LOAN AGREEMENT
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THIS LOAN AGREEMENT is entered into as of this ______ day of
_________, 2000, among The Ohio Art Company, an Ohio corporation ("Ohio Art"),
Strydel, Inc., an Ohio corporation ("Strydel") (Ohio Art and Strydel shall be
referred to herein individually as a "Borrower" and collectively as
"Borrowers"), and Fifth Third Bank, Northwestern Ohio, N.A., a national banking
association ("Bank").
ARTICLE I. DEFINITIONS.
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For purposes of this Agreement, the following capitalized
terms shall have the following meanings:
1.1 Agreement shall mean this Loan Agreement as originally
executed and as the same may from time to time be amended or supplemented.
1.2 Business Day shall mean a day when commercial banks are
open for business in Toledo, Ohio.
1.3 CIT shall mean The CIT Group/Business Credit, Inc., its
successors and assigns.
1.4 Closing Date shall mean the date of the making of the
Loan.
1.5 Collateral shall mean all real and personal property of
Borrowers, including, but not limited to:
(a) Each Borrower's entire inventory of goods held for sale or
lease or furnished or to be furnished under contracts of service, whether now
owned or hereafter acquired, together with all attachments, accessories,
additions and parts used or intended to be used therewith, whether now or
hereafter attached, installed, added or affixed to such inventory or stored,
with or without identification to specific inventory, as well as all
substitutions and replacements thereof (hereinafter called the "Inventory"), and
the proceeds (cash and non-cash) of all Inventory, including
accounts, chattel paper, returned or repossessed goods and the products of such
Inventory, and any mass resulting from the commingling thereof with other
property in whatever form the proceeds, products or mass may be.
(b) Each Borrower's entire inventory of parts, supplies,
accessories and accessory tools, whether now owned or hereafter acquired,
together with all attachments, additions and parts used, useful or intended to
be used therewith, and all substitutions and replacements thereof, and the
proceeds (cash and non-cash) of all such inventory, including accounts, chattel
paper, returned or repossessed goods and the products of such inventory and any
mass resulting from the commingling thereof with other property in whatever form
the proceeds, products or mass may be.
(c) All of each Borrower's accounts receivable and rights to
the payment of money however evidenced or arising, extending to each existing
and future account, chattel paper, contract right, general intangible,
instrument and document, as those terms are defined by the Uniform Commercial
Code, and all trademarks, copyrights, patents, licenses, inventions, choses in
action and goods giving rise to each Borrower's right to the payment of money,
including but not limited to such goods in which each Borrower has retained a
security interest or which have been reclaimed, returned or repossessed, all
documents of title and warehouse receipts, and all book entries, records and
files relating to the foregoing, and the proceeds (cash and non-cash) of all the
foregoing.
(d) All of each Borrower's equipment, whether now owned or
hereafter acquired, wherever located, including but not limited to machinery,
tools, accessory tools, motor vehicles, furniture and fixtures, together with
all accessions, parts, accessories, attachments and appurtenances thereto
appertaining, attached or installed or kept or used or intended to be used in
connection therewith and all substitutions or renewals thereof, and/or
improvements, replacements and additions thereto, and all proceeds (cash and
non-cash) of all the foregoing.
1.6 Collateral Documents shall mean the Security Agreements,
related financing statements and the Mortgages.
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1.7 Dollars and $ shall mean United States dollars or such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts in the United
States.
1.8 Guarantor shall mean Trinc Co., an Ohio corporation.
1.9 Guaranty shall mean the Unconditional Cognovit Guaranty of
Guarantor.
1.10 Intercreditor Agreement shall mean the agreement to be
executed by Bank and CIT described in Section 4.1(k) hereof.
1.11 Loan shall mean the Term Loan described in Article II
hereof.
1.12 Note shall mean the Term Note described in Article II
hereof.
1.13 Mortgages shall have the meaning described in
Section 4.1(e) hereof.
1.14 Permitted Liens shall mean the following:
(a) Liens for taxes, assessments, or governmental
charges or levies the payment of which is not at
the time required by law;
(b) Liens imposed by law, such as liens of carriers,
warehousemen, mechanics, and materialmen arising in
the ordinary course of business for sums not yet
due or being contested by appropriate proceedings
promptly initiated and diligently conducted,
provided other appropriate provision, if any, as
shall be required by GAAP shall have been made
therefor;
(c) Liens incurred or deposits made in the ordinary
course of business in connection with workers'
compensation, unemployment insurance, and other types
of social security, or to secure the performance of
tenders, statutory obligations, and surety and appeal
bonds, or to secure the
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performance and return of money bonds and other
similar obligations, excluding obligations for the
payment of borrowed money;
(d) Purchase money security interests granted by
Borrower incidental to the ordinary conduct of
Borrower's business;
(e) Liens incurred in connection with loans by CIT as
described in the Intercreditor Agreement; and
(f) Liens evidenced by the Mortgages and Security
Agreements, as well as any other liens in favor of
Bank or any affiliate of Bank.
1.15 Prime Rate shall mean the variable prime lending rate of
the Bank in effect from time to time, changing as and when said Prime Rate
changes.
1.16 Security Agreements shall mean the security agreements
described in Section 4.1(b).
1.17 Subsidiary shall mean any corporation at least the
majority of whose securities having ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) are at the time owned by Ohio Art and/or one or more
of its Subsidiaries.
Each accounting term not defined herein and each accounting
term partly defined herein to the extent not defined shall have the meaning
given to it under generally accepted accounting principles, as in effect on the
date of this Agreement.
ARTICLE II. LOAN.
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2.1 The Term Loan and Term Note. Subject to the terms and
conditions of this Agreement, Bank agrees to make a loan in the amount of Five
Million Two Hundred Thousand Dollars ($5,200,000.00) (the "Term Loan") to
Borrower for a term of seven (7) years. The Term Loan shall be secured by the
Collateral Documents and evidenced by an Amended and Restated Promissory Note in
substance and form acceptable to Bank (the "Term Note").
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2.1.1 Interest on Loan. The Term Loan shall bear interest from
the date thereof at an initial floating rate equal to the Prime Rate plus two
percent (2%) for the first year of the Term Loan, which rate shall increase by
one-half percent (1/2%) on each anniversary date of the Term Note until the Term
Note is paid in full.
2.1.2 Payment of Loan. The Term Loan shall be paid in
eighty-four (84) consecutive monthly principal and interest installments of
Ninety-one Thousand Five Hundred and No/100 Dollars ($91,500.00) each, on the
1st day of each month commencing May 1, 2000, through April 1, 2007, the due
date of the Term Note, at which time all principal and interest owing thereunder
shall be paid in full. All interest shall be computed on the basis of a year of
three hundred sixty (360) days, notwithstanding actual days elapsed. Any payment
which falls on a non-Business Day shall be rescheduled to the next succeeding
Business Day and interest shall continue to accrue to such rescheduled Business
Day.
2.1.3 Late Charge. Any Term Note payment which is more than
ten (10) days overdue will be assessed a late charge equal to five percent (5%)
of the overdue payment.
2.1.4 Default Rate of Interest. If the Term Note is not paid
in full at maturity (whether by acceleration or otherwise) or if any installment
of the Term Note is not paid when due, or in the event any other default under
Article VI hereof occurs and is continuing under this Agreement, the Note or any
of the Collateral Documents, Bank shall have the right, without notice, to
increase the annual rate of interest on the entire unpaid principal balance of
the Term Note to six percent (6%) above the interest rate then in effect
hereunder until the entire amount of principal and/or interest then due has been
paid in full or the default is cured.
2.1.5 Amendment and Restatement. The Term Loan represents the
terming out of the balance of the revolving loan from Bank to Ohio Art evidenced
by a promissory revolving note in the principal amount of $18,000,000.00 dated
as of May 20, 1998 and amended as of February 2, 1999. This Agreement represents
an amendment and restatement of the existing Loan Agreement and related
documents among Borrowers and Bank. None of the funds evidenced by the Term Note
constitute a new loan.
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ARTICLE III. REPRESENTATIONS AND WARRANTIES OF
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BORROWERS.
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In order to induce Bank to enter into this Agreement, each of
Borrowers, on its own behalf, makes the following representations and warranties
which shall survive the execution and delivery of this Agreement and the Note
and the making of the Loans but which, unless otherwise indicated, shall be
deemed to be made as of the Closing Date;
3.1 Due Organization. Borrower is a duly organized and validly
existing corporation in good standing under the laws of Ohio and is duly
qualified to conduct business as a foreign corporation in all jurisdictions
where the failure to do so would have a material adverse effect on its business.
3.2 Requisite Power. Borrower has all requisite corporate
power and all governmental licenses, authorizations, consents and approvals
necessary to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, except for licenses, authorizations
and approvals the absence of which could not reasonably be expected to have a
material adverse effect on its business. Borrower has all requisite corporate
power to borrow the sums provided for in this Agreement, and to execute and
deliver this Agreement, the Note and the Collateral Documents. The execution,
delivery and performance of this Agreement, the Note and the Collateral
Documents have been duly authorized by Borrower's Board of Directors and do not
require any consent or approval of the stockholders of Borrower.
3.3 Binding Agreement. This Agreement has been duly executed
and delivered by Borrower and constitutes, and the Note and the Collateral
Documents when executed and delivered by Borrower will constitute, legal, valid
and binding obligations of Borrower, enforceable against it in accordance with
their terms, except (i) as the enforceability thereof may be affected by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and (ii) the availability of certain equitable remedies may be
limited by certain equitable principles of general applicability.
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3.4 Other Agreements. The execution, delivery and performance
of this Agreement, the Note and the Collateral Documents will not violate any
provision of law or regulation (including, without limitation, regulations of
the Federal Reserve Board), or any order of any governmental authority, court,
arbitration board or tribunal or the Articles of Incorporation, By- Laws or Code
of Regulations of Borrower, or result in the breach of, constitute a default
under, contravene any provisions of, or result in the creation of any security
interest, lien, charge or encumbrance upon any of the property or assets of
Borrower pursuant to any indenture or agreement to which Borrower or any of its
properties is bound, except for security interests and liens in favor of Bank as
provided herein.
3.5 Litigation. There is no litigation, investigation or
proceeding in any court or before any arbitrator or regulatory commission,
board, administrative agency or other governmental authority pending, or, to the
knowledge of Borrower, threatened against or affecting Borrower or any of its
properties, which (i) could reasonably be expected to materially adversely
affect the performance by Borrower of this Agreement, the Note or the Collateral
Documents or any of the transactions contemplated hereby or thereby, or (ii) if
adversely determined would have a material adverse effect on the business,
operations or condition, financial or otherwise, of Borrower. Schedule 3.5 is a
list of all pending litigation against each of the Borrowers.
3.6 Consents. No consent, license, permit, approval or
authorization of, exemption by, notice to report to, or registration, filing or
declaration with, any governmental authority or agency is required in connection
with the execution, delivery and performance by Borrower of this Agreement, the
Note or the Collateral Documents, or the transactions contemplated hereby or
thereby (except for mortgage recordings or UCC filings).
3.7 Financials. The consolidated unaudited financial
statements of Ohio Art as of January 31, 2000, and the related statements of
income, retained earnings and changes in financial position for the three fiscal
quarters ended on such date, copies of which have been heretofore delivered to
Bank, have been represented by Ohio Art to be true, complete and correct and
fairly
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present the financial condition of Ohio Art and its subsidiaries as of such
dates and the results of its operations for the periods then ended. All of the
aforementioned financial statements have been prepared in accordance with
generally accepted accounting principles (subject to customary year-end
adjustments and the absence of notes). There has been no material adverse change
in the business, operations or condition, financial or otherwise, of Ohio Art,
since January 31, 2000. Ohio Art and its subsidiaries do not have any material
liabilities, direct or contingent, except as disclosed in the aforementioned
financial statements, the loans and other financial accommodations from CIT to
Borrower or otherwise disclosed in writing to Bank.
3.8 Tax Returns. All tax returns required to be filed by
Borrower in any jurisdiction have been filed or permitted extensions have been
requested therefor; all taxes, assessments, fees and other governmental charges
upon Borrower, or upon any of its respective properties, incomes or franchises,
which are due and payable have been paid, or adequate reserve has been provided
for payment thereof.
3.9 Title and Lien. Except as otherwise disclosed in writing
to Bank, the Permitted Liens, and except for the encum brances created under the
Collateral Documents and the security interests of CIT described in Section
1.14(e) herein, all of the property and assets of Borrower are free from all
liens, charges, security interests and encumbrances in the nature of a lien or
security interest whatsoever; and, except as aforesaid, Borrower has a good and
marketable title to all such property and assets. As of the Closing Date, the
UCC financing statements and mortgages necessary to establish liens and security
interests required to be created under this Agreement and the Collateral
Documents will have been delivered to Bank.
3.10 Other Information. Borrower has previously furnished Bank
certain information, including estimates and projections of Borrower's results
of operations and financial position for and as at the end of certain future
periods. All such projections and estimates have been prepared and made in good
faith based on currently available information. There are no statements or
conclusions therein which are based upon or include misleading information or
fail to take into account material information regarding the matters covered
therein. Borrower has no
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reason to believe, as of the date hereof, that any of the statements or
conclusions included therein is not true and correct in all material respects.
3.11 Partnerships and Joint Ventures. Borrower is not a
general partner or a limited partner in any general or limited partnership or a
joint venturer in any joint venture. Ohio Art has no Subsidiaries except Strydel
and Guarantor. Strydel has no Subsidiaries.
3.12 Existing Defaults. Except in connection with prior loans
by Bank, Borrower is not in default under any term of any material mortgage,
indenture, deed of trust or any other agreement to which it is a party or by
which it or any of its properties may be bound except for agreements (i) the
breach of which could not reasonably be expected to have a material adverse
effect on Borrower's business and (ii) being contested in good faith for which
the Borrower is maintaining adequate reserves in accordance with generally
accepted accounting principles ("GAAP"). Borrower is not in material violation
of any law, ordinance, rule or regu lation to which it or any of its properties
is subject the violation of which could reasonably be expected to have a
material adverse effect on Borrower's business.
3.13 Fire and Explosion. Neither the business nor the material
properties nor the operations of Borrower are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), materially and adversely affecting such
business or properties or operations.
ARTICLE IV. CONDITIONS PRECEDENT.
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4.1 Conditions of Funding. The obligation of Bank to make the
Loan is subject to the fulfillment to Bank's satisfaction of each of the
following conditions on the Closing Date:
(a) Bank shall have received the Note, duly executed
and delivered by Borrowers;
(b) Bank shall have received Borrowers' executed
Security Agreements granting Bank a second security
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interest in all tangible and intangible assets of
Ohio Art and Strydel (second only to CIT) as
security for the Loan;
(c) Bank shall have received and shall have approved
certified copies of Requests for Information (Form
UCC-11) from the appropriate governmental entities
listing all effective financing statements which
name either of Borrowers as debtor and which are
filed in all relevant jurisdictions, together with
copies of all such other financing statements (none
of which shall cover the Collateral purported to be
covered by the Security Agreement), and judgment
and lien searches on Borrowers satisfactory to
Bank;
(d) Bank shall have received executed copies of proper
financing statements in form and substance
satisfactory to Bank, to be filed under the Uniform
Commercial Code in all jurisdictions as may be
necessary, or in Bank's opinion, desirable to
perfect Bank's security interests created under the
Security Agreements, and all filings, recordings
and other actions that are necessary or advisable,
in the opinion of Bank, in order to establish,
protect, preserve and perfect Bank's security
interests and liens as legal, valid and enforceable
second security interests and liens in the
Collateral, and Bank shall have received evidence
thereof in form and substance satisfactory to it;
(e) Bank shall have received executed first mortgages
(the "Mortgages") on all of the real property owned
by Ohio Art in Bryan, Ohio and all of the real
property owned by Strydel in Stryker, Ohio
(collectively the "Real Property") from Borrowers in
recordable form and a mortgagee's title insurance
policy on the Real Property from a title company
reasonably acceptable to Bank which shall insure
Bank's first mortgage position on the Real Property
for the full amount of the Loan as to all of the Real
Property located in Bryan, Ohio, and in the amount of
$2,500,000.00 as to all of the Real
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Property in Stryker, Ohio. The mortgage on the Bryan,
Ohio real property shall be an amendment and
restatement of the existing mortgage dated May 19,
1998 executed by The Ohio Art Company in favor of
Bank on certain real property in Bryan, ▇▇▇▇▇▇▇▇
County, Ohio and recorded at Book 412, Page 122 of
the ▇▇▇▇▇▇▇▇ County, Ohio Mortgage Records;
(f) Bank shall have received confirmation of the good
standing of Borrowers from the State of Ohio;
(g) Bank shall have received a certified borrowing
resolution in a form reasonably satisfactory to
Bank executed by an authorized officer of each
Borrower;
(h) Bank shall have received a copy of Borrower's fire
and extended coverage insurance policy with an
endorsement covering all of the Collateral and the
Real Property and naming Bank as loss payee;
(i) the representations and warranties of Borrowers set
forth in Article III hereof and of Borrowers in the
Security Agreements and the Mortgages shall be true
and correct on the Closing Date, with the same effect
as though such representations and warranties had
been made on and as of such date;
(j) the Collateral Documents shall be effective to create
in favor of Bank a legal, valid and enforceable first
or second security interest in the Collateral and
Real Property covered thereby, as appropriate, as
described above, and except for Permitted Liens;
(k) Bank shall have received an acceptable Intercreditor
Agreement executed by CIT describing the respective
rights of Bank and CIT in the Collateral and the Real
Property;
(l) Bank shall have received the Guarantor's executed
unlimited cognovit guaranty of Borrowers'
obligations under the Loan;
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(m) Borrowers shall have paid Bank a Loan Continuation
Fee in the amount of Seventy-five Thousand Dollars
($75,000.00); and
(n) all other documents and legal matters in connection
with the transactions contemplated by this Agreement,
the Note and the Collateral Documents shall be in
reasonably satisfactory form and substance to Bank.
ARTICLE V. AFFIRMATIVE COVENANTS.
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Each of Borrowers, on its own behalf, covenants that until the
payment in full of the Loan and fulfillment of all of their obligations
hereunder, such Borrower shall comply with the following covenants:
5.1 Accounting Records. Borrower shall maintain adequate books
and accounts in accordance with generally accepted accounting principles
consistently applied, and permit any representative of Bank, at any reasonable
time and with reasonable notice (if no default under Article VI then exists), to
inspect, audit and examine such books and inspect any of its properties and
shall furnish Bank with all information regarding the business and its finances
as soon as reasonably practicable upon Bank's reasonable request.
5.2 Financial Statements. Borrower will furnish Bank or cause
to be furnished to Bank:
(a) monthly internal financial and operating statements
of Borrower, in reasonable detail, subject to year-
end review adjustments and certified by Borrower's
President or principal financial officer to have been
prepared in accordance with generally accepted
accounting principles consistently applied. Such
statements shall be provided to Bank within thirty
(30) days of the end of the applicable month,
beginning with the first full calendar month ending
after closing;
(b) within one hundred twenty (120) days after the close
of the fiscal year of Ohio Art, a copy of the
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annual reviewed consolidated financial statements of
Ohio Art certified by the President or principal
financial officer of Ohio Art to fairly present the
consolidated financial condition of Ohio Art and to
have been prepared in accordance with generally
accepted accounting principles consistently applied;
(c) prompt written notice of any condition or event which
has resulted or might reasonably be expected to
result in (i) a material adverse change in Borrower's
condition (financial or otherwise) or operations, or
(ii) a material breach of or noncompliance with any
term, condition or covenant of any material contract,
agreement or loan to which Borrower is a party or by
which it or its property may be bound which could
reasonably be expected to have a material adverse
effect on Borrower's business;
(d) prompt written notice of any claims, proceedings or
disputes (whether or not purportedly on behalf of
Borrower) against, or to the knowledge of Borrower
threatened, or affecting, Borrower which, if
adversely determined, would have a material adverse
effect on the business, properties or condition
(financial or otherwise) of Borrower (without in any
way limiting the foregoing, it being understood that
claims, proceedings, or disputes involving monetary
amounts in excess of $10,000.00 not fully covered by
insurance shall be deemed to be material), or any
material labor controversy resulting in or
threatening to result in a strike against Borrower or
any proposal by any public authority to acquire any
of the material assets or business of Borrower.
5.3 Filings. Borrower shall from time to time record, register
and file all such notices, statements and other documents and take such other
steps, including, but not limited to, the amendment of the financing statements
prepared under the Security Agreements, as may be necessary or advisable to
render fully valid and enforceable under all applicable laws the rights, liens
and
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priorities of Bank with respect to all security from time to time furnished
under this Agreement, the Security Agreements or the Mortgages, or intended to
be so furnished, in each case in such form and at such times as shall be
satisfactory to Bank.
5.4 Tax Returns. Within thirty (30) days after the applicable
filing date, Borrower shall furnish Bank with copies of federal income tax
returns filed by Borrower.
5.5 Formation of Subsidiary; Reorganization. Borrower shall
not form any subsidiary to make investments in or to make a loan to any person
or entity except for (i) advances in the ordinary course of business to
officers, directors and employees for routine travel and similar expenses, which
in the aggregate do not exceed $50,000.00 at any time outstanding; (ii) loans to
officers and key employees of Borrower, so long as the aggregate outstanding
balance thereof does not exceed $75,000.00; and (iii) loans from Strydel to Ohio
Art in an aggregate principal amount which does not at any time exceed
$1,000,000.00. Borrower shall not change its name or participate in any merger,
consolidation or reorganization.
5.6 Encumbrance or Sale of Property. Except for Permitted
Liens, Borrower shall not sell, grant a security interest in or otherwise
encumber or transfer any portion of the Collateral or the Real Property.
5.7 Dividends. Borrower shall not pay any dividends to
shareholders without the prior written consent of Bank, except Borrower may
declare and pay dividends to the extent permitted under the loan documents
between Borrowers and CIT.
5.8 Deposit Account. As long as any portion of the Loan
remains unpaid, Borrower shall maintain a non-interest bearing deposit account
or deposit accounts with the Bank with an aggregate minimum balance of One
Hundred Thousand Dollars ($100,000.00). Bank hereby waives its right of setoff
against such accounts.
5.9 Real Property Title Defect. Borrowers shall use their
reasonable efforts to resolve the title defect on Parcel II of the Bryan, Ohio
real property owned by The Ohio Art Company as described in Schedule B - Section
II, Item 42.A. of Title Insurance Commitment No. 43010-2, effective January 20,
2000, issued by First
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American Title Insurance Company through Midland Title Agency of Northwest Ohio,
Inc.
ARTICLE VI. DEFAULT.
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6.1 Default. The occurrence of any of the following events
shall constitute a default under this Agreement:
(a) if either Borrower is in default in making any payment
under this Agreement, the Note or any of the Collateral Documents;
(b) in the event of any non-payment default by either Borrower
under this Agreement, the Note or any of the Collateral Documents, and such
default is not cured within thirty (30) days after its occurrence;
(c) if there is any continuing default by either Borrower
under any document or agreement between Bank and either Borrower, regardless of
whether such document or agreement is directly related to this Agreement and the
cure period therefor, if any, shall have expired. Any default under this
Agreement shall (after expiration of applicable cure periods) constitute a
default under any other document or agreement between Bank and either Borrower;
(d) if there is any continuing default (after expiration of
applicable cure periods) by either Borrower under any loans from CIT to either
Borrower;
(e) the dissolution or termination of business of either of
the Borrowers; and
(f) the insolvency or bankruptcy or any assignment for the
benefit of creditors of, or application for relief under any state or federal
law relating to the relief of debtors by, either of the Borrowers, provided
however, that in the case of an involuntary bankruptcy petition, it shall not
constitute a default hereunder unless such bankruptcy petition remains
undismissed or unstayed more than sixty (60) days after the filing date thereof.
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6.2 Cross-Default; Cross-Collateral. A continuing default
(after expiration of applicable cure periods) under this Agreement, any
Collateral Document or the Note shall constitute a default under any other loan
then existing from the Bank to either of the Borrowers. Any single continuing
default shall (after expiration of applicable cure periods) give the Bank all
rights of a secured lender and all rights to accelerate the amounts due under
the Note and/or any other note evidencing any other loan from the Bank to either
of the Borrowers.
ARTICLE VII. REMEDIES.
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Upon the occurrence of any continuing default (after
expiration of applicable cure periods) until such default shall have been waived
by Bank, Bank may avail itself of any and all remedies available to it at law or
in equity, and all such remedies shall be cumulative and none shall be deemed
exclusive of any other; further, and not in limitation of the foregoing, Bank
may terminate this Agreement, accelerate all payments due under the Loan and
demand full payment of the Borrowers' indebtedness to it; and may utilize any
remedy available to it under the terms and provisions of the Collateral
Documents.
ARTICLE VIII. RELEASE.
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Borrowers hereby irrevocably waive and release any and all
claims, actions, causes of action, suits, and defenses which either now has or
might hereafter have against Bank for or by reason of any matter, cause or thing
whatsoever which relates to any loans made by Bank to either Borrower or any
related entity prior to the date hereof.
ARTICLE IX. MISCELLANEOUS.
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9.1 Waivers. Any waiver, permit, consent or approval by Bank
of any breach of any provision, condition or covenant of this Agreement, the
Note or the Collateral Documents must be in writing and shall be effective only
to the extent it is set forth in writing. No waiver of a specific breach shall
operate as a waiver of any other breach occurring at a later time.
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9.2 Failure or Delay. No failure or delay on the part of Bank
in the exercise of any power, right or privilege under this Agreement, the Note
or the Collateral Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise of any other power, right or privilege.
9.3 Cumulative Rights. All rights and remedies existing under
this Agreement, the Note and the Collateral Documents are cumulative with, and
not exclusive of, any rights or remedies otherwise available under applicable
law.
9.4 Severability. Any provision of this Agreement, the Note or
the Collateral Documents which is prohibited or unenforceable in any
jurisdiction, shall be, only as to such jurisdiction, ineffective to the extent
of such prohibition or unenforceability, but all of the remaining provisions of
this Agreement, the Note and the Collateral Documents shall remain valid.
9.5 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of Bank and Borrowers and their respective
heirs, successors and assigns; provided, however, that neither Borrower may
assign or transfer its rights or obligations under this Agreement without the
prior written consent of Bank. Bank reserves the right to sell, assign,
transfer, negotiate or grant participations in all or any part of, or any
interest in, Bank's rights and obligations under this Agreement, the Note and
the Collateral Documents to other financial institutions. In connection
therewith, Bank may disclose all documents and information which Bank now or
hereafter may have relating to the Loan or Borrowers, or the business of any of
the foregoing; provided the recipient thereof agrees to maintain the
confidentiality of material non-public information.
9.6 Notices. Any notice which either party may be required or
may desire to give to the other party under any provision of this Agreement, the
Note or the Collateral Documents shall be in writing and shall be deemed to have
been given or made when deposited in the mail, postage prepaid, and addressed as
follows:
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To Borrowers: The Ohio Art Company
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: President
To Bank: Fifth Third Bank, Northwestern Ohio, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Exec. Vice-Pres.
Bank and Borrowers may change the address to which all notices, requests and
other communications are to be sent by giving written notice of such address
change to the other party in conformity with this paragraph, but such change
shall not be effective until notice of such change has been received by the
other party.
9.7 Costs, Expenses and Attorneys' Fees. Borrowers will
reimburse Bank for all costs and expenses, including, but not limited to,
reasonable attorneys' fees and expenses (which counsel may be Bank employees),
expended or incurred by Bank in enforcing this Agreement, in preparing and
amending this Agreement, the Note and/or the Collateral Documents, in collecting
any sum which becomes due Bank on the Note or under any of the Collateral
Documents, or in the protection, preservation or enforcement of any rights of
Bank in connection with the Collateral Documents. In the event the Loans do not
close for any reason except for the bad faith or wilful misconduct of Bank,
Borrowers shall still reimburse Bank for all expenses incurred by Bank in
connection herewith. Provided however, that absent a continuing default,
Borrowers' responsibility for reimbursement of Bank's audit expenses under
Section 5.1 hereof shall be limited to two (2) audits per twelve (12) month
period.
9.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original with the same effect as if
the signatures thereto and hereto were upon the same instrument.
9.9 Governing Law. The validity, construction and effect of
this Agreement, the Collateral Documents and the Note shall be governed by the
laws of the State of Ohio.
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9.10 Complete Agreement. This written Agreement, together with
the exhibits to this Agreement, is intended by the parties as a final expression
of their agreement and is intended as a complete statement of the terms and
conditions of their agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed on the day and year first written at the beginning of this
Agreement.
FIFTH THIRD BANK, NORTHWESTERN
OHIO, N.A.
By:____________________________
Title:_________________________
THE OHIO ART COMPANY
By:____________________________
Title:_________________________
STRYDEL, INC.
By:____________________________
Title:_________________________
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