{"id":41160,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/modification-agreement-schuff-steel-co-and-bank-one-arizona-na.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"modification-agreement-schuff-steel-co-and-bank-one-arizona-na","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/modification-agreement-schuff-steel-co-and-bank-one-arizona-na.html","title":{"rendered":"Modification Agreement &#8211; Schuff Steel Co. and Bank One Arizona NA"},"content":{"rendered":"<pre>                               MODIFICATION AGREEMENT\n\nDATE:      JUNE 30, 1997\n\nPARTIES:   Borrower:  SCHUFF STEEL COMPANY,\n                      a Delaware corporation.\n\n           Bank:      BANK ONE, ARIZONA, NA,\n                      a national banking association\n\nRECITALS:\n\n        A.  Bank has extended to Borrower credit ('Loan') in the principal\namount of $6,500,000.00 pursuant to the Revolving Line of Credit Loan Agreement\n(Accounts Receivable and Inventory), dated June 30, 1995 ('Loan Agreement'),\nand evidenced by the Revolving Line of Credit Note (Variable Rate), dated June\n30, 1995 ('Note'). The unpaid principal of the Loan as of the date hereof is\n$0.00.\n\n        B.  The Loan and\/or guaranty of Loan is secured by, among other things,\n(i) the Continuing Security Agreement Inventory, Receivables and Rights to\nPayment, dated September 15, 1994, and (ii) the Security Agreement Consumer\nGoods, Equipment and Farm Equipment, including Titled Vehicles, dated September\n15, 1994, both by Borrower for the benefit of Bank (the agreements, documents,\nand instruments securing the Loan and the Note are referred to individually and\ncollectively as the ('SECURITY DOCUMENTS').\n\n        C.  Bank and Borrower have executed and delivered previously the\nfollowing agreements ('MODIFICATIONS') modifying the terms of the Loan, the\nNote, the Loan Agreement, and\/or the Security Documents: (i) Modification\nAgreement, dated June 30, 1996, (ii) Modification Agreement, dated March 31,\n1997, and (iii) Letter Agreement, dated May 7, 1997. (The Note, the Loan\nAgreement, the Security Documents, any arbitration resolution, and all other\nagreements, documents, and instruments evidencing, securing, or otherwise\nrelating to the Loan, as modified in the Modifications, are sometimes referred\nto individually and collectively as the 'LOAN DOCUMENTS'. Hereinafter, 'NOTE',\nLOAN AGREEMENT', and 'SECURITY DOCUMENTS' shall mean such documents as modified\nin the Modifications.)\n\n        D.  Borrower has requested that Bank modify the Loan and the Loan\nDocuments as provided herein. Bank is willing to so modify the Loan and the\nLoan Documents, subject to the terms and conditions herein.\n\nAGREEMENT:\n----------\n\nFor good and valuable consideration, the receipt and sufficiency of which are\nhereby acknowledged, Borrower and Bank agree as follows:\n\n1.  ACCURACY OF RECITALS.\n    ---------------------\n\nBorrower acknowledges the accuracy of the Recitals.\n\n2.  MODIFICATION OF LOAN DOCUMENTS.\n    -------------------------------\n\n    2.1  The Loan Documents are modified as follows:\n\n        2.1.1  The maturity date of the Loan and the Note is changed from June\n30, 1998 to June 30, 1999. On the maturity date Borrower shall pay to Bank the\nunpaid principal, accrued and unpaid interest, and all other amounts payable by\nBorrower under the Loan Documents as modified herein.\n\n        2.1.2  The reference to Section 1.1 'Expiration Date' in Section 13 of\nthe Loan Agreement is modified to read in its entirety as follows:\n\n                1.1 Expiration Date:  June 30, 1999\n\n                                          1\n\n\n\n        2.1.3  The amount of the Loan and the Note, and the maximum principal\namount that may at any time be outstanding thereunder, is changed from\n$6,500,000.00 to $10,000,000.00 and Borrower may obtain, and Bank shall be\nobligated to make, further advances under the Loan Documents subject to the\nterms and conditions of the Loan Documents applicable to advances.\n\n        2.1.4  Section 1.2 of the Loan Agreement is hereby deleted in its\nentirety and replaced with the following:\n\n                 1.2  ADVANCES. Subject to the terms and conditions hereof,\n            Advances of the Loan will be made in amounts not to exceed the\n            amount ('Borrowing Base') calculated as the 'Advance available' in\n            accordance with the formula set forth in the Contractor Borrowing\n            Base Reconciliation Certificate attached hereto as Exhibit A and by\n            this reference incorporated herein. In calculating the Borrowing\n            Base, the following terms shall have the hereinafter described\n            meanings: \n\n                    'Billing' or 'Progress Billing' is an amount owing to\n                 Borrower and B &amp; K Steel Fabrications, Inc., an Arizona\n                 corporation, (collectively, 'Entities'), which has arisen from\n                 the delivery and\/or shipment of products previously made and\n                 from services rendered for which an invoice has been issued by\n                 the Entities to its customer ('Customer') with respect to a\n                 specific job contracted for by the Customer ('Job'), and which\n                 amount is subject to a perfected security interest in favor of\n                 Bank and is not subject to any other security interest, lien,\n                 claim or encumbrance.\n\n                    'Retention' is the amount of a Billing for which the\n                 Entities will not receive payment from its Customer until the\n                 related Job has been totally completed by the Entities.\n\n                    'Ineligible' is that Billing, or that part of a Billing, as\n                 determined by Bank in its sole and absolute discretion: (a)\n                 which is subject to any offset, counterclaim or defense\n                 asserted by the Customer, (b) which has remained unpaid for\n                 more than the number of days set forth in Section 13 after the\n                 date due under the terms of the related invoice, (c) where more\n                 than fifteen percent (15%) of the total amount owing from the\n                 Customer with respect to the related Job has remained unpaid\n                 for more than the number of days set forth in Section 13 after\n                 the date due under the terms of the related invoices, (d) which\n                 is an uninsured amount owing from a Customer located in a\n                 foreign country, or (e) which is owing from the United States\n                 of America or any agency, department or subdivision thereof,\n                 unless a properly executed assignment of claims has been\n                 received by Bank.\n\n                    'Inventory' is an amount (determined on the basis of the\n                 lower of cost or market value) equal to the inventory of the\n                 Entities (consisting of those items within the categories set\n                 forth in Section 13), as determined by Bank in its sole and\n                 absolute discretion, to be (a) in good condition and salable in\n                 the ordinary course of the Entities' business, (b) owned by the\n                 Entities free and clear of any mortgages, liens, security\n                 interests, claims, encumbrances or rights of others, excepting\n                 only the security interests in favor of Bank, (c) located at a\n                 location identified in a Security Agreement (hereinafter\n                 defined), (d) subject to a perfected security interest in favor\n                 of Bank, (e) not subject to any consignment to any Customer,\n                 and (f) not acquired by the Entities in or as part of a bulk\n                 transfer of sale or assets unless the Entities have complied\n                 with all applicable bulk sales or bulk transfer laws.\n\n                    'Book Overdrafts' is the amount by which the aggregate\n                 amount of checks of the Entities that are outstanding exceeds\n                 the balance of the Entities' general ledger.\n\n                    'Advance Multiplier' is the percentage set forth in Section\n                 13 hereof as the 'Eligible Receivables Percentage.'\n\n                    'Fixed Assets' is according to generally accepted accounting\n                 principles consistently applied.\n\n        2.1.5   From and after June 30, 1997, interest shall accrue on the\nunpaid principal of the Loan and the Note at the rate per annum equal to the\nsum of (i) zero percent (0.00%) per annum, and (ii) the rate per annum most\nrecently publicly announced by Bank, or its successors, in Phoenix, Arizona, as\nits 'prime rate,' as in effect from time to time. The rate per annum will\nchange on each day that such 'prime rate' changes. The 'prime rate' is not\nnecessarily the best or lowest rate offered by Bank, and Bank may lend to its\ncustomers at rates that are at, above, or below its 'prime rate.'\n\n        2.1.6   The reference to Section 4.1(b) in Section 13 of the Loan\nAgreement is hereby deleted and replaced with the following:\n\n                                            2\n\n\n                4.1(b)  Non-Utilization Fee:    0.25% per annum\n\n        2.1.7   Sections 6.1(d)(i) and (ii) of the Loan Agreement are modified\nto read in their entirety as follows:\n\n                 (i) a minimum Tangible Net Worth shall be maintained in the\n                 amount set forth in Section 13 hereof, where Tangible Net Worth\n                 shall mean Net Worth plus Subordinated Indebtedness. 'Net\n                 Worth' shall mean the sum of the following: capital, capital\n                 surplus and retained earnings, less the sum of the value of\n                 Borrower's books of all intangible assets, including, but not\n                 limited to, goodwill, patents, franchises, trademarks,\n                 copyrights and the write-up in the book value of any assets\n                 resulting therefrom after acquisition. 'Subordinated\n                 Indebtedness' shall mean any and all indebtedness of Borrower\n                 to any other Creditor, the repayment of which, is subordinated\n                 in writing to Bank.\n\n                 (ii) a minimum Owner's Equity shall be maintained on the dates\n                 and of the percentage set forth in Section 13 hereof, where\n                 'Owner's Equity' shall mean the results obtained by dividing\n                 (A) Tangible Net Worth (as herein defined) by (B) Borrower's\n                 Total Assets less Intangibles.\n\n        2.1.8   The reference to Section 6.1(d)(i) in Section 13 of the Loan\nAgreement is hereby deleted in its entirety and replaced with the following:\n\n                 6.1(d)(i) Minimum Tangible Net Worth:  $19,000,000.00\n\n        2.1.9   The reference to Section 6.1(d)(ii) in Section 13 of the Loan\nAgreement is hereby deleted in its entirety and replaced with the following:\n\n                 6.1(d)(ii) Owner's Equity:     at June 30, 1997 and September\n                                                30, 1997 - 33%\n                                                at December 31, 1997 and\n                                                forward - 40%\n\n        2.1.10  Section 6.1(d)(iv) of the Loan Agreement is hereby deleted in\nits entirety.\n\n        2.1.11  Section 6.1(d)(vi) of the Loan Agreement is hereby deleted in\nits entirety and replaced with the following:\n\n                 (vi) a minimum Debt Coverage Ratio shall be maintained in the\n                 amount set forth in Section 13 hereof, where 'Debt Coverage\n                 Ratio' shall mean the results obtained by dividing (A) net\n                 profit after taxes plus Depreciation and Amortization plus or\n                 less change in Deferred Taxes by (B) prior period Current\n                 Maturities and Long Term Debt.\n\n        2.1.12  Section 13 of the Loan Agreement is hereby modified to include\na reference to Section 6.1(d)(vi) as follows:\n\n                 6.1(d)(vi) Debt Coverage Ratio:        1.50:1.0\n\n   2.2     Each of the Loan Documents is modified to provide that it shall\nbe a default or an event of default thereunder if Borrower shall fail to comply\nwith any of the covenants of Borrower herein or if any representation or\nwarranty by Borrower herein is materially incomplete, incorrect, or misleading\nas of the date hereof.\n\n   2.3     Each reference in the Loan Documents to any of the Loan\nDocuments shall be a reference to such document as modified herein.\n\n3. RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL\n\nThe Loan Documents are ratified and affirmed by Borrower and shall remain in\nfull force and effect as modified herein. Any property or rights to or\ninterests in property granted as security in the Loan Documents shall remain as\nsecurity for the Loan and the obligations of Borrower in the Loan Documents.\n\n4. BORROWER REPRESENTATIONS AND WARRANTIES.\n\nBorrower represents and warrants to Bank:\n        \n   4.1     No default or event of default under any of the Loan Documents\nas modified herein, nor any event, that, with the\n\n                                        3\n\n        \n\n\ngiving of notice or the passage of time or both, would be a default or an event\nof default under the Loan Documents as modified herein has occurred and is\ncontinuing.\n\n        4.2  There has been no material adverse change in the financial\ncondition of Borrower or any other person whose financial statement has been\ndelivered to Bank in connection with the Loan from the most recent financial\nstatement received by Bank.\n\n        4.3  Each and all representations and warranties of Borrower in the\nLoan Documents are accurate on the date hereof.\n\n        4.4  Borrower has no claims, counterclaims, defenses, or set-offs with\nrespect to the Loan or the Loan Documents as modified herein.\n\n        4.5  The Loan Documents as modified herein are the legal, valid, and\nbinding obligation of Borrower, enforceable against Borrower in accordance with\ntheir terms.\n\n        4.6  Borrower is validly existing under the laws of the State of its\nformation or organization and has the requisite power and authority to execute\nand deliver this Agreement and to perform the Loan Documents as modified\nherein. The execution and delivery of this Agreement and the performance of the\nLoan Documents as modified herein have been duly authorized by all requisite\naction by or on behalf of Borrower. This Agreement has been duly executed and\ndelivered on behalf of Borrower.\n\n5.  BORROWER COVENANTS.\n    -------------------\n\nBorrower covenants with Bank:\n\n        5.1  Borrower shall execute, deliver, and provide to Bank such\nadditional agreements, documents, and instruments as reasonably required by\nBank to effectuate the intent of this Agreement.\n\n        5.2  Borrower fully, finally, and forever releases and discharges Bank\nand its successors, assigns, directors, officers, employees, agents, and\nrepresentatives from any and all actions, causes of action, claims, debts,\ndemands, liabilities, obligations, and suits, of whatever kind or nature, in\nlaw or equity of Borrower, whether now known or unknown to Borrower, (i) in\nrespect of the Loan, the Loan Documents, or the actions or omissions of Bank in\nrespect of the Loan or the Loan Documents and (ii) arising from events\noccurring prior to the date of this Agreement.\n\n        5.3  Contemporaneously with the execution and delivery of this\nAgreement, Borrower has paid to Bank:\n\n             5.3.1  All accrued and unpaid interest under the Note and all\namounts, other than interest and principal, due and payable by Borrower under\nthe Loan Documents as of the date hereof.\n\n             5.3.2  All the internal and external costs and expenses incurred\nby Bank in connection with this Agreement (including, without limitation,\ninside and outside attorneys, title, filing, and recording costs, expenses, and\nfees).\n\n             5.3.3  A commitment fee of $12,500.00 due annually.\n\n             5.3.4  A documentation fee of $150.00.\n\n        5.4  Contemporaneously with the execution and delivery of this\nAgreement, Bank has released the following Continuing Guarantys: (i) Continuing\nGuaranty, dated June 30, 1995, by David A. and Nancy A. Schuff, and (ii)\nContinuing Guaranty, dated June 30, 1995, by Scott A. Schuff.\n\n6.  EXECUTION AND DELIVERY OF AGREEMENT BY BANK.\n    --------------------------------------------\n\nBank shall not be bound by this Agreement until (i) Bank has executed and\ndelivered this Agreement, (ii) Borrower has performed all of the obligations of\nBorrower under this Agreement to be performed contemporaneously with the\nexecution and delivery of this Agreement, (iii) if required by Bank, Borrower\nand any guarantor(s) of the Loan have executed and delivered to Bank an\narbitration resolution, and (iv) each guarantor of the Loan has executed the\nConsent of Guarantor(s) below.\n\n                                      4\n\n\n7.  INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.\n    ------------------------------------------------------------------------\n\nThe Loan Documents as modified herein contain the complete understanding and\nagreement of Borrower and Bank in respect of the Loan and supersede all prior\nrepresentations, warranties, agreements, arrangements, understandings, and\nnegotiations. No provision of the Loan Documents as modified herein may be\nchanged, discharged, supplemented, terminated, or waived except in a writing\nsigned by the parties thereto.\n\n8.  BINDING EFFECT.\n    ---------------\n\nThe Loan Documents as modified herein shall be binding upon and shall inure to\nthe benefit of Borrower and Bank and their respective successors and assigns.\n\n9.  CHOICE OF LAW.\n    --------------\n\nThis Agreement shall be governed by and construed in accordance with the laws\nof the State of Arizona, without giving effect to conflicts of law principles.\n\n10. COUNTERPART EXECUTION.\n    ----------------------\n\nThis Agreement may be executed in one or more counterparts, each of which shall\nbe deemed an original and all of which together shall constitute one and the\nsame document. Signature pages may be detached from the counterparts and\nattached to a single copy of this Agreement to physically form one document.\n\nDATED as of the date first above stated.\n\n                                SCHUFF STEEL COMPANY,\n                                a Delaware corporation\n\n\n                                By  \/s\/ David A. Schuff\n                                  ----------------------------\n                                   David A. Schuff, Chairman\n\n\n                                BANK ONE, ARIZONA, NA,\n                                a national banking association\n\n\n                                By  \/s\/ Brad Richards\n                                  -----------------------------\n                                   Brad Richards, Vice president\n\n\n                               CONSENT OF GUARANTOR(S)\n\nThe undersigned (i) consent to the modification of the Loan Documents and all\nother matters in the foregoing Agreement, (ii) reaffirm the Continuing\nGuaranty, dated March 31, 1997 and any other agreements, documents and\ninstruments securing or otherwise relating thereto ('Guarantor Documents'),\n(iii) acknowledge that the Guarantor Documents continue in full force and\neffect, remain unchanged, except as specifically modified hereby, and are \nvalid, binding and enforceable in accordance with their respective terms, \n(iv) agree that all references, if any, in the Guarantor Documents to any of \nthe Loan Documents are modified to refer to those documents as modified by the\nAgreement, and (v) agree to be bound by the release of Bank set forth in the\nAgreement.\n\nDated as of the date of the Agreement.\n\n                                        B &amp; K STEEL FABRICATIONS, INC.,\n                                        an Arizona corporation\n\n\n                                        By \/s\/ Scott A. Schuff\n                                          -----------------------------\n                                           Scott A. Schuff, President\n\n                                          5\n\n\n\n                                     EXHIBIT 'A'\n\n                CONTRACTOR BORROWING BASE RECONCILIATION CERTIFICATE\n                                SCHUFF STEEL COMPANY\n\n<font size=\"2\">1.   Total Progress Billings                                    $____________\n\n2.      Less: Ineligible Billings                               (____________)\n\n3.      Less: Retention                                         (____________)\n\n4.   Eligible Progress Billings as of ______      $____________\n\n5.      Add: Inventory\n\n6.      Less: Accounts Payable                                  (____________)\n\n7.      Less: Billings in Excess of Cost                        (____________)\n\n8.      Less: Book Overdrafts                                   (____________)\n\n9.      Add: Cost in Excess of Billings                          ____________\n\n10.     Add: Unbilled Billings                                   ____________\n\n11.     Add: Retention Payables (not to exceed \n             Retention Receivables)                              ____________\n\n12.     Total Cost as of _________               $____________\n\n13.     New Eligible Progress Billings \n         (Ln #4 - Ln #12)                        $____________\n\n14.     Borrowing Base Advance Potential\n         (Ln #13 x 75%, not to exceed $10MM)                    _____________\n\n15.     Less: RLC Balance                                      (_____________)\n\n16.     Less: LOC Balance                                      (_____________)\n\n17.     Maximum Borrower Base Advance                           _____________\n\n18.     50% of Depreciated Book Value of Fixed Assets           _____________\n\n19.     75% of appraised FMV of Fixed Assets                    _____________\n\n20.     Fixed Assets Advance Potential (greater of\n          Ln #18, Ln #19 or $5MM)                               _____________\n\n21.     Maximum Advance (greater of Ln #17 or Ln #20)          $_____________\n\n                                                SCHUFF STEEL COMPANY\n\n                                                By________________________\n\n                                                Its_______________________\n\n      \n<\/font><\/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-41160","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\/41160","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=41160"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41160"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41160"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}