REVOLVING CREDIT AGREEMENT

 

                                                                   EXHIBIT 10.25

 

 

                           REVOLVING CREDIT AGREEMENT

 

This Revolving Credit Agreement (the "AGREEMENT") is made and entered into by

and between the undersigned borrower (the "BORROWER")and the undersigned bank

(the "BANK") as of the date set forth on the last page of this Agreement.

 

                                ARTICLE I. LOANS

 

1.1 REVOLVING CREDIT LOANS. From time to time prior to FEBRUARY 24, 2005 (the

"MATURITY DATE") or the earlier termination hereof, the Borrower may borrow from

the Bank for working capital purposes up to the aggregate principal amount

outstanding at any one time of the lesser of (i) $ 200,000.00 (the "LOAN

AMOUNT"), less letters of credit issued by the Bank, or (ii) if applicable, the

BORROWING BASE (defined below). All revolving loans hereunder will be evidenced

by a single promissory note of the Borrower payable to the order of the Bank in

the principal amount of the Loan Amount (the "NOTE"). Although the Note will be

expressed to be payable in the full Loan Amount, the Borrower will be obligated

to pay only the amounts actually disbursed hereunder, together with accrued

interest on the outstanding balance at the rates and on the dates specified

therein and such other charges provided for herein. In the event that the

principal amount outstanding under the Note exceeds the Borrowing Base at any

time, the Borrower will immediately, without request, prepay an amount

sufficient to eliminate such excess.

 

1.2 BORROWING BASE. The Borrowing Base will be an amount equal to the sum of

(i) 70.00% of the face amount of Eligible Accounts, and (ii) the lesser of $ N/A

or 50.00% of the Borrower's cost of Eligible Inventory, as such cost may be

diminished as a result of any event causing loss or depreciation in value of

Eligible Inventory less (iii) the current outstanding loan balance on note(s) in

the original amount(s) of $ N/A , and less (iv) undrawn amounts of outstanding

letters of credit issued by Bank or any affiliate thereof. The Borrower will

provide the Bank with information regarding the Borrowing Base in such form and

at such times as the Bank may request. The terms used in this Section 1.2 will

have the meanings set forth in a supplement entitled "Financial Definitions," a

copy of which the Borrower acknowledges having received with this Agreement and

which is incorporated herein by reference.

 

1.3 ADVANCES AFTER MATURITY OR IN EXCESS OF MAXIMUM LOAN AMOUNT. The Bank shall

have no obligation whatsoever, and the Bank has no present intention, to make

any advance after the Maturity Date or which would cause the principal amount

outstanding under this Agreement to exceed the maximum loan amount or any other

limitations on advances stated in this Agreement. Notwithstanding the foregoing,

the Bank may from time to time, in its sole and absolute discretion, agree to

make an advance after the Maturity Date or which would cause the principal

amount of advances outstanding under this Agreement to exceed the maximum loan

amount or any of the other limitations on advances. The Borrower is and shall be

and remain unconditionally liable to the Bank for the amount of all advances,

including, without limitation, advances in excess of the maximum loan amount or

any other limitation on advances and advances made after the Maturity Date.

Immediately upon the Bank's demand, the Borrower shall pay to the Bank the

amount of any advances made after the Maturity Date or in excess of the maximum

loan amount or any other limitation on advances contained in this Agreement,

together with interest on the principal amount of such excess advances, for so

long as such advances are outstanding, at the highest interest rate from time to

time in effect for such advances. Any such advances shall not be deemed an

extension of this Agreement nor an increase in the maximum loan amount available

for borrowing under this Agreement.

 

1.4 ADVANCES AND PAYING PROCEDURE. The Bank is authorized and directed to credit

any of the Borrower's accounts with the Bank (or to the account the Borrower

designates in writing) for all loans made hereunder, and the Bank is authorized

to debit such account or any other account of the Borrower with the Bank for the

amount of any principal, interest or expenses due under the Note or other amount

due hereunder on the due date with respect thereto. If, upon any request by the

Borrower to the Bank to issue a wire transfer, there is an inconsistency between

the name of the recipient of the wire and its identification number as specified

by the Borrower, the Bank may, without liability, transmit the payment via wire

based solely upon the Identification number.

 

1.5 CLOSING FEE. The Borrower will pay the Bank a one-time closing fee of $ N/A

contemporaneously with execution of this Agreement. This fee is in addition to

all other fees, expenses and other amounts due hereunder.

 

1.6 LOAN FACILITY FEE. The Borrower will pay a loan facility fee equal to:

 

        |_|        n/a        per annum, payable annually in advance; (or)

              --------------

 

        |_|        n/a        % per annum of the Loan Amount, payable annually in

             -------------- advance; (or)

 

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        |_|        n/a        % per annum of the   difference   between the Loan

             -------------- Amount and the actual daily unpaid principal amount

             of the Note outstanding from time to time, payable quarterly, in

             arrears, on the last business day of each third calendar month,

             and at maturity; (or)

 

         |_|        n/a        % per annum of the actual daily unpaid principal

             -------------- amount of the Note outstanding from time to time,

             payable quarterly, in arrears, on the last business day of each

             third calendar month, and at maturity.

 

The loan facility fee is payable for the entire period that this Agreement is in

effect, regardless of whether any amounts are outstanding hereunder at any given

time.

 

1.7 EXPENSES AND ATTORNEYS' FEES. Upon demand, the Borrower will immediately

reimburse the Bank and any Participant (defined below) for all attorneys' fees

and all other costs, fees and out-of-pocket disbursements incurred by the Bank

or any Participant in connection with the preparation, execution, delivery,

administration, defense and enforcement of this Agreement or any of the other

Loan Documents (defined below), including attorneys' fees and all other costs

and fees (a) incurred before or after commencement of litigation or at trial, on

appeal or in any other proceeding, (b) incurred in any bankruptcy proceeding and

(c) related to any waivers or amendments with respect thereto (examples of costs

and fees include but are not limited to fees and costs for: filing, perfecting

or confirming the priority of the Bank's lien, title searches or insurance,

appraisals, environmental audits and other reviews related to the Borrower, any

collateral or the loans, if requested by the Bank). The Borrower will also

reimburse the Bank and any Participant for all costs of collection, including

all attorneys' fees, before and after judgment, and the costs of preservation

and/or liquidation of any collateral.

 

1.8 COMPENSATING BALANCES. The Borrower will maintain on deposit with the Bank

in non-interest bearing accounts average daily collected balances, in excess of

that required to support account activity and other credit facilities extended

to the Borrower by the Bank, an amount at least equal to the sum of (i) $ N/A

and (ii) N/A % of the Loan Amount as computed on a monthly basis. If the

Borrower fails to keep and maintain such balances, it will pay a deficiency fee,

payable within five days after receipt of a statement therefor calculated on the

amount by which the Borrower's average daily balances are less than the

requirements set forth above, computed at a rate equal to the rate set forth in

the Note.

 

1.9 CONDITIONS BORROWING. The Bank will not be obligated to make (or continue to

make) advances hereunder unless (i) the Bank has received executed originals of

the Note and all other documents or agreements applicable to the loans described

herein, including but not limited to the documents specified in Article III

(collectively with this Agreement the "LOAN DOCUMENTS"), in form and content

satisfactory to the Bank: (ii) If the loan is secured, the Bank has received

confirmation satisfactory to it that the Bank has a properly perfected security

interest, mortgage or lien, with the proper priority; (iii) the Bank has

received certified copies of the Borrower's governance documents and

certification of entity status satisfactory to the Bank and all other relevant

documents; (iv) the Bank has received a certified copy of a resolution or

authorization in form and content satisfactory to the Bank authorizing the loan

and all acts contemplated by this Agreement and all related documents, and

confirmation of proper authorization of all guaranties and other acts of third

parties contemplated hereunder; (v) If required by the Bank, the Bank has been

provided with an Opinion of the Borrower's counsel in form and content

satisfactory to the Bank confirming the matters outlined in Section 2.2 and such

other matters as the Bank requests; (vi) no default exists under this Agreement

or under any other Loan Documents, or under any other agreements by and between

the Borrower and the Bank; and (vii) all proceedings taken in connection with

the transactions contemplated by this Agreement (including any required

environmental assessments), and all instruments, authorizations and other

documents applicable thereto, are satisfactory to the Bank and its counsel.

 

                      ARTICLE II. WARRANTIES AND COVENANTS

 

While any part of the credit granted to the Borrower under this Agreement or the

other Loan Documents is available or any obligations under any of the Loan

Documents are unpaid or outstanding, the Borrower continuously warrants and

agrees as follows:

 

2.1 ACCURACY OF INFORMATION. All information, certificates or statements given

to the Bank pursuant to this Agreement and the other Loan Documents will be true

and complete when given.

 

2.2 ORGANIZATION AND AUTHORITY; LITIGATION. This Agreement and the other Loan

Documents are the legal, valid and binding obligations of the Borrower,

enforceable against the Borrower in accordance with their terms. The execution,

delivery and performance of this Agreement and all other Loan Documents to which

the Borrower is a party (i) are within the borrower's power; (ii) have been duly

authorized by all appropriate entity action; (iii) do not require the approval

of any governmental agency; and (iv) will not violate any law, agreement or

restriction by which the Borrower is bound. If the Borrower is not an

individual, the Borrower is validly existing and in good standing under the laws

of its state of

 

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organization, has all requisite power and authority and possesses all licenses

necessary to conduct its business and own its properties. There is no litigation

or administrative proceeding threatened or pending against the Borrower which

would, if adversely determined, have a material adverse effect on the Borrower's

financial condition or its property.

 

2.3 EXISTENCE; BUSINESS ACTIVITIES; ASSETS; CHANGE OF CONTROL. The Borrower will

(i) preserve its existence, rights and franchises; (ii) not make any material

change in the nature or manner of its business activities; (iii) not liquidate,

dissolve, acquire another entity or merge or consolidate with or into another

entity or change its form of organization; (iv) not amend its organizational

documents in any manner that may conflict with any term or condition of the Loan

Documents; and (v) not sell, lease, transfer or otherwise dispose of all or

substantially all of its assets. Other than the transfer to a trust beneficially

controlled by the transferor, no event shall occur which causes or results in a

transfer of majority ownership of the Borrower while any Obligations are

outstanding or while the Bank has any obligation to provide funding to the

Borrower.

 

2.4 USE OF PROCEEDS; MARGIN STOCK; SPECULATION. Advances by the Bank hereunder

will be used exclusively by the Borrower for working capital and other regular

and valid purposes. The Borrower will not, without the prior written consent of

the Bank, redeem, purchase, or retire any of the capital stock or declare or pay

any dividends, or make any other payments or distributions of a similar type or

nature including withdrawal distributions. The Borrower will not use any of the

loan proceeds to purchase or carry margin stock (as defined in Regulation U of

the Board of Governors of the Federal Reserve System). No part of any of the

proceeds will be used for speculative investment purposes, including, without

limitation, speculating or hedging in the commodities and/or futures market.

 

2.5 ENVIRONMENTAL MATTERS. Except as disclosed in a written schedule attached to

this Agreement (if no schedule is attached, there are no exceptions), there

exists no uncorrected violation by the Borrower of any federal, state or local

laws (including statutes, regulations, ordinances or other governmental

restrictions and requirements) relating to the discharge of air pollutants,

water pollutants or process waste water or otherwise relating to the environment

or Hazardous Substances as hereinafter deferred, whether such laws currently

exist or are enacted in the future (collectively "ENVIRONMENTAL LAWS"). The term

"HAZARDOUS SUBSTANCES" will mean any hazardous or toxic wastes, chemicals or

other substances, the generation, possession or existence of which is prohibited

or governed by any Environmental Laws. The Borrower is not subject to any

judgment, decree, order or citation, or a party to (or threatened with) any

litigation or administrative proceeding, which asserts that the Borrower (i) has

violated any Environmental Laws; (ii) is required to clean up, remove or take

remedial or other action with respect to any Hazardous Substances (collectively

"REMEDIAL ACTION"); or (iii) is required to pay all or a portion of the cost of

any Remedial Action, as a potentially responsible party. Except as disclosed on

the Borrower's environmental questionnaire provided to the Bank, there are not

now, nor to the Borrower's knowledge after reasonable investigation have there

ever been, any Hazardous Substances (or tanks or other facilities for the

storage of Hazardous Substances) stored, deposited, recycled or disposed of on,

under or at any real estate owned or occupied by the Borrower during the periods

that the Borrower owned or occupied such real estate, which if present on the

real estate or in soils or ground water, could require Remedial Action. To the

Borrower's knowledge, there are no proposed or pending changes in Environmental

Laws which would adversely affect the Borrower or its business, and there are no

conditions existing currently or likely to exist while the Loan Documents are in

effect which would subject the Borrower to Remedial Action or other liability.

The Borrower currently complies with and will continue to timely comply with all

applicable Environmental Laws; and will provide the Bank, immediately upon

receipt, copies of any correspondence, notice, complaint, order or other

document from any source asserting or alleging any circumstance or condition

which requires or may require a financial contribution by the Borrower or

Remedial Action or other response by or on the part of the Borrower under

Environmental Laws, or which seeks damages or civil, criminal or punitive

penalties from the Borrower for an alleged violation of Environmental Laws.

 

2.6 COMPLIANCE WITH LAWS. The Borrower has complied with all laws applicable to

its business and its properties, and has all permits, licenses and approvals

required by such laws, copies of which have been provided to the Bank.

 

2.7 RESTRICTION ON INDEBTEDNESS. The Borrower will not create, incur, assume or

have outstanding any indebtedness for borrowed money (including capitalized

leases) except (i) any indebtedness owing to the Bank and its affiliates, and

(ii) any other indebtedness outstanding on the date hereof, and shown on the

Borrower's financial statements delivered to the Bank prior to the date hereof,

provided that such other indebtedness will not be increased.

 

2.8 RESTRICTION ON LIENS. The Borrower will not create, incur, assume or permit

to exist any mortgage, pledge, encumbrance or other lien or levy upon or

security interest in any of the Borrower's property now owned or hereafter

acquired, except (i) taxes and assessments which are either not delinquent or

which are being contested in good faith with adequate reserves provided;

(ii) easements, restrictions and minor title irregularities which do not, as a

practical matter, have an adverse effect upon the ownership and use of the

affected property; (iii) liens in favor of the Bank and its affiliates; and

(iv) other liens disclosed in writing to the Bank prior to the date hereof.

 

<PAGE>

 

2.9 RESTRICTION CONTINGENT LIABILITIES. The Borrower will not guarantee or

become a surety or otherwise contingently liable for any obligations of others,

except pursuant to the deposit and collection of checks and similar matters in

the ordinary course of business.

 

2.10 INSURANCE. The Borrower will maintain insurance to such extent, covering

such risks and with such insurers as is usual and customary for businesses

operating similar properties, and as is satisfactory to the Bank, including

insurance for fire and other risks insured against by extended coverage, public

liability insurance and workers' compensation insurance; and will designate the

Bank as loss payee with a "Lender's Loss Payable" endorsement on any casualty

policies and take such other action as the Bank may reasonably request to ensure

that the Bank will receive (subject to no other interests) the insurance

proceeds on the Bank's collateral.

 

2.11 TAXES AND OTHER LIABILITIES. The Borrower will pay and discharge, when due,

all of its taxes, assessments and other liabilities, except when the payment

thereof is being contested in good faith by appropriate procedures which will

avoid foreclosure of liens securing such items, and with adequate reserves

provided therefor.

 

2.12 FINANCIAL STATEMENTS AND REPORTING. The financial statements and other

information previously provided to the Bank or provided to the Bank in the

future are or will be complete and accurate and prepared in accordance with

generally accepted accounting principles. There has been no material adverse

change in the Borrower's financial condition since such information was provided

to the Bank. The Borrower will (i) maintain accounting records in accordance

with generally recognized and accepted principles of accounting consistently

applied throughout the accounting periods involved; (ii) provide the Bank with

such information concerning its business affairs and financial condition

(including insurance coverage) as the Bank may request; and (iii) without

request, provide the Bank with management-prepared financial statements:

 

      |X| quarterly within           30        days of the end of each quarter;

                              --------------

      |_| monthly within              n/a       days of the end of each month;

                              --------------

 

and annual REVIEWED FINANCIAL STATEMENTS PREPARED BY AN ACCOUNTING FIRM

ACCEPTABLE TO THE BANK within 120 days of the end of each fiscal year.

 

2.13 INSPECTION OF PROPERTIES AND RECORDS; FISCAL YEAR. The Borrower will permit

representatives of the Bank to visit and inspect any of the properties and

examine any of the books and records of the Borrower at any reasonable time and

as often as the Bank may reasonably desire. The Borrower will not change its

fiscal year.

 

2.14     FINANCIAL STATUS.   The Borrower will maintain at all times:

<TABLE>

<CAPTION>

<S>   <C>                                                <C>    <C>    

(i)   Net Working Capital in the amount of at least       (v)    Capital Expenditures not to exceed

     $             n/a                       .                  $    n/a      per fiscal year

      -------------------------------------                    ---------

 

(ii) Tangible Net Worth in the amount of at least       (vi)   Cash Flow Coverage Ratio of at least

     $             n/a                       .                  $      n/a .

      -------------------------------------                   ----------

 

(iii) Debt to Worth Ratio of not more than              (vii) Offices, Directors, Partners, Members, and

     $             n/a                       .                  Management Salaries and Other Compensation

      -------------------------------------                   not to exceed $    n/a      per fiscal year.

                                                                             ----------

(iv) Current Ratio of at least:       n/a                            .

                               ------------------------------------

</TABLE>

 

The terms used in this Section 2.14 will have the meanings set forth in a

supplement entitled "Financial Definitions," a copy of which the Borrower hereby

acknowledges having received with this Agreement and which is incorporated

herein by reference.

 

2.15 PAID-IN-FULL PERIOD. |_| If checked here, all revolving loans under this

Agreement and the Note must be paid in full for a period of at least N/A

consecutive days during each fiscal year.

 

                     ARTICLE III. COLLATERAL AND GUARANTIES

 

3.1 COLLATERAL. This Agreement and the Note are secured by any and all security

interests, pledges, mortgages/deeds of trust (except any mortgage/deed of trust

expressly limited by its terms to a specific obligation of Borrower to Bank) or

liens now or hereafter in existence granted to the Bank to secure indebtedness

of the Borrower to the Bank, including without limitation as described in the

following documents:

 

<PAGE>

 

  |_|   Real Estate Mortgage(s)/Deed(s) of Trust dated ___________________________

      covering real estate located at __________________________________________

      __________________________________________________________________________

  |X|   Security Agreement(s) dated    02/24/04

                                  ----------------------------------------------

  |_|   Possessory Collateral Pledge Agreement(s) dated __________________________

  |_|   Other ____________________________________________________________________

      __________________________________________________________________________

 

3.2 GUARANTIES. This Agreement and the Note are guarantied by each and every

guaranty now or hereafter in existence guarantying the indebtedness of the

Borrower to the Bank (except for any guaranty expressly limited by its terms to

a specific separate obligation of Borrower to the Bank) including, without

limitation, the following: _____________________________________________________

 

  -------------------------------------------------------------------------------

  -------------------------------------------------------------------------------

  -------------------------------------------------------------------------------

  -------------------------------------------------------------------------------

 

3.3 CREDIT BALANCES; SETOFF. As additional security for the payment of the

obligations described in the Loan Documents and any other obligations of the

Borrower to the Bank of any nature whatsoever (collectively the "OBLIGATIONS",

the Borrower hereby grants to the Bank a security interest in, a lien on and an

express contractual right to set off against all depository account balances,

cash and any other property of the Borrower now or hereafter in the possession

of the Bank and the right to refuse to allow withdrawals from any account

(collectively "SETOFF"). The Bank may, at any time upon the occurrence of a

default hereunder (notwithstanding any notice requirements or grace/cure periods

under this or other agreements between the Borrower and the Bank) Setoff against

the Obligations WHETHER OR NOT THE OBLIGATIONS (INCLUDING FUTURE INSTALLMENTS)

ARE THEN DUE OR HAVE BEEN ACCELERATED, ALL WITHOUT ANY ADVANCE OR

CONTEMPORANEOUS NOTICE OR DEMAND OF ANY KIND TO THE BORROWER, SUCH NOTICE AND

DEMAND BEING EXPRESSLY WAIVED.

 

The omission of any reference to an agreement in Sections 3.1 and 3.2 above will

not affect the validity or enforceability thereof. The rights and remedies of

the Bank outlined in this Agreement and the documents identified above are

intended to be cumulative.

 

                              ARTICLE IV. DEFAULTS

 

4.1 DEFAULTS. NOTWITHSTANDING ANY CURE PERIODS DESCRIBED BELOW, THE BORROWER

WILL IMMEDIATELY NOTIFY THE BANK IN WRITING WHEN THE BORROWER OBTAINS KNOWLEDGE

OF THE OCCURRENCE OF ANY DEFAULT SPECIFIED BELOW. Regardless of whether the

Borrower has given the required notice, the occurrence of one or more of the

following will constitute a default:

 

(a) NONPAYMENT. The Borrower shall fail to pay (i) any interest due on the Note

    or any fees, charges, costs or expenses under the Loan Documents by 5 days

    after the same becomes due; or (ii) any principal amount of the Note when

    due.

 

(b) NONPERFORMANCE. The Borrower or any guarantor of Borrower's Obligations to

    the Bank ("GUARANTOR") shall fail to perform or observe any agreement, term,

    provision, condition, or covenant (other than a default occurring under (a),

    (c), (d), (e), (f) or (g) of this Section 4.1) required to be performed or

    observed by the Borrower or any Guarantor hereunder or under any other Loan

    Document or other agreement with or in favor of the Bank.

 

(c) MISREPRESENTATION. Any financial information, statement, certificate,

    representation or warranty given to the Bank by the Borrower or any

    Guarantor (or any of their representatives) in connection with entering

     into this Agreement or the other Loan Documents and/or any borrowing

    thereunder, or required to be furnished under the terms thereof, shall

    prove untrue or misleading in any material respect (as determined by the

    Bank in the exercise of its judgment) as of the time when given.

 

(d) DEFAULT ON OTHER OBLIGATIONS. The Borrower or any Guarantor shall be in

    default under the terms of any loan agreement, promissory note, lease,

    conditional sale contract or other agreement, document or instrument

    evidencing, governing or securing any indebtedness owing by the Borrower or

    any Guarantor to the Bank or any indebtedness in excess of $10,000 owing by

    the Borrower to any third party, and the period of grace, if any, to cure

    said default shall have passed.

 

(e) JUDGMENTS. Any judgment shall be obtained against the Borrower or any

    Guarantor which, together with all other outstanding unsatisfied judgments

    against the Borrower (or such Guarantor), shall exceed the sum of $10,000

    and shall remain unvacated, unbonded or unstayed for a period of 30 days

    following the date of entry thereof.

   

 

<PAGE>

 

(f) INABILITY TO PERFORM; BANKRUPTCY/INSOLVENCY. (i) The Borrower or any

    Guarantor shall die or cease to exist; or (ii) any Guarantor shall attempt

    to revoke any guaranty of the Obligations described herein, or any guaranty

    becomes unenforceable in whole or in part for any reason; or (iii) any

    bankruptcy, insolvency or receivership proceedings, or an assignment for the

    benefit of creditors, shall be commenced under any Federal or state law by

    or against the Borrower or any Guarantor; or (iv) the Borrower or any

    Guarantor shall become the subject of any out-of-court settlement with its

    creditors; or (v) the Borrower or any Guarantor is unable or admits in

    writing its inability to pay its debts as they mature; or (vi) if the

    Borrower is a limited liability company, any member thereof shall withdraw

    or otherwise become disassociated from the Borrower.

  

(g) ADVERSE CHANGE; INSECURITY. (i) There is a material adverse change in the

    business, properties, financial condition or affairs of the Borrower or any

    Guarantor, or in any collateral securing the Obligations; or (ii) the Bank

    in good faith deems itself insecure.

 

4.2 TERMINATION OF LOANS; ADDITIONAL BANK RIGHTS. Upon the Maturity Date or the

occurrence of any of the events identified in Section 4.1, the Bank may at any

time (notwithstanding any notice requirements or grace/cure periods under this

or other agreements between the Borrower and the Bank) (i) immediately terminate

its obligation, if any, to make additional loans to the Borrower; (ii) Setoff;

and/or (iii) take such other steps to protect or preserve the Bank's interest in

any collateral, including without limitation, notifying account debtors to make

payments directly to the Bank, advancing funds to protect any collateral and

insuring collateral at the Borrower's expense; all without demand or notice of

any kind, all of which are hereby waived.

 

4.3 ACCELERATION OF OBLIGATIONS. Upon the Maturity Date or the occurrence of any

of the events identified in Sections 4.1(a) through 4.1(e) and 4.1(g), and the

passage of any applicable cure periods, the Bank may at any time thereafter, by

written notice to the Borrower, declare the unpaid principal balance of any

Obligations, together with the interest accrued thereon and other amounts

accrued hereunder and under the other Loan Documents, to be immediately due and

payable; and the unpaid balance will thereupon be due and payable, all without

presentation, demand, protest or further notice of any kind, all of which are

hereby waived, and notwithstanding anything to the contrary contained herein or

in any of the other Loan Documents. Upon the occurrence of any event under

Section 4.1(f), the unpaid principal balance of any Obligations, together with

all interest accrued thereon and other amounts accrued hereunder and under the

other Loan Documents, will thereupon be immediately due and payable, all without

presentation, demand, protest or notice of any kind, all of which are hereby

waived, and notwithstanding anything to the contrary contained herein or in any

of the other Loan Documents.

 

NOTHING CONTAINED IN SECTION 4.1, SECTION 4.2 OR THIS SECTION WILL LIMIT THE

BANK'S RIGHT TO SETOFF AS PROVIDED IN SECTION 3.3 OR OTHERWISE IN THIS

AGREEMENT.

 

4.4 OTHER REMEDIES. Nothing in this Article IV is intended to restrict the

Bank's rights under any of the Loan Documents or at law, and the Bank may

exercise all such rights and remedies as and when they are available.

 

                             ARTICLE V. OTHER TERMS

 

5.1 FINANCIAL DEFINITIONS SUPPLEMENT. If a Borrowing Base or covenants regarding

financial status apply to this loan, the "FINANCIAL DEFINITIONS" Supplement

identified in Sections 1.2 and 2.14 of this Agreement is hereby incorporated

into this Agreement. The Borrower acknowledges receiving a copy of such

Supplement.

 

5.2 ADDITIONAL TERMS; ADDENDUM/SUPPLEMENTS. The warranties, covenants,

conditions and other terms described in this Section and/or in the Addendum

and/or other attached document(s) referenced in this Section are incorporated

into this Agreement:

 

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                           ARTICLE VI. MISCELLANEOUS

 

6.1 DELAY; CUMULATIVE REMEDIES. No delay on the part of the Bank in exercising

any right, power or privilege hereunder or under any of the other Loan Documents

will operate as a waiver thereof, nor will any single or partial exercise of any

right,

 

<PAGE>

 

power or privilege hereunder preclude other or further exercise thereof or the

exercise of any other right, power or privilege. The rights and remedies herein

specified are cumulative and are not exclusive of any rights or remedies which

the Bank would otherwise have.

 

6.2 RELATIONSHIP TO OTHER DOCUMENTS. The warranties, covenants and other

obligations of the Borrower (and the rights and remedies of the Bank) that are

outlined in this Agreement and the other Loan Documents are intended to

supplement each other. In the event of any inconsistencies in any of the terms

in the Loan Documents, all terms will be cumulative so as to give the Bank the

most favorable rights set forth in the conflicting documents, except that if

there is a direct conflict between any preprinted terms and specifically

negotiated terms (whether included in an addendum or otherwise), the

specifically negotiated terms will control.

 

6.3 SUCCESSORS. The rights, options, powers and remedies granted in this

Agreement and the other Loan Documents shall be binding upon the Borrower and

the Bank and their respective successors and assigns, and shall inure to the

benefit of the Borrower and the Bank and the successors and assigns of the Bank,

including without limitation any purchaser of any or all of the rights and

obligations of the Bank under the Note and the other Loan Documents. The

Borrower may not assign its rights or obligations under this Agreement or any

other Loan Documents without the prior written consent of the Bank.

 

6.4 DISCLOSURE. The Bank may, in connection with any sale or potential sale of

all or any interest in the Note and other Loan Documents, disclose any financial

information the Bank may have concerning the Borrower to any purchaser or

potential purchaser. From time to time, the Bank may, in its discretion and

without obligation to the Borrower, any Guarantor or any other third party,

disclose information about the Borrower and this loan to any Guarantor, surety

or other accommodation party. This provision does not obligate the Bank to

supply any information or release the Borrower from its obligation to provide

such information, and the Borrower agrees to keep all Guarantors, sureties or

other accommodation parties advised of its financial condition and other matters

which may be relevant to their obligations to the Bank.

 

6.5 INDEMNIFICATION. Except for harm arising from the Bank's willful misconduct,

the Borrower hereby indemnifies and agrees to defend and hold the Bank harmless

from any and all losses, costs, damages, claims and expenses of any kind

suffered by or asserted against the Bank relating to claims by third parties

arising out of the financing provided under the Loan Documents or related to any

collateral (including, without limitation, the Borrower's failure to perform its

obligations relating to Environmental Matters described in Section 2.5 above).

This indemnification and hold harmless provision will survive the termination of

the Loan Documents and the satisfaction of the Obligations due the Bank.

 

6.6 NOTICE OF CLAIMS AGAINST BANK; LIMITATION OF CERTAIN DAMAGES. In order to

allow the Bank to mitigate any damages to the Borrower from the Bank's alleged

breach of its duties under the Loan Documents or any other duty, if any, to the

Borrower, the Borrower agrees to give the Bank immediate written notice of any

claim or defense it has against the Bank, whether in tort or contract, relating

to any action or inaction by the Bank under the Loan Documents, or the

transactions related thereto, or of any defense to payment of the Obligations

for any reason. The requirement of providing timely notice to the Bank

represents the parties' agreed-to standard of performance regarding claims

against the Bank. Notwithstanding any claim that the Borrower may have against

the Bank, and regardless of any notice the Borrower may have given the Bank, THE

BANK WILL NOT BE LIABLE TO THE BORROWER FOR CONSEQUENTIAL AND/OR SPECIAL DAMAGES

ARISING THEREFROM, EXCEPT THOSE DAMAGES ARISING FROM THE BANK'S WILLFUL

MISCONDUCT.

 

6.7 NOTICES. Notice of any record shall be deemed delivered when the record has

been (a) deposited in the United States Mail, postage pre-paid, (b) received by

overnight delivery service, (c) received by telex, (d) received by telecopy,

(e) received through the internet, or (f) when personally delivered.

 

6.8 PAYMENTS. Payments due under the Note and other Loan Documents will be made

in lawful money of the United States. All payments may be applied by the Bank to

principal, interest and other amounts due under the Loan Documents in any order

which the Bank elects.

 

6.9 APPLICABLE LAW AND JURISDICTION; INTERPRETATION; JOINT LIABILITY;

SEVERABILITY. This Agreement and all other Loan Documents will be governed by

and interpreted in accordance with the internal laws of the State of COLORADO,

except to the extent superseded by Federal law. THE BORROWER HEREBY CONSENTS TO

THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY

OR FEDERAL JURISDICTION OF