{"id":41116,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-agreement-schuff-steel-co-and-bank-one-arizona-na.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-agreement-schuff-steel-co-and-bank-one-arizona-na","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-agreement-schuff-steel-co-and-bank-one-arizona-na.html","title":{"rendered":"Loan Agreement &#8211; Schuff Steel Co. and Bank One Arizona NA"},"content":{"rendered":"<pre>                                 LOAN AGREEMENT\n\n\n      This Agreement is entered into by and between SCHUFF STEEL COMPANY, an\nArizona corporation ('Borrower') and Bank One, Arizona, NA, a national banking \nassociation ('Bank').\n\n      Borrower has applied to Bank for a loan in the amount of $500,000.00. In \nconsideration of Bank making said loan the Borrower hereby warrants and agrees \nas follows:\n\n       1. THE LOAN. This loan shall be repaid in accordance with the terms of\nthe promissory note(s) prepared by Bank and executed by Borrower. The purpose of\nthis loan is to purchase equipment.\n\n       2. BUSINESS ORGANIZATION. Borrower is a Corporation. The primary business\noperation of Borrower is STRUCTURAL STEEL ERECTION COMPANY. Borrower's form of\norganization and primary business operation shall remain the same during the\nterm of this Agreement.\n\n       3. COLLATERAL. As security for the loan the Borrower will provide the\nfollowing collateral under duly executed security documents and agrees to be\nbound by the terms contained therein:\n\n       S\/A EQUIPMENT DTD 9\/15\/94\n\n       4. NET WORTH. A minimum tangible net worth of $5,300,000.00 and a\nminimum owner's equity of   *  % shall be maintained at all times so\nlong as the loan is outstanding, as determined in accordance with generally\naccepted accounting practices consistently applied. 'Tangible net worth' shall\nmean the sum of the following, determined in accordance with generally accepted\naccounting practices and principles: capital, capital surplus and retained\nearning, less the sum of the value on the borrower's books of all intangible\nassets including but not limited to: goodwill, patents, franchises, trademarks,\ncopyrights and the write-up in the book value of any assets resulting therefrom\nafter acquisition. 'Owner's equity' shall be defined and computed as 'tangible\nnet worth' (as herein defined) divided by total assets.\n\n       5. NET WORKING CAPITAL. While the loan is outstanding, current assets\nshall be maintained in excess of current liabilities by $  *   and a current\nratio of   *   :   *    shall be maintained and calculated by dividing current\nassets by current liabilities, as determined in accordance with generally\naccepted accounting practices.\n\n       6. INVESTMENT IN FIXED ASSETS. Acquisition or purchase of fixed assets\nshall not exceed $  N\/A during any 12-month period, without prior consent of \nBank.\n\n       7. LEASING OF CAPITAL EQUIPMENT. No lease of personal property will be\nentered into which would cause Borrower's total rental obligations for personal\nproperty to exceed \n\n* SEE ATTACH ADDENDUM\n\n                                       1\n\n\n\n$ N\/A                              per fiscal year,\n ---------------------------------\nwithout prior consent of Bank.\n\n       8. SUBORDINATION OF EXISTING DEBT. The following indebtedness of Borrower\nwill be subordinated to Bank's loan in a manner satisfactory to Bank:\n\n\n<font size=\"2\">\n                  NAME OF CREDITOR                                      AMOUNT\n                  ----------------                                      ------\n\n                                                               \n(a) N\/A                                                           $N\/A\n(b)                                                               $\n(c)                                                               $\n<\/font>\n\n       9. DIVIDENDS. No corporate dividends in excess of $ *\nshall be paid during any 12-month period, without prior consent of Bank.\n\n       10. COMPENSATION. No annual salary, bonuses, withdrawals, or other\ncompensation, in cash or otherwise, shall be paid in excess of the following\nlimits to the persons indicated or to any other person.\n\n\n<font size=\"2\">\n                        NAME                                      ANNUAL AMOUNT\n\n                                                               \n(a) N\/A                                                           $N\/A\n(b)                                                               $\n(c)                                                               $\n<\/font>\n\n       11. CHANGE OF OWNERSHIP. Borrower will not repurchase any company issued\nstock, buy out a Partnership interest or materially change ownership of the\ncompany without prior written consent of Bank.\n\n      12. FINANCIAL STATEMENTS. Borrower will furnish Bank, no later than\n90 days after the end of its fiscal year, financial statements which\naccurately reflect Borrower's assets, liabilities and net worth as of the end of\nthe fiscal year and profit and loss statements for the fiscal year in such form\nand with such certifications as may be reasonably required by Bank. Borrower\nshall also furnish Bank  MONTHLY (INSERT MONTHLY, QUARTERLY, SEMI-ANNUAL)\nfinancial statements, as previously defined, no later than 60 days after their\npreparation. Borrower shall furnish Bank the above statements and such other\nstatements and reports containing such other information and with such\ncertifications as Bank may reasonably require from time to time.\n\n      13.   WARRANTIES AND COVENANTS.\n\n              (a) Borrower warrants that all transactions with Bank, including\nthe execution of all agreements and instruments by any representative on behalf\nof Borrower, are and will be duly authorized and that Bank may rely upon any\nstatements and representations made by Borrower with respect to such\nauthorizations.\n\n              (b) Borrower warrants that all financial statements and other\nstatements or reports given to Bank are and will be accurate.\n\n              (c) Borrower will keep all books and records of the business on a\nconsistent basis in accordance with generally accepted accounting practices and\nwill permit a representative of Bank to examine and audit the books at such\nreasonable times as Bank may request.\n\n              (d) Borrower will maintain executive and management personnel\nsatisfactory to Bank.\n\n              (e) Borrower will promptly inform Bank of any material litigation\ninvolving Borrower or of any other adverse matter which may occur, the effect of\nwhich may prejudice the payment of the loan.\n\n              (f) Borrower will not, in the operation of the business, incur\nother indebtedness for borrowed money, or act as guarantor for any indebtedness\nof others or lend money, or encumber any of the assets of the business except to\nBank. Borrower will not sell, transfer or assign any assets or engage in any\nother material transactions, except in the ordinary course of business.\n\n              (g) Borrower will pay all current bills and obligations when due.\nBorrower will keep all permits and \n\n* SEE ATTACHED ADDENDUM\n                                       2\n\n\nfranchises necessary for the conduct of its business in force and effect and\nwill keep all of its equipment, machinery and vehicles in good repair.\n\n              (h) Borrower will maintain adequate fire, public liability and\nother hazard liability insurance. All policies covering property given as\nsecurity for the loan(s) shall have a loss payable clause in favor of Bank.\n\n              (i) This Agreement shall continue as long as the loan or any part\nthereof or any renewal or extension thereof remains unpaid.\n\n              (j) No consent or waiver by the Bank of the terms of this\nAgreement shall be effective unless in writing. Time is of the essence of this\nAgreement. No waiver of any breach or default of Borrower shall be deemed a\nwaiver of any breach or default thereafter occurring or a waiver of the time is\nof the essence provision. Failure of Bank to take steps to collect the\nindebtedness due it or to exercise its rights in the collateral shall not be a\nwaiver of its right to take action at a subsequent date.\n\n       14. DEFAULT. Any one of the following events shall constitute the default\nof Borrower under this loan and all collateral instruments securing the unpaid\nbalance thereof:\n\n              (a) Nonpayment of any installment of principal or interest when\ndue.\n\n              (b) Breach of any of Borrower's warranties or the making of any\nmaterial misrepresentation. \n\n              (c) Appointment of a receiver or trustee to take possession of the\nbusiness or of any portion of the collateral and the continuance of such\nreceiver or trustee in possession for a period of 10 days. \n\n              (d) Petition by Borrower for reorganization or arrangement under\nthe bankruptcy laws. \n\n              (e) Attachment, garnishment, levy of execution, or judicial\nseizure of any portion of the collateral which is not dismissed or stayed within\n10 days. \n\n              (f) Insolvency of Borrower. \n\n              (g) Discontinuance by Borrower of the business or abandonment of\nany substantial portion of Borrower's assets. \n\n              If any event of default shall occur, the whole of the principal\nsum then remaining unpaid on all notes and other obligations to Bank, together\nwith the interest thereon, shall become immediately due and payable at the\nelection of Bank. If suit is instituted to collect the notes and other\nobligations, Borrower promises to pay, in addition to the costs and\ndisbursements allowed by law, such additional sums as the court may award as\nattorney's fees.\n\n       15. EXPENSES. Borrower shall reimburse Bank, upon demand, for all of\nBank's direct expenses in connection with making any and all loans and the\nperfection of Bank's security interests.\n\n       16. CONDITION OF BANK'S OBLIGATIONS. All agreements or commitments of\nBank to make any loan or advance to Borrower are and will be subject to the\nfollowing terms and conditions:\n\n              (a) Due and punctual performance by Borrower of all of Borrower's\nagreements with Bank.\n\n              (b) Correctness of all statements and representations by Borrower\nto Bank.\n\n              (c) Execution and delivery by Borrower of all loan and security\ninstruments in such form as Bank shall require.\n\n              (d) Acceptance and approval by Bank of all collateral.\n\n              (e) Payment by Borrower of any and all fees and charges specified\nby Bank.\n\n              (f) Verification and approval of Borrower's credit.\n\n              (g) No material adverse matter occurring.\n\n       17. Any modification, waiver or other change of this agreement must be\nagreed to in writing.\n\nADDITIONAL PROVISIONS. See attached sheet for additional provisions incorporated\nby reference in this Agreement.\n\n\nIN WITNESS WHEREOF, this Agreement is executed this 30th day of June, 1995.\n\n\n                                       3\n\n\n\n                                    BORROWER\n\n\n                                    SCHUFF STEEL COMPANY, an Arizona corporation\n\n\n                                    By: ________________________________________\n                                         DAVID A. SCHUFF, CHAIRMAN\n\n\n                                    By: ________________________________________\n                                         SCOTT A. SCHUFF, PRESIDENT\n\n\n\n\n\n\nBANK\n\nBANK ONE, ARIZONA, NA\n\n\nBy: ____________________________________\n      BRAD RICHARDS, VICE PRESIDENT\n\n\n\n                                       4\n\n                                   ADDENDUM TO\n                                 LOAN AGREEMENT\n      BETWEEN SCHUFF STEEL COMPANY, an Arizona corporation ('BORROWER') AND\n                         BANK ONE, ARIZONA, NA ('BANK')\n                               DATED JUNE 30, 1995\n\n\n1. Section 4 of the Agreement is hereby modified to include as follows:\n\n      a minimum Owner's Equity shall be maintained of the 21%, where 'Owner's\n      equity' 'Owner's Equity Percentage' shall mean the results obtained by\n      dividing (A) Tangible Net Worth (as herein defined) by (B) Borrower's\n      Total Assets on a six month average.\n\n2. Section 5 of the Agreement is modified to read in its entirety as follows:\n\n      Net Working Capital. While the loan is outstanding, current assets shall\n      be maintained in excess of current liabilities by $4,500,000.00 and a\n      current ratio of 1.25:1.0 shall be maintained and calculated by dividing\n      current assets by current liabilities after deducting short term advances\n      to share holders. The outstanding balance on the $6,500,000.00 Revolving\n      Line of Credit will be considered to be a current liability for the\n      purpose of calculating both 'Net working capital' and 'Current ratio'.\n\n3. Section 12, paragraph 2 is hereby is deleted in its entirety and replaced\nwith the following:\n\n      Borrower will furnish Bank, annual financial statements of CPA Audited\n      quality, and monthly financial statement of company prepared quality as\n      outlined above. Borrower shall furnish such other information as Bank may\n      reasonably require from time to time.\n\n      Borrower will cause Related Entity, 19TH AVENUE\/BUCHANAN LIMITED\n      PARTNERSHIP ('BLP'), to furnish Bank: (A) as soon as available and in any\n      event within ninety (90) days after the end of each fiscal year of BLP,\n      financial statements which accurately reflect BLP assets, liabilities and\n      net worth as of the end of the fiscal year and profit and loss statements\n      for the fiscal year with the following certification requirement: CPA\n      Compiled, (B) as soon as available and in any event within thirty (30)\n      days of filing, a copy of BLP federal income tax return(s) for each year,\n      together with all schedules and other documents filed with such returns.\n\n      Borrower will cause Guarantor, David A. Schuff ( Nancy A.), to furnish\n      Bank: (A) annual updated balance sheet in such form and with such\n      certifications as may be reasonably required by Bank, and (B) within\n      thirty (30) days of filing, a copy of such person's federal income tax\n      return(s) for each calendar year, together with all schedules and other\n      documents filed with such return.\n\n\n                                   Page 1 of 2\n\n      Borrower will cause Guarantor, Scott A. Schuff, to furnish Bank: (A)\n      annual updated balance sheet in such form and with such certifications as\n      may be reasonably required by Bank, and (B) within thirty (30) days of\n      filing, a copy of such person's federal income tax return(s) for each\n      calendar year, together with all schedules and other documents filed with\n      such return.\n\n4. Section 14 of the Agreement is modified to include subsection (h) as follows:\n\n      (h) An occurrence of any condition or event that is a default, designated\n      as a default, an Event of Default in any other Loan Documents or any\n      agreement, document or instrument relating to any other indebtedness of\n      Borrower to Bank, the same shall be an event of default under this\n      Agreement.\n\n5. Section 18 of the Agreement is modified to read in its entirety as follows:\n\n      Except for Permitted Payments and Distributions (defined below). Borrower\n      shall not directly or indirectly (A) declare or pay any dividend or other\n      distribution on or on account of any capital stock or other securities of\n      Borrower. (B) pay any management fee. or (C) make any other payment or\n      distribution to any stockholder in Borrower. 'PERMITTED PAYMENTS AND\n      DISTRIBUTIONS' means. (aa) dividends payable solely in shares of the\n      common stock of Borrower. (bb) annual dividends not exceeding in any\n      fiscal year borrower the aggregate amount of income taxes payable by the\n      stockholders of Borrower during that fiscal year of Borrower on the income\n      of Borrower as a Subchapter S corporation ('TAX DIVIDENDS'), (cc)\n      payments, dividends, or other distributions at the times and in the\n      amounts needed to pay the premiums on the two life insurance policies now\n      in effect on the lives of David A. Schuff and Scott A. Schuff, each policy\n      being in the face amount of $3,000,000, ('PREMIUM AMOUNTS'), and (dd)\n      dividends or other distributions during each fiscal year of Borrower of no\n      more than sixty percent (60%) of Residual Net Profits for the preceding\n      fiscal year. In all events Borrower shall retain an not pay out or\n      distribute forty percent (40%) of Residual Net Profits for each fiscal\n      year of Borrower. 'RESIDUAL NET PROFITS' means, for any fiscal year of\n      Borrower, net profits of Borrower during the preceding fiscal year of\n      Borrower determined according to generally accepted account principles,\n      less Tax Dividends and Premium Amounts during the current fiscal year of\n      Borrower.\n\nDATED: JUNE 30, 1995\n\nBank:\n\nBANK ONE, ARIZONA, NA\n\nBY:__________________________________\n      Brad Richards, Vice President\n\nBorrower:\n\nSCHUFF STEEL COMPANY, an Arizona corporation\n\nBy:__________________________________\nIts:   President\n\n\n                                   Page 2 of 2\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6850,8773],"corporate_contracts_industries":[9415,9481],"corporate_contracts_types":[9560,9567],"class_list":["post-41116","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bank-one-corp","corporate_contracts_companies-schuff-international-inc","corporate_contracts_industries-financial__banks","corporate_contracts_industries-construction__specialty","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41116"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41116"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41116"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}