EXHIBIT 10.7
CREDIT AGREEMENT
Dated as of October 30, 2003
Automation, Manufacturing & Robotic Technologies, LLC, a Minnesota
limited liability company, (the "Borrower"), the chief executive office of which
is located at 0000 Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxxxxxxxx 00000, and M&I
Xxxxxxxx & Xxxxxx Bank, (the "Bank"), located at 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement the following terms
shall have the following meanings (such meanings to be equally applicable to
singular and plural forms of the terms defined):
(a) "Account" and "account" shall have the meaning given
"Account" under Minn. Stat. Section 336.9-102(2).
(b) "Advance" shall have the meaning given to that term
in Section 2.1 hereof.
(c) "Affiliates" shall mean any of the following Persons:
(i) any director, officer or employee of the
Borrower;
(ii) any person who, individually or with his
immediate family, beneficially owns or holds 3% or more of
voting interest of the Borrower;
(iii) any company in which any Person described
above owns a 3% or greater equity interest; or
(iv) any other Person that at such time directly
or indirectly, through one or more intermediaries, controls,
or is controlled by, or is under common control with, such
first Person. As used in this definition, "control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by
contract or otherwise.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a public holiday or the equivalent under the laws
of the State of Minnesota or the United States of America..
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(e) "Capitalized Lease" shall mean any lease with respect
to which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in accordance
with GAAP.
(f) "Commitment" shall have the meaning given to that
term in Section 2.1 hereof.
(g) "Event of Default" shall mean one of the events
specified in Section 6.1.
(h) "Financing Statements" shall mean all UCC financing
statements to be filed with appropriate filing offices and all other
documents which need to be filed with government offices to reflect or
evidence the security interests granted to the Bank by the Borrower.
(i) "GAAP" shall mean generally accepted accounting
principles as in effect in the United States from time to time as
consistently applied by the Borrower from year to year.
(j) "Guaranty" shall mean the guaranty of Aero Systems
Engineering, Inc. guarantying all obligations of the Borrower under
this Agreement.
(k) "Loan Documents" shall mean this Agreement, the Note,
the Security Agreement, the Guaranty, and all other documents to be
executed in connection with this Agreement, including but not limited
to those documents to be executed under Section 3.1.
(l) "Loan Party" shall mean any Person obligated under
any Loan Document, including (without limitation) the Borrower.
(m) "Note" shall mean the $500,000 Promissory Note, dated
as of the date hereof, in the principal amount of the Commitment,
together with any amendment, modification or restatement thereof, and
any other promissory note executed in connection with this Agreement.
(n) "Person" shall mean an individual, corporation,
partnership, joint venture, trust or unincorporated organization or
government or other agency or political subdivision thereof.
(o) "Security Agreement" shall mean the Security
Agreement granting the Bank a security interest in all of the
Borrower's assets (the "Collateral"), dated as of the date hereof, from
the Borrower to the Bank, together with any amendment thereto and any
other documents necessary to perfect the Bank's security interest or
otherwise allow it to realize on Collateral in the event of a default
under this Agreement.
(p) "Termination Date" shall have the meaning given to
that term in Section 2.1 hereof.
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Section 1.2. Accounting and Other Terms. All accounting terms not
specifically defined in this Agreement shall be construed in accordance with
GAAP. Other terms defined herein shall have the meanings ascribed to them
herein.
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ARTICLE II.
THE LOAN
Section 2.1. Commitment for Loan. The Bank agrees, in accordance with
the terms of this Agreement, to make advances (the "Advances") to the Borrower
from time to time from the date hereof to and including October 30, 2004 (the
"Termination Date"), or the earlier termination of the Commitment under the
terms of this Agreement, in an aggregate amount not to exceed Five Hundred
Thousand and no hundredths Dollars ($500,000.00) (the "Commitment"). Each
Advance shall be in the amount of not less than $10,000.00. Within the limits of
the Commitment the Borrower may borrow, prepay pursuant to Section 2.5 and
reborrow under this Section 2.1. The Bank and the Borrower may agree to extend
the Termination Date, but neither party shall have any obligation to do so.
Section 2.2. The Note. The Advances made shall be evidenced by the Note
which is to be delivered to the Bank pursuant to Article III.
Section 2.3. Making of Advances. Borrower may request Advances under
this Agreement by giving notice in writing or by facsimile, and must be given so
as to be received by the Bank not later than 3:00 p.m., Minneapolis time, the
date of requested Advance; specifying the date of the requested Advance and the
amount thereof and any other information requested by the Bank. Any request for
an Advance shall be deemed to be a representation that the Borrower's
representations and warranties contained in Section 4.1 are true and correct as
of the date of the Advance as though made on and as of such date and that no
event has occurred and is continuing, or will result from such Advance, which
constitutes an Event of Default or would constitute an Event of Default but for
the requirement that notice be given or time elapse or both. The Bank may
disburse each requested Advance by crediting immediately available funds in the
amount of the Advance to Borrower's demand deposit account maintained with the
Bank.
Section 2.4. Interest and Payments. The Borrower shall repay, and shall
pay interest on, the aggregate unpaid principal amount of all Advances, in
accordance with the Note. All payments of principal, interest and fees under
this Agreement shall be made when due to the Bank in U.S. Dollars in immediately
available funds. All computations of interest shall be made by the Bank on the
basis of the actual number of days elapsed in a year of 360 days. Whenever any
such payment shall be due on a non-Business Day such payment shall be made on
the next succeeding Business Day, and such extension of time shall be included
in the computation of interest or fees, as the case may be. The Bank is
expressly authorized to charge any principal or fee payment, when due, to
Borrower's demand deposit account maintained at the Bank, or, if that account
shall not contain sufficient funds, to any other account maintained by Borrower
at the Bank.
The unpaid principal balance of the Loan shall bear interest at a definite and
certain but variable rate per annum equal to the Prime Rate (as hereinafter
defined) plus 0.50%. As used herein, "Prime Rate" means the rate established by
and publicly announced by the Bank from time to time as its Prime Rate. Each
change in the Prime Rate shall be effective as of the date of announcement
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by the Bank of said change, and the interest rate shall be adjusted accordingly
on the same date. The Bank may lend to any of its customers at rates that are
above or below the Prime Rate.
At the Bank's option the interest rate shall be increased by three percent
(3.0%) during any period of time in which the Borrower is in default under the
Loan Documents (as hereinafter defined). Interest shall be calculated on the
basis of a 360-day year but shall be charged on the actual number of days
principal remains unpaid. In no event shall the interest rate exceed the maximum
lawful rate. Interest only on the unpaid principal balance shall be due and
payable in arrears on the last day of October, 2003, and on the same day of each
month thereafter until the Termination Date, on which date the entire unpaid
principal balance together with all accrued interest shall become due and
payable.
Section 2.5. Voluntary Prepayment. The Borrower may, upon notice to the
Bank, prepay the Note in whole or in part with accrued interest to the date of
such prepayment on the amount prepaid.
Section 2.6. Mandatory Payment. In the event that the aggregate
outstanding principal amount of Advances made under this Agreement shall exceed
the Commitment, the Borrower shall pay to the Bank the amount of such excess
together with the amount of accrued interest to the date of such prepayment on
the amount prepaid, within five days after demand by the Bank for such amounts.
Section 2.7. Use of Proceeds. The credit available under this Agreement
shall be used for operating cash flow.
ARTICLE III.
CONDITIONS OF LENDING
Section 3.1. Conditions Precedent to Initial Advance. The Bank shall
have no obligation to make the initial Advance unless the Bank shall have
received on or before the date of such Advance the following documents:
(a) The Note, properly executed and delivered on behalf
of the Borrower.
(b) The Security Agreement, in form acceptable to the
Bank properly executed and delivered on behalf of the Borrower,
granting to the Bank a first lien on the property described in the
Security Agreement (the "Collateral") as security for the performance
of the Borrower's obligations under this Agreement and the Note,
together with any UCC-1 Financing Statement or other document deemed
necessary or desirable by the Bank to perfect the liens granted by the
Security Agreement.
(c) The Guaranty, in form acceptable to the Bank,
properly executed and delivered on behalf of Aero Systems Engineering,
Inc.
(d) A copy of the Borrower's articles of organization
certified as of a current date by the Minnesota Secretary of State,
together with a copy of the Borrower's member
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control agreement and operating agreement certified by a current
officer or manager of the Borrower.
(e) A certified copy of the resolutions of the Board of
Directors of the Borrower, approving the execution and delivery of the
Loan Documents to which it is a party and approving all other matters
contemplated by this Agreement.
(f) A certificate by an officer of the Borrower
certifying the names of the officer or officers of the Borrower
authorized to sign the Loan Documents to which it is a party, together
with a sample of the true signature of such officer.
(g) Evidence of insurance as required by the Security
Agreement and Section 5.1(e) hereof.
(h) UCC, tax lien, bankruptcy and judgment searches
showing any filings against the Borrower.
(i) A Certificate of Good Standing of the Borrower, duly
issued as of a current date by the Minnesota Secretary of State.
(j) Copies of all Contribution Agreements with Members of
the Borrower.
(k) An opinion of the Borrower's counsel to the effect
that: (1) the Borrower is duly organized and is in good standing under
the laws of Minnesota; (2) the Borrower has the power and authority to
enter into the Loan Documents; (3) the Loan Documents have been duly
authorized, executed and delivered by the Borrower; (4) the Loan
Documents create valid and binding obligations upon the Borrower
enforceable according to the terms thereof; (5) the Loan is not
usurious under applicable law; and (6) such other matters as Bank or
its counsel may require.
Section 3.2. Conditions Precedent to Each Advance. The obligation of
the Bank to make an Advance (including the initial Advance) shall be subject to
the further conditions precedent, that on the date of such Advance or Issuance:
(a) The representations and warranties contained in
Section 4.1 of this Agreement are correct on and as of the date of such
Advance as though made on such date; and
(b) No event has occurred and is continuing, or will
result from such Advance, which constitutes an Event of Default or
would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower. To induce
the Bank to make Advances, the Borrower represents and warrants as follows:
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(a) Corporate Existence; Compliance with Law. The
Borrower (i) is duly organized, validly existing, and in good standing
as a limited liability company under the laws of Minnesota and is
qualified to do business in each jurisdiction where its ownership of
property or conduct of business requires such qualification and where
failure to qualify would have a material adverse effect on the Borrower
or its property and/or business or on the ability of the Borrower to
pay or perform the Obligations; (ii) has the corporate power and
authority and the legal right to own and operate its property and to
conduct business in the manner in which it does and proposes so to do;
and (iii) is in compliance with all requirements of law and contractual
obligations.
(b) Corporate Power; Authorization; Enforceable
Obligations. The Borrower has the corporate power and authority and the
legal right to execute, deliver, and perform the Loan Documents to
which it is a party and has taken all necessary corporate action to
authorize the execution, delivery, and performance of the Loan
Documents. The Loan Documents to which it is a party have been duly
executed and delivered on behalf of the Borrower and constitute legal,
valid, and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, subject to the
effect of applicable bankruptcy and other similar laws affecting the
rights of creditors generally and the effect of equitable principles
whether applied in an action at law or a suit in equity.
(c) No Legal Bar. The execution, delivery, and
performance of the Loan Documents to which the Borrower is a party, the
borrowings hereunder and the use of the proceeds thereof, will not
violate any requirement of law or any contractual obligation of the
Borrower or create or result in the creation of any lien on the
Collateral in favor of any party other than the Bank.
(d) No Material Litigation. Except as disclosed on
Exhibit A hereto, no litigation, investigation, or proceeding
(including, without limitation, hazardous materials claims) of or
before any arbitrator or governmental authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower its or
against any of such parties' properties or revenues that is likely to
be adversely determined and that, if adversely determined, is likely to
have a material adverse effect on the business, operations, property,
or financial or other condition of the Borrower.
(e) Taxes. The Borrower has filed or caused to be filed
all tax returns that are required to be filed and have paid all taxes
shown to be due and payable on said returns or on any assessments made
against them or any of it property other than taxes that are being
contested in good faith by appropriate proceedings and as to which the
Borrower has established adequate reserves in conformity with GAAP.
(f) Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Borrower Act of 1940, as
amended.
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(g) Subsidiaries. Attached hereto as Exhibit B is an
accurate and complete list of all presently existing Subsidiaries of
the Borrower, their respective jurisdictions of incorporation and
qualification and the percentage of their capital stock owned by the
Borrower or other Subsidiaries. All of the issued and outstanding
shares of capital stock of such Subsidiaries have been duly authorized
and issued and are fully paid and nonassessable.
(h) Federal Reserve Board Regulations. Neither the
Borrower nor any of its Subsidiaries is engaged or will engage,
principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" within the respective meanings of such terms under
Regulation U. No part of the proceeds of any Loan issued hereunder will
be used for "purchasing" or "carrying" "margin stock" as so defined or
for any purpose that violates, or that would be inconsistent with, the
provisions of the Regulations of the Board of Governors of the Federal
Reserve System.
(i) ERISA. (i) No Prohibited Transactions, Accumulated
Funding Deficiencies, withdrawals from Multiemployer Plans or
Reportable Events have occurred with respect to any Plans or
Multiemployer Plans that, in the aggregate, could subject the Borrower
to any tax, penalty, or other liability where such tax, penalty, or
liability is not covered in full, for the benefit of the Borrower, by
insurance; (ii) no notice of intent to terminate a Plan has been filed,
nor has any Plan been terminated under Section 4041 of ERISA, nor has
the PBGC instituted proceedings to terminate, or appoint a trustee to
administer, a Plan, and no event has occurred or condition exists that
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; (iii) the present value of all benefit liabilities (as defined in
Section 4001(a)(16) of ERISA) under all Plans (based on the actuarial
assumptions used to fund the Plans) does not exceed the assets of the
Plans; and (iv) the execution, delivery, and performance by the
Borrower of this Agreement and the Loans hereunder and the use of the
proceeds thereof will not involve any Prohibited Transactions.
(j) Assets. The Borrower has good and marketable title to
all property and assets reflected in the financial statements referred
to in previous paragraph 4(a), except property and assets sold or
otherwise disposed of in the ordinary course of business subsequent to
the respective dates thereof and except for incidental liens or
imperfections of title which do not involve security for indebtedness
for borrowed money ("Permitted Encumbrances"). The Borrower has no
outstanding Liens on any of its properties or assets nor are there any
security agreements to which the Borrower is a party, or title
retention agreements, whether in the form of leases or otherwise, of
any personal property except as reflected in the financial statements
referred to in previous paragraph 4.1(a) and except for Permitted
Encumbrances.
(k) Securities Acts. The Borrower has not issued any
unregistered securities in violation of the registration requirements
of Section 5 of the Securities Act of 1933, as amended, or any other
law, and is not violating any rule, regulation, or requirement under
the Securities Act of 1933, as amended, or the Securities and Exchange
Act of 1934, as amended. The Borrower is not required to qualify an
indenture under the Trust Indenture Act of 1939, as
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amended, in connection with its execution and delivery of the Notes. No
proceeds of any Advance will be used to acquire any security in any
transaction which is subject to Section 13 and 14 of the Securities
Exchange Act of 1934.
(l) Consents, etc. No consent, approval, authorization
of, or registration, declaration or filing with any governmental
authority is required on the part of the Borrower in connection with
the execution and delivery of the Loan Documents or the performance of
or compliance with the terms, provisions, and conditions hereof or
thereof.
(m) Regulated Entities. The Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation
limiting its ability to incur Indebtedness.
(n) Copyrights, Patents, Trademarks, and Licenses, etc.
Borrower owns or is licensed or otherwise has the right to use all of
the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations, and other rights if the failure
to so own or be licensed or otherwise have the right to use the same
could have a material adverse effect on the business, operations,
property, or financial or other condition of the Borrower. To the best
knowledge of the Borrower, no slogan or other advertising device,
product, process, method, substance, part, or other material now
employed or now contemplated to be employed by the Borrower infringes
on any rights held by any other Person. Except as specifically
disclosed in Exhibit A hereto, no claim or litigation regarding any of
the foregoing is pending or, to the Borrower's knowledge, threatened,
and to the knowledge of the Borrower, no patent, invention, device,
application, principle, or any statute, law, rule, regulation,
standard, or code is pending or proposed that, in either case, could
reasonably be expected to have a material adverse effect on the
business, operations, property, or financial or other condition of the
Borrower.
(o) Insurance. The properties of the Borrower are insured
with financially sound and reputable insurance companies (not
Affiliates) acceptable to the Bank in such amounts, with such
deductibles, and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties
in localities where the Borrower operates.
(p) Full Disclosure. None of the representations or
warranties made by the Borrower in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none
of the statements contained in any exhibit, report, statement, or
certificate furnished by or on behalf of the Borrower in connection
with the Loan Documents contains or will contain any untrue statement
of a material fact or omits or will omit any material fact required to
be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they are made, not misleading as
of the time when made or delivered.
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(q) Solvency. The Borrower, after the funding of any
Advance hereunder, is solvent, has assets having a fair market value in
excess of the amount required to pay its probable liabilities on its
existing debts as they become absolute and matured, and has and will
have, until the Loan has been paid and performed in full, access to
adequate capital for the conduct of its business and the ability to pay
its debts from time to time incurred in connection therewith, as such
debts mature.
(r) Financial Statements. The financial statements of the
Borrower that have been furnished to the Bank prior to the date of this
Agreement present fairly the financial condition of the Borrower as of
the dates of such statements, and the results of the operations of the
Borrower for the financial periods then ended, and since such dates
there has been no material adverse change in such financial condition.
(s) Defaults. The Borrower is not in default in the
payment of principal or interest on any indebtedness for borrowed money
and is not in default under any instrument or agreement under or
subject to which any indebtedness for borrowed money has been issued,
and no event has occurred and is continuing which, with or without the
lapse of time or the giving of notice, or both, constitutes or would
constitute an event of default under any such instrument or agreement
or an Event of Default hereunder.
ARTICLE V.
COVENANTS OF THE BORROWER
Section 5.1. Affirmative Covenants. So long as the Note shall remain
unpaid or the Bank shall have a Commitment hereunder, the Borrower will, unless
the Bank shall give its prior written consent:
(a) Financial Reporting. Furnish to the Bank:
(1) Monthly Financial Statement. As soon as
available and in any event within 30 days after the end of
each month of each calendar year of the Borrower, a copy of
the unaudited financial statement of the Borrower prepared in
conformity with GAAP, signed by the Borrower's chief financial
officer and consisting of at least statements of income, cash
flow and stockholders' equity for the Borrower for such month
and for the period from the beginning of such fiscal year to
the end of such month, a balance sheet of the Borrower as of
the end of such month and accounts receivable aging trial
balance, all in form and substance satisfactory to Bank.
(2) Other Reports. Such other reports as the
Bank may request from time to time.
(b) Visitation Rights. At any reasonable time and from
time to time, permit the Bank or any agents or representatives thereof,
to examine and make copies of and
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abstracts from the records and books of account of, and visit the
properties of, the Borrower and to discuss the affairs, finances and
accounts of the Borrower with any of its officers or directors.
(c) Notification of Default, Etc. Notify the Bank as
promptly as practicable (but in any event not later than three (3)
Business Days) after Borrower obtains knowledge of: (i) the occurrence
of any event which constitutes an Event of Default or which would
constitute an Event of Default with the passage of time or the giving
of notice or both; or (ii) the commencement of any litigation or
governmental proceedings of any type which could materially adversely
affect the financial condition or business operations of the Borrower.
(d) Keeping of Financial Records and Books of Account.
Maintain proper financial records in accordance with GAAP which fully
and correctly reflect all financial transactions and all assets and
liabilities of the Borrower.
(e) Maintenance of Insurance. Maintain such insurance
with reputable insurance carriers as is normally carried by companies
engaged in similar businesses and owning similar property, and name the
Bank as loss payee on all policies insuring property in which the Bank
has a lien or security interest and provide the Bank with certificates
of insurance evidencing its status as a loss payee. The loss payee
endorsement shall provide for payment to the Bank notwithstanding any
acts or omissions of the Borrower and shall require notice to the Bank
30 days prior to the expiration or cancellation of the insurance.
(f) Maintenance of Properties, Etc. Maintain and preserve
all of its properties, necessary or useful in the proper conduct of its
business, in good working order and condition, ordinary wear and tear
excepted.
(g) Payment of Taxes. Pay all taxes, assessments and
governmental charges of any kind payable by it as such taxes,
assessments and charges become due and before any penalty shall be
imposed, except as Borrower shall contest in good faith and by
appropriate proceedings and provided that the Borrower maintains such
reserves therefor as are required by GAAP.
(h) Maintenance of Accounts. Maintain all its corporate
bank accounts (the accounts for depositing revenues and paying
expenses) at the Bank.
(i) Preservation of Corporate Existence, Etc. Preserve
and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain
qualified, as a foreign corporation in each jurisdiction in which such
qualification is necessary or desirable in view of its business and
operations or the ownership of its properties.
Section 5.2. Negative Covenants. So long as the Note shall remain
unpaid or the Bank shall have a Commitment hereunder, the Borrower will not,
unless the Bank shall give its prior written consent:
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(a) Liens. Create or suffer to exist any mortgage,
pledge, lien, security interest or other encumbrance on the Collateral
except those in favor of the Bank or Permitted Encumbrances.
(b) Merger, Etc. Merge or consolidate with any other
Person; sell, transfer, convey, lease or otherwise dispose of (whether
in one transaction or in a series of transactions) all or a substantial
portion of its assets (whether now owned or hereafter acquired) to any
other Person.
(c) Remuneration. Pay a salary or other remuneration to
any of its officers, directors, employees or stockholders in an amount
which is in excess of a reasonable salary or other remuneration paid
for similar services by similar businesses.
(d) Change in Nature of Business. Make any material
change in the nature of the business of the Borrower, taken as a whole,
as carried on at the date hereof.
ARTICLE VI.
DEFAULT
Section 6.1. Events of Default. "Events of Default" in this Agreement
means any of the following events:
(a) Failure of the Borrower to pay the principal of the
Note when due or, if payable on demand, upon demand;
(b) Failure of the Borrower to pay any interest or fees
required to be paid hereunder or under the Note when due;
(c) Any representation or warranty made by, or on behalf
of, any Loan Party in, or pursuant to, any Loan Document shall prove to
have been incorrect in any material respect when made;
(d) Default in performance of any other covenant or
agreement of any Loan Party in, or pursuant to, any Loan Document and
continuance of such default or breach for a period of 30 days after
written notice thereof to the Borrower and such Loan Party by the Bank;
(e) An uncured default in that certain Credit Agreement
between Aero Systems Engineering, Inc. and the Bank dated September 21,
2001, as amended;
(f) The Borrower shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the
Borrower (and in the case of proceedings against, remain undismissed
for sixty days) seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, custodianship, protection, relief, or composition
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of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief, or the appointment of a receiver, custodian, trustee, or
other similar official for it or him or for any substantial part of its
or his property; or shall take any corporate action to authorize any of
the actions set forth above in this subsection;
(g) The Borrower shall fail to pay any indebtedness for
borrowed money of the Borrower or any interest or premium thereon, when
due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such debt; or any other default under any
agreement or instrument relating to any such debt, or any other event,
shall occur and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such
default or event is to accelerate, or to permit the acceleration of,
the maturity of such debt; or any such debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
(h) Any guaranty or any third party security interest
securing any indebtedness of the Borrower to the Bank shall be
repudiated or revoked, or purported to be repudiated or revoked;
(i) The entry against the Borrower of a final judgment,
decree or order for the payment of money in excess of $25,000 and the
continuance of such judgment, decree or order unsatisfied for a period
of 30 days without a stay of execution;
(j) Any adverse change reasonably deemed by the Bank to
be material or substantial shall occur in the assets, financial
condition or credit standing of the Borrower;
(k) Any sale, encumbrance (occurring after the date
hereof), or transfer (i) of a majority of the stock interests in the
Borrower, or (ii) that causes Aero Systems Engineering, Inc. to lose
control of the Borrower;
Section 6.2 Rights and Remedies. If any Event of Default shall occur
and be continuing, the Bank may exercise any or all of the following rights and
remedies:
(a) By written notice to the Borrower, suspend or
terminate the Commitment, whereupon the same shall forthwith be
suspended or terminated;
(b) Declare the Note, all interest thereon, and all other
obligations under, or pursuant to, any Loan Document to be immediately
due and payable, and upon such declaration the Note, interest and other
obligations shall immediately be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are expressly
waived;
(c) Exercise any right or remedy under the Security
Agreement or the Guaranty;
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(d) Exercise any other right or remedy available to the
Bank at law or in equity.
ARTICLE VII.
MISCELLANEOUS
Section 7.1. No Waiver; Cumulative Remedies. No failure or delay on the
part of the Bank in exercising any right or remedy under, or pursuant toy any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy or power preclude other or further exercise
thereof, or the exercise of any other right, remedy or power. The remedies in
the Loan Documents are cumulative and are not exclusive of any remedies provided
by law.
Section 7.2. Amendments and Waivers. No amendment or waiver of any
provision of any Loan Document shall be effective unless such amendment or
waiver is in writing and is signed by the Bank, and such amendment or waiver
shall be effective only in the specific instance and for the specific purpose
for which it was given.
Section 7.3. Notices, Etc. Any notices required or contemplated
hereunder or under the Notes shall be given to the following addresses:
If to the Borrower: Automation, Manufacturing & Robotic
Technologies, LLC
0000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
With a copy to: Aero Systems Engineering, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx
If to Bank: M&I Xxxxxxxx & Xxxxxx Bank
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Vice President
Any notice, demand or request so delivered shall constitute valid
notice under this Agreement and shall be deemed to have been received (a) on the
day of actual delivery in the case of personal delivery, (b) on the next
Business Day after the date when sent in the case of delivery by
nationally-recognized overnight courier, (c) on the third Business Day after the
date of deposit in the U.S. mail in the case of mailing or (d) in the case of a
facsimile transmission on the day sent, if on a Business Day, or if not sent of
a Business Day, on the next Business Day after the day sent, provided that
notices to the Bank pursuant to the provisions of Article II shall not be
effective until received by the Bank. Any party hereto may from time to time by
notice in writing served upon the other as aforesaid designate a different
mailing address or a different person to which all such notices, demands or
request thereafter are to be addressed.
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Section 7.4. Costs and Expenses. The Borrower agrees to pay (a) on the
date of this Agreement all costs and expenses incurred by the Bank through the
date of this Agreement in connection with the credit facilities that are the
subject of this Agreement, including (without limitation) reasonable attorneys
fees and legal expenses and (b) on demand all costs and expenses of the Bank,
including reasonable attorneys fees and expenses, in connection with the
administration and enforcement of the Loan Documents (whether suit is commenced
or not).
Section 7.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default the Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Bank to
or for the credit or the account of the Borrower or Guarantor against any and
all of the obligations of the Borrower now or hereafter existing under any Loan
Documents, irrespective of whether or not the Bank shall have made any demand
under any Loan Documents and although such obligations may be unmatured. The
Bank agrees promptly to notify the Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Bank under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Bank may have.
Section 7.6. Governing Law; Severability; Jurisdiction. All Loan
Documents shall be governed by the laws of the State of Minnesota. Any term used
in this Agreement and not otherwise defined shall have the definition given that
term in the Uniform Commercial Code as in effect in the State of Minnesota from
time to time. If any term in this Agreement shall be held to be illegal or
unenforceable, the remaining portions of this Agreement shall not be affected,
and this Agreement shall be construed and enforced as if this Agreement did not
contain the term held to be illegal or unenforceable. The Borrower hereby
irrevocably submits to the jurisdiction of the Minnesota District Court, Fourth
District, and the Federal District Court, District of Minnesota, Fourth
Division, over any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of such action or proceeding may
be heard and determined in any such court.
Section 7.7. Waiver Of Jury Trial. The Bank and the Borrower hereby
voluntarily, knowingly and intentionally waive any and all rights to trial by
jury in any legal action or proceeding arising under this agreement, regardless
of whether such action or proceeding concerns any contractual or tortious or
other claim. The Borrower acknowledges that this waiver of jury trial is a
material inducement to the Bank in extending credit to the Borrower, that the
Bank would not have extended such credit without this jury trial waiver, and
that the Borrower has been represented by an attorney or has had an opportunity
to consult with an attorney in connection with this jury trial waiver and
understands the legal effect of this waiver.
Section 7.8. Binding Effect; Assignment. All Loan Documents shall be
binding upon and inure to the benefit of the Loan Parties and the Bank and their
respective successors and assigns. No Loan Party shall have the right to assign
its rights or interest under such agreement without the prior written consent of
the Bank.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
AUTOMATION, MANUFACTURING &
ROBOTIC TECHNOLOGIES, LLC
By /s/ Xxxxxxx Xxxxxxxx
------------------------------
Its Chief Manager
M&I XXXXXXXX & ILSLEY BANK
By /s/ Xxxx Xxxxxxxx
------------------------------
Its Vice President
By /s/ Xxxx Xxxxxxxx
------------------------------
Its Assistant Vice President
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EXHIBIT A
Litigation and Claims
- 17 -
EXHIBIT B
Subsidiaries
None
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