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EXHIBIT 10.58
FIRST AMENDED AND RESTATED LOAN AGREEMENT
BETWEEN
STANDARD FEDERAL BANK
AND
GALION HOLDING COMPANY,
▇▇▇▇▇▇▇ E-Z PACK, INC. (FORMERLY KNOWN AS
GALION SOLID WASTE EQUIPMENT, INC.),
GALION DUMP BODIES, INC.,
▇▇▇▇▇▇▇ GROUP SALES OF FLORIDA, INC., (FORMERLY KNOWN
AS M.E.G. EQUIPMENT SALES OF FLORIDA, INC.) AND
▇▇▇▇▇▇▇ INDUSTRIES, INC.
THIS AGREEMENT made and delivered this 2nd day of October , 1995, by and
among Galion Holding Company, a Michigan corporation, ▇▇▇▇▇▇▇ E-Z Pack Inc., a
Michigan corporation, formerly known as Galion Solid Waste Equipment, Inc.,
Galion Dump Bodies, Inc., a Michigan corporation, and ▇▇▇▇▇▇▇ Group Sales of
Florida, Inc., a Florida corporation, formerly known as M.E.G. Equipment Sales
of Florida, Inc., a Florida corporation (collectively, "Borrower"), whose
address/principal office is 6200 Elmridge, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Standard Federal Bank, a federal savings bank ("Standard Federal"), whose
address is ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇
Industries, Inc., a Michigan corporation (the "Guarantor").
RECITALS:
A. On September 15, 1994, the Borrower and Standard Federal
entered into a Loan Agreement, as amended by a First Amendment to Loan
Agreement, dated February 16, 1995, a Second Amendment to Loan Agreement, dated
May 5, 1995, and a Third Amendment to Loan Agreement, dated June 22, 1995 (the
"Loan Agreement"), pursuant to which the Borrower opened a revolving line of
credit facility with Standard Federal, Loan No. 0250012691, with a credit limit
of up to $10,000,000.00, as evidenced by a Third Amended and Restated
Promissory Note (Line of Credit), dated June 22, 1995, in the principal amount
of $10,000,000.00, and Standard Federal made a term loan to the Borrower, Loan
No. 0250016750, as evidenced by a Promissory Note (Term Loan), dated September
15, 1994, secured by a Security Agreement, dated September 15, 1994, and a
Security Agreement, dated June 22, 1995 (collectively, the "Security
Agreement"), and two Open-End Commercial Mortgages and Assignments of Lease and
Rentals, dated June 29, 1993, as amended September 15, 1994, February 6, 1995,
February 16, 1995, May 5, 1995 and June 22, 1995 (the "Mortgages"), and
supported by a Guaranty, dated May 5, 1995 (the "Guaranty"), executed by the
Guarantor.
B. The Borrower has requested an additional line of credit to
provide additional working capital required to carry additional
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inventory of demonstrators and Standard Federal is willing to supply such
financing subject to the terms and conditions set forth in this Agreement.
C. Standard Federal and the Borrower therefore wish to restate
the Loan Agreement in its entirety as herein provided.
NOW, THEREFORE, in reliance upon the representations herein provided
and in consideration of the premises and the mutual promises herein contained,
the Borrower and Standard Federal hereby agree and the Loan Agreement is hereby
amended and restated in its entirety as follows:
SECTION 1. REVOLVING LINE OF CREDIT
1.1 Standard Federal hereby extends to the Borrower a revolving
line of credit (the "Revolving Line of Credit") which shall not exceed at any
one time outstanding the Revolving Credit Limit as hereafter defined. The term
"Revolving Credit Limit" shall mean the lesser of: (a) Ten Million and 00/100
Dollars ($10,000,000.00), or (b) an amount equal to the sum of: (i) an amount
equal to 80% of Eligible Accounts Receivable, plus (ii) an amount equal to the
lesser of: (1) Five Million and 00/100 Dollars ($5,000,000.00), or (2) an
amount equal to 50% of Qualified Inventory. As used herein, the term "Eligible
Accounts Receivable" shall mean accounts receivable of the Borrower less than
90 days old, not doubtful as to collectibility or disputed as to existence or
amount or subject to offset, contra-indebtedness or return and not intra-
company or owing from any affiliated or related company or other entity,
exclusive of any account receivable arising under a government contract, the
assignment of which is subject to the Assignment of Claims Act of 1940, as
amended, or any other similar federal or state statute or regulation governing
the assignment of contracts with a governmental agency. The term "Qualified
Inventory" shall mean the inventory of Borrower in which Standard Federal holds
a perfected first security interest exclusive of any returned or damaged items
and work-in-process.
1.2 The Revolving Line of Credit herein extended shall be subject
to the terms and conditions of a Third Amended and Restated Promissory Note
(Line of Credit), dated June 22, 1995, and all renewals and amendments thereof
(the "Revolving Line of Credit Note"). The Revolving Line of Credit shall be
payable and shall bear interest as set forth in the Revolving Line of Credit
Note. This Loan Agreement and the Revolving Line of Credit Note are of equal
materiality and shall each be construed in such manner as to give full force
and effect to all provisions of both documents.
1.3 Standard Federal shall, from time to time during the term
hereof, make advances to Borrower under the Revolving Line of Credit upon
request therefor by Borrower, provided that upon giving effect to such advance
no Event of Default (as defined in the
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Revolving Line of Credit Note or this Agreement) and no event which with notice
and/or the passage of time would become an Event of Default shall exist at the
time the advance is to be made; and provided further that upon giving effect to
such advance and at the time the advance is to be made all of the
representations and warranties of Borrower contained in this Agreement and all
other documents executed in connection with the Revolving Line of Credit are
true and correct in all material respects; and provided further that at the
time the advance is to be made Standard Federal shall not have previously or
concurrently declared all amounts owing under the Revolving Line of Credit Note
to be immediately due and payable; and provided further the amount requested
shall not cause the total amount outstanding under the Revolving Line of Credit
to exceed the Revolving Credit Limit.
1.4 If at any time the amount outstanding under the Revolving Line
of Credit shall exceed the Revolving Credit Limit, Borrower shall, on demand,
forthwith pay to Standard Federal such sums as are necessary to reduce the
amount outstanding to an amount not greater than the Revolving Credit Limit.
1.5 Borrower shall pay to Standard Federal, on the first day of
each month, commencing on October 1, 1995 and continuing on the same day of
each consecutive month thereafter until the termination of the Revolving Line
of Credit and all sums owing for principal and interest with respect to the
Revolving Line of Credit are paid in full, an Unused Line Fee in the amount of
0.25% per annum of the amount available for draw but not advanced from time to
time on the Revolving Line of Credit ("Unused Line"). The amount of the Unused
Line Fee payable on the first day of each month will be determined by
multiplying the average daily balance of the Unused Line for the calendar month
which ends one month prior to the due date of such Unused Line Fee by .020833%.
1.6 In all events, unless earlier terminated, the Revolving Line
of Credit shall terminate March 31, 1997 . Upon termination, Borrower
shall forthwith pay to Standard Federal all sums owing for principal and
interest with respect to the Revolving Line of Credit.
SECTION 1A. DEMONSTRATOR LINE OF CREDIT
1A.1 Standard Federal hereby extends to the Borrower a revolving
line of credit (the "Demonstrator Line of Credit") (the Demonstrator Line of
Credit and the Revolving Line of Credit are hereinafter collectively referred
to as the "Line of Credit") which shall not exceed at any one time outstanding
the principal amount of One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000.00) (the "Demonstrator Credit Limit").
1A.2 The Demonstrator Line of Credit herein extended shall be
subject to the terms and conditions of a Promissory Note (Line of
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Credit) of even date herewith, and all renewals and amendments thereof (the
"Demonstrator Line of Credit Note") (the Demonstrator Line of Credit Note and
the Revolving Line of Credit Note are hereinafter collectively referred to as
the "Line of Credit Note"). The Demonstrator Line of Credit shall be payable
and shall bear interest as set forth in the Demonstrator Line of Credit Note.
This Loan Agreement and the Demonstrator Line of Credit Note are of equal
materiality and shall each be construed in such manner as to give full force
and effect to all provisions of both documents.
1A.3 Standard Federal shall, from time to time during the term
hereof, make advances to Borrower under the Demonstrator Line of Credit upon
request therefor by Borrower, provided that upon giving effect to such advance
no Event of Default (as defined in the Demonstrator Line of Credit Note or this
Agreement) and no event which with notice and/or the passage of time would
become an Event of Default shall exist at the time the advance is to be made;
and provided further that upon giving effect to such advance and at the time
the advance is to be made all of the representations and warranties of Borrower
contained in this Agreement and all other documents executed in connection with
the Demonstrator Line of Credit are true and correct in all material respects;
and provided further that at the time the advance is to be made Standard
Federal shall not have previously or concurrently declared all amounts owing
under the Demonstrator Line of Credit Note to be immediately due and payable;
and provided further the amount requested shall not cause the total amount
outstanding under the Demonstrator Line of Credit to exceed the Demonstrator
Credit Limit.
1A.4 Each advance under the Demonstrator Line of Credit shall be
used solely for the purchase of inventory of the Borrower for demonstrator
purposes, as determined in a manner acceptable to Standard Federal. Each
advance shall be in an amount not in excess of Eighty Five percent 85.0% of the
inventory at cost of the Borrower's demonstrator inventory as reflected in the
demonstrator inventory reports properly furnished by the Borrower as required
under Section 3.2(e) hereof.
1A.5 If at any time the amount outstanding under the Demonstrator
Line of Credit shall exceed the Demonstrator Credit Limit, Borrower shall, on
demand, forthwith pay to Standard Federal such sums as are necessary to reduce
the amount outstanding to an amount not greater than the Demonstrator Credit
Limit.
1A.6 In all events, unless earlier terminated, the Demonstrator
Line of Credit shall terminate March 31, 1997. Upon termination, Borrower
shall forthwith pay to Standard Federal all sums owing for principal and
interest with respect to the Demonstrator Line of Credit.
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SECTION 1B. TERM LOAN
1B.1 Standard Federal has extended to the Borrower a term loan (the
"Term Loan") in the principal amount of Two Million and 00/100 Dollars
($2,000,000.00).
1B.2 The Term Loan herein extended shall be subject to the terms
and conditions of a Promissory Note (Term Loan), dated September 15, 1994, and
all renewals and amendments thereof (the "Term Note"). The Term Loan shall be
payable and shall bear interest as set forth in the Term Note. This Loan
Agreement and the Term Note are of equal materiality and shall each be
construed in such manner as to give full force and effect to all provisions of
both documents.
SECTION 1C. CONDITIONS TO MAKING LOANS
1C.1 The following are conditions precedent to the obligation of
Standard to make the Line of Credit and the Term Loan hereunder:
1C.1(a) The Borrower shall have delivered or shall have had delivered to
Standard Federal, in form and substance satisfactory to Standard Federal and
its counsel, each of the following:
a. A duly executed copy of this Loan Agreement;
b. A duly executed copy of the Line of Credit Note, the Term
Note, a security agreement and such other loan documents as
Standard Federal shall require to evidence and document the
Line of Credit and the Term Loan;
c. Such credit applications, financial statements,
authorizations, and such information concerning the Borrower
and its business, operations, and condition (financial and
otherwise) as Standard Federal may reasonably request;
d. Certified copies of resolutions of the Boards of Directors of
the Borrower approving the execution and delivery of the loan
documents required hereunder;
e. A certificate of the Secretary or an Assistant Secretary of
the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign the loan documents
required hereunder;
f. Copies of each of the Articles of Incorporation of the
Borrower, certified by the Secretary of State of Michigan as
of a recent date;
g. Copies of each of the Articles of Incorporation and Bylaws of
the Borrower, certified by the Secretary or an Assistant
Secretary of the Borrower as of the date of this Agreement as
being accurate and complete;
h. Certificate of good standing of the Borrower from the
Secretary of State of Michigan as of a recent date;
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i. Certificates of authority and good standing of the Borrower
for each state in which the Borrower is qualified to do business;
j. A certificate of compliance of the chief financial officer or
treasurer of the Borrower in form satisfactory to Standard
Federal dated as of the date of this Agreement;
k. Such certificates, binders or other evidence of all insurance
required of the Borrower under this Loan Agreement as Standard
Federal may reasonably require; and
l. Acknowledgement copies of all UCC-1 financing statements filed
with respect to the Collateral accompanied by a search report
showing such financing statements as duly filed and evidencing
that the security interest of Standard Federal in the
Collateral is prior to all other security interests of record.
1C.1(b) All acts and conditions (including, without limitation, the obtaining
of any necessary regulatory approvals and the making of any required filings,
recordings, or registrations) required to be done and performed and to have
happened precedent to the execution, delivery, and performance of the loan
documents required hereunder and to constitute the same legal, valid, and
binding obligations, enforceable in accordance with their respective terms,
shall have been done and performed and shall have happened in due and strict
compliance with all applicable laws.
1C.1(c) All documentation, including, without limitation, documentation for
corporate and legal proceedings in connection with the transactions
contemplated by the Loan Documents shall be satisfactory in form and substance
to Standard Federal and its counsel and all fees and charges, including
recording and filing fees, shall have been paid as required hereunder.
1C.2 As conditions precedent to Standard Federal's obligation to
make the Term Loan and to fund any request for an advance under the Line of
Credit, at and as of the date of the funding thereof;
a. The representations and warranties of the Borrower contained
in the Loan Documents shall be accurate and complete in all
respects as if made on and as of such date;
b. The Borrower shall have paid all fees and expenses, including
any recording fees and charges, required hereunder;
c. There shall not have occurred an Event of Default or any event
which with the passage of time of the giving of notice or both
would constitute an Event of Default;
d. The Borrower shall have delivered a Borrowing Base Certificate
in form satisfactory to Standard Federal; and
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e. Following the making of such loan or advance, the aggregate
principal amount outstanding will not exceed the limitations
described in Sections 1, 1A and 1B.
SECTION 2. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to Standard Federal that
as of the date of acceptance of this Agreement, as of the time any advance is
to be made hereunder and, unless expressly provided otherwise herein or agreed
to by a writing signed by Standard Federal, at all times any amounts are
outstanding hereunder:
2.1 The Borrower and each of its subsidiaries, if any, are
corporations duly organized, validly existing and in good standing under the
laws of the state of their incorporation; the Borrower and each of its
subsidiaries (if any) have the legal power and authority to own their
properties and assets and to carry out their business as now being conducted
and each is qualified to do business in the State of Ohio, the State of
Michigan and in every jurisdiction where the nature of its business or the
property owned or operated by it makes such qualification necessary and is
otherwise in compliance with all applicable laws, statutes, regulations, rules
and requirements of any federal, state, judicial, regulatory or administrative
body having jurisdiction of the Borrower or any of its assets; the Borrower has
the legal power and authority to execute and perform this Agreement, to borrow
money in accordance with its terms, to execute and deliver the Line of Credit
Note and the Term Note and other documents contemplated hereby, to grant to
Standard Federal mortgages and security interests in the Collateral, as hereby
contemplated, and to do any and all other things required of it hereunder; and
this Agreement, the Line of Credit Note, the Term Note and all other documents
contemplated hereby, when executed by the Borrower's duly authorized officers
will constitute its valid and binding legal obligations enforceable in
accordance with their terms.
2.2 The execution, delivery and performance of this Agreement, the
borrowings hereunder and the execution and delivery of the Line of Credit Note
and the Term Note and other documents contemplated hereby (a) have been duly
authorized by all requisite corporate action, (b) do not require governmental
approval or the approval of any person not a party to this Agreement, (c) will
not result (with or without notice and/or the passage of time) in any conflict
with or breach or violation of or default under, any provision of law, the
Articles of Incorporation or Bylaws of the Borrower or any indenture, agreement
or other instrument to which the Borrower is a party, or by which it or any of
its properties or assets are bound, and (d) will not result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Borrower other than in favor of Standard
Federal and as contemplated hereby.
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2.3 There is not pending or, to the best of the knowledge of the
Borrower, threatened, any litigation, proceeding or governmental investigation
which could materially and adversely affect the business of the Borrower or its
subsidiaries, if any, or its ability to perform its covenants hereunder.
2.4 Borrower has good and marketable title to its properties given
as security as herein described, and, except for liens in favor of Standard
Federal, liens for taxes not delinquent or being contested in good faith and
liens created in connection with worker's compensation, unemployment insurance
and social security, or to secure the performance of bids, tenders or contracts
(other than for the repayment of borrowed money), leases, statutory
obligations, surety and appeal bonds, and other obligations of like nature made
in the ordinary course of business, none of the Borrower's or any of its
subsidiaries' (if any) assets are subject to any mortgage, pledge, lien,
security interest, or other encumbrance of any kind or character except as have
been disclosed to Standard Federal in writing. The Borrower owns all material
patents, trademarks, service marks, trade names, copyrights, licenses and other
rights, free from any material restrictions, that are necessary for the
operation of its business as presently conducted.
2.5 All financial data which has been or shall hereafter be
furnished to Standard Federal for the purposes of, or in connection with, this
Agreement, including particularly, but without limitation, the audited
consolidated financial statements of ▇▇▇▇▇▇▇ Industries, Inc. as of September
30, 1994, prepared by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., and the Form 10-Q's filed with the
Securities and Exchange Commission by ▇▇▇▇▇▇▇ industries, Inc. pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly
periods ended December 31, 1994, March 31, 1995 and June 30, 1995, and the
transactions contemplated hereby has been and/or shall be prepared in
accordance with generally accepted accounting principles consistently applied,
and does or will fairly present the financial condition of the Borrower as of
the dates, and the results of its operations for the periods, for which the
same is furnished to Standard Federal.
2.6 There has been no material adverse change in the business,
properties or condition (financial or otherwise) of the Borrower or its
subsidiaries (if any) since the date of the latest financial statements
provided to Standard Federal and there are no material debts, liabilities or
obligations (absolute or contingent) of the Borrower except as reflected in
such financial statements (or in the notes thereto).
2.7 The Borrower is not in default in the repayment of any
indebtedness for money borrowed by it nor has there occurred any event which,
with or without notice or the passage of time or both,
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would constitute a default by the Borrower under any agreement or instrument
pertaining to any indebtedness for money borrowed by it.
2.8 Borrower has filed all reports and tax returns required by
governmental authority to be filed by it prior to the date hereof and Borrower
has received no notice that such reports or returns have been rejected,
declared insufficient, or otherwise challenged by such governmental authority.
2.9 The principal officers of the Borrower ("Principal Officers")
are as follows:
Galion Holding Company:
Chairman of the Board ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ E-Z Pack, Inc.:
Chairman of the Board ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Galion Dump Bodies, Inc.:
Chairman of the Board ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Group Sales of Florida, Inc.:
Chairman of the Board ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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2.10 ▇▇▇▇▇▇▇ E-Z Pack, Inc., a Michigan corporation, and Galion
Dump Bodies, Inc., a Michigan corporation, are each wholly-owned subsidiaries
of Galion Holding Company, a Michigan corporation, which is a wholly-owned
subsidiary of ▇▇▇▇▇▇▇ Industries, Inc., a Michigan corporation. ▇▇▇▇▇▇▇
Industries, Inc., ▇▇▇▇▇▇▇ E-Z Pack Inc. and Galion Dump Bodies, Inc. each hold
one-third of the outstanding capital stock of ▇▇▇▇▇▇▇ Group Sales, Inc.,
Michigan corporation, of which ▇▇▇▇▇▇▇ Group Sales of Florida, Inc., a Florida
corporation, is a wholly-owned subsidiary. Galion Holding Company, as of the
date of this Loan Agreement, owns no other subsidiaries.
2.11 None of the proceeds of the Line of Credit or Term Loan will
be used for the purpose of purchasing or carrying any "margin stock" as defined
in Regulation U or G of the Board of Governors of the Federal Reserve System
(12 C.F.R. Part 221 and 207), or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry a margin stock
or for any other purpose which might constitute this transaction a "purpose
credit" within the meaning of such Regulation U or G. Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stocks. Neither Borrower nor any person acting on behalf of Borrower
has taken or will take any action which might cause the Line of Credit Note and
the Term Note or any of the other documents executed in conjunction therewith,
including this Agreement, to violate Regulations U or G or any other
regulations of the Board of Governors of the Federal Reserve System or to
violate Section 7 of the Securities Exchange Act of 1934 or any rule or
regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect. Borrower and its subsidiaries, if any, own no
"margin stock" except for that described in the financial statements provided
to Standard Federal and, as of the date hereof, the aggregate value of all
"margin stock" owned by Borrower and its subsidiaries, if any, does not exceed
25% of all of the value of all of Borrower's and its subsidiaries', if any,
assets.
2.12 Except as disclosed in the environmental reports listed in
attached Schedule 2.12, copies of which the Borrower has furnished to Standard
Federal, neither the Borrower nor, to the best of Borrower's knowledge after
due inquiry, any other person or entity, has caused or permitted any waste,
oil, pesticides, or any substance or material of any kind which is currently
known or suspected to be toxic or hazardous, including but not limited to any
substance defined as a "Hazardous Waste" in Title 40, Part 261 of the Code of
Federal Regulations, (hereinafter referred to as "Hazardous Material") to be
discharged, dispersed, released, disposed of, or allowed to escape on, under or
at any property owned, occupied or operated by any Borrower in violation of any
Hazardous Materials Laws (as hereinafter defined), nor has any property owned,
occupied or operated by any Borrower, or any part thereof, ever been used by
the Borrower or, to the best of Bor-
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rower's knowledge after due inquiry, any prior owner or any other person, as a
dump, storage or disposal site for any Hazardous Material, nor has there
occurred any other violation of the federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq., or any other federal, state or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to or imposing liability or
standards of conduct concerning, any Hazardous Material ("Hazardous Materials
Laws") with respect to any property owned, occupied or operated by any
Borrower. No asbestos or asbestos-containing materials have been installed,
used, incorporated into, or disposed of on any property owned, occupied or
operated by any Borrower. No polychlorinated biphenyls ("PCBs") are located on
or in any property owned, occupied or operated by any Borrower, in the form of
electrical transformers, fluorescent light fixtures with ballasts, cooling
oils, or any other device or form. All underground storage tanks located on
any property owned, occupied or operated by any Borrower have been installed
and are being operated in full compliance with all applicable Hazardous
Materials Laws. The Borrower: (a) has not received any notice of any release,
threatened release, escape, seepage, leakage, spillage, discharge or emission
of any Hazardous Materials in, under or upon any property owned, occupied or
operated by any Borrower or of any violation of any Hazardous Materials Law,
and (2) does not know of any basis for any such notice or violation.
2.13 No "reportable event," as defined in the Employee Retirement
Income Security Act of 1974 and any amendments thereto ("ERISA"), has occurred
and is continuing with respect to any employee pension and/or profit sharing
benefit plan maintained by or on behalf of the Borrower for the benefit of any
of its employees. The Pension Benefit Guaranty Corporation ("PBGC") has not
instituted proceedings to terminate any such employee pension and/or profit
sharing plan or to appoint a trustee to administer such plan. The Borrower
has maintained and funded and caused each of its subsidiaries, if any, to
maintain and fund all employee pension and/or profit sharing plans in
accordance with their terms and with all applicable provisions of ERISA.
Neither the Borrower nor any duly appointed administrator of any employee
pension and/or profit sharing plan: (a) has incurred any liability to PBGC with
respect to any such plan other than for premiums not yet due or payable, (b)
has instituted or intends to institute proceedings to terminate any such plan
under Section 4042 or 4041A of Erisa, or (c) has withdrawn from any
Multi-Employer Pension Plan (as that term is defined in Section 3(37) of
ERISA).
2.14 There is no material fact that the Borrower has not disclosed
to Standard Federal which could have a material adverse effect on the
properties, business, prospects or condition (financial or otherwise) of the
Borrower or any of its subsidiaries. For purposes of this Section 2.14, a
"material adverse effect" means any circumstance or event which (a) could
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have any adverse effect whatsoever upon the validity, performance or
enforceability of any material provision of the Loan Documents, (b) is or might
be material and adverse to the financial condition or business operations of
the Borrower or any subsidiary, (c) could impair the ability of the Borrower to
fulfill its obligations under the Loan Documents, or (d) causes an Event of
Default or any event which, with notice or lapse of time or both, could become
an Event of Default. Neither the financial statements referred to in Section
2.5 hereof, nor any certificate or statement delivered herewith or heretofore
by Borrower in connection with the negotiations of this Loan Agreement,
contains any untrue statement of a material fact or omits to state any material
fact necessary to keep the statements contained herein or therein, under the
circumstances in which they were made, from being misleading.
2.15 Each request for an advance under the Line of Credit shall
constitute, without the necessity of specifically containing a written
statement, a representation and warranty by Borrower that no Event of Default
exists and that all representations and warranties contained in this Section 2
or in any mortgage, guaranty, security agreement or other document given to
secure or relating to the Line of Credit Note or this Agreement are true and
correct at and as of the time the advance is to be made.
SECTION 3. AFFIRMATIVE COVENANTS OF BORROWER
3.1 Prior to Standard Federal's disbursement of any advances under
the Line of Credit, or closing of the Term Loan, the Borrower shall; (a)
furnish to Standard Federal, if Standard Federal so requires, certified copies
of its Articles of Incorporation, Bylaws and Certificate of Good Standing,
which Articles of Incorporation and Good Standing Certificate are to be
certified by the appropriate official of the Borrower's state of incorporation;
(b) furnish to Standard Federal if Standard Federal so requires a statement of
the Borrower and the chief financial officer of Borrower certifying that they
are unaware of the occurrence of an Event of Default or of any event which with
notice and/or the passage of time could become an Event of Default; and (c)
furnish Standard Federal such other instruments, documents, opinions or
certificates as Standard Federal or its counsel shall reasonably require. All
actions, proceedings, instruments and documents required or requested hereunder
shall be satisfactory to and approved by Standard Federal and/or its counsel
prior to the disbursement of advances under the Line of Credit or closing of
the Term Loan.
3.2 From the date hereof until all amounts owing under the Line of
Credit and the Term Loan are paid in full and all obligations under the Line of
Credit Note and the Term Note, this Agreement and all other documents executed
in connection with the Line of Credit and the Term Loan are fully paid,
performed and
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satisfied and so long as Standard Federal has any commitment to make advances
hereunder, the Borrower covenants and agrees it will:
3.2(a) Furnish to Standard Federal as soon as available and, in any event,
within 90 days after the close of each fiscal year of the parent corporation of
the Borrower, ▇▇▇▇▇▇▇ Industries, Inc. ("▇▇▇▇▇▇▇"), or, in the event ▇▇▇▇▇▇▇
obtains an extension of the filing date from the Securities Exchange
Commission, by such extended date, detailed financial statements of ▇▇▇▇▇▇▇ as
of the close of such fiscal year, containing a consolidated balance sheet of
▇▇▇▇▇▇▇ and its subsidiaries and statements of income and cash flows of ▇▇▇▇▇▇▇
and its subsidiaries for such fiscal year prepared in accordance with generally
accepted accounting principles and in a manner consistent with prior such
statements containing an analysis of sources and uses of funds and such other
comments and financial details as are usually included in similar reports.
Such statements shall be accompanied by an opinion thereon (which shall not be
qualified by reason of any limitation imposed by Borrower or ▇▇▇▇▇▇▇) of
independent certified public accountants selected by ▇▇▇▇▇▇▇ and acceptable to
Standard Federal as to the fairness of the statements included in the report
and to the effect that the examination of such accounts in connection with such
financial statements has been made in accordance with generally accepted
auditing standards and, accordingly, includes such tests of the accounting
records and such other auditing procedures as were considered necessary in the
circumstances.
3.2(b) Furnish to Standard Federal, as soon as available and in any event
within 45 days after the close of each quarter of each fiscal year of ▇▇▇▇▇▇▇,
or, in the event ▇▇▇▇▇▇▇ obtains an extension of the filing date from the
Securities Exchange Commission, by such extended date, detailed financial
statements of ▇▇▇▇▇▇▇ as of the close of such fiscal period containing a
consolidated balance sheet of ▇▇▇▇▇▇▇ and its subsidiaries and statements of
income and cash flows of the ▇▇▇▇▇▇▇ and its subsidiaries for such fiscal
period and for the portion of the fiscal year ending with such period in
reasonable detail and form acceptable to Standard Federal and certified by the
chief financial officer of ▇▇▇▇▇▇▇ as being true and correct and as having been
prepared in accordance with generally accepted accounting principles
consistently applied, subject to year-end adjustments, if any.
3.2(c) Furnish to Standard Federal in a form acceptable to Standard Federal
within a reasonable time not to exceed 20 days after the end of each calendar
month during the term hereof a statement of accounts receivable of Borrower
certified as correct by Borrower or a Principal Officer showing the agings
thereof and the payment, write-off or other disposition of former accounts
receivable the disposition of which has not previously been reported to
Standard Federal, and such other information and data as Standard Federal may
reasonably require. Borrower will further
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specifically disclose any facts known to Borrower which facts would tend to
render doubtful the collectibility of any account receivable disclosed in such
statements, or which would indicate that the existence or amount of such
account is disputed by the debtor thereon or which would preclude any account
from being included in the computation of Eligible Accounts Receivable herein
defined.
3.2(d) Furnish to Standard Federal in a form acceptable to Standard Federal
within a reasonable time not to exceed 20 days after the end of each calendar
month during the term hereof a statement of inventory of the Borrower certified
as correct by Borrower or a Principal Officer showing the method of reporting
and all additions to and dispositions of inventory since the previous inventory
report and such other information and data as Standard Federal may reasonably
require.
3.2(e) Furnish to Standard Federal in a form acceptable to Standard Federal
within a reasonable time not to exceed 20 days after the end of each calendar
month during the term hereof a statement of the Borrower's demonstrator
inventory, as determined in a manner acceptable to Standard Federal, certified
as correct by Borrower or a Principal Officer showing the method of reporting
and all additions to and dispositions of demonstrator inventory since the
previous Demonstrator report and such other information and data as Standard
Federal may reasonably require.
3.2(f) Furnish to Standard Federal, promptly after ▇▇▇▇▇▇▇ sends, files or
publishes the same, copies of all proxy statements, financial statements and
reports that ▇▇▇▇▇▇▇ sends to its public shareholders and copies of all
regular, periodic and special reports and all registration statements and
amendments thereto that ▇▇▇▇▇▇▇ files with the Securities and Exchange
Commission or any other governmental authority and any Exchange, and copies of
all press releases issued by ▇▇▇▇▇▇▇.
3.2(g) Promptly inform Standard Federal of the occurrence of any Event of
Default or of any event (including without limitation any pending or threatened
litigation or other proceedings before any governmental body or agency) which
could have a materially adverse effect upon the Borrower's business,
properties, financial condition or ability to comply with its obligations
hereunder or under the Line of Credit Note or the Term Note.
3.2(h) Furnish such other information as Standard Federal may reasonably
request and permit Standard Federal and its agents, attorneys and employees to
inspect all of the books, records and properties of the Borrower at any
reasonable time.
3.2(i) Maintain adequate insurance with responsible companies in such amounts
and against such risks and hazards as are normally insured against by similar
businesses, and provide Standard Federal
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evidence of such insurance upon request; policies of casualty insurance shall
contain a customary mortgagee clause requiring payment of proceeds to Borrower
and to Standard Federal as their interests may appear and all other insurance
shall contain a customary loss payable clause requiring payment of proceeds to
Borrower and to Standard Federal as their interests may appear and all
insurance policies shall provide that no cancellation, reduction in amount,
change in coverage or expiration thereof shall be effective until at least 30
days prior written notice has been given by the insurer to Standard Federal;
and pay when due all taxes, assessments, fees and similar charges of every kind
and nature lawfully assessed upon the Borrower and/or its property, except to
the extent being contested in good faith; and in the event the Borrower fails
to maintain such insurance or to pay promptly any taxes or charges when due,
then and in such event Standard Federal, in its sole discretion, may, but shall
not be required to, pay the same and any amounts expended by Standard Federal
for such purpose shall become a part of the Line of Credit and shall bear
interest at the rate applicable to the outstanding principal balance owing
under the Line of Credit Note.
3.2(j) Preserve and keep in full force and effect its own and its material,
operating subsidiaries' (if any) corporate existence in good standing and
maintain voting control in its present controlling shareholder(s); keep current
all filings of assumed name certificates for each name under which and each
county in which the Borrower does business and promptly inform Standard Federal
of any assumed names under which it does business which were not used by the
Borrower on the date of this Agreement; continue to conduct and operate its
business substantially as presently conducted and operated in accordance with
all applicable laws and regulations; maintain and protect all franchises and
trade names and preserve all the remainder of its property used or useful in
the conduct of its business and keep the same in good repair and condition; pay
its indebtedness and obligations when due under normal terms and maintain
proper books of record and account, and; otherwise remain in compliance with
all applicable laws, statutes, regulations, rules and requirements of any
federal, state, judicial, regulatory or administrative body having jurisdiction
of the Borrower or any of its assets, except to the extent noncompliance is
immaterial and would not have a material adverse effect on Borrower.
3.2(k) Cause ▇▇▇▇▇▇▇ to maintain on a consolidated statement basis "Tangible
Net Worth" of not less than the amounts specified below as of the end of each
fiscal quarter during the fiscal years ending on the dates specified below:
Minimum
"Tangible
Fiscal Year-End Net Worth"
--------------- ----------
09/30/94 $16,500,000
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09/30/95 $18,000,000
09/30/96 $19,000,000
"Tangible Net Worth" shall mean total assets less trademarks,
franchises, copyrights, licenses, goodwill, similar intangible assets and all
liabilities (excluding debt subordinated to Standard Federal upon terms and
conditions acceptable to Standard Federal) of the Borrower.
3.2(l) Cause ▇▇▇▇▇▇▇ to maintain on a consolidated statement basis the ratio
of "Current Assets" to "Current Liabilities" of not less than the ratios
specified below as of the end of each fiscal quarter during the fiscal years
ending on the dates specified below:
Fiscal Year-End Minimum Current Ratio
--------------- ---------------------
09/30/94 2.25 to 1.00
09/30/95 2.30 to 1.00
09/30/96 2.35 to 1.00
"Current Assets" shall include all assets considered current in
accordance with generally accepted accounting principles as in effect as of the
date of this Agreement, consistently applied, less all amounts due Borrower
from any of its directors, officers, employees, its shareholders, or any
company controlled by any of its shareholders. "Current Liabilities" shall
include all liabilities considered current in accordance with generally
accepted accounting principles as in effect as of the date of this Agreement,
consistently applied, except that portion of ▇▇▇▇▇▇▇'▇ $5,000,000.00 line of
credit with Standard Federal which is payable within a twelve-month period.
3.2(m) Cause ▇▇▇▇▇▇▇, on a consolidated statement basis, to maintain the
ratio of "Liabilities" to "Tangible Net Worth" of not more than the ratios
specified below as of the end of each fiscal quarter during the fiscal years
ending on the dates specified below:
Fiscal Year-End Maximum Liabilities-to-Worth Ratio
--------------- ----------------------------------
09/30/94 2.75 to 1.00
09/30/95 2.65 to 1.00
09/30/96 2.55 to 1.00
"Liabilities" shall mean all liabilities of ▇▇▇▇▇▇▇ and its
consolidated subsidiaries as defined in accordance with generally
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accepted accounting principles as in effect as of the date of this Agreement,
consistently applied.
"Tangible Net Worth" shall mean total assets less trademarks,
franchises, copyrights, licenses, goodwill, similar intangible assets and all
liabilities (excluding debt subordinated to Standard Federal upon terms and
conditions acceptable to Standard Federal) of ▇▇▇▇▇▇▇.
3.2(n) Cause ▇▇▇▇▇▇▇, on a consolidated statement basis, to maintain an
Interest Coverage Ratio of not less than 2.00 to 1.00 for each fiscal year.
The "Interest Coverage Ratio" shall be defined as the ratio of ▇▇▇▇▇▇▇'▇ net
income, plus interest charges, income and other taxes and amortization and
depreciation for the fiscal year to all interest expense of the Borrower for
such fiscal year, as determined in accordance with generally accepted
accounting principles.
3.2(o) Cause ▇▇▇▇▇▇▇, on a consolidated statement basis, to maintain a Fixed
Charge Coverage Ratio of not less than 1.75 to 1.00 for each fiscal year. The
"Fixed Charge Coverage Ratio" for each fiscal year shall be defined as the
ratio of ▇▇▇▇▇▇▇'▇ net income, plus amortization and depreciation for the
fiscal year, to current maturities of long term debt, as determined in
accordance with generally accepted accounting principles.
3.2(p) At all times meet and cause each of its subsidiaries, if any, to meet
the minimum funding requirements of ERISA with respect to all employee pension
and/or profit sharing plans subject to ERISA and, with respect to any such
employee benefit plan, promptly notify Standard Federal in writing of any
reportable event, as defined in ERISA, or any proposed termination (voluntary
or otherwise) which could give rise to material termination liability within
the meaning of ERISA Section 4062.
3.3 The Borrower will not make any change in its accounting
policies or financial reporting practices and procedures, except changes in
accounting policies which are required or permitted by generally accepted
accounting principles and changes in financial reporting practices and
procedures which are required or permitted by generally accepted accounting
principles.
3.4 The Borrower shall use the monies loaned hereunder only for
the purpose(s) set forth in the preamble hereto.
3.5 The Borrower shall allow Standard Federal's participant in the
Line of Credit and Term Loan and staff or independent accountants or auditors
selected by Standard Federal's participant to conduct a full audit of the
Borrower's financial statements and its books and records twice during the
first year of the term of the Line of Credit and Term Loan and once in each of
the second and third years of the term of the Line of Credit and Term Loan.
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Standard Federal's participant shall schedule such audits during normal
business hours of the Borrower and shall provide Borrower not less than two (2)
business days notice of the commencement of each audit. The Borrower shall
make adequate facilities available on its premises at Borrower's expense to
enable Standard Federal's participant to conduct the audits herein described
and shall make available all of its books, records and other documents and
information as may be reasonably requested to facilitate the audits. The
Borrower agrees to pay to Standard Federal's participant an audit fee of
$3,000.00 plus travel expenses for each audit so conducted by the participant.
SECTION 4. NEGATIVE COVENANTS
4.1 From the date hereof until all amounts owing under the Line of
Credit are paid in full and all obligations under the Line of Credit Note and
the Term Note, this Agreement and all other documents executed in connection
with the Line of Credit and the Term Loan are fully paid, performed and
satisfied and so long as Standard Federal has any commitment to make advances
hereunder, the Borrower covenants and agrees that it will not do and will not
permit any subsidiary, if any, to do any of the following without the prior
written approval of Standard Federal:
4.1(a) Create, incur, assume or permit to exist (a) any mortgage, pledge,
security interest, lien or charge of any kind upon any of its property or
assets whether now owned or hereafter acquired other than in favor of Standard
Federal, except as required or permitted by Standard Federal, or (b) any
indebtedness or liability for borrowed money, except indebtedness to Standard
Federal or indebtedness subordinated to the prior payment in full of the
Borrower's indebtedness to Standard Federal which is approved in writing by
Standard Federal, except as otherwise required or permitted in writing by
Standard Federal.
4.1(b) Make loans, advances or extensions of credit to any Entity (which in
this Agreement means any individual, partnership, corporation or other legal
entity), other than a parent or subsidiary of the Borrower, in excess of
$100,000.00 in principal amount, except for sales on open account and in
ordinary course of business; or guarantee or in any way become responsible for
obligations of any other Entity except by endorsement of negotiable instruments
for deposit or collection in the ordinary course of business; or subordinate
any indebtedness due it from an Entity to indebtedness of any other creditor of
such Entity.
4.1(c) Sell, lease or transfer, during any fiscal year, except inventory in
the ordinary course of business, any substantial portion of its assets; or
consolidate with or merge into any other Entity, or permit another to merge
into it; or acquire by lease or purchase all or substantially all the business
or assets of any Entity; or enter into any lease-back arrangement with any
Entity.
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4.1(d) Allow ▇▇▇▇▇▇▇ to acquire or expend for, by lease, purchase or
otherwise, during any fiscal year, fixed assets in excess of $4,500,000.
SECTION 5. SECURITY
5.1 In order to secure: (1) the full and timely performance of the
Borrower's covenants set forth herein and in the Line of Credit Note and the
Term Note, (2) the repayment of any and all indebtedness of the Borrower to
Standard Federal arising pursuant to the Line of Credit Note, the Term Note
(including any renewals or substitutions thereof), this Agreement and any
mortgage, guaranty, security agreement or other document given to secure or
relating to the Line of Credit Note, the Term Note or this Agreement, and (3)
all other indebtedness and liabilities of the Borrower to Standard Federal
arising under this Agreement, the Line of Credit Note or the Term Note, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising:
5.1(a) The Borrower hereby grants unto Standard Federal a security interest
in the following property and the proceeds thereof: (i) any and all securities
or other property received by the Borrower with respect to, on account of or in
exchange for any item of Collateral; (ii) all stock and/or liquidating
dividends (whether the same be in the form of cash or other property) paid
upon, on account of or with respect to any item of Collateral; and (iii) all
bank deposits, instruments, negotiable documents, chattel paper and any and all
other property of the Borrower of any kind whatsoever which shall at any time
be in the possession or under the control of Standard Federal; and
5.1(b) The Borrower has executed and delivered to Standard Federal the
Mortgages and the Security Agreement, the provisions of which are hereby
incorporated herein by reference (herein, together with the property described
in Sections 5.1(a) (i), (ii) and (iii) above, referred to as the "Collateral"
or "item(s) of Collateral").
5.2 The Borrower shall execute and deliver to Standard Federal any
and all documents (including financing statements) as Standard Federal may
require to insure the perfection and priority of its liens and security
interests in the Collateral and furnish, if Standard Federal so requires, proof
of hazard insurance policies, in accordance with Section 3.2(i) above, relating
to the Collateral. Borrower shall also furnish a standard ALTA mortgage title
insurance policy without exceptions (provided that the policy may contain
exceptions approved in writing by Standard Federal) insuring Standard Federal
mortgage interest in the properties described in the Mortgages.
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SECTION 6. EVENTS OF DEFAULT
The occurrence of any of the events enumerated in Sections 6.1
to 6.11 below shall constitute an Event of Default for purposes of this
Agreement:
6.1 FAILURE TO PAY MONIES DUE. If any indebtedness of the
Borrower to Standard Federal on the Line of Credit or the Term Loan is not paid
when due, regardless of whether such indebtedness has arisen pursuant to the
terms of the Line of Credit Note, the Term Note, this Agreement or any
mortgage, security agreement, guaranty, instrument or other agreement executed
in conjunction herewith.
6.2 MISREPRESENTATION. If any warranty or representation made by
or for the Borrower and/or any endorser or guarantor of the Line of Credit Note
or the Term Note in connection with the loan(s) evidenced thereby, or if any
financial data or any other information now or hereafter furnished to Standard
Federal by or on behalf of the Borrower and/or any endorser or guarantor of the
Line of Credit Note or the Term Note shall prove to be false, inaccurate or
misleading in any material respect.
6.3 NONCOMPLIANCE WITH AFFIRMATIVE COVENANTS AND OTHER AGREEMENTS.
If the Borrower shall fail to perform any of its obligations and covenants
under Section 3 of this Agreement, or shall fail to comply with any of the
other provisions of this Agreement, other than under Section 4 hereof, or the
Line of Credit Note, the Term Note, or any other agreement with Standard
Federal to which it may be a party, other than the payment of principal and
interest.
6.4 NONCOMPLIANCE WITH NEGATIVE COVENANTS. If the Borrower shall
fail to perform any of its obligations and covenants described in Section 4 of
this Agreement.
6.5 BUSINESS SUSPENSION. If the Borrower and/or any endorser or
guarantor of the Line of Credit Note or the Term Note shall voluntarily suspend
transaction of its business.
6.6 BANKRUPTCY, ETC. If the Borrower and/or any endorser or
guarantor of the Line of Credit Note or the Term Note: (a) makes a general
assignment for the benefit of creditors; (b) shall file a voluntary petition in
bankruptcy or for a reorganization to effect a plan or other arrangement with
creditors; or shall file an answer to a creditor's petition or other petition
against Borrower and/or any endorser or guarantor of the Line of Credit Note or
the Term Note for relief in bankruptcy or for a reorganization which answer
admits the material allegations thereof; or if any order for relief shall be
entered by any court of bankruptcy jurisdiction with respect to the Borrower
and/or any endorser or guarantor of the Line of Credit Note or the Term Note,
or if bankruptcy, reorganization or liquidation proceedings are instituted
against
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Borrower and/or any endorser or guarantor of the Line of Credit Note or the
Term Note and remain undismissed for 60 days; (c) has entered against it any
order by any court approving a plan for the reorganization of the Borrower or
any endorser or guarantor of the Line of Credit Note or the Term Note or any
other plan or arrangement with creditors of the Borrower or any endorser or
guarantor of the Line of Credit Note or the Term Note; (d) shall apply for or
permit the appointment of a receiver, trustee or custodian for any substantial
portion of the Borrower's and/or any endorser's or guarantor's properties or
assets; or (e) becomes unable to meet its debts as they mature or becomes
insolvent.
6.7 JUDGMENTS AND WRITS. If there shall be entered against the
Borrower and/or any endorser or guarantor of the Line of Credit Note or the
Term Note one or more judgments or decrees which are not insured against or
satisfied or appealed from and bonded within the time or times limited by
applicable rules of procedure for appeal as of right or if a writ of attachment
or garnishment against the Borrower and/or any endorser or guarantor of the
Line of Credit Note or the Term Note shall be issued and levied in an action
claiming $100,000.00 or more and not released, bonded or appealed from within
30 days after the levy thereof.
6.8 MERGER. If the Borrower shall merge or consolidate with another
entity.
6.9 CHANGE OF CONTROL OR MANAGEMENT. If the Borrower or a
controlling portion of its voting stock or a substantial portion of its assets
comes under the practical, beneficial or effective control of any person or
persons other than those having such control as of the date of execution of the
Line of Credit Note and the Term Note, whether by reason of merger,
consolidation, sale or purchase of stock or assets or otherwise, if any such
change of control, in the sole and absolute discretion of Standard Federal,
adversely impacts upon the ability of the Borrower to carry on its business as
theretofore conducted.
6.10 OTHER DEFAULTS. If the Borrower and/or any endorser or
guarantor of the Line of Credit Note or the Term Note shall default in the due
payment of any material indebtedness to whomsoever owed, or shall default in
the observance or performance of any material term, covenant or condition in
any mortgage, security agreement, guaranty, instrument, lease or agreement to
which the Borrower and/or any endorser or guarantor of the Line of Credit Note
or the Term Note is a party.
6.11 REPORTABLE EVENT. If there shall occur any "reportable
event", as defined in the Employee Retirement Income Security Act of 1974 and
any amendments thereto, which is determined to constitute grounds for
termination by the Pension Benefit Guaranty Corporation of any employee pension
benefit plan maintained by or on behalf of the Borrower for the benefit of any
of its employees
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or for the appointment by the appropriate United States District Court of a
trustee to administer such plan and such reportable event is not corrected and
such determination is not revoked within 30 days after notice thereof has been
given to the plan administrator or the Borrower; or the institution of
proceedings by the Pension Benefit Guaranty Corporation to terminate any such
employee benefit pension plan or to appoint a trustee to administer such plan;
or the appointment of a trustee by the appropriate United States District Court
to administer any such employee benefit pension plan.
SECTION 7. REMEDIES UPON EVENT OF DEFAULT
7.1 Upon the occurrence of any Event of Default described in
Sections 6.2, 6.3 or 6.10 hereof which is not cured or waived in writing by
Standard Federal within 15 days after written notice to the Borrower of such
default; or upon the occurrence of any Event of Default described in Section
6.1 which continues unremedied for 10 days, or upon the occurrence of any Event
of Default described in Sections 6.4, 6.5, 6.6, 6.7, 6.8, 6.9 or 6.11, Standard
Federal's commitment to lend hereunder, if any, shall terminate and Standard
Federal may, without notice, declare the entire unpaid and outstanding
principal balance of the Line of Credit and the Term Loan and all accrued
interest to be due and payable in full forthwith, without presentment, demand
or notice of any kind, all of which are hereby expressly waived by Borrower,
and thereupon Standard Federal shall have and may exercise any one or more of
the rights and remedies provided herein or in the Line of Credit Note or the
Term Note or in any mortgage, guaranty, security agreement or other document
relating hereto or granted secured parties under the Michigan Uniform
Commercial Code, including the right to take possession of and dispose of the
Collateral, or otherwise provided by applicable law, and to offset against the
Line of Credit and the Term Loan any amount owing by Standard Federal to the
Borrower.
SECTION 8. MISCELLANEOUS.
8.1 No default shall be waived by Standard Federal except in
writing and a waiver of any default shall not be a waiver of any other default
or of the same default on a future occasion. No single or partial exercise of
any right, power or privilege hereunder, or any delay in the exercise hereof,
shall preclude other or further exercise of the rights of the parties to this
Agreement.
8.2 No forbearance on the part of Standard Federal in enforcing
any of its rights under this Agreement, nor any renewal, extension or
rearrangement of any payment or covenant to be made or performed by the
Borrower hereunder shall constitute a waiver of any of the terms of this
Agreement or of any such right.
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8.3 This Agreement shall be construed in accordance with the law of the
State of Michigan.
8.4 All covenants, agreements, representations and warranties made
in connection with this Agreement and any document contemplated hereby shall
survive the borrowing hereunder and shall be deemed to have been relied upon by
Standard Federal. All statements contained in any certificate or other
document delivered to Standard Federal at any time by or on behalf of the
Borrower pursuant hereto shall constitute representations and warranties by the
Borrower.
8.5 The Borrower agrees that it will pay all costs and expenses
incurred by Standard Federal in enforcing Standard Federal's rights under this
Agreement and the documents contemplated hereby, including without limitation
any and all reasonable fees and disbursements of legal counsel to Standard
Federal.
8.6 This Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns; provided, however, that the Borrower
shall not assign or transfer its rights or obligations hereunder without the
prior written consent of Standard Federal.
8.7 If any provision of this Agreement shall be held or deemed to
be or shall, in fact, be inoperative or unenforceable as applied in any
particular case in any or all jurisdictions, or in all cases because it
conflicts with any other provision or provisions hereof or any constitution or
statute or rule of public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative, or unenforceable
to any extent whatever. The invalidity of any one or more phrases, sentences,
clauses or sections contained in this Agreement, shall not affect the remaining
portions of this Agreement, or any part thereof.
SECTION 9. ADDITIONAL PROVISION
9.1 In addition to the terms, covenants and conditions set forth
above, Borrower has caused the Guarantor to execute and deliver to Standard
Federal the Guaranty, which is an unlimited and continuing guaranty of payment
of the obligations of Borrower under the Line of Credit and the Term Loan.
Guarantor acknowledges and agrees that the Guaranty supports all obligations
and liabilities of the Borrower to Standard Federal as herein described.
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IN WITNESS WHEREOF, the Borrower and Standard Federal have caused this
Line of Credit Loan Agreement to be executed as of the day and year first
written above.
Witnesses: BORROWER:
GALION HOLDING COMPANY, a Michigan
corporation
By:
--------------------------- -------------------------------
E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President/Treasurer
Taxpayer Identification Number:
▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ E-Z PACK, INC., a Michigan
corporation
By:
--------------------------- -------------------------------
E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer
Taxpayer Identification Number:
----------------------------------
GALION DUMP BODIES, INC., a Michigan
corporation
By:
--------------------------- -------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer
Taxpayer Identification Number:
----------------------------------
24
25
▇▇▇▇▇▇▇ GROUP SALES OF FLORIDA,
INC., a Florida corporation
By:
--------------------------- -------------------------------
E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer
Taxpayer Identification Number:
▇▇-▇▇▇▇▇▇▇
GUARANTOR:
▇▇▇▇▇▇▇ INDUSTRIES, INC., a Michigan
corporation
By:
--------------------------- -------------------------------
E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Treasurer
-----------------------
▇▇-▇▇▇▇▇▇▇
Taxpayer Identification Number
STANDARD FEDERAL:
STANDARD FEDERAL BANK, a
federal savings bank
By:
----------------------------
Its:
------------------------
25
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Schedule 2.12
1. Final Report Phase I Environmental Assessment Peabody-Galion
Corporation, Winesburg, ▇▇▇▇▇▇ County, Ohio, prepared by
▇▇▇▇▇▇▇ & Wheler, Environmental Engineers and Scientists,
dated February, 1993, Project No. 2471.
2. Final Report Phase II Site Investigation, Galion Site,
Winesburg, Ohio, prepared by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Environmental
Engineers and Scientists, dated September, 1993, Project No.
2471.
3. Phase II Site Investigation Peabody-Galion Site, Galion, Ohio,
prepared by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Environmental Engineers and
Scientists, dated January, 1993, Project No. 2429.
26