of the
United States or at any other jurisdiction in which the Bank conducts it
business, (vi) to its independent auditors and other professional advisors that
have a reasonable need or basis for access thereto and provided that such
persons agree to be bound by the terms of this SECTION 9.15 and (vii) to the
extent reasonably required in connection with any proceeding to enforce its
rights hereunder; provided, however, the Bank shall instruct such independent
auditors or other professional advisors to keep such information confidential in
accordance with the terms of this
SECTION 9.15; provided, further, that in the event of any disclosure of
non-public information pursuant to any of clauses (ii), (iii), (iv) and (vi)
above, the Bank shall make a good faith attempt, to the extent practicable, to
notify Borrower of any such disclosure of non-public information at least three
(3) Business Days prior to disclosing such information, and in any event shall
notify Borrower of such disclosure as soon as practicable.
9.16 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE INSTRUMENTS AND
DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN
THE PATIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
This Agreement is executed as of the date stated at the top of the page.
Bank of America Texas, N.A. Mountain Empire Rubber &
Specialty Co., Inc.
By:________________________________ By:_______________________________
Xxx X. Xxxx, Vice President Xxxxx Xxxxxx, Chairman
By:_______________________________
Xxx Xxxxxxxxx, Secretary
Telecopy No.: 000-000-0000 Telecopy No.: 000-000-0000
Address where notices to the Bank Address where notices to the
are to be sent: Borrower are to be sent:
Bank of America Texas, N.A. 000 Xxxxxxxx Xxxx
Xxxx.: Commercial Loan Services Xxxxxxx Xxxx, Xxxxxxxxx 00000
000 Xxxx Xxxxxx, Xxx. 0000
Xxxxxxx, Xxxxx 00000
