LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Loan Agreement") is entered into on this 29th
day of September 2004, by and among XXXXXXX MACHINE WORKS, INC., a Texas
corporation ("Xxxxxxx"), EXCALIBUR HOLDINGS, INC., a Texas corporation
("Excalibur Holdings"), and EXCALIBUR INDUSTRIES, INC., a Delaware corporation
("Excalibur Industries") (Xxxxxxx, Excalibur Holdings, and Excalibur Industries
are collectively referred to herein as the "Borrowers"), and STILLWATER NATIONAL
BANK AND TRUST COMPANY (the "Lender").
W I T N E S S E T H :
1. LENDING AGREEMENT. Subject to the terms and conditions hereinafter set
forth, Lender agrees to lend to Borrower, and the Borrower agrees to
borrow from the Lender, a sum not to exceed THREE MILLION FOUR HUNDRED
FIFTY THOUSAND DOLLARS ($3,450,000.00), as evidenced by the Notes (as
defined below).
2. BORROWERS' NOTES. The indebtedness will be evidenced by the following Term
Note and the Revolving Note (each as defined below) (the Term Note and the
Revolving Note are referred to collectively as the "Notes"):
2.1. Term Note. Promissory Note of even date herewith in the principal
face amount of TWO MILLION FOUR HUNDRED FIFTY THOUSAND DOLLARS
($2,450,000.00) ("Term Note"), which will be in form and substance
and payable on the terms approved by Lender. Interest only will be
paid monthly commencing October 31, 2004, and on the last day of
each month thereafter. The Term Note shall mature and become due on
January 15, 2005, at which time, the Borrowers will make a balloon
payment of the entire outstanding principal balance together with
all accrued interest and other charges, if any.
2.2. Revolving Line of Credit. The Lender will provide Xxxxxxx a
revolving line of credit as follows:
2.2.1. Revolving Note. Promissory Note of even date herewith in the
principal face amount of ONE MILLION DOLLARS ($1,000,000.00)
in form and substance and payable on the terms approved by
the Lender (the " Revolving Note"). The aggregate of advances
made during the term of the Note may exceed the face amount
thereof, but the unpaid principal balance due on the Note
will not exceed the lesser of (a) the Borrowing Base (as
defined below) or (b) the face amount of the Note.
2.2.2. Advances. Advances under the Revolving Note will be limited
to the Borrowing Base. The Borrowing Base shall be determined
on a monthly basis upon the submission of a signed "Monthly
Borrowing Base Certificate" in form as is shown on Schedule
"1" attached hereto, or such other form as satisfactory to
Lender. Each Monthly Borrowing Base Certificate will be
supported by a current accounts receivable aging, and such
other documentation that may reasonably required by the
Lender to determine the Borrowing Base. After determination
of the Borrowing Base for any given month, Borrower may
obtain advances by submitting an "Advance Request" in the
form satisfactory to Lender.
2.2.3. Authority to Request Advances. The Lender may make loans in
any amount and in any manner requested in writing by any
officer or agent of Xxxxxxx or by any person reasonably
believed by the Lender to be an officer or agent of Xxxxxxx.
Loan proceeds may be disbursed by deposit in any deposit
account of Xxxxxxx, by an instrument payable Xxxxxxx. The
Borrowers and Lender acknowledge and agree that the initial
advance shall be in the amount of $____________________ and
deposited to Xxxxxxx'x operating account maintained with
Lender.
2.2.4. Purpose . Funds advanced under the Revolving Note will be
used by the Borrowers solely for the following purposes: (a)
to provide general working capital to Xxxxxxx; (b) to pay all
fees owing to the Lender, and all expenses payable by the
Borrowers pursuant to the terms hereof; and (c) to reimburse
the Lender for out-of-pocket expenses incurred by the Lender
in connection with the preparation, administration,
amendment, modification and enforcement of the Loan Documents
(as defined in Section 7.2 hereof), including but not limited
to attorneys' fees and expenses.
2.3. Interest. The Notes will bear interest on the unpaid principal
balance at a per annum rate equal to the Reference Rate plus two
percent (2%), which interest rate will be adjusted on each day on
which a change in the Reference Rate occurs (the "Interest Rate").
The "Reference Rate" will mean the prime rate of interest as
published in the "Money Rates" section of the of the Wall Street
Journal, which rate is not necessarily the lowest rate of interest
charged by the Lender. Interest on the Notes will be paid monthly
commencing on October 31, 2004, and on the last day of each calendar
month thereafter. The entire unpaid principal balance of the Notes
and all accrued interest thereon will be due and payable on January
15, 2005.
2.4. Prepayment. Borrowers may prepay the Notes at any time, without
premium or penalty. Each prepayment will be applied by the Lender
first to the payment of unpaid fees and expenses, then to accrued
interest on the Revolving Note and then to the payment of principal.
In addition, if at any time the aggregate outstanding principal
balance of the debt under the Revolving Note exceeds the then amount
of the Borrowing Base, the Borrowers shall immediately, without
notice or demand, prepay the Revolving Note in an amount equal to
the excess.
2.5. Notation of Advances. The Lender shall have the right (acting at its
sole discretion with or without the consent of the Borrowers) to
make notations of advances by it to Xxxxxxx and payments to it by
Xxxxxxx on any liability ledger records maintained by or for the
Lender as to indebtedness of Borrowers, and such ledger shall be
presumed correct until the contrary is established by Xxxxxxx. Upon
demand by the Lender at any time or from time to time, Xxxxxxx will
confirm and admit by signed writing the exact amount of indebtedness
for principal and interest then outstanding under this Agreement.
Any billing statement or accounting rendered by or for the Lender
shall be conclusive and fully binding on Borrower unless specific
written notice of exception is given to the Lender by Borrower
within thirty (30) days thereafter.
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2.6. Lending Restrictions. Notwithstanding any other provision of this
Agreement or the other Loan Documents, any advance herein provided
for will not be required to be made by the Lender: (a) if after
making such advance, the Lender would, as determined in the sole
discretion of the Lender, exercised in good faith, be in violation
of any regulatory requirements imposed by any branch of government
of the United States of America or any state thereof; (b) if any
event of Default has occurred and has not been cured by a borrower
or waived by the Lender; (c) if, since the the date of this
Agreement and up to the date of the advance request, any litigation
or governmental proceeding has been instituted against a Borrower or
any of the Collateral, which, if decided adversely, will, in the
reasonable opinion of the Lender, adversely affect to a material
extent, the financial condition or continued operation of a
Borrower; or (d) if, since the date of this Agreement and up to the
date of the advance request, any loss, destruction, liens, claims or
encumbrances against any of the Collateral (other than those in
favor of the Lender) have occurred, been made or filed and have not
been removed or settled to the satisfaction of the Lender.
3. RECOURSE. The Notes will be full recourse to the Borrowers.
4. BORROWING BASE. "Borrowing Base" means, as of any given date, the sum of
the following: (a) eighty percent (80%), or at the Lender's sole
discretion any lesser percentage designated upon 60 days notice, of
Eligible Accounts Receivable of Xxxxxxx; plus (b) fifty percent (50%) of
the value of the inventory of Xxxxxxx, up to a maximum of the lesser of
(i) One Hundred Thousand Dollars ($100,000.00) or (ii) the amount of (a),
above, and subject to the following:
4.1. Accounts Receivable. "Accounts Receivable" means, as of any given
date, all accounts receivable of Xxxxxxx for goods sold and
delivered and services rendered by Xxxxxxx in the ordinary course of
the business presently conducted by Xxxxxxx and representing amounts
then invoiced and due and owing. An Account Receivable shall be an
"Eligible Account Receivable," and shall be included in the
Borrowing Base, only if and so long as it meets each and all of the
following requirements:
4.1.1. It is a valid, genuine and legally enforceable obligation,
subject to no defense, set off or counter-claim, of the
account debtor or other obligor named herein or in the
records of Xxxxxxx pertaining thereto, and that Xxxxxxx has
not received from the account debtor or other obligor any
notification repudiating such obligation or asserting that
such obligation is subject to any defense, set off or
counterclaim; and
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4.1.2. It is owned by Xxxxxxx free and clear of all interests,
liens, attachments, encumbrances and security interests,
except the security interest granted to the Lender pursuant
to this Agreement; and
4.1.3. The account debtor or other obligor is located in the United
States; and
4.1.4. Not more than ninety (90) days have expired since the date of
invoice; or, if the Lender in its sole discretion accepts as
eligible an Account Receivable which is due on a date stated
in the invoice, not more than thirty (30) days have expired
since the date stated; and
4.1.5. None of the Borrowers has received notice from the Lender
that the credit of the account debtor is not satisfactory to
the Lender for any reason; and
4.1.6. The account debtor is not an entity in which any of the
Borrowers has a controlling interest; and
4.1.7. The entire receivable of one account debtor becomes
ineligible if more than ten percent (10%) of the total due is
over ninety (90) days past due, unless the ten percent (10%)
over ninety (90) days is attributable to an isolated dispute
over a specific invoice.
4.2. Inventory. The value of inventory used in determining the Borrowing
Base shall equal the value of raw material plus the value of
finished product and shall not include the value of any work in
progress.
5. COLLATERAL SECURITY. The performance of all covenants and agreements
contained in this Loan Agreement and in the other documents executed or
delivered as a part of this transaction and the payment of the Notes and
all renewals, amendments and modifications thereof shall be secured by the
following (the "Collateral"):
5.1. Security Agreement. The Borrowers shall execute and deliver to
Lender a Security Agreement (the "Security Agreement") granting a
first priority security interest covering all of the Borrowers'
goods, chattels, accounts, inventory, equipment, contract rights,
medical equipment, accounts receivable, health care accounts
receivable, general intangibles, and all other personal property,
whether now owned or hereafter acquired, and all proceeds, products,
rents, profits and income therefrom, and UCC-1 Financing Statements
as necessary to perfect Lender's security interest in such
Equipment.
5.2. Lockbox Agreement . The Lender and Borrowers agree that (a) Lender
will establish a lockbox account (the "Lockbox") for the receipt of
payments on account and accounts receivable of Xxxxxxx; (b) the
Borrowers will cooperate with Lender to assure that all account
debtors of Xxxxxxx are notified to make payments on account to the
Lockbox; and (c) without limiting the requirement that all account
debtors make payment only to the Lockbox, any payments received
directly by Borrowers will be deposited before 11:00 a.m. the
following business day into the Lockbox. The Lockbox will be swept
by the Lender on a daily basis and the funds therein will be applied
to the principal balance on the Revolving Note, provided however,
that, on or about the 15 th day of each month, the funds swept from
the lockbox will be applied first to pay the outstanding interest on
the Revolving Note and then to principal balance. The Borrowers and
Lender will enter into a lockbox agreement in the form and substance
satisfactory to Lender (the "Lockbox Agreement").
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6. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and severally
represent and warrant that:
6.1. Power and Authority. Each of the Borrowers is duly authorized,
qualified, and licensed under all applicable federal, state and
municipal laws, regulations, ordinances and orders of public
authorities to carry on Borrowers' business in Texas and all other
jurisdictions where Borrowers conduct business; the Borrowers have
adequate authority, power and legal right to enter into and carry
out the provisions of this Loan Agreement and other documents
contemplated herein and to consummate the transactions contemplated
hereby.
6.2. No Default. The making and performance by the Borrowers of this Loan
Agreement, or the documents to be executed in connection herewith,
will not violate any provision or constitute a default under any
indenture, agreement, or instrument to which any of the Borrowers is
bound or affected.
6.3. Ownership. Borrowers own good title to all of the Collateral.
6.4. Financial Statements. The Borrowers' financial statements heretofore
delivered or to be delivered hereafter to Lender are and will be
true and correct in all material respects, have been prepared in
accordance with generally accepted accounting principles
consistently applied, and fully and accurately present the financial
condition reflected therein without material change since the dates
thereof.
6.5. Full Disclosure. Neither this Loan Agreement, nor any statements or
documents referred to herein or delivered by the Borrowers pursuant
to this Loan Agreement, contains any untrue statement or omits to
state a material fact necessary to make the statement herein or
therein not misleading.
6.6. Survival of Representations and Warranties. All covenants,
representations and warranties made herein and under all documents
executed pursuant hereto shall survive the making of the loans
hereunder and the delivery of the Note and other instruments
executed in connection therewith until complete repayment of the
Note and all renewals and modifications thereof, and all other
indebtedness of Borrowers to Lender under the terms of this Loan.
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7. CONDITIONS PRECEDENT TO LOAN. The obligation of the Lender to perform this
Loan Agreement and to make the initial or any future advances under any of
the Notes is subject to the continued performance by the Borrowers of the
following conditions precedent:
7.1. Revolving Note. As soon as all of the following conditions set forth
at Sections 7.2 through 7.4 hereof have been satisfied, and if no
Default has occurred hereunder, the Lender will advance funds under
the Revolving Note solely for the purposes set forth in Section
2.2.4 hereof and subject to the provisions of Section 2.2.2 hereof.
7.2. Closing Documents . This Loan Agreement, the Term Note, the
Revolving Note, the Security Agreement, the Lockbox Agreement, and
all other documents as might be required by the Lender, including
but not limited to UCC-1 Financing Statements (all of the foregoing
are referred to herein as the "Loan Documents") shall have been duly
authorized, executed and delivered to Lender.
7.3. Insurance . Borrowers will deliver to the Lender prior to the
initial advance under the Note, certificates of insurance reflecting
insurance coverage, premiums prepaid, with insurance companies
satisfactory to Lender, in such amounts and against such risks as
shall be required by the Lender, including, but not limited to, the
following:
7.3.1. public liability insurance which designates Lender as an
additional insured; and
7.3.2. property damage insurance covering the Collateral for 100% of
full replacement cost, which insurance designates the Lender
as a loss payee.
7.4. No Default. The representations and warranties set forth in
paragraph 6 of this Agreement shall be true and correct on and as of
the date of the initial advance and each additional advance with the
same effect as if such representations and warranties had been made
on and as of such date and there shall have occurred and be
continuing no Default.
8. COVENANTS. Until payment in full of the Notes and all renewals and
modifications thereof, and performance of all obligations owing to Lender
under this Loan Agreement and the Loan Documents, unless the Lender shall
otherwise consent in writing or by e-mail (which consent shall not be
unreasonably withheld), the Borrowers jointly and severally covenant and
agree as follows:
8.1. Performance of Obligations. The Borrowers will promptly and
punctually perform all of the obligations hereunder and under the
Loan Documents, and under all other instruments executed or
delivered pursuant thereto;
8.2. Use of Loan Proceeds. The Borrowers shall not permit any funds
advanced to Borrowers under the Loan Document to be used for any
purpose other than the purposes set forth in Section 2.2.4 hereof;
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8.3. Books and Records. The Borrowers will keep and maintain accurate
books and records of account in regard to the Borrowers' business
for the current year and the three trailing calendar years, which
will be kept in accordance with generally accepted accounting
principles consistently applied;
8.4. Financial Reports and Condition. The Borrowers will furnish or cause
to be furnished to the Lender, prepared in accordance with generally
accepted accounting principles and certified as to truth and
accuracy by either the chief executive officer or chief financial
officer of the Borrowers the following:
8.4.1. Weekly Borrowing Base Certificate. On a weekly basis, Xxxxxxx
will provide a Weekly Borrowing Base Certificate in the form
of Schedule "1" hereto for reporting purposes only. The
Borrowing Base is determined on a monthly basis as provided
in Section 2.2.2.
8.4.2. Annual Financial Statements. The Borrowers will furnish to
the Lender their audited annual financial statement on or
before March 1st of each year.
8.4.3. Income Tax Returns. The Borrowers will furnish to the Lender
copies of their respective federal income tax returns and
requests for an extension of time in which to file within
fifteen (15) days after filing of same.
8.4.4. Monthly Financial Reports. Within fifteen (15) days after the
close of each month commencing with the month ending
September 30, 2004, the Borrowers will furnish to the Lender
the following:
8.4.4.1. Accounts Receivable Aging/Listings. A current aging
of accounts receivable of Xxxxxxx;
8.4.4.2. Inventory. A current listing of the inventory of
Xxxxxxx;
8.4.4.3. Cash Flow Statements. A statement of changes in cash
and a cash flow statement of Xxxxxxx in form
satisfactory to the Lender; and
8.4.4.4. Other Reports. A balance sheet of Xxxxxxx as of the
close of the particular month and an income
statement of Xxxxxxx for such month.
8.4.5. Other Information. At the Lender's request from time to time,
the Borrowers will provide the Lender with such other
information as the Lender may reasonably request regarding
the business affairs or financial condition of the Borrowers,
and the Borrowers will provide access to the Lender at all
reasonable times to all agreements, purchase and sale
contracts, maintenance agreements and all other documents and
information relating to the Collateral.
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8.5. Lender's Access. Borrowers will at all reasonable times and as often
as Lender may request, upon reasonable advance notice from Lender,
permit any of Lender's officers and employees, and any authorized
representative of Lender, to visit Borrowers' offices or field
locations to (a) inspect the Collateral, and (b) examine, copy,
audit or make excepts from any and all books, records, and documents
relating to Borrowers' business and accounts, wherever located.
8.6. Other Information. Within ten (10) days after becoming aware of the
existence thereof, the Borrowers shall notify the Lender of any
development or other information which may materially and adversely
affect (a) the Borrowers' properties, business prospects, profits or
condition (financial or otherwise); (b) the Collateral; or (c) the
performance by the Borrowers under this Agreement, any of the Loan
Documents, or any other instrument executed pursuant thereto.
Without limiting the foregoing, the notice required by this
paragraph 8.6 shall include information regarding (a) any
substantial dispute between any of the Borrowers and any
governmental regulatory body or law enforcement authority, including
without limitation medicare payment disputes, (b) any material
litigation, arbitration or other proceeding, or (c) any material
claim by or against any of the Borrowers; Permits. The Borrowers
currently hold and will maintain all
8.7. licenses, permits, charters and registrations which are material to
the conduct of Borrowers' business;
8.8. Compliance with Laws . The Borrowers will duly observe and conform,
in all material respects, to all laws, rules and regulations of any
governmental authority applicable to the Borrowers;
8.9. Debt Restriction. Borrowers will not incur or allow to be
outstanding any future indebtedness for borrowed money, other than
that evidenced by the Notes, indebtedness incurred for liability
insurance premiums financed for no more than twelve (12) months, and
ordinary trade payables, which are incurred in connection with the
Borrowers' business;
8.10. No Redemptions . The Borrowers will not redeem the common stock
interests in the Borrowers from any shareholder of any of the
Borrowers, and none of the Borrowers will permit the transfer of any
common stock interests in any of the Borrowers by any shareholder of
any of the Borrowers to any other shareholder or to any third
person;
8.11. No Distributions . Borrowers will not, without the Lender's consent,
distributions of cash, or anything else of value, to any of the
shareholders of any of the Borrowers;
8.12. No Merger . None of the Borrowers will merge into or with or
consolidate with any corporation, partnership, limited liability
company, or other legal entity;
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8.13. Restriction on New Business. None of the Borrowers will enter into
any businesses unrelated to the ownership and operation of a the
Borrowers' business;
8.14. Capital Expenditures. The Borrowers will not incur debt for capital
expenditures, in excess of Fifty Thousand Dollars ($50,000.00)
annually, including without limitation acquisition of real estate,
acquisition or construction of buildings, fixtures and equipment,
and acquisition of machinery, equipment, vehicles, furniture and
fixtures, except as otherwise contemplated by this Loan Agreement;
8.15. Loans . None of the Borrowers will make any loans or advances to any
of the members of any of the Borrowers, or to any of the Borrowers'
directors, employees, or affiliates without the prior written
consent of the Lender;
8.16. Sale of Assets. The Borrowers will not grant or permit the existence
of a lien or security interest on any of the Collateral, except for
the lien in favor of the Lender contemplated hereby, and will not
sell any of the Collateral, except Inventory in the ordinary course
of business;
8.17. No Compensation. None of the directors or shareholders of any of the
Borrowers will be paid any salary solely by virtue of their status
as directors or shareholders;
8.18. Insurance Coverage. The Borrowers will continuously maintain the
insurance coverages described at Section 7.3, and will pay all
insurance premiums therefor prior to the due dates thereof;
8.19. Prior Loans. The Borrowers shall remain liable all amounts owing
Lender under all prior loans and advances from Lender to the
Borrowers.
9. DEFAULT. Each of the following shall constitute a default hereunder and
under each of the Loan Documents ("Default"):
9.1. Nonpayment of Note. Failure to pay when due any interest on or
principal of the Term Note or the Revolving Note or any renewals or
modifications thereof; or
9.2. Other Nonpayment. Failure to make payment when due of any other
amount payable to the Lender under the terms of this Loan Agreement
or any of the Loan Documents; or
9.3. Breach of Covenants. Breach by Borrowers in the performance or
observance of any covenants made under this Agreement or any of the
Loan Documents, or under the terms of any other instrument delivered
to Lender in connection with this Loan Agreement; provided that with
respect to any non-monetary covenants, a breach of such non-monetary
covenant, which is not cured by the Borrowers within thirty (30)
days after the occurrence thereof; or
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9.4. Creation of Liens. The creation or enforcement of any lien,
mortgage, pledge, security interest, encumbrance, or other lien
(including a lien of attachment, judgment or execution) securing a
charge or obligation affecting any or all of the Collateral; or
9.5. Ownership. The assignment, sale, transfer, encumbrance or conveyance
of all or any portion of the Borrowers' Collateral, without the
prior written consent of Lender, or if any common stock interests in
any of the Borrowers are issued by any of the Borrowers, or conveyed
by existing shareholders of any of the Borrowers without the
Lender's prior written consent; or
9.6. Judgment. Entry by any court of final judgment (and the expiration
of all appeals) against any of the Borrowers which is not covered by
insurance, or an attachment of any property of any of the Borrowers,
either of which is not discharged to the satisfaction of Lender
within thirty (30) days thereof; or
9.7. Casualty Loss; Condemnation. Substantial damage or destruction by
casualty of all or a substantial portion of the Collateral (which
damage is not covered by insurance), or taking by rights of eminent
domain of all or any substantial portion of the real property owned
by the Borrowers which materially and adversely affects the
Borrowers' ability to conduct the Borrowers' business; or
9.8. Bankruptcy. The institution of bankruptcy, reorganization,
liquidation or receivership proceedings by or against any of the
Borrowers, or the making of any assignment for the benefit of
creditors by or against any of the Borrowers, if any of the
Borrowers becomes insolvent or any admission by any of the Borrowers
of its inability to pay its debts as such debts mature; or
9.9. Governmental Requirements. The issuance of any order, decree or
judgment pursuant to any judicial or administrative proceeding
declaring that the Borrowers' operation of the Borrowers' hospital
business is in material violation of any law, ordinance, rule or
regulation of any governmental agency, department, commission,
board, bureau or instrumentality; or
9.10. Representations. Any representation, warranty, statement,
certificate, schedule or report made or furnished to the Lender by
any of the Borrowers proves to be false or erroneous in any material
respect at the time of the making thereof, and any of the Borrowers
fails to take or cause to be taken corrective measures with respect
to such representations or warranties satisfactory to the Lender
within thirty (30) days after written notice by the Lender, and such
corrective measures are not completed to Lender's satisfaction
within thirty (30) days after such written notice is given.
10. REMEDIES . On the occurrence of a Default, as defined in Section 8 of this
Agreement, the Lender may, at Lender's option, take any of the following
actions:
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10.1. Acceleration of Notes. The Lender may declare the Notes and all
renewals and modifications thereof to be immediately due and payable
whereupon the Notes and any renewals and modifications thereof shall
become forthwith due and payable without presentment, demand,
protest or notice of any kind, and the Lender shall be entitled to
proceed simultaneously or selectively and successively to enforce
its rights under the Notes, this Loan Agreement, and any or all of
the Loan Documents, and any of the instruments executed pursuant to
the terms thereof, or in connection therewith, and all renewals and
modifications thereof, and to exercise all other remedies available
to the Lender at law or in equity. Nothing contained herein shall
limit Lender's rights and remedies available under applicable law.
10.2. Selective Enforcement. In the event the Lender shall elect to
selectively and successively enforce its rights under any of the
Loan Documents, such action shall not be deemed a waiver or
discharge of any other lien, encumbrance or security instrument
securing payment of the Note until such time as the Lender shall
have been paid in full all amounts owing under the Notes. The
foreclosure of any lien provided pursuant to the terms of the Loan
Documents without the simultaneous foreclosure of all such liens
shall not merge the liens granted which are not foreclosed with any
interest that the Lender might obtain as a result of such selective
and successive foreclosure.
11. RELEASE. Borrowers hereby jointly and severally release, acquit and
forever discharge the Lender and the Lender's subsidiaries, affiliates,
officers, directors, shareholders, agents, employees, servants, attorneys
and representatives, as well as the respective heirs, personal
representatives, successors and assigns of any and all of them (hereafter
collectively called the "Released Lender Parties") from any and all
claims, demands, debts, actions, causes of action, suits, contracts,
agreements, obligations, accounts, defenses, offsets against indebtedness
and liabilities of any kind or character whatsoever, known or unknown,
suspected or unsuspected, in contract or in tort, at law or in equity,
including without implied limitation, such claims and defenses as fraud,
mistake, duress and usury, which the Borrowers ever had, now have, or
might hereafter have against the Released Lender Parties, jointly or
severally, for or by reason of any matter, cause or thing whatsoever
occurring prior to the date of this Loan Agreement, whether or not related
in whole or in part, directly or indirectly to the Borrowers'
indebtedness. In addition, the Borrowers agree not to commence, join in,
prosecute or participate in any suit or other proceeding in a position
which is adverse to any of the Released Lender Parties arising directly or
indirectly from any of the foregoing matters.
12. MISCELLANEOUS . It is further agreed as follows:
12.1. Recording Fees. The Borrowers will pay all recording and filing fees
and notary fees.
12.2. Expenses. The Borrowers will pay all attorneys' fees and expenses
incurred by the Lender which are incidental to (a) the negotiation
and preparation of the Loan Documents; (b) the enforcement or
defense of any or all of the Loan Documents and any instrument
executed pursuant thereto or in connection therewith to evidence or
secure the Borrowers' indebtedness to the Lender, and all renewals
and modifications thereof; (c) the protection of the Lender's
collateral; (d) the negotiation and preparation of all renewals and
modifications to the Loan Documents; (e) the partial or full release
of any of the Lender's liens on the Collateral; and (f) any legal
advice sought by the Lender in connection with the Loan Documents.
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12.3. Notices . Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or
sent by facsimile transmission or by registered or certified mail,
postage prepaid, return receipt requested and addressed as listed
below or to such other address as the party concerned may substitute
by written notice to the other. All notices shall be deemed received
on the date of personal delivery, the date of confirmation of
receipt of a facsimile transmission, or within three days (excluding
Saturdays, Sundays and holidays recognized in the United States)
after being mailed:
The Borrowers: 00000 XX 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
With a copy to:
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Fax:
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The Lender: Stillwater National Lender and Trust Company
0000 X. Xxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Executive Vice President
Fax: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxxx, Esq.
Xxxxxx & Xxxxxxx, P.C.
000 X. Xxxxxxxx
0000 Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
12.4. Amendment and Waiver. This Loan Agreement and the Loan Documents
may not be amended or modified in any way, except by an instrument
in writing executed by all of the parties thereto; provided,
however, Lender may, in writing: (a) extend the time for performance
of any of the obligations of Borrowers; (b) waive any default by
Borrowers; and (c) waive the satisfaction of any condition that is
precedent to the performance of Lender's obligations under this Loan
Agreement. In the event of a waiver of an event of default by
Lender, such specific event of default shall be deemed to have been
cured and not continuing, but no such waiver shall extend to the
reoccurrence of the same default or any subsequent or other default
or impair any consequence of such subsequent or other default.
12
12.5. Non-Waiver; Cumulative Remedies. No failure on the part of Lender to
exercise and no delay in exercising any right hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise by the Lender of any right hereunder preclude any other or
further right of exercise thereof. The remedies herein provided are
cumulative and not alternative.
12.6. Applicable Law. This Loan Agreement, all of the Loan Documents and
all other documents executed pursuant thereto and in connection
therewith to evidence or secure the loans contemplated hereby shall
be deemed to be a contract made under the laws of the State of
Oklahoma. Nothing in this Loan Agreement shall be construed to
constitute the Lender as a joint venturer with the Borrowers or to
constitute a partnership among any of such parties.
12.7. Descriptive Headings . The descriptive headings of the paragraphs of
this Loan Agreement are for convenience only and shall not be used
in the construction of the terms hereof.
12.8. Integrated Agreement . This Loan Agreement, all of the Loan
Documents and the other loan documents executed pursuant hereto or
in connection herewith constitute the entire agreement between the
parties hereto, and there are no agreements, understandings,
warranties or representations between the parties other than those
set forth in such documents and this Loan Agreement, and the Loan
Documents supercede and replace all prior agreements, letters, and
understandings between the Lender the Borrowers with respect to the
matters set forth herein.
12.9. Time of Essence . Time is of the essence of this Loan Agreement.
12.10.Binding Effect . This Loan Agreement shall be binding on and inure
to the benefit of the parties hereto and their respective
successors, personal representatives, legal representatives and
assigns.
12.11.Third Party Beneficiary. Nothing in this Loan Agreement, express or
implied, is intended to confer on any person, other than the parties
hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Loan Agreement.
12.12.Participation. Lender is authorized to sell participation interests
in the loan evidenced by this Agreement to other financial
institutions; and Borrowers agree that subject to the terms of the
agreements of participation, each holder of a participation interest
will be entitled to rely on the terms of the loan documents executed
in connection herewith as if such holder had been named as an
original party to the loan documents. In connection with the sale
and proposed sales of such participation interests, the Lender is
authorized to disclose all financial and other information about the
Borrowers and provide copies of the Loan Documents to all potential
and actual participants, and any such actions taken prior to the
date hereof are hereby authorized.
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12.13.Accuracy of Information. This Loan Agreement has been entered into
by the Lender based upon the information, data and representations
furnished by the Borrowers to the Lender, and the Lender's
obligation to close and fund the loan is subject to the continued
accuracy of all matters submitted to the Lender herewith. By
acceptance hereof, the Borrowers jointly and severally represent and
warrant to the Lender that all such information, data and
representations heretofore and hereafter furnished to the Lender are
complete and accurate in all material respects and there is
contained therein no untrue statement of a material fact or omission
to state a material fact necessary in order to make the statements
made in light of the circumstances under which they were made not
misleading, and this warranty shall be true at the time the loan is
closed and shall survive closing. There shall be no material change
at the time the loan is closed of the income and expenses of the
property, the financial condition of the Borrowers and all other
features of the transaction shall be as represented by the Borrowers
to the Lender.
12.14.Maximum Legal Rate of Interest. Notwithstanding any other provisions
of this Loan Agreement or any of the Loan Documents to the contrary,
the total interest charges incurred by the Borrowers pursuant to the
Note shall not exceed the maximum legal rate of interest under
Oklahoma law. If the holder of the Note shall ever be entitled to
receive, collect or apply, as interest on the loans, any amount in
excess of the maximum legal rate of interest permitted to be charged
by applicable law, and, in the event any holder of the Note ever
receives, collects or applies, as interest, any such excess, such
amount which would be excessive interest shall be applied to the
reduction of the unpaid principal balance of the Note, and if the
principal balance is paid in full, any remaining excess shall be
forthwith paid to Borrowers. In determining whether or not the
interest paid or payable under any specific contingency exceeds the
highest lawful rate, Borrowers and Lender shall, to the maximum
extent permitted, under applicable law: (a) characterize any
non-principal payment as an expense, fee or premium rather than as
interest; (b) exclude voluntary prepayments and the effects thereof;
(c) "spread" the total amount of interest on the Note throughout the
entire term of the Note so that the interest rate is uniform
throughout the entire term of the Note.
00.00.Xx Responsibility of Lender. Notwithstanding any term or provision
of the Loan Documents, Lender shall not have any obligation or
responsibility for the management, conduct or operation of the
business and affairs of Borrowers. No provision hereof or of any of
the other Loan Documents shall be construed or interpreted to create
any relationship between Borrowers and Lender other than that of
debtor and creditor.
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12.16.Jurisdiction. The Borrowers hereby jointly and severally submit to
the jurisdiction of any state or federal court located in Tulsa
County, Oklahoma, or in Oklahoma County, Oklahoma, as elected by the
Lender, in connection with any action or proceeding commenced for
the collection, enforcement, or defense of this Loan Agreement, the
Notes, or any of the other Loan Documents, and hereby waives all
objections to venue or any objections based on the theory of
non-convenient forum in connection therewith.
12.17.Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be an original instrument, but all
of which taken together will constitute one agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed as of the day and year first above written.
XXXXXXX MACHINE WORKS, INC.,
a Texas corporation
By:
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Name:
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Title:
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EXCALIBUR HOLDINGS, INC.,
a Texas corporation
By:
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Name:
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Title:
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EXCALIBUR INDUSTRIES, INC.,
a Delaware corporation
By:
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Name:
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Title:
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(the "Borrowers")
STILLWATER NATIONAL BANK AND TRUST COMPANY
By:
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Name:
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Title:
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(the "Lender")
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MONTHLY BORROWING BASE CERTIFICATE
1. I, ______________________________, am the duly elected, qualified and
acting ____________________ of XXXXXXX MACHINE WORKS, INC., a Texas corporation
("Xxxxxxx"), and do hereby make this certificate on behalf of the Borrower.
2. Pursuant to the Loan Agreement, dated September ___, 2004 (the "Loan
Agreement"), among Xxxxxxx, Excalibur Holdings, Inc., a Texas corporation, and
Excalibur Industries, Inc., a Texas corporation (together, the "Borrowers") and
Stillwater National Bank and Trust Company ("Lender"), Xxxxxxx hereby certifies
that, as of _____________, 20__, the Borrowing Base as described in the Loan
Agreement is the following:
Total Accounts Receivable $________
Less:Foreign Accounts $________
Less:Set-Off Accounts $________
Less:Accounts 90 days past due $________
Less:Related Accounts $________
Less:10% Rule $________
Eligible Accounts Receivable $________x 80% = $________
Eligible Inventory $________x 50% = $________
(Inventory is limited to the lesser of (a) $100,000.00
and (b) 50% of total Borrowing Base)
Borrowing Base $________
3. As of the date of this Certificate, the above information is true and
correct, and no Default has occurred and is continuing under the Loan Agreement.
If a Default has occurred, I have stated on an attachment hereto the nature of
the Default, the period of existence thereof and the action proposed to be taken
with respect thereto.
4. Attached hereto is a true and correct accounts receivable aging report
as of the date set forth in paragraph 2 hereof.
IN WITNESS WHEREOF, I have, hereunto signed my name and certify to the
above as of thisday of ______________, 20__.
XXXXXXX MACHINE WORKS, INC.,
a Texas corporation
By:
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Name:
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Title:
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