AMENDMENT TO CREDIT FACILITIES
------------------------------
This Amendment to Credit Facilities ("Amendment") is effective as of
April 11, 2003 (the "Amendment Effective Date") by Xxxxxxx Industries, Inc.
("Company") and Bank One, NA, a national banking association ("Bank").
RECITALS
--------
A. Company and Bank are parties to a Credit Agreement, dated February
2, 1997, as amended by a First Amendment to Credit Agreement dated January
28,2000 and by a Modification Agreement dated August 1,2001 and by an Amendment
to Credit Agreement dated January 28,2003 (as amended, the "Credit Agreement").
B. Bank has provided a Line of Credit to Company under which Bank has
extended certain letters of credit for the account of the Company in an
aggregate principal amount not to exceed $3,250,000 (the "Letter of Credit
Line").
C. The Company is obligated to Bank under the following reimbursement
agreements:
(i) the Reimbursement and Pledge Agreement between
the Company and the Bank dated as of August 13, 1998, relating
to the Five Million Dollars ($5,000,000) principal amount The
Stanly County Industrial Facilities and Pollution Control
Financing Authority Variable Rate Demand Economic Development
Revenue Bonds (Xxxxxxx Industries, Inc. Project), Series 1998
(the "1998 Reimbursement Agreement"),
(ii) the Reimbursement Agreement made by the Company
in favor of the Bank dated as of December 1, 1994, relating to
the Six Million Dollars ($6,000,000) principal amount State of
Oregon Economic Development Revenue Bonds, Series CLI (Xxxxxxx
Industries, Inc. Project), dated December 22, 1994 (the "1994
Reimbursement Agreement"),
(iii) the Reimbursement Agreement made by the Company
in favor of the Bank dated as of November 1, 1991, relating to
the Three Million Nine Hundred Thousand Dollars ($3,900,000)
principal amount The Indiana Development Finance Authority
Limited Obligation Refunding Revenue Bonds (Xxxxxxx
Industries, Inc. Project), Series 1991, dated Decembers, 1991
(the "1991 Reimbursement Agreement") (collectively, the 1998
Reimbursement Agreement, the 1994 Reimbursement Agreement and
the 1991 Reimbursement Agreement are referred to herein as the
"Reimbursement Agreements").
D. The Company has requested Bank to amend the Credit Agreement and the
Letter of Credit Line and the Reimbursement Agreements, effective as of the
Amendment Effective Date, as herein provided. Bank has agreed to amend the
Credit Agreement and Letter of Credit Line and Reimbursement Agreements as set
forth in this Amendment, all subject to the terms and conditions of this
Amendment, including the conditions precedent set forth in Section 6.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the Recitals and the mutual
covenants and agreements herein, and for other good and valuable considerations,
the receipt and sufficiency of which are acknowledged by the parties to this
Amendment, it is agreed as follows:
1. Definitions. Terms which are defined in the Credit Agreement shall
have the same meanings in this Amendment as are ascribed to them in the Credit
Agreement, as amended hereby, excepting only those terms which are expressly
defined in this Amendment, which shall have the meanings ascribed to them in
this Amendment.
2. Amendments to Credit Agreement. The Credit Agreement is amended as
follows:
a. The definition of "Revolving Credit Termination Date" set
forth in Section 1 of the Existing Agreement is amended and restated in
its entirety as of the Amendment Effective Date to read as follows:
"Revolving Credit Termination Date" shall mean the earlier to
occur of (a) May 31,2006 and (b) the date on which the
Commitment shall be terminated pursuant to Section 2.2 or
Section 6.2.
b. A new definition of Debt Service Coverage Ratio is added to
Section 1 of the Credit Agreement to provide as follows:
"Debt Service Coverage Ratio" means the ratio of the sum of
Company's EBITDA plus goodwill impairment less dividends,
taxes and common stock repurchases, to the sum of the current
portion of Company's long term debt payments and interest
expense.
"Capital Expenditures" means purchases of property and
equipment as referred to in the Company's year end statement
of cash flows required to be included with Company's financial
statements under Section 5.1(d) of the Loan Agreement.
c. The definition of "Revolving Credit Loan Eurodollar Margin"
in Section 1.1 of the Credit Agreement shall be amended and restated as
follows:
"Revolving Credit Loan Eurodollar Margin" shall mean, with
respect to any Revolving Credit Loan that is also a
Eurodollars Rate Loan, the following amounts based on the
ratio of consolidated Funded Debt to consolidated EBITDA of
the Company and its Subsidiaries as of the end of the most
recent fiscal quarter of the Company for which financial
statements of the Company have been delivered pursuant to
Section 5.l(d)(ii):
Ratio of Funded Debt to Consolidated Revolving Credit Loan
------------------------------------ -------------------------
EBITDA Eurodollar Margin
------ -----------------
greater than 3.00 to 1.00 1.75% per annum
greater than 2.50 to 1.00 but not greater 1.625% per annum
than 3.00 to 1.00
greater than 2.00 to 1.00 but not greater 1.50% per annum
than 2.50 to 1.00
less than or equal to 2.00 to 1.00 1.375% per annum
d. Section 2.3 of the Credit Agreement is amended to provide
in its entirety as follows:
2.3 Fees, (a) The Company agrees to pay to the Bank a
commitment fee on the daily average unused amount of the Revolving
Credit Commitment equal to one-quarter of one percent (.25%) per annum.
Accrued commitment fees shall be payable quarterly in arrears on the
last Business Day of each March, June, September and December, and on
the Revolving Credit Termination Date.
e. Section 5.2(c)of the Credit Agreement shall be amended and
restated as follows:
(c) Tangible Net Worth. Permit or suffer the consolidated
Tangible Net Worth of the Company and its Subsidiaries to be less than
$52,000,000 at any time, which amount shall be increased by an amount
equal to 50% of the Cumulative Net Income of the Company and its
Subsidiaries for each fiscal year, beginning with the fiscal year
ending on December 31, 2003 and annually thereafter.
f. Section 5.2(d) of the Credit Agreement shall be amended and
restated as follows:
(d) Total Liabilities to Tangible Net Worth. Permit or suffer
the ratio of consolidated Total Liabilities of the Company and its
Subsidiaries to consolidated Tangible Net Worth of the Company and its
Subsidiaries to be greater than 1.00 to 1.00 at any time.
g. Section 5.2(b) of the Credit Agreement, captioned "Working
Capital" is deleted, and that provision is replaced with "RESERVED" to
avoid renumbering other provisions.
h. A new Section 5.2(j) is added to the Credit Agreement to
provide as follows:
(j) Capital Expenditures. The Company shall not permit or
suffer its Capital Expenditures during any calendar year to exceed
$6,000,000 in the aggregate.
i. A new Section 5.2(k) is added to the Credit Agreement to
provide as follows:
(k) Debt Service Coverage. The Company shall not permit or
suffer its Debt Service Coverage Ratio to be less than 1.10 to 1.00.
3. Amendment to Letter of Credit Line. The Letter of Credit Line is
amended as follows:
a. To increase that Letter of Credit Line to $3,500,000 for
the issuance of standby letters of credit with expiries not to exceed
one year and commercial letters of credit with expiries not to exceed
six months.
b. To extend the term of that Letter of Credit Line until the
earlier to occur of (a) May 31, 2004 and (b) the date on which the Bank
takes the action referred to in Section 6.2(ii) of the Credit
Agreement.
c. Any reference in the Letter of Credit Line to Commission
Rate or fee for issuing a letter of credit shall be amended to refer to
a Commission Rate or fee for issuing a letter of credit of one and
one-quarter percent (1.25%) per annum.
4. Amendment to Reimbursement Agreements. The Commission Rate in
Section 2.02(b) of the 1991 Reimbursement Agreement, Section 2.02(b) of the 1994
Reimbursement Agreement and Section 2.5.2 of the 1998 Reimbursement Agreement is
amended to refer to a Commission Rate of one and one-quarter percent (1.25%) per
annum.
5. Security Interest. All obligations of Company to Bank under the
Credit Agreement, Letter of Credit Line and the Reimbursement Agreements shall
be secured by a security interest in all of Company's accounts receivable and
inventory, now owned or hereafter acquired, pursuant to the Security Agreement
in the form attached as Exhibit A (the "Security Agreement").
6. Representations and Warranties. The Company represents and warrants
to Bank that:
a. (i) The execution, delivery and performance of this
Amendment and all agreements and documents delivered pursuant hereto by
the Company has been duly authorized by all necessary action (whether
corporate, partnership or otherwise) and does not and will not violate
any provision of any law, rule, regulation, order, judgment,
injunction, or award presently in effect applying to the Company, or of
the Company's articles of incorporation, by-laws, articles of
organization or operating agreement (as applicable) or result in a
breach of or constitute a default under any material agreement, lease
or instrument to which the Company is a party or by which the Company's
properties may be bound or affected; (ii) no authorization, consent,
approval, license, exemption or filing of a registration with any court
or governmental department, agency or instrumentality is or will be
necessary to the valid execution, delivery or performance by any of
them of this Amendment and all
agreements and documents delivered pursuant hereto; and (iii) this
Amendment and all agreements and documents delivered pursuant hereto by
the Company are its legal, valid and binding obligations and
enforceable against the Company in accordance with the terms thereof.
b. After giving effect to the amendments contained in this
Amendment, the representations and warranties contained in Section 4 of
the Credit Agreement are true and correct on and as of the Amendment
Effective Date with the same force and effect as if made on and as of
the Amendment Effective Date, except that the representation in Section
4.6 of the Credit Agreement shall be deemed to refer to the financial
statements of Company most recently delivered to Bank prior to the
Amendment Effective Date.
c. No Event of Default or Unmatured Event of Default has
occurred and is continuing or will exist under the Credit Agreement as
of the Amendment Effective Date.
7. GENERAL RELEASE. THE COMPANY FOR ITSELF AND ITS LEGAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE "RELEASING PARTIES"),
HEREBY RELEASES AND DISCHARGES BANK, ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES,
ATTORNEYS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE
"RELEASED PARTIES") FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES AND
CAUSES OF ACTION WHICH ANY OF THE RELEASING PARTIES HAS ASSERTED OR CLAIMED OR
MIGHT NOW OR HEREAFTER ASSERT OR CLAIM AGAINST ALL OF ANY OF THE RELEASED
PARTIES, WHETHER KNOWN OR UNKNOWN, ARISING OUT OF, RELATED TO OR IN ANY WAY
CONNECTED WITH OR BASED UPON ANY PRIOR RELATED EVENT (AS SUCH TERM IS
HEREINAFTER DEFINED). THE TERM "PRIOR RELATED EVENT" SHALL MEAN ANY ACT,
OMISSION, CIRCUMSTANCE, AGREEMENT, LOAN EXTENSION OF CREDIT, TRANSACTION,
TRANSFER, PAYMENT, EVENT, ACTION OR OCCURRENCE BETWEEN OR INVOLVING THE COMPANY
AND ALL OR ANY OF THE PRIOR TO THE EXECUTION OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITING IN ANY RESPECT THE GENERALITY OF THE FOREGOING: (i) ANY ACTION
TAKEN ON OR PRIOR TO THE EXECUTION OF THIS RIGHT OR PURPORTED RIGHT OF BANK AS A
CREDITOR; (u) ANY FAILURE OR REFUSAL TO MAKE ANY LOAN OR ADVANCE; AND (in) ANY
PAYMENT OR OTHER TRANSFER MADE TO BANK BY OR FOR THE ACCOUNT OF THE COMPANY AT
ANY TIME PRIOR TO THE EXECUTION OF THIS AGREEMENT. THE COMPANY AGREES AND
ACKNOWLEDGES THAT THIS SECTION IS NOT TO BE CONSTRUED AS OR DEEMED AN
ACKNOWLEDGMENT OR ADMISSION ON THE PART OF ANY OF THE RELEASED PARTIES OF
LIABILITY FOR ANY MATTER OR AS PRECEDENT UPON WHICH ANY LIABILITY MAY BE
ASSERTED.
8. Conditions. The obligation of Bank to execute and to perform this
Amendment shall be subject to full satisfaction of the following conditions
precedent:
a. This Amendment shall have been duly executed and delivered
by the Company.
b. The Security Agreement shall have been duly
executed and delivered by the Company.
c. Bank shall have received such additional agreements,
documents and certifications, fully executed by the Company as may be
reasonably requested by Bank, or its counsel.
9. Binding on Successors and Assigns. All of the terms and provisions
of this Amendment shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns and legal representatives.
10. Governing Law/Entire Agreement/Survival. This Amendment is a
contract made under, and shall be governed by and construed in accordance with,
the laws of the State of Indiana applicable to contracts made and to be
performed entirely with such state and without giving effect to the choice of
law principles of such state. This Amendment constitutes and expresses the
entire understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements and understandings,
commitments, inducements or conditions, whether express or implied, oral or
written. All covenants, agreements, undertakings, representations and warranties
made in this Amendment shall survive the execution and delivery of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the Amendment Effective Date.
BANK ONE, NA By: >
-
/S/ Xxxx Xxxxxxxx, V.P.
(Printed Name and Title)
XXXXXXX INDUSTRIES, INC. By:
/S/ Xxxx X. Xxxxxx, Secretary-Treasurer
(Printed Name and Title)
ELDS01 JST 148480v4
LOAN PARTICIPATION AGREEMENT
----------------------------
This Agreement is entered into on April 11, 2003, between Bank One, NA,
with principal offices at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000
("Lead Bank") and National City Bank of Indiana, with offices at 000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000 ("Participant").
RECITALS
--------
Lead Bank has extended and has agreed to extend credit to Xxxxxxx
Industries, Inc., an Indiana corporation ("Borrower"), whose address is 0000
Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, in accordance with the commercial
loan agreement and industrial revenue bond letter of credit reimbursement
agreements described in Section l(c) below. Participant desires to obtain a
participation interest in the loans made or to be made by Lead Bank to Borrower,
and Lead Bank is willing to sell Participant a participation interest in the
loans to Borrower on the terms and conditions contained in this Agreement.
Lead Bank and Participant agree as follows:
AGREEMENT
---------
Section 1. Definitions.
(a) "Collateral" includes all liens, security interests, mortgages,
guaranties and other instruments, property or rights received or acquired by
Lead Bank in connection with or securing the Loans.
(b) "Collections" includes all amounts received by Lead Bank as
principal of or interest on the Loan, or received after default on the Loan
whether as proceeds of the Collateral or otherwise.
(c) "Loan" or "Loans" refers to the following loans, advances or other
extensions of credit made or to be made by Lead Bank to Borrower:
(i) $10,000,000 Revolving Credit Facility pursuant to a Credit
Agreement between Lead Bank and Borrower dated February 2, 1997, as
amended by a First Amendment to Credit Agreement dated January 28,
2000, by a Modification Agreement dated August 1, 2001, by an Amendment
to Credit Agreement dated January 28, 2003 and by an Amendment to
Credit Agreement dated /April 11 , 2003 (as amended or as may hereafter
be amended, the "Credit Agreement"), and evidenced by a promissory note
dated April 11____, 2003 made by Borrower to Lead Bank in the original
principal amount of up to $10,000,000, and all extensions,
modifications, renewals, substitutions and replacements of that note
(the "Revolving Note").
(ii) $3,500,000 line of credit pursuant to Borrower's
application agreements for letters of credit containing Borrower's
reimbursement agreement
for draws against such letters of credit, and under which Lead Bank has
issued and may issue letters of credit for the account of Borrower in
an aggregate face amount not to exceed $3,500,000 (the "Letter of
Credit Loan").
(iii) The Reimbursement and Pledge Agreement between the
Borrower and the Lead Bank dated as of August 13, 1998, relating to the
Five Million Dollars ($5,000,000) principal amount The Stanly County
Industrial Facilities and Pollution Control Financing Authority
Variable Rate Demand Economic Development Revenue Bonds (Xxxxxxx
Industries, Inc. Project), Series 1998 (the "1998 Reimbursement
Agreement").
(iv) The Reimbursement Agreement made by the Borrower in favor
of the Lead Bank dated as of December 1, 1994, relating to the Six
Million Dollars ($6,000,000) principal amount State of Oregon Economic
Development Revenue Bonds, Series CLI (Xxxxxxx Industries, Inc.
Project), dated December 22, 1994 (the "1994 Reimbursement Agreement").
(v) The Reimbursement Agreement made by the Borrower in favor
of the Lead Bank dated as of November 1, 1991, relating to the Three
Million Nine Hundred Thousand Dollars ($3,900,000) principal amount The
Indiana Development Finance Authority Limited Obligation Refunding
Revenue Bonds (Xxxxxxx Industries, Inc. Project), Series 1991, dated
December 5, 1991 (the "1991 Reimbursement Agreement").
(d) The 1998 Reimbursement Agreement, the 1994 Reimbursement Agreement
and the 1991 Reimbursement Agreement are sometimes referred to herein as the
"Reimbursement Agreements". The Revolving Credit Note, the Credit Agreement, the
Line of Credit, the Reimbursement Agreements, and all other agreements,
documents and instruments evidencing, securing or otherwise relating to the
Credit Agreement, the Line of Credit or the Reimbursement Agreements are
sometimes referred to individually and collectively as the "Loan Documents".
(e) "Resettlement Date" is the date on which Collections are applied to
Borrower's account and on which Collections are to be remitted to Participant.
Section 2. Sale of Participation. Lead Bank hereby sells to Participant
and Participant hereby purchases a participation of fifty percent (50%) of (i)
the principal amount of the Loans referenced in Section l(c)(i) (ii) (iii) (iv)
and (v) outstanding on the date of this Agreement, (ii) the principal amount of
any future advances under the Loans, (iii) the interest attributable to such
principal amounts from the date of this Agreement, (iv) fees payable under the
Reimbursement Agreements, and (v) the Collateral securing the Loans, for an
amount equal to fifty percent (50%) of the sum of items (i) and (ii) above, with
ZERO Dollars ($ - 0 - ) payable by Participant on the date of this Agreement.
With respect to any future advances under the Loans, including any drawings made
under letters of credit relating to the Letter of Credit Loan and the
Reimbursement Agreements, Participant will provide the amount of its pro-rata
portion of advances to Lead Bank in immediately available funds by 2:00 p.m.
Elkhart, Indiana time, on the day Lead Bank requests funds if Lead Bank makes
such request by 10:00 a.m. Elkhart time, or if Lead Bank does not notify
Participant by such time, then by 10:00 a.m. Elkhart time on the next banking
day.
The participation sold under this agreement shall constitute a sale,
without recourse to the Lead Bank, of an undivided interest in the Lead Bank's
interest in the Loans, the Lead Bank's commitment (if any) to make the Loans,
the Loan Documents, all amounts payable by the Borrower under the Loan Documents
including principal, interest, and fees, and any collateral securing the Loans.
Participant represents and warrants to Lead Bank that Participant has,
independently and without reliance on Lead Bank, made its own credit analysis
and performed such due diligence as Participant deems appropriate and will
continue to be responsible for making its own independent evaluation of the
credit, financial condition, and all other matters concerning the Borrower.
Section 3. Application of Collections. Lead Bank shall receive all
Collections and apply them on each Resettlement Date pro-rata, together with
pro-rata interest, in accordance with the respective percentage participation of
Lead Bank and Participant in the Loan. If after Lead Bank has paid Participant
its pro-rata portion of any Collections such payment must be paid back by Lead
Bank for any reason, Participant will pay on demand to Lead Bank the
Participant's pro-rata portion of the amount that must be paid back by Lead
Bank, together with Participant's pro-rata portion of any interest or penalties
payable thereon. The Participant acknowledges and agrees that the Lead Bank
shall have no obligation to attempt to collect any Loan in preference and
priority over the collection and/or enforcement of any other debt of the
Borrower to the Lead Bank. The Lead Bank, however, agrees that the proceeds of
all collateral directly securing repayment of the Loans shall be applied first
to the payment of the Loans.
Section 4. Documentation. Lead Bank has delivered to Participant a copy
of the Loan Documents and Lead Bank will deliver to Participant copies of all
future extensions and modifications thereof and replacements therefor. All
additional documents on file with Lead Bank concerning the Loan Documents, the
Loan or this Participation Agreement shall be available at Lead Bank's office
for Participant's inspection at reasonable times on reasonable notice to Lead
Bank. The Lead Bank shall promptly furnish to the Participant copies of all
financial statements received from the Borrower pursuant to the Loan Documents.
The Lead Bank shall promptly notify the Participant of the occurrence of any
event of default under any of the Loan Documents of which the Lead Bank has
actual knowledge and of any information as to any actual or potential event of
default received by the Lead Bank from any source which the Lead Bank believes
to be accurate and reliable. The Lead Bank shall, however, have no
responsibility to the Participant for any errors or omissions in any such
reports, financial statements or other information. The Participant may at any
time request other information and/or documents in the Lead Bank's possession
relating to the Loans. That information and/or documents shall not be
unreasonably withheld.
Section 5. Lead's Administration.
(a) The Note, all Collateral and the Loan shall be held by Lead Bank and dealt
with in Lead Bank's name on Participant's behalf. Lead Bank will service, manage
andcollect the Loan and the Collateral in the ordinary course of business and in
accordance with Lead Bank's usual practices. It is agreed that Lead Bank may use
its sole discretion with respect to exercising or refraining from exercising
Lead Bank's rights, or waiving Lead Bank's rights, with respect to the Loan.
Subject only to considerations of prudent banking practices, Lead Bank shall
have the sole discretion concerning the initiation, prosecution, settlement or
termination of collection proceedings if the Loan becomes in default. Lead Bank
will examine the Collateral and Borrower's books and records relating to the
Loan as Lead Bank deems necessary.
(b) Lead Bank may, in its sole discretion, without notice to or consent by
Participant, and subject only to considerations of prudent banking practices,
extend, modify or replace the Note or release or otherwise deal in any of the
Collateral or release any guarantor of the obligations of Borrower.
(c) The Lead Bank shall exercise the same care in administering the Loans as it
would if the Loans were made entirely for the Lead Bank's own account, but Lead
Bank shall not be liable to Participant for any action taken or omitted or for
any error in judgment, except for Lead Bank's own bad faith.
(d) Notwithstanding Section 5(a) (b) and (c) above, the Lead Bank shall not
without the consent of the Participant (a) agree to any material amendment or
modification of any of the Loan Documents, including any waiver of any financial
covenants and any amendment which would extend the maturity of any Loan,
increase the amount of any Loan, or reduce the interest on any Loan; (b) release
any security for any Loan other than in accordance with the express provisions
of the Loan Documents; (c) commence any legal proceeding to collect any Loan; or
(d) take any action to seize, foreclose, sell or transfer any collateral. If the
Participant's consent shall be requested but denied, the Lead Bank may (but
shall have no obligation to) repurchase the participation evidenced by this
agreement for a price equal to the outstanding balance of the Participant's
interest in the Loans plus accrued and unpaid interest and fees payable under
the Reimbursement Agreements to the date of such repurchase.
Section 6. Expenses. All expenses of receiving Collections, including,
but not limited to, attorney's fees, court costs and disbursements, shall be
shared pro-rata by Participant and Lead Bank in accordance with their respective
percentage interests. Participant's portion of such expenses shall be payable to
Lead Bank on demand. Lead Bank may receive Participant's portion of such
expenses by deducting them from any amounts required to be remitted by Lead Bank
to Participant hereunder.
Section 7. Offset. Lead Bank may offset against amounts owed to
Participant under this Agreement any amounts Participant may owe Lead Bank under
any agreements or circumstances.
Section 8. Disclaimer. The Lead Bank makes no representation or
warranty, whether express or implied, to the Participant with respect to (a) the
collectibility of the Loans, (b) the financial condition or solvency of the
Borrower or any other party obligated on the Loans, (c) the accuracy of any
information, statements, or certificates provided to the Participant under this
agreement; or (d) the existence, sufficiency or value of any collateral securing
the Loans.
Section 9. Reimbursement and Indemnification. The Participant shall
reimburse the Lead Bank on demand in proportion to the Participant's pro rata
interest in the Loan, for all out-of-pocket expenses, including reasonable
attorney's fees, incurred by the Lead Bank in connection with the making or
collection or the Loans, to the extend not recovered from the Borrower. The
Participant shall indemnify the Lead Bank for the Participant's pro rata share
(determined in accordance with its pro rata interest in the Loan) of any costs,
expenses (including reasonable attorney's fees and disbursements), claims,
damages, actions, losses or liabilities, incurred by the Lead Bank in connection
with the Loans unless they result from the Lead Bank's own gross negligence or
willful misconduct or are paid in satisfaction of a judgment, settlement
agreement, or arbitration award arising out of the Borrower's allegations of
fraud, deceit, misrepresentation, or lack of good faith (other than allegations
that arise out of conduct of the Participant or conduct of the Lead Bank
specifically directed, authorized, or concurred in by the Participant).
Section 10. Notices. Except as provided in Section 2 above, all notices
required or permitted to be given under this Agreement shall be in writing
(including telecommunications) and shall be deemed effective if delivered to the
recipient's address or facsimile number set forth beside its name below by any
of the following means: (a) hand delivery, (b) registered or certified mail,
postage prepaid, with return receipt requested, (c) express mail, postage
prepaid, (d) Federal Express or like overnight courier service or (e) facsimile
or other wire transmission with request for assurance of receipt in a manner
typical with respect to communication of that type. Notice made in accordance
with the section shall be deemed delivered upon receipt.
If to Lead Bank, to: Bank One, NA
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
If to Participant, to: National City Bank of Indiana
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
Facsimile: (000)000-0000
Section 11. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the Lead Bank and the Participant and
supersedes all prior agreements and understandings relating to its subject
matter. This Agreement may not be amended or in any manner modified unless such
amendment or modification is in writing and signed by both parties.
Section 12. Other Provisions.
(a) Participant shall not sell, pledge, assign, sub-participate, or
otherwise transfer its rights under this Agreement, the Collateral, or any
portion of the Loan without procuring in advance the written consent of Lead
Bank. Lead Bank may sell, pledge, assign, sub-participate, or otherwise transfer
its rights under this Agreement, the Collateral, or any portion of the Loan
without the consent of Participant.
(b) Lead Bank reserves the right to purchase at Lead Bank's option with
Borrower's written consent upon thirty (30) days' notice the participation
interest of Participant for an amount equal to Participant's portion of the
outstanding principal balance of the Loan as of the date of purchase under the
option, plus accrued interest thereon through the date of purchase.
(c) Participant acknowledges that Lead Bank may have other banking
relationships with Borrower, any guarantor of Borrower's obligations under the
Loan, or their affiliates. Participant shall have no interest in any property
taken as collateral for any other loans or extensions of credit made by Lead
Bank to Borrower or any guarantor, or in any property in Lead Bank's possession
or control, or in any deposit held or other indebtedness owing by Lead Bank,
which may be or become collateral for or otherwise available for payment of the
Loan by reason of the general description of secured obligations contained in
any security agreement or other agreement or instrument held by Lead Bank or by
reason of the right of set-off, counterclaim or otherwise, except that if any of
those items or the proceeds thereof are applied in reduction of amounts
outstanding under the Loan, then Participant shall be entitled to its pro-rata
share in such application.
(d) Nothing in this Agreement shall confer upon either party any
interest in, or subject either party to any liability for, the assets or
liabilities of the other, except only as to the Loan or Collateral in accordance
with this Participation Agreement.
(e) This Agreement shall be governed by the laws of the State of
Indiana, may not be amended or modified orally, and shall bind the respective
legal representatives, successors and assigns of the parties.
(f) All notices shall be in writing and mailed to the respective
parties at the addresses set forth below.
"LEAD BANK"
Bank One, NA
By: /S/ Xxxx Xxxxxxxx, V.P.
(Printed Name and Title)
"PARTICIPANT"
National City Bank of Indiana
By: /S/ Xxxxxx X. Xxxxxx, Xx., V.P.
(Printed Name and Title)
ELDS01 JST 148476v4
RESOLUTION OF BOARD OF DIRECTORS OF
XXXXXXX INDUSTRIES, INC.
AN INDIANA CORPORATION ("CORPORATION")
The Corporation desires to engage in financial transactions from time to time
with Bank One, Indiana, N.A., a national banking association, formerly known as
NBD Bank, N.D. (the "Bank"), to further the Corporation's purposes; and
The Corporation desires to authorize certain of its officers to engage in these
transactions for the Corporation; and
The Corporation desires to ratify all past transactions and eliminate the
necessity of presenting separate individual resolutions to the Bank in the
future.
RESOLVED: The President, Vice-President, Treasurer, Secretary, Vice-President -
Finance or any of them, are authorized from time to time for the Corporation to:
1. NEGOTIATE AND PROCURE LOANS, lines of credit, letters of credit,
discounts, foreign exchange contracts, and any other credit from the Bank in any
form and in any amount and on any terms as they shall determine.
2. GUARANTY to the Bank the obligation of any third party in any amount and
on any terms as they shall determine.
3. SUBORDINATE to the Bank any interest of the Corporation in any note,
lease, mortgage, debt, or any other asset belonging to this Corporation on any
terms as they shall determine.
4. GIVE AS SECURITY for any such credits or guarantees, security interests in
or pledges, assignments, hypothecations, mortgages, or transfers of any
property, tangible or intangible, real or personal, of this Corporation, all as
they shall determine.
5. LEASE personal property as lessee and elect as to tax credit and
depreciation deductions.
6. SELL, assign, pledge or transfer all stocks or securities now or later in
the Corporation's name.
7. ENTER INTO ANY DERIVATIVE TRANSACTION, including, without limitation, any
rate swap transactions, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, current option and any similar transaction or option and any
combination of the foregoing (collectively, "Derivative Transactions"); and any
cancellation, buy-back, reversal, termination or assignment of any Derivative
Transaction.
8. SIGN in the name of this Corporation agreements, notes, drafts,
acceptances, guaranties, subordination agreements, assignments, applications for
letters of credit, appointments, security agreements, financing statements,
mortgages, pledges, hypothecations, transfers, leases and any other instrument
or document deemed necessary by the Bank to carry out the authority contained in
this resolution.
FURTHER: The Bank is authorized and directed to pay the proceeds of any action
taken pursuant to these resolutions in the manner directed by any of the persons
authorized to act, whether payable to the order of any of them in an individual
capacity or not, and whether the proceeds are deposited to the individual credit
of any of them or the individual credit of any other person.
These resolutions shall continue in force until notice to the contrary in
writing is delivered to the Bank.
FURTHER: Any one of the persons authorized above or any other person designated
by a person authorized above may request loans or other credit under credit
facilities approved by the Bank, and authorize payment by the Corporation of any
of its obligations under such credit facilities. Those instructions may be made
by telephone, facsimile, or any other means of communication. The Bank is
released from any liability for following instructions that the recipient
believes in good faith to have been given by a person authorized to act under
these resolutions.
FURTHER: The authority given is retroactive, and any acts referred to which were
performed prior to the adoption of these resolutions are ratified and affirmed.
I CERTIFY that I am the duly elected and qualified Secretary of the Corporation
and the keeper of the records and the corporate seal of the Corporation and that
the above is a true and correct copy of resolutions duly adopted at a meting of
the Board of Directors of the Corporation held in accordance with its by-laws on
May 15, 2001, and that they are in full force and effect.
I FURTHER CERTIFY that the individuals whose signatures appear below have been
duly elected and are presently the incumbents of the offices set below their
respective signatures, and that the signatures are the genuine original
signatures of each respectively.
Actual Signatures Actual Signatures
/S/ Xxxxx X. Lung _____________________________________
Xxxxx X. Lung, President _______________________,Vice President
(Print Name)
/S/ Xxxx Xxx Xxxxxx, Jr. _____________________________________
Xxxx Xxx Xxxxxx, Jr., Treasurer ________________________, Secretary
(Print Name)
------------------------------ -------------------------------------
______________, Vice-President-Finance _____________________________________
(Print Name) (Print Name)
(Print Title)
EXECUTED on April 11, 2003.
/S/ Xxxx Xxx Xxxxxx, Jr.
Xxxx Xxx Xxxxxx, Jr., Secretary
[LOGO]
BANK ONE
LINE OF CREDIT Note
DUE: MAY 31, 2006 $10,000,000.00
DATE: APRIL 11, 2003
PROMISE TO PAY. On or before May 31, 2006, for value received, Xxxxxxx
Industries, Inc. (the "Borrower") promises to pay to Bank One, NA, with its main
office in Chicago, IL, whose address is 000 X. Xxxxxxxx Xx., Xxxxxxx, XX 00000
(the "Bank") or order, in lawful money of the United States of America, the sum
of Ten Million and 00/100 Dollars ($10,000,000.00) or such lesser sum as is
indicated on Bank records, plus interest as provided below.
DEFINITIONS. As used in this Note, the following terms have the following
respective meanings:
"ADVANCE" means a Eurodollar Advance or a Prime Rate Advance and "ADVANCES"
means all Eurodollar Advances and all Prime Rate Advances under this Note.
"APPLICABLE MARGIN" means with respect to any Prime Rate Advance or Eurodollar
Advance, as the case may be, the rate per annum set forth below opposite the
applicable Funded Debt to EBITDA Ratio. Funded Debt to EBITDA Ratio is defined
in the Credit Agreement.
----------------------------------------------------------------------------
Funded Debt to EBITDA Ratio Applicable Margin
----------------------------------------------------------------------------
Prime Rate Eurodollar
Advance Advance
----------------------------------------------------------------------------
Greater than 3.00 to 1.00 0.00% 1.75%
----------------------------------------------------------------------------
Less than or equal 3.00 to 1.00 but 0.00% 1.625%
greater than 2.50 to 1.00
----------------------------------------------------------------------------
Less than or equal to 2.50 to 1.00 0.00% 1.50%
but greater than 2.00 to 1.00
----------------------------------------------------------------------------
Less than or equal to 2.00 to 1.00 0.00% 1.375%
----------------------------------------------------------------------------
The Applicable Margin shall, in each case, be determined and adjusted quarterly
on the first day of the month after the date of delivery of the quarterly and
annual financial statements required by the Credit Agreement, provided, however,
that if such financial statements are not delivered within two Business Days
after the required date (each, an "Interest Determination Date"), the Applicable
Margin shall increase to the maximum percentage amount set forth in the table
above from the date such financial statements were required to be delivered to
the Bank until received by the Bank, and provided further, that after such
financial statements are received by the Bank, the Applicable Margin shall be
determined and adjusted retroactive to the date the financial statements were
required to have been delivered to the Bank. The Applicable Margin shall be
effective from an Interest Determination Date until the next Interest
Determination Date. Such determinations by the Bank shall be conclusive absent
manifest error. The initial Applicable Margin for Prime Rate Advances is 0.00%
and for Eurodollar Advances is 1.50 %.
"CREDIT AGREEMENT" means a certain Credit Agreement, dated January 28, 2000,
between the Borrower and the Bank, as amended.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Indiana and/or New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day other than a Saturday, Sunday or any other day on
which national banking associations are authorized to be closed.
"EURODOLLAR BASE RATE" means, with respect to the relevant Interest Period, the
applicable British Bankers' Association LIBOR rate for deposits in U.S. dollars
as reported by any generally recognized financial information service as of
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, and having a maturity equal to such Interest Period, provided
that, if no such British Bankers' Association LIBOR rate is available to the
Bank, the applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the rate determined by the Bank to be the rate at which BANK ONE
CORPORATION or one of its affiliate banks offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of the principal amount outstanding
on such date and having a maturity equal to such Interest Period.
"EURODOLLAR ADVANCE" means any borrowing under this Note when and to the extent
that its interest rate is determined by reference to the Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance for the relevant
Interest Period, the sum of (i) the Applicable Margin plus (ii) the quotient of
(a) the Eurodollar Base Rate applicable to such Interest Period, divided by (b)
one minus the Reserve Requirement (expressed as a decimal) applicable to such
Interest Period.
"INTEREST PERIOD" means, with respect to a Eurodollar Advance, a period of one
(1), two (2), three (3) or six (6) month(s) commencing on a Business Day
selected by the Borrower pursuant to this Note. Such Interest Period shall end
on the day which corresponds numerically to such date one (1), two (2), three
(3) or six (6) month(s) thereafter, as applicable, provided, however, that if
there is no such numerically corresponding day in such first, second, third or
sixth succeeding month(s), as applicable, such Interest Period shall end on the
last Business Day of such first, second, third or sixth succeeding month(s), as
applicable. If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.
"PRIME RATE" means a rate per annum equal to the prime rate of interest
announced from time to time by the Bank or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"PRIME RATE ADVANCE" means any Advance under this Note when and to the extent
that its interest rate is determined by reference to the Prime Rate. "PRINCIPAL
PAYMENT DATE" is defined in the paragraph entitled "Principal Payments" below.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"RESERVE REQUIREMENT" means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D. INTEREST RATES. The
aggregate number of Eurodollar Advances outstanding at any one time evidenced by
this Note may not exceed five (5). The Borrower shall pay interest to the Bank
on the outstanding and unpaid principal amount of each Prime Rate Advance at the
Prime Rate plus the Applicable Margin and each Eurodollar Advance at the
Eurodollar Rate. Interest shall be calculated on the basis of the actual number
of days elapsed in a year of 360 days. In no event shall the interest rate
applicable to any Advance exceed the maximum rate allowed by law. Any interest
payment which would for any reason be deemed unlawful under applicable law shall
be applied to principal. BANK RECORDS. The Bank shall, in the ordinary course of
business, make notations in its records of the date, amount, interest rate and
Interest Period of each Advance hereunder, the amount of each payment on the
Advances, and other information. Such records shall, in the absence of manifest
error, be conclusive as to the outstanding principal balance of and interest
rate or rates applicable to this Note.
Notice AND MANNER OF ELECTING INTEREST RATES ON ADVANCES. The Borrower shall
give the Bank written notice (effective upon receipt) of the Borrower's intent
to draw down an Advance under this Note no later than 11:00 a.m. Eastern time,
one (1) Business Day before disbursement, if the full amount of the drawn
Advance is to be disbursed as a Prime Rate Advance and three (3) Business Days
before disbursement, if any part of such Advance is to be disbursed as a
Eurodollar Advance. The Borrower's notice must specify: (a) the disbursement
date, (b) the amount of each Advance, (c) the type of each Advance (Prime Rate
Advance or Eurodollar Advance), and (d) for each Eurodollar Advance, the
duration of the applicable Interest Period; provided, however, that the Borrower
may not elect an Interest Period ending after the maturity date of this Note.
Each Eurodollar Advance shall be in a minimum amount of Five Hundred Thousand
and 00/100 Dollars ($500,000.00). All notices under this paragraph are
irrevocable. By the Bank's close of business on the disbursement date and upon
fulfillment of the conditions set forth herein and in any other of the Related
Documents, the Bank shall disburse the requested Advances in immediately
available funds by crediting the amount of such Advances to the Borrower's
account with the Bank. CONVERSION AND RENEWALS. The Borrower may elect from time
to time to convert one type of Advance into another or to renew any Advance by
giving the Bank written notice no later than 11:00 a.m. Eastern time, one (1)
Business Day before conversion into a Prime Rate Advance and three (3) Business
Days before conversion into or renewal of a Eurodollar Advance, specifying: (a)
the renewal or conversion date, (b) the amount of the Advance to be converted or
renewed, (c) in the case of conversion, the type of Advance to be converted into
(Prime Rate Advance or Eurodollar Advance), and (d) in the case of renewals of
or conversion into a Eurodollar Advance, the applicable Interest Period,
provided that (i) the minimum principal amount of each Eurodollar Advance
outstanding after a renewal or conversion shall be Two Hundred Fifty Thousand
and 00/100 Dollars ($250,000.00); (ii) a Eurodollar Advance can only be
converted on the last day of the Interest Period for the Advance; and (iii) the
Borrower may not elect an Interest Period ending after the maturity date of this
Note. All notices given under this paragraph are irrevocable. If the Borrower
fails to give the Bank the notice specified above for the renewal or conversion
of a Eurodollar Advance by 11:00 a.m. Eastern time three (3) Business Days
before the end of the Interest Period for that Advance, the Advance shall
automatically be converted to a Prime Rate Advance on the last day of the
Interest Period for the Advance.
INTEREST PAYMENTS. Interest on the Advances shall be paid as follows:
A. For each Prime Rate Advance, on the thirtieth day of each month beginning
with the first month following disbursement of the Advance or following
conversion of an Advance into a Prime Rate Advance, and at the maturity or
conversion of the Advance into a Eurodollar Advance; B. For each Eurodollar
Advance, on the last day of the Interest Period for the Advance and, if the
Interest Period is longer than three months, at three-month intervals beginning
with the day three months from the date the Advance is disbursed.
PRINCIPAL PAYMENTS. All outstanding principal and interest is due and payable in
full on May 31, 2006, which is defined herein as the "Principal Payment Date".
DEFAULT RATE OF INTEREST. After a default has occurred under this Note, whether
or not the Bank elects to accelerate the maturity of this Note because of such
default, all Advances outstanding under this Note, including all Eurodollar
Advances, shall bear interest at a per annum rate equal to the Prime Rate, plus
the Applicable Margin for a Prime Rate Advance, plus three percent (3.00%) from
the date the Bank elects to impose such rate. Imposition of this rate shall not
affect any limitations contained in this Note on the Borrower's right to repay
principal on any Eurodollar Advance before the expiration of the Interest Period
for that Advance.
PREPAYMENT. The Borrower may prepay all or any part of any Prime Rate Advance at
any time without premium or penalty. The Borrower may prepay any Eurodollar
Advance only at the end of an Interest Period.
FUNDING LOSS INDEMNIFICATION. Upon the Bank's request, the Borrower shall pay
the Bank amounts sufficient (in the Bank's reasonable opinion) to compensate it
for any loss, cost, or expense incurred as a result of: A. Any payment of a
Eurodollar Advance on a date other than the last day of the Interest Period for
the Advance, including, without limitation, acceleration of the Advances by the
Bank pursuant to this Note or the Related Documents; or B. Any failure by the
Borrower to borrow or renew a Eurodollar Advance on the date specified in the
relevant notice from the Borrower to the Bank.
ADDITIONAL COSTS. If any applicable domestic or foreign law, treaty, government
rule or regulation now or later in effect (whether or not it now applies to the
Bank) or the interpretation or administration thereof by a governmental
authority charged with such interpretation or administration, or compliance by
the Bank with any guideline, request or directive of such an authority (whether
or not having the force of law), shall (a) affect the basis of taxation of
payments to the Bank of any amounts payable by the Borrower under this Note or
the Related Documents (other than taxes imposed on the overall net income of the
Bank by the jurisdiction or by any political subdivision or taxing authority of
the jurisdiction in which the Bank has its principal office), or (b) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
the Bank, or (c) impose any other condition with respect to this Note or the
Related Documents and the result of any of the foregoing is to increase the cost
to the Bank of maintaining any Eurodollar Advance or to reduce the amount of any
sum receivable by the Bank on such an Advance, or (d) affect the amount of
capital required or expected to be maintained by the Bank (or any corporation
controlling the Bank) and the Bank determines that the amount of such capital is
increased by or based upon the existence of the Bank's obligations under this
Note or the Related Documents and the increase has the effect of reducing the
rate of return on the Bank's (or its controlling corporation's) capital as a
consequence of the obligations under this Note or the Related Documents to a
level below that which the Bank (or its controlling corporation) could have
achieved but for such circumstances (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by the Bank to be material,
then the Borrower shall pay to the Bank, from time to time, upon request by the
Bank, additional amounts sufficient to compensate the Bank for the increased
cost or reduced sum receivable. Whenever the Bank shall learn of circumstances
described in this section which are likely to result in additional costs to the
Borrower, the Bank shall give prompt written notice to the Borrower of the basis
for and the estimated amount of any such anticipated additional costs. A
statement as to the amount of the increased cost or reduced sum receivable,
prepared in good faith and in reasonable detail by the Bank and submitted by the
Bank to the Borrower, shall be conclusive and binding for all purposes absent
manifest error in computation.
ILLEGALITY. If any applicable domestic or foreign law, treaty, rule or
regulation now or later in effect (whether or not it now applies to the Bank) or
the interpretation or administration thereof by a governmental authority charged
with such interpretation or administration, or compliance by the Bank with any
guideline, request or directive of such an authority (whether or not having the
force of law), shall make it unlawful or impossible for the Bank to maintain or
fund the Eurodollar Advances, then, upon notice to the Borrower by the Bank, the
outstanding principal amount of the Eurodollar Advances, together with accrued
interest and any other amounts payable to the Bank under this Note or the
Related Documents on account of the Eurodollar Advances shall be repaid (a)
immediately upon the Bank's demand if such change or compliance with such
requests, in the Bank's judgment, requires immediate repayment, or (b) at the
expiration of the last Interest Period to expire before the effective date of
any such change or request provided, however, that subject to the terms and
conditions of this Note and the Related Documents the Borrower shall be entitled
to simultaneously replace the entire outstanding balance of any Eurodollar
Advance repaid in accordance with this section with a Prime Rate Advance in the
same amount.
INABILITY TO DETERMINE INTEREST RATE. If the Bank determines that (a) quotations
of interest rates for the relevant deposits referred to in the definition of
Eurodollar Rate are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the interest rate on a
Eurodollar Advance as provided in this Note, or (b) the relevant interest rates
referred to in the definition of Eurodollar Rate do not accurately cover the
cost to the Bank of making or maintaining Eurodollar Advances, then the Bank
shall forthwith give notice of such circumstances to the Borrower, whereupon (i)
the obligation of the Bank to make Eurodollar Advances shall be suspended until
the Bank notifies the Borrower that the circumstances giving rise to the
suspension no longer exists, and (ii) the Borrower shall repay in full the then
outstanding principal amount of each Eurodollar Advance, together with accrued
interest, on the last day of the then current Interest Period applicable to the
Advance, provided, however, that, subject to the terms and conditions of this
Note and the Related Documents, the Borrower shall be entitled to simultaneously
replace the entire outstanding balance of any Eurodollar Advance repaid in
accordance with this section with a Prime Rate Advance in the same amount.
OBLIGATIONS DUE ON NON-BUSINESS DAY. Whenever any payment under this Note
becomes due and payable on a day that is not a Business Day, if no default then
exists under this Note, the maturity of the payment shall be extended to the
next succeeding Business Day, except, in the case of a Eurodollar Advance, if
the result of the extension would be to extend the payment into another calendar
month, the payment must be made on the immediately preceding Business Day.
MATTERS REGARDING PAYMENT. The Borrower will pay the Bank at the Bank's address
shown above or at such other place as the Bank may designate. Payments shall be
allocated among principal, interest and fees at the discretion of the Bank
unless otherwise agreed or required by applicable law. Acceptance by the Bank of
any payment which is less than the payment due at the time shall not constitute
a waiver of the Bank's right to receive payment in full at that time or any
other time.
LATE FEE. If any payment is not received by the Bank within ten (10) days after
its due date, the Bank may assess and the Borrower agrees to pay a late fee
equal to the greater of: (a) five percent (5.00%) of the past due amount or (b)
Twenty Five and 00/100 Dollars ($25.00), up to the maximum amount of One
Thousand Five Hundred and 00/100 Dollars ($1,500.00) per late charge.
BUSINESS LOAN. The Borrower acknowledges and agrees that this Note evidences a
loan for a business, commercial, agricultural or similar commercial enterprise
purpose, and that all advances made under this Note shall not be used for any
personal, family or household purpose.
CREDIT FACILITY. The Bank has approved a revolving credit facility to the
Borrower in a principal amount not to exceed the face amount of this Note. The
credit facility is in the form of advances made from time to time by the Bank to
the Borrower. This Note evidences the Borrower's obligation to repay those
advances. The aggregate principal amount of debt evidenced by this Note is the
amount reflected from time to time in the records of the Bank. Until the
earliest of maturity, the occurrence of any default, or the occurrence of any
event that would constitute the occurrence of any default but for the lapse of
time until the end of any grace or cure period, the Borrower may borrow, pay
down and reborrow under this Note subject to the terms of the Related Documents.
LIABILITIES. The term "Liabilities" in this Note means all obligations,
indebtedness and liabilities of the Borrower to any one or more of the Bank,
BANK ONE CORPORATION, and any of their subsidiaries, affiliates or successors,
now existing or later arising, including, without limitation, all loans,
advances, interest, costs, overdraft indebtedness, credit card indebtedness,
lease obligations, or obligations relating to any Rate Management Transaction,
all monetary obligations incurred or accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar proceedings, regardless of
whether allowed or allowable in such proceeding, and all renewals, extensions,
modifications, consolidations or substitutions of any of the foregoing, whether
the Borrower may be liable jointly with others or individually liable as a
debtor, maker, co-maker, drawer, endorser, guarantor, surety or otherwise, and
whether voluntarily or involuntarily incurred, due or not due, absolute or
contingent, direct or indirect, liquidated or unliquidated. The term "Rate
Management Transaction" in this Note means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into among the
Borrower the Bank or BANK ONE CORPORATION, or any of its subsidiaries or
affiliates or their successors, which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
RELATED DOCUMENTS. The term "Related Documents" in this Note means all loan
agreements, credit agreements, reimbursement agreements, security agreements,
mortgages, deeds of trust, pledge agreements, assignments, guaranties, or any
other instrument or document executed in connection with this Note or in
connection with any of the Liabilities.
SECURITY. The term "Collateral" in this Note means all real or personal property
described in all security agreements, pledge agreements, mortgages, deeds of
trust, assignments, or other instruments now or hereafter executed in connection
with this Note or in connection with any of the Liabilities. If applicable, the
Collateral secures the payment of this Note and the Liabilities.
BANK'S RIGHT OF SETOFF. In addition to the Collateral, if any, the Borrower
grants to the Bank a security interest in, and the Bank is authorized to setoff
and apply, all Accounts, Securities and Other Property, and Bank Debt against
any and all Liabilities of the Borrower. This right of setoff may be exercised
at any time and from time to time after default by Borrower, and without prior
notice to the Borrower. This security interest and right of setoff may be
enforced or exercised by the Bank regardless of whether or not the Bank has made
any demand under this paragraph or whether the Liabilities are contingent,
matured, or unmatured. Any delay, neglect or conduct by the Bank in exercising
its rights under this paragraph will not be a waiver of the right to exercise
this right of setoff or enforce this security interest. The rights of the Bank
under this paragraph are in addition to other rights the Bank may have in the
Related Documents or by law. In this paragraph: (a) the term "Accounts" means
any and all accounts and deposits of the Borrower (whether general, special,
time, demand, provisional or final) at any time held by the Bank (including all
Accounts held jointly with another, but excluding any XXX or Xxxxx Account, or
any trust Account in which a security interest would be prohibited by law); (b)
the term "Securities and Other Property" means any and all securities and other
property of the Borrower in the custody, possession or control of the Bank
(other than property held by the Bank in a fiduciary capacity); and (c) the term
"Bank Debt" means all indebtedness at any time owing by the Bank, to or for the
credit or account of the Borrower.
REPRESENTATIONS BY BORROWER. Borrower represents that: (a) the execution and
delivery of this Note and the performance of the obligations it imposes do not
violate any law, conflict with any agreement by which it is bound, or require
the consent or approval of any governmental authority or other third party; (b)
this Note is a valid and binding agreement, enforceable according to its terms;
and (c) all balance sheets, profit and loss statements, and other financial
statements furnished to the Bank in connection with the Liabilities are accurate
and fairly reflect the financial condition of the organizations and persons to
which they apply on their effective dates, including contingent liabilities of
every type, which financial condition has not changed materially and adversely
since those dates. Each Borrower, other than a natural person, further
represents that: (a) it is duly organized, existing and in good standing
pursuant to the laws under which it is organized; and (b) the execution and
delivery of this Note and the performance of the obligations it imposes (i) are
within its powers and have been duly authorized by all necessary action of its
governing body, and (ii) do not contravene the terms of its articles of
incorporation or organization, its by-laws, or any partnership, operating or
other agreement governing its affairs.
EVENTS OF DEFAULT/ACCELERATION. If any of the following events occurs this Note
shall become due immediately, without notice, at the Bank's option:
1. The Borrower, or any guarantor of this Note (the "Guarantor"), fails to pay
when due any amount payable under this Note, under any of the Liabilities,
or under any agreement or instrument evidencing debt to any creditor.
2. The Borrower or any Guarantor (a) fails to observe or perform any other
term of this Note which is not remedied within 30 days after written notice
from Bank; (b) makes any materially incorrect or misleading representation,
warranty, or certificate to the Bank; (c) makes any materially incorrect or
misleading representation in any financial statement or other information
delivered to the Bank; or (d) defaults under the terms of any agreement or
instrument relating to any debt for borrowed money (other than the debt
evidenced by this Note) and the effect of such default will allow the
creditor to declare the debt due before its maturity.
3. In the event (a) there is a default under the terms of any Related
Document, (b) any guaranty of the loan evidenced by this Note is terminated
or becomes unenforceable in whole or in part, (c) any Guarantor fails to
promptly perform under its guaranty, or (d) the Borrower fails to comply
with, or pay, or perform under any agreement, now or hereafter in effect,
between the Borrower and BANK ONE CORPORATION, or any of its subsidiaries
or affiliates or their successors.
4. There is any loss, theft, damage, or destruction of any Collateral not
covered by insurance, which would materially and adversely affect the
Borrower.
5. A "reportable event" (as defined in the Employee Retirement Income Security
Act of 1974 as amended) occurs that would permit the Pension Benefit
Guaranty Corporation to terminate any employee benefit plan of the Borrower
or any affiliate of the Borrower.
6. The Borrower or any Guarantor becomes insolvent or unable to pay its debts
as they become due.
7. The Borrower or any Guarantor (a) makes an assignment for the benefit of
creditors; (b) consents to the appointment of a custodian, receiver, or
trustee for itself or for a substantial part of its assets; or (c)
commences any proceeding under any bankruptcy, reorganization, liquidation,
insolvency or similar laws of any jurisdiction.
8. A custodian, receiver, or trustee is appointed for the Borrower or any
Guarantor or for a substantial part of its assets without its consent.
9. Proceedings are commenced against the Borrower or any Guarantor under any
bankruptcy, reorganization, liquidation, or similar laws of any
jurisdiction, and they remain undismissed for thirty (30) days after
commencement; or the Borrower or the Guarantor consents to the commencement
of those proceedings.
10. Any judgment is entered against the Borrower or any Guarantor, or any
attachment, levy, or garnishment is issued against any property of the
Borrower or any Guarantor, which is not covered by insurance and which
would materially and adversely impact the Borrower.
11. The Borrower or any Guarantor dies, or a guardian or conservator is
appointed for the Borrower or any Guarantor or all or any portion of the
Borrower's assets, any Guarantor's assets, or the Collateral.
12. The Borrower or any Guarantor, without the Bank's written consent (a) is
dissolved, (b) merges or consolidates with any third party, (c) leases,
sells or otherwise conveys a material part of its assets or business
outside the ordinary course of its business, (d) leases, purchases, or
otherwise acquires a material part of the assets of any other business
entity, except in the ordinary course of its business, or (e) agrees to do
any of the foregoing (notwithstanding the foregoing, any subsidiary may
merge or consolidate with any other subsidiary, or with the Borrower, so
long as the Borrower is the survivor).
13. There is a substantial change in the existing or prospective financial
condition of the Borrower or any Guarantor that the Bank in good faith
determines to be materially adverse.
REMEDIES. If this Note is not paid at maturity, whether by acceleration or
otherwise, the Bank shall have all of the rights and remedies provided by any
law or agreement. The Bank is authorized to cause all or any part of the
Collateral to be transferred to or registered in its name or in the name of any
other person or business entity, with or without designating the capacity of
that nominee. Without limiting any other available remedy, the Borrower is
liable for any deficiency remaining after disposition of any Collateral. The
Borrower is liable to the Bank for all reasonable costs and expenses of every
kind incurred in the making or collection of this Note, including without
limitation reasonable attorneys' fees and court costs. These costs and expenses
include without limitation any costs or expenses incurred by the Bank in any
bankruptcy, reorganization, insolvency or other similar proceeding. All amounts
payable under the terms of this Note shall be paid without relief from valuation
and appraisement laws.
WAIVERS. Any party liable on this Note waives (a) to the extent permitted by
law, all rights and benefits under any laws or statutes regarding sureties, as
may be amended; (b) any right to receive notice of the following matters before
the Bank enforces any of its rights: (i) the Bank's acceptance of this Note,
(ii) any credit that the Bank extends to the Borrower, (iii) the Borrower's
default, (iv) any demand, diligence, presentment, dishonor and protest, or (v)
any action that the Bank takes regarding the Borrower, anyone else, any
Collateral, or any of the Liabilities, that it might be entitled to by law or
under any other agreement; (c) any right to require the Bank to proceed against
the Borrower, any other obligor or guarantor of the Liabilities, or any
Collateral, or pursue any remedy in the Bank's power to pursue; (d) any defense
based on any claim that any endorser or other parties' obligations exceed or are
more burdensome than those of the Borrower; (e) the benefit of any statute of
limitations affecting liability of any endorser or other party liable hereunder
or the enforcement hereof; (f) any defense arising by reason of any disability
or other defense of the Borrower or by reason of the cessation from any cause
whatsoever (other than payment in full) of the obligation of the Borrower for
the Liabilities; and (g) any defense based on or arising out of any defense that
the Borrower may have (other than payment in full) to the payment or performance
of the Liabilities or any portion thereof. Any party liable on this Note
consents to any extension or postponement of time of its payment without limit
as to the number or period, to any substitution, exchange or release of all or
any part of the Collateral, to the addition of any other party, and to the
release or discharge of, or suspension of any rights and remedies against, any
person who may be liable for the payment of this Note. The Bank may waive or
delay enforcing any of its rights without losing them. Any waiver affects only
the specific terms and time period stated in the waiver. No modification or
waiver of any provision of this Note is effective unless it is in writing and
signed by the party against whom it is being enforced.
SUBORDINATION. Any rights of any party liable on this Note, whether now existing
or hereafter arising, to receive payment on account of any indebtedness
(including interest) owed to any party liable on this Note by the Borrower, or
to withdraw capital invested by it in the Borrower, or to receive distributions
from the Borrower, shall at all times be subordinate to the full and prior
repayment to the Bank of the Liabilities. No party liable on this Note shall be
entitled to enforce or receive payment of any sums hereby subordinated until the
Liabilities have been paid in full and any such sums received in violation of
this paragraph shall be received by such party in trust for the Bank. Any party
liable on this Note agrees to stand still with regard to the Bank's enforcement
of its rights, including taking no action to delay, impede or otherwise
interfere with the Bank's rights to realize on the Collateral. The foregoing
notwithstanding, until the occurrence of any default, any party liable on this
Note is not prohibited from receiving distributions from the Borrower in an
amount equal to any income tax liability imposed on such party liable on this
Note attributable to an ownership interest, if any, in the Borrower.
RIGHTS OF SUBROGATION. Any party liable on this Note waives and agrees not to
enforce any rights of subrogation, contribution or indemnification that it may
have against the Borrower, any person liable on the Liabilities, or the
Collateral, until the Borrower and such party liable on this Note have fully
performed all their obligations to the Bank, even if those obligations are not
covered by this Note.
REINSTATEMENT. All parties liable on this Note agree that to the extent any
payment is received by the Bank in connection with the Liabilities, and all or
any part of such payment is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid by the Bank or paid over to
a trustee, receiver or any other entity, whether under any bankruptcy act or
otherwise (any such payment is hereinafter referred to as a "Preferential
Payment"), then this Note shall continue to be effective or shall be reinstated,
as the case may be, and whether or not the Bank is in possession of this Note,
and, to the extent of such payment or repayment by the Bank, the Liabilities or
part thereof intended to be satisfied by such Preferential Payment shall be
revived and continued in full force and effect as if said Preferential Payment
had not been made.
GOVERNING LAW AND VENUE. This Note is delivered in the State of Indiana and
governed by Indiana law (without giving effect to its laws of conflicts). The
Borrower agrees that any legal action or proceeding with respect to any of its
obligations under this Note may be brought by the Bank in any state or federal
court located in either Elkhart or St. Xxxxxx County in the State of Indiana, as
the Bank in its sole discretion may elect. By the execution and delivery of this
Note, the Borrower submits to and accepts, for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of those
courts. The Borrower waives any claim that either Elkhart or St. Xxxxxx County
in the State of Indiana is not a convenient forum or the proper venue for any
such suit, action or proceeding.
RENEWAL AND EXTENSION. This Note is given in replacement, renewal and/or
extension of, but not extinguishing the indebtedness evidenced by, that
Revolving Credit Note dated January 28, 2000 executed by the Borrower in the
original principal amount of Ten Million and 00/100 Dollars ($10,000,000.00),
including previous renewals or modifications thereof, if any (the "Prior Note"),
and is not a novation thereof. All interest evidenced by the Prior Note shall
continue to be due and payable until paid. If applicable, all Collateral
continues to secure the payment of this Note and the Liabilities. The provisions
of this Note are effective on April 11, 2003.
MISCELLANEOUS. The Borrower, if more than one, is jointly and severally liable
for the obligations represented by this Note, the term "Borrower" means any one
or more of them, and the receipt of value by any one of them constitutes the
receipt of value by the others. This Note binds the Borrower and its successors,
and benefits the Bank, its successors and assigns. Any reference to the Bank
includes any holder of this Note. Section headings are for convenience of
reference only and do not affect the interpretation of this Note. Any notices
and demands under or related to this document shall be in writing and delivered
to the intended party at its address stated herein, and if to the Bank, at its
main office if no other address of the Bank is specified herein, by one of the
following means: (a) by hand, (b) by a nationally recognized overnight courier
service, or (c) by certified mail, postage prepaid, with return receipt
requested. Notice shall be deemed given: (a) upon receipt if delivered by hand,
(b) on the Delivery Day after the day of deposit with a nationally recognized
courier service, or (c) on the fifth Delivery Day after the notice is deposited
in the mail. "Delivery Day" means a day other than a Saturday, a Sunday, or any
other day on which national banking associations are authorized to be closed.
Any party may change its address for purposes of the receipt of notices and
demands by giving notice of such change in the manner provided in this
provision. This Note and any Related Documents embody the entire agreement
between the Borrower and the Bank regarding the terms of the loan evidenced by
this Note and supercede all oral statements and prior writings relating to that
loan. If any provision of this Note cannot be enforced, the remaining portions
of this Note shall continue in effect. The Borrower agrees that the Bank may
provide any information or knowledge the Bank may have about the Borrower or
about any matter relating to this Note or the Related Documents to BANK ONE
CORPORATION, or any of its subsidiaries or affiliates or their successors, or to
any one or more purchasers or potential purchasers of this Note or the Related
Documents, The Borrower agrees that the Bank may at any time sell, assign or
transfer one or more interests or participations in all or any part of its
rights and obligations in this Note to one or more purchasers whether or not
related to the Bank.
WAIVER OF SPECIAL DAMAGES. THE BORROWER WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM
THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.
JURY WAIVER. THE BORROWER 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 ON CONTRACT, TORT, OR
OTHERWISE) BETWEEN THE BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY
RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING EVIDENCED BY THIS NOTE.
Address: 0000 X. 00xx Xxxxxx XXXXXXXX:
Xxxxxxx, XX 00000 Xxxxxxx Industries, Inc.
Mailing X.X. Xxx 000 By: /S/ Xxxx X. Xxxxxx
Xxxxxxx Xxxxxxx, Xx 00000
Xxxx X. Xxxxxx, Secretary
/ Treasurer
Xxxx Xxxxxxxx IN000001007287463
ELDS01 JST 149243v3
[LOGO]
BankOne
Continuing Security Agreement
NAME OF DEBTOR: XXXXXXX INDUSTRIES, INC.
TAXPAYER I.D. NO.: 00-0000000
STATE ORGANIZATION NO.: 194321-004
DEBTOR'S ADDRESS: 0000 X. 00XX XXXXXX, XXXXXXX, XX 00000
GRANT OF SECURITY INTEREST. Xxxxxxx Industries, Inc. (the "Debtor") grants to
Bank One, NA, with its main office in Chicago, IL, whose address is 000 X.
Xxxxxxxx Xx., Xxxxxxx, XX 00000, on behalf of itself and its successors and
assigns (the "Bank"), as secured party, a continuing security interest in all of
the "Collateral" (as hereinafter defined) to secure the payment and performance
of the Liabilities.
BORROWER. The term "Borrower" in this agreement means Xxxxxxx Industries, Inc.
LIABILITIES. The term "Liabilities" in this agreement means all obligations,
indebtedness and liabilities of the Borrower to any one or more of the Bank,
BANK ONE CORPORATION, and any of their subsidiaries, affiliates or successors,
now existing or later arising, including, without limitation, all loans,
advances, interest, costs, overdraft indebtedness, credit card indebtedness,
lease obligations, or obligations relating to any Rate Management Transaction,
all monetary obligations incurred or accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar proceedings, regardless of
whether allowed or allowable in such proceeding, and all renewals, extensions,
modifications, consolidations or substitutions of any of the foregoing, whether
the Borrower may be liable jointly with others or individually liable as a
debtor, maker, co-maker, drawer, endorser, guarantor, surety or otherwise, and
whether voluntarily or involuntarily incurred, due or not due, absolute or
contingent, direct or indirect, liquidated or unliquidated. The term "Rate
Management Transaction" in this agreement means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into among the
Borrower, the Bank or BANK ONE CORPORATION, or any of its subsidiaries or
affiliates or their successors, which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
COLLATERAL. Accounts and Inventory.
DESCRIPTION OF COLLATERAL. As used in this agreement, the term "Collateral"
means all of the Debtor's property of the types indicated above and defined
below, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located, including but not limited to any items
listed on any schedule or list attached hereto. In addition, the term
"Collateral" includes all "proceeds", "products" and "supporting obligations"
(as such terms are defined in the "UCC", meaning the Uniform Commercial Code of
Indiana, as in effect from time to time) of the Collateral indicated above, (as
such terms are defined in the UCC) arising from the sale, rent, lease, casualty
loss or other disposition of the Collateral, and any Collateral returned to,
repossessed by or stopped in transit by the Debtor, and all insurance claims
relating to any of the Collateral (defined above). The term "Collateral" further
includes all of the Debtor's right, title and interest in and to all books,
records and data relating to the Collateral identified above, regardless of the
form of media containing such information or data, and all software necessary or
desirable to use any of the Collateral identified above or to access, retrieve,
or process any of such information or data. Where the Collateral is in the
possession of the Bank or the Bank's agent, the Debtor agrees to deliver to the
Bank any property that represents an increase in the Collateral or profits or
proceeds of the Collateral.
1. "Accounts" means all of the Debtor's "accounts"as defined in Article 9 of the
UCC.
2. "Inventory" means all of the Debtor's "inventory" as defined in Article 9 of
the UCC. In addition, "Inventory" includes any "documents" issued with
respect to any of the Debtor's "inventory" (as defined in Article 9 of the
UCC). Without limiting the security interest granted, the Debtor represents
and warrants that the Debtor's Inventory is presently located at any and all
locations.
REPRESENTATIONS, WARRANTIES AND COVENANTS. The Debtor represents and warrants
to, and covenants and agrees with the Bank that:
1. Its principal residence or chief executive office is at the address shown
above;
2. The Debtor's name as it appears in this agreement is its exact name as it
appears in the Debtor's organizational documents, as amended, including
any trust documents;
3. It is or will become the owner of the Collateral free from any liens,
encumbrances or security interests, except for this security interest and
existing liens disclosed to and accepted by the Bank in writing, and it
will defend the Collateral against all claims and demands of all persons at
any time claiming any interest in the Collateral;
4. It will keep the Collateral free of liens, encumbrances and other security
interests, except for this security interest, maintain the Collateral in
good repair, not use it illegally and exhibit the Collateral to the Bank on
demand;
5. At its own expense, the Debtor will maintain comprehensive casualty
insurance on the Collateral against such risks, in such amounts, with such
deductibles and with such companies as may be satisfactory to the Bank.
Each insurance policy shall contain a lender's loss payable endorsement
satisfactory to the Bank and a prohibition against cancellation or
amendment of the policy or removal of the Bank as loss payee without at
least thirty (30) days prior written notice to the Bank. In all events, the
amounts of such insurance coverages shall conform to prudent business
practices and shall be in such minimum amounts that the Debtor will not be
deemed a co-insurer. The policies, or certificates evidencing them, shall,
if the Bank so requests, be deposited with the Bank. The Debtor authorizes
the Bank, after default by Debtor, to endorse on the Debtor's behalf and to
negotiate drafts reflecting proceeds of insurance of the Collateral,
provided that the Bank shall remit to the Debtor such surplus, if any, as
remains after the proceeds have been applied, at the Bank's option, to the
satisfaction of all of the Liabilities (in such order of application as the
Bank may elect) or, after default by Debtor to the establishment of a cash
collateral account for the Liabilities;
6. It will not sell, lease, license or offer to sell, lease, license or
otherwise transfer the Collateral or any rights in or to the Collateral,
without the written consent of the Bank, except in the ordinary course of
business;
7. It will notify Bank upon request of any changes of location of the
Collateral to locations different from the locations of the Collateral
described in this agreement.
8. It will pay promptly when due all taxes and assessments upon the
Collateral, or for the use or operation of the Collateral;
9. No financing statement covering all or any part of the Collateral or any
proceeds is on file in any public office, unless the Bank has approved that
filing. From time to time at the Bank's request, the Debtor will execute
one or more financing statements in form satisfactory to the Bank and will
pay the cost of filing them in all public offices where filing is deemed by
the Bank to be necessary or desirable. In addition, the Debtor shall
execute and deliver, or cause to be executed and delivered, such other
documents as the Bank may from time to time request to perfect or to
further evidence the security interest created in the Collateral by this
agreement including, without limitation: (a) 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
in form satisfactory to the Bank; (b) any assignments of claims under
government contracts which are included as part of the Collateral, together
with any notices and related documents as the Bank may from time to time
request; (c) after default by Debtor, any assignment of any specific
account receivable as the Bank may from time to time request; (d) a notice
of security interest and a control agreement with respect to any
Collateral, all in form and substance satisfactory to the Bank; (e) a
notice to and acknowledgment from any person holding possession of any
Collateral as a bailee for the Bank's benefit, all in form and substance
satisfactory to the Bank; and (f) any consent to the assignment of proceeds
of any letter of credit, all in form and substance satisfactory to the
Bank;
10. It will not, without (he Bank's prior written consent, change the Debtor's
name, the Debtor's business organization, the jurisdiction under which the
Debtor's business organization is formed or organized, or the Debtor's
chief executive office, or of any additional places of the Debtor's
business;
11. It will provide any information that the Bank may reasonably request and
will permit the Bank or the Bank's agents to inspect and copy its books,
records, data and the Collateral at any time during normal business hours;
12. The Bank shall have the right now, and at any time in the future in its
sole and absolute discretion, without notice to the Debtor, to (a) prepare,
file and sign the Debtor's name on any proof of claim in bankruptcy or
similar document against any owner of the Collateral and (b) prepare, file
and sign the Debtor's name on any financing statement, notice of lien,
assignment or satisfaction of lien or similar document in connection with
the Collateral. The Debtor hereby authorizes the Bank to file financing
statements containing the collateral description "All of the Debtor's
assets whether now owned or hereafter acquired." or such lesser amount of
assets as the Bank may determine, or the Bank may, at its option, file
financing statements containing any collateral description which reasonably
describes the Collateral in which a security interest is granted under this
agreement;
13. The Debtor shall keep all tangible Collateral in good order and repair and
shall not waste or destroy any of the Collateral, nor use any of the
Collateral in violation of any applicable law or any policy of insurance
thereon. To the extent that the Collateral consists of "farm products" (as
defined in the UCC), the Debtor shall attend to and care for the crops and
livestock in accordance with the best practices of good husbandry, and do,
or cause to be done, any and all acts that may at any time be appropriate
or necessary to grow, raise, harvest, care for, preserve and protect the
farm products;
14. Except as may be otherwise disclosed in writing by the Debtor to the Bank,
none of the Collateral is attached to real estate so as to constitute a
"fixture" (as defined in the UCC) and none of the Collateral shall at any
time hereafter be attached to real estate so as to constitute a fixture. If
any of the Collateral is now or at any time hereafter becomes so attached
to real estate so as to constitute a fixture, the Debtor shall, at any time
upon the Bank's request, furnish the Bank with a disclaimer of interest in
the Collateral executed by each person or entity having an interest in such
real estate.
ACCOUNTS. If the Collateral includes the Debtor's "Accounts" and until the Bank
gives notice to the Debtor to the contrary, the Debtor will, in the usual course
of its business and at its own expense, on the Bank's behalf but not as the
Bank's agent, demand and receive and use its best efforts to collect all moneys
due or to become due with respect to the Collateral. Until the Bank gives notice
to the Debtor to the contrary after the Debtor is in default, it may use the
funds collected in its business. Upon notice from the Bank or upon default, the
Debtor agrees that all sums of money it receives on account of or in payment or
settlement of the Accounts shall be held by it as trustee for the Bank without
commingling with any of the Debtor's other funds, and shall immediately be
delivered to the Bank with endorsement to the Bank's order of any check or
similar instrument. It is agreed that, at any time the Bank so elects, the Bank
shall be entitled, in its own name or in the name of the Debtor or otherwise,
but at the expense and cost of the Debtor, to collect, demand, receive, xxx for
or compromise any and all Accounts and to give good and sufficient releases, to
endorse any checks, drafts or other orders for the payment of money payable to
the Debtor and, in the Bank's discretion, to file any claims or take any action
or proceeding which the Bank may deem necessary or advisable. It is expressly
understood and agreed, however, that the Bank shall not be required or obligated
in any manner to make any demand or to make any inquiry as to the nature or
sufficiency of any payment received by it or to present or file any claim or
take any other action to collect or enforce the payment of any amounts which may
have been assigned to the Bank or to which the Bank may be entitled at any time
or times. All notices required in this paragraph will be immediately effective
when sent. Such notices need not be given prior to the Bank's taking action. The
Debtor appoints the Bank or the Bank's designee as the Debtor's attorney-in-fact
to do all things with reference to the Collateral as provided for in this
section including without limitation (1) to notify the post office authorities
to change the Debtor's mailing address to one designated by the Bank, (2) to
receive, open and dispose of mail addressed to the Debtor, (3) to sign the
Debtor's name on any invoice or xxxx of lading relating to any Collateral, on
assignments and verifications of account and on notices to the Debtor's
customers, and (4) to do all things necessary to carry out this agreement. The
Debtor ratifies and approves all acts of the Bank as attorney-in-fact. The Bank
shall not be liable for any act or omission, nor any error of judgment or
mistake of fact or law, but only for its gross negligence or willful misconduct.
This power being coupled with an interest is irrevocable until all of the
Liabilities have been fully satisfied.
PLEDGE. If the Debtor is not liable for all or any part of the Liabilities, then
the Debtor agrees that:
1. If any moneys become available from any source other than the Collateral
that the Bank can apply to the Liabilities, the Bank may apply them in any
manner it chooses, including but not limited to applying them against
obligations, indebtedness or liabilities which are not secured by this
agreement.
2. The Bank may take any action against the Borrower, the Collateral or any
other collateral for the Liabilities, or any other person liable for any of
the Liabilities.
3. The Bank may release the Borrower or anyone else from the Liabilities,
either in whole or in part, or release the Collateral in whole or in part
or any other collateral for the Liabilities, and need not perfect a
security interest in the Collateral or any other collateral for the
Liabilities.
4. The Bank does not have to exercise any rights that it has against the
Borrower or anyone else, or make any effort to realize on the Collateral or
any other collateral for the Liabilities, or exercise any right of setoff.
5. Without notice or demand and without affecting the Debtor's obligations
hereunder, from time to time, the Bank is authorized to: (a) renew, modify,
compromise, extend, accelerate or otherwise change the time for payment of,
or otherwise change the terms of the Liabilities or any part thereof,
including increasing or decreasing the rate of interest thereon; (b)
release, substitute or add any one or more sureties, endorsers, or
guarantors; (c) take and hold other collateral for the payment of the
Liabilities, and enforce, exchange, substitute, subordinate, waive or
release any such collateral; (d) proceed against the Collateral or any
other collateral for the Liabilities and direct the order or manner of sale
as the Bank in its discretion may determine; and (e) apply any and all
payments received by the Bank in connection with the Liabilities, or
recoveries from the Collateral or any other collateral for the Liabilities,
in such order or manner as the Bank in its discretion may determine.
6. The Debtor's obligations hereunder shall not be released, diminished or
affected by (a) any act or omission of the Bank, (b) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially
all of the assets of the Borrower, or any receivership, insolvency,
bankruptcy, reorganization, or other similar proceedings affecting the
Borrower or any of its assets, (c) any change in the composition or
structure of the Borrower, including a merger or consolidation with any
other person or entity, or (d) any payments made upon the Liabilities.
7. The Debtor expressly consents to any impairment of any other collateral for
the Liabilities, including, but not limited to, failure to perfect a
security interest and release of any other collateral for the Liabilities
and any such impairment or release shall not affect the Debtor's
obligations hereunder.
8. The Debtor waives and agrees not to enforce any rights of subrogation,
contribution or indemnification that it may have against the Borrower, any
person liable on the Liabilities, or the Collateral, until the Borrower and
the Debtor have fully performed all their obligations to the Bank, even if
those obligations are not covered by this agreement.
9. The Debtor waives (a) to the extent permitted by law, all rights and
benefits under any laws or statutes regarding sureties, as may be amended,
(b) any right the Debtor may have to receive notice of the following
matters before the Bank enforces any of its rights: (i) the Bank's
acceptance of this agreement, (ii) any credit that the Bank extends to the
Borrower, (iii) the Borrower's default, (iv) any demand, diligence,
presentment, dishonor and protest, or (v) any action that the Bank takes
regarding the Borrower, anyone else, any other collateral for the
Liabilities, or any of the Liabilities, which it might be entitled to by
law or under any other agreement, (c) any right it may have to require the
Bank to proceed against the Borrower, any other obligor or guarantor of the
Liabilities, the Collateral or any other collateral for the Liabilities, or
pursue any remedy in the Bank's power to pursue, (d) any defense based on
any claim that the Debtor's obligations exceed or are more burdensome than
those of the Borrower, (e) the benefit of any statute of limitations
affecting the Debtor's obligations hereunder or the enforcement hereof, (f)
any defense arising by reason of any disability or other defense of the
Borrower or by reason of the cessation from any cause whatsoever (other
than payment in full) of the obligation of the Borrower for the
Liabilities, and (g) any defense based on or arising out of any defense
that the Borrower may have to the payment or performance of the Liabilities
or any portion thereof. The Bank may waive or delay enforcing any of its
rights without losing them. Any waiver affects only the specific terms and
time period stated in the waiver.
10. The Debtor agrees that to the extent any payment is received by the Bank in
connection with the Liabilities, and all or any part of such payment is
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid by the Bank or paid over to a trustee,
receiver or any other entity, whether under any bankruptcy act or otherwise
(any such payment is hereinafter referred to as a "Preferential Payment"),
then this agreement shall continue to be effective or shall be reinstated,
as the case may be, and whether or not the Bank is in possession of this
agreement, and, to the extent of such payment or repayment by the Bank, the
Liabilities or part thereof intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect as if said
Preferential Payment had not been made. If this agreement must be
reinstated, the Debtor agrees to execute and deliver to the Bank any new
security agreements and financing statements, if necessary or if requested
by the Bank, in form and substance acceptable to the Bank, covering the
Collateral.
11. Any rights of the Debtor, whether now existing or hereafter arising, to
receive payment on account of any indebtedness (including interest) owed to
the Debtor by the Borrower, or to withdraw capital invested by the Debtor
in the Borrower, or to receive distributions from the Borrower, shall at
all times be subordinate to the full and prior repayment to the Bank of the
Liabilities. The Debtor shall not be entitled to enforce or receive payment
of any sums hereby subordinated until the Liabilities have been paid in
full and any such sums received in violation of this agreement shall be
received by the Debtor in trust for the Bank. The Debtor agrees to fully
cooperate with the Bank and not to delay, impede or otherwise interfere
with the efforts of the Bank to secure payment from the assets which secure
the Liabilities including actions, proceedings, motions, orders, agreements
or other matters relating to relief from automatic stay, abandonment of
property, use of cash collateral and sale of the Bank's collateral free and
clear of all liens. The foregoing notwithstanding, until the occurrence of
any default, the Debtor is not prohibited from receiving distributions from
the Borrower in an amount equal to any income tax liability imposed on the
Debtor attributable to the Debtor's ownership interest in the Borrower, if
any.
DEFAULT; REMEDIES. If any of the Liabilities are not paid at maturity, whether
by acceleration or otherwise, or if a default by anyone occurs under the terms
of any agreement related to any of the Liabilities, then the Bank shall have the
rights and remedies provided by law or this agreement, including but not limited
to the right to require the Debtor to assemble the Collateral and make it
available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties, the right to take possession of the
Collateral with or without demand and with or without process of law, and the
right to sell and dispose of it and distribute the proceeds according to law.
Should a default occur, the Debtor will pay to the Bank all costs reasonably
incurred by the Bank for the purpose of enforcing its rights hereunder, to the
extent not prohibited by law, including, without limitation: costs of
foreclosure; costs of obtaining money damages; and a reasonable fee for the
services of outside attorneys employed or engaged by the Bank for any purpose
related to this agreement, including, without limitation, consultation, drafting
documents, sending notices or instituting, prosecuting or defending litigation
or any proceeding. The Debtor agrees that upon default the Bank may dispose of
any of the Collateral in its then present condition, that the Bank has no duty
to repair or clean the Collateral prior to sale, and that the disposal of the
Collateral in its present condition or without repair or clean-up shall not
affect the commercial reasonableness of such sale or disposition. The Bank's
compliance with any applicable state or federal law requirements in connection
with the disposition of the Collateral will not adversely affect the commercial
reasonableness of any sale of the Collateral. The Bank may disclaim warranties
of title, possession, quiet enjoyment, and the like, and the Debtor agrees that
any such action shall not affect the commercial reasonableness of the sale. In
connection with the right of the Bank to take possession of the Collateral, the
Bank may take possession of any other items of property in or on the Collateral
at the time of taking possession, and hold them for the Debtor without liability
on the part of the Bank. The Debtor expressly agrees that the Bank may enter
upon the premises where the Collateral is believed to be located without any
obligation of payment to the Debtor, and that the Bank may, without cost, use
any and all of the Debtor's "equipment" (as defined in the UCC) in the
manufacturing or processing of any "inventory" (as defined in the UCC) or in
growing, raising, cultivating, caring for, harvesting, loading and transporting
of any of the Collateral that constitutes "farm products" (as defined in the
UCC). If there is any statutory requirement for notice, that requirement shall
be met if the Bank sends notice to the Debtor at least ten (10) days prior to
the date of sale, disposition or other event giving rise to the required notice,
and such notice shall be deemed commercially reasonable. The Debtor is liable
for any deficiency remaining after disposition of the Collateral.
MISCELLANEOUS.
1. Where the Collateral is located at, used in or attached to a facility
leased by the Debtor, the Debtor will obtain from the lessor a consent
to the granting of this security interest and a release or
subordination of the lessor's interest in any of the Collateral, in
form acceptable to the Bank.
2. At its option the Bank may, but shall be under no duty or obligation
to, discharge taxes, liens, security interests or other encumbrances at
any time levied or placed on the Collateral, pay for insurance on the
Collateral, and pay for the maintenance and preservation of the
Collateral, and the Debtor agrees to reimburse the Bank on demand for
any payment made or expense incurred by the Bank, with interest at the
highest rate at which interest may accrue under any of the instruments
evidencing the Liabilities.
3. No delay on the part of the Bank in the exercise of any right or remedy
waives that right or remedy, no single or partial exercise by the Bank
of any right or remedy precludes any other exercise of it or the
exercise of any other right or remedy, and no waiver or indulgence by
the Bank of any default is effective unless it is in writing and signed
by the Bank, nor does a waiver on one occasion waive that right on any
future occasion.
4. If any provision of this agreement is invalid, it shall be ineffective
only to the extent of its invalidity, and the remaining provisions
shall be valid and effective.
5. Except as provided in the Accounts; Chattel Paper; General
Intangibles; and Instruments paragraph above, any notices and demands
under or related to this document shall be in writing and delivered to
the intended party at its address stated herein, and if to the Bank, at
its main office if no other address of the Bank is specified herein, by
one of the following means: (a) by hand, (b) by a nationally recognized
overnight courier service, or (c) by certified mail, postage prepaid,
with return receipt requested. Notice shall be deemed given: (a) upon
receipt if delivered by hand, (b) on the Delivery Day after the day of
deposit with a nationally recognized courier service, or (c) on the
fifth Delivery Day after the notice is deposited in the mail. "Delivery
Day" means a day other than a Saturday, a Sunday, or any other day on
which national banking associations are authorized to be closed. Any
party may change its address for purposes of the receipt of notices and
demands by giving notice of such change in the manner provided in this
provision.
6. All rights of the Bank benefit the Bank's successors and assigns; and
all obligations of the Debtor bind the Debtor's heirs, executors,
administrators, successors and assigns. If there is more than one
Debtor, their obligations are joint and several,
7. A carbon, photographic or other reproduction of this agreement is
sufficient as, and can be filed as, a financing statement. The Bank is
irrevocably appointed the Debtor's attorney-in-fact to execute any
financing statement on the Debtor's behalf covering the Collateral.
Additionally, the Debtor authorizes the Bank to file one or more
financing statements related to the security interests created by this
agreement, and further authorizes the Bank, as secured party herein,
instead of the Debtor, to sign such financing statements.
SECURITY AGREEMENT IN ADDITION TO OTHER SECURITY AGREEMENTS. This Security
Agreement is in addition to and not in substitution or replacement of any other
security agreement executed by the Debtor in favor of the Bank, and the Bank's
rights under this Security Agreement and any such other security agreement are
cumulative.
GOVERNING LAW AND VENUE. This agreement is delivered in the State of Indiana and
governed by Indiana law (without giving effect to its laws of conflicts), except
to the extent that the laws regarding the perfection and priority of property of
the state in which any property securing the Liabilities is located are
applicable. The Debtor agrees that any legal action or proceeding with respect
to any of its obligations under this agreement may be brought by the Bank in any
state or federal court located in Elkhart or St. Xxxxxx County in the State of
Indiana, as the Bank in its sole discretion may elect. By the execution and
delivery of this agreement, the Debtor submits to and accepts, for itself and in
respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of those courts. The Debtor waives any claim that Elkhart or St.
Xxxxxx County, State of Indiana are not a convenient forum or the proper venue
for any such suit, action or proceeding.
REPRESENTATIONS. Each Debtor represents that: (a) the execution and delivery of
this agreement and the performance of the obligations it imposes do not violate
any law, do not conflict with any agreement by which it is bound, and do not
require the consent or approval of any governmental authority or any third
party; (b) this agreement is a valid and binding agreement, enforceable
according to its terms; and (c) all balance sheets, profit and loss statements,
and other financial statements furnished to the Bank in connection with the
Liabilities are accurate and fairly reflect the financial condition of the
organizations and persons to which they apply on their effective dates,
including contingent liabilities of every type, which financial condition has
not changed materially and adversely since those dates. Each Debtor, other than
a natural person, further represents that: (a) it is duly organized, existing
and in good standing under the laws where it is organized; and (b) the execution
and delivery of this agreement and the performance of the obligations it imposes
(i) are within its powers and have been duly authorized by all necessary action
of its governing body; and (ii) do not contravene the terms of its articles of
incorporation or organization, its by-laws, or any agreement governing its
affairs.
WAIVER OF SPECIAL DAMAGES. THE DEBTOR WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM
THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.
JURY WAIVER. THE DEBTOR 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 ON CONTRACT, TORT, OR
OTHERWISE) BETWEEN OR AMONG THE DEBTOR AND THE BANK ARISING OUT OF OR IN ANY WAY
RELATED TO THIS DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO
PROVIDE THE FINANCING DESCRIBED HEREIN.
Dated: _April 11 ___,2003 DEBTOR:
Xxxxxxx Industries, Inc.
By:/S/ Xxxx X. Xxxxxx
_Andy X. Xxxxxx, Secretary/Treasurer ______
Printed Name Title
AndyMitchell IN000001007287463
ELDSOI JST 149242v3
