SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), is entered into as of December
12, 2000, between Starcraft Corporation and Starcraft Automotive Group, Inc.,
an Indiana corporation (collectively "Company"), with a place of business
located at 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000 and Xxxxx X. Xxxx and G.
Xxx Xxxxxx (collectively "Lender"), 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000.
The parties agree as follows:
I. DEFINITIONS AND CONSTRUCTION.
A. Definitions.
As used in this Agreement, the following terms shall have the following
definitions:
"Account Debtor" means any Person who is or who may become obligated under,
with respect to, or on account of, an Account.
"Accounts" means all currently existing and hereafter arising accounts,
contract rights, and all other forms of obligations owing to Company arising out
of the sale or lease of goods or the rendition of services by Company,
irrespective of whether earned by performance, and any and all credit insurance,
guaranties, or security therefor.
"Agreement" has the meaning set forth in the preamble hereto.
"Bankruptcy Code" means the United States Bankruptcy Code (11 X.X.X.xx. 101
et seq.), as amended, and any successor statute.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company's Books" means all of Company's books and records including:
ledgers; records indicating, summarizing, or evidencing Company's properties or
assets (including the Collateral) or liabilities; all information relating to
Company's business operations or financial condition; and all computer programs,
disk or tape files, printouts, runs, or other computer prepared information.
"Code" means the Indiana Uniform Commercial Code.
"Collateral" means each of the following:
a) the Accounts,
b) Company's Books,
c) the Equipment,
d) the General Intangibles,
e) the Inventory,
f) the Negotiable Collateral,
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g) any money, or other assets of Company that now or hereafter come
into the possession, custody, or control of Lender, and
h) the proceeds and products, whether tangible or intangible, of any
of the foregoing, including proceeds of insurance covering any or
all of the Collateral, and any and all Accounts, Company's Books,
Equipment, General Intangibles, Inventory, Negotiable Collateral,
money, deposit accounts, or other tangible or intangible property
resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof or
interest therein, and the proceeds thereof.
"deems itself insecure" means that the Person deems itself insecure in
accordance with the provisions of Section 1208 of the Code.
"Default" means an event, condition, or default that, with the giving of
notice, the passage of time, or both, would be an Event of Default.
"Equipment" means all of Company's present and hereafter acquired
machinery, machine tools, motors, equipment, furniture, furnishings, fixtures,
vehicles (including motor vehicles and trailers), tools, parts, goods (other
than consumer goods, farm products, or Inventory), wherever located, including
any interest of Company in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing.
"Event of Default" has the meaning set forth in Section 6.
"FEIN" means Federal Employer Identification Number.
"General Intangibles" means all of Company's present and future general
intangibles and other personal property (including contract rights, rights
arising under common law, statutes, or regulations, chooses or things in action,
goodwill, patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, literature, reports, catalogs,
deposit accounts, insurance premium rebates, tax refunds, and tax refund
claims), other than goods, Accounts, and Negotiable Collateral.
"Insolvency Proceeding" means any proceeding commenced by or against any
Person under any provision of the Bankruptcy Code or under any other bankruptcy
or insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.
"Inventory" means all present and future inventory in which Company has any
interest, including goods held for sale or lease or to be furnished under a
contract of service and all of Company's present and future raw materials, work
in process, finished goods, and packing and shipping materials, wherever
located.
"Lien" means any interest in property securing an obligation owed to, or a
claim by, any Person other than the owner of the property, whether such interest
shall be based on the common law, statute, or contract, whether such interest
shall be recorded or perfected, and whether such interest shall be contingent
upon the occurrence of some future event or events or the existence of some
future circumstance or circumstances, including the lien or security interest
arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation,
assignment, deposit arrangement, security agreement, adverse claim or charge,
conditional sale or trust receipt, or from a lease, consignment, or bailment for
security purposes and also including reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances affecting Real Property.
"Loan Documents" means this Agreement and the Reimbursement Agreement
issued by Company to Lender and any other agreement entered into, now or in the
future, in connection with this Agreement.
"Negotiable Collateral" means all of Company's present and future letters
of credit, notes, drafts, instruments, investment property, security
entitlements, securities (including the shares of stock of subsidiaries of
Company), documents, personal property leases (wherein Company is the lessor),
chattel paper, and Company's Books relating to any of the foregoing.
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"Obligations" means all loans, debts, principal, interest (including any
interest that, but for the provisions of the Bankruptcy Code, would have
accrued), liabilities, obligations, fees, charges, costs, guaranties, covenants,
and duties owing by Company to Starcraft of any kind and description (whether
pursuant to or evidenced by the Loan Documents and irrespective of whether for
the payment of money), whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising.
"Permitted Liens" means Liens set forth on Schedule P-1.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Voidable Transfer" has the meaning set forth in Section 13.8.
B. Code.
Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein.
C. Construction.
Unless the context of this Agreement clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, the term "including" is not limiting, and the term "or" has, except
where otherwise indicated, the inclusive meaning represented by the phrase
"and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms
in this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. An Event of Default shall "continue" or be
"continuing" until such Event of Default has been waived in writing by Lender.
Section, subsection, clause, schedule, and exhibit references are to this
Agreement unless otherwise specified. Any reference in this Agreement or in the
Loan Documents to this Agreement or any of the Loan Documents shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, and supplements, thereto and thereof, as
applicable.
D. Schedules.
All of the schedules attached to this Agreement shall be deemed
incorporated herein by reference.
II. GRANT OF SECURITY INTEREST.
X. Xxxxx of Security Interest.
Company hereby grants to Lender a continuing security interest in all
currently existing and hereafter acquired or arising Collateral in order to
secure prompt repayment of any and all Obligations and in order to secure prompt
performance by Company of each of its covenants and duties under the Loan
Documents. Lender's security interests in the Collateral shall attach to all
Collateral without further act on the part of Lender or Company. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for the sale of Inventory to buyers in the ordinary
course of business, Company has no authority, express or implied, to dispose of
any item or portion of the Collateral.
B. Negotiable Collateral.
In the event that any Collateral, including proceeds, is evidenced by or
consists of Negotiable Collateral, Company, immediately upon the request of
Lender, shall endorse and deliver physical possession of such Negotiable
Collateral to Lender.
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C. Collection of Accounts, General Intangibles, and Negotiable
Collateral.
At any time, Lender or Lender's designee may (a) notify customers or
Account Debtors of Company that the Accounts, General Intangibles, or Negotiable
Collateral have been assigned to Lender or that Lender has a security interest
therein, and (b) collect the Accounts, General Intangibles, and Negotiable
Collateral directly and apply the proceeds thereof to the Obligations.
D. Delivery of Additional Documentation Required.
At any time upon the request of Lender, Company shall execute and deliver
to Lender all financing statements, continuation financing statements, fixture
filings, security agreements, pledges, assignments, endorsements of certificates
of title, applications for title, affidavits, reports, notices, schedules of
accounts, letters of authority, and all other documents that Lender reasonably
may request, in form satisfactory to Lender, to perfect and continue perfected
Lender's security interests in the Collateral, and in order to fully consummate
all of the transactions contemplated hereby and under the other the Loan
Documents.
E. Power of Attorney.
Company hereby irrevocably makes, constitutes, and appoints Lender (and any
of Lender's officers, employees, or agents designated by Lender) as Company's
true and lawful attorney, with power to (a) if Company refuses to, or fails
timely to execute and deliver any of the documents described in Section 2.4,
sign the name of Company on any of the documents described in Section 2.4, (b)
at any time that an Event of Default has occurred and is continuing or Lender
deems itself insecure, sign Company's name on any invoice or xxxx of lading
relating to any Account, drafts against Account Debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to Account
Debtors, (c) send requests for verification of Accounts, (d) endorse Company's
name on any collection item that may come into Lender's possession, (e) at any
time that an Event of Default has occurred and is continuing or Lender deems
itself insecure, notify the post office authorities to change the address for
delivery of Company's mail to an address designated by Lender, to receive and
open all mail addressed to Company, and to retain all mail relating to the
Collateral and forward all other mail to Company, (f) at any time that an Event
of Default has occurred and is continuing or Lender deems itself insecure, make,
settle, and adjust all claims under Company's policies of insurance and make all
determinations and decisions with respect to such policies of insurance, and (g)
at any time that an Event of Default has occurred and is continuing or Lender
deems itself insecure, settle and adjust disputes and claims respecting the
Accounts directly with Account Debtors, for amounts and upon terms that Lender
determines to be reasonable, and Lender may cause to be executed and delivered
any documents and releases that Lender determines to be necessary. The
appointment of Lender as Company's attorney, and each and every one of Lender's
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully and finally repaid and performed and Lender's
obligation to extend credit hereunder is terminated.
F. Right to Inspect.
Lender (through any of its officers, employees, or agents) shall have the
right, from time to time hereafter to inspect Company's Books and to check,
test, and appraise the Collateral in order to verify Company's financial
condition or the amount, quality, value, condition of, or any other matter
relating to, the Collateral.
In order to induce Lender to enter into this Agreement, Company makes the
following representations and warranties which shall be true, correct and such
representations and warranties shall survive the execution and delivery of this
Agreement:
III. REPRESENTATIONS AND WARRANTIES.
A. No Encumbrances.
Company has good and indefeasible title to the Collateral, free and clear
of Liens except for Permitted Liens.
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B. Location of Inventory and Equipment.
The Inventory and Equipment are not stored with a bailee, warehouseman, or
similar party (without Lender's prior written consent) and are located only at
the locations identified on Schedule 3.2 or otherwise permitted by Section 4.3.
C. Location of Chief Executive Office.
The chief executive office of Company is located at the address indicated
in the preamble to this Agreement.
IV. AFFIRMATIVE COVENANTS.
Company covenants and agrees that, so long as any credit hereunder shall be
available and until full and final payment of the Obligations, and unless Lender
shall otherwise consent in writing, Company shall do all of the following:
A. Taxes.
Cause all assessments and taxes, whether real, personal, or otherwise, due
or payable by, or imposed, levied, or assessed against Company or any of its
property to be paid in full, before delinquency or before the expiration of any
extension period. Company shall make due and timely payment or deposit of all
such federal, state, and local taxes, assessments, or contributions required of
it by law, and will execute and deliver to Lender, on demand, appropriate
certificates attesting to the payment thereof or deposit with respect thereto.
Company will make timely payment or deposit of all tax payments and withholding
taxes required of it by applicable laws, including those laws concerning
F.I.C.A., F.U.T.A., state disability, and local, state, and federal income
taxes, and will, upon request, furnish Lender with proof satisfactory to Lender
indicating that Company has made such payments or deposits.
B. Insurance.
a. At its expense, keep the Collateral insured against loss or
damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as are ordinarily insured
against by other owners in similar businesses. Company also shall
maintain business interruption, public liability, product
liability, and property damage insurance relating to Company's
ownership and use of the Collateral, as well as insurance against
larceny, embezzlement, and criminal misappropriation.
b. All such policies of insurance shall be in such form, with such
companies, and in such amounts as may be reasonably satisfactory
to Lender. All hazard insurance and such other insurance as
Lender shall specify, shall contain a Form 438BFU (NS) mortgagee
endorsement, or an equivalent endorsement satisfactory to Lender,
showing Lender as sole loss payee thereof, and shall contain a
waiver of warranties. Every policy of insurance referred to in
this Section 4.2 shall contain an agreement by the insurer that
it will not cancel such policy except after 30 days prior written
notice to Lender and that any loss payable thereunder shall be
payable notwithstanding any act or negligence of Company or
Lender which might, absent such agreement, result in a forfeiture
of all or a part of such insurance payment. Company shall deliver
to Lender certified copies of such policies of insurance and
evidence of the payment of all premiums therefor.
c. Original policies or certificates thereof satisfactory to Lender
evidencing such insurance shall be delivered to Lender at least
30 days prior to the expiration of the existing or preceding
policies. Company shall give Lender prompt notice of any loss
covered by such insurance, and Lender shall have the right to
adjust any loss. Lender shall have the exclusive right to adjust
all losses payable under any such insurance policies without any
liability to Company whatsoever in respect of such adjustments.
Any monies received as payment for any loss under any insurance
policy including the insurance policies mentioned above, shall be
paid over to Lender to be applied at the option of Lender either
to the prepayment of the Obligations without premium, in such
order or manner as Lender may elect, or shall be disbursed to
Company under stage payment terms satisfactory to Lender for
application to the cost of repairs, replacements, or
restorations. All repairs, replacements, or restorations shall be
effected with reasonable promptness and shall be of a value at
least equal to the value of the items or property destroyed prior
to such damage or destruction. Upon the occurrence of an Event of
Default, Lender shall have the right to apply all prepaid
premiums to the payment of the Obligations in such order or form
as Lender shall determine.
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d. Company shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be
maintained under this Section 4.2, unless Lender is included
thereon as named insured with the loss payable to Lender under a
standard 438BFU (NS) Mortgagee endorsement, or its local
equivalent. Company immediately shall notify Lender whenever such
separate insurance is taken out, specifying the insurer
thereunder and full particulars as to the policies evidencing the
same, and originals of such policies immediately shall be
provided to Lender.
C. Location of Inventory and Equipment.
Keep the Inventory and Equipment only at the locations identified on
Schedule 3.2; provided, however, that Company may amend Schedule 3.2 to add a
new location so long as such amendment occurs by written notice to Lender not
less than 30 days prior to the date on which the Inventory or Equipment is moved
to such new location, so long as such new location is within the continental
United States, and so long as, at the time of such written notification, Company
provides any financing statements or fixture filings necessary to perfect and
continue perfected Lender's security interests in such assets.
V. NEGATIVE COVENANTS.
Company covenants and agrees that, so long as any credit hereunder shall be
available and until full and final payment of the Obligations, Company will not
do any of the following without Lender's prior written consent:
A. Liens.
Create, incur, assume, or permit to exist, directly or indirectly, any Lien
on or with respect to any of its property or assets, of any kind, whether now
owned or hereafter acquired, or any income or profits therefrom, except for
Permitted Liens.
B. Restrictions on Fundamental Changes.
Enter into any merger, consolidation, reorganization, or recapitalization,
or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, assign, lease,
transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its property or assets.
C. Disposal of Assets.
Sell, lease, assign, transfer, or otherwise dispose of any of Company's
properties or assets other than sales of Inventory to buyers in the ordinary
course of Company's business as currently conducted (including so long as no
Event of Default exists or would be caused thereby, obsolete or unuseful
Equipment in the aggregate amount not to exceed $50,000 in any fiscal year).
D. Change Name.
Change Company's name, FEIN, corporate structure (within the meaning of
Section 9402(7) of the Code), or identity, or add any new fictitious name.
E. Change in Location of Chief Executive Office; Inventory and Equipment
with Bailees.
Relocate its chief executive office to a new location without providing 30
days prior written notification thereof to Lender and so long as, at the time of
such written notification, Company provides any financing statements or fixture
filings necessary to perfect and continue perfected Lender's security interests.
The Inventory and Equipment shall not at any time now or hereafter be stored
with a bailee, warehouseman, or similar party without Lender's prior written
consent.
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VI. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
A. If Company fails to pay when due and payable or when declared due
and payable, any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due Lender or
other amounts constituting Obligations;
B. If Company fails to perform, keep, or observe any term, provision,
condition, covenant, or agreement contained in this Agreement, in any of
the other Loan Documents, or in any other present or future agreement
between Company and Lender;
C. If an Insolvency Proceeding is commenced by Company;
D. If an Insolvency Proceeding is commenced against Company and any of
the following events occur: (a) Company consents to the institution of the
Insolvency Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the petition
commencing the Insolvency Proceeding is not dismissed within 45 calendar
days of the date of the filing thereof; (d) an interim trustee is appointed
to take possession of all or a substantial portion of the properties or
assets of, or to operate all or any substantial portion of the business of,
Company; or (e) an order for relief shall have been issued or entered
therein;
VII. LENDER'S RIGHTS AND REMEDIES.
A. Rights and Remedies.
Upon the occurrence, and during the continuation, of an Event of Default
Lender may, at its election, without notice of its election and without demand,
do any one or more of the following, all of which are authorized by Company:
a. Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable;
b. Cease advancing money or extending credit to or for the benefit of
Company, under any of the Loan Documents, or under any other agreement
between Company and Lender;
c. Terminate any of the Loan Documents as to any future liability or
obligation of Lender, but without affecting Lender's rights and security
interests in the Collateral and without affecting the Obligations;
x. Xxxxxx or adjust disputes and claims directly with Account Debtors
for amounts and upon terms which Lender considers advisable;
e. Cause Company to hold all returned Inventory in trust for Lender,
segregate all returned Inventory from all other property of Company or in
Company's possession and conspicuously label said returned Inventory as the
property of Lender;
f. Without notice to or demand upon Company or any guarantor, make
such payments and do such acts as Lender considers necessary or reasonable
to protect its security interests in the Collateral. Company agrees to
assemble the Collateral if Lender so requires, and to make the Collateral
available to Lender as Lender may designate. Company authorizes Lender to
enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase,
contest, or compromise any encumbrance, charge, or Lien that in Lender's
determination appears to conflict with its security interests and to pay
all expenses incurred in connection therewith. With respect to any of
Company's owned or leased premises, Company hereby grants Lender a license
to enter into possession of such premises and to occupy the same, without
charge, in order to exercise any of Lender's rights or remedies provided
herein, at law, in equity, or otherwise;
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g. Without notice to Company (such notice being expressly waived), and
without constituting a retention of any collateral in satisfaction of an
obligation (within the meaning of Section 9505 of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of Company
held by Lender, or (ii) indebtedness at any time owing to or for the credit
or the account of Company held by Lender;
h. Hold, as cash collateral, any and all balances and deposits of
Company held by Lender to secure the full and final repayment of all of the
Obligations;
i. Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein)
the Collateral. Lender is hereby granted a license or other right to use,
without charge, Company's labels, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to
the Collateral, in completing production of, advertising for sale, and
selling any Collateral and Company's rights under all licenses and all
franchise agreements shall inure to Lender's benefit;
j. Sell the Collateral at either a public or private sale, or both, by
way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Company's premises) as Lender
determines is commercially reasonable. It is not necessary that the
Collateral be present at any such sale;
k. Lender shall give notice of the disposition of the Collateral as
follows:
(1) Lender shall give Company and each holder of a security
interest in the Collateral who has filed with Lender a written request
for notice, a notice in writing of the time and place of public sale,
or, if the sale is a private sale or some other disposition other than
a public sale is to be made of the Collateral, then the time on or
after which the private sale or other disposition is to be made;
(2) The notice shall be personally delivered or mailed, postage
prepaid, to Company as provided in Section 10, at least 5 days before
the date fixed for the sale, or at least 5 days before the date on or
after which the private sale or other disposition is to be made; no
notice needs to be given prior to the disposition of any portion of
the Collateral that is perishable or threatens to decline speedily in
value or that is of a type customarily sold on a recognized market.
Notice to Persons other than Company claiming an interest in the
Collateral shall be sent to such addresses as they have furnished to
Lender;
(3) If the sale is to be a public sale, Lender also shall give
notice of the time and place by publishing a notice one time at least
5 days before the date of the sale in a newspaper of general
circulation in the county in which the sale is to be held;
l. Lender may credit bid and purchase at any public sale; and
m. Any deficiency that exists after disposition of the Collateral as
provided above will be paid immediately by Company. Any excess will be
returned, without interest and subject to the rights of third Persons, by
Lender to Company.
B. Remedies Cumulative.
Lender's rights and remedies under this Agreement, the Loan Documents, and
all other agreements shall be cumulative. Lender shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in
equity. No exercise by Lender of one right or remedy shall be deemed an
election, and no waiver by Lender of any Event of Default shall be deemed a
continuing waiver. No delay by Lender shall constitute a waiver, election, or
acquiescence by it.
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VIII. TAXES AND EXPENSES.
If Company fails to pay any monies (whether taxes, assessments, insurance
premiums, or, in the case of leased properties or assets, rents or other amounts
payable under such leases) due to third Persons, or fails to make any deposits
or furnish any required proof of payment or deposit, all as required under the
terms of this Agreement, then, Lender may do any or all of the following: (a)
make payment of the same or any part thereof; or (b) obtain and maintain
insurance policies of the type described in Section 4.2, and take any action
with respect to such policies as Lender deems prudent. Company shall reimburse
Lender for any such amounts paid by Lender. Any such payments made by Lender
shall not constitute an agreement by Lender to make similar payments in the
future or a waiver by Lender of any Event of Default under this Agreement.
Lender need not inquire as to, or contest the validity of, any such expense,
tax, or Lien and the receipt of the usual official notice for the payment
thereof shall be conclusive evidence that the same was validly due and owing.
IX. WAIVERS; INDEMNIFICATION.
A. Demand; Protest; etc.
Company waives demand, protest, notice of protest, notice of default or
dishonor, notice of payment and nonpayment, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Lender on which
Company may in any way be liable.
B. Lender's Liability for Collateral.
So long as Lender complies with its obligations, if any, under Section 9207
of the Code, Lender shall not in any way or manner be liable or responsible for:
(a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring
or arising in any manner or fashion from any cause; (c) any diminution in the
value thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other Person. All risk of loss, damage, or destruction of
the Collateral shall be borne by Company.
C. Indemnification.
Company shall pay, indemnify, defend, and hold Lender, and each of their
respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an "Indemnified Person") harmless (to the fullest
extent permitted by law) from and against any and all claims, demands, suits,
actions, investigations, proceedings, and damages, and all reasonable attorneys
fees and disbursements and other costs and expenses actually incurred in
connection therewith (as and when they are incurred and irrespective of whether
suit is brought), at any time asserted against, imposed upon, or incurred by any
of them in connection with or as a result of or related to the execution,
delivery, enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions contemplated herein, and with respect
to any investigation, litigation, or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). Company shall have no
obligation to any Indemnified Person under this Section 9.3 with respect to any
Indemnified Liability that a court of competent jurisdiction finally determines
to have resulted from the gross negligence or willful misconduct of such
Indemnified Person. This provision shall survive the termination of this
Agreement and the repayment of the Obligations.
X. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other Loan Document shall be in writing
and (except for financial statements and other informational documents which may
be sent by first-class mail, postage prepaid) shall be personally delivered or
sent by registered or certified mail (postage prepaid, return receipt
requested), overnight courier, or telefacsimile to Company or to Lender, as the
case may be, at its address set forth below:
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If to Company: 0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attn: ...........................................
Fax No............................................
If to Lender: 0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attn: ...........................................
Fax No............................................
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other. All notices or demands sent in accordance with this Section 10, other
than notices by Lender in connection with Sections 9504 or 9505 of the Code,
shall be deemed received on the earlier of the date of actual receipt or 3 days
after the deposit thereof in the mail. Company acknowledges and agrees that
notices sent by Lender in connection with Sections 9504 or 9505 of the Code
shall be deemed sent when deposited in the mail or personally delivered, or,
where permitted by law, transmitted telefacsimile or other similar method set
forth above.
XI. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN AN ANOTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INDIANA. THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF ELKHART, STATE OF INDIANA OR,
AT THE SOLE OPTION OF Lender, IN ANY OTHER COURT IN WHICH Lender SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY. EACH OF BORROWER AND Lender WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 11. BORROWER AND Lender HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF BORROWER AND
Lender REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
XII. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers delivered to
Lender may be destroyed or otherwise disposed of by Lender 4 months after they
are delivered to or received by Lender, unless Company requests, in writing, the
return of said documents, schedules, or other papers and makes arrangements, at
Company's expense, for their return.
XIII. GENERAL PROVISIONS.
A. Effectiveness.
This Agreement shall be binding and deemed effective when executed by
Company and Lender.
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B. Successors and Assigns.
This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties; provided, however, that Company
may not assign this Agreement or any rights or duties hereunder without Lender's
prior written consent and any prohibited assignment shall be absolutely void. No
consent to an assignment by Lender shall release Company from its Obligations.
Lender may assign this Agreement and its rights and duties hereunder and no
consent or approval by Company is required in connection with any such
assignment. Lender reserves the right to sell, assign, transfer, negotiate, or
grant participations in all or any part of, or any interest in Lender's rights
and benefits hereunder. In connection with any such assignment or participation,
Lender may disclose all documents and information which Lender now or hereafter
may have relating to Company or Company's business. To the extent that Lender
assigns its rights and obligations hereunder to a third Person, Lender
thereafter shall be released from such assigned obligations to Company. Without
limiting the foregoing, Company acknowledges that Lender has collaterally
assigned Lender's rights under the Loan Documents to Lender Capital Corporation.
C. Section Headings.
Headings and numbers have been set forth herein for convenience only.
Unless the contrary is compelled by the context, everything contained in each
section applies equally to this entire Agreement.
D. Interpretation.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against Lender or Company, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of all parties hereto.
E. Severability of Provisions.
Each provision of this Agreement shall be severable from every other
provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
F. Amendments in Writing.
This Agreement can only be amended by a writing signed by both Lender and
Company.
G. Counterparts; Telefacsimile Execution.
This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement. Delivery of an
executed counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile also
shall deliver an original executed counterpart of this Agreement but the failure
to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
H. Revival and Reinstatement of Obligations.
If the incurrence or payment of the Obligations by Company or any guarantor
of the Obligations or the transfer by either or both of such parties to Lender
of any property of either or both of such parties should for any reason
subsequently be declared to be void or voidable under any state or federal law
relating to creditors' rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, and other voidable or
recoverable payments of money or transfers of property (collectively, a
"Voidable Transfer"), and if Lender is required to repay or restore, in whole or
in part, any such Voidable Transfer, or elects to do so upon the reasonable
advice of its counsel, then, as to any such Voidable Transfer, or the amount
thereof that Lender is required or elects to repay or restore, and as to all
reasonable costs, expenses, and attorneys fees of Lender related thereto, the
liability of Company or such guarantor automatically shall be revived,
reinstated, and restored and shall exist as though such Voidable Transfer had
never been made.
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I. Integration.
This Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof.
J. Subordination Agreement.
Notwithstanding anything contained in this Agreement to the contrary, the
rights and remedies of Lender are subject to the terms and conditions of that
certain Subordination Agreement of even date herewith (the "Subordination
Agreement") between the Lender and Foothill Capital Corporation. In the event of
a conflict between this Agreement on the one hand, and the Subordination
Agreement on the other hand, the terms of the Subordination Agreement shall
govern.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in Goshen, Indiana, effective the date first above mentioned, on this
12 day of December, 2000.
COMPANY:
STARCRAFT AUTOMOTIVE GROUP, INC.
An Indiana corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Title: President
--------------------------------
STARCRAFT CORPORATION,
an Indiana corporation
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Title: President
--------------------------------
LENDER:
/s/ Xxxxx X. Xxxx
--------------------------------------
Xxxxx X. Xxxx
/s/ G. Xxx Xxxxxx
--------------------------------------
G. Xxx Xxxxxx
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SCHEDULES
Schedule P-1 Permitted Liens
Schedule 3.2 Location of Inventory and Equipment
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