Exhibit (10a) being the Business Loan Agreement between Web Press
Corporation and KeyBank National Association dated
May 19, 2000.
BUSINESS LOAN AGREEMENT
______________________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral
$305,000.00 05-19-2000 11-22-2000 4000009704 402 305
Account Officer Initials
E93826 SPH09 SPH
_____________________________________________________________
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
______________________________________________________________________________
Borrower: WEB PRESS CORPORATION Lender: KEYBANK NATIONAL
22023 68TH AVENUE SOUTH ASSOCIATION
KENT, WA 98032 Bellevue COMMUNITY
BANKING CENTER
700 FIFTH AVENUE
48TH FLOOR
SEATTLE, WA 98104
THIS BUSINESS LOAN AGREEMENT between WEB PRESS CORPORATION ("Borrower") and
KEYBANK NATIONAL ASSOCIATION ("Lender") is made and executed on the following
terms and conditions. Borrower has received prior commercial loans from
Lender or has applied to Lender for a commercial loan or loans and other
financial accommodations, including those which may be described on any
exhibit or schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations
from Lender to Borrower, are referred to in this Agreement individually as the
"Loan" and collectively as the "Loans." Borrower understands and agrees that:
(a) in granting, renewing, or extending any Loan, Lender is relying upon
Borrower's representations, warranties, and agreements, as set forth in this
Agreement; (b) the granting, renewing, or extending of any Loan by Lender at
all times shall be subject to Lender's sole judgment and discretion; and (c)
all such Loans shall be and shall remain subject to the following terms and
conditions of this Agreement.
TERM. This Agreement shall be effective as of May 19, 2000, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America
Agreement. The word "Agreement" means this Business Loan Agreement, as this
Business Loan Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Business Loan
Agreement from time to time.
Borrower. The word "Borrower" means WEB PRESS CORPORATION. The word
"Borrower" also includes, as applicable, all subsidiaries and affiliates of
Borrower as provided below in the paragraph titled "Subsidiaries and
Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
Collateral. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for a Loan, whether real
or personal property, whether granted directly or indirectly, whether
granted now or in the future, and whether granted in the form of a security
interest, mortgage, deed of trust, assignment, pledge chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
Event of Default. The words "Event of Default" means and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT."
Grantor. The word "Grantor" means and includes without limitation each and
all of the persons or entities granting a Security Interest in any
Collateral for the Indebtedness, including without limitation all Borrowers
granting such a Security Interest.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with any Indebtedness.
Indebtedness. The word "Indebtedness" means and includes without limitation
all Loans, together with all other obligations, debts and liabilities of
Borrower to Lender, or any one or more of them, as well as all claims by
Lender against Borrower, or any one or more of them; whether now or
hereafter existing, voluntary or involuntary, due or not due, absolute or
contingent, liquidated or unliquidated; whether Borrower may be liable
individually or jointly with others; whether Borrower may be obligated as a
guarantor, surety, or otherwise; whether recovery upon such Indebtedness
may be or hereafter may become barred by any statute of limitations; and
whether such Indebtedness may be or hereafter may become otherwise
unenforceable.
Lender. The word "Lender" means KEYBANK NATIONAL ASSOCIATION, its
successors and assigns.
Loan. The word "Loan" or "Loans" means and includes without limitation any
and all commercial loans and financial accommodations from Lender to
Borrower, whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to this
Agreement from time to time.
Note. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan obligations in
favor of Lender, as well as any substitute, replacement or refinancing note
or notes therefor.
Permitted Liens. The words "Permitted Liens" mean: (a) liens and security
interests securing Indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either not yet due or being
contested in good faith; (c) liens of materialmen, mechanics, warehousemen,
or carriers, or other like liens arising in the ordinary course of business
and securing obligations which are not yet delinquent; (d) purchase money
liens or purchase money security interests upon or in any property acquired
or held by Borrower in the ordinary course of business to secure
indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled "Indebtedness and
Liens"; (e) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in writing;
and (f) those liens and security interests which in the aggregate
constitute an immaterial and insignificant monetary amount with respect to
the net value of Borrower's assets.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and
05-19-00 BUSINESS LOAN AGREEMENT Page 2
Loan No 4000009704 (Continued)
documents, whether now or hereafter existing, executed in connection with
the Indebtedness.
Security Agreement. The words "Security Agreement" mean and include without
limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.
Security Interest. The words "Security Interest" mean and include without
limitation any type of collateral security, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien or title retention contract, lease or consignment intended as
a security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise.
SARA. The word "SARA" means the Superfund Amendments and Reauthorization
Act of 1986 as now or hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the
Initial Loan Advance and each subsequent Loan Advance under this
agreement shall be subject to the fulfillment to Lender's satisfaction
of all of the conditions set forth in this Agreement and in the
Related Documents.
Loan Documents. Borrower shall provide to Lender in form satisfactory to
Lender the following documents for the Loan: (a) the Note, (b) Security
Agreements granting to Lender security interests in the Collateral, (c)
Financing Statements perfecting Lender's Security Interests; (d) evidence
of insurance as required below; and (e) any other documents required under
this Agreement or by Lender or its counsel, including without limitation
any guaranties described below.
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents, and such other authorizations and other documents and
instruments as Lender or its counsel, in their sole discretion, may
require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees,
charges, and other expenses which are then due and payable as specified in
this Agreement or any Related Document.
Representations and Warranties. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any
Loan, and at all times any Indebtedness exists:
Organization. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Washington
and is validly existing and in good standing in all states in which
Borrower is doing business. Borrower has the full power and authority to
own its properties and to transact the businesses in which it is presently
engaged or presently proposes to engage. Borrower also is duly qualified
as a foreign corporation and is in good standing in all states in which the
failure to so qualify would have a material adverse effect on its business
or financial condition.
Authorization. The execution, delivery, and performance of this Agreement
and all Related Documents by Borrower, to the extent to be executed,
delivered or performed by Borrower, have been duly authorized by all
necessary action by Borrower; do not require the consent or approval of any
other person, regulatory authority or government body; and do not conflict
with, result in a violation of, or constitute a default under (a) any
provision of its articles of incorporation or organization, or bylaws, or
any agreement or other instrument binding upon Borrower or (b) any law,
governmental regulation, court decree, or order applicable to Borrower.
Financial Information. Each financial statement of Borrower supplied to
Lender truly and completely disclosed Borrower's financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material
contingent obligations except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement
required hereunder to be given by Borrower when delivered will constitute,
legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their respective terms.
Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not
presently due and payable, Borrower owns and has good title to all of
Borrower's properties free and clear of all Security Interests, and has not
executed any security documents or financing statements relating to such
properties. All of Borrower's properties are titled in Borrower's legal
name, and Borrower has not used, or filed a financing statement under, any
other name for at least the last five (5) years.
Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA," "SARA," the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
seq., or other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. Except as disclosed to and
acknowledged by Lender in writing, Borrower represents and warrants that:
(a) During the period of Borrower's ownership of the properties, there has
been no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or substance by any person on,
under, about or from any of the properties. (b) Borrower has no knowledge
of, or reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened release
of any hazardous waste or substance on, under, about or from the properties
by any prior owners or occupants of any of the properties, or (ii) any
actual or threatened litigation or claims of any kind by any person
relating to such matters. (c) Neither Borrower nor any tenant, contractor,
agent or other authorized user of any of the properties shall use,
generate, manufacture, store, treat, dispose of, or release any hazardous
waste or substance on, under, about or from any of the properties; and any
such activity shall be conducted in compliance with all applicable federal,
state, and local laws, regulations, and ordinances, including without
limitation those laws, regulations and ordinances described above. Borrower
authorizes Lender and its agents to enter upon the properties to make such
inspections and tests as Lender may deem appropriate to determine
compliance of the properties with this section of the Agreement. Any
inspections or tests made by Lender shall be at Borrower's expense and for
Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any
other person. The representations and warranties contained herein are based
on Borrower's due diligence in investigating the properties for hazardous
waste and hazardous substances. Borrower hereby (a) releases and waives any
future claims against Lender for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any such laws, and
(b) agrees to indemnify and hold harmless Lender against any and all
claims, losses, liabilities, damages, penalties, and expenses which Lender
may directly or indirectly sustain or suffer resulting from a breach of
this section of the Agreement or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release of a
hazardous waste or substance on the properties, occurring prior to
Borrower's ownership or interest in the properties, whether or not the same
was or should have been known to Borrower. The provisions of this section
of the Agreement, including the obligation to indemnity, shall survive the
payment of the Indebtedness and the termination or expiration of this
Agreement and shall not be affected by Lender's acquisition of any interest
in any of the properties, whether by foreclosure or otherwise.
05-19-00 BUSINESS LOAN AGREEMENT Page 3
Loan No 4000009704 (Continued)
Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which
may materially adversely affect Borrower's financial condition or
properties, other than litigation, claims, or other events, if any, that
have been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all tax returns and reports of
Borrower that are or were required to be filed, have been filed, and all
taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith
in the ordinary course of business and for which adequate reserves have
been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing,
Borrower has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or
affecting any of the Collateral directly or indirectly securing repayment
of Borrower's Loan and Note, that would be prior or that may in any way be
superior to Lender's Security Interests and rights in and to such
collateral.
Binding Effect. This Agreement, the Note, all Security Agreements directly
or indirectly securing repayment of Borrower's Loan and Note and all of the
Related Documents are binding upon Borrower as well as upon Borrower's
successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms.
Commercial Purposes. Borrower intends to use the Loan proceeds solely for
business or commercial related purposes.
Employee Benefit Plans. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (i) no Reportable Event
nor Prohibited Transaction (as defined in ERISA) has occurred with respect
to any such plan, (ii) Borrower has not withdrawn from any such plan or
initiated steps to do so, (iii) no steps have been taken to terminate any
such plan, and (iv) there are no unfunded liabilities other than those
previously disclosed to Lender in writing.
Location of Borrowers Offices and Records. Borrower's place of business, or
Borrower's Chief executive office, if Borrower has more than one place of
business, is located at 22023 68TH AVENUE SOUTH, KENT, WA 98032. Unless
Borrower has designated otherwise in writing this location is also the
office or offices where Borrower keeps its records concerning the
Collateral.
Year 2000. Borrower warrants and represents that all software utilized in
the conduct of Borrower's business will have appropriate capabilities and
compatibility for operation to handle calendar dates falling on or after
January 1, 2000, and all information pertaining to such calendar dates, in
the same manner and with the same functionality as the software does
respecting calendar dates falling on or before December 31, 1999. Further,
Borrower warrants and represents that the data-related user interface
functions, data-fields, and data-related program instructions and functions
of the software include the indication of the century.
Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will
be, true and accurate in every material respect on the date as of which
such information is dated or certified; and none of such information is or
will be incomplete by omitting to state any material fact necessary to make
such information not misleading.
Survival of Representations and Warranties. Borrower understands and agrees
that Lender, without independent investigation, is relying upon the above
representations and warranties in extending Loan Advances to Borrower.
Borrower further agrees that the foregoing representations and warranties
shall be continuing in nature and shall remain in full force and effect
until such time as Borrower's Indebtedness shall be paid in full, or until
this Agreement shall be terminated in the manner provided above, whichever
is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Litigation. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all existing and all
threatened litigation, claims, investigations, administrative proceedings
or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial
condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis,
and permit Lender to examine and audit Borrower's books and records at all
reasonable times.
Financial Statements. Furnish Lender with, as soon as available, but in no
event later than ninety (90) days after the end of each fiscal year,
Borrower's balance sheet and income statement for the year ended, reviewed
by a certified public accountant satisfactory to Lender, and, as soon as
available, but in no event later than thirty (30) days after the end of
each fiscal quarter, Borrowers balance sheet and profit and loss statement
for the period ended, prepared and certified as correct to the best
knowledge and belief by Borrower's chief financial officer or other officer
or person acceptable to Lender. All financial reports required to be
provided under this Agreement shall be prepared in accordance with
generally accepted accounting principles, applied on a consistent basis,
and certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables,
inventory schedules, budgets, forecasts, tax returns, and other reports
with respect to Borrower's financial condition and business operations as
Lender may request from time to time.
Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverage's and with
insurance companies reasonably acceptable to Lender. Borrower, upon request
of Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverage's will not be cancelled or diminished without at
least ten (10) days' prior written notice to Lender. Each insurance policy
also shall include an endorsement providing that coverage in favor of
Lender will not be impaired in any way by any act, omission or default of
Borrower or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such loss payable or other
endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (a) the
name of the insurer; (b) the risks insured; (c) the amount of the policy;
(d) the properties insured; (e) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (f) the expiration date of the policy. In addition, upon
request of Lender (however not more often than annually), Borrower will
have an independent appraiser satisfactory to Lender determine, as
applicable, the actual cash value or replacement cost of any Collateral.
The cost of such appraisal shall be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish executed
guaranties of the Loans in favor of Lender, executed by the guarantor named
below, on Lenders forms, and in the amount and under the conditions spelled
out in those guaranties.
Guarantors Amounts
WEB LEADER INTERNATIONAL, INC. Unlimited
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
05-19-00 BUSINESS LOAN AGREEMENT Page 4
Loan No 4000009704 (Continued)
Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or its properties, income, or profits, prior to the
date on which penalties would attach, and all lawful claims that, if
unpaid, might become a lien or charge upon any of Borrower's properties,
income, or profits. Provided however, Borrower will not be required to pay
and discharge any such assessment, tax, charge, levy, lien or claim so long
as (a) the legality of the same shall be contested in good faith by
appropriate proceedings, and (b) Borrower shall have established on its
books adequate reserves with respect to such contested assessment, tax,
charge, levy, lien, or claim in accordance with generally accepted
accounting practices. Borrower, upon demand of Lender, will furnish to
Lender evidence of payment of the assessments, taxes, charges, levies,
liens and claims and will authorize the appropriate governmental official
to deliver to Lender at any time a written statement of any assessments,
taxes, charges, levies, liens and clams against Borrower's properties,
income, or profits.
Performance. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in the Related Documents in a timely
manner, and promptly notify Lender if Borrower learns of the occurrence of
any event which constitutes an Event of Default under this Agreement or
under any of the Related Documents.
Operations. Maintain executive and management personnel with substantially
the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in
executive and management personnel; conduct its business affairs in a
reasonable and prudent manner and in compliance with all applicable
federal, state and municipal laws, ordinances, rules and regulations
respecting its properties, charters, businesses and operations, including
without limitation, compliance with the Americans with Disabilities Act and
with all minimum funding standards and other requirements of ERISA and
other laws applicable to Borrower's employee benefit plans.
Inspection. Permit employees or agents of Lender at any reasonable time to
inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records
and to make copies and memoranda of Borrower's books,accounts, and records.
If Borrower now or at any time hereafter maintains any records (including
without limitation computer generated records and computer software
programs for the generation of such records) in the possession of a third
party, Borrower, upon request or Lender, shall notify such party to permit
Lender free access to such records at all reasonable times and to provide
Lender with copies of any records it may request, all at Borrower's
expense.
Compliance Certificate. Unless waived in writing by Lender, provide Lender
at least annually and at the time of each disbursement of Loan proceeds
with a certificate executed by Borrower's chief financial officer, or other
officer or person acceptable to Lender, certifying that the representations
and warranties set forth in this Agreement are true and correct as of the
date of the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects
with all environmental protection federal, state and local laws, statutes,
regulations and ordinances; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on its part or on the part
of any third party, on property owned occupied by Borrower, any
environmental activity where damage may result to the environment, unless
such environmental activity is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state or local
governmental authorities; shall furnish to Lender promptly and in any event
within thirty (30) days after receipt thereof a copy of any notice,
summons, lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrowers part in connection with any
environmental activity whether or not there is damage to the environment
and/or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory
notes, mortgages, deeds of trust, security agreements, financing
statements, instruments, documents and other agreements as Lender or Its
attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:
Indebtedness and Liens. (a) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume indebtedness for borrowed money,
including capital leases, (b) except as allowed as a Permitted Lien, sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of Borrower's assets, or (c) sell with recourse any of
Borrower's accounts, except to Lender.
Continuity of Operations. (a) Engage in any business activities
substantially different than those in which Borrower is presently engaged,
(b) cease operations, liquidate, merge, transfer, acquire or consolidate
with any other entity, change ownership, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business, (C) pay
any dividends on Borrower's stock (other than dividends payable in its
stock), provided, however that notwithstanding the foregoing, but only so
long as no Event of Default has occurred and is continuing or would result
from the payment of dividends, if Borrower is a "Subchapter S Corporation"
(as defined in the Internal Revenue Code of 1986, as amended), Borrower may
pay cash dividends on its stock to its shareholders from time to time in
amounts necessary to enable the shareholders to pay income taxes and make
estimated income tax payments to satisfy their liabilities under federal
and state law which arise solely from their status as Shareholders of a
Subchapter S Corporation because of their ownership of shares of stock of
Borrower, or (d) purchase or retire any of Borrower's outstanding shares or
alter or amend Borrower's capital structure.
Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any interest in any other
enterprise or entity, or (c) incur any obligation as surety or guarantor
other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds
if: (a) Borrower or any Guarantor is in default under the terms of this
Agreement or any of the Related Documents or any other agreement that Borrower
or any Guarantor has with Lender; (b) Borrower or any Guarantor becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is
adjudged a bankrupt; (c) there occurs a material adverse change in Borrower's
financial condition, in the financial condition of any Guarantor, or in the
value of any Collateral securing any Loan; or (d) any Guarantor seeks, claims
or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of
the Loan or any other loan with Lender; or (e) Lender in good faith deems
itself insecurs, even though no event of Default shall have occurred.
ADDITIONAL COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Maximum Capital Expenditures. The Borrower's capital expenditures shall not
exceed $600,000.00 in any fiscal year.
Interest Coverage Ratio. The ratio of Borrower's earnings before interest and
taxes divided by interest expenses shall not be less than 2.00 to 1.00;
calculated at the end of each quarter.
Senior Liabilities to Adjusted Tangible Capital Ratio. Borrower shall maintain
a ratio of Total Senior Liabilities to Adjusted Tangible Capital of not more
than 2.50 to 1.00; calculated at the end of each quarter. The Words "Total
Senior Liabilities" means total liabilities less Subordinated Debt. The words
"Adjusted Tangible Capital" mean Tangible Capital less investments in,
advances to, promissory notes and any receivables from, any affiliate or other
05-19-00 BUSINESS LOAN AGREEMENT Page 5
Loan No 4000009704 (Continued)
related entity of Borrower. The words "Tangible Capital" mean Tangible Net
Worth plus Subordinated Debt. The words "Tangible Net Worth" mean Borrower's
total assets excluding all intangible assets (i.e., goodwill, trademarks,
patents, copyright, organizational expenses, and similar intangible items, but
including leaseholds and leasehold improvements) less Total Debt. The words
"Total Debt" mean all of Borrower's liabilities including Subordinated Debt.
The words "Subordinated Debt" mean indebtedness and liabilities of Borrower
which have been subordinated by written agreement to indebtedness owned by
Borrower to Lender in form and substance acceptable to Lender.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all
accounts Borrower may open in the future, excluding however all IRA and Keogh
accounts, and all trust accounts for which the grant of a security interest
would be prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
Default on Indebtedness. Failure of Borrower to make any payment when due
on the Loans.
Other Defaults. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or failure
of Borrower to comply with or to perform any other term, obligation,
covenant or condition contained in any other agreement between Lender and
Borrower.
Default In Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or Borrower's or any
Grantor's ability to repay the Loans or perform their respective
obligations under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under this
Agreement or the Related Documents is false or misleading in any material
respect at the time made or furnished, or becomes false or misleading at
any time thereafter.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any Security
Agreement to create a valid and perfected Security Interest) at any time
and for any reason.
Insolvency. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any creditor
of any Grantor against any collateral securing the Indebtedness, or by any
governmental agency. This includes a garnishment, attachment, or levy on or
of any of Borrower's deposit accounts with Lender. However, this Event of
Default shall not apply if there is a good faith dispute by Borrower or
Grantor, as the case may be, as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding, and if
Borrower or Grantor gives Lender written notice of the creditor or
forfeiture proceeding and furnishes reserves or a surety bond for the
creditor or forfeiture proceeding satisfactory to Lender.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness. Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure the Event of Default.
Change In Ownership. Any change in ownership of twenty-five percent (25%)
or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
Insecurity. Lender, in good faith, deems itself insecure.
Right to Cure. If any default, other than a Default on Indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been given
a notice of a similar default within the preceding twelve (12) months, it
may be cured (and no Event of Default will have occurred) if Borrower or
Grantor, as the case may be, after receiving written notice from Lender
demanding cure of such default: (a) cures the default within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lenders sole discretion to be
sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make Loan Advances or disbursements), and, at Lender's option,
all Indebtedness immediately will become due and payable, all without notice
of any kind to Borrower, except that in the case of an Event of Default of the
type described in the "Insolvency" subsection above, such acceleration shall
be automatic and not optional. In addition, Lender shall have all the rights
and remedies provided in the Related Documents or available at law, in equity,
or otherwise. Except as may be prohibited by applicable law, all of Lender's
rights and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take
action to perform an obligation of Borrower or of any Grantor shall not affect
Lender's right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment
Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender in the State of Washington. If there is a lawsuit, Borrower agrees
upon Lender's request to submit to the jurisdiction of the courts of King
County, the State of Washington. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
Caption headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Agreement.
Multiple Parties; Corporate Authority. All obligations of Borrower under
this Agreement shall be joint and several, and all references to Borrower
shall mean each and every Borrower. This means that each of the persons
signing below is responsible for all obligations in this Agreement.
05-19-00 BUSINESS LOAN AGREEMENT Page 6
Loan No 4000009704 (Continued)
Consent to Loan Participation. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or
knowledge Lender may have about Borrower or about any other matter relating
to the Loan, and Borrower hereby waives any rights to privacy it may have
with respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. Borrower also agrees that the
purchasers of any such participation interests will be considered as the
absolute owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the sale
of such participation interests. Borrower further waives all rights of
offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce Borrower's
obligation under the Loans irrespective of the failure or insolvency of any
holder of any interest in the Loans. Borrower further agrees that the
purchaser of any such participation interests may enforce its interests
irrespective of any personal claims or defenses that Borrower may have
against Lender.
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
expenses, including without limitation attorneys' fees, incurred in
connection with the preparation, execution, enforcement, modification and
collection of this Agreement or in connection with the Loans made pursuant
to this Agreement. Lender may pay someone else to help collect the Loans
and to enforce this Agreement, and Borrower will pay that amount. This
includes, subject to any limits under applicable law, Lender's attorneys'
fees and Lender's legal expenses, whether or not there is a lawsuit,
including attorneys' fees for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Borrower also will pay any
court costs, in addition to all other sums provided by law.
Notices. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (unless otherwise required
by law), and shall be effective when actually delivered or when deposited
with a nationally recognized overnight courier or deposited in the United
States mail, first class, postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above. Any party may change
its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is
to change the party's address. To the extent permitted by applicable law,
if there is more than one Borrower, notice to any Borrower will constitute
notice to all Borrowers. For notice purposes, Borrower will keep Lender
informed at all times of Borrowers current address(es).
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
Subsidiaries and Affiliates of Borrower. To the extent the context of any
provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word "Borrower" as
used herein shall include all subsidiaries and affiliates of Borrower.
Notwithstanding the foregoing however, under no circumstances shall this
Agreement be construed to require Lender to make any Loan or other
financial accommodation to any subsidiary or affiliate of Borrower.
Successors and Assigns. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall inure to
the benefit of Lender, its successors and assigns. Borrower shall not,
however, have the right to assign its rights under this Agreement or any
interest therein, without the prior written consent of Lender.
Survival. All warranties, representations, and covenants made by Borrower
in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement shall be considered to have been
relied upon by Lender and will survive the making of the Loan and delivery
to Lender of the Related Documents, regardless of any investigation made by
Lender or on Lender's behalf.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Grantor as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not constitute
continuing consent in subsequent instances where such consent is required,
and in all cases such consent may be granted or withheld in the sole
discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
MAY 19, 2000.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
BORROWER:
WEB PRESS CORPORATION
By: /s/ GARY B. PALMER
Gary B. Palmer, President
By: /s/ CRAIG L. MATHISON
Craig L. Mathison, Vice President of Finance
LENDER:
KeyBank National Association
By: /s/ SAMUEL P. HENRY
Authorized Officer:Samuel P. Henry, Vice President
PROMISSORY NOTE
______________________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral
$305,000.00 05-19-2000 11-22-2000 4000009704 402 305
Account Officer Initials
E93826 SHP09 SPH
_____________________________________________________________
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
______________________________________________________________________________
Borrower: WEB PRESS CORPORATION Lender: KEYBANK NATIONAL
22023 68TH AVENUE SOUTH ASSOCIATION
KENT, WA 98032 Bellevue COMMUNITY
BANKING CENTER
700 FIFTH AVENUE
48TH FLOOR
SEATTLE, WA 98104
______________________________________________________________________________
Principal Amount: $305,000.00 Initial Rate: 9.250%
Date of Note: May 19, 2000
PROMISE TO PAY. WEB PRESS CORPORATION. ("Borrower") promises to pay to KeyBank
National Association("Lender"), or order, in lawful money of the United States
of America, the principal amount of Three Hundred Fifty Thousand & 00/100
Dollars ($305,000.00) or so much as may be outstanding, together with interest
on the unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan on demand, or if no demand is made, in
one payment of all outstanding principal plus all accrued unpaid interest on
November 22, 2000. In addition, Borrower will pay regular monthly payments of
accrued unpaid interest beginning June 22, 2000, and all subsequent interest
payments are due on the same day of each month after that. The annual interest
rate for this Note is computed on a 365/360 basis; that is, by applying the
ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the
principal balance is outstanding. Borrower will pay Lender at Lender's address
shown above or at such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be applied first
to any unpaid collection costs and any late charges, then to any unpaid
interest, and any remaining amount to principal.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is the Prime Rate
announced by Lender (the "Index"). The interest Rate will change
automatically and correspondingly on the date of each announced change of the
Index by Lender. The Index is not necessarily the lowest rate charged by
Lender on its loans and is set by Lender in its sole discretion. If the index
becomes unavailable during the term of this loan, the lender may designate a
substitute index after notifying Borrower. Lender will tell Borrower the
current index rate upon Borrower's request. Borrower understands that Lender
may make loans based on other rates as well. The interest rate change will not
occur more often than each day that the index changes. The index currently is
9.500% per annum. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 0.250 percentage points under the
index, resulting in an initial rate of 9.250% per annum. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum
rate allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject
to refund upon early payment (whether voluntary or as a result of default),
except as otherwise required by law. Except for the foregoing, Borrower may
pay without penalty all or a portion of the amount owed earlier than it is
due. Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments of accrued
unpaid interest. Rather, they will reduce the principal balance due.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $50.00, whichever is greater.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d)
Any representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment
for the benefit of creditors, or any proceeding is commenced either by
Borrower or against Borrower under any bankruptcy or insolvency laws. (f) Any
creditor tries to take any of Borrower's property on or in which Lender has a
lien or security interest. This includes a garnishment of any of Borrowers
accounts with Lender. (g) Any guarantor dies or any of the other events
described in this default section occurs with respect to any guarantor of this
Note. (h) A material adverse change occurs in Borrower's financial condition,
or Lender believes the prospect of payment or performance of the Indebtedness
is impaired. (i) Lender in good faith deems itself insecure.
If any default, other than a default in payment, is curable and if Borrower
has not been given a notice of a breach of the same provision of this Note
within the preceding twelve (12) months, it may be cured (and no event of
default will have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (a) cures the default within fifteen
(15) days; or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender's sole discretion to
be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may also, if
permitted under applicable law, increase the variable interest rate on this
Note to 3.000 percentage points over the Index. The interest rate will not
exceed the maximum rate permitted by applicable law. Lender may hire or pay
someone else to help collect this Note if Borrower does not pay. Borrower also
will pay Lender that amount. This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal expenses whether
or not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction), appeals, and any anticipated post-judgment collection
services. If not prohibited by applicable law, Borrower also will pay any
court costs, in addition to all other sums provided by law. This Note has been
delivered to Lender and accepted by Lender in the State of Washington. If
there is a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of King County or Pierce County, the State of
Washington. This Note shall be governed by and construed in accordance with
the laws of the State of Washington.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in and hereby assigns, conveys, delivers, pledges, and transfers to
05-19-00 PROMISSORY NOTE Page 2
Loan No 4000009704 (Continued)
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all
accounts Borrower may open in the future, excluding however all IRA and Keogh
accounts, and all trust accounts for which the grant of a security interest
would be prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing on this Note
against any and all such accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested only in writing by Borrower or by an authorized
person. All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to Lender's office shown above. The
following party or parties are authorized to request advances under the line
of credit until Lender receives from Borrower at Lender's address shown above
written notice of revocation of their authority: GARY B. PALMER, PRESIDENT;
CRAIG L.MATHISON, VICE PRESIDENT. Borrower agrees to be liable for all sums
either: (a) advanced in accordance with the instructions of an authorized
person or (b) credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lenders internal records, including daily
computer printouts. Lender will have no obligation to advance funds under this
Note if: (a) Borrower or any guarantor is in default under the terms of this
Note or any agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of this Note; (b)
Borrower or any guarantor ceases doing business or is insolvent; (c) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this Note or any other loan with Lender; or (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (e) Lender in good faith deems itself
insecure under this Note or any other agreement between Lender and Borrower.
ADDITIONAL PROVISION. Any advance that Lender in its sole discretion may
permit after the final payment date provided in this Note will be due on
demand and otherwise subject to the terms of this Note.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Lenders right to
declare payment of this Note on its demand. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment demand for payment protest and
notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether
as maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties also agree
that Lender may modify this loan without the consent of or notice to anyone
other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE
NOTE.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
BORROWER:
WEB PRESS CORPORATION
BY: /s/ GARY B. PALMER_______________________
GARY B. PALMER, PRESIDENT
BY: /s/ CRAIG L. MATHISON
_________________________________________
CRAIG L. MATHISON, VICE PRESIDENT
COMMERCIAL SECURITY AGREEMENT
______________________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral
$305,000.00 05-19-2000 11-22-2000 4000009704 402 305
Account Officer Initials
E93826 SHP09 SHP
_____________________________________________________________
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
______________________________________________________________________________
Borrower: WEB PRESS CORPORATION Lender: KEYBANK NATIONAL
22023 68TH AVENUE SOUTH ASSOCIATION
KENT, WA 98032 Bellevue COMMUNITY
BANKING CENTER
700 FIFTH AVENUE
48TH FLOOR
SEATTLE, WA 98104
______________________________________________________________________________
THIS COMMERCIAL SECURITY AGREEMENT is entered into between WEB PRESS
CORPORATION. (referred to below as "Grantor"); and KeyBank National
Association(referred to below as "Lender"). For valuable consideration,
Grantor grants to Lender a security interest in the Collateral to secure the
Indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights
which Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
Agreement. The word "Agreement" means this Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time.
Collateral. The word "Collateral" means the following described property of
Grantor, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:
All equipment.
In addition, the word "Collateral" includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising,
and wherever located:
(a) All attachments, accessions, accessories, tools, parts, supplies,
increases, and additions to and all replacements of and substitutions
for any property described above.
(b) All products and produce of any of the property described in this
Collateral section.
(c) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral section.
(d) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property described
in this Collateral section.
(e) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
Event of Default. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "Events of Default."
Grantor. The word "Grantor" means WEB PRESS CORPORATION, its successors and
assigns.
Guarantor. The word "Guarantor" means and includes without limitation each
and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by
the Note, including all principal and interest, together with all other
indebtedness and costs and expenses for which Grantor is responsible under
this Agreement or under any of the Related Documents. In addition, the word
"Indebtedness" includes all other obligations, debts and liabilities, plus
interest thereon, of Grantor, or any one or more of them, to Lender, as
well as all claims by Lender against Grantor, or any one or more of them,
whether existing now or later; whether they are voluntary or involuntary,
due or not due, direct or indirect, absolute or contingent, liquidated or
unliquidated; whether Grantor may be liable individually or jointly with
others; whether Grantor may be obligated as guarantor, surety,
accommodation party or otherwise; whether recovery upon such indebtedness
may be or hereafter may become barred by any statute of limitations; and
whether such indebtedness may be or hereafter may become otherwise
unenforceable.
Lender. The word "Lender" means KEYBANK NATIONAL ASSOCIATION, its
successors and assigns.
Note. The word "Note" means the note or credit agreement dated MAY 19,
2000, in the principal amount of $305,000.00 from WEB PRESS CORPORATION to
Lender, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for the note or credit
agreement.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the Indebtedness.
RIGHT OF SETOFF. Grantor hereby grants Lender a contractual possessory
security interest in and hereby assigns, conveys, delivers, pledges, and
transfers all of Grantor's right, title and interest in and to Grantor's
accounts with Lender (whether checking, savings, or some other account),
including all accounts held jointly with someone else and all accounts Grantor
may open in the future, excluding, however, all IRA and Keogh accounts, and
all trust accounts for which the grant of a security interest would be
prohibited by law. Grantor authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all Indebtedness against any and all such
accounts.
05-19-00 COMMERCIAL SECURITY AGREEMENT
Page 2
Loan No 4000009704 (Continued)
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:
Perfection of Security Interest. Grantor agrees to execute such financing
statements and to take whatever other actions are requested by Lender to
perfect and continue Lender's security interest in the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Lender's interest upon any and all chattel paper if not delivered to Lender
for possession by Lender. Grantor hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect or to continue the security interest granted in this Agreement.
Lender may at any time, and without further authorization from Grantor,
file a carbon, Photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor
will reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Lenders security interest in the
Collateral. Grantor promptly will notify Lender before any change in
Grantor's name including any change to the assumed business names of
Grantor. This is a continuing Security Agreement and will continue in
effect even though all or any part of the Indebtedness is paid in full and
even though for a period of time Grantor may not be indebted to Lender.
No Violation. The execution and delivery of this Agreement will not violate
any law or agreement governing Grantor or to which Grantor is a party, and
its certificate or articles of incorporation and bylaws do not prohibit any
term or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with
applicable laws concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear
to be on the Collateral. At the time any account becomes subject to a
security interest in favor of Lender, the account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by the
account debtor, for merchandise held subject to delivery instructions or
theretofore shipped or delivered pursuant to a contract of sale, or for
services theretofore performed by Grantor with or for the account debtor;
there shall be no setoffs or counterclaims against any such account; and no
agreement under which any deductions or discounts may be claimed shall have
been made with the account debtor except those disclosed to Lender in
writing.
Removal of Collateral. Grantor shall keep the Collateral (or to the extent
the Collateral consists of intangible property such as accounts, the
records concerning the Collateral) at Grantor's address shown above, or at
such other locations as are acceptable to Lender. Except in the ordinary
course of its business, including the sales of inventory, Grantor shall not
remove the Collateral from its existing locations without the prior written
consent of Lender. To the extent that the Collateral consists of vehicles,
or other titled property, Grantor shall not take or permit any action which
would require application for certificates of title for the vehicles
outside the State of Washington, without the prior written consent of
Lender.
Transactions Involving Collateral. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the Collateral.
While Grantor is not in default under this Agreement, Grantor may sell
inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A sale in
the ordinary course of Grantor's business does not include a transfer in
partial or total satisfaction of a debt or any bulk sale. Grantor shall not
pledge, mortgage, encumber or otherwise permit the Collateral to be subject
to any lien, security interest, encumbrance, or charge, other than the
security interest provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if junior in right
to the security interests granted under this Agreement. Unless waived by
Lender, all proceeds from any disposition of the Collateral (for whatever
reason) shall be held in trust for Lender and shall not be commingled with
any other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver any such proceeds to Lender.
Title. Grantor represents and warrants to Lender that it holds good and
marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement
covering any of the Collateral is on file in any public office other than
those which reflect the security interest created by this Agreement or to
which Lender has specifically consented. Grantor shall defend Lender's
rights in the Collateral against the claims and demands of all other
persons.
Collateral Schedules and Locations. Insofar as the Collateral consists of
equipment, Grantor shall deliver to Lender, as often as Lender shall
require, such lists, descriptions, and designations of such Collateral as
Lender may require to identify the nature, extent, and location of such
Collateral. Such information shall be submitted for Grantor and each of its
subsidiaries or related companies.
Maintenance and Inspection of Collateral. Grantor shall maintain all
tangible Collateral in good condition and repair. Grantor will not commit
or permit damage to or destruction of the Collateral or any part of the
Collateral. Lender and its designated representatives and agents shall have
the right at all reasonable times to examine, inspect, and audit the
Collateral wherever located. Grantor shall immediately notify Lender of all
cases involving the return, rejection, repossession, loss or damage of or
to any Collateral; of any request for credit or adjustment or of any other
dispute arising with respect to the Collateral; and generally of all
happenings and events affecting the Collateral or the value or the amount
of the Collateral.
Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon this
Agreement, upon any promissory note or notes evidencing the Indebtedness,
or upon any of the other Related Documents. Grantor may withhold any such
payment or may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to pay and
so long as Lender's interest in the Collateral is not jeopardized in
Lender's sole opinion. If the Collateral is subjected to a lien which is
not discharged within fifteen (15) days, Grantor shall deposit with Lender
cash, a sufficient corporate surety bond or other security satisfactory to
Lender in an amount adequate to provide for the discharge of the lien plus
any interest, costs, attorneys' fees or other charges that could accrue as
a result of foreclosure or sale of the Collateral. In any contest Grantor
shall defend itself and Lender and shall satisfy any final adverse judgment
before enforcement against the Collateral. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the contest
proceedings.
Compliance with Governmental Requirements. Grantor shall comply promptly
with all laws, ordinances, rules and regulations of all governmental
authorities, now or hereafter in effect, applicable to the ownership,
production, disposition, or use of the Collateral. Grantor may contest in
good faith any such law, ordinance or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Lender's
interest in the Collateral, in Lender's opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the Collateral
never has been, and never will be so long as this Agreement remains a lien
on the Collateral, used for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of any
hazardous waste or substance, as those terms are defined in the
Comprehensive Environmental Response, Compensation, and Liability
05-19-00 COMMERCIAL SECURITY AGREEMENT Page 3
Loan No 4000009704 (Continued)
Act of 1980, as amended, 42 U.S.C Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or Federal laws, rules, or
regulations adopted pursuant to any of the foregoing. The terms "hazardous
waste" and "hazardous substance" shall also include, without limitation,
petroleum and petroleum by-products or any fraction thereof and asbestos.
The representations and warranties contained herein are based on Grantor's
due diligence in investigating the Collateral for hazardous wastes and
substances. Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and (b) agrees to
indemnify and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This
obligation to indemnify shall survive the payment of the Indebtedness and
the satisfaction of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain all
risks insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with
respect to the Collateral, in form, amounts, coverage's and basis
reasonably acceptable to Lender and issued by a company or companies
reasonably acceptable to Lender. Grantor, upon request or Lender, will
deliver to Lender from time to time the policies or certificates of
insurance in form satisfactory to Lender, including stipulations that
coverage's will not be canceled or diminished without at least ten (10)
days' prior written notice to Lender and not including any disclaimer of
the insurer's liability for failure to give such a notice. Each insurance
policy also shall include an endorsement providing that coverage in favor
of Lender will not be impaired in any way by any act, omission or default
of Grantor or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest, Grantor
will provide Lender with such loss payable or other endorsements as Lender
may require. If Grantor at any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but shall not be
obligated to) obtain such insurance as Lender deems appropriate, including
if it so chooses "single interest insurance," which will cover only
Lender's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify Lender of
any loss or damage to the Collateral. Lender may make proof of loss if
Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds
thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed Collateral
Lender shall, upon satisfactory proof of expenditure, pay or reimburse
Grantor from the proceeds for the reasonable cost of repair or restoration.
If Lender does not consent to repair or replacement of the Collateral,
Lender shall retain a sufficient amount of the proceeds to pay all of the
Indebtedness, and shall pay the balance to Grantor. Any proceeds which have
not been disbursed within six (6) months after their receipt and which
Grantor has not committed to the repair or restoration of the Collateral
shall be used to prepay the Indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be created
by monthly payments from Grantor of a sum estimated by Lender to be
sufficient to produce, at least fifteen (15) days before the premium due
date, amounts at least equal to the insurance premiums to be paid. If
fifteen (15) days before payment is due, the reserve funds are
insufficient, Grantor shall upon demand pay any deficiency to Lender. The
reserve funds shall be held by Lender as a general deposit and shall
constitute a non-interest-bearing account which Lender may satisfy by
payment of the insurance premiums required to be paid by Grantor as they
become due. Lender does not hold the reserve funds in trust for Grantor,
and Lender is not the agent of Grantor for payment of the insurance
premiums required to be paid by Grantor. The responsibility for the payment
of premiums shall remain Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as
Lender may reasonably request including the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the policy; (d) the
property insured; (e) the then current value on the basis of which
insurance has been obtained and the manner of determining that value; and
(f) the expiration date of the policy. In addition, Grantor shall upon
request by Lender (however not more often than annually) have an
independent appraiser satisfactory to Lender determine, as applicable, the
cash value or replacement cost of the Collateral.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of
the tangible personal property and beneficial use of all the Collateral and
may use it in any lawful manner not inconsistent with this Agreement or the
Related Documents, provided that Grantor's right to possession and beneficial
use shall not apply to any Collateral where possession of the Collateral by
Lender is required by law to perfect Lender's security interest in such
Collateral. Until otherwise notified by Lender, Grantor may collect any of the
Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as
Lender in Lender's sole discretion, shall deem appropriate under the
circumstances, but failure to honor any request by Grantor shall not of itself
be deemed to be a failure to exercise reasonable care. Lender shall not be
required to take any steps necessary to preserve any rights in the Collateral
against prior parties, nor to protect, preserve or maintain any security
interest given to secure the Indebtedness.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged under the Note
from the date incurred or paid by Lender to the date of repayment by Grantor.
All such expenses shall become a part of the Indebtedness and, at Lender's
option, will (a) be payable on demand, (b) be added to the balance of the Note
and be apportioned among and be payable with any installment payments to
become due during either (i) the term of any applicable insurance policy or
(ii) the remaining term of the Note, or (c) be treated as a balloon payment
which will be due and payable at the Note's maturity. This Agreement also will
secure payment of these amounts. Such right shall be in addition to all other
rights and remedies to which Lender may be entitled upon the occurrence of an
Event of Default
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
Default on Indebtedness. Failure of Grantor to make any payment when due on
the Indebtedness.
Other Defaults. Failure of Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or in any other agreement between Lender and
Grantor.
Default in Favor of Third Parties. Should Borrower or any Grantor default
under any loan, extension of credit security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower's property or
Borrower's or any Grantor's ability to repay the Loans or perform their
respective obligations under this Agreement or any of the Related
Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Agreement, the
Note or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
Defective Collateralization. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any
time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
05-19-00 COMMERCIAL SECURITY AGREEMENT Page 4
Loan No 4000009704 (Continued)
for any part of Grantor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against the Collateral or any other collateral securing
the Indebtedness. This includes a garnishment of any of Grantor's deposit
accounts with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or such Guarantor dies or
becomes incompetent. Lender, at its option, may, but shall not be required
to, permit the Guarantor's estate to assume unconditionally the obligations
arising under the guaranty in a manner satisfactory to Lender, and, in
doing so, cure the Event of Default.
Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
Insecurity. Lender, in good faith, deems itself insecure.
Right to Cure. If any default, other than a Default on Indebtedness, is
curable and if Grantor has not been given a prior notice of a breach of the
same provision of this Agreement, it may be cured (and no Event of Default
will have occurred) if Grantor, after Lender sends written notice demanding
cure of such default, (a) cures the default within (15) days; or (b), if
the cure requires more than (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Washington Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following
rights and remedies:
Accelerate Indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice.
Assemble Collateral. Lender may require Grantor to deliver to Lender all or
any portion of the Collateral and any and all certificates of title and
other documents relating to the Collateral. Lender may require Grantor to
assemble the Collateral and make it available to Lender at a place to be
designated by Lender. Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the Collateral. If the
Collateral contains other goods not covered by this Agreement at the time
of repossession, Grantor agrees Lender may take such other goods, provided
that Lender makes reasonable efforts to return them to Grantor after
repossession.
Sell the Collateral. Lender shall have full power to sell, lease, transfer,
or otherwise deal with the Collateral or proceeds thereof in its own name
or that of Grantor. Lender may sell the Collateral at public auction or
private sale. Unless the Collateral threatens to decline speedily in value
or is of a type customarily sold on a recognized market, Lender will give
Grantor reasonable notice of the time after which any private sale or any
other intended disposition of the Collateral is to be made. The
requirements of reasonable notice shall be met if such notice is given at
least ten (10) days before the time of the sale or disposition. All
expenses relating to the disposition of the Collateral, including without
limitation the expenses of retaking, holding, insuring, preparing for sale
and selling the Collateral, shall become a part of the Indebtedness secured
by this Agreement and shall be payable on demand, with interest at the Note
rate from date of expenditure until repaid.
Appoint Receiver. To the extent permitted by applicable law, Lender shall
have the following rights and remedies regarding the appointment of a
receiver: (a) Lender may have a receiver appointed as a mailer of right,
(b) the receiver may be an employee of Lender and may serve without bond
and (c) all fees of the receiver and his or her attorney shall become part
of the Indebtedness secured by this Agreement and shall be payable on
demand, with interest at the Note rate from date of expenditure until
repaid.
Collect Revenues, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from the
Collateral. Lender may at any time in its discretion transfer any
Collateral into its own name or that of its nominee and receive the
payments, rents, income, and revenues therefrom and hold the same as
security for the indebtedness or apply it to payment of the Indebtedness in
such order of preference as Lender may determine. Insofar as the Collateral
consists of accounts, general intangibles, insurance policies, instruments,
chattel paper, choices in action, or similar property, Lender may demand,
collect, receipt for, settle, compromise, adjust, sue for, foreclose, or
realize on the Collateral as Lender may determine, whether or not
Indebtedness or Collateral is then due. For these purposes, Lender may, on
behalf of and in the name of Grantor, receive, open and dispose of mail
addressed to Grantor; change any address to which mail and payments are to
be sent; and endorse notes, checks, drafts, money orders, documents of
title, instruments and items pertaining to payment, shipment, or storage of
any Collateral. To facilitate collection, Lender may notify account debtors
and obligors on any Collateral to make payments directly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,
Lender may obtain a Judgment against Grantor for any deficiency remaining
on the Indebtedness due to Lender after application of all amounts received
from the exercise of the rights provided in this Agreement. Grantor shall
be liable for a deficiency even if the transaction described in this
subsection is a sale of accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and remedies of
a secured creditor under the provisions of the Uniform Commercial Code, as
may be amended from time to time. In addition, Lender shall have and may
exercise any or all other rights and remedies it may have available at law,
in equity, or otherwise.
Cumulative Remedies. All of Lender's rights and remedies, whether evidenced
by this Agreement or the Related Documents or by any other writing, shall
be cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an
obligation of Grantor under this Agreement, after Grantor's failure to
perform, shall not affect Lender's right to declare a default and to
exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender in the State of Washington. If there is a lawsuit, Grantor agrees
upon Lenders request to submit to the jurisdiction of the courts of King or
Pierce County, the State of Washington. Lender and Grantor hereby waive the
right to any jury that in any action, proceeding, or counterclaim brought
by either Lender or Grantor against the other. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Washington.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lenders
05-19-00 COMMERCIAL SECURITY AGREEMENT Page 5
Loan No 4000009704 (Continued)
legal expenses, incurred in connection with the enforcement of this
Agreement. Lender may pay someone else to help enforce this Agreement, and
Grantor shall pay the costs and expenses of such enforcement. Costs and
expenses include Lender's attorneys' fees and legal expenses whether or not
there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (and including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services Grantor also shall pay all court costs and such
additional fees as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Multiple Parties; Corporate Authority. All obligations of Grantor under
this Agreement shall be joint and several, and all references to Grantor
shall mean each and every Grantor. This means that each of the persons
signing below is responsible for all obligations in this Agreement.
Notices. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (unless otherwise required
by law), and shall be effective when actually delivered or when deposited
with a nationally recognized overnight courier or deposited in the United
States mail, first class, postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above. Any party may change
its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is
to change the party's address. To the extent permitted by applicable law,
if there is more than one Grantor, notice to any Grantor will constitute
notice to all Grantors. For notice purposes, Grantor will keep Lender
informed at all times of Grantor's current address(es).
Power of Attorney. Grantor hereby appoints Lender as its true and lawful
attorney-in-fact, irrevocably with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, sue and recover
all sums of money or other property which may now or hereafter become due,
owing or payable from the Collateral; (b) to execute, sign and endorse any
and all claims, instruments, receipts, checks, drafts or warrants issued in
payment for the Collateral; (c) to settle or compromise any and all claims
arising under the Collateral, and, in the place and stead of Grantor to
execute and deliver its release and settlement for the claim; and (d) to
file any claim or claims or to take any action or institute or take part in
any proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or
advisable. This power is given as security for the Indebtedness, and the
authority hereby conferred is and shall be irrevocable and shall remain in
full force and effect until renounced by Lender.
Preference Payments. Any monies Lender pays because of an asserted
preference claim in Borrower's bankruptcy will become a part of the
Indebtedness and, at Lender's option, shall be payable by Borrower as
provided above in the "EXPENDITURES BY LENDER" paragraph.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
Successor Interests. Subject to the limitations set forth above on transfer
of the Collateral, this Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Grantor, shall constitute a waiver of
any of Lender's, rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
Waiver of Co-obligor's Rights. If more than one person is obligated for the
Indebtedness, Borrower irrevocably waives, disclaims and relinquishes all
claims against such other person which Borrower has or would otherwise have
by virtue of payment of the Indebtedness or any part thereof, specifically
including but not limited to all rights of indemnity, contribution or
exoneration.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
May 19, 2000.
GRANTOR:
WEB PRESS CORPORATION
By: /s/ GARY B. PALMER
___________________________________________
GARY B. PALMER, PRESIDENT
By: /s/ CRAIG L. MATHISON
___________________________________________
CRAIG L. MATHISON, VICE PRESIDENT
CORPORATE RESOLUTION TO GUARANTEE
______________________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral
$305,000.00 05-19-2000 11-22-2000 4000009704 402 305
Account Officer Initials
E93826 SHP09 SHP
______________________________________________________________________________
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
______________________________________________________________________________
Borrower: WEB PRESS CORPORATION Lender: KEYBANK NATIONAL
22023 68TH AVENUE SOUTH ASSOCIATION
KENT, WA 98032 Bellevue COMMUNITY
BANKING CENTER
Guarantor: WEB LEADER INTERNATIONAL, INC. 700 FIFTH AVENUE
22023 68TH AVENUE SOUTH 48TH FLOOR
KENT, WA 98032 SEATTLE, WA 98104
______________________________________________________________________________
I, the undersigned Secretary or Assistant Secretary of WEB LEADER
INTERNATIONAL, INC. (the "Corporation"), HEREBY CERTIFY that the Corporation
is organized and existing under and by virtue of the laws of the State of
Washington with its principal office at 22023 68TH AVENUE SOUTH, KENT, WA
98032.
I, FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on May 19, 2000, at which ia quorum was present and voting, or
by other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:
WHEREAS the granting of the loan or other financial accommodations described
below from KEYBANK NATIONAL ASSOCIATION to WEB PRESS CORPORATION will be
beneficial to this Corporation, and accordingly this Corporation is willing to
provide its guaranty to Lender as provided below;
AND WHEREAS one of the conditions required by Lender for the granting of the
loan or other financial accommodations is that Lender be furnished with the
written corporate guaranty of this Corporation as corporate guarantor.
BE IS RESOLVED,that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:
NAME POSITION ACTUAL SIGNATURE
GARY B. PALMER CHAIRMAN x /S/GARY B.PALMER
acting for and on behalf of the Corporation and as its act and deed be, and he
or she hereby is, authorized and empowered:
Guaranty. To guarantee or act as surely for loans or other financial
accommodations to WEB PRESS CORPORATION from KEYBANK NATIONAL
ASSOCIATION ("Lender") on such guarantee or surely terms as may be
agreed upon between the officers or employees of this Corporation and
Lender and in such sum or sums of money as in his or her judgement
should be guaranteed or assured, without limit (the "Guaranty").
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
otherwise encumber and deliver to Lender, as security for the Guaranty,
any property now or hereafter belonging to the Corporation or in which
the Corporation now or hereafter may have an interest, including without
limitation all real property and all personal property (tangible or
intangible) of the Corporation. Such property may be mortgaged,
pledged, transferred, endorsed, hypothecated, or encumbered at the time
such loans are obtained or such indebtedness is incurred, or at any
other time or times, and may be either in addition to or in lieu of any
property theretofore mortgaged, pledged, transferred, endorsed,
hypothecated, or encumbered. The provisions of these Resolutions
authorizing or relating to the pledge, mortgage, transfer, endorsement,
hypothecation, granting of a security interest in, or in any way
encumbering, the assets of the Corporation shall include, without
limitation, doing so in order to lend collateral security for the
indebtedness, now or hereafter existing, and of any nature whatsoever,
of WEB PRESS CORPORATION to Lender. The Corporation has considered the
value to itself of lending collateral in support of such indebtedness,
and the Corporation represents to Lender that the Corporation is
benefited by doing so.
Execute Security Documents. To execute and deliver to Lender the forms
of mortgage, deed of trust, pledge agreement, hypothecation agreement,
and other security agreements and financing statements which may be
submitted by Lender, and which shall evidence the terms and conditions
under and pursuant to which such liens and encumbrances, or any of them,
are given; and also to execute and deliver to Lender any other written
instruments, any chattel paper, or any other collateral, of any kind or
nature, which he or she may in his or her discretion deem reasonably
necessary or proper in connection with or pertaining to the giving of
the liens and encumbrances.
Further Acts. To do and perform such other acts and things and to
execute and deliver such other documents and agreements, including
agreements waiving the right to a trial by jury, as he or she may in his
or her discretion deem reasonably necessary or proper in order to carry
into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other address as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation, (d) change in the authorized signer(s), (e)
conversion of the Corporation to a new or different type of business entity,
or (f) change in any other aspect of the Corporation that directly relates to
any agreements between the Corporation and Lender. No change in name of the
Corporation will take effect until after Lender has been notified.
05-19-2000 CORPORATE RESOLUTION TO BORROW Page 2
Loan No 4000009704 (Continued)
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions and performed prior to the passage of these Resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of his or
her revocation shall have been delivered to and received by Lender. Any such
notice shall not affect any of the Corporation's agreements or commitments in
effect at the time notice if given.
I FURTHER CERTIFY that the officer, employee, or agent named above is duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupies the position set opposite the name; that the foregoing
Resolutions now stand of record on the books of the Corporation; and that the
Resolutions are in full force and effect and have not been modified or revoked
in any manner whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on May 19, 2000 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X /S/ALAN W. WHITE____________
X_____________________________
NOTE: In case the Secretary or other certifying officer is designated by the
foregoing
resolutions as one of the signing officers, it is advisable to have this
certificate signed by a
second Officer or Director of the Corporation.
COMMERCIAL GUARANTY
________________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral
402 305
Account Officer Initials
E93826 SHP09
________________________________________________________________________
References in the shaded area are for Lender's us only and do not limit
the applicability of this document to any particular loan or item.
________________________________________________________________________
BORROWER: WEB PRESS CORPORATION LENDER: KEYBANK NATIONAL
22023 68TH AVENUE SOUTH Bellevue COMMUNITY
KENT, WA 98032 BANKING CENTER
700 FIFTH AVENUE
48TH FLOOR
SEATTLE, WA 98104
GUARANTOR: WEB LEADER INTERNATIONAL, INC.
22023 68TH AVENUE SOUTH
KENT, WA 98032
========================================================================
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, WEB
LEADER INTERNATIONAL, INC. ("Guarantor") absolutely and unconditionally
guarantees and promises to pay to KEYBANK NATIONAL ASSOCIATION
("Lender") or its order, on demand, in legal tender of the United States
of America, the Indebtedness (as that term is defined below) of WEB
PRESS CORPORATION ("Borrower") to Lender on the terms and conditions set
forth in this Guaranty. Under this Guaranty, the liability of Guarantor
is unlimited and the obligations of Guarantor are continuing.
DEFINITIONS. The following words shall have the following meanings when
used in this Guaranty:
Borrower. The word "Borrower" means WEB PRESS CORPORATION.
Guarantor. The word "Guarantor" means WEB LEADER INTERNATIONAL,
INC..
Guaranty. The word "Guaranty" means this Guaranty made by
Guarantor for the benefit of Lender dated May 19, 2000.
Indebtedness. The word "Indebtedness" is used in its most
comprehensive sense and means and includes any and all of
Borrower's liabilities, obligations, debts, and indebtedness to
Lender, now existing or hereinafter incurred or created,
including, without limitation, all loans, advances, interest,
costs, debts, overdraft indebtedness, credit card indebtedness,
lease obligations, other obligations, and liabilities of Borrower,
or any of them, and any present or future judgments against
Borrower, or any of them; and whether any such Indebtedness is
voluntarily or involuntarily incurred, due or not due, absolute or
contingent, liquidated or unliquidated, determined or
undetermined; whether Borrower may be liable individually or
jointly with others, or primarily or secondarily, or as guarantor
or surety; whether recovery on the Indebtedness may be or may
become barred or unenforceable against Borrower for any reason
whatsoever; and whether the indebtedness arises from transactions
which may be voidable on account of infancy, insanity, ultra
vires or otherwise.
Lender. The word "Lender" means KEYBANK NATIONAL ASSOCATION, its
successors and assigns.
Related Documents. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust, and all other instruments,
agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this
Guaranty shall be unlimited.
NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be
open and continuous for so long as this Guaranty remains in force.
Guarantor intends to guarantee at all times the performance and prompt
payment when due, whether at maturity or earlier by reason of
acceleration or otherwise, of all Indebtedness. Accordingly, no
payments made upon the Indebtedness will discharge or diminish the
continuing liability of Guarantor in connection with any remaining
portions of the Indebtedness or any of the Indebtedness which
subsequently arises or is thereafter incurred or contracted. Any
married person who signs this Guaranty as the Guarantor hereby expressly
agrees that recourse under this agreement may be had against both his or
her separate property and community property, whether now owned or
hereafter acquired.
DURATION OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of any acceptance by Lender, or any notice
to Guarantor or to Borrower, and will continue in full force until all
Indebtedness incurred or contracted before receipt by Lender of any
notice of revocation shall have been fully and finally paid and
satisfied and all other obligations of Guarantor under this Guaranty
shall have been performed in full. If Guarantor elects to revoke this
Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the
address of Lender listed above or such other place as Lender may
designate in writing. Written revocation of this Guaranty will apply
only to advances or new Indebtedness created after actual receipt by
Lender of Guarantor's written revocation. For this purpose and without
limitation, the term "new Indebtedness" does not include Indebtedness
which at the time of notice or revocation is contingent, unliquidated,
undetermined or not due and which later becomes absolute, liquidated,
determined or due. Notice of revocation shall be effective only as to
the particular Guarantor providing the notice, and shall not affect the
liability of other guarantors. This Guaranty will continue to bind
Guarantor for all Indebtedness incurred by Borrower or committed by
Lender prior to receipt of Guarantor's written notice of revocation,
including any extensions, renewals, substitutions or modifications of
the Indebtedness. All renewals, extensions, substitutions, and
modifications of the Indebtedness granted after Guarantor's revocation,
are contemplated under this Guaranty and, specifically will not be
considered to be new Indebtedness. This Guaranty shall bind the estate
of Guarantor as to Indebtedness created both before and after the death
or incapacity of Guarantor, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty
in the same manner in which Guarantor might have terminated it and with
the same effect. Release of any guarantor or termination of any other
guaranty of the Indebtedness shall not affect the liability of Guarantor
under this Guaranty. A revocation received by Lender from any one or
more Guarantors shall not effect the liability of any remaining
Guarantors under this Guaranty. It is anticipated that fluctuations may
occur in the aggregate amount of Indebtedness covered by this Guaranty,
and it is specifically acknowledged and agreed by Guarantor that
reductions in the amount of Indebtedness, even to zero dollars ($0.00),
prior to written revocation of this Guaranty by Guarantor shall not
constitute a termination of this Guaranty. This Guaranty is binding
upon Guarantor and Guarantor's heirs, successors and assigns so long as
any of the guaranteed Indebtedness remains unpaid and even though the
Indebtedness guaranteed may from time to time be zero dollars ($0.00).
05-19-2000 COMMERCIAL GUARANTY Page 2
Loan No 4000009704 (Continued)
========================================================================
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender,
either before or after any revocation hereof, without notice or demand
and without lessening Guarantor's liability under this Guaranty, from
time to time: (a) prior to revocation as set forth above, to make one or
more additional secured or unsecured loans to Borrower, to lease
equipment or other goods to Borrower, or otherwise to extend additional
credit to Borrower; (b) to alter, compromise, renew, extend, accelerate,
or otherwise change one or more times the time for payment or other
terms of the Indebtedness or any part of the Indebtedness, including
increases and decreases of the rate of interest on the Indebtedness;
extensions may be repeated and may be for longer than the original loan
term; (c) to take and hold security for the payment of this Guaranty or
the Indebtedness, and exchange, enforce, waive, subordinate, fail or
decide note to perfect, and release any such security, with or without
the substitution of new collateral; (d) to release, substitute, agree
not to sue, or deal with any one or more or Borrower's sureties,
endorsers, or other guarantors on any terms or in any manner Lender may
chose; (e) to determine how, when and what application of payments and
credits shall be made on the Indebtedness; (f) to apply such security
and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the
controlling security agreement or deed of trust, as Lender in its
discretion may determine; (g) to sell, transfer, assign, or grant
participation's in all or any part of the Indebtedness; and (h) to
assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (a) no representations or agreements of any kind
have been made to Guarantor which would limit or qualify in any way the
terms of this Guaranty; (b) this Guaranty is executed at Borrower's
request and not at the request of Lender; (c) Guarantor has full power,
right and authority to enter into this Guaranty; (d) the provisions of
this Guaranty do not conflict with or result in a default under any
agreement or other instrument binding upon Guarantor and do not result
in a violation of any law, regulation, court decree or order applicable
to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate,
transfer, or otherwise dispose of all or substantially all of
Guarantor's assets, or any interest therein; (f) upon Lender's request,
Guarantor will provide to Lender financial and credit information in
form acceptable to Lender, and all such financial information which
currently has been, and all future financial information which will be
provided to Lender is and will be true and correct in all material
respects and fairly present the financial condition of Guarantor as of
the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of
the most recent financial statements provided to Lender and no event has
occurred which may materially adversely affect Guarantor's financial
condition; (h) no litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Guarantor is pending or threatened; (i) Lender has made no
representation to Guarantor as to the creditworthiness of Borrower; and
(j) Guarantor has established adequate means of obtaining from Borrower
on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means
of any facts, events, or circumstances which might in any way affect
Guarantor's risks under this Guaranty, and Guarantor further agrees
that, absent a request for information, Lender shall have no obligation
to disclose to Guarantor any information or documents acquired by Lender
in the course of its relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (a) to continue lending money or to
extend other credit to Borrower; (b) to make any presentment, protest,
demand, or notice of any kind, including notice of any nonpayment of the
Indebtedness or of any nonpayment related to any collateral, or notice
of any action or nonaction on the part of Borrower, Lender, any surety,
endorser, or other guarantor in connection with the Indebtedness or in
connection with the creation of new or additional loans or obligations;
(c) to resort for payment or to proceed directly or at once against any
person, including Borrower or any other guarantor; (d) to proceed
directly against or exhaust any collateral held by Lender form Borrower,
any other guarantor, or any other person; (e) to pursue any other remedy
within Lender's power; to (f) to commit any act or omission on any kind,
or at any time, with respect to any matter whatsoever.
If now or hereafter (a) Borrower shall be or become insolvent, and (b)
the Indebtedness shall not at all times until paid be fully secured by
collateral pledged by Borrower, Guarantor hereby forever waives and
relinquishes in favor of Lender and Borrower, and their respective
successors, any claim or right to payment Guarantor may now have or
hereafter have or acquire against Borrower, by subrogation or otherwise,
so that at no time shall Guarantor be or become a "creditor" of Borrower
within the meaning of 11 U.S.C. section 547(b), or any successor
provision of the Federal Bankruptcy laws.
Guarantor also waives any and all rights or defenses arising by reason
of (a) any "one action" or "anti-deficiency" law or any other law which
may prevent Lender from bringing any action, including a claim for
deficiency, against Guarantor, before or after Lender's commencement or
completion of any foreclosure action, either judicially or by exercise
of a power of sale; (b) any election of remedies by Lender which
destroys or otherwise adversely affects Guarantor's subrogation rights
or Guarantor's rights to proceed against Borrower for reimbursement,
including without limitation, any loss of rights Guarantor may suffer by
reason of any law limiting, qualifying, or discharging the Indebtedness;
(c) any disability or other defense of Borrower, of any other guarantor,
or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in legal
tender, of the Indebtedness; (d) any right to claim discharge of the
Indebtedness on the basis of unjustified impairment of any collateral
for the Indebtedness; (e) any statue of limitations, if at any time any
action or suit brought by Lender against Guarantor is commenced there is
outstanding Indebtedness of Borrower to Lender which is not barred by an
applicable statue of limitations; or (f) any defenses given to
guarantors a law or in equity other than actual payment and performance
of the Indebtedness. If payment is made by Borrower, whether
voluntarily or otherwise, or by any third party, on the Indebtedness and
thereafter Lender is forced to remit the amount of the payment to
Borrower's trustee in bankruptcy or to any similar person under any
federal or state bankruptcy law or law for the relief of debtors, the
Indebtedness shall be considered unpaid for the purpose of enforcement
of the Guaranty.
Guarantor further waives and agrees not to assert or claim at any time
any deductions to the amount guaranteed under this Guaranty for any
claim of setoff, counterclaim, counter demand, recoupment or similar
right, whether such claim, demand or right may be asserted by the
Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants
and agrees that each of the waivers set forth above is made with
Guarantor's full knowledge of its significance and consequences and
that, under the circumstances, the waivers are reasonable and not
contrary to public policy or law. If any such waiver is determined to
be contrary to any applicable law or public policy, such waiver shall be
effective only to the extent permitted by law or public policy.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of
setoff against the moneys, securities or other property of Guarantor
given to Lender by law, Lender shall have, with respect to Guarantor's
obligations to Lender under this Guaranty and to the extent permitted by
law, a contractual security interest in and a right of setoff against,
and Guarantor hereby assigns, conveys, delivers, pledges, and transfers
to Lender all of Guarantor's right, title and interest in and to, all
deposits, moneys, securities and other property of Guarantor now or
hereafter in the possession of or on deposit with Lender, whether held
in a general or special account or deposit, whether held jointly with
someone else, or whether held for safekeeping or otherwise, excluding
however all IRA, Keogh and trust accounts. Every such security interest
and right of setoff may be exercised without demand upon or notice to
Guarantor. No security interest or right of setoff shall be deemed to
have been waived by any act of conduct on the part of the Lender or by
any neglect to exercise such right of setoff or to enforce such security
interest or by any delay in so doing. Every right of setoff and
security interest shall continue in full force and effect until such
right of setoff or security interest is specifically waived or released
by an instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that
the Indebtedness of Borrower to Lender, whether now existing or
hereafter created, shall be prior to any claim that Guarantor may now
have or hereafter acquire against Borrower, whether or not Borrower
becomes insolvent. Guarantor hereby expressly subordinates any claim
Guarantor may have against Borrower, upon any account whatsoever, to any
claim that Lender may now or hereafter have against Borrower. In the
event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of
creditors, by voluntary liquidation, or otherwise, the assets of
Borrower applicable to the payment of the claims of both Lender and
Guarantor shall be paid to Lender and shall be first applied by Lender
to the Indebtedness of Borrower to Lender. Guarantor does hereby assign
to Lender all claims which it may have or acquire against Borrower or
against any assignee or trustee in bankruptcy of Borrower; provided
however, that such assignment shall be effective only for the purpose of
assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter
evidencing any debts or obligations of Borrower to Guarantor shall be
marked with a legend that the same are subject to this Guaranty and
shall be delivered to Lender. Guarantor agrees, and Lender hereby is
authorized, in the name of Guarantor, from time to time to execute and
file financing statements and continuation statements and to execute
such other documents and to take such other actions as Lender deems
necessary or appropriate to perfect, preserve and enforce its rights
under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire and final understanding and agreement of
the parties as to matters set forth in this Guaranty. No
alteration of or amendment to this Guaranty shall be effective
unless given in writing and signed by the party or parties sought
to be charged or bound by the alteration or amendment.
Applicable Law. This Guaranty has been delivered to Lender and
accepted by Lender in the State of Washington. If there is a
lawsuit, Guarantor agrees upon Lender's request to submit to the
jurisdiction of the courts of King or Pierce County, State of
Washington. Lender and Guarantor hereby waive the right to any
jury trail in any action, proceeding, or counterclaim brought by
either Lender or Guarantor against the other. This Guaranty shall
be governed by and construed in accordance with the laws of the
State of Washington.
Attorney's Fees; Expenses. Guarantor agrees to pay upon demand
all of Lender's costs and expenses, including attorney's fees and
Lender's legal expenses, incurred in connection with the
enforcement of this Guaranty. Lender may pay someone else to help
enforce this Guaranty, and Guarantor shall pay the costs and
expenses of such enforcement. Costs and expenses include Lender's
attorneys' fees and legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (and including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Guarantor also shall pay all
court costs and such additional fees as may be directed by the
court.
Notices. All notices required to be given by either party to the
other under this Guaranty shall be in writing, may be sent by
telefacsimile (unless otherwise required by law), and, except for
revocation notices by Guarantor, shall be effective when actually
delivered or when deposited with a nationally recognized overnight
courier, or when deposited in the United States mail, first class
postage prepaid, addressed to the party to whom the notice is to
be given at the address shown above or to such other addresses as
either party may designate to the other in writing. All
revocation notices by Guarantor shall be in writing and shall be
effective only upon delivery to Lender as provided above in the
section titled "DURATION OF GUARANTY." If there is more than one
Guarantor, notice to any Guarantor will constitute notice to all
Guarantors. For notice purposes, Guarantor agrees to keep Lender
informed at all times of Guarantor's current address.
Interpretation. In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty in the
singular shall be deemed to have been used in the plural where the
context and construction so require; and where there is more than
one Borrower named in this Guaranty or when this Guaranty is
executed by more than one Guarantor, the words "Borrower" and
"Guarantor" respectively shall mean all and any one or more of
them. The words "Guarantor," "Borrower," and "Lender" include the
heirs, successors, assigns, and transferees of each of them.
Caption headings in this Guaranty are for convenience purposes
only and are not to be used to interpret or define the provisions
of this Guaranty. If a court of competent jurisdiction finds any
provision of this Guaranty to be invalid or unenforceable as to
any person or circumstance, such finding shall not render that
provision invalid or unenforceable as to any other persons or
circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. If any one or more
of Borrower or Guarantor are corporations or partnerships, it is
not necessary for Lender to inquire into the powers of Borrower or
Guarantor or of the officers, directors, partners, or agents
acting or purporting to act on their behalf, and any Indebtedness
made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty.
Waiver. Lender shall not be deemed to have waived any rights
under this Guaranty unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or
any other right. A waiver by Lender of a provision of this
Guaranty shall not prejudice or constitute a waiver of Lender's
right otherwise to demand strict compliance with that provision or
any other provision of this Guaranty. No prior waiver by Lender,
nor any course of dealing between Lender and Guarantor, shall
constitute a waiver of any of Lender's rights or any of
Guarantor's obligations as to any future transactions. Whenever
the consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS
THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF
THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED
IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO
FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.
THIS GUARANTY IS DATED MAY 19, 2000.
GUARANTOR:
WEB PRESS INTERNATIONAL, INC.
BY: /s/ GARY B. PALMER____________________
GARY B. PALMER, CHAIRMAN
CORPORATE RESOLUTION TO BORROW
______________________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral
$305,000.00 05-19-2000 11-22-2000 4000009704 402 305
Account Officer Initials
E93826 SPH09 SPH
______________________________________________________________________________
Reference in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
______________________________________________________________________________
Borrower: WEB PRESS CORPORATION Lender: KEYBANK NATIONAL
22023 68TH AVENUE SOUTH ASSOCIATION
KENT, WA 98032 Bellevue COMMUNITY
BANKING CENTER
700 FIFTH AVENUE
48TH FLOOR
SEATTLE, WA 98104
==============================================================================
I, the undersigned Secretary or Assistant Secretary of WEB PRESS COPRORATION
(the "Corporation"), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of Washington as a
corporation for profit, with its principal office at 22023 68TH AVENUE SOUTH,
KENT, WA 98032, and is duly authorized to transact business in the State of
Washington.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on May 19, 2000, at which a quorum was present and voting, or
by other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:
BE IT RESOLVED, that any two (2) of the following named officers, employees,
or agents of the Corporation, whose actual signatures are shown below:
NAMES POSITIONS ACTUAL SIGNATUARES
GARY B. PALMER PRESIDENT X /s/ GARY B. PALMER____
CRAIG L. MATHISON VICE PRESIDENT x /s/ CRAIG L. MATHISON_
acting for and on behalf of the Corporation and as its act and deed be, and
they hereby are, authorized and empowered:
Borrow Money. To borrow from time to time from KEYBANK NATIONAL
ASSOCIATION ("Lender") such sum or sums of money as in their judgement
should be borrowed, without limitation and to enter into other
agreements with Lender or its affiliates, including without limitation
agreements relating to interest rate swaps, or options, foreign currency
exchange, letters of credit, trust, investment or fiduciary services, or
other financial products or services, on such terms as may be agreed
upon between the Corporation and Lender or its affiliates.
Execute Notes. To execute and deliver to Lender the promissory note or
notes, or other evidence of credit accommodations of the Corporation on
Lender's forms, at such rates of interest and on such terms as may be
agreed upon, evidencing the sums of money so borrowed or any
indebtedness of the Corporation to Lender, and also to execute and
deliver to Lender one or more renewals, extensions, modifications,
refinancings, consolidations, or substitutions for one or more of the
notes, any portion of the notes, or any other evidence of credit
accommodations.
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
otherwise encumber and deliver to Lender, as security for the payment of
any loans or credit accommodations so obtained, any promissory notes so
executed (including any amendments to or modifications, renewals, and
extensions of such promissory notes), or any other or further
indebtedness of the Corporation to Lender at any time owing, however the
same may be evidenced, any property now or hereafter belonging to the
Corporation or in which the Corporation now or hereafter may have an
interest, including without limitation all real property and all
personal property (tangible or intangible) of the Corporation. Such
property may be mortgaged, pledged, transferred, endorsed, hypothecated,
or encumbered at the time such loans are obtained or such indebtedness
is incurred, or at any other time or times, and may be either in
addition to or in lieu of any property theretofore mortgaged, pledged,
transferred, endorsed, hypothecated, or encumbered.
Execute Security Documents. To execute and deliver to Lender the forms
of mortgage, deed of trust, pledge agreement, hypothecation agreement,
and other security agreements and financing statements which may be
submitted by Lender, and which shall evidence the terms and conditions
under and pursuant to which such liens and encumbrances, or any of them,
are given; and also to execute and deliver to Lender any other written
instruments, any chattel paper, or any other collateral, of any kind or
nature, which they may in their discretion deem reasonably necessary or
proper in connection with or pertaining to the giving of the liens and
encumbrances. Notwithstanding the foregoing, any one of the above
authorized persons may execute, deliver, or record financing statements.
Negotiate Items. To draw, endorse, and discount with Lender all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness
payable to or belonging to the Corporation in which the Corporation may
have an interest, and either to receive cash for the same or to cause
such proceeds to be credited to the account of the Corporation with
Lender or to cause such other disposition of the proceeds derived
therefrom as they may deem advisable.
Further Acts. In the case of lines of credit, to designate additional
or alternate individuals as being authorized to request advances
thereunder, and in all cases, to do and perform such other acts and
things, to pay any and all fees and costs, and to execute and deliver
such other documents and agreements, including agreements waiving the
right to a trail by jury, as they may in their discretion deem
reasonably necessary or proper in order to carry into effect the
provisions of these Resolutions. The following person or persons
currently are authorized to request advances and authorize payments
under the line of credit until Lender receives written notice of
revocation of their authority: GARY B. PALMER, PRESIDENT; and CRAIG L.
MATHISON, VICE PRESIDENT.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions and performed prior to the passage of these Resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such
notice shall not affect any of the Corporation's agreements or commitments in
effect at the time notice is given.
BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation, (d) change in the authorized signer(s), (e)
conversion of the Corporation to a new or different type of business entity,
or (f) change in any other aspect of the Corporation that directly or
indirectly relates to any agreements between the Corporation and Lender. No
change in the name of the Corporation will take effect until after Lender has
been notified.
I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case
may be, and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand or record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified
or revoked in any manner whatsoever. The Corporation has no corporate seal,
and therefore, no seal is affixed to this certificate.
IN TESTIMONY WHEREOF, I have hereunto set my hand on May 19, 2000 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X /s/ ALAN W. WHITE
___________________________
ALAN W. WHITE,
VICE PRESIDENT
NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, it is advisable to have
this certificate signed by a second Officer or Director of the Corporation.
==============================================================================
Exhibit (10b) being the Borrowing Agreement between Web Press
Corporation and the Export-Import Bank of the
United States dated May 21, 2000.
ANNEX B
EXPORT-IMPORT BANK OF THE UNITED STATES
WORKING CAPITAL GUARANTEE PROGRAM
BORROWER AGREEMENT
THIS BORROWER AGREEMENT (this "Agreement") is made and entered
into by the entity identified as Borrower on the signature page hereof
("Borrower") in favor of the Export-Import Bank of the United States
("Ex-Im Bank") and the institution identified as Lender on the
signature page hereof ("Lender").
RECITALS
Borrower has requested that Lender established a Loan Facility in
favor of Borrower for the purpose of providing Borrower with pre-export
working capital to finance the manufacture, production or purchase and
subsequent export sale of Items.
It is a condition to the establishment of such Loan Facility that
Ex-Im Bank guarantee the payment of ninety percent (90%) of certain
credit accommodations subject to the terms and conditions of a Master
Guarantee Agreement, the Loan Authorization Agreement, and to the
extent applicable, the Delegated Authority Letter Agreement.
Borrower is executing this Agreement for the benefit of Lender
and Ex-Im Bank in consideration for and as a condition to Lender's
establishing the Loan Facility and Ex-Im Bank's agreement to guarantee
such Loan Facility pursuant to the Master Guarantee Agreement.
NOW, THEREFORE, Borrower hereby agrees as follows:
ARTICLE I
DEFINITIONS
1.01 Definition of Terms. As used in this Agreement, including the
Recitals to this Agreement and the Loan Authorization Agreement, the
following terms shall have the following meanings:
"Accounts Receivable" shall mean all of Borrower's now owned or
hereafter acquired (a) "accounts" (as such term is defined in the UCC),
other receivables, book debts and other forms of obligations, whether
arising out of goods sold or services rendered or from any other
transactions; (b) rights in, to and under all purchase orders or
receipts for goods or services; (c) rights to any goods represented or
purported to be represented by any of the foregoing (including unpaid
sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods); (d)
moneys due or to become due to such Borrower under all purchase orders
and contracts for the sale of goods or the performance of services or
both by Borrower (whether or not yet earned by performance on the part
of Borrower), including the proceeds of the foregoing; (e) any notes,
drafts, letters of credit, insurance proceeds or other instruments,
documents and writings evidencing or supporting the foregoing; and (f)
all collateral security and guarantees of any kind given by any other
Person with respect to any of the foregoing.
"Advance Rate" shall mean the rate specified in Section 5(C) of
the Loan Authorization Agreement for each category of Collateral.
"Business Day" shall mean any day on which the Federal Reserve
Bank of New York is open for business.
"Buyer" shall mean a Person that has entered into one or more
Export Orders with Borrower.
"Collateral" shall mean all property and interest in property in
or upon which Lender has been granted a Lien as security for the
payment of all the Loan Facility Obligations including the Collateral
identified in Section 6 of the Loan Authorization Agreement and all
products and proceeds (cash and non-cash) thereof.
"Commercial Letters of Credit" shall mean those letters of credit
subject to the UCP payable in Dollars and issued or caused to be issued
by Lender on behalf of Borrower under a Loan Facility for the benefit
of a supplier(s) of Borrower in connection with Borrower's purchase of
goods or services from the supplier in support of the export of the
Items.
"Country Limitation Schedule" shall mean the schedule published
from time to time by Ex-Im Bank and provided to Borrower by Lender
which sets forth on a country by country basis whether and under what
conditions Ex-Im Bank will provide coverage for the financing of export
transactions to countries listed therein.
"Credit Accommodation Amount" shall mean, the sum of (a) the
aggregate outstanding amount of Disbursements and (b) the aggregate
outstanding face amount of Letter of Credit Obligations.
"Credit Accommodations" shall mean, collectively, Disbursements
and Letter of Credit Obligations.
"Debarment Regulations" shall mean, collectively, (a) the
Governmentwide Debarment and Suspension (Nonprocurment) regulations
(Common Rule), 53 Fed. Reg. (May 26, 1988), (b) Subpart 9.4 (Debarment,
Suspension, and Ineligibility) of the Federal Acquisition Regulations,
48 C.F.R. 9.400-9.409 and (c) the revised Governmentwide Debarment and
Suspension (Nonprocurement) regulations (Common Rule), 60 Fed. Reg.
33037 (June 26, 1995).
"Delegated Authority Letter Agreement" shall mean the Delegated
Authority Letter Agreement, if any, between Ex-Im Bank and Lender.
"Disbursement" shall mean, collectively, (a) an advance of a
working capital loan from Lender to Borrower under the Loan Facility,
and (b) an advance to fund a drawing under a Letter of Credit issued or
caused to be issued by Lender for the account of Borrower under the
Loan Facility.
"Dollars" or "$" shall mean the lawful currency of the United
States.
"Effective Date" shall mean the date on which (a) the Loan
Documents are executed by Lender and Borrower or the date, if later, on
which agreements are executed by Lender and Borrower adding the Loan
Facility to an existing working capital loan arrangement between Lender
and Borrower and (b) all of the conditions to the making of the initial
Credit Accommodations under the Loan Documents or any amendments
thereto have been satisfied.
"Eligible Export-Related Accounts Receivable" shall mean and
Export-Related Account Receivable which is acceptable to Lender and
which is deemed to be eligible pursuant to the Loan Documents, but in
no event shall Eligible Export-Related Accounts Receivable include any
Account Receivable:
(a) that does not arise from the sale of Items in the ordinary
course of Borrower's business;
(b) that is not subject to a valid, perfected first priority
Lien in favor of Lender;
(c) as to which any covenant, representation or warranty
contained in the Loan Documents with respect to such Account Receivable
has been breached;
(d) that is not owned by Borrower or is subject to any right,
claim or interest of another Person other than the Lien in favor of
Lender.
(e) with respect to which an invoice has not been sent;
(f) that arises from the sale of defense articles or defense
services;
(g) that is due and payable from a Buyer located in a country
with which Ex-Im Bank is prohibited from doing business as designated
in the Country Limitation Schedule;
(h) that does not comply with the requirements of the Country
Limitation Schedule;
(i) that is due and payable more than one hundred eighty (180)
days from the date of the invoice;
(j) that is not paid within sixty (60) calendar days from its
original due date, unless it is insured through Ex-Im Bank export
credit insurance for comprehensive commercial and political risk, or
through Ex-Im Bank approved private insurers for comparable coverage,
in which case it is not paid within ninety (90) calendar days from its
due date;
(k) that arises from a sale of goods to or performance of
services for an employee of Borrower, a stockholder of Borrower, a
subsidiary of Borrower, a Person with a controlling interest in
Borrower or a Person which shares common controlling ownership with
Borrower;
(l) that is backed by a letter of credit unless the Items
covered by the subject letter of credit have been shipped;
(m) that Lender or Ex-Im Bank, in its reasonable judgement,
deems uncollectible for any reason;
(n) that is due and payable in a currency other than Dollars,
except as may be approved in writing by Ex-Im Bank;
(o) that is due and payable from a military Buyer, except as
may be approved in writing by Ex-Im Bank;
(p) that does not comply with the terms of sale set forth in
Section 7 of the Loan Authorization Agreement;
(q) that is due and payable from a Buyer who (i) applies for,
suffers, or consents to the appointment of , or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property or calls a meeting of
its creditors, (ii) admits in writing its inability, or is generally
unable, to pay its debts as they become due or ceases operations of its
present business, (iii) makes a general assignment for the benefit of
creditors (iv) commences a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as
bankrupt or insolvent, (vi) files a petition seeking to take advantage
of any other law providing for the relief of debtors, (vii) acquiesces
to, or fails to have dismissed any petition which is filed against it
in any involuntary case under such bankruptcy laws, or (viii) take any
action for the purpose of effecting any of the forgoing;
(r) that arises from a bill-and-hold, guaranteed sale, sale-
and-return, sale on approval, consignment or any other repurchase or
return basis of is evidenced by chattel paper;
(s) for which the Items giving rise to such Account Receivable
have not been shipped and delivered to and accepted by the Buyer or the
services giving rise to such Account receivable have not been performed
by Borrower and accepted by the Buyer or the Account Receivable
otherwise does not represent a final sale;
(t) that is subject to any offset, deduction, defense, dispute,
or counterclaim or the Buyer is also a creditor or supplier of Borrower
or the Account Receivable is contingent in any respect or for any
reason;
(u) for which Borrower has made any agreement with the Buyer
for any deduction therefrom, except for discounts or allowances made in
the ordinary course of business for prompt payment, all of which
discounts or allowances are reflected in the calculation of the face
value of each respective invoice related thereto; or
(v) for which any of the Items giving rise to such Account
Receivable have been returned, rejected or repossessed.
"Eligible Export-Related Inventory" shall mean Export- Related
Inventory which is acceptable to Lender and which is deemed to be
eligible pursuant to the Loan Documents, but in no event shall Eligible
Export-Related Inventory include any Inventory;
(a) that is not subject to a valid, perfected first priority
Lien in favor to Lender;
(b) that is located at an address that has not been disclosed
to Lender in writing;
(c) that is placed by Borrower on consignment or held by
Borrower on consignment from another Person;
(d) that is in the possession of a processor or bailee, or
located on premises leased or subleased to Borrower, or on premises
subject to a mortgage in favor or a Person other than Lender, unless
such processor or bailee or mortgage or the lessor or sublessor of such
premises as the case may be, has executed and delivered all
documentation which Lender shall require to evidence the subordination
or other limitation or extinguishment of such Person's rights with
respect to such Inventory and Lender's right to gain access thereto;
(e) that is produced in violation of the Fair Labor Standards
Act or subject to the "hot goods" provisions contained in 29 US.C:215
or any successor statute or section;
(f) as to which any covenant, representation or warranty with
respect to such Inventory contained in the Loan Documents has been
breached;
(g) that is not located in the United States;
(h) that is demonstration Inventory;
(i) that consists of proprietary software (i.e. software
designed solely for Borrower's internal use and not intended for
resale);
(j) that is damaged, obsolete, returned, defective, recalled or
unfit for further processing;
(k) that has been previously exported from the United States;
(l) that constitutes defense articles or defense services;
(m) that is to be incorporated into Items destined for shipment
to a country as to which Ex-Im Bank is prohibited from doing business
as designated in the Country Limitation Schedule;
(n) that is to be incorporated into Items destined for shipment
to a Buyer located in a country in which Ex-Im Bank coverage is not
available for commercial reasons as designated in the Country
Limitation Schedule, unless and only to the extent that such Items are
to be sold to such country on terms of a letter of credit confirmed by
a bank acceptable to Ex-Im Bank; or
(o) that is to be incorporated into Items whose sale would
result in an Account Receivable which would not be an Eligible Export-
Related Account Receivable.
"Eligible Person" shall mean a sole proprietorship, partnership,
limited liability partnership corporation or limited liability company
which (a) is domiciled, organized, or formed as the case may be, in the
United States; (b) is in good standing in the state of its formation or
otherwise authorized to conduct business in the United States; (c) is
not currently suspended or debarred from doing business with the United
States government or any instrumentality, division, agency or
department thereof; (d) exports or plans to export Items; (e) operates
and has operated as a going concern for at least one (1) year; (f) has
a positive tangible net worth determined in accordance with GAAP; and
(g) has revenue generating operations relating to its core business
activities for at least one year.
"ERISA" shall mean the Employee Income Security Act of 1974 and
the rules and regulations promulgated thereunder.
"Export Order" shall mean a written export order or contract for
the purchase by the Buyer from Borrower of any of the Items.
"Export-Related Accounts Receivable" shall mean those Accounts
Receivable arising from the sale of Items which are due and payable to
Borrower in the United States.
"Export-Related Accounts Receivable Value" shall mean, at the
date of determination thereof, the aggregate face amount of Eligible
Export-Related Accounts Receivable less taxes, discounts, credits,
allowances and Retainages, except to the extent otherwise permitted by
Ex-Im Bank in writing.
"Export-Related Borrowing Base" shall mean, at the date of
determination thereof, the sum of (a) the Export-Related Inventory
Value multiplied by the Advance Rate applicable to Export-Related
Inventory set forth in Section 5(C)(1) of the Loan Authorization
Agreement, (b) the Export-Related Accounts Receivable Value multiplied
by the Advance Rate applicable to Export-Related Accounts Receivable
set forth in Section 5(C)(2) of the Loan Authorization Agreement, (c)
if permitted by Ex-Im Bank in writing, the Retainage Value multiplied
by the Retainage Advance Rate set forth in Section 5(C)(3) of the Loan
Authorization Agreement and (d) the Other Assets Value multiplied by
the Advance Rate applicable to Other Assets set forth in Section
5(C)(4) of the Loan Authorization Agreement.
"Export-Related Borrowing Base Certificate" shall mean a
certificate in the form provided or approved by Lender, executed by
Borrower and delivered to Lender pursuant to the Loan Documents
detailing the Export-Related Borrowing Base supporting the Credit
Accommodations which reflects, to the extent included in the Export-
Related Borrowing Base, Export-Related Accounts Receivable, Eligible
Export-Related Accounts Receivable, Export-Related Inventory and
Eligible Export-Related Inventory balances that have been reconciled
with Borrower's general ledger, Accounts Receivable aging report and
Inventory schedule.
"Export-Related General Intangibles" shall mean those General
Intangibles necessary or desirable to or for the disposition of Export-
Related Inventory.
"Export-Related Inventory" shall mean the Inventory of Borrower
located in the United States that has been purchased, manufactured or
otherwise acquired by Borrower for resale pursuant to Export Orders.
"Export-Related Inventory Value" shall mean, at the date of
determination thereof, the lower of cost or market value of Eligible
Export-Related Inventory of Borrower as determined in accordance with
GAAP.
"Final Disbursement Date" shall mean unless subject to an
extension of such date agreed to by Ex-Im Bank, the last date on which
Lender may make a Disbursement set forth in Section 10 of the Loan
Authorization Agreement or, if such date is not a Business Day the next
succeeding Business Day; provided, however, to the extent that Lender
has not received cash collateral or an indemnity with respect to Letter
of Credit Obligations outstanding on the Final Disbursement Date, the
Final Disbursement Date with respect to an advance to fund a drawing
under a Letter of Credit shall be no later than thirty (30) Business
Days after the expiry date of the Letter of Credit related thereto.
"GAAP" shall mean the generally accepted accounting principles
issued by the American Institute of Certified Public Accountants as in
effect from time to time.
"General Intangibles" shall mean all intellectual property and
other "general intangibles" (as such term is defined in the UCC)
necessary or desirable to or for the disposition of Inventory.
"Guarantor" shall mean each Person, if any, identified in Section
3 of the Loan Authorization Agreement who shall guarantee (jointly and
severally if more than one) the payment and performance of all or a
portion of the Loan Facility Obligations.
"Guaranty Agreement" shall mean a valid and enforceable agreement
of guaranty executed by each Guarantor in favor of Lender.
"Inventory" shall mean all "inventory" (as such term is defined
in the UCC), now or hereafter owned or acquired by Borrower, wherever
located, including all inventory, merchandise, goods and other personal
property which are held by or on behalf of Borrower for sale or lease
or are furnished or are to be furnished under a contract of service or
which constitute raw materials, work in process or materials used or
consumed or to be used or consumed in Borrower's business or in the
processing, production, packaging, promotion, delivery or shipping of
the same, including other supplies.
"ISP" shall mean the International Standby Practices-ISP98,
International Chamber of Commerce Publication No. 590 and any
amendments and revisions thereof.
"Issuing Bank" shall mean the bank that issues a Letter of
Credit, which bank is Lender itself or a bank that Lender has caused to
issue a Letter of Credit by way of guarantee.
"Items" shall mean the finished goods or services which are
intended for export from the United States, as specified in Section
4(A) of the Loan Authorization Agreement.
"Letter of Credit" shall mean a Commercial Letter of Credit or
Standby Letter of Credit.
"Letter of Credit Obligations" shall mean all outstanding
obligations incurred by Lender, whether direct or indirect, contingent
or otherwise, due or not due, in connection with the issuance or
guarantee by Lender or the Issuing Bank of Letters of Credit.
"Lien" shall mean any mortgage, security deed or deed to trust,
pledge, hypothecation, assignment, deposit arrangement, lien, charge,
claim, security interest, security title, easement or encumbrance, or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or
title retention agreement, any financing lease have substantially the
same economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement perfecting a security
interest under the UCC or comparable law of any jurisdiction) by which
property is encumbered or otherwise charged.
"Loan Agreement" shall mean a valid and enforceable agreement
between Lender and Borrower setting forth the terms and conditions of
the Loan Facility.
"Loan Authorization Agreement" shall mean the Loan Authorization
Agreement entered into between Lender and Ex-Im Bank or the Loan
Authorization Notice setting forth certain terms and conditions of the
Loan Facility, a copy of which is attached hereto as Annex A.
"Loan Authorization Notice" shall mean the Loan Authorization
Notice executed by Lender and delivered to Ex-Im Bank in accordance
with the Delegated Authority Letter Agreement setting forth the terms
and conditions of each Loan Facility.
"Loan Documents" shall mean the Loan Authorization Agreement, the
Loan Agreement, this Agreement, each promissory note (if applicable),
each Guaranty Agreement and all other instruments, agreements and
documents now or hereafter executed by Borrower or any Guarantor
evidencing, securing, guaranteeing or otherwise relating to the Loan
Facility or any Credit Accommodations made thereunder.
"Loan Facility" shall mean the Revolving Loan Facility, the
Transaction Specific Loan Facility or the Transaction Specific
Revolving Loan Facility established by Lender in favor of Borrower
under the Loan Documents.
"Loan Facility Obligations" shall mean all loans, advances,
debts, expenses, fees, liabilities, and obligations for the performance
of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or
amounts are liquidated or determinable) owing by Borrowers to Lender,
or any kind or nature, present or future, arising in connection with
the Loan Facility.
"Loan Facility Term" shall mean the number of months from the
Effective Date to the Final Disbursement Date as originally set forth
in the Loan Authorization Agreement.
"Master Guarantee Agreement" shall mean the Master Guarantee
Agreement between Ex-Im Bank and Lender, as amended, modified,
supplemented and restated from time to time.
"Master Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, operations, prospects or financial or other
condition of Borrower or any Guarantor, (b) Borrower's ability to pay
or perform the Loan Facility Obligations in accordance with the terms
thereof, (c) the Collateral or Lender's Liens on the Collateral or the
priority of such Lien or (d) Lender's rights and remedies under the
Loan Documents.
"Maximum Amount" shall mean the maximum principal balance of
Credit Accommodations that may be outstanding at any time under the
Loan Facility specified in Section 5(A) of the Loan Authorization
Agreement.
"Other Assets" shall mean the Collateral, if any, described in
Section 5(C)(4) of the Loan Authorization Agreement.
"Other Assets Value" shall mean, at the date of determination
thereof, the value of the Other Assets as determined in accordance with
GAAP.
"Permitted Liens" shall mean (a) Liens for taxes, assessments or
other governmental charges or levies not delinquent, or, being
contested in good faith and by appropriate proceedings and with respect
to which proper reserves have been taken by Borrower provided, that,
that Lien shall have no effect on the priority of the Liens in favor of
Lender or the value of the assets in which Lender has such a Lien and
stay of enforcement of any such Lien shall be in effect; (b) deposits
or pledges securing obligations under worker's compensation,
unemployment insurance, social security or public liability laws or
similar legislation; (c) deposits or pledges securing bids, tenders,
contracts (other than contracts for the payment of money), leases
statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of Borrower's business; (d)
judgement Liens that have been stayed or bonded; (e) mechanics',
workers', materialmen's or other like Liens arising in the ordinary
course of Borrower's business with respect to obligations which are not
due; (f) Liens placed upon fixed assets hereafter acquired to secure a
portion of the purchase price thereof, provided, that, any such Lien
shall not encumber any other property of Borrower; (g) security
interests being terminated concurrently with the execution of the Loan
Documents; (h) Liens in favor of Lender securing the Loan Facility
Obligations; and (i) Liens disclosed in Section 6(D) of the Loan
Authorization Agreement.
"Person" shall mean any individual, sole proprietorship,
partnership, limited liability partnership, joint venture, trust,
unincorporated organization association, corporation, limited liability
company, institution, public benefit corporation, entity or government
(whether national, federal, provincial, state, county, city, municipal
or otherwise, including any instrumentality, division, agency, body or
department thereof), and shall include such Person's successors and
assigns.
"Principals" shall mean any officer, director, owner, partner,
key employee, or other Person with primary management or supervisory
responsibilities with respect to Borrower or any other Person (whether
or not an employee) who has critical influence on or substantive
control over the transactions covered by this Agreement.
"Retainage" shall mean that portion of the purchase price of an
Export Order that a Buyer is not obligated to pay until the end of a
specified period of time following the satisfactory performance under
such Export Order.
"Retainage Accounts Receivable" shall mean those portions of
Eligible Export-Related Accounts Receivable arising out of a Retainage.
"Retainage Advance Rate" shall mean the percentage rate specified
in Section 5(C)(3) of the Loan Authorization Agreement as the Advance
Rate for the Retainage Accounts Receivable of Borrower.
"Retainage Value" shall mean, at the date of determination
thereof, the aggregate face amount of Retainage Accounts Receivable,
less taxes, discounts, credits and allowances, except to the extent
otherwise permitted by Ex-Im Bank in writing.
"Revolving Loan Facility" shall mean the credit facility or
portion thereof established by Lender in favor of Borrower for the
purpose of providing pre-export working capital in the form of loans
and/or Letters of Credit to finance the manufacture, productions or
purchase and subsequent export sale of Items pursuant to Loan Documents
under which Credit Accommodations may be made and repaid on a
continuous basis based solely on the Export-Related Borrowing Base
during the term of such credit facility.
"Special Conditions" shall mean those conditions, if any, set
forth in Section 13 of the Loan Authorization Agreement.
"Specific Export Orders" shall mean those Export Orders specified
in Section 5(D) of the Loan Authorization Agreement.
"Standby Letter of Credit" shall mean those letters of credit
subject to the ISP or UCP issued or caused to be issued by Lender for
Borrower's account that can be drawn upon by a Buyer only if Borrower
fails to perform all of its obligations with respect to an Export
Order.
"Transaction Specific Loan Facility" shall mean a credit facility
or a portion thereof established by Lender in favor of Borrower for the
purpose of providing pre-export working capital in the form of loans
and/or Letters of Credit to finance the manufacture, production or
purchase and subsequent export sale of Items pursuant to Loan Documents
under which Credit Accommodations are made based solely on the Export-
Related Borrowing Base relating to Specific Export Orders and once such
Credit Accommodations are repaid they may not be reborrowed.
"Transaction Specific Revolving Loan Facility" shall mean a
Revolving Credit Facility established to provide financing of Specific
Export Orders.
"UCC" shall mean the Uniform Commercial Code as the same may be
in effect from time to time in the jurisdiction in which Borrower or
Collateral is located.
"UCP" shall mean the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication
No. 500 and any amendments and revisions thereof.
"U.S." or "United States" shall mean the United States of America
and its territorial possessions.
"U.S. Content" shall mean with respect to any Item all the labor,
materials, and services which are of U.S. origin or manufacture, and
which are incorporated into an Item in the United States.
"Warranty" shall mean Borrower's guarantee to Buyer that the
Items will function as intended during the warranty period set forth in
the applicable Export Order.
"Warranty Letter of Credit" shall mean a Standby Letter of Credit
which is issued or caused to be issued by Lender to support the
obligations of Borrower with respect to a Warranty or a Standby Letter
of Credit which by its terms becomes a Warranty Letter of Credit.
1.02 Rules of Construction. For purposes of this Agreement, the
following additional rules of construction shall apply, unless
specifically indicated to the contrary: (a) wherever from the context
it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and pronouns state in
the masculine, feminine or neuter gender shall include the masculine,
the feminine and the neuter; (b) the term "or" is not exclusive; (c)
the term "including" (or any form thereof) shall not be limiting or
exclusive; (d) all references to statues and related regulations shall
include any amendments of same and any successor statues and
regulations; (e) the words "this Agreement", "herein", "hereunder" or
other words of similar import refer to this Agreement as a whole
including the schedules, exhibits, and annexes hereto as the same may
be amended, modified or supplemented; (f) all references in this
Agreement to sections, schedules, exhibits, and annexes shall refer to
the corresponding sections, schedules, exhibits, and annexes of or to
this Agreement; and (g) all references to any instruments or
agreements, including references to any of the Loan Documents, or the
Delegated Authority Letter of Agreement shall include any and all
modifications, amendments and supplements thereto and any and all
extensions or renewals thereof to the extent permitted under this
Agreement.
1.03 Incorporation of Recitals. The Recitals to this Agreement are
incorporated into and shall constitute a part of this Agreement.
ARTICLE II
OBLIGATIONS OF BORROWER
Until payment in full of all Loan Obligations and termination of
the Loan Documents, Borrower agrees as follows:
2.01 Use of Credit Accommodations. (a) Borrower shall use Credit
Accommodations only for the purpose of enabling Borrower to finance the
cost of manufacturing, producing, purchasing or selling the Items.
Borrower may not use any of the Credit Accommodations for the purpose
of: (i) servicing or repaying any of Borrower's pre-existing or future
indebtedness unrelated to the Loan Facility (unless approved by Ex-Im
Bank in writing); (ii) acquiring fixed assets or capital goods for use
in Borrower's business; (iii) acquiring, equipping or renting
commercial space outside the United States; (iv) paying the salaries of
non U.S. citizens or non-U.S. permanent residents who are located in
offices outside of the United States; or (v) in connection with a
Retainage or Warranty (unless approved by Ex-Im Bank in writing).
(b) In addition, no Credit Accommodation may be used to finance
the manufacture, purchase or sale of any of the following:
(i) Items to be sold or resold to a Buyer located in a country
as to which Ex-Im Bank if prohibited from doing business as designated
in the Country Limitation Schedule;
(ii) that part of the cost of Items which is not U.S. Content
unless such part is not greater than fifty percent (50%) of the cost of
the Items and is incorporated into the Items in the United States;
(iii) defense articles or defense services; or
(iv) without Ex-Im Bank's prior written consent, any Items to be
used in the construction, alteration, operation or maintenance of
nuclear power, enrichment, reprocessing, research or heavy water
production facilities.
2.02 Loan Documents and Loan Authorization Agreement. (a) Each Loan
Document and this Agreement have been duly executed and delivered on
behalf of Borrower, and each such Loan Document and this Agreement are
and will continue to be a legal and valid obligation of Borrower,
enforceable against it in accordance with its terms.
(b) Borrower shall comply with all of the terms and conditions
of the Loan Documents, this Agreement and the Loan Authorization
Agreement.
2.03 Export-Related Borrowing Base Certificates and Export Orders. In
order to receive Credit Accommodations under the Loan Facility,
Borrower shall have delivered to Lender an Export-Related Borrowing
Base Certificate as frequently as required by Lender but at least
within the past thirty (30) calendar days and a copy of the Export
Order(s) (or, for Revolving Loan Facilities, if permitted by Lender, a
written summary of the Export Orders) against which Borrower is
requesting Credit Accommodations. If Lender permits summaries of
Export Orders, Borrower shall also deliver promptly to Lender copies of
any Export Orders requested by Lender. In addition, so long as there
are any Credit Accommodations outstanding under the Loan Facility,
Borrower shall deliver to Lender at least once a month no later than
the twentieth (20th) day of such month or more frequently as required
by the Loan Documents, an Export-Related Borrowing Base Certificate.
2.04 Exclusions from the Export-Related Borrowing Base. In determining
the Export-Related Borrowing Base, Borrower shall exclude therefrom
inventory which is not Eligible Export-Related Inventory and Accounts
Receivable which are not Eligible Export-Related Accounts Receivable.
Borrower shall promptly, but in any event within five (5) Business
Days, notify Lender (a) if any then existing Export-Related Inventory
no longer constitutes Eligible Export-Related Inventory or (b) of any
event or circumstance which to Borrower's knowledge would cause Lender
to consider any then existing Export-Related Accounts Receivable as no
longer constituting an Eligible Export-Related Accounts Receivable.
2.05 Financial Statements. Borrower shall deliver to Lender the
financial statements required to be delivered by Borrower in accordance
with Section 11 of the Loan Authorization Agreement.
2.06 Schedules, Reports and Other Statements. Borrower shall submit to
Lender in writing each month (a) an Inventory schedule for the
preceding month and (b) an Accounts Receivable aging report for the
preceding month detailing the terms of the amounts due from each Buyer.
Borrower shall also furnish to Lender promptly upon request such
information, reports, contracts, invoices and other data concerning the
Collateral as Lender may from time to time specify.
2.07 Additional Security or Payment. (a) Borrower shall at times
ensure that the Export-Related Borrowing Base equals or exceeds the
Credit Accommodation Amount. If informed by Lender or if Borrower
otherwise has actual knowledge that the Export-Related Borrowing Base
is at any time less than the Credit Accommodation Amount, Borrower
shall, within five (5) Business Days, either (i) furnish additional
Collateral to Lender, in form and amount satisfactory to Lender and Ex-
Im Bank or (ii) pay to Lender an amount equal to the differences
between the Credit Accommodation Amount and the Export-Related
Borrowing Base.
(b) For purposes of this Agreement, in determining the Export-
Related Borrowing Base there shall be deducted from the Export-Related
Borrowing Base (i) an amount equal to twenty-five percent (25%) of the
outstanding face amount of Commercial Letters of Credit and Standby
Letters of Credit and (ii) one hundred percent (100%) of the face
amount of Warranty Letters of Credit less the amount of cash collateral
held by Lender to secure Warranty Letters of Credit.
(c) Unless otherwise approved in writing by Ex-Im Bank, for
Revolving Loan Facilities (other than Transaction Specific Revolving
Loan Facilities), Borrower shall at all times ensure that the
outstanding principal balance of the Credit Accommodations that is
supported by Export-Related Inventory does note exceed sixty percent
(60%) of the sum of the total outstanding principal balance of the
Disbursements and the undrawn face amount of all outstanding Commercial
Letters of Credit. If informed by Lender or Borrower otherwise has
actual knowledge that the outstanding principal balance of the Credit
Accommodations that is supported by Inventory exceeds sixty percent
(60%) of the sum of the total outstanding principal balance of the
Disbursements and the undrawn face amount of all outstanding Commercial
Letters of Credit, Borrower shall, within five (5) Business Days,
either (i) furnish additional non-Inventory Collateral to Lender, in
form and amount satisfactory to Lender and Ex-Im Bank, or (ii) pay down
the applicable portion of the Credit Accommodations so that the above
described ratio is not exceeded.
2.08 Continued Security Interest. Borrower shall not change (a) its
name or identity in any manner, (b) the location of its principal place
of business, (c) the location of any of the Collateral or (d) the
location of any of the books or records related to the Collateral, in
each instance without giving thirty (30) days prior written notice
thereof to Lender and taking all actions deemed necessary or
appropriate by Lender to continuously protect and perfect Lender's
Liens upon the Collateral.
2.09 Inspection of Collateral. Borrower shall permit the
representatives of Lender and Ex-Im bank to make at any time during
normal business hours inspections of the Collateral and of Borrower's
facilities, activities, and books and records, and shall cause its
officers and employees to give full cooperation and assistance in
connection therewith.
2.10 General Intangibles. Borrower represents and warrants that it
owns, or is licensed to use, all General Intangibles necessary to
conduct its business as currently conducted except where the failure of
Borrower to own or license such General Intangibles could not
reasonably be expected to have a Material Adverse Effect.
2.11 Notice of Certain Events. Borrower shall promptly, but in any
event within five (5) Business Days, notify Lender in writing of the
occurrence of any of the following:
(a) Borrower or any Guarantor (i) applies for, consents to or
suffers the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all
or a substantial part of its property or calls a meeting of its
creditors, (ii) admits in writing its inability, or is generally
unable, to pay its debts as they become due or ceases operations of its
present business (iii) makes a general assignment for the benefit of
creditors, (iv) commences a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) is adjudicated as
bankrupt or insolvent, (vi) files a petition seeking to take advantage
of any other law providing for the relief of debtors, (vii) acquiesces
to, or fails to have dismissed within thirty (30) days, any petition
filed against it in any involuntary case under such bankruptcy laws, or
(vii) takes any action for the purpose of effecting any of the
foregoing;
(b) any Lien in any of the Collateral, granted or intended by
the Loan Documents to be granted to Lender, ceases to be a valid,
enforceable, perfected, first priority Lien (or a lesser priority if
expressly permitted pursuant to Section 6 of the Loan Authorization
Agreement) subject only to Permitted Liens;
(c) the issuance of any levy, assessment, attachment, seizure
or Lien, other than a Permitted Lien, against any of the Collateral
which is not stayed or lifted within thirty (30) calendar days;
(d) any proceeding is commenced by or against Borrower or any
Guarantor for the liquidation of its assets or dissolution;
(e) any litigation if filed against Borrower or any Guarantor
which has had or could reasonably be expected to have a Material
Adverse Effect and such litigation is not withdrawn or dismissed within
thirty (30) calendar days of the filing thereof;
(f) any default or event under the Loan Documents;
(g) any failure to comply with any terms of the Loan
Authorization Agreement;
(h) any material provision of any Loan Document or this
Agreement for any reason ceases to be valid, binding and enforceable in
accordance with its terms;
(i) any event which has had or could reasonably be expected to
have a Material Adverse Effect; or
(j) the Credit Accommodations Amount exceeds the applicable
Export-Related Borrowing Base.
2.12 Insurance. Borrower will at all times carry property, liability
and other insurance, with insurers acceptable to Lender, in such form
and amounts, and with such deductibles and other provisions, as Lender
shall require, and Borrower will provide evidence of such insurance to
Lender, so that Lender is satisfied that such insurance is, at all
times, in full force and effect. Each property insurance policy shall
name Lender as loss payee and shall contain a lender's loss payable
endorsement in form acceptable to Lender and each liability insurance
policy shall name Lender as an additional insured. All policies in
insurance shall provide that they may not be cancelled or changed
without at least ten (10) days' prior written notice to Lender and
shall otherwise be in form and substance satisfactory to Lender.
Borrower will promptly deliver to Lender copies of all reports made to
insurance companies.
2.13 Taxes. Borrower has timely filed all tax returns and reports
required by applicable law, has timely paid all applicable taxes,
assessments, deposits and contributions owing by Borrower and will
timely pay all such items in the future as they became due and payable.
Borrower may, however, defer payment of any contested taxes; provided,
that Borrower (a) in good faith contests Borrower's obligation to pay
such taxes by appropriate proceedings promptly and diligently
instituted and conducted; (b) notifies Lender in writing of the
commencement of, and any material development in, the proceedings; (c)
posts bonds or takes any other steps required to keep the contested
taxes from becoming a Lien upon any of the Collateral; and (d)
maintains adequate reserves therefor in conformity with GAAP.
2.14 Compliance with Laws. Borrower represents and warrants that it
has complied in all material respects with all provisions of all
applicable laws and regulations, including those relating to Borrower's
ownership or real personal property, the conduct and licensing of
Borrower's business the payment and withholding of taxes, ERISA and
other employee matters, safety and environmental matters.
2.15 Negative Covenants. Without the prior written consent of Ex-Im
Bank and Lender, Borrower shall not (a) merge, consolidate or otherwise
combine with any other Person; (b) acquire all or substantially all of
the assets or capital stock of any other Person; (c) sell, lease,
transfer, convey, assign or otherwise dispose of any of its assets,
except for the sale of Inventory in the ordinary course of business and
the disposition of obsolete equipment in the ordinary course of
business; (d) create any Lien on the Collateral except for Permitted
Liens; (e) make any material changes in its organizational structure or
identity; or (f) enter into any agreement to do any of the foregoing.
2.16 Reborrowings and Repayment Terms. (a) If the Loan Facility is a
Revolving Loan Facility, provided that Borrower is not in default under
any of the Loan Documents, Borrower may borrow, repay and reborrow
amounts under the Loan Facility until the close of business on the
Final Disbursement Date. Unless the Revolving Loan Facility is renewed
or extended by Lender with the consent of Ex-Im Bank, Borrower shall
pay in full the outstanding Loan Facility Obligations and all accrued
and unpaid interest thereon no later than the first Business Day after
the Final Disbursement Date.
(b) If the Loan Facility is a Transaction Specific Loan
Facility, Borrower shall, within two(2) Business Days of the receipt
thereof, pay to Lender (for application against the outstanding Loan
Facility Obligations and accrued and unpaid interest thereon) all
checks, drafts, cash and other remittances it may receive in payment or
on account of the Export-Related Accounts Receivable or any other
Collateral, in precisely the form received (except for the endorsement
of Borrower where necessary). Pending such deposit, Borrower shall
hold such amounts in trust for Lender separate and apart and shall not
commingle any such items of payment with any of its other funds or
property.
2.17 Cross Default. Borrower shall be deemed in default under the Loan
Facility if Borrower fails to pay when due any amount payable to Lender
under any loan or other credit accommodations to Borrower whether or
not guaranteed by Ex-Im Bank.
2.18 Munitions list. If any of the Items are articles, services, or
related technical data that are listed on the United States Munitions
List (part 121 of title 22 of the Code of Federal Regulations),
Borrower shall send a written notice promptly, but in any event within
five (5) Business Days, of Borrower learning thereof to Lender
describing the Item(s) and the corresponding invoice amount.
2.19 Suspension and Debarment, etc. On the date of this Agreement
neither Borrower nor its Principles are (a) debarred, suspended,
proposed for debarment with a final determination still pending,
declared ineligible or voluntarily excluded (as such terms are defined
under any of the Debarment Regulations referred to below) from
participating in procurement or Nonprocurement transactions with any
United States federal government department or agency pursuant to any
of the Debarment Regulations or (b) indicted, convicted or had a civil
judgement rendered against Borrower or any of its Principals for any of
the offenses listed in any of the Debarment Regulations. Unless
authorized by Ex-Im Bank, Borrower will not knowingly enter into any
transactions in connection with the Items with any person who is
debarred, suspended, declared ineligible or voluntarily excluded from
participation in procurement or Nonprocurement transactions with any
United States federal government department or agency pursuant to any
of the Debarment Regulations. Borrower will provide immediate written
notice to Lender if at any time it learns that the certification set
forth in this Section 2.19 was erroneous when made or has become
erroneous by reason of changed circumstances.
ARTICLE III
RIGHTS AND REMEDIES
3.01 Indemnification. Upon Ex-Im Bank's payment of a Claim to Lender
in connection with the Loan Facility pursuant to the Master Guarantee
Agreement, Ex-Im Bank may assume all rights and remedies of Lender
under the Loan Documents and may enforce any such rights or remedies
against Borrower, the Collateral and any Guarantors. Borrower shall
hold Ex-Im Bank and Lender harmless from and indemnify them against any
and all liabilities, damage, claims costs and losses incurred or
suffered by either of them resulting from (a) any materially incorrect
certification or statement knowingly made by Borrower or its agents to
Ex-Im Bank or Lender in connection with the Loan Facility, this
Agreement, the Loan Authorization Agreement or any other Loan Documents
or (b) any material breach by Borrower of the terms and conditions of
this Agreement, the Loan Authorization Agreement or any of the other
Loan Documents. Borrower also acknowledges that any statement,
certification or representation made by Borrower in connection with the
Loan Facility is subject to the penalties provided in Article 18 U.S.C.
Section 1001.
3.02 Liens. Borrower agrees that any and all Liens granted by it to
Lender are also hereby granted to Ex-Im Bank to secure Borrower's
obligation, however arising, to reimburse Ex-Im Bank for any payments
made by Ex-Im Bank pursuant to the Master Guarantee Agreement. Lender
is authorized to apply the proceeds of, and recoveries from, any
property subject to such Liens to the satisfaction of Loan Facility
Obligations in accordance with the terms of any agreement between
Lender and Ex-Im Bank.
ARTICLE IV
MISCELLANEOUS
4.01 Governing Law. This Agreement and the Loan Authorization
Agreement and the obligations arising under this Agreement and the Loan
Authorization Agreement shall be governed by, and construed in
accordance with, the law of the state governing the Loan Documents.
4.02 Notification. All notices required by this Agreement shall be
given in the manner and to the parties provided for in the Loan
Agreement.
4.03 Partial Invalidity. If at any time any of the provisions of this
Agreement becomes illegal, invalid or unenforceable in any respect
under the law of any jurisdiction, neither the legality, the validity
nor the enforceability of the remaining provisions hereof shall in any
way be affected or impaired.
4.04 Waiver of Jury Trail. BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT
MAY HAVE TO A TRAIL BY JURY IN RESPECT OF ANY ACTION, SUIT,
PROCEEDING OR OTHER LITIGATION BROUGHT TO RESOLVE ANY
DISPUTE ARISING UNDER, ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT, THE LOAN AUTHORIZATION AGREEMENT, ANY LOAN
DOCUMENT, OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OR OMMISSIONS OF
LENDER, EX-IM BANK, OR ANY OTHER PERSON, RELATING TO THIS
AGREEMENT, THE LOAN AUTHORIZATION AGREEMENT OR ANY OTHER
LOAN DOCUMENT.
IN WITNESS WHEREOF, Borrower has caused the Agreement to be
duly executed as of the 22 day of May, 2000.
Web Press Corporation
(Name of Borrower)
By:_____________________________
(Signature)
Name: Craig L. Mathison_________
(Print or Type)
Title: Vice President of Finance
(Print or Type)
ACKNOWLEDGED:
KeyBank National Association
(Name of Lender)
By: ____________________________
(Signature)
Name: Richard C. Allen
(Print or Type)
Title: Vice President, International Division
(Print or Type)
Exhibit (10c) being the modification and extension agreement of the business
loan agreement dated April 7, 1999, between Web Press Corporation and KeyBank
National Association.
MODIFICATION AND/OR EXTENSION AGREEMENT
Date: July 7, 2000 MM/BSM
Borrower(s): Web Press Corporation
Lender: KEYBANK NATIONAL ASSOCIATION
Note: Dated April 7, 1999, in the principal amount of
$3,000,000.00.
Loan #: 31-93826-2010039502
FOR VALUE RECEIVED, Borrower and Lender hereby agree to modify the
above-referenced Loan and Promissory Note and/or Loan Agreement as follows:
1. MODIFICATION AND/OR EXTENSION PROVISIONS.
The maturity date of the Loan is hereby extended to June 1, 2003.
2. CONDITIONS. The modifications and/or extension described above are
subject to and conditioned upon Borrower's full satisfaction of all of the
following conditions on or before the date first stated above, time being
of the essence.
A. There shall be no uncured event of default under the Loan, nor any
event or condition which with notice or the passage of time would be
an event of default thereunder.
B. Borrower shall deliver to Lender a fully executed original of the
Modification and/or Extension Agreement.
C. All expenses incurred by Lender in connection with this Agreement
(including without limitation, attorney fees, recording charges, charges
for title policy update(s), escrow charges, costs of obtaining updated or
additional appraisal(s) or collateral valuations, if required by Lender)
shall be paid by Borrower.
D. Borrower shall comply with the following additional conditions:
Borrower shall pay Lender in cash an extension fee of $5,000.00.
3. GENERAL PROVISIONS. Except as modified above, all other provisions of the
Promissory Note and any other documents securing or relating to the Loan (the
"Loan Documents") remain in full force and effect. All security given for the
Loan and all guarantees of the Loan (as applicable) shall continue in full
force. Borrower warrants and represents to Lender that it has full right,
power and authority to enter into this agreement and to perform all its
obligations hereunder, and that all information and materials submitted to
Lender in connection with this modification are accurate and complete.
Borrower warrants that no default exists under the Loan Documents.
Borrower reaffirms its obligation to pay the Loan in full and reaffirms
the validity and enforceability of the Loan Documents, without set-off,
counterclaim or defense.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
NOT ENFORCEABLE UNDER WASHINGTON LAW.
LENDER: BORROWER:
KEYBANK NATIONAL ASSOCIATION WEB PRESS CORPORATION
By: /s/ Samuel P. Henry________________ By: /s/ Gary B. Palmer_________
Samuel P. Henry Vice President Gary B. Palmer President
By: /s/ Craig L. Mathison______
Craig L. Mathison
Vice President of Finance
