Exhibit 10.2
'000000002000206013007008142008*
BUSINESS LOAN AGREEMENT (ASSET BASED)
Principal $6,000,000.00 loan Date 08-14-2008 Maturity 08-13-2009 loan No 0000000000
Call/ Coli 5300 Account 309275 Initials
References in the boxes above are for Xxxxxx'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.
Borrower:
ELECSYS CORPORATION; DCI, INC.; NTG, INC.; and RADIX CORPORATION
000 X. XXXXXXX XXXXX
XXXXXX, XX 00000
Lender:
Bank Midwest N.A. Town Pavilion Facility 0000 Xxxx Xxxxxx Xxxxxx Xxxx, XX 00000
THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated August 14, 2008, is made and
executed between ELECSYS CORPORATION; DCI, INC.; NTG, INC.; and RADIX
CORPORATION ("Borrower") and Bank Midwest N.A. ("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. 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; (B)
the granting, renewing, or extending of any loan by lender at all times shall be
subject to lender's sole judgment and discretion; and (C) all such loans shall
be and remain subject to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of August 14, 2008, 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' fees, and other fees and charges, or until such time as the
parties may agree in writing to terminate this Agreement.
ADVANCE AUTHORITY. The following person or persons are authorized, except as
provided in this paragraph, 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 such authority: XXXX X. XXXXXXXX,
President & CEO of ELECSYS CORPORATION; XXXX X. XXXXXXX, VP, CFO & Secretary of
ELECSYS CORPORATION; XXXX X. XXXXXXXX, President of DCI. INC.; XXXX X. XXXXXXX,
VP-Finance, Secretary & Treasurer of DCI, INC.; XXXX X. XXXXXXXX,
Director/Treasurer of NTG, INC.; XXXX X. XXXXXXX, Director & Secretary of NTG,
INC.; XXXX X. XXXXXXXX, Director & Treasurer of RADIX CORPORATION; and XXXX X.
XXXXXXX, Director & Secretary of RADIX CORPORATION. FUNDS ARE TO BE DISBURSED AT
XXXXXXXX'S REQUEST AND LOAN OFFICER'S APPROVAL.
LINE OF CREDIT. Xxxxxx agrees to make Advances to Borrower from time to time
from the date of this Agreement t_. 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 Borrower to
Lender. (2) Lender shall have received such opinions of counsel, supplemental
opinions, and documents as lender 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 Borrower's Accounts, Inventory, 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 Loans, 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
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) (Continued)
Page 2
limitation the proceeds of any insurance. With respect to the Collateral,
Xxxxxxxx agrees and represents and warrants to lender:
Perfection of Security Interests. Xxxxxxxx agrees to execute all documents
perfecting lender's Security Interest and to take whatever actions are requested
by lender to perfect and continue lender's Security Interests in the Collateral.
Upon request of lender, Borrower will deliver to lender any and all of the
documents evidencing or constituting the Collateral, and Borrower will note
lender's interest upon any and all chattel paper and instruments if not
delivered to lender for possession by lender. 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-fact 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 will reimburse lender for all expenses for
the perfection, termination, and the continuation of the perfection of lender'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 lender 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 lender'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 (Receivables) are or will be located at 000
X. Xxxxxxx Xxxxx, Xxxxxx XX 00000. With respect to the Inventory, Xxxxxxxx
agrees to keep and maintain such records as lender may require, including
without limitation information concerning Eligible Inventory and records
itemizing and describing the kind, type, quality, and quantity of Inventory,
Borrower's Inventory costs and selling prices, and the daily withdrawals and
additions to Inventory. Records related to Inventory are or will be located at
000 X. Xxxxxxx Xxxxx, Xxxxxx XX 00000. 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 Inventory and schedules of Eligible Accounts and Eligible Inventory 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 within 30 days of month end. With respect
to Eligible Inventory, schedules shall be delivered within 30 days of month end.
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; (2) All
Account information listed on schedules delivered to lender will be true and
correct, subject to immaterial variance; and (3) 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.
Representations and Warranties Concerning Inventory. With respect to the
Inventory, Borrower represents and warrants to lender: (1) All Inventory
represented by Borrower to be Eligible Inventory for purposes of this Agreement
conforms to the requirements of the definition of Eligible Inventory; (2) All
Inventory values listed on schedules delivered to lender will be true and
correct, subject to immaterial variance; (3) The value of the Inventory will be
determined on a consistent accounting basis; (4) Except as agreed to the
contrary by lender in writing, all Eligible Inventory is now and at all times
hereafter will be in Borrower's physical possession and shall not held by others
on consignment, sale on approval, or sale or return; (5) Except as reflected in
the Inventory schedules delivered to lender, all Eligible Inventory is now and
at all times hereafter will be of good and merchantable quality, free from
defects; (6) Eligible Inventory is not now and will not at any time hereafter be
stored with a bailee, warehouseman, or similar party without lender's prior
written consent, and, in such event, Borrower will concurrently at the time of
bailment cause any such bailee, warehouseman, or similar party to issue and
deliver to lender, in form acceptable to lender, warehouse receipts in lender
name evidencing the storage of Inventory; and (7) lender, its assigns, or agents
shall have the right at any time and at Borrower's expense to inspect and
examine the Inventory and to check and test the same as to quality, quantity,
value, and condition.
CONDITIONS PRECEDENT TO EACH ADVANCE. Xxxxxx's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to lender'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) 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.
MULTIPLE BORROWERS. This Agreement has been executed by multiple obligors who
are referred to in this Agreement individually, collectively and interchangeably
as "Borrower." Unless specifically stated to the contrary, the word" Borrower"
as used in this Agreement, including without limitation all representations,
warranties and covenants, shall include all Borrowers. Borrower understands and
agrees that, with or without notice to anyone Borrower, lender may (A) make one
or more additional secured or unsecured loans or otherwise extend additional
credit with respect to any other Borrower; (B) with respect to any other
Borrower alter, compromise, renew, extend, accelerate, or otherwise change one
or more times the time for payment or other terms of any indebtedness, including
increases and decreases of the rate of interest on the indebtedness; (C)
exchange, enforce, waive, subordinate, fail or decide not to perfect, and
release any security, with or without the substitution of new collateral; (D)
release, substitute, agree not to sue, or deal with anyone or more of Borrower's
or any other Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner lender may choose; (E) determine how, when and what application of
payments and credits shall be made on any indebtedness; (F) apply such security
and direct the order or manner of sale of any Collateral, including without
limitation, any non-judicial sale permitted by the terms of the controlling
security agreement or deed of trust, as lender in its discretion may determine;
(G) sell, transfer, assign or grant participations in all or any part of the
loan; (H) exercise or refrain from exercising
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) (Continued)
Page 3
any rights against Borrower or others, or otherwise act or refrain from acting;
(I) settle or compromise any indebtedness; and (J) subordinate the payment of
all or any part of any of Borrower's indebtedness to lender to the payment of
any liabilities which may be due lender or others.
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. ElECSYS CORPORATION 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 Kansas. ElECSYS CORPORATION is duly
authorized to transact business in all other states in which ElECSYS CORPORATION
is doing business, having obtained all necessary filings, governmental licenses
and approvals for each state in which ElECSYS CORPORATION is doing business.
Specifically, ELECSYS CORPORATION is, and at all times shall be, duly qualified
as a foreign corporation in all states in which the failure to so qualify would
have a material adverse effect on its business or financial condition. ElECSYS
CORPORATION 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. ELECSYS CORPORATION maintains an office at 000 X. XXXXXXX XXXXX, XXXXXX,
XX 00000. Unless ELECSYS CORPORATION has designated otherwise in writing, the
principal office is the office at which ELECSYS CORPORATION keeps its books and
records including its records concerning the Collateral. ELECSYS CORPORATION
will notify lender prior to any change in the location of ELECSYS CORPORATION's
state of organization or any change in ELECSYS CORPORATION's name. ELECSYS
CORPORATION 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 ELECSYS CORPORATION and
ELECSYS CORPORATION's business activities.
DCI. INC. 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 Kansas. DCI, INC. is duly authorized to transact business
in all other states in which DCI, INC. is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
DCI. INC. is doing business. Specifically, DCI, INC. is, and at all times shall
be, duly qualified as a foreign corporation in all states in which the failure
to so qualify would have a material adverse effect on its business or financial
condition. DCI, INC. 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. DCI, INC. maintains an office at 000 X. XXXXXXX XXXXX, XXXXXX, XX
00000. Unless DCI, INC. has designated otherwise in writing, the principal
office is the office at which DCI, INC. keeps its books and records including
its records concerning the Collateral. DCI. INC. will notify lender prior to any
change in the location of DCI. INC.'s state of organization or any change in
DCI, INC.'s name. DCI. INC. 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 DCI,
INC. and DCI, INC.'s business activities.
NTG, INC. 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 Kansas. NTG, INC. is duly authorized to transact business
in all other states in which NTG, INC. is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
NTG, INC. is doing business. Specifically, NTG, INC. is, and at all times shall
be, duly qualified as a foreign corporation in all states in which the failure
to so qualify would have a material adverse effect on its business or financial
condition. NTG, INC. 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. NTG, INC. maintains an office at 000 X. XXXXXX X XXXXX, XXXXXX, XX
00000. Unless NTG, INC. has designated otherwise in writing, the principal
office is the office at which NTG, INC. keeps its books and records including
its records concerning the Collateral. NTG, INC. will notify lender prior to any
change in the location of NTG, INC. 's state of organization or any change in
NTG, INC.'s name. NTG, INC. 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 NTG,
INC. and NTG, INC.'s business activities.
RADIX CORPORATION 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 Kansas. RADIX CORPORATION is duly authorized to
transact business in all other states in which RADIX CORPORATION is doing
business, having obtained all necessary filings, governmental licenses and
approvals for each state in which RADIX CORPORATION is doing business.
Specifically, RADIX CORPORATION is, and at all times shall be, duly qualified as
a foreign corporation in all states in which the failure to so qualify would
have a material adverse effect on its business or financial condition. RADIX
CORPORATION 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. RADIX CORPORATION maintains an office at 000 X. XXXXXX X XXXXX, XXXXXX,
XX 00000. Unless RADIX CORPORATION has designated otherwise in writing, the
principal office is the office at which RADIX CORPORATION keeps its books and
records including its records concerning the Collateral. RADIX CORPORATION will
notify lender prior to any change in the location of RADIX CORPORATION's state
of organization or any change in RADIX CORPORATION's name. RADIX CORPORATION
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 RADIX CORPORATION and RADIX
CORPORATION'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 (a) Borrower's articles of incorporation or
organization, or bylaws, or (b) 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
lender 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 statement supplied to lender. Borrower has no material contingent
obligations except as disclosed in 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
lender, 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.
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) (Continued)
Page 4
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 the 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, defend, 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 and defend, shall
survive the payment of the Indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender'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 thirty (30)
days after the end of each fiscal quarter, Borrower's balance sheet and profit
and loss statement for the period ended, prepared by Xxxxxxxx in form
satisfactory to Lender.
Additional Requirements. Monthly Financial Statements, Accounts Receivable Aging
report, Accounts Payable Aging report, Inventory report and Borrowing Base
Certificate.
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.
Financial Covenants and Ratios. Comply with the following covenants and ratios:
Operating Ratio Requirements. Borrower shall comply with the following operating
ratio requirements: Expense Ratio Requirements. Borrower shall comply with the
following expense ratio requirements: Additional Requirements. Financial
covenants are tested quarterly on a trailing twelve month basis.
1) Minimum EBITDA to Debt Service - 1.5x
2) Maximum Funded Debt to EBITDA - 4.0x, stepping down to 3.5x by September 30,
2008 and 3.0x by September 30, 2009
3) Maximum Funded Debt to Tangible Net Worth - 2.0x
4) Minimum Tangible Net Worth - $4,000,000.00 DEFINED TERMS
The following financial metrics are defined with respect to Borrower. Static
metrics reported on the balance sheet shall be defined as the figure reported as
at the effective date of calculation unless otherwise specified; cumulative
metrics reported on the income statement shall be defined as amounts accrued
during the 12 consecutive calendar months immediately prior to the effective
date of calculation. Accounting terms not specifically defined herein are
assumed to have the meaning used in GAAP.
Debt Service means, with respect to the Borrower for any period, the aggregate
amount of scheduled principal and interest expense payments made by Borrower on
all Funded Debt.
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) ( Continued)
Page 5
EBITDA means, with respect to Borrower for any period, (i) the sum of (a) net
income, (b) cash interest expense, (c) depreciation and amortization expense,
(d) federal, state, and local income or franchise taxes, and (e) any losses
incurred from the sale of fixed assets, minus (ii) any gains realized from the
sale of fixed assets, in each case for such period, computed and calculated,
without duplication. For purposes of calculating the financial covenants herein,
EBITDA shall not include the EBITDA of any acquired company or division for any
period prior to the date of such acquisition.
Funded Debt means, as to Borrower at any particular time, the sum of (a) all
obligations for borrowed money (whether as a direct obligor on a promissory
note, bond, debenture, or other similar instrument, as a reimbursement obligor
with respect to an issued letter of credit or similar instrument, as an obligor
under a guaranty in respect of borrowed money, or as any other type of direct or
contingent obligor), and (b) all capitalized lease obligations (other than the
interest component of such obligations), calculated without duplication.
Tangible Net Worth means the additive and subtractive result of (a) total equity
as determined in accordance with GAAP, consistently applied plus (b)
Subordinated Debt minus (c) total intangible assets as determined by lender in
its sole discretion on a consistent basis including without limitation: (i)
receivables from directors, officers, employees, agents, subsidiaries, or
affiliates of Borrower, (ii) deferred financing costs a net, (iii) returned
checks or drafts, (iv) capitalized product development or R&D costs, (v)
deferred fees and customer charges, (vi) deposits held by entities and under
terms other than by financial institutions as demand and time deposits and
instruments held in the normal course of business, (vii) prepaid expenses and
other prepaid accounts, (viii) investments in closely-held businesses that are
not consolidated with Borrower, (ix) goodwill, (x) other intangible assets.
Except as provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance with
generally accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.
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 lender, 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 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 lender 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. Provided however,
Xxxxxxxx will not be required to pay and discharge any such assessment, tax,
charge, xxxx, xxxx or claim so long as (1) the legality of the same shall be
contested in good faith by appropriate proceedings, and (2) Borrower shall have
established on Borrower's books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with GAAP.
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 lender 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 lender's sole opinion, lender'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 lender'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 Borrower'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 lender, 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'5 expen5e,
Compliance Certificates. Unless waived in writing by lender, provide lender
within fifteen (15) days after the end of each Month End, 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.
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BUSINESS LOAN AGREEMENT (ASSET BASED) ( Continued)
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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.
XXXXXX'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect lender'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:
Capital Expenditures. Make or contract to make capital expenditures, including
leasehold improvements, in any fiscal year in excess of $1,000,000.00 or incur
liability for rentals of property (including both real and personal property) in
an amount which, together with capital expenditures, shall in any fiscal year
exceed such sum.
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 recourse any of Borrower'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 to any other person, enterprise or entity, (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.
Agreements. Borrower will not enter into any agreement containing any provisions
which would be violated or breached by the performance of Borrower's obligations
under this Agreement or in connection herewith.
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.
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. Borrower authorizes lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt 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
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) (Continued)
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commencement of any proceeding under any bankruptcy or insolvency laws by or
against Xxxxxxxx.
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.
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.
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 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 ten (10)
days; or (2) if the cure requires more than ten (10) days, immediately initiate
steps which Xxxxxx 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 Lender's 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.
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.
Attorneys' Fees; Expenses. Xxxxxxxx agrees to pay upon demand all of Xxxxxx's
costs and expenses, including Xxxxxx's 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 attorneys' fees and legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and
appeals. 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 federal law applicable to
Lender and, to the extent not preempted by federal law. the laws of the State of
Missouri without regard to its conflicts of law provisions. This Agreement has
been accepted by Xxxxxx in the State of Missouri.
Choice of Venue. If there is a lawsuit, Xxxxxxxx agrees upon Xxxxxx's request to
submit to the jurisdiction of the courts of XXXXXXX County, State of Missouri.
Joint and Several Liability. All obligations of Borrower under this Agreement
shall be joint and several, and all references to Borrower shall mean each and
every Borrower. This means that each Borrower signing below is responsible for
all obligations in this Agreement. Where anyone or more of the parties is a
corporation, partnership, limited liability company or similar entity, it is not
necessary for Lender to inquire into the powers of any of the officers,
directors, partners, members, or other agents acting or purporting to act on the
entity's behalf. and any obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Agreement.
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
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) ( Continued)
Page 8
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. Any notice required to be given under this Agreement shall be given in
writing, and shall be effective when actually delivered, 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 other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Xxxxxxxx agrees to
keep Xxxxxx informed at all times of Xxxxxxxx's current address. Unless
otherwise provided or required by 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 person or
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other person or 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 by or on behalf of Borrower
contained in this Agreement or any Related Documents 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 Xxxxxx.
Survival of Representations and Warranties. Xxxxxxxx understands and agrees that
in extending Loan Advances, Xxxxxx 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 Xxxxxx, 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 Xxxxxxxx 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). Account Debtor.
The words" Account Debtor" mean the person or entity obligated upon an Account.
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 ELECSYS CORPORATION; DCI, INC.; NTG, INC.;
and RADIX CORPORATION and includes all co-signers and co-makers signing the Note
and all their successors and assigns.
Borrowing Base. The words "Borrowing Base" mean, as determined by Lender from
time to time, the lesser of (1) $6,000,000.00 or (2) the sum of (a) 80.000% of
the aggregate amount of Eligible Accounts, plus (b) 50.000% of the aggregate
amount of Eligible Inventory.
Business Day. The words "Business Day" mean a day on which commercial banks are
open in the State of Missouri.
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 Xxxxxx 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 Borrower is or may become liable to the
Account Debtor for goods sold or services rendered by the Account Debtor to
Borrower.
(5) Accounts which are subject to dispute, counterclaim, or setoff.
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) ( Continued)
Page 9
(6) Accounts with respect to which the goods have not been shipped or delivered,
or the services have not been rendered, to the Account Debtor.
(7) Accounts with respect to which lender, in its sole discretion, deems the
creditworthiness or financial condition of the Account Debtor to be
unsatisfactory.
(8) 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 or fails generally to pay its debts (including its payrolls) as such
debts become due.
(9) Accounts which have not been paid in full within 90 days from the invoice
date.
(10) All Accounts of any account debtor of Borrower if any Account of such
account debtor has not been paid in full within 90 days of its invoice date.
(11) All Accounts due from foreign companies.
Eligible Inventory. The words "Eligible Inventory" mean, at any time, all of
Borrower's Inventory as defined below, except:
(1) Inventory which is not owned by Borrower free and clear of all
security interests, liens, encumbrances, and claims of third parties.
(2) (2) Inventory which lender, in its sole discretion, deems to be
obsolete, unsalable, damaged, defective, or unfit for further
processing.
(3) Work in progress.
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. Inventory. The word
"Inventory" means all of Borrower's raw materials, work in process, finished
goods, merchandise, parts and supplies, of every kind and description, and goods
held for sale or lease or furnished under contracts of service in which Borrower
now has or hereafter acquires any right, whether held by Borrower or others, and
all documents of title, warehouse receipts, bills of lading, and all other
documents of every type covering all or any part of the foregoing. Inventory
includes inventory temporarily out of Xxxxxxxx's custody or possession and all
returns on Accounts.
lender. The word "lender" means Bank Midwest N.A., 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 ElECSYS CORPORATION; DCI, INC.;
NTG, INC.; and RADIX CORPORATION in the principal amount of $6,000,000.00 dated
August 14, 2008, 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.
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.
Loan No: 2000206013
BUSINESS LOAN AGREEMENT (ASSET BASED) (Continued)
Page 10
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.
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN
WRITING TO MODIFY IT.
WAIVE JURY. All parties to this Agreement hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by any party against
any other party.
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 AUGUST 14, 2008.
BORROWER:
XXX.XXX.
RADIX CORPORA TI
By:
XXXX X. XXXX CORPORA TlON
LENDER:
BANK M_ N.A.
