LOAN AGREEMENT
This Loan Agreement (the "Agreement") dated as of March 7,
1997, by and between TEXAS COMMERCE BANK NATIONAL
ASSOCIATION a national banking association ("Bank") and the
Borrower described below. In consideration of the Loan or Loans
described below and the mutual covenants and agreements
contained herein, and intending to be legally bound hereby, Bank
and Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other
terms defined herein, the following terms shall have the meaning
set forth with respect thereto:
A. Borrower: Peerless Mfg. Co., a Texas Corporation
B. Borrower's Address:2819 ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
C. Current Assets. Current Assets means the aggregate amount
of all the assets of the Borrower and its Subsidiaries, on a
consolidated basis, assets which would, in accordance with GAAP,
properly be defined as current assets.
D. Current Liabilities. Current Liabilities means the
aggregate amount of all current liabilities of the
Borrower and its Subsidiaries, on a consolidated basis, as
determined in accordance with GAAP, but in any event shall
include all liabilities except those having a maturity date which
is more than one year from the date as of which such
computation is being made.
E. Hazardous Materials. Hazardous Materials include all
materials defined as hazardous materials or substances
under any local, state or federal environmental laws,
rules or regulations, and petroleum, petroleum products, oil
and asbestos.
▇. ▇▇▇▇. Lien shall mean any mortgage, pledge, charge,
encumbrance, security interest, collateral assignment or other
lien or restriction of any kind, whether based on common law,
constitutional provision, statute or contract.
G. Loan. Any loan described in Section 2 hereof and any
subsequent loan which states that it is subject to this Loan
Agreement.
H. Loan Documents. Loan Documents means this Loan Agreement
and any and all promissory notes executed by Borrower in
favor of Bank and all other documents, instruments,
guarantees, certificates and agreements executed and/or
delivered by Borrower, any guarantor or third party in connection
with any Loan.
I. NationsBank Loan Documents means the Fifth Amended and
Restated Loan Agreement dated as of February 3, 1997, between
Borrower and NationsBank of Texas, N.A.("NationsBank") and
any and all promissory notes executed by Borrower in favor of
NationsBank and all other documents, instruments, guarantees,
certificates and agreements executed and/or delivered by
Borrower, any guarantor or third party in connection with any
loan to NationsBank.
J. Net Income. Net Income means net profit after taxes of the
Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP.
K. Net Loss. Net Loss means net loss after taxes of the
Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP.
L. Obligations means all principal, interest and other
amountswhich are or become owing to Bank under this Note, any
Application or any other Loan Document.
M. Obligor means Borrower and any guarantor, surety,
co-signer, general partner or other person who may now or
hereafter be obligated to pay all or any part of the
Obligations.
N. Person means any individual, Corporation, trust,
unincorporated organization, Governmental Authority or any other
form of entity.
O. Proper Form means in form and substance satisfactory to the
Bank.
P. Subsidiary. Subsidiary means as to any Person, a
corporation, partnership or other entity of which shares of
stock or other ownership interests having ordinary voting
power (other than such stock or such other ownership interests
having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity
are at the time owned, or the management of which is otherwise
controlled, directly or indirectly, through one or more
intermediaries, or both by such Person.
Q. Accounting Terms. All accounting terms not specifically
defined or specified herein shall have the meanings generally
attributed to such terms under generally accepted accounting
principles ("GAAP"), as in effect from time to time,
consistently applied, with respect to the financial statements
referenced in Section 3.H. hereof.
2. LOANS.
A. Before making any Loan or issuing any Letter of Credit, Bank
may require satisfaction of the following conditions precedent:
(1) Bank has received the following, each duly executed and in
form acceptable to Bank: (a) if requested by Bank, a Request
for Loan, substantially in the form of Exhibit A, not later than
one (1) Business Day before the date (which shall also be a
Business Day) of the proposed Loan; (b) such other documents as
Bank reasonably requires; and (c) in the case of Letters of
Credit, Bank's standard form Application for the Issuance of
an Irrevocable Standby Letter of Credit in form and
substance acceptable to Bank and its legal counsel (each
such application an "Application" and collectively,
"Applications") duly executed and delivered by Borrower or
Borrower and a Subsidiary, if applicable two (2) Business
Days, prior to the date on which the Letter of Credit is to
be issued; and (2) no Event of Default has occurred and is
continuing; and (3) making the Loan or the issuance of a
Letter of Credit is not prohibited by, and will not subject Bank
to any penalty or onerous condition under any legal
requirement as determined by Bank.
B. Loan. Bank hereby agrees to make (or has made) one or more
Loans to Borrower in the aggregate principal face amount of TWO
MILLION FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS
($2,500,000.00) (the "Commitment"). The Commitment shall be
reduced by an amount equal to the sum of: (a) the face amount of
all outstanding Letters of Credit; and (b) the amount of any
unreimbursed drawings or other amounts owing to the Bank under
or in respect of any Letter of Credit or Application;
(items (a) and (b) are hereinafter collectively referred to as
the "L/C Obligations") such that, on any date, the sum of (1.)
all Loans outstanding on such date and (2.) all L/C
Obligations on such date, does not exceed the Commitment.. The
obligation to repay the Loans is evidenced by a promissory
note or notes dated March 7, 1997 (the promissory note or notes
together with any and all renewals, extensions or
rearrangements thereof being hereafter collectively referred
to as the "Note") having a maturity date, repayment terms and
interest rate as set forth in the Note.
i. Revolving Credit Feature. The Loan provides for a revolving
line of credit (the "Line") under which Borrower may from time
to time, borrow, repay and re-borrow funds.
ii. Usage Fee. Borrower will pay hereafter on May 15, 1997
and on the same day of each quarter for the period from and
including the date the Line was established to and including
the maturity date of the Line, a usage fee at a rate per annum
of .25% of the average daily unused portion of the Line during
such period. The Borrower may at any time upon written notice
to the Bank permanently reduce the amount of the Line at which
time the obligation of the Borrower to pay a usage fee shall
thereupon correspondingly be reduced.
iii. Letter of Credit Subfeature. As a subfeature under the
Line, Bank may from time to time up to and including December
12, 1997, issue letters of credit for the account of Borrower
(each, a "Letter of Credit" and collectively, "Letters of
Credit"); provided, however, that Bank shall have received
an application ("Application" or "Applications")
substantially in the form of the Bank's standard application
therefor duly completed and executed by the Borrower in Proper
Form not less than two (2) Business Day(s) prior to the date on
which the Letter of Credit is to be issued; and provided further
that the aggregate undrawn amount of all outstanding Letters
of Credit shall not at any time exceed $2,500,000.00. No Letter
of Credit shall have an expiration date subsequent to December
12, 1998, unless 100% secured by a Bank CD. The undrawn
amount of all Letters of Credit plus any and all amounts
paid by Bank in connection with drawings under any Letter of
Credit for which the Bank has not been reimbursed shall be
reserved under the Commitment and shall not be available for
advances thereunder. Each draft paid by Bank under a Letter of
Credit shall be deemed an advance under the Line and shall be
repaid in accordance with the terms of the Line; provided
however, that if the Line is not available for any reason
whatsoever, at the time any draft is paid by Bank, or if
advances are not available under the Line in such amount due to
any limitation of borrowing set forth herein, then the full
amount of such drafts shall be immediately due and payable,
together with interest thereon, from the date such amount is
paid by Bank to the date such amount is fully repaid by
Borrower, at that rate of interest applicable to advances under
the Line. In such event, Borrower agrees that Bank, at
Bank's sole discretion may debit Borrower's deposit account
with Bank for the amount of such draft. Letters of Credit
shall be priced at a rate of 1.00% per annum of the face amount
of the Letter of Credit.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants to Bank as follows:
A. Good Standing. Borrower and each of Borrower's Subsidiaries
is a corporation, duly organized, validly existing and in good
standing under the laws of Texas, or in the jurisdiction in
which it is organized, and has the power and authority to own
its property and to carry on its business in each
jurisdiction in which Borrower or Subsidiary does business.
B. Authority and Compliance. Borrower has full power and
authority to execute and deliver the Loan Documents and to incur
and perform the obligations provided for therein, all of
which have been duly authorized by all proper and necessary
action of the appropriate governing body of Borrower. No
consent or approval of any public authority or other third
party is required as a condition to the validity of any Loan
Document, and Borrower is in compliance with all laws and
regulatory requirements to which it is subject.
C. Binding Agreement. This Agreement and the other Loan
Documents executed by Borrower constitute valid and legally
binding obligations of Borrower, enforceable in accordance with
their terms.
D. Litigation. There is no proceeding involving Borrower
pending or, to the knowledge of Borrower, threatened
before any court or governmental authority, agency or
arbitration authority, except as disclosed to Bank in writing
and acknowledged by Bank prior to the date of this Agreement.
E. No Conflicting Agreements. There is no charter, bylaw,
stock provision, partnership agreement or other document
pertaining to the organization, power or authority of Borrower
and no provision of any existing agreement, mortgage,
indenture or contract binding on Borrower or affecting its
property, which would conflict with or in any way prevent the
execution, delivery or carrying out of the terms of this
Agreement and the other Loan Documents.
F. Ownership of Assets. Borrower has good title to its assets,
and its assets are free and clear of liens, except those granted
to Bank and as disclosed to Bank in writing prior to the
date of this Agreement.
G. Taxes. All taxes and assessments due and payable by Borrower
have been paid or are being contested in good faith by
appropriate proceedings and the Borrower has filed all tax
returns which it is required to file.
H. Financial Statements. The financial statements of
Borrower heretofore delivered to Bank have been prepared in
accordance with GAAP applied on a consistent basis throughout
the period involved and fairly present Borrower's financial
condition as of the date or dates thereof, and there has been no
material adverse change in Borrower's financial condition or
operations since December 31, 1996. All factual information
furnished by Borrower to Bank in connection with this Agreement
and the other Loan Documents is and will be accurate and
complete on the date as of which such information is delivered to
Bank and is not and will not be incomplete by the omission of
any material fact necessary to make such information not
misleading.
I. Place of Business. Borrower's chief executive office is
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
J. Environmental. The conduct of Borrower's business
operations and the condition of Borrower's property does not and
will not violate any federal laws, rules or ordinances for
environmental protection regulations of the Environmental
Protection Agency, any applicable local or state law, rule,
regulation or rule of common law or any judicial
interpretation thereof relating primarily to the environment or
Hazardous Materials.
K. Continuation of Representations and Warranties.
All representations and warranties made under this Agreement
shall be deemed to be made at and as of the date hereof and at
and as of the date of any advance under any Loan and the
issuance of any Letter of Credit.
L. Business Purposes. All Loans are for business,
commercial, investment or other similar purpose and not
primarily for personal, family, household or agricultural
use, as such terms are used in Chapter One of the Texas
Credit Code and shall be for the purpose of financing accounts
receivable.
M. No Margin Stock. No Loan shall be used for the
purchase or carrying of any "margin stock" as that term is
defined in Regulation "U" of the Board of Governors of the
Federal Reserve System.
4. AFFIRMATIVE COVENANTS. Until full payment and performance
of all obligations of Borrower under the Loan Documents,
Borrower will, unless Bank, consents otherwise in writing (and
without limiting any requirement of any other Loan Document).
A. Financial Condition. Maintain Borrower's financial
condition as follows, determined in accordance with GAAP
applied on a consistent basis throughout the period involved
except to the extent modified by the following definitions:
i. Maintain a Current Ratio (defined as Current Assets
divided by Current Liabilities plus Letters of Credit
outstanding under the Letter of Credit Subfeature of not
less than 1.0 to 1.0 for each calendar quarter.
ii. * Net income shall be greater than $0 for the nine
months ending on March 31, 1997. Net income shall be
greater than $500,000 for the twelve months ending on June 30,
1997. * Net loss shall not be greater than $300,000 for the
three months ending September 30, 1997.
B. Financial Statements and Other Information. Maintain a
system of accounting satisfactory to Bank and in accordance with
GAAP applied on a consistent basis throughout the period
involved, permit Bank's officers or authorized representatives
to visit and inspect Borrower's books of account and other
records at such reasonable times and as often as Bank may
desire, and pay the reasonable fees and disbursements of
any accountants or other agents of Bank selected by Bank for
the foregoing purposes. Unless written notice of another
location is given to Bank, Borrower's books and records
will be located at Borrower's chief executive office set forth
above. All financial statements called for below shall be
prepared in form and content acceptable to Bank and by
independent certified public accountants acceptable to Bank.
In addition, Borrower will:
i. Furnish to Bank consolidated and consolidating
financial statements of Borrower for each fiscal year of
Borrower, within 90 days after the close of each such fiscal
year.
ii. Furnish to Bank consolidated and consolidating
financial statements including a balance sheet and profit and
loss statement) of Borrower for each quarter of each fiscal year
of Borrower, within 45 days after the close of each such period.
iii. Furnish to Bank a REPORTING REQUIREMENTS, COVENANTS
AND COMPLIANCE CERTIFICATE for (and executed by an
authorized representative of) Borrower as attached hereto
as Exhibit B, concurrently with and dated as of the date of
delivery of each of the financial statements as required in
paragraphs i and ii above, containing (a) a certification
that the financial statements of even date are true and
correct and that the Borrower is not in default under the
terms of this Agreement, and (b) computations and
conclusions, in such detail as Bank may request, with
respect to compliance with this Agreement, and the other
Loan Documents, including computations of all quantitative
covenants.
iv. Furnish to Bank promptly such additional information,
reports and statements respecting the business operations and
financial condition of Borrower and, respectively, from time
to time, as Bank may reasonably request.
C. Insurance. Maintain insurance with responsible
insurance companies on such of its properties, in such amounts
and against such risks as is customarily maintained by similar
businesses operating in the same vicinity, specifically to
include fire and extended coverage insurance covering all
assets, all to be with such companies and in such amounts as are
satisfactory to Bank and providing for at least 30 days prior
notice to Bank of any cancellation thereof. Satisfactory
evidence of such insurance will be supplied to Bank prior to
funding under the Loan(s) and 30 days prior to each policy
renewal.
D. Existence and Compliance. Maintain its existence, good
standing and qualification to do business, where required and
comply with all laws, regulations and governmental
requirements including, without limitation, environmental
laws applicable to it or to any of its property, business
operations and transactions.
E. Adverse Conditions or Events. Promptly advise Bank in
writing of (i) any condition, event or act which comes to its
attention that would or might materially adversely affect
Borrower's financial condition or operations or Bank's rights
under the Loan Documents, (ii) any litigation filed by or
against Borrower, (iii) any event that has occurred that would
constitute an event of default under any Loan Documents and (iv)
any uninsured or partially uninsured loss through fire, theft,
liability or property damage.
F. Taxes and Other Obligations. Pay all of its taxes,
assessments and other obligations, including, but not limited to
taxes, costs or other expenses arising out of this transaction,
as the same become due and payable, except to the extent the same
are being contested in good faith by appropriate proceedings in a
diligent manner.
G. Maintenance. Maintain all of its tangible property in
good condition and repair and make all necessary replacements
thereof, and preserve and maintain all licenses, trademarks,
privileges, permits, franchises, certificates and the like
necessary for the operation of its business.
H. Environmental. Immediately advise Bank in writing of (i)
any and all enforcement, cleanup, remedial, removal, or other
governmental or regulatory actions instituted, completed or
threatened pursuant to any applicable federal, state, or local
laws, ordinances or regulations relating to any Hazardous
Materials affecting Borrower's business operations; and (ii)
all claims made or threatened by any third party against
Borrower relating to damages, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous
Materials. Borrower shall immediately notify Bank of any remedial
action taken by Borrower with respect to Borrower's business
operations. Borrower will not use or permit any other party to
use any Hazardous Materials at any of Borrower's places of
business or at any other property owned by Borrower except
such materials as are incidental to Borrower's normal course
of business, maintenance and repairs and which are handled
in compliance with all applicable environmental laws.
Borrower agrees to permit Bank, its agents, contractors and
employees to enter and inspect any of Borrower's places of
business or any other property of Borrower at any reasonable
times upon three (3) days prior notice for the purposes of
conducting an environmental investigation and audit (including
taking physical samples) to insure that Borrower is complying
with this covenant and Borrower shall reimburse Bank on demand
for the costs of any such environmental investigation and
audit. Borrower shall provide Bank, its agents,
contractors, employees and representatives with access to and
copies of any and all data and documents relating to or dealing
with any Hazardous Materials used, generated, manufactured,
stored or disposed of by Borrowers business operations within
five (5) days of the request therefore.
I. Collateral. This Loan Agreement and all Applications
are presently unsecured. Borrower agrees to provide Bank a
security interest in any collateral which is hereafter pledged
by Borrower to secure other indebtedness for borrowed money,
such security interest to be pari passu with the security
interest granted to another lender; provided however, that with
respect to letters of credit issued by NationsBank or other
lender which are cash secured, this provision shall mean that
letters of credit issued by Bank on similar terms and conditions
(i.e. letter of credit expiry date extends beyond the
maturity date of a line of credit) shall also be cash secured
and not that Bank shall share in the cash collateral securing
such letters of credit.
5. Negative Covenants. Until full payment and performance of
all obligations of Borrower under the Loan Documents, Borrower
will not, without the prior written consent of Bank (and
without limiting any requirement of any other Loan Documents):
Until full payment and performance of all obligations of
Borrower under the Loan Documents, Borrower will not, without the
prior written consent of Bank (and without limiting any
requirement of any other Loan Documents):
A. Make an investment in, or loan or advance, to any
Subsidiary, including but not limited to Peerless International
N.V., Peerless Europe B.V., and Peerless Europe Ltd., that
would cause the aggregate amount of investments, loans or
advances in subsidiaries to exceed $2,000,000 at any time.
B. Extend loans or advances to any individual,
partnership corporation or other entity not considered in the
normal course of Borrower's business.
C. Sell, lease, assign or otherwise dispose of or transfer
any assets, except in the normal course of its business, or enter
into any merger or consolidation, or transfer control or
ownership of Borrower or form or acquire any subsidiary.
D. Fail to promptly pay when due all lawful claims, whether
for labor, materials or otherwise.
E. Create, incur, assume or become liable in any matter for
any indebtedness (for borrowed money, deferred payment for the
purchase of assets, lease payments, as surety or guarantor
for the debt of another, or otherwise) except for normal
trade debts incurred in the ordinary course of Borrower's
business, and except for existing indebtedness disclosed to
Bank in writing prior to the date of this agreement.
F. Change the general character of business as conducted at the
date hereof, or engage in any type of business not reasonably
related to its business as presently conducted.
G. Amend, modify or restate the NationsBank Loan Documents as
they exist on March 7, 1997.
6. DEFAULT. Borrower shall be in default under this Agreement
and under each of the other Loan Documents if it shall default
in the payment of any amounts due and owing under the Loan or
should it fail to timely and properly observe, keep or perform
any term, covenant, agreement or condition in any Loan
Document or in any other loan agreement, promissory note,
security agreement, deed of trust, deed to secure debt,
mortgage, assignment or other contract securing or
evidencing payment of any indebtedness of Borrower to Bank or
any affiliate or subsidiary of Texas Commerce Bank National
Association.
7. REMEDIES UPON DEFAULT. If an event of default shall occur,
Bank shall have all rights, powers and remedies available under
each of the Loan Documents as well as all rights and remedies
available at law or in equity.
8. NOTICES. All notices, requests or demands which any
party is required or may desire to give to any other party
under any provision of this Agreement must be in writing
delivered to the other party at the following address:
Borrower: Peerless Mfg. Co.
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Bank: Texas Commerce Bank National Association
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as any party may designate by written
notice to the other party. Each such notice request and
demand shall be deemed given or made as follows:
A. If sent by mail, upon the earlier of the date of receipt or
five (5) days after deposit in the U.S. Mail, first class
postage prepaid;
B. If sent by any other means, upon delivery.
9. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all costs and
expenses, including reasonable attorneys' fees (to include
outside counsel fees and all allocated costs of Bank's in-house
counsel if permitted byapplicable law), incurred by Bank in
connection with (a) negotiation and preparation of this
Agreement and each of the Loan Documents, and (b) all other
costs and attorneys' fees incurred by Bank for which Borrower
is obligated to reimburse Bank in accordance with the Terms of
the Loan Documents.
10. MISCELLANEOUS. Borrower and Bank further covenant and
agree as follows, without limiting any requirement of any other
Loan Document:
A. Cumulative Rights and No Waiver. Each and every right
granted to Bank under any Loan Document, or allowed it by law or
equity shall be cumulative of each other and may be exercised in
addition to any and all other rights of Bank, and no delay in
exercising any right shall operate as a waiver thereof, nor
shall any single or partial exercise by Bank of any right
preclude any other or future exercise thereof or the exercise
of any other right. Borrower expressly waives any
presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate
and notice of acceleration. No notice to or demand on
Borrower in any case shall, of itself entitle Borrower to any
other future notice or demand in similar or other
circumstances.
B. Applicable Law. This Loan Agreement and the rights
and obligations of the parties hereunder shall be governed
by and interpreted in accordance with the laws of Texas and
applicable United States federal law.
C. Amendment. No modification, consent, amendment or waiver of
any provision of this Loan Agreement, nor consent to any
departure by Borrower therefrom, shall be effective unless the
same shall be in writing and signed by an officer of Bank, and
then shall be effective only in the specified instance and for
the purpose for which given. This Loan Agreement is binding
upon Borrower, its successors and assigns, and inures to
the benefit of Bank, its successors and assigns; however,
no assignment or other transfer of Borrower's rights or
obligations hereunder shall be made or be effective without
Bank's prior written consent, nor shall it relieve Borrower of
any obligations hereunder. There is no third party beneficiary
of this Loan Agreement.
D. Documents. All documents, certificates and other items
required under this Loan Agreement to be executed and/or
delivered to Bank shall be in form and content satisfactory to
Bank and its counsel.
E. Partial Invalidity. The enforceability or invalidity of
any provision of this Loan Agreement shall not affect the
enforceability or validity of any other provision herein and
the invalidity or unenforceability of any provision of any
Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may
apply to other persons or circumstances.
F. Indemnification. Notwithstanding anything to the
contrary contained in Section 10(G), Borrower shall indemnify,
defend and hold Bank and its successors and assigns harmless
from and against any and all claims, demands, suits, losses,
damages, assessments, fines, penalties, costs or other
expenses (including reasonable attorneys' fees and court costs)
arising from or in any way related to any of the transactions
contemplated hereby, including but not limited to actual or
threatened damage to the environment, agency costs of
investigation, personal injury or death, or property damage, due
to a release or alleged release of Hazardous Materials,
arising from Borrower's business operations, any other property
owned by Borrower or in the surface or ground water arising
from Borrower's business operations, or gaseous emissions
arising from Borrower's business operations or any other
condition existing or arising from Borrower's business
operations resulting from the use or existence of Hazardous
Materials, whether such claim proves to be true or false.
Borrower further agrees that its indemnity obligations shall
include, but are not limited to, liability for damages
resulting from the personal injury or death of an employee of
the Borrower, regardless of whether the Borrower has paid the
employee under the workmen's compensation laws of any state or
other similar federal or state legislation for the protection
of employees. The term "property damage" as used in this
paragraph includes, but is not limited to, damage to any real or
personal property of the Borrower, the Bank, and of any third
parties. The Borrower's obligations under this paragraph shall
survive the repayment of the Loan and any deed in lieu
of foreclosure or foreclosure of any Deed to Secure Debt,
Deed of Trust, Security Agreement or Mortgage securing the
Loan.
G. Survivability. All covenants, agreements, representations
and warranties made herein or in the other Loan Documents shall
survive the making of the Loan and shall continue in full force
and affect so long as the Loan is outstanding or the obligation
of the Bank to make any advances under the Line shall not have
expired.
12. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG
THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING
OUT OF OR RELATING TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT
OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING
ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE
FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE
STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE
ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE
OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE
SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE
CITY OF THE BORROWER'S DOMICILE AT TIME OF THE EXECUTION OF THIS
INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S.
WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR
LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE
DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY,
UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF
ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND
ANY WAIVERS CONTAINED IN THIS ARBITRATION PROVISION; OR (II) BE
A WAIVER BY THE BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR
(III) LIMIT THE RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF
HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR
(C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE BANK MAY
EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR
DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR
THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH
ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR
CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
13. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed under seal by their duly
authorized representatives as of the date first above written.
BORROWER: PEERLESS MFG. CO.
By: /s/ ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ (Seal)
Name: ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer
[Corporate Seal]
BANK: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Seal)
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
If the Borrower is a corporation, the signature should be
attested by the Secretary or Assistant Secretary of the
corporation and the corporate seal affixed.
Attest: /s/ ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ (Seal)
Name: ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
Title: Secretary/Treasurer
