BUSINESS LOAN AGREEMENT (ASSET BASED)
Principal Loan Date Maturity Loan No Call/Coll Account Officer Inititals
$1,000,000.00 09-11-2001 09-01-2002 9001 2/7380 3147622 54403
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing" * * * " has been omitted due to text length
limitations.
Corporation: EPENZIO, INC. Lender: ZIONS FIRST NATIONAL BANK
0000 XXXX XXXXXXXXXX XXXXXXX, XXXXX 000 XXXXX XXXXXX XXXXXXXXXX XXXXXXX XXXXXX
XXXX XXXX XXXX, XX 00000 000 XXXX 00000 XXXXX, XXXXX 000
XXXXX, XX 00000
THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated September 11, 2001. is made and
executed between XXXXXXX. INC. ("Borrower") and ZIONS FIRST NA TIONAL BANK
("Lender") on the following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a commercial loan or
loans or other financial accommodations, including those which may be described
on any exhibit or schedule attached to this Agreement ("Loan"). Xxxxxxxx
understands and agrees that: (A) in granting, renewing. or extending any Loan,
Lender is relying upon Borrower's representations, warranties. and agreements as
set forth in this Agreement, and (B) all such Loans shall be and remain subject
to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of September 11, 2001, and shall
continue in full force and effect until such time as all of Borrower's Loans in
favor of Lender have been paid in full, including principal, interest. costs,
expenses, attorneys' tees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement.
ADVANCE AUTHORITY. The following persons currently are authorized to request
advances and authorize payments under the line of credit until Xxxxxx receives
from Borrower, at Xxxxxx's address shown above, written notice of revocation of
their authority: XXXX X. XXXXXXXX, President of EPENZIO, INC.; XXXX X. XXXXXXXX,
CEO of EPENZIO. INC.; and XXXX XXXXXXXXXX. CFO.
LINE OF CREDIT. Xxxxxx agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing
Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows:
Conditions Precedent to Each Advance. Xxxxxx's obligation to make any Advance
to or for the account of Borrower under this Agreement is subject to the
following conditions precedent, with all documents, instruments, opinions,
reports, and other items required under this Agreement to be in form and
substance satisfactory to Lender:
(1) Lender shall have received evidence that this Agreement and all
Related Documents have been duly authorized, executed, and
delivered by Xxxxxxxx to Lender .
(2) Lender shall have received such opinions of counsel, supplemental
opinions, and documents as Xxxxxx may request.
(3) The security interests in the Collateral shall have been duly
authorized, created, and perfected with first lien priority and
shall be in full force and effect.
(4) All guaranties required by Lender for the credit facility(ies)
shall have been executed by each Guarantor, delivered to Lender,
and be in full force and effect.
(5) Lender, at its option and for its sole benefit, shall have
conducted an audit of Xxxxxxxx's Accounts, books, records, and
operations, and Lender shall be satisfied as to their condition.
(6) Borrower shall have paid to Lender all fees, costs, and expenses
specified in this Agreement and the Related Documents as are then
due and payable.
(7) There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement, and
Borrower shall have delivered to Lender the compliance certificate
called for in the paragraph below titled "Compliance Certificate."
Making Loan Advances. Advances under this credit facility. as well as
directions for payment from Xxxxxxxx's accounts, may be requested orally or
in writing by authorized persons. Lender may, but need not, require that all
oral requests be confirmed in writing. Each Advance shall be conclusively
deemed to have been made at the request of and for the benefit of Borrower
(1) when credited to any deposit account of Borrower maintained with Lender
or (2) when advanced in accordance with the instructions of an authorized
person. Lender, at its option, may set a cutoff time, after which all
requests for Advances will be treated as having been requested on the next
succeeding Business Day.
Mandatory Loan Repayments. If at any time the aggregate principal amount of
the outstanding Advances shall exceed the applicable Borrowing Base,
Borrower, immediately upon written or oral notice from Lender, shall pay to
Lender an amount equal to the difference between the outstanding principal
balance of the Advances and the Borrowing Base. On the Expiration Date,
Borrower shall pay to Lender in full the aggregate unpaid principal amount of
all Advances then outstanding and all accrued unpaid interest, together with
all other applicable fees, costs and charges, if any, not yet paid.
Loan Account. Lender shall maintain on its books a record of account in which
Lender shall make entries for each Advance and such other debits and credits as
shall be appropriate in connection with the credit facility. Lender shall
provide Borrower with periodic statements of Xxxxxxxx's account, which
statements shall be considered to be correct and conclusively binding on
Borrower unless Borrower notifies Lender to the contrary within thirty (30) days
after Xxxxxxxx's receipt of any such statement which Borrower deems to be
incorrect.
COLLATERAL. To secure payment of the Primary Credit Facility and performance of
all other Loan, obligations and duties owed by Borrower to Lender, Borrower (and
others. if required) shall grant to Lender Security Interests in such property
and assets as Lender may require. Lender's Security Interests in the Collateral
shall be continuing liens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance. With
respect to the Collateral, Xxxxxxxx agrees and represents and warrants to
Xxxxxx:
Perfection of Security Interests. Xxxxxxxx agrees to execute financing
statements and all documents perfecting Xxxxxx's Security Interest and to
take whatever other actions are requested by Xxxxxx to perfect and continue
Xxxxxx's Security Interests in the Collateral. Upon request of Xxxxxx,
Xxxxxxxx will deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Borrower will note Xxxxxx's interest upon
any and all chattel paper and instruments if not delivered to Lender for
possession by Xxxxxx . Contemporaneous with the execution of this Agreement,
Xxxxxxxx will execute one or more UCC financing statements and any similar
statements as may be required by applicable law, and Lender will file such
financing statements and all such similar statements in the appropriate
location or locations. Borrower hereby appoints Lender as its irrevocable
attorney-in-tact for the purpose of executing any documents necessary to
perfect or to continue any Security Interest. Lender may at any time, and
without further authorization from Borrower, file a carbon, photograph,
facsimile, or other reproduction of any financing statement for use as a
financing statement. Borrower
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9001 (Continued) Page 2
will reimburse Lender for all expenses for the perfection, termination, and
the continuation of the perfection of Xxxxxx's security interest in the
Collateral. Borrower promptly will notify Lender before any change in
Xxxxxxxx's name including any change to the assumed business names of
Xxxxxxxx. Borrower also promptly will notify Lender before any change in
Borrower's Social Security Number or Employer Identification Number. Xxxxxxxx
further agrees to notify Xxxxxx in writing prior to any change in address or
location of Xxxxxxxx's principal governance office or should Borrower merge
or consolidate with any other entity.
Collateral Records. Borrower does now, and at all times hereafter shall, keep
correct and accurate records of the Collateral, all of which records shall be
available to Lender or Xxxxxx's representative upon demand for inspection and
copying at any reasonable time. With respect to the Accounts, Xxxxxxxx agrees
to keep and maintain such records as Lender may require, including without
limitation information concerning Eligible Accounts and Account balances and
agings. Records related to Accounts (Receivablesl are or will be located at.
The above is an accurate and complete list of all locations at which Borrower
keeps or maintains business records concerning Xxxxxxxx's collateral.
Collateral Schedules. Concurrently with the execution and delivery of this
Agreement, Borrower shall execute and deliver to Lender schedules of Accounts
and schedules of Eligible Accounts in form and substance satisfactory to the
Lender. Thereafter supplemental schedules shall be delivered according to the
following schedule: With respect to Eligible Accounts, schedules shall be
delivered Every 30 days.
Representations and Warranties Concerning Accounts. With respect to the
Accounts, Borrower represents and warrants to Lender: ( 1 ) Each Account
represented by Borrower to be an Eligible Account for purposes of this
Agreement conforms to the requirements of the definition of an Eligible
Account; (21 All Account information listed on schedules delivered to Lender
will be true and correct, subject to immaterial variance; and (31 Lender, its
assigns, or agents shall have the right at any time and at Borrower's expense
to inspect, examine, and audit Xxxxxxxx's records and to confirm with Account
Debtors the accuracy of such Accounts.
Remittance Account. Xxxxxxxx agrees that Xxxxxx may at any time require
Borrower to institute procedures whereby the payments and other proceeds of
the Accounts shall be paid by the Account Debtors under a remittance account
or lock box arrangement with Xxxxxx, or Xxxxxx's agent, or with one or more
financial institutions designated by Lender. Borrower further agrees that, if
no Event of Default exists under this Agreement, any and all of such funds
received under such a remittance account or lock box arrangement shall, at
Xxxxxx's sole election and discretion, either be ( 1) paid or turned over to
Borrower; (21 deposited into one or more accounts for the benefit of Borrower
(which deposit accounts shall be subject to a security assignment in favor of
Lenderl; (3) deposited into one or more accounts for the joint benefit of
Borrower and Lender (which deposit accounts shall likewise be subject to a
security assignment in favor of Xxxxxxx; (41 paid or turned over to Lender to
be applied to the Indebtedness in such order and priority as Lender may
determine within its sole discretion; or (51 any combination of the foregoing
as Lender shall determine from time to time. Xxxxxxxx further agrees that,
should one or more Events of Default exist, any and all funds received under
such a remittance account or lock box arrangement shall be paid or turned
over to Lender to be applied to the Indebtedness, again in such order and
priority as Lender may determine within its sole discretion.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Xxxxxx's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following documents for
the Loan: (1) the Note; (2) Security Agreements granting to Lender security
interests in the Collateral; (3) financing statements and all other documents
perfecting Lender's Security Interests; (4) evidence of insurance as required
below; (51 together with all such Related Documents as Lender may require for
the Loan; all in form and substance satisfactory to Lender and Lender's
counsel.
Borrower's Authorization. Borrower shall have provided in form and substance
satisfactory to Lender properly certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents.
In addition, Borrower shall have provided such other resolutions,
authorizations, documents and instruments as Lender or its counsel, may
require.
Fees and Expenses Under This Agreement. Borrower shall have paid to Lender
all fees, costs, and expenses specified in this Agreement and the Related
Documents as are then due and payable.
Representations and Warranties. The representations and warranties set forth
in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement or
under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
Organization. Borrower is a corporation for profit which is, and at all times
shall be, duly organized, validly existing, and in good standing under and by
virtue of the laws of the State of Utah. Borrower is duly authorized to
transact business in all other states in which Borrower is doing business,
having obtained all necessary filings, governmental licenses and approvals
for each state in which Borrower is doing business. Specifically, Borrower
is, and at all times shall be, duly qualified as a foreign corporation in all
states in which)he failure to so qualify would have a material adverse effect
on its business or financial condition. Borrower has the full power and
authority to own its properties and to transact the business in which it is
presently engaged or presently proposes to engage. Borrower maintains an
office at 0000 XXXX XXXXXXXXXX XXXXXXX, XXXXX 000, XXXX XXXX XXXX, XX 00000.
Unless Borrower has designated otherwise in writing, the principal office is
the office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender prior to any
change in the location of Xxxxxxxx's state of organization or any change in
Borrower's name. Borrower shall do all things necessary to preserve and to
keep in full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and decrees
of any governmental or quasi-governmental authority or court applicable to
Borrower and Xxxxxxxx's business activities.
Assumed Business Names. Xxxxxxxx has filed or recorded all documents or
filings required by law relating to all assumed business names used by
Xxxxxxxx. Excluding the name of Xxxxxxxx, the following is a complete list of
all assumed business names under which Borrower does business: None.
Authorization. Borrower's execution, delivery, and performance of this
Agreement and all the Related Documents have been duly authorized by all
necessary action by Borrower and do not conflict with, result in a violation
of, or constitute a default under (1) any provision of Borrower's articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (2) any law, governmental regulation,
court decree, or order applicable to Borrower or to Borrower's properties.
Financial Information. Each of Xxxxxxxx's financial statements supplied to
Xxxxxx truly and completely disclosed Xxxxxxxx's financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statment supplied to Lender. Borrower has no material contingent
obligations except as disclosed in
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BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9001 (Continued) Page 3
such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Xxxxxxxx's financial statements or in writing to Lender and as
accepted by Xxxxxx, and except for property tax liens for taxes not presently
due and payable, Borrower owns and has good title to all of Borrower's
properties free and clear of all Security Interests, and has not executed any
security documents or financing statements relating to such properties. All
of Xxxxxxxx's properties are titled in Borrower's legal name, and Xxxxxxxx
has not used, or filed a financing statement under, any other name for at
least the last five (5) years.
Hazardous Substances. Except as disclosed to and acknowledged by Xxxxxx in
writing, Borrower represents and warrants that: ( 1) During the period of
Borrower's ownership of Borrower's Collateral, there has been no use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substance by any person on, under, about or from any
of the Collateral. (2) Borrower has no knowledge of, or reason to believe
that there has been (a) any breach or violation of any Environmental Laws;
(b) any use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any Hazardous Substance on, under, about or from the
Collateral by any prior owners or occupants of any of the Collateral; or (c)
any actual or threatened litigation or claims of any kind by any person
relating to such matters. (3) Neither Borrower nor any tenant, contractor,
agent or other authorized user of any of the Collateral shall use, generate,
manufacture, store, treat, dispose of or release any Hazardous Substance on,
under, about or from any of the Collateral; and any such activity shall be
conducted in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation all Environmental
Laws. Borrower authorizes Lender and its agents to enter upon the Collateral
to make such inspections and tests as Lender may deem appropriate to
determine compliance of the Collateral with this section of the Agreement.
Any inspections or tests made by Lender shall be at Borrower's expense and
for Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any other
person. The representations and warranties contained herein are based on
Borrower's due diligence in investigating the Collateral for hazardous waste
and Hazardous Substances. Borrower hereby ( 1) releases and waives any future
claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (2} agrees
to indemnify and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on
the Collateral. The provisions of this section of the Agreement, including
the obligation to indemnify, shall survive the payment of the Indebtedness
and the termination, expiration or satisfaction of this Agreement and shall
not be affected by Xxxxxx's acquisition of any interest in any of the
Collateral, whether by foreclosure or otherwise.
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may
materially adversely affect Borrower's financial condition or properties,
other than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Xxxxxx in writing.
Taxes. To the best of Xxxxxxxx's knowledge, all of Xxxxxxxx's tax returns and
reports that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith in
the ordinary course of business and for which adequate reserves have been
provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing,
Xxxxxxxx has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or affecting
any of the Collateral directly or indirectly securing repayment of Borrower's
Loan and Note, that would be prior or that may in any way be superior to
Xxxxxx's Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (if any),
and all Related Documents are binding upon the signers thereof, as well as
upon their successors, representatives and assigns, and are legally
enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Xxxxxx that, so long
as this Agreement remains in effect, Borrower will: Notices of Claims and
Litigation. Promptly inform Xxxxxx in writing of ( 1) all material adverse
changes in Borrower's financial condition, and (2) all existing and all
threatened litigation, claims, investigations, administrative proceedings or
similar actions affecting Borrower or any Guarantor which could materially
affect the financial condition of Borrower or the financial condition of any
Guarantor .
Financial Records. Maintain its books and records in accordance with GAAP,
applied on a consistent basis, and permit Xxxxxx to examine and audit
Xxxxxxxx's books and records at all reasonable times.
Financial Statements. Furnish Lender with the following:
Annual Statements. As soon as available, but in no event later than
ninety (90) days after the end of each fiscal year, Xxxxxxxx's balance
sheet and income statement for the year ended, audited by a certified
public accountant satisfactory to Lender .
Interim Statements. As soon as available, but in no event later than 45
days after the end of each fiscal quarter, Xxxxxxxx's balance sheet and
profit and loss statement for the period ended, prepared by Xxxxxxxx .
All financial reports required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent basis, and
certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and statements,
as Xxxxxx may request from time to time.
Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and with
insurance companies acceptable to Lender. Borrower, upon request of Xxxxxx,
will deliver to Lender from time to time the policies or certificates of
insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least ten ( 10) days
prior written notice to Lender. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be impaired
in any way by any act, omission or default of Borrower or any other person.
In connection with all policies covering assets in which Lender holds or is
offered a security interest for the Loans, Borrower will provide Lender with
such lender's loss payable or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (1) the
name of the insurer; (2) the risks insured; (3) the amount of the policy;
(4) the properties insured; (5) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (6) the expiration date of the policy. In addition, upon
request of Lender (however not more often than annually), Borrower will
have an independent appraiser satisfactory to Lender determine, as
applicable, the actual cash
BUSINESS LOAN AGREEMENT {ASSET BASED)
Loan No: 9001 (Continued) Page 4
value or replacement cost of any Collateral. The cost of such appraisal shall
be paid by Borrower .
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection
with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Xxxxxxxx's business
operations, unless specifically consented to the contrary by Xxxxxx in
writing.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness
and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed
upon Borrower or its properties, income, or profits, prior to the date on
which penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower's properties, income, or
profits.
Performance. Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the Related
Documents, and in all other instruments and agreements between Borrower and
Lender. Borrower shall notify Xxxxxx immediately in writing of any default in
connection with any agreement.
Operations. Maintain executive and management personnel with substantially
the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in
executive and management personnel; conduct its business affairs in a
reasonable and prudent manner .
Environmental Studies. Promptly conduct and complete, at Borrower's expense,
all such investigations, studies, samplings and testings as may be requested
by Lender or any governmental authority relative to any substance, or any
waste or by-product of any substance defined as toxic or a hazardous
substance under applicable federal, state, or local law, rule, regulation,
order or directive, at or affecting any property or any facility owned,
leased or used by Borrower .
Compliance with Governmental Requirements. Comply with all laws, ordinances,
and regulations, now or hereafter in effect, of all governmental authorities
applicable to the conduct of Borrower's properties, businesses and
operations, and to the use or occupancy of the Collateral, including without
limitation, the Americans With Disabilities Act. Borrower may contest in good
faith any such law, ordinance, or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Borrower has
notified Lender in writing prior to doing so and so long as, in Xxxxxx's sole
opinion, Xxxxxx's interests in the Collateral are not jeopardized. Lender may
require Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Xxxxxx's interest.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Xxxxxxxx's other
properties and to examine or audit Xxxxxxxx's books, accounts, and records
and to make copies and memoranda of Xxxxxxxx's books, accounts, and records.
If Borrower now or at any time hereafter maintains any records (including
without limitation computer generated records and computer software programs
for the generation of such records) in the possession of a third party,
Borrower, upon request of Xxxxxx, shall notify such party to permit Lender
free access to such records at all reasonable times and to provide Lender
with copies of any records it may request, all at Borrower's expense.
Compliance Certificates. Unless waived in writing by Xxxxxx, provide Lender
within thirty (30) days after the end of each fiscal quarter , with a
certificate executed by Xxxxxxxx's chief financial officer, or other officer
or person acceptable to Lender, certifying that the representations and
warranties set forth in this Agreement are true and correct as of the date of
the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects
with any and all Environmental Laws; not cause or permit to exist, as a
result of an intentional or unintentional action or omission on Borrower's
part or on the part of any third party, on property owned and/or occupied by
Borrower, any environmental activity where damage may result to the
environment, unless such environmental activity is pursuant to and in
compliance with the conditions of a permit issued by the appropriate federal,
state or local governmental authorities; shall furnish to Lender promptly and
in any event within thirty (30) days after receipt thereof a copy of any
notice, summons, lien, citation, directive, letter or other communication
from any governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with any
environmental activity whether or not there is damage to the environment
and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, assignments, financing
statements, instruments, documents and other agreements as Lender or its
attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.
RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except federal, state or local income or franchise taxes
imposed on Lender), reserve requirements, capital adequacy requirements or other
obligations which would (A) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates, (B) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or
(C) reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Xxxxxx's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error .
XXXXXX'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Xxxxxx's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Xxxxxxxx. All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either ( 1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
Indebtedness and Liens. ( 1) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness for borrowed money, including capital
leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security
interest in, or encumber any of Borrower's assets (except as allowed as
Permitted Liens) or (3) sell with
________________________
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9001 (Continued) Page 5
recourse any of Xxxxxxxx's accounts, except to Xxxxxx .
Continuity of Operations. (1) Engage in any business activities substantially
different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other
entity, change its name, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower's stock
(other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has
occurred and is continuing or would result from the payment of dividends, if
Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue
Code of 1986, as amended), Borrower may pay cash dividends on its stock to
its shareholders from time to time in amounts necessary to enable the
shareholders to pay income taxes and make estimated income tax payments to
satisfy their liabilities under federal and state law which arise solely from
their status as Shareholders of a Subchapter S Corporation because of their
ownership of shares of Borrower's stock, or purchase or retire any of
Borrower's outstanding shares or alter or amend Borrower's capital structure.
Loans, Acquisitions and Guaranties. ( 1) Loan, invest in or advance money or
assets, (2) purchase, create or acquire any interest in any other enterprise
or entity, or (3) incur any obligation as surety or guarantor other than in
the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good xxxxx xxxxx itself insecure, even though no Event of Default shall have
occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Xxxxx accounts, or any trust accounts
for which setoff would be prohibited by law. Xxxxxxxx authorizes Xxxxxx, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
Payment Default. Xxxxxxxx fails to make any payment when due under the Loan.
Other Defaults. Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of
the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower .
Default in Favor of Third Parties. Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's or any Grantor's property or Borrower's
or any Grantor's ability to repay the Loans or perform their respective
obligations under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished
to Lender by Borrower or on Borrower's behalf under this Agreement or the
Related Documents is false or misleading in any material respect, either now
or at the time made or furnished or becomes false or misleading at any time
thereafter .
Insolvency. The dissolution or termination of Xxxxxxxx's existence as a going
business, the insolvency of Xxxxxxxx, the appointment of a receiver for any
part of Xxxxxxxx's property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower .
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency
against any collateral securing the Loan. This includes a garnishment of any
of Xxxxxxxx's accounts, including deposit accounts, with Lender. However,
this Event of Default shall not apply if there is a good faith dispute by
Xxxxxxxx as to the validity or reasonableness of the claim which is the basis
of the creditor or forfeiture proceeding and if Borrower gives Xxxxxx written
notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness. In the event of a death, Lender, at its option,
may, but shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of Default.
Change in Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower .
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Xxxxxx believes the prospect of payment or performance of the
Loan is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, other than a default on Indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been given a
notice of a similar default within the preceding twelve (12) months, it may
be cured (and no Event of Default will have occurred) if Borrower or Grantor,
as the case may be, after receiving written notice from Lender demanding cure
of such default: ( 1) cure the default within fifteen (15) days; or (2) if
the cure requires more than fifteen (15) days, immediately initiate steps
which Lender deems in Xxxxxx's sole discretion to be sufficient to cure the
default and thereafter continue and complete all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender's option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Xxxxxx's
BUSINESS LOAN AGREEMENT (ASSET BASED}
Loan No: 9001 (Continued) Page 6
rights and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Xxxxxx to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Xxxxxx's
right to declare a default and to exercise its rights and remedies.
CUSTOMER LIST. BORROWER SHALL FURNISH TO LENDER AN ANNUAL LIST OF BORROWER'S
ACCOUNT RECEIVABLE CUSTOMERS AND THEIR ADDRESSES IN A FORM ACCEPTABLE TO LENDER
WITHIN 20 DAYS OF THE END OF EACH ANNUAL PERIOD.
ACCOUNTS PAYABLE AGING. BORROWER SHALL FURNISH TO LENDER A QUARTERLY ACCOUNTS
PAYABLE AGING REPORT WITHIN 20 DAYS OF THE END OF EACH QUARTER IN A FORM
ACCEPTABLE TO LENDER.
AUTHORIZATION TO VERIFY ACCOUNTS RECEIVABLE. BORROWER HEREBY AUTHORIZES LENDER
TO VERIFY ITS ACCOUNTS RECEIVABLE THROUGH WRITTEN AND/OR VERBAL VERIFICATION
METHODS AT THE DISCRETION OF THE LENDER.
WAIVER OF CLAIMS. BORROWER (i} REPRESENTS THA T THEY HA VE NO DEFENSES TO OR
SETOFFS AGAINST ANY INDEBTEDNESS OR OTHER OBLIGATIONS OWING TO LENDER OR ITS
AFFILIATES (THE "OBLIGATIONS"), NOR CLAIMS AGAINST LENDER OR ITS AFFILIATES FOR
ANY MA TTER WHA TSOEVER, RELA XXX OR UNRELA XXX TO THE OBLIGA TIONS, AND (ii)
RELEASE LENDER AND ITS AFFlLIA TES FROM ALL CLAIMS, CAUSES OF ACTION, AND COSTS,
IN LAW OR EQUITY, EXISTING AS OF THE DATE OF THIS AGREEMENT WHICH BORROWER HAS
OR MA Y HA VE BY REASON OF ANY MA TTER OF ANY CONCEIV ABLE KIND OR CHARACTER WHA
TSOEVER, RELA XXX OR UNRELA XXX TO THE OBLIGATIONS, INCLUDING THE SUBJECT MATTER
OF THIS AGREEMENT. THIS PROVISION SHALL NOT APPLY TO CLAIMS FOR PERFORMANCE OF
EXPRESS CONTRACTUAL OBLIGATIONS OWING TO BORROWER BY LENDER OR ITS AFFILIATES.
DEFINITION OF INDEBTEDNESS AND NOTE. "Indebtedness" and "Note" as referenced
herein are hereby deleted in their entirety and replaced with the following:
Indebtedness. The word "Indebtedness" means and includes without limitation all
Loans, together with all other obligations, debts and liabilities of Borrower to
Lender, or anyone or more of them, as well as all claims by Lender against
Borrower, or anyone or more of them; whether now or hereafter existing,
voluntary or involuntary, due or not due, absolute or contingent, liquidated or
unliquidated; whether Borrower may be liable individually or jointly with
others; whether Borrower may be obligated as a guarantor, surety, or otherwise;
whether recovery upon such indebtedness may be or hereafter may become barred by
any statute of limitations; and whether such indebtedness may be or hereafter
may become otherwise unenforceable.
Note: The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations in
favor of Xxxxxx, as well as any substitute, replacement or refinancing note or
notes therefor .
BORROWING BASE CERTIFICATE. BORROWER SHALL FURNISH TO LENDER A MONTHLY BORROWING
BASE CERTIFICATE, CERTIFIED BY AN AUTHORIZED OFFICER/EMPLOYEE OF BORROWER,
WITHIN 20 DAYS OF THE END OF EACH MONTH, IN A FORM ACCEPTABLE TO LENDER
SPECIFICALLY REQUESTS OTHERWISE IN WRITING TO BORROWER.
ACCOUNTS RECEIVABLE AGING. BORROWER SHALL FURNISH TO LENDER A MONTHLY ACCOUNTS
RECEIVABLE AGING REPORT WITHIN 20 DAYS OF THE END OF EACH MONTH IN A FORM
ACCEPTABLE TO LENDER.
DEBT COVERAGE. BORROWER SHALL MAINTAIN A RATIO OF TOTAL EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZA TION TO TOTAL DEBT SERVICE COVERAGE
OF NOT LESS THAN 1.50 TO 1.00, MEASURED ON A QUARTERLY BASIS.
TANGIBLE NET WORTH. BORROWER SHALL MAINTAIN A TANGIBLE NET WORTH OF NOT LESS
THAN $1,000,000.00, MEASURED ON A QUARTERLY BASIS.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Agreement. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the party or parties
sought to be charged or bound by the alteration or amendment.
Arbitration Disclosures.
1. ARBITRATION IS FINAL AND BINDING ON THE PARTIES AND SUBJECT TO ONLY VERY
LIMITED REVIEW BY A COURT .
2. IN ARBITRATION THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN COURT,
INCLUDING THEIR RIGHT TO A JURY TRIAL.
3. DISCOVERY IN ARBITRATION IS MORE LIMITED THAN DISCOVERY IN COURT.
4. ARBiTRATORS ARE NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
REASONING IN THEIR AWARDS. THE RIGHT TO APPEAL OR SEEK MODIFICATION OF
ARBITRATORS' RULINGS IS VERY LIMITED.
5. A PANEL OF ARBITRATORS MIGHT INCLUDE AN ARBITRATOR WHO IS OR WAS
AFFILIATED WITH THE BANKING INDUSTRY.
6. ARBITRATION WILL APPLY TO ALL DISPUTES BETWEEN THE PARTIES, NOT JUST
THOSE CONCERNING THE AGREEMENT.
7. IF YOU HAVE QUESTIONS ABOUT ARBITRATION, CONSULT YOUR ATTORNEY OR THE
AMERICAN ARBITRATION ASSOCIATION.
(a) Any claim or controversy ("Dispute") between or among the parties
and their employees, agents, affiliates, and assigns, including,
but not limited to, Disputes arising out of or relating to this
agreement, this arbitration provision ("arbitration clause"), or
any related agreements or instruments relating hereto or delivered
in connection herewith ("Related Agreements"), and including, but
not limited to, a Dispute based on or arising from an alleged tort,
shall at the request of any party be resolved by binding
arbitration in accordance with the applicable arbitration rules of
the American Arbitration Association (the" Administrator"). The
provisions of this arbitration clause shall survive any
termination, amendment, or expiration of this agreement or Related
Agreements. The provisions of this arbitration clause shall
supersede any prior arbitration agreement between or among the
parties.
(b) The arbitration proceedings shall be conducted in a city mutually
agreed by the parties. Absent such an agreement, arbitration will
be conducted in Salt Lake City, Utah or such other place as may be
determined by the Administrator. The Administrator and the
arbitrator(s) shall have the authority to the extent practicable to
take any action to require the arbitration proceeding to be
completed and the arbitrator(s) , award issued within 150 days of
the filing of the Dispute with the Administrator. The arbitrator(s}
shall have the authority to impose sanctions on any party that
fails to comply with time periods imposed by the Administrator or
the arbitrator(s), including the sanction of summarily dismissing
any Dispute or defense with prejudice. The arbitrator(s} shall have
the authority to resolve any Dispute regarding the terms of this
agreement, this arbitration clause, or Related Agreements,
including any claim or controversy regarding the arbitrability of
any Dispute. All limitations periods applicable to any Dispute or
defense, whether by statute or agreement, shall apply to any
arbitration proceeding hereunder and the arbitrator(s) shall have
the authority to decide whether any Dispute or defense is barred by
a limitations period and, if so, to summarily enter an award
dismissing any Dispute or defense on that basis. The doctrines of
compulsory counterclaim, res judicata, and collateral estoppel
shall apply to any arbitration proceeding hereunder so that a party
must state as a counterclaim in the arbitration proceeding any
claim or controversy which arises out of the transaction or
occurrence that is the subject matter of the Dispute. The
arbitrator(s} may in the arbitrator(s}' discretion and at the
request of any party: (1} consolidate in a single arbitration
proceeding any other claim arising out of the same transaction
involving another party to that transaction that is bound by an
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9001 (Continued) Page 7
arbitration clause with Xxxxxx, such as borrowers, guarantors,
sureties, and owners of collateral; and (2) consolidate or
administer multiple arbitration claims or controversies as a class
action in accordance with Rule 23 of the Federal Rules of Civil
Procedure.
(c) The arbitrator(s) shall be selected in accordance with the rules of
the Administrator from panels maintained by the Administrator. A
single arbitrator shall have expertise in the subject matter of the
Dispute. Where three arbitrators conduct an arbitration proceeding,
the Dispute shall be decided by a majority vote of the three
arbitrators, at least one of whom must have expertise in the
subject matter of the Dispute and at least one of whom must be a
practicing attorney. The arbitrator(s) shall award to the
prevailing party recovery of all costs and fees (including
attorneys' fees and costs, arbitration administration fees and
costs, and arbitrator(s) , fees) .The arbitrator(s) , either during
the pendency of the arbitration proceeding or as part of the
arbitration award, also may grant provisional or ancillary remedies
including but not limited to an award of injunctive relief,
foreclosure, sequestration, attachment, replevin, garnishment, or
the appointment of a receiver .
(d) Judgement upon an arbitration award may be entered in any court
having jurisdiction, subject to the following limitation: the
arbitration award is binding upon the parties only if the amount
does not exceed Four Million Dollars ($4,000,000.00); if the award
exceeds that limit, either party may demand the right to a court
trial. Such a demand must be filed with the Administrator within
thirty (30) days following the date of the arbitration award; if
such a demand is not made with that time period, the amount of the
arbitration award shall be binding. The computation of the total
amount of an arbitration award shall include amounts awarded for
attorneys' fees and costs, arbitration administration fees and
costs, and arbitrator(s)' fees.
(e) No provision of this arbitration clause, nor the exercise of any
rights hereunder, shall limit the right of any party to: ( 1)
judicially or non-judicially foreclose against any real or personal
property collateral or other security; (2) exercise self-help
remedies, including but not limited to repossession and setoff
rights; or (3) obtain from a court having jurisdiction thereover
any provisional or ancillary remedies including but not limited to
injunctive relief, foreclosure, sequestration, attachment,
replevin, garnishment, or the appointment of a receiver . Such
rights can be exercised at any time, before or after initiation of
an arbitration proceeding, except to the extent such action is
contrary to the arbitration award. The exercise of such rights
shall not constitute a waiver of the right to submit any Dispute to
arbitration, and any claim or controversy related to the exercise
of such rights shall be a Dispute to be resolved under the
provisions of this arbitration clause. Any party may initiate
arbitration with the Administrator. If any party desires to
arbitrate a Dispute asserted against such party in a complaint,
counterclaim, cross-claim, or third-party complaint thereto, or in
an answer or other reply to any such pleading, such party must make
an appropriate motion to the trial court seeking to compel
arbitration, which motion must be filed with the court within 45
days of service of the pleading, or amendment thereto, setting
forth such Dispute. If arbitration is compelled after commencement
of litigation of a Dispute, the party obtaining an order compelling
arbitration shall commence arbitration and pay the Administrator's
filing fees and costs within 45 days of entry of such order.
Failure to do so shall constitute an agreement to proceed with
litigation and waiver of the right to arbitrate. In any arbitration
commenced by a consumer regarding a consumer Dispute, Lender shall
pay one half of the Administrator's filing fee, up to $250.
(f) Notwithstanding the applicability of any other law to this
agreement, the arbitration clause, or Related Agreements between or
among the parties, the Federal Arbitration Act, 9 U.S.C. Section 1
et seq., shall apply to the construction and interpretation of this
arbitration clause. If any provision of this arbitration clause
should be determined to be unenforceable, all other provisions of
this arbitration clause shall remain in full force and effect.
Attorneys' Fees; Expenses. Xxxxxxxx agrees to pay upon demand all of Xxxxxx's
costs and expenses, including Xxxxxx's reasonable attorneys' fees and Xxxxxx's
legal expenses, incurred in connection with the enforcement of this Agreement.
Lender may hire or pay someone else to help enforce this Agreement, and Borrower
shall pay the costs and expenses of such enforcement. Costs and expenses include
Xxxxxx's reasonable attorneys' fees and legal expenses whether or not Xxxxxx's
salaried employee and whether or not there is a lawsuit, including reasonable
attorneys' fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Borrower also shall pay all court
costs and such additional fees as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.
Consent to Loan Participation. Xxxxxxxx agrees and consents to Xxxxxx's sale or
transfer, whether now or later, of one or more participation interests in the
Loan to one or more purchasers, whether related or unrelated to Lender. Lender
may provide, without any limitation whatsoever, to anyone or more purchasers, or
potential purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower hereby
waives any rights to privacy Borrower may have with respect to such matters.
Borrower additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such participation
interests. Xxxxxxxx also agrees that the purchasers of any such participation
interests will be considered as the absolute owners of such interests in the
Loan and will have all the rights granted under the participation agreement or
agreements governing the sale of such participation interests. Borrower further
waives all rights of offset or counterclaim that it may have now or later
against Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Xxxxxxxx's obligation under the Loan irrespective of the failure or insolvency
of any holder of any interest in the Loan. Xxxxxxxx further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have against
Xxxxxx .
Governing Law. This Agreement will be governed by, construed and enforced in
accordance with tederallaw and the laws of the State of Utah. This Agreement has
been accepted by Xxxxxx in the State of Utah.
Choice of Venue. If there is a lawsuit, Xxxxxxxx agrees upon Xxxxxx's request to
submit to the jurisdiction of the courts of SALT LAKE County, State of Utah.
No Waiver by Xxxxxx. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by Xxxxxx. No
delay or omission on the part of Lender in exercising any right shall operate as
a waiver of such right or any other right. A waiver by Xxxxxx of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Xxxxxx, nor any course of dealing between
Xxxxxx and Borrower, or between Lender and any Grantor, shall constitute a
waiver of any of Lender's rights or of any of Borrower's or any Grantor's
obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender .
Notices. Unless otherwise provided by applicable law, any notice required to be
given under this Agreement or required by law shall be given in writing, and
shall be effective when actually delivered in accordance with the law or with
this Agreement, when actually received by telefacsimile (unless otherwise
required by law), when deposited with a nationally recognized overnight courier,
or, if mailed, when deposited in the United States mail, as first class,
certified or registered mail postage prepaid, directed to the addresses shown
near the beginning of this Agreement. Any party may change its address for
notices under this Agreement by giving formal written notice to the
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9001 (Continued) Page 8
other parties, specifying that the purpose of the notice is to change the
party's address. For notice purposes, Xxxxxxxx agrees to keep lender informed at
all times of Xxxxxxxx's current address. Unless otherwise provided by applicable
law, if there is more than one Borrower, any notice given by lender to any
Borrower is deemed to be notice given to all Borrowers.
Severability. If a court of competent jurisdiction finds any provision of this
Agreement to be illegal, invalid, or unenforceable as to any circumstance, that
finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and enforceable. If
the offending provision cannot be so modified, it shall be considered deleted
from this Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement shall not
affect the legality, validity or enforceability of any other provision of this
Agreement.
Subsidiaries and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used in this
Agreement shall include all of Borrower's subsidiaries and affiliates.
Notwithstanding the foregoing however, under no circumstances shall this
Agreement be construed to require lender to make any loan or other financial
accommodation to any of Borrower's subsidiaries or affiliates.
Successors and Assigns. All covenants and agreements contained by or on behalf
of Borrower shall bind Xxxxxxxx's successors and assigns and shall inure to the
benefit of lender and its successors and assigns. Borrower shall not, however,
have the right to assign Xxxxxxxx's rights under this Agreement or any interest
therein, without the prior written consent of lender .
Survival of Representations and Warranties. Xxxxxxxx understands and agrees that
in extending loan Advances, lender is relying on all representations,
warranties, and covenants made by Borrower in this Agreement or in any
certificate or other instrument delivered by Borrower to lender under this
Agreement or the Related Documents. Borrower further agrees that regardless of
any investigation made by lender, all such representations, warranties and
covenants will survive the extension of loan Advances and delivery to lender of
the Related Documents, shall be continuing in nature, shall be deemed made and
redated by Borrower at the time each loan Advance is made, and shall remain in
full force and effect until such time as Borrower's Indebtedness shall be paid
in full, or until this Agreement shall be terminated in the manner provided
above, whichever is the last to occur .
Time is of the Essence. Time is of the essence in the performance of this
Agreement.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:
Account. The word" Account" means a trade account, account receivable, other
receivable, or other right to payment for goods sold or services rendered owing
to Borrower (or to a third party grantor acceptable to lender) .
Advance. The word" Advance" means a disbursement of loan funds made, or to be
made, to Borrower or on Borrower's behalf under the terms and conditions of this
Agreement.
Agreement. The word" Agreement" means this Business loan Agreement (Asset
Based), as this Business loan Agreement (Asset Based) may be amended or modified
from time to time, together with all exhibits and schedules attached to this
Business loan Agreement (Asset Based) from time to time.
Borrower. The word "Borrower" means EPENZIO, INC., and all other persons and
entities signing the Note in whatever capacity.
Borrowing Base. The words "Borrowing Base" mean ,as determined by lender from
time to time, the lesser of (1) $1,000,000.00 or (2) 75.000% of the aggregate
amount of Eligible Accounts..
Business Day. The words "Business Day" mean a day on which commercial banks are
open in the State of Utah.
Collateral. The word "Collateral" means all property and assets granted as
collateral security for a loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention contract,
lease or consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or otherwise. The
word Collateral also includes without limitation all collateral described in the
Collateral section of this Agreement.
Eligible Accounts. The words "Eligible Accounts" mean at any time, all of
Borrower's Accounts which contain selling terms and conditions acceptable to
lender. The net amount of any Eligible Account against which Borrower may borrow
shall exclude all returns, discounts, credits, and offsets of any nature. Unless
otherwise agreed to by lender in writing, Eligible Accounts do not include:
(1) Accounts with respect to which the Account Debtor is employee or agent
of Xxxxxxxx .
(2) Accounts with respect to which the Account Debtor is a subsidiary of,
or affiliated with Borrower or its shareholders, officers, or
directors.
(3) Accounts with respect to which goods are placed on consignment,
guaranteed sale, or other terms by reason of which the payment by the
Account Debtor may be conditional.
(4) Accounts with respect to which the Account Debtor is not a resident of
the United States, except to the extent such Accounts are supported by
insurance, bonds or other assurances satisfactory to lender .
(5) Accounts with respect to which Borrower is or may become liable to the
Account Debtor for goods sold or services rendered by the Account
Debtor to Borrower .
(6) Accounts which are subject to dispute, counterclaim, or setoff.
(7) Accounts with respect to which the goods have not been shipped or
delivered, or the services have not been rendered, to the Account
Debtor .
(8) Accounts with respect to which lender, in its sole discretion, deems
the creditworthiness or financial condition of the Account Debtor to be
unsatisfactory.
(9) Accounts of any Account Debtor who has filed or has had filed against
it a petition in bankruptcy or an application for relief under any
provision of any state or federal bankruptcy, insolvency, or
debtor-in-relief acts; or who has had appointed a trustee, custodian,
or receiver for the assets of such Account Debtor; or who has made an
assignment for the benefit of creditors or has become insolvent c or
fails oenerallv to pav its debts (includinq its payrolls) as such debts
become due. _______________________
BUSINESS LOAN AGREEMENT {ASSET BASED)
Loan No: 9001 (Continued) Page 9
(10) Accounts with respect to which the Account Debtor is the United States
government or any department or agency of the United States.
(11) Accounts which have not been paid in full within 60 days from due date
or 90 days from the invoice date. The entire balance of any Account of
any single Account Debtor will be ineligible whenever the portion of
the Account which has not been paid within 60 days from due date or 90
days from the invoice date is in excess of 20.000% of the total amount
outstanding on the Account.
(12) Accounts with respect to which the account debtor is not a resident of
the following Canadian Provinces; British Columbia, Alberta,
Saskatchewan, Manitoba, and Ontario, except to the extent such
accounts are supported by insurance, bonds, or other assurances
satisfactory to lender. Accounts which lender in its sole descretion
reasonably deems ineligible
(13) That portion of the Accounts of any single Account Debtor which
exceeds 10.00% of all of Borrower's Accounts with such portion
increasing to 100.00% for the Accounts of Monterey Financial, Fair
Financial and MicroFinancial (leasecomm).
Environmental laws. The words "Environmental laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. ("CERClA "), the Superfund
Amendments and Reauthorization Act of 1986, Pub. l. No.99-499 ("XXXX "), the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or
other applicable state or federal laws, rules, or regulations adopted pursuant
thereto.
Event of Default. The words "Event of Default" mean any of the events of default
set forth in this Agreement in the default section of this Agreement.
Expiration Date. The words "Expiration Date" mean the date of termination of
lender's commitment to lend under this Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
Grantor. The word "Grantor" means each and all of the persons or entities
granting a Security Interest in any Collateral for the loan, including without
limitation all Borrowers granting such a Security Interest.
Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation
party of any or all of the loan.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to lender,
including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that,
because of their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health
or the environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without limitation
any and all hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental laws. The term "Hazardous Substances" also
includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the
Note or Related Documents, including all principal and interest together with
all other indebtedness and costs and expenses for which Borrower is responsible
under this Agreement or under any of the Related Documents.
Lender. The word "lender" means ZIONS FIRST NATIONAl BANK, its successors and
assigns.
Loan. The word "loan" means any and all loans and financial accommodations from
lender to Borrower whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations described
herein or described on any exhibit or schedule attached to this Agreement from
time to time.
Note. The word "Note" means the Note executed by Borrower in the principal
amount of $1,000,000.00 dated September 11, 2001 , together with all renewals
of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.
Permitted Liens. The words "Permitted liens" mean (1) liens and security
interests securing Indebtedness owed by Xxxxxxxx to lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good
faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary course of business and securing obligations
which are not yet delinquent; (4) purchase money liens or purchase money
security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of
this Agreement or permitted to be incurred under the paragraph of this Agreement
titled "Indebtedness and Liens"; (5) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the lender in
writing; and (6) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to the
net value of Borrower's assets.
Primary Credit Facility. The words "Primary Credit Facility" mean the credit
facility described in the line of Credit section of this Agreement.
Related Documents. The words "Related Documents" mean all promissory notes,
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the loan.
Security Agreement. The words" Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements, understandings or
other agreements, whether created by law, contract, or otherwise, evidencing,
governing, representing, or creating a Security Interest.
Security Interest. The words "Security Interest" mean, without limitation, any
and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or
title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract,
or otherwise.
FINAl AGREEMENT. Xxxxxxxx understands that this Agreement and the related loan
documents are the final expression of the agreement between lender and Xxxxxxxx
and may not be contradicted by evidence of any alleged oral agreement.
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No: 9001 (Continued) Page 10
XXXXXXXX ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) AND XXXXXXXX AGREES TO ITS TERMS. THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) IS DATED SEPTEMBER 11, 2001.
BORROWER:
EPENZIO, INC.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------------
Xxxx X. Xxxxxxxx, President of EPENZIO, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, COO of EPENZIO, INC.
LENDER:
ZIONS FIRST NATIONAL BANK
By: /s/
-----------------------------------------------
Authorized Signer
