EXHIBIT 10.4
LOAN AGREEMENT
THIS AGREEMENT, made as of the 14th day of June, 1996, by and between
AGSCO, INC., a North Dakota corporation ("Borrower"), and First American Bank
Valley, a North Dakota banking corporation, First National Bank North Dakota, a
national banking association and American Bank Xxxxxxxx, a Minnesota banking
corporation (hereafter individually referred to as "Bank" and collectively
referred to as "Banks").
RECITALS
A. The Borrower has requested extensions of credit from the Banks; and
B. The Banks are willing to agree to provide the requested credit to the
Borrower on the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereby agree as follows:
1. DEFINITIONS. The following terms when used in this Agreement shall,
except where the context otherwise requires, have the following meanings (such
definitions to apply to the singular and plural forms thereof):
"AGENT" shall mean First American Bank Valley, a North Dakota banking
corporation.
"BANK" shall have the meaning provided in the preamble hereto.
"BORROWER" shall have the meaning provided in the preamble hereto.
"BORROWING" shall mean a borrowing consisting of Loans or Term Loans
made on the same day by the Banks.
"BORROWING BASE" shall mean an amount equal to the sum of (i) 70% of
Borrower's Eligible Accounts PLUS (ii) 60% of Eligible Inventory.
"BUSINESS DAY" shall mean a banking business day of all of the Banks.
"COMMITMENT" shall have the meaning provided in Section 2.1.
"COMMITMENT FEE" shall have the meaning provided in Section 2.7(b).
Ex. 10.4 - 1
"DEFAULT" shall mean any event which if continued uncured would, with
notice or lapse of time or both, constitute an Event of Default.
"ELIGIBLE ACCOUNTS" shall mean such accounts receivable of the
Borrower as to which the Bank, in its sole discretion, shall from time to
time determine to be collectable in a timely manner in the ordinary course
of business without dispute or set off. Eligible Accounts shall not
include any account with respect to which: (a) any product warranty is
breached as to any account; (b) the account is not paid by the account
debtor within 90 days from the date of the invoice ; (c) the account debtor
disputes liability or makes any claim with respect to any account; (d) a
petition in bankruptcy or other application for relief under any insolvency
law is filed with respect to the account debtor; (e) the account debtor
assigns for the benefit of creditors, becomes insolvent, fails, suspends,
or goes out of business; (f) the account arises from a sale to an account
debtor outside the United States or Canada, unless the sale is on letter of
credit, acceptance or other terms acceptable to the Bank; (g) the account
debtor on an account is a supplier to or creditor of the Borrower or an
affiliate thereof, (h) the account debtor on an account is an affiliate of
the Borrower or is controlled by an affiliate of the Borrower; (i) the
accounts are due from an account debtor that has more than 10% of its total
accounts due to the Borrower more than 90 days past their invoice dates;
(j) the account represents a manufacturer's rebate that has not been
invoiced but only to the extent such rebates exceed 4.5% of aggregate sales
of such manufacturer's products; or (k) the Bank shall reasonably become
dissatisfied with the creditworthiness of an account debtor owing an
account.
"ELIGIBLE INVENTORY" shall mean be the value of all of Borrower's
inventory held for sale to customers and work in process. The value of
such inventory and work in process shall be the lowest of (i) Borrower's
cost; (ii) the book value of such inventory and work in process; or (iii)
the fair market value of such inventory and work in process. Eligible
Inventory shall not include any inventory held on consignment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended, and the rules and
regulations promulgated thereunder by any governmental agency or authority,
as from time to time in effect.
"EVENT OF DEFAULT" shall have the meaning specified in Section 7.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean those principles
in effect on the date hereof applied in a manner consistent with those used
in preparing the Borrower's financial statements.
"GUARANTY" shall mean any agreements, undertaking or arrangement by
which the respective obligor guarantees, endorses or otherwise becomes or
is contingently liable upon (by direct or indirect agreement contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise
to invest in, a debtor, or otherwise to assure a creditor against
Ex. 10.4 - 2
loss) the debt, obligation or other liability of any Person (other than
guaranties or endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the shares
of any Person.
"INDEBTEDNESS" of any Person shall mean all liabilities, indebtedness
and obligations that would be shown as liabilities on such Person's balance
sheet prepared in accordance with Generally Accepted Accounting Principles.
"LOAN" shall mean a loan by a Bank to the Borrower pursuant to Section
2.
"MAJORITY BANKS" shall mean at any time the Agent and at least one of
the other Banks.
"MAXIMUM AVAILABLE LOANS" shall at any time mean the lesser of: (a)
the Borrowing Base (as reported on the most recent Borrowing Base and
Compliance Certificate delivered pursuant to Section 5.3 hereof); or (b)
the Total Revolving Credit Commitment Amount.
"NOTE" or "NOTES" shall have the meaning provided in Section 2.3.
"NOTICE OF BORROWING" shall have the meaning provided in Section 2.2.
"OBLIGATIONS" shall mean all obligations of the Borrower to any Bank
under the Notes, this Agreement and any other document delivered hereunder.
"PERCENTAGE" shall have the meaning provided in Section 2.1.
"PERSON" shall mean any natural person, corporation, firm,
association, partnership, joint venture, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other
capacity.
"PLAN" shall mean each employee benefit plan or other class of
benefits covered by Title IV of ERISA, in either case whether now in
existence or hereafter instituted, of Borrower.
"REFERENCE RATE" shall mean the lowest New York Prime Rate, as
published in the WALL STREET JOURNAL, as the same may change from time to
time; the Banks may lend to their other customers at rates that are at,
above or below the Reference Rate.
"SECURITY INTEREST" shall mean any lien, pledge, mortgage,
encumbrance, charge or security interest of any kind whatsoever (including,
without limitation, the lien or retained security title of a conditional
vendor) whether arising under a security instrument or as a matter of law,
judicial process or otherwise.
Ex. 10.4 - 3
"TERM BANK(S)" shall have the meaning specified in Section 3.1.
"TERM LOANS" shall mean a loan by a Term Bank to the Borrower pursuant
to Section 3.
"TERM LOAN COMMITMENT AMOUNT" shall mean $1,000,000.00.
"TERM LOAN OBLIGATIONS" shall mean the unpaid principal balance of the
Term Notes.
"TERM LOAN PERCENTAGE" shall have the meaning specified in Section
3.1.
"TERM NOTES" shall have the meaning specified in Section 3.2 hereof.
"TERM NOTICE OF BORROWING" shall have the meaning provided in Section
3.2.
"TERMINATION DATE" shall have the meaning provided in Section 2.1.
"TOTAL BANK COMMITMENT AMOUNT" shall mean for each Bank, at any time
the start of (i) an amount equal to such Bank's Percentage of the Total
Revolving Credit Commitment Amount; plus (ii) such Bank's Term Loan
Percentage of the Term Loan Commitment Amount.
"TOTAL REVOLVING CREDIT COMMITMENT AMOUNT" shall mean the sum of
$8,750,000.00.
"TOTAL COMMITMENTS" shall mean at any time the start of (a) the Total
Revolving Credit Commitment Amount; plus (b) the Term Loan Commitment
Amount.
2. REVOLVING CREDIT COMMITMENT OF BANKS.
2.1 COMMITMENTS. Subject to the terms and conditions of this
Agreement, each Bank for itself alone agrees (such agreement as to each
Bank, called its "Commitment") that it will, from time to time on any
Business Day occurring during the period from the date hereof through the
date which is the earlier of ("Termination Date") March 1, 1997, or the
date of termination of the Commitments pursuant to Section 2.5, make Loans
to Borrower pursuant to Section 2.2, equal to the percentage (as to each
Bank, called its "Percentage" and specified opposite the name of such Bank
on the signature page hereof) of the aggregate amount of Loans requested by
Borrower from all Banks on such Business Day; PROVIDED, HOWEVER, that no
Bank shall be required or permitted on any date to make any Loan if after
giving effect thereto the start of the aggregate outstanding principal
amount of all Loans would exceed the Maximum Available Loans, or the sum of
the aggregate outstanding principal amount of all Loans made by such Bank
would exceed its Percentage of the Maximum Available Loans. Subject to the
terms and conditions of this Agreement, Borrower may from time to time
borrow, repay and reborrow amounts pursuant to the Commitments.
Ex. 10.4 - 4
2.2 BORROWING PROCEDURE. Borrower may from time to time by written
telecopied notice or notice transmitted electronically through the Agent's
Execubank Service (the "Notice of Borrowing") delivered by not later than
11:00 a.m. (Central Time) on any Business Day to the Agent (which shall
give notice thereof to each other Bank on or before 12:30 p.m. on such
Business Day) request Loans from all Banks in an integral multiple of
$1,000.00 to be made on the same Business Day specified in such notice. On
or before 2:00 p.m., Central Time, on the date specified in such notice,
each Bank shall furnish or make available for the account of the Agent, in
immediately available funds, or the Agent shall have been advised of a
confirming Federal Reserve Bank wire number, an amount equal to such Banks'
Percentage of the aggregate amount of Loans requested. All Loans shall be
made at the office of the Agent by credit in immediately available funds to
Borrower's general deposit account maintained with the Agent on the
Business Day specified. In the case of any Loan by any Bank other than the
Agent, the Agent shall be required to make such credit only to the extent
that it shall have received immediately available funds or been advised of
a confirming Federal Reserve Bank wire number from such Bank as above
provided. Each Notice of Borrowing shall be in the form of EXHIBIT A
attached hereto. Each Notice of Borrowing shall be irrevocable and binding
on the Borrower.
Unless the Agent shall have received notice from a Bank prior to the
date of any Borrowing that such Bank will not make available to the Agent
such Banks' Percentage of such Borrowing, the Agent may assume that such
Bank has made such portion available to the Agent on the date of such
Borrowing in accordance with this Section 2.2 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date
a corresponding meant. If and to the extent such Bank shall not have so
made such Percentage available to the Agent, such Bank agrees to repay to
the Agent forthwith on demand such corresponding meant together with
interest thereon, for each day from the date such mount is made available
to the Borrower until the date such amount is repaid to the Agent, at the
Reference Rate; PROVIDED, HOWEVER, if such Bank shall repay to the Agent
such corresponding amount, the amount repaid shall constitute such Bank's
Loan as part of such Borrowing for purposes of this Agreement.
The failure of any Bank to make the Loan as part of any Borrowing
shall not relieve any other Bank of its obligation to make its Loan on the
date of such Borrowing, but no Bank shall be responsible for the failure of
any other Bank to make the Loan to be made by such other Bank. The Agent
shall use its best efforts to give Borrower notice of any Banks' failure to
make its Loan.
2.3 NOTES. All Loans made by any Bank shall be evidenced by a
promissory note of Borrower, dated the date hereof (herein, together with
all promissory notes, if any, accepted in substitution or replacement
therefor, called individually a "Note" and collectively the "Notes"),
payable to the order of such Bank in a principal meant equal to its
Percentage of the Total Revolving Credit Commitment Amount. The aggregate
unpaid amount of Loans set forth on the records of a Bank shall be
rebuttable presumptive evidence of the principal
Ex. 10.4 - 5
amount owing and unpaid on the Note of such Bank. Each of the Notes shall
be in the form of EXHIBIT C attached to this Agreement.
2.4 MATURITY. The Notes will all mature and be due and payable in
full on March 1, 1997.
2.5 TERMINATION. The Commitments of the Banks shall terminate and
the Banks shall be relieved of their obligations to make any further Loans:
(a) five (5) Business Days after notice is given, at any
time when no Loans are outstanding, by Borrower to Agent (of which
Agent shall give prompt notice to each other Bank); or
(b) immediately and without further action upon the
occurrence of any Event of Default of the nature referred to in clause
(d) of Section 7.1; or
(c) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Notes shall be declared to be due and
payable pursuant to this Section 2; or
(d) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Majority Banks shall so elect by notice to
Borrower from the Agent for purposes of this clause.
2.6 INTEREST.
(a) Interest accrued on the Notes shall be payable on the
first day of each month commencing July 1, 1996.
(b) Interest will accrue on the Notes at a fluctuating rate per
annum at all times equal to the Reference Rate.
2.7 LATE FEES. Borrower agrees to pay a late payment service
charge in mount equal to five percent (5.0%) OF any installment of
principal or interest (including any final installment) not received by any
Bank within ten (10) days of the date due.
2.8 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of any
Bank to make any advances against any of the Notes shall be subject to the
further conditions precedent that on the date of such advance the following
statements shall be true (the receipt by the Borrower of the proceeds of
such advance shall be deemed to constitute a representation or warranty by
the Borrower that such statements are true):
Ex. 10.4 - 6
(a) The representations and warranties contained in Section
4 hereof are correct on and as of the date of such advance as though
made on or as of such date; and
(b) No Default or Event of Default has occurred and is
continuing.
2.9 COMPUTATIONS. Interest on the Notes, and any other
compensation payable to the Banks hereunder shall be computed utilizing the
actual number of days elapsed in a year of 360 days.
2.10 VOLUNTARY PAYMENT. Borrower shall have the right at any time,
not later than 11:00 a.m. Central Time on the same Business Day m such
payment, to pay the Notes in whole or in part without premium of penalty
but with seemed interest to the date or prepayment on the amount prepaid.
2.11 PAYMENT TO AGENT. Any other provision of this Agreement to the
contrary notwithstanding, Borrower shall make all payments of accrued
interest on and principal of the Notes in immediately available funds to
the Agent at its office shown in Section 9.4 hereof for the account of the
Banks or holders of Notes thereof in accordance with each Banks' Percentage
of such payments. The Borrower hereby authorizes the Agent to charge from
time to time against the Borrower's account with it any amount so due on
the due date thereof. The Borrower hereby further authorizes each Bank, if
and to the extent payment is not made when due hereunder or under the Note
held by such Bank, to charge from time to time against the Borrower's
account with such Bank any amount so due. The Agent shall promptly
distribute to each Bank in immediately available funds its respective
Percentage of all payments of principal or interest received by it for the
account of such Bank. Any payment due from the Agent to any Bank pursuant
to this paragraph shall bear interest commencing the first Business Day
following the Business Day the Agent received such payment at a rate equal
to the Reference Rate. Subject to the provisions of Section 2.12, all
amounts received by each Bank (whether as a result of payment transmitted
by Borrower or otherwise) on account of payment of interest on or principal
of the Notes, as the case may be, shall be so applied by it to such
payment.
2.12 PRO RATA SHARING.
(a) If any holder of any Note shall obtain any payment
(whether voluntary, involuntary, by application of offset or
otherwise) upon any principal of or interest on such Note in excess of
its Percentage of payments then or thereafter obtained by all holders
upon principal of or interest on all Notes, such holder shall purchase
from the other holders of Notes such participations therein as shall
be necessary for such purchasing holder to share the excess payment
received with such other holders according to each such holder's
Percentage; PROVIDED, HOWEVER, that if all or any portion of the
excess payment is thereafter recovered from such purchasing holder,
then purchase shall be rescinded and the purchase price restored pro
rate according
Ex. 10.4 - 7
to the extent of such recovery, but without interest. Any payments
received by any Bank shall be applied first to the outstanding amount
of any Loans in accordance with each Banks' respective Percentage
thereof.
(b) Following any Default or Event of Default hereunder and
continuing until such Default or Event of Default is remedied or
waived as provided herein, any payments received by any Bank pursuant
to this Agreement shall be applied ratably to the outstanding amount
of any Loans and Term Loans according to the percentage that each
Bank's total outstanding balances bear to the aggregate outstanding
balances of all the Banks on such Loans and Term Loans. To the extent
any Bank receives payments in excess of what is required pursuant to
this Section 2.12, such Bank shall purchase participations from the
other Banks as may be necessary for the purchasing Bank to share the
excess received by the purchasing Bank in accordance with the priority
set forth above.
2.13 MANDATORY PREPAYMENT. At least once prior to the maturity of
the Notes, reduce the outstanding balance of principal and interest on the
Notes to zero for a period of thirty (30) consecutive days.
3. TERM LOANS.
3.1 TERM LOANS. Subject to compliance with all terms and
conditions hereof, each of First American Bank Valley and First National
Bank North Dakota (hereinafter individually "Term Bank" and collectively,
the "Term Banks") hereby alone agrees (such agreement as to each Term Bank
called its "Term Loan Commitment Amount") that will from time to time
during the period from the date hereof through the date which is the
earlier of the Termination Date, or the date of termination of the Term
Loans pursuant to Section 3.5, make Term Loans to Borrower pursuant to
Section 3.2, equal to the percentage (as to each Term Bank called its "Term
Loan Percentage" and specified opposite the name of each Term Bank on the
signature page hereof) of the aggregate amount of such Term Loans so
requested by Borrower; PROVIDED, HOWEVER, that no Term Bank shall be
required or permitted on any date to make any Term Loan if after giving
effect thereto the sum of the aggregate amount of all Term Loans made would
exceed the Term Loan Commitment Amount or the aggregate amount of all Term
Loans made by such Term Bank would exceed its Term Loan Percentage of the
Term Loan Commitment Amount.
3.2 BORROWING PROCEDURE. Borrower may from time to time but not
more often than once each calendar month, by written telecopied notice (the
"Term Notice of Borrowing") delivered by not later than 11:00 a.m. (Central
Time) on any Business Day to the Agent (which shall give prompt notice
thereof to each other Term Bank) request Term Loans from the Term Banks in
a minimum aggregate amount of $100,000.00, to be made on the same Business
Day specified in such notice. The Term Notice of Borrowing shall be
accompanied by invoices, purchase orders and other information requested by
Agent
Ex. 10.4 - 8
describing the fixed assets acquired with the proceeds of such requested
Borrowing. On or before 2:00 p.m., Central Time, on the date specified in
such notice, each Term Bank shall furnish or make available for the account
of the Agent, in immediately available funds or the Agent shall have been
advised of a continuing Federal Reserve Bank wire number, an amount equal
to such Term Banks' Term Loan Percentage of the aggregate amount of Term
Loans requested. All Term Loans shall be made at the office of the Agent
by credit in immediately available funds to Borrower's general deposit
account maintained with the Agent on the Business Day specified. In the
case of any Term Loan by any Term Bank other than the Agent, the Agent
shall be required to make such credit only to the extent that it shall have
received immediately available funds or been advised of a continuing
Federal Reserve Bank wire number from such Term Bank as above provided.
Each Term Notice of Borrowing shall be in the form of EXHIBIT B attached
hereto. Each Term Notice of Borrowing shall be irrevocable and binding on
the Borrower.
Unless the Agent shall have received notice from a Term Bank prior to
the date of any Borrowing that such Term Bank will not make available to
the Agent such Term Banks' percentage of such Borrowing, the Agent may
assume that such Term Bank has made such portion available to the Agent on
the date of such Borrowing in accordance with this Section 3.2 and the
Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent such Term Bank
shall not have so made such Term Loan Percentage available to the Agent,
such Term Bank agrees to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at the Reference Rate; PROVIDED, HOWEVER, if
such Term Bank shall repay to the Agent such corresponding amount, the
amount repaid shall constitute such Term Banks' Term Loan as part of such
Borrowing for purposes of this Agreement.
The failure of any Term Bank to make the Term Loans as part of any
Borrowing shall not relieve any other Term Bank of its obligation to make
its Term Loan on the date of such Borrowing, but no Term Bank shall be
responsible for the failure of any other Term Bank to make the Loan to be
made by such other Term Bank. The Agent shall use its best efforts to give
Borrower notice of any Term Banks' failure to make its Term Loan.
3.3 TERM NOTES. All Term Loans made by the Term Banks shall be
evidenced by a promissory note of Borrower, dated the date hereof and in
the form of EXHIBIT D attached hereto (herein, together with all promissory
notes, if any, accepted in substitution or replacement therefor, called
individually a "Term Note" and collectively, the "Term Notes"), payable to
the order of such Term Bank in a principal amount equal to $500,000.00. The
aggregate paid amount of Term Loans set forth on the records of a Term Bank
shall be rebuttable presumptive evidence of the principal amount owing and
unpaid on the Term Note of such Term Bank.
Ex. 10.4 - 9
3.4 MATURITY OF TERM NOTES. The Term Notes will all mature and be
due and payable in full on March 1, 1997.
3.5 TERMINATION. The Term Loan Commitments Amount of the Term
Banks shall terminate and the Term Banks shall be relieved of their
obligations to make any further Term Loans:
(a) five (5) Business Days after notice is given, at any
time when no Term Loans are outstanding, by Borrower to Agent (of
which Agent shall give prompt notice to each other Term Bank); or
(b) immediately and without further action upon the
occurrence of any Event of Default of the nature referred to in clause
(d) of Section 7.1; or
(c) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Term Notes shall be declared to be due and
payable pursuant to this Section 3; or
(d) immediately when any Event of Default (other than of
the nature specified in clause (d) of Section 7.1) shall have occurred
and be continuing and the Term Banks shall so elect by notice to
Borrower from the Agent for purposes of this clause; or
(e) At such time as the Term Banks have advanced against
the Term Notes, in the aggregate, the Term Loan Commitment Amount.
3.6 INTEREST AND PAYMENTS ON THE TERM NOTES.
(a) Borrower agrees to pay interest on the Term Notes from
the date of this Agreement until all principal and interest thereon
has been paid in full at a rate per annum equal at all times to the
Reference Rate.
(b) Interest seemed on the Term Notes and the principal
thereof, shall be payable as provided in the Term Notes.
(c) No provision of this Agreement or the Term Notes shall
require the payment or permit the collection of interest in excess of
the rate permitted by applicable law.
3.7 LATE FEES. Borrower agrees to pay a late payment service
charge in an amount equal to five percent (5.0%) of any installment of
principal or interest (including any final installment) not received by any
Term Bank within ten (10) days of the date due.
Ex. 10.4 - 10
3.8 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of any
Term Bank to make any advances against any of the Term Notes shall be
subject to the further conditions precedent that on the date of such
advance the following statements shall be true (the receipt by the Borrower
of the proceeds of such advance shall be deemed to constitute a
representation or warranty by the Borrower that such statements are true):
(a) The representation and warranties contained in Section
4 hereof are correct on and as of the date of such advance as though
made on or as of such date; and
(b) No Default or Event of Default has occurred and is
continuing.
3.9 COMPUTATIONS. Interest on the Term Notes, and any other
compensation payable to the Term Banks hereunder shall be computed
utilizing the actual number of days elapsed in a year of 360 days.
3.10 VOLUNTARY PAYMENT. Borrower shall have the right at any time,
by giving notice to the Agent no later than 11:00 a.m. Central Time on the
same Business Day to pay the Term Notes in whole or in part without premium
or penalty but with seemed interest to the date of prepayment on the amount
prepaid.
3.11 PAYMENT TO AGENT. Any other provision of this Agreement to the
contrary notwithstanding, Borrower shall make all payments of seemed
interest on and principal of the Term Notes in immediately available funds
to the Agent at its office shown on in Section 9.4 hereof for the account
of Term Banks or holders of Term Notes thereof in accordance with each such
Bank's Term Loan Percentage of such payments. The Borrower hereby
authorizes the Agent to charge from time to time against the Borrower's
account with it any amount so due on the due date thereof. The Borrower
hereby further authorizes each Term Bank, if and to the extent payment is
not made when due hereunder or under the Term Note held by such Term Bank,
to charge from time to time against the Borrower's account with such Term
Bank any meant so due. The Agent shall promptly distribute to each Term
Bank in immediately available funds its respective Term Loan Percentage of
all payments of principal or interest received by it for the account of
such Term Bank. Any payment due from the Agent to any Term Bank pursuant
to this paragraph shall bear interest commencing the first Business Day
following the Business Day the Agent received such payment at a rate equal
to the Reference Rate. Subject to the provisions of Section 3.12, all
amounts received by each Term Bank (whether as a result of payment
transmitted by Borrower or otherwise) on account of payment of interest on
or principal of the Term Notes, as the case may be, shall be so applied by
it to such payment.
3.12 PRO-RATA SHARING.
Ex. 10.4 - 11
(a) If any holder of any Term Note shall obtain any payment
(whether voluntary, involuntary, by application of offset or
otherwise) upon any principal of or interest on such Term Note in
excess of its Term Loan Percentage of payments then or thereafter
obtained by all holders upon principal of or interest on all Term
Notes, such holder shall purchaser from the other holders of Term
Notes such participations therein as shall be necessary for such
purchasing holder to share the excess payment received with such other
holders according to each such holder's Term Loan Percentage;
PROVIDED, HOWEVER, that if all or any portion of the excess payment is
thereafter recovered from such purchasing holder, the purchase shall
be rescinded and the purchase price restored pro rate according to the
extent of such recovery, but without interest.
(b) Following any Default or Event of Default hereunder and
continuing until such Default or Event of Default is remedied or
waived as provided herein, any payments received by any Bank pursuant
to this Agreement shall be applied ratably to the outstanding amount
of any Loans, Term Loans according to the percentage that each Bank's
total outstanding balances bear to the aggregate outstanding balances
of all the Banks on such Loans and Term Loans. To the extent any Bank
receives payments in excess of what is required pursuant to this
Section 3.12(b), such Bank shall purchase participations from the
other Banks as may be necessary for the purchasing Bank to share the
excess received by the purchasing Bank in accordance with the priority
set forth above.
4. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to each of the Banks that:
4.1 ORGANIZATION, QUALIFICATION AND AUTHORIZATION.
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of North Dakota; has the
corporate power and authority to own its property and to carry on its
business as now being conducted; and is duly qualified and licensed to
do business, and is in good standing, in every jurisdiction in which
the nature of the business in which it is engaged makes such
qualification or licensing necessary, except for those jurisdiction
where its failure to be qualified, licensed or in good standing would
not have a material adverse effect on its business or property.
4.2 VALIDITY OF OBLIGATIONS. Borrower has full power,
right and authority to execute and deliver this Loan Agreement, the
Notes and all other documents and agreements required to be delivered
by Borrower hereunder ("Loan Documents"), to obtain the credit herein
provided for, and to perform and observe each and all of the matters
and things provided for in the Loan Documents. The execution and
delivery of the Loan Documents and the performance or observance of
the terms thereof have been duly authorized by all necessary and
corporate and shareholder action and do not contravene or violate any
provision of law or any charter or bylaw provision or any
Ex. 10.4 - 12
covenant, indenture or agreement of or binding upon Borrower, nor
require the consent or approval of any governmental entity or agency
thereof.
4.3 TITLE TO ASSETS. The Borrower has good and marketable
title to all of its property and assets reflected in its balance
sheet, prepared and delivered to the Bank, subject to the encumbrances
as therein detailed.
4.4 LITIGATION. No actions, suits or proceedings are
pending or, to the Borrower's knowledge, threatened, against or
affecting it before any court, governmental or administrative body or
agency which might result in any material adverse change in the
operations, business property, assets or condition (financial or
otherwise) of the Borrower, or which would question the validity of
this Agreement or of any action taken or to be taken by Borrower
pursuant to or in connection with this Agreement.
4.5 NO EVENTS OF DEFAULT. No Default or Event of Default
has occurred and is continuing as of the date hereof.
4.6 SUBSIDIARIES AND AFFILIATES. Borrower has no
subsidiaries [corporations in which Borrower owns or controls,
directly or indirectly, more than 50% of the voting stock of such
corporation ("Subsidiaries")] or affiliates except those listed on
EXHIBIT G attached hereto.
4.7 ERISA COMPLIANCE. The provisions of each Plan comply in all
material respects with all applicable requirements of ERISA, and Borrower
has not incurred any "accumulated funding deficiency" within the meaning of
ERISA which is material, in connection with any Plan. Borrower does not
participate in any multi-employer pension Plan.
4.8 GUARANTY OR SURETYSHIP. Except as disclosed on EXHIBIT H
attached hereto, Borrower is not a party to any contract of Guaranty or
suretyship and none of its assets is subject to such a contract.
4.9 ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously herewith furnished by or on behalf of Borrower or to any
Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of the Borrower to any Bank will be,
true and accurate in every material respect on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information not misleading.
4.10 TAX RETURNS; AUDITS. Borrower has filed all federal, state and
provincial income tax returns which are required to be filed, and have paid
all taxes as shown on said returns and on all assessments received by it to
the extent that such notes have become due
Ex. 10.4 - 13
or have obtained extensions with respect to the filing of such returns and
have made provision for the payment of taxes anticipated to be payable in
connection with such returns. Borrower has made all required withholding
deposits. Federal income tax returns of Borrower have been examined and
approved or adjusted by the applicable taxing authorities or closed by
applicable statutes for all fiscal years prior to and including the fiscal
year ended 1992. Except as disclosed to the Banks in writing prior to the
date hereof, Borrower has no knowledge of any objections to or claims for
additional taxes by federal, state or local taxing authorities for
subsequent years.
4.11 INDEBTEDNESS. Except for Indebtedness hereunder, Indebtedness
for accounts payable incurred in the ordinary course of business and
Indebtedness disclosed on EXHIBIT H attached hereto, the Borrower has no
outstanding Indebtedness.
4.12 COMPLIANCE WITH OTHER AGREEMENTS. The Borrower is not in
material violation of its Articles of Incorporation, Bylaws or other
governing documents. Borrower is not in default in the performance of any
obligation, agreement, or condition contained in any bond, debenture, note,
or in any indenture, loan agreement, or other agreement.
5. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees with the
Banks that so long as any amount remains unpaid on the Notes or the Term Notes,
or the Banks have any obligation to advance against the Notes, Borrower will:
5.1 MAINTAIN ASSETS. Maintain and keep its assets, properties and
equipment in good repair, working order and condition and from time to time
make or cause to be made all needed renewals, replacements and repairs so
that at all times the Borrower's businesses can be operated efficiently.
5.2 INSURANCE. Insure and keep insured all of its property of an
insurable value under all-risk policies in an amount reasonably acceptable
to the Banks and carry such other insurance as is usually carried by
persons engaged in the same or similar business, all such insurance to name
the Agent, as agent for the Banks, an additional insured on liability
coverages, and from time to time furnish to the Agent upon request
appropriate evidence of the carrying of all insurance required by this
Section.
5.3 FINANCIAL STATEMENTS. Furnish to the Bank:
(a) Within ninety (90) days after the end of each of
Borrowers fiscal years, audited annual financial statements for
Borrower, which include a balance sheet and income statement prepared
by accountants reasonably acceptable to the Banks and in accordance
with Generally Accepted Accounting Principles consistently applied.
(b) Within ninety (90) days after the end of each of the
fiscal years of Ag Park, LLC, a North Dakota limited liability company
("Ag Park"), reviewed annual
Ex. 10.4 - 14
financial statements for Ag Park which include a balance sheet and
income statement prepared by accountants reasonably acceptable to the
Banks and in accordance with Generally Accepted Accounting Principles
consistently applied.
(c) Within ninety (90) days after the end of Borrower's
fiscal years, consolidated and consolidating financial statements for
Borrower and Ag Park, which include a balance sheet and consolidated
income statement prepared by accountants reasonably acceptable to the
Banks and in accordance with Generally Accepted Accounting Principles
consistently applied.
(d) Within thirty (30) days after the end of each calendar
month, compiled, consolidated and consolidating interim financial
statements for Borrower and Ag Park, which include an internally
prepared balance sheet, profit and loss statements and accounts
receivable aging summary as of the end of such calendar month,
together with a narrative explaining any significant trends or
variances from budget.
(e) On or before the twentieth (20th) day of each month
hereafter, a Borrowing Base and Compliance Certificate as of the end
of the immediately preceding month in the form of EXHIBIT I.
(f) At least annually, and more frequently at Agent's
request, a complete listing and aging of Borrower's accounts
receivable.
(g) Such other information as the Banks may reasonably
request from time to time.
5.4 ACCESS TO RECORDS. Permit any person designated by the Banks,
at the Banks' expense, to visit and inspect any of its properties, books
and financial records and to discuss the Borrower's affairs, finances and
accounts with the Borrower, all at such reasonable times and as often as
Banks any reasonably request.
5.5 TAXES, ASSESSMENTS AND CHARGES. Promptly pay over to the
appropriate authorities all starts for taxes deducted and withheld from
wages as well as the employer's contributions and other governmental
charges imposed upon or asserted against the Borrower's income, profits,
properties and rental charges or otherwise which are or might become a lien
charged upon the Borrower's properties, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves shall have
been established on the Borrower's books with respect thereto.
5.6 NOTIFICATION OF CHANGES Promptly notify the Banks of:
(a) Any litigation which might materially and adversely
affect the Borrower or any of its properties;
Ex. 10.4 - 15
(b) The occurrence of any Default or Event of Default under
this Agreement.
(c) Any material adverse change in the operations,
business, properties, assets or conditions, financial or otherwise, of
the Borrower which could adversely and materially affect the
Borrower's ability to perform its obligations under the Loan
Documents.
(d) Any casualty or other losses in excess of $50,000.00
whether or not covered by insurance.
5.7 CORPORATE EXISTENCE. Maintain its corporate existence and
conduct the same general type of business as is now being carried on and
continue compliance with all applicable statutes, laws, rules and
regulations.
5.8 BOOKS AND RECORDS. Keep true and accurate books of records and
in accordance with Generally Accepted Accounting Principles.
5.9 REIMBURSEMENT OF EXPENSES. Promptly reimburse the Agent for:
(a) any and all reasonable expenses, fees and
disbursements, including attorneys' fees and inventory and receivable
audit fees, incurred in connection with the preparation of this
Agreement and the instruments and documents related thereto up to a
maximum of $6,500.00; and
(b) all expenses of collection of any loans made or to be
made hereunder, including reasonable attorneys' fees.
5.10 MINIMUM TANGIBLE NET WORTH. Cause Ag Park and Borrower to
maintain as of each of Borrower's fiscal year ends, a consolidated minimum
Tangible Net Worth of not less than $5,250,000.00. The term "Tangible Net
Worth" as used herein shall mean the start of Borrower's and Ag Park's
consolidated net worth determined in accordance with Generally Accepted
Accounting Principles, exclusive of goodwill, prepaid expenses, amounts due
from officers, and other intangible assets.
5.11 MINIMUM CURRENT RATIO. Cause Ag Park and Borrower to maintain
a ratio of their consolidated current assets (determined in accordance with
Generally Accepted Accounting Principles) to their consolidated current
liabilities (determined in accordance with Generally Accepted Accounting
Principles) of not less than the following for the periods indicated:
Ex. 10.4 - 16
PERIOD MAXIMUM RATIO
------ -------------
On 6/30/96 1.15 to 1
On 7/31/96 1.15 to 1
On 8/31/96 1.15 to 1
On 9/30/96 1.15 to 1
On 10/31/96 1.20 to 1
On 11/30196 and
each month end thereafter 1.15 to 1
5.12 MAXIMUM DEBT/TANGIBLE NET WORTH RATIO. Cause Ag Park and
Borrower to maintain at all times a ratio of its consolidated Indebtedness
to consolidated Tangible Net Worth of not greater than the following for
the periods indicated:
PERIOD MAXIMUM RATIO
------ -------------
On 6/30/96 5.00 to 1
On 7/31/96 5.00 to I
On 8/31/96 5.00 to 1
On 9/30/96 5.00 to 1
On 10/31/96 2.75 to 1
On 11/30/96 and
each month end thereafter 5.00 to 1
For the purposes hereof, "Indebtedness" shall mean all liabilities,
indebtedness and obligations that would be shown as liabilities on
Borrower's and Ag Park's balance sheets prepared in accordance with
Generally Accepted Accounting Principles. For the purposes hereof,
"Tangible Net Worth" shall have the meaning provided in Section 5.10.
5.13 CASH FLOW COVERAGE RATIO. Cause Ag Park and Borrower to
maintain a minimum consolidated Cash Flow Coverage Ratio of not less than
1.20 to 1 as of October 31, 1996. The term "Cash Flow Coverage" shall mean
the sum of Borrower's and Ag Park's net income plus interest and
depreciation, divided by the sum of mandatory debt retirement plus
interest, plus dividends, plus Net Capital Purchases, all determined on a
consolidated basis in accordance with Generally Accepted Accounting
Principles. For the purposes hereof, "Net Capital Purchases" shall mean
the difference between total capital expenditures and the cumulative amount
of all advances against the Term Notes, determined in accordance with
Generally Accepted Accounting Principles.
5.14 MAINTAIN ACCOUNTS. Maintain all primary depository accounts
with the Agent.
5.15 PLANS. Maintain all Plans in strict compliance with the ERISA,
as amended.
Ex. 10.4 - 17
5.16 USE OF TERM LOAN PROCEEDS. Use proceeds of any Term Loans
solely to purchase fixed assets for use in Borrower's business and
operations.
6. NEGATIVE COVENANTS. The Borrower hereby covenants and agrees with the
Banks that so long as any amount shall remain unpaid on the Notes or the Term
Notes or so long as the Banks have any obligation to make advances hereunder,
Borrower will not:
6.1 MERGE, CONSOLIDATE OR SELL. Transfer, lease or sell all or
substantially all of the Borrower's property and business to any other
entity or entities. other than in the ordinary course of business.
6.2 DEFAULT ON OTHER OBLIGATIONS. Default upon or fail to pay any
of the other debts or obligations as the same mature, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves shall have been established with respect thereto.
6.3 LIENS AND ENCUMBRANCES. Create, assume, incur or suffer to
exist any pledge, mortgage, assignment or other lien or encumbrance of any
kind, or upon any of its property of any kind, whether now owned or
hereafter acquired, or of or upon the income or profits therefrom except
for:
(a) Liens for taxes, assessments and other governmental
charges which are not delinquent or which are being contested in good
faith by appropriate proceedings diligently conducted, against which
required reserves have been set up;
(b) Liens incurred or deposits made in the ordinary course
of business in connection with workmen's compensation, unemployment
insurance or other similar laws or to secure the performance of
statutory obligations of a like nature (exclusive of obligations for
the payment of money borrowed);
(c) Liens imposed by law in connection with transactions in
the ordinary course of business, such as liens of carriers,
warehousemen, mechanics and materialmen for sums not yet due or being
contested in good faith and by appropriate proceedings diligently
conducted, against which adequate reserves have been set up;
(d) Landlords' liens under authorized leases to which the
Borrower is a party; and
(e) Zoning restrictions, licenses and minor encumbrances
and irregularities in title, all of which in the aggregate do not
materially detract from the value of the property involved or
materially impair their use in the operation of Borrower's business.
Ex. 10.4 - 18
6.4 GUARANTEES. Except as disclosed on EXHIBIT H attached hereto,
assume, guarantee, endorse or otherwise become liable for the obligation of
any person, firm or corporation except by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business,
nor sell any notes or accounts receivable with recourse.
6.5 INVESTMENTS. Except as disclosed on EXHIBIT H attached hereto,
make or permit to exist any loans or advances to or investments in any
person, firm or corporation, or any other entity, other than through the
purchase or sale of negotiable instruments.
6.6 LOANS TO AFFILIATES. Make or permit to exist loans or advances
to Subsidiaries, stockholders or affiliates of Borrower in excess of
$50,000.00 in the aggregate outstanding at any time.
6.7 INDEBTEDNESS. Issue, assume, incur or otherwise become
obligated for any Indebtedness except for Indebtedness for accounts payable
incurred in the ordinary course of business, the Indebtedness hereunder and
the Indebtedness listed on EXHIBIT H attached hereto.
6.8 NO NEW SUBSIDIARIES. Create or permit to exist any
Subsidiaries.
6.9 FISCAL YEAR. Change its fiscal year.
7. DEFAULTS.
7.1 EVENT OF DEFAULT. Any one or more of the following events
shall constitute an Event of Default:
(a) PAYMENT. The Borrower shall fail to pay the Notes or
the Term Notes upon the terms and conditions therein set forth or fail
to pay any fees or expenses payable pursuant hereto and such failure
shall continue unremedied for five (5) days; or
(b) OTHER OBLIGATIONS. The Borrower shall default under
the terms and conditions of any note, agreement or other document
governing, or evidencing any indebtedness and such default shall be
sufficient to entitle the lender thereunder to accelerate payment of
such indebtedness or otherwise exercise any remedies with respect to
such indebtedness; or
(c) OTHER COVENANTS OR AGREEMENTS HEREIN. The Borrower
shall default in the due performance or observance of any term,
covenant or agreement contained in this Agreement (excluding those
defaults otherwise covered by this Section 7.1), or in any other
documents or agreement delivered pursuant hereto or in connection
Ex. 10.4 - 19
herewith and such default shall continue for a period of thirty (30)
days after written notice thereof shall have been given by Bank to the
Borrower; or
(d) INSOLVENCY. The Borrower shall (i) become insolvent or
unable to pay its debts generally as they mature, (ii) suspends
business, (iii) makes a general assignment for the benefit of
creditors, (iv) admits in writing its inability to pay its debts
generally as they mature, (v) files a petition in bankruptcy or a
petition or answer seeking a reorganization, arrangement with
creditors or other similar relief under the Federal bankruptcy laws or
under any other applicable law of the United States of America or any
State thereof, (vi) consents to the appointment of a trustee or
receiver for the Borrower or for a substantial part of its property,
(vii) is adjudicated a bankrupt on an involuntary petition in
bankruptcy, (viii) takes any corporate action for the purpose of
effecting or consenting to any of the foregoing, or (ix) has an order,
judgment or decree entered appointing, without its consent, a trustee
or receiver for Borrower or any guarantor or for a substantial part of
its property, or approving a petition filed against the Borrower
seeking a reorganization, arrangement with creditors or other similar
relief under the Federal bankruptcy laws or under any other applicable
law of the United States of America or any State hereof, which order,
judgment or decree shall not be vacated or set aside or stayed within
thirty (30) days from the date of entry; or
(e) REPRESENTATIONS AND WARRANTIES. If any representation
or warranty contained in this Agreement any other document or any
letter or certificate furnished or to be furnished to the Banks proves
to be false as of the date the Agreement or such documents is executed
or at the time such letter or certificate is delivered to the Banks;
or
(f) CHANGE IN OWNERSHIP. Ownership of more than five
percent (5%) of the voting stock of the Borrower shall change
without the Banks' prior written approval; or
(g) JUDGMENTS. Judgments against the Borrower for the
payment of money totaling in excess of $25,000.00 shall be
outstanding for a period of thirty (30) days without a stay of
execution.
7.2 BANKS' RIGHTS ON DEFAULT. If an Event of Default described in
Section 7.l(d) shall occur, the full unpaid principal amount of the Notes
and the Term Notes and all other Obligations of Borrower hereunder shall
automatically be due and payable without declaration, notice, presentment,
protest or demand of any kind (all of which we hereby waived) and the
obligation of Banks to make additional Loans shall automatically terminate.
If any other Event of Default shall occur and be continuing, the Agent may
at the direction of the Majority Banks (unless precluded from doing so by
operation of law, an order of a court of competent jurisdiction or stay
imposed by law): (a) terminate the obligation of each
Ex. 10.4 - 20
Bank to make additional Loans and may at the direction of the Majority
Banks declare the outstanding principal mount of the Notes and the Term
Notes to be due and payable and any or all other Obligations of Borrower
hereunder owing to be due and payable, without notice, presentment, protest
or demand of any kind (all of which are hereby waived), whereupon the full
unpaid meant of such Notes and the Term Notes and any and all other
Obligations of Borrower hereunder, which shall be so declared due and
payable shall be and become immediately due and payable; and (b) take such
actions as may otherwise be available in equity or at law. All remedies of
the Banks shall be cumulative.
8. AGENT BANK.
8.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby appoints First
American Bank Valley, a North Dakota banking corporation as the Agent with
such powers and duties as are specifically delegated or required of the
Agent by the terms hereof and such other powers as are reasonably
incidental thereto. Each Bank hereby authorizes, consents to and directs
the Borrower to deal with the Agent as the true and lawful agents of such
Bank to the full extent provided herein. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein with
respect to its role as Agent, or any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against
the Agent. The Agent may execute any of its duties under this Agreement by
and through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected ed by them with reasonable care. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes and the Term Notes) the
Agent shall be required to act or refrain from acting upon the instructions
of the Majority Banks and such instruction shall be binding upon all Banks
and holders of the Notes and the Term Notes.
8.2 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Bank for
any action taken or omitted to be taken by it or them under this Agreement
or any document executed pursuant hereto, or in connection herewith or
therewith, except for its or their own willful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any document executed pursuant hereto nor to
make any inquiry respecting the performance by Borrower of its Obligations
hereunder or thereunder. The Agent shall be entitled to rely upon advice
of counsel concerning legal matters and upon any notice, consent,
certificate, statements or writing which they believe to be genuine and to
have been presented by a proper Person. The provisions of this Section
shall survive termination of this Agreement.
Ex. 10.4 - 21
8.3 SUCCESSOR AGENT. The Agent may resign as such at any time upon
at least thirty (30) days prior written notice to Borrower and all Banks.
If the Agent at any time shall resign, the Majority Banks may appoint a
successor Agent, which shall be one of the Banks, and which shall thereupon
become the Agent, hereunder and shall be entitled to receive from the prior
Agent, documents of transfer and assignment as such successor Agent may
reasonably request.
8.4 LOANS BY THE AGENT. The Agent shall have the same rights and
powers with respect to the Loans made by them and the Notes and the Term
Notes held by them as any Bank and may exercise the same as if they were
not the Agent, and the term "Bank" and when appropriate, "holder" shall
include the Agent in its individual capacity.
8.5 CREDIT DECISIONS. Each Bank acknowledged that it has
independently of the Agent and each other Bank and based on the financial
information delivered to it by the Borrower and such other documents,
information and investigations as it has deemed appropriate, made its own
credit decisions to extend its Commitment to make Loans and the loans
evidenced by the Term Notes hereunder from time to time. Each Bank also
acknowledges that it will, independently of the Agent and each other Bank
and based on such other documents, information and investigations as it
shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights
and privileges available to it under this Agreement or any instrument
executed pursuant hereto.
8.6 INDEMNIFICATION. To the extent the Agent is not reimbursed and
indemnified by the Borrower, the Banks will reimburse and indemnify the
Agent, in the same proportion that such Banks' Total Bank Commitment Amount
bears to the Total Commitments, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements or any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent (or either of them)
in performing their duties hereunder or under any other document delivered
pursuant hereto, in any way relating to or arising out of this Agreement or
any other document delivered pursuant hereto; provided that no Bank shall
be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct.
8.7 BALANCES. Each Bank shall from time to time on request of
Agent confirm to the Agent balances on its respective Notes.
9. MISCELLANEOUS.
9.1 BINDING EFFECT. The parties hereto agree that this Agreement
shall be binding upon and inure to the benefit of their respective heirs,
successors in interest and assigns including any holder of the Notes or the
Term Notes, provided, however, that the Borrower
Ex. 10.4 - 22
may not assign or transfer its interest hereunder without the prior written
cement of the Bank; and provided further, that any assignment of all the
Banks' interests hereunder and under the other Loan Documents (except for
sales of participations contemplated by Section 9.2 hereof) shall not be
binding upon Borrower unless and until Borrower has received written notice
of such assignment.
9.2 PARTICIPATIONS. The Company acknowledges that the Banks may
sell one or more participations in the loan evidenced hereby to other
financial institutions.
9.3 GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder and under the Notes, and any other documents
delivered herewith shall be construed in accordance with and governed by
the laws of the State of North Dakota. The Borrower hereby consents to the
jurisdiction of the courts of the State of North Dakota for any actions
brought hereon or on the Notes or the Term Notes.
9.4 NOTICES. Any notices required or contemplated hereunder shall
be effective the second business day after the placing thereof in the
United States mails, certified mail and with return receipt requested,
postage prepaid, and addressed as follows:
If to Borrower: AGSCO, INC.
X.X. Xxx 00000
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000-0000
Attn: Xxxxx Xxxxx, President
With a Copy To: Fischer, Olson, Xxxxx & Bata Ltd.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
If to Agent First American Bank Valley
or Banks: 0000 Xxxxx Xxxxxxxx Xxxx
X.X. Xxx 00000
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxxx
First National Bank North Dakota
4th and XxXxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxx Xxxxxxxxxxx
Ex. 10.4 - 23
American Bank Moorhead
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxx
With a Copy to: Xxxxxxxxxxx, Xxxxxxx & Xxxxxxxx, P.A.
000 Xxxxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxxx
9.5 RIGHT OF OFFSET. In addition to, and without limitation of,
any rights of any Bank under any applicable law or otherwise, each Bank
may, when any Default of the nature referred to in clause (d) of Section
7.1 or any other Event of Default shall have occurred and be continuing and
without notice or demand of any kind, appropriate and apply toward payment
of any Obligations owing to it whether or not due) any amounts, property,
balances, credits, deposit accounts or moneys of Borrower in the possession
or control of such Bank for any purpose; PROVIDED, HOWEVER, that any such
amount, property, balances, credits, deposit accounts or money, so applied
by any Bank on any of the Obligations owing to it shall be subject to the
provisions of Sections 2.12 and 3.12.
Each Bank agrees to give Borrower notice of any offset promptly after
effecting such offset.
9.6 NO WAIVERS. No failure or delay on the part of Bank in
exercising any right, power or privilege hereunder and no course of dealing
between the Borrower and Bank shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
9.7 HEADINGS. The headings of various sections of this Agreement
have inserted for reference only and shall not be deemed to be a part of
this Agreement.
9.8 AMENDMENT AND WAIVER. Neither this Agreement nor any provision
hereof may be modified, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought.
9.9 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by the Banks, Borrower hereby agrees to
indemnify, exonerate and hold each Bank, and each of its officers,
directors, employees and agents of that Bank (the "Bank Parties") free and
harmless from and against any and all actions, causes of action, suits,
losses, liabilities and damages, and expenses in connection therewith,
including, without limitation,
Ex. 10.4 - 24
reasonable attorneys' fees and disbursements (the "Indemnified
Liabilities"), incurred by the Bank Parties or any of them as a result of,
or arising out of, or relating to:
(a) any transaction financed or to be financed in whole or
in part directly or indirectly with proceeds of the Loans and the Term
Loans, or
(b) the execution, delivery, performance or enforcement of
this Agreement by any of the Bank Parties,
except for any such Indemnified Liabilities arising on account of any Bank
Party's gross negligence or willful misconduct, and if and to the extent
that the foregoing undertaking may be unenforceable for any reason,
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. The provisions of this Section shall survive
termination of this Agreement.
9.10 COUNTERPARTS. This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original and all of which
shall constitute one and the same document.
10 DOCUMENT REQUIREMENTS. To induce the Banks to commit to make
the requested Loans and the Term Loans pursuant to the terms and conditions
hereof, and as a condition to any advance to the Borrower hereunder, the
Borrower shall on or before the date hereof, deliver to the Banks the
following documents all dated of even date herewith (the "Loan Documents"):
10.1 NOTES. The Notes in the amount of each Banks' Commitment
payable to each of the respective Banks;
10.2 TERM NOTES. The Term Notes each in the amount $500,000.00
payable to the Term Banks;
10.3 CERTIFICATE OF AUTHORITY. A completed Certificate of Authority
for Borrower in the form of EXHIBIT E attached hereto.
10.4 CERTIFICATE OF GOOD STANDING. A current Certificate of Good
Standing for Borrower issued by the office of the North Dakota Secretary of
State.
10.5 FINANCIAL STATEMENTS. Current financial statements for
Borrower.
10.6 OPINION OF COUNSEL. An opinion of Borrower's counsel in the
form of EXHIBIT F attached hereto.
Ex. 10.4 - 25
Executed in _________________________ as of the year and day first above
written.
AGSCO, INC.
BY:
--------------------------------------
Xxxxx Xxxxx
Its President
First American Bank Valley
By:
--------------------------------------
Its:
-------------------------------
PERCENTAGE COMMITMENT OF FABV TERM NOTE TERM NOTE TO FABV
---------- ------------------ PERCENTAGE -----------------
----------
54.2857% $4,750,000.00 50% $500,000.00
First National Bank of North Dakota
By:
--------------------------------------
Its:
-------------------------------
PERCENTAGE COMMITMENT OF FNBGF TERM NOTE TO
---------- ------------------- TERM NOTE ------------
PERCENTAGE FNBGF
---------- -----
28.5714% $2,500,000.00 50% $500,000.00
Ex. 10.4 - 26
American Bank Moorhead
By:
--------------------------------------
Its:
-------------------------------
PERCENTAGE COMMITMENT OF AMERICAN BANK MOORHEAD
---------- ------------------------------------
17.1429% $1,500,000.00
Ex. 10.4 - 27
EXHIBITS
A. Notice of Borrowing
B. Term Notice of Borrowing
C. Form of Note
D. Form of Tem Note
E. Certificate of Authority
F. Form of Opinion of Counsel
G. Subsidiaries
H. Exceptions to Section 4.8, 4.11, 6.4, 6.5 and 6.7
I. Borrowing Base and Compliance Certificate
Ex. 10.4 - 28
EXHIBIT A
FORM OF NOTICE OF BORROWING
AND PAYMENTS
First American Bank Valley
000 Xxxxx Xxxxxx Xxxxx
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attention: Xxxx X. Xxxxxxxx
Gentlemen:
The undersigned, AGSCO, INC., a North Dakota corporation refers to the Loan
Agreement dated as of June 14, 1996 (the "Loan Agreement"; the terms defined
therein being used herein as therein defined), between the undersigned, the bank
parties thereto (the "Banks") and you, as the Agent (the "Agent") and hereby
gives you notice, pursuant to Section 2.2 of the Loan Agreement, that the
undersigned hereby requests a Loan under the Loan Agreement, and in that
connection sets forth below the information relating to such Loan (the
"Requested Advance") or a payment of the Notes ("Payment"):
(a) The requested Business Day of the Requested Advance/Payment
(circle one) is ________________, 199_;
(b) check one
The aggregate principal amount of the Requested Advance is
------ U.S. $_________ and the aggregate unpaid principal amount of
all Loans after giving effect to the Requested Advance is
$___________; or
The aggregate principal amount of the Payment is U.S.
------ $_________ and the aggregate unpaid balance of all Loans
after giving effect to the Payment is $___________.
(c) The undersigned confirms that the conditions precedent set
forth in Section 2.8 of the Loan Agreement are satisfied as of the date
hereof.
AGSCO, INC.
By:
--------------------------------------
Its:
-------------------------------
Ex. 10.4 - 29
EXHIBIT B
FORM OF TERM NOTICE OF BORROWING
First American Bank Valley
000 Xxxxx Xxxxxx Xxxxx
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attention: Xxxx X. Xxxxxxxx
Gentlemen:
The undersigned, AGSCO, INC., a North Dakota corporation refers to the Loan
Agreement dated as of June 14, 1996 (the "Loan Agreement"; the terms defined
therein being used herein as therein defined), between the undersigned, the Xxx
Xxxxx and you, as the Agent (the "Agent") and hereby gives you notice, pursuant
to Section 3.2 of the Loan Agreement, that the undersigned hereby requests a
Term Loan under the Loan Agreement, and in that connection sets forth below the
information relating to such Term Loan (the "Proposed Loan"):
(a) The requested Business Day of the Proposed Loan is ___________,
199_;
(b) The aggregate principal amount of the Proposed Loan is U.S.
$_________________.
(c) The cumulative principal amount of all Term Loan Borrowing
Loans after giving effect to the Proposed Loan is $____________.
(d) The remaining Term Loan Commitment is ($1,000,000.00 LESS (c)
above) $____________.
(e) The undersigned confirms that the conditions precedent set
forth in Section 3.8 of the Loan Agreement we satisfied as of the date
hereof.
AGSCO, INC.
By:
--------------------------------------
Its:
-------------------------------
Ex. 10.4 - 30
EXHIBIT C
NOTE
$______________ Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996
FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of _________________________________,
a _______________ (the "Bank"), at the office of its agent bank, First American
Bank Valley, at such agents office in Grand Forks, North Dakota. the sum of
_____________________________ AND NO/100THS DOLLARS ($__________________), or
such lesser star m may actually be owing under borrowings made pursuant to that
certain Loan Agreement (the "Loan Agreement") of even date herewith between the
undersigned and the Bank, with interest on the principal balance from the date
hereof calculated at a rate per annum at all times equal to the Reference Rate
(computed on the basis of actual days elapsed in a year of 360 days).
The term "Reference Rate" shall be that rate of interest published in the
WALL STREET JOURNAL as the lowest New York Prime Rate. All changes in the rate
of interest due hereon are effective automatically on the same day the Reference
Rate change takes effect.
From and after the date hereof this Note shall be payable as follows:
(a) interest accrued hereon shall be payable on the first day of
each month commencing July 1, 1997; and
(b) all unpaid principal and interest accrued thereon shall be due
and payable in fall on Mach 1, 1997.
All payments trader this Note shall be applied initially against seemed
interest and thereafter in reduction of principal.
The undersigned agrees to pay a late payment service charge in an amount
equal to five percent (5.0%) of any installment of principal or interest
(including any final installment) not received by the Bank within ten (10) days
of the due date.
This Note may be prepaid at any time without premium or penalty.
This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Low Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions trader
which the indebtedness evidenced hereby was incurred, trader which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.
Ex. 10.4 - 31
NOTE
PAGE TWO
$________________ Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996
So long as no Event of Default (as defined in the Loan Agreement) and no
event which would be an Event of Default on the giving of notice, lapse of time
or both, has occurred and is continuing and subject to compliance with all the
terms and conditions of this Note and the Loan Agreement, the undersigned may
borrow, repay and reborrow regardless of the cumulative meant of advances
hereunder up to the Bank's Percentage of the Maximum Available Loans specified
in the Loan Agreement.
Presentment and demand for payment, notice of dishonor, protest and notice
of protest we hereby waived. In the Event of Default, as set forth above, the
undersigned agrees to pay costs of collection and reasonable attorneys' fees.
The undersigned hereby submits itself to the jurisdiction of the courts of
the State of North Dakota and the Federal courts of the United States located in
such state in respect of all actions arising out of or in connection with the
interpretation or enforcement of this Note, waives any argument that venue in
such forums is not convenient and agrees that any action instituted by it shall
be venued in such forums.
AGSCO, INC.
By:
-----------------------------
Xxxxx Xxxxx
Its President
Ex. 10.4 - 32
EXHIBIT D
TERM NOTE
$500,000.00 Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996
FOR VALUE RECEIVED, the undersigned, AGSCO, INC., a North Dakota
corporation, promises to pay to the order of __________________________, a
___________________ (the "Bank"), at the office of its agent bank, First
American Bank Valley, at such agents office in Grand Forks, North Dakota, the
sum of FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($500,000.00), or such lesser
am as may actually be owing trader borrowings made pursuant to that certain Loan
Agreement (the "Loan Agreement") of even date herewith between the undersigned
and the Bank, with interest on the principal balance from the date hereof
calculated at a rate per annum at all times equal to the Reference Rate
(computed on the basis of actual days elapsed in a year of 360 days).
The term "Reference Rate" shall be that rate of interest published in the
WALL STREET JOURNAL as the lowest New York Prime Rate. All changes in the rate
of interest due hereon we effective automatically on the same day the Reference
Rate change takes effect.
From and after the date hereof this Note shall be payable as follows:
(a) the undersigned shall make equal installment payments in the
amount of $10,225.00 on the first day of each month hereafter commencing on
the first day of the calendar month following the initial advance
hereunder; and
(b) all unpaid principal and interest seemed thereon shall be due
and payable in full on March 1, 1997.
All payments trader this Note shall be applied initially against seemed
interest and thereafter in reduction of principal.
The undersigned agrees to pay a late payment service charge in an meant
equal to five percent (5.0%) of any installment of principal or interest
(including any final installment) not received by the Bank within ten (10) days
of the due date.
This Note may be prepaid at any time without premium or penalty.
This Note is issued in connection with the Loan Agreement. The holder
hereof shall have all the advantages of the Loan Agreement and reference to the
Loan Agreement is hereby made for a statement of the terms and conditions under
which the indebtedness evidenced hereby was incurred, trader which borrowings
hereunder may be limited and under which the amounts outstanding hereunder may
be accelerated.
Ex. 10.4 - 33
TERM NOTE
PAGE TWO
$500,000.00 Grand Forks, North Dakota
Due: March 1, 1997 June 14, 1996
Presentment and demand for payment, notice of dishonor, protest and notice
of protest are hereby waived. In the Event of Default, m set forth above, the
undersigned agrees to pay costs of collection and reasonable attorneys' fees.
The undersigned hereby submits itself to the jurisdiction of the courts of
the State of North Dakota and the Federal courts of the United States located in
such state in respect of all actions arising out of or in connection with the
interpretation or enforcement of this Note, waives any argument that venue in
such forums is not convenient and agrees that any action instituted by it shall
be venued in such forums.
AGSCO, INC.
By:
---------------------------------
Xxxxx Xxxxx
Its President
Ex. 10.4 - 34
EXHIBIT E
CERTIFICATE OF AUTHORITY
OF AGSCO, INC.
I, Xxxxxxx Xxxxx, do hereby certify as follows:
1. I am the Secretary of AGSCO, INC., a corporation organized and
existing under the laws of the State of North Dakota (hereinafter called "this
Corporation").
2. The Articles of Incorporation attached hereto AS EXHIBIT 1 and the
Bylaws attached hereto as EXHIBIT 2 are, respectively, true, complete and
correct copies of the Corporation's Articles of Incorporation, duly filed with
the Secretary of State of the State of North Dakota, and the By-Laws of the
Corporation, which Articles and By-Laws have been duly adopted by the
Corporation and are presently in fall force and effect.
3. The following is a true, complete and correct copy of resolutions duly
adopted by the Board of Directors of the Corporation, and said resolutions are
now in full force and effect:
FIRST RESOLUTION
RESOLVED, that the President be, and hereby is, authorized, for and on
behalf of and in the came of this Corporation;
(i) To borrow money and obtain other credit and financial
accommodations, in any amount, from First American Bank Valley, a North
Dakota banking corporation, First National Bank North Dakota, a national
banking association and American Bank Moorhead, a Minnesota banking
corporation (collectively, the "Banks");
(ii) To mortgage, pledge, grant a security interest or lien in and
on all or such part of its real and personal property as such officer may
deem to be appropriate to secure to the Banks repayment of any indebtedness
by this Corporation to the Banks and to execute such security agreements,
mortgages, financing statements, assignments, pledge agreements and other
documents and instruments as may be requested by the Banks to create,
perfect or continue such mortgage, pledge, security interest, lien or
assignment;
(iii) To sign, execute and deliver loan and credit agreements,
security agreements, promissory notes, acceptances and other evidences of
indebtedness therefor, as collateral therefor or in renewal thereof, in
such amounts and for such time, at such rates of interest and upon such
terms as such officer may see fit;
(vi) To do such other acts and things, make such other agreements
and execute and deliver such other certificates, instruments and other
writings as may be required or as
Ex. 10.4 - 35
the Banks or such officer may dem to be appropriate in connection with any
of the foregoing or the following resolutions.
SECOND RESOLUTION
RESOLVED, FURTHER, that (without limiting the generality of the foregoing
resolution) each officer referred to in the foregoing resolution, acting
alone or acting with others, be and is hereby authorized and directed to
execute, acknowledge, deliver and perform the following agreements,
instruments, certificates, and other writings for, on behalf of and in the
name of this Corporation, and that all of such agreements, instruments,
certificates and other writings and all other matters contemplated thereby
be and the same hereby we ratified, approved and confirmed:
1. A Loan Agreement to be dated, made and delivered to the Banks
by this Corporation (the "Loan Agreement").
2. The Notes to be dated, made and delivered to the Banks by this
Corporation in the form contemplated in and pursuant to the
Loan Agreement ("Notes").
3. All such other agreements, certificates, instruments, and other
writings m may reasonably be required to affect the
transactions contemplated in the Loan Agreement.
THIRD RESOLUTION
RESOLVED, FURTHER, that any of L. Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxx X.
Xxxxxxx or Xxxxx Xxxxxxxx, acting alone, is authorized to request advances
and authorize payments on the loans obtained from the Banks pursuant to the
Loan Agreement and the Notes.
FOURTH RESOLUTION
RESOLVED, FURTHER, that the Secretary shall certify to the Banks the names
and signatures of the persons who presently we duly elected, qualified and
acting as the officer or employees refused to in the foregoing resolutions,
and the Secretary shall from time to time hereafter, upon a change in the
facts so certified, immediately certify to the Banks the names and
signatures of the persons then authorized to sign or to set; the Banks
shall be fully protected in relying on such certificates and on the
obligation of the Secretary (set forth above) immediately to certify to the
Banks any change in any facts so certified; and the Banks shall be
indemnified and saved harmless by this Corporation from any claims,
demands, expenses, losses and damages resulting from or growing out of
honoring or relying on the signature or other authority (whether or not
properly used) of any officer
Ex. 10.4 - 36
whose name and signature was so certified, or refusing to honor any
signature or authority not so certified.
FIFTH RESOLUTION
RESOLVED, FURTHER, that the foregoing resolutions are in addition to, and
do not limit and shall not be limited by, any resolutions heretofore or
hereafter adopted by this Corporation for the conduct of business with the
Banks; and the foregoing resolutions shall continue in force until express
written notice of their prospective rescission or modification, as to
further transactions not then undertaken or committed for, has been
received by the Banks.
SIXTH RESOLUTION
RESOLVED, FURTHER, that any and all transactions by or on behalf of this
Corporation with the Banks prior to the adoption of these resolutions be
and the same hereby we in all respects ratified, approved and confirmed.
4. The Board of Directors of this Corporation has, and at the time of
adoption of the foregoing resolutions had, full power and lawful authority to
adopt the foregoing resolutions and to confer the powers therein granted to the
persons named, and such persons have full power and authority to exercise the
same. The signatures appearing below are the true, authentic and official
signatures of the officers and other employees referred to in the foregoing
resolutions; and the persons named below as officers and other employees have
been duty elected to and now hold the office in this Corporation or we currently
employed by this Corporation in the capacity set forth opposite their names:
Name Title Sample Signature
---- ----- ----------------
Xxxxx Xxxxx President
--------------------------
L. Xxxxxxx Xxxxx Chief Executive Officer
--------------------------
Xxxxx X. Xxxxxxx Senior Accountant
--------------------------
Xxxxx Xxxxxxxx Manager of Production
Financing --------------------------
Xxxxxxx Xxxxx Secretary
--------------------------
5. The foregoing resolutions are effective and binding on this
Corporation without approval of its shareholders.
Ex. 10.4 - 37
6. The forms of the Loan Agreement, Revolving Note and any other writings
executed, on behalf of this Corporation by an officer of this Corporation, dated
as of the date hereof, and delivered to the Banks are the agreements and
writings referred to in and approved by the Second Resolution set forth above.
IN WITNESS WHEREOF, I hereunto subscribed any name this 14th day of June,
1996.
----------------------------------
Secretary
Ex. 10.4 - 38
EXHIBIT F
OPINION OF COUNSEL
[ON BORROWER'S COUNSEL'S LETTERHEAD]
June 14, 1996
First American Bank Valley
000 Xxxxx Xxxxxx Xxxxx
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attention: Xxxx X. Xxxxxxxx
First National Bank North Dakota
4th and XxXxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxx Xxxxxxxxxxx
American Bank Moorhead
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxx
Re: AGREEMENT WITH AGSCO, INC.
Ladies and Gentlemen:
We have acted as counsel to AGSCO, INC., a corporation organized trader the
laws of the State of North Dakota (the "Borrower"), in connection with the
preparation, execution and delivery of a Loan Agreement (the "Agreement") dated
as of among the Borrower and you.
In that connection we have examined (a) the Articles and Bylaws of the
Borrower and all amendments thereto (the "Articles and Bylaws"), (b) resolution
of the board of directors of the Borrower regarding this transaction, (c) the
Agreement, the Notes and the Schedules and Exhibits attached thereto and all
other documents executed and delivered by Borrower pursuant to the Agreement
("Loan Documents"), (d) such other documents, corporate and official records and
other instruments, and such laws and regulations, as we have deemed necessary in
order to render this opinion.
All capitalized terms used herein, except as otherwise defined herein, are
used with the same meaning as defined in or used in the Agreement.
Based upon such examination and subject to the foregoing, it is our opinion
that:
Ex. 10.4 - 39
1. The Borrower is a corporation validly organized and existing
and in good standing under the laws of the State of North Dakota, has full
power and authority to own its property and conduct its business
substantially as presently conducted by it and is duly qualified to do
business and is in good standing in each jurisdiction where the nature of
its business makes such qualification necessary and where the failure to so
qualify would permanently preclude the Borrower from enforcing its rights
with respect to its assets. The Borrower has full power and authority to
enter into and to perform its obligations trader the Loan Documents and to
obtain Loans pursuant to the terms of the Agreement.
2. The execution and delivery by the Borrower of, and the
Borrower's obtaining loans and performing its obligations from time to time
under, the Loan Documents have been duly authorized by all necessary
corporate action, does not require any approval or consent of, or any
registration, qualification or filing with, any governmental agency or
authority or any approval or consent of any other person or entity
(including, without limitation, any stockholder), does not and will not
conflict with, result in any violation of or constitute any default trader,
any provision of the Articles and ByLaws or, to our knowledge, any
agreement, other instrument, any law or governmental regulation or any
court decree or order, binding upon or applicable to it and will not result
in the creation or imposition of any security interest in or lien or
encumbrance on any of its properties pursuant to the provisions of any
agreement or other document known to us binding upon or applicable to it.
3. The Loan Documents executed by the Borrower have been duly
executed and delivered and are, the legal, valid and binding obligations of
the Borrower enforceable in accordance with their respective terms, subject
only to bankruptcy, insolvency, reorganization, moratorium or similar laws
at the time in effect affecting the enforceability of rights of creditors
generally and by general equitable principles which may limit the right to
obtain equitable remedies.
4. To the best of our knowledge except as disclosed to you on
Schedule A attached hereto, there is no action, suit or proceeding at law
or equity, or before or by any federal, state, local or other governmental
department, commission, head, bureau, agency or instrumentality, domestic
or foreign, pending, or threatened against the Borrower or its properties;
and to our knowledge the Borrower is not in default with respect to any
final judgment, writ, injunction, decree, rate or regulation of any court
or federal, state, local or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign.
5. To the best of our knowledge the Borrower is not in violation
of any law, regulation, ordinance or rule(including those of any
non-governmental self-regulatory agency) applicable to it.
Ex. 10.4 - 40
6. The interest, fees, other expenses and charges payable by the
Borrower under the Loan Documents are not usurious.
Sincerely,
Ex. 10.4 - 41
EXHIBIT G
SUBSIDIARIES
None
Ex. 10.4 - 42
EXHIBIT H
EXCEPTIONS TO SECTIONS 4.8, 4.11, 6.4 AND 6.5
As to Section 4.8 and 6.4: (Guaranty or Suretyship)
None
As to Section 4.1 1 and 6.7: (Indebtedness)
Creditor Amount Goods covered
-------- ------ -------------
First Bank fsb $891,676.94 Unsecured
$297,584.91 Unsecured
Xxxxx X. Xxxxx $375,000.00 Unsecured
As to Section 6.5: (Investments)
None
Ex. 10.4 - 43
EXHIBIT I
BORROWING BASE COMPLIANCE CERTIFICATE
First American Bank Valley
000 Xxxxx Xxxxxx Xxxxx
P.O. Box 13118
Grand Forks, North Dakota 58208-3118
Attention: Xxxx X. Xxxxxxxx
First National Bank North Dakota
4th and XxXxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxx Xxxxxxxxxxx
American Bank Moorhead
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxx
Re: Loan Agreement between AGSCO, INC., a North Dakota corporation
("Borrower") and First American Bank Valley, a North Dakota banking
corporation, First National Bank North Dakota, a national banking
association and American Bank Moorhead, a Minnesota banking
corporation (collectively, the "Banks") dated __________________
("Loan Agreement").
Ladies and Gentlemen:
Pursuant to that certain Loan Agreement, and any amendments thereto and
extensions thereof, the Borrower hereby:
A. repeats and reaffirms to the Banks each and all of the representations
and warranties made by the Borrower in the Loan Agreement and the agreements
related thereto, and certifies to the Banks that each and all of said warranties
and representations are true and correct as of the date hereof; and
B. represents, warrants and certifies that the Borrower owns, subject
only to the security interest granted to the Banks, the following properties:
1. Accounts
(a) Accounts Receivable
as of __________, 199_ $
-----------------
Ex. 10.4 - 44
(b) Accrued Rebates Receivable
(Limited to 4.5% of commodity sales) $
-----------------
(c) Invoiced Rebates Receivable $
-----------------
(d) Total Accounts Receivable $
-----------------
(e) Less: Ineligible Accounts Receivable
(i) Over 90 days $
--------
(ii) 10% over 90 days $
--------
(iii) bankruptcy of
account debtor $
--------
(iv) accounts receivable
from related parties $
--------
(v) accrued rebates receivable
in excess of 4.5% of
commodity sales $
--------
(vi) other accounts
deemed ineligible
by bank $
--------
Total Ineligibles $
-----------------
(f) Eligible Accounts Receivable
(Line 1(d) minus Line 1(e)) $
-----------------
(g) Loan Value of Accounts Receivable
(Line 1(f) times 70%) $
-----------------
2. Inventory
(a) Total Inventory as of
_____________, 19__ $
-----------------
(b) Work in Process $
-----------------
(c) Eligible Inventory
(Line 2(a) plus Line 2(b)) $
-----------------
(d) Loan Value of Inventory
(Line 2(c) times 60%) $
-----------------
3. Outstanding Balance of Revolving Notes $
-----------------
4. Margin (Deficit)
(Line 1g plus 2d minus Line 3) $
-----------------
C. represents, warrants and certifies that there has not been (except as
may be otherwise indicated below) any change since the computation dates
specified above to the date hereof which would materially reduce the amounts
shown above if such amounts were computed as of the date of this Certificate.
Ex. 10.4 - 45
D. The undersigned, the senior accountant officer of the Borrower, hereby
certifies as of ___________, 199_ that the following computations of financial
covenants and tests contained in the Loan Agreement and related documents are as
follows:
Tangible Net Worth:
a) Net Worth
-----------------
b) Intangible Assets
-----------------
c) Tangible Net Worth (a-b)
-----------------
Required: Greater than or equal to $5,250,000.00 (Section 5.10)
Debt to Tangible Net Worth:
a) Indebtedness
-----------------
b) Tangible Net Worth
-----------------
c) Debt to Tangible Net
Worth (a divided by b)
-----------------
Required: Less than or equal to the following: (Section 5.12)
Period Maximum Ratio
------ -------------
On 6/30/96 5.00 to 1
On 7/31/96 5.00 to 1
On 8/31/96 5.00 to 1
On 9/30/96 5.00 to 1
On 10/31/96 2.75 to 1
On 11/30/96 and
each month end thereafter 5.00 to 1
Current Ratio:
a) Current Assets
-----------------
b) Current Liability
-----------------
c) Current Ratio
(a divided by b)
-----------------
Required: Greater than or equal to the following: (Section 5.11)
Period Maximum ratio
------ -------------
On 6/30/96 1.15 to 1
On 7/31/96 1.15 to 1
On 8/31/96 1.15 to 1
Ex. 10.4 - 46
On 9/30/96 1.15 to 1
On 10/31/96 1.20 to 1
On 11/30/96 and
each month end thereafter 1.15 to 1
Cash Flow Coverage Ratio:
a) Consolidated Net Income $
-----------------
b) Interest $
-----------------
c) Depreciation $
-----------------
d) Total Cash Available
(lines a + b + c) $
-----------------
e) Mandatory Debt Retirement $
-----------------
f) Interest $
-----------------
g) Dividends $
-----------------
h) Net Capital Purchase
(i) Capital Expenditures $
--------
(ii) Aggregate Term Note
Advances $
--------
(iii) Total
(Line h(i) less h(ii)) $
-----------------
i) Total Cash Requirements
(lines e + f + g + h(iii)) $
-----------------
j) Cash Flow Coverage Ratio
[line(d) divided by line (i)] $
-----------------
Required: Not less than 1.20 as of October 31, 1996 (Section 5.13)
Advances to Stockholders
a) Outstanding to date
-------------------
Required: Less than or equal to $50,000.00 (Section 6.6)
All capitalized terms not defined herein shall have the meaning ascribed to
them in the Loan Agreement.
The undersigned further confirms that each representation and warranty
contained in the Loan Agreement and related documents is true and accurate as
the date hereof.
Ex. 10.4 - 47
The undersigned further confirms that no Event of Default has occurred or
is continuing and no event which with the giving notice or the passage of time
or both would mature into an Event of Default has occurred or is continuing.
Sincerely,
AGSCO, INC.
By:
------------------------------
Its:
-----------------
Ex. 10.4 - 48
