EXHIBIT 10.37
BUSINESS LOAN AGREEMENT
NAME(S)/ADDRESS(ES) OF BORROWER(S) ("Borrower, I, My or Me")
MAXCO, INC.
0000 XXXXXXXXXX XXX
XXXXXXX XX 00000
NAME/ADDRESS OF LENDER (CREDITOR) ("Lender, You, or Your")
CAPITOL NATIONAL BANK
000 XXXXXXXXXX XXXXXX XXXXX
XXXXXXX, XX 00000
TYPE OF BUSINESS
METALS SERVICE CENTERS /X/ CORPORATION / / PARTNERSHIP / / PROPRIETORSHIP
LIMITED LIABILITY LIMITED LIABILITY
/ / COMPANY / / PARTNERSHIP
AMOUNT AND TERM OF LOAN(S) OR LINE(S) OF CREDIT
AMOUNT $2,700,000.00
TWO MILLION SEVEN HUNDRED THOUSAND AND NO/100
TRANSACTION DATE MATURITY DATE ACCOUNT NUMBER /X/ LOAN / / LINE OF CREDIT
5/28/2004
INTEREST RATE
WSJP + 1.0%
PURPOSE OF CREDIT
PAYOFF NATIONAL CITY AND COMERICA BANK.
The undersigned Borrower, in consideration of the Lender granting the loan(s) or
line(s) of credit upon the terms described above hereby agrees, warrants and
represents as follows:
A. PREPAYMENT. Borrower agrees that in the event of prepayment, the Borrower
will pay a prepayment penalty on the following basis:
B. ACCOUNTING AND COMPENSATING BALANCES. Borrower agrees to maintain the
following accounts with Lender:
BORROWER AGREES TO MAINTAIN A DEPOSITORY RELATIONSHIP WITH CAPITOL NATIONAL
BANK THROUGHOUT LIFE OF THE LOAN.
1. % of the balance of the loan or used portion of the line of credit
plus
2. % of any unused portion of the line of credit, if any.
C. FINANCIAL REQUIREMENTS. Provisions 1 and 2 below shall be in accordance with
generally accepted accounting principles.
1. Borrower will maintain a net worth of at least $
2. Borrower will maintain current assets in excess of current liabilities
in a ratio of at least to one.
3. Borrower will not make (without prior written consent of Lender)
investments in fixed assets in excess of: $
4. Borrower will enter into no lease (without prior written consent of
Lender) with an aggregate rental of more than: $
5. Borrower will cause its following named creditor(s) to subordinate
its debt to the debt of the Borrower to Lender in a form prescribed by
Lender.
NAME OF CREDITOR DOLLAR AMOUNT SUBORDINATED
6. Borrower will submit financial data as follows:
QUARTERLY SEC 10Q & ANNUAL SEC 10K STATEMENTS ON BORROWER. ANNUAL PERSONAL
FINANCIAL STATEMENTS ON GUARANTOR. IRS TAX RETURNS ON BOTH BORROWER &
GUARANTOR.
D. SECURITY. To secure its loan or line of credit, the Borrower has or will
deliver possession of the following collateral or will execute the following
instruments of pledge, mortgage, assignment, guarantee, or security agreement
and will comply with all of the provisions of those documents:
DEMAND NOTE BETWEEN ATMOSPHERE ANNEALING INC. AND MAXCO, INC. DATED JANUARY 3,
1997. ALL ASSETS. 1,785,838 SHARES OF INTERGRAL VISION, INC. STOCK & 454,767
SHARES OF MEDAR, INC. NKA INTEGRAL VISION, INC. STOCK. REFER TO SECURITY
AGREEMENTS DATED 05/28/04. ***
E. GUARANTORS. To induce the Lender to extend and continue to extend financial
accommodations to Borrower, the following named individual(s) or entity(ies)
have agreed to guarantee repayment of any Indebtedness of Borrower:
The Borrower(s) acknowledge(s) having read and understood the terms listed on
page one as well as on pages two and three hereof and agrees to be bound by and
to comply with them:
By X /s/ Xxxxxxx Xxxxxxx 5/28/04 By X
------------------------------------ ----------------------------
Date Date
XXXXXXX XXXXXXX
Its VICE PRESIDENT OF FINANCE Its
& TREASURER
By X By X
------------------------------------ ----------------------------
Date Date
Its Its
GENERAL AGREEMENTS
1. The business of the Borrower shall be continued in its present form and
at the address as shown on page one, and the Borrower will not enter into
changes of its partnership agreement, limited liability company articles of
organization, or, if a corporation, enter into a consolidation, merger, or
permit a majority of its common stock to be transferred, or grant options which
could result in such actions unless the Lender is first notified and consents in
writing to any such change.
2. The proceeds of the loan or line of credit will be used lawfully and
exclusively for the benefit of the Borrower's business and for the purpose set
forth on page one.
3. All collateral security given to secure the loan or line of credit shall
also secure all of the other obligations of the Borrower to the Lender of
whatsoever nature, past, present, or future. All collateral security given for
other obligations of the Borrower to the Lender, together with any debt from
Lender to Borrower, (including, but not limited to checking, deposit accounts,
certificates of deposit, savings accounts, and the like) shall, likewise, secure
the loan or line of credit described on page one. It is the expressed intent to
cross-collateralize all of the borrowings or other indebtedness of Borrower to
the Lender. The breach of the terms of any note, security agreement, mortgage,
pledge, or loan agreement of whatsoever nature between the Borrower and the
Lender shall constitute default and breach of all such agreements, including
this agreement.
4. The Borrower will at all times maintain in full force adequate liability
and property insurance to protect its assets, the insurance to be in such form
and such amounts as the Lender, at its sole discretion, may require.
5. This agreement shall pertain to and govern monies owed by Borrower to
Lender, identified as loan(s) and/or line(s) of credit on page one, including
all renewals, extensions and changes of form related thereto, until the same
have been paid In full.
G. BORROWER'S WARRANTIES
Borrower Warrants:
1. All representations and statements of whatever nature made or delivered
to the Lender at any time prior to, contemporaneous with, or subsequent to this
agreement have been, are, or shall be true in all respects.
2. The Borrower has full and unencumbered title to all property relied upon
by the Lender as security and to all assets set forth in any financial
statement, unless otherwise indicated in such statement.
3. The Borrower will keep its books and records in accordance with
generally accepted accounting principles and will deliver balance sheets as well
as profit and loss statements from time to time in a form satisfactory to the
Lender.
4. The Borrower agrees that the Lender may itself, or by its authorized
representative, inspect the premises, books, and records of the Borrower during
regular business hours and at reasonable intervals.
5. As to any real estate which has been, is now, or will be in the future
owned or occupied by Borrower, that such real estate has not in the past, nor
will now or in the future be allowed in any manner to be exposed to or contain
hazardous or environmentally harmful substances as may be defined or regulated
by any state or federal law or regulation which impacts, in any way, such
substances, except to the extent the existence of such substances has been
presently disclosed in writing to Lender, and Borrower will immediately notify
Lender in writing of any assertion made by any party to the contrary. Borrower
indemnifies and holds Lender and Lender's directors, officers, employees, and
agents harmless from any liability or expense of whatsoever nature, including
reasonable attorney fees, incurred directly or indirectly as a result of
Borrower's involvement with hazardous or environmentally harmful substances as
may be defined or regulated as such under any state or federal law or
regulation.
6. If the Borrower is a corporation, it will not pay dividends or purchase
or retire any of its capital stock without written permission of the Lender.
7. The Borrower will not, during the term of this agreement, incur any
other indebtedness for borrowed money, become a guarantor or surety for any
third party, will not lend money, encumber any of its assets, or sell any asset,
except in the ordinary course of Borrower's business, without the written
permission of the Lender. For the purposes of this section, the sale of accounts
is deemed to be borrowing money.
H. EVENTS OF DEFAULT
The Borrower agrees to pay all of the Lender's expenses incidental to
perfecting Lender's security interests and liens, including all insurance
premiums and title insurance costs, Uniform Commercial Code search fees, and
all, fees incurred by Lender for audits, inspection, and copying of Borrower's
books and records. In addition, any costs associated with the closing of this
loan, attorney fees and other incidental costs shall be paid by Borrower. The
Borrower also agrees to pay all costs and expenses of Lender in connection with
the enforcement of Lender's rights and remedies under this agreement, the
Related Documents, and any other agreements between the Borrower and Lender in
connection with any amendments, modifications, waiver of consent with respect to
this agreement, including reasonable attorney fees.
Any failure of the Borrower to pay any interest, principal, or fee when
due; any breach or default of any term, condition or warranty of this agreement
or any other agreement between the Borrower and the Lender; any appointment of a
receiver, trustee, or assignment for the benefit of creditors; any voluntary or
involuntary bankruptcy insolvency proceeding; any assessment for taxes (other
than real property taxes) levied by any government entity; or any lien,
attachment, or garnishment by a creditor of the Borrower shall constitute a
default hereof. Borrower shall also be in default if the Lender should, in good
faith, believe the Borrower's ability to repay its indebtedness under this
Agreement, any collateral, or the ability to resort to any collateral, is or
soon will be impaired, time being of the very essence.
I. REMEDIES ON DEFAULT
In addition to any other remedies upon an event of Default, Lender shall
have the right to cease to make any further advances under this Agreement, or
any other indebtedness which Borrower has with Lender. Upon such a default the
Lender may, at its sole and absolute option, declare all sums due from the
Borrower immediately due and payable regardless of the terms of any note or
other evidence of indebtedness between the Borrower and the Lender. No
indulgence or failure of the Lender to enforce any rights hereunder or under any
other agreement between the Borrower and the Lender shall constitute a waiver or
those terms by the Lender, and the Lender may enforce such terms upon subsequent
or continuing default.
J. DEFINITIONS
1. "AGREEMENT" shall mean this Business Loan Agreement.
2. "COLLATERAL shall mean the Property which Borrower and any other
Obligor has pledged, mortgaged, or granted Lender a security interest in,
wherever located and whether now ended or hereafter acquired, together with all
replacements, substitutions, proceeds and products thereof.
3. "EVENT OF DEFAULT" shall mean any of the events described in section H
of this Agreement and in the Related Documents.
4. "FINANCIAL STATEMENTS" shall mean all balance sheets, earnings
statements, and other financial information (whether of Borrower, or an Obligor)
which have been, are now, or are in the future furnished to Lender.
5. "INDEBTEDNESS" shall mean the Loan(s) and all other loans and
indebtedness of Borrower to Lender, including but not limited to Lender advances
for payments of insurance, taxes, any amounts advanced by Lender to protect its
interest in the Collateral, overdrafts in deposit accounts with Lender, and all
other indebtedness, obligations and liabilities of Borrower to Lender, whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, joint or several, due or to become due, now existing or hereafter
arising.
By initialing, I acknowledge this is page 2 of 3 of the Business Loan Agreement.
/s/ VS
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Initials Initials Initials Initials
6. "OBLIGOR" shall mean any person having any obligation to Lender, whether
for the payment of money or otherwise, under this Agreement or under the Related
Documents, including but not limited to Guarantor and any other guarantors of
the Indebtedness.
7. "PROPERTY" shall mean all of Borrower's (and/or other Obligor's, as
applicable) assets, whether tangible or intangible, real or personal.
8. "RELATED DOCUMENTS" shall mean any and all documents, promissory notes,
security agreements, leases, mortgages, guaranties, pledges and any other
documents or agreements executed in connection with this Agreement. The term
shall include both documents existing at the time of execution of this Agreement
and documents executed after this date of this Agreement.
K. MISCELLANEOUS
1. The Borrower will promptly inform the Lender of any fact or act which
materially affects the Borrower's financial condition.
2. DELETED
3. Borrower warrants that no provision, warranty or promise made by
Borrower in any document related to this transaction causes any conflict
whatsoever with the terms of Borrower's articles of incorporation or
organization, by-laws, partnership agreement, operating agreement, or any
document related to any other transaction Borrower may be involved with, with
any other person or entity.
4. If the Borrower is a corporation, partnership or limited liability
company, the Borrower is duly organized, validly existing and in good standing
(if applicable) under the laws of the state of its organization. The execution
and delivery of this agreement and all documents related hereto, and the
performance by the Borrower of its obligations hereunder and thereunder, are
within its power, have been duly authorized by proper action on the part of the
Borrower and are not in violation of any existing law, rule or regulation of any
governmental agency or authority, or any order or decision of any court. This
agreement and all documents related hereto to which the Borrower is a party,
when executed and delivered, will constitute the valid and binding obligations
of the Borrower enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency or similar laws of general application effecting the
enforcement of creditors' rights and except to the extent that general
principles of equity might affect the specific enforcement of such agreements.
5. This agreement and Related Documents shall be interpreted under the laws
of the State of MICHIGAN. Any action brought by either party must be brought in
the State courts located in XXXXXX County, MICHIGAN. If no county is designated
than in the county and state where the Lender is domiciled. Whenever possible,
each provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law; but, if any provision of this
agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or the invalidity without
invalidating the remainder of such provision or the remaining provisions of this
agreement.
6. The rights and privileges of the Lender hereunder shall inure to the
benefit of its successors and assigns, and this agreement shall be binding on
all heirs, executors, administrators, assigns, and successors of the Borrower.
The Borrower may not assign this agreement or any benefits accruing to it
hereunder without the express written consent of the Lender.
ADDITIONAL PROVISIONS
*** REFER TO SECURITY AGREEMENTS DATED 5/28/04 AND ASSIGNMENTS. COMMERCIAL REAL
ESTATE MORTGAGE ON PROPERTY LOCATED AT 0000 XXXXXXXXXX XXX, XXXXXXX, XX -
MORTGAGE DATED 05/28/04. SECURED UNLIMITED PERSONAL GUARANTEE OF XXX X. XXXX
DATED 05/28/04. ACCESS/ONSET BIDCO GUARANTEE AGREEMENT DATED 05/28/04. IN
ACCORDANCE WITH PARAGRAPH G7 OF THIS AGREEMENT, LENDER PERMITS THE GRANTING BY
BORROWER OF A SUBORDINATE SECURITY INTEREST TO ACCESS BIDCO, LLC AND ONSET
BIDCO, LLC IN THE SAME COLLATERAL IN WHICH THE LENDER HAS A PRIORITY SECURITY
INTEREST.
/s/ VS /s/ JCS
Both Parties -------------------- -----------------
Must Initial: Borrower's Initials Lender's Initials
By initialing, I acknowledge this is page 3 of 3 of the Business Loan Agreement.
/s/ VS
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Initials Initials Initials Initials
