Attached files
Exhibit 10.1
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into this 10th day of March, 2020, by and
between ADDVANTAGE TECHNOLOGIES GROUP, INC., an Oklahoma corporation (the
"Borrower"), and VAST BANK, N.A. (the "Lender").
RECITALS
A. The Borrower has requested that the Lender make a term loan to the Borrower in
the principal amount of $3,474,600.
B. The Lender is willing to make the requested loan, but only upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the above recitals and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Terms. Unless the context otherwise requires, the following terms used
herein shall be construed and controlled by the following definitions:
"Affiliate" means, with respect to any Person, any other Person who has a relationship with
such Person whereby either such other Person directly or indirectly controls, is controlled by or is
under common control with the other, or holds or beneficially owns 10% or more of the equity
interest in the other or 10% or more of any class of voting securities of the other. For purposes of
this definition, a Person has "control" over another Person if such Person has the ability to exercise
a controlling influence over the management and policies of the other Person.
"Agreement" (and such terms as "herein," "hereof," "hereto," "hereby," "hereunder" and
the like) means this Loan Agreement, together with all exhibits and schedules attached hereto.
"Anti-Corruption Laws" means all Laws of any jurisdiction applicable to the Borrower or
any of its Affiliates from time to time concerning or relating to bribery or corruption, including
the United States Foreign Corrupt Practices Act of 1977, as amended, or any similar Law in any
applicable jurisdiction.
"Borrower" is defined in the introductory paragraph of this Agreement.
"Business Day" means any day, other than a Saturday, Sunday or legal holiday for
commercial banks under the laws of the State of Oklahoma, on which the Lender is open for
substantially all of its normal banking functions.
"Capitalized Lease Obligations" of a Person means the amount of the obligations of such
Person under capital leases which should be recorded as a liability of such Person in accordance
with GAAP.
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THIS LOAN AGREEMENT is made and entered into this 10th day of March, 2020, by and
between ADDVANTAGE TECHNOLOGIES GROUP, INC., an Oklahoma corporation (the
"Borrower"), and VAST BANK, N.A. (the "Lender").
RECITALS
A. The Borrower has requested that the Lender make a term loan to the Borrower in
the principal amount of $3,474,600.
B. The Lender is willing to make the requested loan, but only upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the above recitals and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Terms. Unless the context otherwise requires, the following terms used
herein shall be construed and controlled by the following definitions:
"Affiliate" means, with respect to any Person, any other Person who has a relationship with
such Person whereby either such other Person directly or indirectly controls, is controlled by or is
under common control with the other, or holds or beneficially owns 10% or more of the equity
interest in the other or 10% or more of any class of voting securities of the other. For purposes of
this definition, a Person has "control" over another Person if such Person has the ability to exercise
a controlling influence over the management and policies of the other Person.
"Agreement" (and such terms as "herein," "hereof," "hereto," "hereby," "hereunder" and
the like) means this Loan Agreement, together with all exhibits and schedules attached hereto.
"Anti-Corruption Laws" means all Laws of any jurisdiction applicable to the Borrower or
any of its Affiliates from time to time concerning or relating to bribery or corruption, including
the United States Foreign Corrupt Practices Act of 1977, as amended, or any similar Law in any
applicable jurisdiction.
"Borrower" is defined in the introductory paragraph of this Agreement.
"Business Day" means any day, other than a Saturday, Sunday or legal holiday for
commercial banks under the laws of the State of Oklahoma, on which the Lender is open for
substantially all of its normal banking functions.
"Capitalized Lease Obligations" of a Person means the amount of the obligations of such
Person under capital leases which should be recorded as a liability of such Person in accordance
with GAAP.
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"Charter Documents" means (i) the certificate of incorporation of the Borrower filed with
the Oklahoma secretary of state on September 19, 1989 (ii) the bylaws of the Borrower dated as
of September 19, 1989 and (iii) any other internal governance documents of the Borrower, as any
of the foregoing may be amended, modified or restated from time to time (subject, however, to the
provisions of Section 5.11).
"Chymiak" means David E. Chymiak.
"Chymiak Guaranty" means that certain Guaranty and Covenant Agreement dated as of
June 30, 2019, made by Chymiak in favor of the Borrower.
"Chymiak Pledge" means that certain [Pledge Agreement] dated as of June 30, 2019, made
by Chymiak in favor of the Borrower.
"Closing" means the date and time, as specified in Section 7.1, on which the Loan
Documents are delivered by the parties and the Loan is advanced to the Borrower.
"Collateral" means (i) the Personal Property Collateral, (iii) all of the Borrower's rights in
and to the Leveling 8 Mortgages and the Leveling 8 Note, (iv) all of the Borrower's rights in and
to the Chymiak Guaranty and the Chymiak Pledge, and (v) any other Property in which the Lender
is granted a Lien to secure repayment of the Indebtedness (or any portion thereof) pursuant to the
terms of any of the Loan Documents.
"Collateral Documents" is defined in Section 2.11.
"Debt" means any liability, indebtedness or obligation which, in accordance with GAAP,
should be recorded as a liability of such Person.
"Default" means the existence or occurrence of any event or circumstance which, but for
the giving of notice or the passage of time, or both, would constitute an Event of Default.
"Default Rate" means, for any period following the occurrence of a Default, a per annum
rate of interest that is 4% higher than the interest rate that would otherwise be in effect if such
Default had not occurred.
"Distribution" means, as to any Person, any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of common stock or other equity interests
in such Person, or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such equity interest in such Person or any option, warrant or
other right to acquire any equity interest in such Person.
"EBITDA" means, with reference to any period of time, net income (or loss) of a Person
for such period, plus, to the extent deducted from revenues in determining net income, (i) interest
expense, (ii) expense for income taxes paid or accrued, (iii) depreciation and (iv) amortization.
"Environmental Laws" means any and all Federal, state, local, foreign and other applicable
statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions,
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the Oklahoma secretary of state on September 19, 1989 (ii) the bylaws of the Borrower dated as
of September 19, 1989 and (iii) any other internal governance documents of the Borrower, as any
of the foregoing may be amended, modified or restated from time to time (subject, however, to the
provisions of Section 5.11).
"Chymiak" means David E. Chymiak.
"Chymiak Guaranty" means that certain Guaranty and Covenant Agreement dated as of
June 30, 2019, made by Chymiak in favor of the Borrower.
"Chymiak Pledge" means that certain [Pledge Agreement] dated as of June 30, 2019, made
by Chymiak in favor of the Borrower.
"Closing" means the date and time, as specified in Section 7.1, on which the Loan
Documents are delivered by the parties and the Loan is advanced to the Borrower.
"Collateral" means (i) the Personal Property Collateral, (iii) all of the Borrower's rights in
and to the Leveling 8 Mortgages and the Leveling 8 Note, (iv) all of the Borrower's rights in and
to the Chymiak Guaranty and the Chymiak Pledge, and (v) any other Property in which the Lender
is granted a Lien to secure repayment of the Indebtedness (or any portion thereof) pursuant to the
terms of any of the Loan Documents.
"Collateral Documents" is defined in Section 2.11.
"Debt" means any liability, indebtedness or obligation which, in accordance with GAAP,
should be recorded as a liability of such Person.
"Default" means the existence or occurrence of any event or circumstance which, but for
the giving of notice or the passage of time, or both, would constitute an Event of Default.
"Default Rate" means, for any period following the occurrence of a Default, a per annum
rate of interest that is 4% higher than the interest rate that would otherwise be in effect if such
Default had not occurred.
"Distribution" means, as to any Person, any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of common stock or other equity interests
in such Person, or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such equity interest in such Person or any option, warrant or
other right to acquire any equity interest in such Person.
"EBITDA" means, with reference to any period of time, net income (or loss) of a Person
for such period, plus, to the extent deducted from revenues in determining net income, (i) interest
expense, (ii) expense for income taxes paid or accrued, (iii) depreciation and (iv) amortization.
"Environmental Laws" means any and all Federal, state, local, foreign and other applicable
statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions,
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grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities) of the
Borrower directly or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release of any Hazardous
Materials into the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended and
as in effect from time to time.
"Event of Default" means the occurrence or existence of any of the events or circumstances
specified in Article VIII of this Agreement.
"Fixed Charge Coverage Ratio" means for any period of determination, the ratio of
(i) EBITDA of the Borrower for the then most recently ended four fiscal quarters, to (ii) the current
maturities of all Funded Debt of the Borrower (other than current maturities of the Loan) for the
next ensuing four fiscal quarters, plus interest expense of the Borrower (other than interest on the
Loan) during the then most recently ended four fiscal quarters.
"Funded Debt" means, as to any Person, without duplication, (i) Debt of such Person for
money borrowed, (ii) Debt of such Person which represents seller financing of the unpaid purchase
price of goods or services (if incurred for such purpose in lieu of borrowing money or using
available funds to pay such amount) and which is payable over a term of more than six months (or
which permits such Person, at its option, to defer payment for more than six months), (iii) Debt of
such Person evidenced by a promissory note, bond, debenture or other like obligation to pay
money, and (iv) Capitalized Lease Obligations of such Person.
"GAAP" means generally accepted accounting principles in the United States applicable to
commercial entities as set forth in the U.S. GAAP Accounting Standards Codification issued by
the Financial Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are applicable to the
circumstances as of the date of determination, consistently applied.
"Governmental Authority" means any court or any administrative or governmental
department, commission, board, bureau, authority, agency or body of any governmental entity,
whether national, federal, state, county, city, municipal or otherwise.
"Governmental Requirements" means all laws, orders, decrees, ordinances, rules and
regulations of any Governmental Authority.
"Guarantee Obligation" means, as to any Person (the "guaranteeing person"), any
obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing
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protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities) of the
Borrower directly or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release of any Hazardous
Materials into the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended and
as in effect from time to time.
"Event of Default" means the occurrence or existence of any of the events or circumstances
specified in Article VIII of this Agreement.
"Fixed Charge Coverage Ratio" means for any period of determination, the ratio of
(i) EBITDA of the Borrower for the then most recently ended four fiscal quarters, to (ii) the current
maturities of all Funded Debt of the Borrower (other than current maturities of the Loan) for the
next ensuing four fiscal quarters, plus interest expense of the Borrower (other than interest on the
Loan) during the then most recently ended four fiscal quarters.
"Funded Debt" means, as to any Person, without duplication, (i) Debt of such Person for
money borrowed, (ii) Debt of such Person which represents seller financing of the unpaid purchase
price of goods or services (if incurred for such purpose in lieu of borrowing money or using
available funds to pay such amount) and which is payable over a term of more than six months (or
which permits such Person, at its option, to defer payment for more than six months), (iii) Debt of
such Person evidenced by a promissory note, bond, debenture or other like obligation to pay
money, and (iv) Capitalized Lease Obligations of such Person.
"GAAP" means generally accepted accounting principles in the United States applicable to
commercial entities as set forth in the U.S. GAAP Accounting Standards Codification issued by
the Financial Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are applicable to the
circumstances as of the date of determination, consistently applied.
"Governmental Authority" means any court or any administrative or governmental
department, commission, board, bureau, authority, agency or body of any governmental entity,
whether national, federal, state, county, city, municipal or otherwise.
"Governmental Requirements" means all laws, orders, decrees, ordinances, rules and
regulations of any Governmental Authority.
"Guarantee Obligation" means, as to any Person (the "guaranteeing person"), any
obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing
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Person that guarantees or in effect guarantees, or which is given to induce the creation of a separate
obligation by another Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any manner, whether directly or
indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to
assure or hold harmless the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.
"Indebtedness" means and includes all liabilities, obligations or indebtedness of the
Borrower to the Lender of every kind and description, now existing or hereafter incurred, direct or
indirect, absolute or contingent, due or to become due, matured or unmatured, and whether or not
of the same or a similar class or character as the Loan and whether or not contemplated by the
Lender or the Borrower, together with future advances and all extensions and renewals, and
including (i) all liabilities, obligations and indebtedness of the Borrower to the Lender arising out
of or related to this Agreement, the Loan, the Note or any other of the Loan Documents, and (ii)
all liabilities, obligations and indebtedness of the Borrower to the Lender or any of its Affiliates in
respect of any Treasury Management Agreement.
"Laws" means and includes laws, statutes, rules, regulations, ordinances and codes of any
Governmental Authority.
"Lender" is defined in the introductory paragraph of this Agreement.
"Leveling 8" means Leveling 8 Inc., an Oklahoma corporation.
"Leveling 8 Mortgages" means (i) that certain Mortgage with Power of Sale, Assignment
of Leases and Rents, Security Agreement and Fixture Filing filed on July 8, 2019 in the Pettis
County, Missouri Recorder of Deeds, between David Chymiak, LLC, as Mortgagor, and the
Borrower, as Mortgagee, (ii) that certain Mortgage with Power of Sale, Assignment of Leases and
Rents, Security Agreement and Fixture Filing filed on July 9, 2019 in the Bucks County,
Pennsylvania Recorder of Deeds, between David Chymiak, LLC, as Mortgagor, and the Borrower,
as Mortgagee and (iii) that certain Mortgage with Power of Sale, Assignment of Leases and Rents,
Security Agreement and Fixture Filing filed on July 8, 2019 in the Tulsa County, Oklahoma
obligation by another Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any manner, whether directly or
indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to
assure or hold harmless the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.
"Indebtedness" means and includes all liabilities, obligations or indebtedness of the
Borrower to the Lender of every kind and description, now existing or hereafter incurred, direct or
indirect, absolute or contingent, due or to become due, matured or unmatured, and whether or not
of the same or a similar class or character as the Loan and whether or not contemplated by the
Lender or the Borrower, together with future advances and all extensions and renewals, and
including (i) all liabilities, obligations and indebtedness of the Borrower to the Lender arising out
of or related to this Agreement, the Loan, the Note or any other of the Loan Documents, and (ii)
all liabilities, obligations and indebtedness of the Borrower to the Lender or any of its Affiliates in
respect of any Treasury Management Agreement.
"Laws" means and includes laws, statutes, rules, regulations, ordinances and codes of any
Governmental Authority.
"Lender" is defined in the introductory paragraph of this Agreement.
"Leveling 8" means Leveling 8 Inc., an Oklahoma corporation.
"Leveling 8 Mortgages" means (i) that certain Mortgage with Power of Sale, Assignment
of Leases and Rents, Security Agreement and Fixture Filing filed on July 8, 2019 in the Pettis
County, Missouri Recorder of Deeds, between David Chymiak, LLC, as Mortgagor, and the
Borrower, as Mortgagee, (ii) that certain Mortgage with Power of Sale, Assignment of Leases and
Rents, Security Agreement and Fixture Filing filed on July 9, 2019 in the Bucks County,
Pennsylvania Recorder of Deeds, between David Chymiak, LLC, as Mortgagor, and the Borrower,
as Mortgagee and (iii) that certain Mortgage with Power of Sale, Assignment of Leases and Rents,
Security Agreement and Fixture Filing filed on July 8, 2019 in the Tulsa County, Oklahoma
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County Clerk Office, between David Chymiak, LLC, as Mortgagor, and the Borrower, as
Mortgagee.
"Leveling 8 Note" means that certain $6,375,000 Promissory Note dated as of June 30,
2019, made by Leveling 8 in favor of the Borrower.
"Leveling 8 Obligations" means all liabilities, obligations and indebtedness, of every kind
and description and howsoever created, arising or evidenced, whether direct or indirect, absolute
or contingent, now existing or hereafter arising, and whether joint, several, or joint and several, of
Leveling 8 to the Borrower, including the liabilities, obligations and indebtedness of Leveling 8
arising under or evidenced by the Leveling 8 Note.
"Lien" means any mortgage, pledge, lien, tax lien, security interest, assignment, charge,
restriction, claim or other encumbrance, whether statutory, consensual or otherwise, which is
granted, created or suffered to exist by the Borrower on any of its Properties.
"Loan" is defined in Section 2.1.
"Loan Documents" means this Agreement, the Note, the Collateral Documents, and all
other security agreements, pledge agreements, deeds of trust, assignments, financing statements,
stock powers, agreements and documents executed or issued or to be executed or issued pursuant
to this Agreement or in connection with the Loan or the grant, creation, perfection or continuation
of the Liens to be granted to the Lender in and to the Collateral pursuant to this Agreement.
"Material Adverse Effect" means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Borrower; (b) a material impairment of the ability of
the Borrower to perform its obligations under any of the Loan Documents to which it is a party;
or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against
the Borrower of any Loan Document.
"Note" means the promissory note to be made, executed and delivered by the Borrower
pursuant to Section 2.4 in order to evidence the Loan.
"PATRIOT Act" means the USA PATRIOT Act of 2001, 31 U.S.C. Section 5318.
"Permit" means any permit, certificate, consent, franchise, concession, license,
authorization, approval, filing, registration or notification from or with any Governmental
Authority or other Person.
"Permitted Liens" is defined in Section 5.1.
"Person" means and includes any individual, sole proprietorship, corporation, partnership
(whether general, limited, limited liability or special), joint venture, limited liability company,
institution, trust, association, organization (whether or not a legal entity), or Governmental
Authority.
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Mortgagee.
"Leveling 8 Note" means that certain $6,375,000 Promissory Note dated as of June 30,
2019, made by Leveling 8 in favor of the Borrower.
"Leveling 8 Obligations" means all liabilities, obligations and indebtedness, of every kind
and description and howsoever created, arising or evidenced, whether direct or indirect, absolute
or contingent, now existing or hereafter arising, and whether joint, several, or joint and several, of
Leveling 8 to the Borrower, including the liabilities, obligations and indebtedness of Leveling 8
arising under or evidenced by the Leveling 8 Note.
"Lien" means any mortgage, pledge, lien, tax lien, security interest, assignment, charge,
restriction, claim or other encumbrance, whether statutory, consensual or otherwise, which is
granted, created or suffered to exist by the Borrower on any of its Properties.
"Loan" is defined in Section 2.1.
"Loan Documents" means this Agreement, the Note, the Collateral Documents, and all
other security agreements, pledge agreements, deeds of trust, assignments, financing statements,
stock powers, agreements and documents executed or issued or to be executed or issued pursuant
to this Agreement or in connection with the Loan or the grant, creation, perfection or continuation
of the Liens to be granted to the Lender in and to the Collateral pursuant to this Agreement.
"Material Adverse Effect" means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Borrower; (b) a material impairment of the ability of
the Borrower to perform its obligations under any of the Loan Documents to which it is a party;
or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against
the Borrower of any Loan Document.
"Note" means the promissory note to be made, executed and delivered by the Borrower
pursuant to Section 2.4 in order to evidence the Loan.
"PATRIOT Act" means the USA PATRIOT Act of 2001, 31 U.S.C. Section 5318.
"Permit" means any permit, certificate, consent, franchise, concession, license,
authorization, approval, filing, registration or notification from or with any Governmental
Authority or other Person.
"Permitted Liens" is defined in Section 5.1.
"Person" means and includes any individual, sole proprietorship, corporation, partnership
(whether general, limited, limited liability or special), joint venture, limited liability company,
institution, trust, association, organization (whether or not a legal entity), or Governmental
Authority.
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"Personal Property Collateral" means all inventory, accounts, cash and accounts
receivable, whether now owned and existing or hereafter acquired or arising, together with all
accessions thereto, substitutions and replacements therefor, and all proceeds of any of the
foregoing.
"Property" means any asset or property, whether real, personal or mixed, tangible or
intangible, which is now or at any time hereafter owned, operated or leased by the Borrower.
"Related Parties" means, with respect to any Person, such Person's Affiliates and the
shareholders, members, partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.
"Sanctioned Country" means, at any time, a country, region or territory which is itself the
subject or target of any Sanctions.
"Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions-related list
of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department
of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the
European Union or any European Union member state, (b) any Person operating, organized or
resident in a Sanctioned Country, or (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b).
"Sanctions" means all economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including those
administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or
the U.S. Department of State, or (b) the United Nations Security Council, the European Union,
any European Union member state or Her Majesty’s Treasury of the United Kingdom.
"Security Agreement" means the Security Agreement to be executed and delivered by the
Borrower pursuant to Section 2.11(a).
"Solvent" or "Solvency" means, with respect to any Person as of a particular date, that on
such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the ordinary course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in
a business or a transaction, and is not about to engage in a business or a transaction, for which such
Person's property would constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair
value of the property of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (e) the present fair salable value of
the assets of such Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such liabilities will be computed at
the amount which, in light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
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receivable, whether now owned and existing or hereafter acquired or arising, together with all
accessions thereto, substitutions and replacements therefor, and all proceeds of any of the
foregoing.
"Property" means any asset or property, whether real, personal or mixed, tangible or
intangible, which is now or at any time hereafter owned, operated or leased by the Borrower.
"Related Parties" means, with respect to any Person, such Person's Affiliates and the
shareholders, members, partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.
"Sanctioned Country" means, at any time, a country, region or territory which is itself the
subject or target of any Sanctions.
"Sanctioned Person" means, at any time, (a) any Person listed in any Sanctions-related list
of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department
of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the
European Union or any European Union member state, (b) any Person operating, organized or
resident in a Sanctioned Country, or (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b).
"Sanctions" means all economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including those
administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or
the U.S. Department of State, or (b) the United Nations Security Council, the European Union,
any European Union member state or Her Majesty’s Treasury of the United Kingdom.
"Security Agreement" means the Security Agreement to be executed and delivered by the
Borrower pursuant to Section 2.11(a).
"Solvent" or "Solvency" means, with respect to any Person as of a particular date, that on
such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the ordinary course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in
a business or a transaction, and is not about to engage in a business or a transaction, for which such
Person's property would constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair
value of the property of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (e) the present fair salable value of
the assets of such Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured. In computing the
amount of contingent liabilities at any time, it is intended that such liabilities will be computed at
the amount which, in light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
6
"Transfer" means and includes any form of sale, transfer, conveyance, lease or other
disposition of a Property, whether through a single transaction or a series of related transactions.
"Treasury Management Agreement" means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled disbursement,
lockbox, account reconciliation and reporting and trade finance services.
"UCC" means the Uniform Commercial Code as adopted and in effect in the State of
Oklahoma or any other applicable jurisdiction.
1.2 Accounting Terms and Calculations. Accounting and financial terms used herein
and not otherwise defined with respect to the Borrower's financial statements and financial position
have the meanings assigned to them pursuant to GAAP. All financial calculations required to be
made hereunder with respect to the Borrower shall be made in accordance with GAAP (except as
otherwise expressly provided herein).
1.3 Terms Defined in UCC. Unless the context otherwise requires, terms used herein
that are defined in the UCC (such as the terms "accounts," "equipment," "fixtures," "general
intangibles," "inventory" and "proceeds") have the respective meanings set forth therein.
1.4 Construction. The following rules of construction shall apply, unless the context
otherwise requires: (i) all terms defined herein in the singular shall include the plural, as the context
requires, and vice-versa; (ii) the descriptive headings of the Articles and Sections of this
Agreement are inserted for convenience only and shall not be used in the construction of the
content of this Agreement; (iii) the term "or" is not exclusive; (iv) the term "including" (or any
form thereof) shall not be limiting or exclusive; and (v) all references to any of the Loan
Documents include any and all modifications, amendments or supplements thereto and any and all
renewals and extensions thereof.
disposition of a Property, whether through a single transaction or a series of related transactions.
"Treasury Management Agreement" means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled disbursement,
lockbox, account reconciliation and reporting and trade finance services.
"UCC" means the Uniform Commercial Code as adopted and in effect in the State of
Oklahoma or any other applicable jurisdiction.
1.2 Accounting Terms and Calculations. Accounting and financial terms used herein
and not otherwise defined with respect to the Borrower's financial statements and financial position
have the meanings assigned to them pursuant to GAAP. All financial calculations required to be
made hereunder with respect to the Borrower shall be made in accordance with GAAP (except as
otherwise expressly provided herein).
1.3 Terms Defined in UCC. Unless the context otherwise requires, terms used herein
that are defined in the UCC (such as the terms "accounts," "equipment," "fixtures," "general
intangibles," "inventory" and "proceeds") have the respective meanings set forth therein.
1.4 Construction. The following rules of construction shall apply, unless the context
otherwise requires: (i) all terms defined herein in the singular shall include the plural, as the context
requires, and vice-versa; (ii) the descriptive headings of the Articles and Sections of this
Agreement are inserted for convenience only and shall not be used in the construction of the
content of this Agreement; (iii) the term "or" is not exclusive; (iv) the term "including" (or any
form thereof) shall not be limiting or exclusive; and (v) all references to any of the Loan
Documents include any and all modifications, amendments or supplements thereto and any and all
renewals and extensions thereof.
ARTICLE II
TERMS OF THE LOAN
2.1 Amount of Loan. Subject to the terms and conditions of this Agreement and the
other Loan Documents, and in reliance upon the representations and warranties contained herein
and therein, the Lender agrees to make a $3,474,600 term loan to the Borrower (the "Loan") at
Closing.
2.2 Use of Proceeds. The proceeds of the Loan shall be used by the Borrower for
general working capital purposes.
2.3 Disbursement. Subject to the Borrower's satisfaction of all applicable conditions
precedent as set forth in this Agreement, the Loan will be made to the Borrower at Closing.
2.4 Note. To evidence the Loan, the Borrower will make, execute and deliver the Note
to the Lender at the Closing. Notwithstanding the principal amount stated on the face of the Note,
the actual principal amount due from the Borrower on account of the Note will be the sum of all
advances actually made pursuant to the Loan, less all principal payments actually received by the
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TERMS OF THE LOAN
2.1 Amount of Loan. Subject to the terms and conditions of this Agreement and the
other Loan Documents, and in reliance upon the representations and warranties contained herein
and therein, the Lender agrees to make a $3,474,600 term loan to the Borrower (the "Loan") at
Closing.
2.2 Use of Proceeds. The proceeds of the Loan shall be used by the Borrower for
general working capital purposes.
2.3 Disbursement. Subject to the Borrower's satisfaction of all applicable conditions
precedent as set forth in this Agreement, the Loan will be made to the Borrower at Closing.
2.4 Note. To evidence the Loan, the Borrower will make, execute and deliver the Note
to the Lender at the Closing. Notwithstanding the principal amount stated on the face of the Note,
the actual principal amount due from the Borrower on account of the Note will be the sum of all
advances actually made pursuant to the Loan, less all principal payments actually received by the
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Lender in collected funds. The advances made by the Lender and the principal payments received
from the Borrower under the Loan will be recorded by the Lender in its books and records, and
the unpaid principal balance so recorded will be considered presumptive evidence of the principal
amount owing on the Note, absent manifest error.
2.5 Interest.
2.5.1. Contract Rate. The unpaid principal amount from time to time outstanding
under the Note shall bear interest at a fixed rate equal to 6.00% per annum.
2.5.2. Post-Default Interest. Upon the occurrence of any Event of Default and
continuing thereafter until cured to the satisfaction of the Lender, the unpaid principal
amount outstanding under the Note will bear interest at the Default Rate.
2.5.3. Computation of Interest. Interest on the Note shall be computed on the basis
of a year consisting of 360 days and for the actual number of days elapsed.
2.6 Required Payments.
2.6.1. Semi-Annual Payments. The Note will be payable as to principal and
interest as follows:
Due Date Amount
June 30, 2020 $700,000
December 31, 2020 $700,000
June 30, 2021 $700,000
December 31, 2021 $470,000
June 30, 2022 $470,000
December 31, 2022 $434,000
2.6.2. Maturity. The entire unpaid principal balance of the Note (which the
Borrower acknowledges will be a balloon payment), together with all unpaid interest
accrued thereon, will be due and payable on December 31, 2022.
2.7 Optional Prepayment. At any time and from time to time, the Borrower may prepay
the outstanding principal balance of the Note, in whole or in part; provided, however, that any such
prepayment must be accompanied by payment of all unpaid interest accrued on the principal
amount being prepaid. Amounts prepaid on the Note may not be re-borrowed.
2.8 Making of Payments. All payments, including prepayments, of principal of, or
interest on, the Note shall be made to the Lender by wire transfer on or before 2:00 p.m. on the
date due, in immediately available funds. Whenever a payment is due on a day other than a
8
from the Borrower under the Loan will be recorded by the Lender in its books and records, and
the unpaid principal balance so recorded will be considered presumptive evidence of the principal
amount owing on the Note, absent manifest error.
2.5 Interest.
2.5.1. Contract Rate. The unpaid principal amount from time to time outstanding
under the Note shall bear interest at a fixed rate equal to 6.00% per annum.
2.5.2. Post-Default Interest. Upon the occurrence of any Event of Default and
continuing thereafter until cured to the satisfaction of the Lender, the unpaid principal
amount outstanding under the Note will bear interest at the Default Rate.
2.5.3. Computation of Interest. Interest on the Note shall be computed on the basis
of a year consisting of 360 days and for the actual number of days elapsed.
2.6 Required Payments.
2.6.1. Semi-Annual Payments. The Note will be payable as to principal and
interest as follows:
Due Date Amount
June 30, 2020 $700,000
December 31, 2020 $700,000
June 30, 2021 $700,000
December 31, 2021 $470,000
June 30, 2022 $470,000
December 31, 2022 $434,000
2.6.2. Maturity. The entire unpaid principal balance of the Note (which the
Borrower acknowledges will be a balloon payment), together with all unpaid interest
accrued thereon, will be due and payable on December 31, 2022.
2.7 Optional Prepayment. At any time and from time to time, the Borrower may prepay
the outstanding principal balance of the Note, in whole or in part; provided, however, that any such
prepayment must be accompanied by payment of all unpaid interest accrued on the principal
amount being prepaid. Amounts prepaid on the Note may not be re-borrowed.
2.8 Making of Payments. All payments, including prepayments, of principal of, or
interest on, the Note shall be made to the Lender by wire transfer on or before 2:00 p.m. on the
date due, in immediately available funds. Whenever a payment is due on a day other than a
8
Business Day, the due date shall be extended to the next succeeding Business Day and interest (if
any) shall accrue during such extension.
2.9 Maximum Lawful Interest Rate. It is not the intention of the Lender or the
Borrower to violate the laws of any applicable jurisdiction relating to usury or other restrictions
on the maximum lawful interest rate. The Loan Documents and all other agreements between the
Borrower and the Lender, whether now existing or hereafter arising and whether written or oral,
are hereby limited so that in no event shall the interest paid or agreed to be paid to the Lender for
the use, forbearance or detention of money loaned, or for the payment or performance of any
covenant or obligation contained herein or in any other Loan Document, exceed the maximum
amount permissible under applicable law. If from any such circumstances the Lender should ever
receive anything of value deemed interest under applicable law which would exceed interest at the
highest lawful rate, such excessive interest shall be applied to the reduction of the principal amount
owing hereunder, and not to the payment of interest, or if such excessive interest exceeds any
unpaid balance of principal, such excess shall be refunded to the Borrower. All sums paid or
agreed to be paid to the Lender for the use, forbearance or detention of monies advanced under the
Loan shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of the Indebtedness until payment in full so that the rate of interest on
account of the Indebtedness is uniform throughout the term thereof. This Section 2.9 shall control
every other provision of the Loan Documents and all other agreements between the Lender and
the Borrower.
2.10 Collateral. To secure the prompt payment of the Indebtedness and the performance
of all the covenants and agreements contained in this Agreement and the other Loan Documents,
the Borrower will grant and maintain in favor of the Lender a valid and perfected first priority lien
and security interest in and to the Collateral, subject only to Permitted Liens.
2.11 Collateral Documents. In order to provide the Lender with perfected liens, security
interests and assignments in, to and of the Collateral, the Borrower will execute and deliver the
following collateral documents (collectively, the "Collateral Documents") to the Lender (or cause
to be executed and delivered to the Lender), on or before the Closing Date, each in form and
substance satisfactory to the Lender:
(a) the Security Agreement; and
2.12 Late Fee. To the extent any principal and interest due under any Loan Document
is not paid within 15 calendar days of the due date therefore, and, to the extent that the following
described fee is deemed to constitute interest, subject to Section 2.9, in addition to any interest or
other fees and charges due hereunder or under the applicable Loan Document, the Borrower shall
pay a late fee equal to 5% of the amount of the payment that was to have been made. The Borrower
agrees that the charges set forth herein are reasonable compensation to Lender for the acceptance
and handling of such late payments.
9
any) shall accrue during such extension.
2.9 Maximum Lawful Interest Rate. It is not the intention of the Lender or the
Borrower to violate the laws of any applicable jurisdiction relating to usury or other restrictions
on the maximum lawful interest rate. The Loan Documents and all other agreements between the
Borrower and the Lender, whether now existing or hereafter arising and whether written or oral,
are hereby limited so that in no event shall the interest paid or agreed to be paid to the Lender for
the use, forbearance or detention of money loaned, or for the payment or performance of any
covenant or obligation contained herein or in any other Loan Document, exceed the maximum
amount permissible under applicable law. If from any such circumstances the Lender should ever
receive anything of value deemed interest under applicable law which would exceed interest at the
highest lawful rate, such excessive interest shall be applied to the reduction of the principal amount
owing hereunder, and not to the payment of interest, or if such excessive interest exceeds any
unpaid balance of principal, such excess shall be refunded to the Borrower. All sums paid or
agreed to be paid to the Lender for the use, forbearance or detention of monies advanced under the
Loan shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of the Indebtedness until payment in full so that the rate of interest on
account of the Indebtedness is uniform throughout the term thereof. This Section 2.9 shall control
every other provision of the Loan Documents and all other agreements between the Lender and
the Borrower.
2.10 Collateral. To secure the prompt payment of the Indebtedness and the performance
of all the covenants and agreements contained in this Agreement and the other Loan Documents,
the Borrower will grant and maintain in favor of the Lender a valid and perfected first priority lien
and security interest in and to the Collateral, subject only to Permitted Liens.
2.11 Collateral Documents. In order to provide the Lender with perfected liens, security
interests and assignments in, to and of the Collateral, the Borrower will execute and deliver the
following collateral documents (collectively, the "Collateral Documents") to the Lender (or cause
to be executed and delivered to the Lender), on or before the Closing Date, each in form and
substance satisfactory to the Lender:
(a) the Security Agreement; and
| (b) 2.14.4). |
the Leveling 8 Mortgage Assignments (as defined in Section |
is not paid within 15 calendar days of the due date therefore, and, to the extent that the following
described fee is deemed to constitute interest, subject to Section 2.9, in addition to any interest or
other fees and charges due hereunder or under the applicable Loan Document, the Borrower shall
pay a late fee equal to 5% of the amount of the payment that was to have been made. The Borrower
agrees that the charges set forth herein are reasonable compensation to Lender for the acceptance
and handling of such late payments.
9
2.13 Additional Documentation. The Borrower, at its expense, will promptly and
diligently take all action necessary to maintain and preserve the security interests and mortgage
liens granted in the Collateral and either will cause to be timely filed, together with the payment
of all necessary filing fees and taxes, such UCC financing and continuation statements in such
offices of public record, or will cause to be promptly delivered to the Lender such statements,
instruments, assignments, documents or papers, as may be necessary, to keep the security interest
granted to the Lender continuously perfected in the Collateral.
2.14 Leveling 8 Mortgage and Leveling 8 Note.
2.14.1. The Leveling 8 Obligations shall be postponed and subordinated in right of
payment, lien and enforcement to the prior payment in full, of all amounts included in or
payable under the Indebtedness. Until such time as the Indebtedness has been irrevocably
repaid in full, no payments shall be made by or on behalf of Leveling 8 or accepted by the
Borrower upon or in respect of any Leveling 8 Obligations (whether for principal, interest
or otherwise), unless such payment is specifically authorized to be made by the terms of
Section 2.14.2.
2.14.2. Notwithstanding the provisions of subsection 2.14.1 above, the following
payments may be made by Leveling 8 and accepted by the Borrower as long as, in each
instance, no Default or Event of Default has occurred and is continuing at the time any
such payment is proposed to be made:
(1) Payments of semiannual interest accrued on the Leveling 8 Note at the rate
of interest stated in the Leveling 8 Note; and
(2) Payments of semiannual principal on the Leveling 8 Note as scheduled in
the Leveling 8 Note.
In the event that, notwithstanding the foregoing, any payment shall be received by the
Borrower contrary to the provisions of this Section 2.14.2, such payment shall be held by
the Borrower in trust for the benefit of the Lender and shall immediately be paid over or
delivered to the Lender.
The Borrower shall direct Leveling 8 to make each semiannual payment required by
Section 2.6.1 directly to the Lender, and the Borrower agrees that the amount of each
semiannual payment required to be paid by Leveling 8 to the Borrower under the Leveling
8 Note shall be reduced by the amount of each direct payment made by Leveling 8 to the
Lender pursuant to this sentence. The Lender shall apply such funds upon receipt to the
amounts owed under Section 2.6.1.
2.14.3. Until such time as the Indebtedness has been irrevocably repaid in full, the
Borrower agrees to not accelerate the Leveling 8 Note or foreclose or enforce the Leveling
8 Mortgage. In the event that, notwithstanding the foregoing provisions, any proceeds or
distribution of assets or securities of Leveling 8, of any kind or character, whether in cash,
property or securities, shall be received by the Borrower before the Indebtedness has been
paid in full, such proceeds or distribution shall be received and held in trust for the benefit
10
diligently take all action necessary to maintain and preserve the security interests and mortgage
liens granted in the Collateral and either will cause to be timely filed, together with the payment
of all necessary filing fees and taxes, such UCC financing and continuation statements in such
offices of public record, or will cause to be promptly delivered to the Lender such statements,
instruments, assignments, documents or papers, as may be necessary, to keep the security interest
granted to the Lender continuously perfected in the Collateral.
2.14 Leveling 8 Mortgage and Leveling 8 Note.
2.14.1. The Leveling 8 Obligations shall be postponed and subordinated in right of
payment, lien and enforcement to the prior payment in full, of all amounts included in or
payable under the Indebtedness. Until such time as the Indebtedness has been irrevocably
repaid in full, no payments shall be made by or on behalf of Leveling 8 or accepted by the
Borrower upon or in respect of any Leveling 8 Obligations (whether for principal, interest
or otherwise), unless such payment is specifically authorized to be made by the terms of
Section 2.14.2.
2.14.2. Notwithstanding the provisions of subsection 2.14.1 above, the following
payments may be made by Leveling 8 and accepted by the Borrower as long as, in each
instance, no Default or Event of Default has occurred and is continuing at the time any
such payment is proposed to be made:
(1) Payments of semiannual interest accrued on the Leveling 8 Note at the rate
of interest stated in the Leveling 8 Note; and
(2) Payments of semiannual principal on the Leveling 8 Note as scheduled in
the Leveling 8 Note.
In the event that, notwithstanding the foregoing, any payment shall be received by the
Borrower contrary to the provisions of this Section 2.14.2, such payment shall be held by
the Borrower in trust for the benefit of the Lender and shall immediately be paid over or
delivered to the Lender.
The Borrower shall direct Leveling 8 to make each semiannual payment required by
Section 2.6.1 directly to the Lender, and the Borrower agrees that the amount of each
semiannual payment required to be paid by Leveling 8 to the Borrower under the Leveling
8 Note shall be reduced by the amount of each direct payment made by Leveling 8 to the
Lender pursuant to this sentence. The Lender shall apply such funds upon receipt to the
amounts owed under Section 2.6.1.
2.14.3. Until such time as the Indebtedness has been irrevocably repaid in full, the
Borrower agrees to not accelerate the Leveling 8 Note or foreclose or enforce the Leveling
8 Mortgage. In the event that, notwithstanding the foregoing provisions, any proceeds or
distribution of assets or securities of Leveling 8, of any kind or character, whether in cash,
property or securities, shall be received by the Borrower before the Indebtedness has been
paid in full, such proceeds or distribution shall be received and held in trust for the benefit
10
of the Lender and shall immediately be paid over or delivered to the Lender for application
to the payment of the Indebtedness remaining unpaid until all such Indebtedness has been
paid in full, after giving effect to any concurrent payment, distribution or provision therefor
to or for the Lender.
2.14.4. The Borrower shall execute and deliver to the Lender assignments to the
Lender of the Leveling 8 Mortgages at Closing (the "Leveling 8 Mortgage Assignments").
The Lender agrees that it will not file the Leveling 8 Mortgage Assignments in the real
to the payment of the Indebtedness remaining unpaid until all such Indebtedness has been
paid in full, after giving effect to any concurrent payment, distribution or provision therefor
to or for the Lender.
2.14.4. The Borrower shall execute and deliver to the Lender assignments to the
Lender of the Leveling 8 Mortgages at Closing (the "Leveling 8 Mortgage Assignments").
The Lender agrees that it will not file the Leveling 8 Mortgage Assignments in the real
property records unless and until the occurrence of an Event of Default.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In addition to all other representations and warranties in this Agreement, the Borrower
represents and warrants to the Lender as follows:
3.1 Existence; Compliance with Law. The Borrower (i) is duly organized or formed, as
applicable, validly existing and (if relevant) in good standing under the laws of the jurisdiction of
its incorporation, (ii) has the corporate power and authority and the legal right, to own and operate
its property and assets, to lease the property and assets it leases and causes to be operated by lessee,
and to conduct the business in which it is currently engaged under the Governmental Requirements
of each jurisdiction in which it owns, leases and/or operates its property or assets, (iii) (if relevant)
is duly qualified as a foreign corporation and is in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or assets or the conduct of its business requires
such qualification, (iv) is in material compliance with its applicable Charter Documents, and (v)
is in compliance with all Governmental Requirements, except to the extent that the failure to
comply therewith could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
3.2 Entity Power; Authorization; Enforceable Obligations. The Borrower has the
power and authority, and the legal right, to make, deliver and perform the Loan Documents and to
borrow hereunder, and has taken all necessary corporate or other action to authorize the execution,
delivery and performance of the Loan Documents and to authorize the borrowings on the terms
and conditions of this Agreement and the other Loan Documents. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other Loan Documents,
except consents, authorizations, filings and notices which have been obtained or made and are in
full force and effect. Each Loan Document has been duly executed and delivered on behalf of the
Borrower. This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (whether enforcement is sought by proceedings
in equity or at law).
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REPRESENTATIONS AND WARRANTIES
In addition to all other representations and warranties in this Agreement, the Borrower
represents and warrants to the Lender as follows:
3.1 Existence; Compliance with Law. The Borrower (i) is duly organized or formed, as
applicable, validly existing and (if relevant) in good standing under the laws of the jurisdiction of
its incorporation, (ii) has the corporate power and authority and the legal right, to own and operate
its property and assets, to lease the property and assets it leases and causes to be operated by lessee,
and to conduct the business in which it is currently engaged under the Governmental Requirements
of each jurisdiction in which it owns, leases and/or operates its property or assets, (iii) (if relevant)
is duly qualified as a foreign corporation and is in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or assets or the conduct of its business requires
such qualification, (iv) is in material compliance with its applicable Charter Documents, and (v)
is in compliance with all Governmental Requirements, except to the extent that the failure to
comply therewith could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
3.2 Entity Power; Authorization; Enforceable Obligations. The Borrower has the
power and authority, and the legal right, to make, deliver and perform the Loan Documents and to
borrow hereunder, and has taken all necessary corporate or other action to authorize the execution,
delivery and performance of the Loan Documents and to authorize the borrowings on the terms
and conditions of this Agreement and the other Loan Documents. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental Authority or any other
Person is required in connection with the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other Loan Documents,
except consents, authorizations, filings and notices which have been obtained or made and are in
full force and effect. Each Loan Document has been duly executed and delivered on behalf of the
Borrower. This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (whether enforcement is sought by proceedings
in equity or at law).
11
3.3 No Legal Bar. The execution, delivery and performance of this Agreement, the
other Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not
violate any Governmental Requirement or any contractual or other obligation of the Borrower and
will not result in, or require, the creation or imposition of any Lien on the Borrower’s assets,
properties or revenues pursuant to any Governmental Requirement or any such contractual or other
obligation (other than the Liens created by the Loan Documents). No Governmental Requirement
or contractual or other obligation applicable to the Borrower or the Borrower’s properties or assets
could reasonably be expected to have a Material Adverse Effect. No performance of a contractual
or other obligation by the Borrower, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Permitted Lien) on the property, assets or
revenues of the Borrower.
3.4 Licenses, Permits, Etc. The Borrower possesses all licenses, permits, consents,
approvals, franchises and intellectual property (or otherwise possesses the right to use such
intellectual property without violation of the rights of any other Person) which are necessary for
the Borrower to own its assets and properties, except for those licenses, permits, consents,
approvals, franchises and intellectual property the failure of which to possess could not reasonably
be expected to have a Material Adverse Effect. The Borrower is not in violation in any material
respect of the terms under which it possesses any licenses, permits, consents, approvals, franchises
and intellectual property owned by the Borrower or the right to use such licenses, permits,
consents, approvals, franchises and intellectual property.
3.5 Compliance. No consent or approval of any Governmental Authority or any other
Person is required as a condition to the validity or performance of any Loan Document, and the
Borrower is in compliance with all Governmental Requirements to which the Borrower is subject.
3.6 Contractual Default. The Borrower is not in default under or with respect to any of
its contractual obligations in any respect that could reasonably be expected to have a Material
Adverse Effect.
3.7 Litigation. There is no litigation, investigation or proceeding of or before any
arbitrator, mediator or any Governmental Authority or, to the Borrower’s knowledge, threatened
by or against the Borrower or against any of the Borrower’s assets, properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated hereby, or (b) that
could reasonably be expected to have a Material Adverse Effect.
3.8 No Conflicting Agreements. There is no provision of any existing agreement,
mortgage, indenture, instrument, document or contract binding on the Borrower or affecting any
property or asset of the Borrower, which would conflict with or in any way prevent the execution,
delivery or carrying out of the terms of this Agreement and the other Loan Documents.
3.9 Insurance. All policies of insurance of any kind or nature of the Borrower,
including policies of fire, theft, product liability, public liability, property damage, other casualty,
employee fidelity, workers’ compensation and employee health and welfare insurance, if and as
applicable, are in full force and effect as of the date of this Agreement and are of a nature and
provide such coverage as is customarily carried by businesses of the size and character of the
12
other Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not
violate any Governmental Requirement or any contractual or other obligation of the Borrower and
will not result in, or require, the creation or imposition of any Lien on the Borrower’s assets,
properties or revenues pursuant to any Governmental Requirement or any such contractual or other
obligation (other than the Liens created by the Loan Documents). No Governmental Requirement
or contractual or other obligation applicable to the Borrower or the Borrower’s properties or assets
could reasonably be expected to have a Material Adverse Effect. No performance of a contractual
or other obligation by the Borrower, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Permitted Lien) on the property, assets or
revenues of the Borrower.
3.4 Licenses, Permits, Etc. The Borrower possesses all licenses, permits, consents,
approvals, franchises and intellectual property (or otherwise possesses the right to use such
intellectual property without violation of the rights of any other Person) which are necessary for
the Borrower to own its assets and properties, except for those licenses, permits, consents,
approvals, franchises and intellectual property the failure of which to possess could not reasonably
be expected to have a Material Adverse Effect. The Borrower is not in violation in any material
respect of the terms under which it possesses any licenses, permits, consents, approvals, franchises
and intellectual property owned by the Borrower or the right to use such licenses, permits,
consents, approvals, franchises and intellectual property.
3.5 Compliance. No consent or approval of any Governmental Authority or any other
Person is required as a condition to the validity or performance of any Loan Document, and the
Borrower is in compliance with all Governmental Requirements to which the Borrower is subject.
3.6 Contractual Default. The Borrower is not in default under or with respect to any of
its contractual obligations in any respect that could reasonably be expected to have a Material
Adverse Effect.
3.7 Litigation. There is no litigation, investigation or proceeding of or before any
arbitrator, mediator or any Governmental Authority or, to the Borrower’s knowledge, threatened
by or against the Borrower or against any of the Borrower’s assets, properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated hereby, or (b) that
could reasonably be expected to have a Material Adverse Effect.
3.8 No Conflicting Agreements. There is no provision of any existing agreement,
mortgage, indenture, instrument, document or contract binding on the Borrower or affecting any
property or asset of the Borrower, which would conflict with or in any way prevent the execution,
delivery or carrying out of the terms of this Agreement and the other Loan Documents.
3.9 Insurance. All policies of insurance of any kind or nature of the Borrower,
including policies of fire, theft, product liability, public liability, property damage, other casualty,
employee fidelity, workers’ compensation and employee health and welfare insurance, if and as
applicable, are in full force and effect as of the date of this Agreement and are of a nature and
provide such coverage as is customarily carried by businesses of the size and character of the
12
Borrower. The Borrower has not been refused insurance for any material coverage for which it has
applied or has had any policy of insurance terminated (other than at the Borrower’s request).
3.10 Taxes. The Borrower has timely filed (or caused to be timely filed) all federal, state
and other tax returns, reports and statements (collectively, “Tax Returns”) that are required to be
filed by the Borrower with the appropriate Governmental Authorities in all jurisdictions in which
such Tax Returns are required to be filed; all such Tax Returns are true and correct in all material
respects; the Borrower has timely paid, prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof, all taxes shown to be due and payable
on said Tax Returns or on any assessments made against the Borrower or any of the Borrower’s
properties or assets, and all other taxes, fees or other charges imposed on the Borrower or any of
the Borrower’s properties or assets by or otherwise due and payable to any Governmental
Authority (other than any for which the amount or validity of which are currently being contested
in good faith by appropriate proceedings); and no tax Lien has been filed against the property or
assets of the Borrower, and, to the Borrower’s knowledge, no claim is being asserted, with respect
to any such tax, fee or other charge. No Tax Return is under audit or examination by any
Governmental Authority and no notice of such an audit or examination or any assertion of any
claim for taxes has been given or made by any Governmental Authority. Proper and accurate
amounts have been withheld by the Borrower (if and to the extent any such withholdings are so
required) for all periods in full and complete compliance with the tax, social security, health care
and unemployment withholding provisions of applicable Governmental Requirements, and such
withholdings (if any) have been timely paid to the respective Governmental Authorities. The
Borrower (i) does not intend to treat the Loan or any other transaction contemplated hereby as
being a “reportable transaction” (within the meaning of Treasury Regulation 1.6011-4), and (ii) is
not aware of any facts or events that would result in such treatment.
3.11 No Default. No Default or Event of Default has occurred and is continuing.
3.12 Adverse Circumstances. Neither the business nor any property or asset of the
Borrower is presently affected by any fire, explosion, accident, strike, lockout, or other dispute,
embargo, act of God, act of public enemy or terrorism, or similar event or circumstance, nor has
any other event or circumstance relating to the Borrower's business, affairs, properties or assets
occurred, any of which could have a Material Adverse Effect.
3.13 Accuracy of Information. To the Borrower's knowledge, after due inquiry, all
factual information furnished to Lender in connection with this Agreement and the other Loan
Documents is and will be true, accurate and complete in all material respects on the date as of
which such information is delivered to Lender and is not and will not be incomplete by the
omission of any material fact necessary to make such information not misleading, provided that,
with respect to projected financial information, the Borrower only represents that such information
was prepared in good faith based upon assumptions believed to be reasonable at the time.
3.14 Environmental. To the Borrower’s knowledge, after due inquiry, the conduct of
the Borrower's business operations and the condition of the Borrower's properties or assets owned,
operated or managed by the Borrower does not, and the condition of the Borrower's properties or
assets which are operated or managed by others does not, violate any Environmental Law or any
other Governmental Requirement relating primarily to the environment, Hazardous Materials, or
13
applied or has had any policy of insurance terminated (other than at the Borrower’s request).
3.10 Taxes. The Borrower has timely filed (or caused to be timely filed) all federal, state
and other tax returns, reports and statements (collectively, “Tax Returns”) that are required to be
filed by the Borrower with the appropriate Governmental Authorities in all jurisdictions in which
such Tax Returns are required to be filed; all such Tax Returns are true and correct in all material
respects; the Borrower has timely paid, prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof, all taxes shown to be due and payable
on said Tax Returns or on any assessments made against the Borrower or any of the Borrower’s
properties or assets, and all other taxes, fees or other charges imposed on the Borrower or any of
the Borrower’s properties or assets by or otherwise due and payable to any Governmental
Authority (other than any for which the amount or validity of which are currently being contested
in good faith by appropriate proceedings); and no tax Lien has been filed against the property or
assets of the Borrower, and, to the Borrower’s knowledge, no claim is being asserted, with respect
to any such tax, fee or other charge. No Tax Return is under audit or examination by any
Governmental Authority and no notice of such an audit or examination or any assertion of any
claim for taxes has been given or made by any Governmental Authority. Proper and accurate
amounts have been withheld by the Borrower (if and to the extent any such withholdings are so
required) for all periods in full and complete compliance with the tax, social security, health care
and unemployment withholding provisions of applicable Governmental Requirements, and such
withholdings (if any) have been timely paid to the respective Governmental Authorities. The
Borrower (i) does not intend to treat the Loan or any other transaction contemplated hereby as
being a “reportable transaction” (within the meaning of Treasury Regulation 1.6011-4), and (ii) is
not aware of any facts or events that would result in such treatment.
3.11 No Default. No Default or Event of Default has occurred and is continuing.
3.12 Adverse Circumstances. Neither the business nor any property or asset of the
Borrower is presently affected by any fire, explosion, accident, strike, lockout, or other dispute,
embargo, act of God, act of public enemy or terrorism, or similar event or circumstance, nor has
any other event or circumstance relating to the Borrower's business, affairs, properties or assets
occurred, any of which could have a Material Adverse Effect.
3.13 Accuracy of Information. To the Borrower's knowledge, after due inquiry, all
factual information furnished to Lender in connection with this Agreement and the other Loan
Documents is and will be true, accurate and complete in all material respects on the date as of
which such information is delivered to Lender and is not and will not be incomplete by the
omission of any material fact necessary to make such information not misleading, provided that,
with respect to projected financial information, the Borrower only represents that such information
was prepared in good faith based upon assumptions believed to be reasonable at the time.
3.14 Environmental. To the Borrower’s knowledge, after due inquiry, the conduct of
the Borrower's business operations and the condition of the Borrower's properties or assets owned,
operated or managed by the Borrower does not, and the condition of the Borrower's properties or
assets which are operated or managed by others does not, violate any Environmental Law or any
other Governmental Requirement relating primarily to the environment, Hazardous Materials, or
13
health and safety. The Borrower has not received notice of, nor are there presently existing, any
judicial, administrative, arbitral or other proceeding (including any notice of violation or alleged
violation) under or relating to any Environmental Law or any environmental permit to which the
Borrower is, or to the Borrower’s knowledge, will be, named as a party that is pending or, to the
Borrower’s knowledge, threatened. The Borrower has not received any written request for
information, or been notified that the Borrower is a potentially responsible party under or relating
to any Environmental Law, or with respect to any Hazardous Materials or matters of environmental
concern. The Borrower has not entered into or agreed to any consent decree, order, or settlement
or other agreement or undertaking, and the Borrower is not subject to any judgment, decree, or
order or other agreement, in any judicial, administrative, arbitral or other forum for dispute
resolution, relating to compliance with or liability under any Environmental Law or any other
Governmental Requirement relating primarily to the environment or Hazardous Materials. The
Borrower has not assumed or retained, by contract, operation of law or otherwise, any liabilities
of any kind, fixed or contingent, known or unknown, under any Environmental Law or with respect
to any Hazardous Materials or matters of environmental concern.
3.15 Compliance With Laws. The Borrower is presently in compliance in all material
respects with all applicable Governmental Requirements to which the Borrower, or any of the
Borrower's assets or properties, is subject (except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect), provided that this warranty is made to
the Borrower's knowledge with respect to the Borrower's assets or properties which are operated
or managed by other Persons.
3.16 Solvency; Compliance with Financial Covenants. The Borrower is, and after giving
effect to the incurrence of all Indebtedness being incurred in connection herewith will be and will
continue to be, Solvent.
3.17 Margin Regulations; Investment Company Act.
3.17.1. No part of the proceeds of any Loan will be used for buying or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms under
Regulation U (as defined within the applicable Governmental Requirements promulgated
by the applicable Governmental Authorities from time to time) as now and from time to
time hereafter in effect or for any purpose that violates the provisions of any Governmental
Authority. If requested by Lender, the Borrower will furnish to Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
3.17.2. The Borrower is not an “investment company”, or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to regulation under any Governmental
Requirement which limits its ability to incur Indebtedness, other than Regulation X (as
defined within the applicable Governmental Requirements promulgated by the applicable
Governmental Authorities from time to time).
3.17.3. The Borrower and each of its respective Affiliates are in compliance, in all
material respects, with the Patriot Act. None of the proceeds of the Loan will be used,
14
judicial, administrative, arbitral or other proceeding (including any notice of violation or alleged
violation) under or relating to any Environmental Law or any environmental permit to which the
Borrower is, or to the Borrower’s knowledge, will be, named as a party that is pending or, to the
Borrower’s knowledge, threatened. The Borrower has not received any written request for
information, or been notified that the Borrower is a potentially responsible party under or relating
to any Environmental Law, or with respect to any Hazardous Materials or matters of environmental
concern. The Borrower has not entered into or agreed to any consent decree, order, or settlement
or other agreement or undertaking, and the Borrower is not subject to any judgment, decree, or
order or other agreement, in any judicial, administrative, arbitral or other forum for dispute
resolution, relating to compliance with or liability under any Environmental Law or any other
Governmental Requirement relating primarily to the environment or Hazardous Materials. The
Borrower has not assumed or retained, by contract, operation of law or otherwise, any liabilities
of any kind, fixed or contingent, known or unknown, under any Environmental Law or with respect
to any Hazardous Materials or matters of environmental concern.
3.15 Compliance With Laws. The Borrower is presently in compliance in all material
respects with all applicable Governmental Requirements to which the Borrower, or any of the
Borrower's assets or properties, is subject (except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect), provided that this warranty is made to
the Borrower's knowledge with respect to the Borrower's assets or properties which are operated
or managed by other Persons.
3.16 Solvency; Compliance with Financial Covenants. The Borrower is, and after giving
effect to the incurrence of all Indebtedness being incurred in connection herewith will be and will
continue to be, Solvent.
3.17 Margin Regulations; Investment Company Act.
3.17.1. No part of the proceeds of any Loan will be used for buying or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms under
Regulation U (as defined within the applicable Governmental Requirements promulgated
by the applicable Governmental Authorities from time to time) as now and from time to
time hereafter in effect or for any purpose that violates the provisions of any Governmental
Authority. If requested by Lender, the Borrower will furnish to Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
3.17.2. The Borrower is not an “investment company”, or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to regulation under any Governmental
Requirement which limits its ability to incur Indebtedness, other than Regulation X (as
defined within the applicable Governmental Requirements promulgated by the applicable
Governmental Authorities from time to time).
3.17.3. The Borrower and each of its respective Affiliates are in compliance, in all
material respects, with the Patriot Act. None of the proceeds of the Loan will be used,
14
directly or indirectly, (a) for the purpose of making any payments to any governmental
official or employee, political party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, or otherwise in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person, in any instance in violation of any Anti-Corruption Laws, (b)
for the purpose of funding, financing or facilitating any activities, business or transaction
of or with any Sanctioned Person or in any Sanctioned Country, or (c) in any manner that
would result in the violation of any Sanctions applicable to the Borrower. Neither the
Borrower, nor any Affiliate of the Borrower: (a) is a Sanctioned Person; (b) owns assets in
a Sanctioned Person; or (c) derives any of its operating income from investments in, or
transactions with Sanctioned Persons.
3.18 Financial Condition. The Borrower does not have any Guarantee Obligations,
unusual or long-term commitments, or other liabilities as of the date of this Agreement.
3.19 ERISA. The Borrower does not maintain any employee pension or other defined
benefit plan or trust for the benefit of its employees which is subject to Title IV of ERISA.
3.20 Continuation of Representations and Warranties. All representations and
warranties made under this Agreement shall be deemed to be made at and as of the date of Closing
and each date of funding of a Loan, and in all instances shall be true and correct in all material
respects and not misleading.
official or employee, political party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, or otherwise in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person, in any instance in violation of any Anti-Corruption Laws, (b)
for the purpose of funding, financing or facilitating any activities, business or transaction
of or with any Sanctioned Person or in any Sanctioned Country, or (c) in any manner that
would result in the violation of any Sanctions applicable to the Borrower. Neither the
Borrower, nor any Affiliate of the Borrower: (a) is a Sanctioned Person; (b) owns assets in
a Sanctioned Person; or (c) derives any of its operating income from investments in, or
transactions with Sanctioned Persons.
3.18 Financial Condition. The Borrower does not have any Guarantee Obligations,
unusual or long-term commitments, or other liabilities as of the date of this Agreement.
3.19 ERISA. The Borrower does not maintain any employee pension or other defined
benefit plan or trust for the benefit of its employees which is subject to Title IV of ERISA.
3.20 Continuation of Representations and Warranties. All representations and
warranties made under this Agreement shall be deemed to be made at and as of the date of Closing
and each date of funding of a Loan, and in all instances shall be true and correct in all material
respects and not misleading.
ARTICLE IV
AFFIRMATIVE COVENANTS
Until the Indebtedness has been paid and satisfied in full, and unless Lender shall otherwise
consent in writing, the Borrower agrees to perform or cause to be performed the following:
4.1 Financial Statements.
4.1.1. Annual Borrower Statements. Within 90 days after the close of each fiscal
year, the Borrower will furnish to the Lender a copy of the Borrower’s audited annual
financial statements for such fiscal year, containing at least a balance sheet as of the close
of such fiscal year and statement of income for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP.
4.1.2. Quarterly Borrower Statements. Within 45 days after the close of each
quarter of each fiscal year (except with respect to the fourth quarter of each fiscal year),
the Borrower will furnish to the Lender copies of the Borrower's unaudited company
prepared quarterly financial statements, each prepared in the same manner as the financial
statements referred to in Section 4.1.1, and containing at least a balance sheet as of the
close of such quarter and statement of income for such quarter and for the period from the
beginning of such fiscal year to the close of such quarter.
4.1.3. Compliance Certificates. Each set of annual or quarterly financial
statements furnished by the Borrower to the Lender pursuant to Sections 4.1.1 and 4.1.2
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AFFIRMATIVE COVENANTS
Until the Indebtedness has been paid and satisfied in full, and unless Lender shall otherwise
consent in writing, the Borrower agrees to perform or cause to be performed the following:
4.1 Financial Statements.
4.1.1. Annual Borrower Statements. Within 90 days after the close of each fiscal
year, the Borrower will furnish to the Lender a copy of the Borrower’s audited annual
financial statements for such fiscal year, containing at least a balance sheet as of the close
of such fiscal year and statement of income for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP.
4.1.2. Quarterly Borrower Statements. Within 45 days after the close of each
quarter of each fiscal year (except with respect to the fourth quarter of each fiscal year),
the Borrower will furnish to the Lender copies of the Borrower's unaudited company
prepared quarterly financial statements, each prepared in the same manner as the financial
statements referred to in Section 4.1.1, and containing at least a balance sheet as of the
close of such quarter and statement of income for such quarter and for the period from the
beginning of such fiscal year to the close of such quarter.
4.1.3. Compliance Certificates. Each set of annual or quarterly financial
statements furnished by the Borrower to the Lender pursuant to Sections 4.1.1 and 4.1.2
15
shall be accompanied by a completed Compliance Certificate, signed by the chief executive
officer or chief financial officer of the Borrower, (i) stating that such officer, after due
inquiry, has no knowledge of the occurrence of a Default or an Event of Default and that,
to the knowledge of such officer, after due inquiry, the Borrower have complied with the
terms of the Loan Documents to which each is a party in all material respects, or, in the
event such officer has knowledge of a Default or an Event of Default or that any of the
terms of the Loan Documents has not been complied with in all material respects, the nature
of such Default or Event of Default or non-compliance will be specified in such
Compliance Certificate together with any steps being taken by the Borrower to correct such
Default or Event of Default or non-compliance, and (ii) demonstrating the Borrower's
compliance with the financial covenant set forth in Article VI.
4.2 Notifications.
4.2.1. Litigation. The Borrower will promptly furnish the Lender with notice of
any litigation involving the Borrower where the amount sued for or the value of the
Property involved (after taking into account any amount which is fully covered by
insurance) is in excess of $200,000, or which, if the outcome were adverse to the Borrower,
could reasonably be expected to materially adversely affect the financial condition,
business or operations of the Borrower.
4.2.2. Liens. The Borrower will notify the Lender of the existence or asserted
existence of any Liens (other than Permitted Liens) on any Properties of the Borrower,
promptly upon the Borrower's obtaining knowledge thereof.
4.2.3. Default. The Borrower will notify the Lender as soon as practicable, but in
any event within ten (10) days after the Borrower knows or has reason to know that any of
the following has occurred: (i) any Default or Event of Default, or (ii) any material change
in the accounting practices and procedures of the Borrower, including a change in the fiscal
year of the Borrower.
4.3 Accounting Procedures. The Borrower will maintain adequate and accurate books
and records of account in accordance with GAAP. The Lender will, upon reasonable request, have
the right to examine and copy the books and records of the Borrower and to meet with the Borrower
to discuss its business affairs, finances and accounts.
4.4 Permits. The Borrower will obtain and maintain in effect all Permits which are (i)
material to its business, Properties, operations or condition, financial or otherwise, and/or (ii)
necessary for it to carry on its business as contemplated to be conducted.
4.5 Existence. The Borrower will maintain its existence as a corporation and will
remain in good standing under the laws of the State of Oklahoma.
4.6 Maintenance of Properties. The Borrower will maintain (or cause to be maintained)
all of its Properties in good and workable condition, repair and appearance and will protect the
same from deterioration, other than normal wear and tear, at all times.
16
4.7 Compliance with Laws. The Borrower will comply in all material respects with all
Laws to which it is subject or by which its Properties are bound or affected, including all Laws
pertaining to its business and operations, except to the extent that any of the foregoing are being
diligently contested in good faith by appropriate legal proceedings and against which there are
established reserves in accordance with sound business practices and GAAP.
4.8 Taxes; Other Liens. The Borrower will pay (or cause to be paid) prior to
delinquency all taxes, assessments, governmental charges or levies, and all claims for labor,
materials, supplies, rent and other obligations which, if unpaid, might become a Lien against any
of its Property, excluding only liabilities being diligently contested in good faith by appropriate
legal proceedings and against which there are established reserves in accordance with sound
business practices and GAAP.
4.9 Further Assurances. The Borrower will, from time to time, promptly cure any
defects or omissions in the execution and delivery of this Agreement or any of the other Loan
Documents signed pursuant to this Agreement, including the execution and delivery of additional
documents reasonably requested by the Lender in order to carry out and give effect to the
provisions of this Agreement and the other Loan Documents.
4.10 Performance of Obligations. The Borrower (i) will pay the Note according to the
reading, tenor and effect thereof, and (ii) will do and perform every act and discharge all of the
obligations provided to be performed and discharged under this Agreement and all other Loan
Documents to which it is a party at the time or times and in the manner therein specified.
4.11 Maintenance of Insurance.
4.11.1. Required Insurance. The Borrower will maintain, or cause to be maintained
in full force and effect (i) casualty insurance on all real and personal property on an allrisks basis (including the perils of flood and quake) covering the lesser of the amount of
the Loan or the repair and replacement cost of all such Property, (ii) insurance coverage
for public liability insurance in amounts and with deductibles acceptable to the Lender, and
(iii) such other insurance coverage in such amounts and with respect to such risks as the
Lender may reasonably request. All such insurance shall be provided by financially sound
and reputable insurance companies not Affiliates of the Borrower and having a minimum
A.M. Best rating of A, size category VII. On or prior to the Closing Date, and at all times
thereafter, the Borrower will cause the Lender to be named as an additional insured,
assignee and loss payee (which shall include, as applicable, identification as mortgagee),
as applicable, on each insurance policy required to be maintained pursuant to this Section
4.11.1 pursuant to endorsements in form and content acceptable to the Lender. The
Borrower will deliver to the Lender (i) on or before the Closing Date, a certificate from the
Borrower’s insurance broker dated such date showing the amount of coverage as of such
date, and that such policies will include effective waivers (whether under the terms of any
such policy or otherwise) by the insurer of all claims for insurance premiums against all
loss payees and additional insureds and all rights of subrogation against all loss payees and
additional insureds, and that if all or any part of such policy is canceled, terminated or
expires, the insurer will forthwith give notice thereof to each additional insured, assignee
and loss payee and that no cancellation, reduction in amount or material change in coverage
17
Laws to which it is subject or by which its Properties are bound or affected, including all Laws
pertaining to its business and operations, except to the extent that any of the foregoing are being
diligently contested in good faith by appropriate legal proceedings and against which there are
established reserves in accordance with sound business practices and GAAP.
4.8 Taxes; Other Liens. The Borrower will pay (or cause to be paid) prior to
delinquency all taxes, assessments, governmental charges or levies, and all claims for labor,
materials, supplies, rent and other obligations which, if unpaid, might become a Lien against any
of its Property, excluding only liabilities being diligently contested in good faith by appropriate
legal proceedings and against which there are established reserves in accordance with sound
business practices and GAAP.
4.9 Further Assurances. The Borrower will, from time to time, promptly cure any
defects or omissions in the execution and delivery of this Agreement or any of the other Loan
Documents signed pursuant to this Agreement, including the execution and delivery of additional
documents reasonably requested by the Lender in order to carry out and give effect to the
provisions of this Agreement and the other Loan Documents.
4.10 Performance of Obligations. The Borrower (i) will pay the Note according to the
reading, tenor and effect thereof, and (ii) will do and perform every act and discharge all of the
obligations provided to be performed and discharged under this Agreement and all other Loan
Documents to which it is a party at the time or times and in the manner therein specified.
4.11 Maintenance of Insurance.
4.11.1. Required Insurance. The Borrower will maintain, or cause to be maintained
in full force and effect (i) casualty insurance on all real and personal property on an allrisks basis (including the perils of flood and quake) covering the lesser of the amount of
the Loan or the repair and replacement cost of all such Property, (ii) insurance coverage
for public liability insurance in amounts and with deductibles acceptable to the Lender, and
(iii) such other insurance coverage in such amounts and with respect to such risks as the
Lender may reasonably request. All such insurance shall be provided by financially sound
and reputable insurance companies not Affiliates of the Borrower and having a minimum
A.M. Best rating of A, size category VII. On or prior to the Closing Date, and at all times
thereafter, the Borrower will cause the Lender to be named as an additional insured,
assignee and loss payee (which shall include, as applicable, identification as mortgagee),
as applicable, on each insurance policy required to be maintained pursuant to this Section
4.11.1 pursuant to endorsements in form and content acceptable to the Lender. The
Borrower will deliver to the Lender (i) on or before the Closing Date, a certificate from the
Borrower’s insurance broker dated such date showing the amount of coverage as of such
date, and that such policies will include effective waivers (whether under the terms of any
such policy or otherwise) by the insurer of all claims for insurance premiums against all
loss payees and additional insureds and all rights of subrogation against all loss payees and
additional insureds, and that if all or any part of such policy is canceled, terminated or
expires, the insurer will forthwith give notice thereof to each additional insured, assignee
and loss payee and that no cancellation, reduction in amount or material change in coverage
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thereof shall be effective until at least thirty (30) days after receipt by each additional
insured, assignee and loss payee of written notice thereof, (ii) on an annual basis, and upon
the request of the Lender from time to time full information as to the insurance carried, (iii)
within five days of receipt of notice from any insurer, a copy of any notice of cancellation,
nonrenewal or material change in coverage from that existing on the date of this
Agreement, and (iv) immediately, notice of any cancellation or nonrenewal of coverage by
the Borrower. In the event the Borrower fails to provide the Lender with evidence of the
insurance coverage required by this Agreement, the Lender may purchase insurance at the
Borrower’s expense. The coverage purchased by the Lender may, but need not, protect the
Borrower’s interests. The Borrower may later cancel any insurance purchased by the
Lender, but only after providing the Lender with evidence that Borrower has obtained
insurance as required by this Agreement. If Lender purchases insurance, to the fullest
extent provided by law, the Borrower will be responsible for the costs of that insurance,
including interest and other charges imposed by the Lender in connection with the
placement of the insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Indebtedness. The Borrower
acknowledges that the costs of insurance purchased by the Lender may be more than the
cost of insurance that the Borrower would be able to obtain on their own.
4.11.2. Compliance With Insurance Conditions. The Borrower shall not bring or
keep any article on its properties, or cause or knowingly allow any condition to exist, if the
presence of such article or the occurrence of such condition could reasonably cause the
invalidation of any insurance required by Section 4.11.1 or would otherwise be prohibited
insured, assignee and loss payee of written notice thereof, (ii) on an annual basis, and upon
the request of the Lender from time to time full information as to the insurance carried, (iii)
within five days of receipt of notice from any insurer, a copy of any notice of cancellation,
nonrenewal or material change in coverage from that existing on the date of this
Agreement, and (iv) immediately, notice of any cancellation or nonrenewal of coverage by
the Borrower. In the event the Borrower fails to provide the Lender with evidence of the
insurance coverage required by this Agreement, the Lender may purchase insurance at the
Borrower’s expense. The coverage purchased by the Lender may, but need not, protect the
Borrower’s interests. The Borrower may later cancel any insurance purchased by the
Lender, but only after providing the Lender with evidence that Borrower has obtained
insurance as required by this Agreement. If Lender purchases insurance, to the fullest
extent provided by law, the Borrower will be responsible for the costs of that insurance,
including interest and other charges imposed by the Lender in connection with the
placement of the insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Indebtedness. The Borrower
acknowledges that the costs of insurance purchased by the Lender may be more than the
cost of insurance that the Borrower would be able to obtain on their own.
4.11.2. Compliance With Insurance Conditions. The Borrower shall not bring or
keep any article on its properties, or cause or knowingly allow any condition to exist, if the
presence of such article or the occurrence of such condition could reasonably cause the
invalidation of any insurance required by Section 4.11.1 or would otherwise be prohibited
by the terms thereof.
ARTICLE V
NEGATIVE COVENANTS
Until the Indebtedness has been paid and satisfied in full, and unless the Lender shall
otherwise consent in writing, the Borrower will not perform or permit to be performed any of the
following acts:
5.1 Creation of Liens. The Borrower will not create, assume or suffer to exist any Lien
on any portion of the Collateral or on any of its other Properties, whether now owned or hereafter
acquired, except for the following (collectively, "Permitted Liens"):
(a) deposits to secure payment of worker's compensation,
unemployment insurance and other similar benefits;
(b) Liens for property taxes not yet delinquent or are being diligently
contested in good faith by appropriate legal proceedings and against which there
are established reserves in accordance with sound business practices and GAAP;
(c) statutory Liens against which there are established adequate reserves
and which (i) are being contested in good faith by appropriate legal proceedings or
(ii) arise in the ordinary course of business and secure obligations which are not yet
due and not in default;
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NEGATIVE COVENANTS
Until the Indebtedness has been paid and satisfied in full, and unless the Lender shall
otherwise consent in writing, the Borrower will not perform or permit to be performed any of the
following acts:
5.1 Creation of Liens. The Borrower will not create, assume or suffer to exist any Lien
on any portion of the Collateral or on any of its other Properties, whether now owned or hereafter
acquired, except for the following (collectively, "Permitted Liens"):
(a) deposits to secure payment of worker's compensation,
unemployment insurance and other similar benefits;
(b) Liens for property taxes not yet delinquent or are being diligently
contested in good faith by appropriate legal proceedings and against which there
are established reserves in accordance with sound business practices and GAAP;
(c) statutory Liens against which there are established adequate reserves
and which (i) are being contested in good faith by appropriate legal proceedings or
(ii) arise in the ordinary course of business and secure obligations which are not yet
due and not in default;
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(d) Liens of judgments, execution, attachment or similar process which
will not result or have not yet resulted in the occurrence of an Event of Default as
set forth in Article VIII of this Agreement;
(e) other encumbrances approved in advance in writing by the Lender;
and
(f) Liens in favor of the Lender.
5.2 Restrictions on Debt. The Borrower will not create, incur, assume or suffer to exist
any Debt, other than:
(a) Indebtedness under the Loan Documents;
(b) trade accounts payable incurred in the ordinary course of business
which are not past due or in default;
(c) other Debt owing to the Lender; and
(d) Debt arising after the Closing in the event the Borrower elects to pay
annual insurance premiums on a deferred basis.
5.3 Restrictions on Guarantee Obligations. The Borrower will not create, incur or suffer
to exist any Guarantee Obligations.
5.4 Sale of Assets. The Borrower will not Transfer, whether pursuant to a single
transaction or a series of transactions, all or any portion of its Property (or any interest therein) or
any other material Property owned by it. Notwithstanding the foregoing, the Borrower may (i) sell
inventory and collect its accounts receivable in the ordinary course of business, (ii) Transfer
personal property or fixtures which, in the reasonable judgment of the Borrower, have become
obsolete or unfit for use or which are no longer useful in the Borrower’s operations, on the
condition that the Borrower shall replace such personal property or fixtures by, or substitute for
the same, other personal property or fixtures (not necessarily of the same character) owned by the
Borrower, which shall (A) be of at least equal value to the personal property or fixtures disposed
of, and (B) perform a function or serve a purpose the same as, similar to or related to that of the
personal property or fixtures disposed of; and (iii) grant Permitted Liens.
5.5 Changes in Structure. The Borrower will not: (i) merge or consolidate with any
Person (or enter into any merger or consolidation agreement or plan), or permit any such merger
or consolidation with it; or (ii) liquidate, wind-up or dissolve (or take or permit any action to
liquidate, wind-up or dissolve).
5.6 Limitations on Distributions. Except as otherwise provided herein, and if no Default
or Event of Default has occurred and is continuing, the Borrower may make Distributions,
provided, however, that no such Distribution would cause the Borrower to be in default of any
covenant contained herein or in the Loan Documents.
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will not result or have not yet resulted in the occurrence of an Event of Default as
set forth in Article VIII of this Agreement;
(e) other encumbrances approved in advance in writing by the Lender;
and
(f) Liens in favor of the Lender.
5.2 Restrictions on Debt. The Borrower will not create, incur, assume or suffer to exist
any Debt, other than:
(a) Indebtedness under the Loan Documents;
(b) trade accounts payable incurred in the ordinary course of business
which are not past due or in default;
(c) other Debt owing to the Lender; and
(d) Debt arising after the Closing in the event the Borrower elects to pay
annual insurance premiums on a deferred basis.
5.3 Restrictions on Guarantee Obligations. The Borrower will not create, incur or suffer
to exist any Guarantee Obligations.
5.4 Sale of Assets. The Borrower will not Transfer, whether pursuant to a single
transaction or a series of transactions, all or any portion of its Property (or any interest therein) or
any other material Property owned by it. Notwithstanding the foregoing, the Borrower may (i) sell
inventory and collect its accounts receivable in the ordinary course of business, (ii) Transfer
personal property or fixtures which, in the reasonable judgment of the Borrower, have become
obsolete or unfit for use or which are no longer useful in the Borrower’s operations, on the
condition that the Borrower shall replace such personal property or fixtures by, or substitute for
the same, other personal property or fixtures (not necessarily of the same character) owned by the
Borrower, which shall (A) be of at least equal value to the personal property or fixtures disposed
of, and (B) perform a function or serve a purpose the same as, similar to or related to that of the
personal property or fixtures disposed of; and (iii) grant Permitted Liens.
5.5 Changes in Structure. The Borrower will not: (i) merge or consolidate with any
Person (or enter into any merger or consolidation agreement or plan), or permit any such merger
or consolidation with it; or (ii) liquidate, wind-up or dissolve (or take or permit any action to
liquidate, wind-up or dissolve).
5.6 Limitations on Distributions. Except as otherwise provided herein, and if no Default
or Event of Default has occurred and is continuing, the Borrower may make Distributions,
provided, however, that no such Distribution would cause the Borrower to be in default of any
covenant contained herein or in the Loan Documents.
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5.7 Restrictions on Loans. The Borrower will not make any loan, advance or other
extension of credit, directly or indirectly, to or for the benefit of any other Person.
5.8 Transactions With Affiliates. Except as contemplated by this Agreement, the
Borrower will not (i) enter into any other transaction, including the purchase, sale or exchange of
property, with any Affiliate, or (ii) make any payments to any Affiliate for services performed or
equipment or materials provided, except to reimburse such Affiliate for its actual cost of
performing such services or providing such equipment or materials, which actual cost shall not, in
any event, exceed the amount that would be charged by a non-Affiliate under a bona fide, arm'slength contract for performance of such services or provision of such equipment and materials.
5.9 Creation of Plans Under ERISA. The Borrower will not establish or become
obligated to make contributions with respect to any employee pension plan or other defined benefit
plan or trust for the benefit of its employees which is subject to Title IV of ERISA.
5.10 Sale-Leaseback Transactions. The Borrower will not make or permit the
occurrence of any sale, transfer or disposition of any of its real or personal Property followed by
its leasing or rental of such Property, or any portion thereof, as lessee.
5.11 Modification of Documents. The Borrower will not participate in, enter into, suffer
or permit any material amendment, modification, restatement, cancellation or termination of any
of its Charter Documents.
extension of credit, directly or indirectly, to or for the benefit of any other Person.
5.8 Transactions With Affiliates. Except as contemplated by this Agreement, the
Borrower will not (i) enter into any other transaction, including the purchase, sale or exchange of
property, with any Affiliate, or (ii) make any payments to any Affiliate for services performed or
equipment or materials provided, except to reimburse such Affiliate for its actual cost of
performing such services or providing such equipment or materials, which actual cost shall not, in
any event, exceed the amount that would be charged by a non-Affiliate under a bona fide, arm'slength contract for performance of such services or provision of such equipment and materials.
5.9 Creation of Plans Under ERISA. The Borrower will not establish or become
obligated to make contributions with respect to any employee pension plan or other defined benefit
plan or trust for the benefit of its employees which is subject to Title IV of ERISA.
5.10 Sale-Leaseback Transactions. The Borrower will not make or permit the
occurrence of any sale, transfer or disposition of any of its real or personal Property followed by
its leasing or rental of such Property, or any portion thereof, as lessee.
5.11 Modification of Documents. The Borrower will not participate in, enter into, suffer
or permit any material amendment, modification, restatement, cancellation or termination of any
of its Charter Documents.
ARTICLE VI
FINANCIAL COVENANT
Until the Indebtedness has been paid and satisfied in full, and unless the Lender shall
otherwise consent in writing, the Borrower will not:
6.1 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio calculated
as of each September 30, beginning September 30, 2020, to be less than 1.25 to one (1.25:1.00).
FINANCIAL COVENANT
Until the Indebtedness has been paid and satisfied in full, and unless the Lender shall
otherwise consent in writing, the Borrower will not:
6.1 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio calculated
as of each September 30, beginning September 30, 2020, to be less than 1.25 to one (1.25:1.00).
ARTICLE VII
CONDITIONS PRECEDENT; ADMINISTRATION OF LOAN
7.1 Closing. The Closing will take place at the offices of the Lender in Tulsa
Oklahoma, on March __, 2020, or at such other place or date as the parties shall mutually agree,
provided that all conditions to the Closing set forth in Section 7.2 have been satisfied.
7.2 Conditions to Closing. The commitment of the Lender to establish the Loan is
subject to the Borrower's satisfaction of the following conditions precedent at or as of the Closing:
7.2.1. Loan Documents. This Agreement and all other Loan Documents shall have
been duly and validly authorized, executed, acknowledged (where appropriate) and
delivered to the Lender by the appropriate parties thereto, all in form and substance
satisfactory to the Lender.
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CONDITIONS PRECEDENT; ADMINISTRATION OF LOAN
7.1 Closing. The Closing will take place at the offices of the Lender in Tulsa
Oklahoma, on March __, 2020, or at such other place or date as the parties shall mutually agree,
provided that all conditions to the Closing set forth in Section 7.2 have been satisfied.
7.2 Conditions to Closing. The commitment of the Lender to establish the Loan is
subject to the Borrower's satisfaction of the following conditions precedent at or as of the Closing:
7.2.1. Loan Documents. This Agreement and all other Loan Documents shall have
been duly and validly authorized, executed, acknowledged (where appropriate) and
delivered to the Lender by the appropriate parties thereto, all in form and substance
satisfactory to the Lender.
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7.2.2. Perfection. All actions and filings shall have been made or taken as are
necessary to create and perfect the liens, security interests and assignments contemplated
by Section 2.11, including the filing and recording of appropriate UCC financing
statements and fixture filings.
7.2.3. Existence and Authority. The Borrower shall have provided or caused to be
provided to the Lender the following documents, each in form and substance satisfactory
to the Lender and its counsel:
(a) a true and correct copy of the certificate of formation of the
Borrower, including all amendments thereto, certified by the Oklahoma Secretary
of State;
(b) true and correct copy of the operating agreement of the Borrower,
including all amendments thereto, certified by the secretary or other authorized
officer of the Borrower;
(c) a good standing certificate issued by the Oklahoma Secretary of
State not more than thirty (30) days prior to the Closing, certifying as to the due
formation, valid existence and good standing of the Borrower;
(d) true and correct copies of the resolutions or approvals adopted by
the Borrower, duly authorizing the borrowings contemplated hereunder and the
execution, delivery and performance of the Loan Documents to which the Borrower
is a party;
(e) a certificate executed by a manager, or by the president or the
secretary, of the Borrower stating the names of the officers authorized to execute
and deliver the Loan Documents on behalf of the Borrower and containing
specimen signatures of such officers; and
(f) any other information requested by the Lender at least three days
prior to the Closing in order to verify the identity of the Borrower, as required by
Section 326 of the PATRIOT Act.
7.2.4. Insurance. The Lender shall have received copies of insurance policies, or
binders or certificates of insurance, in form and substance satisfactory to the Lender,
evidencing that the Borrower has obtained and is maintaining the minimum insurance
coverages required by this Agreement and the Loan Documents, together with all required
endorsements of such policies.
7.2.5. UCC Searches. The Lender shall have received certified responses to UCC
lien search requests reflecting that there are no effective UCC financing statements on file
in any filing offices in the State of Oklahoma naming the Borrower as debtor, other than
financing statements relating to Permitted Liens.
7.2.6. Loan Fee. The Lender shall have received a loan fee from the Borrower
equal to $17,373.
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necessary to create and perfect the liens, security interests and assignments contemplated
by Section 2.11, including the filing and recording of appropriate UCC financing
statements and fixture filings.
7.2.3. Existence and Authority. The Borrower shall have provided or caused to be
provided to the Lender the following documents, each in form and substance satisfactory
to the Lender and its counsel:
(a) a true and correct copy of the certificate of formation of the
Borrower, including all amendments thereto, certified by the Oklahoma Secretary
of State;
(b) true and correct copy of the operating agreement of the Borrower,
including all amendments thereto, certified by the secretary or other authorized
officer of the Borrower;
(c) a good standing certificate issued by the Oklahoma Secretary of
State not more than thirty (30) days prior to the Closing, certifying as to the due
formation, valid existence and good standing of the Borrower;
(d) true and correct copies of the resolutions or approvals adopted by
the Borrower, duly authorizing the borrowings contemplated hereunder and the
execution, delivery and performance of the Loan Documents to which the Borrower
is a party;
(e) a certificate executed by a manager, or by the president or the
secretary, of the Borrower stating the names of the officers authorized to execute
and deliver the Loan Documents on behalf of the Borrower and containing
specimen signatures of such officers; and
(f) any other information requested by the Lender at least three days
prior to the Closing in order to verify the identity of the Borrower, as required by
Section 326 of the PATRIOT Act.
7.2.4. Insurance. The Lender shall have received copies of insurance policies, or
binders or certificates of insurance, in form and substance satisfactory to the Lender,
evidencing that the Borrower has obtained and is maintaining the minimum insurance
coverages required by this Agreement and the Loan Documents, together with all required
endorsements of such policies.
7.2.5. UCC Searches. The Lender shall have received certified responses to UCC
lien search requests reflecting that there are no effective UCC financing statements on file
in any filing offices in the State of Oklahoma naming the Borrower as debtor, other than
financing statements relating to Permitted Liens.
7.2.6. Loan Fee. The Lender shall have received a loan fee from the Borrower
equal to $17,373.
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7.2.7. Closing Certificate. The Lender shall have received a certificate signed by
a manager of the Borrower, certifying that, to the best of his or her knowledge, after due
investigation, all representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are true and correct as in all material respects
as of the Closing, that no Default or Event of Default exists as of the Closing, and that all
of the conditions specified in this Section 7.2 have been satisfied.
a manager of the Borrower, certifying that, to the best of his or her knowledge, after due
investigation, all representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are true and correct as in all material respects
as of the Closing, that no Default or Event of Default exists as of the Closing, and that all
of the conditions specified in this Section 7.2 have been satisfied.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Events of Default. The occurrence of any of the following events or existence of
any of the following circumstances, unless waived in writing by the Lender, shall constitute a
"Default" and if not remedied within any applicable cure period shall constitute an "Event of
Default":
8.1.1. Nonpayment. If the Borrower shall fail to pay any installment of principal
or interest on the Loan when due (whether at the stated due date, upon maturity, upon
acceleration or otherwise).
8.1.2. Other Nonpayment. If the Borrower shall fail to pay or reimburse when due
any other amount payable by the Borrower to the Lender under this Agreement or any other
Loan Document and such failure shall continue for a period of 10 days after the Lender
gives notice of such failure to the Borrower.
8.1.3. Representations and Warranties. If any representation, statement,
certificate, schedule or report made or furnished to the Lender by or on behalf of the
Borrower shall prove to have been false or erroneous in any material respect as of the date
on which such warranty or representation was made.
8.1.4. Breach of Covenants. If the Borrower fails to perform or observe any term,
covenant or agreement contained in (a) Article IV and such failure continues unremedied
for more than twenty (20) days after the Lender gives notice of such failure to the Borrower,
provided, however, that if such default cannot be fully remedied within such 20-day period,
but can reasonably be expected to be fully remedied, such default shall not constitute an
Event of Default if the Borrower shall promptly upon receipt of such notice commence the
curing of such default and shall thereafter diligently prosecute and complete the same
within ninety (90) days of receipt of written notice from the Lender or such longer period
of time as the Lender in its sole discretion may agree, or (b) Article V or Article VI.
8.1.5. Default Under Loan Documents. If a material default shall be made in the
due observance or performance by the Borrower of any of the covenants or agreements
contained in any other Loan Document to which it is a party, and such default shall continue
unremedied beyond the expiration of any grace period expressly provided in the applicable
Loan Document, or if any "event of default" shall occur under the Note or any of the other
Loan Documents pursuant to the terms thereof and such event of default shall continue
beyond the expiration of any applicable cure period.
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EVENTS OF DEFAULT
8.1 Events of Default. The occurrence of any of the following events or existence of
any of the following circumstances, unless waived in writing by the Lender, shall constitute a
"Default" and if not remedied within any applicable cure period shall constitute an "Event of
Default":
8.1.1. Nonpayment. If the Borrower shall fail to pay any installment of principal
or interest on the Loan when due (whether at the stated due date, upon maturity, upon
acceleration or otherwise).
8.1.2. Other Nonpayment. If the Borrower shall fail to pay or reimburse when due
any other amount payable by the Borrower to the Lender under this Agreement or any other
Loan Document and such failure shall continue for a period of 10 days after the Lender
gives notice of such failure to the Borrower.
8.1.3. Representations and Warranties. If any representation, statement,
certificate, schedule or report made or furnished to the Lender by or on behalf of the
Borrower shall prove to have been false or erroneous in any material respect as of the date
on which such warranty or representation was made.
8.1.4. Breach of Covenants. If the Borrower fails to perform or observe any term,
covenant or agreement contained in (a) Article IV and such failure continues unremedied
for more than twenty (20) days after the Lender gives notice of such failure to the Borrower,
provided, however, that if such default cannot be fully remedied within such 20-day period,
but can reasonably be expected to be fully remedied, such default shall not constitute an
Event of Default if the Borrower shall promptly upon receipt of such notice commence the
curing of such default and shall thereafter diligently prosecute and complete the same
within ninety (90) days of receipt of written notice from the Lender or such longer period
of time as the Lender in its sole discretion may agree, or (b) Article V or Article VI.
8.1.5. Default Under Loan Documents. If a material default shall be made in the
due observance or performance by the Borrower of any of the covenants or agreements
contained in any other Loan Document to which it is a party, and such default shall continue
unremedied beyond the expiration of any grace period expressly provided in the applicable
Loan Document, or if any "event of default" shall occur under the Note or any of the other
Loan Documents pursuant to the terms thereof and such event of default shall continue
beyond the expiration of any applicable cure period.
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8.1.6. Insolvency. If the Borrower shall (i) apply for or consent to the appointment
of a custodian, receiver, trustee or liquidator for itself or its Property, (ii) admit in writing
the inability to pay, or generally fail to pay, its debts as they become due, (iii) make a
general assignment for the benefit of creditors, (iv) commence any proceeding relating to
the bankruptcy, reorganization, liquidation, receivership, conservatorship, insolvency,
readjustment of debt, dissolution or liquidation, or if company action is taken for the
purpose of effecting any of the foregoing, (v) suffer any such appointment or
commencement of a proceeding as described in clause (i) or (iv) of this Section 8.1.6,
which appointment or proceeding is not terminated or discharged within ninety (90) days,
or (vi) become insolvent.
8.1.7. Judgments. If Borrower shall have entered against it by any court a final
judgment or judgments for the payment of money in an aggregate amount (exclusive of
any portion covered by insurance) in excess of $200,000 and such judgment(s) shall remain
undischarged for a period of 45 consecutive days (unless stayed on appeal), or if any legal
action shall be taken by a judgment creditor to attach or levy upon any Properties of the
Borrower to enforce any such judgment.
8.1.8. Default on Other Funded Debt. If Borrower shall fail to pay any principal
or interest on any Funded Debt in excess of $100,000 as and when the same shall become
due and payable and such default shall continue beyond the expiration of any applicable
grace period expressly provided, or if any default or event of default shall occur under the
terms of any agreement or other document which would entitle the holder or holders thereof
to accelerate the maturity thereof.
8.1.9. Material Contracts. If the Borrower shall default in the payment or
performance of its obligations, duties, covenants or agreements under the terms of any
agreement or contract that is material to its affairs, financial or otherwise, and such default
shall continue beyond the expiration of any applicable grace period expressly provided
(unless such default is being disputed by appropriate legal proceedings and adequate
reserves therefor have been established on the Borrower's books and records).
8.1.10. Unenforceability. If this Agreement or any other Loan Document shall for
any reason cease to be a valid, binding and enforceable obligation of the Borrower or any
other party thereto, or if any of the Loan Documents shall cease to create a valid and
perfected, first priority Lien (subject only to Permitted Liens) on the Collateral covered
thereby.
8.1.11. Leveling 8 Mortgage; Leveling 8 Note. If a default or event of default
occurs under a Leveling 8 Mortgage or the Leveling 8 Note.
8.2 Acceleration of Indebtedness. If any Event of Default specified in Section 8.1.6
shall occur, all obligations of the Lender hereunder, including any obligation to make further
advances under the Loan, will automatically terminate, and the Loan and all other outstanding
Indebtedness will become immediately due and payable, without notice or demand. If any other
Event of Default shall occur and be continuing, the Lender may, at its option, without notice or
demand, terminate its obligations hereunder, including any obligation to make further advances
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of a custodian, receiver, trustee or liquidator for itself or its Property, (ii) admit in writing
the inability to pay, or generally fail to pay, its debts as they become due, (iii) make a
general assignment for the benefit of creditors, (iv) commence any proceeding relating to
the bankruptcy, reorganization, liquidation, receivership, conservatorship, insolvency,
readjustment of debt, dissolution or liquidation, or if company action is taken for the
purpose of effecting any of the foregoing, (v) suffer any such appointment or
commencement of a proceeding as described in clause (i) or (iv) of this Section 8.1.6,
which appointment or proceeding is not terminated or discharged within ninety (90) days,
or (vi) become insolvent.
8.1.7. Judgments. If Borrower shall have entered against it by any court a final
judgment or judgments for the payment of money in an aggregate amount (exclusive of
any portion covered by insurance) in excess of $200,000 and such judgment(s) shall remain
undischarged for a period of 45 consecutive days (unless stayed on appeal), or if any legal
action shall be taken by a judgment creditor to attach or levy upon any Properties of the
Borrower to enforce any such judgment.
8.1.8. Default on Other Funded Debt. If Borrower shall fail to pay any principal
or interest on any Funded Debt in excess of $100,000 as and when the same shall become
due and payable and such default shall continue beyond the expiration of any applicable
grace period expressly provided, or if any default or event of default shall occur under the
terms of any agreement or other document which would entitle the holder or holders thereof
to accelerate the maturity thereof.
8.1.9. Material Contracts. If the Borrower shall default in the payment or
performance of its obligations, duties, covenants or agreements under the terms of any
agreement or contract that is material to its affairs, financial or otherwise, and such default
shall continue beyond the expiration of any applicable grace period expressly provided
(unless such default is being disputed by appropriate legal proceedings and adequate
reserves therefor have been established on the Borrower's books and records).
8.1.10. Unenforceability. If this Agreement or any other Loan Document shall for
any reason cease to be a valid, binding and enforceable obligation of the Borrower or any
other party thereto, or if any of the Loan Documents shall cease to create a valid and
perfected, first priority Lien (subject only to Permitted Liens) on the Collateral covered
thereby.
8.1.11. Leveling 8 Mortgage; Leveling 8 Note. If a default or event of default
occurs under a Leveling 8 Mortgage or the Leveling 8 Note.
8.2 Acceleration of Indebtedness. If any Event of Default specified in Section 8.1.6
shall occur, all obligations of the Lender hereunder, including any obligation to make further
advances under the Loan, will automatically terminate, and the Loan and all other outstanding
Indebtedness will become immediately due and payable, without notice or demand. If any other
Event of Default shall occur and be continuing, the Lender may, at its option, without notice or
demand, terminate its obligations hereunder, including any obligation to make further advances
23
under the Loan, and declare the Loan and all other outstanding Indebtedness to be immediately
due and payable, whereupon the same shall become forthwith due and payable.
8.3 Exercise of Remedies. Upon the occurrence and during the continuation of any
Event of Default, the Lender shall be entitled to exercise all rights and remedies available to it
under the Loan Documents and applicable Law, through judicial action or otherwise, including:
(i) commencing one or more actions against the Borrower and reducing the claims of the Lender
to judgment; and (ii) foreclosing, realizing upon or otherwise enforcing the Lender's rights in and
Liens on the Collateral.
8.4 Selective Enforcement. In the event Lender elects to selectively and successively
enforce its rights under this Agreement or any one or more of the other Loan Documents, or against
any portion of the Collateral, such action shall not be deemed a waiver or discharge of any other
right, lien or encumbrance until such time as the Lender shall have been paid in full all
Indebtedness of the Borrower to the Lender.
8.5 Waiver of Default. The Lender may, by an instrument in writing signed by the
Lender, waive any Event of Default and any of the consequences of such Event of Default, and, in
such event, the Lender and all other parties hereto shall be restored to their respective former
positions, rights and obligations hereunder. Any Event of Default so waived shall for all purposes
of this Agreement be deemed to have been cured and not to be continuing; but no such waiver
shall extend to any subsequent or other Event of Default or impair any consequence of such
subsequent or other Event of Default.
8.6 Deposits; Setoff. Regardless of the adequacy of any other collateral held by Lender,
any deposits or other sums credited by or due from the Lender to the Borrower shall at all times
constitute collateral security for the Indebtedness, and may be set off against the Loan in any
manner the Lender shall choose and any and all liabilities, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising to the Lender. The rights granted by this
section shall be in addition to the rights of the Lender under any statutory banker's lien or the
common law right of set-off.
8.7 Application of Payments. From and during the continuation of any Event of
Default, any monies or property received by the Lender pursuant to this Agreement or any other
Loan Document or the exercise of any rights or remedies under any Loan Document or other
agreement which secures any of the Indebtedness, shall be applied in the following order:
First, to payment of that portion of the Indebtedness constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of counsel to the
Lender) payable to the Lender in its capacity as such;
Second, to payment of that portion of the Indebtedness constituting accrued and
unpaid interest on the Loan;
Third, to payment of that portion of the Indebtedness constituting unpaid principal
of the Loan and to payment of amounts due under any Treasury Management Agreement
between the Borrower and the Lender, or any Affiliate of the Lender; and
24
due and payable, whereupon the same shall become forthwith due and payable.
8.3 Exercise of Remedies. Upon the occurrence and during the continuation of any
Event of Default, the Lender shall be entitled to exercise all rights and remedies available to it
under the Loan Documents and applicable Law, through judicial action or otherwise, including:
(i) commencing one or more actions against the Borrower and reducing the claims of the Lender
to judgment; and (ii) foreclosing, realizing upon or otherwise enforcing the Lender's rights in and
Liens on the Collateral.
8.4 Selective Enforcement. In the event Lender elects to selectively and successively
enforce its rights under this Agreement or any one or more of the other Loan Documents, or against
any portion of the Collateral, such action shall not be deemed a waiver or discharge of any other
right, lien or encumbrance until such time as the Lender shall have been paid in full all
Indebtedness of the Borrower to the Lender.
8.5 Waiver of Default. The Lender may, by an instrument in writing signed by the
Lender, waive any Event of Default and any of the consequences of such Event of Default, and, in
such event, the Lender and all other parties hereto shall be restored to their respective former
positions, rights and obligations hereunder. Any Event of Default so waived shall for all purposes
of this Agreement be deemed to have been cured and not to be continuing; but no such waiver
shall extend to any subsequent or other Event of Default or impair any consequence of such
subsequent or other Event of Default.
8.6 Deposits; Setoff. Regardless of the adequacy of any other collateral held by Lender,
any deposits or other sums credited by or due from the Lender to the Borrower shall at all times
constitute collateral security for the Indebtedness, and may be set off against the Loan in any
manner the Lender shall choose and any and all liabilities, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising to the Lender. The rights granted by this
section shall be in addition to the rights of the Lender under any statutory banker's lien or the
common law right of set-off.
8.7 Application of Payments. From and during the continuation of any Event of
Default, any monies or property received by the Lender pursuant to this Agreement or any other
Loan Document or the exercise of any rights or remedies under any Loan Document or other
agreement which secures any of the Indebtedness, shall be applied in the following order:
First, to payment of that portion of the Indebtedness constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of counsel to the
Lender) payable to the Lender in its capacity as such;
Second, to payment of that portion of the Indebtedness constituting accrued and
unpaid interest on the Loan;
Third, to payment of that portion of the Indebtedness constituting unpaid principal
of the Loan and to payment of amounts due under any Treasury Management Agreement
between the Borrower and the Lender, or any Affiliate of the Lender; and
24
Last, the balance, if any, after all of the Indebtedness has been indefeasibly paid in
full, to the Borrower or to such other Persons who may be lawfully entitled to receive such
excess.
full, to the Borrower or to such other Persons who may be lawfully entitled to receive such
excess.
ARTICLE IX
EXPENSES AND INDEMNITY
9.1 Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Lender (including the reasonable fees, charges and disbursements of
counsel for the Lender), in connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), and including without limitation all
recording and filing fees, recording costs, examinations of and certifications as to public records,
title insurance premiums, survey costs, expenses to clear title, appraisal fees and costs of required
environmental assessments, and (ii) all out-of-pocket expenses incurred by the Lender (including
the fees, charges and disbursements of any counsel for the Lender) in connection with the
enforcement or protection of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section 9.1, or (B) in connection with the Loan,
including all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of the Loan.
9.2 Indemnification by Borrower. The Borrower shall indemnify the Lender and the
Lender's Related Parties of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and disbursements of any
counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the administration of this Agreement and the other Loan
Documents or the consummation of the transactions contemplated hereby or thereby, (ii) the Loan
or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the Borrower, or any
Environmental Liability related in any way to the Borrower, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory, whether brought by a third party or by the Borrower, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses (x) are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of
such Indemnitee's obligations hereunder or under any other Loan Document, if the Borrower has
obtained a final and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.
9.3 Waiver of Consequential Damages, Etc. To the fullest extent permitted by
25
EXPENSES AND INDEMNITY
9.1 Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Lender (including the reasonable fees, charges and disbursements of
counsel for the Lender), in connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), and including without limitation all
recording and filing fees, recording costs, examinations of and certifications as to public records,
title insurance premiums, survey costs, expenses to clear title, appraisal fees and costs of required
environmental assessments, and (ii) all out-of-pocket expenses incurred by the Lender (including
the fees, charges and disbursements of any counsel for the Lender) in connection with the
enforcement or protection of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section 9.1, or (B) in connection with the Loan,
including all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of the Loan.
9.2 Indemnification by Borrower. The Borrower shall indemnify the Lender and the
Lender's Related Parties of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and disbursements of any
counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the administration of this Agreement and the other Loan
Documents or the consummation of the transactions contemplated hereby or thereby, (ii) the Loan
or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the Borrower, or any
Environmental Liability related in any way to the Borrower, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on contract,
tort or any other theory, whether brought by a third party or by the Borrower, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses (x) are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of
such Indemnitee's obligations hereunder or under any other Loan Document, if the Borrower has
obtained a final and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.
9.3 Waiver of Consequential Damages, Etc. To the fullest extent permitted by
25
applicable Law, the Borrower shall not assert, and the Borrower hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, or the use of the proceeds of the Loan. No Indemnitee
referred to in Section 9.2 above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.
9.4 Expenses Following Default. Upon the occurrence of an Event of Default, the
Borrower will from time to time, within thirty (30) days after a request made by the Lender,
reimburse the Lender for all amounts expended, advanced or incurred by the Lender to satisfy any
obligation of the Borrower under this Agreement or any other Loan Documents, or to collect upon
the Note or any of the Indebtedness, or to enforce the rights of Lender under this Agreement and
any other Loan Documents, which amounts will include all court costs, bonds, reasonable
attorneys' fees and expenses, reasonable fees of auditors and accountants, and investigation
expenses reasonably incurred by the Lender in connection with any such matters, together with
interest at the applicable Default Rate on each such amount from the date the same is due and
payable to the Lender until the date it is repaid to the Lender. All amounts advanced in connection
herewith shall be secured by the Collateral.
9.5 Payments. All amounts due under Article IX shall be payable not later than thirty
(30) days after demand therefor.
9.6 Survival. The agreements in Article IX shall survive the replacement of the Lender,
and the repayment, satisfaction or discharge of all of the other Obligations.
any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, or the use of the proceeds of the Loan. No Indemnitee
referred to in Section 9.2 above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.
9.4 Expenses Following Default. Upon the occurrence of an Event of Default, the
Borrower will from time to time, within thirty (30) days after a request made by the Lender,
reimburse the Lender for all amounts expended, advanced or incurred by the Lender to satisfy any
obligation of the Borrower under this Agreement or any other Loan Documents, or to collect upon
the Note or any of the Indebtedness, or to enforce the rights of Lender under this Agreement and
any other Loan Documents, which amounts will include all court costs, bonds, reasonable
attorneys' fees and expenses, reasonable fees of auditors and accountants, and investigation
expenses reasonably incurred by the Lender in connection with any such matters, together with
interest at the applicable Default Rate on each such amount from the date the same is due and
payable to the Lender until the date it is repaid to the Lender. All amounts advanced in connection
herewith shall be secured by the Collateral.
9.5 Payments. All amounts due under Article IX shall be payable not later than thirty
(30) days after demand therefor.
9.6 Survival. The agreements in Article IX shall survive the replacement of the Lender,
and the repayment, satisfaction or discharge of all of the other Obligations.
ARTICLE X
MISCELLANEOUS PROVISIONS
The parties further agree as follows:
10.1 Participating Lender. In the event the Lender shall determine at any time or from
time to time to sell one or more participation interests in the Loan to one or more other financial
institutions or other lenders, the Borrower agrees that, subject to the terms of the agreements of
participation, each participating lender will be entitled to rely on the terms of this Agreement and
the other Loan Documents as fully as if such participating lender had been named as the holder of
the Note and a party to this Agreement and the other Loan Documents. Any costs or expenses
incurred by the Lender in negotiating, preparing or entering into any such participation agreement
shall be paid by the Lender.
10.2 Cumulative Remedies. No failure on the part of the Lender to exercise and no delay
in exercising any right or remedy under this Agreement and the documents signed pursuant to this
Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of
any right thereunder preclude any other or further right of exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not alternative.
26
MISCELLANEOUS PROVISIONS
The parties further agree as follows:
10.1 Participating Lender. In the event the Lender shall determine at any time or from
time to time to sell one or more participation interests in the Loan to one or more other financial
institutions or other lenders, the Borrower agrees that, subject to the terms of the agreements of
participation, each participating lender will be entitled to rely on the terms of this Agreement and
the other Loan Documents as fully as if such participating lender had been named as the holder of
the Note and a party to this Agreement and the other Loan Documents. Any costs or expenses
incurred by the Lender in negotiating, preparing or entering into any such participation agreement
shall be paid by the Lender.
10.2 Cumulative Remedies. No failure on the part of the Lender to exercise and no delay
in exercising any right or remedy under this Agreement and the documents signed pursuant to this
Agreement shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of
any right thereunder preclude any other or further right of exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not alternative.
26
10.3 [Reserved.]
10.4 Notices. All notices, requests and demands required or authorized hereunder shall
be given in writing and served in person, delivered by certified mail, return receipt requested,
delivered by nationally recognized overnight courier, or transmitted by telefacsimile (fax),
10.4 Notices. All notices, requests and demands required or authorized hereunder shall
be given in writing and served in person, delivered by certified mail, return receipt requested,
delivered by nationally recognized overnight courier, or transmitted by telefacsimile (fax),
addressed as follows:
1221 E Houston
Broken Arrow, OK 74012
21553 E Apache St
Catoosa, OK 74015
110 N Elgin STE 500
Tulsa, OK 74120
Lauren.Smith@Vast.Bank
4000 One Williams Center
Tulsa, Oklahoma 74172-0148
Fax: (918) 586-8682
or at such other address as either party hereto shall designate for such purpose in a notice to the
other party hereto. Notices served in person or via overnight courier shall be effective and deemed
given when delivered, notices sent by certified mail shall be effective and deemed given five
Business Days after being deposited in the U.S. mail, postage prepaid, and notices transmitted by
telefacsimile will be deemed given when sent if between the hours of 8 a.m. and 5 p.m. of the
recipient’s time zone (and if not, it shall be deemed given on the next Business Day), as indicated
by the sender's written confirmation of transmission.
10.1 APPLICABLE LAW. THE OBLIGATIONS EVIDENCED BY THE TERM
NOTE WAS NEGOTIATED, EXECUTED, DELIVERED AND CONTRACTED IN TULSA,
OKLAHOMA, AND THIS AGREEMENT AND ALL LOAN DOCUMENTS SIGNED
PURSUANT TO THIS AGREEMENT SHALL BE DEEMED TO BE CONTRACTS MADE
UNDER THE LAWS OF THE STATE OF OKLAHOMA AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA.
10.2 Not A Joint Venture. Nothing in this Agreement shall be construed to constitute
the Lender as a joint venturer with the Borrower or to constitute a partnership.
27
| Borrower: | Addvantage Technologies Group, Inc. Attn: Scott Francis |
Broken Arrow, OK 74012
| With a copy to: | Leveling 8, Inc. Attn: David E Chymiak |
Catoosa, OK 74015
| Lender: | Vast Bank, N.A. Attn: Lauren Smith |
Tulsa, OK 74120
Lauren.Smith@Vast.Bank
| With a copy to: | Jason B. Coutant Conner & Winters, LLP |
Tulsa, Oklahoma 74172-0148
Fax: (918) 586-8682
or at such other address as either party hereto shall designate for such purpose in a notice to the
other party hereto. Notices served in person or via overnight courier shall be effective and deemed
given when delivered, notices sent by certified mail shall be effective and deemed given five
Business Days after being deposited in the U.S. mail, postage prepaid, and notices transmitted by
telefacsimile will be deemed given when sent if between the hours of 8 a.m. and 5 p.m. of the
recipient’s time zone (and if not, it shall be deemed given on the next Business Day), as indicated
by the sender's written confirmation of transmission.
10.1 APPLICABLE LAW. THE OBLIGATIONS EVIDENCED BY THE TERM
NOTE WAS NEGOTIATED, EXECUTED, DELIVERED AND CONTRACTED IN TULSA,
OKLAHOMA, AND THIS AGREEMENT AND ALL LOAN DOCUMENTS SIGNED
PURSUANT TO THIS AGREEMENT SHALL BE DEEMED TO BE CONTRACTS MADE
UNDER THE LAWS OF THE STATE OF OKLAHOMA AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA.
10.2 Not A Joint Venture. Nothing in this Agreement shall be construed to constitute
the Lender as a joint venturer with the Borrower or to constitute a partnership.
27
10.3 Binding Effect. This Agreement and the Loan Documents shall be binding on, and
shall inure to the benefit of, the parties hereto and their respective successors and assigns; provided,
however, that without the prior, written consent of the Lender, the Borrower shall not assign or
transfer any of its interest, rights or obligations arising out of or relating to this Agreement or any
other Loan Documents.
10.4 Survival of Representations and Warranties. All representations and warranties
made herein will survive the delivery of this Agreement and the making of any advances under the
Loan.
10.5 Exhibits and Schedules. All exhibits and schedules attached to this Agreement are
incorporated herein for all purposes, and shall be considered a part of this Agreement.
10.6 Severability. In the event any one or more of the provisions contained in this
Agreement or any other Loan Document shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect and in any jurisdiction, (i) such invalidity, illegality or
unenforceability shall not affect any other provision thereof, (ii) the remaining provisions shall
remain in full force and effect, (iii) such invalid, illegal or unenforceable provision shall not be
affected in any other jurisdiction, and (iv) there shall be added to the affected document a
provision, to be prepared by the Lender and its counsel, as similar as possible to the invalid, illegal
or unenforceable provision but so as to be valid, legal and enforceable.
10.7 Entire Agreement; Conflicting Provisions. This Agreement and the Loan
Documents referred to herein constitute the entire agreement of the parties hereto with respect to
the Loan and all matters arising out of or related thereto. In the event of any conflict between or
among the provisions of this Agreement and the provisions of any other Loan Documents, the
provisions of this Agreement shall control.
10.8 Waivers. No act, delay, omission or course of dealing between or among the parties
hereto will constitute a waiver of their respective rights or remedies under this Agreement or the
documents signed pursuant to this Agreement. No waiver, change, modification or discharge of
any of the rights and duties of the parties hereto will be effective unless contained in a written
instrument signed by the party sought to be bound.
10.9 SUBMISSION TO JURISDICTION. ALL ACTIONS OR PROCEEDINGS WITH
RESPECT TO THIS AGREEMENT MAY BE INSTITUTED IN ANY STATE OR FEDERAL
COURT SITTING IN TULSA, OKLAHOMA, AS THE LENDER MAY ELECT, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION (BOTH SUBJECT MATTER AND PERSON) OF EACH SUCH COURT.
10.10 PATRIOT Act Notification. The Lender hereby notifies the Borrower that pursuant
to the requirements of the PATRIOT Act, it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of the Borrower
and other information that will allow the Lender to identify the Borrower in accordance with the
PATRIOT Act.
28
shall inure to the benefit of, the parties hereto and their respective successors and assigns; provided,
however, that without the prior, written consent of the Lender, the Borrower shall not assign or
transfer any of its interest, rights or obligations arising out of or relating to this Agreement or any
other Loan Documents.
10.4 Survival of Representations and Warranties. All representations and warranties
made herein will survive the delivery of this Agreement and the making of any advances under the
Loan.
10.5 Exhibits and Schedules. All exhibits and schedules attached to this Agreement are
incorporated herein for all purposes, and shall be considered a part of this Agreement.
10.6 Severability. In the event any one or more of the provisions contained in this
Agreement or any other Loan Document shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect and in any jurisdiction, (i) such invalidity, illegality or
unenforceability shall not affect any other provision thereof, (ii) the remaining provisions shall
remain in full force and effect, (iii) such invalid, illegal or unenforceable provision shall not be
affected in any other jurisdiction, and (iv) there shall be added to the affected document a
provision, to be prepared by the Lender and its counsel, as similar as possible to the invalid, illegal
or unenforceable provision but so as to be valid, legal and enforceable.
10.7 Entire Agreement; Conflicting Provisions. This Agreement and the Loan
Documents referred to herein constitute the entire agreement of the parties hereto with respect to
the Loan and all matters arising out of or related thereto. In the event of any conflict between or
among the provisions of this Agreement and the provisions of any other Loan Documents, the
provisions of this Agreement shall control.
10.8 Waivers. No act, delay, omission or course of dealing between or among the parties
hereto will constitute a waiver of their respective rights or remedies under this Agreement or the
documents signed pursuant to this Agreement. No waiver, change, modification or discharge of
any of the rights and duties of the parties hereto will be effective unless contained in a written
instrument signed by the party sought to be bound.
10.9 SUBMISSION TO JURISDICTION. ALL ACTIONS OR PROCEEDINGS WITH
RESPECT TO THIS AGREEMENT MAY BE INSTITUTED IN ANY STATE OR FEDERAL
COURT SITTING IN TULSA, OKLAHOMA, AS THE LENDER MAY ELECT, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION (BOTH SUBJECT MATTER AND PERSON) OF EACH SUCH COURT.
10.10 PATRIOT Act Notification. The Lender hereby notifies the Borrower that pursuant
to the requirements of the PATRIOT Act, it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of the Borrower
and other information that will allow the Lender to identify the Borrower in accordance with the
PATRIOT Act.
28
10.11 WAIVER OF JURY TRIAL. EACH OF BORROWER AND LENDER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY. EACH OF BORROWER AND LENDER
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH OF BORROWER AND LENDER WARRANTS
AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING
THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
10.12 Counterparts. This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or electronic (pdf) means shall be effective as
delivery of a manually executed counterpart of this Agreement.
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY. EACH OF BORROWER AND LENDER
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH OF BORROWER AND LENDER WARRANTS
AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING
THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
10.12 Counterparts. This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or electronic (pdf) means shall be effective as
delivery of a manually executed counterpart of this Agreement.
[signatures on following page]
29
IN WITNESS WHEREOF, the Lender and the Borrower have caused this Agreement to
be duly executed, effective as of the date first above written.
"Borrower": ADDVANTAGE TECHNOLOGIES GROUP,
INC.
By: /s/ Joseph E. Hart
Name: Joseph E. Hart
Title: CEO
"Lender": VAST BANK, N.A.
By: /s/ Lauren N. Smith
Name: Lauren N. Smith
Title: Vice President
Acknowledgement
The undersigned, David E. Chymiak, Leveling 8 Inc. and David Chymiak LLC, each (i)
acknowledge receipt of drafts of the Loan Agreement between Vast Bank, N.A. and Addvantage
Technologies, Inc. and the other Loan Documents, (ii) agree to the conditions of Section 2.14 of
such Loan Agreement, including without limitation the condition that payments on the Leveling 8
Note be made directly to Vast Bank, N.A. until and through the December 31, 2022 payment, and
(iii) that a part of the Collateral securing the Loan from Vast Bank, N.A. to Addvantage
Technologies, Inc. is all of Addvantage Technologies, Inc.'s rights in and to the Leveling 8
Mortgages, the Leveling 8 Note, the Chymiak Guaranty and the Chymiak Pledge. Capitalized
terms not defined in this acknowledgement are hereby assigned the meanings ascribed to them in
The undersigned, David E. Chymiak, Leveling 8 Inc. and David Chymiak LLC, each (i)
acknowledge receipt of drafts of the Loan Agreement between Vast Bank, N.A. and Addvantage
Technologies, Inc. and the other Loan Documents, (ii) agree to the conditions of Section 2.14 of
such Loan Agreement, including without limitation the condition that payments on the Leveling 8
Note be made directly to Vast Bank, N.A. until and through the December 31, 2022 payment, and
(iii) that a part of the Collateral securing the Loan from Vast Bank, N.A. to Addvantage
Technologies, Inc. is all of Addvantage Technologies, Inc.'s rights in and to the Leveling 8
Mortgages, the Leveling 8 Note, the Chymiak Guaranty and the Chymiak Pledge. Capitalized
terms not defined in this acknowledgement are hereby assigned the meanings ascribed to them in
the Loan Agreement.
/s/ David E. Chymiak
David E. Chymiak
LEVELING 8 INC.
By: /s/ David E. Chymiak
Name: David E. Chymiak
Title: President
DAVID CHYMIAK LLC
By: /s/ David E. Chymiak
Name: David E. Chymiak
Title: Sole Member
David E. Chymiak
LEVELING 8 INC.
By: /s/ David E. Chymiak
Name: David E. Chymiak
Title: President
DAVID CHYMIAK LLC
By: /s/ David E. Chymiak
Name: David E. Chymiak
Title: Sole Member