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EXHIBIT 10.1(a)
BANK ONE, ARIZONA, NA
LOAN AGREEMENT
This Agreement is entered into by and between XXXXXX STEEL COMPANY, an
Arizona corporation ("Borrower") and Bank One, Arizona, NA, a national banking
association ("Bank").
Borrower has applied to Bank for a loan in the amount of $1,000,000.00. In
consideration of Bank making said loan the Borrower hereby warrants and agrees
as follows:
1. THE LOAN. This loan shall be repaid in accordance with the terms of the
promissory note(s) prepared by Bank and executed by Borrower. The purpose of
this loan is to support Standby Letters of Credit.
2. BUSINESS ORGANIZATION. Borrower is a corporation. The primary business
operation of Borrower is structural steel erection company. Borrower's form of
organization and primary business operation shall remain the same during the
term of this Agreement.
3. COLLATERAL. As security for the loan the Borrower will provide the
following collateral under duly executed security documents and agrees to be
bound by the terms contained therein:
S/A - INVENTORY, RECEIVABLES AND RIGHTS TO PAYMENT
S/A - EQUIPMENT
4. NET WORTH. A minimum tangible net worth of $6,100,000.00 and a minimum
owner's equity of 21.0% shall be maintained where "Owner's Equity" "Owner's
Equity Percentage" shall mean the results obtained by dividing (A) Tangible Net
Worth (as herein defined) by (B) Borrower's Total Assets on a six month average.
5. NET WORKING CAPITAL. While the loan is outstanding, current assets
shall be maintained in excess of current liabilities by $4,900,000.00 and a
current ratio of 1.25:1.00 shall be maintained and calculated by dividing
current assets by current liabilities after deducting short term advances to
shareholders. The outstanding balance on the $6,500,000.00 Revolving Line of
Credit will be considered to be a current liability for the purpose of
calculating both "Net Working Capital" and "Current Ratio".
6. INVESTMENT IN FIXED ASSETS. Acquisition or purchase of fixed assets
shall not exceed $N/A during any 12-month period, without prior consent of Bank.
7. LEASING OF CAPITAL EQUIPMENT. No lease of personal property will be
entered into which would cause Borrower's total rental obligations for personal
property to exceed $N/A per fiscal year, without prior consent of Bank.
8. SUBORDINATION OF EXISTING DEBT. The following indebtedness of Borrower
will be subordinated to Bank's loan in a manner satisfactory to Bank:
NAME OF CREDITOR AMOUNT
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(a) $
(b) N/A $
(c) $
9. DIVIDENDS. No corporate dividends in excess of $N/A shall be paid
during any 12-month period, without prior consent of Bank.
10. COMPENSATION. No annual salary, bonuses, withdrawals, or other
compensation, in cash or otherwise, shall be paid in excess of the following
limits to the persons indicated or to any other person.
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NAME ANNUAL AMOUNT
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(a) N/A $
(b) $
(c) $
11. CHANGE OF OWNERSHIP. Borrower will not repurchase any company issued
stock, buy out a Partnership interest or materially change ownership of the
company without prior written consent of Bank.
12. FINANCIAL STATEMENTS. Borrower shall furnish Bank: (i) as soon as
available and in any event within one hundred fifty (150) days after the end of
each fiscal year of Borrower, financial statements which accurately reflect
Borrower's assets, liabilities and net worth as of the end of the fiscal year
and profit and loss statements for the fiscal year with the following
certification requirement: Independent certified public financial statements,
(ii) as soon as available and in any event within sixty (60) days after the end
of each monthly period, financial reports of Borrower which accurately reflect
Borrower's assets, liabilities and net worth as of the end of the period, and
with the following certification requirement: Borrower prepared, and (iii) as
soon as available and in any event within thirty (30) days of filing, a copy of
Borrower's federal income tax return(s) for each year, together with all
schedules and other documents filed with such returns. Borrower shall furnish
such other information as Bank may reasonably require from time to time.
Borrower shall cause Guarantor, Xxxxx X. and Xxxxx X. Xxxxxx, to furnish
Bank: (A) annual updated balance sheet in such form and with such certifications
as may be reasonably required by Bank, and (B) a copy of such person's federal
income tax return for such calendar year, together with all schedules and other
documents filed with such return, both by August 15th of each year.
Borrower shall cause Guarantor, Xxxxx X. Xxxxxx, to furnish Bank: (A)
annual updated balance sheet in such form and with such certifications as may be
reasonably required by Bank, and (B) a copy of such person's federal income tax
return for such calendar year, together with all schedules and other documents
filed with such return, both by August 15th of each year.
13. WARRANTIES AND COVENANTS.
(a) Borrower warrants that all transactions with Bank, including the
execution of all agreements and instruments by any representative on behalf of
Borrower, are and will be duly authorized and that Bank may rely upon any
statements and representations made by Borrower with respect to such
authorizations.
(b) Borrower warrants that all financial statements and other
statements or reports given to Bank are and will be accurate.
(c) Borrower will keep all books and records of the business on a
consistent basis in accordance with generally accepted accounting practices and
will permit a representative of Bank to examine and audit the books at such
reasonable times as Bank may request.
(d) Borrower will maintain executive and management personnel
satisfactory to Bank.
(e) Borrower will promptly inform Bank of any material litigation
involving Borrower or of any other adverse matter which may occur, the effect of
which may prejudice the payment of the loan.
(f) Borrower will not, in the operation of the business, incur other
indebtedness for borrowed money, or act as guarantor for any indebtedness of
others or lend money, or encumber any of the assets of the business except to
Bank. Borrower will not sell, transfer or assign any assets or engage in any
other material transactions, except in the ordinary course of business.
(g) Borrower will pay all current bills and obligations when due.
Borrower will keep all permits and franchises necessary for the conduct of its
business in force and effect and will keep all of its equipment, machinery and
vehicles in good repair.
(h) Borrower will maintain adequate fire, public liability and other
hazard liability insurance. All policies covering property given as security for
the loan(s) shall have a loss payable clause in favor of Bank.
(i) This Agreement shall continue as long as the loan or any part
thereof or any renewal or extension thereof remains unpaid.
(j) No consent or waiver by the Bank of the terms of this Agreement
shall be effective unless in writing. Time is of the essence of this Agreement.
No waiver of any breach or default of Borrower shall be deemed a waiver of any
breach or default thereafter occurring or a waiver of the time is of the essence
provision. Failure of Bank to take steps to collect the indebtedness due it or
to exercise its rights in the collateral shall not be a waiver of its right to
take action at a subsequent date.
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14. DEFAULT. Any one of the following events shall constitute the default
of Borrower under this loan and all collateral instruments securing the unpaid
balance thereof:
(a) Nonpayment of any installment of principal or interest when due.
(b) Breach of any of Borrower's warranties or the making of any
material misrepresentation.
(c) Appointment of a receiver or trustee to take possession of the
business or of any portion of the collateral and the continuance of such
receiver or trustee in possession for a period of 10 days.
(d) Petition by Borrower for reorganization or arrangement under the
bankruptcy laws.
(e) Attachment, garnishment, levy of execution, or judicial seizure
of any portion of the collateral which is not dismissed or stayed within 10
days.
(f) Insolvency of Borrower.
(g) Discontinuance by Borrower of the business operations or
abandonment of any substantial portion of Borrower's assets.
If any event of default shall occur, the whole of the principal sum
then remaining unpaid on all notes and other obligations to Bank, together with
the interest thereon, shall become immediately due and payable at the election
of Bank.
If suit is instituted to collect the notes and other obligations,
Borrower promises to pay, in addition to the costs and disbursements allowed by
law, such additional sums as the court may award as attorney's fees.
15. EXPENSES. Borrower shall reimburse Bank, upon demand, for all of
Bank's direct expenses in connection with making any and all loans and the
perfection of Bank's security interests.
16. CONDITION OF BANK'S OBLIGATIONS. All agreements or commitments of Bank
to make any loan or advance to Borrower are and will be subject to the following
terms and conditions:
(a) Due and punctual performance by Borrower of all of Borrower's
agreements with Bank.
(b) Correctness of all statements and representations by Borrower to
Bank.
(c) Execution and delivery by Borrower of all loan and security
instruments in such form as Bank shall require.
(d) Acceptance and approval by Bank of all collateral.
(e) Payment by Borrower of any and all fees and charges specified by
Bank.
(f) Verification and approval of Borrower's credit.
(g) No material adverse matter occurring.
17. Any modification, waiver or other change of this agreement must be
agreed to in writing.
18. ADDITIONAL PROVISIONS. See attached sheet for additional provisions
incorporated by reference in this Agreement.
IN WITNESS WHEREOF, this Agreement is executed this 30th day of June, 1996.
BORROWER
XXXXXX STEEL COMPANY,
an Arizona corporation
By_____________________________________
Xxxxx X. Xxxxxx, Chairman
BANK
BANK ONE, ARIZONA, NA,
a national banking association
By_____________________________________
Xxxx Xxxxxxxx, Vice President
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