Exhibit 10.15
CREDIT AGREEMENT
BETWEEN
UNITED ACQUISITION, INC.
AND
FIRST INDIANA BANK
Dated as of
July 27, 2001
TABLE OF CONTENTS
CREDIT AGREEMENT ....................................................Page 1
Section 1. ACCOUNTING TERMS -- DEFINITIONS ..........................Page I
Section 2. THE LOANS ................................................Page 6
a. The Revolving Loan ..........................................Page 6
(i) The Commitment -- Use of Proceeds ...................Page 6
(ii) Method of Borrowing .................................Page 7
(iii) Interest on the Revolving Loan ......................Page 8
(iv) Extensions of Revolving Loan Maturity Date ..........Page 8
(v) Special Repayments of Principal .....................Page 9
b. The Term Loan ...............................................Page 9
(i) Amount ..................................................Page 9
(ii) The Term Note ..........................................Page 9
(iii) Interest on the Term Loan .............................Page 9
(iv) Use of Proceeds of the Term Loan .......................Page 10
c. Term Loan 11 ................................................Page 10
(i) Amount ..................................................Page 10
(ii) Term Note 11 ...........................................Page 10
(iii) Interest on Term Loan Il ..............................Page 10
(iv) Use of Proceeds of Term Loan II ........................Page 11
d. Term Loan III ...............................................Page 11
(i) Amount ..............................................Page 11
(ii) Term Note III .......................................Page 11
(iii) Interest on Term Loan III ...........................Page 11
(iv) Use of Proceeds of Term Loan III ....................Page 12
(v) Cash Flow Recapture .................................Page 12
e. Provisions Applicable to All of the Loans ...................Page 12
(i) Calculation of Interest ............................Page 12
(ii) Manner of Payment -- Application ...................Page 13
(iii) Commitment Fee .....................................Page 13
(iv) Automatic Debit ....................................Page 13
Section 3. REPRESENTATIONS AND WARRANTIES ...........................Page 13
a. Organization of the Company .................................Page 13
b. Authorization; No Conflict ..................................Page 14
c. Validity and Binding Nature .................................Page 14
d. Financial Statements ........................................Page 14
e. Litigation and Contingent Liabilities .......................Page 15
f. Liens .......................................................Page 15
i
g. Employee Benefit Plans ..........................................Page 15
h. Payment of Taxes ................................................Page 15
i. Investment Company Act ..........................................Page 16
j. Regulation U and other Federal Regulations ......................Page 16
k. Hazardous Substances ............................................Page 16
1. Subsidiaries ....................................................Page 16
m. Ownership........................................................Page 16
Section 4 COLLATERAL FOR THE OBLIGATIONS ...........................Page 16
a. Security Agreement ..............................................Page 16
b. Mortgages .......................................................Page 17
(i) Title Insurance ........................................Page 18
(ii) Appraisal Reports ......................................Page 18
(iii)Environmental Reports ..................................Page 19
(iv) Surveys ................................................Page 20
(v) Flood Hazard Determination Forms .......................Page 20
c. Subordination Agreements ........................................Page 20
d. Guaranty Agreements .............................................Page 21
e. Capital Contribution Agreement ..................................Page 22
Section 5. AFFIRMATIVE COVENANTS OF THE COMPANY ....................Page 22
a. Corporate Existence .............................................Page 22
b. Reports, Certificates and Other Information .....................Page 22
(i) Annual Statements ......................................Page 22
(ii) Interim Statements .....................................Page 23
(iii)Xxxxxxxxx and Xxxxxx Financial Statements ..............Page 23
(iv) Officer's Certificate ..................................Page 23
(v) Borrowing Base Certificates ............................Page 23
(vi)Orders...................................................Page 23
(vii)Notice of Default or Litigation ........................Page 24
(viii) Compliance Certificates ..............................Page 24
(ix) Registration Statements and Reports ....................Page 24
(x) Other Information .......................................Page 24
c. Books, Records and Inspections ..................................Page 24
d. Insurance .......................................................Page 24
e. Taxes and Liabilities ...........................................Page 25
f. Compliance with Legal and Regulatory Requirements ...............Page 25
g. Financial Covenants .............................................Page 25
(i) Capital Base ...........................................Page 25
(ii) Fixed Charge Coverage Ratio ...........................Page 25
h. Primary Banking Relationship ....................................Page 25
i. Employee Benefit Plans ..........................................Page 25
j. Hazardous Substances ............................................Page 26
k. Change In Control ...............................................Page 27
Section 6. NEGATIVE COVENANTS OF THE COMPANY ........................Page 27
a. Restricted Payments .............................................Page 27
b. Liens ...........................................................Page 27
c. Guaranties ......................................................Page 29
d. Loans or Advances ...............................................Page 29
e. Mergers, Consolidations, Sales,
Acquisition or Formation of Subsidiaries ........................Page 29
f. Margin Stock ...............................................Page 30
g. Other Agreements ................................................Page 30
h. Judgments .......................................................Page 30
i. Principal Office ................................................Page 30
j. Hazardous Substances ............................................Page 30
Section 7. CONDITIONS OF LENDING ...................................Page 30
a. No Default ......................................................Page 30
b. Documents to be Furnished at Closing ............................Page 31
c. Documents to be Furnished at Time of Each Advance ...............Page 35
Section 8. EVENTS OF DEFAULT ........................................Page 35
a. Nonpayment of the Loans .........................................Page 35
b. Nonpayment of Other Indebtedness for Borrowed Money .............Page 36
c. Other Material Obligations ......................................Page 36
d. Bankruptcy, Insolvency, etc .....................................Page 36
e. Warranties and Representations ..................................Page 37
f. Violations of Negative and Financial Covenants ..................Page 37
g. Noncompliance With Other Provisions of this Agreement ...........Page 37
Section 9. EFFECT OF EVENT OF DEFAULT ...............................Page 37
Section 10. WAIVER ..................................................Page 37
Section 11. NOTICES .................................................Page 38
Section 12. COSTS, EXPENSES AND TAXES ...............................Page.39
Section 13. SEVERABILITY ............................................Page 39
Section 14. CAPTIONS ................................................Page 39
Section 15. GOVERNING LAW -- JURISDICTION ...........................Page 39
Section 16. PRIOR AGREEMENTS, ETC ...................................Page 40
iii
Section 17. SUCCESSORS AND ASSIGNS ..................................Page 40
Section 18. WAIVER OF JURY TRIAL ....................................Page 40
Section 19. ARBITRATION .............................................Page 40
Exhibit "A" Application for Revolving Loan Advance and
Officer's Certificate
Exhibit "B" Promissory Note (Revolving Loan)($3,500,000.00)
Exhibit "C" Promissory Note (Term Loan) ($291,000.00)
Exhibit "D" Promissory Note (Term Loan 11) ($1,116,000.00)
Exhibit "E" Promissory Note (Term Loan 111) ($1,750,000.00)
Exhibit "F" Schedule of Exceptions
Exhibit "G" Security Agreement (Equipment, Inventory,
Accounts Receivable and General Intangibles)
Exhibit "H" Mortgage, Security Agreement, Assignment of Rents
and Fixture Filing (Indiana)
Exhibit "I" Mortgage (Michigan)
Exhibit "J" Subordination Agreement (United Expressline, Inc.)
Exhibit "K" Subordination Agreement ( Huntington Capital
Investment Company)
Exhibit "L" Subordination Agreement (Xxxxxx Corporation)
Exhibit "M" Guaranty Agreement (Xxxxxx Corporation)
Exhibit "N" Guaranty Agreement (Obsidian Capital Partners, L.P.)
Exhibit "O" Guaranty Agreement (Xxxxx X. Xxxxxxxxx)
Exhibit "P" Guaranty Agreement (Xxxxxxx Xxxxxx)
Exhibit "Q" Subordination Agreement (Xxxxxx Corporation)
Exhibit "R" Leasehold Mortgage (St. Xxxxxx County, Michigan)
iv
Exhibit "S" Assignment of Rents and Leases (St. Xxxxxx County, Michigan)
Exhibit "T" Assignment of Rents and Leases (St. Xxxxxx County, Michigan
-Encroachment Parcel)
Exhibit "U" Capital Contribution Agreement
v
CREDIT AGREEMENT
UNITED ACQUISITION, INC., an Indiana corporation (the "Company"), and FIRST
INDIANA BANK, a federal savings bank with its principal office in Indianapolis,
Indiana (the "Bank"), agree as follows:
Section 1. ACCOUNTING TERMS - DEFINITIONS. All accounting and financial
terms used in this Agreement are used with the meanings such terms would be
given in accordance with generally accepted accounting principles except as may
be otherwise specifically provided in this Agreement. The following terms have
the meanings indicated when used in this Agreement with the initial letter
capitalized:
"Acquisition" means the acquisition by the Company of all of the assets of
United Expressline, and all other transactions contemplated by the
Acquisition Documents.
"Acquisition Documents" means the Purchase Agreement, including all
exhibits and schedules thereto, and all agreements, documents and
instruments executed and delivered pursuant thereto or in connection
therewith.
"Advance" means a disbursement of proceeds of the Revolving Loan.
"Agreement" means this Credit Agreement between the Company and the Bank,
as it may from time to time be amended.
"Application for Revolving Loan Advance" or "Application" means a written
application of the Company for a disbursement of proceeds of the Revolving
Loan substantially in the form of Exhibit "A" attached hereto.
"Authorized Officer" means the Chairman of the Board or the President of
the Company or such other officer whose authority to perform acts to be
performed only by an Authorized Officer under the terms of this Agreement
is evidenced to the Bank by a certified copy of an appropriate resolution
of the Board of Directors of the Company. o "Bank" is used as defined in
the preamble. o "Banking Day" means a day on which the principal office of
the Bank in the City of Indianapolis, Indiana, is open for the purpose of
conducting substantially all of the Bank's business activities.
"Borrowing Base" means an amount equal to the sum of eighty percent (80 %)
of the adjusted book value of the Company's accounts receivable, plus fifty
percent (50 %) of the book value of the Company's inventory located at the
Company's facilities in Bristol, Indiana, and White Pigeon, Michigan. For
purposes of the preceding sentence, the phrase "adjusted book value of the
Company's accounts receivable" means the book value of the Company's
accounts receivable less any accounts which are ninety (90) days or more
past date of invoice, or which are due from an account debtor known to the
Company to be the subject of a bankruptcy or other insolvency proceeding or
known to the Company to have ceased doing business, and less all accounts
due from any account debtor if ten percent (10 %) or more of the aggregate
amount of the accounts receivable from such debtor are ninety (90) days or
more past due, and provided that any account receivable otherwise
includable in the Borrowing Base shall be reduced, but not below zero, by
the amount of any accounts payable to the account debtor from whom such
account is due. For purposes hereof, the term "inventory" shall include the
Company's raw materials, work in progress, and finished goods inventories.
"Borrowing Base Certificate" means a certificate of the Company signed by
an appropriate officer indicating the amount of the Borrowing Base as of a
stated date and in such form and showing such detail as the Bank may
reasonably require.
"Capital Base" means the shareholders' equity of the Company plus the
principal amount of the Company's Subordinated Debt. o Capital Contribution
Agreement" is used as defined in Section 4(e). o "Code" means the Internal
Revenue Code of 1986, as amended.
"Commitment" means the agreement of the Bank to extend the Revolving Loan
to the Company until the Revolving Loan Maturity Date, and if the context
so requires, the term may also refer to the maximum principal amount which
is permitted to be outstanding under the Revolving Loan at any time.
"Company" is used as defined in the Preamble.
"Xxxxxx" means the Xxxxxx Corporation, a New York corporation.
2
"EBITDA" means earnings before interest, taxes, depreciation, and
amortization, all determined in accordance with GAAP. o "Encroachment
Assignment of Leases" is used as defined in Section 4(b). o "Encroachment
Lease" is used as defined in Section 4(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. "Event of Default" means any of the events described in Section 8.
"GAAP" means generally accepted account principles as then in effect, which
shall include the official interpretations thereof by the Financial
Accounting Standards Board, consistently applied.
"Guarantor" and "Guarantors" are used as defined in Section 4(d).
"Guaranty Agreement" and "Guaranty Agreements" are used as defined in
Section 4(d).
"Hazardous Substance" means any hazardous or toxic substance regulated by
any federal, state or local statute or regulation including but not limited
to the Comprehensive Environmental Response, Compensation and Liability
Act, the Resource Conservation and Recovery Act and the Toxic Substance
Control Act, or by any federal, state or local governmental agencies having
jurisdiction over the control of any such substance including but not
limited to the United States Environmental Protection Agency.
"Huntington" means The Huntington Capital Investment Company, an Ohio
corporation, and its successors and assigns under the Note Purchase
Agreement.
"Loan" means any of the Revolving Loan, the Term Loan, Term Loan 11 or
Term Loan III, as the context requires, and when used in the plural form
refers to all of the Loans, collectively.
"Loan Document" means any of this Agreement, the Revolving Note, the Term
Note, Term Note II, Term Note III, the Mortgages, Michigan Assignment of
Leases, the Encroachment Assignment of Leases, the Security Agreement, the
Subordination Agreements, the Guaranty Agreements, the Management
Subordination Agreement, the Capital Contribution Agreement, and any other
instrument or document which evidences or secures the Loans or any of them
or which expresses an agreement as to terms applicable to the Loans
or any of them, and in the plural means any two or more of the Loan
Documents, as the context requires.
"Management Subordination Agreement" is used as defined in Section 6(a).
"Michigan Assignment of Leases" is used as defined in Section 4(b).
"Mortgages" is used as defined in Section 4(b).
"Note" means any of the Revolving Note, the Term Note, Term Note II or Term
Note III, as the context requires, and when used in the plural form refers
to all of the Notes, collectively.
"Note Purchase Agreement" means that certain Note Purchase Agreement
entered into as of even date by and between the Company and Huntington.
"Obligations" means all obligations of the Company in favor of the Bank of
every type and description, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, including but not
limited to: (i) all of such obligations on account of the Loans, including
any Advances made pursuant to any extension of the Commitment beyond the
initial Revolving Loan Maturity Date or pursuant to any other amendment of
this Agreement, and (ii) all other obligations arising under any Loan
Document as amended from time to time.
"Obsidian" means Obsidian Capital Partners, L.P., aDelaware limited
partnership.
"Officer's Certificate" means a certificate in the form included as a part
of Exhibit "A" attached hereto signed by
the chief executive officer or the chief financial officer of the Company,
confirming that all of the representations and warranties contained in
Section 3 of this Agreement are true and correct as of the date of such
certificate except as specified therein and with the further exceptions
that: (i) the representation contained in Section 3(d) shall be construed
so as to refer to the latest financial statements which have been furnished
to the Bank as of the date of any Officer's Certificate, (ii) the
representations contained in Section 3(k) (with respect to Hazardous
Substances) will be construed so as to apply not only to the Company, but
also to any Subsidiaries, whether now owned or hereafter acquired, (iii)
the representation contained in 4
Section 3(l) shall be deemed to be amended to reflect the existence of any
Subsidiary hereafter formed or acquired by the Company with the consent of
the Bank, and (iv) all other representations will be construed to have been
amended to conform with any changes of which the Company shall have
previously given the Bank notice in writing. The Certificate shall further
confirm that no Event of Default or Unmatured Event of Default shall have
occurred and be continuing as of the date of the Certificate or shall
describe any such event which shall have occurred and be then continuing
and the steps being taken by the Company to correct it.
"Plan" means an employee pension benefit plan as defined in ERISA.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by the Bank, which is not necessarily the
lowest rate charged to any customer, changing when and as said prime rate
changes.
"Purchase Agreement" means that certain Purchase Agreement among the
Seller, the Company, J.J.M., Incorporated, an Indiana corporation ("JJM'),
and the respective shareholders of the Company and JJM, dated as of
___________________________________.
"Revolving Loan" is used as defined in Section 2(a)(i).
"Revolving Loan Maturity Date" means July 1, 2002, and thereafter any
subsequent date to which the Commitment may be extended by the Bank
pursuant to the terms of Section 2(a)(iv).
"Revolving Note" is used as defined in Section 2(a)(ii).
"Seller" means United Expressline.
"Security Agreement" is used as defined in Section 4(a).
"Share Exchange" is used as defined in Section 5(k).
"Subordinated Debt" means indebtedness of the Company which is subordinated
to the indebtedness of the Company to the Bank under the terms of the
Subordination Agreements and any other indebtedness of the Company which is
subordinated to the Company's indebtedness to the Bank on substantially
similar terms.
"Subordination Agreements" is used as defined in Section 4(c).
5
"Subsidiary" means any corporation, partnership, joint venture or other
business entity over which the Company exercises control, provided that it
shall be conclusively presumed that the Company exercises control over any
such entity fifty-one percent (51 %) or more of the equity interest in
which is owned by the Company, directly or indirectly.
"Term Loan" is used as defined in Section 2(b). o "Term Loan II" is used as
defined in Section 2(c). o "Term Loan III" is used as defined in Section
2(d). o "Term Note" is used as defined in Section 2(b)(ii). o "Term Note
II" is used as defined in Section 2(c)(ii). o "Term Note III" is used as
defined in Section 2(d)(ii).
"United Expressline" means United Expressline, Inc., an Indiana
corporation, doing business as Southwest Expressline.
"Unmatured Event of Default" means any event specified in Section 8, which
is not initially an Event of Default, but which would, if uncured, become
an Event of Default with the giving of notice or the passage of time or
both.
Section 2. THE LOANS. Subject to all of the terms and conditions of this
Agreement, the Bank will make the Loans described in this Section to the
Company.
a. The Revolving Loan. The Bank will make a revolving loan to the Company
on the following terms and subject to the following conditions: (i)
The Commitment -- Use of Proceeds. From this date and until the
Revolving Loan Maturity Date, the Bank agrees to make Advances
(collectively, the "Revolving Loan") under a revolving line of credit
from time to time to the Company of amounts not exceeding in the
aggregate at any time outstanding Three Million Five Hundred Thousand
and 00/100 Dollars ($3,500,000.00) (the " Commitment") or the
Borrowing Base; provided that all of the conditions of lending stated
in Section 7 of this Agreement as being applicable to the Revolving
Loan have been fulfilled at the time of each Advance. Proceeds of the
Revolving Loan may be used by the Company only for working capital
purposes and to finance the Acquisition.
(ii) Method of Borrowing. The obligation of the Company to repay the
Revolving Loan shall be evidenced by a promissory note (the "Revolving
Note") of the Company in the form of Exhibit "B" attached hereto. So
long as no Event of Default or Unmatured Event of Default shall have
occurred and be continuing and until the Revolving Loan Maturity Date,
the Company may borrow, repay and reborrow under the Revolving Note on
any Banking Day; provided, that no borrowing may cause the principal
balance of the Loan to exceed the lesser of the Commitment or the
Borrowing Base or may result in an Event of Default or an Unmatured
Event of Default. Each Advance under the Revolving Loan shall be
conditioned upon receipt by the Bank from the Company of an
Application for Revolving Loan Advance and an Officer's Certificate;
provided, that the Bank may, at its discretion, make a disbursement
upon the oral request of the Company made by an Authorized Officer, or
upon a request transmitted to the Bank by telephone facsimile ("fax")
machine, or by any other form of written electronic communication (all
such requests for Advances being hereafter referred to as "informal
requests"). In so doing, the Bank may rely on any informal request
which shall have been received by it in good faith from a person
reasonably believed to be an Authorized Officer. Each informal request
shall be promptly confirmed by a duly executed Application and
Officer's Certificate if the Bank so requires and shall in and of
itself constitute the representation of the Company that no Event of
Default or Unmatured Event of Default has occurred and is continuing
or would result from the making of the requested Advance, and that the
making of the requested Advance shall not cause the principal balance
of the Revolving Loan to exceed the lesser of the Commitment or the
Borrowing Base. All borrowings and reborrowings and all repayments
shall be in amounts of not less than Twenty-Five Thousand Dollars
($25,000.00), except for repayment of the entire principal balance of
the Revolving Loan
7
and except for special prepayments of principal required under the
terms of Section 2(a)(v). Upon receipt of an Application, or at the
Bank's discretion upon receipt of an informal request for an Advance
and upon compliance with any other conditions of lending stated in
Section 7 of this Agreement applicable to the Revolving Loan, the Bank
shall disburse the amount of the requested Advance to the Company. All
Advances by the Bank and payments by the Company shall be recorded by
the Bank on its books and records, and the principal amount
outstanding from time to time, plus interest payable thereon, shall be
determined by reference to the books and records of the Bank. The
Bank's books and records shall be presumed prima facie to be correct
as to such matters.
(iii)Interest on the Revolving Loan. The principal amount of the Revolving
Loan outstanding from time to time shall bear interest until maturity
of the Revolving Note at a rate per annum equal to the Prime Rate plus
three-quarters percent (3/4%). After maturity, whether on the
Revolving Loan Maturity Date or on account of acceleration upon the
occurrence of an Event of Default, and until paid in full, the
Revolving Loan shall bear interest at a per annum rate equal to the
Prime Rate plus three and three-quarters percent (3-3/4%). Accrued
interest shall be due and payable monthly on the first Banking Day of
each month prior to maturity. After maturity, interest shall be
payable as accrued and without demand.
(iv) Extensions of Revolving Loan Maturity Date. The Bank may, upon the
request of the Company, but at the Bank's sole discretion, extend the
Revolving Loan Maturity Date from time to time to such date or dates
as the Bank may elect by notice in writing to the Company, and upon
any such extension and upon execution and delivery by the Company of a
Revolving Note reflecting the extended maturity date, the date to
which the Commitment is then extended will become the "Revolving Loan
Maturity Date" for purposes of this Agreement.
8
(v) Special Repayments of Principal. At any time the principal balance of
the Revolving Loan exceeds the Borrowing Base, as determined on the
basis of the most recent Borrowing Base Certificate furnished by the
Company or as determined by the Bank upon an inspection of the books
and records of the Company, the Company shall immediately repay that
portion of the principal balance of the Revolving Loan which is in
excess of the Borrowing Base. Such repayment shall be due without
demand.
b. The Term Loan. The Bank will make a term loan (the "Term Loan") to the
Company contemporaneously with the execution of this Agreement on the
following terms and subject to the following conditions:
(i) Amount. The principal amount of the Term Loan shall be Two
Hundred Ninety-One Thousand and 00/100 Dollars ($291,000.00).
(ii) The Term Note. The obligation of the Company to repay the Term
Loan shall be evidenced by a promissory note of the Company (the
"Term Note") in the form of Exhibit "C" attached hereto. The
principal of the Term Loan shall be repayable in equal monthly
installments of $4,850.00, which shall be due and payable
commencing on the first Banking Day of September, 2001, and
thereafter on the first Banking Day of each month until July 1,
2006, on which date the entire principal balance of the Term Loan
shall be due and payable together with all accrued and unpaid
interest. The principal of the Term Loan may be prepaid at any
time in whole or in part, provided that any partial prepayment
shall be in an amount which is an integral multiple of
$25,000.00, and provided, further, that all partial prepayments
shall be applied to the latest maturing installments of principal
payable under the Term Loan in inverse order of maturity.
(iii)Interest on the Term Loan. The unpaid principal balance from
time to time of the Term Loan shall bear interest from the date
the Loan is made prior to the maturity of the Term Note at a rate
per annum equal to the Prime Rate plus one percent (1 %). After
maturity, whether scheduled maturity or maturity by virtue of
acceleration on account of the 9
occurrence of an Event of Default, interest will accrue on the
Term Loan at a rate per annum. equal to the Prime Rate plus four
percent (4 %). Prior to maturity, interest shall be due and
payable on the first Banking Day of each month in addition to the
installments of principal due on such dates. After maturity,
interest shall be payable as accrued and without demand.
(iv) Use of Proceeds of the Term Loan. The proceeds of the Term Loan
shall be used in their entirety to finance the Acquisition.
c. Term Loan 11. The Bank will make a second term loan ("Term Loan II")
to the Company contemporaneously with the execution of this Agreement
on the following terms and subject to the following conditions:
(i) Amount. The principal amount of Term Loan 11 shall be One Million
One Hundred Sixteen Thousand and 00/100 Dollars ($1,116,000.00).
(ii) Term Note II. The obligation of the Company to repay Term Loan II
shall be evidenced by a promissory note of the Company ("Term
Note II") in the form of Exhibit "D" attached hereto. The
principal of Term Loan 11 shall be repayable in equal monthly
installments of $6,200.00 which shall be due and payable
commencing on the first Banking Day of September, 2001, and
thereafter on the first Banking Day of each month until July 1,
2006, on which date the entire principal balance of Term Loan II
shall be due and payable together with all accrued and unpaid
interest. The principal of Term Loan II may be prepaid at any
time in whole or in part, provided that any partial prepayment
shall be in an amount which is an integral multiple of
$25,000.00; and provided further, that all partial prepayments
shall be applied to the latest maturing installments of principal
payable under Term Loan II in inverse order of maturity.
(iii)Interest on Term Loan II. The unpaid principal balance from time
to time of Term Loan II shall bear interest from the date the
Loan is made prior to the maturity of Term Note II at a rate per
annum equal to the Prime Rate plus one percent (1%). After
maturity, whether
10
scheduled maturity or maturity by virtue of acceleration on
account of the occurrence of an Event of Default, interest will
accrue on Term Loan Il at a rate per annum equal to the Prime
Rate plus four percent (4 %). Prior to maturity, interest shall
be due and payable on the first Banking Day of each month in
addition to the installments of principal due on such dates.
After maturity, interest shall be payable as accrued and without
demand.
(iv) Use of Proceeds of Term Loan 11. The proceeds of Term Loan II
shall be used in their entirety to finance the Acquisition.
d. Term Loan II. The Bank will make a third term loan ("Term Loan III")
to the Company contemporaneously with the execution of this Agreement
on the following terms and subject to the following conditions:
(i) Amount. The principal amount of Term Loan III shall be One
Million Seven Hundred Fifty Thousand and 00/100 Dollars
($1,750,000.00).
(ii) Term Note III. The obligation of the Company to repay Term Loan
III shall be evidenced by a promissory note of the Company ("Term
Note III" in the form of Exhibit "E" attached hereto. The
principal of Term Loan III shall be repayable in equal monthly
installments of $72,916.67, which shall be due and payable
commencing on the first Banking Day of September, 2001, and
thereafter on the first Banking Day of each month until July 1,
2003, on which date the entire principal balance of Term Loan III
shall be due and payable together with all accrued and unpaid
interest. The principal of Term Loan II may be prepaid at any
time in whole or in part, provided that any partial prepayment
shall be in an amount which is an integral multiple of
$25,000.00, and provided further, that all partial prepayments
shall be applied to the latest maturing installments of principal
payable under the Term Loan in inverse order of maturity.
(iii)Interest on Term Loan III. The unpaid principal balance from
time to time of Term Loan III shall bear interest from the date
the Loan is made prior to the maturity of Term Note
11
III at a rate per annum equal to the Prime Rate plus two percent
(2%). After maturity, whether scheduled maturity or maturity by
virtue of acceleration on account of the occurrence of an Event
of Default, interest will accrue on Term Loan III at a rate per
annum. equal to the Prime Rate plus five percent (5 %). Prior to
maturity, interest shall be due and payable on the first Banking
Day of each month in addition to the installments of principal
due on such dates. After maturity, interest shall be payable as
accrued and without demand.
(iv) Use of Proceeds of Term Loan III. The proceeds of Term Loan III
shall be used in their entirety to finance the Acquisition.
(v) Cash Flow Recapture. On April 30 of each calendar year beginning
on April 30, 2002, until payment in full of all outstanding
principal and interest of Term Loan III, in addition to any
scheduled principal payment required under 2(d)(ii) above, the
Company shall also make a principal prepayment on Term Loan III
in an amount equal to fifty percent (50 %) of Excess Cash Flow
for the immediately preceding fiscal year of the Company. Such
Excess Cash Flow prepayment shall be applied to latest scheduled
installments of principal payable under Term Loan III in inverse
order of maturity. As used herein, the term "Excess Cash Flow"
means the remainder of-. (A) EBITDA, minus (B) the sum of: (1)
interest expense, (2) capital expenditures not made with borrowed
funds, (3) cash taxes and/or member distributions permitted
hereunder for the payment of taxes, plus (4) scheduled principal
payments on term indebtedness including principal payments on
Subordinated Debt permitted under the Subordination Agreements,
plus or minus (C) changes in working capital.
e. Provisions Applicable to All of the Loans. The following provisions
are applicable to all of the Loans:
(i) Calculation of Interest. Interest on a Loan shall be calculated
by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal
12
balance, multiplied by the actual number of days the principal
balance is outstanding.
(ii) Manner of Payment - Application. All payments of principal and
interest on the Loans shall be payable at the principal office of
the Bank in Indianapolis, Indiana, in funds available for the
Bank's immediate use in that city and no payment will be
considered to have been made until received in such funds. All
payments received on account of any of the Loans will be applied
first to the satisfaction of any interest which is then due and
payable, and to principal only after all interest which is due
and payable has been satisfied.
(iii)Commitment Fee. The Bank acknowledges receipt from the Company
of the sum of $42,035.00, either previous to or contemporaneously
with the execution of this Agreement, as a fee for the Bank's
commitment to make the Loans.
(iv) Automatic Debit. The Bank may debit when due all payments of
principal and interest due under the terms of this Agreement to
any deposit account of the Company carried with the Bank without
further authority.
Section 3. REPRESENTATIONS AND WARRANTIES. To induce the Bank to make the
Loans, the Company represents and warrants to the Bank that:
a. Organization of the Company. The Company is a corporation organized,
existing and in good standing under the laws of the State of Indiana.
The Company is qualified to do business in every jurisdiction in
which: (i) the nature of the business conducted or the character or
location of properties owned or leased, or the residences or
activities of employees make such qualification necessary, and (ii)
failure so to qualify might impair the title of the Company to
material properties or the Company's right to enforce material
contracts or result in exposure of the Company to liability for
material penalties in such jurisdiction. No jurisdiction in which the
Company is not qualified to do business has asserted that the Company
is required to be qualified therein. The principal office of the
Company is located at 00000 Xxxxxx Xxxx 0, Xxxxxxx, Xxxxxxx 00000. The
Company does not conduct any material operations or keep any material
amounts of property at
13
any other location, except the following: 68939 M 000, Xxxxx
Xxxxxx, Xxxxxxxx. The Company has not done business under any
name other than its present corporate name at any time during the
six years preceding the date of this Agreement. The Company has
received all necessary consents, including the consent of United
Expressline, to use the name "United Expressline, Inc."
immediately after the consummation of the Acquisition.
b. Authorization: No Conflict. The execution and delivery of this
Agreement, the borrowings hereunder, the execution and delivery of all
of the other Loan Documents and the performance by the Company of its
obligations under this Agreement and all of the other Loan Documents
are within the Company's corporate powers, have been duly authorized
by all necessary corporate action, have received any required
governmental or regulatory agency approvals and do not and will not
contravene or conflict with any provision of law or of the Articles of
Incorporation or ByLaws of the Company or of any agreement binding
upon the Company or its properties.
c. Validity and Binding Nature. This Agreement and all of the other Loan
Documents are the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws
enacted for the relief of debtors generally and other similar laws
affecting the enforcement of creditors' rights generally or by
equitable principles which may affect the availability of specific
performance and other equitable remedies.
d. Financial Statements. The Company's pro forma financial statements
provided to the Bank dated April 30, 2001, have been prepared in
accordance with GAAP. The Company's audited financial statements and
its unaudited interim financial statements to be furnished to the Bank
pursuant to Section 5(b) of this Agreement will be prepared in
accordance with generally accepted accounting principles consistently
applied except, as to the interim statements, for the absence of a
statement of cash flows, footnotes and adjustments normally made at
year end which are not material in amount. Such statements will
present fairly the financial position of the Company as of the dates
thereof and
14
the results of its operations for the periods covered and since the
date of the latest of such statements there has been no material
adverse change in the financial position of the Company or in the
results of its operations.
e. Litigation and Contingent Liabilities. No litigation, arbitration
proceedings or governmental proceedings are pending or threatened
against the Company which would, if adversely determined, materially
and adversely affect its financial position or continued operations.
The Company has no material contingent liabilities not provided for or
disclosed in the financial statements referred to in Section 3(d) or
in the "Schedule of Exceptions" attached hereto as Exhibit "F."
f. Liens. None of the assets of the Company are subject to any mortgage,
pledge, title retention lien, or other lien, encumbrance or security
interest except for liens and security interests described in the
exceptions enumerated in Section 6(b).
g. Employee Benefit Plans. Each Plan maintained by the Company is in
material compliance with ERISA, the Code, and all applicable rules and
regulations adopted by regulatory authorities pursuant thereto, and
the Company has filed all reports and returns required to be filed by
ERISA, the Code and such rules and regulations. No Plan maintained by
the Company and no trust created under any such Plan has incurred any
"accumulated funding deficiency " within the meaning of Section 412(c)
(1) of the Code, and the present value of all benefits vested under
each Plan did not exceed, as of the last annual valuation date, the
value of the assets of the respective Plans allocable to such vested
benefits. The Company has no knowledge that any "reportable event" as
defined in ERISA has occurred with respect to any Plan.
h. Payment of Taxes. The Company has filed all federal, state and local
tax returns and tax related reports which the Company is required to
file by any statute or regulation and all taxes and any tax related
interest payments and penalties that are due and payable have been
paid, except for such as are being contested in good faith and by
appropriate proceedings and as to which appropriate reserves have been
established. Adequate provision has been made for the payment when due
of all tax liabilities which have been incurred, but are not as yet
due and payable.
15
i. Investment Company Act. The Company is not an "investment company" or
a company .controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
j. Regulation U and other Federal Regulations. The Company is not engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin
stock within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System. Not more than twenty-five percent (25%) of
the consolidated assets of the Company consists of margin stock,
within the contemplation of Regulation U, as amended.
k. Hazardous Substances. Except as disclosed on the "Schedule of
Exceptions" attached hereto as Exhibit "E" to the best knowledge of
the Company after due inquiry and investigation; (i) there are no
underground storage tanks of any kind on any premises owned or
occupied by or under lease to the Company; (ii) there are no tanks,
drums or other containers of any kind on premises owned or occupied by
or under lease to the Company, the contents of which are unknown to
the Company; (iii) no premises owned or occupied by or under lease to
the Company have ever been used, and as of the date of this Agreement,
no such premises are being used for any activities involving the use,
treatment, transportation, generation, storage or disposal of any
Hazardous Substances in reportable quantities, and (iv) no Hazardous
Substances in reportable quantities have been released on any such
premises nor is there any threat of release of any Hazardous
Substances in reportable quantities on any such premises.
l. Subsidiaries. The Company has no Subsidiaries as of the date of this
Agreement.
m. Ownership. Immediately prior to the execution of this Agreement and
the consummation of the transactions contemplated hereunder, all
capital stock of the Company is owned by Obsidian Capital Partners,
L.P., an Indiana limited partnership.
Section 4. COLLATERAL FOR THE OBLIGATIONS. The Obligations will be secured
and supported as provided in this Section:
a. Security Agreement. The Obligations shall be secured by a security
interest in all of the Company's equipment, inventory, accounts
receivable, general intangibles and depository and concentration
16
accounts maintained by the Company individually or jointly with the
Bank or any of the Bank's affiliates, all whether now owned or
hereafter acquired, and in all proceeds thereof, which security
interest will be created by a Security Agreement (the "Security
Agreement") in the form attached hereto as Exhibit "G" The Security
Agreement will provide a security interest in the collateral described
therein subject only to liens and security interests described in the
exceptions enumerated in Section 6(b).
b. Mortgages. The Obligations will further be secured by the mortgage
lien and security interests created by a Mortgage, Security Agreement,
Assignment of Rents and Fixture Filing in the form attached hereto as
Exhibit "H" (the "Indiana Mortgage") on the real estate in Elkhart
County, Indiana, owned by the Company and commonly known as 00000
Xxxxxx Xxxx 0, Xxxxxxx, Xxxxxxx (referred to in this Section as the
"Indiana Real Estate"). The Obligations will be further secured by the
mortgage lien and security interests created by a Mortgage in the form
attached hereto as Exhibit "I" (the "Michigan Mortgage") and by an
Assignment of Rents and Leases in the form attached hereto as Exhibit
"S" ("the Michigan Assignment of Leases") on the real estate in St.
Xxxxxx County, Michigan, owned by the Company and commonly known as
00000 X 000, Xxxxx Xxxxxx, Xxxxxxxx 00000 (referred to in this Section
as the "Michigan Real Estate"). The Obligations will be further
secured by the lien of a Leasehold Mortgage in the form of Exhibit "R"
(the "Leasehold Mortgage") and by an Assignment of Rents and Leases in
the form of Exhibit "T" attached hereto (the "Encroachment Assignment
of Leases") on the leasehold interest of the Company created by that
certain Real Estate Lease entered into by and among the Company,
Xxxxxx X. Xxxxxx, Trustee of the Xxxxxx X. Xxxxxx Trust dated
September 11, 1992, Xxxxxxxxxxx X. Xxxxxx, and Xxxxxx X. Xxxxx, dated
as of even date herewith (the "Encroachment Lease") on certain real
estate located in White Pigeon, St. Xxxxxx County, Michigan (the
"Encroachment Parcel").The Indiana Real Estate, the Michigan Real
Estate, and the Encroachment Parcel are hereinafter sometimes
collectively referred to the as the "Real Estate" and the Indiana
Mortgage, the Leasehold Mortgage, and the Michigan Mortgage are
hereinafter sometimes
17
each referred to as a "Mortgage" and collectively referred to as the
"Mortgages"). In support of the Mortgages, and the Michigan Assignment
of Leases and the Encroachment Assignment of Leases, the Company shall
provide to the Bank at the Company's expense the following
documentation:
(i) Title Insurance. The Company shall provide the Bank with a
mortgagee's title insurance policy in the amount of $395,000 with
respect to the Indiana Mortgage, and in the amount of $1,000,000
with respect to the Michigan Mortgage, and in the amount of
$100,000 with respect to the Leasehold Mortgage, all on the
American Land Title Association form of mortgagee's title policy
(1992 Revision), which shall include a revolving credit
endorsement, an ALTA form of Comprehensive endorsement, an ALTA
form 3.1 zoning endorsement, an access endorsement, a last dollar
endorsement, and such other endorsements as the Bank may require.
The coverage provided by each title insurance policy shall Mot be
subject to the standard exceptions as to rights of parties in
possession and matters which would be disclosed by survey,
easements not shown by the public records and mechanic's liens
not shown by the public records, and otherwise the coverage shall
be subject to no exceptions other than: (A) easements and use
restrictions and encroachments disclosed by survey which do not
materially arid adversely affect the value or marketability of
the applicable Real Estate or the usefulness of the applicable
Real Estate in the operations of the Company, and (B) the liens
described in the exceptions enumerated in Section 6(b).
(iii)Appraisal Reports. The Company shall provide to the Bank at the
Company's expense an appraisal report for the Indiana Real Estate
and the Michigan Real Estate each addressed to the Bank with
respect to the applicable Real Estate prepared in compliance with
the regulations of the Office of the Comptroller of the Currency
with respect to appraisal practice applicable to "federally
related transactions" adopted pursuant to the Financial
Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") and shall be 18
prepared in response to an engagement letter to be issued by the
Bank.
(iii)Environmental Reports. The Company shall furnish the report or
reports of a registered engineer or environmental consultant
acceptable to the Bank, confirming that there are no material
environmental problems associated with the Indiana Real Estate or
the Michigan Real Estate. The report or reports shall be in form
satisfactory to the Bank and shall include, at a minimum: A) a
statement of the results of an examination of all relevant
documents and records concerning ownership and use of the
applicable Real Estate; B) a statement of the results of an
inspection of the applicable Real Estate, which inspection shall
have included the use of such equipment as is customarily used by
engineers and environmental consultants in connection with the
preparation of "Phase I" environmental reports to detect traces
of buried Hazardous Substances and underground storage tanks and
drums and which inspection shall have been made for the purpose
of determining whether all or any part of the applicable Real
Estate is being used or has been used to store or dispose of any
Hazardous Substances in quantities which are or could be
detrimental to the applicable Real Estate, human health or the
environment or in violation of any laws or regulations, state or
federal, whether the applicable Real Estate is or has been
affected by any Hazardous Substances and whether the applicable
Real Estate contains or has contained any underground storage
tanks or asbestos of any kind, and a statement of the
recommendations of the reporting engineer or consultant as to
such further investigation or tests, if any, as may be necessary
to resolve such issues; C) confirmation that the applicable Real
Estate is not listed as a known hazardous waste site on any
environmental reporting list maintained by any governmental
agency having jurisdiction as to environmental matters over the
applicable Real Estate, and D) a statement of the professional
qualifications of the engineer or consultant who prepared such
report. The Company shall also furnish to the 19
Bank the supplemental report of the reporting engineer or
consultant as to the results of such further tests and
investigations as may have been recommended in the initial
report.
(iv) Surveys. The Company shall furnish the Bank with Minimum
Standards Detail Land Title Survey together with Minimum
Standards Detail Certificates certified to the Bank prepared by a
registered land surveyor or engineer dated within thirty (30)
days preceding closing, which surveys shall locate all recorded
easements with recording information and contain a statement as
to whether or not the Indiana Real Estate or the Michigan Real
Estate, as applicable, is in a flood plain.
(v) Flood Hazard Determination Forms. The Company shall obtain the
completion of a Flood Hazard Determination Form from a registered
land surveyor or engineer pursuant to the requirements of the
Office of the Comptroller of the Currency and the Federal
Emergency Management Agency for the Indiana Real Estate and the
Michigan Real Estate.
c. Subordination Agreements. The indebtedness of the Company to United
Expressline under that certain Promissory Note dated as of even date
herewith in the original principal amount of $1,500,000.00 shall be
subordinated to the indebtedness of the Company to the Bank under the
terms of a Subordination Agreement (the "United Subordination
Agreement") in the form of Exhibit "J" attached hereto. The
indebtedness of the Company to Huntington under that certain
Promissory Note dated as of event date herewith in the original
principal amount of $3,500,000.00 issued pursuant to the Note Purchase
Agreement shall be subordinated to the indebtedness of the Company to
the Bank under the terms of a Subordination Agreement (the "Huntington
Subordination Agreement") in the form of Exhibit "K" attached hereto.
The indebtedness of the Company to Xxxxxx under that certain
Promissory Note dated as of even date herewith in the original
principal amount of $500,000.00 shall be subordinated to the
indebtedness of the Company to the Bank under the terms of a
Subordination (the "Xxxxxx Subordination Agreement) in the form of
Exhibit "L" attached hereto. The management fees payable by the
Company to Xxxxxx shall be
20
subordinated to the Obligations pursuant to the Management
Subordination Agreement described in Section 6(a) hereto (the United
Expressline Subordination Agreement, the Huntington Subordination
Agreement, the Management Subordination Agreement, and the Xxxxxx
Subordination Agreement are each called a "Subordination Agreement"
and collectively referred to as the "Subordination Agreements").
d. Guaranty Agreements. Payment of the Obligations shall be supported by
the unconditional guaranty of prompt payment of Xxxxxx, which guaranty
shall be evidenced by a Guaranty Agreement (the "Xxxxxx Guaranty
Agreement") in the form attached hereto as Exhibit "M" attached
hereto. Payment of the Obligations up to a maximum principal amount of
$1,000,000 shall also be supported by the unconditional guaranty of
prompt payment of Obsidian, which guaranty shall be evidenced by a
Guaranty Agreement (the "Obsidian Guaranty Agreement") in the form
attached hereto as Exhibit "N." Payment of the Obligations up to a
maximum principal amount of $500,000 shall also be supported by the
unconditional guaranty of prompt payment of Xxxxx X. Xxxxxxxxx
("Xxxxxxxxx") , which guaranty shall be evidenced by a Guaranty
Agreement (the "Xxxxxxxxx Guaranty Agreement") in the form attached
hereto as "Exhibit O." Payment of the Obligations up to a maximum
principal amount of $500,000 shall also be supported by the
unconditional guaranty of prompt payment of Xxxxxxx Xxxxxx ("Durham"),
which guaranty shall be evidenced by a Guaranty Agreement (the "Durham
Guaranty Agreement") in the form attached hereto as Exhibit "P"
(Xxxxxx, Obsidian, Xxxxxxxxx, and Durham, are each referred to as
"Guarantor" and collectively, as the "Guarantors," and the Xxxxxx
Guaranty Agreement, the Obsidian Guaranty Agreement, the Xxxxxxxxx
Guaranty Agreement, and the Durham Guaranty Agreement are each
referred to as a "Guaranty Agreement" and collectively as the
"Guaranty Agreements"). Each of the Obsidian Guaranty Agreement, the
Durham Guaranty Agreement, and the Xxxxxxxxx Guaranty Agreement shall
provide that the guaranty obligation provided thereunder shall
terminate and the respective Guarantor shall have no further liability
thereunder upon payment in full of all outstanding principal and
accrued interest under Term Loan III provided that at such time no
Event
21
of Default or Unmatured Event of Default has occurred and is
continuing.
e. Capital Contribution Agreement. Xxxxxx and Obsidian shall agree to
make a capital contribution on behalf of the Company whenever the
Company fails to comply with the financial covenants set forth in the
Note Purchase Agreement pursuant to the terms of the Capital
Contribution Agreement to be entered into by and among Xxxxxx,
Obsidian, the Bank, the Company, and Huntington in the form of Exhibit
"U" attached hereto (the "Capital Maintenance Agreement").
Section 5. AFFIRMATIVE COVENANTS OF THE COMPANY. Until all Obligations of
the Company terminate or are paid and satisfied in full and so long as the
Commitment is outstanding, the Company shall strictly observe the following
covenants:
a. Corporate Existence. The Company shall preserve its corporate
existence. The Company shall notify the Bank promptly upon changing
its name from "United Acquisition, Inc." to "United Expressline,
Inc.," and shall provide the Bank with all necessary written evidence
of such name change including but not limited to a complete copy of a
file-marked Amendment to Articles of Incorporation filed with the
Indiana Secretary of State's Office amending the name of the Company.
b. Reports, Certificates and Other Information. The Company shall furnish
to the Bank copies of the following financial statements, certificates
and other information:
(i) Annual Statements. As soon as available and in any event within
one hundred twenty (120) days after the close of each fiscal
year, financial statements of the Company for such fiscal year
prepared and presented in accordance with generally accepted
accounting principles, consistently applied (except for changes
in which the independent accountants of the Company concur) in
each case setting forth in comparative form corresponding figures
for the preceding fiscal year, together with the audit report,
unqualified as to scope, of independent certified public
accountants approved by the Bank, which approval shall not be
unreasonably withheld , together with the management letter, if
any, issued by such independent certified public accountants. 22
(ii) Interim Statements. As soon as available and in any event within
thirty (30) days after the end of each fiscal quarter, a copy of
the interim financial statements of the Company, consisting at a
minimum of:
A. the balance sheet as of the end of the quarter, and
B. a statement of income for the quarter and for the partial or
full fiscal year ended as of the end of the quarter, all in
reasonable detail and accompanied by the written
representation of the chief financial officer of the Company
that such financial statements have been prepared in
accordance with generally accepted accounting principles
(except that they need not include a statement of cash flows
and footnotes and need not reflect adjustments normally made
at year end, if such adjustments are not material in
amount), consistently applied, (except for changes in which
the independent accountants of the Company concur) and
present fairly the financial position of the Company and the
results of its operation as of the dates of such statements
and for the fiscal periods then ended.
(iii)Xxxxxxxxx and Durham Financial Statements. On or before April 15
each year, financial statements of Xxxxxxxxx and Xxxxxx on the
Bank's form.
(iv) Officer's Certificate. Contemporaneously with the furnishing of
each set of financial statements provided for in Sections 5(b)(i)
and 5(b)(ii), an Officer's Certificate.
(v) Borrowing Base Certificates. Within thirty (30) days after the
end of each month, a Borrowing Base Certificate as of that month
end and promptly as of such other dates as the Bank may
reasonably require. Each Borrowing Base Certificate shall include
or be accompanied by an accounts receivable aging report in such
form as may be reasonably acceptable to the Bank.
(vi) Orders. Prompt notice of any orders in any material proceedings
to which the Company is a party, issued by any court or
regulatory agency, federal or state, and if the Bank should so
request, a copy of any such order.
23
(vii)Notice of Default or Litigatio . Immediately upon learning of
the occurrence of an Event of Default or Unmatured Event of
Default, or the institution of or any adverse determination in
any litigation, arbitration proceeding or governmental proceeding
which is material to the Company, or the occurrence of any event
which could have a material adverse effect upon the Company,
written notice thereof describing the same and the steps being
taken with respect thereto.
(viii) Compliance Certificates. Within thirty (30) days following each
month end, a certificate of the Chief Financial Officer or other
appropriate officer of the Company demonstrating compliance with
the financial covenants stated in Section 5(g). Such certificate
shall relate the covenants to the month-end figures and shall
otherwise be in such form and provide such detail as may be
reasonably satisfactory to the Bank.
(ix) Registration Statements and Reports. Promptly upon filing with
the Securities and Exchange Commission or any state securities
regulatory authority, copies of all registration statements and
all periodic and special reports required or permitted to be
filed under federal or state securities laws and regulations.
(x) Other Information. From time to time such other information
concerning the Company as the Bank may reasonably request.
c. Books, Records and Inspections. The Company shall maintain complete
and accurate books and records, and permit access thereto by the Bank
for purposes of inspection, copying and audit, and the Company shall
permit the Bank to inspect its properties and operations at all
reasonable times.
d. Insurance. In addition to any insurance required by the Mortgages and
the Security Agreement, the Company shall maintain such insurance as
may be required by law and such other insurance, to such extent and
against such hazards and liabilities, as is customarily maintained by
companies similarly situated. The Company agrees to name the Bank as
additional loss payee on any such insurance policy under a standard
lender's loss payable clause and to provide a copy of any such policy
to the Bank.
24
e. Taxes and Liabilities. The Company shall pay when due all taxes,
license fees, assessments and other liabilities except such as are
being contested in good faith and by appropriate proceedings and for
which appropriate reserves have been established.
f. Compliance with Legal and Regulatory Requirements. The Company shall
maintain material compliance with the applicable provisions of all
federal, state and local statutes, ordinances and regulations and any
court orders or orders of regulatory authorities issued thereunder.
g. Financial Covenants. The Company shall observe each of the following
financial covenants:
(i) Capital Base. The Company shall maintain a minimum Capital Base
at a level not less than $6,750,000.00 at all times until
September 30, 2001, with the minimum Capital Base required
hereunder increasing on September 30, 2001, and on the last day
of each fiscal quarter thereafter, by seventy-five percent (75 %)
of the Company's net income for the fiscal period then ended,
exclusive of losses.
(ii) Fixed Charge Coverage Ratio. For each period of twelve (12)
consecutive calendar months commencing with the calendar month
ending July 31, 200 1, the Company shall maintain a fixed charge
coverage ratio of not less than 1.15 to 1.00 until October 31,
2002, and not less than l.20 to 1.00 at all times thereafter. For
purposes of this covenant, the phrase " fixed charge coverage
ratio" means the ratio of. (A) the sum of the Company's EBITDA
plus capital contributions made to the Bank under the Capital
Contribution Agreement, over (B) the sum of the principal paid
plus interest expense plus capital expenditures not paid from
borrowed funds.
h. Primary Banking Relationship. The Company shall maintain its primary
concentration and deposit accounts with the Bank.
i. Employee Benefit Plans. The Company shall maintain and shall cause any
Subsidiary to maintain any Plan in material compliance with ERISA, the
Code, and all rules and regulations of regulatory authorities pursuant
thereto and shall file and shall cause any Subsidiary to file all
reports required to
25
be filed pursuant to ERISA, the Code, and such rules and regulations.
j. Hazardous Substances. If the Company or any Subsidiary should commence
the use, treatment, transportation, generation, storage or disposal of
any Hazardous Substance in reportable quantities in its operations in
addition to those noted in Exhibit "F" attached hereto, the Company
shall immediately notify the Bank of the commencement of such activity
with respect to each such Hazardous Substance. The Company shall cause
any Hazardous Substances which are now or may hereafter be used or
generated in the operations of the Company or any Subsidiary in
reportable quantities to be accounted for and disposed of in
compliance with all applicable federal, state and local laws and
regulations. The Company shall notify the Bank immediately upon
obtaining knowledge that:
(i) any premises which have at any time been owned or occupied by or
have been under lease to the Company or any Subsidiary are the
subject of an environmental investigation by any federal, state
or local governmental agency having jurisdiction over the
regulation of any Hazardous Substances, the purpose of which
investigation is to quantify the levels of Hazardous Substances
located on such premises; or
(ii) the Company or any Subsidiary has been named or is
threatened to be named as a party responsible for the
possible contamination of any real property or ground
waterwith Hazardous Substances, including, but not limited
to the contamination of past and present waste disposal
sites.
If the Company or any Subsidiary is notified of any event described at items (i)
or (ii) above, the Company shall immediately engage or cause the Subsidiary to
engage a firm or firms of engineers or environmental consultants appropriately
qualified to determine as quickly as practical the extent of contamination and
the potential financial liability of the Company or the Subsidiary with respect
thereto, and the Bank shall be provided with a copy of any report prepared by
such firm or by any governmental agency as to such matters as soon as any such
report becomes available to the Company, and Company shall immediately establish
reserves in the amount of the potential
financial liability of the Company or the Subsidiary identified by such
environmental consultants or engineers. The selection of any engineers or
environmental consultants engaged pursuant to die requirements of this Section
shall be subject to the approval of the Bank, which approval shall not be
unreasonably withheld.
k. Change in Control. Contemporaneously with the execution of this
Agreement, Obsidian shall exchange all of its ownership of the Company
represented by the Company's capital stock with Xxxxxx (the "Share
Exchange") so that upon the consummation of the Share Exchange Xxxxxx
will own all of the capital stock of the Company.
Section 6. NEGATIVE COVENANTS OF THE COMPANY. Until all Obligations of the
Company teminate or are paid and satisfied in fall, and so long as the
Commitment is outstanding, the Company shall strictly observe the following
covenants: a. Restricted Payments. The Company shall not purchase or redeem any
shares of the capital stock of the Company or declare or pay any dividends
thereon except for dividends payable entirely in capital stock. The Company
shall not make any other distributions to shareholders as shareholders, or set
aside any funds for any such purpose, or prepay, purchase or redeem any
subordinated indebtedness of the Company. The Company shall not pay any
management fees to Xxxxxx at any time an Event of Default or Unmatured Event of
Default has occurred and is continuing or would result therefrom as farther
provided in the Subordination Agreement in the form attached hereto as Exhibit
"Q" (the "Management Subordination Agreement"). Notwithstanding any other
provision of this Section, the Company may pay dividends from net income to its
sole shareholder, Xxxxxx, for any fiscal year during which the Company's federal
arid state income tax returns are consolidated with Danzer's federal and state
income tax returns with the effect that the Company pays its federal and state
income tax through Xxxxxx. b. Liens. The Company shall not create or permit to
exist any mortgage, pledge, title retention lien or other lien, encumbrance or
security interest (all of which are hereafter referred to in this subsection
27
as a "lien" or "liens") with respect to any property or assets now owned or
hereafter acquired except:
(i) liens in favor of the Batik created pursuant to the requirements
of this Agreement or otherwise, and liens in favor of Huntington
Capital Investment Company subordinated to liens in favor of the
Bank on terms satisfactory to the Bank;
(ii) any lien or deposit with any governmental agency required or
permitted to qualify the Company to conduct business or exercise
any privilege, franchise or license, or to maintain
self-insurance or to obtain the benefits of or secure obligations
under any law pertaining to worker's compensation, unemployment
insurance, old age pensions, social security or similar matters,
or to obtain any stay or discharge in any legal or administrative
proceedings, or any similar lien or deposit arising in the
ordinary course of business;
(iii)any mechanic's, worker's, repairmen's, carrier's, warehousemen's
or other like liens arising in the ordinary course of business
for amounts not yet due and for the payment of which adequate
reserves have been established, or deposits made to obtain the
release of such liens;
(iv) easements, licenses, minor irregularities in title or minor
encumbrances on or over any real property which do not, in the
judgment of the Bank, materially detract from the value of such
property or its marketability or its usefulness in the business
of the Company;
(v) liens for taxes and governmental charges which are not yet due or
which are being contested in good faith and by appropriate
proceedings and for which appropriate reserves have been
established;
(vi) liens created by or resulting from any litigation or legal
proceeding which is being contested in good faith and by
appropriate proceedings and for which appropriate reserves have
been established; and
(vii)those specific liens now existing described on the "Schedule of
Exceptions" attached hereto as Exhibit F." -----------
28
c. Guaranties. The Company shall not be a guarantor or surety of, or
otherwise be responsible in any manner with respect to any undertaking
of any other person or entity, whether by guaranty agreement or by
agreement to purchase any obligations, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or
services, or otherwise, except for:
(i) guaranties in favor of the Bank;
(ii) guaranties by endorsement of instruments for deposit made in the
ordinary course of business; and
(iii)those specific existing guaranties listed in the "Schedule of
Exceptions" attached hereto as Exhibit "F."
d. Loans or Advances. The Company shall not make or permit to exist any
loans or advances to any other person or entity, except for: (i)
extensions of credit or credit accommodations to customers or vendors
made by the Company in the ordinary course of its business as now
conducted; (ii) reasonable salary advances to non-executive employees,
and other advances to agents and employees for anticipated expenses to
be incurred on behalf of the Company in the course of discharging
their assigned duties; and (iii) the specific items listed in the
"Schedule of Exceptions" attached hereto as Exhibit "F."
e. Mergers, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. The Company shall not be a party to any consolidation or
to any merger and shall not purchase the capital stock of or otherwise
acquire any equity interest in any other business entity, except for
die Acquisition as contemplated in the Acquisition Documents. The
Company shall not acquire any material part of the assets of any other
business entity, except in the ordinary course of business. The
Company shall not sell, transfer, convey or lease all or any material
part of its assets, except in the ordinary course of business, or sell
or assign with or without recourse any receivables. The Company shall
not cause to be created or otherwise acquire any Subsidiaries.
29
f. Margin Stock. The Company shall not use or cause or permit the
proceeds of the Loans to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing
or carrying any margin stock within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System, as amended from time
to time.
g. Other Agreements. The Company shall not enter into any agreement
containing any provision which would be violated or breached in
material respect by the performance of its obligations under this
Agreement or under any other Loan Document.
h. Judgments. The Company shall not permit any uninsured judgment or
monetary penalty rendered against it in any judicial or administrative
proceeding to remain unsatisfied for a period in excess of forty-five
(45) days unless such judgment or penalty is being contested in good
faith by appropriate proceedings and execution upon such judgment has
been stayed, and unless an appropriate reserve has been established
with respect thereto.
i. Principal Office. The Company shall not change the location of its
principal office unless it gives not less than ten (10) days prior
written notice of such change to the Bank.
j. Hazardous Substances. The Company shall not allow or permit to
continue the release or threatened release of any Hazardous Substance
on any premises owned or occupied by or under lease to the Company or
any Subsidiary.
Section 7. CONDITIONS OF LENDING. The obligation of the Bank to make any
Advance and to make the Term Loan, Term Loan II, and Term Loan III shall be
subject to fulfillment of each of the following conditions precedent:
a. No Default. No Event of Default or Unmatured Event of Default shall
have occurred and be continuing, and the representations and
warranties of the Company contained in Section 3 shall be true and
correct as of the date of this Agreement and as of the date of each
Advance, except that after the date of this Agreement: (i) the
representations contained in Section 3 (d) will be construed so as to
refer to the latest financial statements furnished to the Bank by the
Company pursuant to
30
the requirements of this Agreement, (ii) the representations contained
in Section 3(k) (with respect to Hazardous Substances) will be
construed so as to apply not only to the Company, but also to any
Subsidiaries, (iii) the representation contained in Section 3(l) will
be construed so as to except any Subsidiary which may hereafter be
formed or acquired by the Company with the consent of the Bank, and
(iv) all other representations will be construed to have been amended
to conform with any changes of which the Bank shall previously have
been given notice in writing by the Company.
b. Documents to be Furnished at Closing. The Bank shall have received
contemporaneously with the execution of this Agreement, the following,
each duly executed, currently dated and in form and substance
satisfactory to the Bank:
(i) The Revolving Note, the Term Note, Term Note II, and Term Note
Ill.
(ii) The Mortgages.
(iii)The Security Agreement and requisite Uniform Commercial Code
financing statements.
(iv) The Subordination Agreements together with a copy of the
Subordinated Notes.
(v) The Guaranty Agreements and Certificates Regarding Solvency.
(vi) The Schedule of Exceptions.
(vii)A certified copy of a Resolution of the Board of Directors of
the Company authorizing the execution, delivery and performance,
respectively, of this Agreement and the other Loan Documents
provided for in this Agreement to which the Company is a party,
and the Acquisition Documents to which the Company is a party.
(viii) A certificate of the Secretary of the Board of Directors of the
Company certifying the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents
provided for in this Agreement to which the Company is a party,
and the Acquisition Documents to which the Company is a party,
together with a sample of the true signature of each such
officer.
(ix) A copy of the file-marked Articles of Incorporation of the
Company certified as complete and correct as of a recent date by
the Secretary of State of Indiana, and a copy of the By-Laws of
the Company, certified as complete and correct by the Secretary
of the Board of Directors of the Company.
31
(x) A currently dated Certificate of Existence of the Company issued
by the Secretary of State of Indiana, and from each state in
which the Company is qualified or required to be qualified to do
business.
(xi) A certified copy of a Resolution of the Board of Directors of
Xxxxxx authorizing the execution, delivery and performance,
respectively, of its Guaranty Agreement, its Subordination
Agreement, and the other Loan Documents provided for in this
Agreement to which Xxxxxx is a party.
(xii)A certificate of the Secretary of the Board of Directors of
Xxxxxx certifying the names of the officer or officers authorized
to sign its Guaranty Agreement, its Subordination Agreement, and
the other Loan Documents provided for in this Agreement to which
Xxxxxx is a party, together with a sample of the true signature
of each such officer.
(xiii) A copy of the file-marked Articles of Incorporation of Xxxxxx
certified as complete and correct as of a recent date by the
Secretary of State of New York, and a copy of the By-Laws of
Xxxxxx, certified as complete and correct by the Secretary of the
Board of Directors of Xxxxxx.
(xiv)A currently dated Certificate of Existence of Xxxxxx issued by
the Secretary of State of New York, and from each state in which
Xxxxxx is qualified or required to be qualified to do business.
(xv) A certified copy of a Resolution of the General Partner of
Obsidian authorizing the execution, delivery and performance,
respectively, of its Guaranty Agreement, its Subordination
Agreement, and the other Loan Documents provided for in this
Agreement to which Obsidian is a party.
(xvi)A certificate of the General Partnership of Obsidian certifying
the names of the officer or officers authorized to sign its
Guaranty Agreement, its Subordination Agreement, and the other
Loan Documents provided for in this Agreement to which Obsidian
is a party, together with a sample of the true signature of each
such officer.
(xvii) A copy of the file-marked Certificate of Limited Partnership of
Obsidian certified as complete and correct as of a recent date by
the Secretary of State of Delaware, and a copy of the Limited
Partnership of Obsidian, certified as complete and correct by the
General Partner of Obsidian. 32
(xviii) A currently dated Certificate of Existence of Obsidian issued
by the Secretary of State of Delaware, and from each state in
which Obsidian is qualified or required to be qualified to do
business.
(xix)A certified copy of a Resolution of the Board of Directors of
United Expressline authorizing the execution, delivery and
performance, respectively, of its Subordination Agreement, and
the other Loan Documents provided for in this Agreement to which
United Expressline is a party, and the Acquisition Documents to
which United Expressline is a party.
(xx) A certificate of the Secretary of the Board of Directors of
United Expressline certifying the names of the officer or
officers authorized to sign its Subordination Agreement, and the
other Loan Documents provided for in this Agreement to which
United Expressline is a party, and the Acquisition Documents to
which United Expressline is a party, together with a sample of
the true signature of each such officer.
(xxi)A copy of the file-marked Articles of Incorporation of United
Expressline certified as complete and correct as of a recent date
by the Secretary of State of Indiana, and a copy of the By-Laws
of United Expressline, certified as complete and correct by the
Secretary of the Board of Directors of United Expressline.
(xxii) A currently dated Certificate of Existence of United
Expressline issued by the Secretary of State of Indiana, and from
each state in which United Expressline is qualified or required
to be qualified to do business.
(xxiii) The opinion of counsel for the Company addressed to the Bank
to the effect that the representations stated in Sections 3(a),
3(b), 3(c), 3(i), 3 (j) and 3(l) are correct. Such opinion shall
be in such form as may be reasonably acceptable to the Bank.
(xxiv) The Minimum Standards Detail Land Title Surveys required under
the terms of Section 4(b)(iv).
(xxv)The commitments for the title insurance policies required under
the terms of Section 4(b)(I).
(xxvi) Certificates evidencing the existence of all insurance required
under the terms of this Agreement or any other Loan Documents.
(xxvii) The appraisals required under the terms of Section 4(b)(ii).
(xxviii) The environmental reports required under the terms of Section
4(b)(iii).
(xxix) The commitment fee required under the terms of Section
2(e)(iii).
(xxx)The Flood Hazard Determination Forms required under the terms of
Section 4(b)(v).
(xxxi) A complete copy of the Acquisition Documents entered into by
the Company and United Expressline.
(xxxii) An appraisal report for the Company's machinery and equipment
addressed to the Bank with respect to the Company's equipment
showing an orderly liquidation value of not less than $402,840.00
on the equipment.
(xxxiii) Evidence satisfactory to the Bank of not less than $1,500,000
in equity in the Company.
(xxxiv) A complete copy of the Share Exchange Agreement entered into
by and between Obsidian and Xxxxxx with respect to the capital
stock of the Company.
(xxxv) The opinion of counsel for United Expressline as to the due
organization of United Expressline, the enforceability of the
Purchase Agreement, and as to such other matters as the Bank may
reasonably require.
(xxxvi) Evidence satisfactory to the Bank of the consummation of die
Share Exchange.
(xxxvii) Evidence satisfactory to the Bank of the change in the name
of the Company to "United Expressline, Inc." and the requisite
filings in both Indiana and Michigan and such other places as the
Bank may reasonably require will be consummated within a
reasonable time after closing, and as to the due consent of
United Expressline as to the use of that name.
(xxxviii) A photocopy of the executed Real Estate Lease entered into
among the Company, Xxxxxx X. Xxxxxx, Xxxxxxxxxxx X. Xxxxxx, and
Xxxxxx X. Xxxxx, together with Landlord's Consent, Waiver and
Estoppel Certificate executed by Xxxxxx X. Xxxxxx, Xxxxxxxxxxx X.
Xxxxxx, and Xxxxxx X. Xxxxx, respectively, in form and content
acceptable to the Bank.
(xxxix) The Management Subordination Agreement together with a
complete copy of the Management Agreement.
(xl) The Capital Contribution Agreement.
(xli)Copies of all documents executed by the Company pursuant to the
Note Purchase Agreement.
(xlii) Such other documents as the Bank may reasonably require.
(xIiii) The fees of legal counsel for the Bank incurred in connection
with the drafting, negotiation, and execution of this Agreement
and the other Loan Documents.
c. Documents to be Furnished at Time of Each Advance. The Bank shall have
received the following prior to making any Advance, each duly executed
and currently dated, unless waived at the Bank's discretion as
provided in Section 2(a)(ii):
(i) An Application for the Advance.
(ii) An Officer's Certificate.
(iii) Such other documents as the Bank may reasonably require.
Section 8. EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
a. Nonpayment of the Loans. Default in the payment when due of any amount
payable under the terms of any of the Notes, or otherwise payable to
the Bank or any other holder of the Notes under the terms of this
Agreement.
b. Nonpayment of Other Indebtedness for Borrowed Money. Default by the
Company in the payment when due, whether by acceleration or otherwise,
of any other material indebtedness for borrowed money, or default in
the performance or observance of any obligation or condition with
respect to any such other indebtedness if the effect of such default
is to accelerate the maturity of such other indebtedness or to permit
the holder or holders thereof, or any trustee or agent for such
holders, to cause such indebtedness to become due and payable prior to
its scheduled maturity, unless the Company is contesting the existence
of such default in good faith and by appropriate proceedings.
c. Other Material Obligations. Subject to the expiration of any
applicable grace period, default by the Company in the payment when
due, or in the performance or observance of any material obligation
of, or condition agreed to by the Company with respect to any material
purchase or lease of goods, securities or services except only to the
extent that the existence of any such default is being contested in
good faith and by appropriate proceedings and that appropriate
reserves have been established with respect thereto.
35
d. Bankruptcy, Insolvency, etc. The Company or any Guarantor admitting in
writing its inability to pay its debts as they mature or an
administrative or judicial order of dissolution or determination of
insolvency being entered against the Company or any Guarantor; or the
Company or any Guarantor applying for, consenting to, or acquiescing
in the appointment of a trustee or receiver for the Company or such
Guarantor or any property thereof, or the Company making a general
assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee or receiver being
appointed for the Company or any Guarantor or for a substantial part
of its property and not being discharged within sixty (60) days; or
any bankruptcy, reorganization, debt arrangement, or other proceeding
under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding being instituted by or against the Company or
any Guarantor, and, if involuntary, being consented to or acquiesced
in by the Company or such Guarantor or remaining for sixty (60) days
undismissed.
e. Warranties and Representations. Any warranty or representation made by
the Company or any Guarantor in this Agreement or in any other Loan
Document proving to have been false or misleading in any material
respect when made, or any schedule, certificate, financial statement,
report, notice, or other writing furnished by the Company or any
Guarantor to the Bank proving to have been false or misleading in any
material respect when made or delivered.
f. Violations of Negative and Financial Covenants. Failure by the Company
to comply with or perform any covenant stated in Section 5(g) or
Section 6 of this Agreement.
g. Noncompliance With Other Provisions of this Agreement. Failure of the
Company to comply with or perform any covenant or other provision of
this Agreement or to perform any other Obligation (which failure does
not constitute an Event of Default under any of the preceding
provisions of this Section 8) and continuance of such failure for
thirty (30) days after notice thereof to the Company from the Bank.
36
Section 9. EFFECT OF EVENT OF DEFAULT. If any Event of Default described in
Section 8(d) shall occur, maturity of the Loans shall immediately be accelerated
and the Notes and the Loans evidenced thereby, and all other indebtedness and
any other payment Obligations of the Company to the Bank shall become
immediately due and payable, and the Commitment shall immediately terminate, all
without notice of any kind. When any other Event of Default has occurred and is
continuing, the Bank or any other holder of the Notes may accelerate payment of
the Loans and declare the Notes and all other payment Obligations due and
payable, whereupon maturity of the Loans shall be accelerated and the Notes and
the Loans evidenced thereby, and all other payment Obligations shall become
immediately due and payable and the Commitment shall immediately terminate, all
without notice of any kind. The Bank or such other holder shall promptly advise
the Company of any such declaration, but failure to do so shall not impair the
effect of such declaration. The remedies of the Bank specified in this Agreement
or in any other Loan Document shall not be exclusive, and the Bank may avail
itself of any other remedies provided by law as well as any equitable remedies
available to the Bank.
Section 10. WAIVER - AMENDMENTS. No delay on the part of the Bank, or any
holder of the Notes in the exercise of any right, power or remedy shall operate
as a waiver thereof, nor shall any single or partial exercise by any of them of
any right, power or remedy preclude any other or further exercise thereof, or
the exercise of any other right, power or remedy. No amendment, modification or
waiver of, or consent with respect to any of the provisions of this Agreement or
the other Loan Documents or otherwise of the Obligations shall be effective
unless such amendment, modification, waiver or consent is in writing and signed
by the Bank.
Section 11. NOTICES. Any notice given under or with respect to this
Agreement to the Company or the Bank shall be in writing and, if delivered by
hand or sent by overnight courier service, shall be deemed to have been given
when delivered and, if mailed, shall be deemed to have been given five (5) days
after the date when sent by registered or certified mail, postage prepaid, and
addressed to the Company or the Bank (or other holder of the Notes) at its
address shown below, or at such other address as any such party may, by written
notice to the other parry to this Agreement, have designated as its address for
such purpose. The addresses referred to are as follows:
37
As to the Company: UNITED ACQUISITION, INC.
Bank Xxx Xxxxxx/Xxxxx - Xxxxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
with copy to :
Xxxx X. Xxxxxx, Esquire
XXXXX XXXXXXX & XXXXXX, LLP
One American Square
18th Floor
P.O. Box 82035
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
As to the Bank: FIRST INDIANA BANK
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx,
Vice President
Telephone: (000) 000-0000
with copy to:
Xxxxxxx X. Xxxxxx, Esquire
KROGER, GARDIS & XXXXX, L.L.P.
Bank Xxx Xxxxxx/Xxxxxx
Xxxxx 000
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000 Ext. 926
Section 12. COSTS, EXPENSES AND TAXES. The Company shall pay or reimburse
the Bank on demand for all reasonable out-of-pocket costs and expenses of the
Bank including reasonable attorneys' fees and legal expenses incurred by it in
connection with the drafting, negotiation, execution, and delivery of this
Agreement and the other Loan Documents, and in connection with the enforcement,
or restructuring in the nature of a workout, of this Agreement or any other Loan
Document. The Company shall also reimburse the Bank for expenses incurred by the
Bank in connection with any audit of the books and records or physical assets of
the Company conducted pursuant to any right granted to the Bank under the terms
of this Agreement or any other Loan Document. Such reimbursement shall include,
without limitation, reimbursement of the Bank for its overhead expenses
reasonably allocated to such audits. In addition, the Company shall pay or
reimburse the
38
Bank for all expenses incurred by the Bank in connection with the perfection of
any security interests or mortgage liens granted to the Bank by the Company and
for any stamp or similar documentary or transaction taxes which may be payable
in connection with the execution or delivery of this Agreement or any other Loan
Document or in connection with any other instruments or documents provided for
herein or delivered or required in connection herewith including, without
limitation, expenses incident to any lien or title search or title insurance
commitment or policy. All obligations provided for in this Section shall survive
termination of this Agreement.
Section 13. SEVERABILITY. If any provision of this Agreement or any other
Loan Documenjt is determined to be illegal or unenforceable, such provision
shall be deemed to be severable from the balance of the provisions of this
Agreement or such Document and the remaining provisions shall be enforceable in
accordance with their terms.
Section 14. CAPTIONS. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
Section 15. GOVERNING LAW - JURISDICTION. Except as may otherwise be
expressly provided in any other Loan Document, this Agreement and all other Loan
Documents are made under and will be governed in all cases by the substantive
laws of the State of Indiana, notwithstanding the fact that Indiana conflicts of
law rules might otherwise require the substantive rules of law of
anotherjurisdictionto apply. The Company consents to the jurisdiction of any
state or federal court located within Xxxxxx County, Indiana, and waives
personal service of any and all process upon the Company. All service of process
may be made by messenger, by certified mail, return receipt requested, or by
registered mail directed to the Company at the address stated in Section 11. The
Company waives any objection which the Company may have to any proceeding
commenced in a federal or state court located within Xxxxxx County, Indiana,
based upon improper venue or foram non conveniens. Nothing contained in this
Section shall affect the right of the Bank to serve legal process in any other
manner pennitted by law or to bring any action or proceeding against the Company
or its property in the courts of any other jurisdiction.
Section 16. PRIOR AGREEMENTS, ETC. This Agreement supersedes all previous
agreements and commitments made by the Bank and the Company with respect to the
Loans and all other subjects of this Agreement, including, without limitation,
any oral or written proposals or commitments made or issued by the Bank.
Section 17. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon and shall inure to the benefit of the Company
and the Bank and their respective successors and assigns, provided that the
Company's rights under this Agreement shall not be assignable without the prior
written consent of the Bank.
Section 18. WAIVER OF JURY TRIAL. THE COMPANY AND THE BANK (BY ITS
ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) BETWEEN THE COMPANY
AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING EVIDENCED BY THIS AGREEMENT.
Section 19. ARBITRATION. BANK AND THE COMPANY AGREE THAT UPON THE WRITTEN
DEMAND OF EITHER PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF ANY
LEGAL PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT
PROCEEDING, ALL DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER
INDIVIDUAL, JOINT, OR CLASS IN NATURE, ARISING FROM TIES AGREEMENT, OR ANY LOAN
DOCUMENT OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT AND TORT DISPUTES,
SHALL BE RESOLVED BY BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA"). ANY ARBITRATION PROCEEDING HELD
PURSUANT TO THIS ARBITRATION PROVISION SHALL BE CONDUCTED IN THE CITY NEAREST
THE COMPANY'S ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY OTHER PLACE
SELECTED BY MUTUAL AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR DISPOSE OF ANY
COLLATERAL SHALL CONSTITUTE A WAIVER OF THIS ARBITRATION AGREEMENT OR BE
PROHIBITED BY THIS ARBITRATION AGREEMENT.
THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY DURING
ANY DISPUTE TO SEEK, USE, AND EMPLOY ANCILLARY OR PRELIMINARY RIGHTS AND/OR
REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON, PRESERVING,
PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER FORCIBLE ENTRY AND DETAINER FOR
POSSESSION OF ANY REAL OR PERSONAL PROPERTY, AND ANY SUCH ACTION SHALL NOT 40
BE DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES INCLUDE, WITHOUT LIMITATION,
OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER, INVOKING A POWER
OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE; OBTAINING A WRIT OF ATTACHMENT OR
IMPOSITION OF A RECEIVERSHIP; OR EXERCISING ANY RIGHTS RELATING TO PERSONAL;
PROPERTY, INCLUDING EXERCISING THE RIGHT OF SETOFF, OR TAKING OR DISPOSING OF
SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO THE UNIFORM
COMMERCIAL CODE. ANY DISPUTES, CLAIMS, OR CONTROVERSIES CONCERNING THE
LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR REMEDY,
CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR OTHERWISE
MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE ARBITRATED;
PROVIDED, HOWEVER THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE POWER TO ENJOIN
OR RESTRAIN ANY ACT OF ANY PARTY. JUDGMENT UPON ANY AWARD RENDERED BY ANY
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE STATUTE OF
LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSE. THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT OF THIS ARBITRATION PROVISION.
Dated as of July 27th, 2001.
UNITED ACQUISITION, INC., an Indiana corporation
By:__________________________________________
Xxxxxxx X. Xxxxxx, Chairman
FIRST INDIANA BANK, a federal savings bank
By:__________________________________________
Xxxxxxx X. Xxxxxxxxx, Vice President
SCHEDULE OF EXHIBITS
Exhibit "A" - Application for Revolving Loan Advance and Officer's Certificate
Exhibit "B" - Promissory Note (Revolving Loan)($3,500,000.00)
Exhibit "C" - Promissory Note (Term Loan) ($291,000.00)
Exhibit "D" - Promissory Note (Term Loan II) ($1,116,000.00)
Exhibit "E" - Promissory Note (Term Loan III) ($1,750,000.00)
Exhibit "F" - Schedule of Exceptions
Exhibit "G" - Security Agreement (Equipment, Inventory, Accounts Receivable
and General Intangibles)
Exhibit "H" - Mortgage, Security Agreement, Assignment of Rents
and Fixture Filing (Indiana)
Exhibit "I" - Mortgage (Michigan)
Exhibit "J" - Subordination Agreement (United Expressline, Inc.)
Exhibit "K" - Subordination Agreement (Huntington Capital Investment Company)
Exhibit "L" - Subordination Agreement (Xxxxxx Corporation)
Exhibit "M" - Guaranty Agreement (Xxxxxx Corporation)
Exhibit "N" - Guaranty Agreement (Obsidian Capital Partners, L.P.)
Exhibit "O" - Guaranty Agreement (Xxxxx X. Xxxxxxxxx)
Exhibit "P" - Guaranty Agreement (Xxxxxxx Xxxxxx)
Exhibit "Q" - Subordination Agreement (Xxxxxx Corporation)
Exhibit "R" - Leasehold Mortgage (St. Xxxxxx County, Michigan)
Exhibit "S" - Assignment of Rents and Leases (St. Xxxxxx County, Michigan)
Exhibit "T" - Assignment of Rents and Leases (St. Xxxxxx County,
Michigan-Encroachment Parcel)
43
Exhibit "U" - Capital Contribution Agreement (Obsidian Capital Partners, L.P.,
Xxxxxx Corporation, and The Huntington Capital Investment Company)
Exhibit "A"
APPLICATION FOR REVOLVING LOAN ADVANCE
Date:______________________
FIRST INDIANA BANK
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
We request an advance in the amount of $________________ under the
Revolving Loan provided for in the Credit Agreement dated as of July __, 2001,
between UNITED ACQUISITION, INC., an Indiana corporation and FIRST INDIANA BANK,
a federal savings bank. Please disburse this Advance by crediting the amount
thereof to our Account No. __________ maintained with you.
Very truly yours,
UNITED ACQUISITION, INC., an Indiana
corporation
By:_________________________________
---------------------------------
(Printed Name and Title)
OFFICER'S CERTIFICATE
I represent that I am the (chief executive officer or chief financial
officer) of UNITED ACQUISITION, INC., an Indiana corporation (the "Company").
In support of the above Application for a Revolving Loan Advance and
pursuant to the terms of the Credit Agreement mentioned therein, I certify to
you that:
1. Each of the representations contained in Sections 3(a) through 3(c),
inclusive, and 3(e) through 3(m), inclusive, of the Credit Agreement are
true and correct as of this date.
2. The financial statements of the Company as of _________________, ______,
and for the fiscal year then ended, and the financial statements as of
_______________, ______ and for the partial fiscal year then ended, present
fairly the financial condition of the Company and the results of its
operations as of the dates of such statements and for the fiscal periods
then ended, and since the date of the latest of such statements there has
been no material adverse change in its financial position or its
operations.
3. No Event of Default or Unmatured Event of Default, as those terms are
defined in the Credit Agreement, has occurred and is continuing.
-----------------------------------
(Printed Name and Title)
of UNITED ACQUISITION, INC.,
an Indiana corporation
Exhibit "B"
PROMISSORY NOTE
(Revolving Loan)
Indianapolis, Indiana
$3,500,000.00 Dated: July ___, 2001
Final Maturity: July 1, 2002
On or before July 1,2002 ("Final Maturity"), UNITED ACQUISITION, INC., an
Indiana corporation (the "Maker") promises to pay to the order of FIRST INDIANA
BANK, a federal savings bank (the "Bank") at the principal office of the Bank at
Indianapolis, Indiana, the principal sum of Three Million Five Hundred Thousand
and 00/100 Dollars ($3,500,000.00) or so much of the principal amount of the
Loan represented by this Note as may be disbursed by the Bank under the terms of
the Credit Agreement described below, and to pay interest on the unpaid
principal balance outstanding from time to time as provided in this Note.
This Note evidences indebtedness (the "Loan") incurred or to be incurred by
the Maker under a revolving line of credit extended to the Maker by the Bank
under a Credit Agreement dated the date of this Note. All references in this
Note to the Credit Agreement shall be construed as references to that Agreement
as it may be amended from time to time. The Loan is referred to in the Credit
Agreement as the "Revolving Loan." Subject to the terms and conditions of the
Credit Agreement, the proceeds of the Loan may be advanced and repaid and
re-advanced until Final Maturity. The principal amount of the Loan outstanding
from time to time shall be determined by reference to the books and records of
the Bank on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be recorded. Such books and records shall be deemed
prima facie to be correct as to such matters.
The terms "Advance" and "Banking Day" are used in this Note as defined in
the Credit Agreement.
Interest on the unpaid principal balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit Agreement. Prior to maturity, accrued interest shall be due and
payable on the first Banking Day of each month commencing on the first Banking
Day of the month immediately following the month in which this Note is executed.
After maturity, interest shall be due and payable as accrued and without demand.
Interest will be calculated by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
The entire outstanding principal balance of this Note shall be due and
payable, together with accrued interest, at Final Maturity. Reference is made to
the Credit Agreement for provisions requiring prepayment of principal under
certain circumstances. Principal may be prepaid, but only as provided in the
Credit Agreement.
If any installment of interest due under the terms of this Note is not paid
when due, then the Bank or any subsequent holder of this Note may, subject to
the terms of the Credit Agreement, at its option and without notice, declare the
entire principal amount of the Note and all accrued interest immediately due and
payable. Reference is made to the Credit Agreement which provides for
acceleration of the maturity of this Note upon the happening of other "Events of
Default" as defined therein.
If any installment of interest due under the terms of this Note prior to
maturity is not paid in full when due, then the Bank at its option and without
prior notice to the Maker, may assess a late payment fee in an amount equal to
five percent (5%) of the amount past due. Each late payment fee assessed shall
be due and payable on the earlier of the next regularly scheduled interest
payment date or the maturity of this Note. Waiver by the Bank of any late
payment fee assessed, or the failure of the Bank in any instance to assess a
late payment fee shall not be construed as a waiver by the Bank of its right to
assess late payment fees thereafter.
All payments on account of this Note shall be applied first to expenses of
collection, next to any late payment fees which are due and payable, next to
interest which is due and payable, and only after satisfaction of all such
expenses, fees and interest, to principal.
The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.
All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.
This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that Indiana
conflicts of law rules might otherwise require the substantive rules of law of
another jurisdiction to apply.
UNITED ACQUISITION, INC.,
an Indiana corporation
By:_________________________________
---------------------------------
(Printed name and title)
Exhibit "C"
PROMISSORY NOTE
(Term Loan)
Indianapolis, Indiana
$291,000.00 Dated: July ___, 200l
Final Maturity: July 1, 2006
UNITED ACQUISITION, INC., an Indiana corporation (the "Maker") promises to
pay to the order of FIRST INDIANA BANK, a federal savings bank (the "Bank") at
the principal banking office of the Bank at Indianapolis, Indiana, the principal
sum of Two Hundred Ninety-One Thousand and 00/100 Dollars ($291,000.00) and to
pay interest on the unpaid principal balance outstanding from time to time as
herein provided.
This Note evidences a loan (the "Loan") extended to the Maker by the Bank
under a Credit Agreement dated the date of this Note. The Loan is referred to in
the Credit Agreement as the "Term Loan." All references in this Note to the
Credit Agreement shall be construed as references to that Agreement as it may be
amended from time to time.
The principal of the Loan shall be repaid in installments in the amount of
$4,850.00 each, which shall be due and payable commencing on the first Banking
Day of September, 2001, and continuing on the first Banking Day of each month
thereafter until July 1, 2006, on which date the entire principal balance of
this Note shall be due and payable. The term "Banking Day" is used in this Note
as defined in the Credit Agreement. Principal may be prepaid, but only as
provided in the Credit Agreement, and provided further that all partial
prepayments shall be applied to the latest maturing installments of principal
payable under this Note in inverse order of maturity.
Interest on the unpaid principal balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit Agreement. Prior to maturity, accrued interest shall be due and
payable on the first Banking Day of each month commencing on the first Banking
Day of the month immediately following the month in which this Note is executed
in addition to the installments of principal due on those dates. After maturity,
interest shall be due and payable as accrued and without demand. Interest will
be calculated by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding.
If any installment of principal or interest due under the terms of this
Note is not paid when due, then the Bank or any subsequent holder of this Note
may, at its option and without notice, declare the entire principal amount of
this Note and all accrued interest immediately due and payable. Reference is
made to the Credit Agreement for other conditions under which the maturity of
this Note may be accelerated.
If any installment of principal and interest due under the terms of this
Note prior to maturity is not paid in full when due, then the Bank at its option
and without prior notice to the Maker, may assess a late payment fee in an
amount equal to five percent (5%) of the amount past due. Each late payment fee
assessed shall be due and payable on the earlier of the next regularly scheduled
interest payment date or the maturity of this Note. Waiver by the Bank of any
late payment fee assessed, or the failure of the Bank in any instance to assess
a late payment fee shall not be construed as a waiver by the Bank of its right
to assess late payment fees thereafter for subsequent later payments.
All payments on account of this Note shall be applied first to expenses of
collection, next to any late payment fees which are due and payable, next to
interest which is due and payable, and only after satisfaction of all such
expenses, fees and interest, to principal.
The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.
All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.
This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that Indiana
conflicts of law rules might otherwise require the substantive rules of law of
another jurisdiction to apply.
UNITED ACQUISITION, INC., an Indiana corporation
By:_________________________________
---------------------------------
(Printed name and title)
Exhibit "D"
PROMISSORY NOTE
(Term Loan II)
Indianapolis, Indiana
$1,116,000.00 Dated: July __, 2001
Final Maturity: July 1, 2006
UNITED ACQUISITION, INC., an Indiana corporation (the "Maker") promises to
pay to the order of FIRST INDIANA BANK, a federal savings bank (the "Bank") at
the principal banking office of the Bank at Indianapolis, Indiana, the principal
sum of One Million One Hundred Sixteen Thousand and 00/100 Dollars
($1,116,000.00) and to pay interest on the unpaid principal balance outstanding
from time to time as herein provided.
This Note evidences a loan (the "Loan") extended to the Maker by the Bank
under a Credit Agreement dated the date of this Note. The Loan is referred to in
the Credit Agreement as "Term Loan II." All references in this Note to the
Credit Agreement shall be construed as references to that Agreement as it may be
amended from time to time.
The principal of the Loan shall be repaid in installments in the amount of
$6,200.00 each, which shall be due and payable commencing on the first Banking
Day of September, 2001, and continuing on the first Banking Day of each month
thereafter until July 1, 2006, on which date the entire principal balance of
this Note shall be due and payable. The term "Banking Day" is used in this Note
as defined in the Credit Agreement. Principal may be prepaid, but only as
provided in the Credit Agreement, and provided further that all partial
prepayments shall be applied to the latest maturing installments of principal
payable under this Note in inverse order of maturity.
Interest on the unpaid principal balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit Agreement. Prior to maturity, accrued interest shall be due and
payable on the first Banking Day of each month commencing on the first Banking
Day of the month immediately following the month in which this Note is executed
in addition to the installments of principal due on those dates. After maturity,
interest shall be due and payable as accrued and without demand. Interest will
be calculated by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding.
If any installment of principal or interest due under the terms of this
Note is not paid when due, then the Bank or any subsequent holder of this Note
may, at its option and without notice, declare the entire principal amount of
this Note and all accrued interest immediately due and payable. Reference is
made to the Credit Agreement for other conditions under which the maturity of
this Note may be accelerated.
If any installment of principal and interest due under the terms of this
Note prior to maturity is not paid in full when due, then the Bank at its option
and without prior notice to the Maker, may assess a late payment fee in an
amount equal to five percent (5%) of the amount past due. Each late payment fee
assessed shall be due and payable on the earlier of the next regularly scheduled
interest payment date or the maturity of this Note. Waiver by the Bank of any
late payment fee assessed, or the failure of the Bank in any instance to assess
a late payment fee shall not be construed as a waiver by the Bank of its right
to assess late payment fees thereafter for subsequent later payments.
All payments on account of this Note shall be applied first to expenses of
collection, next to any late payment fees which are due and payable, next to
interest which is due and payable, and only after satisfaction of all such
expenses, fees and interest, to principal.
The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.
All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.
This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that Indiana
conflicts of law rules might otherwise require the substantive rules of law of
another jurisdiction to apply.
UNITED ACQUISITION, INC., an Indiana corporation
By:_______________________________________
---------------------------------------
(Printed name and title)
Exhibit "E"
PROMISSORY NOTE
(Term Loan III)
Indianapolis, Indiana
$1,750,000.00 Dated: July __, 2001
Final Maturity: July 1, 2003
UNITED ACQUISITION, INC., an Indiana corporation (the "Maker") promises to
pay to the order of FIRST INDIANA BANK, a federal savings bank (the "Bank") at
the principal banking office of the Bank at Indianapolis, Indiana, the principal
sum of One Million Seven Hundred Fifty Thousand and 00/100 Dollars
($1,750,000.00) and to pay interest on the unpaid principal balance outstanding
from time to time as herein provided.
This Note evidences a loan (the "Loan") extended to the Maker by the Bank
under a Credit Agreement dated the date of this Note. The Loan is referred to in
the Credit Agreement as "Term Loan III." All references in this Note to the
Credit Agreement shall be construed as references to that Agreement as it may be
amended from time to time.
The principal of the Loan shall be repaid in installments in the amount of
$72,916.67 each, which shall be due and payable commencing on the first Banking
Day of September, 2001, and continuing on the first Banking Day of each month
thereafter until July 1, 2003, on which date the entire principal balance of
this Note shall be due and payable. The term "Banking Day" is used in this Note
as defined in the Credit Agreement. Principal may be prepaid, but only as
provided in the Credit Agreement, and provided further that all partial
prepayments shall be applied to the latest maturing installments of principal
payable under this Note in inverse order of maturity.
Interest on the unpaid principal balance of the Loan outstanding from time
to time prior to and after maturity will accrue at the rate or rates provided in
the Credit Agreement. Prior to maturity, accrued interest shall be due and
payable on the first Banking Day of each month commencing on the first Banking
Day of the month immediately following the month in which this Note is executed
in addition to the installments of principal due on those dates. After maturity,
interest shall be due and payable as accrued and without demand. Interest will
be calculated by applying the ratio of the annual interest rate over a year of
360 days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding.
If any installment of principal or interest due under the terms of this
Note is not paid when due, then the Bank or any subsequent holder of this Note
may, at its option and without notice, declare the entire principal amount of
this Note and all accrued interest immediately due and payable. Reference is
made to the Credit Agreement for other conditions under which the maturity of
this Note may be accelerated.
If any installment of principal and interest due under the terms of this
Note prior to maturity is not paid in full when due, then the Bank at its option
and without prior notice to the Maker, may assess a late payment fee in an
amount equal to five percent (5%) of the amount past due. Each late payment fee
assessed shall be due and payable on the earlier of the next regularly scheduled
interest payment date or the maturity of this Note. Waiver by the Bank of any
late payment fee assessed, or the failure of the Bank in any instance to assess
a late payment fee shall not be construed as a waiver by the Bank of its right
to assess late payment fees thereafter for subsequent later payments.
All payments on account of this Note shall be applied first to expenses of
collection, next to any late payment fees which are due and payable, next to
interest which is due and payable, and only after satisfaction of all such
expenses, fees and interest, to principal.
The Maker and any endorsers severally waive demand, presentment for payment
and notice of nonpayment of this Note, and each of them consents to any renewals
or extensions of the time of payment of this Note without notice.
All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.
This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that Indiana
conflicts of law rules might otherwise require the substantive rules of law of
another jurisdiction to apply.
UNITED ACQUISITION, INC., an Indiana corporation
By:_________________________________
---------------------------------
(Printed name and title)
Exhibit "F"
SCHEDULE OF EXCEPTIONS
This Schedule is a part of the Credit Agreement between UNITED ACQUISITION,
INC., an Indiana corporation(the "Company"), and FIRST INDIANA BANK, a federal
savings bank (the "Bank") dated as of the date of this Schedule. The Company
hereby certifies as follows:
1. Litigation and Contingent Liabilities. There are no exceptions to the
representations contained in Section 3(e) with respect to litigation and
contingent liabilities, except the following: None.
2. Hazardous Substances. There are no exceptions to the representation
contained in Section 3(k), except the following: None.
3. Liens. There are no "liens" (as defined in Section 6(b)) on any property of
the Company except for liens of the types described in items (i) through
(vi) of the enumeration contained in Section 6(b), and except for the
following: None.
4. Guaranties. The Company is not a guarantor or surety of, or otherwise
responsible in any manner with respect to any undertaking of any other
person or entity, except for the items of the type described in items (i)
and (ii) of the enumeration contained in Section 6(c), and except for the
following: None.
5. Loans and Advances. The Company does not have outstanding any loans or
advances to any person or entity except for items of a type described in
items (i) and (ii) of the enumeration contained in Section 6(d), and except
for the following: None.
6. Indebtedness and Capital Leases. The Company presently has no indebtedness
for borrowed money nor is the Company a lessee under any capital lease
except for such obligations to the Bank, and except for the following:
None.
Dated as of July __, 2001.
UNITED ACQUISITION, INC., an Indiana corporation
By:_______________________________________
---------------------------------------
(Printed name and title)
Exhibit "G"
SECURITY AGREEMENT
(Equipment, Inventory, Accounts Receivable, General Intangibles,
Chattel Paper, and Depository Accounts)
UNITED ACQUISITION, INC., an Indiana corporation (the "Company"), grants to
FIRST INDIANA BANK, a federal savings bank (the "Bank") a security interest in
all of the Company's Equipment, Inventory, Accounts Receivable, General
Intangibles, Chattel Paper, and Depository Accounts, whether now owned or
hereafter acquired, and in the proceeds thereof to secure the payment and
performance of all of the Obligations. Such security interest is granted on the
terms stated in this Security Agreement.
1. DEFINITIONS. As used in this Security Agreement, the following terms have
the meanings indicated when used with the initial letter capitalized:
(a) "Account Debtor" means a party who is obligated to the Company
with respect to any Account Receivable, or General Intangible.
(b) "Accounts Receivable" or "Account" is used as defined in the
Uniform Commercial Code.
(c) "Chattel Paper" is used as defined in the Uniform Commercial
Code.
(d) "Collateral" means all property or rights in which a security
interest is granted under this Security Agreement.
(e) "Collateral Account" is used as defined in Paragraph 10(a).
(f) "Credit Agreement" means the Credit Agreement between the Company
and the Bank dated the date of this Security Agreement, as it may
be amended from time to time.
(g) "Default" means an "Event of Default" as defined in the Credit
Agreement.
(h) "Depository Accounts" means all depository and concentration
accounts of the Company and its Subsidiaries maintained with the
Bank or any affiliate of the Bank, whether in the name of the
Company individually or jointly with any such Subsidiary or other
third party.
(i) "Equipment" means all of the furniture, fixtures, machinery and
equipment of the Company together with all tools, accessories,
parts and accessions now in, attached to or hereafter placed in
or added to such property, and any replacements of any such
property.
(j) "General Intangibles" is used as defined in the Uniform
Commercial Code.
(k) "Inventory" means all goods which are held for sale or lease to
customers or which are furnished, have been furnished or are to
be furnished under contracts of service, or which are raw
materials, work in process or materials used or consumed in the
Company's business.
(1) "Obligations" is used as defined in the Credit Agreement.
(m) "Subsidiary" and "Subsidiaries" are used as defined in the Credit
Agreement.
(n) "Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of Indiana, or in the state
where the relevant collateral is located.
2. FINANCING STATEMENTS. The Company authorizes the Bank at the expense of the
Company to execute on its behalf and file a financing statement or
statements in those public offices deemed necessary by the Bank to perfect
its security interest. Such financing statements may be signed by the Bank
alone. In addition, the Company shall execute and deliver any financing
statement or other document that the Bank may request to perfect or to
further evidence the security interest created by this Security Agreement
including, without limitation, any certificate or certificates of title to
the Collateral with the security interest of the Bank noted thereon or
executed applications for such certificates of title.
3. LOCATION, INSPECTION AND PROTECTION OF COLLATERAL. Unless the Company gives
the Bank not less than ten (10) days prior written notice of additional
locations at which Inventory and Equipment shall be kept, all Inventory and
Equipment is kept and shall be kept at the following addresses:
00000 Xxxxxx Xxxx 8 68939 M 103
Xxxxxxx, Xxxxxxx 00000 White Pigeon, Michigan
Unless the Company gives the Bank written notice of the location of additional
offices where records of the Company relative to Accounts Receivable, Chattel
Paper, and General Intangibles are kept, all such records of the Company shall
be kept at the following address:
00000 Xxxxxx Xxxx 0
Xxxxxxx, Xxxxxxx 00000
which, the Company represents, is also the address of its principal office. The
Company shall not keep duplicate Accounts Receivable records at any other
address or change the location of its principal office unless the Company gives
the Bank not less than 10 days' prior written notice of such event. The Company
shall, at all reasonable times and in a reasonable manner, allow the officers,
attorneys and accountants of the Bank to examine, inspect, photocopy and make
abstracts from the Company's books and records and to verify Equipment and
Inventory, the latter both as to quantity and quality, and to arrange for
verification of Accounts Receivable, under reasonable procedures, directly with
the Account Debtors or by other methods. The Company shall also deliver to the
Bank upon request any promissory notes or other papers evidencing any Account
and any guaranty or collateral and all Chattel Paper together with appropriate
endorsements and assignments and any information relating thereto and shall do
anything else the Bank may reasonably require to further protect the Bank's
interest in the Collateral. If any of the Collateral consists of Equipment
normally used in more than one state and the Company intends to use any of such
Collateral in any jurisdiction other than a state in which the Company shall
have previously advised the Bank such Collateral is to be used, the Company
shall not commence use in such other jurisdiction except upon ten (10) days
prior written notice to the Bank.
4. FIXTURES. None of the Collateral is attached to real estate so as to
constitute a fixture. If any Collateral is hereafter so attached to any
real estate, notice of the common address, legal description, and name of
the owner of record of such real estate shall be furnished to the Bank at
least ten (10) days prior to such attachment. If any Collateral is
hereafter attached to real estate prior to the perfection of the security
interest created by this Security Agreement in such Collateral, the Company
shall, on demand, furnish the Bank with a disclaimer of interest in the
Collateral executed by each person having an interest in such real estate.
5. THE COMPANY'S TITLE. The Company has full and clear title to all of the
Collateral presently owned and shall have such title to all Collateral
hereafter acquired except for the security interest granted by this
Security Agreement and any other lien or security interest permitted under
the terms of the Credit Agreement, and the Company shall keep the
Collateral free at all times from any lien or encumbrance except those
permitted by the Credit Agreement. No financing statements covering all or
any portion of the Collateral is on file at any public office except as may
be required or permitted by this Security Agreement and the Credit
Agreement.
6. THE COMPANY'S DUTY TO MAINTAIN THE COLLATERAL. The Company shall keep all
tangible Collateral in good order and repair and shall not waste or destroy
any of the Collateral. The Company shall not use the Collateral in
violation of any statute or ordinance or contrary to the provisions of any
policy of insurance thereon.
7. INSURANCE. In addition to maintaining such insurance on the Collateral as
is required by the Credit Agreement, the Company shall, upon the reasonable
request of the Bank, keep the Collateral insured against such additional
risks, in such amounts and under such policies as the Bank may reasonably
require and with such companies as shall be reasonably acceptable to the
Bank. All policies providing insurance on the Collateral shall, provide
that any loss thereunder shall be payable to the Bank under a standard form
of secured lender's loss payable endorsement. The Company authorizes the
Bank to endorse on the Company's behalf and to negotiate drafts reflecting
proceeds of insurance on the Collateral, provided that the Bank shall remit
to the Company such surplus, if any, as remains after the proceeds have
been applied at the Bank's option, (a) to the satisfaction of all of the
Obligations or to the establishment of a cash collateral account for the
Obligations, or (b) to the replacement or repair of the Collateral;
provided, however, that so long as no Default exists, and provided further
that the Company can demonstrate to the Bank's satisfaction that any
proposed replacement or repair of collateral is economically and physically
feasible, such proceeds shall be applied, at the Company's option and to
the extent necessary, as provided in the foregoing clause (b). Certificates
evidencing the existence of all of the insurance required under the Credit
Agreement or this Security Agreement shall be furnished to the Bank by the
Company and the original policies providing such insurance shall be
delivered to the Bank at its request.
8. ADVANCES TO PROTECT COLLATERAL. Upon failure of the Company to
procure any required insurance or to remove any prohibited encumbrance upon the
Collateral or if any policy providing any required insurance is canceled, the
Bank may procure such insurance or remove any encumbrance on the Collateral and
any amounts expended by the Bank for such purposes shall be immediately due and
payable by the Company to the Bank and shall be added to and become a part of
the Obligations secured hereby and shall bear interest at the Prime Rate, as
defined in the Credit Agreement, plus three percent (3%) per annum.
9. DEALING WITH COLLATERAL PRIOR TO DEFAULT. Prior to Default and thereafter
until the Bank shall notify the Company of the revocation of such
authority:
(a) the Company may, in the ordinary course of business, at its own
expense, sell, lease or furnish under contracts of service, any
of the Inventory normally held by the Company for such purposes,
provided that a sale in the ordinary course of business shall not
include a transfer in total or partial satisfaction of a debt,
and the Company may use and consume, in the ordinary course of
its business, any raw materials, work in process or materials
normally held by it for such purposes;
(b) the Company shall, at its own expense, endeavor to collect, when
due, all amounts due with respect to any Accounts or General
Intangibles, and shall take such action with respect to
collection as the Bank may reasonably request or, in the absence
of such request, as the Company may deem advisable in accordance
with sound business practice, and
(c) the Company may grant, in the ordinary course of business, to any
Account Debtor, any rebate, refund or adjustment to which such
Account Debtor may be entitled, and may accept, in connection
therewith, the return of the goods, the sale or lease of which
shall have given rise to the obligation of the Account Debtor.
10. DEALING WITH COLLATERAL AFTER DEFAULT. After Default and upon the request
of the Bank:
(a) the Company shall upon receipt of any checks, drafts, cash or
other remittances in payment of Inventory sold or in payment of
Accounts Receivable of the Company, deposit the same in a special
collateral account (the "Collateral Account") maintained with the
Bank; such proceeds shall be deposited in the form received
except for the indorsement of the Company when required, which
indorsement the Bank is authorized to make on the Company's
behalf, and shall be held by the Bank as security for all
Obligations;
(b) the Company shall deliver to the Bank all other instruments and
Chattel Paper which constitute proceeds from the sale of
Collateral, whether then held or thereafter acquired; and
(c) the Company shall keep segregated any such checks, drafts, cash,
other instruments, Chattel Paper or other remittances from any of
the Company's other funds or property and shall hold such items
in trust for the benefit of the Bank until delivery to the Bank
or deposit in the Collateral Account and the Bank may apply all
or any portion of the funds on deposit in the Collateral Account
against any Obligations in the order of application provided for
in the Credit Agreement or, absent such provision, at the
discretion of the Bank.
After Default, the Bank may notify any Account Debtor to make payment directly
to the Bank of any amounts due or to become due under any Account Receivable,
General Intangible instrument or Chattel Paper and the Bank may enforce the
collection of any Account Receivable, General Intangible, instrument or Chattel
Paper in its name or in the name of the Company, by suit or otherwise, and may
surrender, release or exchange all or any part thereof or compromise or extend
or renew for any period, whether or not longer than the original period, any
indebtedness thereunder or evidenced thereby, and any Account Debtor will be
fully protected in relying upon the representation of the Bank that it has
authority under the terms of this Security Agreement to deal with any Account
Receivable, General Intangible, instrument or Chattel Paper and need not look
beyond this Security Agreement and such representation of the Bank to establish
the Bank's authority in that regard.
11. SUBSTITUTION AND SALE OF EQUIPMENT. The Company may from time to time so
long as no Default has occurred and is continuing, substitute items of
Equipment so long as any new Equipment becomes subject to the security
interest created by this Security Agreement and is subject to no prior
liens or security interest other than those permitted by the Credit
Agreement. So long as no Default has occurred and is continuing, the
Company may, in the ordinary course of its business, sell or otherwise
dispose of any items of Equipment for which substitutes have been obtained
or which are no longer useful to the Company in its operations, provided
that at least 10 days prior written notice of any proposed disposition of
any material amount of Equipment in a single or a planned series of
transactions is given to the Bank. Upon the request of the Company, the
Bank will deliver an appropriate release of its security interest in any
item of Equipment disposed of by the Company pursuant to the provisions of
this paragraph.
12. REMEDIES UPON DEFAULT. Upon the occurrence of any Default the Bank shall
have with respect to the Collateral, in addition to all rights and remedies
specified in the Credit Agreement, this Security Agreement or any other
agreement between the Company and the Bank, the remedies of a secured party
under the Uniform Commercial Code as in force from time to time in Indiana,
regardless of whether the Code in such form has been enacted in the
jurisdiction in which any such right or remedy is asserted. Any notice
required by law, including but not limited to notice of the intended
disposition of all or any portion of the Collateral, shall be deemed
reasonably and properly given if given at least 10 days prior to such
disposition in the manner prescribed for the giving of notices in the
Credit Agreement. Any proceeds of the disposition of any of the Collateral
shall be applied first to the payment of the expenses of the retaking,
holding, repairing, preparing for sale and sale of the Collateral,
including reasonable attorneys' fees and legal expenses in connection
therewith and any balance of such proceeds shall be applied by the Bank to
the Obligations in such order as the Bank shall determine.
13. RELATION TO CREDIT AGREEMENT. This Security Agreement is given pursuant to
the terms of the Credit Agreement and shall be deemed a part thereof and
subject to the terms and conditions of the Credit Agreement.
14. NOTICES. Any notice required or otherwise given concerning this Security
Agreement by either party to the other shall be given as notices are
required to be given under the terms of the Credit Agreement.
[This Space Left Blank Intentionally]
Dated as of July ____, 2001.
UNITED ACQUISITION, INC., an Indiana corporation
By:_______________________________________
---------------------------------------
(Printed name and title)
STATE OF __________ )
) SS:
COUNTY OF ________ )
Before me the undersigned, a Notary Public in and for said County and
State, personally appeared ______________________________, the
________________________ of UNITED ACQUISITION, INC., an Indiana corporation,
who as such authorized officer acknowledged the execution of the foregoing
Security Agreement (Equipment, Inventory, Accounts Receivable, General
Intangibles, Chattel Paper and Depository Accounts) on behalf of said
corporation this ____ day of July, 2001.
------------------------------------------
Notary Public
------------------------------------------
Printed Name
My Commission Expires:________________
County of Residence:___________________
Exhibit "H"
Elkhart County, Indiana
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF RENTS AND FIXTURE FILING
FOR PURPOSES OF THE SECURITY AGREEMENT CONTAINED IN THIS INSTRUMENT THE "SECURED
PARTY" AND THE "DEBTOR" AND THEIR RESPECTIVE ADDRESSES ARE AS FOLLOWS:
SECURED PARTY: FIRST INDIANA BANK
000 XXXXX XXXXXXXXXXXX
XXXXX 0000
XXXXXXXXXXXX, XXXXXXX 00000
ATTENTION: XXXXXXX X. XXXXXXXXX, VICE PRESIDENT
DEBTOR: UNITED ACQUISITION, INC.
00000 XXXXXX XXXX 0
XXXXXXX, XXXXXXX 00000
ATTENTION: XXXX XXXXXXX, PRESIDENT
THIS INSTRUMENT WHEN RECORDED SHALL CONSTITUTE A "FIXTURE FILING" FOR
PURPOSES OF THE UNIFORM COMMERCIAL CODE. THE ADDRESS OF THE SECURED PARTY SHOWN
ABOVE IS THE ADDRESS AT WHICH INFORMATION CONCERNING THE SECURED PARTY'S
SECURITY INTEREST MAY BE OBTAINED.
UNITED ACQUISITION, INC., an Indiana corporation (the "Mortgagor"),
MORTGAGES AND WARRANTS to FIRST INDIANA BANK, a federal savings bank with its
principal office in Indianapolis, Indiana, (the "Bank") and the Mortgagor GRANTS
A SECURITY INTEREST to the Bank in the following property, to-wit:
all that real estate located in Elkhart County, Indiana, described in the
"Schedule" which is attached to this Mortgage, Security Agreement,
Assignment of Rents and Fixture Filing (this "Mortgage") and incorporated
herein by this reference (the "Real Estate"); and
any items of furniture, machinery, equipment or other tangible personal
property which are now or hereafter become attached to the Real Estate or
any improvement thereon so as to constitute a fixture, whether now owned or
hereinafter acquired (the "Personal Property").
TOGETHER WITH all present and future improvements, rights, privileges,
interests, easements, hereditaments, and appurtenances thereunto belonging or in
any manner pertaining thereto, and the proceeds therefrom (all of such Real
Estate, Personal Property and other rights being hereafter referred to as the
"Mortgaged Premises").
This Mortgage is given to secure all of the Mortgagor's Obligations to the
Bank. The term "Obligations" as used in this Mortgage means all obligations of
the Mortgagor in favor of the Bank of every type and description, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, including but not limited to all obligations of the Mortgagor
in favor of the Bank arising under a Credit Agreement between the Mortgagor and
the Bank dated the date of this Mortgage (the "Credit Agreement"), which
Obligations include the obligation of the Mortgagor to repay all advances made
by the Bank to the Mortgagor under a revolving line of credit in the maximum
outstanding aggregate principal amount of $3,500,000.00 ("Revolving Loan"), to
repay a term loan ("Term Loan") in the original principal amount of $291,000.00,
which Term Loan has a final maturity date of July 1,2006, to repay a second term
loan ("Term Loan II") in the original principal amount of $l,116,000.00, which
Term Loan II has a final maturity date of July 1, 2006, to repay a third term
loan ("Term Loan III") in the original principal amount of $1,750,000.00, which
Term Loan III has a final maturity date of July 1,2003, and all now existing and
future obligations of the Mortgagor to the Bank, however created, evidenced, or
acquired, whether direct or indirect, absolute or contingent, matured or
unmatured, including future obligations and advances to the same extent as if
such future obligations and advances were made on the date of the execution of
this Mortgage (it being understood that the Bank is not under any obligation to
make any future advances except as specifically set forth in the Credit
Agreement), provided, however, that any such future obligations or advances
shall be secured by this Mortgage up to the maximum aggregate amount of
$10,000,000.00 outstanding at any time. All of the Obligations, including those
arising under the Credit Agreement, are secured as they now exist and as they
may be increased or otherwise changed by any amendment to any instrument or
agreement which now or hereafter evidences, secures or expresses terms
applicable to any of the Obligations, including amendments to the Credit
Agreement and any "Loan Document" as that term is defined in the Credit
Agreement.
As additional security for the Obligations, the Mortgagor assigns to the
Bank the rents, issues and profits of the Mortgaged Premises, including any
rents and all other amounts (collectively "Lease Payments") which are due or
shall become due to the Mortgagor under the terms of any present or future lease
(a "Lease"), oral or written, of all or any portion of the Mortgaged Premises
(all such rents, issues, profits and Lease Payments are hereafter collectively
referred to as the "Rents"). This Assignment of Rents is an absolute assignment,
and is intended to vest in the Bank the right to collect all Rents subject only
to the conditional license to collect Rents granted by the Bank to the Mortgagor
under the terms of numbered Paragraph 7 of this Mortgage.
The Mortgagor further covenants and agrees as follows:
1. The Mortgagor shall pay and perform all of the Obligations promptly when
payment or performance is due, with reasonable attorneys' fees and costs of
collection, and without relief from valuation and appraisement laws.
2. The Mortgagor shall keep the Mortgaged Premises in good repair and shall
not commit or permit waste thereon or do or permit to be done anything that may
impair the value of the Mortgaged Premises. The Mortgagor shall promptly restore
any part of the Mortgaged Premises which may be damaged or destroyed. The
Mortgagor shall pay when due all taxes and assessments levied or assessed
against the Mortgaged Premises or any part thereof.
3. The Mortgagor shall comply with all statutes, ordinances, rules,
regulations, orders, and directions of any legislative, executive,
administrative, or judicial body or official applicable to the Mortgaged
Premises, or any part thereof, or to the Mortgagor, or to the operation of any
business of Mortgagor which directly affects the Mortgaged Premises; provided,
however, that the Mortgagor may contest any of the matters referred to in this
paragraph as provided in the Credit Agreement or otherwise in any reasonable
manner which in the judgment of the Bank will not adversely affect the rights of
the Bank, its successors or assigns.
4. The Mortgagor will procure and maintain in effect at all times insurance
written by insurance companies acceptable to the Bank which insures against loss
or destruction of the Mortgaged Premises by fire, wind storm, lightning,
vandalism and malicious mischief and such other perils as are generally covered
by "extended coverage" insurance for the full replacement value of the Mortgaged
Premises. All policies providing such insurance shall provide that any loss
thereunder shall be payable to the Bank under a standard form of secured
lender's loss payable endorsement. The Mortgagor shall also procure business
interruption insurance in such amounts as the Bank may reasonably require. The
Mortgagor authorizes the Bank to endorse on Mortgagor's behalf and to negotiate
drafts representing proceeds of such insurance, provided that the Bank shall
remit to the Mortgagor such surplus, if any, as remains after the proceeds have
been applied at the Bank's option: (a) to the satisfaction of the Obligations or
to the establishment of a cash collateral account securing the Obligations, or
(b) to the restoration of the Mortgaged Premises; provided, however, that so
long as no Default (as hereafter defined) has occurred and is continuing, and
provided that the Mortgagor can demonstrate to the Bank's satisfaction that
restoration of the Mortgaged Premises is physically and economically feasible,
such proceeds shall be applied, at the Mortgagor's option and to the extent
necessary, as provided in the foregoing clause (b) and any balance shall be
remitted to the Mortgagor. Certificates evidencing the existence of all of the
insurance required under the terms of this Mortgage shall be furnished to the
Bank and the original policies providing such insurance shall be delivered to
the Bank at the Bank's request.
5. Upon demand and failure of the Mortgagor so to do, the Bank may, in its
discretion, advance and pay all sums necessary to protect and preserve the
Mortgaged Premises, and all sums so advanced and paid by the Bank shall become a
part of the indebtedness secured hereby, shall bear interest from date of
payment at a rate equal to the Prime Rate plus four percent (4%) per annum, and
shall be payable to the Bank upon demand. Such sums shall include, but not by
way of limitation: (a) taxes, assessments and other charges which may be or
become senior to this Mortgage as liens on the Mortgaged Premises, or any part
thereof; (b) the cost of any title insurance, surveys, or other evidence which
in the discretion of the Bank may be required in order to evidence, insure or
preserve the lien of this Mortgage; (c) all costs, expenses, and reasonable
attorneys' fees incurred by the Bank in respect of any and all legal and
equitable actions which relate to this Mortgage or to the Mortgaged Premises,
and (d) the cost of any repairs respecting the Mortgaged Premises which are
reasonably deemed necessary by the Bank. As used in this Mortgage, the term
"Prime Rate" means a variable per annum rate of interest equal at all times to
the rate of interest established and quoted by the Bank as its Prime Rate, such
rate to change contemporaneously with each change in such established and quoted
rate; provided that it is understood the Prime Rate shall not necessarily be
representative of the rate of interest actually charged by the Bank on any loan
or class of loans. The Bank shall be subrogated to the rights of the holder of
each lien or claim paid with moneys secured hereby.
6. If all or any part of the Mortgaged Premises is damaged, taken, or
acquired, either temporarily or permanently, in any condemnation proceeding, or
by exercise of the right of eminent domain, or by the alteration of the grade of
any street affecting the Mortgaged Premises, the amount of any award or other
payment for such taking or damages made in consideration thereof, to the extent
of the full amount of the then remaining unpaid Obligations, is hereby assigned
to the Bank, which is empowered to collect and receive the same and to give
proper receipts therefor in the name of the Mortgagor, and all such sums shall
be paid forthwith directly to the Bank. Any award or payment so received by the
Bank may, at the option of the Bank: (a) be applied to the satisfaction of the
Obligations or to the establishment of a cash collateral account for the
Obligations, or (b) be released, in whole or in part, to the Mortgagor for the
purpose of altering, restoring, or rebuilding any part of the Mortgaged Premises
which may have been altered, damaged or destroyed as a result of such taking,
alteration, or proceeding; provided, however, that so long as no Default has
occurred and is continuing, and provided that the Mortgagor can demonstrate to
the Bank's satisfaction that any proposed alteration, restoration or rebuilding
is physically and economically feasible, such awards shall be applied at the
Mortgagor's option and to the extent necessary as provided in the foregoing
clause (b).
7. At any time a Default (as hereafter defined) has occurred and is
continuing, the Bank may enter upon and take possession of the Real Estate or
any part thereof, and at any such time, or if the Bank in the reasonable
exercise of its discretion determines that payment or performance of any of the
Obligations is insecure, the Bank may demand, xxx for, receive and give
receipts, releases and satisfactions for all Rents. At any time that the Bank
has not exercised its right to take possession of the Real Estate and there is
not in effect any demand by the Bank for the direct payment of Lease Payments to
the Bank given pursuant to the immediately preceding sentence, the Mortgagor may
collect Lease Payments provided that no Rents shall be collected by the
Mortgagor more than thirty (30) days in advance of the period of occupancy to
which they relate. Lease Payments collected by the Mortgagor pursuant to the
license granted in the immediately preceding sentence shall be held by the
Mortgagor as trustee for the benefit of the Bank and shall be applied to the
satisfaction of Obligations to the extent that any are then due and payable. Any
balance remaining after satisfaction of all Obligations which are then due and
payable may be used by the Mortgagor for any proper purpose. Any demand by the
Bank upon any tenant of the Mortgaged Premises accompanied by a copy of this
Mortgage shall be sufficient authority for such tenant thereafter to make all
Lease Payments directly to the Bank and any such tenant shall have no obligation
or authority to inquire into the propriety of any such demand. Upon making Lease
Payments to the Bank pursuant to the Bank's demand, any tenant of the Mortgaged
Premises shall be as fully discharged of its obligations under any Lease to the
extent of such payments as if such payments had been made directly to the
Mortgagor. If at any time Lease Payments are required to be made directly to the
Bank under the terms of this paragraph and notwithstanding such requirement such
payments are made to the Mortgagor, the Mortgagor will receive such payments in
trust for the Bank and will forward them immediately to the Bank in the form in
which received, adding only such endorsements or assignments as may be necessary
to perfect the Bank's title thereto. Any amounts collected by the Bank pursuant
to the assignment of rents contained in this Mortgage shall be applied by the
Bank to the payment of such of the Obligations as are then due and payable as
the Bank in its sole discretion shall determine. If no Obligations are then due
and payable, such amounts may be held by the Bank as cash collateral for the
Obligations, without liability for interest thereon, provided that the Bank
will, at the direction of the Mortgagor, invest such amounts for the account and
at the risk of the Mortgagor in U.S. Treasury Bills with less than 60 days
remaining to maturity or in similar essentially risk-free, cash equivalent
investments as the Mortgagor may reasonably direct and any earnings derived from
such investments will become a part of the cash collateral account. Any portion
or all of the cash collateral account which is not applied to Obligations
pursuant to the terms of this paragraph may at the discretion of the Bank be
released to the Mortgagor. The authority given to collect Rents conferred upon
the Bank under the terms of this Mortgage is irrevocable.
8. The Mortgagor grants to the Bank as secured party a security interest in
the Personal Property in accordance with the provisions of the Uniform
Commercial Code as enacted in Indiana. The Mortgagor authorizes the Bank at the
expense of the Mortgagor to execute on its behalf and file any other financing
statements deemed necessary by the Bank to perfect its security interest in the
Personal Property and to file such financing statements in those public offices
deemed necessary by the Bank. Such financing statements may be signed by the
Bank alone. In addition, the Mortgagor shall execute and deliver any financing
statement or other document that the Bank may request to perfect or to further
evidence the security interest created by this Mortgage.
9. If, after the execution of this Mortgage, applicable law requires the
taxation of this Mortgage or any Obligation secured by this Mortgage, the
Mortgagor, upon demand by the Bank, shall pay such taxes or reimburse the Bank
therefor unless it is unlawful to require the Mortgagor to do so.
Notwithstanding the foregoing, the Mortgagor shall not be obligated to pay any
portion of any of the Bank's federal or state income taxes.
10. As used in this paragraph, the following terms have the meanings
indicated:
a. Clean-up. "Clean-up" means the removal or remediation of Contamination
or other response to Contamination in compliance with all
Environmental Laws and to the satisfaction of all applicable
governmental agencies, and in compliance with good commercial
practice.
b. Contamination. "Contamination" means the Release of any Hazardous
Substance on, in or under the Real Estate or the presence of any
Hazardous Substance on, in or under the Real Estate as the result of a
Release, or the emanation of any Hazardous Substance from the Real
Estate.
c. Environmental Laws. "Environmental Laws" means all federal, state and
local laws, statutes, codes, ordinances, regulations, rules or other
requirements with the force of law, including but not limited to
consent decrees and judicial or administrative orders, relating to the
environment, including but not limited to those applicable to the use,
storage, treatment, disposal or Release of any Hazardous Substances,
all as amended or modified from time to time including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"); the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"); the Clean Water Act, as
amended; the Clean Air Act, as amended; the Federal Insecticide,
Fungicide and Rodenticide Act, as amended; the Hazardous Materials
Transportation Act, as amended, and any and all Indiana environmental
statutes including, without limitation, those codified under Title 13
of the Indiana Code and all regulations promulgated under or pursuant
to such federal and Indiana Statutes.
d. Hazardous Substance. "Hazardous Substance" means any hazardous waste
or hazardous substance, or any pollutant or contaminant or toxic
substance or other chemicals or substances including, without
limitation, asbestos, petroleum, polychlorinated biphenyls, and any
other substance regulated by any Environmental Laws.
e. Release. "Release" means the spilling, leaking, disposing,
discharging, dumping, pouring, emitting, depositing, injecting
leaching, escaping or other release or threatened release, whether
intentional or unintentional, of any Hazardous Substance.
f. Regulatory Actions. "Regulatory Actions" means any claim, demand,
action or proceeding brought or instigated by any governmental
authority in connection with any Environmental Law including, without
limitation, any civil, criminal or administrative proceeding whether
or not seeking costs, damages, penalties or expenses.
g. Third-party Claims. "Third-party Claims" means any claim, action,
demand or proceeding, other than a Regulatory Action, based on
negligence, trespass, strict liability, nuisance, toxic tort or
detriment to human health or welfare due to Contamination, whether or
not seeking costs, damages, penalties, or expenses, and including any
action for contribution to Clean-up costs.
The Mortgagor shall indemnify, defend and hold harmless the Bank and its
affiliates, shareholders, directors, officers, employees and agents (all being
included in the word "Bank" for purposes of this paragraph) from any and all
claims, causes of action, damages, demands, fines, liabilities, losses,
penalties, judgments, settlements, expenses and costs, however defined, and of
whatever nature, known or unknown, absolute or contingent, including, but not
limited to, attorneys' fees, consultant's fees, fees of environmental or other
engineers, and related expenses including, without limitation, expenses related
to site inspections and soil and water analyses, which may be asserted against,
imposed on, suffered or incurred by the Bank arising out of or in any way
related to (a) any actual, alleged or threatened Release of any Hazardous
Substance on, in or under the Real Estate, (b) any related injury to human
health or safety (including wrongful death) or any actual or alleged injury to
the environment by reason of the condition of, or past or present activities on
the Real Estate, (c) any actual or alleged violation of Environmental Law
related to the Real Estate, (d) any lawsuit or administrative proceeding brought
or threatened by any person, including any governmental entity or agency,
federal, state or local, including any governmental order relating to or
occasioned by any actual or alleged Contamination or threat of Contamination,
(e) any lien imposed upon the Real Estate in favor of any governmental entity as
a result of any Contamination or threat of Contamination, and (f) all costs and
expenses of any Clean-up. The Mortgagor represents and covenants that the
Mortgagor's storage, generation, transportation, handling or use, if any, of
Hazardous Substances on or from the Real Estate is currently, and will remain at
all times, in compliance with all applicable Environmental Laws. If any Clean-up
is required with respect to the Real Estate, the Mortgagor shall expeditiously
complete such Clean-up at the Mortgagor's expense and without the necessity of
demand by the Bank. If the Mortgagor should fail to initiate and diligently
pursue any Clean-up or should otherwise fail to perform any obligation under the
terms of this paragraph, the Bank may, at its sole discretion and without any
obligation to complete any Clean-up which it may cause to be commenced, cause
the Clean-up or partial Clean-up of the Real Estate and pay on behalf of the
Mortgagor any costs, fines or penalties imposed on the Mortgagor pursuant to any
Environmental Laws or make any other payment or perform any other action which
will prevent a lien in favor of any federal, state or local government authority
or any other person from attaching to the Real Property pursuant to the
provisions of any Environmental Law, and all costs and expenses of the Bank
incurred in pursuing any of the remedies provided in this paragraph shall be
added to the obligations secured by this Mortgage, which costs and expenses
shall become due and payable without notice as incurred by the Bank, together
with interest thereon at the Prime Rate plus three percent (3 %) per annum until
paid.
11. The occurrence of any of the following events shall be deemed a
"Default" under this Mortgage:
(a) an "Event of Default" as defined in the Credit Agreement shall have
occurred and be continuing or the Mortgagor shall otherwise fail to
pay or perform any of the Obligations promptly when such payment or
performance is due or within such grace period as may be applicable;
(b) the Mortgagor shall otherwise fail to observe and perform the terms
and conditions of this Mortgage, or
(c) the Mortgagor shall abandon the Mortgaged Premises.
12. Upon the occurrence and continuance of a Default, all indebtedness
secured hereby shall, at the option of the Bank, become immediately due and
payable and this Mortgage may be foreclosed accordingly. The Bank shall be
entitled to the appointment of a receiver for the Mortgaged Premises to collect
the rents and profits and to maintain the Mortgaged Premises during any
foreclosure proceedings. The Bank shall have the option of proceeding as to both
the Real Estate and the Personal Property in accordance with its rights and
remedies in respect of the Real Estate, in which event the default provisions of
the Uniform Commercial Code shall not apply. If the Bank elects to proceed with
respect to the Personal Property separately from the Real Estate, the
requirement of the Uniform Commercial Code as to reasonable notice of any
proposed sale or disposition of the Personal Property shall be met if such
notice is delivered or mailed to the Mortgagor at its address stated above at
least ten (10) days prior to such sale or disposition. In any action to
foreclose this Mortgage, the Bank shall be entitled to recover, in addition to
all reasonable attorney and related paraprofessional expenses incurred in
connection therewith, all other reasonable costs and expenses associated with
foreclosure including, without limitation, all expenses incurred for title
searches, abstracts of title, title insurance, appraisals, surveys and
environmental assessments reasonably deemed necessary by the Bank, all of which
costs and expenses shall be additional amounts secured by this Mortgage. As used
in the preceding sentence, the term "environmental assessments" means
inspections and reports of environmental engineers or firms of environmental
engineers or other appropriate experts, and associated samplings and testings of
soil or groundwater, the purpose of which is to determine whether there is any
Contamination associated with the Real Estate and if so, the extent thereof, and
to estimate of the cost of Clean-up of any Contamination, and to determine
whether there are any underground storage tanks or any asbestos in, on, or under
the Real Estate and if so, whether there are any violations of Environmental
Laws in connection therewith. As used in this paragraph, the terms
"Contamination," "Clean-up" and "Environmental Laws" are used as defined in
numbered Paragraph 10.
13. The Bank, at its option and on such terms as it may desire, may extend
the time of payment or performance of any part or all of the Obligations or
release any part of the Mortgaged Premises from the lien of this Mortgage
without impairing the lien of this Mortgage except as to the portion of the
Mortgaged Premises expressly released and without releasing the Mortgagor or any
guarantors or sureties of or from any of the obligations. No delay by the Bank
in the exercise of any of its rights under this Mortgage shall preclude the
subsequent exercise thereof so long as any Default continues uncured, and no
waiver by the Bank of any Default of the Mortgagor shall operate as a waiver of
subsequent or other Defaults. The making of any payment by the Bank for any of
the purposes herein permitted shall not constitute a waiver of any breach of the
Mortgagor's covenant to perform such act. Notice by the Bank of its intention to
exercise any right or option under this Mortgage is expressly waived by the
Mortgagor, and any one or more of the Bank's rights or remedies under this
Mortgage may be enforced successively or concurrently. Time is of the essence of
this Mortgage.
14. All obligations of the Mortgagor under this Mortgage shall extend to
and be binding upon the successors and assigns of the Mortgagor, and shall inure
to the benefit of the Bank and its successors and assigns.
15. This Mortgage secures indebtedness incurred for a business purpose.
16. This Mortgage shall be governed by and construed and enforced in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
[This Space Left Blank Intentionally]
Dated as of July ____, 2001.
UNITED ACQUISITION, INC., an Indiana
corporation
By:____________________________________
------------------------------------
(Printed name and title)
STATE OF _____________ )
)SS:
COUNTY OF ____________ )
Before me, a Notary Public in and for the above County and State,
personally appeared ________________________, the __________________________ of
UNITED ACQUISITION, INC., an Indiana corporation, who as such officer
acknowledged the execution of the foregoing Mortgage, Security Agreement,
Assignment of Rents and Fixture for and on behalf of said corporation this _____
day of July, 2001.
Signature:_________________________________
Printed:___________________________________
Notary Public
My Commission Expires:________________
My County of Residence: ________________
THIS INSTRUMENT PREPARED BY: Xxxxxxx X. Xxxxxx, Esquire
KROGER, GARDIS & XXXXX, L.L.P.
Bank One Center/Circle, Suite 900
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
(000) 000-0000
Exhibit "H"
SCHEDULE
TRACT I
A part of the Northwest Quarter (NW 1/4) of Section Twenty-eight (28), Township
Thirty-eight (38) North, Range Six (6) East, more particularly described as
follows:
Beginning at a railroad spike in the pavement of County Road 8 at the Southwest
Corner of said Quarter Section; thence due East along the South line of said
Quarter Section, Two Hundred Fifty and Thirty-eight hundredths (250.36) feet to
a nail; thence North One (1) degree Twelve (12) minutes East, Five Hundred
Seventy-three and Twelve hundredths (673.12) feet to an iron stake; thence due
East Three Hundred Forty-two (342) feet to the East line of land owned by Xxxxx
Xxx and Xxxxx Xxxxx (Elkhart County Deed Record 287, page 613); thence North One
(1) degree Twelve (12) minutes East along the East line of said Xxxxx land. Five
Hundred Twenty and Thirty-eight hundredths (520.38) feet to an iron stake at the
Northeast Corner of said Xxxxx land; thence xxx Xxxx along the North line of
said Xxxxx land, Five Hundred Eighty-seven and Ninety-two hundredths (587.92)
feet to the West line of said Section; thence South One (1) degree Twenty-six
(26) minutes West along the West line of said Section, One Thousand Ninety-three
arid Six tenths (1093.6) feet to the place of beginning.
TRACT II
A part of the Northwest Quarter (NW 114) of Section Twenty-eight (28), Township
Thirty-eight (38) North, Range Six (6) East in Washington Township, Elkhart
County, Indiana, more particularly described as follows:
Commencing at the Southwest Corner of the Northwest Quarter (NW 1/4) of said
Section Twenty-eight (28); thence due East along the South line of said Section,
and along the centerline of County Road No. 8, Five Hundred Ninety-two and
Thirty-eight hundredths (592.38) feet to the Southeasterly corner of land
conveyed to Xxxxx Xxx Xxxxx (Elkhart County Deed Record 374, page 18) for the
beginning point of this description: thence North One (1) degree Twelve (12)
minutes East along the Easterly line of said Xxxxx Xxxxx land, One Thousand
Ninety-three and Fifty hundredths (1093.50) feet to the Northeasterly corner of
said Xxxxx Xxxxx land; thence South Eighty-eight (88) degrees Thirty (30)
minutes East along the South line of land conveyed to Xxxx X. Xxxxx (Elkhart
County Deed Record 188, page 433), Five Hundred Sixty and Eighty-nine hundredths
(560.89) feet to the Southeasterly corner of said Xxxx Xxxxx land; thence South
One (1) degree Twenty-six (26) minutes West along the Westerly line of land
conveyed to Xxxxx 8. and Xxxxxx X. Xxxxxxxx (Elkhart County Deed Record 199,
page 144, Five Hundred Thirty-nine and Eighty-four hundredths (539.84) feet to
the centerline of County Road No. 8; thence South Twenty-three (23) degrees
Thirteen (13) minutes West along the centerline of said County Road No. 8, One
Hundred Twenty-eight and Fifty hundredths (128.50) feet; thence South
Twenty-seven (27) degrees Nine (09) minutes West along the centerline of said
County Road No. 8, Two Hundred Twenty-nine and Sixty-one hundredths (229.61)
feet; thence South Fifty-two (52) degrees Forty-three (43) minutes West along
the centerline of said County Road No. 8, Two Hundred Seventy-five and
Seventy-six hundredths (27576) feet; thence South Seventy-three (73) degrees
Forty-two (42) minutes West along the centerline of said County Road No. 8, One
Hundred Seventy-five and Fifty hundredths (1 75.50) feet to the South line of
said Quarter Section; thence xxx Xxxx along the South line of said Quarter
Section and the centerline of said County Road No. 8, Thirty and Eighty-two
hundredths (30.82) feet to the place of beginning.
SCHEDULE (continued)
TRACT III
A part of the Northwest Quarter (NW 1/4) of Section Twenty-eight (28), Township
Thirty-eight (38) North, Range Six (6) East, more particularly described as
follows:
Commencing at a railroad spike in the pavement of County Road 8 at the Southwest
Corner of said Quarter Section; thence due East along the South line of said
Quarter Section, Two Hundred Fifty and Thirty-eight hundredths (250.38) feet to
a nail for the beginning point of this description; thence North One (1) degree
Twelve (12) minutes East, Five Hundred Seventy-three and Twelve hundredths
(573.12) feet to an iron stake; thence due East Three Hundred Forty-two (342)
feet to the East line of land owned by Xxxxx Xxx and Xxxxx Xxxxx (Elkhart County
Deed Record 287, page 613); thence South One (1) degree Twelve (12) minutes West
along the East line of said Xxxxx land Five Hundred Seventy-three and Twelve
hundredths (573.12) feet to a nail on the South line of said Quarter Section,
said point being the Southeast Corner of said Xxxxx land; thence xxx Xxxx along
the South tine of said Quarter Section, Three Hundred Forty-two (342) feet to
the place of beginning.
Exhibit "I"
St. Xxxxxx County, Michigan
MORTGAGE
THIS MORTGAGE CONSTITUTES A FUTURE ADVANCE
MORTGAGE UNDER MICHIGAN LAW
FOR PURPOSES OF THE SECURITY AGREEMENT CONTAINED IN THIS INSTRUMENT THE "SECURED
PARTY" AND THE "DEBTOR" AND THEIR RESPECTIVE ADDRESSES ARE AS FOLLOWS:
SECURED PARTY: FIRST INDIANA BANK
000 XXXXX XXXXXXXXXXXX
XXXXX 0000
XXXXXXXXXXXX, XXXXXXX 00000
ATTENTION: XXXXXXX X. XXXXXXXXX, VICE PRESIDENT
DEBTOR: UNITED ACQUISITION, INC.
00000 XXXXXX XXXX 0
XXXXXXX, XXXXXXX 00000
ATTENTION: XXXX XXXXXXX, PRESIDENT
THIS INSTRUMENT WHEN RECORDED SHALL CONSTITUTE A "FIXTURE FILING" FOR PURPOSES
OF THE UNIFORM COMMERCIAL CODE. THE ADDRESS OF THE SECURED PARTY SHOWN ABOVE IS
THE ADDRESS AT WHICH INFORMATION CONCERNING THE SECURED PARTY'S SECURITY
INTEREST MAY BE OBTAINED.
UNITED ACQUISITION, INC., an Indiana corporation (the "Mortgagor"), MORTGAGES
AND WARRANTS to FIRST INDIANA BANK, a federal savings bank with its principal
office in Indianapolis, Indiana (the "Bank"), and the Mortgagor GRANTS A
SECURITY INTEREST to the Bank in the following property, to wit:
all that real estate located in the City of White Pigeon, St. Xxxxxx
County, Michigan, described in the "Schedule" which is attached to
this Mortgage (this "Mortgage") and incorporated herein by this
reference (the "Real Estate"); and
any items of furniture, machinery, equipment or other tangible
personal property of Mortgagor which are now or hereafter become
attached to the Real Estate or any improvement thereon so as to
constitute a fixture, whether now owned or hereinafter acquired (the
"Personal Property").
TOGETHER WITH all present and future improvements, rights, privileges,
interests, easements, hereditaments, and appurtenances thereunto belonging or in
any manner pertaining thereto, and the proceeds therefrom (all of such Real
Estate, Personal Property and other rights being hereafter referred to as the
"Mortgaged Premises").
This Mortgage is given to secure all of the Mortgagor's Obligations to the
Bank. The term "Obligations" as used in this Mortgage means all obligations of
the Mortgagor in favor of the Bank of every type and description, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, including but not limited to all obligations of the Mortgagor
in favor of the Bank arising under a Credit Agreement between the Mortgagor and
the Bank dated the date of this Mortgage (the "Credit Agreement"), which
Obligations include the obligation of the Mortgagor to repay all advances made
by the Bank to the Mortgagor under a revolving line of credit in the maximum
outstanding aggregate principal amount of $3,500,000.00 ("Revolving Loan"), to
repay a term loan ("Term Loan") in the original principal amount of $291,000.00,
which Term Loan has a final maturity date of July 1, 2006, to repay a second
term loan ("Term Loan II") in the original principal amount of $1,116,000.00,
which Term Loan II has a final maturity date of July 1, 2006, to repay a third
term loan ("Term Loan III") in the original principal amount of $1,750,000.00,
which Term Loan III has a final maturity date of July 1, 2003, and all now
existing and future obligations of the Mortgagor to the Bank, however created,
evidenced, or acquired, whether direct or indirect, absolute or contingent,
matured or unmatured, including future obligations and advances to the same
extent as if such future obligations and advances were made on the date of the
execution of this Mortgage (it being understood that the Bank is not under any
obligation to make any future advances except as specifically set forth in the
Credit Agreement), provided, however, that any such future obligations or
advances shall be secured by this Mortgage up to the maximum aggregate amount of
$10,000,000.00 outstanding at any time. All of the Obligations, including those
arising under the Credit Agreement, are secured as they now exist and as they
may be increased or otherwise changed by any amendment to any instrument or
agreement which now or hereafter evidences, secures or expresses terms
applicable to any of the Obligations, including amendments to the Credit
Agreement and any "Loan Document" as that term is defined in the Credit
Agreement.
As additional security for the Obligations, insurance premiums, taxes and
assessments, of the type and manner herein provided, pursuant to Act 210 of the
Public Acts of Michigan of 1953, as amended, the Mortgagor assigns to the Bank
the rents, issues and profits of the Mortgaged Premises, including any rents and
all other amounts (collectively "Lease Payments") which are due or shall become
due to the Mortgagor under the terms of any present or future lease (a "Lease"),
oral or written, of all or any portion of the Mortgaged Premises (all such
rents, issues, profits and Lease Payments are hereafter collectively referred to
as the "Rents") under any Lease or Leases of the Mortgaged Premises (including
any extensions, amendments or renewals thereof), whether due or to become due,
including all such Leases in existence or coming into existence during the
period this Mortgage is in effect. This assignment of rents shall run with the
land and be good and valid as against the Mortgagor herein or those claiming by,
under or through the Mortgage, from the date of the recording of this
instrument. This assignment shall continue to be operative during the
foreclosure or any other proceedings taken to enforce this Mortgage. In the
event of a sale or foreclosure which shall result in a deficiency, this
assignment shall stand as security during the redemption period for the payment
of such deficiency. This assignment shall not be construed as obligating the
Bank to perform any of the covenants or undertakings required to be performed by
the Mortgagor contained in any Leases. This assignment of rents is an absolute
assignment, and is intended to vest in the Bank the right to collect all Rents
subject only to the conditional license to collect Rents granted by the Bank to
the Mortgagor under the terms of numbered Paragraph 7 of this Mortgage. These
provisions are not intended to evidence an additional recordable event, as may
be prohibited by Act 459 of the Public Acts of Michigan of 1996, but rather are
included in this Mortgage for purposes of complying with any applicable
requirements of Act 210 of the Public Acts of Michigan of 1953, as amended.
The Mortgagor further covenants and agrees as follows:
1. The Mortgagor shall pay and perform all of the Obligations promptly when
payment or performance is due, with reasonable attorneys fees and costs of
collection, and without relief from valuation and appraisement laws.
2. The Mortgagor shall keep the Mortgaged Premises in good repair and shall
not commit or permit waste thereon or do or permit to be done anything that may
impair the value of the Mortgaged Premises. The Mortgagor shall promptly restore
any part of the Mortgaged Premises which may be damaged or destroyed. The
Mortgagor shall pay when due all taxes and assessments levied or assessed
against the Mortgaged Premises or any part thereof. Failure of the Mortgagor to
pay any taxes, assessments or governmental charges levied or assessed against
the Mortgaged Premises, or any part thereof, or any installment of any such tax,
assessment or charge, or any premium upon any policy of insurance covering any
part of the Mortgaged Premises, at the time or times such taxes, assessments,
charges, installments thereof or insurance premiums are due and payable, shall
constitute waste, a Default (as hereafter defined), and in accordance with the
provisions of Act No. 236 of the Public Acts of Michigan for 1961, as amended,
shall entitle the Bank to exercise the remedies afforded by such Act and the
Credit Agreement when the same become an Event of Default thereunder. Payment by
the Bank for and on behalf of the Mortgagor of any such delinquent tax,
assessment, charge or insurance premium properly payable by the Mortgagor under
the terms of this Mortgage shall not cure the Default herein described nor shall
it in any manner impair the Bank's right to the appointment of a receiver on
account thereof, as herein provided. Upon the happening of any such acts of
waste, and the same becoming a Default (as hereafter defined), and on proper
application made therefor by the Bank to a court of competent jurisdiction, the
Bank shall forthwith be entitled to the appointment of a receiver of the
Mortgaged Premises and of the earnings, income, rents, issues and profits
thereof, with such powers as the court making such appointment shall confer, and
the Mortgagor hereby irrevocably consents to such appointment and waives notice
of any application therefor.
3. The Mortgagor shall comply with all statutes, ordinances, rules,
regulations, orders, and directions of any legislative, executive,
administrative or judicial body or official applicable to the Mortgaged
Premises, or any part thereof, or to the Mortgagor, or to the operation of any
business of Mortgagor which directly affects the Mortgaged Premises; provided,
however, that the Mortgagor may contest any of the matters referred to in this
paragraph as provided in the Credit Agreement or otherwise in any reasonable
manner which in the judgment of the Bank will not adversely affect the rights of
the Bank, or its successors or assigns.
4. The Mortgagor will procure and maintain in effect at all times insurance
written by insurance companies acceptable to the Bank which insures against loss
or destruction of the Mortgaged Premises by fire, wind storm, lightning,
vandalism and malicious mischief and such other perils as are generally covered
by "extended coverage" insurance for the full replacement value of the Mortgaged
Premises. The Mortgagor shall also procure business interruption insurance in
such amounts as the Bank may reasonably require. All policies providing such
insurance shall provide that any loss thereunder shall be payable to the Bank
under a standard form of secured lender's loss payable endorsement. The
Mortgagor authorizes the Bank to endorse on Mortgagor's behalf and to negotiate
drafts representing proceeds of such insurance, provided that the Bank shall
remit to the Mortgagor such surplus, if any, as remains after the proceeds have
been applied at the Bank's option: (a) to the satisfaction of the Obligations or
to the establishment of a cash collateral account securing the Obligations, or
(b) to the restoration of the Mortgaged Premises; provided, however, that so
long as no Default (as hereafter defined) has occurred and is continuing, and
provided that the Mortgagor can demonstrate to the Bank's satisfaction that
restoration of the Mortgaged Premises is physically and economically feasible,
such proceeds shall be applied, at the Mortgagor's option and to the extent
necessary, as provided in the foregoing clause (b) and any balance shall be
remitted to the Mortgagor. Certificates evidencing the existence of all of the
insurance required under the terms of this Mortgage shall be furnished to the
Bank and the original policies providing such insurance shall be delivered to
the Bank at the Bank's request.
5. Upon demand and failure of the Mortgagor so to do, the Bank may, in its
discretion, cause the Bank to advance and pay all sums necessary to protect and
preserve the Mortgaged Premises, and all sums so advanced and paid by the Bank
shall become a part of the indebtedness secured hereby, shall bear interest from
date of payment at a rate equal to the Prime Rate plus four percent (4%) per
annum, and shall be payable by the Mortgagor to the Bank upon demand. Such sums
shall include, but not by way of limitation: (a) taxes, assessments and other
charges which may be or become senior to this Mortgage as liens on the Mortgaged
Premises, or any part thereof; (b) the cost of any title insurance, surveys or
other evidence which in the discretion of the Bank may be required in order to
evidence, insure or preserve the lien of this Mortgage; (c) all costs, expenses,
and reasonable attorneys fees incurred by the Bank and the Bank in respect of
any and all legal and equitable actions which relate to this Mortgage or to the
Mortgaged Premises, and (d) the cost of any repairs respecting the Mortgaged
Premises which are reasonably deemed necessary by the Bank. As used in this
Mortgage, the term "Prime Rate" means a variable per annum rate of interest
equal at all times to the rate of interest established and quoted by the Bank as
its Prime Rate, such rate to change contemporaneously with each change in such
established and quoted rate; provided that it is understood the Prime Rate shall
not necessarily be representative of the rate of interest actually charged by
the Bank on any loan or class of loans. The Bank shall be subrogated to the
rights of the holder of each lien or claim paid with moneys secured hereby.
6. If all or any part of the Mortgaged Premises is damaged, taken or
acquired, either temporarily or permanently, in any condemnation proceeding, or
by exercise of the right of eminent domain, or by the alteration of the grade of
any Street affecting the Mortgaged Premises, the amount of any award or other
payment for such taking or damages made in consideration thereof, to the extent
of the full amount of the then remaining unpaid Obligations, is hereby assigned
to the Bank, which is empowered to collect and receive the same and to give
proper receipts therefor in the name of the Mortgagor, and all such sums shall
be paid forthwith directly to the Bank. Any award or payment so received by the
Bank may, at the option of the Bank: (a) be applied to the satisfaction of the
Obligations or to the establishment of a cash collateral account for the
Obligations, or (b) be released, in whole or in part, to the Mortgagor for the
purpose of altering, restoring or rebuilding any part of the Mortgaged Premises
which may have been altered, damaged or destroyed as a result of such taking,
alteration or proceeding; provided, however, that so long as no Default (as
hereafter defined) has occurred and is continuing, and provided that the
Mortgagor can demonstrate to the Bank's satisfaction that any proposed
alteration, restoration or rebuilding is physically and economically feasible,
such awards shall be applied at the Mortgagor's option and to the extent
necessary as provided in the foregoing clause (b).
7. At any time a Default (as hereafter defined) has occurred and is
continuing, the Bank may, to the extent permitted by applicable law, enter upon
and take possession of the Real Estate or any part thereof, and at any such
time, the Bank may demand, xxx for, receive and give receipts, releases and
satisfactions for all Rents. At any time that the Bank has not exercised its
right to take possession of the Real Estate and there is not in effect any
demand by the Bank for the direct payment of Lease Payments to the Bank given
pursuant to the immediately preceding sentence, the Mortgagor may collect Lease
Payments provided that no Rents shall be collected by the Mortgagor more than
thirty (30) days in advance of the period of occupancy to which they relate.
Lease Payments collected by the Mortgagor pursuant to the license granted in the
immediately preceding sentence shall be held by the Mortgagor as trustee for the
benefit of the Bank and shall be applied to the satisfaction of Obligations to
the extent that any are then due and payable. Any balance remaining after
satisfaction of all Obligations which are then due and payable may be used by
the Mortgagor for any proper purpose. Any demand by the Bank upon any tenant of
the Mortgaged Premises accompanied by a copy of this Mortgage shall be
sufficient authority for such tenant thereafter to make all Lease Payments
directly to the Bank and any such tenant shall have no obligation or authority
to inquire into the propriety of any such demand. Upon making Lease Payments to
the Bank pursuant to the Bank's demand, any tenant of the Mortgaged Premises
shall be as fully discharged of its obligations under any Lease to the extent of
such payments as if such payments had been made directly to the Mortgagor. If at
any time Lease Payments are required to be made directly to the Bank under the
terms of this paragraph and notwithstanding such requirement such payments are
made to the Mortgagor, the Mortgagor will receive such payments in trust for the
Bank and will forward them immediately to the Bank in the form in which
received, adding only such endorsements or assignments as may be necessary to
perfect the Bank's title thereto. Any amounts collected by the Bank pursuant to
the assignment of rents contained in this Mortgage shall be applied by the Bank
to the payment of such of the Obligations as are then due and payable as the
Bank in its sole discretion shall determine. If no Obligations are then due and
payable, such amounts may be held by the Bank as cash collateral for the
Obligations, without liability for interest thereon, provided that the Bank
will, at the direction of the Mortgagor, invest such amounts for the account and
at the risk of the Mortgagor in U.S. Treasury Bills with less than 60 days
remaining to maturity or in similar essentially risk-free, cash equivalent
investments as the Mortgagor may reasonably direct and any earnings derived from
such investments will become a part of the cash collateral account. Any portion
or all of the cash collateral account which is not applied to Obligations
pursuant to the terms of this paragraph may at the discretion of the Bank be
released to the Mortgagor. The authority given to collect Rents conferred upon
the Bank under the terms of this Mortgage is irrevocable. In the event that the
Mortgagor fails, refuses or neglects to deliver or surrender such possession,
the Bank shall be entitled to the appointment of a receiver of the Mortgaged
Premises and of the earnings, income, rents, issue and profits thereof, with
such powers as the court making such appointment may confer. The Mortgagor
agrees to execute and deliver to the Bank assignments of rents on all future
leases on the Mortgaged Premises during the term of this Mortgage, such
assignments to be in the form and manner satisfactory to the Bank. Any default
by the Mortgagor under the terms and conditions of any such assignment shall be
a Default (as hereafter defined) under the terms and conditions of this
Mortgage, entitling the Bank to exercise any and all rights and remedies
provided by this Mortgage. If the Mortgagor shall fail to perform and discharge
any of the obligations, covenants and agreements required to be performed by it
under any such assignment of rents, the Bank may elect to perform the same; any
sums which may be so paid out by the Bank, including the cost, expenses and
attorneys' fees paid out in any suit affecting the same, shall bear interest at
the a rate equal to the Prime Rate plus four percent (4%) per annum from the
dates of such payments, shall be paid by the Mortgagor to the Bank upon demand
and shall be deemed a part of the Obligations hereby secured and recoverable as
such in all respects. The Mortgagor shall assign to the Bank, upon request, as
further security for the Obligations hereby secured, the Mortgagor's interest in
all agreements, contracts licenses and permits affecting the Mortgaged Premises,
such assignments to be made by instruments in form satisfactory to the Bank, but
no such assignment shall be construed as a consent by the Bank to any agreement,
contract, license or permit so assigned, or to impose upon the Bank any
obligations with respect thereto.
8. The Mortgagor grants to the Bank as secured party a security interest in
the Personal Property in accordance with the provisions of the Uniform
Commercial Code as enacted in Michigan. The Mortgagor authorizes the Bank at the
expense of the Mortgagor to execute on its behalf and file any other financing
statements deemed necessary by the Bank to perfect its security interest in the
Personal Property and to file such financing statements in those public offices
deemed necessary by the Bank. Such financing statements may be signed by the
Bank alone. In addition, the Mortgagor shall execute and deliver any financing
statement or other document that the Bank may request to perfect or to further
evidence the security interest created by this Mortgage.
9. If, after the execution of this Mortgage, applicable law requires the
taxation of this Mortgage or any Obligation secured by this Mortgage, the
Mortgagor, upon demand by the Bank, shall pay such taxes or reimburse the Bank
therefor unless it is unlawful to require the Mortgagor to do so.
Notwithstanding the foregoing, the Mortgagor shall not be obligated to pay any
portion of any of the Bank's or any of the Bank's federal or state income taxes.
10. As used in this paragraph, the following terms have the meanings
indicated:
a. Clean-up. "Clean-up" means the removal or remediation of Contamination
or other response to Contamination in compliance with all
Environmental Laws and to the satisfaction of all applicable
governmental agencies, and in compliance with good commercial
practice.
b. Contamination. "Contamination" means the Release of any Hazardous
Substance on, in or under the Real Estate or the presence of any
Hazardous Substance on, in or under the Real Estate as the result of a
Release, or the emanation of any Hazardous Substance from the Real
Estate.
c. Environmental Laws. "Environmental Laws" means all federal, state and
local laws, statutes, codes, ordinances, regulations, rules or other
requirements with the force of law, including but not limited to
consent decrees and judicial or administrative orders, relating to the
environment, including but not limited to those applicable to the use,
storage, treatment, disposal or Release of any Hazardous Substances,
all as amended or modified from time to time including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"); the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"); the Clean Water Act, as
amended; the Clean Air Act, as amended; the Federal Insecticide,
Fungicide and Rodenticide Act, as amended; the Hazardous Materials
Transportation Act, as amended, any environmental statutes of the
State of Michigan and all regulations promulgated under or pursuant to
such federal and Michigan Statutes.
d. Hazardous Substance. "Hazardous Substance" means any hazardous waste
or hazardous substance, or any pollutant or contaminant or toxic
substance or other chemicals or substances including, without
limitation, asbestos, petroleum, polychlorinated biphenyls, and any
other substance regulated by any Environmental Laws.
e. Release. "Release" means the spilling, leaking, disposing,
discharging, dumping, pouring, emitting, depositing, injecting,
leaching, escaping or other release or threatened release, whether
intentional or unintentional, of any Hazardous Substance.
f. Regulatory Actions. "Regulatory Actions" means any claim, demand,
action or proceeding brought or instigated by any governmental
authority in connection with any Environmental Law including, without
limitation, any civil, criminal or administrative proceeding whether
or not seeking costs, damages, penalties or expenses.
g. Third-party Claims. "Third-party Claims" means any claim, action,
demand or proceeding, other than a Regulatory Action, based on
negligence, trespass, strict liability, nuisance, toxic tort or
detriment to human health or welfare due to Contamination, whether or
not seeking costs, damages, penalties, or expenses, and including any
action for contribution to Clean-up costs.
The Mortgagor shall indemnify, defend and hold harmless the Bank, and its
affiliates, shareholders, directors, officers, employees and agents (all being
included in the word "Indemnified Parties" for purposes of this paragraph) from
any and all claims, causes of action, damages, demands, fines, liabilities,
losses, penalties, judgments, settlements, expenses and costs, however defined,
and of whatever nature, known or unknown, absolute or contingent, including, but
not limited to, attorneys' fees, consultant's fees, fees of environmental or
other engineers, and related expenses including, without limitation, expenses
related to site inspections and soil and water analyses, which may be asserted
against, imposed on, suffered or incurred by any of the Indemnified Parties
arising out of or in any way related to (a) any actual, alleged or threatened
Release of any Hazardous Substance on, in or under the Real Estate, (b) any
related injury to human health or safety (including wrongful death) or any
actual or alleged injury to the environment by reason of the condition of, or
past or present activities on the Real Estate, (c) any actual or alleged
violation of Environmental Law related to the Real Estate, (d) any lawsuit or
administrative proceeding brought or threatened by any person, including any
governmental entity or agency, federal, state or local, including any
governmental order relating to or occasioned by any actual or alleged
Contamination or threat of Contamination, (e) any lien imposed upon the Real
Estate in favor of any governmental entity as a result of any Contamination or
threat of Contamination, and (I) all costs and expenses of any Clean-up. The
Mortgagor represents and covenants that the Mortgagor's storage, generation,
transportation, handling or use, if any, of Hazardous Substances on or from the
Real Estate is currently, and will remain at all times, in compliance with all
applicable Environmental Laws. If any Clean-up is required with respect to the
Real Estate, the Mortgagor shall expeditiously complete such Clean-up at the
Mortgagor's expense and without the necessity of demand by the Bank. If the
Mortgagor should fail to initiate and diligently pursue any Clean-up or should
otherwise fail to perform any obligation under the terms of this paragraph, the
Bank may, at its sole discretion and without any obligation to complete any
Clean-up which it may cause to be commenced, cause the Clean-up or partial
Cleanup of the Real Estate and pay on behalf of the Mortgagor any costs, fines
or penalties imposed On the Mortgagor pursuant to any Environmental Laws or make
any other payment or perform any other action which will prevent a lien in favor
of any federal, state or local government authority or any other person from
attaching to the Real Estate pursuant to the provisions of any Environmental
Law, and all costs and expenses of the Bank incurred in pursuing any of the
remedies provided in this paragraph shall be added to the obligations secured by
this Mortgage, which costs and expenses shall become due and payable without
notice as incurred by the Bank, together with interest thereon at the Prime Rate
plus four percent (4%) per annum until paid.
11. The occurrence of any of the following events shall be deemed a
"Default" under this Mortgage:
a. an "Event of Default" as defined in the Credit Agreement shall have
occurred and be continuing or the Mortgagor shall otherwise fail to
pay or perform any of the Obligations promptly when such payment or
performance is due or within such grace period as may be applicable;
b. the Mortgagor shall fail to pay or perform any of the obligations of
the Mortgagor under this Mortgage when such payment or performance is
due; or
c. the Mortgagor shall abandon the Mortgaged Premises.
12. Upon the occurrence and continuance of a Default, all Obligations
secured hereby shall, at the option of the Bank, become immediately due and
payable and this Mortgage may be foreclosed accordingly. The Bank shall be
entitled to the appointment of a receiver for the Mortgaged Premises to collect
the rents and profits and to maintain the Mortgaged Premises during any
foreclosure proceedings. The Bank shall have the option of proceeding as to both
the Real Estate and the Personal Property in accordance with its rights and
remedies in respect of the Real Estate, in which event the default provisions of
the Michigan Uniform Commercial Code shall not apply. If the Bank elects to
proceed with respect to the Personal Property separately from the Real Estate,
the requirement of the Michigan Uniform Commercial Code and of the Indiana
Uniform Commercial Code as to reasonable notice of any proposed sale or
disposition of the Personal Property shall be met if such notice is delivered or
mailed to the Mortgagor at its address stated above at least ten (10) days prior
to such sale or disposition. In any action to foreclose this Mortgage, the Bank
shall be entitled to recover, in addition to all reasonable attorney and related
paraprofessional expenses incurred in connection therewith, all other reasonable
costs and expenses associated with foreclosure including, without limitation,
all expenses incurred for title searches, abstracts of title, title insurance,
appraisals, surveys and environmental assessments reasonably deemed necessary by
the Bank, all of which costs and expenses shall be additional amounts secured by
this Mortgage. As used in the preceding sentence, the term "environmental
assessments " means inspections and reports of environmental engineers or firms
of environmental engineers or other appropriate experts, and associated
samplings and testings of soil or groundwater, the purpose of which is to
determine whether there is any Contamination associated with the Real Estate and
if so, the extent thereof, and to estimate of the cost of Clean-up of any
Contamination, and to determine whether there are any underground storage tanks
or any asbestos in, on, or under the Real Estate and if so, whether there are
any violations of Environmental Laws in connection therewith. As used in this
paragraph, the terms "Contamination," "Clean-up,~~ and "Environmental Laws" are
used as defined numbered Paragraph 10.
13. Power is hereby granted to the Bank, if a Default exists, to grant,
bargain, sell, release and convey the Mortgaged Premises and appurtenances at
public auction or vendue, and on such sale to execute and deliver to the
purchasers, his, her, its or their heirs, successors and assigns, good, ample
and sufficient deed or deeds of conveyance in law, pursuant to the statute in
such case made and provided, and to apply the proceeds of such sale in the
manner hereinafter provided.
a. Upon a foreclosure sale of the Mortgaged Premises or any part thereof,
the proceeds of such sale shall be applied in the following order:
(i) to the payment of all costs of the suit or foreclosure, including
reasonable attorneys' fees and the cost of title insurance,
searches and abstracts;
(ii) to the payment of all other expenses of the Bank and the Bank,
including all monies expended by the Bank and all other amounts
payable by the Mortgagor to the Bank, the Bank or to any Bank
hereunder, with interest thereon;
(iii)to the payment of the principal and interest of the Obligations
secured hereby; and
(iv) to the payment of the surplus, if any, to the Mortgagor or to
whosoever shall be entitled thereto.
b. Upon any foreclosure sale of the Mortgaged Premises, the same may be
sold either as a whole or in parcels, as the Bank may elect, and if in
parcels, the same may be divided as the Bank may elect, and at the
election of the Bank may be offered first in parcels and then as a
whole, that offer producing the highest price for the entire Mortgaged
Premises to prevail, any law, statutory or otherwise, to the contrary
notwithstanding, and the Mortgagor hereby waives the right to require
any such sale to be made in parcels or the right to select such
parcels.
14. The Bank shall have the right to make all divisions under Section 108
of the Land Division Act, Act No. 288 of the Public Acts of 1967.
15. WARNING -- THIS MORTGAGE CONTAINS A POWER OF SALE AND, UPON DEFAULT,
MAY BE FORECLOSED BY ADVERTISEMENT. IN FORECLOSURE BY ADVERTISEMENT, NO HEARING
IS INVOLVED AND THE ONLY NOTICE REQUIRED IS TO PUBLISH NOTICE IN A LOCAL
NEWSPAPER AND TO POST A COPY OF THE NOTICE ON THE PROPERTY.
16. WAIVER -- IF THIS MORTGAGE IS FORECLOSED BY ADVERTISEMENT, THE
MORTGAGOR HEREBY VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY WAIVES ALL RIGHTS
UNDER THE CONSTITUTION AND LAWS OF THE STATE OF MICHIGAN AND CONSTITUTION AND
LAWS OF THE UNITED STATES TO ALL NOTICE AND A HEARING IN CONNECTION WITH THE
ABOVE MENTIONED FORECLOSURE BY ADVERTISEMENT, EXCEPT AS SET FORTH IN THE
MICHIGAN STATUTE PROVIDING FOR FORECLOSURE BY ADVERTISEMENT.
17. In connection with the Bank's right to possession of the Mortgaged
Premises upon a Default, the Mortgagor acknowledges that it has been advised
that there is a significant body of case law in Michigan which purportedly
provides that in the absence of a showing of waste of a character sufficient to
endanger the value of the Mortgaged Premises or other special factors, a
mortgagor is entitled to remain in possession of mortgaged premises, and to
enjoy the income, rents and profits therefrom, during the pendency of
foreclosure proceedings and until the expiration of the redemption period, even
if the mortgage documents expressly provide to the contrary. The Mortgagor
further acknowledges that it has been advised that the Bank recognizes the value
of the security covered hereby is inextricably intertwined with the
effectiveness of the management, maintenance and general operation of the
Mortgaged Premises, and that the Bank would not make the loans secured hereby
unless they could be assured that they would have the right to take possession
of the Mortgaged Premises through the Bank in order to manage or to control
management thereof, upon a Default, notwithstanding that foreclosure proceedings
may not have been instituted, or are pending, or the redemption period may not
have expired. ACCORDINGLY, THE MORTGAGOR HEREBY KNOWINGLY, INTELLIGENTLY AND
VOLUNTARILY WAIVES ALL RIGHT TO POSSESSION OF THE MORTGAGED PREMISES FROM AND
AFTER THE DATE OF A DEFAULT, UPON DEMAND FOR POSSESSION BY THE BANK, AND THE
MORTGAGOR AGREES NOT TO ASSERT ANY OBJECTION OR DEFENSE TO THE BANK REQUEST OR
PETITION TO A COURT FOR POSSESSION. THE RIGHTS HEREBY CONFERRED UPON THE BANK
HAVE BEEN AGREED UPON PRIOR TO ANY DEFAULT AND THE EXERCISE BY THE BANK OF ANY
SUCH RIGHTS SHALL NOT BE DEEMED TO PUT THE BANK IN THE STATUS OF A "MORTGAGEE IN
POSSESSION." THE MORTGAGOR ACKNOWLEDGES THAT THIS PROVISION IS MATERIAL TO THIS
TRANSACTION AND THAT THE BANK WOULD NOT MAKE THE LOANS SECURED HEREBY BUT FOR
THIS PARAGRAPH.
18. The Bank, at its option and on such terms as it may desire, may extend
the time of payment or performance of any part or all of the Obligations or
release any part of the Mortgaged Premises from the lien of this Mortgage
without impairing the lien of this Mortgage except as to the portion of the
Mortgaged Premises expressly released and without releasing the Mortgagor or any
guarantors or sureties of or from any of the Obligations. No delay by the Bank
in the exercise of any of its rights under this Mortgage shall preclude the
subsequent exercise thereof so long as any Default continues uncured, and no
waiver by the Bank of any Default of the Mortgagor shall operate as a waiver of
subsequent or other Defaults. The making of any payment by the Bank for any of
the purposes herein permitted shall not constitute a waiver of any breach of the
Mortgagor's covenant to perform such act. Notice by the Bank of its intention to
exercise any right or option under this Mortgage is expressly waived by the
Mortgagor, and any one or more of the Bank's rights or remedies under this
Mortgage may be enforced successively or concurrently. Time is of the essence of
this Mortgage.
19. All obligations of the Mortgagor under this Mortgage shall extend to
and be binding upon the successors and assigns of the Mortgagor, and shall inure
to the benefit of the Bank, and its successors and assigns.
20. This Mortgage secures indebtedness incurred for a business purpose.
21. This Mortgage is given, in part, for the purpose of securing loan
advances which the Bank may make to or for the Mortgagor pursuant and subject to
the terms and provisions of the Credit Agreement. The parties hereto intend
that, in addition to any other debt or obligation secured hereby, this Mortgage
shall secure unpaid balances of loan advances made after this Mortgage is
delivered to the Register of Deeds of St. Xxxxxx County, Michigan, whether made
pursuant to an obligation of the Bank or otherwise, and in such event, such
advances shall be secured to the same extent as if such future advances were
made on the date hereto, although there may be no advance made at the time of
execution hereof and although there may be no indebtedness outstanding at the
time any advance is made. THIS MORTGAGE IS A FUTURE ADVANCE MORTGAGE AND SECURES
FUTURE ADVANCES, INCLUDING PROTECTIVE ADVANCES, BOTH AS DEFINED IN ACT 35 OF THE
PUBLIC ACTS OF 1992, AS AMENDED, BEING MCLA ss.565.901, et seq. Such loan
advances may or may not be evidenced by notes executed pursuant to the Credit
Agreement.
22. This Mortgage shall be governed by and construed and enforced in all
cases by the substantive laws of the State of Michigan.
Dated as of July ____, 2001.
Signed and acknowledged UNITED ACQUISITION, INC., an Indiana
in the presence of: corporation
_________________________________ By:_________________________________
--------------------------------- ------------------------------------
(Printed name) (Printed name and title)
---------------------------------
---------------------------------
(Printed name)
STATE OF ____________ )
) SS:
COUNTY OF _________ )
Before me, a Notary Public in and for the above County and State,
personally appeared ______________________________, the
__________________________ of UNITED ACQUISITION, INC., an Indiana corporation,
who as such officer acknowledged the execution of the foregoing Mortgage,
Security Agreement, Assignment of Rents and Fixture for and on behalf of said
corporation this _____ day of July, 2001.
Signature: ___________________________
Printed: _____________________________
Notary Public
My Commission Expires: _________________
My County of Residence: _________________
THIS INSTRUMENT PREPARED BY:
Xxxxxxx X. Xxxxxx, Esquire
KROGER, GARDIS & XXXXX, L.L.P.
Suite 900
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone No.: (000) 000-0000
SCHEDULE
All that real estate in St. Xxxxxx County, Michigan, described as follows:
That part of Xxxxxxx and Holabird's Addition to the Village of Mottville,
according to plat of record in the Office of the Register of Deeds for St.
Xxxxxx County, Michigan in Liber C of Deeds on Page 272, described as follows:
Commencing at the Southeast corner of Section 19 of Xxxxxxx and Holabird's
Addition; thence South 89(degree)52' West 471.20 feet (measured 471.53 feet);
thence South 00(degree)46' West 438.20 feet (measured South 00(degree)46'23"
West 438.03 feet); thence North 89(degree)52' East 477.12 feet (measured North
89(degree)57'30" East 476.52 feet); thence North 438.74 feet to the point of
beginning.
Together with an easement for ingress and egress over the South 35 feet of the
following:
That part of Section (Block) 18, Xxxxxxx and Holabird's Addition to the Village
of Mottville, according to plat of record in the Office of the Register of Deeds
for St. Xxxxxx County, Michigan in Liber C of Deeds on Page 272. described as
follows:
Commencing at a point that is South 33 feet and South 89(degree)52' West 819.5
feet from the intersection of the centerline of Union and Cecalia Streets in the
Village of Mottville; thence continuing South 89(degree)52' West 114.75 feet to
the centerline of Xxxxxxx X-000; thence South 28(degree)49' West along the
centerline of said highway, 226 feet: thence on a 02(degree)30' curve to the
left the long chord of which is South 26(degree)51' West 127.74 feet; Thence
North 89(degree)52' East 239.75 feet; thence South 00(degree)46' West 5.15 feet;
thence North 89(degree)52' East 141.70 feet; thence North 242 feet; thence South
89(degree)52' West 100 feet; thence North 75 feet to the point of beginning.
Exhibit "J"
SUBORDINATION AGREEMENT
UNITED ACQUISITION, INC., an Indiana corporation (the "Company"), FIRST
INDIANA BANK, a federal savings bank (the "Bank"), and UNITED EXPRESSLINE, INC.,
an Indiana corporation (the "Junior Creditor"), agree as follows:
1. Background --Definitions. This Agreement is made in the context of the
following agreed state of facts:
a. The Bank and the Company are parties to a Credit Agreement dated
the date of this Subordination Agreement under the terms of which
the Bank will extend a revolving line of credit (the "Revolving
Loan") to the Company for loans up to a maximum outstanding
principal amount of $3,500,000.00, a term loan (the "Term Loan")
in the principal amount of $291,000.00, a second term loan ("Term
Loan II") in the principal amount of $1,116,000.00, and a third
term loan ("Term Loan III") in the principal amount of
$1,750,000.00. The Revolving Loan, the Term Loan, Term Loan II,
and Term Loan III are hereafter referred to collectively as the
"Loans," and the Term Loan, Term Loan II, and Term Loan Ill, are
hereafter sometimes referred to collectively as the "Term Loans."
All obligations of the Company to the Bank on account of the
Loans, whether such obligations now exist or arise hereafter,
including principal, interest and expenses of collection, and
including any obligations on account of any extension, renewal or
restructuring of the Loans, are hereafter referred to as the
"Senior Obligations."
b. The Company is indebted to the Junior Creditor in the principal
amount of $1,500,000.00. The indebtedness of the Company to the
Junior Creditor is represented by the promissory note of the
Company dated July ____, 2001 (the "Subordinated Note"). Any
promissory note which may hereafter be given by the Company to
the Junior Creditor to replace the Subordinated Note or to
represent any extension, renewal or restructuring of the
indebtedness now represented by the Subordinated Note is
hereafter referred to as a "Substitute Subordinated Note." All
obligations of the Company to the Junior Creditor now represented
by the Subordinated Note or any Substitute Subordinated Note are
hereafter referred to as the "Junior Obligations.
As used in this Agreement, the term "Loan Document" means any instrument or
document which evidences or secures the Loans or any of them or which expresses
an agreement between the Company and the Bank as to terms applicable to the
Loans or any of them. As used in this Agreement, the term "Default" means an
Event of Default or Unmatured Event of Default as those terms are defined in the
Credit Agreement and includes, without limitation, not only failure of the
Company to pay any installment of principal or interest on any of the Loans when
due, but also failure of the Company to observe certain covenants contained in
the Credit Agreement, including financial covenants. As used in this Agreement,
the term "Insolvency Proceeding" means any proceeding, whether voluntary or
involuntary, for the distribution, division or application of assets of the
Company or the proceeds thereof, regardless of whether such proceeding is for
the liquidation, dissolution, winding up of affairs, reorganization or
arrangement of the obligations of the Company, or for a composition among the
creditors of the Company and whether in bankruptcy or in connection with a
receivership or under an assignment for the benefit of the Creditors of the
Company or otherwise including, without limitation, any meeting of Creditors of
the Company in connection with any such proceeding.
2. Subordination. The Junior Obligations are and shall hereafter be
subordinate and inferior in right of payment to all of the Senior Obligations.
Notwithstanding any provision to the contrary contained in the Subordinated Note
or any other agreement between the Company and the Junior Creditor with respect
to the Junior Obligations, the Company shall not make and shall not be required
to make any payment on account of the principal of or interest on the Junior
Obligations until the Senior Obligations have been paid in full and the Bank has
no further obligation to make additional advances to the Company under the
Revolving Loan, including advances made pursuant to any extension of the term of
the Revolving Loan; provided, that the Company may make the regularly scheduled
payments of interest provided for under the terms of the Subordinated Note so
long as no Default has occurred and is continuing or would occur as a result of
such payment, and, provided further, that no such payment shall be made more
than ten (10) days prior to its regularly scheduled due date. Further, the
Junior Creditor agrees that the Junior Obligations shall be and remain at all
times unsecured.
The Company shall not be required to perform or omit any other act
otherwise required to be performed or omitted under the terms of the
Subordinated Note or otherwise with respect to the Junior Obligations at any
time such performance or omission would result in the occurrence of a Default.
The due date for any payment or performance of any Junior Obligation shall be
deemed to be extended during any period in which such payment or performance is
prevented by the provisions of this Agreement, and no cause of action against
the Company will accrue to the Junior Creditor or any subsequent holder of the
Junior Obligations during the continuance of any such extension.
3. Limitation on Right of Action. Notwithstanding anything to the contrary
contained in any of the documents evidencing, securing, or pertaining to the
Junior Obligations (collectively~, the "Junior Documents"), the Junior Creditor
agrees that, while any Senior Obligations are outstanding, the Junior Creditor
shall not take any Enforcement Action (as hereinafter defined) with respect to
the Junior Obligations, unless:
(a) the Bank shall have taken an action to realize or foreclose upon
any collateral securing the Senior Obligations; or
(b) a proceeding under the Bankruptcy Code or any similar state
statute or law (including any law providing for the appointment
of a receiver or other similar official) shall have been
commenced by or against the Company by persons other than the
Junior Creditor.
As used herein, the term "Enforcement Action" means (a) the acceleration of
all or any portion of the Junior Obligations, (b) any realization or foreclosure
upon any collateral securing the Junior Obligations, (c) any demand by the
Junior Creditor for payment of the Junior Obligations, (d) the enforcement of
any of the rights or remedies, contractual or otherwise, of the Junior Creditor,
whether at law, suit in equity, arbitration proceedings or otherwise, in
furtherance of the actions set forth in provisions (a), (b), and (c) above.
4. Improper Payment. Any amount paid by the Company to the Junior Creditor
in violation of any provision of this Agreement shall be received in trust by
the Junior Creditor for the benefit of the Bank and shall, with or without
demand, be immediately delivered by the Junior Creditor to the Bank in the same
form in which received, with the addition only of such endorsements or
assignments as may be necessary to perfect the title of the Bank to such
payment. Such amounts may be applied by the Bank to any item of the Senior
Obligations in such order as the Bank in its discretion shall determine or may
be returned to the Company at the Bank's discretion. Upon the request of the
Bank, the Company and the Junior Creditor will execute such documents and
perform all such other acts as may reasonably be required to rescind premature
performance of any Junior Obligation and to reestablish, to the maximum extent
practical, the status quo prior to such premature performance.
5. Authority of Bank to Act for Junior Creditor. The Junior Creditor
appoints the Bank or, at the Bank's discretion any officer of the Bank, as the
Junior Creditor's attorney-in-fact, with full power of substitution, and with
the exclusive right and power to enforce claims arising on account of the Junior
Obligations by proof of debt, proof of claim or otherwise in any Insolvency
Proceeding; to collect any assets of the Company distributed in any such
Proceeding by way of dividend or otherwise, and to receive any securities of the
Company or of any reorganized entity emerging from any Insolvency Proceeding,
which securities are issued and distributed on account of the Junior
Obligations; to vote claims of the Junior Creditor arising on account of the
Junior Obligations in any Insolvency Proceeding and to accept or reject any plan
of partial or complete liquidation, reorganization, arrangement, composition or
extension in any Insolvency Proceeding; to execute any endorsement or assignment
of the Subordinated Note or any Substitute Subordinated Note required in
connection with any Insolvency Proceeding, and generally to take any action in
connection with any Insolvency Proceeding which the Junior Creditor would be
authorized to take but for this Agreement. Any action taken by the Bank or the
Bank's officer pursuant to the power of attorney granted under the terms of this
Paragraph shall be taken for the use and benefit of the Bank, and may be taken
in the name of the Bank or in the name of the Junior Creditor and without notice
to the Junior Creditor. Such power of attorney is a power coupled with an
interest and shall be irrevocable until all of the Senior Obligations have been
satisfied in full and until the Bank is no longer under any obligation under the
terms of the Credit Agreement to make any further loan or advance to the
Company.
6. Distributions in Liquidation. In the event of the liquidation of the
Company or the distribution of any of its assets or the securities of any
successor on account of any liquidation, bankruptcy, receivership,
reorganization, assignment for the benefit of creditors or similar proceeding,
the Junior Creditor shall not be entitled to any payment or distribution on
account of any Junior Obligation until all Senior Obligations have been
satisfied in full, and the Junior Creditor shall receive any money, securities
or other property distributed in any such proceeding to the Junior Creditor on
account of Junior Obligations in trust for the benefit of the Bank and shall
deliver any such property to the Bank in the same form as received, adding only
such endorsements or assignments as may be necessary to perfect the title of the
Bank to such property, for application to the satisfaction of the Senior
Obligations in such order as the Bank in its discretion may determine. Any
excess of such property remaining after satisfaction of all of the Senior
Obligations shall be returned to the Junior Creditor. The Bank may liquidate any
noncash property received from the Junior Creditor because of any provision of
this Section in the manner in which collateral may be liquidated under the terms
of the Uniform Commercial Code as enacted in the State of Indiana, and such
property may be liquidated in any order that the Bank shall determine in the
exercise of the Bank's sole discretion.
7. Subordination Absolute. The subordination of the Junior Obligations to
the Senior Obligations effected by this Subordination Agreement shall be
absolute and the Bank may from time to time, without the consent of or notice to
the Junior Creditor and without affecting the subordination of the Junior
Obligations to the Senior Obligations: (i) obtain a security interest in any
property to secure any of the Senior Obligations; (ii) obtain the primary or
secondary liability of any party or parties in addition to the Company with
respect to any of the Senior Obligations; (iii) extend or renew any of the
Senior Obligations for any period beyond their original due dates; (iv) release
or compromise any liability of any other party or parties primarily or
secondarily liable with respect to any of the Senior Obligations; (v) release
any security interest that the Bank might now have or hereafter obtain in any
property securing any of the Senior Obligations and permit any substitution or
exchange of any such property; (vi) extend loans and other credit accommodations
to the Company in addition to the Revolving Loan and the Term Loans and increase
the maximum amount which may be loaned to the Company under the Revolving Loan;
provided, that nothing contained in this Agreement shall be construed so as to
require the Bank to apply the proceeds of collateral or guaranties held for both
the Senior Obligations and other obligations of the Company which are not
entitled to the benefit of this Agreement in any particular order.
8. Notice of Subordination. The Company and the Junior Creditor shall,
contemporaneously with the execution of this Agreement, cause the following
legend to be placed on the face of the Subordinated Note:
This Promissory Note is subject to a Subordination Agreement dated as
of July ____ 2001, in favor of FIRST INDIANA BANK.
A photocopy of the Note with such legend endorsed thereon shall immediately
be delivered to the Bank. The same legend shall be placed on any Substitute
Subordinated Note before it is delivered to the Junior Creditor and a photocopy
of any Substitute Subordinated Note shall be delivered to the Bank immediately
upon its execution and delivery to the Junior Creditor.
9. Successors and Assigns. This Agreement shall be binding upon the Company
and the Junior Creditor and the Junior Creditor's successors in interest to the
Subordinated Note and any Substitute Subordinated Note and the Junior
Obligations and shall inure to the benefit of the Bank and its successors and
assigns.
10. Severability. If any provision of this Agreement is determined to be
illegal or unenforceable, such provision shall be deemed to be severable from
the balance of the provisions of this Agreement and the remaining provisions
shall be enforceable in accordance with their terms.
11. Governing Law. This Agreement is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
Dated as of July ___ 2001.
UNITED ACQUISITION, INC., an Indiana corporation
By: ________________________________
------------------------------------
(Printed Name and Title)
FIRST INDIANA BANK, a federal savings bank
By: ________________________________
Xxxxxxx X. Xxxxxxxxx, Vice President
UNITED EXPRESSLINE, INC., an Indiana corporation
By: ________________________________
____________________________________
(Printed Name and Title)
Exhibit "K"
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement"), dated the ____ day of
July, 2001, is entered into by and among THE HUNTINGTON CAPITAL INVESTMENT
COMPANY (the "Subordinated Lender"), FIRST INDIANA BANK, a federal savings bank
("Bank" or "Senior Lender"), and UNITED ACQUISITION, INC., an Indiana
corporation (the "Company").
WHEREAS, the Senior Lender and the Subordinated Lender desire to enter into
this Agreement in order to set forth the relative rights among such parties in
respect of certain indebtedness and obligations owing to such parties by the
Company.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. SUBORDINATION OF SUBORDINATED INDEBTEDNESS. The payment of the
Subordinated Indebtedness and the rights of the holders thereof are subordinated
to the payment of the Senior Indebtedness and the rights of the holders thereof
to the extent specified in this Section 1.
1.1 Certain Definitions. As used in this Section 1, the following terms
have the following respective meanings:
"Bankruptcy Code" shall mean 11 X.X.X.xx. 101 et seq., as from time to
time hereafter amended, and any successor or similar statute.
"Blockage Period" shall have the meaning specified in Section 1.4(a).
"Company" has the meaning set forth in the preamble to this Agreement,
together with any permitted successors and assigns.
"Enforcement Action" means, with respect to the holders of the Senior
Indebtedness or the holders of the Subordinated Indebtedness, as
applicable, (a) the acceleration of all or any portion of the Senior
Indebtedness or the Subordinated Indebtedness, as applicable, (b) any
realization or foreclosure upon any collateral securing the Senior
Indebtedness or the Subordinated Indebtedness, as applicable, (c) any
demand by any holder of the Senior Indebtedness or any holder of the
Subordinated Indebtedness, as applicable, for payment thereof other
than a demand for payments to bring the Senior Indebtedness or the
Subordinated Indebtedness, as applicable, current on a non accelerated
basis (including any notice of such a demand), (d) subject to the
following proviso, the enforcement of any of the rights or remedies,
contractual or otherwise, of any holder of the Senior Indebtedness or
and holder of the Subordinated Indebtedness, as applicable, whether at
law, suit in equity, arbitration proceedings or otherwise, in
furtherance of the actions set forth in provisions (a), (b), and (c)
above; provided, however, that this clause (d) shall not include or be
deemed to include the giving of notices (including routine notices
under the Senior Bank Agreement or Note Purchase Documents, as
applicable, notices of default or event of default, and notices of
breaches of covenants and other provisions of the Senior Bank
Agreement or Note Purchase Documents, as applicable) or the making of
requests or the delivery of other communications pursuant to and upon
the terms permitted or otherwise contemplated by the Senior Bank
Agreement or Note Purchase Documents, as applicable. Notwithstanding
anything contained herein, no holder of Subordinated Indebtedness
shall make any demand for payments to bring the Subordinated
Indebtedness current on a non accelerated basis (including any notice
of such a demand) if a Blockage Period shall then be in effect or
shall initiate an Enforcement Action during a Blockage Period.
"Event of Default" shall have the meaning specified in the Senior Bank
Agreement.
"Liquidation Payment" shall have the meaning specified in Section 1.3.
"Note Purchase Agreement" shall mean that certain Note Purchase
Agreement, dated as of even date herewith entered into by and between
the Company and the Subordinated Lender, as amended, modified and
supplemented from time to time.
"Note Purchase Documents" shall mean, collectively, the Note Purchase
Agreement, the Senior Subordinated Notes, and any and all other
agreements, documents or instruments (together with any and all
amendments, modifications, and supplements thereto, restatements
thereof, and substitutes therefor to the extent not prohibited
hereunder) previously, now or hereafter executed and delivered by the
Company, the Subordinated Lender or any other Person in connection
with the Senior Subordinated Notes.
"Permitted Securities" means shares of stock or other securities of
the Company or another corporation which are subordinated at least to
the same extent as the Subordinated Indebtedness.
"Person" shall mean an individual, a corporation, a limited liability
company, an association, a joint-stock company, a business trust or
other similar organization, a partnership, a joint venture, a trust,
an unincorporated organization or a government or any agency,
instrumentality or political subdivision thereof.
"Senior Bank Agreement" shall mean that certain Credit Agreement dated
as of even date herewith entered into by and between the Company and
the Senior Lender, as amended or otherwise modified or supplemented
from time to time.
"Senior Bank Documents" shall mean, collectively, the Senior Bank
Agreement and any and all promissory notes, and other agreements,
documents, instruments and security documents (together with any and
all amendments, modifications, and supplements thereto, restatements
thereof, and substitutes therefor to the extent not prohibited
hereunder) previously, now or hereafter executed and delivered in
connection with the Senior Indebtedness.
"Senior Default" shall have mean any Event of Default as defined in
the Senior Bank Agreement.
"Senior Indebtedness" shall mean the principal amount of any
indebtedness of the Company now existing or hereafter incurred or due
under the Senior Bank Agreement (or under any agreement executed in
connection with any extension, refinancing, refunding or renewal
thereof) and under the Senior Bank Documents, together with any
interest (including any interest accruing after the commencement of
any action or proceeding under any bankruptcy, insolvency or other
similar law, and any interest that would have accrued but for the
commencement of any such proceeding, whether or not any such interest
is allowed as an enforceable claim in such proceeding) and premium or
other amount (including any fee or expense) due thereon or payable
with respect thereto, including any such amounts payable by any
guarantor thereof; provided, that for purposes of the subordination
provisions hereof, Senior Indebtedness shall not exceed in the
aggregate for principal the amount of $7,500,000 (subject to the
provisions of Section 1 .2(c)(ii) hereof).
"Senior Lender" shall mean Bank and each other holder from time to
time of any Senior Indebtedness.
"Senior Subordinated Notes" shall mean the Senior Subordinated Note
due July 31, 2006, in the principal amount of $3,500,000, issued by
the Company pursuant to the Note Purchase Agreement (together with any
and all amendments, modifications, and supplements thereto,
restatements thereof, and substitutes therefor to the extent not
prohibited hereunder).
"Subordinated Lender Default" shall mean any Event of Default as
defined in the Note Purchase Agreement.
"Subordinated Indebtedness" shall mean the principal amount of the
indebtedness evidenced by the Senior Subordinated Notes, together with
any interest (including any interest accruing after the commencement
of any action or proceeding under any bankruptcy, insolvency or other
similar law, and any interest that would have accrued but for the
commencement of any such proceeding, whether or not any such interest
is allowed as an enforceable claim in such proceeding), and premium
and any other amount (including any fee or expense) due thereon or
payable, if any, with respect thereto, including any such amounts
payable by any guarantor thereof and including any and all obligations
of the Company under any of the Note Purchase Documents.
"Subordinated Lender" has the meaning ascribed thereto in the preamble
to this Agreement, together with any successors and assigns.
"Subordination Notice" shall have the meaning specified in Section
1.4.
1.2 Subordinated Indebtedness Subordinated to Senior Indebtedness: No
Amendments.
(a) The Company for itself and its successors and assigns, and
for its subsidiaries and the successors and assigns of such
subsidiaries, covenants and agrees, and each holder of any
Subordinated Indebtedness, by its acceptance thereof, shall be deemed
to have agreed, notwithstanding anything to the contrary in any of the
Note Purchase Documents, that the payment of the Subordinated
Indebtedness shall be subordinated to the extent and in the manner set
forth in this Section 1, to the prior payment in full in cash or cash
equivalents of all Senior Indebtedness, and that each holder of Senior
Indebtedness, whether now outstanding or hereafter created, incurred,
assumed or guaranteed, shall be deemed to have acquired Senior
Indebtedness in reliance upon the provisions contained in this Section
1. No present or future holder of Senior Indebtedness shall be
prejudiced in the right to enforce the subordination of the
Subordinated Indebtedness effected pursuant to this Section 1 by any
act or failure to act on the part of the Company.
(b) Neither this Section 1 nor any of the terms of the
Subordinated Indebtedness shall be amended or otherwise modified
without the written consent of the Senior Lender; provided, however,
that (i) the Subordinated Lender may, without the consent of the
Senior Lender, waive defaults, extend the maturity of the Subordinated
Indebtedness and enter into any other amendments, the effect of which
is to make the terms of the Subordinated Indebtedness less restrictive
on the Company than prior to such amendment, and (ii) that if the
Senior Bank Agreement is amended in a manner that adds a financial
covenant or any other material covenant or any default or makes an
existing financial covenant or other material covenant or any default
more restrictive on the Company or any of its Subsidiaries, then the
Subordinated Lender and the Company and the affected Subsidiary shall
be permitted, without the consent of the Senior Lender, to make the
same amendment or modification to the Note Purchase Documents, it
being understood that any amendment to or modification of the
financial covenants will continue to maintain (on a financial covenant
by financial covenant basis) the same percentage spread between those
contained in the Senior Bank Agreement and those contained in the Note
Purchase Agreement, each as in effect on the date hereof.
(c) Without the written consent of the Subordinated Lender, no
amendment or modification shall be made to the Senior Bank Documents,
nor shall any refinancing of the Senior Indebtedness be effectuated,
which (i) increases the principal amount of Senior Indebtedness in
excess of $7,500,000 in the aggregate at any one time outstanding;
provided, that this Agreement shall not be terminated or invalidated
in any respect in the event the aggregate principal amount of Senior
Indebtedness exceeds $7,500,000 at any time, nor shall any cause of
action accrue against the Senior Lender in favor of the Subordinated
Lender as a consequence thereof, it being understood that the
subordination of the Subordinated Indebtedness shall be effective as
to Senior Indebtedness not exceeding $7,500,000 in the aggregate, or
(ii) renews or reschedules the time for payment of the Term Loan, Term
Loan II, or Term Loan III, or modifies the amount of any scheduled
payment of the Term Loan, Term Loan II, or Term Loan III, such that
the aggregate outstanding and unpaid principal amount of the Term
Loan, Term Loan II, Term Loan III, and the Revolving Loan, together
with any other term indebtedness which may be extended by the Senior
Lender to the Company, on July 31, 2006, exceeds $5,000,000; provided,
that this Agreement shall not be terminated or invalidated in any
respect in the event the aggregate principal amount of Senior
Indebtedness exceeds $5,000,000 on July 31, 2006, nor shall any cause
of action accrue against the Senior Lender in favor of the
Subordinated Lender as a consequence thereof, it being understood that
the subordination of the Subordinated Indebtedness shall be effective
as to Senior Indebtedness not exceeding $5,000,000 in the aggregate as
of July 31, 2006, or (iii) increases the applicable interest rate on
any of the Loans comprising the Senior Indebtedness in excess of two
percent (2%) above the rates of interest in effect as of the date
hereof; provided, that nothing herein shall be deemed to restrict the
application by the Senior Lender of any default rate of interest
provided in the Senior Bank Documents at any time or from time to time
so long as the default rate of interest does not at any time exceed a
rate that is two percent (2%) higher than the default rate in effect
as of the date hereof.
(d) The Senior Lender hereby consents to the Subordinated Lender
taking liens and security interests in the collateral described in the
Senior Bank Documents as in effect on the date hereof (together with
such other collateral in which the Subordinated Lender obtains a lien
or security interest with the consent of the Senior Lender, the
"Collateral"). Notwithstanding the order of perfection or the failure
of the Senior Lender's liens and security interests in the Collateral
to be or remain perfected, the Subordinated Lender hereby subordinates
its existing and any future security interests in the Collateral to
the existing and future security interests of the Senior Lender in the
Collateral. The Subordinated Lender agrees that, anything contained in
any documents evidencing the Subordinated Indebtedness, any financing
statement or any existing or future agreement between the Subordinated
Lender and the Company to the contrary notwithstanding, the
Subordinated Lender does not presently hold, and shall not obtain or
acquire, without the prior written consent of the Senior Lender, any
security interest, lien or other interest in any equipment, assets, or
real or other property of the Company, other than the Collateral.
1.3 Dissolution, Liquidation, Reorganization, etc. Upon any payment or
distribution of the assets of the Company (or any of its Subsidiaries)
of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution, winding-up, total or partial
liquidation, reorganization, composition, arrangement, adjustment or
readjustment of such Company (or any of its Subsidiaries) or its (or
their) securities, whether voluntary or involuntary, or in bankruptcy,
insolvency, reorganization, liquidation or receivership proceedings,
or upon a general assignment for the benefit of creditors, or any
other marshaling of the assets and liabilities of such Company (or any
of its Subsidiaries), or otherwise (hereinafter a "Liquidation
Payment"), then and in any such event:
(a) the holder of the Senior Indebtedness shall be entitled to
receive payment in full in cash or cash equivalents (or to have such
payment duly provided for in cash or cash equivalents in a manner
reasonably satisfactory to the holders of Senior Indebtedness) of all
amounts due or to become due on or in respect of all Senior
Indebtedness before any Liquidation Payment, whether in cash, property
or securities is made on account of or applied to any of the
Subordinated Indebtedness;
(b) any Liquidation Payment, whether in cash, property or
securities to which the holder of the Subordinated Indebtedness would
be entitled except for the provisions of this Section 1, shall be paid
or delivered by any debtor, custodian, liquidating trustee, agent or
other Person making such Liquidation Payment, directly to the holder
of the Senior Indebtedness, or its representative for application to
the payment of the Senior Indebtedness in full in cash or cash
equivalents after giving effect to any concurrent payment or
distribution, or provision therefor, to the holder of such Senior
Indebtedness;
(c) the holder of the Subordinated Indebtedness at the time
outstanding hereby irrevocably authorizes and empowers the holder of
the Senior Indebtedness or such holder's representative to collect and
receive such holder's share of any Liquidation Payment and to receipt
therefor, and, if the holder of Subordinated Indebtedness fails to
file a claim therefor at least ten (10) calendar days prior to the
date established by rule of law or order of court for such filing, to
file, prove and vote such claim therefor (any such claim filed or
proved or with respect to which a vote shall be made by the holder of
the Senior Indebtedness on the behalf of any such holder of
Subordinated Indebtedness shall hereinafter be referred to as the
"Claim"); and
(d) the holder of the Subordinated Indebtedness shall execute and
deliver to the holder of the Senior Indebtedness or its representative
all such further instruments confirming the authorization described in
Section 1.3(c), and shall take all such other action, as may be
reasonably requested by the holder of the Senior Indebtedness or such
representative to enforce such Claims.
Upon any payment or distribution of assets referred to in this
Section 1, the holder of the Subordinated Indebtedness shall be
entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such bankruptcy, insolvency,
reorganization, liquidation, receivership or other proceeding is
pending, or a certificate of the debtor, custodian, liquidating
trustee, agent or other Person making any such payment or distribution
to such holders, for the purpose of ascertaining the Persons entitled
to participate therein, the holders of the Senior Indebtedness, the
then outstanding principal amount of the Senior Indebtedness and any
and all amounts payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Section 1.
1.4 No Payments With Respect to Subordinated Indebtedness in Certain
Circumstances/Blockage Periods.
(a) Subject to the provisions of this Section 1.4(a), and Section
1.4(b), and (c), the Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make, and neither the holder
nor any assignee or successor holder of any Subordinated Indebtedness
will accept or receive any payment or distribution (in cash, property
or securities, by set-off or otherwise), whether direct or indirect,
of or on account of the Subordinated Indebtedness, and no Enforcement
Action shall be commenced by the Subordinated Lender, if, at the time
of such payment or distribution or immediately after giving effect
thereto or at the time of initiation of the Enforcement Action a
Senior Default has occurred and is continuing under the Senior Bank
Agreement; provided, however, that in the event such Senior Default is
based solely on the occurrence of a Subordinated Lender Default under
the Note Purchase Agreement which the Subordinated Lender subsequently
waives in a writing to the Company and to the Senior Lender prior to
the delivery of the notice referenced in Section 1 .4(a)(i) below,
then no Senior Default shall be deemed to have occurred, and if such
waiver by the Subordinated Lender occurs after the delivery of such a
Subordination Notice, the resulting Block Period shall be deemed to
have expired automatically, effective as of the date of such waiver,
and such Blockage Period shall not count toward the maximum of four
(4) Blockage Periods permitted hereunder. Any period during which the
restrictions imposed by this Section 1.4(a) are in effect as a result
of a Senior Default is hereinafter referred to as a "Blockage Period".
The following shall govern Blockage Periods:
(i) The Bank shall give the Company and the holder of the
Subordinated Indebtedness written notice at the addresses shown
on below each party's signature on the signature pages hereto
(each a "Subordination Notice") of such Senior Default, which
notice shall state that it is a "Subordination Notice" and shall
make explicit reference to the provisions of this Section
1.4(a)(i).
(ii) Each Blockage Period triggered by a Senior Default
shall commence on the date of delivery of such Subordination
Notice to the Company and the Subordinated Lender; provided, that
in the event such Senior Default is the result of a default in
the payment when due of all or any portion of the principal of or
interest on any Senior Indebtedness (subject to any grace
periods)(such default called a "Payment Default"), then such
Blockage Period shall commence on the date such payment was due
and payable under the terms of the Senior Bank Documents. For
purposes of this Section 1.4(a): (1) no Blockage Period shall
exceed 180 days in duration; (2) Blockage Periods shall not be in
effect for more than an aggregate of 180 days during any period
of 360 consecutive days; (3) there shall be no more than four
Blockage Periods in effect while this Agreement is in effect;
provided, that in the event upon the expiration of any Blockage
Period the Subordinated Lender is paid all scheduled principal
and accrued and unpaid interest on the Subordinated Indebtedness
coming due during such Blockage Period, then such Blockage Period
shall not count toward the maximum of four Blockage Periods
permitted during the term of this Agreement; and (4) no Blockage
Period shall be triggered by a the same Senior Default; provided,
that a breach of a covenant contained in any of Sections 5(g) or
6 of the Senior Bank Agreement as of any calendar date which
provides the basis for a Senior Default hereunder shall not be
considered the same Senior Default if the same covenant is
breached as of any other calendar date.
(b) The restrictions imposed by Section 1.4(a) shall cease to
apply, and the Company may resume payments in respect of the
Subordinated Indebtedness (including any payments which shall not have
been made on account of the provisions of this Section 1), upon the
earliest to occur of: (i) the cure of the Senior Default by the
Company, (ii) the written waiver thereof by the holder of the Senior
Indebtedness with respect to which such Senior Default shall have
occurred, (iii)the expiration of the applicable Blockage Period, or
(iv) the voluntary termination of such Blockage Period by the holder
of the Senior Indebtedness.
(c) In the event of either: (i) the failure of the Company to pay
the principal of and interest and premium, if any, on any Senior
Indebtedness upon the maturity thereof, or (ii) an acceleration of the
maturity of the principal of any Senior Indebtedness in accordance
with the terms thereof (which acceleration has not been rescinded or
annulled), such Senior Indebtedness shall first be paid in full in
cash or cash equivalents (or provision for such payment in cash or
cash equivalents shall be made in a manner satisfactory to the holder
or holders of such Senior Indebtedness) before any payment or
distribution (in cash, properties or securities, by set-off or
otherwise) is made on account of or applied to the Subordinated
Indebtedness.
1.5 Payments and Distributions Received. If any payment or distribution of
any kind or character, whether in cash, property or securities, shall
be received by any holder of any of the Subordinated Indebtedness in
contravention of this Section 1, such payment or distribution shall be
held in trust for the benefit of, and shall be paid over or delivered
and transferred to, the holders of the Senior Indebtedness, or their
representative or representatives for application to the payment of
the Senior Indebtedness to the extent necessary to pay all such Senior
Indebtedness in full in cash or cash equivalents, after giving effect
to any concurrent payment or distribution, or provision therefor, to
the holders of such Senior Indebtedness. In the event of the failure
of any holder of any of the Subordinated Indebtedness to endorse or
assign any such payment or distribution, the holder of the Senior
Indebtedness (or such holder's representative) is hereby irrevocably
authorized to endorse or assign the same. Each holder of Subordinated
Indebtedness shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of
Senior Indebtedness or to be the agent or representative of any holder
of Senior Indebtedness to establish the identity of the holder of
Senior Indebtedness and its right to any such payment or distribution
for purposes of this Section.
1.6 Subrogation. Subject to the irrevocable payment in full of all Senior
Indebtedness in cash or cash equivalents, if cash, property or
securities otherwise payable or deliverable to the holder of the
Subordinated Indebtedness shall have been applied pursuant to this
Section 1 to the payment of Senior Indebtedness, then and in each such
case, the holder of the Subordinated Indebtedness shall be subrogated
to the rights of each holder of Senior Indebtedness to receive any
further payment or distribution in respect of or applicable to the
Senior Indebtedness; and, for the purposes of such subrogation, no
payment or distribution to the holder of Senior Indebtedness of any
cash, property or securities to which any holder of Subordinated
Indebtedness would be entitled except for the provisions of this
Section 1 shall, and no payment over pursuant to the provisions of
this Section 1 to the holder of Senior Indebtedness by the holder of
the Subordinated Indebtedness shall as between the Company, its
creditors (other than the holder of Senior Indebtedness) and the
holder of Subordinated Indebtedness, be deemed to be a payment by the
Company to or on account of Senior Indebtedness.
1.7 Certain Notices. In the event that: (a) any Senior Indebtedness or
Subordinated Indebtedness shall be transferred and/or shall become due
and payable before the expressed maturity thereof as the result of the
occurrence of a default or any Event of Default, or (b) any term or
provision of any agreement, document or instrument related to the
Senior Indebtedness or Subordinated Indebtedness shall be amended,
modified or supplemented, or compliance therewith waived, the Company
will give immediate written notice in writing of such event to each
holder of Subordinated Indebtedness and Senior Indebtedness (together
with copies of all related agreements, documents and instruments).
Each notice of any transfer of any Senior Indebtedness or Subordinated
Indebtedness shall include the name and address of the applicable
transferee for purposes of this Section 1. The holder of Senior
Indebtedness shall be obligated to give a Subordination Notice (as
defined in Section 1.4) to a holder of Subordinated Indebtedness other
than the initial holders thereof only if the holder or holders of
Senior Indebtedness shall have been furnished written notice of such
other holder's address for purposes of this Section 1. No holder of
Subordinated Indebtedness shall be obligated to give any notice under
this Section to any holder of Senior Indebtedness unless such holder
of Subordinated Indebtedness shall have been furnished written notice
of the address of such holder of Senior Indebtedness for purposes of
this Section 1.
The holder of any Subordinated Indebtedness shall furnish to the
holder of Senior Indebtedness copies of any notice furnished by such
holder to the Company of the occurrence of an Event of Default or
default or Triggering Event (as defined in the Note Purchase
Agreement) under the Senior Subordinated Note.
1.8 Subordination Not Affected, etc. The terms of this Section 1, the
subordination effected hereby, and the rights created hereby of the
holder of the Senior Indebtedness shall not be affected by: (a) any
amendment or modification of or supplement to any Senior Indebtedness
(or any renewal, extension, refinancing or refunding thereof) or any
agreement, document or instrument relating thereto, to the extent not
prohibited by Section 1.2(c), (b)any exercise or non-exercise of any
right, power or remedy under or in respect of any Senior Indebtedness
(or any security or collateral therefor) or pursuant to any agreement,
document or instrument relating thereto, or (c) any waiver, consent,
release, indulgence, delay or other action, inaction or omission, in
respect of any Senior Indebtedness (or any security or collateral
therefor) or pursuant to any agreement, document or instrument
relating thereto, whether or not any holder of any Subordinated
Indebtedness shall have had notice or knowledge of any of the
foregoing.
1.9 Ob1igations Unimpaired. The provisions of this Section 1 are solely
for the purpose of defining the relative rights of the holder of
Senior Indebtedness on the one hand and the holder of Subordinated
Indebtedness on the other hand, and (a) subject to the rights, if any,
under this Section 1 of the holder of Senior Indebtedness, nothing in
this Section 1 shall (i) impair as between the Company and any holder
of any Subordinated Indebtedness as to which such Company is liable,
the obligation of the Company, which is unconditional and absolute, to
pay to the holder thereof all amounts due thereon in accordance with
the terms thereof, or (ii) except as otherwise provided in Sections
1.4 and 1.10, prevent the holder of any Subordinated Indebtedness from
exercising all remedies available to such holder, whether arising
under any agreement, document or instrument related thereto,
applicable law or otherwise, and (b)no Person is entitled to any third
party beneficiary rights or other similar rights on account of or
under this Section 1 other than the holder of the Senior Indebtedness.
The failure to make any payment due in respect of any of the
Subordinated Indebtedness or to comply with any of the terms and
conditions of any of the agreements, documents and instruments related
to any of the Subordinated Indebtedness by reason of any provision of
this Section 1 shall not be construed as preventing the occurrence of
any default or event of default with respect to the Subordinated
Indebtedness.
1.10 Limitation on Right of Action. Notwithstanding anything to the
contrary contained in any of the Note Purchase Documents, the holder
of the Subordinated Indebtedness agrees that, if any Senior
Indebtedness is outstanding, such holder of the Subordinated
Indebtedness will not take any Enforcement Action with respect to the
Subordinated Indebtedness, unless:
(a) the holder or holders of any Senior Indebtedness shall have
taken any action to realize or foreclose upon any collateral securing
the Senior Indebtedness; or
(b) a proceeding under the Bankruptcy Code or any similar state
statute or law (including any law providing for the appointment of a
receiver or other similar official) shall have been commenced by or
against the Company by Persons other than the holders of the
Subordinated Indebtedness; or
(c) both (i) an event of default under the Note Purchase
Agreement shall have occurred and shall have continued uncured and
unwaived at the time of the initiation of any Enforcement Action, (ii)
no Blockage Period shall be in existence at the time of the initiation
of any Enforcement Action, and (iii) not less than 30 days prior to
taking any Enforcement Action with respect to the Subordinated
Indebtedness, the holder of Subordinated Indebtedness shall have given
the holder of Senior Indebtedness written notice of the same (which
notice may be given prior to the expiration of any such Blockage
Period, if applicable), which notice shall specify in reasonable
detail the default on the basis of which such holder of the
Subordinated Indebtedness shall take any Enforcement Action and the
specific Enforcement Action that such holder of Subordinated
Indebtedness then intends to take.
1.11 Legends, etc. The Company covenants to cause each Subordinated Note
(or other instrument evidencing any of the Subordinated Indebtedness)
now or hereafter issued to contain a provision or legend in
substantially the following form:
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE
SENIOR INDEBTEDNESS (AS DEFINED IN THE SUBORDINATION AGREEMENT
HEREINAFTER REFERRED TO) PURSUANT TO, AND TO THE EXTENT PROVIDED IN,
THE SUBORDINATION AGREEMENT DATED AS OF JULY __, 2001 (THE
"SUBORDINATION AGREEMENT") BY THE MAKER HEREOF AND PAYEE NAMED HEREIN
IN FAVOR OF FIRST INDIANA BANK.
1.12 Information Concerning Financial Condition. Each holder of the
Subordinated Indebtedness hereby assumes responsibility for keeping
itself informed of the financial condition of the Company, and any and
all endorsers and guarantors of the Senior Indebtedness and of all
other circumstances bearing upon the risk of nonpayment of the Senior
Indebtedness and/or any other indebtedness that diligent inquiry would
reveal. Each holder of the Subordinated Indebtedness hereby assents to
any extension or postponement of the time of payment of the Senior
Indebtedness or to any other indulgence with respect thereto, to any
substitution, exchange or release of collateral which may at any time
secure the Senior Indebtedness and/or to the addition or release of
any other party or person primarily or secondarily liable therefor.
1.13 Additional Agreements. To the extent not otherwise prohibited by this
Agreement, the Senior Lender may, at any time and from time to time,
enter into such agreements with the Company as the Senior Lender may
deem proper, extending the time of payment of or renewing or otherwise
altering the terms of all or any of the Senior Indebtedness or
affecting the security underlying any or all of the Senior
Indebtedness, or may exchange, sell, release, surrender or otherwise
deal with any such security, without in any way impairing or affecting
this Agreement thereby.
1.14 Effectiveness: Reinstatement of Subordination. The Subordinated Lender
waives any and all notice from the Senior Lender (except notices
specifically provided for in this Agreement) of the creation or
modification of the Senior Indebtedness and notice of or proof of
reliance by the Senior Lender upon the subordination provided for in
this Agreement. The Senior Indebtedness and the Subordinated
Indebtedness shall each be conclusively deemed to have been created,
contracted or incurred in reliance upon the provisions of this
Subordination Agreement. The provisions of this Agreement shall
continue to be effective or be reinstated, as the case may be, if any
of the Senior Indebtedness is outstanding or becomes outstanding or if
at any time payment of any of the Senior Indebtedness is rescinded or
must otherwise be returned by the holders of the Senior Indebtedness
upon the bankruptcy, insolvency or reorganization of the Company, all
as though such payment had not been made.
2. NOTICES. All communications provided for herein shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of
such communication by a recognized overnight delivery service (charges prepaid),
(b)by a recognized overnight delivery service (charges prepaid), or (c) by
messenger. The respective addresses of the parties hereto for purposes of this
Agreement are set forth on the signature pages hereto.. Any party may change its
address (or telecopy number) by notice to each of the other parties in
accordance with this Section 2. Communications under this Agreement shall be
deemed given only when actually received.
3. BINDING EFFECT. This Agreement shall be binding upon the Company, and
its successors and assigns, each existing and future holder from time to time of
Subordinated Indebtedness, and each existing and future holder from time to time
of any Senior Indebtedness.
4. AMENDMENTS AND WAIVERS. This Agreement may not be amended nor may
compliance with the terms hereof be waived except by a written instrument signed
by the Senior Lender and the Subordinated Lender, it being expressly agreed that
no consent of the Company shall be required for any such amendment or waiver.
5. GOVERNING LAW: JURISDICTION: WAIVER OF JURY TRIAL. This Agreement,
including the validity hereof and the rights and obligations of the parties
hereunder, and all amendments and supplements hereof and all waivers and
consents hereunder, shall be construed in accordance with and governed by the
domestic substantive laws of the State of Indiana without giving effect to any
choice of law or conflicts of law provision or rule that would cause the
application of the domestic substantive laws of any other jurisdiction. EACH OF
THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT,
ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST IT IN RESPECT OF ITS
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
6. MISCELLANEOUS. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof or
thereof. This Agreement embodies the entire agreement and understanding among
the parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. In case any provision in this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. This Agreement may be executed in any number of counterparts
and by the parties hereto, as the case may be, on separate counterparts but all
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above written.
THE HUNTINGTON CAPITAL INVESTMENT COMPANY
By: ______________________________________
------------------------------------------
(Printed name and title)
Address: 41 5. Xxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, Xxxx 00000
xxxx.xxxxxxx@xxxxxxxxxx.xxx
FIRST INDIANA BANK, a federal savings bank
By: ______________________________________
Xxxxxxx X. Xxxxxxxxx, Vice President
Address: 000 X. Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
xxxx.xxxxxxxxx@xxxxxxxxxxxx.xxx
[THIS SPACE LEFT BLANK INTENTIONALLY]
The undersigned hereby acknowledges and agrees to the foregoing
Subordination Agreement, and agrees that it will not pay any of the Subordinated
Indebtedness (as defined in the foregoing Subordination Agreement), except as
permitted by the foregoing Subordination Agreement.
UNITED ACQUISITION, INC., an Indiana corporation
By: ________________________________
----------------------------------
(Printed name and title)
Address:
Bank One Center/Tower - Suite 3680
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Exhibit "L"
SUBORDINATION AGREEMENT
UNITED ACQUISITION, INC., an Indiana corporation (the "Company"), FIRST
INDIANA BANK, a federal savings bank (the "Bank"), and the XXXXXX CORPORATION, a
New York corporation (the "Junior Creditor"), agree as follows:
1. Background--Definitions. This Agreement is made in the context of the
following agreed state of facts:
a. The Bank and the Company are parties to a Credit Agreement dated
the date of this Subordination Agreement under the terms of which
the Bank will extend a revolving line of credit (the "Revolving
Loan") to the Company for loans up to a maximum outstanding
principal amount of $3,500,000.00, a term loan (the "Term Loan")
in the principal amount of $291,000.00, a second term loan ("Term
Loan II") in the principal amount of $1,116,000.00, and a third
term loan ("Term Loan III") in the principal amount of
$1,750,000.00. The Revolving Loan, the Term Loan, Term Loan II,
and Term Loan III are hereafter referred to collectively as the
"Loans," and the Term Loan, Term Loan II, and Term Loan Ill, are
hereafter sometimes referred to collectively as the "Term Loans."
All obligations of the Company to the Bank on account of the
Loans, whether such obligations now exist or arise hereafter,
including principal, interest and expenses of collection, and
including any obligations on account of any extension, renewal or
restructuring of the Loans, are hereafter referred to as the
"Senior Obligations."
b. The Company is indebted to the Junior Creditor in the principal
amount of $500,000.00. The indebtedness of the Company to the
Junior Creditor is represented by the promissory note of the
Company dated July ____, 2001 (the "Subordinated Note"). Any
promissory note which may hereafter be given by the Company to
the Junior Creditor to replace the Subordinated Note or to
represent any extension, renewal or restructuring of the
indebtedness now represented by the Subordinated Note is
hereafter referred to as a "Substitute Subordinated Note." All
obligations of the Company to the Junior Creditor now represented
by the Subordinated Note or any Substitute Subordinated Note are
hereafter referred to as the "Junior Obligations."
As used in this Agreement, the term "Loan Document" means any instrument or
document which evidences or secures the Loans or any of them or which expresses
an agreement between the Company and the Bank as to terms applicable to the
Loans or any of them. As used in this Agreement, the term "Default" means an
Event of Default or Unmatured Event of Default as those terms are defined in the
Credit Agreement and includes, without limitation, not only failure of the
Company to pay any installment of principal or interest on any of the Loans when
due, but also failure of the Company to observe certain covenants contained in
the Credit Agreement, including financial covenants. As used in this Agreement,
the term "Insolvency Proceeding" means any proceeding, whether voluntary or
involuntary, for the distribution, division or application of assets of the
Company or the proceeds thereof, regardless of whether such proceeding is for
the liquidation, dissolution, winding up of affairs, reorganization or
arrangement of the obligations of the Company, or for a composition among the
creditors of the Company and whether in bankruptcy or in connection with a
receivership or under an assignment for the benefit of the Creditors of the
Company or otherwise including, without limitation, any meeting of Creditors of
the Company in connection with any such proceeding.
2. Subordination. The Junior Obligations are and shall hereafter be
subordinate and inferior in right of payment to all of the Senior Obligations.
Notwithstanding any provision to the contrary contained in the Subordinated Note
or any other agreement between the Company and the Junior Creditor with respect
to the Junior Obligations, the Company shall not make and shall not be required
to make any payment on account of the principal of or interest on the Junior
Obligations until the Senior Obligations have been paid in full and the Bank has
no further obligation to make additional advances to the Company under the
Revolving Loan, including advances made pursuant to any extension of the term of
the Revolving Loan; provided, that the Company may make the regularly scheduled
payments of interest provided for under the terms of the Subordinated Note so
long as no Default has occurred and is continuing or would occur as a result of
such payment, and, provided further, that no such payment shall be made more
than ten (10) days prior to its regularly scheduled due date.
The Company shall not be required to perform or omit any other act otherwise
required to be performed or omitted under the terms of the Subordinated Note or
otherwise with respect to the Junior Obligations at any time such performance or
omission would result in the occurrence of a Default. The due date for any
payment or performance of any Junior Obligation shall be deemed to be extended
during any period in which such payment or performance is prevented by the
provisions of this Agreement, and no cause of action against the Company will
accrue to the Junior Creditor or any subsequent holder of the Junior Obligations
during the continuance of any such extension.
3. Improper Payment. Any amount paid by the Company to the Junior Creditor
in violation of any provision of this Agreement shall be received in trust by
the Junior Creditor for the benefit of the Bank and shall, with or without
demand, be immediately delivered by the Junior Creditor to the Bank in the same
form in which received, with the addition only of such endorsements or
assignments as may be necessary to perfect the title of the Bank to such
payment. Such amounts may be applied by the Bank to any item of the Senior
Obligations in such order as the Bank in its discretion shall determine or may
be returned to the Company at the Bank's discretion. Upon the request of the
Bank, the Company and the Junior Creditor will execute such documents and
perform all such other acts as may reasonably be required to rescind premature
performance of any Junior Obligation and to reestablish, to the maximum extent
practical, the status quo prior to such premature performance.
4. Authority of Bank to Act for Junior Creditor. The Junior Creditor
appoints the Bank or, at the Bank's discretion any officer of the Bank, as the
Junior Creditor's attorney-in-fact, with full power of substitution, and with
the exclusive right and power to enforce claims arising on account of the Junior
Obligations by proof of debt, proof of claim or otherwise in any Insolvency
Proceeding; to collect any assets of the Company distributed in any such
Proceeding by way of dividend or otherwise, and to receive any securities of the
Company or of any reorganized entity emerging from any Insolvency Proceeding,
which securities are issued and distributed on account of the Junior
Obligations; to vote claims of the Junior Creditor arising on account of the
Junior Obligations in any Insolvency Proceeding and to accept or reject any plan
of partial or complete liquidation, reorganization, arrangement, composition or
extension in any Insolvency Proceeding; to execute any endorsement or assignment
of the Subordinated Note or any Substitute Subordinated Note required in
connection with any Insolvency Proceeding, and generally to take any action in
connection with any Insolvency Proceeding which the Junior Creditor would be
authorized to take but for this Agreement. Any action taken by the Bank or the
Bank's officer pursuant to the power of attorney granted under the terms of this
Paragraph shall be taken for the use and benefit of the Bank, and may be taken
in the name of the Bank or in the name of the Junior Creditor and without notice
to the Junior Creditor. Such power of attorney is a power coupled with an
interest and shall be irrevocable until all of the Senior Obligations have been
satisfied in full and until the Bank is no longer under any obligation under the
terms of the Credit Agreement to make any further loan or advance to the
Company.
5. Distributions in Liquidation. In the event of the liquidation of the
Company or the distribution of any of its assets or the securities of any
successor on account of any liquidation, bankruptcy, receivership,
reorganization, assignment for the benefit of creditors or similar proceeding,
the Junior Creditor shall not be entitled to any payment or distribution on
account of any Junior Obligation until all Senior Obligations have been
satisfied in full, and the Junior Creditor shall receive any money, securities
or other property distributed in any such proceeding to the Junior Creditor on
account of Junior Obligations in trust for the benefit of the Bank and shall
deliver any such property to the Bank in the same form as received, adding only
such endorsements or assignments as may be necessary to perfect the title of the
Bank to such property, for application to the satisfaction of the Senior
Obligations in such order as the Bank in its discretion may determine. Any
excess of such property remaining after satisfaction of all of the Senior
Obligations shall be returned to the Junior Creditor. The Bank may liquidate any
noncash property received from the Junior Creditor because of any provision of
this Section in the manner in which collateral may be liquidated under the terms
of the Uniform Commercial Code as enacted in the State of Indiana, and such
property may be liquidated in any order that the Bank shall determine in the
exercise of the Bank's sole discretion.
6. Subordination Absolute. The subordination of the Junior Obligations to
the Senior Obligations effected by this Subordination Agreement shall be
absolute and the Bank may from time to time, without the consent of or notice to
the Junior Creditor and without affecting the subordination of the Junior
Obligations to the Senior Obligations: (i) obtain a security interest in any
property to secure any of the Senior Obligations; (ii) obtain the primary or
secondary liability of any party or parties in addition to the Company with
respect to any of the Senior Obligations; (iii) extend or renew any of the
Senior Obligations for any period beyond their original due dates; (iv) release
or compromise any liability of any other party or parties primarily or
secondarily liable with respect to any of the Senior Obligations; (v) release
any security interest that the Bank might now have or hereafter obtain in any
property securing any of the Senior Obligations and permit any substitution or
exchange of any such property; (vi) extend loans and other credit accommodations
to the Company in addition to the Revolving Loan and the Term Loans and increase
the maximum amount which may be loaned to the Company under the Revolving Loan;
provided, that nothing contained in this Agreement shall be construed so as to
require the Bank to apply the proceeds of collateral or guaranties held for both
the Senior Obligations and other obligations of the Company which are not
entitled to the benefit of this Agreement in any particular order.
7. Notice of Subordination. The Company and the Junior Creditor shall,
contemporaneously with the execution of this Agreement, cause the following
legend to be placed on the face of the Subordinated Note:
This Promissory Note is subject to a Subordination Agreement dated as
of July ___, 2001, in favor of FIRST INDIANA BANK.
A photocopy of the Note with such legend endorsed thereon shall immediately
be delivered to the Bank. The same legend shall be placed on any Substitute
Subordinated Note before it is delivered to the Junior Creditor and a photocopy
of any Substitute Subordinated Note shall be delivered to the Bank immediately
upon its execution and delivery to the Junior Creditor.
8. Successors and Assigns. This Agreement shall be binding upon the Company
and the Junior Creditor and the Junior Creditor's successors in interest to the
Subordinated Note and any Substitute Subordinated Note and the Junior
Obligations and shall inure to the benefit of the Bank and its successors and
assigns.
9. Severability. If any provision of this Agreement is determined to be
illegal or unenforceable, such provision shall be deemed to be severable from
the balance of the provisions of this Agreement and the remaining provisions
shall be enforceable in accordance with their terms.
10. Governing Law. This Agreement is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
Dated as of July ___, 2001
UNITED ACQUISITION, INC., an Indiana corporation
By: ________________________________
-----------------------------------
(Printed Name and Title)
FIRST INDIANA BANK, a federal savings bank
By: ________________________________
Xxxxxxx X. Xxxxxxxxx, Vice President
XXXXXX CORPORATION, a New York corporation
By: ________________________________
-----------------------------------
(Printed Name and Title)
Exhibit "M"
GUARANTY AGREEMENT
This undertaking and agreement (this "Guaranty") is made by XXXXXX
CORPORATION, a New York corporation (the "Guarantor"), in favor of FIRST INDIANA
BANK, a federal savings bank (the "Bank") in consideration of the loans
described in this Guaranty made or to be made by the Bank to UNITED ACQUISITION,
INC., an Indiana corporation (the "Borrower"). This Guaranty is on the following
terms:
1. BACKGROUND OF THIS GUARANTY -- CERTAIN DEFINITIONS. The Bank and the
Borrower are parties to a Credit Agreement dated the date of this Guaranty (the
"Credit Agreement") under the terms of which the Bank has agreed to extend a
revolving line of credit in the maximum aggregate outstanding principal amount
of $3,500,000.00 (referred to in the Credit Agreement as the "Revolving Loan"),
a term loan in the original principal amount of $291,000.00 (referred to in the
Credit Agreement as the "Term Loan"), a second term loan in the original
principal amount of $1,116,000.00 (referred to in the Credit Agreement as "Term
Loan II"), and a third term loan in the original principal amount of
$1,750,000.00 (referred to in the Credit Agreement as "Term Loan III") to the
Borrower subject to the fulfillment of certain conditions, one of which is the
execution and delivery by the Guarantor of this Guaranty. This Guaranty is made
by the Guarantor in consideration of the agreement of the Bank to make the
Revolving Loan, the Term Loan, Term Loan II, and Term Loan III (collectively,
the "Loans"). All defined terms used in this Guaranty and which are not
specifically defined herein are used as defined in the Credit Agreement. The
term "Obligations" as used in this Guaranty means all of the obligations of the
Borrower in favor of the Bank of every type and description, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
including but not limited to the Borrower's obligation to repay the principal
of, interest on and expenses of collection of the Loans as provided in the
Credit Agreement and the other Loan Documents, including any Advances under the
Revolving Loan made after this date and after the initial Revolving Loan
Maturity Date pursuant to any extension or extensions of the Revolving Loan
Maturity Date, and all other obligations incurred pursuant to the terms of the
Credit Agreement and any other Loan Document including any obligations arising
on account of any amendment to or extension of the Credit Agreement or any other
Loan Document. The term "Default" means an "Event of Default" as defined in the
Credit Agreement.
2. THE GUARANTY. The Guarantor guarantees the full and prompt payment of
all of the Obligations when due, whether at scheduled maturity or at maturity by
virtue of acceleration on account of a Default. The Guarantor further agrees to
pay to the Bank an amount equal to all expenses, including reasonable attorneys'
fees, paid or incurred by the Bank after Default in endeavoring to enforce this
Guaranty.
3. FINANCIAL INFORMATION. As long as this Guaranty is in effect the
Guarantor shall furnish to the Bank the following:
a. Certificates Regarding Solvency. At such times as the Bank may
reasonably require, a "Certificate Regarding Solvency" in the
form attached "Annex."
b. Other Information. Such other information relating to the
financial condition of the Guarantor as the Bank may reasonably
require.
4. GUARANTY ABSOLUTE. This Guaranty shall be absolute, continuing and
unconditional, irrespective of the irregularity, invalidity or unenforceability
of any other Loan Document and shall not be affected or impaired by any failure,
negligence or omission on the part of the Bank to realize upon and protect any
collateral for any of the Obligations. This Guaranty shall remain in full force
and effect until all of the Obligations have been satisfied in full and the
Commitment of the Bank to make Advances under the Revolving Loan has expired.
The Bank may from time to time, without notice to the Guarantor and without
affecting the Guarantor's liability under this Guaranty:
a. obtain a security interest in any property to secure any of the
Obligations;
b. obtain the primary or secondary liability of any party or parties
in addition to the Borrower and the Guarantor with respect to any
of the Obligations;
c. extend or renew any of the Obligations for any period beyond
their original due dates;
d. release or compromise the liability of any other party or parties
which are now or may hereafter become primarily or secondarily
liable with respect to any of the Obligations;
e. release any security interest which the Bank now has or may
hereafter obtain in any property securing any of the Obligations
and permit any substitution or exchange of any such property;
f. proceed against the Guarantor for payment of the Obligations,
whether or not the Bank shall have resorted to any property
securing any of the Obligations or shall have proceeded against
the Borrower or any other party primarily or secondarily liable
with respect to any of the Obligations;
g. amend the terms of the Credit Agreement from time to time in any
particulars, or
h. extend loans and other credit accommodations to the Borrower in
addition to the Revolving Loan, the Term Loan, Term Loan II, and
Term Loan III, and increase the maximum amount which may be
loaned to the Borrower under the Revolving Loan.
5. ASSIGNMENT AND PARTICIPATIONS. The Bank may, without notice to the
Borrower or the Guarantor, sell or otherwise assign all or any portion of the
Obligations and any participations therein, and upon any such sale or
assignment, the transferee shall have the right to enforce this Guaranty to the
extent of the transferee's interest directly against the Guarantor as fully as
if the transferee were specifically named in the Guaranty as the holder of such
interest, but the Bank shall have the unimpaired right to enforce this Guaranty
for the benefit of the Bank and for the benefit of any participant in respect of
whose participation the Bank has retained such right.
6. SUBROGATION WAIVER. In order to induce the Bank to make the Loans in
reliance, in part, upon this Guaranty, notwithstanding the fact that the
Guarantor is an "insider" with respect to the Borrower, as the term "insider" is
defined in the Bankruptcy Code, the Guarantor waives for itself, its legal
representatives and assigns any right of indemnity, reimbursement or
contribution from the Borrower or any other person obligated with respect to any
of the Obligations (any such other person being referred to hereafter in this
paragraph as a "Co-Obligor") or from the property of the Borrower or from the
property of any Co-Obligor, and the Guarantor further waives any right of
subrogation to the rights of the Bank against the Borrower or any Co-Obligor or
the property of the Borrower or any Co-Obligor which would otherwise arise by
virtue of any payment made by the Guarantor to the Bank on account of this
Guaranty, whether any such right of indemnity, reimbursement, contribution or
subrogation would otherwise arise by virtue of contract, whether express or
implied, with any person or as a matter of law or equity, and the Guarantor
undertakes on behalf of itself, its legal representatives and assigns that
neither the Guarantor nor the Guarantor's legal representatives or assigns will
attempt to exercise or accept the benefits of any such right and should the
Guarantor or the Guarantor's legal representative or assigns receive any payment
or distribution of money or other property on account of such right
notwithstanding the provisions of this paragraph, such money or other property
shall be held in trust by the recipient for the Bank and shall immediately be
delivered to the Bank for application to the Obligations in the same form as
received, with the addition only of such endorsements or assignments as may be
necessary to perfect the title of the Bank thereto.
7. OTHER WAIVERS. The Guarantor waives: (i) notice of the acceptance of
this Guaranty, (ii) notice of the existence and creation of all or any of the
Obligations, (iii) notice of nonpayment of any of the Obligations and (iv)
diligence by the Bank in collection of the Obligations and the protection of or
realization upon any collateral for the Obligations.
8. REINSTATEMENT. If any amount which is paid to the Bank by the Borrower
or any other party and which is applied by the Bank to the satisfaction of any
of the Obligations, is returned by the Bank to the Borrower or such other party
or a trustee in Bankruptcy or other legal representative of the Borrower or such
other party by virtue of a claim that such payment constituted a voidable
preference under the Bankruptcy Code or under any state insolvency law, whether
such amount is returned under court order or pursuant to settlement of the claim
of preference, then this Guaranty shall be reinstated as to such amount as
though such payment to the Bank had never been made and notwithstanding any
intervening return or cancellation of any note or other instrument or agreement
evidencing the reinstated Obligations.
9. SUBORDINATION. All obligations of the Borrower to the Guarantor (the
"Junior Obligations")are and shall hereafter be subordinate and inferior in
right of payment to all of the Obligations. Notwithstanding any provision to the
contrary contained in promissory note or any other agreement between the
Borrower and the Guarantor with respect to the Junior Obligations, the Borrower
shall not make and shall not be required to make any payment on account of the
principal of or interest on the Junior Obligations until the Obligations have
been paid in full and the Bank has no further obligation to make additional
advances to the Borrower under the Revolving Loan, including advances made
pursuant to any extension of the term of the Revolving Loan. In the event of the
liquidation of the Borrower' or the distribution of any of its assets or the
securities of any successor on account of any liquidation, bankruptcy,
receivership, reorganization, assignment for the benefit of creditors or similar
proceeding, the Guarantor shall not be entitled to any payment or distribution
on account of any Junior Obligation until all Obligations have been satisfied in
full.
10. MISCELLANEOUS. This Guaranty shall be binding upon the Guarantor, upon
the Guarantor's legal representatives, successors and assigns. If any provision
of this Guaranty is determined to be illegal or unenforceable, such provision
shall be deemed to be severable from the balance of the provisions of this
Guaranty and the remaining provisions shall be enforceable in accordance with
their terms.
11. CHOICE OF LAW. This Guaranty is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
12. CORPORATE AUTHORITY. In order to induce the Bank to accept this
Guaranty and to make the Loans to the Borrower, the Guarantor represents and
warrants to the Bank that: (i) the Guarantor is a corporation organized,
existing and in good standing under the laws of the State of New York; (ii)
execution and delivery of this Guaranty are within the Guarantor's corporate
powers, have been duly authorized by all necessary corporate action and do not
contravene or conflict with any provision of law or of the Articles of
Incorporation or By-laws of the Guarantor or of any agreement binding upon the
Guarantor or its properties, and (iii) this Guaranty is the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms.
13. ARBITRATION. BANK AND THE GUARANTOR AGREE THAT UPON THE WRITTEN DEMAND
OF EITHER PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF ANY LEGAL
PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT PROCEEDING, ALL
DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR
CLASS IN NATURE, ARISING FROM THIS AGREEMENT, OR ANY LOAN DOCUMENT OR OTHERWISE,
INCLUDING WITHOUT LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE RESOLVED BY
BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION
ASSOCIATION ("AAA"). ANY ARBITRATION PROCEEDING HELD PURSUANT TO THIS
ARBITRATION PROVISION SHALL BE CONDUCTED IN THE CITY NEAREST THE GUARANTOR'S
ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY OTHER PLACE SELECTED BY MUTUAL
AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SHALL
CONSTITUTE A WAIVER OF THIS ARBITRATION AGREEMENT OR BE PROHIBITED BY THIS
ARBITRATION AGREEMENT.
THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY DURING
ANY DISPUTE TO SEEK, USE, AND EMPLOY ANCILLARY OR PRELIMINARY RIGHTS AND/OR
REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON, PRESERVING,
PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER FORCIBLE ENTRY AND DETAINER FOR
POSSESSION OF ANY REAL OR PERSONAL PROPERTY, AND ANY SUCH ACTION SHALL NOT BE
DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES INCLUDE, WITHOUT LIMITATION,
OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER, INVOKING A POWER
OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE; OBTAINING A WRIT OF ATTACHMENT OR
IMPOSITION OF A RECEIVERSHIP; OR EXERCISING ANY RIGHTS RELATING TO PERSONAL
PROPERTY, INCLUDING EXERCISING THE RIGHT OF SETOFF, OR TAKING OR DISPOSING OF
SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO THE UNIFORM
COMMERCIAL CODE. ANY DISPUTES, CLAIMS, OR CONTROVERSIES CONCERNING THE
LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR REMEDY,
CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR OTHERWISE
MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE ARBITRATED;
PROVIDED, HOWEVER THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE POWER TO ENJOIN
OR RESTRAIN ANY ACT OF ANY PARTY. JUDGMENT UPON ANY AWARD RENDERED BY ANY
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE STATUTE OF
LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSE. THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT OF THIS ARBITRATION PROVISION.
Dated as of July ___ 2001.
XXXXXX CORPORATION, a New York
corporation
By: _______________________________
-----------------------------------
(Printed name and title)
STATE OF __________ )
) SS:
COUNTY OF _______ )
Before me the undersigned, a Notary Public in and for said County and
State, personally appeared__________________, the _______________ of XXXXXX
CORPORATION, a New York, who as such authorized officer acknowledged the
execution of the foregoing Guaranty Agreement on behalf of said corporation this
______ day of July, 2001.
Signature: _________________________________
Printed: ___________________________________
Notary Public
My Commission Expires: _______________
My County of Residence: _______________
ANNEX
CERTIFICATE REGARDING SOLVENCY
XXXXXX CORPORATION, a New York corporation (the "Guarantor"), by its duly
authorized officer, makes the following representations to FIRST INDIANA BANK, a
federal savings bank (the "Bank") and acknowledges that the Bank is entitled to
rely and will rely upon these representations, in providing certain financial
accommodations to UNITED ACQUISITION, INC., an Indiana corporation, pursuant to
a certain Credit Agreement dated as of July _____, 2001, (the "Credit
Agreement").
1. The assets of the Guarantor at a "fair valuation" within the
meaning of the Bankruptcy Code of 1978, as amended, (the "Code")
are worth approximately $___________ as of this date.
2. The liabilities of the Guarantor, including without limitation
contingent liabilities to the extent appropriate for
consideration in determining whether the Guarantor is
"insolvent", within the meaning of the Code, but excluding the
Guarantor's contingent liability under the Guaranty Agreement
(the "Guaranty") required to be given by the Guarantor under the
terms of the Credit Agreement, total approximately
$______________ as of _________ 200_, the end of the last fiscal
quarter of the Guarantor.
3. The Guarantor is not insolvent within the meaning of the Code,
after taking into account its contingent liability under the
Guaranty.
4. After taking into account its contingent liability under the
Guaranty, the Guarantor has sufficient capital for the operation
of its business as presently conducted and at the level of
operations contemplated for the foreseeable future. The minimum
amount of capital required to support the Guarantor's operations
at the level planned for the foreseeable future is
$________________.
5. The Guarantor is currently paying its debts as they become due in
the ordinary course of its business. After taking into account
its contingent liability under the Guaranty, the Guarantor
believes that it will be able to continue to pay its debts as
they become due in the ordinary course of its business.
Dated ___________________, 2001.
XXXXXX CORPORATION, a New York
corporation
By: _______________________________
-----------------------------------
(Printed name and title)
Exhibit "N"
GUARANTY AGREEMENT
This undertaking and agreement (this "Guaranty") is made by OBSIDIAN
CAPITAL PARTNERS, L.P., a Delaware limited partnership (the "Guarantor"), in
favor of FIRST INDIANA BANK, a federal savings bank (the "Bank") in
consideration of the loans described in this Guaranty made or to be made by the
Bank to UNITED ACQUISITION, INC., an Indiana corporation (the "Borrower"). This
Guaranty is on the following terms:
1. BACKGROUND OF THIS GUARANTY -- CERTAIN DEFINITIONS. The Bank and the
Borrower are parties to a Credit Agreement dated the date of this Guaranty (the
"Credit Agreement") under the terms of which the Bank has agreed to extend a
revolving line of credit in the maximum aggregate outstanding principal amount
of $3,500,000.00 (referred to in the Credit Agreement as the "Revolving Loan"),
a term loan in the original principal amount of $291,000.00 (referred to in the
Credit Agreement as the "Term Loan"), a second term loan in the original
principal amount of $1,116,000.00 (referred to in the Credit Agreement as "Term
Loan II"), and a third term loan in the original principal amount of
$1,750,000.00 (referred to in the Credit Agreement as "Term Loan III") to the
Borrower subject to the fulfillment of certain conditions, one of which is the
execution and delivery by the Guarantor of this Guaranty. This Guaranty is made
by the Guarantor in consideration of the agreement of the Bank to make the
Revolving Loan, the Term Loan, Term Loan II, and Term Loan III (collectively,
the "Loans"). All defined terms used in this Guaranty and which are not
specifically defined herein are used as defined in the Credit Agreement. The
term "Obligations" as used in this Guaranty means all of the obligations of the
Borrower in favor of the Bank of every type and description, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
including but not limited to the Borrower's obligation to repay the principal
of, interest on and expenses of collection of the Loans as provided in the
Credit Agreement and the other Loan Documents, including any Advances under the
Revolving Loan made after this date and after the initial Revolving Loan
Maturity Date pursuant to any extension or extensions of the Revolving Loan
Maturity Date, and all other obligations incurred pursuant to the terms of the
Credit Agreement and any other Loan Document including any obligations arising
on account of any amendment to or extension of the Credit Agreement or any other
Loan Document. The term "Default" means an "Event of Default" as defined in the
Credit Agreement.
2. THE GUARANTY. The Guarantor guarantees the full and prompt payment of
all of the Obligations when due, whether at scheduled maturity or at maturity by
virtue of acceleration on account of a Default. The Guarantor further agrees to
pay to the Bank an amount equal to all expenses, including reasonable attorneys'
fees, paid or incurred by the Bank after Default in endeavoring to enforce this
Guaranty.
Notwithstanding any other provision of this Guaranty, the maximum amount
which the Guarantor may be required to pay under the terms of this Guaranty
shall not exceed $1,000,000.00, together with interest at a variable rate equal
at all times to the Prime Rate plus four percent (4%) per annum on any portion
of any amount payable under the terms of this Guaranty which remains unpaid
after the date of the Bank's demand for payment, plus expenses of enforcement of
this Guaranty, including reasonable attorney fees. As used in this paragraph,
the term "Prime Rate" means a variable per annum interest rate equal at all
times to the rate of interest established and quoted by the Bank as its Prime
Rate, such rate to change contemporaneously with each change in such established
and quoted rate, provided that it is understood that the Prime Rate shall not
necessarily be representative of the rate of interest actually charged by the
Bank on any loan or class of loans.
Upon payment in full of all outstanding principal and accrued interest of
Term Loan III, provided that no Event of Default or Unmatured Event of Default
has occurred and is then continuing, all obligations and liabilities hereunder
shall terminate and this Guaranty shall be released in full, subject, however,
to reinstatement as provided in Section 8 herein.
3. FINANCIAL INFORMATION. As long as this Guaranty is in effect the
Guarantor shall furnish to the Bank the following:
a. Certificates Regarding Solvency. At such times as the Bank may
reasonably require, a "Certificate Regarding Solvency" in the
form attached "Annex."
b. Other Information. Such other information relating to the
financial condition of the Guarantor as the Bank may reasonably
require.
4. GUARANTY ABSOLUTE. This Guaranty shall be absolute, continuing and
unconditional, irrespective of the irregularity, invalidity or unenforceability
of any other Loan Document and shall not be affected or impaired by any failure,
negligence or omission on the part of the Bank to realize upon and protect any
collateral for any of the Obligations. This Guaranty shall remain in full force
and effect until all of the Obligations have been satisfied in full and the
Commitment of the Bank to make Advances under the Revolving Loan has expired.
The Bank may from time to time, without notice to the Guarantor and without
affecting the Guarantor's liability under this Guaranty:
a. obtain a security interest in any property to secure any of the
Obligations;
b. obtain the primary or secondary liability of any party or parties
in addition to the Borrower and the Guarantor with respect to any
of the Obligations;
c. extend or renew any of the Obligations for any period beyond
their original due dates;
d. release or compromise the liability of any other party or parties
which are now or may hereafter become primarily or secondarily
liable with respect to any of the Obligations;
e. release any security interest which the Bank now has or may
hereafter obtain in any property securing any of the Obligations
and permit any substitution or exchange of any such property;
f. proceed against the Guarantor for payment of the Obligations,
whether or not the Bank shall have resorted to any property
securing any of the Obligations or shall have proceeded against
the Borrower or any other party primarily or secondarily liable
with respect to any of the Obligations;
g. amend the terms of the Credit Agreement from time to time in any
particulars, or
h. extend loans and other credit accommodations to the Borrower in
addition to the Revolving Loan, the Term Loan, Term Loan LI, and
Term Loan III, and increase the maximum amount which may be
loaned to the Borrower under the Revolving Loan.
5. ASSIGNMENT AND PARTICIPATIONS. The Bank may, without notice to the
Borrower or the Guarantor, sell or otherwise assign all or any portion of the
Obligations and any participations therein, and upon any such sale or
assignment, the transferee shall have the right to enforce this Guaranty to the
extent of the transferee's interest directly against the Guarantor as fully as
if the transferee were specifically named in the Guaranty as the holder of such
interest, but the Bank shall have the unimpaired right to enforce this Guaranty
for the benefit of the Bank and for the benefit of any participant in respect of
whose participation the Bank has retained such right.
6. SUBROGATION WAIVER. In order to induce the Bank to make the Loans in
reliance, in part, upon this Guaranty, notwithstanding the fact that the
Guarantor is an "insider" with respect to the Borrower, as the term "insider" is
defined in the Bankruptcy Code, the Guarantor waives for itself, its legal
representatives and assigns any right of indemnity, reimbursement or
contribution from the Borrower or any other person obligated with respect to any
of the Obligations (any such other person being referred to hereafter in this
paragraph as a "Co-Obligor") or from the property of the Borrower or from the
property of any Co-Obligor, and the Guarantor further waives any right of
subrogation to the rights of the Bank against the Borrower or any Co-Obligor or
the property of the Borrower or any Co-Obligor which would otherwise arise by
virtue of any payment made by the Guarantor to the Bank on account of this
Guaranty, whether any such right of indemnity, reimbursement, contribution or
subrogation would otherwise arise by virtue of contract, whether express or
implied, with any person or as a matter of law or equity, and the Guarantor
undertakes on behalf of itself, its legal representatives and assigns that
neither the Guarantor nor the Guarantor's legal representatives or assigns will
attempt to exercise or accept the benefits of any such right and should the
Guarantor or the Guarantor's legal representative or assigns receive any payment
or distribution of money or other property on account of such right
notwithstanding the provisions of this paragraph, such money or other property
shall be held in trust by the recipient for the Bank and shall immediately be
delivered to the Bank for application to the Obligations in the same form as
received, with the addition only of such endorsements or assignments as may be
necessary to perfect the title of the Bank thereto.
7. OTHER WAIVERS. The Guarantor waives: (i) notice of the acceptance of
this Guaranty, (ii) notice of the existence and creation of all or any of the
Obligations, (iii) notice of nonpayment of any of the Obligations and (iv)
diligence by the Bank in collection of the Obligations and the protection of or
realization upon any collateral for the Obligations.
8. REINSTATEMENT. If any amount which is paid to the Bank by the Borrower
or any other party and which is applied by the Bank to the satisfaction of any
of the Obligations, is returned by the Bank to the Borrower or such other party
or a trustee in Bankruptcy or other legal representative of the Borrower or such
other party by virtue of a claim that such payment constituted a voidable
preference under the Bankruptcy Code or under any state insolvency law, whether
such amount is returned under court order or pursuant to settlement of the claim
of preference, then this Guaranty shall be reinstated as to such amount as
though such payment to the Bank had never been made and notwithstanding any
intervening return or cancellation of any note or other instrument or agreement
evidencing the reinstated Obligations.
9. SUBORDINATION. All obligations of the Borrower to the Guarantor (the
"Junior Obligations")are and shall hereafter be subordinate and inferior in
right of payment to all of the Obligations. Notwithstanding any provision to the
contrary contained in promissory note or any other agreement between the
Borrower and the Guarantor with respect to the Junior Obligations, the Borrower
shall not make and shall not be required to make any payment on account of the
principal of or interest on the Junior Obligations until the Obligations have
been paid in full and the Bank has no further obligation to make additional
advances to the Borrower under the Revolving Loan, including advances made
pursuant to any extension of the term of the Revolving Loan. In the event of the
liquidation of the Borrower or the distribution of any of its assets or the
securities of any successor on account of any liquidation, bankruptcy,
receivership, reorganization, assignment for the benefit of creditors or similar
proceeding, the Guarantor shall not be entitled to any payment or distribution
on account of any Junior Obligation until all Obligations have been satisfied in
full.
10. MISCELLANEOUS. This Guaranty shall be binding upon the Guarantor, upon
the Guarantor's legal representatives, successors and assigns. If any provision
of this Guaranty is determined to be illegal or unenforceable, such provision
shall be deemed to be severable from the balance of the provisions of this
Guaranty and the remaining provisions shall be enforceable in accordance with
their terms.
11. CHOICE OF LAW. This Guaranty is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
12. AUTHORITY. In order to induce the Bank to accept this Guaranty and to
make the Loans to the Borrower, the Guarantor represents and warrants to the
Bank that: (i) the Guarantor is a limited partnership organized, existing and in
good standing under the laws of the State of Delaware; (ii) execution and
delivery of this Guaranty are within the Guarantor's powers, have been duly
authorized by all necessary partnership action and do not contravene or conflict
with any provision of law or of the Certificate of Limited Partnership or the
Limited Partnership Agreement of the Guarantor or of any agreement binding upon
the Guarantor or its properties, and (iii) this Guaranty is the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms.
13. ARBITRATION. BANK AND THE GUARANTOR AGREE THAT UPON THE WRITTEN DEMAND
OF EITHER PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF ANY LEGAL
PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT PROCEEDING, ALL
DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR
CLASS IN NATURE, ARISING FROM THIS AGREEMENT, OR ANY LOAN DOCUMENT OR OTHERWISE,
INCLUDING WITHOUT LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE RESOLVED BY
BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION
ASSOCIATION ("AAA"). ANY ARBITRATION PROCEEDING HELD PURSUANT TO THIS
ARBITRATION PROVISION SHALL BE CONDUCTED IN THE CITY NEAREST THE GUARANTOR'S
ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY OTHER PLACE SELECTED BY MUTUAL
AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SHALL
CONSTITUTE A WAIVER OF THIS ARBITRATION AGREEMENT OR BE PROHIBITED BY THIS
ARBITRATION AGREEMENT.
THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY DURING
ANY DISPUTE TO SEEK, USE, AND EMPLOY ANCILLARY OR PRELIMINARY RIGHTS AND/OR
REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON, PRESERVING,
PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER FORCIBLE ENTRY AND DETAINER FOR
POSSESSION OF ANY REAL OR PERSONAL PROPERTY, AND ANY SUCH ACTION SHALL NOT BE
DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES INCLUDE, WITHOUT LIMITATION,
OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER, INVOKING A POWER
OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE; OBTAINING A WRIT OF ATTACHMENT OR
IMPOSITION OF A RECEIVERSHIP; OR EXERCISING ANY RIGHTS RELATING TO PERSONAL
PROPERTY, INCLUDING EXERCISING THE RIGHT OF SETOFF, OR TAKING OR DISPOSING OF
SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO THE UNIFORM
COMMERCIAL CODE. ANY DISPUTES, CLAIMS, OR CONTROVERSIES CONCERNING THE
LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR REMEDY,
CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR OTHERWISE
MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE ARBITRATED;
PROVIDED, HOWEVER THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE POWER TO ENJOIN
OR RESTRAIN ANY ACT OF ANY PARTY. JUDGMENT UPON ANY AWARD RENDERED BY ANY
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE STATUTE OF
LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSE. THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT OF THIS ARBITRATION PROVISION.
Dated as of July ___ 2001.
OBSIDIAN CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: _______________________________, its
general partner
By: __________________________________
--------------------------------------
(Printed name and title)
STATE OF _________ )
) SS:
COUNTY OF ________ )
Before me the undersigned, a Notary Public in and for said County and
State, personally appeared , the _____________________ of
___________________________ the General Partnership of OBSIDIAN CAPITAL
PARTNERS, L.P., a Delaware limited partnership, who as such authorized officer
acknowledged the execution of the foregoing Guaranty Agreement on behalf of said
limited partnership this ______ day of July, 2001.
Signature: ________________________________
Printed: ___________________________________
Notary Public
My Commission Expires: ____________________
My County of Residence: ____________________
ANNEX
CERTIFICATE REGARDING SOLVENCY
OBSIDIAN CAPITAL PARTNERS, L.P., a Delaware limited partnership (the
"Guarantor"), by its duly authorized officer, makes the following
representations to FIRST INDIANA BANK, a federal savings bank (the "Bank") and
acknowledges that the Bank is entitled to rely and will rely upon these
representations, in providing certain financial accommodations to UNITED
ACQUISITION, INC., an Indiana corporation, pursuant to a certain Credit
Agreement dated as of July~, 2001, (the "Credit Agreement").
1. The assets of the Guarantor at a "fair valuation" within the meaning
of the Bankruptcy Code of 1978, as amended, (the "Code") are worth
approximately $______________ as of this date.
2. The liabilities of the Guarantor, including without limitation
contingent liabilities to the extent appropriate for consideration in
determining whether the Guarantor is "insolvent", within the meaning
of the Code, but excluding the Guarantor's contingent liability under
the Guaranty Agreement (the "Guaranty") required to be given by the
Guarantor under the terms of the Credit Agreement, total approximately
$______________ as of _________ 200_, the end of the last fiscal
quarter of the Guarantor.
3. The Guarantor is not insolvent within the meaning of the Code, after
taking into account its contingent liability under the Guaranty.
4. After taking into account its contingent liability under the Guaranty,
the Guarantor has sufficient capital for the operation of its business
as presently conducted and at the level of operations contemplated for
the foreseeable future. The minimum amount of capital required to
support the Guarantor's operations at the level planned for the
foreseeable future is $________________
5. The Guarantor is currently paying its debts as they become due in the
ordinary course of its business. After taking into account its
contingent liability under the Guaranty, the Guarantor believes that
it will be able to continue to pay its debts as they become due in the
ordinary course of its business.
Dated ______________, 2001.
OBSIDIAN CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: ______________________________, its
general partner
By: ________________________________
-----------------------------------
(Printed name and title)
Exhibit "O"
GUARANTY AGREEMENT
This undertaking and agreement (this "Guaranty") is made by XXXXX X.
XXXXXXXXX, a resident of the State of Indiana (the "Guarantor"), in favor of
FIRST INDIANA BANK, a federal savings bank (the "Bank") in consideration of the
loans described in this Guaranty made or to be made by the Bank to UNITED
ACQUISITION, INC., an Indiana corporation (the "Borrower"). This Guaranty is on
the following terms:
1. BACKGROUND OF THIS GUARANTY-- CERTAIN DEFINITIONS. The Bank and the
Borrower are parties to a Credit Agreement dated the date of this Guaranty (the
"Credit Agreement") under the terms of which the Bank has agreed to extend a
revolving line of credit in the maximum aggregate outstanding principal amount
of $3,500,000.00 (referred to in the Credit Agreement as the "Revolving Loan"),
a term loan in the original principal amount of $291,000.00 (referred to in the
Credit Agreement as the "Term Loan"), a second term loan in the original
principal amount of $1,116,000.00 (referred to in the Credit Agreement as "Term
Loan II"), and a third term loan in the original principal amount of
$1,750,000.00 (referred to in the Credit Agreement as "Term Loan III") to the
Borrower subject to the fulfillment of certain conditions, one of which is the
execution and delivery by the Guarantor of this Guaranty. This Guaranty is made
by the Guarantor in consideration of the agreement of the Bank to make the
Revolving Loan, the Term Loan, Term Loan II, and Term Loan III (collectively,
the "Loans"). All defined terms used in this Guaranty and which are not
specifically defined herein are used as defined in the Credit Agreement. The
term "Obligations" as used in this Guaranty means all of the obligations of the
Borrower in favor of the Bank of every type and description, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
including but not limited to the Borrower's obligation to repay the principal
of, interest on and expenses of collection of the Loans as provided in the
Credit Agreement and the other Loan Documents, including any Advances under the
Revolving Loan made after this date and after the initial Revolving Loan
Maturity Date pursuant to any extension or extensions of the Revolving Loan
Maturity Date, and all other obligations incurred pursuant to the terms of the
Credit Agreement and any other Loan Document including any obligations arising
on account of any amendment to or extension of the Credit Agreement or any other
Loan Document. The term "Default" means an "Event of Default" as defined in the
Credit Agreement.
2. THE GUARANTY. The Guarantor guarantees the full and prompt payment of
all of the Obligations when due, whether at scheduled maturity or at maturity by
virtue of acceleration on account of a Default. The Guarantor further agrees to
pay to the Bank an amount equal to all expenses, including reasonable attorneys'
fees, paid or incurred by the Bank after Default in endeavoring to enforce this
Guaranty.
Notwithstanding any other provision of this Guaranty, the maximum amount
which the Guarantor may be required to pay under the terms of this Guaranty
shall not exceed $500,000.00~ together with interest at a variable rate equal at
all times to the Prime Rate plus four percent (4%) per annum on any portion of
any amount payable under the terms of this Guaranty which remains unpaid after
the date of the Bank's demand for payment, plus expenses of enforcement of this
Guaranty, including reasonable attorney fees.
As used in this paragraph, the term "Prime Rate" means a variable per annum
interest rate equal at all times to the rate of interest established and quoted
by the Bank as its Prime Rate, such rate to change contemporaneously with each
change in such established and quoted rate, provided that it is understood that
the Prime Rate shall not necessarily be representative of the rate of interest
actually charged by the Bank on any loan or class of loans.
Upon payment in full of all outstanding principal and accrued interest of
Term Loan III, provided that no Event of Default or Unmatured Event of Default
has occurred and is then continuing, all obligations and liabilities hereunder
shall terminate and this Guaranty shall be released in full, subject, however,
to reinstatement as provided in Section 8 herein.
3. FINANCIAL INFORMATION. As long as this Guaranty is in effect the
Guarantor shall furnish to the Bank the Guarantor's personal financial
statement, in such form as the Bank shall reasonably require, as of the end of
each calendar year and on or before April 15 of the following calendar year a
complete copy of the Guarantor's federal and state income tax returns or a
complete copy of a properly and timely filed extension for time in which to file
such taxes, and promptly upon the filing of such federal and state income tax
returns pursuant to the time allowed by such extension a complete copy of such
income tax returns.
4. GUARANTY ABSOLUTE. This Guaranty shall be absolute, continuing and
unconditional, irrespective of the irregularity, invalidity or unenforceability
of any other Loan Document and shall not be affected or impaired by any failure,
negligence or omission on the part of the Bank to realize upon and protect any
collateral for any of the Obligations. This Guaranty shall remain in full force
and effect until all of the Obligations have been satisfied in full and the
Commitment of the Bank to make Advances under the Revolving Loan has expired.
The Bank may from time to time, without notice to the Guarantor and without
affecting the Guarantor's liability under this Guaranty:
a. obtain a security interest in any property to secure any of the
Obligations;
b. obtain the primary or secondary liability of any party or parties in
addition to the Borrower and the Guarantor with respect to any of the
Obligations;
c. extend or renew any of the Obligations for any period beyond their
original due dates;
d. release or compromise the liability of any other party or parties
which are now or may hereafter become primarily or secondarily liable
with respect to any of the Obligations;
e. release any security interest which the Bank now has or may hereafter
obtain in any property securing any of the Obligations and permit any
substitution or exchange of any such property;
f. proceed against the Guarantor for payment of the Obligations, whether
or not the Bank shall have resorted to any property securing any of
the Obligations or shall have proceeded against the Borrower or any
other party primarily or secondarily liable with respect to any of the
Obligations;
g. amend the terms of the Credit Agreement from time to time in any
particulars, or
h. extend loans and other credit accommodations to the Borrower in
addition to the Revolving Loan, the Term Loan, Term Loan II, and Term
Loan III, and increase the maximum amount which may be loaned to the
Borrower under the Revolving Loan.
5. ASSIGNMENT AND PARTICIPATIONS. The Bank may, without notice to the
Borrower or the Guarantor, sell or otherwise assign all or any portion of the
Obligations and any participations therein, and upon any such sale or
assignment, the transferee shall have the right to enforce this Guaranty to the
extent of the transferee's interest directly against the Guarantor as fully as
if the transferee were specifically named in the Guaranty as the holder of such
interest, but the Bank shall have the unimpaired right to enforce this Guaranty
for the benefit of the Bank and for the benefit of any participant in respect of
whose participation the Bank has retained such right.
6. SUBROGATION WAIVER. In order to induce the Bank to make the Loans in
reliance, in part, upon this Guaranty, notwithstanding the fact that the
Guarantor is an "insider" with respect to the Borrower, as the term "insider" is
defined in the Bankruptcy Code, the Guarantor waives for itself, its legal
representatives and assigns any right of indemnity, reimbursement or
contribution from the Borrower or any other person obligated with respect to any
of the Obligations (any such other person being referred to hereafter in this
paragraph as a "Co-Obligor") or from the property of the Borrower or from the
property of any Co-Obligor, and the Guarantor further waives any right of
subrogation to the rights of the Bank against the Borrower or any Co-Obligor or
the property of the Borrower or any Co-Obligor which would otherwise arise by
virtue of any payment made by the Guarantor to the Bank on account of this
Guaranty, whether any such right of indemnity, reimbursement, contribution or
subrogation would otherwise arise by virtue of contract, whether express or
implied, with any person or as a matter of law or equity, and the Guarantor
undertakes on behalf of itself, its legal representatives and assigns that
neither the Guarantor nor the Guarantor's legal representatives or assigns will
attempt to exercise or accept the benefits of any such right and should the
Guarantor or the Guarantor's legal representative or assigns receive any payment
or distribution of money or other property on account of such right
notwithstanding the provisions of this paragraph, such money or other property
shall be held in trust by the recipient for the Bank and shall immediately be
delivered to the Bank for application to the Obligations in the same form as
received, with the addition only of such endorsements or assignments as may be
necessary to perfect the title of the Bank thereto.
7. OTHER WAIVERS. The Guarantor waives: (i) notice of the acceptance of
this Guaranty, (ii) notice of the existence and creation of all or any of the
Obligations, (iii) notice of nonpayment of any of the Obligations and (iv)
diligence by the Bank in collection of the Obligations and the protection of or
realization upon any collateral for the Obligations.
8. REINSTATEMENT. If any amount which is paid to the Bank by the Borrower
or any other party and which is applied by the Bank to the satisfaction of any
of the Obligations, is returned by the Bank to the Borrower or such other party
or a trustee in Bankruptcy or other legal representative of the Borrower or such
other party by virtue of a claim that such payment constituted a voidable
preference under the Bankruptcy Code or under any state insolvency law, whether
such amount is returned under court order or pursuant to settlement of the claim
of preference, then this Guaranty shall be reinstated as to such amount as
though such payment to the Bank had never been made and notwithstanding any
intervening return or cancellation of any note or other instrument or agreement
evidencing the reinstated Obligations.
9. MISCELLANEOUS. This Guaranty shall be binding upon the Guarantor, upon
the Guarantor's legal representatives, successors and assigns. If any provision
of this Guaranty is determined to be illegal or unenforceable, such provision
shall be deemed to be severable from the balance of the provisions of this
Guaranty and the remaining provisions shall be enforceable in accordance with
their terms.
10. AUTHORITY. In order to induce the Bank to accept this Guaranty and to
make the Loans to the Borrower, the Guarantor represents and warrants to the
Bank that: (i) the Guarantor is a limited partnership organized, existing and in
good standing under the laws of the State of Delaware; (ii) execution and
delivery of this Guaranty are within the Guarantor's powers, have been duly
authorized by all necessary partnership action and do not contravene or conflict
with any provision of law or of the Certificate of Limited Partnership or the
Limited Partnership Agreement of the Guarantor or of any agreement binding upon
the Guarantor or its properties, and (iii) this Guaranty is the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms.
11. ARBITRATION. BANK AND THE GUARANTOR AGREE THAT UPON THE WRITTEN DEMAND
OF EITHER PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF ANY LEGAL
PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT PROCEEDING, ALL
DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR
CLASS IN NATURE, ARISING FROM THIS AGREEMENT, OR ANY LOAN DOCUMENT OR OTHERWISE,
INCLUDING WITHOUT LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE RESOLVED BY
BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION
ASSOCIATION ("AAA"). ANY ARBITRATION PROCEEDING HELD PURSUANT TO THIS
ARBITRATION PROVISION SHALL BE CONDUCTED IN THE CITY NEAREST THE GUARANTOR'S
ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY OTHER PLACE SELECTED BY MUTUAL
AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SHALL
CONSTITUTE A WAIVER OF THIS ARBITRATION AGREEMENT OR BE PROHIBITED BY THIS
ARBITRATION AGREEMENT.
THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY DURING
ANY DISPUTE TO SEEK, USE, AND EMPLOY ANCILLARY OR PRELIMINARY RIGHTS AND/OR
REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON, PRESERVING,
PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER FORCIBLE ENTRY AND DETAINER FOR
POSSESSION OF ANY REAL OR PERSONAL PROPERTY, AND ANY SUCH ACTION SHALL NOT BE
DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES INCLUDE, WITHOUT LIMITATION,
OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER, INVOKING A POWER
OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE; OBTAINING A WRIT OF ATTACHMENT OR
IMPOSITION OF A RECEIVERSHIP; OR EXERCISING ANY RIGHTS RELATING TO PERSONAL
PROPERTY, INCLUDING EXERCISING THE RIGHT OF SETOFF, OR TAKING OR DISPOSING OF
SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO THE UNIFORM
COMMERCIAL CODE. ANY DISPUTES, CLAIMS, OR CONTROVERSIES CONCERNING THE
LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR REMEDY,
CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR OTHERWISE
MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE ARBITRATED;
PROVIDED, HOWEVER THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE POWER TO ENJOIN
OR RESTRAIN ANY ACT OF ANY PARTY. JUDGMENT UPON ANY AWARD RENDERED BY ANY
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE STATUTE OF
LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSE. THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT OF THIS ARBITRATION PROVISION.
Dated as of July ____ 2001.
----------------------------
Xxxxx X. Xxxxxxxxx
STATE OF _________ )
)SS:
COUNTY OF _______ )
Before me the undersigned, a Notary Public in and for said County and
State, personally appeared XXXXX X. XXXXXXXXX, a resident of the State of
Indiana, who acknowledged the execution of the foregoing Guaranty Agreement this
______ day of July, 2001.
Signature: _____________________
Printed: _______________________
Notary Public
My Commission Expires: _______________
My County of Residence: _______________
Exhibit "P"
GUARANTY AGREEMENT
This undertaking and agreement (this "Guaranty") is made by XXXXXXX XXXXXX,
a resident of the State of Indiana (the "Guarantor"), in favor of FIRST INDIANA
BANK, a federal savings bank (the "Bank") in consideration of the loans
described in this Guaranty made or to be made by the Bank to UNITED ACQUISITION,
INC., an Indiana corporation (the "Borrower"). This Guaranty is on the following
terms:
1. BACKGROUND OF THIS GUARANTY -- CERTAIN DEFINITIONS. The Bank and the
Borrower are parties to a Credit Agreement dated the date of this Guaranty (the
"Credit Agreement") under the terms of which the Bank has agreed to extend a
revolving line of credit in the maximum aggregate outstanding principal amount
of $3,500,000.00 (referred to in the Credit Agreement as the "Revolving Loan"),
a term loan in the original principal amount of $291,000.00 (referred to in the
Credit Agreement as the "Term Loan"), a second term loan in the original
principal amount of $1,116,000.00 (referred to in the Credit Agreement as "Term
Loan II"), and a third term loan in the original principal amount of
$1,750,000.00 (referred to in the Credit Agreement as "Term Loan III") to the
Borrower subject to the fulfillment of certain conditions, one of which is the
execution and delivery by the Guarantor of this Guaranty. This Guaranty is made
by the Guarantor in consideration of the agreement of the Bank to make the
Revolving Loan, the Term Loan, Term Loan II, and Term Loan III (collectively,
the "Loans"). All defined terms used in this Guaranty and which are not
specifically defined herein are used as defined in the Credit Agreement. The
term "Obligations" as used in this Guaranty means all of the obligations of the
Borrower in favor of the Bank of every type and description, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
including but not limited to the Borrower's obligation to repay the principal
of, interest on and expenses of collection of the Loans as provided in the
Credit Agreement and the other Loan Documents, including any Advances under the
Revolving Loan made after this date and after the initial Revolving Loan
Maturity Date pursuant to any extension or extensions of the Revolving Loan
Maturity Date, and all other obligations incurred pursuant to the terms of the
Credit Agreement and any other Loan Document including any obligations arising
on account of any amendment to or extension of the Credit Agreement or any other
Loan Document. The term "Default" means an "Event of Default" as defined in the
Credit Agreement.
2. THE GUARANTY. The Guarantor guarantees the full and prompt payment of
all of the Obligations when due, whether at scheduled maturity or at maturity by
virtue of acceleration on account of a Default. The Guarantor further agrees to
pay to the Bank an amount equal to all expenses, including reasonable attorneys'
fees, paid or incurred by the Bank after Default in endeavoring to enforce this
Guaranty.
Notwithstanding any other provision of this Guaranty, the maximum amount
which the Guarantor may be required to pay under the terms of this Guaranty
shall not exceed $500,000.00, together with interest at a variable rate equal at
all times to the Prime Rate plus two percent (2%) per annum on any portion of
any amount payable under the terms of this Guaranty which remains unpaid after
the date of the Bank's demand for payment, plus expenses of enforcement of this
Guaranty, including reasonable attorney fees.
As used in this paragraph, the term "Prime Rate" means a variable per annum
interest rate equal at all times to the rate of interest established and quoted
by the Bank as its Prime Rate, such rate to change contemporaneously with each
change in such established and quoted rate, provided that it is understood that
the Prime Rate shall not necessarily be representative of the rate of interest
actually charged by the Bank on any loan or class of loans.
Upon payment in full of all outstanding principal and accrued interest of
Term Loan III, provided that no Event of Default or Unmatured Event of Default
has occurred and is then continuing, all obligations and liabilities hereunder
shall terminate and this Guaranty shall be released in full, subject, however,
to reinstatement as provided in Section 8 herein.
3. FINANCIAL INFORMATION. As long as this Guaranty is in effect the
Guarantor shall furnish to the Bank the Guarantor's personal financial
statement, in such form as the Bank shall reasonably require, as of the end of
each calendar year and on or before April 15 of the following calendar year a
complete copy of the Guarantor's federal and state income tax returns or a
complete copy of a properly and timely filed extension for time in which to file
such taxes, and promptly upon the filing of such federal and state income tax
returns pursuant to the time allowed by such extension a complete copy of such
income tax returns.
4. GUARANTY ABSOLUTE. This Guaranty shall be absolute, continuing and
unconditional, irrespective of the irregularity, invalidity or unenforceability
of any other Loan Document and shall not be affected or impaired by any failure,
negligence or omission on the part of the Bank to realize upon and protect any
collateral for any of the Obligations. This Guaranty shall remain in full force
and effect until all of the Obligations have been satisfied in full and the
Commitment of the Bank to make Advances under the Revolving Loan has expired.
The Bank may from time to time, without notice to the Guarantor and without
affecting the Guarantor's liability under this Guaranty:
a. obtain a security interest in any property to secure any of the
Obligations;
b. obtain the primary or secondary liability of any party or parties in
addition to the Borrower and the Guarantor with respect to any of the
Obligations;
c. extend or renew any of the Obligations for any period beyond their
original due dates;
d. release or compromise the liability of any other party or parties
which are now or may hereafter become primarily or secondarily liable
with respect to any of the Obligations;
e. release any security interest which the Bank now has or may hereafter
obtain in any property securing any of the Obligations and permit any
substitution or exchange of any such property;
f. proceed against the Guarantor for payment of the Obligations, whether
or not the Bank shall have resorted to any property securing any of
the Obligations or shall have proceeded against the Borrower or any
other party primarily or secondarily liable with respect to any of the
Obligations;
g. amend the terms of the Credit Agreement from time to time in any
particulars, or
h. extend loans and other credit accommodations to the Borrower in
addition to the Revolving Loan, the Term Loan, Term Loan II, and Term
Loan III, and increase the maximum amount which may be loaned to the
Borrower under the Revolving Loan.
5. ASSIGNMENT AND PARTICIPATIONS. The Bank may, without notice to the
Borrower or the Guarantor, sell or otherwise assign all or any portion of the
Obligations and any participations therein, and upon any such sale or
assignment, the transferee shall have the right to enforce this Guaranty to the
extent of the transferee's interest directly against the Guarantor as fully as
if the transferee were specifically named in the Guaranty as the holder of such
interest, but the Bank shall have the unimpaired right to enforce this Guaranty
for the benefit of the Bank and for the benefit of any participant in respect of
whose participation the Bank has retained such right.
6. SUBROGATION WAIVER. In order to induce the Bank to make the Loans in
reliance, in part, upon this Guaranty, notwithstanding the fact that the
Guarantor is an "insider" with respect to the Borrower, as the term "insider" is
defined in the Bankruptcy Code, the Guarantor waives for itself, its legal
representatives and assigns any right of indemnity, reimbursement or
contribution from the Borrower or any other person obligated with respect to any
of the Obligations (any such other person being referred to hereafter in this
paragraph as a "Co-Obligor") or from the property of the Borrower or from the
property of any Co-Obligor, and the Guarantor further waives any right of
subrogation to the rights of the Bank against the Borrower or any Co-Obligor or
the property of the Borrower or any Co-Obligor which would otherwise arise by
virtue of any payment made by the Guarantor to the Bank on account of this
Guaranty, whether any such right of indemnity, reimbursement, contribution or
subrogation would otherwise arise by virtue of contract, whether express or
implied, with any person or as a matter of law or equity, and the Guarantor
undertakes on behalf of itself, its legal representatives and assigns that
neither the Guarantor nor the Guarantor's legal representatives or assigns will
attempt to exercise or accept the benefits of any such right and should the
Guarantor or the Guarantor's legal representative or assigns receive any payment
or distribution of money or other property on account of such right
notwithstanding the provisions of this paragraph, such money or other property
shall be held in trust by the recipient for the Bank and shall immediately be
delivered to the Bank for application to the Obligations in the same form as
received, with the addition only of such endorsements or assignments as may be
necessary to perfect the title of the Bank thereto.
7. OTHER WAIVERS. The Guarantor waives: (i) notice of the acceptance of
this Guaranty, (ii) notice of the existence and creation of all or any of the
Obligations, (iii) notice of nonpayment of any of the Obligations and (iv)
diligence by the Bank in collection of the Obligations and the protection of or
realization upon any collateral for the Obligations.
8. REINSTATEMENT. If any amount which is paid to the Bank by the Borrower
or any other party and which is applied by the Bank to the satisfaction of any
of the Obligations, is returned by the Bank to the Borrower or such other party
or a trustee in Bankruptcy or other legal representative of the Borrower or such
other party by virtue of a claim that such payment constituted a voidable
preference under the Bankruptcy Code or under any state insolvency law, whether
such amount is returned under court order or pursuant to settlement of the claim
of preference, then this Guaranty shall be reinstated as to such amount as
though such payment to the Bank had never been made and notwithstanding any
intervening return or cancellation of any note or other instrument or agreement
evidencing the reinstated Obligations.
9. MISCELLANEOUS. This Guaranty shall be binding upon the Guarantor, upon
the Guarantor's legal representatives, successors and assigns. If any provision
of this Guaranty is determined to be illegal or unenforceable, such provision
shall be deemed to be severable from the balance of the provisions of this
Guaranty and the remaining provisions shall be enforceable in accordance with
their terms.
10. AUTHORITY. In order to induce the Bank to accept this Guaranty and to
make the Loans to the Borrower, the Guarantor represents and warrants to the
Bank that: (i) the Guarantor is a limited partnership organized, existing and in
good standing under the laws of the State of Delaware; (ii) execution and
delivery of this Guaranty are within the Guarantor's powers, have been duly
authorized by all necessary partnership action and do not contravene or conflict
with any provision of law or of the Certificate of Limited Partnership or the
Limited Partnership Agreement of the Guarantor or of any agreement binding upon
the Guarantor or its properties, and (iii) this Guaranty is the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms.
11. ARBITRATION. BANK AND THE GUARANTOR AGREE THAT UPON THE WRITTEN DEMAND
OF EITHER PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF ANY LEGAL
PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT PROCEEDING, ALL
DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR
CLASS IN NATURE, ARISING FROM THIS AGREEMENT, OR ANY LOAN DOCUMENT OR OTHERWISE,
INCLUDING WITHOUT LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE RESOLVED BY
BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION
ASSOCIATION ("AAA"). ANY ARBITRATION PROCEEDING HELD PURSUANT TO THIS
ARBITRATION PROVISION SHALL BE CONDUCTED IN THE CITY NEAREST THE GUARANTOR'S
ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY OTHER PLACE SELECTED BY MUTUAL
AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SHALL
CONSTITUTE A WAIVER OF THIS ARBITRATION AGREEMENT OR BE PROHIBITED BY THIS
ARBITRATION AGREEMENT.
THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY DURING
ANY DISPUTE TO SEEK, USE, AND EMPLOY ANCILLARY OR PRELIMINARY RIGHTS AND/OR
REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON, PRESERVING,
PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER FORCIBLE ENTRY AND DETALNER FOR
POSSESSION OF ANY REAL OR PERSONAL PROPERTY, AND ANY SUCH ACTION SHALL NOT BE
DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES INCLUDE, WITHOUT LIMITATION,
OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER, INVOKING A POWER
OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE; OBTAINING A WRIT OF ATTACHMENT OR
IMPOSITION OF A RECEIVERSHIP; OR EXERCISING ANY RIGHTS RELATING TO PERSONAL
PROPERTY, INCLUDING EXERCISING THE RIGHT OF SETOFF, OR TAXING OR DISPOSING OF
SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO THE UNIFORM
COMMERCIAL CODE. ANY DISPUTES, CLAIMS, OR CONTROVERSIES CONCERNING THE
LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR REMEDY,
CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR OTHERWISE
MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE ARBITRATED;
PROVIDED, HOWEVER THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE POWER TO ENJOIN
OR RESTRAIN ANY ACT OF ANY PARTY. JUDGMENT UPON ANY AWARD RENDERED BY ANY
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE STATUTE OF
LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSE. THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO THE
CONSTRUCTION, INTERPRETATION; AND ENFORCEMENT OF THIS ARBITRATION PROVISION.
Dated as of July ___ 2001.
-----------------------------------
Xxxxxxx Xxxxxx
STATE OF ________ )
) SS:
COUNTY OF _______ )
Before me the undersigned, a Notary Public in and for said County and
State, personally appeared XXXXXXX XXXXXX, a resident of the State of Indiana,
who acknowledged the execution of the foregoing Guaranty Agreement this ______
day of July, 2001.
Signature: ___________________________
Printed: _____________________________
Notary Public
My Commission Expires: ______________
My County of Residence: ______________
Exhibit "Q"
SUBORDINATION AGREEMENT
(Management Fees)
UNITED ACQUISITION, INC., an Indiana corporation (the "Company"), FIRST
INDIANA BANK, a federal savings bank (the "Bank"), and the XXXXXX CORPORATION, a
New York corporation (the "Junior Creditor"), agree as follows:
1. Background -- Definitions. This Agreement is made in the context of the
following agreed state of facts:
a. The Bank and the Company are parties to a Credit Agreement dated the
date of this Subordination Agreement under the terms of which the Bank
will extend a revolving line of credit (the "Revolving Loan") to the
Company for loans up to a maximum outstanding principal amount of
$3,500,000.00, a term loan (the "Term Loan") in the principal amount
of $291,000.00, a second term loan ("Term Loan II") in the principal
amount of $1,116,000.00, and a third term loan ("Term Loan III") in
the principal amount of $1,750,000.00. The Revolving Loan, the Term
Loan, Term Loan II, and Term Loan III are hereafter referred to
collectively as the "Loans," and the Term Loan, Term Loan II, and Term
Loan III, are hereafter sometimes referred to collectively as the
"Term Loans." All obligations of the Company to the Bank on account of
the Loans, whether such obligations now exist or arise hereafter,
including principal, interest and expenses of collection, and
including any obligations on account of any extension, renewal or
restructuring of the Loans, are hereafter referred to as the "Senior
Obligations."
b. The Company is obligated to pay to the Junior Creditor management fees
pursuant to the terms of a Management Agreement entered into between
the Junior Creditor and the Company dated as of July ,2001, as may be
amended (the "Management Agreement"). All obligations of the Company
to the Junior Creditor now represented by the Management Agreement are
hereafter referred to as the "Junior Obligations.
As used in this Agreement, the term "Loan Document" means any instrument or
document which evidences or secures the Loans or any of them or which expresses
an agreement between the Company and the Bank as to terms applicable to the
Loans or any of them. As used in this Agreement, the term "Default" means an
Event of Default or Unmatured Event of Default as those terms are defined in the
Credit Agreement and includes, without limitation, not only failure of the
Company to pay any installment of principal or interest on any of the Loans when
due, but also failure of the Company to observe certain covenants contained in
the Credit Agreement, including financial covenants. As used in this Agreement,
the term "Insolvency Proceeding" means any proceeding, whether voluntary or
involuntary, for the distribution, division or application of assets of the
Company or the proceeds thereof, regardless of whether such proceeding is for
the liquidation, dissolution, winding up of affairs, reorganization or
arrangement of the obligations of the Company, or for a composition among the
creditors of the Company and whether in bankruptcy or in connection with a
receivership or under an assignment for the benefit of the Creditors of the
Company or otherwise including, without limitation, any meeting of Creditors of
the Company in connection with any such proceeding.
2. Subordination. The Junior Obligations are and shall hereafter be
subordinate and inferior in right of payment to all of the Senior Obligations.
Notwithstanding any provision to the contrary contained in the Management
Agreement or any other agreement between the Company and the Junior Creditor
with respect to the payment of management fees, the Company may make the
regularly scheduled management fee payments provided under the terms of the
Management Agreement only so long as no Default has occurred and is continuing
or would occur as a result of such payment, and, provided further, that no such
payment shall be made more than ten (10) days prior to its regularly scheduled
due date.
The Company shall not be required to perform or omit any other act otherwise
required to be performed or omitted under the terms of the Management Agreement
or otherwise with respect to the Junior Obligations at any time such performance
or omission would result in the occurrence of a Default. The due date for any
payment or performance of any Junior Obligation shall be deemed to be extended
during any period in which such payment or performance is prevented by the
provisions of this Agreement, and no cause of action against the Company will
accrue to the Junior Creditor or any subsequent holder of the Junior Obligations
during the continuance of any such extension or as a result of the nonpayment of
the management fees otherwise required under the Management Agreement but
prohibited to be paid pursuant to the provisions hereof.
3. Improper Payment. Any amount paid by the Company to the Junior Creditor
in violation of any provision of this Agreement shall be received in trust by
the Junior Creditor for the benefit of the Bank and shall, with or without
demand, be immediately delivered by the Junior Creditor to the Bank in the same
form in which received, with the addition only of such endorsements or
assignments as may be necessary to perfect the title of the Bank to such
payment. Such amounts may be applied by the Bank to any item of the Senior
Obligations in such order as the Bank in its discretion shall determine or may
be returned to the Company at the Bank's discretion. Upon the request of the
Bank, the Company and the Junior Creditor will execute such documents and
perform all such other acts as may reasonably be required to rescind premature
performance of any Junior Obligation and to reestablish, to the maximum extent
practical, the status ~ prior to such premature performance.
4. Authority of Bank to Act for Junior Creditor. The Junior Creditor
appoints the Bank or, at the Bank's discretion any officer of the Bank, as the
Junior Creditor's attorney-in-fact, with full power of substitution, and with
the exclusive right and power to enforce claims arising on account of the Junior
Obligations by proof of debt, proof of claim or otherwise in any Insolvency
Proceeding; to collect any assets of the Company distributed in any such
Proceeding by way of dividend or otherwise, and to receive any securities of the
Company or of any reorganized entity emerging from any Insolvency Proceeding,
which securities are issued and distributed on account of the Junior
Obligations; to vote claims of the Junior Creditor arising on account of the
Junior Obligations in any Insolvency Proceeding and to accept or reject any plan
of partial or complete liquidation, reorganization, arrangement, composition or
extension in any Insolvency Proceeding; to execute any endorsement or assignment
of the Management Agreement required in connection with any Insolvency
Proceeding, and generally to take any action in connection with any Insolvency
Proceeding which the Junior Creditor would be authorized to take but for this
Agreement. Any action taken by the Bank or the Bank's officer pursuant to the
power of attorney granted under the terms of this Paragraph shall be taken for
the use and benefit of the Bank, and may be taken in the name of the Bank or in
the name of the Junior Creditor and without notice to the Junior Creditor. Such
power of attorney is a power coupled with an interest and shall be irrevocable
until all of the Senior Obligations have been satisfied in full and until the
Bank is no longer under any obligation under the terms of the Credit Agreement
to make any further loan or advance to the Company.
5. Distributions in Liquidation. In the event of the liquidation of the
Company or the distribution of any of its assets or the securities of any
successor on account of any liquidation, bankruptcy, receivership,
reorganization, assignment for the benefit of creditors or similar proceeding,
the Junior Creditor shall not be entitled to any payment or distribution on
account of any Junior Obligation until all Senior Obligations have been
satisfied in full, and the Junior Creditor shall receive any money, securities
or other property distributed in any such proceeding to the Junior Creditor on
account of Junior Obligations in trust for the benefit of the Bank and shall
deliver any such property to the Bank in the same form as received, adding only
such endorsements or assignments as may be necessary to perfect the title of the
Bank to such property, for application to the satisfaction of the Senior
Obligations in such order as the Bank in its discretion may determine. Any
excess of such property remaining after satisfaction of all of the Senior
Obligations shall be returned to the Junior Creditor. The Bank may liquidate any
noncash property received from the Junior Creditor because of any provision of
this Section in the manner in which collateral may be liquidated under the terms
of the Uniform Commercial Code as enacted in the State of Indiana, and such
property may be liquidated in any order that the Bank shall determine in the
exercise of the Bank's sole discretion.
6. Subordination Absolute. The subordination of the Junior Obligations to
the Senior Obligations effected by this Subordination Agreement shall be
absolute and the Bank may from time to time, without the consent of or notice to
the Junior Creditor and without affecting the subordination of the Junior
Obligations to the Senior Obligations: (i) obtain a security interest in any
property to secure any of the Senior Obligations; (ii) obtain the primary or
secondary liability of any party or parties in addition to the Company with
respect to any of the Senior Obligations; (iii) extend or renew any of the
Senior Obligations for any period beyond their original due dates; (iv) release
or compromise any liability of any other party or parties primarily or
secondarily liable with respect to any of the Senior Obligations; (v) release
any security interest that the Bank might now have or hereafter obtain in any
property securing any of the Senior Obligations and permit any substitution or
exchange of any such property; (vi) extend loans and other credit accommodations
to the Company in addition to the Revolving Loan and the Term Loans and increase
the maximum amount which may be loaned to the Company under the Revolving Loan;
provided, that nothing contained in this Agreement shall be construed so as to
require the Bank to apply the proceeds of collateral or guaranties held for both
the Senior Obligations and other obligations of the Company which are not
entitled to the benefit of this Agreement in any particular order.
7. Notice of Subordination. The Company and the Junior Creditor shall,
contemporaneously with the execution of this Agreement, cause the following
legend or provision to be included in the Management Agreement:
This Management Agreement is subject to a Subordination Agreement
dated as of July __, 2001, in favor of FIRST INDIANA BANK.
A photocopy of the Management Agreement with such legend endorsed thereon
shall immediately be delivered to the Bank.
8. Successors and Assigns. This Agreement shall be binding upon the Company
and the Junior Creditor and the Junior Creditor's successors in interest to the
Management Agreement and the Junior Obligations and shall inure to the benefit
of the Bank and its successors and assigns.
9. Severability. If any provision of this Agreement is determined to be
illegal or unenforceable, such provision shall be deemed to be severable from
the balance of the provisions of this Agreement and the remaining provisions
shall be enforceable in accordance with their terms.
10. Governing Law. This Agreement is made under and will be governed in all
cases by the substantive laws of the State of Indiana, notwithstanding the fact
that Indiana conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
Dated as of July ___ 2001.
UNITED ACQUISITION, INC., an Indiana
Corporation
By: _______________________________
-----------------------------------
(Printed Name and Title)
FIRST INDIANA BANK, a federal savings bank
By: ________________________________
Xxxxxxx X. Xxxxxxxxx, Vice President
XXXXXX CORPORATION, a New York corporation
By: ________________________________
-----------------------------------
(Printed Name and Title)
Exhibit "R"
St. Xxxxxx County, Michigan
LEASEHOLD MORTGAGE
THIS LEASEHOLD MORTGAGE CONSTITUTES A FUTURE ADVANCE
LEASEHOLD MORTGAGE UNDER MICHIGAN LAW
FOR PURPOSES OF THE SECURITY AGREEMENT CONTAINED IN THIS INSTRUMENT THE "SECURED
PARTY" AND THE "DEBTOR" AND THEIR RESPECTIVE ADDRESSES ARE AS FOLLOWS:
SECURED PARTY: FIRST INDIANA BANK
000 XXXXX XXXXXXXXXXXX
XXXXX 0000
XXXXXXXXXXXX, XXXXXXX 00000
ATTENTION: XXXXXXX X. XXXXXXXXX, VICE PRESIDENT
DEBTOR: UNITED ACQUISITION, INC.
00000 XXXXXX XXXX 0
XXXXXXX, XXXXXXX 00000
ATTENTION: XXXX XXXXXXX, PRESIDENT
THIS INSTRUMENT WHEN RECORDED SHALL CONSTITUTE A "FIXTURE FILING" FOR
PURPOSES OF THE UNIFORM COMMERCIAL CODE. THE ADDRESS OF THE SECURED PARTY SHOWN
ABOVE IS THE ADDRESS AT WHICH INFORMATION CONCERNING THE SECURED PARTY'S
SECURITY INTEREST MAY BE OBTAINED.
UNITED ACQUISITION, INC., an Indiana corporation (the "Mortgagor"),
MORTGAGES AND WARRANTS to FIRST INDIANA BANK, a federal savings bank with its
principal office in Indianapolis, Indiana, (the "Bank") and the Mortgagor GRANTS
A SECURITY INTEREST to the Bank in the following property, to-wit:
all of the leasehold estate of the Mortgagor in that Real Estate (the "Real
Estate") located in St. Xxxxxx County, Michigan, described in the
"Schedule," which is attached to this Leasehold Mortgage (this "Mortgage"),
and incorporated herein by reference, which leasehold estate is held by the
Mortgagor, under the terms of a Real Estate Lease entered into among Xxxxxx
X. Xxxxxx, as Trustee of the Xxxxxx X. Xxxxxx Trust dated September 11,
1992, Xxxxxxxxxxx X. Xxxxxx, and Xxxxxx X. Xxxxx (collectively, the
"Landlord") as Lessor, and the Mortgagor as Lessee dated July ________,
2001, which lease agreement or a memorandum thereof is recorded in the
office of the Recorder of St. Xxxxxx County, Michigan on
____________________, 2001, as __________________________.
all of the Mortgagor's present and future right, title, and interest,
whether as owner or lessee, in and to any items of furniture, machinery,
equipment or other tangible personal property which are now or hereafter
become attached to the Real Estate or any improvement thereon so as to
constitute a fixture (the "Personal Property").
TOGETHER WITH all present and future improvements, rights, privileges,
interests, easements, hereditaments, and appurtenances thereunto belonging or in
any manner pertaining thereto, including, without limitation, any leasehold
estate or interest in the fee simple title in or to the Real Estate hereafter
acquired by the Mortgagor, and the proceeds therefrom (all of such Real Estate,
Personal Property and other rights being hereafter referred to as the "Mortgaged
Premises").
The lease agreement referred to above and any other written or oral lease
under which the Mortgagor may hereafter occupy all or any portion of the
Mortgaged Premises is referred to hereafter as the "Lease."
This Mortgage is given to secure all of the Mortgagor's Obligations to the
Bank. The term "Obligations" as used in this Mortgage means all obligations of
the Mortgagor in favor of the Bank of every type and description, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, including but not limited to all Obligations of the Mortgagor
m favor of the Bank arising under a Credit Agreement between the Mortgagor and
the Bank dated the date of this Mortgage (the "Credit Agreement"), which
Obligations include the obligation of the Mortgagor to repay all advances made
by the Bank to the Mortgagor under a revolving line of credit in the maximum
outstanding aggregate principal amount of $3,500,000.00 ("Revolving Loan"), to
repay a term loan ("Term Loan") in the original principal amount of $291,000.00,
which Term Loan has a final maturity date of July 1, 2006, to repay a second
term loan ("Term Loan II") in the original principal amount of $1,116,000.00,
which Term Loan II has a final maturity date of July 1, 2006, to repay a third
term loan ("Term Loan III") in the original principal amount of $1,750,000.00,
which Term Loan III has a final maturity date of July 1, 2003, and all now
existing and future obligations of the Mortgagor to the Bank, however created,
evidenced, or acquired, whether direct or indirect, absolute or contingent,
matured or unmatured, including future obligations and advances to the same
extent as if such future obligations and advances were made on the date of the
execution of this Mortgage (it being understood that the Bank is not under any
obligation to make any future advances except as specifically set forth in the
Credit Agreement), provided, however, that any such future obligations or
advances shall be secured by this Mortgage up to the maximum aggregate amount of
$10,000,000.00 outstanding at any time. All of the Obligations, including those
arising under the Credit Agreement, are secured as they now exist and as they
may be increased or otherwise changed by any amendment to any instrument or
agreement which now or hereafter evidences, secures or expresses terms
applicable to any of the Obligations, including amendments to the Credit
Agreement and any "Loan Document" as that term is defined in the Credit
Agreement.
As additional security for the Obligations, insurance premiums, taxes and
assessments, of the type and manner herein provided, pursuant to Act 210 of the
Public Acts of Michigan of 1953, as amended, the Mortgagor assigns to the Bank
the rents, issues and profits of the Mortgaged Premises, including any rents and
all other amounts (collectively "Lease Payments") which are due or shall become
due to the Mortgagor under the terms of any present or future lease (a "Lease"),
oral or written, of all or any portion of the Mortgaged Premises (all such
rents, issues, profits and Lease Payments are hereafter collectively referred to
as the "Rents") under any Lease or Leases of the Mortgaged Premises (including
any extensions, amendments or renewals thereof), whether due or to become due,
including all such Leases in existence or coming into existence during the
period this Mortgage is in effect. This assignment of rents shall run with the
land and be good and valid as against the Mortgagor herein or those claiming by,
under or through the Mortgage, from the date of the recording of this
instrument. This assignment shall continue to be operative during the
foreclosure or any other proceedings taken to enforce this Mortgage. In the
event of a sale or foreclosure which shall result in a deficiency, this
assignment shall stand as security during the redemption period for the payment
of such deficiency. This assignment shall not be construed as obligating the
Bank to perform any of the covenants or undertakings required to be performed by
the Mortgagor contained in any Leases. This assignment of rents is an absolute
assignment, and is intended to vest in the Bank the right to collect all Rents
subject only to the conditional license to collect Rents granted by the Bank to
the Mortgagor under the terms of numbered Paragraph 8 of this Mortgage. These
provisions are not intended to evidence an additional recordable event, as may
be prohibited by Act 459 of the Public Acts of Michigan of 1996, but rather are
included in this Mortgage for purposes of complying with any applicable
requirements of Act 210 of the Public Acts of Michigan of 1953, as amended.
The Mortgagor further covenants and agrees as follows:
1. The Mortgagor shall pay and perform all of the Obligations promptly when
payment or performance is due, with reasonable attorneys' fees and costs of
collection, and without relief from valuation and appraisement laws.
2. The Mortgagor shall keep the Mortgaged Premises in good repair and shall
not commit or permit waste thereon or do or permit to be done anything that may
impair the value of the Mortgaged Premises. The Mortgagor shall promptly restore
any part of the Mortgaged Premises which may be damaged or destroyed. The
Mortgagor shall pay when due all taxes and assessments levied or assessed
against the Mortgaged Premises or any part thereof. Failure of the Mortgagor to
pay any taxes, assessments or governmental charges levied or assessed against
the Mortgaged Premises, or any part thereof, or any installment of any such tax,
assessment or charge, or any premium upon any policy of insurance covering any
part of the Mortgaged Premises, at the time or times such taxes, assessments,
charges, installments thereof or insurance premiums are due and payable, shall
constitute waste, a Default (as hereafter defined), and in accordance with the
provisions of Act No. 236 of the Public Acts of Michigan for 1961, as amended,
shall entitle the Bank to exercise the remedies afforded by such Act and the
Credit Agreement when the same become an Event of Default thereunder. Payment by
the Bank for and on behalf of the Mortgagor of any such delinquent tax,
assessment, charge or insurance premium properly payable by the Mortgagor under
the terms of this Mortgage shall not cure the Default herein described nor shall
it in any manner impair the Bank's right to the appointment of a receiver on
account thereof, as herein provided. Upon the happening of any such acts of
waste, and the same becoming a Default (as hereafter defined), and on proper
application made therefor by the Bank to a court of competent jurisdiction, the
Bank shall forthwith be entitled to the appointment of a receiver of the
Mortgaged Premises and of the earnings, income, rents, issues and profits
thereof, with such powers as the court making such appointment shall confer, and
the Mortgagor hereby irrevocably consents to such appointment and waives notice
of any application therefor.
3. The Mortgagor shall keep the Mortgaged Premises in good repair and shall
not commit or permit waste thereon, or do or permit to be done anything that may
impair the value of the Mortgaged Premises. To the extent permissible under the
terms of the Lease, the Mortgagor shall promptly restore any part of the
Mortgaged Premises which may be damaged or destroyed. The Mortgagor shall pay or
cause to be paid when due all taxes and assessments levied or assessed against
the Mortgaged Premises or any part thereof.
4. The Mortgagor shall comply with all statutes, ordinances, rules,
regulations, orders, and directions of any legislative, executive,
administrative, or judicial body or official applicable to the Mortgaged
Premises, or any part thereof, or to the Mortgagor, or to the operation of any
business of Mortgagor which directly affects the Mortgaged Premises; provided,
however, that the Mortgagor may contest any of the matters referred to in this
paragraph in any reasonable manner which in the judgment of the Bank will not
adversely affect the rights of the Bank, its successors or assigns.
5. The Mortgagor will procure and maintain in effect at all times insurance
written by insurance companies acceptable to the Bank which insures against loss
or destruction of the Mortgaged Premises by fire, wind storm, lightning,
vandalism and malicious mischief and such other perils as are generally covered
by "extended coverage" insurance for the full replacement value of the Mortgaged
Premises. All policies providing such insurance shall provide that any loss
thereunder shall be payable to the Bank under a standard form of secured
lender's loss payable endorsement. The Mortgagor shall also procure business
interruption insurance in such amounts as the Bank may reasonably require. The
Mortgagor authorizes the Bank to endorse on Mortgagor's behalf and to negotiate
drafts representing proceeds of such insurance, provided that the Bank shall
remit to the Mortgagor such surplus, if any, as remains after the proceeds have
been applied at the Bank's option: (a) to the satisfaction of the Obligations or
to the establishment of a cash collateral account securing the Obligations, or
(b) to the restoration of the Mortgaged Premises; provided, however, that so
long as no Default (as hereafter defined) has occurred and is continuing, and
provided that the Mortgagor can demonstrate to the Bank's satisfaction that
restoration of the Mortgaged Premises is physically and economically feasible,
such proceeds shall be applied, at the Mortgagor's option and to the extent
necessary, as provided in the foregoing clause (c) and any balance shall be
remitted to the Mortgagor. Certificates evidencing the existence of all of the
insurance required under the terms of this Mortgage shall be furnished to the
Bank and the original policies providing such insurance shall be delivered to
the Bank at the Bank's request.
6. Upon demand and failure of the Mortgagor so to do, the Bank may, in its
discretion, advance and pay all sums necessary to protect and preserve the
Mortgaged Premises, and all sums so advanced and paid by the Bank shall become a
part of the indebtedness secured hereby, shall bear interest from date of
payment at a rate equal to the Prime Rate plus three percent (4 %) per annum,
and shall be payable to the Bank upon demand. Such sums shall include, but not
by way of limitation: (a) rents or other amounts due and payable to the Landlord
and any other amounts necessary to cure any default by the Mortgagor under the
terms of the Lease, (b) taxes, assessments and other charges which may be or
become senior to this Mortgage as liens on the Mortgaged Premises, or any part
thereof; (c) the cost of any title insurance, surveys, or other evidence which
in the reasonable discretion of the Bank may be required in order to evidence,
insure or preserve the lien of this Mortgage; (d) all costs, expenses, and
reasonable attorneys' fees incurred by the Bank in respect of any and all legal
and equitable actions which relate to this Mortgage or to the Mortgaged
Premises, and (e) the cost of any repairs respecting the Mortgaged Premises
which are reasonably deemed necessary by the Bank. As used in this Mortgage, the
term "Prime Rate" means a variable per annum rate of interest equal at all times
to the rate of interest established and quoted by the Bank as its Prime Rate,
such rate to change contemporaneously with each change in such established and
quoted rate; provided that it is understood the Prime Rate shall not necessarily
be representative of the rate of interest actually charged by the Bank on any
loan or class of loans. The Bank shall be subrogated to the rights of the holder
of each lien or claim paid with moneys secured hereby.
7. If all or any part of the Mortgaged Premises is damaged, taken, or
acquired, either temporarily or permanently, in any condemnation proceeding, or
by exercise of the right of eminent domain, or by the alteration of the grade of
any street affecting the Mortgaged Premises, the amount of any award or other
payment for such taking or damages made in consideration thereof, to the extent
of the full amount of the then remaining unpaid Obligations, is hereby assigned
to the Bank, which is empowered to collect and receive the same and to give
proper receipts therefor in the name of the Mortgagor, and all such sums shall
be paid forthwith directly to the Bank. Any award or payment so received by the
Bank may, at the option of the Bank: (a) be applied to the satisfaction of the
Obligations or to the establishment of a cash collateral account for the
Obligations, or (b) be released, in whole or in part, to the Mortgagor for the
purpose of altering, restoring, or rebuilding any part of the Mortgaged Premises
which may have been altered, damaged or destroyed as a result of such taking,
alteration, or proceeding; provided, however, that so long as no Default has
occurred and is continuing, and provided that the Mortgagor can reasonably
demonstrate to the Bank's satisfaction that any proposed alteration, restoration
or rebuilding is physically and economically feasible, and is permissible under
the terms of the Lease, such awards shall be applied at the Mortgagor's option
and to the extent necessary as provided in the foregoing clause (b).
8. At any time a Default (as hereafter defined) has occurred and is
continuing, the Bank may enter upon and take possession of the Real Estate or
any part thereof, and at any such time, or if the Bank in the reasonable
exercise of its discretion determines that payment or performance of any of the
Obligations is insecure, the Bank may demand, xxx for, receive and give
receipts, releases and satisfactions for all Rents. At any time that the Bank
has not exercised its right to take possession of the Real Estate and there is
not in effect any demand by the Bank for the direct payment of Lease Payments to
the Bank given pursuant to the immediately preceding sentence, the Mortgagor may
collect Lease Payments provided that no Rents shall be collected by the
Mortgagor more than thirty (30) days in advance of the period of occupancy to
which they relate. Lease Payments collected by the Mortgagor pursuant to the
license granted in the immediately preceding sentence shall be held by the
Mortgagor as trustee for the benefit of the Bank and shall be applied to the
satisfaction of Obligations to the extent that any are then due and payable. Any
balance remaining after satisfaction of all Obligations which are then due and
payable may be used by the Mortgagor for any proper purpose. Any demand by the
Bank upon any tenant of the Mortgaged Premises accompanied by a copy of this
Mortgage shall be sufficient authority for such tenant thereafter to make all
Lease Payments directly to the Bank and any such tenant shall have no obligation
or authority to inquire into the propriety of any such demand. Upon making Lease
Payments to the Bank pursuant to the Bank's demand, any tenant of the Mortgaged
Premises shall be as fully discharged of its obligations under any lease to the
extent of such payments as if such payments had been made directly to the
Mortgagor. If at any time Lease Payments are required to be made directly to the
Bank under the terms of this paragraph and notwithstanding such requirement such
payments are made to the Mortgagor, the Mortgagor will receive such payments in
trust for the Bank and will forward them immediately to the Bank in the form in
which received, adding only such endorsements or assignments as may be necessary
to perfect the Bank's title thereto. Any amounts collected by the Bank pursuant
to the assignment of rents contained in this Mortgage shall be applied by the
Bank to the payment of such of the Obligations as are then due and payable as
the Bank in its sole discretion shall determine. If no Obligations are then due
and payable, such amounts may be held by the Bank as cash collateral for the
Obligations, without liability for interest thereon, provided that the Bank
will, at the direction of the Mortgagor, invest such amounts for the account and
at the risk of the Mortgagor in U.S. Treasury Bills with less than 60 days
remaining to maturity or in similar essentially risk-free, cash equivalent
investments as the Mortgagor may reasonably direct and any earnings derived from
such investments will become a part of the cash collateral account. Any portion
or all of the cash collateral account which is not applied to Obligations
pursuant to the terms of this paragraph may at the discretion of the Bank be
released to the Mortgagor. The authority given to collect Rents conferred upon
the Bank under the terms of this Mortgage is irrevocable. In the event that the
Mortgagor fails, refuses or neglects to deliver or surrender such possession,
the Bank shall be entitled to the appointment of a receiver of the Mortgaged
Premises and of the earnings, income, rents, issue and profits thereof, with
such powers as the court making such appointment may confer. The Mortgagor
agrees to execute and deliver to the Bank assignments of rents on all future
leases on the Mortgaged Premises during the term of this Mortgage, such
assignments to be in the form and manner satisfactory to the Bank. Any default
by the Mortgagor under the terms and conditions of any such assignment shall be
a Default (as hereafter defined) under the terms and conditions of this
Mortgage, entitling the Bank to exercise any and all rights and remedies
provided by this Mortgage. If the Mortgagor shall fail to perform and discharge
any of the obligations, covenants and agreements required to be performed by it
under any such assignment of rents, the Bank may elect to perform the same; any
sums which may be so paid out by the Bank, including the cost, expenses and
attorneys' fees paid out in any suit affecting the same, shall bear interest at
the a rate equal to the Prime Rate plus four percent (4%) per annum from the
dates of such payments, shall be paid by the Mortgagor to the Bank upon demand
and shall be deemed a part of the Obligations hereby secured and recoverable as
such in all respects. The Mortgagor shall assign to the Bank, upon request, as
further security for the Obligations hereby secured, the Mortgagor's interest in
all agreements, contracts licenses and permits affecting the Mortgaged Premises,
such assignments to be made by instruments in form satisfactory to the Bank, but
no such assignment shall be construed as a consent by the Bank to any agreement,
contract, license or permit so assigned, or to impose upon the Bank any
obligations with respect thereto.
9. The Mortgagor grants to the Bank as secured party a security interest in
the Personal Property in accordance with the provisions of the Uniform
Commercial Code as enacted in Indiana. The Mortgagor authorizes the Bank at the
expense of the Mortgagor to execute on its behalf and file any other financing
statements deemed necessary by the Bank to perfect its security interest in the
Personal Property and to file such financing statements in those public offices
deemed necessary by the Bank. Such financing statements may be signed by the
Bank alone. In addition, the Mortgagor shall execute and deliver any financing
statement or other document that the Bank may request to perfect or to further
evidence the security interest created by this Mortgage.
10. If, after the execution of this Mortgage, applicable law requires the
taxation of this Mortgage or any Obligation secured by this Mortgage, the
Mortgagor, upon demand by the Bank, shall pay such taxes or reimburse the Bank
therefor unless it is unlawful to require the Mortgagor to do so.
Notwithstanding the foregoing, the Mortgagor shall not be obligated to pay any
portion of any of the Bank's federal, state or local income taxes.
11. As used in this paragraph, the following terms have the meanings
indicated:
a. Clean-up. "Clean-up" means the removal or remediation of Contamination
or other response to Contamination in compliance with all
Environmental Laws and to the satisfaction of all applicable
governmental agencies, and in compliance with good commercial
practice.
b. Contamination. "Contamination" means the Release of any Hazardous
Substance on, in or under the Real Estate or the presence of any
Hazardous Substance on, in or under the Real Estate as the result of a
Release, or the emanation of any Hazardous Substance from the Real
Estate.
c. Environmental Laws. "Environmental Laws" means all federal, state and
local laws, statutes, codes, ordinances, regulations, rules or other
requirements with the force of law, including but not limited to
consent decrees and judicial or administrative orders, relating to the
environment, including but not limited to those applicable to the use,
storage, treatment, disposal or Release of any Hazardous Substances,
all as amended or modified from time to time including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"); the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"); the Clean Water Act, as
amended; the Clean Air Act, as amended; the Federal Insecticide,
Fungicide and Rodenticide Act, as amended; the Hazardous Materials
Transportation Act, as amended, and any and all environmental statutes
of the State of Michigan and all regulations promulgated under or
pursuant to such federal and Michigan Statutes.
d. Hazardous Substance. "Hazardous Substance" means any hazardous waste
or hazardous substance, or any pollutant or contaminant or toxic
substance or other chemicals or substances including, without
limitation, asbestos, petroleum, polychlorinated biphenyls, and any
other substance regulated by any Environmental Laws.
e. Release. "Release" means the spilling, leaking, disposing,
discharging, dumping, pouring, emitting, depositing, injecting
leaching, escaping or other release or threatened release, whether
intentional or unintentional, of any Hazardous Substance.
f. Regulatory Actions. "Regulatory Actions" means any claim, demand,
action or proceeding brought or instigated by any governmental
authority in connection with any Environmental Law including, without
limitation, any civil, criminal or administrative proceeding whether
or not seeking costs, damages, penalties or expenses.
g. Third-party Claims. "Third-party Claims" means any claim, action,
demand or proceeding, other than a Regulatory Action, based on
negligence, trespass, strict liability, nuisance, toxic tort or
detriment to human health or welfare due to Contamination, whether or
not seeking costs, damages, penalties, or expenses, and including any
action for contribution to Clean-up costs.
The Mortgagor shall indemnify, defend and hold harmless the Bank and its
affiliates, shareholders, directors, officers, employees and agents (all being
included in the word "Bank" for purposes of this paragraph) from any and all
claims, causes of action, damages, demands, fines, liabilities, losses,
penalties, judgments, settlements, expenses and costs, however defined, and of
whatever nature, known or unknown, absolute or contingent, including, but not
limited to, attorneys' fees, consultant's fees, fees of environmental or other
engineers, and related expenses including, without limitation, expenses related
to site inspections and soil and water analyses, which may be asserted against,
imposed on, suffered or incurred by the Bank arising out of or in any way
related to (a) any actual, alleged or threatened Release of any Hazardous
Substance on, in or under the Real Estate, (b) any related injury to human
health or safety (including wrongful death) or any actual or alleged injury to
the environment by reason of the condition of, or past or present activities on
the Real Estate, (c) any actual or alleged violation of Environmental Law
related to the Real Estate, (d) any lawsuit or administrative proceeding brought
or threatened by any person, including any governmental entity or agency,
federal, state or local, including any governmental order relating to or
occasioned by any actual or alleged Contamination or threat of Contamination,
(e) any lien imposed upon the Real Estate in favor of any governmental entity as
a result of any Contamination or threat of Contamination, and (f) all costs and
expenses of any Clean-up. The Mortgagor represents and covenants that
Mortgagor's storage, generation, transportation, handling or use, if any, of
Hazardous Substances on or from the Real Estate is currently, and will remain at
all times, in compliance with all applicable Environmental Laws. If any Clean-up
is required with respect to the Real Estate, the Mortgagor shall expeditiously
complete such Clean-up at the Mortgagor's expense and without the necessity of
demand by the Bank. If the Mortgagor should fail to initiate and diligently
pursue any Clean-up or should otherwise fail to perform any obligation under the
terms of this paragraph, the Bank may, at its sole discretion and without any
obligation to complete any Clean-up which it may cause to be commenced, cause
the Clean-up or partial Clean-up of the Real Estate and pay on behalf of the
Mortgagor any costs, fines or penalties imposed on the Mortgagor pursuant to any
Environmental Laws or make any other payment or perform any other action which
will prevent a lien in favor of any federal, state or local government authority
or any other person from attaching to the Real Property pursuant to the
provisions of any Environmental Law, and all costs and expenses of the Bank
incurred in pursuing any of the remedies provided in this paragraph shall be
added to the obligations secured by this Mortgage, which costs and expenses
shall become due and payable without notice as incurred by the Bank, together
with interest thereon at the Prime Rate plus four percent (4%) per annum until
paid.
12. The occurrence of any of the following events shall be deemed a
"Default" under this Mortgage:
(a) an "Event of Default" as defined in the Credit Agreement shall have
occurred and be continuing or the Mortgagor shall otherwise fail to
pay or perform any of the Obligations promptly when such payment or
performance is due or within such grace period as may be applicable;
(b) the Mortgagor shall otherwise fail to observe and perform the terms
and conditions of this Mortgage; or
(c) the Mortgagor shall abandon the Mortgaged Premises.
13. Upon the occurrence and continuance of a Default, all indebtedness
secured hereby shall, at the option of the Bank, become immediately due and
payable and this Mortgage may be foreclosed accordingly. The Bank shall be
entitled to the appointment of a receiver for the Mortgaged Premises to collect
the rents and profits and to maintain the Mortgaged Premises during any
foreclosure proceedings. The Bank shall have the option of proceeding as to both
the Real Estate and the Personal Property in accordance with its rights and
remedies in respect of the Real Estate, in which event the default provisions of
the Indiana Uniform Commercial Code shall not apply. If the Bank elects to
proceed with respect to the Personal Property separately from the Real Estate,
the requirement of the Indiana Uniform Commercial Code as to reasonable notice
of any proposed sale or disposition of the Personal Property shall be met if
such notice is delivered or mailed to the Mortgagor at its address stated above
at least ten (10) days prior to such sale or disposition. In any action to
foreclose this Mortgage, the Bank shall be entitled to recover, in addition to
all reasonable attorney and related paraprofessional expenses incurred in
connection therewith, all other reasonable costs and expenses associated with
foreclosure including, without limitation, all expenses incurred for title
searches, abstracts of title, title insurance, appraisals, surveys and
environmental assessments reasonably deemed necessary by the Bank, all of which
costs and expenses shall be additional amounts secured by this Mortgage. As used
in the preceding sentence, the term "environmental assessments" means
inspections and reports of environmental engineers or firms of environmental
engineers or other appropriate experts, and associated samplings and testings of
soil or groundwater, the purpose of which is to determine whether there is any
Contamination associated with the Real Estate and if so, the extent thereof, and
to estimate of the cost of Clean-up of any Contamination, and to determine
whether there are any underground storage tanks or any asbestos in, on, or under
the Real Estate and if so, whether there are any violations of Environmental
Laws in connection therewith. As used in this paragraph, the terms
"Contamination," "Clean-up" and "Environmental Laws" are used as defined in
numbered Paragraph 11.
14. Power is hereby granted to the Bank, if a Default exists, to grant,
bargain, sell, release and convey the Mortgaged Premises and appurtenances at
public auction or vendue, and on such sale to execute and deliver to the
purchasers, his, her, its or their heirs, successors and assigns, good, ample
and sufficient deed or deeds of conveyance in law, pursuant to the statute in
such case made and provided, and to apply the proceeds of such sale in the
manner hereinafter provided.
a. Upon a foreclosure sale of the Mortgaged Premises or any part thereof,
the proceeds of such sale shall be applied in the following order:
(i) to the payment of all costs of the suit or foreclosure, including
reasonable attorneys' fees and the cost of title insurance,
searches and abstracts;
(ii) to the payment of all other expenses of the Bank and the Bank,
including all monies expended by the Bank and all other amounts
payable by the Mortgagor to the Bank, the Bank or to any Bank
hereunder, with interest thereon;
(iii)to the payment of the principal and interest of the Obligations
secured hereby; and
(iv) to the payment of the surplus, if any, to the Mortgagor or to
whosoever shall be entitled thereto.
b. Upon any foreclosure sale of the Mortgaged Premises, the same may be
sold either as a whole or in parcels, as the Bank may elect, and if in
parcels, the same may be divided as the Bank may elect, and at the
election of the Bank may be offered first in parcels and then as a
whole, that offer producing the highest price for the entire Mortgaged
Premises to prevail, any law, statutory or otherwise, to the contrary
notwithstanding, and the Mortgagor hereby waives the right to require
any such sale to be made in parcels or the right to select such
parcels.
15. The Bank shall have the right to make all divisions under Section 108
of the Land Division Act, Act No. 288 of the Public Acts of 1967.
16. WARNING -- THIS MORTGAGE CONTAINS A POWER OF SALE AND, UPON DEFAULT,
MAY BE FORECLOSED BY ADVERTISEMENT. IN FORECLOSURE BY ADVERTISEMENT, NO HEARING
IS INVOLVED AND THE ONLY NOTICE REQUIRED IS TO PUBLISH NOTICE IN A LOCAL
NEWSPAPER AND TO POST A COPY OF THE NOTICE ON THE PROPERTY.
17. WAIVER -- IF THIS MORTGAGE IS FORECLOSED BY ADVERTISEMENT, THE
MORTGAGOR HEREBY VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY WAIVES ALL RIGHTS
UNDER THE CONSTITUTION AND LAWS QF THE STATE OF MICHIGAN AND CONSTITUTION AND
LAWS OF THE UNITED STATES TO ALL NOTICE AND A HEARING IN CONNECTION WITH THE
ABOVE MENTIONED FORECLOSURE BY ADVERTISEMENT, EXCEPT AS SET FORTH IN THE
MICHIGAN STATUTE PROVIDING FOR FORECLOSURE BY ADVERTISEMENT.
18. In connection with the Bank's right to possession of the Mortgaged
Premises upon a Default, the Mortgagor acknowledges that it has been advised
that there is a significant body of case law in Michigan which purportedly
provides that in the absence of a showing of waste of a character sufficient to
endanger the value of the Mortgaged Premises or other special factors, a
mortgagor is entitled to remain in possession of mortgaged premises, and to
enjoy the income, rents and profits therefrom, during the pendency of
foreclosure proceedings and until the expiration of the redemption period, even
if the mortgage documents expressly provide to the contrary. The Mortgagor
further acknowledges that it has been advised that the Bank recognizes the value
of the security covered hereby is inextricably intertwined with the
effectiveness of the management, maintenance and general operation of the
Mortgaged Premises, and that the Bank would not make the loans secured hereby
unless they could be assured that they would have the right to take possession
of the Mortgaged Premises through the Bank in order to manage or to control
management thereof, upon a Default, notwithstanding that foreclosure proceedings
may not have been instituted, or are pending, or the redemption period may not
have expired. ACCORDINGLY, THE MORTGAGOR HEREBY KNOWINGLY, INTELLIGENTLY AND
VOLUNTARILY WAIVES ALL RIGHT TO POSSESSION OF THE MORTGAGED PREMISES FROM AND
AFTER THE DATE OF A DEFAULT, UPON DEMAND FOR POSSESSION BY THE BANK, AND THE
MORTGAGOR AGREES NOT TO ASSERT ANY OBJECTION OR DEFENSE TO THE BANK REQUEST OR
PETITION TO A COURT FOR POSSESSION. THE RIGHTS HEREBY CONFERRED UPON THE BANK
HAVE BEEN AGREED UPON PRIOR TO ANY DEFAULT AND THE EXERCISE BY THE BANK OF ANY
SUCH RIGHTS SHALL NOT BE DEEMED TO PUT THE BANK IN THE STATUS OF A "MORTGAGEE IN
POSSESSION." THE MORTGAGOR ACKNOWLEDGES THAT THIS PROVISION IS MATERIAL TO THIS
TRANSACTION AND THAT THE BANK WOULD NOT MAKE THE LOANS SECURED HEREBY BUT FOR
THIS PARAGRAPH.
19. The Bank, at its option and on such terms as it may desire, may extend
the time of payment or performance of any part or all of the Obligations or
release any part of the Mortgaged Premises from the lien of this Mortgage
without impairing the lien of this Mortgage except as to the portion of the
Mortgaged Premises expressly released and without releasing the Mortgagor or any
guarantors or sureties of or from any of the Obligations. No delay by the Bank
in the exercise of any of its rights under this Mortgage shall preclude the
subsequent exercise thereof so long as any Default continues uncured, and no
waiver by the Bank of any Default of the Mortgagor shall operate as a waiver of
subsequent or other Defaults. The making of any payment by the Bank for any of
the purposes herein permitted shall not constitute a waiver of any breach of the
Mortgagor's covenant to perform such act. Notice by the Bank of its intention to
exercise any right or option under this Mortgage is expressly waived by the
Mortgagor, and any one or more of the Bank's rights or remedies under this
Mortgage may be enforced successively or concurrently. Time is of the essence of
this Mortgage.
20. All obligations of the Mortgagor under this Mortgage shall extend to
and be binding upon the successors and assigns of the Mortgagor, and shall inure
to the benefit of the Bank and its successors and assigns.
21. This Mortgage secures indebtedness incurred for a business purpose.
22. This Mortgage is given, in part, for the purpose of securing loan
advances which the Bank may make to or for the Mortgagor pursuant and subject to
the terms and provisions of the Credit Agreement. The parties hereto intend
that, in addition to any other debt or obligation secured hereby, this Mortgage
shall secure unpaid balances of loan advances made after this Mortgage is
delivered to the Register of Deeds of St. Xxxxxx County, Michigan, whether made
pursuant to an obligation of the Bank or otherwise, and in such event, such
advances shall be secured to the same extent as if such future advances were
made on the date hereto, although there may be no advance made at the time of
execution hereof and although there may be no indebtedness outstanding at the
time any advance is made. THIS MORTGAGE IS A FUTURE ADVANCE MORTGAGE AND SECURES
FUTURE ADVANCES, INCLUDING PROTECTIVE ADVANCES, BOTH AS DEFINED IN ACT 35 OF THE
PUBLIC ACTS OF 1992, AS AMENDED, BEING MCLA ss.565.901, et seq. Such loan
advances may or may not be evidenced by notes executed pursuant to the Credit
Agreement.
23. This Mortgage shall be governed by and construed and enforced in all
cases by the substantive laws of the State of Michigan, notwithstanding the fact
that Michigan conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply.
Dated as of July ___, 2001.
Signed and acknowledged UNITED ACQUISITION, INC., an
in the presence of: Indiana corporation
-------------------------------- -----------------------------------
-------------------------------- By:--------------------------------
(Printed name) (Printed name and title)
--------------------------------
--------------------------------
(Printed name)
STATE OF ______________ )
) SS:
COUNTY OF ___________ )
Before me, a Notary Public in and for the above County and State,
personally appeared ______________ the ___________ of UNITED ACQUISITION, INC.,
an Indiana corporation, who acknowledged the execution of the foregoing
Leasehold Mortgage, Security Agreement, Assignment of Rents and Fixture Filing
on behalf of said corporation this _______ day of July, 2001.
Signature: ________________________________
Printed: __________________________________
Notary Public
My Commission Expires: ______________
My County of Residence: ______________
THIS INSTRUMENT PREPARED BY: Xxxxxxx X. Xxxxxx, Esquire, KROGER, GARDIS & XXXXX,
L.L.P., Bank Xxx Xxxxxx/Xxxxxx - Xxxxx 000, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxx 00000-0000, (000) 000-0000.
SCHEDULE
All that real estate in St. Xxxxxx County, Michigan, which is further described
as follows:
A Parcel of Land being located in the Fractional Southwest Quarter of
Section 0, Xxxx 0 Xxxxx, Xxxxx 12 West, Mottville Township, St. Xxxxxx
County, Michigan, more particularly described as follows:
Commencing at the intersection of Xxxxxxx Street and Union Street as
monumented with a pipe,
THENCE South 89 degrees 44 minutes 10 seconds West for a distance of 390.12
feet along the Centerline of said Xxxxxxx Street to the northerly
projection of the East line of Section 19 (Block 19) of Xxxxxxx and
Holabird's Addition to the Village of Mottville according to the Plat of
Record in the Office of the Register of Deeds for St. Xxxxxx County.
Michigan in Liber C of Deeds on Page 272; THENCE South 00 degrees 10
minutes 45 seconds East for a distance of 350.14 feet along said extension
and said East line to the Southeast Corner of said Section 19 (Block 19) as
monumented with a pipe, being the POINT OF BEGINNING; THENCE South 89
degrees 30 minutes 56 seconds East for a distance of 26.00 feet; THENCE
South 00 degrees 16 minutes 02 seconds East for a distance of 438.47 feet;
THENCE South 89 degrees 50 minutes 55 seconds West for a distance of 28.00
feet; THENCE North 00 degrees 00 minutes 21 seconds West for a distance of
438.76 feet to the POINT OF BEGINNING.
Together with and subject to covenants, easements, and restrictions of
record.
Said property contains 0.272 acres more or less.
Exhibit "S"
DRAFTED BY AND AFTER St. Xxxxxx County, Michigan
RECORDING. RETURN TO:
Xxxxxxx X. Xxxxxx, Esquire
KROGER, GARDIS & XXXXX, L.L.P.
Suite 900
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone No.: (000) 000-0000
ASSIGNMENT OF RENTS AND LEASES
THIS ASSIGNMENT, made as of the date appearing at the end hereof, by UNITED
ACQUISITION, INC., an Indiana corporation, with a mailing address of 00000
Xxxxxx Xxxx 0 Xxxxxxx, Xxxxxxx 00000 (hereinafter called "Assignor") in favor of
FIRST INDIANA BANK, a federal savings bank with a mailing address of 000 Xxxxx
Xxxxxxxxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter called
"Assignee").
WITNESSETH
Assignor, for good and valuable consideration, the receipt of which is
hereby acknowledged, does hereby absolutely and unconditionally grant, bargain,
sell, transfer, assign, convey, set over and deliver unto Assignee all right,
title and interest of Assignor in, to and under all written and oral leases and
rental agreements of the real estate located in St. Xxxxxx County, Michigan, and
legally described in Exhibit "A" attached hereto and incorporated herein (the
"Property"), whether now in existence or hereafter entered into, and all
guaranties, amendments, extensions, renewals and subleases of said leases and
any of them, all of which are hereinafter called the "Leases," all rents, income
and profits which may now or hereafter be or become due or owing under the
Leases, and any of them, or on account of the use of the Property, any award
hereafter made in any bankruptcy, insolvency or reorganization proceeding in any
state or federal court involving any of the tenants of the Leases, and any and
all payments made by such tenants in lieu of rent.
This Assignment is made for the purpose of securing:
A. The payment of the indebtedness (including any extensions or renewals
thereof) evidenced by a certain promissory note of Assignor of even
date herewith for a revolving line of credit in the maximum
outstanding aggregate principal amount of $3,500,000.00 (the
"Revolving Note"), a certain promissory note of Assignor of even date
herewith in the principal amount of $291,000.00 (the "Term Note"), a
certain promissory note of Assignor of even date herewith in the
principal amount of $1,116,000.00 ("Term Note II"), a certain
promissory note of Assignor of even date herewith in the principal
amount of $1,750,000.00 ("Term Note III")(the Revolving Note, the Term
Note, Term Note II and Term Note III are hereinafter collectively
referred to as the "Notes"). The Notes are secured by a certain
Mortgage (the "Mortgage") of even date herewith encumbering the
Property and are issued pursuant to the terms of that certain Credit
Agreement entered into by and between the Assignor and the Assignee
dated as of even date herewith (as such Credit Agreement may hereafter
be amended, modified, or restated, the "Credit Agreement"); and
B. The payment of all other sums with interest thereon becoming due and
payable to Assignee under the provisions of the Mortgage and any other
instrument constituting security for the Notes; and
C. The performance and discharge of each and every term, covenant and
condition contained in the Notes, the Credit Agreement, the Mortgage
and any other instrument constituting security for the Notes.
Assignor represents, warrants, covenants and agrees with Assignee as
follows:
1. The sole ownership of the entire lessor's interest in the Leases is or
shall be vested in Assignor, and Assignor has not, and shall not,
perform any acts or execute any other instruments which might prevent
Assignee from fully exercising its rights under any of the terms,
covenants and conditions of this Assignment.
2. The Leases are and shall be valid and enforceable in accordance with
their terms and have not been altered, modified, amended, terminated,
canceled, renewed or surrendered nor have any of the terms and
conditions thereof been waived in any manner whatsoever except as
approved in writing by Assignee.
3. Assignor shall not materially alter the term or the amount of rent
payable or the term of any Lease without notice to Assignee and
Assignee's consent, which shall not be unreasonably withheld.
4. To the best of its knowledge, there are no defaults now existing under
any of the Leases and there exists no state of facts which, with the
giving of notice or lapse of time or both, would constitute a default
under any of the Leases.
5. Assignor shall give prompt notice to Assignee of any notice received
by Assignor claiming that a default has occurred under any of the
Leases on the part of Assignor, together with a complete copy of any
such notice.
6. Each of the Leases shall remain in full force and effect irrespective
of any merger of the interest of lessor and any lessee under any of
the leases.
7. Assignor will not permit any Lease to become subordinate to any lien
other than the lien of the Mortgage.
8. There are no existing Leases for the Property.
The parties further agree as follows:
This Assignment is an absolute, present assignment from Assignor to
Assignee, effective immediately, and is not merely an assignment for security
purposes. Notwithstanding the foregoing, until a notice is sent to the Assignor
in writing that a default has occurred under the terms and conditions of the
Notes or any other instrument constituting additional security for the Notes
(which notice is hereafter called a "Notice"), Assignor is granted a license to
receive, collect and enjoy the rents, income and profits accruing from the
Property.
In the event of any default at any time in the Notes, Mortgage or any other
Loan Document as defined in the Mortgage constituting additional security for
the Notes, Assignee may, at its option, after service of a Notice, receive and
collect all such rents, income and profits as they become due, from the
Property. Assignee shall thereafter continue to receive and collect all such
rents, income and profits, as long as such default or defaults shall exist, and
during the pendency of any foreclosure proceedings, and if there is a
deficiency, during any redemption period. All sums received by Assignor after
service of such Notice shall be deemed received in trust and shall be
immediately turned over to Assignee.
Assignor hereby irrevocably appoints Assignee its true and lawful attorney
with power of substitution and with full power for Assignee in its own name and
capacity or in the name and capacity of Assignor, from and after service of
Notice, to demand, collect, receive and give complete acquittances for any and
all rents, income and profits accruing from the Property, either in its own name
or in the name of Assignor or otherwise, which Assignee may deem necessary or
desirable in order to collect and enforce the payment of the rents, income and
profits. Such appointment is coupled with an interest and is irrevocable.
Assignor also hereby irrevocably appoints Assignee as its true and lawful
attorney to appear in any state or federal bankruptcy, insolvency, or
reorganization proceeding in any state or federal court involving any of the
tenants of the Leases. Lessees of the Property are hereby expressly authorized
and directed to pay any and all amounts due Assignor pursuant to the Leases to
Assignee or such nominee as Assignee may designate in writing delivered to and
received by such lessees who are expressly relieved of any and all duty,
liability or obligation to Assignor in respect of all payments so made.
In the event of default, from and after service of a Notice Assignee is
hereby vested with full power to use all measures, legal and equitable, deemed
by it necessary or proper to enforce this Assignment and to collect the rents,
income and profits assigned hereunder, including the right of Assignee or its
designee, to enter upon the Property, or any part thereof, and take possession
of all or any part of the Property together with all personal property,
fixtures, documents, books, records, papers and accounts of Assignor relating
thereto, and may exclude the Assignor, its agents and servants, wholly
therefrom. Assignor hereby grants full power and authority to Assignee to
exercise all rights, privileges and powers herein granted at any and all times
after service of a Notice, with full power to use and apply all of the rents and
other income herein assigned to the payment of the costs of managing and
operating the Property and of any indebtedness or liability of Assignor to
Assignee, including but not limited to the payment of taxes, special
assessments, insurance premiums, damage claims, the costs of maintaining,
repairing, rebuilding and restoring the improvements on the Property or of
making the same rentable, reasonable attorneys' fees incurred in connection with
the enforcement of this Assignment, and of principal and interest payments due
from Assignor to Assignee on the Notes and the Mortgage, all in such order as
Assignee may determine. Assignee shall be under no obligation to exercise or
prosecute any of the rights or claims assigned to it hereunder or to perform or
carry out any of the obligations of the lessor under any of the Leases and does
not assume any of the liabilities in connection with or arising or growing out
of the covenants and agreements of Assignor in the leases. It is further
understood that this Assignment shall not operate to place responsibility for
the control, care, management or repair of the Property, or parts thereof, upon
Assignee, nor shall it operate to make Assignee liable for the performance of
any of the terms and conditions of any of the Leases, or for any waste of the
Property by any lessee under any of the Leases or any other person, or for any
dangerous or defective condition of the Property or for any negligence in the
management, upkeep, repair or control of the Property resulting in loss or
injury or death to any lessee, licensee, employee or stranger.
Waiver of or acquiescence by Assignee in any default by the Assignor, or
failure of the Assignee to insist upon strict performance by the Assignor of any
covenants, conditions or agreements in this Assignment, shall not constitute a
waiver of any subsequent or other default or failure, whether similar or
dissimilar.
The rights and remedies of Assignee under this Assignment are cumulative
and are not in lieu of, but are in addition to any other rights or remedies
which Assignee shall have under the Notes or any other instrument constituting
security for the Notes, or at law or in equity.
If any term of this Assignment, or the application thereof to any person or
circumstances, shall, to any extent, be invalid or unenforceable, the remainder
of this Assignment, or the application of such term to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term of this Assignment shall be valid and
enforceable to the fullest extent permitted by law.
Any and all notices, elections, demands, or requests permitted or required
to be made under this Assignment, including without limitation a Notice, shall
be in writing, signed by the party giving such notice, election, demand or
request, and shall be delivered personally, by telegram, or sent by registered,
certified, or Express United States mail, postage prepaid, or by Federal Express
or similar service requiring a receipt, to the other party at the address set
forth above, or to such other party and at such other address within the United
States of America as any party may designate as provided herein. The date of
receipt of such notice, election, demand or request shall be the earliest of (i)
the date of actual receipt, (ii) three (3) days after the date of mailing by
registered or certified mail, (iii) one (1) day after the date of mailing by
Express Mail, or the delivery (for redelivery) to Federal Express or another
similar service requiring a receipt, or (iv) the date of personal delivery (or
refusal upon presentation for delivery).
Assignor hereby authorizes Assignee to give written notice of this
Assignment, which may include a copy hereof, at any time to any tenant under any
of the Leases.
The terms "Assignor" and "Assignee" shall be construed to include the legal
representatives, successors and assigns thereof. The gender and number used in
this Assignment are used as a reference term only and shall apply with the same
effect whether the parties are of the masculine or feminine gender, corporate or
other form, and the singular shall likewise include the plural.
This Assignment may not be amended, modified or changed nor shall any
waiver of any provisions hereof be effective, except only by an instrument in
writing and signed by the party against whom enforcement of any waiver,
amendment, change, modification or discharge is sought.
Notwithstanding anything contained herein to the contrary, in no event
shall this Assignment be deemed to reduce the indebtedness evidenced by the
Notes by an amount in excess of the actual amount of cash received by Assignee
under the Leases, whether before, during or after the occurrence of an Event of
Default, and Assignor acknowledges that in no event shall the indebtedness
secured hereby be reduced by the value from time to time of the rents, income
and profits of or from the Property. In addition, Assignee reserves the right,
at any time, whether before or after the occurrence of an Event of Default, to
recharacterize this Assignment as merely constituting security for the
indebtedness of Assignor to Assignee, which recharacterization shall be made by
written notice delivered to Assignor. Assignee's receipt of any rents, issues,
and profits pursuant to this Assignment after the institution of foreclosure
proceedings, either by court action or by the private power of sale contained in
any mortgage or deed of trust now or hereafter securing the Notes, shall not
cure an Event of Default, as defined in the Notes, or affect such proceedings or
sale.
IN WITNESS WHEREOF, the said Assignor has caused this instrument to be
signed and sealed as of the ____ day of July, 2001.
Signed and acknowledged UNITED ACQUISITION, INC., an Indiana
in the presence of: corporation
------------------------------------
____________________________________ By: ________________________________
(Printed name)
------------------------------------
(Printed name and title)
------------------------------------
------------------------------------
(Printed name)
STATE OF_____________ )
)SS:
COUNTY OF ____________ )
Before me, a Notary Public in and for the above County and State,
personally appeared _________________ the _____________________ of UNITED
ACQUISITION, INC., an Indiana corporation, who as such officer acknowledged the
execution of the foregoing Assignment of Rents and Leases for and on behalf of
said corporation this _____ day of July, 2001.
Signature: _________________________________
Printed: ___________________________________
Notary Public
My Commission Expires: _______________
My County of Residence: _______________
EXHIBIT "A"
Legal Description
All that real estate in St. Xxxxxx County, Michigan, described as follows:
That part of Xxxxxxx and Holabird's Addition to the Village of Mottville,
according to plat of record in the Office of the Register of Deeds for St.
Xxxxxx County, Michigan in Liber C of Deeds on Page 272, described as follows:
Commencing at the Southeast corner of Section 19 of Xxxxxxx and Holabird's
Addition; thence South 89(0)52' West 471.20 feet (measured 471.53 feet); thence
South 00(0)46' West 438.20 feet (measured South 00(0)46'23" West 438.03 feet);
thence North 89(0)52' East 477.12 feet (measured North 89(0)57'30" East 476.52
feet); thence North 438.74 feet to the point of beginning.
Together with an easement for ingress and egress over the South 35 feet of the
following:
That part of Section (Block) 18, Xxxxxxx and Holabird's Addition to the Village
of Mottville, according to plat of record in the Office of the Register of Deeds
for St. Xxxxxx County, Michigan in Liber C of Deeds on Page 272, described as
follows:
Commencing at a point that is South 33 feet and South 89(0)52' West 819.5 feet
from the intersection of the centerline of Union and Cecalia Streets in the
Village of Mottville; thence continuing South 89(0)52' West 114.75 feet to the
centerline of Xxxxxxx X-000; thence South 28(0)49' West along the centerline of
said highway, 226 feet; thence on a 02(0)30' curve to the left the long chord of
which is South 26(0)51' West 127.74 feet; thence North 89(0)52' East 239.75
feet; thence South 00(0)46' West 5.15 feet; thence North 89(0)52' East 141.70
feet; thence North 242 feet; thence South 89(0)52' West 100 feet; thence North
75 feet to the point of beginning.
Exhibit "T"
DRAFTED BY AND AFTER St. Xxxxxx County, Michigan
RECORDING, RETURN TO:
Xxxxxxx X. Xxxxxx, Esquire
KROGER, GARDIS & XXXXX, L.L.P.
Suite 900
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telephone No.: (000) 000-0000
ASSIGNMENT OF RENTS AND LEASES
THIS ASSIGNMENT, made as of the date appearing at the end hereof, by UNITED
ACQUISITION, INC., an Indiana corporation, with a mailing address of 00000
Xxxxxx Xxxx 0 Xxxxxxx, Xxxxxxx 00000 (hereinafter called "Assignor") in favor of
FIRST INDIANA BANK, a federal savings bank with a mailing address of 000 Xxxxx
Xxxxxxxxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter called
"Assignee").
WITNESSETH
Assignor, for good and valuable consideration, the receipt of which is
hereby acknowledged, does hereby absolutely and unconditionally grant, bargain,
sell, transfer, assign, convey, set over and deliver unto Assignee all right,
title and interest of Assignor in, to and under all written and oral leases and
rental agreements of the real estate located in St. Xxxxxx County, Michigan, and
legally described in Exhibit "A" attached hereto and incorporated herein (the
"Property"), whether now in existence or hereafter entered into, and all
guaranties, amendments, extensions, renewals and subleases of said leases and
any of them, all of which are hereinafter called the "Leases," all rents, income
and profits which may now or hereafter be or become due or owing under the
Leases, and any of them, or on account of the use of the Property, any award
hereafter made in any bankruptcy, insolvency or reorganization proceeding in any
state or federal court involving any of the tenants of the Leases, and any and
all payments made by such tenants in lieu of rent.
This Assignment is made for the purpose of securing:
A. The payment of the indebtedness (including any extensions or renewals
thereof) evidenced by a certain promissory note of Assignor of even
date herewith for a revolving line of credit in the maximum
outstanding aggregate principal amount of $3,500,000.00 (the
"Revolving Note"), a certain promissory note of Assignor of even date
herewith in the principal amount of $291,000.00 (the "Term Note"), a
certain promissory note of Assignor of even date herewith in the
principal amount of $1,116,000.00 ("Term Note II"), a certain
promissory note of Assignor of even date herewith in the principal
amount of $1,750,000.00 ("Term Note III")(the Revolving Note, the Term
Note, Term Note II and Term Note III are hereinafter collectively
referred to as the "Notes"). The Notes are secured by a certain
Leasehold Mortgage (the "Mortgage") of even date herewith encumbering
the Property and are issued pursuant to the terms of that certain
Credit Agreement entered into by and between the Assignor and the
Assignee dated as of even date herewith (as such Credit Agreement may
hereafter be amended, modified, or restated, the "Credit Agreement");
and
B. The payment of all other sums with interest thereon becoming due and
payable to Assignee under the provisions of the Mortgage and any other
instrument constituting security for the Notes; and
C. The performance and discharge of each and every term, covenant and
condition contained in the Notes, the Credit Agreement, the Mortgage
and any other instrument constituting security for the Notes.
Assignor represents, warrants, covenants and agrees with Assignee as
follows:
1. The sole ownership of the entire lessor's interest in the Leases is or
shall be vested in Assignor, and Assignor has not, and shall not,
perform any acts or execute any other instruments which might prevent
Assignee from fully exercising its flights under any of the terms,
covenants and conditions of this Assignment.
2. The Leases are and shall be valid and enforceable in accordance with
their terms and have not been altered, modified, amended, terminated,
canceled, renewed or surrendered nor have any of the terms and
conditions thereof been waived in any manner whatsoever except as
approved in writing by Assignee.
3. Assignor shall not materially alter the term or the amount of rent
payable or the term of any Lease without notice to Assignee and
Assignee's consent, which shall not be unreasonably withheld.
4. To the best of its knowledge, there are no defaults now existing under
any of the Leases and there exists no state of facts which, with the
giving of notice or lapse of time or both, would constitute a default
under any of the Leases.
5. Assignor shall give prompt notice to Assignee of any notice received
by Assignor claiming that a default has occurred under any of the
Leases on the part of Assignor, together with a complete copy of any
such notice.
6. Each of the Leases shall remain in full force and effect irrespective
of any merger of the interest of lessor and any lessee under any of
the leases.
7. Assignor will not permit any Lease to become subordinate to any lien
other than the lien of the Mortgage.
8. There are no existing Leases for the Property.
The parties further agree as follows:
This Assignment is an absolute, present assignment from Assignor to
Assignee, effective immediately, and is not merely an assignment for security
purposes. Notwithstanding the foregoing, until a notice is sent to the Assignor
in writing that a default has occurred under the terms and conditions of the
Notes or any other instrument constituting additional security for the Notes
(which notice is hereafter called a "Notice"), Assignor is granted a license to
receive, collect and enjoy the rents, income and profits accruing from the
Property.
In the event of any default at any time in the Notes, Mortgage or any other
Loan Document as defined in the Mortgage constituting additional security for
the Notes, Assignee may, at its option, after service of a Notice, receive and
collect all such rents, income and profits as they become due, from the
Property. Assignee shall thereafter continue to receive and collect all such
rents, income and profits, as long as such default or defaults shall exist, and
during the pendency of any foreclosure proceedings, and if there is a
deficiency, during any redemption period. All sums received by Assignor after
service of such Notice shall be deemed received in trust and shall be
immediately turned over to Assignee.
Assignor hereby irrevocably appoints Assignee its true and lawful attorney
with power of substitution and with full power for Assignee in its own name and
capacity or in the name and capacity of Assignor, from and after service of
Notice, to demand, collect, receive and give complete acquittances for any and
all rents, income and profits accruing from the Property, either in its own name
or in the name of Assignor or otherwise, which Assignee may deem necessary or
desirable in order to collect and enforce the payment of the rents, income and
profits. Such appointment is coupled with an interest and is irrevocable.
Assignor also hereby irrevocably appoints Assignee as its true and lawful
attorney to appear in any state or federal bankruptcy, insolvency, or
reorganization proceeding in any state or federal court involving any of the
tenants of the Leases. Lessees of the Property are hereby expressly authorized
and directed to pay any and all amounts due Assignor pursuant to the Leases to
Assignee or such nominee as Assignee may designate in writing delivered to and
received by such lessees who are expressly relieved of any and all duty,
liability or obligation to Assignor in respect of all payments so made.
In the event of default, from and after service of a Notice Assignee is
hereby vested with full power to use all measures, legal and equitable, deemed
by it necessary or proper to enforce this Assignment and to collect the rents,
income and profits assigned hereunder, including the right of Assignee or its
designee, to enter upon the Property, or any part thereof, and take possession
of all or any part of the Property together with all personal property,
fixtures, documents, books, records, papers and accounts of Assignor relating
thereto, and may exclude the Assignor, its agents and servants, wholly
therefrom. Assignor hereby grants full power and authority to Assignee to
exercise all rights, privileges and powers herein granted at any and all times
after service of a Notice, with full power to use and apply all of the rents and
other income herein assigned to the payment of the costs of managing and
operating the Property and of any indebtedness or liability of Assignor to
Assignee, including but not limited to the payment of taxes, special
assessments, insurance premiums, damage claims, the costs of maintaining,
repairing, rebuilding and restoring the improvements on the Property or of
making the same rentable, reasonable attorneys' fees incurred in connection with
the enforcement of this Assignment, and of principal and interest payments due
from Assignor to Assignee on the Notes and the Mortgage, all in such order as
Assignee may determine. Assignee shall be under no obligation to exercise or
prosecute any of the rights or claims assigned to it hereunder or to perform or
carry out any of the obligations of the lessor under any of the Leases and does
not assume any of the liabilities in connection with or arising or growing out
of the covenants and agreements of Assignor in the leases. It is further
understood that this Assignment shall not operate to place responsibility for
the control, care, management or repair of the Property, or parts thereof, upon
Assignee, nor shall it operate to make Assignee liable for the performance of
any of the terms and conditions of any of the Leases, or for any waste of the
Property by any lessee under any of the Leases or any other person, or for any
dangerous or defective condition of the Property or for any negligence in the
management, upkeep, repair or control of the Property resulting in loss or
injury or death to any lessee, licensee, employee or stranger.
Waiver of or acquiescence by Assignee in any default by the Assignor, or
failure of the Assignee to insist upon strict performance by the Assignor of any
covenants, conditions or agreements in this Assignment, shall not constitute a
waiver of any subsequent or other default or failure, whether similar or
dissimilar.
The rights and remedies of Assignee under this Assignment are
cumulative and are not in lieu of, but are in addition to any other rights or
remedies which Assignee shall have under the Notes or any other instrument
constituting security for the Notes, or at law or in equity.
If any term of this Assignment, or the application thereof to any
person or circumstances, shall, to any extent, be invalid or unenforceable, the
remainder of this Assignment, or the application of such term to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each term of this Assignment shall be valid and
enforceable to the fullest extent permitted by law.
Any and all notices, elections, demands, or requests permitted or required
to be made under this Assignment, including without limitation a Notice, shall
be in writing, signed by the party giving such notice, election, demand or
request, and shall be delivered personally, by telegram, or sent by registered,
certified, or Express United States mail, postage prepaid, or by Federal Express
or similar service requiring a receipt, to the other party at the address set
forth above, or to such other party and at such other address within the United
States of America as any party may designate as provided herein. The date of
receipt of such notice, election, demand or request shall be the earliest of (i)
the date of actual receipt, (ii) three (3) days after the date of mailing by
registered or certified mail, (iii) one (1) day after the date of mailing by
Express Mail, or the delivery (for redelivery) to Federal Express or another
similar service requiring a receipt, or (iv) the date of personal delivery (or
refusal upon presentation for delivery).
Assignor hereby authorizes Assignee to give written notice of this
Assignment, which may include a copy hereof, at any time to any tenant under any
of the Leases.
The terms "Assignor" and "Assignee" shall be construed to include the legal
representatives, successors and assigns thereof. The gender and number used in
this Assignment are used as a reference term only and shall apply with the same
effect whether the parties are of the masculine or feminine gender, corporate or
other form, and the singular shall likewise include the plural.
This Assignment may not be amended, modified or changed nor shall any
waiver of any provisions hereof be effective, except only by an instrument in
writing and signed by the party against whom enforcement of any waiver,
amendment, change, modification or discharge is sought.
Notwithstanding anything contained herein to the contrary, in no event
shall this Assignment be deemed to reduce the indebtedness evidenced by the
Notes by an amount in excess of the actual amount of cash received by Assignee
under the Leases, whether before, during or after the occurrence of an Event of
Default, and Assignor acknowledges that in no event shall the indebtedness
secured hereby be reduced by the value from time to time of the rents, income
and profits of or from the Property. In addition, Assignee reserves the right,
at any time, whether before or after the occurrence of an Event of Default, to
recharacterize this Assignment as merely constituting security for the
indebtedness of Assignor to Assignee, which recharacterization shall be made by
written notice delivered to Assignor. Assignee's receipt of any rents, issues,
and profits pursuant to this Assignment after the institution of foreclosure
proceedings, either by court action or by the private power of sale contained in
any mortgage or deed of trust now or hereafter securing the Notes, shall not
cure an Event of Default, as defined in the Notes, or affect such proceedings or
sale.
IN WITNESS WHEREOF, the said Assignor has caused this instrument to be
signed and sealed as of the ___ day of July, 2001.
Signed and acknowledged UNITED ACQUISITION, INC., an Indiana
in the presence of: corporation
-----------------------------------
___________________________________ By: ________________________________
(Printed name)
------------------------------------
(Printed name and title)
-----------------------------------
-----------------------------------
(Printed name)
STATE OF _____________ )
)SS:
COUNTY OF ____________ )
Before me, a Notary Public in and for the above County and State,
personally appeared ________________, the ____________________ of UNITED
ACQUISITION, INC., an Indiana corporation, who as such officer acknowledged the
execution of the foregoing Assignment of Rents and Leases for and on behalf of
said corporation this _____ day of July, 2001.
Signature: ___________________________
Printed: _____________________________
Notary Public
My Commission Expires: ______________
My County of Residence: ______________
EXHIBIT "A"
Legal Description
All that real estate in St. Xxxxxx County, Michigan, described as follows:
A Parcel of Land being located in the Fractional Southwest Quarter of
Section 0, Xxxx 0 Xxxxx, Xxxxx 12 West, Mottville Township, St. Xxxxxx
County, Michigan, more particularly described as follows:
Commencing at the intersection of Xxxxxxx Street and Union Street as
monumented with a pipe,
THENCE South 89 degrees 44 minutes 10 seconds West for a distance of 390.12
feet along the Centerline of said Xxxxxxx Street to the northerly
projection of the East line of Section 19 (Block 19) of Xxxxxxx and
Holabird's Addition to the Village of Mottville according to the Plat of
Record in the Office of the Register of Deeds for St. Xxxxxx County,
Michigan in Liber C of Deeds on Page 272; THENCE South 00 degrees 10
minutes 45 seconds East for a distance of 350.14 feet along said extension
and said East line to the Southeast Corner of said Section 19 (Block 19) as
monumented with a pipe, being the POINT OF BEGINNING; THENCE South 89
degrees 30 minutes 56 seconds East for a distance of 26.00 feet; THENCE
South 00 degrees: 16 minutes 02 seconds East for a distance of 438.47 feet;
THENCE South 89 degrees 50 minutes 55 seconds West for a distance of 28.00
feet; THENCE North 00 degrees 00 minutes 21 seconds West for a distance of
438.76 feet to the POINT OF BEGINNING.
Together with and subject to covenants, easements, and restrictions of
record. Said property contains 0.272 acres more or less.