Exhibit 10.1
Principal
$ 8,500,000.00 |
Loan Date
10-29-2007 |
Maturity
09-29-2011 |
Loan No
▇▇▇▇▇▇▇▇▇▇ |
Call/Cell
0019 |
Account
100248 |
Officer
107 |
Initials |
| References in the boxes above are for
▇▇▇▇▇▇’s use only and do not limit the applicability of this document to any
particular loan or Item. Any Item above containing “***” has been omitted due to
text length limitations. |
| Borrower: |
|
▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC.
PO BOX 449
▇▇▇▇▇▇, MT 59034 |
Lender: |
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First Interstate Bank
Billings Downtown Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 30918
Billings, MT 59116-0918 |
THIS
BUSINESS LOAN AGREEMENT dated October 29, 2007, is made and executed between ▇▇▇▇▇▇▇▇▇▇▇▇
RESOURCES, INC, (“Borrower”) and First interstate Bank (“Lender”) 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 or other financial
accommodations, including those which may be described on any exhibit or schedule
attached to this Agreement (“Loan”). ▇▇▇▇▇▇▇▇ 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 discretions and (C) all such Loans shall be and remain
subject to the terms and conditions of this Agreement.
TERM. This
Agreement shall be effective as of October 29, 2007, and shall continue in full
force and effect until such time as all of Borrower’s Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses,
attorneys’ fees, and other fees and charges, or until September 29, 2011.
CONDITIONS
PRECEDENT TO EACH ADVANCE. Lender’s obligation to make
the initial Advance and each subsequent 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.
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Loan
Documents. Borrower shall provide to Lender the following documents for the Loans (1)
the Note; (2) Security Agreements granting to Lender security interests in the
Collateral; (3) financing statements and all other documents perfecting Lender’s
Security Interests; (4) evidence of insurance as regulated below; (5) guaranties; (6)
together with all such Related Documents as Lender may require for the Loan; all in form
and substance satisfactory to Lender and ▇▇▇▇▇▇’s counsel.
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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, in addition, Borrower shall have
provided such other resolutions, authorizations, documents and instruments as Lender or
its counsel, may require.
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Payment
of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other
expenses which are than due and payable as specified in this Agreement or any Related
Document.
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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.
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No
Event of Default. There shall not exist at the time of any Advance a condition which
would constitute an Event of Default under this Agreement or under any Related Document.
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1
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:
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Organization. Borrower
is a corporation for profit which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of
the laws of the State of Delaware, Borrower is duly authorized to transact
business in all other states in which Borrower is doing business, having
obtained all necessary filings, governmental licenses and approvals for
each state in which Borrower is doing business. Specifically, Borrower is,
and at all times shall be, duly qualified as a foreign corporation in all
states in which the failure to so qualify would have a material adverse
effect on its business or financial condition. Borrower has the full power
and authority to own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. Borrower
maintains an office at 25 MILES EAST OF ▇▇▇▇▇▇, MT, ▇▇▇▇▇▇, MT 59034.
Unless Borrower has designated otherwise in writing, the principal office
is the office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender prior to
any change in the location of Borrower’s state of organization of any
change in Borrower’s name. Borrower shall do all things necessary to
preserve and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental or quasi-governmental
authority or court applicable to Borrower and Borrower’s business
activities.
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Assumed
Business Names. ▇▇▇▇▇▇▇▇ has filed or recorded all documents or filings required by
law relating to all assumed business names used by ▇▇▇▇▇▇▇▇. Excluding the name of
▇▇▇▇▇▇▇▇, the following is a complete list of all assumed business names under which
Borrower does business: None.
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Authorization. Borrower’s
execution, delivery, and performance of this Agreement and all the Related
Documents have been duly authorized by all necessary action by Borrower
and do not conflict with, result in a violation of, or constitute a
default under (1) any provision of (a) Borrower’s articles of
incorporation or organization, or bylaws, or (b) any agreement or other
instrument binding upon Borrower or (2) any law, governmental regulation,
court decree, or order applicable to Borrower or to Borrower’s
properties.
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Financial
Information. Each of ▇▇▇▇▇▇▇▇’s financial statements supplied to ▇▇▇▇▇▇ truly
and completely disclosed ▇▇▇▇▇▇▇▇’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.
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Legal
Effect. This Agreement constitutes, and any instrument or agreement Borrower is
required to give under this Agreement when delivered will constitute legal, valid, and
binding obligations of Borrower enforceable against Borrower in accordance with their
respective terms.
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Properties. Except
as contemplated by this Agreement or as previously disclosed in ▇▇▇▇▇▇▇▇’s
financial statements or in writing to Lender and as accepted by ▇▇▇▇▇▇,
and except for property tax liens for taxes not presently due and payable,
▇▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇▇’s properties are titled in Borrower’s legal name, and
▇▇▇▇▇▇▇▇ has not used or filed a financing statement under any other name
for at least the last five (5) years.
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2
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Hazardous
Substances. Except as disclosed to and acknowledged by ▇▇▇▇▇▇ in writing, Borrower
represents and warrants that; (1) During the period of Borrower’s ownership of the
Collateral, there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance by any person on, under, about
or from any of the Collateral, (2) Borrower has no knowledge of, or reason to believe
that there has been (a) any breach or violation of any Environmental Laws; (b) any use,
generation, manufacture, storage, treatment, disposal, release or threatened release of
any Hazardous Substance on, under, about or from the Collateral by any prior owners or
occupants of any of the Collateral; or (c) any actual or threatened litigation or claims
of any kind by any person relating to such matters, (3) Neither Borrower nor any tenant,
contractor, agent or other authorized user of any of the Collateral shall use, generate,
manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about
or from any of the collateral; and any such activity shall be conducted in compliance
with all applicable federal, state, and local laws, regulations, and ordinances,
including without limitation all Environmental Laws, Borrower authorizes Lender and its
agents to enter upon the Collateral to make such inspections and tests as Lender may deem
appropriate to determine compliance of the Collateral 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
Collateral for hazardous waste and Hazardous Substances, Borrower hereby (1) 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 (2) agrees to
indemnify, defend, 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 Collateral. The provisions of this
section of the Agreement including the obligation to indemnify and defend, shall survive
the payment of the Indebtedness and the termination, expiration or satisfaction of this
Agreement and shall not be affected by Lender’s acquisition of any interest in any
of the Collateral, whether by foreclosure or otherwise.
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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 ▇▇▇▇▇▇ in writing.
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Taxes. To
the best of ▇▇▇▇▇▇▇▇’s knowledge, all of ▇▇▇▇▇▇▇▇’s tax returns
and reports 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.
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Lien
Priority. Unless otherwise previously disclosed to Lender in writing, ▇▇▇▇▇▇▇▇ 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.
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Binding
Effect. This Agreement, the Note, all Security Agreements (if any), and all Related
Documents are binding upon the signers thereof, as well as upon their successors,
representatives and assigns, and are legally enforceable in accordance with their
respective terms.
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AFFIRMATIVE
COVENANTS. Borrower covenants and agrees with ▇▇▇▇▇▇ that, so long as this Agreement
remains in effect. Borrower will;
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Notices
of Claims and Litigation. Promptly inform ▇▇▇▇▇▇ in writing of (1) all material
adverse changes in Borrower’s financial condition, and (2) 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.
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Financial
Records. Maintain its books and records in accordance with GAAP, applied on a
consistent basis, and permit ▇▇▇▇▇▇ to examine and audit ▇▇▇▇▇▇▇▇’s books and
records at all reasonable times.
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3
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Financial
Statement. Furnish Lender with the following:
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Annual
Statements. As soon as available, but in no event later than one-hundred-twenty (120)
days after the end of each fiscal year. ▇▇▇▇▇▇▇▇’s balance sheet and income
statement for the year ended, audited by a certified public accountant satisfactory to
Lender.
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Interim
Statements. As soon as available, but in no event later than sixty (60) days after
the end of each fiscal quarter. ▇▇▇▇▇▇▇▇’s balance sheet and profit and loss
statement for the period ended, prepared by ▇▇▇▇▇▇▇▇.
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All
financial reports required to be provided under this Agreement shall be prepared in
accordance with GAAP, applied on a consistent basis, and certified by Borrower as being
true and correct.
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Additional
information. Furnish such additional information and statements, as ▇▇▇▇▇▇ may
request from time to time.
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Financial
Covenants and Ratios. Comply with the following covenants and ratios:
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Tangible
Net Worth. Commencing no later than September 30, 2009, ▇▇▇▇▇▇▇▇ will maintain at all
times thereafter a Tangible Net Worth of not less then $30,000,000.00.
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Capital
Expenditures. Borrower will not make or contract to make any single capital
expenditure, including leasehold improvements, or incur liability for rental or lease of
property if after giving effect thereto, the total of such expenditure would exceed
$500,000.00 during any fiscal year of Borrower, without the prior written consent of
Lender.
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Negative
Pledge. Borrower will not create, incur, assume, or suffer to exist any liens or
encumbrances upon or with respect to any of its assets or properties, now owned or
hereafter acquired, except liens in favor of Lender, without the prior written consent of
Lender.
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Debt
Coverage Ratio. Borrower shall have, and continuously maintain as of each quarter and
year end, a ratio of operating income to debt service of not less than 1.5 to 1. For debt
coverage ratio determination, operating income will be defined as ▇▇▇▇▇▇▇▇’s
operating income for the immediately preceding twelve months, plus depreciation,
amortization, accretion and other non-cash expenses. Debt service will be defined as the
current portion of long-term debt, excluding any outstanding debt drawn on the
$20,000,000.00 Line of Credit.
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Except
as provided above, all computations made to determine compliance with the requirement
contained in this paragraph shall be made in accordance with generally accepted
accounting principles, applied on a consistent basis, and certified by Borrower as being
true and correct, calculated and verified quarterly.
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Insurance. Maintain
fire and other risk insurance, public liability insurance, and such other
insurance as Lender may require with respect to Borrower’s properties
and operations, in form, amounts, coverages and with insurance companies
acceptable to Lender. Borrower, upon request of ▇▇▇▇▇▇, will deliver to
Lender from time to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will not be
cancelled or diminished without at least 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 lender’s loss payable or other endorsements as Lender may
require.
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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: (1) the name of the insurer; (2) the risks
insured; (3) the amount of the policy; (4) the properties insured; (5) the then current
property values on the basis of which insurance has been obtained, and the manner of
determining those values; and (6) 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.
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4
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Guaranties. Prior
to disbursement of any Loan proceeds, furnish executed guaranties of the
Loans in favor of ▇▇▇▇▇▇, executed by the guarantor named below, on ▇▇▇▇▇▇’s
forms, and in the amount and under the conditions set forth in those
guaranties.
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| Name of Guarantor |
Amount |
| ▇▇▇▇▇▇▇▇▇▇▇▇ COAL COMPANY |
Unlimited, secured by ▇▇▇▇▇▇▇▇▇▇▇▇ Resources, Inc. stock |
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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.
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Loan
Proceeds. Use all Loan proceeds solely for ▇▇▇▇▇▇▇▇’s business operations,
unless specifically consented to the contrary by ▇▇▇▇▇▇ in writing.
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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.
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Performance. Perform
and comply, in a timely manner, with all terms, conditions, and provisions
set forth in this Agreement, in the Related Documents, and in all other
instruments and agreements between Borrower and Lender. Borrower shall
notify ▇▇▇▇▇▇ immediately in writing of any default in connection with any
agreement.
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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.
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Environmental
Studies. Promptly conduct and complete, at Borrower’s expense, all such
investigations, studies, samplings and testings as may be requested by Lender or any
governmental authority relative to any substance, or any waste or by-product of any
substance defined as toxic or a hazardous substance under applicable federal, state, or
local law, rule, regulation, order or directive, at or affecting any property or any
facility owned, leased or used by Borrower,
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Compliance
with Governmental Requirements. Comply with all laws, ordinances, and regulations,
now or hereafter in effect, of all governmental authorities applicable to the conduct of
Borrower’s properties, businesses and operations, and to the use or occupancy of the
Collateral, including without limitation, the Americans With Disabilities Act. Borrower
may contest in good faith any such law, ordinance, or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Borrower has notified
Lender in writing prior to doing so and so long as, in ▇▇▇▇▇▇’s sole opinion, ▇▇▇▇▇▇’s
interests in the Collateral are not jeopardized. Lender may require Borrower to post
adequate security or a bond, reasonably satisfactory to surety Lender, to protect ▇▇▇▇▇▇’s
interest.
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Inspection. Permit
employees or agents of Lender at any reasonable time to inspect any and
all Collateral for the Loan or Loans and ▇▇▇▇▇▇▇▇’s other properties
and to examine or audit ▇▇▇▇▇▇▇▇’s books, accounts, and records and
to make copies and memoranda of ▇▇▇▇▇▇▇▇’s books, accounts, and
records. If Borrower now or at any time hereafter maintains any records
(including without limitation computer generated records and computer
software programs for the generation of such records) in the possession of
a third party, Borrower, upon request of ▇▇▇▇▇▇, 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.
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5
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Environmental
Compliance and Reports. Borrower shall comply in all respects with any and all
Environmental Laws: not cause or permit to exist, as a result of an intentional or
unintentional action or omission on Borrower’s part or on the part of any third
party, on property owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental activity is pursuant to
and in compliance with the conditions of a permit issued by the appropriate federal,
state or local governmental authorities; shall furnish to Lender promptly and in any
event within thirty (30) days after receipt thereof a copy of any notice, summons, lien,
citation, directive, letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission on Borrower’s
part in connection with any environmental activity whether or not there is damage to the
environment and/or other natural resources.
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Additional
Assurances. Make, execute and deliver to Lender such promissory notes, mortgages,
deeds of trust, security agreements, assignments, financing statements, instruments,
documents and other agreement as Lender or its attorneys may reasonably request to
evidence and secure the Loans and to perfect all Security Interests.
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▇▇▇▇▇▇’S
EXPENDITURES. If any action or proceeding is commenced that would materially affect
Lender’s Interest in the Collateral or if Borrower fails to comply with any
provision of this Agreement or any Related Documents, including but not limited to
Borrower’s failure to discharge or pay when due any amounts Borrower is required to
discharge or pay under this Agreement or any Related Documents, Lender on Borrower’s
behalf may (but shall not be obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on any Collateral and paying
all costs for insuring, maintaining and preserving any 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
▇▇▇▇▇▇▇▇. All such expenses will 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 (1) the term of any applicable insurance policy; or (2) 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.
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:
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Continuity
of Operations. (1) Engage in any business activities substantially different than
those in which Borrower is presently engaged, (2) cases operations, liquidate, merge,
transfer, acquire or consolidate with any other entity, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business, or (3) 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 Borrower’s stock, or purchase or retire any
of Borrower’s outstanding shares or alter or amend Borrower’s capital
structure.
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Loans,
Acquisitions and Guarantees. (1) Loan, invest in or advance money or assets to any
other person, enterprise or entity, (2) purchase, create or acquire any interest in any
other enterprise or entity, or (3) incur any obligation as surety or guarantor other than
in the ordinary courage of business., except to guarantor and/or parent company.
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Agreements. Borrower
will not enter into any agreement containing any provisions which would be
violated or breached by the performance of Borrower’s obligations
under this Agreement or in connection herewith.
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6
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
dies, becomes incompetent or 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 ▇▇▇▇▇ ▇▇▇▇▇ itself insecure, even
though no Event of Default shall have occurred.
RIGHT
OF SETOFF. To the extent permitted by applicable laws, Lender reserves a right of
setoff in all Borrower’s accounts with Lender (whether checking, savings, or some
other account). This includes all accounts Borrower holds jointly with someone else and
all accounts Borrower may open in the future. However, this does not include any IRA or
▇▇▇▇▇ accounts, or any trust accounts for which setoff would be prohibited by law,
Borrower authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge or
setoff all sums owing on the Indebtedness against any and all such accounts, and, at
▇▇▇▇▇▇’s option, to administratively freeze all such accounts to allow Lender to
protect ▇▇▇▇▇▇’s charge and setoff rights provided in this paragraph.
DEFAULT. Each
of the following shall constitute an Event of Default under this Agreement:
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Payment
Default. ▇▇▇▇▇▇▇▇ fails to make any payment when due under the Loan.
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Other
Defaults. Borrower fails 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
to comply with or to perform any term, obligation, covenant or condition contained in any
other agreement between Lender and Borrower.
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Default
in Favor of Third Parties. Borrower or any Grantor 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
or any Grantor’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.
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False
Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Agreement or the Related Documents is
false or misleading in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.
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Insolvency. The
dissolution or termination of ▇▇▇▇▇▇▇▇’s existence as a going
business, the Insolvency of ▇▇▇▇▇▇▇▇, 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.
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Defective
Collateralization. This Agreement or any of the Related Documents ceases to be in
full force and effect (including failure of any collateral document to create a valid and
perfected security interest or lien) at any time and for any reason.
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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 or by any governmental agency against any collateral securing the
Loan. This includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there is a good
faith dispute by ▇▇▇▇▇▇▇▇ as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding and if Borrower gives ▇▇▇▇▇▇ 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.
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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.
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7
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Change
in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common
stock of Borrower.
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Adverse
Change. A material adverse change occurs in Borrower's financial condition, or
▇▇▇▇▇▇ believes the prospect of payment or performance of the Loan is impaired.
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Insecurity. Lender
in good faith believes itself insecure.
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EFFECT
OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise
provided in this Agreement or the Related Documents, all commitments and obligations of
Lender under this Agreement or the Related Documents or any other agreement immediately
will terminate (including any obligation to make further Loan Advances or disbursements),
and, at Lender’s option, all Indebtedness immediately will become due and payable,
all without notice of any kind to Borrower, except that in the case of an Event of
Default of the type described in the “Insolvency” subsection above, such
acceleration shall be automatic and not optional. In addition, Lender shall have all the
rights and remedies provided in the Related Documents or available at law, in equity, or
otherwise. 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
▇▇▇▇▇▇ 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 ▇▇▇▇▇▇’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:
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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.
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Attorneys’ Fees;
Expenses. ▇▇▇▇▇▇▇▇ agrees to pay upon demand all of ▇▇▇▇▇▇’s costs and expenses,
including ▇▇▇▇▇▇’s attorneys’ fees and ▇▇▇▇▇▇’s legal expenses, incurred
in connection with the enforcement of this Agreement. Lender may hire or pay someone else
to help enforce this Agreement, and Borrower shall pay the costs and expenses of such
enforcement. Costs and expenses include ▇▇▇▇▇▇’s attorneys’ fees and 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.
Borrower also shall pay all court costs and such additional fees as may be directed by
the court.
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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.
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Consent
to Loan Participation. ▇▇▇▇▇▇▇▇ agrees and consents to ▇▇▇▇▇▇’s sale or
transfer, whether now or later, of one or more participation interests in the Loan 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 Borrower 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. ▇▇▇▇▇▇▇▇ also agrees that the purchasers of any such participation interests
will be considered as the absolute owners of such interests in the Loan 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 ▇▇▇▇▇▇▇▇’s obligation under the Loan irrespective of the
failure or insolvency of any holder of any interest in the Loan. ▇▇▇▇▇▇▇▇ 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.
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8
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Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to the
extent not preempted by federal law, the laws of the State of Montana without regard to
its conflicts of law provisions. This Agreement has been accepted by ▇▇▇▇▇▇ in the State
of Montana.
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No
Waiver by ▇▇▇▇▇▇. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by ▇▇▇▇▇▇. 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇, nor any course of dealing between ▇▇▇▇▇▇ and Borrower, or between Lender and
any Grantor, shall constitute a waiver of any of Lender’s rights or of any of
Borrower’s or any 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.
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Notices. Any
notice required to be given under this Agreement shall be given in
writing, and shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the
beginning of this Agreement. 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. For notice purposes, ▇▇▇▇▇▇▇▇ agrees to keep ▇▇▇▇▇▇ informed at
all times of ▇▇▇▇▇▇▇▇’s current address. Unless otherwise provided or
required by law, if there is more than one Borrower, any notice given by
Lender to any Borrower is deemed to be notice given to all Borrowers.
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Severability. If
a court of competent jurisdiction finds any provision of this Agreement to
be illegal, invalid, or unenforceable as to any circumstance, that finding
shall not make the offending provision illegal, invalid, or unenforceable
as to any other circumstance. If feasible, the offending provision shall
be considered modified so that it becomes legal, valid and enforceable. If
the offending provision cannot be so modified, it shall be considered
deleted from this Agreement. Unless otherwise required by law, the
illegality, invalidity, or unenforceability of any provision of this
Agreement shall not affect the legality, validity or enforceability of any
other provision of this Agreement.
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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 in this Agreement shall include all of
Borrower’s subsidiaries and affiliates. 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 of Borrower’s subsidiaries or affiliates.
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Successors
and Assigns. All covenants and agreements by or on behalf of Borrower contained in
this Agreement or any Related Documents shall bind Borrower’s successors and assigns
and shall inure to the benefit of Lender and its successors and assigns. Borrower shall
not, however, have the right to assign Borrower’s rights under this Agreement or any
interest therein, without the prior written consent of Lender.
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Survival
of Representations and Warranties. ▇▇▇▇▇▇▇▇ understands and agrees that in making the
Loan, ▇▇▇▇▇▇ is relying on all representations, warranties, and covenants made by
Borrower in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement or the Related Documents. ▇▇▇▇▇▇▇▇ further agrees
that regardless of any investigation made by ▇▇▇▇▇▇, all such representations, warranties
and covenants will survive the making of the Loan and delivery to Lender of the Related
Documents, 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.
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Time
is of the Essence. Time is of the essence in the performance of this Agreement.
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9
BUSINESS LOAN AGREEMENT
(Continued)
DEFINITIONS. The
following capitalized words and terms shall have the following meanings when
used in this Agreement. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. Accounting words and
terms not otherwise defined in this Agreement shall have the meanings assigned
to them in accordance with generally accepted accounting principles as in
effect on the date of this Agreement:
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Advance. The
word “Advance” means a disbursement of Loan funds made, or to be
made, to Borrower or on Borrower’s behalf on a line of credit or
multiple advance basis under the terms and conditions of this Agreement.
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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.
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Borrower. The
word “Borrower” means ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC. and includes
all co-signers and co-makers signing the Note and all their successors and
assigns.
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Collateral. The
word “Collateral” means all property and assets granted as
collateral security for a Loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral
mortgage, deed of trust, assignment, pledge, crop pledge, chattel
mortgage, collateral chattel mortgage, chattel trust, factor’s 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.
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Environmental
Laws. The words “Environmental Laws” mean any and all state, federal and
local statutes, regulations and ordinances relating to the protection of human health or
the environment, including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”),
the Superfund Amendments and Reauthorization Act of 1988, Pub, L. No. 99-499 (“▇▇▇▇”),
the Hazardous Materials transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 8901, et seq., or other applicable state
or federal laws, rules, or regulations adopted pursuant thereto.
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Event
of Default. The words “Event of Default” mean any of the events of default
set forth in this Agreement in the default section of this Agreement.
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GAAP. The
word “GAAP” means generally accepted accounting principles.
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Grantor. The
word “Grantor” means each and all of the persons or entities
granting a Security interest in any Collateral for the Loan, including
without limitation all Borrowers granting such a Security interest.
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Guarantor. The
word “Guarantor” means any guarantor, surety, or accommodation
party of any or all of the Loan.
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Guaranty. The
word “Guaranty” means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.
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Hazardous
Substances. The words “Hazardous Substances” mean materials that, because
of their quantity, concentration or physical, chemical or infectious characteristics, may
cause or pose a present or potential hazard to human health or the environment when
improperly used, treated, stored, disposed of, generated, manufactured, transported or
otherwise handled. The words “Hazardous Substances” are used in their very
broadest sense and include without limitation any and all hazardous or toxic substances,
materials or waste as defined by or listed under the Environmental Laws. The term “Hazardous
Substances” also includes, without limitation, petroleum and petroleum by-products
or any fraction thereof and asbestos.
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10
BUSINESS LOAN AGREEMENT
(Continued)
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Indebtedness. The
word “Indebtedness” means the indebtedness evidenced by the Note
or Related Documents, including all principal and interest together with
all other indebtedness and costs and expenses for which Borrower is
responsible under this Agreement or under any of the Related Documents.
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Lender. The
word “Lender” means First Interstate Bank, its successors and
assigns.
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Loan. The
word “Loan” means any and all 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.
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Note. The
word “Note” means the Note executed by ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES,
INC. in the principal amount of $8,500,000.00 dated October 29, 2007,
together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the note or
credit agreement, including Note dated 10/29/07 in the amount of
$20,000,000.00.
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Related
Documents. The words “Related Documents” mean all promissory notes, credit
agreements, loan agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all other
instruments, agreements and documents, whether now or hereafter existing, executed in
connection with the Loan.
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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.
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Security
Interest. The words “Security Interest” mean, without limitation, any and
all types of collateral security, present and future, whether in the form of a lien,
charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop
pledge, chattel mortgage, collateral 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.
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11
BUSINESS LOAN AGREEMENT
(Continued)
**
BORROWER ACKNOWLEDGES HAVING READ
ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND ▇▇▇▇▇▇▇▇ AGREES TO ITS
TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED OCTOBER 29, 2007.
BORROWER:
▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES,
INC.
| By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ |
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|
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PRESIDENT
of ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC. |
|
▇▇▇▇▇▇ ▇▇▇▇▇, ASST SECRETARY
of ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC. |
.
LENDER:
FIRST INTERSTATE BANK
| By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
|
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Authorized Signer |
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| ** |
Fees and Costs: |
Whenever this Agreement or any of the Related Documents permit Lender to
incur fees and costs reimbursable by Borrower, such fees and costs shall be reasonable in
amount and necessarily incurred. |
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Holidays: |
The words “Business Day” mean any day other than a Saturday, Sunday, or other
day on which commercial banks in Montana are authorized or required to close under the
laws of the State of Montana. Notwithstanding anything herein or in any of the Related
Documents to the contrary, whenever this Agreement or any of the Related Documents require
payment or other actions to be performed on a day which is not a Business Day, the payment
or other action need not be made or performed until the next Business Day. |
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12
First Interstate Bank (logo omitted)
PROMISSORY NOTES
Principal
$ 8,500,000.00 |
Loan Date
10-29-2007 |
Maturity
09-29-2011 |
Loan No.
▇▇▇▇▇▇▇▇▇▇ |
Call & Cell
0019 |
Account
100248 |
Officer
107 |
Initials |
| References in the boxes above are for
▇▇▇▇▇▇’s use only and do not limit the applicability of this document to any
particular loan or Item. Any item above containing “****” has been omitted due
to text length limitations. |
| Borrower: |
|
▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC.
PO BOX 449
▇▇▇▇▇▇, MT 59034 |
Lender: |
|
FIRST INTERSTATE BANK
Billings Downtown
Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 30918
Billings, MT 59116-0918 |
| Principal Amount: $8,500,000.00 |
Date of Note: October 29, 2007 |
PROMISE
TO PAY. ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC. (“Borrower”) promises to pay to First
Interstate Bank (“Lender”), or order, in lawful money of the United States of
America, the principal amount of Eight Million Five Hundred Thousand & 00/100 Dollars
($8,500,000.00), together with interest on the unpaid principal balance from October 29,
2007, until paid in full.
PAYMENT. Subject
to any payment changes resulting from changes in the Index, Borrower will pay
this loan in accordance with the following payment schedule: 15 quarterly
consecutive principal payments of $531,243.60 each, beginning January 29, 2008,
during which interest continues to accrue on the unpaid principal balances at
an interest rate based on the Prime Rate published in the ‘Money Rates’ section
of the Wall Street Journal (currently 7.750%), resulting in an initial interest
rate of 7.750%); 15 quarterly consecutive interest payments, beginning January
29, 2008, with interest calculated on the unpaid principal balances at an
interest rate based on the Prime Rate published in the ‘Money Rates’ Section
of the Wall Street Journal (currently 7.750%), resulting in an initial interest
rate of 7.750%; and one principal and interest payment of $538,340,84 on
September 29, 2011, with interest calculated on the unpaid principal balances
at an interest rate based on the Prime Rate published in the ‘Money Rates’ section
of the Wall Street Journal (currently 7.750%, resulting in an initial interest
rate of 7.750%. This estimated final payment is based on the assumption that
all payments will be made exactly as scheduled and that the index does not
change; the actual final payment will be for all principal and accrued interest
not yet paid, together with any other unpaid amounts under this Note,
Notwithstanding the foregoing, the rate of interest accrual described for the
principal only payment stream applies only to the extent that no other interest
rate for any other payment stream applies. Unless otherwise agreed or required
by applicable law, payments will be applied to accrued interest first, then to
principal, then to escrow if applicable, then to accrued and unpaid loan fees.
Interest on this Note is computed on a 365/365 simple interest basis; that is,
by applying the ratio of the annual interest rate over the number of days in a
year, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at ▇▇▇▇▇▇’s address shown above or at such other place as Lender may
designate in writing.
VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time
based on changes in an Independent Index which is the Prime Rate published in the ‘Money
Rates’, section of the Wall Street Journal (the “Index”). The index
is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute Index after
notifying Borrower, Lender will tell Borrower the current index rate upon Borrower’s
request. The interest rate change will not occur more often than each day during the term
of the Note. The adjusted interest rate will be equal to the Index on the date of the
adjustment plus the same percentage points over the Index as described herein. Borrower
understands that Lender may make loans based on other rates as well, The Index currently
is 7.750% per annum. The interest rate or rates to be applied to the unpaid principal
balance during this Note will be the rate or rates set forth herein in the “Payment” section.
Notwithstanding any other provision of this Note, after the first payment stream, the
interest rate for each subsequent payment stream will be effective as of the last payment
date of the just-ending payment stream. NOTICE: Under no circumstances will the interest
rate on this Note be more than the maximum rate allowed by applicable law. Whenever
increases occur in the interest rate, Lender, at its option, may do one or more of the
following: (A) increase Borrower’s payments to ensure Borrower’s loan will pay
off by its original final maturity date, (B) increase Borrower’s payments to cover
accruing interest, (C) increase the number of Borrower’s payments, and (D) continue
Borrower’s payments at the same amount and increase Borrower’s final payment.
13
PROMISSORY NOTE
(Continued)
PREPAYMENT. ▇▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇ in writing, relieve Borrower of ▇▇▇▇▇▇▇▇’s
obligation to continue to make payments under the payment schedule, Rather,
early payments will reduce the principal balance due and may result in
Borrower’s making fewer payments, Borrower agrees not to send Lender
payments marked “paid in full”, “without recourse”, or
similar language. If Borrower sends such a payment, ▇▇▇▇▇▇ may accept it
without losing any of ▇▇▇▇▇▇’s rights under this Note, and Borrower will
remain obligated to pay any further amount owed to Lender. All written
communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes “payment in
full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: First Interstate Bank, Billings Operations Center, P.O. Box 30918
Billings, MT 59116-0918.
LATE
CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the
regularly scheduled payment or $100.00, whichever is less.
INTEREST
AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the
interest rate on this Note shall be increased by adding a 5.000 percentage point margin (“Default
Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest
rate change that would have applied had there been no default. After maturity, or after
this Note would have matured had there been no default, the Default Rate Margin will
continue to apply to the final interest rate described in this Note. However, in no event
will the interest rate exceed the maximum interest rate limitations under applicable law.
DEFAULT. Each
of the following shall constitute an event of default (“Event of Default”)
under this Note:
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Payment
Default. Borrower fails to make any payment when due under this Note,
|
| |
Other
Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to
comply with or to perform any term, obligation, covenant or condition contained in any
other agreement between Lender and Borrower.
|
| |
Default
in Favor of Third Parties. Borrower or any Grantor 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.
|
| |
False
Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Note or the related documents is false
or misleading in any material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.
|
| |
Insolvency. The
dissolution or termination of ▇▇▇▇▇▇▇▇’s existence as a going
business, the insolvency of ▇▇▇▇▇▇▇▇, the appointment of a receiver for
any part of ▇▇▇▇▇▇▇▇’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.
|
14
PROMISSORY NOTE
(Continued)
| |
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 or by any governmental agency against any collateral securing the
loan. This includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there is a good
faith dispute by ▇▇▇▇▇▇▇▇ as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding and if Borrower gives ▇▇▇▇▇▇ 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 any Guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the Indebtedness evidenced
by this Note.
|
| |
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
▇▇▇▇▇▇ believes the prospect of payment or performance of this Note is impaired.
|
| |
Insecurity. Lender
in good faith believes itself insecure.
|
LENDER’S
RIGHTS. Upon default, ▇▇▇▇▇▇ may declare the entire unpaid principal balance under
this Note and all accrued unpaid interest immediately due, and then Borrower will pay
that amount.
ATTORNEYS’FEES
EXPENSES: Lender may hire or pay someone else to help collect this Note if Borrower
does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, ▇▇▇▇▇▇’s attorney’ fees and ▇▇▇▇▇▇’s legal expenses,
whether or not there is a lawsuit, including attorneys’ fees, expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals. If not prohibited by applicable law, ▇▇▇▇▇▇▇▇ also will pay any
court costs, in addition to all other sums provided by law.
GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the
extent not preempted by federal law, the laws of the State of Montana without regard to
its conflicts of law provisions. This Note has been accepted by ▇▇▇▇▇▇ in the State of
Montana.
RIGHT
OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of
setoff in all Borrower’s accounts with Lender (whether checking, savings, or some
other account). This includes all accounts Borrower holds jointly with someone else and
all accounts Borrower may open in the future. However, this does not include any IRA or
▇▇▇▇▇ accounts, or any trust accounts for which setoff would be prohibited by law.
Borrower authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge or
setoff all sums owing on the indebtedness against any and all such accounts, and, at
▇▇▇▇▇▇’s option, to administratively freeze all such accounts to allow Lender to
protect ▇▇▇▇▇▇’s charge and setoff rights provided in this paragraph.
COLLATERAL. ▇▇▇▇▇▇▇▇
acknowledges this Note is secured by the following collateral described in the
security instruments listed herein:
| |
Inventory,
chattel paper, accounts, equipment and general intangibles described in Commercial
Security Agreements dated October 29, 2007.
|
SUCCESSOR
INTERESTS. The terms of this Note shall be binding upon ▇▇▇▇▇▇▇▇, and upon ▇▇▇▇▇▇▇▇’s
heirs, personal representatives, successors and assigns, and shall inure to the benefit
of Lender and its successors and assigns.
15
PROMISSORY NOTE
(Continued)
NOTICES. Any
notice required to be given under this Note shall be given in writing, and
shall be effective when actually delivered, when actually received by
telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the address shown near the beginning of this Note. Any
person may change his or her address for notices under this Note by giving
formal written notice to the other person or persons, specifying that the
purpose of the notice is to change the person’s address. For notice
purposes, I agree to keep ▇▇▇▇▇▇ informed at all times of my current address.
Unless otherwise provided or required by law, if there is more than one
Borrower, any notice given by Lender to any Borrower is deemed to be notice
given to all Borrowers. It will be my responsibility to tell the others of the
notice from the Lender.
GENERAL
PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect
the rest of the Note. Borrower does not agree or intend to pay, and ▇▇▇▇▇▇ does not agree
or intend to contract for, charge, collect, take, reserve or receive (collectively
referred to herein as “charge or collect”), any amount in the nature of
interest or in the nature of a fee for this loan, which would in any way or event
(including demand, prepayment, or acceleration) cause Lender to charge or collect more
for this loan than the maximum Lender would be permitted to charge or collect by federal
law or the law of the State of Montana (as applicable). Any such excess interest or
unauthorized fee shall, instead of anything stated to the contrary, be applied first to
reduce the principal balance of this loan, and when the principal has been paid in full,
be refunded to Borrower. 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, 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 ▇▇▇▇▇▇ without the consent of or notice to anyone. All
such parties also agree that ▇▇▇▇▇▇ may modify this loan without the consent of or notice
to anyone other than the party with whom the modification is made. The obligations under
this Note are joint and several.
PRIOR TO SIGNING THIS
NOTE. ▇▇▇▇▇▇▇▇ READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. ▇▇▇▇▇▇▇▇ AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES,
INC.
| By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ |
| |
|
|
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
PRESIDENT
of ▇▇▇▇▇▇▇▇▇▇▇▇
RESOURCES,
INC. |
|
▇▇▇▇▇▇ ▇▇▇▇▇,
ASST SECRETARY of ▇▇▇▇▇▇▇▇▇▇▇▇
RESOURCES, INC. |
16
First Interstate Bank (logo omitted)
PROMISSORY NOTES
Principal
$ 20,000,000.00 |
Loan Date
10/29/2007 |
Maturity
10/28/2008 |
Loan, No
▇▇▇▇▇▇▇▇▇▇ |
Call/ Cell
0042 |
Account
100248 |
Officer
107 |
Initials |
| Reference in the boxes above are for
▇▇▇▇▇▇’s use only and do not limit the applicability of this document to any
particular loan or item. Any item above containing “***” has been omitted due to
text length limitations. |
| Borrower: |
|
▇▇▇▇▇▇▇▇▇▇▇▇
RESOURCES, INC.
PO Box 443
HARDIN, MT 59034 |
Lender: |
|
First Interstate Bank
Billings Downtown Branch
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 30915
Billings, MT 59115-0918 |
| Principal Amount: $20,000,000.00 |
Initial Rate: 7.750% |
Date of Note: October 29, 2007 |
PROMISE
TO PAY, ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC. (“Borrower”) promises to pay to First
Interstate Bank (“Lender”), or order, in lawful money of the United States of
America, the principal amount of Twenty Million & 00/100 Dollars ($20,000,000.00) 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 in one payment of all outstanding principal plus all accrued
unpaid interest on October 28, 2008. In addition, Borrower will pay regular
monthly payments of all accrued unpaid interest due as of each payment date,
beginning November 29, 2007, with all subsequent interest payments to be due on
the same day of each month after that. Unless otherwise agreed or required by
applicable law, payments will be applied to accrued interest first, then to
principal, then to borrow if applicable, then to accrued and unpaid loan fees.
Interest on this Note is computed on a 365/365 simple interest basis; that is,
by applying the ratio of the annual interest rate over the number of days in a
year, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender
at ▇▇▇▇▇▇’s address shown above or at such other place as Lender may
designate in writing.
VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time
based on changes in an independent index which is the Prime Rate published in the ‘Money
Rates’ section of the Wall Street Journal (the “Index”). The Index is not
necessarily the lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan. Lender may designate a substitute index after
notifying Borrower. Lender will tell Borrower the current index rate upon ▇▇▇▇▇▇▇▇’s
request. The interest rate change will not occur more often than each day during the term
of the Note. The adjusted interest rate will be equal to the Index on the date of the
adjustment plus the same percentage points over the index as described herein. Borrower
understands that Lender may make loans based on other rates as well. The Index currently
is 7.750% per annum. The interest rate to be applied to the unpaid principal balance
during this Note will be at a rate equal to the Index, resulting in an initial rate of
7.750% per annum. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.
PREPAYMENT. ▇▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇ in writing, relieve ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇’s
obligation to continue to make payments of accrued unpaid interest. Rather,
early payments will reduce the principal balance due. ▇▇▇▇▇▇▇▇ agrees not to
send Lender payments marked “paid in full”, “without
recourse”, or similar language. If Borrower sends such a payment, ▇▇▇▇▇▇
may accept it without losing any of ▇▇▇▇▇▇’s rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or
other payment instrument that indicates that the payment constitutes “payment
in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: First Interstate Bank, Billings Operations Center, P.O. Box 30918
Billings, MT 59116-0918.
17
PROMISSORY NOTE
(Continued)
LATE
CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the
regularly scheduled payment or $100,00, whichever is less.
INTEREST
AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the
interest rate on this Note shall be increased by adding a 5.000 percentage point margin (“Default
Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest
rate change that would have applied had there been no default. However, in no event will
the interest rate exceed the maximum interest rate limitations under applicable law.
DEFAULT. Each
of the following shall constitute an event of default (“Event of Default”)
under this Note:
| |
Payment
Default. Borrower fails to make any payment when due under this Note.
|
| |
Other
Defaults. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Note or in any of the related documents or to
comply with or to perform any term, obligation, covenant or condition contained in any
other agreement between Lender and Borrower.
|
| |
Default
in Favor of Third Parties. Borrower or any Grantor 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.
|
| |
False
Statements. Any warranty, representation or statement made or furnished to Lender by
Borrower or on Borrower’s behalf under this Note or the related documents is false
or misleading in any material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.
|
| |
Insolvency. The
dissolution or termination of ▇▇▇▇▇▇▇▇’s existence as a going
business, the insolvency of ▇▇▇▇▇▇▇▇, the appointment of a receiver for
any part of ▇▇▇▇▇▇▇▇’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 or by any governmental agency against any collateral securing the
loan. This includes a garnishment of any of Borrower’s accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there is a good
faith dispute by ▇▇▇▇▇▇▇▇ as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding and if Borrower gives ▇▇▇▇▇▇ 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 any Guarantor dies or become incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the indebtedness evidenced
by this Note.
|
| |
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
▇▇▇▇▇▇ believes the prospect of payment of performance of this Note is impaired.
|
| |
Insecurity. Lender
in good faith believes itself insecure.
|
LENDER’S
RIGHTS. Upon default, ▇▇▇▇▇▇ may declare the entire unpaid principal balance under
this Note and all accrued unpaid interest immediately due, and then Borrower will pay
that amount.
18
PROMISSORY NOTE
(Continued)
ATTORNEYS’FEES
EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower
does not pay. Borrower will pay Lender that amount. This includes, subject to any limits
under applicable law, ▇▇▇▇▇▇’s attorneys’ fees and ▇▇▇▇▇▇’s legal
expenses, whether or not there is a lawsuit, including attorneys’ fees, expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals. If not prohibited by applicable law, ▇▇▇▇▇▇▇▇ also will pay any
court costs, in addition to all other sums provided by law.
GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the
extent not preempted by federal law, the laws of the State of Montana without regard to
its conflicts of law provisions. This Note has bean accepted by ▇▇▇▇▇▇ in this State of
Montana.
RIGHT
OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of
efforts in all Borrower’s accounts with Lender (whether checking, savings or some
other account). This includes all accounts Borrower holds jointly with someone else and
all accounts Borrower may open in the future. However, this does not include any IRA or
▇▇▇▇▇ accounts, or any trust accounts for which setoff would be prohibited by law.
Borrower authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge or
setoff all sums owing on the indebtedness against any and all such accounts, and, at
▇▇▇▇▇▇’s option, to administratively freeze all such accounts to allow Lender to
protect ▇▇▇▇▇▇’s charge and setoff rights provided in this paragraph.
COLLATERAL. ▇▇▇▇▇▇▇▇
acknowledges this Note is secured by the following collateral described in the
security instruments listed herein:
| |
Inventory,
chattel paper, accounts, equipment and general intangibles described in Commercial
Security Agreements dated October 29, 2007.
|
LINE
OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note
may be requested orally by Borrower or as provided in this paragraph. All oral requests
shall be confirmed in writing on the day on the request. All communications,
instructions, or directions by telephone or otherwise to Lender are to be directed to
▇▇▇▇▇▇’s office shown above. The following person or persons are authorized to
request advances and authorize payments under the line of credit until ▇▇▇▇▇▇ receives
from Borrower, at ▇▇▇▇▇▇’s address shown above, written notice of revocation of such
authority: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PRESIDENT of ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES. INC., and ▇▇▇▇▇▇ ▇▇▇▇▇,
ASST SECRETARY of ▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, CONTROLLER OF
▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES, INC. AND ▇▇▇▇▇▇ ▇. ▇▇▇▇, VICE PRESIDENT OF FINANCE OF
▇▇▇▇▇▇▇▇▇▇▇▇ COAL COMPANY. ▇▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇▇’s accounts with ▇▇▇▇▇▇. The unpaid principal balance owing on this Note at
any time may be evidenced by endorsements on this Note or by ▇▇▇▇▇▇’s internal
records, including daily computer print-outs,
SUCCESSOR
INTERESTS. The terms of this Note shall be binding upon ▇▇▇▇▇▇▇▇, and upon ▇▇▇▇▇▇▇▇’s
heirs, personal representatives, successors end assigns, and shall inure to the benefit
of Lender and its successors and assigns.
NOTICES. Any
notice required to be given under this Note shall be given in writing, and
shall be effective when actually delivered, when actually received by
telefacimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class; certified or registered mail postage
prepaid, directed to the address shown near the beginning of this Note. Any
person may change his or her address for notices under this Note by giving
formal written notice to the other person or persons, specifying that the
purpose of the notice is to change the person’s address. For notice
purposes. I agree to keep ▇▇▇▇▇▇ informed at all times of my current address.
Unless otherwise provided or required by law. If there is more than one
Borrower, any notice given by Lender to any Borrower is deemed to be notice
given to all Borrowers. It will be my responsibility to tell the others of the
notice from the Lender.
19
PROMISSORY NOTE
(Continued)
GENERAL
PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect
the rest of the Note. Borrower does not agree or intend to pay, and ▇▇▇▇▇▇ does not agree
or intend to contract for, charge, collect, take, reserve or receive (collectively
referred to herein as “charge or collect”), any amount in the nature of
interest or in the nature of a fee for this loan, which would in any way or event
(including demand, prepayment, or acceleration) cause Lender to charge or collect more
for this loan than the maximum Lender would be permitted to charge or collect by federal
law or the law of the State of Montana (as applicable). Any such excess interest or
unauthorized fee shall, Instead of anything stated to the contrary, be applied first to
reduce the principal balance of this loan, and when the principal has been paid in full,
be refunded to Borrower. 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, 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, fall to
realize upon or perfect Lender’s security interest in the collateral; and take any
other action deemed necessary by ▇▇▇▇▇▇ without the consent of or notice to anyone. All
such parties also agree that ▇▇▇▇▇▇ may modify this loan without the consent of or notice
to anyone other than the party with whom the modification is made. The obligations under
this Note are joint and several.
PRIOR
TO SIGNING THIS NOTE, ▇▇▇▇▇▇▇▇ READ AND UNDERSTOOD ALL THEPROVISIONS OF THIS NOTE,
INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.▇▇▇▇▇▇▇▇ AGREES TO THE TERMS OF
THE NOTE.
BORROWER ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
▇▇▇▇▇▇▇▇▇▇▇▇ RESOURCES
INC.
| By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
By: |
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ |
| |
|
|
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
PRESIDENT
of ▇▇▇▇▇▇▇▇▇▇▇▇
RESOURCES,
INC. |
|
▇▇▇▇▇▇ ▇▇▇▇▇,
ASST SECRETARY of ▇▇▇▇▇▇▇▇▇▇▇▇
RESOURCES, INC. |
20
