UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

 

FORM 10

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

 

 

AmeraMex International, Inc.

(Exact name of Registrant as specified in its charter)

 

Nevada   88-0501944

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

 

3930 Esplanade

Chico, CA 95973

(Address of principal executive offices)

   

1-530-895-8955

(Registrant’s telephone number, including area code)

  

Securities to be registered pursuant to Section 12(b) of the Act:

 

None.

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of a “large accelerated filer,” “accelerated filer,” “smaller reporting company,” “emerging growth company” in Rule 12b-2 of the Exchange Act.

             
Large accelerated filer     Accelerated filer  
         
Non-accelerated filer  

☐  (Do not check if a smaller reporting

company)

  Smaller reporting company  

 

Emerging growth company  

 

       
               

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial account standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 
 

 

TABLE OF CONTENTS

 

Item 1. Business. 2
Item 1A. Risk Factors. 8
Item 2. Financial information. 8
Item 3. Properties. 13
Item 4. Security Ownership of Certain Beneficial Owners and Management. 13
Item 5. Directors and Executive Officers. 15
Item 6. Executive Compensation. 17
Item 7. Certain Relationships and Related Transactions. 18
Item 8. Legal Proceedings. 19
Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters. 19
Item 10. Recent Sales of Unregistered Securities. 20
Item 11. Description of Registrant’s Securities to be Registered. 20
Item 12. Indemnification of Directors and Officers. 23
Item 13. Financial Statements and Supplementary Data 25
Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 25
Item 15. Financial Statements and Exhibits. 25

 

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AMERAMEX INTERNATIONAL, INC.

INFORMATION REQUIRED IN REGISTRATION STATEMENT

 

Item 1.   Business.

 

General

 

The following is a summary of some of the information contained in this document. Unless the context requires otherwise, references in this document to “our Company,” “us,” “we,” “our,” “AmeraMex,” or the “Company” are to AmeraMex International, Inc.

 

Organization

 

We were originally incorporated as Hamre Equipment Company, Inc. in California on November 17, 1989. We merged into AmeraMex International, Inc., a Nevada corporation, on May 29, 1990.

 

Objectives

 

 

 

 

Description of Business and Principal Products or Services

We sell, lease, and rent heavy equipment to companies within four industries:

 

1. Construction (light and infrastructure);
2. Shipping logistics;
3. Mining; and
4. Commercial farming.

 

With customers in the United States, Canada, Latin America, Asia and Africa, we have over 30 years of experience in heavy equipment sales and service and inventories of top-of-the-line equipment from manufacturers such as Taylor Machine Works Inc. and Terex Heavy Equipment.

 

Our parts warehouse contains a sizeable heavy equipment parts inventory, ensuring that we have the necessary parts on hand to maintain and repair all lines of represented equipment. Our in-house and field technicians solve service needs to get equipment back on the job as quickly as possible.

 

Our service facility is equipped with overhead cranes, a paint shop, and a welding-fabricating shop. The facility

 

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includes modern, specialized tools and state-of-the-art diagnostic equipment. Our service staff has access to manufacturers’ technical specifications to speed repairs.

 

Reports to Security Holders

 

Upon effectiveness of this registration statement, we will be subject to the reporting requirements of Section 12(g) of the Exchange Act, and as such, we intend to file all required disclosures.

 

You may read and copy any materials we file with the SEC in the SEC’s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

 

Jumpstart Our Business Startups Act

 

We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we did not have more than $1,070,000,000 in annual gross revenue and did not have such amount as of December 31, 2018, our last fiscal year.

 

We may lose our status as an emerging growth company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1,070,000,000 or (ii) we issue more than $1,070,000,000 in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if at any time we are deemed to be a large accelerated filer. We will lose our status as an emerging growth company on the last day of our fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective registration statement.

 

As an emerging growth company, we may take advantage of specified reduced reporting and other burdens that are otherwise applicable to generally reporting companies. These provisions include:

 

  A requirement to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis Disclosures;

 

  Reduced disclosure about the emerging growth company’s executive compensation arrangements; and

 

  No non-binding advisory votes on executive compensation or golden parachute arrangements.

   

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As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Such sections are provided below:

 

Section 404(b) of the Sarbanes-Oxley Act of 2002 requires a public company’s auditor to attest to, and report on, management’s assessment of its internal controls.

 

Sections 14A(a) and (b) of the Exchange Act, implemented by Section 951 of the Dodd-Frank Act, require companies to hold shareholder advisory votes on executive compensation and golden parachute compensation. In addition, under Section  14(a) of the Exchange Act, we will be required to file preliminary and definitive proxy statements to ensure that shareholders' rights are upheld.

 

We have already taken advantage of these reduced reporting burdens in this registration statement, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Exchange Act.

 

As long as we qualify as an emerging growth company, we will not be required to comply with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Exchange Act.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards.  We are choosing to irrevocably opt in to the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act.  

 

History

 

We have grown from a used forklift dealer in Northern California to the owner and operator of a multi-million dollar fleet of heavy equipment for sale, lease, or rent to companies in the United States, Canada, Latin America, Asia and Africa.

 

The Company has three business units:

 

1. Hamre Equipment Inc.;

2. Hamre Heavy Haul; and

3. Hamre Parts & Service Organization.

 

These units are authorized dealers for well-known equipment manufacturers and carry a large inventory of heavy equipment and Hamre Parts & Service Organization includes a complete maintenance organization with a large parts inventory and service department.

 

We supply heavy equipment to many different industries. Currently, the majority of our revenue is from the sales of new and refurbished container handlers to portside logistics companies. In addition to this line of work, we have an extensive equipment inventory for infrastructure development. Growing demand for infrastructure

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development typically calls for equipment to be rented, rather than purchased, allowing us to maximize the use of our inventory.

 

The Hamre Heavy Haul business unit includes a customized fleet of heavy haul equipment and was initially formed to transfer heavy equipment for AmeraMex, however, in recent years, we have expanded to market our heavy haul services to third-party companies throughout the United States.

 

Cautionary Note Regarding Forward-Looking Statements

 

This registration statement contains forward-looking statements that may be affected by matters outside our control that could cause materially different results.

 

Some of the information in this registration statement contains forward-looking statements. These statements express, or are based on, our expectations about future events. Forward-looking statements give our current expectations or forecasts of future events. Forward-looking statements generally can be identified by the use of forward-looking terminology, such as, “may,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “believe,” or “continue” or the negative thereof or similar terminology. They include statements regarding our:

 

  Financial position;

 

  Business plans;

 

  Budgets;

 

  Amount, nature and timing of capital expenditures;

 

  Cash flow and anticipated liquidity;

 

  Future operations of unknown nature costs;

 

  Acquisition and development of other technology;

 

  Future demand for any products and services acquired; and

 

  Operating costs and other expenses.

 

Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results include:

 

  General economic conditions;

 

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  Our cost of operations;

 

  Our ability to generate sufficient cash flows to continue operating;

 

  Availability of capital;

 

  The strength and financial resources of our competitors;

 

  Our ability to find and retain skilled personnel; and

 

  The lack of liquidity of our common stock.

 

Any of the factors listed above and other factors contained in this registration statement could cause our actual results to differ materially from the results implied by these or any other forward-looking statements made by us or on our behalf. We cannot assure you that our future results will meet our expectations. When you consider these forward-looking statements, you should keep in mind these risk factors and the other cautionary statements in this registration statement. Our forward-looking statements speak only as of the date made.

 

Strategy

 

We have a clearly defined strategy to find opportunities that expand our reach within the United States and internationally. We now have customers in over 12 countries. As we continue to sell new equipment to U.S. customers, we purchase older equipment from well-respected brands that may not meet EPA Tier III requirements in the U.S., and refurbish the equipment to like-new condition. The equipment is sold AS IS with NO warranty agreement. The equipment is then marketed internationally. Our target markets for sales of new and refurbished equipment are:

 

· Canada
· Indonesia
· Pakistan
· Germany
· Singapore
· Vietnam
· China
· Russia
· India
· The Middle East
· West Africa
· Central America
· Mexico

 

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Opportunities

 

We believe the demand for leased or rented equipment is growing. Companies within the construction and logistics industries hesitate to purchase equipment that may become idle if related markets weaken. Additionally, the cost of many types of heavy-duty equipment and container handlers has increased substantially because of new federal emission control standards. Due to these and other concerns, many companies forgo purchasing and instead rent or lease needed equipment.

 

Internationally, our ongoing expansion, specifically within Western Africa, allows us to take advantage of the improving global infrastructure construction market and the increased import and export of natural resources. We have already established marketing opportunities within the governments of several West African countries.

 

The current trade issues with China have no bearing on our business or current plans. However, trade issues between the United States and China are constantly evolving and the future could bring about potential negative impacts on our business, including increased costs and higher prices.

 

Market

 

Our market is highly competitive and constantly changing. Commercial success is frequently dependent upon capital availability, the effectiveness and sufficiency of which are very difficult to accurately predict. It is one of the principal economic risks of companies in our industry.

 

According to the “Heavy Construction Equipment Market Size, Share & Trend Analysis Report By Product (Earth Moving, Material Handling, Concrete & Road Construction), By Application, And Segment Forecasts, 2018 – 2025,” published by Grand View Research in January 2018 (the “Construction Equipment Report”): “The global heavy construction equipment market size was valued at $55.9 billion in 2016. Increased investment in the infrastructure sector is expected to drive growth over the forecast period. Heavy duty construction equipment is likely to witness high demand from the infrastructure sector owing to a rise in construction activities.”

 

Competition

 

There is a large number of companies and individuals engaged in the provision of construction equipment; accordingly, there is a high degree of competition in our industry. Many of the companies and individuals with whom we compete have substantially greater technical, personnel, and financial resources than us. In view of our limited financial resources, we will continue to be at a significant competitive disadvantage compared to our competitors.

 

According to the Construction Equipment Report, global vendors such as Caterpillar, Komatsu Ltd., and AB Volvo are some of the leading market players in the heavy equipment industry. These vendors dominate the market in terms of technology, experience, and quality.

 

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A rise in prominence of Chinese vendors in the industry has been observed in the last few years. Manufacturers in China have capitalized on government-funded infrastructure projects and are continuously evolving and in some circumstances, acquiring European vendors.

 

Some other key players in the market for heavy duty construction equipment are Hitachi Construction Machinery Co. Ltd., Liebherr, Deere & Company, Doosan Bobcat, XCMG Group, SANY Group, and Zoomlion Heavy Industry Science & Technology Co. Ltd.

 

Amount Spent on Research and Development

 

None.

 

Employees

 

As of the date of this registration statement, we have 16 full time employees. In addition to our employees, we utilize various consultants and contractors for other services on an as-needed basis.

   

Item 1A. Risk Factors.

 

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act , we are not required to provide the information required by this Item.

 

Item 2. Financial information.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Certain statements contained in this registration statement, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of our company and the products and services we expect to offer and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also forward-looking statements which involve risks, uncertainties, and assumptions. Because forward-looking statements are inherently subject to risks and uncertainties, our actual results may differ materially from the results discussed in the forward-looking statements. The following discussion and analysis of financial condition and results of our operations is based upon, and should be read in conjunction with, the audited financial statements and related notes elsewhere in this registration statement.

 

Overview

 

We sell, lease, and rent heavy equipment to companies within four industries: construction (light and infrastructure), shipping logistics, mining, and commercial farming. With customers in the United States, Canada, Latin America, Asia and Africa, we have over 30 years of experience in heavy equipment sales and service and inventories of top-of-the-line equipment from manufacturers such as Taylor Machine Works Inc. and Terex Heavy Equipment.

 

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We were originally incorporated as Hamre Equipment Company, Inc. in California on November 17, 1989. We merged into AmeraMex International, Inc., a Nevada corporation, on May 29, 1990.

 

Selected Financial Data:

 

Statement of Income for the Years Ended December 31, 2018 and 2017.

 

  2018 2017
REVENUES (audited) (audited)
   Sales of Equipment and Other Revenues $ 7,027,948 $ 6,722,121
   Rentals and Leases 2,769,906 1,987,393
      Total Revenues 9,797,854 8,709,514
     
COST OF REVENUES    
    Sales of Equipment and Other Revenues 5,700,920 5,489,114
    Rentals and Leases 985,584 705,156
      Total Cost of Revenues 6,686,504 6,194,270
     
GROSS PROFIT 3,111,350 2,515,244
     
OPERATING EXPENSES    
   Sales and Marketing 325,519 274,564
   General and Administrative 834,394 726,382
      Total Operating Expenses 1,159,913 1,000,946
PROFIT FROM OPERATIONS 1,951,437 1,514,298
     
OTHER INCOME (EXPENSE)    
   Interest Expense (828,585) (563,123)
   Other Income 131,165 507,561
      Total Other Income (Expense) (697,420) (55,562)
     
INCOME BEFORE PROVISION FOR INCOME TAXES 1,254,017 1,458,736
     
PROVISION FOR INCOME TAXES 368,422 594,326
     
NET INCOME $ 885,595 $ 864,410

 

Results of Operations

 

Fiscal Year Ended December 31, 2018 (audited) as compared to the Fiscal Year Ended December 31, 2017 (audited)

 

We had revenue of $9,797,854 for the year ended December 31, 2018 as compared to revenue of $8,709,514 for the year ended December 31, 2017, a 12.5% increase. This increase is attributed to an overall

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economic improvement for business as the economy continues to rebound from the economic downturn. We also entered into a large contract with a long-time client located in Mexico.

 

We had costs of revenue of $6,686,504 for the year ended December 31, 2018 as compared to costs of $6,194,270 for the year ended December 31, 2017. Our costs increased by $492,234, or 8.0%, while our revenues increased by 12.5%. This is as a result of the time and effort we put forth in finding the best used equipment on the market. By successfully purchasing the best priced high quality equipment, our sales are able to outpace our costs with regard to equipment acquisition and sales.

 

We experienced an increase in operating expenses from $1,000,946 in 2017 as compared to $1,159,913 in 2018. This increase of approximately 15.9% in operating expenses is a result of the need to repair, replace parts, paint, and transport our equipment when it is sold. As our sales increase, the costs of operating rise.

 

We had net income of $885,595 for the year ended December 31, 2018 as compared to net income of $864,410 for the year ended December 31, 2017. We had an increase of 2.5% in our net income because of an increase in sales and rentals along with a minor increase in rental costs.

 

Sales of Equipment and Other Revenues in 2018 were $7,027,948 and made up 71.7% of our Total Revenues and in 2017 made up $6,722,121, or 77.2%, of Total Revenues. The remaining portion of Total Revenues, Rentals and Leases, were $2,769,906, or 28.3%, in 2018 and in 2017, Rentals and Leases made up 22.8% of Total Revenues and totaled $1,987,393.

 

While both Sales of Equipment and Other Revenues and Rentals and Leases increased in dollar terms from 2017 to 2018, the growth of Rentals and Leases outpaced the growth of Sales of Equipment and Other Revenue. From 2017 to 2018, Sales of Equipment and Other Revenues increased $305,827, or 4.6%, while during the same period Rentals and Leases increased $782,513, or 39.4%. In 2018, we acquired a lucrative government contract for the long-term rental of equipment which accounted for the higher growth in Rental Revenue compared to sales of Equipment and Other Revenues.

 

From 2017 to 2018, our Interest Expense increased from $563,123 to $828,585. This increase is due in part to multiple financing agreements put in place during 2018. On March 28, 2019, we entered into a line of credit for borrowing and refinancing up to $6.5 million with an interest rate of 10% per annum, due monthly. This line of credit expires March 22, 2022. Upon funding of the line of credit, proceeds were used to repay one of our outstanding lines of credit (see Note 6 of the Financial Statements) in addition to other notes payable (see Note 7). Based upon the refinance of these notes, we anticipate interest expense in 2019 will be lower than interest expense in 2018.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

 

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Liquidity and Capital Resources

 

Selected Financial Data:

 

Summary of Cash Flows Fiscal 2018 and Fiscal 2017

 

    2018 (audited)     2017 (audited)
Net cash provided by operating activities $ 1,420,165   $ 1,975,547
Net cash used in investing activities   (2,279,220)     (1,734,920)
Net cash provided by financing activities   503,182     246,158
Net increase (decrease) in cash and cash equivalents   (355,873)     486,785
Cash and cash equivalents, beginning of years   553,625     66,840
Cash and cash equivalents, end of year   197,752     553,625

 

Our Net Income from 2017 to 2018 increased $21,185, from $864,410 in 2017 to $885,595 in 2018. As of December 31, 2017, our Net Cash provided by Operating Activities was $1,975,547. This number dropped to $1,420,165 as of December 31, 2018. Comparing us on December 31, 2017 to December 31, 2018, our Accounts Receivable decreased from $318,614 to $182,641, our Inventory had reduced by $1,111,416 as of December 31, 2017 and as of December 31, 2018, Inventory had increased by $381,787. Accounts Payable as of December 31, 2017 was $1,071,163, but by December 31, 2018, our Accounts Payable was reduced by $937,588.

 

As of December 31, 2017 our Payments for Property and Equipment was $159,735 and as of December 31, 2018 the number was $473,757. Payments for Rental Equipment as of the end of 2017 was $1,709,379 and as of the end of 2018, was $1,936,628. Proceeds from Sale of Equipment was consistent and as of the end of 2017, proceeds were $134,194 and as of the end of 2018, proceeds were $131,165. Overall, Net Cash Used in Investing Activities as of the end of 2017 was $1,734,920 and $2,279,220 by the end of 2018.

 

We received Proceeds from Notes Payable as of December 31, 2017 of $2,234,219 and as of December 31, 2018 the amount was $2,843,059, an increase of $608,840, or an increase of 27.3%. Payments on Notes Payable also increased as of the end of 2017 from $2,011,337 to $2,577,325 at the end of 2018. This is an increase of $565,988, or 28.1%. In addition the Net Borrowings Under Lines of Credit as of the end of 2017 was $42,089 and $286,456 at the end of 2018, an increase of $244,367, or an increase of 580.6%. Overall Net Cash Provided by Financing Activities went from $246,158 as of the end of 2017 to $503,182 as of the end of 2018, due to the increase in Proceeds from Notes Payable and Net Borrowings Under Lines of Credit and an increase in the amount of Payments on Notes Payable.

 

We expect to generate sufficient cash flows from operations to meet our obligations, and to continue to obtain financing for equipment purchases in the normal course of business. Subsequent to December 31, 2018, we entered into a line of credit with a finance company that provides for borrowing and refinancing up to $6,500,000. We believe that our expected cash flows from operations and our commitments for the above

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referenced credit facility will be sufficient to operate in the normal course of business.

 

Management may sell and lease equipment and obtain additional debt financing to acquire equipment and provide cash flow for operations.

 

As of December 31, 2018, we had a working capital surplus of $2,084,318.

 

Critical Accounting Policies

 

All companies are required to include a discussion of critical accounting policies and estimates used in the preparation of their financial statements. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Our inventory consists of used equipment held for sale and includes parts and attachments. Our inventory is valued at the lower of the inventory’s cost (specific identification or first in, first out basis) or the current market price of the inventory, less costs to sell. Our expenditures for transporting equipment to our facility and refurbishment costs, including parts and labor, are added to the value of the inventory and these costs are capitalized. Our management compares the cost of inventory with its market value and allowances are made to write down inventory to market value, if market value is lower.

 

Expenditures for maintenance and repairs for property and equipment and rental equipment are expensed as incurred. Any additional renewals and improvements to property and equipment and rental equipment, and which extend its useful life, are capitalized. When these assets are retired or otherwise disposed of, the related costs for the assets and the accumulated depreciation are removed from the respective accounts. Any gain or loss is included in our operations. We depreciate these assets using the straight-line method for substantially all assets with estimated lives as follows:

 

Furniture and fixtures 5-7 years
Leasehold improvements

Estimated life of the asset as building is owned by Hamre

and leased on a month to month basis

Vehicles 3-5 years
Equipment 5-7 years
Rental equipment 5-7 years

 

For the impairment or disposal of our long-lived assets (assets expected to be kept for at least one year) used in operations, when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the type of asset are less than the asset’s carrying amounts, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Any loss on long-lived assets which are disposed are determined in a similar manner, however, the fair values are reduced for the cost

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of disposal. In 2018 and 2017, we do not believe we had any impairment of our long-lived assets.

 

Revenue Recognition

 

Our primary source of generating revenue is through the sale and rental of heavy equipment. In accordance with accounting rules, we recognize revenue when the customer obtains control of the promised equipment and reflect what we are paid in exchange for the equipment. To determine our revenue recognition depending upon whether the equipment is sold or leased, we perform the following five steps: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) calculate the transfer price; (iv) allocate the transaction price to the performance obligation in the contract; and (v) recognize revenue when (or as) the customer satisfies a performance obligation. In the event any revenue does not meet these recognition criteria, such revenue will be deferred.

 

Equipment Sales – We recognize revenue from the sale of equipment upon delivery of the equipment to the customer and passing the risk of loss to the customer, and when we have no other significant obligations with regard to the equipment and collectability of the revenue from the customer is reasonably assured.

 

Equipment Rentals – Our rental revenues are made up of short-term agreements with monthly or annual terms. We recognize rental revenues in the month rental payments are due based upon the accrual method of accounting. Our equipment lease agreements contain varying terms, but typically range from one to five years for commercial entities. In addition to commercial entities, we also have lease agreements with various governments that have terms of 12 to 24 months and contain options to renew annually through five years. When lease terms are completed, and depending on the specific lease agreement, our customers may have the option to return the equipment, to renew the lease term, purchase the equipment at fair market value, or continue to rent the equipment on a month-to-month basis. Our agreements do not contain provisions for contingent rentals, which would allow rentals to cease or continue based upon certain defined events. Rental revenues for equipment leases are recognized upon receipt. Our initial direct costs for rental equipment are capitalized and amortized over the expected term of the applicable lease. To date, initial direct costs for operating leases have not been significant.

 

Item 3. Properties.

 

We lease a building and real property in Chico, California from a trust whose trustee is Lee Hamre, our Chief Executive Officer for monthly lease payments of $9,800. We are currently leasing the building and real property on a month-to-month basis. The total rent for 2018 was $107,800 and total rent for 2017 was $117,600.

 

Item 4. Security Ownership of Certain Beneficial Owners and Management.

 

The following table sets forth information with respect to the beneficial ownership of our outstanding common stock by:

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  Each person who is known by us to be the beneficial owner of 5% or more of our common stock;

 

  Our executive officers, and each director as identified in the “Management — Executive Compensation” section; and

 

  All of our directors and executive officers as a group.

  

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the “SEC”) and generally includes voting or investment power with respect to securities. Shares of common stock and options, warrants and convertible securities that are currently exercisable or convertible within 60 days of the date of this document into shares of our common stock are deemed to be outstanding and to be beneficially owned by the person holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of the person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

The information below is based on the number of shares of our common stock that we believe were beneficially owned by each person or entity as of the date of this registration statement.

 

Name and Address [1] of
Beneficial Owner

Number of Shares of

Common Stock

Percent of Class
Lee Hamre, CEO & Chairman 308,182,833 40.9%
Marty Tullio, Secretary & Director 45,833,333 6.1%
Hope Stone, CFO -0- *
Michael Maloney, Director 13,000,000 1.7%
All officers and directors as a group (four persons) 367,016,166 48.7%

Warren Murphy

9988 Troon Court

Windsor, CA 95492

 

67,905,000 9.0%

*Less than 1%. 

 

Rule 13d-3 under the Exchange Act governs the determination of beneficial ownership of securities. That rule provides that a beneficial owner of a security includes any person who directly or indirectly has or shares voting power and/or investment power with respect to such security. Rule 13d-3 also provides that a beneficial owner of a security includes any person who has the right to acquire beneficial ownership of such security within sixty days, including through the exercise of any option, warrant or conversion of a security. Any securities not outstanding which are subject to such options, warrants or conversion privileges are deemed to be outstanding 

___________________

 

[1] The address of all officers and directors is our corporate address at 3930 Esplanade, Chico, California 95973.

 

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for the purpose of computing the percentage of outstanding securities of the class owned by such person. Those securities are not deemed to be outstanding for the purpose of computing the percentage of the class owned by

any other person. Included in this table are only those derivative securities with exercise prices that we believe have a reasonable likelihood of being “in the money” within the next 60 days.

 

Item 5. Directors and Executive Officers.

 

The following table sets forth the names and ages of our current directors and executive officers and includes the principal offices and positions held by each person and the date each person began his or her role with the Company. Our executive officers were appointed by our Board of Directors. Our directors serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation, or removal by the Board of Directors. There are no family relationships among our directors and executive officers. 

 

Name Age Position Date
       
Lee Hamre 68 Chief Executive Officer and Chairman 2006
       
Marty Tullio

71

 

Secretary and Director 2012
Hope Stone 48 Chief Financial Officer

2018

 

Michael Maloney 57

Director

 

 

2012

 

 

 

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.

 

Lee Hamre, Chief Executive Officer and Chairman

 

Mr. Hamre has been in the heavy equipment business for over 38 years. He worked for Buehrer Inc. in Berkeley, California for 13 years from 1976 to 1989. He then founded Hamre Equipment Co. as its sole owner in 1989. In 2006, he merged Hamre Equipment Co. with AmeraMex International after having rented equipment to AmeraMex International for several years.

 

Michael Maloney, Chief Operations Officer & Director

 

Having retired from a 32 year career in law enforcement which culminated with his assignment as the Chief of Police in the City of Chico, California from 2009 through 2012, Mr. Maloney joined our Board of Directors and became our Chief Operating Officer. With significant budget, management, and strategic planning experience, he has provided counsel to us on a variety of management issues and has coordinated the handling of sensitive personnel matters, all while offering a fresh perspective from outside of the industry. Mr. Maloney is also Director of Public Safety, Education, and Training at Butte College; a Board Member of Catalyst

15  
 

Domestic Violence Services; and a Board Member of the California Partnership to End Domestic Violence.

 

Marty Tullio, Secretary and Director

 

Marty Tullio is a veteran of the investor relations and corporate communications fields. She has managed the financial communications programs for a wide range of public and private companies, providing day-to-day counsel to executive management and coordinating investor relations efforts for a number of diversified clients. Ms. Tullio is proactive in the planning and execution of investor outreach programs, including road shows and investor conferences, and in developing strategic communications plans for client organizations.

 

Ms. Tullio has more than a decade of in-house agency investor relations management experience, specializing in the targeting and development of institutional investor and research analyst following, support of fundraising activities, corporate and crisis communications, consulting, and the introduction and positioning of companies to the investment community.

 

Prior to becoming an investor relations professional, Ms. Tullio spent 15 years as a sales and marketing executive in the technology industry, with companies such as NCR, GTE Telenet, and a division of McDonnell-Douglas. She has held several managerial and executive positions, including Vice President of Sales and Marketing, Executive Vice President, and General Manager. Marty earned a Bachelor of Arts degree as well as her investor relations certification from the University of California, Irvine.

Hope Stone, Chief Financial Officer

Hope Stone joined us as Chief Financial Officer in June 2018. Ms. Stone is responsible for our overall financial strategy and direction, as well as human resources. Within finance, she guides our treasury, accounting, tax and internal and external audit functions.

Prior to joining us, Ms. Stone held CFO/Controller roles with DigitalPath, Inc. and Moana Nursery and she also worked in the insurance practice at ISU Stetson-Beemer. Throughout her over 20-year career in accounting, auditing and financial planning, Ms. Stone has established a reputation for building world-class teams and for aligning financial and business metrics to support business strategy and high-growth. Ms. Stone has spearheaded multiple SBA loans and equipment and other financing transactions. Stone holds a BS in Finance from Tennessee Baptist College and an MBA from the University of Devonshire.

Conflicts of Interest – General

 

There can be no assurance that management will resolve all conflicts of interest in favor of the Company.

 

Our directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses. Thus, there exist potential conflicts of interest including, among other things, time, efforts and corporate opportunity, involved in

16  
 

participation with such other entities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of the Company. Insofar as the officers and directors are engaged in other business activities, management anticipates it will devote only up to approximately 40 hours per week to the Company's affairs.

  

Conflicts of Interest – Corporate Opportunities

 

Presently, there is no requirement included in our Articles of Incorporation, Bylaws, or minutes which provides that officers and directors of our Company must disclose business opportunities which come to their attention. Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose any business opportunities brought to their attention, in their capacity as an officer and/or director or otherwise. Excluded from this duty would be opportunities which the person learns about through his or her involvement as an officer and/or director of another company. We have no intention of merging with or acquiring an affiliate, associated person, or business opportunity from any affiliate or any client of any such person.

 

Our Board of Directors has adopted a policy that the Company will not seek a fund of, any entity in which any officer or director serves as an officer or director or in which they or their family members own or hold a controlling ownership interest. Although the Board of Directors could elect to change this policy, the Board of Directors has no present intention to do so.

 

Annual Meeting

 

Our annual meeting of stockholders is scheduled to take place on November 5 of each year. This will be an annual meeting of stockholders and will include the election of directors. The annual meeting will be held at our principal office or at such other place as permitted by the laws of the State of Nevada and on such date as may be fixed from time to time by resolution of our board of directors.

 

Item 6. Executive Compensation.

 

The following table sets forth the compensation paid to our officers from the years ended December 31, 2018 and 2017.

 

Name and Principal Position Year Salary ($) Stock Awards Price per Share Stock Awards ($) Total ($)
Lee Hamre, CEO & Chairman

2018

2017

 

150,000

150,000

 

-0-

-0-

 

N/A

N/A

 

-0-

-0-

 

150,000

150,000

 

Susan Anderson,

Former COO [2] , [3]

2018

2017

 

73,982

65,000

 

-0-

-0-

 

N/A

N/A

 

-0-

-0-

 

73,982

65,000

 

Hope Stone,

CFO [4]

2018 70,000 -0- N/A -0- 70,000

Tracie Hannick,

Former CFO [5]

2017

 

28,000

 

-0-

 

N/A

 

-0-

 

28,000

 

 

___________________

 

[2] COO from June 1, 2018 through February 15, 2019.

[3] Employed but not as Officer, until appointed as COO on June 1, 2018.

[4] Appointed as CFO on June 4, 2018.

[5] Resigned as CFO on June 1, 2018.

 

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There was no Bonus, Option Award, or Other Compensation paid during the years listed in the table above.

 

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

 

There are no employment contracts, compensatory plans or arrangements, including payments to be received from us, with respect to any of our directors or executive officers which would in any way result in payments to any such person because of his or her resignation, retirement or other termination of employment with us. These agreements do not provide for payments to be made as a result of any change in control of us, or a change in the person's responsibilities following such a change in control.

 

Equity Compensation Plan Information

 

We currently do not have a Stock Option Plan.

 

Item 7. Certain Relationships and Related Transactions.

 

Related Party Transactions

 

Except as described below, there were no transactions with any executive officers, directors, 5% stockholders and their families and affiliates since January 1, 2016.

 

We lease our facility from the Lee Hamre Trust. (See Item 3. Properties.)

 

We have a note payable to our CEO, Lee Hamre, for funds loaned for our operations. The note is interest bearing at 10% per annum, unsecured, and payable upon demand. The balance of the note at December 31, 2018 and 2017 was $353,643 and $402,650, respectively. During the years ended December 31, 2018 and 2017, we repaid $49,008 and $18,813, respectively, on the note. The note incurred $29,774 in interest in 2018 and $26,041 of interest in 2017.

 

Director Independence

 

We are not subject to the listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our Board comprised of a majority of “independent directors.” None of our three directors (see Item 6 above) is independent as defined under the Nasdaq Marketplace Rules.

 

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Item 8. Legal Proceedings.

 

We anticipate that we will from time to time become subject to claims and legal proceedings arising in the ordinary course of business. It is not feasible to predict the outcome of any such proceedings and we cannot assure that their ultimate disposition will not have a materially adverse effect on our business, financial condition, cash flows or results of operations. As of the filing of this registration statement, we are not a party to any pending legal proceedings, nor are we aware of any civil proceeding or government authority contemplating any legal proceeding.

 

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

 

Market

 

Our stock is quoted with the OTC Markets Group, Inc., also known as Pink Sheets. This is not considered a market, and, therefore, there is currently no public market for our Common Stock.

 

Rules Governing Low-price Stocks That May Affect Our Stockholders' Ability to Resell Shares of Our Common Stock

 

We are a “penny stock” company, as our stock price is less than $5.00 per share. If we are able to obtain an exchange listing for our stock, we cannot make an assurance that we will be able to maintain a stock price greater than $5.00 per share and if the share price were to fall below such threshold, that we would not be subject to the penny stock rules.

 

The penny stock rules require broker-dealers, prior to a transaction in a penny stock not otherwise exempt from the rules, to make a special suitability determination for the purchaser to receive the purchaser’s written consent to the transaction prior to sale, to deliver standardized risk disclosure documents prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock. In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.

 

Holders

 

We have approximately 258 record holders of our common stock as of the date of this registration statement according to the records of our transfer agent. The number of our stockholders of record excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.

 

19  
 

Our transfer agent is Pacific Stock Transfer Company, 6725 Via Austi Parkway, #300, Las Vegas, Nevada, 89119. Their telephone number is (702) 361-3033.

 

Dividends

 

We have not declared a dividend on our common stock, and we do not anticipate the payment of dividends in the near future as we intend to reinvest our profits to grow our business. There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. The Nevada Revised Statutes, however, does prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

 

Item 10. Recent Sales of Unregistered Securities.

During the year ended December 31, 2016, the Company issued 14,125,000 shares of common stock to officers, directors, and employees of the Company for services rendered valued at $108,763. In addition, during the year ended December 31, 2016, the Company issued 75,000,000 shares of common stock to an officer and director of the Company for the settlement of $80,000 in related party debt and accounts payable.

 

On March 10, 2016, an aggregate of 25,000,000 shares of common stock were issued to McCloud Communications for investor relations services for 2015; 50,000,000 shares of common stock were issued to Lee Hamre for partial repayment of a $700,000 loan to us; and 500,000 shares of common stock were issued to Michael Maloney for services rendered.

 

On February 12, 2016, an aggregate of 12,000,000 shares of common stock were given to three board members as compensation for their services during 2015.

 

During 2017 and 2018, we did not issue any shares of common or preferred stock.

All issuances were exempt from the registration requirements of Section 5 of the Securities Act of 1933 as they did not involve a public offering under Section 4(a)(2) and were issued as restricted securities as defined in Rule 144 of the Act.

Item 11. Description of Registrant’s Securities to be Registered.

 

Our Articles of Incorporation (the “Articles of Incorporation”) authorize us to issue (a) 1,000,000,000 shares of Common Stock, par value $0.001 per share, of which 753,415,879 shares are issued and outstanding as of the date of this registration statement, and (b) 5,000,000 shares of Preferred Stock, $0.001 par value per share, none of which are issued or outstanding.

 

20  
 

Only our common stock is being registered in this registration statement. Information on our preferred stock is also provided below; however, the preferred stock is not being registered.

 

Common Stock

 

Holders of Common Stock are entitled to one vote for each share on all matters submitted to a vote of shareholders. Holders of Common Stock are entitled to share in all dividends that the Board of Directors, in its discretion, declares from legally available funds. In the event of our liquidation, dissolution or winding up, subject to the preferences of any shares of Preferred Stock which may then be authorized and outstanding, each outstanding share entitles its holder to participate in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the Common Stock.

 

Holders of Common Stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions for the Common Stock. The rights of the holders of Common Stock are subject to any rights that may be fixed for holders of Preferred Stock, when and if any Preferred Stock is authorized and issued. All outstanding shares of Common Stock are duly authorized, validly issued, fully paid and non-assessable.

 

Preferred Stock

 

Our articles of incorporation authorized the issuance of up to 5,000,000 shares of Preferred Stock in one or more series with such designations, voting powers, if any, preferences and relative, participating, optional or other special rights, and such qualifications, limitations and restrictions, as are determined by resolution of our Board of Directors. Our preferred stock is not being registered.

 

Dividends

 

We have not declared dividends since our inception. Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available. We presently anticipate that all earnings, if any, will be retained for development of our business. Any future disposition of dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors.

 

Employees Stock Compensation Plan

 

We do not have a Stock Option Plan as of the date of this filing.

 

Anti-Takeover Effects of Our Articles of Incorporation and Bylaws

 

We are governed by the Nevada Revised Statutes (referred to as the “NRS”). Our articles of incorporation and bylaws do not permit cumulative voting in the election of directors. Cumulative voting allows a stockholder to vote a portion or all of the stockholder’s shares for one or more candidates for seats on the board of directors. Without cumulative voting, a minority stockholder may not be able to gain as many seats on our board of

21  
 

directors as the stockholder would be able to gain if cumulative voting were permitted. The absence of cumulative voting makes it more difficult for a minority stockholder to gain a seat on our board of directors to influence our board’s decision regarding a takeover or otherwise.

 

Limitations of Liability and Indemnification

 

Our articles of incorporation and bylaws provide that we will indemnify our directors and officers, and other agents, to the fullest extent permitted by the NRS, which prohibits our articles of incorporation from limiting the liability of our directors for the following:

 

   • any breach of the director’s duty of loyalty to us or to our stockholders;

 

   • acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

 

   • unlawful payment of dividends or unlawful stock repurchases or redemptions; and

 

   •   any transaction from which the director derived an improper personal benefit.

 

If Nevada law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Nevada law, as so amended. Our articles of incorporation will not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Nevada law. This provision also does not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Under our bylaws, we will also be empowered to purchase insurance on behalf of any person whom we are required or permitted to indemnify.

 

In addition to the indemnification required in our articles of incorporation and bylaws, we may enter into indemnification agreements with our current director and executive officer. These agreements may provide for the indemnification of such persons for all reasonable expenses and liabilities, including attorneys’ fees, judgments, fines, and settlement amounts, incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were serving in such capacity. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We may also maintain directors’ and officers’ liability insurance.

 

The limitation of liability and indemnification provisions in our articles of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our

22  
 

directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

 

Listing

 

Although not considered a stock exchange, shares of our common stock are quoted on OTC Markets Group, Inc. Pink Open Market under the symbol “AMMX.”

 

Transfer Agent and Registrar

 

The name and address of our Transfer Agent:

 

Pacific Stock Transfer Co.

 

6725 Via Austi Parkway

Suite 300

Las Vegas, NV 89119

 

Item 12. Indemnification of Directors and Officers.

 

Subsection 7 of Section 78.138 of the Nevada Revised Statutes (the “NRS”) provides that, subject to certain very limited statutory exceptions, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer, unless it is proven that the act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and such breach of those duties involved intentional misconduct, fraud or a knowing violation of law. The statutory standard of liability established by Section 78.138 controls even if there is a provision in the corporation’s articles of incorporation unless a provision in our Articles of Incorporation provides for greater individual liability.

 

Subsection 1 of Section 78.7502 of the NRS empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (any such person, a “Covered Person”), against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Covered Person in connection with such action, suit or proceeding if the Covered Person is not liable pursuant to Section 78.138 of the NRS or the Covered Person acted in good faith and in a manner the Covered Person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceedings, had no reasonable cause to believe the Covered Person’s conduct was unlawful.

 

23  
 

Subsection 2 of Section 78.7502 of the NRS empowers a corporation to indemnify any Covered Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in the capacity of a Covered Person against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by the Covered Person in connection with the defense or settlement of such action or suit, if the Covered Person is not liable pursuant to Section 78.138 of the NRS or the Covered Person acted in good faith and in a manner the Covered Person reasonably believed to be in or not opposed to the best interests of the Corporation. However, no indemnification may be made in respect of any claim, issue or matter as to which the Covered Person shall have been adjudged by a court of competent jurisdiction (after exhaustion of all appeals) to be liable to the corporation or for amounts paid in settlement to the corporation unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances the Covered Person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

 

Section 78.7502 of the NRS further provides that to the extent a Covered Person has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in Subsection 1 or 2, as described above, or in the defense of any claim, issue or matter therein, the corporation shall indemnify the Covered Person against expenses (including attorneys’ fees) actually and reasonably incurred by the Covered Person in connection with the defense.

 

Subsection 1 of Section 78.751 of the NRS provides that any discretionary indemnification pursuant to Section 78.7502 of the NRS, unless ordered by a court or advanced pursuant to Subsection 2 of Section 78.751, may be made by a corporation only as authorized in the specific case upon a determination that indemnification of the Covered Person is proper in the circumstances. Such determination must be made (a) by the stockholders, (b) by the board of directors of the corporation by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding, (c) if a majority vote of a quorum of such non-party directors so orders, by independent legal counsel in a written opinion, or (d) by independent legal counsel in a written opinion if a quorum of such non-party directors cannot be obtained.

 

Subsection 2 of Section 78.751 of the NRS provides that a corporation’s articles of incorporation or bylaws or an agreement made by the corporation may require the corporation to pay as incurred and in advance of the final disposition of a criminal or civil action, suit or proceeding, the expenses of officers and directors in defending such action, suit or proceeding upon receipt by the corporation of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Subsection 2 of Section 78.751 further provides that its provisions do not affect any rights to advancement of expenses to which corporate personnel other than officers and directors may be entitled under contract or otherwise by law.

 

Subsection 3 of Section 78.751 of the NRS provides that indemnification pursuant to Section 78.7502 of the NRS and advancement of expenses authorized in or ordered by a court pursuant to Section 78.751 does not exclude any other rights to which the Covered Person may be entitled under the articles of incorporation or any

24  
 

bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his or her official capacity or in another capacity while holding his or her office. However, indemnification, unless ordered by a court pursuant to Section 78.7502 or for the advancement of expenses under Subsection 2 of Section 78.751 of the NRS, may not be made to or on behalf of any director or officer of the corporation if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. Additionally, the scope of such indemnification and advancement of expenses shall continue for a Covered Person who has ceased to be a director, officer, employee or agent of the corporation, and shall inure to the benefit of his or her heirs, executors and administrators.

 

Section 78.752 of the NRS empowers a corporation to purchase and maintain insurance or make other financial arrangements on behalf of a Covered Person for any liability asserted against such person and liabilities and expenses incurred by such person in his or her capacity as a Covered Person or arising out of such person’s status as a Covered Person whether or not the corporation has the authority to indemnify such person against such liability and expenses.

 

Item 13. Financial Statements and Supplementary Data

 

Our financial statements begin on pages F-1 through F-18 immediately following the signature page of this registration statement.

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

There have been no changes in or disagreements with accountants on accounting or financial disclosure matters.

 

Item 15. Financial Statements and Exhibits.

 

(a) Financial Statements . Our financial statements begin on page F-1 immediately following the signature page of this registration statement.

 

(b) Exhibits .

 

The following documents are filed as exhibits hereto:

 

Exhibit   Exhibit
Number   Description
3.1     Amended and Restated Certificate of Incorporation, dated January 30, 2017
3.2     Bylaws, dated November 2, 2006
3.3     Line of Credit, dated March 29, 2019
3.4     Amendment to Line of Credit, dated April 17, 2019
3.5     Chico Property Lease Agreement, dated December 1, 2012

    

 

25  
 

  SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: 5-10-19 AmeraMex International, Inc. 
   
  By: 

    Lee Hamre
Chief Executive Officer

 

 

 

 

 

 

  

 

 

 

 

26  
 

AMERAMEX INTERNATIONAL, INC.

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Contents

 

 

 

  Page

 

Report of Independent Registered Public Accounting Firm

F-2
Financial Statements:  
Balance Sheets as of December 31, 2018 and 2017 F-3
Statements of Income for the years ended  
December 31, 2018 and 2017 F-4
Statements of Stockholders' Equity for the years ended  
December 31, 2018 and 2017 F-5
Statements of Cash Flows for the years ended  
December 31, 2018 and 2017 F-6
Notes to Financial Statements F-7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F- 1  
 

dbb mckennon

Certified Public Accountants

Registered Firm - Public Company Accounting Oversight Board

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

 

The Stockholders and Board of Directors of AmeraMex International, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of AmeraMex International, Inc. (the "Company") as of December 31, 2018 and 2017, and the related statements of income, stockholders' equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements") . In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB . Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud . The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal contro l over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's inte rna l control over financial reporting . Accordingly, we express no such opinion .

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements . Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion .

 

 

We have served as the Company's auditor since 2017.

 

Newport Beach, California

May 3, 2019

F- 2  
 

 

AMERAMEX INTERNATIONAL, INC.

BALANCE SHEETS

AS OF DECEMBER 31, 2018 and 2017 

 

    2018   2017

ASSETS

       
         
Current Assets:                
    Cash   $ 197,752     $ 553,625  
Accounts Receivable, Net     631,805       449,165  
Inventory, Net     2,689,642       3,257,019  
Other Current Assets     289,060       252,095  
Total Current Assets     3,808,259       4,511,904  
                 
Property and Equipment, Net     988,552       631,202  
Rental Equipment, Net     4,679,122       4,636,719  
Deferred Tax Asset     —         3,682  
Other Assets     234,074       234,074  
TOTAL ASSETS   $ 9,710,007     $ 10,017,581  

         
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current Liabilities:                
Accounts Payable   $ 1,309,032     $ 2,246,619  
Accrued Expenses     118,291       165,950  
Notes Payable, Current Portion     296,618       1,165,080  
Total Current Liabilities     1,723,941       3,577,649  
                 
Deferred Tax Liability     301,680       —    
Notes Payable - Related Party     353,643       402,650  
Notes Payable, Net of Current Portion     4,316,233       4,194,823  
Lines of Credit     774,456       488,000  
Total Liabilities     7,469,953       8,663,122  
                 
Commitments and Contingencies (Note 9)                
Stockholders' Equity:                

    Preferred Stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding

    —         —    

    Common Stock, $0.001 par value, 1,000,000,000 shares authorized, 753,415,879 shares issued and outstanding at December 31, 2018

    and 2017

    754,017       754,017  
    Additional Paid-In Capital     20,785,924       20,785,924  
    Treasury Stock     (5,438 )     (5,438 )
    Accumulated Deficit     (19,294,449 )     (20,180,044 )
      Total Stockholders' Equity     2,240,054       1,354,459  

       TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

  $ 9,710,007     $ 10,017,581  

 

   

The accompanying notes are an integral part of these financial statements 

F- 3  
 

AMERAMEX INTERNATIONAL, INC.

STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

  2018   2017
REVENUES        
Sales of Equipment and Other Revenues   $ 7,027,948     $ 6,722,121  
Rentals and Leases     2,769,906       1,987,393  
Total Revenues     9,797,854       8,709,514  
                 
COST OF REVENUES                

         Sales of Equipment and Other Revenues

    5,700,920       5,489,114  
Rentals and Leases     985,584       705,156  
Total Cost of Revenues     6,686,504       6,194,270  
                 
GROSS PROFIT     3,111,350       2,515,244  

OPERATING EXPENSES

Sales and Marketing

    325,519       274,564  
General and Administrative     834,394       726,382  
Total Operating Expenses     1,159,913       1,000,946  
PROFIT FROM OPERATIONS     1,951,437       1,514,298  

OTHER INCOME (EXPENSE)

Interest Expense

    (828,585 )     (563,123 )
Other Income     131,165       507,561  
Total Other Income (Expense)     (697,420 )     (55,562 )
                 
INCOME BEFORE PROVISION FOR INCOME TAXES     1,254,017       1,458,736  
                 
PROVISION FOR INCOME TAXES     368,422       594,326  
                 
NET INCOME   $ 885,595     $ 864,410  
                 

Weighted Average Shares Outstanding:

Basic

    753,415,879       753,415,879  
Diluted     753,415,879       753,415,879  
                 
Earnings per Share :                
Basic   $ —       $ —    
Diluted   $ —       $ —    

  

The accompanying notes are an integral part of these financial statements 

F- 4  
 

 

AMERAMEX INTERNATIONAL, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

 

 

      Common Stock                                  
      Shares       Amount      

Additional

Paid-in Capital

     

Treasury

Stock

      Accumulated Deficit      

Total

Stockholders'

Equity 

 
Balance, December 31, 2016     753,415,879     $ 754,017     $ 20,785,924     $ (5,438 )   $ (21,044,454 )   $ 490,049  
                                                 
Net income     —         —         —         —         864,410       864,410  
                                                 
Balance, December 31, 2017     753,415,879       754,017       20,785,924       (5,438 )     (20,180,044 )     1,354,459  
                                                 
Net Income     —                 —         —         885,595       885,595  
                                                 
Balance, December 31, 2018     753,415,879     $ 754,017     $ 20,785,924     $ (5,438 )   $ (19,294,449 )   $ 2,240,054  

 

 

 

 

  

 

 

The accompanying notes are an integral part of these financial statements.

 

F- 5  
 

AMERAMEX INTERNATIONAL, INC.

STATEMENTS OF CASH FLOWS

AS OF DECEMBER 31, 2018 and 2017 

       

 

  2018   2017
OPERATING ACTIVITIES              
  Net Income $ 885,595     $ 864,410  
  Adjustments to reconcile Net Income to              
    Net Cash provided by Operating Activites:              
Depreciation   1,183,438       803,139  
Provision for Deferred Income Taxes   305,362       573,343  
Gain on Sale of Property and Equipment   (131,165 )     (25,347 )
Changes in Operating Assets and Liabilities:              
Accounts Receivable   (182,641 )     (318,614 )
Inventory   381,787       (1,111,416 )
Other Current Assets   (36,965 )     36,359  
Acounts Payable   (937,588 )     1,071,163  
Accrued Expenses   (47,658 )     82,510  
   NET CASH PROVIDED BY OPERATING ACTIVITIES   1,420,165       1,975,547  
               
INVESTING ACTIVITIES              
Payments for Property and Equipment   (473,757 )     (159,735 )
Payments for Rental Equipment   (1,936,628 )     (1,709,379 )
Proceeds from Sale of Equipment   131,165       134,194  
   NET CASH USED IN INVESTING ACTIVITIES   (2,279,220 )     (1,734,920 )
               
FINANCING ACTIVITIES              
Proceeds from Notes Payable   2,843,059       2,234,219  
Payments on Notes Payable   (2,577,325 )     (2,011,337 )
Payment on Note Payable - Related Party   (49,008 )     (18,813 )
Net Borrowings Under Lines of Credit   286,456       42,089  
   NET CASH PROVIDED BY FINANCING ACTIVITIES   503,182       246,158  
               
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (355,873 )     486,785  
               
       Cash and Cash Equivalents, beginning of year   553,625       66,840  
       Cash and Cash Equivalents, end of year $ 197,752     $ 553,625  
               
CASH PAID FOR              
       Interest $ 799,831     $ 542,638  
       Income Taxes $ 64,247     $ —    
               
NON CASH INVESTING AND FINANCING ACTIVITIES              
       Transfer of inventory to rental equipment $ 1,111,066     $ —    
       Transfer of rental equipment to inventory $ 185,591     $ —    

 

The accompanying notes are an integral part of these financial statements. 

F- 6  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Note 1 - Organization and Basis of Presentation

 

Organization and Line of Business

 

AmeraMex International, Inc., (the “Company”) was incorporated on May 29, 1990 under the laws of the state of Nevada. The Company sells, leases and rents new and refurbished heavy equipment primarily in the U.S. The Company operates under the name of Hamre Equipment.

 

Note 2 – Summary of Significant Accounting Policies

 

Liquidity Considerations

 

At December 31, 2018, the Company had working capital of approximately $2.1 million. We expect to generate sufficient cash flows from operations to meet our obligations, and we expect to continue to obtain financing for equipment purchases in the normal course of business. Subsequent to year end as discussed on Note 13 below, we obtained a $6.5 million credit facility at commercially reasonable terms to refinance substantially all of our outstanding notes payable. We believe that our expected cash flows from operations, together with the above referenced credit facility, will be sufficient to operate in the normal course of business for next 12 months from the issuance date of these financial statements.

 

Basis of Presentation

 

The accompanying financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and Generally Accepted Accounting Principles (U.S. GAAP). In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments.

 

  Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved. Significant estimates in these financial statements include the allowance for doubtful accounts, inventory reserve, valuation allowance for deferred taxes, and estimated useful life of property and equipment.

 

Cash

 

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At times, cash deposits may exceed FDIC- insured limits. As of December 31, 2018 and 2017, the amount the Company had on deposit that exceeded the FDIC-insured limits was $0, and $303,625, respectively. The Company has not experienced any losses related to a concentration of cash or cash equivalents in an FDIC insured financial institution.

 

Accounts Receivable

 

The Company grants credit to customers under credit terms that it believes are customary in the industry and does not require collateral to support customer receivables. The Company provides an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. As of December 31, 2018 and 2017, the allowance for doubtful accounts was $119,924 and $51,918, respectively. 

F- 7  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Inventory

 

Inventory consists of used equipment held for sale, as well as parts and attachments. Inventory is valued at the lower of the inventory’s cost (specific identification or first in, first out basis) or the current market price of the inventory, less costs to sell. Expenditures for inbound transportation and refurbishment costs, including parts and labor which add to the value of the inventory are capitalized. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower.

 

Property and Equipment, and Rental Equipment

 

Property and equipment and rental equipment are stated at cost. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and improvements, which extend the useful life of the assets, are capitalized. When these assets are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is provided using the straight-line method for substantially all assets with estimated lives as follows:

 

Furniture and fixtures 5-7 years
Leasehold improvements

Estimated life of the asset as building is owned by Hamre

and leased on a month to month basis

Vehicles 3-5 years
Equipment 5-7 years
Rental equipment 5-7 years

 

Other Assets

 

Other assets at December 31, 2018 and 2017, consist principally of cash surrender value of life insurance policies.

 

Long-Lived Assets

The Company applies the provisions of Accounting Standards Codification (ASC) Topic 360, Property, Plant, and Equipment , which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review as of December 31, 2018 and 2017, the Company believes there was no impairment of its long-lived assets.

 

Fair Value of Financial Instruments

 

For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, advances to suppliers, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities.

 

Financial Accounting Standards Board (FASB) ASC Topic 820, Fair Value Measurements and Disclosures , requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments , defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

· Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

F- 8  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement.

    

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity , and FASB ASC Topic 815, Derivatives and Hedging .

 

As of December 31, 2018 and 2017, respectively, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value.

 

Revenue Recognition

 

The Company generates revenues primarily through the sale and rental of heavy equipment. In May 2014 and in subsequent updates, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, as amended, and referred herein as ASC 606. ASC 606 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASC 606 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASC 606 was effective for interim and annual periods beginning after December 15, 2017.

 

Effective January 1, 2018, the Company adopted ASC 606, with no significant impact on our financial statements. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements that the Company deems are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) calculate transfer price; (iv) allocate the transaction price to the performance obligation in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Any revenues that do not meet these recognition criteria will be deferred.

 

Equipment Sales

 

The Company recognizes revenue from equipment sales upon delivery of the equipment to the customer and the risk of loss passes to the customer and, no other significant obligations of the Company exist and collectability is reasonably assured.

 

Equipment Rentals

 

Rental revenues comprise of short term agreements that can have monthly or annual terms. Rental revenues are recognized in the month they are due on the accrual basis of accounting. Our operating lease agreements have varying terms, typically one to five years with commercial entities. We also have agreements governmental entities that are 12 to 24 months in length, with options to renew annually through year five. Upon lease termination, customers, depending in the individual lease agreements, may have the option to return the equipment, to renew the lease term, purchase the equipment at fair market value, or continue to rent on a month-to-month basis. Our operating leases do not provide for contingent rentals. Revenues related to operating leases are recognized on a straight-line basis over the term of the lease. Negotiated lease early-termination charges are recognized upon receipt. Initial direct costs are capitalized and amortized over the expected term of the leases. To date, initial direct costs for operating leases have not been insignificant.

 

F- 9  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Shipping and Handling

 

Costs incurred for shipping and handling of equipment sold to customers are included in costs of goods sold in the statements of income.

 

Sales Tax

 

Sales tax collected from customers is initially recorded as a liability and then remitted in a timely manner to the appropriate governmental entity.

 

Warranty Costs

 

Generally, the Company sells its equipment with no warranty. In the event we determine we should repair equipment, we may do so at our election. In the event a do so, such costs are expensed as incurred.

 

Stock-Based Compensation

 

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation . FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity- based compensation issued to employees and non-employees. There were no stock options outstanding as of December 31, 2018 and 2017 and no shares issued for compensation during the years then ended.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes . ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

 

Basic and Diluted Earnings Per Share

 

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share . Basic earnings per share (EPS) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during 2018 and 2017.

 

Concentrations

 

At December 31, 2018, 53% of the accounts receivable was due from three customers and at December 31, 2017, 72% of the accounts receivable was due from three customers. The loss of one or more of these customers would have a negative impact on the Company’s financial results.

 

For the years ended December 31, 2018 and 2017, no customers accounted for 10% or more of sales.

F- 10  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Recent Accounting Pronouncements

 

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory , which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its financial statements.

 

In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842). ASC 842 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. Since our facilities are leased from our chief executive officer on a month-to-month basis, and we have no equipment leases accounted for as operating leases, the impact of adoption will not have a significant impact.

 

Other recent accounting pronouncements issued by the FASB, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

Note 3 – Inventory

 

Inventory as of December 31, 2018 and 2017 consisted of the following:

 

    2018   2017
Parts and supplies   $ 168,106   $ 109,914
Heavy equipment     2,521,536     3,147,105
Inventory, net   $ 2,689,642   $ 3,257,019

 

  

All the inventory is used as collateral for the notes payable (see Note 6, 7 and 13).

 

Note 4 – Property and Equipment

 

Property and equipment includes assets held for internal use; as of December 31, 2018 and 2017, such consisted of the following:

 

    2018   2017
Furniture and fixtures   $ 74,768   $ 62,753
Leasehold improvements     410,072     356,105
Vehicles and Equipment     1,147,353     785,418
      1,632,193     1,204,276
Less accumulated depreciation     (643,641)     (573,074)
Property and equipment, net   $ 988,552   $ 631,202

 

 

Depreciation expense for the years ended December 31, 2018 and 2017 was $204,186 and $130,198, respectively.

 

All the property and equipment is used as collateral for the line of credit and notes payable (see Notes 6, 7 and 13).

F- 11  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Note 5 – Rental Equipment

 

Rental equipment as of December 31, 2018 and 2017 consisted of the following: 

 

    2018   2017
Rental equipment   $ 6,666,817   $ 5,936,462
Less accumulated depreciation     (1,987,695)     (1,299,743)
Rental equipment, net   $ 4,679,122   $ 4,636,719

 

Depreciation expense for the years ended December 31, 2018 and 2017 was $979,252 and $672,941, respectively.

 

All the rental equipment is used as collateral for the line of credit and notes payable (see Notes 6, 7 and 13).

 

Note 6 – Lines of Credit

 

The Company has line of credit with a bank that provides for borrowing up to $500,000. The line of credit is secured by real estate and bears interest at a variable rate calculated at 0.85% above the bank prime rate. At December 31, 2018 and 2017, the interest rate per annum and the amounts outstanding under this line of credit agreement were 6.1% and $457,951, and 5.1% and $488,000, respectively. The line of credit is secured by substantially all the Company assets, other than those specifically secured by an existing agreement, as well as the building currently leased by the Company – see Note 11 – Related Party Transactions under Lease. As discussed in Note 13, the line of credit was repaid in full subsequent to year end.

 

The Company has line of credit with finance company that provides for borrowing up to $500,000. The line of credit is secured by the equipment purchased and is interest free if paid within 180 days from finance date. After applicable free interest period interest calculates as follows; 30 day LIBOR plus 6.75% - rate after Free Period to Day 365, 30 day LIBOR plus 7.00% - Rate Day 366 to 720, 30 Day LIBOR plus 7.25% - Rate Day 721 to 1095, 30 Day LIBOR plus 12.00% Matured Rate Day 1096 and above. At December 31 2018 and 2017, the amounts outstanding under this line of credit agreement were $316,505 and zero, respectively. This note was not refinanced in connection with the note described in Note 13 and remains available for the Company’s operations.

 

Note 7 – Notes Payable

 

The Company uses credit to finance the purchase of heavy equipment on a short-term and long-term basis and secured by specific pieces of equipment. Substantially all of the notes below were paid on or before March 28, 2019 with proceeds from the newly acquired credit facility as described on Note 13. Notes payable as of December 31, 2018 and 2017, consisted of the following:

 

    2018   2017
 Payable to insurance company; interest only, secured by cash surrender value of life insurance policy; no due date   $ 132,880     $ 132,880  
                 
Note Payable to finance company dated August 11, 2014; interest at 6.0% per annum; monthly principal and interest payments of $3,221; due August 11, 2018 and fully satisfied     —         54,889  

 

 

F- 12  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Note Payable 006 to finance company dated June 16, 2015; interest at 12.7% per annum; monthly principal and interest payments of $3,986; due June 16, 2018 and fully satisfied     —         15,358  
                 
Note Payable 007 to finance company dated June 16, 2015; interest at 12.7% per annum; monthly principal and interest payments of $1,343; due 60 months from issuance; secured by equipment; fully paid on March 28, 2019     20,863       33,559  
                 
Note Payable 010 to bank dated June 6, 2016; interest at 3.23% per annum; 60 monthly principal and interest payments of $2,655 and one final payment for $14,500; due 61 months from issuance; secured by equipment; fully paid on March 28, 2019     87,349       115,549  
                 
Note Payable 011 to finance company dated July 12, 2016; interest at 12.1% per annum; nine monthly payments of $1,850 and one final payment of $185,000; due 10 months from issuance; secured by equipment and fully satisfied     —         175,000  
                 
Note Payable 012 to finance company dated July 29, 2016; interest at 6.25% per annum; monthly principal and interest payments of $899; due 60 months from issuance; secured by equipment; fully paid on March 28, 2019     26,501       35,385  
                 
Note Payable 013 to finance company dated October 26, 2016; interest at 14.4% per annum; monthly principal and interest payments ranging from $1,400 to $14,850; due 26 months from issuance; secured by equipment; fully paid on March 28, 2019     14,106       49,926  
                 
Note Payable 015 to finance company dated February 1, 2017; interest at 8.5% per annum; monthly principal and interest payments of $4,546; due 24 months from issuance; secured by equipment; fully paid on March 28, 2019     4,514       60,381  
                 
Note Payable 016 to finance company dated February 20, 2017; interest at 12.0% per annum; monthly interest only payments with principal payments of $61,000 and $200,500 due on May 20, 2018 and December 20, 2018, respectively; secured by equipment and fully satisfied     —         261,500  

 

 

 

 

F- 13  
 

   AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

Note Payable 018 to finance company dated June 9, 2017; interest at 25.7% per annum; monthly payments of $12,000; due 24 months from issuance; secured by equipment; fully paid on March 28, 2019     87,086       185,697  
                 
Note Payable 019 to finance company dated August 10, 2017; interest at 19.0% per annum; monthly payments of $10,000; due 16 months from issuance; secured by equipment and fully satisfied     —         95,956  
                 
Note Payable 020 to finance company dated August 10, 2017; interest at 20.0% per annum; monthly payments of $10,000; due 15 months from issuance; secured by equipment and fully satisfied     —         91,496  
                 
Note Payable 021 to finance company dated September 11, 2017; interest at 20.8% per annum; monthly payments of $10,000; due 16 months from issuance; secured by equipment and fully satisfied     —         95,703  
                 
Note Payable 022 to finance company dated September 11, 2017; interest at 20.7% per annum; monthly payments of $10,000; due 16 months from issuance; secured by equipment and fully satisfied     —         103,015  
                 
Note Payable 023 to finance company dated September 10, 2017; monthly principal payments of various amounts; due 5 months from issuance; secured by equipment and fully satisfied     —         130,000  
                 
Note Payable 025 to finance company dated October 26, 2017; interest at 7.8% per annum; monthly principal and interest payments of $2,019; due 72 months from issuance; secured by equipment; fully paid March 28, 2019     98,580       114,397  
                 
Note Payable 027 to finance company dated November 3, 2017; monthly principal payments of $40,000; secured by equipment and fully satisfied     —         460,000  
                 
Payable to finance company; interest ranging from 7.80% to 9.04%; monthly payments of $97,090; due November 2021; secured by equipment; fully paid March 28, 2019     2,217,699       3,149,212  
                 

Note Payable 026 to finance company dated November 22, 2017; monthly principal payments of $27,900; due 36 months from issuance; secured by equipment; fully paid March 28, 2019 

    781,553       —    

 

 

   

F- 14  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

 

Note Payable 028 to finance company dated February 28, 2018; interest at 10% per annum; monthly principal and interest payments of $2,800; due 60 months from issuance; secured by equipment; fully paid March 28, 2019     124,588       —    
                 
Notes Payable 031,034,035 & 038 to finance company dated June 6 and 25, 2018, and September 7 and 25, 2018, respectively; interest at 10% annum; monthly principal and interest payments for four months at $625 then one at $63,125, for six months at $1,000 then one at $99,000, three months at $1,900 then one at $191,000, four months at $1,400 then one at $141,400; secured by equipment; fully paid March 28, 2019     252,500       —    
                 
Notes Payable 036 & 040 to finance company; interest ranging from 7.658% to 7.75%; one payment at $3,787 then 35 monthly payments of $13,588, 24 monthly payments of $5,260; secured by equipment; fully paid March 28, 2019     531,116       —    
                 
Note Payable 033 to finance company; interest at 7.49% annum; monthly principal and interest payments of $2,403; due 60 months from issuance; secured by equipment; fully paid March 28, 2019     136,188       —     
               
Other notes payable     97,328       —    
                 
Total     4,612,852       5,359,903  
                 
Less current portion     296,618       1,165,080  
                 
Long-term portion   $ 4,316,233     $ 4,194,823  

 

From time to time, the Company’s Chief Executive Officer provides a personal guarantee on certain of the equipment loans above. As discussed in Note 13, the notes payable detailed above were repaid in full subsequent to year end.

Aggregate future annual maturities of notes payable as of December 31, 2018, as refinanced, are as follows:

 

Years ending December 31:
2019     $ 296,618  
2020       —    
2021       —    
2022       4,316,234  
      $ 4,612,852  

 

 

 

 

F- 15  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

 

Note 8 – Related-Party Transactions

 

Related-Party Note Payable

 

The Company has a note payable to the Company’s Chief Executive Officer. Funds were received years ago to fund operations. The note is interest bearing at 10% per annum, unsecured and payable upon demand. The balance of the note at December 31, 2018 and 2017 was $353,643 and $402,650, respectively. During the years ended December 31, 2018 and 2017, the Company repaid $49,008 and $18,813, respectively, of this note payable. The note incurred $29,774 and $26,041 in interest expense for the years ended December 31, 2018 and 2017 respectively.

Lease

 

The Company leases a building and real property in Chico, California under a five year lease agreement from a trust whose trustee is the Company’s Chief Executive Officer. The lease provides for monthly lease payment of $9,800 per month, and expired on December 1, 2017. The Company is currently leasing the building and real property at the same rate on a month-to-month lease. Rent expense for the years ended December 31, 2018 and 2017 were $107,800 and $117,600, respectively.

 

Note 9 – Commitments and Contingencies

 

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company's financial position.

 

See Note 8 for related party operating lease.

 

Note 10 – Stockholders’ Equity

 

The Company has authorized 5,000,000 shares of $0.001 par value blank check preferred stock, of which no shares were issued and outstanding as of December 31, 2018 and 2017.

 

The Company has authorized 1,000,000,000 shares of $0.001 par value common stock, of which 753,415,879 were issued and outstanding as of December 31, 2018 and 2017. During the years ended December 31, 2018 and 2017, the Company issued no shares of common or preferred stock.

 

Note 11 – Revenues

 

During the years ended December 31, 2018 and 2017, revenues and costs related to domestic and foreign sales of equipment are as follows:  

 

      2018       2017  
    Domestic   Export   Domestic   Export
Equipment Sales   $ 6,200,821   $ 942,908   $ 6,376,266   $ 345,855
Less Cost of Sales     (4,948,450)     (752,470)     (5,247,777)     (284,645)
Gross profit   $ 1,252,371   $ 190,438   $ 1,128,489   $ 61,210

 

During the years ended December 31, 2018 and 2017, there were no foreign rentals of equipment. 

 

F- 16  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

The Company provides equipment for rental on a month-to-month basis and under terms which exceed one year. Future annual estimated rental revenues as of December 31, 2018 are as follows:

 

Years ending December 31:
2019     $ $2,085,657
2020       1,716,557
2021       687,404
      $ $4,489,618

 

 

Note 12 – Income Taxes

 

Income tax expense reflected in the statements of operations consisted of the following for the years ended December 31, 2018 and 2017:

 

    2018   2017
Current tax expense:            
Federal   $ 24,653    $ 20,983
State     38,407     —  
Total current tax expense     63,060     20,983
Deferred tax expense:            
Federal     250,056     474,997
State     55,306     98,346
Total deferred tax expense     305,362     573,343
Total tax expense   $ 368,422   $ 594,326

 

 

A reconciliation of the differences between the effective and statutory income tax rates for years ended December 31, 2018 and 2017 is as follows:

 

    2018   2017
    Amount   Percent   Amount   Percent
Federal statutory rates   $ 263,343     21.0%   $ 490,857     34.0%
State income taxes     87,781     7.0%     83,735     5.8%
Life insurance and meals     17,298     1.5%     19,679     1.4%
Change in deferred taxes related to change in federal rate     —       0.0%     55     0.0%
Income taxes \ Effective rate   $ 368,422     29.5%   $ 594,326     41.2%

  

 

F- 17  
 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017

 

 

As of December 31, 2018 and 2017, the significant components of the deferred tax assets and liabilities are summarized below:

 

    2018   2017
Deferred tax assets (liabilities)            
Net operating loss carryforwards   $ 565,284   $ 431,982
Reserves and allowances     93,404     97,744
Tax credits and other     45,637     20,984
Total deferred tax assets     704,325     550,710
Deferred tax liability -            
   Depreciation     (1,006,005)     (547,028)
Total deferred tax liabilities     (1,006,005)     (547,028)
Net deferred tax asset (liability)   $ 301,680   $ 3,682

 

  

On December 22, 2017, the Tax Cuts and Jobs Act ("Act") was signed into law in the U.S. The Act includes a broad range of tax reforms, certain of which were required by GAAP to be recognized upon enactment. The Company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete.

 

At December 31, 2017, the Company had no significant net deferred tax assets or liabilities, and as such, the Act's impact from the corporate tax rate reduction from 35% to 21%, was not significant in 2017.

 

The Company annually conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of December 31, 2018 and 2017.

 

The Company has approximately $1,985,000 in federal net operating losses that begin to expire in 2029. As of December 31, 2018, the Company has no net operating losses for state income tax reporting purposes.

 

The 2014 to 2018 tax years are still subject to examination by federal and state agencies. We filed amended income tax returns for 2015 and 2016, which are currently under examination by the Internal Revenue Service.

 

Note 13 – Subsequent Events

 

On or about March 28, 2019, the Company entered into line of credit with a finance company that provides for borrowing and refinancing up to $6.5 million, as amended. The credit facility expires March 22, 2022. Interest is due monthly at a rate of 10%, per annum. Principal only becomes due and payable if the Company reaches the maximum balance under the credit facility, for which management does not expect to reach. If the maximum balance is reached, the principal becomes payable at 1.25% of the outstanding principal balance per month. The line of credit is secured by substantially all the Company assets, other than those specifically secured by an existing agreement. Upon funding, proceeds from the financing were used to repay one of the Company’s outstanding lines of credit in Note 6 and all notes payable disclosed in Note 7.

 

 

F- 18  

 

EXHIBIT 3.1

 

AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
AMERAMEX INTERNATIONAL, INC.

 

ARTICLE 1. NAME

 

The name of this corporation is “AmeraMex International, Inc.”

 

ARTICLE 2. SHARES

 

2.1           Authorized Shares . The total number of shares which the corporation is authorized to issue is 1,005,000,000, consisting of 1,000,000,000 shares of common stock, having a par value of $0.001 (the “Common Stock”) and 5,000,000 shares of blank check preferred stock, having a par value of $0,001 (the “Preferred Stock”).

 

2.2           Issuance of Preferred Stock in Series . The Preferred Stock may be issued from time to time in one or more series in any manner permitted by law and the provisions these Articles of Incorporation of me corporation, as determined from time to time by the board of directors and stated in the resolution or resolutions providing for the issuance thereof, prior to the issuance of any shares thereof. The board of directors shall have me authority to fix and determine and to amend, subject to the provisions hereof, the rights and preferences of the shares of any series that is wholly unissued or to be established. Unless otherwise specifically provided in the resolution establishing any series, the board of directors shall further have the authority, after the issuance of shares of a series whose number it has designated, to amend the resolution establishing such series to decrease the number of shares of that series, but not below the number of shares of such series then outstanding.

 

ARTICLE 3. NO PREEMPTIVE RIGHTS

 

No statutory preemptive rights shall exist with respect to shares of stock or securities convertible into shares of stock of this corporation.

 

ARTICLE 4. NO CUMULATIVE VOTING

 

The right to cumulate votes in the election of directors shall not exist with respect to shares of stock of this corporation.

 

ARTICLE 5. BYLAWS

 

The board of directors shall have the power to adopt, amend or repeal the Bylaws or adopt new Bylaws. Nothing herein shall deny the concurrent power of the shareholders to adopt, alter, amend or repeal the Bylaws.

 

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ARTICLE 6. DIRECTORS

 

The number of directors of this corporation shall be fixed by the Bylaws and may be increased or decreased from time to time in the manner specified therein.

 

ARTICLE 7. LIMITATION OF DIRECTORS’ LIABILITY

 

To me full extent mat the Nevada Revised Statutes, as it exists on the date hereof or may hereafter be amended, permits the limitation or elimination of me liability of directors, a director of this corporation shall not be liable to this corporation or its shareholders for monetary damages for conduct as a director. Any amendments to or repeal of this Article shall not adversely affect any right or protection of a director of this corporation for or with respect to an act or omission of such director occurring prior to such repeal or modification.

 

ARTICLE 8. INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

8.1           Right to Indemnification . Any individual who is, was, or is threatened to be made a party to or is otherwise involved in (including without limitation as a witness) any threatened, pending, or completed action, suit, or other proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal (a “proceeding”), by reason of the fact that he or she is or was a director or officer of the corporation or that, while a director or officer, he or she is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, employee benefit plan, or other enterprise (an “indemnitee”), whether the basis of a proceeding is alleged action in an official capacity or in any other capacity while serving as a director, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the corporation, to me full extent permissible by applicable law as then in effect, against all losses, claims, damages, expenses and liabilities (including without limitation any obligation to pay any judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or expense incurred with respect to the proceeding, including attorneys’ fees) actually and reasonably incurred or suffered by the indemnitee in connection with the proceeding, and the indemnification shall continue as to an indemnitee who has ceased to be a director or officer of the corporation or a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Except as provided in Section 8.4 with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify the indemnitee in connection with a proceeding (or part of a proceeding) initiated by the indemnitee only if a proceeding (or part of a proceeding) was authorized or ratified by the board of directors.

 

8.2           Restrictions on Indemnification . The corporation shall not indemnify any director from or on account of: (a) any act or omission of the director finally adjudged to be intentional misconduct or a knowing violation of law; (b) any conduct of the director finally adjudged to be in violation of Nevada Revised Statutes Section 78.300 (as may hereafter be amended or supplemented relating to distributions of the corporation; or (c) any transaction with respect to which it is finally adjudged that the director personally received a benefit in money, property, or services, to which the director was not legally entitled.

 

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8.3           Advancement of Expenses . The right to indemnification conferred in this paragraph shall be a contract right and shall include the right to be paid by the corporation for the expenses incurred in defending any proceeding in advance of its final disposition (an “advancement of expenses”); provided, however, that the payment of an advancement of expenses shall be made only upon delivery to the corporation of a written undertaking, by or on behalf of the director or officer, in the form of a general unlimited obligation to repay all amounts so advanced if it shall ultimately be determined mat such director or officer is not entitled to be indemnified under this paragraph or otherwise.

 

8.4           Right of Indemnitee to Bring Suit . If a claim made on the corporation for indemnification under Section 8.1 or 8.3 is not paid in full by the corporation within 60 days after a written claim has been received by the corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of such claim and, to the extent successful in whole or in part, the indemnitee shall be entitled to be paid also the expense of bring such suit. An indemnitee shall be presumed to be entitled to indemnification under this Article upon submission of a written claim to the corporation or, in an action brought to enforce a claim for an advancement of expenses, where the required undertaking has been tendered to the corporation; and thereafter the corporation shall have the burden of proof to overcome the presumption that the claimant is not so entitled. Neither the failure of the corporation (including its board of directors, independent legal counsel or its shareholders) to have made a determination prior to the filing of such petition that indemnification or reimbursement or advancement of expenses to the claimant is proper in me circumstances, nor an actual determination by me corporation (including its board of directors, independent legal counsel or its shareholders) that the claimant is not entitled to indemnification or to me reimbursement or advancement of expenses, shall be a defense to the action or create a presumption mat the claimant is not so entitled.

 

8.5           Nonexclusivity of Rights . Except as set forth in Section 8.4 herein, the right to indemnification and the advancement of expenses conferred in this Article shall not be exclusive of any other right which any individual may have or hereafter acquire under any statute, provision of the Articles of Incorporation, Bylaws, agreement, vote of shareholders or disinterested directors or otherwise. Notwithstanding any amendment or repeal of this Article, or of any amendment or repeal of any of the procedures that may be established by the board of directors pursuant to tins Article, any indemnitee shall be entitled to indemnification in accordance with the provisions of these Articles of Incorporation and those procedures with respect to any acts or omissions of the indemnitee occurring prior to the amendment or repeal.

 

8.6           Insurance, Contracts and Funding . The corporation may maintain insurance, at its expense, to protect itself and any director, trustee, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such individual against such expense, liability or loss under the Nevada Revised Statutes. Without further shareholder action, the corporation may enter into contracts with any director or officer of the corporation in furtherance of the provisions of this Article and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in tins Article.

 

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8.7            Indemnification of Employees and Agents of the Corporation . From time to time by action of its board of directors, the corporation may provide to employees and agents of the corporation indemnification and payment of expenses in advance of the final disposition of a proceeding to the same extent provided to officers of the corporation by the provisions of this Article or pursuant to rights granted in or provided by the Nevada Revised Statutes.

 

ARTICLE 9. AUTHORITY TO AMEND ARTICLES OF INCORPORATION

 

The corporation reserves the right to amend or repeal any of the provisions contained in these Articles of Incorporation in any manner now or hereafter permitted by the Nevada Revised Statutes or by these Amended and Restated Articles of Incorporation, and the rights of the shareholders of this corporation are granted subject to this reservation.

 

ARTICLE 10. SHAREHOLDER VOTING REQUIREMENT FOR CERTAIN TRANSACTIONS

 

To be adopted by the shareholders, an amendment of the Articles of Incorporation, a plan of merger or share exchange with any other corporation, the sale, lease, exchange, or other disposition, whether in one transaction or a series of transactions, by this corporation of all, or substantially all, of the corporation’s assets other than in the usual and regular course of business, or dissolution of the corporation must be approved by a majority of the votes in each voting group entitled to be cast on such mater. This Article is intended to reduce the voting requirements otherwise prescribed by the Nevada Revised Statutes with respect to the foregoing matters.

 

ARTICLE 11. SHAREHOLDER ACTION BY WRITTEN CONSENT

 

Any action required or permitted to be taken at a meeting of shareholders of me corporation may be taken without a meeting or a vote if either: (a) the action is taken by written consent of all shareholders entitled to vote on the action; or (b) so long as the corporation is not a public company, the action is taken by written consent of shareholders holding of record, or otherwise entitled to vote, in the aggregate not less man me minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote on the action were present and voted. To the extent the Nevada Revised Statutes requires prior notice of any such action to be given to nonconsenting or nonvoting shareholders, such notice shall be given before the date on which the action becomes effective. The notice shall be in the form of a record and shall contain or be accompanied by the same material mat, under the Nevada Revised Statutes, would have been required to be delivered to nonconsenting or nonvoting shareholders in a notice of meeting at which the proposed action would have been submitted for shareholder action. Such notice shall be provided in the same manner as the Bylaws or these Amended and Restated Articles of Incorporation require or permit other notices to shareholders to be provided.

 

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EXECUTED this 30 th day of January, 2017.

 

   
  Lee Hamre, President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5  

 

     
  BARBARA K. CEGAVSKE
Secretary of State
202 North Carson Street
Carson City, Nevada 89701-4201
(775) 684-5708
Website: www.nvsos.gov
 

 

Certificate to Accompany
Restated Articles or
Amended and Restated Articles
(PURSUANT TO NRS)
 
 
 
Filed in the office of Document Number

20170214891-75
Barbara K. Cegavske
Secretary of State
Filing Date and Time
05/15/2017 8:00 AM
State of Nevada Entity Number
C4729-1990


 

USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY

 

This Form is to Accompany Restated Articles or Amended and Restated Articles of Incorporation
(Pursuant to NRS 78.403, 82.371, 86.221, 87A, 88.355 or 88A.250) 

(This form is also to be used to accompany Restated Articles or Amended and Restated Articles for Limited-Liability
Companies, Certificates of Limited Partnership, Limited-Liability Limited Partnerships and Business Trusts)

 

1. Name of Nevada entity as last recorded in this office: 

AMERAMEX INTERNATIONAL, INC.

 

 

2. The articles are: (mark only one box)         ☐ Restated          ☒  Amended and Restated 

Please entitle your attached articles “Restated” or “Amended and Restated,” accordingly.

 

3. Indicate what changes have been made by checking the appropriate box:* 

       
  No amendments; articles are restated only and are signed by an officer of the corporation who has been authorized to execute
    the certificate by resolution of the board of directors adopted on:  
    The certificate correctly sets forth the text of the articles or certificate as amended to the date of the certificate.
     
  The entity name has been amended.
     
  The registered agent has been changed. (attach Certificate of Acceptance from new registered agent)
     
  The purpose of the entity has been amended.
     
  The authorized shares have been amended.
     
  The directors, managers or general partners have been amended.
     
  IRS tax language has been added.
     
  Articles have been added.
     
  Articles have been deleted.
     
  Other. The articles or certificate have been amended as follows: (provide article numbers, if available)
  Articles I through XI of the original Articles of Incorporation filed May 29, 1990, are hereby deleted and replaced in their entirety with Articles 1 through 11 of the attached Amended and Restated Articles of Incorporation dated and effective as of January 30, 2017.

 

4. Effective date and time of filing: (optional)   Date: 01/30/2017   Time:  
    (must not be later than 90 days after the certificate is filed)

 

* This form is to accompany Restated Articles or Amended and Restated Articles which contain newly altered or amended articles.

The Restated Articles must contain all of the requirements as set forth in the statutes for amending or altering the articles for certificates.

IMPORTANT: Failure to include arty of the above information and submit with the proper fees may cause this filing to be rejected.

 

This form must be accompanied by appropriate fees. Nevada Secretary of state Restated Articles
Revised: 1-5-15

 

 

 

EXHIBIT 3.2

 

AMERAMEX INTERNATIONAL, INC.

 

A Nevada Corporation

 

BY-LAWS

 

ARTICLE ONE: OFFICES

 

Section 1.1. Registered Office - The registered office of this corporation shall be in the Country of Carson, Carson City, State of Nevada.

 

Section 1.2. Other Offices - The corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the corporation may require.

 

ARTICLE TWO: MEETINGS OF STOCKHOLDERS

 

Section 2.1. Place . All annual meetings of the stockholders shall be held at the registered office of the corporation or at such other place within or without the State of Nevada as the directors shall determine Special meetings of the stockholders may be held at such time and place within or without the State of Nevada as shall be stated in the notice of the meeting, or in a duly executed waiver of notice thereof.

 

Section 2.2. Annual Meetings . Annual meetings of the stockholders, commencing, with the year 2007, shall be held on March 1st each year if not a legal holiday and. if a legal holiday, then on the next secular day following, or at such other time as may be set by the Board of Directors from time to time, at which the stockholders shall elect by vote a Board of Directors and transact such other business as may properly be brought before the meeting.

 

Section 2.3. Special Meetings . Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the President or the Secretary by resolution of the Board of Directors or at the request in writing, of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose of the proposed meeting.

 

Section 2.4 . Notices of Meetings . Notices of meetings shall be in writing and signed by the President or a Vice-President or the Secretary or an Assistant Secretary or by such other person or persons as the directors shall designate. Such notice shall state the purpose or purposes for which the meeting, is called and the time and the place, which may be within or without this State, where it is to be held. A copy of such notice shall be either delivered personally to or shall be mailed, postage prepaid, to each stockholder of record entitled to vote at such meeting not less than ten nor more than sixty days before such meeting. If mailed, it shall be directed to a stockholder at his address as it appears upon the records of the corporation and upon such mailing of any such notice, the service thereof shall be complete and the time of the notice shall be to run from the date upon which such notice is deposited in the mail for transmission to such stockholder, Personal delivery of any such notice to any officer of a corporation or association or to any member of a partnership shall constitute delivery of such notice to such corporation, association or partnership. In the event of the transfer of stock after delivery of such notice of and prior to the holding, of the meeting, it shall not be necessary to deliver or mail notice of the meeting to the transferee.

 

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Section 2.5. Purpose of Meetings . Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

 

Section 2.6. Quorum . The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting us originally notified.

 

Section 2.7. Voting . When a quorum is present or represented at any meeting, the vote of the holders of a majority of the stock having, voting power present in person or represented by proxy shall be sufficient to elect directors or to decide any questions brought before such meeting, unless the question is one upon which by express provision of the statutes or of the Articles of Incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question.

 

Section 2.8. Share Voting . Each stockholder of record of the corporation shall be entitled at each meeting, of stockholders to one vote for each share of stock standing in his name on the books of the corporation. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting shall be by ballot.

 

Section 2.9. Proxy . At any meeting of the stockholders any stockholder may be represented and vote by a proxy or proxies appointed by an instrument in writing. In the event that any such instrument in writing shall designate two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the secretary of the meeting, when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by the inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting.

 

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Section 2.10. Written Consent in Lieu of Meeting . Any action which may be taken by the vote of the stockholders at a meeting may be taken without a meeting if authorized by the written consent of stockholders holding at least a majority of the voting power, unless the provisions of the statutes or of the Articles of Incorporation require a greater proportion of voting, power to authorize such action in which case such greater proportion of written consents shall be required.

 

ARTICLE THREE: DIRECTORS

 

Section 3.1. Powers . The business of the corporation shall be managed by its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

 

Section 3.2. Number of Directors . The number of directors which shall constitute the whole board shall be a range from a minimum of five (5) to nine (9) directors. The directors shall be elected at the annual meeting of the stockholders, and except as provided in Section 2 of this Article, each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders.

 

Section 3.3. Vacancies . Vacancies in the Board of Directors including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or a special meeting, of the stockholders. The holders of a two-thirds of the outstanding shares of stock entitled to vote may at any time peremptorily terminate the term of office of all or any of the directors by vote at a meeting called for such purpose or by a written statement filed with the secretary or, in his absence, with any other officer. Such removal shall be effective immediately, even if successors are not elected simultaneously and the vacancies on the Board of Directors resulting therefrom shall be filled only by the stockholders.

 

A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the stockholders fail at any annual or special meeting, of stockholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at that meeting.

 

The stockholders may elect a director or directors at any time to flu any vacancy or vacancies not filled by the directors. If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the Board or the stockholders shall have power to elect a successor to take office when the resignation is to become effective.

 

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No reduction of the authorized number of directors shall have the effect of removing, any director prior to the expiration of his term of office.

 

ARTICLE FOUR: MEETINGS OF THE BOARD OF DIRECTORS

 

Section 4.1. Place . Regular meetings of the Board of Directors shall be held at any place within or without the State which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation regular meetings shall be held at the registered office of the corporation. Special meetings of the Board may be held either at a place so designated or at the registered office.

 

Section 4.2. First Meeting . The first meeting of each newly elected Board of Directors shall be held immediately following the adjournment of the meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum be present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors.

 

Section 4.3. Regular Meetings . Regular meetings of the Board of Directors may be held without call or notice at such time and at such place as shall from time to time be fixed and determined by the Board of Directors.

 

Section 4.4. Special Meetings . Special Meetings of the Board of Directors may be called by the Chairman or the President or by any Vice-President or by any two directors.

 

Written notice of the time and place of special meetings shall be delivered personally to each director, or sent to each director by mail or by other form of written communication, charges prepaid, addressed to him at his address as it is shown upon the records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held. In case such notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company at lease forty-eight (48) hours prior to the time of the holding of the meeting. In case such notice is delivered as above provided, it shall be so delivered at lease twenty-four (24) hours prior to the time of the holding, of the meeting,. Such mailing, telegraphing or delivery as above provided shall be due, legal and personal notice to such director.

 

Section 4.5. Notice . Notice of the time and place of holding an adjourned meeting need not be given to the absent directors if the time and place be fixed at the meeting adjourned.

 

Section 4.6. Waiver . The transactions of any meeting of the Board of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if. either before or after the meeting, each of the directors not present signs a written waiver of notice, or a consent to holding such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

 

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Section 4.7. Quorum . A majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by law or by the Articles of Incorporation. Any action of a majority, although not at a regularly called meeting and the record thereof, if assented to in writing by all of the other members of the Board shall be as valid and effective in all respects as if passed by the Board in regular meeting.

 

Section 4.8. Adjournment . A quorum of the directors may adjourn any directors meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the directors present at any directors meeting, either regular or special, may adjourn from time to time until the time fixed for the next regular meeting, of the Board.

 

ARTICLE FIVE: COMMITTEES OF DIRECTORS

 

Section 5.1. Power to Designate . The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the corporation which, to the extent provided in the resolution, shall have and may exercise the power of the Board of Directors in the management of the business and affairs of the corporation and may have power to authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The members of any such committee present at any meeting and not disqualified from voting, may, whether or not they constitute a quorum, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members shall constitute a quorum for the transaction of business, and the act of a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee.

 

Section 5.2. Regular Minutes - The committees shall keep regular minutes of their proceedings and report the same to the Board of Directors.

 

Section 5.3. Written Consent - Any action required or permitted to be taken at any meeting, of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee.

 

ARTICLE SIX: COMPENSATION OF DIRECTORS

 

Section 6.1. Compensation - The directors may be paid their expenses of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like reimbursement and compensation for attending committee meetings.

 

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ARTICLE SEVEN: NOTICES

 

Section 7.1. Notice - Notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to directors may also be given by telegram.

 

Section 7.2. Consent . Whenever all parties entitled to vote at any meeting, whether of directors or stockholders, consent, either by a writing on the records of the meeting or filed with the secretary, or by presence at such meeting and oral consent entered on the minutes, or by taking part in the deliberations at such meeting without objection, the doings of such meetings shall be as valid as if had at a meeting regularly called and noticed, and at such meeting any business may be transacted which is not excepted from the written consent or to the consideration of which no objection for want of notice is made at the time, and if any meeting be irregular for want of notice or of such consent, provided a quorum was present at such meeting, the proceedings of said meeting may be ratified and approved and rendered likewise valid and the irregularity or defect therein waived by a writing signed by all parties having the right to vote at such meeting, and such consent or approval of stockholders may be by proxy or attorney, but all such proxies and powers of attorney must be in writing.

 

Section 7.3. Waiver of Notice . Whenever any notice whatever is required to be given under the provisions of the statutes, of the Articles of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

 

ARTICLE EIGHT: OFFICERS

 

Section 8.1. Appointment of Officers . The officers of the corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. Any person may hold two or more offices.

 

Section 8.2. Time Of Appointment . The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a Chairman of the Board who shall be a director, and shall choose a President, a Secretary and a Treasurer, none of whom need be directors.

 

Section 8.3. Additional Officers . The Board of Directors may appoint a Vice Chairman of the Board, Vice-Presidents and one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

 

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Section 8.4. Salaries . The salaries and compensation of au officers of the corporation shall be fixed by the Board of Directors.

 

Section 8.5. Vacancies - The officers of the corporation shall hold office at the pleasure of the Board of Directors. Any officer elected or appointed by the Board of Directors may be removed at any lime by the Board of Directors. -Any vacancy occurring, in any office of the corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors.

 

Section 8.6. Chairman of the Board . The Chairman of the Board shall preside at meetings of the stockholders and the Board of Directors, and shall see that all orders and resolutions of the Board of Directors are carried into effect.

 

Section 8.7. Vice-Chairman . The Vice-Chairman shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties as the Board of Directors may from time to time prescribe.

 

Section 8.8. President . The President shall be the chief executive officer of the corporation and shall have active management of the business of the corporation. He shall execute on behalf of the corporation all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly designated by the Board of Directors to some other officer or agent of the corporation.

 

Section 8.9. Vice-President . The Vice-President shall act under the direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice-Presidents. The duties and powers of the President shall descend to the Vice-Presidents in such specified order of seniority.

 

Section 8.10. Secretary . The Secretary shall act under the direction of the President. Subject to the direction of the President he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings. He shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors.

 

Section 8.11. Assistant Secretaries . The Assistant Secretaries shall act under the direction of the President. In order of their seniority, unless otherwise determined by the President or the Board of Directors, they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe.

 

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Section 8.12. Treasurer . The Treasurer shall act under the direction of the President. Subject to the direction of the President he shall have custody of the corporate fends and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all monies and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the corporation.

 

Section 8.13. Surety . If required by the Board of Directors, he shall give the corporation a bond in such sum and with such surely or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

 

Section 8.14. Assistant Treasurer . The Assistant Treasurer in the order of their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe.

 

ARTICLE NINE: CERTIFICATES OF STOCK

 

Section 9.1. Share Certificates . Every stockholder shall be entitled to have a certificate signed by the President or a Vice-President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares owned by him in the corporation. If the corporation shall be authorized to issue more than once class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications, limitations or restrictions of such rights, shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such stock.

 

Section 9.2. Transfer Agents . If a certificate is signed (a) by a transfer agent other than the corporation or its employees or (b) by a registrar other than the corporation or its employees, the signatures of the officers of the corporation may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall cease to be such officer before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer. The seal of the corporation, or a facsimile thereof, may, but need not be, affixed to certificates of stock.

 

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Section 9.3. Lost or Stolen Certificates . The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed.

 

Section 9.4. Share Transfers . Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation, if it is satisfied that all provisions of the laws and regulations applicable to the corporation regarding transfer and ownership of shares have been complied with, to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

 

Section 9.5. Voting Shareholder . The Board of Directors may fix in advance a date not exceeding sixty (60) days nor less than ten (10) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining the consent of stockholders for any purpose, as a record date for the determination of the stockholders entitled to notice of and to vote at any such meeting, and any adjournment thereof, or entitled to receive payment of any such dividend, or to give such consent, and in such case, such stockholders, and only such stockholders as shall be stockholder of record on the date so fixed, shall be entitled to notice of and to vote at such meeting, or any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid.

 

Section 9.6. Shareholders Record . The corporation shall be entitled to recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting, and dividends, and the corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as other wise provided by the laws of Nevada.

 

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ARTICLE TEN: GENERAL PROVISIONS

 

Section 10.1 . Dividends . Dividends upon the capital stock of the corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the Articles of Incorporation.

 

Section 10.2. Reserves . Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing, dividends or for repairing or maintaining any property of the corporation or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

 

Section 10.3. Checks . All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

 

Section 10.4. Fiscal Year . The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

 

Section 10.5. Corporate Seal . The corporation may or may not have a corporate seal, as may from time to time be determined by resolution of the Board of Directors. If a corporate seal is adopted, it shall have inscribed thereon the name of the Corporation and the words “Corporate Seals” and “Nevada.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced.

 

ARTICLE ELEVEN: INDEMNIFICATION

 

Every person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he or a person of whom he is the legal representative is or was a director or officer of the corporation or is or was serving, at the request of the corporation or for its benefit as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the General Corporation Law of the State of Nevada from time to time against all expenses, liability and loss including attorney fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under this Article.

 

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The Board of Directors may cause the corporation to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person.

 

The Board of Directors may from time to time adopt further Bylaws with respect to indemnification and may amend these and such Bylaws to provide at all limes the fullest indemnification permitted by the Statutes of the State of Nevada.

 

ARTICLE TWELVE: AMENDMENTS

 

Section 12.1. By Shareholder . The Bylaws may be amended by a majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting.

 

Section 12.2. By Board of Directors . The Board of Directors by a majority vote of the whole Board at any meeting may amend these Bylaws, including Bylaws adopted by the stockholders, but the stockholders may from time to lime specify particular provisions of the Bylaws which shall not be amended by the Board of Directors.

 

* * * * *

 

APPROVED AND ADOPTED effective as of the 2nd of November 2006.
   
Lee R. Hamre, CEO  

 

 

 

 

 

 

 

 

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EXHIBIT 3.3

NEFPASS LLC

 

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (this “Agreement” ) is made as of the ______day of ____________,___________, by and between NEFPASS LLC (“ Lender ”) and AMERAMEX INTERNATIONAL, INC. (“Borrower”).

Borrower is desirous of obtaining a loan from Lender and Lender is willing to make the loan to Borrower upon the terms and conditions set forth herein.

Capitalized terms used herein without definition shall have the meanings assigned to them in Schedule A attached hereto and, for purposes of this Agreement and the other Loan Documents, the rules of construction set forth in Schedule A shall govern.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

1.      ADVANCE OF LOAN .

(a)        The Loan . On the terms and conditions hereinafter set forth, the parties agree that Lender shall lend to Borrower certain sums (hereinafter individually and collectively referred to as the “Loan” ) on the terms specified herein. Time is of the essence.

(b)        Schedules . The amount of each Loan shall be specified on a Schedule now or hereafter attached hereto, in form and substance satisfactory to Lender (hereinafter individually and collectively referred to as the “ Schedule ”), and the principal of the Loan, together with interest on the unpaid balance of such amount from the date of the advance at the Loan Rate specified on such Schedule, shall be payable on the terms and conditions specified in the Schedule.

(c)        Additional Advances under the Schedule . Following the Closing Date and prior to the Stated Maturity Date, Borrower may request additional advances, in an amount not less than $100,000, under the Schedule (an “Advance” ) to purchase equipment, provided the aggregate of the amount of the Advance and the outstanding principal balance of the Schedule does not exceed the Maximum Amount, and the Equipment Conditions are satisfied, in Lender’s sole discretion. Any request for an Advance shall be made by Borrower delivering to Lender a request in the form attached hereto as Exhibit A (“Advance Request”), and shall be accompanied by all documentation and information necessary to satisfy the Equipment Conditions. Borrower may not request more than one Advance per calendar week.

(d)        Single Loan . The Loan and all of the other Obligations of Borrower to Lender shall constitute one general obligation of Borrower secured by all of the Collateral.

2.      PAYMENTS AND PREPAYMENT OF LOAN .

(a)        Principal Payment . On each Payment Date, Borrower shall pay the aggregate principal payments owed with respect to the Loan as set forth in the Schedule; provided, however, on the Stated Maturity Date or date of acceleration of the Loan, Borrower shall repay in full the aggregate of then outstanding principal amount of the Loan plus all accrued and unpaid interest thereon, any Prepayment Fee applicable to the Loan and all other amounts owed hereunder and under each Loan Document related to the Loan. Borrower shall pay accrued interest on the Loan on each Payment Date as provided in Section 2(c) hereof.

(b)        Acceleration . Upon any acceleration of the Loan pursuant to this Agreement or any other Loan Document, Borrower shall immediately repay all (or if only a portion is accelerated thereunder, such portion of) the Loan then outstanding, including all accrued and unpaid interest thereon, plus the aggregate Prepayment Fee for the Loan and all other amounts owed under the Loan Documents.

(c)        Interest , Borrower shall pay interest to Lender on the aggregate outstanding principal balance of the Loan at the Loan Rate. In no event will Lender charge interest at a rate that exceeds the highest rate of interest permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Interest shall be payable on the outstanding principal amount of the Loan on each Payment Date. If any payment due hereunder or under any other Loan Document is not received within five (5) days of its due date, Borrower shall pay a late charge equal to five (5) percent of the amount in arrears.

 

 

(d)        Default Rate . Effective upon the occurrence of any Default and for so long as any Default shall be continuing, the Loan Rate shall automatically be increased to eighteen (18) percent per annum (such increased rate, the “Default Rate”), and all outstanding Obligations, including unpaid interest, shall continue to accrue interest from the date of such Default at the Default Rate applicable to such Obligations.

(e)        Payment Date . If any interest or any other payment to Lender under this Agreement becomes due and payable on a day other than a Business Day, such Payment Date shall be extended to the next succeeding Business Day (unless such next succeeding Business Day is in the next calendar month, in which case such payment date shall be the immediately preceding Business Day) and interest thereon shall be payable at the then applicable rate during such extension.

(f)         Payment by ACH Transfer . Borrower shall make each payment under this Agreement without setoff, counterclaim or deduction and free and clear of all Taxes not later than 12:00 Noon, New York, New York time, on the day when due in lawful money of the United States of America. In order to make such payments, Borrower hereby authorizes Lender to initiate electronic debit or credit entries through the ACH system to any deposit account maintained by Lessee wherever located. Borrower warrants and represents that under no circumstances will it reverse, void, or otherwise render invalid any electronic debit or credit initiated by the Lessor. If Borrower shall be required by law to deduct any Taxes from any payment to Lender under any Loan Document, then the amount payable to Lender shall be increased so that, after making all required deductions, Lender receives an amount equal to that which it could have received had no such deductions been made. For purposes of computing interest and fees, any payments received after 12:00 Noon, New York, New York time, shall be deemed received by Lender on the next Business Day.

(g)        Application of Payments . Borrower irrevocably agrees that Lender shall have the continuing and exclusive right to apply any and all payments against the then due and payable Obligations in such order as Lender may deem advisable. Lender is authorized to, and at its option may (without prior notice or precondition and at any time or times), but shall not be obligated to, make or cause to be made advances on behalf of Borrower for: (1) payment of all fees, expenses, indemnities, charges, costs, principal, interest, or other Obligations owing by Borrower under this Agreement or any of the other Loan Documents, (2) the payment, performance or satisfaction of any of Borrower’s obligations with respect to preservation of the Collateral, or (3) any premium in whole or in part required in respect of any of the policies of insurance required by this Agreement, even if the making of any such advance causes the outstanding balance of the Loan to exceed the Maximum Amount and Borrower agrees to repay immediately, in cash, any amount by which the Loan exceeds the Maximum Amount.

(h)       Increased Capital Costs . If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority affects or would affect the amount of capital required or expected to be maintained by any Lender or any Person controlling Lender, and such Lender determines that the rate of return on its or such controlling Person’s capital as a consequence of making its Loan is reduced to a level below that which Lender or such controlling Person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by such Lender to Borrower, Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return. A statement of Lender as to any such additional amount or amounts (including calculations thereof in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on Borrower.

3.      SECURITY . As security for the payment as and when due of the indebtedness of Borrower to Lender hereunder and under all Schedules (and any renewals, extensions and modifications thereof) and under any other agreement or instrument, both now in existence and hereafter created (as the same may be renewed, extended or modified), and the performance as and when due of all other Obligations of Borrower to Lender, both now in existence and hereafter created (as the same may be renewed, extended or modified), Borrower hereby grants to Lender a security interest in: (a) equipment, including, but not limited to, the items of equipment described on the collateral schedule(s) in form and substance satisfactory to Lender (hereinafter collectively referred to as the “Equipment Schedule” ) now or hereafter executed in connection with the Schedule, together with all related software (embedded therein or otherwise) and all replacements, substitutions and exchanges therefor and thereof and accessions thereto (the “Equipment” ); (b) as and to the extent applicable, all leases, rental contracts, chattel paper, accounts, accounts receivable, security deposits and general intangibles relating thereto, in each case in which Borrower shall from time to time acquire an interest; (c) any and all insurance and/or other proceeds thereof; (d) all chattel paper, accounts, instruments, general intangibles (including payment intangibles), commercial tort claims, deposit accounts, goods, inventory, documents, fixtures, investment property and securities, and letter of credit rights of Borrower; and (e) all accessions, products, and proceeds of the foregoing (the “Collateral” ). Borrower agrees that, with respect to the Collateral, Lender shall have all of the rights and remedies of a secured party under the UCC. Borrower hereby authorizes Lender to file UCC financing statements (“UCC Statements”) describing the Collateral, including, but not limited to, describing the Collateral as “all assets of Borrower” or words of similar import. Without Lender’s prior written consent, Borrower agrees not to file any corrective or termination statements or partial releases with respect to any UCC Statements filed by Lender pursuant to this Agreement.

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4.      CONDITIONS PRECEDENT TO LENDER’S OBLIGATION . The obligation of Lender to make the Loan as set forth in Section 1 hereof is expressly conditioned upon compliance by Borrower, to the reasonable satisfaction of Lender and its counsel, of the following conditions precedent:

(a)        Initial Advance . Concurrently with the execution hereof, or on or prior to the first date on which Lender is to advance the Loan hereunder, Borrower shall cause to be provided to Lender the following:

(1)       Resolutions of the Board of Directors, managing body or validly authorized Executive Committee of Borrower, certified by the Secretary or an Assistant Secretary of Borrower, duly authorizing the borrowing of funds hereunder and the execution, delivery and performance of this Agreement, the Schedule and all related instruments and documents.

(2)       An Agreement of Guaranty in form and substance satisfactory to Lender (hereinafter referred to as the “Guaranty” ) duly executed by or on behalf of Lee Hamre (hereinafter referred to as “Guarantor” ).

(3)       Resolutions of the Board of Directors, managing body or validly authorized Executive Committee of Guarantor, certified by the Secretary or an Assistant Secretary of Guarantor, duly authorizing the undertaking to guarantee Borrower’s obligations hereunder and the execution, delivery and performance of the Guaranty.

(4)       An appraisal of the Collateral to be completed by an appraiser selected by Lender at Borrower’s expense.

(5)       Satisfactory review of all Loan Documents, all due diligence reasonably requested by Lender, and delivery of any other documents, instruments, or agreements as Lender may require in its reasonable discretion.

(6)       A payoff letter with respect to Borrower’s existing debt being paid off, which letter shall include confirmation the lender(s) of such existing debt will file all applicable UCC-3 termination statements or authorize Lender to do so, and other be in form and substance acceptable to Lender in its sole discretion.

(7)       A letter of direction with respect to Borrower’s existing debt being paid off.

(8)       Payment to Lender of a fee in immediately available funds in an amount equal to 3% of the Loan Amount.

(9)       Deliver any agreements, instruments or other documents reasonably requested by Lender in order for Lender to make the ACH withdrawals for payments as set forth in Section 2(f).

(b)        Each Advance . On each date on which Lender is to advance funds hereunder,

 (1)       Borrower shall cause to be provided to Lender the following:

  a.       A certificate executed by the Secretary or an Assistant Secretary of Borrower, certifying that the representations and warranties of Borrower contained herein remain true and correct as of such date, and that no Default or event which, with the giving of notice or the lapse of time, or both, would become a Default hereunder, has then occurred.

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b.       Evidence satisfactory to Lender as to due compliance with the insurance provisions of Section 6(f) hereof.

 

c.       A Schedule in the amount of the Loan to be advanced on such date, duly executed on behalf of Borrower, pursuant to Section 1 hereof.

 

d.       Photocopies of the invoice(s) or other evidence reasonably satisfactory to Lender and its counsel, related to the acquisition cost of the Collateral to which such advance of the Loan relates.

 

e.       An Equipment Schedule describing the Collateral to which such advance of the Loan relates.

 

f.       Such documents and instruments, and other actions, as reasonably may be required by Lender to note Lender (or its nominee) as the registered lienholder on the certificate of title, including, but not limited to the documents and instruments described on the attached Rider Number 1 (the “Title Lien Notation Documents” ) with respect to the Equipment to which such advance of the Loan relates.

 

(2)           Such filings shall have been made and other actions taken as reasonably may be required by Lender and its counsel to perfect a valid, first priority security interest granted by Borrower to Lender with respect to the Collateral.

 

(3)           No Default or event which, with the giving of notice or lapse of time, or both, would become a Default hereunder, shall have occurred.

 

(4)           No event shall have occurred which could have a Material Adverse Effect.

 

5.             REPRESENTATIONS AND WARRANTIES . Borrower hereby represents and warrants that:

 

(a)            Business Existence . Borrower has the form of business organization, and is and will remain duly organized and validly existing in good standing under the laws of the jurisdiction, specified below the signature of Borrower; and is duly qualified and authorized to transact business and is in good standing wherever necessary to perform its obligations under the Loan Documents, including each jurisdiction in which the Collateral is to be located.

 

(b)            Requisite Power and Authority . Borrower has the requisite power and authority to own or hold under lease its properties and to enter into and perform its obligations hereunder; and the borrowing hereunder by Borrower from Lender, the execution, delivery and performance of the Loan Documents, (1) have been duly authorized by all necessary action consistent with Borrower’s form of organization; (2) do not require any approval or consent of any stockholder, member, partner, trustee or holders of any indebtedness or obligations of Borrower except such as have been duly obtained; and (3) do not and will not contravene any law, governmental rule, regulation or order now binding on Borrower, or the organizational documents of Borrower, or contravene the provisions of, or constitute a default under, or result in the creation of any Lien or encumbrance upon the property of Borrower under any agreement to which Borrower is a party or by which it or its property is bound.

 

(c)           No Consents or Approvals . Neither the execution and delivery by Borrower of the Loan Documents, nor the consummation of any of the transactions by Borrower contemplated hereby or thereby, requires the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any Federal, state or foreign governmental authority or agency, except as provided herein.

 

(d)            Enforceability . This Agreement constitutes, and all other Loan Documents when entered into will constitute, the legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with the terms hereof and thereof, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting the enforcement of creditors’ rights generally, and by applicable laws (including any applicable common law and equity) and judicial decisions which may affect the remedies provided herein and therein.

 

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(e)            Litigation . There are no pending or threatened actions or proceedings to which Borrower is a party, and there are no other pending or threatened actions or proceedings of which Borrower has knowledge, before any court, arbitrator or administrative agency, which, either individually or in the aggregate, would have a Material Adverse Effect. Further, Borrower is not in default under any material obligation for the payment of borrowed money, for the deferred purchase price of property or for the payment of any rent which, either individually or in the aggregate, would have a Material Adverse Effect.

 

(f)             Not Real Property Fixtures . Under the laws of the state(s) in which the Equipment is to be located, the Equipment consists solely of personal property and not fixtures.

 

(g)            Validity and Priority of Security Interest. (i) Borrower has or will have, as the case may be, good and marketable title to the Collateral, free and clear of all Liens and encumbrances (excepting only the Lien of Lender). Lender will have a valid, perfected, first priority security interest in the Collateral.

 

(ii)           Upon payment in full of the acquisition cost of the Equipment, Borrower will have good and marketable title to the Equipment, free and clear of all Lenders and encumbrances (excepting only the Lien of Lender). Upon the last to occur of: (A) delivery of an item of Equipment, (2) payment to the vendor of the acquisition cost of such item of Equipment, (3) advance by Lender to Borrower of the Loan relating to such item of the Equipment, (4) filing in the appropriate public office of a UCC financing statement naming Borrower as debtor, and Lender as secured party, and describing such item of the Equipment, and (5) filing in the appropriate public office of the Title Lien Notation Documents with respect to the portion of the Equipment comprised of certificate of title motor vehicles, Lender will have a valid, perfected, first priority purchase money security interest in such item of the Equipment.

 

(h)            Financial Statements . The financial statements of Borrower (copies of which have been furnished to Lender) have been prepared in accordance with GAAP, and fairly present Borrower’s financial condition and the results of Borrower’s operations as of the date of and for the period covered by such statements, and since the date of such statements there has been no Material Adverse Effect on such conditions or operations.

 

(i)             Tax Returns and Payments . Borrower has filed or has caused to have been filed all federal, state and local tax returns which, to the knowledge of Borrower, are required to be filed, and has paid or caused to have been paid all taxes as shown on such returns or on any assessment received by it, to the extent that such taxes have become due, unless and to the extent only that such taxes, assessments and governmental charges are currently contested in good faith and by appropriate proceedings by Borrower and adequate reserves therefor have been established as required under GAAP. To the extent Borrower believes it advisable to do so, Borrower has set up reserves which are believed by Borrower to be adequate for the payment of additional taxes for years which have not been audited by the respective tax authorities.

 

(j)             No Violation of Law . Borrower is not in violation of any law, ordinance, governmental rule or regulation to which it is subject and the violation of which would have a Material Adverse Effect, and Borrower has obtained any and all licenses, permits, franchises or other governmental authorizations necessary for the ownership of its properties and the conduct of its business.

 

(k)           Use of Proceeds . None of the proceeds of the Loan will be used, directly or indirectly, by Borrower for the purpose of purchasing or carrying, or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry, any “margin security” or “margin stock” within the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve System (herein called “margin security” and “margin stock”) or for any other purpose which might make the transactions contemplated herein a “purpose credit” within the meaning of Regulation U, or cause this Agreement to violate any other regulation of the Board of Governors of the Federal Reserve System or the Securities Exchange Act of 1934 or the Small Business Investment Act of 1958, as amended, or any rules or regulations promulgated under any of such statutes.

 

(I)             Business Information . The legal name, jurisdiction of organization, Federal Employer Identification Number and Organizational Number of Borrower, specified on the signature page hereof, are true and correct. Within the previous six (6) years, Borrower has not changed its name, done business under any other name, or merged or been the surviving entity of any merger, except as disclosed to Lender in writing.

 

(m)           ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other existing ERISA Events, could reasonably be expected to result in a liability of Borrower of more than the Minimum Actionable Amount. The present value of all accumulated benefit obligations of Borrower under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan by more than the Minimum Actionable Amount, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Account Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such underfunded Plans by more than the Minimum Actionable Amount. Neither Borrower nor any ERISA Affiliate has incurred or reasonably expects to incur any Withdrawal Liability in excess of the Minimum Actionable Amount.

 

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(n)           Full Disclosure . No information contained in any Loan Document, the financial statements or any written statement furnished by or on behalf of Borrower under any Loan Document, or to induce Lender to execute the Loan Documents, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.

 

6.             COVENANTS OF BORROWER . Borrower covenants and agrees as follows:

 

(a)            Application of Proceeds . The proceeds of the Loan will be used exclusively for business or commercial purposes to refinancing certain of Borrower’s existing Debt and to finance the acquisition of the Equipment and/or to reimburse Borrower with respect to the acquisition cost of the Equipment.

 

(b)            Use of Collateral . Borrower shall use the Collateral solely in the Continental United States and in the conduct of its business and in a careful and proper manner, and (without the prior written consent of Lender) shall not permit the Collateral to be operated or used by, or to come into or remain in the possession of, anyone but Borrower; shall not permanently discontinue use of the Collateral; and shall provide written notice to Lender not more than thirty (30) days after any change of the location of any item of the Collateral (or the location of the principal garage of any item of the Collateral, to the extent that such item is mobile equipment) as specified on the applicable Equipment Schedule.

 

(c)            No Sale or Further Encumbrance . Borrower shall not dispose of or further encumber its interest in the Collateral without the prior written consent of Lender. Borrower shall maintain the Collateral free from all claims, Liens and legal processes of creditors of Borrower other than Liens (1) for fees, taxes, or other governmental charges of any kind which are not yet delinquent or are being contested in good faith by appropriate proceedings which suspend the collection thereof (provided, however, that such proceedings do not involve any substantial danger of the sale, forfeiture or loss of the Equipment or any interest therein); (2) Liens of mechanics, materialmen, laborers, employees or suppliers and similar Liens arising by operation of law incurred by Borrower in the ordinary course of business for sums that are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings which suspend the collection thereof (provided, however, that such contest does not involve any substantial danger of the sale, forfeiture or loss of the Equipment or any interest therein); and (3) Liens arising out of any judgments or awards against Borrower which have been adequately bonded to protect Lender’s interests or with respect to which a stay of execution has been obtained pending an appeal or a proceeding for review (“Permitted Liens”). Borrower shall notify Lender immediately upon receipt of notice of any Lien, attachment or judicial proceeding affecting the Collateral in whole or in part.

 

(d)            Fees and Taxes . Borrower, at its own expense, will pay or cause to be paid all taxes and fees relating to the ownership and use of the Collateral and will keep and maintain, or cause to be kept and maintained, the Collateral in accordance with the manufacturer’s recommended specifications, and in as good operating condition as on the date of execution hereof (or on the date on which acquired, if such date is subsequent to the date of execution hereof), ordinary wear and tear resulting from proper use thereof alone excepted, and will provide all maintenance and service and make all repairs necessary for such purpose. In addition, if any parts or accessories forming part of the Collateral shall from time to time become worn out, lost, destroyed, damaged beyond repair or otherwise permanently rendered unfit for use, Borrower, at its own expense, will within a reasonable time replace such parts or accessories or cause the same to be replaced, with replacement parts or accessories which are free and clear of all Liens, encumbrances or rights of others and have a value and utility at least equal to the parts or accessories replaced. All accessories, parts and replacements for or which are added to or become attached to the Collateral shall immediately be deemed incorporated in the Collateral and subject to the security interest granted by Borrower herein. Upon reasonable advance notice, Lender shall have the right to inspect the Collateral and all maintenance records thereto, if any, at any reasonable time, including, but not limited to, Equipment audits at the location where Borrower primarily keeps and/or uses the Equipment as Lender may deem necessary, provided however, Borrower shall not be required to pay for more than eight such audits per calendar year,

 

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(e)        Loss or Damage . Borrower shall advise Lender in writing within ten (10) days of the occurrence of any material damage, loss, theft, destruction or governmental confiscation or appropriation of any item of the Collateral (an “Event of Loss”) and of the circumstances and extent of such Event of Loss. Within thirty (30) days after receipt of notice from Lender, Borrower shall (at Lender’s option) either: (1) replace the item of Collateral having suffered the Event of Loss with equipment which is free and clear of all Liens and has a value and utility at least equal to the item of Collateral having suffered the Event of Loss, and such replacement collateral shall immediately be deemed “Collateral” hereunder and subject to the security interest granted by Borrower herein; or (2) prepay the Obligations to the extent attributable to the unpaid portion of the Obligations funded with respect to the item of Collateral, if applicable, having suffered the Event of Loss (as reasonably determined by Lender). If any item of Collateral is damaged and such damage can be repaired, Borrower shall (at its expense) promptly effect such repairs. Proceeds of insurance shall be paid to Lender with respect to such reparable damage to the Collateral and shall, at the election of Lender, be applied either to the repair of the Collateral by payment by Lender directly to the party completing the repairs, or to the reimbursement of Borrower for the cost of such repairs; provided, however, that Lender shall have no obligation to make such payment or any part thereof until receipt of such evidence as Lender shall deem satisfactory that such repairs have been completed, and further provided that Lender may apply such proceeds to the payment of any installment or other sum due or to become due under this Agreement if at the time such proceeds are received by Lender there shall have occurred and be continuing any Default or Event of Default. All accessories, parts and replacements for or which are added to or become attached to the Collateral shall immediately be deemed incorporated in the Collateral and subject to the security interest granted by Borrower herein. Upon reasonable advance notice, Lender shall have the right to inspect the Collateral and all maintenance records thereto, if any, at any reasonable time.

 

(f)        Personal Property . The parties intend that the Collateral shall remain personal property, notwithstanding the manner in which it may be affixed to any real property, and Borrower shall obtain and deliver to Lender (to be recorded at Borrower’s expense) from each Person having an interest in or Lien on the property (the “Premises” ) where the Collateral is to be located, waivers of any Lien, encumbrance or interest which such Person might have or hereafter obtain or claim with respect to the Collateral.

 

(g)        Insurance . At its own expense, Borrower shall keep the Collateral or cause it to be kept insured for comprehensive and collision coverage and against loss or damage due to fire and the risks normally included in extended coverage, malicious mischief and vandalism, for the full replacement value thereof. All insurance for loss or damage shall provide that losses, if any, shall be payable to Lender under a lender’s loss payee endorsement. The proceeds of such insurance payable as a result of loss of or damage to the Collateral shall be applied, at Lender’s option, (x) toward the replacement, restoration or repair of the Collateral which may be lost, stolen, destroyed or damaged, or (y) toward payment of the balance outstanding on the Loan or the Obligations. In addition, Borrower shall also carry public liability insurance, both personal injury and property damage. All insurance required hereunder shall be in form and amount and with companies satisfactory to Lender. Borrower shall pay or cause to be paid the premiums therefor and deliver to Lender evidence satisfactory to Lender of such insurance coverage. Borrower shall cause to be provided to Lender, prior to the scheduled expiration or lapse of such insurance coverage, evidence satisfactory to Lender of renewal or replacement coverage. Each insurer shall agree, by endorsement upon the policy or policies issued by it, or by independent instrument furnished to Lender, that (1) it will give Lender thirty (30) days’ prior written notice of the effective date of any material alteration or cancellation of such policy; and (2) insurance as to the interest of any named loss payee other than Borrower shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Borrower with respect to such policy or policies.

 

(h)      Further Assurances . Borrower shall promptly and duly execute and deliver to Lender such further documents, instruments and assurances and take such further action as Lender may from time to time reasonably request in order to carry out the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of Lender hereunder; including, without limitation, the execution and delivery of any document reasonably required, and payment of all necessary costs to record such documents (including payment of any documentary or stamp tax), to perfect and maintain perfected the security interest granted under this Agreement.

 

(i)        Notices to Lender . Borrower shall provide written notice to Lender: (1) not less than thirty (30) days prior to any contemplated change in the name, the jurisdiction of organization, or address of the chief executive office, of Borrower or of Borrower’s organizational structure such that a filed financing statement would become seriously misleading (within the meaning of the UCC); and (2) promptly upon the occurrence of any event which constitutes a Default (as hereinafter defined) hereunder or which, with the giving of notice, lapse of time or both, would constitute a Default hereunder.

 

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(j)        Delivery of Financial Information . Borrower shall furnish Lender (1) within one hundred twenty (120) days after the end of each fiscal year of Borrower, its balance sheet as at the end of such year, and the related statement of income and statement of changes in financial position for such fiscal year, prepared in accordance with GAAP, all in reasonable detail and certified by independent certified public accountants of recognized standing selected by Borrower and reasonably acceptable to Lender; (2) within sixty (60) days after the end of each quarter of Borrower’s fiscal year, its balance sheet as at the end of such quarter and the related statement of income and statement of changes in financial position for such quarter, prepared in accordance with GAAP; and (3) within thirty (30) days after the date on which they are filed, all reports, forms and other filings required to be made by Borrower to the Securities and Exchange Commission, if any (“SEC”) if any, as and when filed (by furnishing these SEC forms, or making them publicly available in electronic form, in each case, within the time periods set forth in clauses (1) and (2), Borrower shall be deemed to have satisfied the requirements of clauses (1), (2) and (3)).

 

(k)       Notice of Bankruptcy . Borrower shall provide written notice to Lender of the commencement of proceedings under the Federal bankruptcy laws or other insolvency laws (as now or hereafter in effect) involving Borrower as a debtor.

 

(I)        Bank Secrecy Act, etc. (1) Borrower has been advised by Lender that the USA Patriot Act establishes minimum standards of account information to be collected and maintained by Lender, and that to help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account; and specifically, this means that when Borrower executes this Agreement, Lender may ask for Borrower’s name and address, the date of birth of the officers executing this Agreement, and other information that will allow Lender to identify Borrower and that Lender may also ask to see the driver’s license or other identifying documents of the officers of Borrower executing this Agreement. (2) Borrower is and will remain in full compliance with all Applicable Laws including, without limitation, (i) ensuring that no Person who owns a controlling interest in or otherwise controls Borrower is or shall be (A) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation, or (B) a Person designated under Sections 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders, and (ii) compliance with all applicable Bank Secrecy Act (“BSA”) laws, regulations and government guidance on BSA compliance and on the prevention and detection of money laundering violations.

 

(m)      Indemnification . Borrower shall indemnify (on an after-tax basis) and defend Lender, its successors and assigns, and their respective directors, officers and employees, from and against any and all claims, actions and suits (including, without limitation, any Environmental Claim or Environmental Loss, and related attorneys’ fees of any kind, nature or description whatsoever arising, directly or indirectly, in connection with any of the Collateral (other than such as may result from the gross negligence or willful misconduct of Lender, its successors and assigns, and their respective directors, officers and employees). The obligations of Borrower under this Section shall survive the expiration of the term of this Agreement.

 

(n)       Financial Covenants . As of the last day of each of Borrower’s fiscal quarters, beginning with the fiscal quarter ending on March 31, 2019, Borrower shall (i) maintain a Fixed Charge Coverage Ratio of no less than 1.0X, and (ii) not cause, permit or suffer to exist the outstanding principal amount under the Schedule to be greater than 75% of OLV.

 

(o)      Titling and Registration . Borrower shall cause the Collateral to be titled in the name of Borrower and shall deliver to Lender the original certificate of title with respect to the Collateral, promptly upon receipt thereof. Borrower shall cause the Collateral to be registered in the name of Borrower, and shall take all actions as reasonably may be required to maintain such registration of the Collateral in the name of Borrower.

 

7.         DEFAULT . A default shall be deemed to have occurred hereunder (“Default”) upon the occurrence of any of the following: (a) non-payment of an installment of principal and/or interest due under the Schedule on the applicable payment date; (b) non-payment of any other Obligation within five (5) days after it is due; (c) failure to maintain, use or operate the Collateral in compliance with Applicable Law; (d) failure to obtain, maintain and comply with all of the insurance coverages required under this Agreement; (e) any transfer or encumbrance, or the existence of any Lien, that is prohibited by this Agreement; (f) a payment or other default by Borrower or its Affiliates under any loan, lease, guaranty or other financial obligation to Lender or its Affiliates which default entitles the other party to such obligation to exercise remedies; (g) a payment or other default by Borrower or its Affiliates under any material loan, lease, guaranty or other material financial obligation to any third party which default has been declared; (h) an inaccuracy in any representation or breach of warranty by Borrower (including any false or misleading representation or warranty) in any financial statement or Loan Document, including any omission of any substantial contingent or unliquidated liability or claim against Borrower; (i) the failure by Borrower generally to pay its debts as they become due or its admission in writing of its inability to pay the same, or the commencement of any bankruptcy, insolvency, receivership or similar proceeding by or against Borrower or any of its properties or business (unless, if involuntary, the proceeding is dismissed within sixty (60) days of the filing thereof) or the rejection of this Agreement or any other Loan Document in any such proceeding; (j) Borrower shall (1) enter into any transaction of merger or consolidation (such actions being referred to as an “Event” ), unless Borrower is the surviving entity or the surviving entity is organized and existing under the Laws of the United States or any state, and prior to such Event: (A) such Person executes and delivers to Lender (x) an agreement satisfactory to Lender, in its sole discretion, containing such

 

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Person’s effective assumption, and its agreement to pay, perform, comply with and otherwise be liable for, in a due and punctual manner, all of Borrower’s Obligations having previously arisen, or then or thereafter arising, under any and all of the Loan Documents, and (y) any and all other documents, agreements, instruments, certificates, opinions and filings requested by Lender; and (B) Lender is satisfied as to the creditworthiness of such Person, and as to such Person’s conformance to the other standard criteria then used by Lender when approving transactions similar to the transactions contemplated in this Agreement; (2) cease to do business as a going concern, liquidate, or dissolve; or (3) sell, transfer, or otherwise dispose of all or substantially all of its assets or property; (k) if Borrower is privately held and effective control of Borrower’s voting capital stock/membership interests/partnership interests, issued and outstanding from time to time, is not retained by the present holders (unless Borrower shall have provided thirty (30) days’ prior written notice to Lender of the proposed disposition and Lender shall have consented thereto in writing); (I) if Borrower is a publicly held corporation and there is a material change in the ownership of Borrower’s capital stock, unless Lender is satisfied as to the creditworthiness of Borrower and as to Borrower’s conformance to the other standard criteria then used by Lender for such purpose immediately thereafter; (m) there occurs a default or anticipatory repudiation under any guaranty executed in connection with this Agreement; (n) failure to satisfy the requirements of any financial covenants set forth in this Agreement; or (o) breach by Borrower of Section 6(k) of this Agreement; or (p) breach by Borrower of any other covenant, condition or agreement (other than those in items (a)-(o)) under this Agreement or any of the other Loan Documents that continues for thirty (30) days after Lender’s written notice to Borrower (but such notice and cure period will not be applicable unless such breach is curable by practical means within such notice period).

 

The occurrence of a Default with respect to the Loan evidenced by any Schedule shall, at the sole discretion of Lender (as set forth in a written declaration to Borrower), constitute a Default with respect to any or all of the other Loans. Notwithstanding anything to the contrary set forth herein, Lender or its assignee(s) (as applicable) may exercise all rights and remedies hereunder independently with respect to each Loan and/or with respect to the Collateral.

 

8.              REMEDIES . Upon the occurrence of a Default hereunder, Lender may, at its option, declare this Agreement to be in default with respect to the Loan evidenced by any or all of the Schedules, and at any time thereafter may do any one or more of the following, all of which are hereby authorized by Borrower:

 

(a)        Rights Under UCC . Exercise any and all rights and remedies of a secured party under the UCC in effect in any applicable jurisdiction at the date of this Agreement and in addition to those rights, at its sole discretion, may require Borrower (at Borrower’s sole expense) to forward promptly any or all of the Collateral to Lender at such location as shall reasonably be required by Lender, or enter upon the premises where any such Collateral is located (without obligation for rent) and take immediate possession of and remove the Collateral by summary proceedings or otherwise, all without liability from Lender to Borrower for or by reason of such entry or taking of possession, whether for the restoration of damage to property caused by such taking or otherwise.

 

(b)        Disposition of Collateral . Subject to any right of Borrower to redeem the Collateral, sell, lease or otherwise dispose of any or all of the Collateral in a commercially reasonable manner at public or private sale with notice to Borrower (the parties agreeing that ten (10) days’ prior written notice shall constitute adequate notice of such sale) at such price as it may deem best, for cash, credit, or otherwise, with the right of Lender to purchase and apply the proceeds:

 

First , to the payment of all expenses and charges, including the expenses of any sale, lease or other disposition, the expenses of any taking, attorneys’ fees, court costs and any other expenses incurred or advances made by Lender in the protection of its rights or the pursuance of its remedies, and to provide adequate indemnity to Lender against all taxes and Liens which by law have, or may have, priority over the rights of Lender to the monies so received by Lender;

 

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Second , to the payment of the Obligations; and

 

Third , to the payment of any surplus thereafter remaining to Borrower or to whosoever may be entitled thereto;

 

and in the event that the proceeds are insufficient to pay the amounts specified in clauses “First” and “Second” above, Lender may collect such deficiency from Borrower.

 

(c)           Other Rights and Remedies . Lender may exercise any other right or remedy available to it under the Loan Documents or Applicable Law, or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof or to rescind this Agreement in whole or in part.

 

(d)           Costs and Expenses; No Remedy Exclusive . In addition, Borrower shall be liable for any and all unpaid additional sums due hereunder or under the Schedule, before, after or during the exercise of any of the foregoing remedies; for all reasonable legal fees and other reasonable costs and expenses incurred by reason of any Default or of the exercise of Lender’s remedies with respect thereto. No remedy referred to in this Section is intended to be exclusive, but each shall be cumulative, and shall be in addition to any other remedy referred to above or otherwise available at law or in equity, and may be exercised concurrently or separately from time to time. Borrower hereby waives any and all existing or future claims to any offset against the sums due hereunder or under the Schedule and agrees to make the payments regardless of any offset or claim which may be asserted by Borrower or on its behalf in connection with this Agreement.

 

(e)           No Waiver . The failure of Lender to exercise, or delay in the exercise of, the rights granted hereunder upon any Default by Borrower or its Affiliates shall not constitute a waiver of any such right upon the continuation or recurrence of any such Default. Lender may take or release other security; may release any party primarily or secondarily liable for the Obligations; may grant extensions, renewals or indulgences with respect to the Obligations and may apply any other security therefor held by it to the satisfaction of the Obligations without prejudice to any of its rights hereunder.

 

9.              NOTICES . All notices (excluding billings and communications in the ordinary course of business) hereunder shall be in writing, personally delivered, sent by overnight courier service, sent by facsimile telecopier, or sent by certified mail, return receipt requested, addressed to the other party at its respective address stated below the signature of such parties or at such other addresses as such parties shall from time to time designate in writing to the other parties; and shall be effective from the date of receipt.

 

10.            LENDER’S RIGHT TO PERFORM FOR BORROWER . (a) Performance and Reimbursement . If Borrower fails to perform or comply with any of its agreements contained herein, Lender shall have the right, but shall not be obligated, to effect such performance or compliance, and the amount of any out-of-pocket expenses and other reasonable expenses of Lender thereby incurred, together with interest thereon at the Default Rate, shall be due and payable by Borrower upon demand.

 

(b) Power of Attorney . Borrower hereby appoints Lender as Borrower’s attorney-in-fact (which power shall be deemed coupled with an interest) to execute, endorse and deliver any deed, conveyance, assignment or other instrument in writing as may be required to vest in Lender any right, title or power which by the terms hereof are expressed to be conveyed to or conferred upon Lender, including, without limitation, real property waivers, and documents and checks or drafts relating to or received in payment for any loss or damage under the policies of insurance required hereby, but only to the extent that the same relates to the Collateral.

 

11.            SUCCESSORS AND ASSIGNS . This Agreement shall inure to the benefit of Lender, its successors and assigns, and shall be binding upon the successors of Borrower. The rights and obligations of Borrower under this Agreement may not be assigned or delegated. Lender reserves the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, Lender’s rights and obligations hereunder, in the Schedules, in the Collateral and/or the Obligations held by it to others at any time and from time to time; and Lender may disclose to any such purchaser, assignee, transferee or participant (the “Participant” ), or potential Participant, this Agreement and all information, reports, financial statements and documents executed or obtained in connection with this Agreement which Lender now or hereafter may have relating to the Loan, Borrower, or the business of Borrower. Borrower hereby grants to any Participant all Liens, rights and remedies of Lender under the provisions of this Agreement or any other documents relating hereto or under applicable laws. Borrower agrees that any Participant may enforce such Liens and exercise such rights and remedies in the same manner as if such Participant were Lender and a direct creditor of Borrower.

 

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12.           CHOICE OF LAW; JURISDICTION; WAIVER OF JURY TRIAL . (a) GOVERNING LAW . THIS AGREEMENT AND ALL OTHER RELATED INSTRUMENTS AND DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, IN ALL RESPECTS, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW)), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.

 

(b)  Jurisdiction . The parties agree that any action or proceeding arising out of or relating to this Agreement may be commenced in any state or Federal court of competent jurisdiction in the State of New York, and each party submits to the jurisdiction of such court and agrees that a summons and complaint commencing an action or proceeding in any such court shall be properly served and shall confer personal jurisdiction if served personally or by certified mail to it at its address designated pursuant hereto, or as otherwise provided under the laws of the State of New York.

 

(c)  WAIVER OF JURY TRIAL . BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT OR THE SCHEDULE. BORROWER AUTHORIZES LENDER TO FILE THIS PROVISION WITH THE CLERK OR JUDGE OF ANY COURT HEARING SUCH CLAIM. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND BORROWER HEREBY ACKNOWLEDGES THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND THE SCHEDULE AND IN THE MAKING OF THIS WAIVER BY LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

13.           MISCELLANEOUS . (a) Entire Agreement . The Loan Documents constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and shall not be amended or altered in any manner except by a document in writing executed by both parties.

 

(b)            Survival . All representations, warranties, and covenants of Borrower contained herein or made pursuant hereto shall survive closing and continue throughout the term hereof and until the Obligations are satisfied in full.

 

(c)            Severability . Any provision of the Loan Documents which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by Applicable Law, Borrower hereby waives any provision of law which renders any provision hereof or thereof prohibited or unenforceable in any respect.

 

(d)            Captions . The captions in this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

(e)            Expenses . Borrower agrees to pay Lender: (i) the actual cost of an annual physical appraisal to determine the then current OLV of the Equipment then constituting Collateral by an appraiser selected by Lender; (ii) the costs of quarterly desktop reviews and all inspections of the Collateral performed by Lender, (iii) the costs of all audits of Borrower’s Books, which may be performed by Lender at any time, (iv) a quarterly administration fee of $2,000, payable on each Payment Date immediately following the last day of each of Borrower’s fiscal quarters, and (v) all costs and expenses (including the fees and expenses of all counsel, advisors, consultants, appraisers, and auditors retained in connection therewith), incurred in connection with: (1) the preparation, negotiation, execution, delivery, performance and enforcement of the Loan Documents and the preservation of any rights thereunder (including, without limitation, filing or recording fees and taxes); (2) collection, including deficiency collections; (3) any amendment, waiver or other modification or waiver of, or consent with respect to, any Loan Document or advice in connection with the administration of the Loan or the rights thereunder; (4) any litigation, dispute, suit, proceeding or action (whether instituted by or between any combination of Lender, Borrower or any other Person), and an appeal or review thereof, in any way relating to the Collateral, any Loan Document, or any action taken or any other agreements to be executed or delivered in connection therewith, whether as a party, witness or otherwise; and (5) any effort (A) to monitor the Loan, (B) to evaluate, observe or assess Borrower or the affairs of such Person, and (C) to verify, protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of the Collateral.

 

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(f)            Joint and Several . The obligations of each Borrower hereunder and under the other Loan Documents are joint and several.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

  12

 

IN WITNESS WHEREOF, the parties hereto have caused this Loan and Security Agreement to be duly executed as of the day and year first above written.

   

NEFPASS LLC
Lender 

     
By:      
Name:     
Title:      

 

501 Merritt Seven
Sixth Floor
Norwalk, Connecticut 06851
Facsimile: 203-939-1597

 

AmeraMex International, Inc.
Borrower 

     
By:   (SIGNATURE OF LEE HAMRE)    
Name:  Lee Hamre  
Title:   President  

 

3930 Esplanade
Chico, CA 95973
Facsimile: (530) 895-8080
Form of Organization: Corporation
Jurisdiction of Organization: Nevada
Organizational No.: C4729-1990
Federal Employer Identification No.: 88-0501944

 

  13

 

SCHEDULE A

 

DEFINITIONS

 

Capitalized terms used in this Agreement and the other Loan Documents shall have (unless otherwise provided elsewhere in this Agreement or in the Loan Documents) the following respective meanings:

 

“Adverse Environmental Condition” shall mean (i) the existence or the continuation of the existence of an Environmental Contamination (including, without limitation, a sudden or non-sudden accidental or non-accidental Environmental Contamination), or exposure to any substance, chemical, material, pollutant, Hazardous Substance, odor or audible noise or other release or emission in, into or onto the environment (including without limitation, the air, ground, water or any surface) at, in, by, from or related to any Collateral, (ii) the environmental aspect of the transportation, storage, treatment or disposal of materials in connection with the operation of any Collateral, or (iii) the violation, or alleged violation, of any Environmental Law, permits or licenses of, by or from any governmental authority, agency or court relating to environmental matters connected with any of the Collateral.

 

“Affiliate” means, with respect to any Person: (i) each other Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five (5) percent or more of the Stock having ordinary voting power for the election of directors of such Person; (ii) each other Person that controls, is controlled by or is under common control with such Person or any Affiliate of such Person; or (iii) each of such Person’s officers, directors, joint venturers and partners. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting Stock, by contract or otherwise.

 

“Agreement” means this Loan and Security Agreement including all appendices, exhibits or schedules attached or otherwise identified thereto, restatements and modifications and supplements thereto, and any appendices, exhibits or schedules to any of the foregoing, each as in effect at the time such reference becomes operative.

 

“Applicable Law” means any law, rule, regulation, ordinance, order, code, common law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award, permit or similar norm or decision of any Governmental Authority.

 

“Availability” means the amount by which the Maximum Amount exceeds the outstanding principal balance of the Schedule(s).

 

“Borrower” means the Person(s) identified as such in the preamble of this Agreement.

 

“BSA” has the meaning assigned to it in Section 6(l) of this Agreement.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York.

 

“Capitalized Lease Obligations” shall mean, as to any Person, all rental obligations of such Person, as lessee under a lease which are or will be required to be capitalized on the books of such Person in accordance with GAAP.

 

“Closing Date” means the date on which a Schedule is executed and delivered to Lender pursuant to this Agreement.

 

“Collateral” has the meaning assigned to it in Section 3 of this Agreement.

 

“Debt” means any indebtedness for borrowed money evidenced by notes, bonds, debentures or similar evidences of indebtedness, and specifically including Capitalized Lease Obligations, current maturities of long term debt, and revolving credit.

 

“Debt Service” means the sum of the required principal payments of long term Debt (whether scheduled principal payments or mandatory prepayments of principal) which became due over the previous twelve months, plus interest expense on all obligations.

 

“Default” has the meaning assigned to it in Section 7 of this Agreement.

 

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“Default Rate” has the meaning assigned to it in Section 2(d) of this Agreement.

 

“EBITDA” means, with respect to any fiscal period, and in accordance with GAAP, Borrower’s consolidated net income for such period plus (a) interest expense, to the extent deducted in determining net income, (b) income taxes, to the extend deducted in determining net income, and (c) all amounts deducted in the determination of net income in respect of noncash items, including depreciation and amortization, less cash payments in respect of non-cash items added back in computing EBITDA in prior periods.

 

“Environmental Claim” shall mean any accusation, allegation, notice of violation, claim, demand, abatement or other order on direction (conditional or otherwise) by any governmental authority or any Person for personal injury (including sickness, disease or death), tangible or intangible property damage, damage to the environment or other adverse affects on the environment, or for fines, penalties or restrictions, resulting from or based upon any Adverse Environmental Condition.

 

“Environmental Contamination” shall mean any actual or threatened release, spill, emission, leaking, pumping, injection, presence, deposit, abandonment, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, or into or out of any of the Collateral, including, without limitation, the movement of any Hazardous Substance or other substance through or in the air, soil, surface water, groundwater or property which is not in compliance with applicable Environmental Laws.

 

“Environmental Law” shall mean any present or future federal, foreign, state or local law, ordinance, order, rule or regulation and all judicial, administrative and regulatory decrees, judgments and orders, pertaining to health, industrial hygiene, the use, disposal or transportation of Hazardous Substances, Environmental Contamination, or pertaining to the protection of the environment, including, but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) (42 U.S.C. §9601 et seq .), the Hazardous Material Transportation Act (49 U.S.C. §1801 et seq .),the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq .), the Resource Conservation and Recovery Act (42 U.S.C. §6901 et. seq. ), the Clean Air Act (42 U.S.C. §7401 et seq .), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq .), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §1361 et seq .), the Occupational Safety and Health Act (19 U.S.C. §651 et seq .), and the Hazardous and Solid Waste Amendments (42 U.S.C. §2601 et seq.) , as these laws have been or may be amended or supplemented, and any successor thereto, and any analogous foreign, state or local statutes, and the rules, regulations and orders promulgated pursuant thereto.

 

“Environmental Loss” shall mean any loss, cost, damage, liability, deficiency, fine, penalty or expense (including, without limitation, reasonable attorneys’ fees, engineering and other professional or expert fees), investigation, removal, cleanup and remedial costs (voluntarily or involuntarily incurred) and damages to, loss of the use of or decrease in value of the Collateral arising out of or related to any Adverse Environmental Condition.

 

“Equipment” has the meaning assigned to it in Section 3 of this Agreement.

 

“Equipment Schedule” has the meaning assigned to it in Section 3 of this Agreement.

 

“ERISA” means the Employee Retirement Income Security Act of 1974 (or any successor legislation thereto), as amended from time to time, and any regulations promulgated thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with Borrower, is treated as a single employer under Section 414(b), (c), (m) or (o) of the IRC, or, solely for the purposes of Section 302 of ERISA and Section 412 of the IRC, is treated as a single employer under Section 414 of the IRC.

 

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the IRC or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(b) of the IRC or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan; (f) the incurrence by Borrower or any ERISA Affiliate of any liability with respect to any withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

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“Event” has the meaning assigned to it in Section 7(j) of this Agreement.

 

“Event of Loss” has the meaning assigned to it in Section 6(e) of this Agreement.

 

“Fixed Charge Coverage Ratio” shall mean a ratio of (A) consolidated EBITDA (less Net Capital Expenditures) for the most recently ended four fiscal quarters, to (B) consolidated Debt Service for the most recently ended four fiscal quarters.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, consistently applied.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Guarantor” has the meaning assigned to it in Section 4(a)(3) of this Agreement.

 

“Guaranty” has the meaning assigned to in Section 4(a)(3) of this Agreement.

 

“Hazardous Substances” shall mean and include hazardous substances as defined in CERCLA; oil of any kind, petroleum products and their by-products, including, but not limited to, sludge or residue; asbestos containing materials; polychlorinated biphenyls; any and all other hazardous or toxic substances; hazardous waste, as defined in CERCLA; medical waste; infectious waste; those substances listed in the United States Department of Transportation Table (49 C.F.R. §172.101); explosives; radioactive materials; and all other pollutants, contaminants and other substances regulated or controlled by the Environmental Laws and any other substance that requires special handling in its collection, storage, treatment or disposal under the Environmental Laws.

 

“Interest Period” has the meaning assigned to it in the Schedule.

 

“IRC” means the Internal Revenue Code of 1986, as now or hereafter amended.

 

“Lender” has the meaning assigned to it in the preamble of this Agreement and, if at any time Lender shall decide to assign, participate or syndicate all or any of the Obligations, such term shall include each such assignee, Participant or such other members of the syndicate; together with its or their successors and assigns.

 

“Lien” means any mortgage, security deed or deed of trust, pledge, hypothecation, assignment, deposit arrangement, Lien, charge, claim, security interest, security title, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction).

 

“Loan” means the loan in the amount of the aggregate principal amount of all advances and evidenced by the Schedule, and made to Borrower under the terms of this Agreement, and any renewals, extensions, revisions, modifications or replacements therefor or thereof.

 

“Loan Documents” means this Agreement, the Schedule, any guaranty and the other documents and instruments executed pursuant hereto, the financial statements, and all other documents, instruments, certificates and notices at any time delivered by any Person (other than Lender) in connection with any of the foregoing.

 

“Loan Rate” has the meaning assigned to it in the Schedule.

 

“Material Adverse Effect” means: a material adverse effect on (a) the business, assets, operations, prospects or financial or other condition of Borrower or the industry within which Borrower operates, (b) Borrower’s ability to pay or perform the Obligations under the Loan Documents in accordance with the terms thereof, (c) the Collateral or the Lien of Lender on the Collateral or the priority of any such Lien, or (d) Lender’s rights and remedies under this Agreement and the other Loan Documents.

 

  3

 

 

“Maximum Amount” means the lesser of (i) $6,000,000, or (ii) 75% of OLV.

 

“Minimum Actionable Amount” means $50,000.

 

“Multiemployer Plan” means a “multiemployer plan,” as defined in Section 4001(a) (3) of ERISA, to which Borrower or any ERISA Affiliate is making, is obligated to make, has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them.

 

“Net Capital Expenditures” shall mean, with respect to any Person, all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of such Person, less proceeds from the sale of assets capitalized on the consolidated balance sheet of such Person, but excluding expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (i) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored or (ii) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced or (iii) by the issuance of Debt (including Capitalized Lease Obligations) from a third party, financial institution or holder of any Stock of such Person.

 

“Obligations” means all loans, advances, debts, expense reimbursement, fees, liabilities, and obligations for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or amounts are liquidated or determinable) owing by Borrower to Lender, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, whether arising under any of the Loan Documents or under any other agreement between Borrower and Lender, and all covenants and duties regarding such amounts. This term includes all principal, interest (including interest accruing at the then applicable rate provided in this Agreement after the maturity of the Loan and interest accruing at the then applicable rate provided in this Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), fees, charges, expenses, attorneys’ fees and any other sum chargeable to Borrower under any of the Loan Documents (including, without limitation, any Prepayment Fee), and all principal and interest due in respect of the Loan.

 

“OFAC” has the meaning assigned to it in Section 6(l) of this Agreement.

 

“OLV” means the orderly liquidation value of the Equipment then constituting Collateral, as determined on the Closing Date pursuant to the appraisal of Sterling Appraisals & Machinery Ltd. dated February 18, 2019, and thereafter (a) on a quarterly basis via a “desktop appraisal” by an appraiser selected by Lender, and (b) on an annual basis via a physical appraisal at Borrower’s expense by an appraiser selected by Lender.

 

“Participant” has the meaning assigned to it in Section 11 of this Agreement.

 

“Payment Date” has the meaning assigned to it in the Schedule.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Permitted Liens” has the meaning assigned to it in Section 6(c) of this Agreement.

 

“Person” means any individual, sole proprietorship, entity, limited liability entity, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation or government (whether Federal, state, county, city, municipal or otherwise, Including any instrumentality, division, agency, body or department thereof), and shall include such Person’s successors and assigns.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the IRC or Section 302 of ERISA, and in respect of which Borrower or any ERISA Affiliate is (or, if such plan were terminated, could under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Premises” has the meaning assigned to it in Section 6(f) of this Agreement.

 

  4

 

 

“Proceeds” means “proceeds,” as such term is defined in the UCC and, in any event, shall include: (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to Borrower from time to time with respect to any Collateral; (ii) any and all payments (in any form whatsoever) made or due and payable to Borrower from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of any Collateral by any governmental body, authority, bureau or agency (or any Person acting under color of governmental authority); (iii) any recoveries by Borrower against third parties with respect to any litigation or dispute concerning any Collateral, including claims arising out of the loss or nonconformity of, interference with the use of, defects in, or infringement of rights in, or damage to, Collateral; and (iv) any and all other amounts, rights to payment or other property acquired upon the sale, lease, license, exchange or other disposition of Collateral and all rights arising out of Collateral.

 

“Schedule” has the meaning assigned to it in Section 1(b) of this Agreement.

 

“SEC” has the meaning assigned to it in Section 6(j) of this Agreement.

 

“Stated Maturity Date” has the meaning assigned to it in the Schedule.

 

“Stock” means all certificated and uncertificated shares, options, warrants, membership interests, general or limited partnership interests, participation or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934).

 

“Taxes” means taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on or measured by the net income of Lender.

 

“Title Lien Notation Documents” has the meaning assigned to it in Section 4(b)(1) of this Agreement.

 

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to the Lien of Lender on any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of this Agreement relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions; provided further, that to the extent that the UCC is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern.

 

“UCC Statements” has the meaning assigned to it in Section 3 of this Agreement.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

Any accounting term used in this Agreement or the other Loan Documents shall have, unless otherwise specifically provided therein, the meaning customarily given such term in accordance with GAAP, and all financial computations thereunder shall be computed, unless otherwise specifically provided therein, in accordance with GAAP consistently applied; provided, that all financial covenants and calculations in the Loan Documents shall be made in accordance with GAAP as in effect on the Closing Date unless Borrower and Lender shall otherwise specifically agree in writing. That certain items or computations are explicitly modified by the phrase “in accordance with GAAP” shall in no way be construed to limit the foregoing. All other undefined terms contained in this Agreement or the other Loan Documents shall, unless the context indicates otherwise, have the meanings provided for by the UCC. The words “herein,” “hereof and “hereunder” or other words of similar import refer to this Agreement as a whole, including the exhibits and schedules thereto, as the same may from time to time be amended, modified or supplemented, and not to any particular section, subsection or clause contained in this Agreement.

 

For purposes of this Agreement and the other Loan Documents, the following additional rules of construction shall apply, unless specifically indicated to the contrary: (a) wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural; (b) the term “or” is not exclusive; (c) the term “including” (or any form thereof) shall not be limiting or exclusive; (d) all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations; and (e) all references to any instruments or agreements, including references to any of the Loan Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof.

 

5

 

EXHIBIT A

 

Form of Advance Request

 

NEFPASS LLC

501 Merritt Seven, 6 th Floor

Norwalk, Connecticut 06851

Facsimile: (203) 939-1597

 

Re: Loan in the original principal amount of $6,000,000.00 from NEFPASS LLC (“Lender”) to AmeraMex International, Inc. ( “Borrower”)

 

Reference is hereby made to that certain Loan and Security Agreement dated as of ____________, 20____ (the “Agreement”), executed by and between Borrower and Lender. Capitalized words and phrases used herein without definition shall have the respective meanings ascribed to such words and phrases in the Agreement.

 

1.            Pursuant to the Agreement, Borrower hereby requests an Advance in the amount of $_____________. Borrower acknowledges that the approval of this Advance by Lender is subject to all of the terms and conditions precedent set forth in the Agreement.

 

2.            Attached hereto is an Equipment Schedule evidencing the added equipment.

 

3.            Borrower hereby represents, warrants and covenants with Lender as follows:

 

(a)        the amount of the Advance does not exceed 75% of the OLV of the equipment identified on the Equipment Schedule attached hereto, nor does the Advance cause the principal amount of all outstanding Loans to exceed 75% of the OLV of all Equipment;

 

(b)       all conditions precedent to the Advance set forth in the Agreement have been satisfied;

 

(c)       all representations and warranties made by Borrower to Lender in the Agreement and otherwise in connection with the Loan continue to be accurate;

 

(d)       no Default has occurred under the Agreement or under any Loan Document, and no event, circumstance or condition has occurred or exists that, with the passage of time or the giving of notice, would constitute a Default under the Agreement or under the other Loan Documents; and

 

(e)       the proceeds of the Advance will be used to purchase the equipment identified on the Equipment Schedule attached hereto.

 

4.             Disbursement of the Advance requested hereby may be subject to (a) Lender perfecting its first priority security interest in the Replacement Equipment, and (b) Lender’s inspection of the equipment identified on the Equipment Schedule attached hereto.

 

6

 

IN WITNESS WHEREOF, Borrower has executed this Advance Request as of ____________, _____.

 

  AMERAMEX INTERNATIONAL, INC ., a Nevada corporation
     
  By:   (LOGO)
     
  Name: LEE R. HAMRE
     
  Title: PRESIDENT

 

7

 

NEFPASS LLC

 

 

 

EQUIPMENT SCHEDULE ADVANCE NO.              

 

THIS EQUIPMENT SCHEDULE ADVANCE NO.                is executed pursuant to and made a part of that certain Loan and Security Agreement dated as of                                     , 2019 (the “Agreement”), between NEFPASS LLC as Lender, and AmeraMex International, Inc. and Hamre Equipment Co., as Borrower, and describes collateral in which Borrower has granted Lender a security interest in connection with the Obligations (as defined in the Agreement) including without limitation that certain Schedule No. [AmeraMex -                 ] dated                                 , 2019 in the original principal amount of $6,000,000.00.

 

Year Make Model S/N Location
         

 

Date:                            ,               

 

NEFPASS LLC   AMERAMEX INTERNATIONAL, INC.  
Lender   Borrower  
       
By:     By:    
Name:     Name: LEE R. HAMRE  
Title:     Title: PRESIDENT  

 

8  

 

 

   

 

NEFPASS LLC

 

 

 

AMENDED AND RESTATED SCHEDULE NO. AMERAMEX - 0001

 

This Amended and Restated Schedule (this “Schedule”) is dated April 17 , 2019, and is executed pursuant to and incorporated by reference in that certain Loan and Security Agreement dated as of March 29, 2019, between AMERAMEX INTERNATIONAL, INC., (individually, collectively, jointly and severally “Borrower”), and NEFPASS LLC (“Lender”) (said agreement, as the same may be amended, restated or supplemented from time to time, being herein called the “Agreement”).

 

Principal Amount of Loan: $6,500,000, or such lesser aggregate principal amount as shall be outstanding under this Amended and Restated Schedule from time to time.
   
Stated Maturity Date: March 28, 2022

 

Principal and interest due hereunder shall be payable as follows:

 

(a)       Interest shall accrue at the Loan Rate from the date hereof and shall be payable, in arrears, on the 1 st day of each calendar month during the term hereof, commencing May 1, 2019 (each, a “Payment Date”), at the Loan Rate or, under the circumstances contemplated by the Agreement, at the Default Rate. Interest shall be computed on the basis of a 30 day month/360 day year.

 

(b)       If Availability is zero as of the last day of any calendar month, on the immediately succeeding Payment Date, Borrower shall pay principal in an amount equal to one and one quarter percent (1.25%) of the outstanding Principal Balance of this Schedule on the date immediately prior to the Payment Date.

 

(c)       If at any time during the term of this Schedule the outstanding principal balance of this Schedule exceeds 75% of the OLV, or if the principal amount of all outstanding Loans exceeds 75% of the OLV of all Equipment, then Borrower shall pay to Lender amounts necessary to reduce the outstanding principal balance such that this covenant is satisfied. This covenant shall be tested quarterly.

 

(d) All remaining outstanding principal on this Schedule, plus all accrued and unpaid interest and all other Obligations, shall be due and payable on the Stated Maturity Date.

 

(e)  If any payment due hereunder is not received within three (3) Business Days of its due date, Borrower shall pay a late charge equal to five (5) percent of the amount in arrears.

 

As used herein, “Loan Rate” shall mean 10.0 percent per annum, calculated on a 30/360 basis.

 

All payments shall be made in immediately available United States Dollars not later than 12:00 Noon, New York, New York time, on the day when due in lawful money of the United States of America. In order to make such payments, Borrower hereby authorizes Lender to initiate electronic debit or credit entries through the ACH system to any deposit account maintained by Lessee wherever located. Borrower warrants and represents that under no circumstances will it reverse, void, or otherwise render invalid any electronic debit or credit initiated by the Lessor. Unless payable earlier as provided in the Agreement, the outstanding principal and interest under this Schedule shall be immediately due and payable on the Stated Maturity Date.

 

Lender shall keep records of the amounts outstanding under this Schedule from time to time, and such records shall be conclusive evidence thereof absent manifest error.

 

 

 

 

Borrower shall have the right to prepay all or any portion of outstanding principal balance and accrued but unpaid interest of the Loan evidenced by this Schedule at any time and from time to time, without premium or penalty of any kind.

 

To the fullest extent permitted by Applicable Law, Borrower waives: (a) presentment, demand and protest, and notice of presentment, dishonor, intent to accelerate, acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all of the Obligations, this Schedule or the other Loan Documents; (b) all rights to notice and a hearing prior to Lender’s taking possession or control of, or to Lender’s replevy, attachment or levy upon, the Collateral or any bond or security that might be required by any court prior to allowing Lender to exercise any of its remedies; and (c) the benefit of all valuation, appraisal and exemption laws.

 

Borrower acknowledges and agrees that this Schedule is executed as part of a commercial transaction and that the proceeds of the Loan evidenced by this Schedule will not be used for any personal or consumer purpose.

 

In the event of the declaration by Lender of a Default under the Agreement, then the Loan evidenced by this Schedule shall be in default and the balance of the principal sum then due under this Schedule, together with all accrued interest thereon, immediately shall become due and payable without further notice, such further notice being expressly waived, and Borrower shall be liable to the holder hereof for reasonable attorneys’ fees and costs of suit.

 

The remedies of Lender as provided herein and in the Agreement shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

 

It is the intention of the parties hereto to comply with the applicable usury laws. Accordingly, it is agreed that, notwithstanding any provisions to the contrary in this Schedule or the Agreement, in no event shall this Schedule or the Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by Applicable Law. If any such excess interest is contracted for, charged or received under this Schedule or the Agreement, or in the event that all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Schedule or the Agreement on the principal balance shall exceed the maximum amount of interest permitted by Applicable Law, then in such event; (a) the provisions of this paragraph shall govern and control, (b) neither Borrower nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by Applicable Law, (c) any such excess which may have been collected shall either be applied as a credit against the then unpaid principal balance or refunded to Borrower, at the option of Lender, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under Applicable Law as now or hereafter construed by the courts having jurisdiction thereof. It is further agreed that, without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Schedule or the Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by Applicable Law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the Indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Borrower or otherwise by Lender in connection with such Obligations; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for Lender to receive a greater interest per annum rate than is presently allowed by law, Borrower agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest rate per annum allowed by the amended state law or the law of the United States of America (but not in excess of the Loan Rate (or, if applicable, the Default Rate) provided for herein).

 

 

 

 

This Schedule amends and restates that certain Schedule No. AmeraMex - 0001, dated March 29, 2019, executed by Borrower in favor of Lender (“Existing Schedule 0001”) in its entirety and refinances that certain Schedule No. AmeraMex - 0002 executed by Borrower in favor of Lender, (“Existing Schedule 0002” and together with Existing Schedule 0001, collectively, the “Existing Schedules”). All obligations, of every type or nature, of Borrower under Existing Schedule 0002 shall become obligations under this Schedule and all obligations, of every type or nature, of Borrower under the Existing Schedules are ratified and confirmed by Borrower as though all of such obligations arose under this Schedule.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered the above Schedule as of the date first above written.

 

  AMERAMEX INTERNATIONAL, INC.
   
  By:  
  Name: LEE R. HAMRE
  Title: President

 

 

 

EXHIBIT 3.4

 

 

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “ Amendment ”) dated as of April 17, 2019 (the “ Effective Date ”), is entered into by and between NEFPASS LLC (“ Lenders ”) and AMERAMEX INTERNATIONAL, LLC (“Borrower”).

 

Lender and Borrower have heretofore executed that certain Loan and Security Agreement dated as of March 29, 2019 (the “ Loan Agreement” ). Capitalized terms used herein without definition shall have the meaning given them in the Loan Agreement.

 

The parties desire to amend the Loan Agreement, on the terms and conditions set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.            Incorporation of Recitals . The foregoing recitals are incorporated herein by reference.

 

Section 2.            Amendments to Loan Agreement.

 

(a)        Section 1 (b) of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

 

(b)        Schedules . The amount of each Loan shall be specified on the Schedule now or hereafter attached hereto, in form and substance satisfactory to Lender (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Schedule”), and the principal of the Loan, together with interest on the unpaid balance of such amount from the date of the advance at the Loan Rate specified on such Schedule, shall be payable on the terms and conditions specified in the Schedule.

 

(b)        Section 1 (c) of the Loan Agreement is deleted and the following substituted in lieu thereof:

 

(c)        Additional Advances under the Schedule . Following the Closing Date and prior to the Stated Maturity Date, Borrower may request additional advances, in an amount not less than $100,000, under the Schedule (an “ Advance ”) to purchase equipment, provided the aggregate of the amount of the Advance and the outstanding principal balance of the Schedule does not exceed the Maximum Amount, and the Equipment Conditions are satisfied, in Lender’s sole discretion. Any request for an Advance shall be made by Borrower delivering to Lender a request in the form attached hereto as Exhibit A (“Advance Request”), and shall be accompanied by all documentation and information necessary to satisfy the Equipment Conditions. Borrower may not request more than one Advance per calendar week. Each such Advance shall be deemed to be evidenced by the Schedule. Subject to the Maximum Amount, Borrower may borrow, repay, and reborrow amounts under this Agreement and the Schedule. Lender shall keep records of the Loans outstanding from time to time, and such records shall be conclusive evidence thereof absent manifest error.

 

 

 

(c)        Section 4(b)(1)(c) of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

 

c.         An Advance Request in the amount of the Loan to be advanced on such date, duly executed on behalf of Borrower, pursuant to Section 1 hereof.

 

(d)        Section 5(g)(ii) of the Loan Agreement is hereby deleted in its entirety and the following substituted in lieu thereof:

 

(ii)       Upon payment in full of the acquisition cost of the Equipment, Borrower will have good and marketable title to the Equipment, free and clear of all Lenders and encumbrances (excepting only the Lien of Lender). Upon the last to occur of: (A) delivery of an item of Equipment, (B) payment to the vendor of the acquisition cost of such item of Equipment, (C) advance by Lender to Borrower of the Loan relating to such item of the Equipment, (D) filing in the appropriate public office of a UCC financing statement naming Borrower as debtor, and Lender as secured party, and describing such item of the Equipment, and (E) filing in the appropriate public office of the Title Lien Notation Documents with respect to the portion of the Equipment comprised of certificate of title motor vehicles, Lender will have a valid, perfected, first priority purchase money security interest in such item of the Equipment.

 

(e)       The reference to “$6,000,000,” in the definition of “Maximum Amount” in Schedule A to the Loan Agreement is hereby replaced with “$6,500,000,”.

 

(f)        The Schedule attached to the Loan Agreement is hereby deleted and replaced with the Schedule attached to this Amendment.

 

(g)        Exhibit A to the Loan Agreement is hereby deleted and replaced with Exhibit A attached to this Amendment.

 

Section 3.            Limited Effect . Except as expressly provided herein, the Loan Agreement and the other Loan Documents shall remain unmodified and in full force and effect. This Amendment shall not be deemed (a) to be a waiver of, or consent to, a modification or amendment of, any other term or condition of the Loan Agreement and the other Loan Document, (b) to prejudice any other right or rights which Lender may now have or may have in the future under or in connection with the Loan Agreement and the other Loan Documents or any of the instruments or agreements referred to therein, as the same may be amended, restated, supplemented or otherwise modified from time to time, (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with Borrower or any other Person with respect to any waiver, amendment, modification or any other change to the Loan Agreement and the other Loan Documents or any rights or remedies arising in favor of Lender under or with respect to any such documents, or (d) to be a waiver of, or consent to or a modification or amendment of, any other term or condition of any other agreement by and between Borrower and Lender. References in the Loan Agreement to “this Loan Agreement” {and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof) and in any other Loan Document to the Loan Agreement shall be deemed to be references to the Loan Agreement as modified hereby.

 

 

 

Section 4.            Acknowledgement and Reaffirmation . By its execution hereof, Borrower: expressly (i) consents to the amendments set forth in this Amendment, (ii) reaffirms all of its covenants, representations, warranties and other obligations set forth in the Loan Agreement, the Schedule, and the other Loan Documents to which it is a party and (iii) acknowledges, represents and agrees that its respective covenants, representations, warranties and other obligations set forth in the Loan Agreement, the Schedule, and the other Loan Documents to which it is a party remain in full force and effect.

 

Section 5.            Representations and Warranties/No Default .

 

(a)       By its execution hereof, Borrower hereby certifies that (i) each of the representations and warranties set forth in the Loan Agreement, the Schedule, and the other Loan Documents made by it is true and correct in all material respects as of the date hereof as if fully set forth herein, except for any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, and (ii) no Default has occurred and is continuing as of the date hereof.

 

(b)       By its execution hereof, Borrower hereby represents and warrants that it has the right, power and authority and has taken all necessary action to authorize the execution, delivery and performance of this Amendment and each other document executed by it in connection herewith to which it is a party in accordance with their respective terms.

 

(c)       By its execution hereof, Borrower hereby represents and warrants that this Amendment and each other document executed by it in connection herewith has been duly executed and delivered by its duly authorized officers, and each such document constitutes the legal, valid and binding obligation of Borrower, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws of general availability relating to or affecting creditors’ rights and by general principles of equity.

 

Section 6.            Release . Borrower hereby absolutely and unconditionally releases and forever discharges Lender, and its respective participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing (the “ Indemnitees ”), from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which Borrower has had, now has, or has made claim to have against any such Indemnitee for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown.

 

Section 7.            indemnity . Borrower agrees to indemnify Indemnitees against, and hold Indemnitees harmless with respect to, any loss, liability or damages (including costs of litigation and reasonable attorney’s fees) resulting from any claims, demands, obligations, rights, or causes of action asserted by a third party as a result of or in connection with any act or failure to act by Borrower, whether in connection with the performance or breach of the duties and obligations of Borrower under, arising from or in respect to this Amendment, the Loan Agreement or otherwise, unless such claim, suit, demand, action or cause of action against the Indemnitees, or any of them, arises out of any acts that are found to have fully resulted from fraudulent conduct, gross negligence or willful misconduct of such Indemnitee as determined by a final, non-appealable order of a court of competent jurisdiction. This indemnity survives and continues in full force and effect notwithstanding the termination of this Amendment.

 

 

 

Section 8.            Costs and Expenses . Borrower hereby reaffirms its agreement under the Loan Agreement to pay or reimburse Lender on demand for all costs and expenses incurred by Lender in connection with the Loan Documents, including without limitation all reasonable fees and disbursements of legal counsel. Without limiting the generality of the foregoing, Borrower specifically agrees to pay all fees and disbursements of counsel to Lender for the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto. Borrower hereby agrees that Lender, at any time or from time to time in its sole discretion and without further authorization by Borrower, may make a loan to Borrower under the Loan Agreement, or apply the proceeds of any loan, for the purpose of paying any such fees, disbursements, costs and expenses.

 

Section 9.            Signatures; Counterparts . Facsimile transmissions of any executed original document and/or retransmission of any executed facsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm facsimile transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Amendment may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

 

Section 10.          Governing Law . THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED, INTERPRETED, AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE).

 

Section 11.         Entire Agreement . This Amendment, together with the Loan Agreement, the Schedule, and the other Loan Documents, represent the entire agreement, and supersede any prior agreements and contemporaneous oral agreements, of the parties concerning the subject matter hereof and thereof.

 

Section 12.          Successors and Assigns . This Amendment shall be binding on and inure to the benefit of the parties and their successors and assigns.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

NEFPASS LLC  
By:    
Name: D.J. BICKERSTAFF  
Title: EVP  
     
     
     
AMERAMEX INTERNATIONAL, INC.  
     
By :    
Name: LEE R.HAMRE  
Title: President  

 

[Signature Page to 1 st Amendment to LSA]

 

 

 

NEFPASS LLC

 

 

AMENDED AND RESTATED SCHEDULE NO. AMERAMEX– [ _________]

 

This Amended and Restated Schedule (this “Schedule”) is dated April __, 2019, and is executed pursuant to and incorporated by reference in that certain Loan and Security Agreement dated as of March 29, 2019, between AMERAMEX INTERNATIONAL, INC., (individually, collectively, jointly and severally “Borrower”), and NEFPASS LLC (“Lender”) (said agreement, as the same may be amended, restated or supplemented from time to time, being herein called the “Agreement”).

 

Principal Amount of Loan:      $[________], or such lesser aggregate principal amount as shall be outstanding under this Amended and Restated Schedule from time to time.

 

Stated Maturity Date:               [________]

 

Principal and interest due hereunder shall be payable as follows:

 

(a)       Interest shall accrue at the Loan Rate from the date hereof and shall be payable, in arrears, on the 1 st day of each calendar month during the term hereof, commencing May 1, 2019 (each, a “Payment Date”), at the Loan Rate or, under the circumstances contemplated by the Agreement, at the Default Rate. Interest shall be computed on the basis of a 30 day month/360 day year.

 

(b)       If Availability is zero as of the last day of any calendar month, on the immediately succeeding Payment Date, Borrower shall pay principal in an amount equal to one and one quarter percent (1.25%) of the outstanding Principal Balance of this Schedule on the date immediately prior to the Payment Date.

 

(c)       If at any time during the term of this Schedule the outstanding principal balance of this Schedule exceeds 75% of the OLV, or if the principal amount of all outstanding Loans exceeds 75% of the OLV of all Equipment, then Borrower shall pay to Lender amounts necessary to reduce the outstanding principal balance such that this covenant is satisfied. This covenant shall be tested quarterly.

 

(d)       All remaining outstanding principal on this Schedule, plus all accrued and unpaid interest and all other Obligations, shall be due and payable on the Stated Maturity Date.

 

(e)       If any payment due hereunder is not received within three (3) Business Days of its due date, Borrower shall pay a late charge equal to five (5) percent of the amount in arrears.

 

As used herein, “Loan Rate” shall mean 10.0 percent per annum, calculated on a 30/360 basis.

 

All payments shall be made in immediately available United States Dollars not later than 12:00 Noon, New York, New York time, on the day when due in lawful money of the United States of America. In order to make such payments, Borrower hereby authorizes Lender to initiate electronic debit or credit entries through the ACH system to any deposit account maintained by Lessee wherever located. Borrower warrants and represents that under no circumstances will it reverse, void, or otherwise render invalid any electronic debit or credit initiated by the Lessor. Unless payable earlier as provided in the Agreement, the outstanding principal and interest under this Schedule shall be immediately due and payable on the Stated Maturity Date.

 

 

 

Lender shall keep records of the amounts outstanding under this Schedule from time to time, and such records shall be conclusive evidence thereof absent manifest error.

 

Borrower shall have the right to prepay all or any portion of outstanding principal balance and accrued but unpaid interest of the Loan evidenced by this Schedule at any time and from time to time, without premium or penalty of any kind.

 

To the fullest extent permitted by Applicable Law, Borrower waives: (a) presentment, demand and protest, and notice of presentment, dishonor, intent to accelerate, acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any or all of the Obligations, this Schedule or the other Loan Documents; (b) all rights to notice and a hearing prior to Lender’s taking possession or control of, or to Lender’s replevy, attachment or levy upon, the Collateral or any bond or security that might be required by any court prior to allowing Lender to exercise any of its remedies; and (c) the benefit of all valuation, appraisal and exemption laws.

 

Borrower acknowledges and agrees that this Schedule is executed as part of a commercial transaction and that the proceeds of the Loan evidenced by this Schedule will not be used for any personal or consumer purpose.

 

In the event of the declaration by Lender of a Default under the Agreement, then the Loan evidenced by this Schedule shall be in default and the balance of the principal sum then due under this Schedule, together with all accrued interest thereon, immediately shall become due and payable without further notice, such further notice being expressly waived, and Borrower shall be liable to the holder hereof for reasonable attorneys’ fees and costs of suit.

 

The remedies of Lender as provided herein and in the Agreement shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

 

It is the intention of the parties hereto to comply with the applicable usury laws. Accordingly, it is agreed that, notwithstanding any provisions to the contrary in this Schedule or the Agreement, in no event shall this Schedule or the Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by Applicable Law. If any such excess interest is contracted for, charged or received under this Schedule or the Agreement, or in the event that all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Schedule or the Agreement on the principal balance shall exceed the maximum amount of interest permitted by Applicable Law, then in such event: (a) the provisions of this paragraph shall govern and control, (b) neither Borrower nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by Applicable Law, (c) any such excess which may have been collected shall either be applied as a credit against the then unpaid principal balance or refunded to Borrower, at the option of Lender, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under Applicable Law as now or hereafter construed by the courts having jurisdiction thereof. It is further agreed that, without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Schedule or the Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by Applicable Law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the Indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Borrower or otherwise by Lender in connection with such Obligations; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for Lender to receive a greater interest per annum rate than is presently allowed by law, Borrower agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest rate per annum allowed by the amended state law or the law of the United States of America (but not in excess of the Loan Rate (or, if applicable, the Default Rate) provided for herein).

 

 

 

This Schedule amends and restates that certain Schedule No. AmeraMex – 0001, dated March 29, 2019, executed by Borrower in favor of Lender (“ Existing Schedule 0001 ”) in its entirety and refinances that certain Schedule No. AmeraMex – 0002 executed by Borrower in favor of Lender, (“ Existing Schedule 0002 ” and together with Existing Schedule 0001, collectively, the “ Existing Schedules ”). All obligations, of every type or nature, of Borrower under Existing Schedule 0002 shall become obligations under this Schedule and all obligations, of every type or nature, of Borrower under the Existing Schedules are ratified and confirmed by Borrower as though all of such obligations arose under this Schedule.

 

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IN WITNESS WHEREOF, the undersigned has duly executed and delivered the above Schedule as of the date first above written.

  AMERAMEX INTERNATIONAL, INC.
  By:  
  Name:  LEE R. HAMRE
  Title: President  

 

 

EXHIBIT A

 

Form of Advance Request

NEFPASS LLC
501 Merritt Seven, 6 th Floor
Norwalk, Connecticut 06851
Facsimile: (203) 939-1597

Re: Loan in the original principal amount of $6,500,000.00 from NEFPASS LLC (“ Lender ”) to AmeraMex International, Inc. (“ Borrower ”)

Reference is hereby made to that certain Loan and Security Agreement dated as of March 29, 2019 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Agreement ”), executed by and between Borrower and Lender. Capitalized words and phrases used herein without definition shall have the respective meanings ascribed to such words and phrases in the Agreement.

1.             Pursuant to the Agreement, Borrower hereby requests an Advance in the amount of $ ________. Borrower acknowledges that the approval of this Advance by Lender is subject to all of the  terms and conditions precedent set forth in the Agreement.

2.             Attached hereto is an Equipment Schedule evidencing the added equipment.

3.             Borrower hereby represents, warrants and covenants with Lender as follows:

(a)            the amount of the Advance does not exceed 75% of the OLV of the equipment identified on the Equipment Schedule attached hereto, nor does the Advance cause the principal amount of all outstanding Loans to exceed 75% of the OLV of all Equipment;

(b)           all conditions precedent to the Advance set forth in the Agreement have been satisfied;

(c)            all representations and warranties made by Borrower to Lender in the Agreement and otherwise in connection with the Loan continue to be accurate;

(d)           no Default has occurred under the Agreement or under any Loan Document, and no event, circumstance or condition has occurred or exists that, with the passage of time or the giving of notice, would constitute a Default under the Agreement or under the other Loan Documents; and

(e)            the proceeds of the Advance will be used to purchase the equipment identified on the Equipment Schedule attached hereto.

4.             Disbursement of the Advance requested hereby may be subject to (a) Lender perfecting its first priority security interest in the Replacement Equipment, and (b) Lender’s inspection of the equipment identified on the Equipment Schedule attached hereto.

5.             Borrower requests that this Advance be disbursed into Borrower account number___________ at________________, ABA#_________________.

 

 

IN WITNESS WHEREOF, Borrower has executed this Advance Request as of_________,_____,

 

  AMERAMEX INTERNATIONAL, INC.,
a Nevada corporation
 
       
  By:    
  Name: LEE R. HAMRE  
  Title: President  

 

 

 

 

NEFPASS LLC

 

 

 

EQUIPMENT SCHEDULE ADVANCE NO._____

 

THIS EQUIPMENT SCHEDULE ADVANCE NO. _ is executed pursuant to and made a part of that certain Loan and Security Agreement dated as of _March 29, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), between NEFPASS LLC as Lender, and AmeraMex International, Inc., as Borrower, and describes collateral in which Borrower has granted Lender a security interest in connection with the Obligations (as defined in the Agreement) including without limitation that certain [Amended and Restated] Schedule No. [AmeraMex - _____]dated______,_____, 2019 in the original principal amount of $6,500,000.00.

 

Year Make Model S/N Location
         

 

Date:__________,_____

 

NEFPASS LLC
Lender
  AMERAMEX INTERNATIONAL. INC.
Borrower
 
By:     By:    
Name:     Name: LEE R. HAMRE  
Title:     Title: President  

 

 

 

EXHIBIT 3.5

 

COMMERCIAL LEASE AGREEMENT

 

LESSEE:

 

AmeraMex International, Inc.

 

LESSOR:

 

The Lee Hamre Trust of 1998

 

This lease is made and entered into this First Day of December, 2012. By and between the above two entities.

 

Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, with the terms and conditions hereinafter set forth, that certain real property and the buildings and other improvements located thereon situated in the city of Chico, California, county of Butte. Address of 3930 Esplanade, Chico, Co.

 

The term of this lease shall be five (5) years with a monthly payment of an amount of $9,800.00 USD per month. (Nine Thousand Eight Hundred) unless terminated earlier as hereinafter provided. At the conclusion of this lease the Lessor and Lessee, at their option, can continue this agreement as a month to month Lease or enter into a new Lease agreement, based upon the written agreement of the parties.

 

The payment shall be made on the first of every month for that particular month and paid to the trust fund on title of the property. Any payments not made on time as agreed and not within the grace period of five (5) working days will have a penalty of 10% added to the monthly payment for that month. All payments shall be made to Lessor or his agent at the address of the Lessor, or to any address designated as the new address for the Lessor by the Lessor in writing.

 

Joint and Several Obligations, Party shall mean Lessor and Lessee, and if more than one person or entity is the Lessor or the Lessee the obligations imposed on that party and several.

 

No waiver by lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision. Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, Other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of its acceptance of such rent.

 

Time is of the essence of this lease. The headings used in this lease are for convenience of the parties only and shall not render the other provisions hereof unenforceable, invalid or illegal.

 

Page One Initials    

 

 

Page Two

 

This lease will be handled in a triple net fashion. The lessee will be responsible for any taxes, maintenance, repairs, or new additions in full and totally during the lease. Lessee will hold Lessor harmless to any claims that are brought against said Lessor. Lessee is responsible for any clean up required by inspection from EPA or Cal Osha if and when the lease is terminated. Lessee is responsible to operate a safe and clean operation at all times and will be responsible for any clean up deemed necessary by Lessor during the term of the lease.

 

Lessor may adjust the monthly rate at an amount equal to the published inflation rate currently reported by the U.S. Government each year one time only. The adjustment will take place to begin with the January 1 st monthly payment if applicable. It will continue with each following month for the rest of that year. Any additional changes cannot be made until the next year at the same time.

 

This lese contains the entire agreement between Lessee and Lessor relating to the leasing of the demised premises. No representation, which is not incorporated herein, shall be binding upon Lessor, and all representations which have been made are incorporated herein or, if not so incorporated, shall be deemed to have been waived by Lessee. All preliminary negotiations between the parties are merged into, and superseded by, the provisions of this lease.

 

This lease may be modified only in writing by either party. And, must be signed by both parties of interest at the time of the modification. The lease shall not be enforceable until executed by both Lessee and Lessor.

 

Signatures shown here are those of responsible parties for the Lessee or Lessor and authorized to make the lease contract with each other.  

 

Signed  

 Lee R. Hamre, Trustee, Lee Hamre Trust of 1998

 

Signed    Janice M. Stuessy, Corp. Secretary, AmeraMex Intl. Inc.