Exhibit 10.4(g)
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BUSINESS LOAN AGREEMENT
Principal Loan Date Maturity Loan No. Call
$172,725.873 08-18-1998 11-16-1998 5010001204 CPB
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Collateral Account Officer Initials
0100 11M
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or Item.
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Borrower: AMERICAN FIRE RETARDANT CORPORATION TIN: 00-0000000
000 XXXXX XXXX
XXXXXXXXX, XX 00000
Lender: ST. XXXXXX BANK & TRUST COMPANY TIN: 000000000
Lafayette Office
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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THIS BUSINESS LOAN AGREEMENT between AMERICAN FIRE RETARDANT CORPORATION
("Borrower") and ST. XXXXXX BANK & TRUST COMPANY ("Lender") Is made and executed
on the following terms and conditions. Borrower has applied to Lender for a loan
or loans and other financial accommodations, Including those which may be
described on any exhibit or schedule attached to this Agreement.
DEFINITIONS. The following words shall have the following meanings when used In
this Agreement. Terms not otherwise defined In this Agreement shall have the
meanings attributed to such terms In the Louisiana Commercial Laws (La. R.S. 10:
9-101, et seq.). All references to dollar amounts shall mean amounts in lawful
money of the United States of America.
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached or to be attached to this
Business Loan Agreement from time to time.
Borrower. The word "Borrower' means individually, collectively and
interchangeably AMERICAN FIRE RETARDANT CORPORATION and all other persons
and entities signing Borrower's Note. The word "Borrower' also Includes, as
applicable, all subsidiaries and affiliates of Borrower as provided below
In the paragraph titled "Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
Collateral. The word "Collateral" means and Includes Individually,
collectively, Interchangeably and without limitation 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 lion, 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.
ERISA. The word "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
Event of Default. The words "Event of Default mean individually,
collectively, and interchangeably any of the Events of Default set forth
below in the section titled "EVENTS OF DEFAULT."
Page 1
Grantor. The word "Grantor" means and Includes Individually, collectively,
Interchangeably and without limitation each and all of the persons or
entities granting a Security Interest In any Collateral for the
Indebtedness, Including without limitation all Borrowers granting such a
Security Interest.
Guarantor. The word "Guarantor" means and Includes Individually,
collectively, Interchangeably and without limitation each and all of the
guarantors, sureties, and accommodation parties In connection with any
Indebtedness.
Indebtedness. The word "Indebtedness" means and Includes Individually,
collectively, Interchangeably and without limitation, any and all present
and future loans, extensions of credit, liabilities and/or obligations of
every nature and kind whatsoever that Borrower may now and In the future
owe to or Incur In favor of Lender and Its successors or assigns, Including
without limitation, Borrower's Indebtedness In favor of Lender under the
Note, whether such loans, extensions of credit, liabilities and/or
obligations are direct or Indirect, or by way of assignment, and whether
related or unrelated, or whether committed or purely discretionary, and
whether absolute or contingent, voluntary or Involuntary, determined or
undetermined, liquidated or unliquidated, due or to become due, together
with Interest, costs, expenses, attorneys' fees and other fees and charges,
whether or not any such Indebtedness may be barred under any statute of
limitations or may be otherwise unenforceable or voidable for any reason.
Lender. The word "Lender" means ST. XXXXXX BANK & TRUST COMPANY TIN:
00-0000000, Its successors and assigns, and any subsequent holder or
holders of Borrower's Loan and Note, or any Interest therein.
Loan. The words "Loan" and "Loans" mean and Include any and all loans and
financial accommodations from Lender to Borrower (or any of them) 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, and further Including any and all subsequent amendments,
additions, substitutions, renewals and refinancings of Borrower's Loan.
Note. The word "Note means and Includes without limitation Borrower's
promissory note or notes evidencing Borrower's Loan obligations In favor of
Lender, as well as any substitute, replacement or refinancing note or notes
therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
interests securing Indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either not yet due or being
contested In good faith; (c) 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; (d) -purchase money
liens or purchase money security Interests upon or In any property acquired
or hold 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"; (e) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in writing;
and (f) 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.
Related Documents. The words "Related Documents" mean and Include
Individually, collectively, Interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other Instruments, agreements and
documents, whether now or hereafter existing, executed In connection with
the Indebtedness.
Security Agreement. The words "Security Agreement" mean and Include
individually, collectively, Interchangeably and 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.
Page 2
Security Interest. The words "Security Interest" mean and include
individually, collectively, Interchangeably and without limitation any and
all present and future mortgages, pledges, crop pledges, assignments and
other security agreements directly or indirectly securing the repayment of
Borrower's Loan and Note, whether created by law, contract, or otherwise.
XXXX. The word "XXXX" means the Superfund Amendments and Reauthorization
Act of 1986 as now or hereafter amended.
APPLICATION FOR AND PURPOSE OF THE LOAN. Borrower has applied to Lender for a
Loan in the aggregate principal amount of $172,725.73 for the following purpose:
RENEWAL OF CASH FLOW MANAGER LOC INTO TERM LOAN.
BORROWER'S LOAN. Lender has agreed to extend a Loan to Borrower in the amount of
$172,725.73 subject to the terms and conditions of this Agreement and Borrower's
attached Note. Borrower agrees to be bound and obligated under the terms and
conditions of this Agreement and Borrower's Note, as well as any and all
Security Agreements directly or Indirectly securing repayment of the same.
BORROWER'S NOTE. Borrower's Loan in favor of Lender shall be evidenced under
Borrower's attached Note dated August 18, 1998, in the amount of $172,725.73.
Borrower's Loan and Note will bear Interest at the rate or rates, and will be
repayable In accordance with the repayment terms as set forth therein.
TERM. This Agreement shall be effective as of the date of its execution, and
shall continue In full force and effect until such time as all of Borrower's
Loan obligations In favor of Lender have been paid In full, In 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.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the Initial
Loan Advance and each subsequent Loan 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 in form satisfactory to
Lender the following documents for the Loan: (a) the Note, (b) Security
Agreements granting to Lender security Interests In the Collateral, (c)
Financing Statements perfecting Lender's Security Interests; (d) evidence
of Insurance as required below; and (e) any other documents required under
this Agreement or by Lender or Its counsel, Including without limitation
any assignments of life Insurance described below and any guaranties
described below.
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, and such other authorizations and other documents and
Instruments as Lender or its counsel, in their sole discretion, may
require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified In
this Agreement or any Related Document.
Representations and Warranties. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement
or under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
Page 3
Organization. Borrower Is a corporation which Is duly organized, validly
existing, and In good standing under the laws of the State of Louisiana.
Authorization. Borrower's execution, delivery and performance of this
Agreement have been duly authorized, and do not conflict with, and will not
result In a violation of, or constitute or give rise to an event of default
under Borrower's Articles of Incorporation or Bylaws, or any agreement or
other Instrument which may be binding upon Borrower, or under any law or
governmental regulation or court decree or order applicable to Borrower
and/or Its properties. Borrower has the power and authority to enter Into
Borrower's Loan and Note and to grant collateral security therefor.
Borrower has the further power and authority to own and to hold all of Its
assets and properties, and to carry on Its business as presently conducted.
Financial Information. Borrower's financial statements previously furnished
to Lender are and were complete and correct, and were prepared in
accordance with generally accepted accounting principles, and fairly
represent Borrower's financial condition as of the date or date thereof. To
the best of Borrower's knowledge, Borrower has no contingent obligations or
liabilities that were not disclosed or reserved against In Borrower's
financial statements or In the notes thereto. Since the dates of such
financial statements, there has been no material adverse change In
Borrower's financial condition or business.
Properties. Except as contemplated by this Agreement or as previously
disclosed In Borrower'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 Borrower's properties are titled In Borrower's legal
name, and Borrower has not used, or filed a financing statement under, any
other name for at least the last five (5) years.
Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "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., 6r other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. Except as disclosed to and
acknowledged by Lender In writing, Borrower represents and warrants that:
(a) During the period of Borrower's ownership of the properties, there has
been no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or substance by any person on,
under, about or from any of the properties. (b) Borrower has no knowledge
of, or reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened release
of any hazardous waste or substance on, under, about or from the properties
by any prior owners or occupants of any of the properties, or (ii) any
actual or threatened litigation or claims of any kind by any person
relating to such matters. (c) Neither Borrower nor any tenant, contractor,
agent or other authorized user of any of the properties shall use,
generate, manufacture, store, treat, dispose of, or release any hazardous
waste or substance on, under, about or from any of the properties; and any
such activity shall be conducted In compliance with all applicable federal,
state, and local laws, regulations, and ordinances, Including without
limitation those laws, regulations and ordinances described above. Borrower
authorizes Lender and Its agents to enter upon the properties to make such
inspections and tests as Lender may deem appropriate to determine
compliance of the properties 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 properties for hazardous
waste and hazardous substances. Borrower hereby (a) 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
(b) agrees to indemnity 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 properties. The provisions of this
section of the Agreement. including the obligation to Indemnity, shall
survive the payment of the Indebtedness and the termination or expiration
of this agreement and shall not be affected by Lender's acquisition of any
interest in any of the properties, whether by foreclosure or otherwise.
Page 4
Litigation. There are no suits or proceedings pending, or to the knowledge
of Borrower, threatened against or affecting Borrower or its assets, before
any court or by any governmental agency, other than those previously
disclosed to Lender In writing, which, If adversely determined, may have a
material adverse effect on Borrower's financial condition or business.
Taxes. To the best of Borrower's knowledge, all tax returns and reports of
Borrower 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,
Borrower 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 Lender's Security Interests and rights In and to such
Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements directly
or Indirectly securing repayment of Borrower's Loan and Note and all of the
Related Documents are binding upon Borrower as well as upon Borrower's
successors, representatives and assigns, and are legally enforceable In
accordance with their respective terms.
Commercial Purposes. Borrower Intends to use the Loan proceeds solely for
business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to which Borrower may
have any liability complies in all material respects with all applicable
requirements of law and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined In ERISA) has occurred with respect to
any such plan, (ii) Borrower has not withdrawn from any such plan or
Initiated steps to do so, (iii) no steps have been taken to terminate any
such plan, and (iv) there are no unfunded liabilities other than those
previously disclosed to Lender in writing.
Location of Borrower's Offices and Records. Borrower's place of business,
or Borrower's Chief executive office, if Borrower has more than one place
of business, is located at 000 XXXXX XXXX, XXXXXXXXX, XX 0000 S. Unless
Borrower has designated otherwise in writing this location is also the
office or offices where Borrower keeps its records concerning the
Collateral.
Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will
be, true and accurate In every material respect on the date as of which
such Information Is dated or certified; and none of such Information is or
will be Incomplete by omitting to state any material fact necessary to make
such Information not misleading.
Survival of Representations and Warranties. Borrower understands and agrees
that Lender, without Independent Investigation, Is relying upon the above
representations and warranties In making the above referenced Loan to
Borrower. Borrower further agrees that the foregoing representations and
warranties shall be continuing In nature 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.
Page 5
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains In effect, Borrower will:
Litigation. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) 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
generally accepted accounting principles, applied on a consistent basis,
and permit Lender to examine and audit Borrower's books and records at all
reasonable times.
Financial Statements. Furnish Lender with, as soon as available, but in no
event later than ninety (90) days after the end of each fiscal year,
Borrower's balance sheet and income statement for the year ended, audited
by a certified public accountant satisfactory to Lender, and, as soon as
available, but in no event later than thirty (30) days after the and of
each fiscal quarter, Borrower's balance sheet and profit and loss statement
for the period ended, prepared and certified as correct to the best
knowledge and belief by Borrower's chief financial officer or other officer
or person acceptable to Lender. All financial reports required to be
provided under this Agreement shall be prepared In accordance with
generally accepted accounting principles, applied on a consistent basis,
and certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables,
inventory schedules, budgets, forecasts, tax returns. and other reports
with respect to Borrower's financial condition and business operations as
Lender may request from time to time. In addition, Borrower shall furnish
Lender with, as soon as available, but In no event later than ninety (90)
days after the and of each fiscal year, copies of Borrower's tax returns
and a detailed projected cash flow statement In form and content acceptable
to Lender based upon planned operations for the following year.
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 reasonably 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 thirty (30) 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: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the policy;
(d) the properties insured; (e) the then current property values on the
basis of which Insurance has been obtained, and the manner of determining
those values; and (f) 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.
Life Insurance. As soon as practical, obtain and maintain life insurance in
form and with Insurance companies reasonably acceptable to Lender on the
following Individuals In the amounts indicated below and, at Lender's
option, cause such Insurance coverage to be pledged, made payable to, or
assigned to Lender on Lender's forms. Lender, at Its discretion, may apply
the proceeds of any Insurance policy to the unpaid balances of any
Indebtedness:
Names of Insured Amount
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XXXXXXX X. XXXXX $750,000.00
XXXXXX X. XXXXXXX $250,000.00
Page 6
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, executed by the guarantors
named below, on Lender's forms, and in the amounts and under the conditions
spelled out in those guaranties.
Guarantors Amount
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XXXXXX X. XXXXX $172,725.73
XXXXXX X. XXXXXXX $172,725.73
XXXXXXX X. XXXXX $172,725.73
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 Borrower's business
operations or as otherwise described above, 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, Borrower will not be required to pay
and discharge any such assessment, tax, charge, xxxx, xxxx or claim so long
as (a) the legality of the same shall be contested In good faith by
appropriate proceedings, and (b) Borrower shall have established on Its
books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim In accordance with generally accepted
accounting practices. Borrower, upon demand of Lender, will furnish to
Lender evidence of payment of the assessments, taxes, charges, levies,
liens and claims and will authorize the appropriate governmental official
to deliver to Lender at any time a written statement of any assessments,
taxes, charges, levies, liens and claims against Borrower's properties,
Income, or profits.
Performance. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in the Related Documents in a timely
manner, and promptly notify Lender if Borrower learns of the occurrence of
any event which constitutes an Event of Default under this Agreement or
under any of the Related Documents.
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 and In compliance with sit applicable
federal, state and municipal laws, ordinances, rules and regulations
respecting Its properties, charters, businesses and operations, Including
without limitation, compliance with the Americans With Disabilities Act and
with all minimum funding standards and other requirements of ERISA and
other laws applicable to Borrower's employee benefit plans.
Inspection. Permit employees or agents of Lender at any reasonable time to
Inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records
and to make copies and memoranda of Borrower'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's
expense.
Change of Location. Immediately notify Lender In writing of any additions
to or changes In the location of Borrower's businesses.
Title to Assets and Property. Maintain good and marketable title to all of
Borrower's assets and properties.
Page 7
Notice of Default, Litigation and ERISA Matters. Forthwith upon learning of
the occurrence of any of the following, Borrower shall provide Lender with
written notice thereof, describing the same and the steps being taken by
Borrower with respect thereto: (i) the occurrence of any Event of Default,
or (ii) the institution of, or any adverse determination In, any
litigation, arbitration proceeding or governmental proceeding, or (iii) the
occurrence of a Reportable Event under, or the institution of steps by
Borrower to withdraw from, or the institution ,of any steps to terminate,
any employee benefit plan as to which Borrower may have any liability.
Other Information. From time to time Borrower will provide Lender with such
other Information as Lender may reasonably request.
Employee Benefit Plans. So long as this Agreement remains in effect,
Borrower will maintain each employee benefit plan as to which it may have
any liability, In compliance with all applicable requirements of law and
regulations.
Other Agreements. Borrower will not enter into any agreement containing any
provision which would be violated or breached by the performance of Its
obligations It hereunder or In connection herewith.
Compliance Certificate. Unless waived In writing by Lender, provide Lender
at least annually and at the time of each disbursement of Loan proceeds
with a certificate executed by Borrower's chief financial officer, or other
officer or person acceptable to Lender, certifying that the representations
and warranties set forth In this Agreement are true and correct as of the
date of the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply In all respects
with all environmental protection federal, state and local laws, statutes,
regulations and ordinances; not cause or permit to exist, as a result of an
Intentional or unintentional action or omission on its 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 Borrowers' 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, 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.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that as long as
this Agreement remains in effect, Borrower shall not, without the prior written
consent of Lender:
Indebtedness and Liens. (a) 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, (b) except as allowed as a Permitted Lien, sell,
transfer, mortgage, assign, pledge, lease, grant a security Interest In, or
encumber any of Borrower's assets, or (c) sell with recourse any of
Borrower's accounts, except to Lender.
Continuity of Operations. (a) Engage In any business activities
substantially different than those In which Borrower Is presently engaged,
(b) cease operations, liquidate, merge, transfer, acquire or consolidate
with any other entity, change ownership, change Its name, dissolve or
transfer or sell Collateral out of the ordinary course of business, (c) pay
any dividends on Borrower's stock (other than dividends payable in its
Page 8
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 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 stock
of Borrower, or (d) purchase or retire any of Borrower's outstanding shares
or alter or amend Borrowers capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any Interest In any other
enterprise or entity, or (c) Incur any obligation as surety or guarantor
other than in the ordinary course of business.
DEPOSIT ACCOUNTS. As collateral security for repayment of Borrower's Note and
all renewals and extensions, as well as to secure any and all other loans,
notes, Indebtedness and obligations that Borrower (or any of them) may now and
In the future owe to Lender or Incur In Lender's favor, whether direct or
Indirect, absolute or contingent, due or to become due, of any nature and kind
whatsoever (with the exception of any Indebtedness under a consumer credit card
account), Borrower Is granting Lender a continuing security Interest In any and
all funds that Borrower may now and In the future have on deposit with Lender or
In certificates of deposit or other deposit accounts as to which Borrower is an
account holder (with the exception of XXX, pension, and other tax-deferred
deposits). Borrower further agrees that Lender may at any time apply any funds
that Borrower may have on deposit with Lender or In certificates of deposit or
other deposit accounts as to which Borrower is an account holder against the
unpaid balance of Borrower's Note and any and all other present and future
Indebtedness and obligations that Borrower (or any of them) may then owe to
Lender, In principal, interest, fees, costs, expenses, and attorneys' fees.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Agreement:
Default under the Indebtedness. Should Borrower default in the payment of
principal or Interest under any of the Indebtedness.
Default under this Agreement. Should Borrower violate, or fail to comply
fully with any of the terms and conditions of, or default under this
Agreement.
Default Under Other Agreements. Should any event of default occur or exist
under any Related Document which directly or Indirectly secures repayment
of the Loan and any of the Indebtedness.
Other Defaults In Favor of Lender. Should Borrower or any Guarantor default
under any other loan, extension of credit, security agreement, or
obligation In favor of Lender.
Default In Favor of Third Parties. Should Borrower or any Guarantor default
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 property, or Borrower's or any
Guarantor's ability to perform their respective obligations under this
Agreement, or any Related Document, or pertaining to the Indebtedness.
Insolvency. Should the suspension, failure or Insolvency, however
evidenced, of Borrower or any Guarantor occur or exist.
Readjustment of Indebtedness. Should proceedings for readjustment of
indebtedness. reorganization. composition or extension under any Insolvency
law be brought by or against Borrower or any Guarantor.
Assignment for Benefit of Creditors. Should Borrower or any Guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
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Receivership. Should a receiver of all or any part of Borrower's property,
or the property of any Guarantor, be applied for or appointed. Dissolution
Proceedings. Should proceedings for the dissolution or appointment of a
liquidator of Borrower or any Guarantor be commenced.
False Statements. Should any representation or warranty of Borrower or any
Guarantor made in connection with the Loan prove to be incorrect or
misleading in any respect.
Insecurity. Should Lender deem itself to be insecure with regard to
repayment of the Loan.
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.
Lender shall have the right at its sole option, to accelerate payment of
Borrower's Note in full, in principal, interest, costs, expenses, attorneys'
fees, and other fees and charges, as well as to accelerate the maturity of any
and all other loans and/or obligations that Borrower may then owe to Lender,
whether direct or indirect, or by way of assignment or purchase of a
participation Interest, and whether absolute or contingent, liquidated or
unliquidated, voluntary or Involuntary, determined or undetermined, due or to
become due, and whether now existing or hereafter arising, and whether Borrower
is obligated alone or with others on a "solidary" or "joint and several" basis,
as a principal obligor or as a surety, of every nature and kind whatsoever,
whether any such Indebtedness may be barred under any statute of limitations or
otherwise may be unenforceable or voidable for any reason whatsoever.
Lender shall have the additional right, again at its sole option, to file an
appropriate collection action against Borrower and/or against any guarantor or
guarantors of Borrower's Loan and Note, and/or to proceed or exercise any rights
against any Collateral then securing repayment of Borrower's Loan and Note.
Borrower and each guarantor further agree that Lender's remedies shall be
cumulative In nature and nothing under this Agreement or otherwise, shall be
construed as to limit or restrict the options and remedies available to Lender
following any event of default under this Agreement 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 Lender 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 Lender's right to
declare a default and to exercise Its rights and remedies.
ADDITIONAL DOCUMENTS. Borrower shall provide Lender with the following
additional documents:
Corporate Resolution. Borrower has provided or will provide Lender with a
certified copy of resolutions property adopted by Borrower's Board of
Directors, and certified by Borrower's corporate secretary or assistant
secretary, under which Borrower's Board of Directors authorized one or more
designated officers or employees to execute this Agreement on behalf of
Borrower and to execute the above referenced Note and any and all Security
Agreements directly or Indirectly securing repayment of the same, and to
consummate the borrowings and other transactions as contemplated hereunder,
and to consent to the remedies following Borrower's default as provided
herein and under the above referenced Security Agreements.
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Certification. Where required by Lender, Borrower has provided or will
provide Lender with a certificate executed by Borrower's principle
executive officer, certifying that the representations and warranties set
forth in this Agreement are true and correct, and further certifying in the
Event of Default presently exists under this Agreement, or under Borrower's
Note, or under any Security Agreement directly or indirectly repayment of
the same, as of the date hereof.
Opinion of Counsel. Where required by Lender, Borrower has provided or will
provide Lender with an opinion of Borrower's counsel certifying to and
that: (a) this Agreement and Borrower's Note and Security Agreements
constitute valid and binding obligations on the part of Borrower that are
enforceable In accordance with their respective terms; (b) Borrower Is
validly existing and In good standing; (c) Borrower has authority to enter
Into this Agreement and to consummate the transactions contemplated
hereunder; and (d) such other matters as may have been requested by Lender
or by Lender's counsel.
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.
Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender In the State of Louisiana. This Agreement shall be governed by and
construed In accordance with the laws of the State of Louisiana.
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. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
Interests In the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one 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 It 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. Borrower also agrees that the
purchasers of any such participation Interests will be considered as the
absolute owners of such Interests In the Loans 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 Borrower's
obligation under the Loans Irrespective of the. failure or Insolvency of
any holder of any Interest In the Loans. Borrower 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 Lender.
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
expenses, Including without limitation attorneys' fees, Incurred In
connection with the preparation, execution, enforcement, modification and
collection of this Agreement or In connection with the Loans made pursuant
to this Agreement. Lender may pay someone else to help collect the Loans
and to enforce this Agreement, and Borrower will pay that amount. This
Includes, subject to any limits under applicable law, Lender's attorneys'
fees and Lender's legal expenses, whether or not there Is a lawsuit,
Including attorneys' fees for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or Injunction), appeals, and any
anticipated post-judgment collection services. Borrower also will pay any
court costs, In addition to all other sums provided by law.
Notices. To give Borrower any notice required under this Agreement, Lender
may hand deliver or mail such notice to Borrower. Lender will deliver or
mail any notice to Borrower (or any of them If more than one) at any
address which Borrower may have given Lender by written notice as provided
In this paragraph. In the event that there Is more than one Borrower under
this Agreement, notice to a single Borrower shall be considered as notice
to all Borrowers. To give Lender any notice under this Agreement, Borrower
(or any Borrower) shall mail the notice to Lender by registered or
certified mail at the address specified In this Agreement, or at any other
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address that Lender may have given to Borrower (or any Borrower) by written
notice as provided In this paragraph. All notices required or permitted
under this Agreement must be In writing and will be considered as given on
the day It Is delivered by hand or deposited In the U.S. Mail, by
registered or certified mail to the address specified in this Agreement.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be Invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision Invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, If the offending provision
cannot be so modified, It shall be stricken and all other provisions of
this Agreement In all other respects shall remain valid and enforceable.
Sole Discretion of Lender. Whenever Lender's consent or approval Is
required under this Agreement, the decision as to whether or not to consent
or approve shall be In the sole and exclusive discretion of Lender and
Lender's decision shall be final and conclusive.
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 herein shall Include all subsidiaries and affiliates of Borrower.
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 subsidiary or affiliate of Borrower.
Successors and Assigns. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall Inure to
the benefit of Lender, Its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
Interest therein, without the prior written consent of Lender.
Survival. All warranties, representations, and covenants made by Borrower
in this Agreement or in any certificate or other Instrument delivered by
Borrower to Lender under this Agreement shall be considered to have been
relied upon by Lender and will survive the making of the Loan and delivery
to Lender of the Related Documents, regardless of any Investigation made by
Lender or on Lender's behalf.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. 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 Lender 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 Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Grantor 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 in subsequent instances where such consent is required,
and in all cases such consent may be granted or withheld in the sole
discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
AUGUST 18, 1998.
BORROWER:
AMERICAN FIRE RETARDANT CORPORATION
/S/ Xxxxxx X. Xxxxx
---------------------------------------------
By: XXXXXX X. XXXXX, EXECUTIVE VICE PRESIDENT
LENDER:
ST. XXXXXX BANK & TRUST COMPANY
---------------------------------------------
By:
Authorized Officer
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