EXHIBIT 10.78
COMMERCIAL INSTALLMENT NOTE (with Financial Covenants) Debtor Name: ▇▇▇▇▇▇ Plastics, Inc.
(Indiana version) Debtor #: 7108391722
---------------------------------------------------------------- Obligation #:
Amount City, State Date Office: Elkhart Central 60-576
$862,468.72 Elkhart, IN March 15, 2000
FOR VALUE RECEIVED, the undersigned ("Debtor") promises to pay to the order of
NATIONAL CITY BANK of Indiana ("Bank"), which has its principal place of
business in Elkhart, Indiana, at any office of Bank, Eight Hundred Sixty-Two
Thousand Four Hundred Sixty-Eight and 72/100 DOLLARS in lawful money of the
United States together with interest, in 60 consecutive monthly installments,
commencing the 15th day of April, 2000. Each installment shall consist of
(XX) principal in the amount of Seven Thousand One Hundred Eighty-Two and
24/100 dollars ($7,182.24) plus the unpaid interest accrued on this
note, except that the final installment shall be in such amount as will
pay all of the unpaid principal of and unpaid interest accrued on this
note in full. Prior to maturity, principal and any overdue interest
shall bear interest computed daily (on the basis of a 360-day year and
actual days elapsed) at a rate which shall be
(XX) a fluctuating rate which is (SEE ATTACHED ADDENDUM). Debtor may prepay
the principal of this note in whole or in part at any time without
premium or penalty.
Concurrently with each prepayment of the principal of this note, Debtor shall
pay the unpaid interest accrued on the principal being prepaid, and each
prepayment shall be applied to the outstanding installments of this note in the
inverse order of their respective due dates.
Debtor authorizes Bank to share all credit and financial information relating to
Debtor with Bank's parent company, and with any subsidiary or affiliate company
of Bank or of Bank's parent company.
If Debtor fails to pay an installment in full within ten (10) days after its due
date, Debtor, in each case, will incur and shall pay a late charge equal to the
greater of twenty dollars ($20.00) or five percent (5%) of the unpaid amount.
The payment of late charge will not cure or constitute a waiver of any Event of
Default under this note.
Except as otherwise provided in writing, payments will be applied first to
installments in the order of their respective due dates and then to late charges
in the order of their respective due dates; provided, however, that if a payment
so applied would pay the principal of this note in full, but leave late charges
outstanding, such payment will inste3ad be applied to late charges prior to
being applied to the principal portion of the final installment. Each payment of
an installment shall be applied first to accrued but unpaid interest and then to
principal. In its discretion, Bank may, from time to time, unilaterally change
any provision for the application of payments and installments by giving a
written notice to Debtor of the change. The notice shall be mailed to the
address indicated herein or such other address that Debtor may furnish in
writing to an appropriate officer of Bank and shall be mailed not less than
fifteen (15) days prior to the effective date of such change.
If this note is not paid in full at maturity (whether by lapse of time,
acceleration of maturity or otherwise), the interest rate otherwise in effect
hereunder shall be increased by three percent (3%) per annum, provided that in
no event shall the principal of and interest on this note bear interest after
maturity at a rate less than the interest rate actually in effect hereunder
immediately after maturity.
In consideration of Bank's granting the loan evidenced by this note, ▇▇▇▇▇▇
further agrees with Bank as follows:
1. (WARRANTIES) Debtor represents and warrants to Bank as follows:
1.1 (ORGANIZATION) Debtor is a corporation organized and in good
standing under Delaware law having its chief executive office
at the address set forth opposite ▇▇▇▇▇▇'s signature below.
Debtor has only the following Subsidiaries, if any:
__________N/A__________. Debtor is duly qualified to transact
business in each state or other jurisdiction in which Debtor
owns or leases any real property or in which ▇▇▇▇▇▇'s counsel
reasonably believes such qualification is necessary.
1.2 (AUTHORITY) Debtor has requisite power and authority to enter
into this note. No registration with or approval of any
governmental agency of any kind is required on the part of
Debtor for the due execution and delivery or for the
enforceability of this note. Each officer executing and
delivering this note on behalf of ▇▇▇▇▇▇ has been duly
authorized to do so. Neither the execution and delivery of
this note by Debtor nor its performance and observance of the
respective provisions hereof will violate any existing
provision in its articles of incorporation, regulations or
by-laws or any applicable law or violate or otherwise
constitute a default under any contract or other obligation
now existing and binding upon it. Upon the execution and
delivery hereof, this note will become a valid and binding
obligation of Debtor.
1.3 (LITIGATION) No litigation or proceeding is pending against
Debtor before any court or any administrative agency which in
the opinion of ▇▇▇▇▇▇'s officers might, if successful, have a
material, adverse effect on Debtor.
1.4 (TAXES) Debtor has filed all federal, state and local tax
returns which are required to be filed by it and paid all
taxes due as shown thereon (except to the extent, if any,
permitted by subsection 2.2). Neither the Internal Revenue
Service nor any other federal, state or local taxing authority
has alleged any material default by Debtor in the payment of
any tax material in amount or threatened to make any
assessment in respect thereof which has not been reflected in
the financial statements referred to in subsection 1.7.
1.5 (ASSETS) Debtor has good and marketable title to all assets
reflected in its December 31, 1999, balance sheet except for
changes resulting from transactions in the ordinary course of
business. All such assets are clear of any mortgage, security
interest or other lien of any kind other than any permitted by
subsection 4.3.
1.6 (COMPLIANCE WITH LAW) Debtor's operations are in full
compliance with all material requirements imposed by law,
whether federal or state, including, without limitation, the
Occupational Safety and Health act, federal and state
environmental protection laws and zoning ordinances.
1.7 (FINANCIAL STATEMENTS) All financial statements and credit
applications delivered by Debtor to Bank accurately reflect
Debtors financial condition and operations at the times and
for the periods therein stated.
2. (AFFIRMATIVE COVENANTS) ▇▇▇▇▇▇ agrees that so long as any Bank Debt
remains outstanding, Debtor shall perform and observe each of the
following: (SEE ATTACHED ADDENDUM)
2.1 (FINANCIAL STATEMENTS) Debtor will furnish each of the
following to Bank
(a) as soon as available and in any event within one hundred
twenty (120) days after the end of each of Debtor's fiscal
years, an annual report of Debtor for that year. If this box (
) is checked, then Debtor's annual report shall be ( ) audited
( ) reviewed ( ) compiled by a certified public accountant
selected by Debtor and reasonably acceptable to Bank.
(b) If this box (XX) is checked, then as soon as available and in
any event within sixty (60) days after the end of each of the
quarterly periods of each of Debtor's fiscal years,
(1) ▇▇▇▇▇▇'s balance sheet as at the end of the period
and its income statement and surplus reconciliation
for ▇▇▇▇▇▇'s current fiscal year to date certified by
an appropriate officer of Debtor to be true and
complete to the best of his knowledge and belief, and
(2) That officer's certification that he knows of no
Potential Event of Default that is then existing or
if any does, a brief description thereof and of
▇▇▇▇▇▇'s intentions in respect thereof,
(c) forthwith upon Bank's written request, such other information
in writing about ▇▇▇▇▇▇'s financial condition, properties and
operations as Bank may from time to time reasonably request.
All of ▇▇▇▇▇▇'s financial statements shall be prepared in accordance
with GAAP consistently applied except as disclosed therein and in form
and detail satisfactory to Bank.
2.2 (TAXES) Debtor will pay in full, prior in each case to the
date when penalties for the nonpayment thereof would attach,
all taxes, assessments and governmental charges and levies for
which it may be or become subject and all lawful claims which,
if unpaid, might become a lien or charge upon its property;
provided, that no item need be paid so long as and to the
extent that it is contested in good faith and by timely and
appropriate proceedings effective to stay the enforcement
thereof.
2.3 (RECORDKEEPING) Debtor will at all times keep true and
complete financial records in accordance with GAAP and,
without limiting the generality of the foregoing, make
appropriate accruals to reserves for estimated and contingent
losses and liabilities. Debtor will permit Bank at all
reasonable times to examine ▇▇▇▇▇▇'s properties and records
and to make copies of and extracts from such records at Bank's
expense.
2.4 (INSURANCE) Debtor will keep itself and all of its insurable
properties insured at all times to such extent, by such
insurers and against such hazards and liabilities as is
generally and prudently done by like businesses, and further
in accordance with the provisions of the Related Writings.
2.5 (EXISTENCE) Debtor will at all times maintain its existence,
rights and franchises.
2.6 (COMPLIANCE WITH LAW) Debtor will comply with all applicable
provisions of the Occupational Safety and Health Act, federal
and state environmental protection laws and every other law
(whether statutory, administrative, judicial or other and
whether federal, state or local) and every lawful governmental
order if non-compliance with such law or order would have a
material, adverse effect on Debtor's business or credit;
provided, that any alleged noncompliance shall not be an Event
of Default if and to the extent
(a) appropriate corrective measures are commenced within
thirty (30) days after the non-compliance becomes
apparent or is alleged, and thereafter and diligently
pursued to the satisfaction of or being corrected by
procedures satisfactory to the court, agency or other
governmental authority in question, or
(b) the alleged non-compliance is contested in good faith
by timely and appropriate proceedings effective to
stay the enforcement thereof.
2.7 (MAINTENANCE) Debtor will maintain all of its fixed assets in
good working order and condition, ordinary wear and tear
excepted.
2.8 (NOTICES) Debtor will cause its chief financial officer, or in
his absence another officer designated by him, to give Bank
prompt written notice whenever (a) Debtor receives notice from
any ERISA regulator that a default under ERISA exists, (b)
Debtor receives notice from any court, agency or other
governmental authority of any alleged non-compliance with any
law or order of the kind referred to in subsection 2.6, (c)
the Internal Revenue Service or any other federal, state or
local taxing authority shall allege any material default by
Debtor in the payment of any tax material in amount or shall
threaten or make any assessment in respect thereof, (d) any
litigation or proceeding shall be brought against Debtor
before any court or administrative agency which, if
successful, might have a material, adverse effect on Debtor,
(e) there shall be filed any application for a determination
of the qualified status of any employee benefit plan, or (f)
he reasonably believes that any Potential Event of Default has
occurred or that any other representation or warranty made in
section 1 shall for any reason have ceased in any material
respect to be true and complete.
2.9 (BUSINESS PURPOSE) All funds disbursed under this note will be
used for business or commercial purposes.
3. (FINANCIAL COVENANTS) Debtor will comply with the following financial
covenants with Bank as follows (applicable subsections must be
initialed by Debtor): (SEE ATTACHED ADDENDUM)
4. (NEGATIVE COVENANTS) Debtor further covenants with Bank as follows:
4.1 (MERGERS) Debtor will not
(a) be a party of any merger or consolidation,
(b) purchase or otherwise acquire the business or all or
substantially all of the assets of another
corporation or business, or
(c) lease as lessor, sell, sell-leaseback or otherwise
transfer (whether in one transaction or a series of
transactions) all or any substantial part of its
fixed assets (other than chattels that shall have
become obsolete or no longer useful in its present
business).
4.2 (BORROWINGS) Debtor will not create, assume or have
outstanding at any time any Debt; provided, that this
subsection shall not apply to any Bank Debt or any
Subordinated Debt or any existing or future Debt secured by a
purchase money security interest permitted by subsection 4.3
or incurred under a lease permitted by subsection 4.3 or any
existing Debt fully disclosed in Debtor's most recent
financial statements, and any renewal or extension thereof in
whole or in part.
4.3 (LIENS: LEASES) Debtor will not (a) acquire or hold any
property subject to any land contract, inventory consignment,
lease or other title retention contract, (b) sell or otherwise
transfer any Receivables, whether with or without recourse, or
(c) suffer or permit any property now owned or hereafter
acquired by it to be or become encumbered by any mortgage,
security interest, lien or financing statement; provided, that
this subsection shall not apply to (i) any lien for a tax,
assessment or government charge or levy, (ii) any lien
securing only workers' compensation, unemployment insurance or
similar obligations, (iii) any mechanic's, carrier's,
landlord's or similar common law or statutory lien incurred in
the normal course of business, (iv) zoning or deed
restrictions, public utility easements, minor title
irregularities and similar matters having no adverse effect as
a practical matter on the ownership or use of any of the
property in question, (v) any lien securing or given in lieu
of surety, stay, appeal or performance bonds, or securing
performance of contracts or bids (other than contracts for the
payment of money borrowed), or deposits required by law or
governmental regulations or by any court order, decree,
judgment or rule or as a condition to the transaction of
business or the exercise of any right, privilege or license,
(vi) any existing lien fully disclosed in Debtor's most recent
financial statements delivered to Bank, *(vii) any mortgage,
security interest or other lien which is created or assumed in
purchasing, constructing or improving any real property or to
which any real property is subject when purchased; provided,
that (A) the mortgage, security interest or other lien is
confined to the property in question and (B) the Debt secured
thereby does not exceed the total cost of the purchase,
construction or improvement, (viii) any lease as lessee, (ix)
any transfer of a check or other medium of payment for deposit
or collection, or any similar transaction in the normal course
of business, or (x) any financing statement perfecting a
security interest that would be permissible under this
subsection.
5. (DEFAULT; REMEDIES) The occurrence of any of the following shall
constitute an Event of Default hereunder: (a) Debtor's Bank Debt or any
part thereof shall not be paid in full promptly when due (whether by
lapse of time, acceleration of maturity or otherwise); (b) any Obligor
shall die or be dissolved; (c) any representation or warranty by any
Obligor in this note or any Related Writing shall be false or erroneous
in any material respect; (d) any Obligor shall fail or omit to perform
or observe any agreement made by that Obligor in this note or in any
Related Writing; (e) a judgment shall be entered against any Obligor in
any court of record; (f) any deposit account of any Obligor is attached
or levied upon; (g) any voluntary petition by or involuntary petition
against any Obligor shall be filed pursuant to any chapter of any
bankruptcy code or any Obligor shall make an assignment for the benefit
of creditors, or there shall be any other marshalling of the assets and
liabilities of any Obligor for the benefit of the Obligor's creditors;
or (h) any Obligor's Bank Debt or any part thereof shall not be paid in
full immediately when due (whether due by lapse of time, or
acceleration or otherwise). Upon the occurrence of an Event of Default,
the holder of this note may, in its sole discretion, declare this note
to be due and payable, and the principal of and interest on this note
shall thereupon become immediately payable in full, without any
presentment, demand, or notice of any kind, which Debtor hereby waives.
Debtor will pay to Bank all costs and expenses of collection of this
note, including, without limitation, attorneys' fees.
6. (DEFINITIONS) In addition to the words and terms elsewhere defined in
this note, any accounting term used in this note shall have the meaning
ascribed thereto by GAAP, and the following words and terms shall have
the following meanings:
Account Officer means that officer who at the time in question is
designated by Bank as the officer having primary responsibility
for giving consideration to ▇▇▇▇▇▇'s requests for credit or, in
that officer's absence, that officer's immediate superior or any
other officer who reports directly to that superior officer;
Bank Debt means Debt payable to Bank, whether initially payable
to Bank or acquired by Bank by purchase, pledge or otherwise and
whether assigned or participated to or from Bank in whole or in
part;
Business Day means a day on which Bank's main office is open to
the public for carrying on substantially all of its banking
functions, but shall not include Saturdays, Sundays or legal
holidays;
Debt means, collectively, all monetary liabilities, and any
charges and expenses incurred in connection therewith, now or
hereafter owing by the Person or Persons in question, including,
without limitation, every such liability whether owing by such
Person or one (1) of such Persons alone or jointly, severally or
jointly and severally, whether created by loan, overdraft,
guaranty or other contract or by quasi-contract, tort, statute or
other operation of law;
ERISA means the Employee Retirement Income Security Act of 1974,
as amended from time to time;
ERISA Regulator means any governmental agency having any
regulatory authority over any of Debtor's pension plans,
including, without limitation, the Department of Labor, the
Internal Revenue Service and the Pension Benefit Guaranty
Corporation;
GAAP refers to generally accepted accounting principles, applied
on a basis consistent with Debtor's accounting procedures in
effect on the date hereof;
Obligor means any Person who is or shall become obligated or
whose property is or shall serve as collateral for the payment of
Debtor's Bank Debt or any part thereof in any manner, and in
addition to Debtor, includes, without limitation, any maker,
endorser, guarantor, subordinating creditor, assignor, pledgor,
mortgagor or hypothecator of property;
Person means a natural person or entity of any kind, including,
without limitation, any corporation, partnership, trust,
governmental body, or any other form or kind of entity;
Potential Event of Default means an event which constitutes, or
which with the lapse of time or the giving of notice or both
would constitute an Event of Default;
Prime Rate means the fluctuating rate of interest which is
publicly announced from time to time by Bank at its principal
place of business as being its "prime rate" or "base rate"
thereafter in effect, with each change in the Prime Rate
automatically, immediately and without notice changing the
fluctuating interest rate thereafter applicable hereunder, it
being agreed that the Prime Rate is not necessarily the lowest
rate of interest then available from Bank on fluctuating rate
loans;
Receivable means a claim for money due or to become due to
Debtor, whether classified as an account, instrument, chattel
paper, general intangible, incorporeal hereditament or otherwise,
and all proceeds of the foregoing;
Reinvestment Rate means a rate of interest equal to the "bond
equivalent yield" for the most actively traded issues of U. S.
Treasury Bills, U. S. Treasury Notes or U. S. Treasury Bonds for
a term similar to the period from the date of prepayment to the
due date of the final installment of this note and in a principal
amount comparable to the principal amount being prepaid, all as
reasonably determined by Bank;
Related Writing means a writing of any form or substance signed
by any Obligor (whether as principal or agent) or by any
attorney, accountant or other representative of any Obligor and
received by Bank in respect of Debtor's Bank Debt or any part
thereof, including, without limitation, any credit application,
credit agreement, reimbursement agreement, financial statement,
promissory note, guaranty, indenture, mortgage, security
agreement, authorization, subordination agreement, certificate,
opinion or any similar writing, but shall not include any
commitment letter issued by Bank, without regard to whether
Debtor or any other Person signed or acknowledged receipt
thereof;
Subordinated Debt means any Debt the payment of which has been
subordinated to the payment in full of Bank Debt, whether by its
terms or by separate written instrument, in either case in form
and substance satisfactory to Bank;
Subsidiary means a Person, other than a natural person, of which
a majority of the outstanding capital stock (or other form of
ownership) or a majority of the voting power in any election of
directors is (or upon the exercise of any outstanding warrants,
options or other rights would be) owned directly, or indirectly
through one or more Subsidiaries, by another Person, other than a
natural person; and
Tangible Net Worth means net worth less intangible assets,
including, without limitation, patents, trademarks, goodwill and
treasury stock.
7. (SHARING INFORMATION) Debtor authorizes Bank to share all credit and
financial information relating to Debtor with Bank's parent company,
and with any subsidiary or affiliate company of Bank or of Bank's
parent company.
8. (NOTICES) Except as otherwise provided in this note, a notice to or
request of Debtor shall be deemed to have been given or made hereunder
when a writing to that effect shall have been delivered to an officer
of Debtor or five (5) days after a writing to that effect shall have
been deposited in the United States mail and sent, with postage
prepaid, by registered or certified mail, to Debtor at the address of
Debtor's chief executive office (or to such other address as Debtor may
hereafter furnish to Bank in writing for that purpose), irrespective of
whether the writing is actually received by ▇▇▇▇▇▇. No other method of
giving actual notice to or making a request of Debtor is hereby
precluded. Every notice required to be given to Bank pursuant to this
note shall be delivered to an Account Officer.
9. (INTERPRETATION) Any holder's delay or omission in the exercise of any
right under this note shall not operate as a waiver of that right or of
any other right under this note. Bank may from time to time in its
discretion grant Debtor waivers and consents in respect of this note or
any Related Writing, but no such waiver or consent shall bind Bank
unless specifically granted by Bank in writing, which writing shall be
strictly construed. Each right, power or privilege specified or
referred to in this note or any Related Writing is in addition to and
not in limitation of any other rights, powers and privileges that Bank
may otherwise have or acquire by operation of law, by other contract or
otherwise. The provisions of this note and the Related Writings shall
bind and benefit ▇▇▇▇▇▇ and Bank and their respective successors and
assigns, including each subsequent holder, if any, of this note. If
more than one person or entity has signed this note then the term
"Debtor" means each of them, they are jointly and severally liable on
this note and on the warrant of attorney below and each shall be the
agent of the others for all purposes relating to this note. If any
provision of this note is determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable, that
determination shall not affect any other provision of this note, and
each such other provision shall be construed and enforced as if the
invalid, illegal or unenforceable provision were not contained herein.
The captions to the various sections and subsections of this note are
for convenience of reference only and shall be disregarded in the
interpretation of this note. This note shall be governed by the law of
the State of Indiana.
10. (ENTIRE AGREEMENT) This note and the Related Writings set forth the
entire agreement between the parties regarding the transactions
contemplated hereby, and supercede all prior agreements, discussions,
representations and understandings, whether written or oral, and any
and all contemporaneous oral agreements, commitments, discussions,
representations and understandings between the parties relating to the
subject matter hereof.
11. (AMENDMENTS) No amendment, modification or supplement to this note or
any Related Writing shall be binding unless executed in writing by all
parties thereto, and this provision shall not be subject to waiver by
any party and shall be strictly enforced.
12. (WAIVER OF JURY TRIAL) IN ORDER TO AVOID DELAYS AND MINIMIZE EXPENSE,
BANK, BY ITS ACCEPTANCE OF THIS NOTE, AND DEBTOR EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY IN
RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY RELATED WRITING OR ANY
AMENDMENT THERETO, WHETHER NOW EXISTING OR HEREINAFTER ARISING AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND A COPY OF THIS NOTE OR
OF THIS PROVISION OF THIS NOTE MAY BE FILED WITH ANY COURT AS EVIDENCE
OF THE CONSENT OF EACH OF THE PARTIES HERETO TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.
------------------------------ ---------------------------------
Debtor
ELKHART, INDIANA 46516 By:
-------------------------------------- ------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇,
Executive Vice President
Address:
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Debtor
By:
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$862,468.72 COMMERCIAL INSTALLMENT NOTE
"Addendum"
(INTEREST RATE)
-------------
▇▇▇▇▇▇▇▇'s option of the following:
A) a fluctuating rate which is fifty one-hundredth's percent (0.50%) per
annum below Prime Rate.
B) a fluctuating rate which is one and seventy five one-hundredth's
percent (1.75%) above the applicable 30, 60 or 90 day LIBOR contract
period exercised.
SECTION 2. (AFFIRMATIVE COVENANTS)
2.1 (FINANCIAL STATEMENTS)
Guarantor (Atlantis Plastics, Inc.) will furnish to Bank within one hundred
twenty (120) days after each fiscal year an Annual report of the Guarantor.
SECTION 3. (FINANCIAL COVENANTS)
3.4 (PRETAX INTEREST COVERAGE) Guarantor (Atlantis Plastics, Inc.) will
not, during any fiscal year of Guarantor commencing with the present
fiscal year), suffer or permit the ratio of (a) the aggregate of its
net income for that year plus its interest expense for that year plus
its federal, state and local income taxes for that year plus
depreciation expense for that year plus amortization expense for that
year (EBITDA) to (b) its net interest expense (excluding amortization
of loan fees) for that year, to be less than 2.0:1.
Initial: _________