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Exhibit 10.3.2
BUSINESS LOAN AGREEMENT
BETWEEN
COLORADO NATIONAL BANK
AND
SPORT-▇▇▇▇▇, INC.
The undersigned, jointly and severally if more than one (herein called
"Borrower"), hereby warrants, covenants and agrees with COLORADO NATIONAL BANK
(herein called "Bank"), as follows:
1. BORROWING. In consideration of the mutual promises herein contained and
in reliance upon the representations and warranties herein subject to the terms
and conditions hereof, Bank does hereby commit or loan to Borrower, and
Borrower acknowledges the following described indebtedness to Bank currently
outstanding or which may be hereafter advanced:
$10,000,000 Revolving Line of Credit
2. REPAYMENT: Borrower promises and agrees to repay the Loan and all other
Indebtedness (as hereinafter defined) of Borrower to Bank with interest in
accordance with the terms and conditions of the promissory note or notes
(herein called the "Note") executed by Borrower herewith and any extensions or
renewals thereof, it being agreed that all Indebtedness not evidenced by such
Note shall be payable by Borrower to Bank upon demand.
3. COLLATERAL. As collateral for the Indebtedness to Bank, the Borrower
grants to the Bank a security interest in the following:
All Accounts now due or hereafter to become due, all Inventory and Raw
Materials now owned or hereafter acquired, all equipment now owned or
hereafter acquired, all General Intangibles now owned or hereafter
acquired.
4. ADVANCE FORMULA. Provided there exists no event of default hereunder,
Bank shall make advances under the Revolving Line of Credit which shall not
exceed in aggregate the face amount of the promissory note representing the
Line.
5. AFFIRMATIVE COVENANTS. So long as any part of the Indebtedness to Bank
remains unpaid, Borrower will:
(a) Keep all of its assets insured against loss or damage by fire,
explosion and other such risks ordinarily insured against by other
owners or users of property in similar businesses, for the full
insurable value thereof, by policies of insurance in such form and with
such companies as may be satisfactory to Bank, naming Bank and the
Borrower, as their respective interests may appear, with the loss
payable to Bank on all insurance policies covering collateral.
Certified copies of all such insurance policies shall be delivered to
Bank upon demand.
(b) Maintain, preserve and keep its plants and properties and every
part thereof in good repair, working order and condition, and from time
to time make all needful and proper repairs, renewals, replacements,
additions, betterments and improvements thereto, so that at all times
the efficiency thereof shall be fully preserved and maintained.
(c) Carry on and conduct its business in substantially the same
manner and in substantially the same fields as such business is now and
has heretofore been carried on, and maintain its legal existence and
comply with all valid and applicable statutes, rules and regulations.
(d) Maintain a system of bookkeeping and accounting satisfactory to
Bank.
(e) Maintain executive management acceptable to the Bank and give
notice to the Bank of any changes thereof.
(f) Furnish Bank, within 45 days after the end of each quarter
period, for that period and fiscal year to date, a balance sheet and
statement of income and expenses in a format acceptable to Bank and
Borrower's 10-Q Report. Also furnish Bank within 120 days after
Borrower's fiscal year end, a complete financial statement prepared by
a CPA on an audited basis and Borrower's 10-K Report.
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(g) For loans secured with accounts receivable and inventory,
furnish Bank a detailed accounts receivable aging within 45 days of the
prior quarterly period.
(h) Furnish a certification within 45 days of the end of each
quarter that there exists no event of default or other action,
condition, or event with which the giving of notice or lapse of time or
both would constitute an event of default hereunder and if such
condition does exist stating the nature thereof and what action is being
taken to correct such condition.
(i) Furnish to Bank such other information as Bank may request, and
allow Bank, by or through its officers, agents, attorneys or
accountants, to examine and inspect the books and records of the
Borrower and to make abstracts and copies thereof and to visit and
inspect any of the property of the Borrower at no cost to the Borrower.
(j) File all Federal, State and other tax and similar returns and
has paid, or provided for the payment of, all taxes and assessments due
thereunder through the current date, including all withholding, FICA,
franchise and other taxes and will continue to file and pay, or provide
for the payment of, such returns and taxes before any penalties are
imposed, except where the validity of any tax is being diligently
contested in good faith. Borrower's Federal income tax returns have been
accepted as filed by the Internal Revenue Service and there are no
unpaid deficiency assessments for any taxes payable now or for any prior
years.
6. ENVIRONMENTAL PROVISIONS.
(a) The Borrower shall carry on the business and operations at the
property to comply in all respects, and will remain in compliance, with
all applicable Federal, state, regional, county or local laws, statutes,
rules, regulations or ordinances, concerning public health, safety or
the environment including, without limitation, (i) laws or regulations
relating to releases, discharges, emissions or disposals to air, water,
land or groundwater, (ii) to the withdrawal or use of groundwater, (iii)
to the use, handling or disposal of polychlorinated biphenyls (PCB's),
asbestos or urea formaldehyde, (iv) to the treatment, storage, disposal
or management of hazardous substances (including, without limitation,
petroleum, its derivatives, by-products or other hydrocarbons), and any
other solid, liquid or gaseous substance, exposure to which is
prohibited, limited or regulated, or may or could pose a hazard to the
health and safety of the occupants of the Site and Facility or the
property adjacent to or surrounding the Site, (v) to the exposure of
persons to toxic, hazardous, or other controlled, prohibited or
regulated substance, (vi) to the transportation, storage, disposal,
management or release of gaseous or liquid substances, and any
regulation, order, injunction, judgment, declaration, notice or demand
issued thereunder.
(b) Bank's obligation to advance funds on any line of credit or
other open ended credit arrangement will terminate upon the occurrence
of a breach of any provision of this Section. Borrower agrees to
indemnify and hold harmless Bank, its assigns, successors, and grantees
against any and all claims and losses resulting from a breach of this
Section and Borrower will pay or reimburse Bank for all costs and
expenses for expert opinions or investigations required or requested by
Bank in Bank's sole discretion, to insure compliance with this Section.
This obligation to indemnify shall survive the payment of the
indebtedness of Borrower to Bank.
7. EVENTS OF DEFAULT. Upon the occurrence of any of the following events,
Bank may, at its option and without notice of any kind whatsoever, suspend or
terminate future advances on any line of credit to Borrower and/or declare the
principal of and interest on any Note of Borrower and all Indebtedness of
Borrower then remaining unpaid to be immediately due and payable, all without
demand, presentment or other notice of any kind, which are hereby expressly
waived:
(a) Non-payment of any principal or interest on its Indebtedness to
Bank or liability to others when and as the same shall have come due and
payable, whether at maturity, by acceleration or otherwise.
(b) Failure to promptly perform and observe the covenants, terms,
and conditions hereof, in the application relative hereto, or of any
agreement or writing executed in connection with herewith or if any
statement, warranty or representation made herein, or in any agreement,
application, or writing made or executed and delivered to Bank in
connection herewith is or proves to be untrue or misleading in any
material respect.
(c) Borrower's adjudication as a bankrupt, or if it makes any
general assignment for the benefit of creditors, or the institution by
or against it of any type of insolvency proceeding or of any
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proceeding for the liquidation or winding up of its affairs, or the
appointment of a receiver or trustee for Borrower or for any of its assets,
or the approval of a properly filed petition for its reorganization under
the Bankruptcy Act or other similar act, or the filing of any petition by
Borrower for an arrangement under Chapter XI of the Bankruptcy Act or other
similar act.
(d) Termination or dissolution of Borrower.
(e) If the Bank in good faith believes that the prospect of prompt payment
of Indebtedness in full as and when due or the full performance of
Borrower's obligations by Borrower is impaired.
(f) Termination or resignation of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Chief Executive
Officer of Borrower.
(g) Resignation or removal of three or more of the Borrower's current Board
of Directors.
(h) Any person, entity or group of persons acting together (not including
the current principal shareholder(s) of Borrower) acquires a sufficient
number of the shares of Borrower's voting common stock to enable such
acquiring person, entity or group to elect a majority of Borrower's Board
of Directors.
(i) Borrower permits its Tangible Net Worth to fall below $20,000,000
(twenty million dollars) at any time.
8. CURE PERIOD.
(a) Borrower shall have five (5) days from the date of an occurrence of an
event of default under Subsection 8(a) above to cure such default. Borrower
shall have twenty days from the date of the giving of notice by Bank to
Borrower of any other event of default (non-payment defaults) set forth in
Section 8 above to cure such default(s).
9. MISCELLANEOUS.
(a) As used herein "Indebtedness" means and includes: (i) all indebtedness
and liabilities of whatsoever kind, nature or description owned to Bank by
Borrower, whether direct or indirect, absolute or contingent, due or to
become due, whether now existing or acquired, whether joint, joint and
several, or several, and (ii) all costs and expenses incurred by Bank in
the protection, preservation, enforcement and collection of any of the
foregoing, including, without limitation, attorney's fees.
(b) In all cases where the context and construction so required, all words
used in the singular shall be deemed to have been used in the plural, and
words in the plural shall be deemed to have been used in the singular, and
words phrased in one gender shall include all genders.
(c) This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, representatives, successors, and
assigns.
(d) The laws of the State of Colorado shall govern this Agreement and all
rights and obligations hereunder, including matters of construction,
validity and performance.
(e) No course of dealing on the part of the Bank, its officers or
employees, nor any failure or delay by Bank with respect to the exercise of
any right, power or privilege by Bank under this loan agreement shall
operate as a waiver thereof, and any single or partial exercise of any such
right, power or privilege shall not preclude any later exercise thereof or
any exercise of any other right, power or privilege hereunder. No waiver or
default shall be effective unless in writing, signed by an officer of the
Bank. No waiver of any default or forbearance on the part of Bank in
enforcing any of its rights under this loan agreement shall operate as a
waiver of any other default or right or of the same default or right on a
future occasion.
(f) In the event of a conflict between any term or condition of this
Agreement and the term or condition of the promissory note, security
documents or any other loan documents executed in connection herewith the
terms and conditions of this Agreement shall control to the extent of any
such conflict.
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Signed and sealed by Borrower this 25th day of October, 1996.
SPORT-▇▇▇▇▇, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman of the Board and
Chief Executive Officer
COLORADO NATIONAL BANK
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
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[LOGO] PROMISSORY NOTE
(Single/Multiple Advance - Single Pay/Demand/Installment - FOR BANK USE ONLY
Commercial/Construction/Agricultural)
OCTOBER 23, 1996 DENVER, CO
--------------------- ------------------------------- Initial Rate: ________________________
Note Date City, State where Bank located
Scheduled Maturity: __________________
For value received, the undersigned (if more than one, jointly and
severally, the "Borrower") promises to pay to the order of Note No.: ____________________________
COLORADO NATIONAL BANK (The "Bank"), its successors and assigns, at the
Bank's office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at any other This Note renews/replaces Note
place designated in writing by the Bank or any subsequent holder hereof No. __________________________________
(the "Holder"), in lawful money of the United States of America, the
principal sum of TEN MILLION AND NO/100 Dollars ($10,000,000.00) or so Dated: _______________________________
much thereof as has been advanced and remains outstanding hereunder on
the Maturity Date, as shown by the Holder's books and records, together Officer Approval: ____________________
with interest at a rate described below (calculated on the basis of actual
days elapsed and a 360 day year) on the unpaid principal hereof, from time to time outstanding, from the date hereof until
this Promissory Note ("Note") is fully paid, as follows:
A. INTEREST RATE:
/ / A fixed annual rate of ____________________%.
/XX/ A variable annual rate equal to the Reference Rate minus -0.50% (The term
"Reference Rate" means the rate determined and announced from time to
time as COLORADO NATIONAL BANK's Reference Rate. The Bank may lend to its
customers at rates that are at, above, or below the Reference Rate).
/ / A variable annual rate equal to the Prime Rate _________________________
________________(The term "Prime Rate" means the highest rate published
from time to time in the Wall Street Journal as the Prime Rate. If a
range of rates is so published, the Holder may choose any rate within
the range.).
/ / Other __________________________________________________________________
________________________________________________________________________
If the index used to compute a variable rate ceases to be available, the Holder
may choose a comparable successor index.
If this Note bears interest at a variable rate, the annual rate of interest
hereon shall never exceed the highest rate permitted by applicable law; and the
rate of interest shall be determined initially as of the date hereof and
thereafter shall be adjusted when and as the index changes.
B. PAYMENTS:
/ / Principal and interest shall be paid in a single payment on
__________________________________________("Maturity Date").
/XX/ Principal shall be paid in a single payment: / / on demand or /X/ on
10/31/97 ("Maturity Date"); interest shall be paid /X/ monthly or
/ / quarterly or / / _____________________ commencing on 11/30/96, and
continuing on the same day of each successive month/quarter/ MONTH (as
applicable) thereafter with a final payment of all unpaid interest at
the time of payment of the principal.
/ / Principal shall be paid in _____________________________(____________)
equal / / monthly, / / quarterly, / / semi-annual or / / annual
installments of $_________________________________ each, commencing on
_________________________________, and continuing on the same day of each
successive month/quarter/six months/year (as applicable) thereafter, with
a final payment of all unpaid principal on ______________________________
("Maturity Date"); interest shall be paid / / monthly or / / quarterly or
/ / ______________________ commencing on _____________________________,
and continuing on the same day of each successive month/quarter/ ________
________________ (as applicable) thereafter until the final payment of all
unpaid principal is received.
/ / Principal and interest shall be paid in _________________(_____________)
equal / / monthly, / / quarterly, / / semi-annual, or / / annual
installments of $___________________________________ each, commencing on
___________________, and continuing on the same day of each successive
month/quarter/six months/year (as applicable) thereafter with a final
payment of all unpaid principal and interest on ___________________
("Maturity Date").
The Bank may charge the Borrower's Account No. ________________________________
maintained with the Bank for payment of / / interest only, or / / principal and
interest due under this Note.
All principal and interest due but not paid on the Maturity date shall bear
interest at a rate of interest five percent (5%) per annum in excess of the
rate otherwise applicable to this Note on the Maturity Date, unless applicable
law limits the rate of interest which may be charged after the Maturity Date,
in which event unpaid principal shall bear interest after the Maturity Date at
the rate in effect on the Maturity Date.
C. MISCELLANEOUS:
/XX/ To the extent the Bank has agreed in a separate written agreement,
amounts repaid may be readvanced to the Borrower and be evidenced
by this Note.
/XX/ This Note is secured. / / This Note is guaranteed.
The Bank has no obligation to renew, modify or extend this Note.
Purpose:
/ / This Note evidences a construction loan in accordance with C.R.S.
4-9-313(1)(c).
/XX/ Other WORKING CAPITAL, TO ALLOW ISSUANCE OF LETTERS OF CREDIT.
OTHER TERMS:
/XX/ This Note is delivered in connection with a certain written agreement
dated OCTOBER 23, 1996.
/XX/ S/A AND F/S ON ACCOUNTS, INVENTORY, EQUIPMENT, AND GENERAL INTANGIBLES.
JURY TRIAL WAIVER. THE BANK AND THE BORROWER EACH IRREVOCABLY WAIVES ITS RIGHT
TO A JURY TRIAL IN ANY ACTION OR PROCEEDING OF ANY ISSUE, CLAIM, COUNTERCLAIM
OR OTHER CAUSE OF ACTION, WHETHER IN CONTRACT OR TORT, BASED UPON OR ARISING
OUT OF THIS NOTE, THE DEBT EVIDENCED HEREBY, ANY COLLATERAL PROPERTY SECURING
SUCH DEBT, OR ANY OTHER AGREEMENT OR DEALINGS RELATING TO THIS NOTE OR SUCH
DEBT.
THIS NOTE IS SUBJECT TO THE ADDITIONAL PROVISIONS SET FORTH
ON THE SECOND PAGE HEREOF.
SPORT-▇▇▇▇▇, INC.
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x /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (its) CHAIRMAN OF THE BOARD x (its)
-------------------------------------------------------- -----------------------------------------------------------
-------------------------------------------------------- -----------------------------------------------------------
x (its) x (its)
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Address ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CNB 10/4/94
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ADDITIONAL PROVISIONS
Prepayment
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So long as the Note bears interest at a variable rate, it may be
prepaid in whole or in part at any time. Unless otherwise agreed to in writing
by the Holder, any prepayment shall be applied first to unpaid accrued interest
with the remainder applied to reduction of principal, and, if principal is
payable in installments, shall be applied to principal in the inverse order of
maturities. If the demand feature of this Note does not apply and this Note
bears interest at a rate that is fixed or based upon multiple fixed rate
advances, this Note or any fixed rate advance hereunder may only be prepaid
with the prior written consent of the Holder. The Holder may impose a
prepayment charge as a condition for granting such consent.
Holidays
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Any extension of time for the payment of the principal of this Note
resulting from the Maturity Date falling on a Saturday, Sunday or legal holiday
shall be included in the computation of interest.
Default
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If payments of principal or interest hereon are not paid when due; or
if any other indebtedness of the Borrower, or of any guarantor, endorser or
surety hereof (an "Accommodator"), to the Holder is not paid when due; or if a
garnishment summons or a writ of attachment or levy is issued against or
severed upon the Holder for the attachment of any property of the Borrower or
an Accommodator in the Holder's possession or any indebtedness owing by the
Holder to the Borrower or an Accommodator; or if the Borrower or an
Accommodator shall submit to the Holder any credit application or financial
statement containing information which shall prove to be incorrect in any
material respect when submitted; or if the Borrower or an Accommodator shall
fail to provide annual financial statements upon request; or if the Borrower
shall fail to pay when due any indebtedness the Borrower may owe to other for
money borrowed; or if the Borrower or an Accommodator shall violate any terms
of any mortgage, security agreement or guaranty securing this Note, including
any "due on sale" clause, or of any other agreement relating to this Note; or
if the Holder shall at any time in good faith believe that the prospect of due
and punctual payment of this Note is impaired, then, in any such event, the
Holder may, at its option, declare this Note to be immediately due and payable
and thereupon this Note shall be immediately due and payable, together with all
unpaid interest accrued hereon, without notice or demand; provided, however,
that if this Note is payable upon demand, nothing herein contained shall
preclude or limit the Holder from demanding payment of this Note at any time
and for any reason, without prior notice.
This Note shall also become automatically due and payable (together
with unpaid interest accrued hereon) without notice or demand should the
Borrower or any Accommodator die (if an individual), or should a petition be
filed by or against the Borrower or any Accommodator under the United States
Bankruptcy Code or any other law relating to insolvency, reorganization,
receivership or relief of debtors.
Cost, Setoff
------------
If this Note is not paid on the Maturity Date or any event occurs that
would entitle the Holder to declare this Note to be immediately due and
payable, the Borrower and each Accommodator agree to pay all costs of
collection, including reasonable attorney fees, where not prohibited by state
law. Any sums credited by or due from the Holder to the Borrower or any
Accommodator and any other property of any Borrower or any Accommodator in the
Holder's possession may at all time be held and treated as collateral security
for the payment hereof. The Holder shall have the right to setoff the
indebtedness evidenced by this Note against any indebtedness of the Holder to
the Borrower or to an Accommodator.
Waivers
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The Holder may at any time renew or modify this Note, extend its
Maturity Date for any period, accept partial payments, or release or substitute
any security for or any party to (including any other Accommodator) this Note,
all without notice to or consent of and without releasing any Accommodator, or
affecting their liability to the Holder. Each Accommodator waives any and all
defenses that may be available to a surety, and any right to require the Holder
to proceed against any security for this Note prior to proceeding under this
Note against any Accommodator or the Borrower, except as said rights may
otherwise be set forth in separate instruments between Bank and any
Accommodator.
Presentment or other demand for payment, protest, notice of dishonor
and notice of protest are hereby waived by the Borrower and each Accommodator.
Miscellaneous
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The Borrower and each Accommodator agree that each provision, for
which the box immediately preceding such provision is checked, is part of this
Note and those provisions for which the relevant box is not checked are not a
part of this Note.
This Note shall be governed by the substantive laws of the state
Colorado, except insofar as the Bank may rely on the laws of the United States
to justify the interest rate charged hereunder.
The unenforceability of any provision of this Note shall not effect
the enforceability or validity of any other provision hereof.