EXHIBIT 10.20
LOAN AGREEMENT
This Loan Agreement (this "Agreement"), made as of the 27th day of
December, 1995, by and between AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO ("Bank"), a national banking association with its principal place
of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and CORCOM,
INC., ("Borrower"), a corporation with its principal place of business at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, has reference to the
following facts and circumstances
Pursuant to Borrower's request, Bank will lend monies to Borrower
pursuant hereto,
NOW, THEREFORE, in consideration of the promises set forth herein,
Borrower agrees to borrow monies from Bank, and Bank agrees to lend monies
to Borrower, upon the following terms and conditions.
1.DEFINITIONS AND TERMS
1.1 The following words, terms and/or phrases shall have the
meanings set forth thereafter and such meanings shall be applicable to
[singular and plural form thereof, giving effect to the numerical difference;
whenever the context so requires], the use of "it" in reference to Borrower
shall mean Borrower as identified at the beginning of this Agreement:
A. "Borrower's Liibilities": all obligations and liabilities of
Borrower to Bank (including without limitation all debts, claims,
and indebtedness) whether primary, secondary, direct, contingent,
fixed or otherwise, heretofore, now and/or from time to time
hereafter owing, due or payable, however evidenced, created,
incurred, acquired or owing, and however arising, whether under
this Agreement or the "Other Agreements" (hereinafter defined)
or operation of law or otherwise.
B. "Charges": all national, federal, state, county, city, municipal
and/or other Governmental (or any instrumentality, division,
agency, body or department thereof,including without limitation
the Pension Benefit Guaranty Corporation) taxes, levies,
assessments, charges, liens, claims or encumbrances upon and/or
relating to the Borrower's Liabilities, Borrower's business,
Borrower's ownership and/or use of any of its assets, and/or
Borrower's income and/or gross receipts.
C. "Indebtedness": (i) indebtedness for borrowed money or for the
deferred purchase price of property or services, (ii) obligations
as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded
as capital leases, (iii) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise)
to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others
of the kinds referred to in clauses (i) or (ii) above, and (iv)
liabilities in respect of unfunded vested benefits under plans
covered by Title IV of the Employee Retirement Income Security Act
of 1974, as the same may be amended and in effect from time to time.
D. "Other Agreements": all agreements, instruments and documents,
including without limitation guaranties, mortgages, deeds of trust,
notes, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, leases, financing
statements and all other written matter heretofore, now and/or
from time to time hereafter executed by and/or on behalf of
Borrower and delivered to Bank.
E. "Persons": any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association
corporation, institution, entity, party or government (whether
national, federal, state, county, city, municipal or otherwise,
including without limitations any instrumentality, division,
agency, body or department thereof).
1.2 Except as otherwise defined in this Agreement or the Other
Agreements, all words, terms and/or phrases used herein and therein shall be
defined by the applicable definition therefor (if any) in the Uniform
Commercial Code of the State of Illinois.
2. LOANS
2.1 Loans made by Bank, to Borrower pursuant to this Agreement
shall be evidenced by notes or other instruments issued or made by Borrower
to Bank. Except as otherwise provided in this Agreement or in any notes
executed and delivered by Borrower to Bank in connection herewith the
principal portion of Borrower's Liabilities shall be payable by Borrower to
Bank on the maturity date(s) described in any such note(s) (as the same may
be amended or renewed) and all costs, fees and expenses payable hereunder or
under the Other Agreements, shall be payable by Borrower to Bank on demand,
in either case at Bank's principal place of business or such other place as
Bank shall specify in writing to Borrower.
2.2 Notwithstanding anything contained in this Agreement or the
Other Agreements to the contrary, the principal portion of Borrower's
Liabilities outstanding at any one time shall not exceed the lesser of
$4,000,000.00 in the aggregate and (ii) the "Borrowing Base" as hereinafter
defined.
2.3 Each loan made by Bank to Borrower pursuant to this Agreement
or the Other Agreements shall constitute an automatic warranty and
representation by Borrower to Bank that there does not then exist an "Event of
Default" (as hereinafter defined) or any event or condition which with notice,
lapse of time and/or the making of such loan would constitute an Event of
Default.
2.4 This Agreement shall be in effect until all of Borrower's
Liabilities have been paid in full and any and all commitments of Bank to
make loans have terminated.
2.5 Bank's commitment to loan shall expire on the earlier of (i)
the date on which Borrower's Liabilities mature under the terms of any note
given by Borrower to Bank evidencing such liabilities, or (ii) the occurrence
of the Event of Default pursuant to Section 7 hereof.
2.6 Provided that an Event of Default does not then exist or would
not then be created thereby or any event which with notice or lapse of time
or both would constitute an Event of Default does not then exist, Bank shall
loan to Borrower an amount (the "Borrowing Base") equal to (i) the sum of 80%
of the face amount (less maximum discounts, credits and allowances which may
have been taken by or granted to obligors in connection therewith) of all
then existing "Eligible Accounts" (as hereinafter defined) that are scheduled
on the initial Schedule of Accounts delivered to Bank, and (ii) the sum of 80%
of the face amount (less maximum discounts, credits and allowances which may
be taken by or granted to Obligors in connection therewith) of all then
existing Eligible Accounts that are scheduled on each related subsequent
Schedule of Accounts delivered to Bank (excepting therefrom those Eligible
Accounts theretofore scheduled to Bank on the initial Schedule of Accounts or
any subsequent Schedule of Accounts delivered to the Bank theretofore). Upon
Bank's request therefore, Borrower ▇▇▇▇▇ attach to each Schedule of Accounts
a true and correct copy of such invoices, delivery receipts and other
documents relating to the account's scheduled thereon, as Bank may request.
2.7 An "Eligible Account" is an Account of Borrower which meets
each of the following requirements (a) if it arises from the sale or lease of
goods, such goods have been shipped or delivered to the Obligor thereof,
(b) it is valid, legally enforceable obligation of the Obligor thereunder, to
the extent it is not subject to any offset, counterclaim or other defense on
the part of such Obligor denying liability thereunder in whole or in part;
(c) It is not subject to any lien or security interest whatsoever, except
those of Bank, (d) it is evidenced by an invoice (dated not later than the
date of shipment to the Obligor or performance and having a due date not more
than 3O days after the date of invoice) rendered to such Obligor, and is not
evidenced by any instrument or chattel paper, (e) it is payable in United
States dollars; (f) it is not owing by any Obligor involved in any bankruptcy
or insolvency proceeding; (g) it is not owing by any affiliate of Borrower;
(h) it is not unpaid more than 90 days after the date of such invoice, (i) it
is not owing by an Obligor which then shall have failed to pay in full any
invoice evidencing any account within 90 days after the date of such invoice,
unless the total invoice amounts of such Obligor which then have not been paid
within 90 days of the date of such invoice represent less than 25% of the
total invoice amounts then outstanding of such Obligor; and (j) it is not an
Account as to which Bank at any time or times hereafter, reasonably
determines, in good faith, that the prospect of payment or performance by the
Obligor thereof is or will be impaired. An Account which is at any time an
Eligible Account, but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Account. Borrower,
immediately upon demand from Bank, shall pay to Bank an amount of money equal
to the monies theretofore advanced Bank to Borrower upon an Account that is
no longer an Eligible Account. Borrower warrants and represents to and
covenants with Bank that the aggregate of the then outstanding amounts (less
maximum discounts, credits and allowances which may be taken by or granted to
Obligors in connection therewith) of all then existing, Eligible Accounts
shall at all times hereafter be at least 125% of the principal portion of
Borrower's Liabilities represented by loans made by Bank to Borrower pursuant
to paragraph 2.6 above.
2.8 With respect to Eligible Accounts, except as otherwise
disclosed by Borrower to Bank in writing, Borrower warrants and represents to
Bank that: (a) they are genuine, in all respects what they purport to be and
are not evidenced by a judgement, (b) they represent undisputed, bona fide
transactions completed in accordance with the terms and provisions contained
in the invoices and other documents delivered to Bank with respect thereto,
(c) the amounts thereof, which may be shown on any Schedule of Accounts and/or
all invoices and statements delivered to Bank with respect thereto, are
actually and absolutely owing to Borrower and are not contingent for any
reason; (d) no payments have been or shall be made thereon except payments
immediately delivered to Bank pursuant to this Agreement; (e) there are no
setoffs, counterclaims or disputes existing or asserted with respect thereto
and Borrower has not made any agreement with any Obligor thereof for any
deduction therefrom except a regular discount allowed by Borrower in the
ordinary course of its business for prompt payment; (f) there are no facts,
events or occurrences which in any way impair the validity or enforcement
thereof or tend to reduce the amount payable thereunder from the amount
thereof, which may be shown on any Schedule of Accounts and on all invoices
and statements delivered to Bank with respect thereto; (g) to the best of
Borrower's knowledge, all Obligors thereof have the capacity to contract and
are solvent; (h) the services furnished and/or goods sold giving rise thereto
are not subject to any lien, claim, encumbrance or security interest except
that of Bank; (i) Borrower has no knowledge of any fact or circumstance which
would impair the validity or collectibility thereof; (j) to Borrower's
knowledge, there are no proceedings or actions which are threatened or pending
against any Obligor thereof which might result in any material adverse change
in its fiscal condition; and (k) the Obligors thereof are not located in
Minnesota or New Jersey, or if so located, Borrower has filed a Notice of
Business Activities Report With the New Jersey Division of Taxation or
Minnesota Department of Revenue for the then current year.
2.9 Any of Bank's officers, employees, or agents shall have the
right, at any time or times hereafter, in Bank's name or in the name of a
nominee of Bank, to verify the validity, amount or any other matter relating
to any Accounts by mail, telephone, telegraph or otherwise. All reasonable
costs, fees and expenses relating thereto incurred by Bank (or for which Bank
becomes obigated) shall be part of Borrower's Liabilities, payable by Borrower
to Bank on demand.
3. NEGATIVE PLEDGE
3.1 Borrower shall not, and shall not permit any of its
subsidiaries to create, incur, permit, or suffer to exist any lien upon any of
its property or assets, now owned or hereafter acquired, except for the
following permitted liens; (a) pledges or deposits made to secure payment of
worker's compensation insurance; (b) liens imposed by mandatory provisions of
law such as for materialmen, mechanics, warehousemen and other liens arising
in the ordinary course of business; (c) liens for taxes, assessments and
governmental charges or levies imposed upon the Borrower's income or profits
or property, if the same are not yet due and payable or if the same are being
contested in good faith and as to which adequate cash reserves have been
provided; (d) liens arising out of good faith deposits in connection with
tenders, leases, real estate bids or contracts (other than contracts involving
the borrowing of money), pledges, or deposits to secure (or in lieu of surety,
stay, appeal or customs bonds and deposits to secure the payment of taxes,
assessments, customs duties or similar charges; and (e) encumbrances
consisting of zoning restrictions, easements, or other restrictions on the
use of real property, provided that such items do not materially impair the
use of such property for the purposes intended by Borrower, and none of which
is violated by existing structures or land use.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS:
INSURANCE AND TAXES
4.1 Borrower, at its sole cost and expense, shall keep and
maintain business interruption insurance and public liability and property
damage insurance. All such policies of insurance shall be in form, with
insurers and in such amounts as may be reasonably satisfactory to Bank.
Borrower shall deliver to Bank the original (or certified) copy of each policy
of insurance, or a certificate of insurance.
4.2 Borrower shall pay promptly, when due, all of the Charges,
and shall not permit the Charges to arise, or to remain and will promptly
discharge the same except to the extent the same are contested in good faith
and as to which adequate reserves have been provided.
5. WARRANTEES, REPRESENTATIONS AND COVENANTS: GENERAL
5.1 Borrower warrants and represents to and covenants with Bank
that: (a) Borrower has the right, power and capacity and is, or upon execution
will be, duly authorized and empowered to enter into, execute, deliver and
perform this Agreement and Other Agreements; (b) the execution, delivery
and/or performance by Borrower of this Agreement and Other Agreements shall
not, by the lapse of time, the giving of notice or otherwise, constitute a
violation of any applicable law or a breach of any provision contained in
Borrower's Articles of Incorporation, By-Laws, Articles of Partnership or
similar document, or contained in any agreement, instrument or document to
which Borrower is now or hereafter a party or by which it is or may be bound;
(c) Borrower is now and at all times hereafter shall be solvent and generally
paying its debts as they mature and Borrower now owns and shall at all times
hereafter own property which, at a fair valuation, is greater than the sum of
its debts; (d) Borrower is not and will not be during the term hereof in
violation of any applicable federal, state or local statute, regulation or
ordinance, in any respect materially and adversely affecting its business,
property, assets, operations or condition, financial or otherwise; and (e)
Borrower is not in default with respect to any indenture, loan agreement,
mortgage, deed or other similar agreement relating to the borrowing of monies
to which it is a party or by which it is bound.
5.2 Borrower warrants and represents to and covenants with Bank
that Borrower shall not, without Bank's prior written consent thereto: (a)
enter into any transaction not in the ordinary course of business which
materially and adversely affects Borrower's ability to repay Borrower's
Liabilities or Indebtedness; (b) other than as specifically permitted in or
contemplated bv this Agreement, encumber, pledge, mortgage, sell, lease or
othewise dispose of or transfer, whether by sale, merger, consolidation or
otherwise, any of Borrower's assets, other than sales in the ordinary course
of business; and (c) incur Indebtedness except renewals or extensions of
existing Indebtedness and interest thereon, except ordinary trade payables,
and except other Indebtedness that is unsecured and is to Persons who execute
and deliver to Bank in form and substance acceptable to Bank and its counsel
subordination agreements subordinating their claims against Borrower therefor
to the payment of Borrower's Liabilities,
5.3 Borrower covenants with Bank that Borrower shall furnish to
Bank; (a) as soon as available but not later than ninety (90) days after the
close of each fiscal year of Borrower, financial statements of Borrower
prepared in accordance with generally accepted accounting principles,
consistently applied, audited by a firm of independent certified public
accountants selected by Borrower and reasonably acceptable to Bank; (b) as
soon as available but not later than thirty (30) days after the end of each
calendar quarter hereafter, financial statements (1O Q's) of Borrower
certified by Borrower to be prepared in accordance with generally accepted
accounting principles and to present fairly the financial position and results
of operations of Borrower for such period; and (c) such other data and
information (financial and otherwise) as Bank, from time to time, may request.
5.4 Borrower covenants with Bank the following:
A. Borrower shall not permit its ratio of Cash Flow Available to Debt
Service ("Cash Flow Ratio") to be less than 1.25:1.00. For
purposes of the Cash Flow Ratio, "Cash Flow Available" on any date
means the Borrower's earnings before interest and taxes, plus (i)
the Borrower's depreciation, amortization and other "non-cash
expense items" (ii) plus or minus net changes in deferred taxes and
LIFO adjustments less (iii) the Borrower's cash payments for capital
expenditures not reflected as an expense, net of any borrowinas to
support the expenditures. For the purposes of Cash Flow Ratio,
"Debt Service" on any date means the sum of the following: (i)
actual amount of total principal and interest payments that
Borrower is obligated to the Bank during the period; (ii) actual
amount of total principal and interest payments Borrower is
obligated to make to financing sources other than the Bank during
the period, anticipated tax payments for the current period, and
(iv) any other cash distributions including, but not limited to,
dividends or stock repurchases.
B. Borrower shall not permit the ratio of its total debt ("Total
Debt") to Tangible Net Worth ("TNW") to at any time be greater than
or equal to 1.0:1.O. As used in this Agreement, Total Debt shall
mean as of any time the aggregate of indebtedness, obligations,
liabilities, reserves and/or other items which will be listed as a
liability on the balance sheet of Borrower in accordance with
generally accepted accounting principles. TNW shall mean the value
of the assets of Borrower after subtracting therefrom the
aggregate of any intangible assets of Borrower, including without
limitation, prepaids, other accounts receivable, goodwill,
franchises, licenses, patents, trademarks, tradenames, copyrights
and brand names, minus the aggregate of all contingent and
non-contingent liabilities of Borrower.
C. Borrower shall not declare or pay a Dividend if such Dividend plus
any Dividends paid in the previous three calendar quarters exceeds
Borrower's Net Income of the previous four calendar quarters.
"Net Income" shall mean Net Income as set forth in Borrowers
Financial Statements supplied to Bank pursuant to Section 5.3 of
this Agreement. "Dividend" shall mean a distribution of Borrower's
assets to shareholders.
6. SETOFF
6.1 To assure the prompt payment to Bank of Borrower's Liabilities
and the prompt, full and faithful performance by Borrower of all the
provisions to be kept, observed or performed by Borrower under this Agreement
and/or the Other Agreements, Borrower expressly acknowledges Bank's right to
setoff all of Borrower's now or hereafter existing monies, reserves, deposits,
deposit accounts and interest given thereon, securities, cash, cash
equivalents and other propertn, now or at any time or times hereafter in
possession or control of Bank or its bailee.
6.2 Borrower shall now and hereafter execute and deliver to Bank,
at the request of Bank, all agreements, instruments and documents (the
"Supplemental Documentation") that Bank may reasonably request in a form and
substance acceptable to Bank to consummate the transaction contemplated in or
by this Agreement or the Other Agreement. Borrower agrees that a carbon,
photographic or photostatic copy, or other reproduction of this Agreement or
of any financing statement shall be sufficient as a financing statement.
7. DEFAULT
7.1 The occurrence of any one of the Following events shall
constitute a default ("Event of Default"): (a) if Borrower fails or neglects
to perform, keep or observe any term, provision, condition, covenant, warranty
or representation contained in this Agreement or in the Other Agreements and
the same is not remedied or cured within thirty (3O) days, which is required
to be performed, kept or observed by Borrower; (b) if Borrower fails to pay
any of Borrower's Liabilities, when due and payable or declared due and
payable within five (5) days of such due date; (c) if any of Borrower's assets
are attached, seized, subjected to a writ of distress warrant, or are levied
upon, or become subject to any lien, or come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors; (d) if
Borrower becomes insolvent or generally fails to pay, or admits in writing its
inability to pay, debts as they become due, if a petition under ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code or any similar law or regulation shall be filed by or
against Borrower, and if filed against Borrower is not dismissed within sixty
(60) days of such filing, or if Borrower shall make an assignment for the
benefit of its creditors or if any case or proceeding is filed by or against
Borrower or if Borrower shall make an assignment for the benefit of its
creditors or if any case or proceeding is filed by or against Borrower for its
dissolution or liquidation, or if Borrower is enjoined, restrained or in any
way prevented by court order from conducting all or any material part of its
business affairs; (e) if a notice of lien, levy or assessment if filed of
record or given to Borrower with respect to all or any substantial part of
Borrower's assets by any federal, state or local department or agency; (f) if
a contribution failure occurs with respect to any pension plan maintained by
Borrower or any corporation, trades or business that is, alone with Borrower,
a member of a controlled group of corporations or controlled group of trades
or businesses (as described in Section 414(b) and (c) of the Internal Revenue
Code of 1986 or Section 4001, of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") sufficient to give rise to a lien under Section
302(f) of ERISA; (g) if Borrower is in default in the payment of any
obligations, indebtedness or other liabilities in excess of $50,000 to any
third parties and such default is declared and is not cured within the time,
if any, specified therefor in any agreement governing the same; (h) the
occurrence of a default (subject to applicable grace or cure periods) or an
Event of Defiult under any of the Other Agreements; or (i) the reasonable
insecurity of Bank.
7.2 All of Bank's rights and remedies under this Agreement and the
Other Agreements are cumulative and non-exclusive.
7.3 Upon an Event of Default without notice by Bank to or demand
by Bank of Borrower, Bank shall have no further obligation to any may then
forthwith cease advancing monies or extending credit to or for the benefit of
Borrower under this Agreement and the Other Agreements. Upon an Event of
Default, without notice by Bank to or demand by Bank of Borrower, Borrower's
Liabilities shall be due and payable, forthwith.
7.4 Any notice required to be given by Bank to Borrower deposited
in the United States mail, postage prepaid shall be delivered by registered or
certified mail to the address specified at the beginning of this Agreement not
less than ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice to Borrower thereof.
7.5 Under an event of default Borrower waives and releases any
cause of action and claim against Bank's possession or collection of the
monies, reserves, deposits, deposit accounts and interest or dividends
thereof, cash or cash equivalents, collectively the "Monies", in conjunction
with this Loan Agreement, absent gross negligence or willful misconduct.
8.GENERAL
8.1 Borrower covenants, warrants and represents to Bank that
all representations and warranties of Borrower contained in this Agreement
and the Other Agyeements shall be true from time of Borrower's execution of
this Agreement to the end of the original term and each renewal term hereof.
All of Borrower's warranties, representations, undertakings, and covenants
contained in thi Agreement or the Other Agreements shall survive the
termination or cancellation of the same, until payment of all of Borrower's
Liabilities.
8.2 The terms and provisions of this Agreement and the Other
Agreements shall supersede any prior agreement or understanding of the parties
hereto, and contain the entire agreement of the parties hereto with respect to
the matter covered hereby. This Agreement and the Other Agreements may not be
modified, altered, or amended except by an agreement in writing signed by
Borrower and Bank. Except for the provisions of Section 2 hereof, this
Agreement shall continue to full force and effect so long as any portion or
component of Borrower's Liabilities shall be outstanding. Should a claim
("Recovery Claim") be made upon the Bank at any time for recovery of any
amount received by the Bank in payment of Borrower's Liabilities (whether
received from Borrower or otherwise) and should the Bank repay all or part of
said amount by reason of (1) any judgment, decree or order of any court or
administrative body having Jurisdiction over Bank or any of its property or
(2) any settlement or comprormse of any such Recovery Claim effected by the
Bank with the claimant (including Borrower), this Agreement shall continue in
effect with respect to the amount so repaid to the same extent as if such
amount had never originally been received by the Bank, notwithstanding any
prior termination of this Agreement, the return of this Aareement to Borrower,
or the cancellation of any note or other instrument evidencing Borrower's
Liabilities. Borrower may not sell, assign or transfer this Agreement,
or the Other Aoreements or any portion thereof
8.3 Bank's failure to require strict performance by Borrower of
any provision of this Agreement shall not waive, affect or diminish any right
of Bank thereafter to demand strict Default by Borrower under this Agreement
or the Other Agreements, whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings, or the
Other Agreements and no Event of Default by Borrower under this Agreement or
the Other Agreements shall be deemed to have been Suspended or waived by Bank
unless such suspension or waiver is by an instrument in writing signed by
an officer of Bank and directed to Borrower specifying such suspension
or waiver.
8.4 If any provision of this Agreement or the Other Agreements or
the application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the Other Agreements and
the application of such provision to other Persons or circumstances will not
be affected thereby and the provisions of this Aareement and the Other
Agreements shall be severable in any such instance.
8.5 This Agreement and the Other Agreements shall be binding upon
and inure to the benefit of the successors and assigns of Borrower and Bank.
This provision, however, shall not be deemed to modify Paragraph 8.2 hereof.
8.6 Borrower hereby appoints Bank as Borrower's agent and
attorney-in-fact for the purpose of carrying out the provisions of this
Agreement in the event of Bank's commitment to Borrower is outstanding and
taking any action and executing any agreement, instrument or document which
Bank may deem necessary or advisable to accomplish the purposes hereof which
appointment is irrevocable and coupled with an interest. All monies paid for
the purposes herein and all costs, fees and expenses paid or incurred in
connection therewith, shall be part of Borrower's Liabilities, payable by
Borrower to Bank on demand.
8.7 Except as otherwise provided in the Other Agreements, if any
provision contained in this Agreement is in conflict with, or inconsistent
with any provision in the Other Agreements, the provision contained in this
Agreement shall govern and control.
8.8 Except as otherwise specifically provided in this Agreement,
Borrower waives any and all notice or demand which Borrower might be entitled
to receive by virtue of any applicable statute of law, and waives presentment,
demand and protest and notice of presentment, protest, default, dishonor,
non-payment, maturity, release, compromise, settlement, extension or renewal
of any and all agreements, instruments or documents at any time held by Bank
on which Borrower may in any way be liable.
8.9 Until Bank is notified by Borrower to the contrary in writing
by registered or certified mail directed to Bank's principal place of
business, the signature upon this Agreement or upon any of the Other
Agreements or any partner, manager, employee or agent of the Borrower, or of
any other Person designated in writing to Bank by any of the foregoing, shall
bind Borrower and be deemed to be the duly authorized act of Borrower.
8.10 This Agreement and the Other Agreements shall be governed and
controlled by the laws of the State of Illinois.
8.11 After an Event of Default, if at anytime or time hereafter
whether or not Borrower's Liabilities are outstanding at such time, Bank; (a)
employs counsel for advice or other representation (i) with respect to this
Agreement, the Other Agreements or the administration of Borrower's
Liabilities, (ii) to represent Bank in any litigation, arbitration contest,
dispute, suit or proceeding or to commence. defend or intervene or to take
any other action in or with respect to any litigation, arbitration, contest,
dispute, suit or proceeding or to commence, defend or intervene or to take
any other action in or VA'th respect to any litigation, arbitration, contest,
dispute, suit or proceeding (whether instituted by Bank, Borrower or any other
Person) in any way or respect relating to this Agreement, the Other
Agreements, or Borrowees affairs, or (iii) to enforce any rights of Bank
against Borrower or any other Person which may be obligated to Bank by virtue
of this Agreement or the Other Agreements, including, without limitation,
any Obligor attempts to or enforces any of Bank's rights or remedies under
this Agreement or the Other Agreements, including the reasonable costs and
expenses incurred by Bank in any manner or way with respect to the foregoing,
shall be part of Borrower's Liabilities, payable by Borrower to Bank on
demand.
8.12 BORROWER IRREVOCABLY AGREES THAT, SUBJECT TO BANK'S SOLE AND
ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT,
ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS
SHALL BE LITIGATED ONLY @T COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO,
STATE OF ILLINOIS. BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF
ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE. BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE OF ANY
LITIGATION BROUGHT AGAINST BORROWER BY BANK IN ACCORDANCE WITH THIS PARAGRAPH.
8.13 BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR PROCEEDING (I) TO ENTORCE OR DEFEND
ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE OTHER AGREEMENTS,
OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR (II) ARISING
FROM ANY DISPUTE OR CONTROVERSY ARISING IN CONNECTION WITH OR RELATED TO THIS
AGREEMENT, THE OTHER AGREEMENTS, OR ANY SUCH AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT, AND AGREES THAT ANY SUCH ACTION, SUIT, COUNTERCLAIM OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
IN WITNESS THEREOF, this Agreement has been duly executed as of the day and
year specified at the beginning hereof.
CORCOM, INC.
By: s/s ▇▇▇▇▇▇ ▇. Buns
Its: Vice President
ATTEST:
By: s/s ▇▇▇▇▇▇ ▇▇▇▇
Its: Secretary
Accepted this 27th day of December, 1995, at Bank's principal place of
business in the City of Chicago, State of Illinois.
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
By: s/s ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Second Vice President
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
REVOLVING LINE OF CREDIT
NOTE
$4,000,000.00 Date: December 27, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Due: December 31, 1996
FOR VALUE RECEIVED, the undersigned, (jointly and severally if more than
one)("Borrower"), promises to pay to the order of American National Bank and
Trust Company of Chicago ("Bank"), at its principal place of business in
Chicago, Illinois or such other place as Bank may designate from time to time
hereafter, the principal sum of Four Million and No/100 Dollars
($4,000,000.00) or such lesser principal sum as may be owed by Borrower to
Bank hereunder, such payment to occur on December 31, 1996. Borrower's
obligations under this Note shall be defined and referred to herein as
"Borrower's Liabilities."
Borrower may prepay all or part of the principal, together with accrued
interest on the amount so prepaid, without penalty during the term of the
Note. All prepayments shall be applied upon installments of the most remote
maturity.
The principal amount of this Note is available to the Borrower on a
revolving basis. The undersigned may borrow, repay and reborrow any amount,
subject to the limitations contained in the Loan Agreement dated March 28,
1995, as amended from time to time, executed by and between Corcom, Inc. and
Bank (the "Loan Agreement"), provided that the total outstanding principal
balance does not exceed the principal amount of this Note and that Borrower
has complied with all the terms of this Note and the Loan Agreement. The books
and records of the Bank shall be determinitive of the unpaid balance of this
Note from time to time outstanding, absent manifest error.
Reference is hereby made to the Loan Acreement for a statement of the
terms and conditions under which the loan evidenced hereby has been made, is
to be repaid and for a statement of Bank's remedies upon the occurrence of an
"Event of Default" as defined in the Loan Agreement. The terms and conditions
of the Loan Agreement are incorporated herein by reference in their entirety.
Borrower's Liabilities unpaid from time to time shall bear interest
(computed on the basis of a 360-day year and actual days elapsed) from the
date hereof until paid at a per annum rate at all times equal to the Bank's
Base Rate or equivalent as announced or published publicly from time to time
(the "Base Rate"). Therefore, interest shall be calculated for each day at
1/360th of the applicable per annum rate. The Base Rate is not indicative of
the lowest or best rate offered by the Bank to any customer or group of
customers. A change in the Base Rate shall constitute a corresponding change
in the interest rate hereunder effective on and as of the date of such change
in the Base Rate. The above notwithstanding, Borrower may elect to and cause
all or a portion of the principal outstanding on this Note to bear interest
at a daily rate equal to one and one-half percent (1 1/2) in excess of the
London Interbank Offered Rate ("LIBOR") as announced by Bank from time to time
pursuant to the terms and conditions of that certain London Interbank Offered
Rate Borrowing Agreement between Borrower and Bank of even date herewith.
Interest accruing prior to maturity shall be payable by Borrower to Bank
monthly, or as billed by Bank to Borrower, at Bank's principal place of
business, or at such other place as Bank may designate from time to time
hereafter. All unpaid interest at maturity shall be paid with the principal
amount of Borrower's Liabilities due hereunder.
Upon the occurrence of an Event of Default, as hereinafter defined,
interest on the unpaid principal balance shall accrue at a rate equal to the
then existing Base Rate plus three percent (3%) per annum.
Borrower agrees that in any action or proceeding instituted to collect
or enforce collection of this Note, the amount recorded on the books and
records of the Bank shall be prima facie evidence of the unpaid principal
balance of this Note; provided that the failure of the Bank to record any
advance hereunder shall not limit or otherwise affect the obligation of the
Company to repay the principal amount owing on this Note together with accrued
interest thereon.
If any payment becomes due and payable on a Saturday, Sunday or legal
holiday under the laws of the State of Illinois, the due date of such payment
shall be extended to the next business day. If the date for any payment of
principal is thereby extended or is extended by operation of law or otherwise,
interest thereon shall be payable at the then applicable rate of interest for
such extended time.
Borrower warrants and represents to Bank that Borrower shall use the
proceeds represented by this Note solely for the proper business purposes, and
consistently with all applicable laws and statutes.
All of Bank's rights and remedies under this Note are cumulative and non-
exclusive. The acceptance by Bank of any partial payment made hereunder after
the time when any of Borrower's Liabilities become due and payable will not
establish a custom, or waive any rights of Bank to enforce prompt payment
thereof Bank's failure to require strict performance by Borrower of any
provision of this Note shall not waive, affect or diminish any right of Bank
thereafter to demand strict compliance and performance therewith. Any waiver
of an Event of Default hereunder shall not suspend, waive or affect any other
Event of Default hereunder. Borrower and every endorser waive presentment,
demand and protest and notice of presentment, protest, default, non-payment,
maturity, release, compromise, settlement, extension or renewal of this Note,
and hereby ratify and confirm whatever Bank may do in this regard. Borrower
further waives any and all notice or demand to which Bank might to entitled
with respect to this Note by virtue of any applicable statute or law (to the
extent permitted by law).
Borrower agrees to pay, upon Bank's demand therefore, any and all
reasonable costs, fees and expenses (including attorneys' fees, costs and
expenses) incurred in enforcing any of Bank's rights hereunder, and to the
extent not paid the same shall become part of Borrower's Liabilities
hereunder.
If any provision of this Note or the application thereof to any party or
circumstance is held invalid or unenforceable, the remainder of this Note and
the application thereof to other parties or circumstances will not be affected
thereby, the provisions of this Note being severable in any such instance.
This Note is submitted by Borrower to Bank at Bank's principal place of
business and shall be deemed to have been made there at. This Note shall be
governed and controlled by the laws of the State of Illinois as to
interpretation, validity, construction, affect, choice of law and in all other
respects.
No modification, waiver, estoppel, amendment, discharge or change of this
Note or any related instrument shall be valid unless the same is in writing
and signed by the party against which the enforcement of such modification,
waiver, estoppel, amendment, discharge or change is sought.
TO INDUCE BANK TO ACCEPT THIS NOTE, BORROWER IRREVOCABLY AGREES THAT,
SUBJECT TO BANK'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN
ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS NOTE
SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE
OF ILLINOIS. BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE
OR FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE AND WAIVES ANY OBJECTION
IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF
ANY PROCEEDING INSTITUTED HEREUNDER.
BORROWER AND BANK IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING (1) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
(II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO
THIS NOTE OR ANY SUCH AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT, AND AGREE
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
BORROWER:
CORCOM, INC.
By: s/s ▇▇▇▇▇▇ ▇. Buns
Its: Vice President
ATTESTED:
By: s/s ▇▇▇▇▇▇ ▇▇▇▇
Its: Secretary
LONDON INTERBANK OFFERED RATE BORROWING AGREEMENT
THIS LONDON INTERBANK OFFERED RATE ("LIBOR") BORROWING AGREEMEENT (this
"Ageement"), dated as of the 27th day of December, 1995 by and between
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO ("Bank"), a national
banking association with its principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇,▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and CORCOM, INC., ("Borrower"); an Illinois
corporation with its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, has reference to the following facts and
circumstances:
A. The Promissory Note of even date hereof in the principal amount of
Four Million Dollars ($4,000,000.00) between Borrower and Bank
(the "Note"), has reference to this Ageement; and
B. Borrower has requested and Bank has agreed to extend an interest
rate option of 150 basis points (1.5%) per annum in excess of the
London Interbank- Offered Rate ("LIBOR").
NOW, THEREFORE, in consideration of any loan, advance, extension of
credit and/or other financial accommodation at any time made by Bank to or for
the benefit of Borrower, and of the promises set forth herein, the parties
hereto agree as follows:
1.DEFINITIONS AND TERMS
1.1 The following, words, terms and/or phrases shall have the
meanings set forth thereafter and such meaningss shall be applicable to the
singular and plural form thereof, whenever the context so requires, the use of
"it" in reference to Borrower shall mean Borrower as identified at the
beginning of this Agreement:
(a) "Borrowing": any portion of Borrower's Labilities bearing
interest at LIBOR.
(b) "Business Day": any day in which the American National Bank and
Trust Company of Chicago, ▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, is open for regular business.
(c) "Event of Default": the definition ascribed to this term in the
Note and Loan Agreement between Borrower and Bank of even date
herewith (the "Loan Agreement").
(d) "Interest Period": the period commencing on the date a LIBOR
Loan is made, and ending as the Borrower may select.
(e) "LIBOR Loans": any principal portion of Borrower's liabilities
bearing interest at LIBOR.
(f) "LIBOR Margin": 150 basis points (1.5%).
(g) "Maturity Date": the date specified in the Note upon which the
Borrower's liabilities are due and payable in full.
1.2 Any terms or phrases not specifically defined in this
Agreement shau have the meanings ascribed to them in the Note.
2. MANNER OF LIBOR ELECTION
2.1 Borrower may elect to cause all or a portion of the principal
outstanding on the Note to bear interest at a daily rate equal to the daily
rate equivalent of 1 1/2% in excess of LIBOR, subject to the following
conditions:
(a) Not more than five (5) nor less than two (2) Business Days prior
to the requested date of any LIBOR borrowing, Borrower shall
deliver to Bank an irrevocable written or telephonic notice
setting forth the requested date and amount of such Borrowing
(which amount shall not be less than $100,000.00 and, if in
excess of Sl00,000.00, shall be in integral multiples of
$100,000.00 in excess of S100,000.00) and the requested period of
such Borrowing which shall be either 30, 60, 90, 120 or 180 days
("Interest Period");
(b) The LIBOR used in computing the interest rate appdcable to such
borrowing shall be the LIBOR as quoted by Bank to Borrower as
being 'in effect for the date of such Borrowing plus the LIBOR
Margin, computed on the basis of a 36O-day year and actual days
elapsed, and shall be fixed for the requested period of such
Borrowing;
(c) Such Borrowing may not be prepaid prior to the expiration of the
requested Interest Period of such Borrowing and shall be repaid
in full on the last day of the requested Interest Period of such
Borrowing.
(d) With respect to any Borrowing of LIBOR Loans, Borrower may not
select an Interest Period that extends beyond the Maturity Date
of any of the Note.
2.2 In the event Borrower fails to give notice pursuant to Section
2.1(a) above of the reborrowing of the principal amount of any maturing LIBOR
Borrowing and has not notified the Banks by 10:00 a.m. (Chicago time) on the
last day, specified in Section 2.1(a), that it intends to renew such
Borrowing, then Borrower shall be deemed to have requested a rate of interest
announced or published publicly from time to time by Bank as its Base Rate of
interest (the "Base Rate").
3. GENERAL PROVISIONS
3.1 Funding Indemnity. In the event Bank shall incur any
reasonable loss, cost or expense (including, without limitation, any loss of
profit, and any loss, cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Bank to fund or
maintain any LIBOR Loan or the relending or reinvesting of such deposits or
amounts paid or prepaid to such Bank) as a result of:
(a) any payment or prepayment of a LIBOR Loan on a date other than
the last day of its Interest Period,
(b) any failure by Borrower to borrow a LIBOR Loan on the date
specified in a notice given pursuant to Section 2.1 hereof,
(c) any failure by Borrower to make any payment of principal on any
LIBOR Loan when due (whether by acceleration or otherwise), or
(d) any acceleration of the maturity of a LIBOR Loan as a result of
the occurrence of any Event of Default,
then, upon the demand of such Bank, Borrower shall pay to Bank such amount as
will reimburse Bank for such loss, cost or expense. If Bank makes such a claim
for compensation, it shall provide to Borrower a certificate executed by an
officer of Bank setting forth the amount of such loss, cost or expense in
reasonable detail (including an explanation of the basis for the computation
of such loss, cost or expense) and the amounts shown on such certificate if
reasonably calculated shall be conclusive.
3.2 Availability of LIBOR Loans. If Bank deternunes that maintenance
of its Loans would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or if Bank determines that deposits of
a type and maturity appropriate to match fund LIBOR Loans are not available
to it then Bank shall forthwith give notice thereof to Borrower, whereupon
until Bank notifies Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Bank to make LIBOR shall
be suspended.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year specified at the beginning hereof.
CORCOM, INC.
(Borrower)
By: s/s ▇▇▇▇▇▇ ▇. Buns
Its: Vice President
ATTEST:
By: s/s ▇▇▇▇▇▇ ▇▇▇▇
Its: Secretary