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EXHIBIT 10.3.7
SECURITY AGREEMENT
(Borrowers)
THIS SECURITY AGREEMENT (this "Agreement"), dated as of May 31,
1996, between STAR BANK, NATIONAL ASSOCIATION, a national banking association
("Bank"), and FM PRECISION GOLF MANUFACTURING CORP., a Delaware corporation ("FM
Manufacturing") and FM PRECISION GOLF SALES CORP., a Delaware corporation ("FM
Sales"), is as follows:
1. DEFINITIONS.
1.1 Financing Agreement. Any capitalized term used but not defined herein
shall have the meaning ascribed thereto in the Financing Agreement dated as of
the date of this Agreement between Borrowers and Bank (the "Financing
Agreement").
1.2 Defined Terms. In addition to the other terms defined in this
Agreement, whenever the following capitalized terms (whether or not underscored)
are used, they shall be defined as follows:
"Borrower" means each of FM Manufacturing and FM Sales and "Borrowers"
means, collectively, FM Manufacturing and FM Sales. To the extent a term or
provision of this Agreement is applicable to a "Borrower", it is applicable to
each Borrower unless the context expressly indicates otherwise.
"Code" means the Uniform Commercial Code, as enacted in the State of
Ohio, Section 1301.01 et seq. of the Ohio Revised Code, as amended from time
to time.
"Collateral" means (i) all Equipment, General Intangibles, Inventory and
Receivables (all as defined below); (ii) all of each Borrower's rights, titles
and interests in and to any and all cash, funds, bank accounts, securities,
deposits, or other sums, whether maintained with Bank, an Affiliate of Bank or
any other Person and all other amounts at any time credited by, or due from Bank
or an Affiliate of Bank, as applicable, to either or both of Borrowers; (iii)
all of each Borrower's books, records and files of whatever type or nature,
whether or not written, stored electronically or electromagnetically or in any
other form, relating to any or all of the Equipment, Inventory, General
Intangibles, Receivables or the property or interests in property described in
clause (ii) above of this definition, or the proceeds of all of the foregoing,
whether or not such books, records, or files constitute Receivables, Equipment
or General Intangibles; (iv) all of the products and proceeds of all of the
foregoing, including proceeds of any insurance, whether or not in the form of
original collateral, Receivables, contract rights, General Intangibles,
Equipment, fixtures, chattel paper, instruments, leases, Inventory, securities,
documents, deposit accounts, or cash; and (v) all of the foregoing, whether now
owned or existing or hereafter acquired or arising, or in which either or both
of Borrowers now have or hereafter acquire any rights or interests.
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"Equipment" means all of each Borrower's equipment, fixtures, and other
goods, including furniture, machinery, tools, dies, jigs, molds, forklifts,
computers and associated hardware and equipment, trade fixtures, vehicles, and
all other tangible personal property not otherwise described herein, together
with any and all attachments, accessions, parts and appurtenances thereto,
substitutions therefor and replacements thereof.
"General Intangibles" means all of each Borrower's general intangibles,
choses in action, causes of action and all other intangible personal property of
each Borrower of every kind and nature (other than Receivables), including
corporate or other business records, inventions, designs, patents, patent
applications, service marks, service ▇▇▇▇ applications, trademarks, trademark
applications, trade names, trade secrets, goodwill, registrations, copyrights,
leases, licenses, rights in and to all computer software and intellectual
property owned, developed, licensed or leased by each Borrower in the operation
of computers and associated hardware and other equipment, franchises, customer
lists, tax refunds, tax refund claims, pension plan refunds and reversions,
rights and claims against carriers and shippers and rights to indemnification
and rights as a lender or a secured party.
"Inventory" means all of each Borrower's inventory and other goods,
including all merchandise, raw materials, work in process, and finished goods,
all rejected, rerouted, repossessed, or returned goods sold or delivered in
respect of any Receivable, and all other tangible personal property held for
sale or lease or furnished or to be furnished under contracts of service or used
or consumed in each Borrower's business or in connection with the manufacture,
packaging, shipping, advertising, selling or finishing of such goods,
merchandise or other personal property and all documents of title or documents
representing the same.
"Receivables" means all of each Borrower's accounts, accounts receivable,
contracts, contract rights, notes, bills, drafts, acceptances, instruments,
documents, shipping documents, documents of title, warehouse receipts, proceeds
of any letters of credit on which either or both of Borrowers is named as a
beneficiary, chattel paper, and all rights of each Borrower to payment for goods
sold or leased or for services rendered, whether or not earned by performance
and whether or not evidenced by an instrument, chattel paper, or a general
intangible, and all other debts, obligations and liabilities in whatever form
owing to each Borrower or however otherwise established or created, all
guaranties, sureties' obligations, and security therefor (including rights at
law and in equity), all right, title and interest of each Borrower in the
Inventory, goods, or merchandise or services which gave rise thereto (including
the rights of reclamation and stoppage of delivery in transit and all other
rights of an unpaid seller for merchandise or services), and all returned,
rejected, rerouted or repossessed goods, the sale of which gave rise to any
Receivable.
1.3 Other Definitional Provisions; Construction. Unless otherwise
specified,
(i) As used in this Agreement, accounting terms relating to
Borrowers not defined in this Agreement have the respective meanings given to
them in accordance with GAAP.
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(ii) References to the Uniform Commercial Code, or UCC, mean as
enacted in the particular jurisdiction(s) encompassed by the reference.
(iii) The definition of any document or instrument includes all
schedules, attachments and exhibits thereto and all renewals, extensions,
supplements, restatements and amendments thereof. All Exhibits attached to this
Agreement are incorporated into, made and form an integral part of this
Agreement for all purposes.
(iv) "Hereunder," "herein," "hereto," "this Agreement" and words of
similar import refer to this entire document; "including" is used by way of
illustration and not by way of limitation, unless the context clearly indicates
the contrary; the singular includes the plural and conversely; and any action
required to be taken by either or both of Borrowers is to be taken promptly,
unless the context clearly indicates the contrary.
(v) All of the uncapitalized terms contained in this Agreement
which are defined under the Code will, unless the context indicates otherwise,
have the meanings provided for in the Code.
2. GRANT OF SECURITY INTEREST; SET-OFF AND RELATED MATTERS.
2.1 Security Interest. As security for the full, prompt and complete
performance by each Borrower of the Obligations, including the Guaranteed
Obligations (as defined in each Guaranty dated of even date herewith executed by
each Borrower and delivered to Bank), each Borrower hereby grants to, and
creates in favor of, Bank a continuing security interest in all of the
Collateral.
2.2 Set-Off. All moneys, securities and other properties of either or both
of Borrowers and the proceeds thereof now or hereafter held or received by Bank
from or for the account of either or both of Borrowers, including any and all
deposits (general or special), account balances and credits of either or both of
Borrowers with Bank or any Affiliate of Bank at any time existing, (i) are part
of the Collateral, (ii) will be held as security for the Obligations, and (iii)
may be set-off and applied against any or all Obligations at any time that there
exists an Event of Default in any such account Borrowers authorize Bank's
Affiliates to pay or to deliver to Bank any deposits or other sums credited by,
or due from, Bank's Affiliates to either or both of Borrowers for application
against any or all of the Obligations, at any time upon the occurrence of any
Event of Default and after the lapse of any applicable period of cure, all
without further notice to Borrowers (such notice being expressly waived) and
without any necessity on Bank's part to resort to other security or sources of
reimbursement for the Obligations; provided that nothing in this Section 2.2
will impair or affect Bank's rights under Sections 3.8 or 7.5 of the Financing
Agreement, and provided, further, that neither Bank nor any Affiliate of Bank
shall set-off any moneys held by Bank or any Affiliate of Bank in any accounts
that are specifically dedicated for payment of taxes, workers' compensation
premiums or ERISA benefits on the condition that there is no commingling of
moneys not so specifically dedicated; if there is any such commingling, the
foregoing proviso respecting no set-off shall not be applicable. The rights
given to Bank hereunder are cumulative with Bank's other rights and
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remedies, including other rights of setoff. Bank will promptly notify Borrowers
of Bank's receipt of such funds for application against the Obligations, but
Bank's failure to do so will not affect the validity or enforceability thereof.
Bank may give notice of the above grants of security interests and assignment of
such deposits and other sums to any such Affiliate of Bank. Bank has
authorization to, and may make any suitable arrangements with, any such
Affiliate of Bank for effectuation thereof, and each Borrower hereby irrevocably
appoints Bank as its attorney to collect any and all such deposits or other sums
to the extent any such payment is not made to Bank by such Affiliate.
3. PERFECTION OF BANK'S SECURITY INTEREST; DUTY OF CARE.
3.1 Required Borrower Actions. Until the termination of this Agreement,
Borrowers shall perform any and all steps and take all actions requested by Bank
from time to time to perfect, maintain, protect, and enforce Bank's security
interest in the Collateral, including (i) executing and delivering all
appropriate documents and instruments as Bank may determine are necessary or
desirable to perfect, preserve, or enforce Bank's interest in the Collateral,
including financing statements, all in form and substance satisfactory to Bank,
(ii) delivering to Bank any warehouse receipts covering that portion of the
Collateral which, with Bank's consent, may be located in warehouses and in
respect of which warehouse receipts are issued, (iii) transferring Inventory to
warehouses approved by Bank, (iv) placing notations on each Borrower's books of
account to disclose Bank's security interests therein, (v) taking such other
steps and actions as deemed necessary or desirable by Bank to protect, perfect,
and enforce Bank's Liens on, and interests in, the Inventory, (vi) transferring
to Bank all letters of credit on which either or both of Borrowers is named as a
beneficiary, and (vii) immediately delivering to Bank any instrument (whether
negotiable or non-negotiable) or any chattel paper that evidences any amount
payable under or in connection with any of the Collateral, which, in each
instance, is duly indorsed to Bank in a manner acceptable to it, to be held as
Collateral pursuant to this Agreement.
3.2 Financing Statements; Notices. Bank is authorized by Borrowers (i) to
file one or more financing statements disclosing Bank's security interests under
this Agreement without either Borrower's signature appearing thereon, and (ii)
to give notice to any creditor or landlord of either or both of Borrowers or to
any other Person who Bank may determine is necessary or desirable under
applicable law to give notice to perfect or preserve Bank's interests in the
Collateral. Borrowers shall pay the costs of, or incidental to, any recording or
filing of any financing statements and other notices in all public offices where
filing is deemed by Bank to be necessary or desirable to perfect, protect or
enforce the Liens granted to Bank under this Agreement. Borrowers agree that a
carbon, photographic, photostatic or other reproduction of this Agreement or of
a financing statement is sufficient as a financing statement. Bank's security
interests in proceeds or the notification of its interests in proceeds in any
financing statement or other filing will not be deemed to authorize any sale or
other disposition by any Borrower except as permitted by the Financing
Agreement.
3.3 Bailees; Warehousemen. If any Inventory is in the possession or
control of any warehouseman or any of either of both of Borrower's agents,
processors, or other bailees, Borrowers shall notify such warehousemen, agents,
processors or other bailees of Bank's
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security interests therein, and upon Bank's request, will obtain a bailee letter
agreement and financing statements acceptable to Bank from such warehouseman,
agent, processor or other bailee.
3.4 Impositions; Protection of Bank's Interests. To protect, perfect, or
enforce, from time to time, Bank's rights or interests in the Collateral, Bank
may, in its discretion exercised in good faith (but without any obligation to do
so), (i) discharge any Liens (other than Permitted Liens so long as no Event of
Default has occurred) at any time levied or placed on the Collateral, (ii) pay
any insurance, (iii) maintain guards where any Collateral is located if an Event
of Default has occurred and is continuing, and (iv) obtain any record from any
service bureau and pay such service bureau the cost thereof. All costs and
expenses incurred by Bank in exercising its discretion under this Section 3.4
will be part of the Obligations, payable on Bank's demand and secured by the
Collateral.
3.5 Bank's Duty of Care. Bank shall have no duty of care with respect to
the Collateral except that Bank shall exercise reasonable care with respect to
the Collateral in Bank's custody. Bank shall be deemed to have exercised
reasonable care if (i) such property is accorded treatment substantially equal
to that which Bank accords its own property or (ii) Bank takes such action with
respect to the Collateral as Borrowers shall request in writing; however,
neither (a) Bank's failure to comply with any such request or to do any such act
requested by Borrowers nor (b) Bank's failure to take steps to preserve rights
against any Persons in such property shall be deemed a failure to exercise
reasonable care. Borrowers agree that Bank has no obligation to take steps to
preserve rights against any prior parties.
3.6 Receivable Verification. At any time that there exists an Event of
Default, Bank, in its own name or in the name of others, may communicate with
each Borrower's account debtors to verify with them to Bank's satisfaction the
existence, amount and terms of any Receivables and the nature of such account
debtor's relationship with the applicable Borrower.
3.7 Equipment. Each Borrower will, on Bank's request, deliver to Bank any
and all evidences of ownership of the Equipment including any certificates of
title and applications for title pertaining to each Borrower's motor vehicles so
that Bank may cause its security interests to be noted on such certificates of
title.
4. POWER OF ATTORNEY.
4.1 Grant of Power. Each Borrower does hereby make, constitute and appoint
Bank (or any officer or agent of Bank) as each Borrower's true and lawful
attorney-in-fact, with full power of substitution, in the name of each Borrower
or in the name of Bank or otherwise, for the use and benefit of Bank, but at the
cost and expense of Borrowers, (i) to indorse the name of each Borrower on any
notes, checks, drafts, money orders, or other instruments of payment (including
payments payable under any policy of insurance on the Collateral) or Collateral
that may come into the possession of Bank in full or part payment of any of the
Obligations; (ii) after an Event of Default has occurred and is continuing, to
sign and indorse the name of each Borrower on any invoice, freight or express
▇▇▇▇, ▇▇▇▇ of lading, storage or warehouse receipts, drafts against
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debtors, assignments, verifications and notices in connection with Receivables
(exclusive of Bank's rights under Section 3.6 above), and any instrument or
document relating thereto or to either or both of Borrower's rights therein;
(iii) after an Event of Default has occurred and is continuing, to give written
notice to the United States Post Office to effect change(s) of address so that
all mail addressed to either Borrower may be delivered directly to Bank; (iv) to
sign and record financing statements pursuant to the UCC and other notices
appropriate under applicable law as Bank deems necessary or desirable to
perfect, preserve, and protect Bank's rights under this Agreement; (v) after an
Event of Default has occurred and is continuing, to obtain and cancel the
insurance referred to in Section 10.14 of the Financing Agreement and indorse
any drafts; (vi) to adjust and settle the insurance referred to in Section 10.14
of the Financing Agreement and indorse any drafts; and (vii) to do any and all
things necessary or desirable to perfect Bank's Lien in the Collateral, to
preserve and protect the Collateral and to otherwise carry out this Agreement.
4.2 Duration; Ratification of Acts. This power of attorney, being coupled
with an interest, will be irrevocable for the term of this Agreement and all
transactions under this Agreement and thereafter so long as any of the
Obligations remain in existence. Borrowers ratify and approve all acts of such
attorney, and neither Bank nor its attorney will be liable for any acts or
omissions or for any error of judgment or mistake of fact or law, except for
willful misconduct. Borrowers will execute and deliver promptly to Bank all
instruments necessary or desirable, as determined in Bank's discretion, to
further Bank's exercise of the rights and powers granted it in this Section 4.
5. WARRANTIES AND REPRESENTATIONS. To induce Bank to make each Loan, each
Borrower represents to Bank that the following statements are, and will
continue throughout the term of this Agreement to be, true:
5.1 Places of Business. Each Borrower's chief executive office and
principal place of business are set forth on Exhibit 5.1, and the only other
offices or locations where either Borrower keeps the Collateral (except for
Inventory in transit) or conduct any business are listed on Exhibit 5.1;
5.2 Prior Locations Of Collateral. None of the Inventory or Equipment
constituting part of the Collateral (except for Inventory in transit) has been
at, or has been removed from, any location during the five year period preceding
the date of this Agreement other than those locations set forth on Exhibit 5.1;
5.3 Names. All trade names, assumed names, fictitious names and
other names used by each Borrower are set forth on Exhibit 5.3;
5.4 State of Title. Borrowers have good and indefeasible title to,
and ownership of, the Collateral, free and clear of all Liens except to the
extent, if any, of the Permitted Liens; and
5.5 Priority. Bank has a first priority security interest in, and Lien on,
the Collateral except to the extent, if any, of the Permitted Liens.
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6. COLLATERAL COVENANTS. Until the Obligations are fully paid, performed
and satisfied and this Agreement is terminated, each Borrower will:
6.1 Claims Against Collateral. Maintain the Collateral, as the same is
constituted from time to time, free and clear of all Liens, except to the
extent, if any, of the Permitted Liens, and will defend or cause to be defended
the Collateral against all of the claims and demands of all Persons whomsoever
(except to the extent, if any, of the Permitted Liens);
6.2 Notice of Change in Place of Business. Give Bank at least 30 days
advance notice in writing of any change in its (i) chief executive office,
registered office, principal place of business, or other places of business, or
the opening of any new places of business and (ii) names from those set forth on
Exhibit 5.3 or the adoption by either Borrower of trade names, assumed names or
fictitious names;
6.3 Notice of Governmental or Foreign Receivables. Notify Bank in writing
immediately upon the creation of any Receivables with respect to which the
account debtor is (i) the United States of America or any state, city, county or
other governmental authority or any department, agency or instrumentality of any
of them, or any foreign government or instrumentality thereof or (ii) any
business which is located in a foreign country;
6.4 Notice of Adverse Information. Immediately notify Bank in writing of
any information which it has or may receive with respect to the Collateral which
might in any manner, in the reasonable judgment of one or more officers of the
Borrower, materially and adversely affect the value thereof or the rights of
Bank with respect thereto;
6.5 Equipment. Maintain the Equipment in good operating condition and
repair, make all necessary replacements thereof so that the value and operating
efficiency thereof shall at all times be maintained and preserved, and promptly
inform Bank of any additions to or, subject to the terms of the Financing
Agreement, deletions from the Equipment. Neither Borrower will permit any of the
Equipment to become a fixture to real property not mortgaged to Bank or an
accession to other personal property not constituting part of the Collateral;
6.6 Inventory. Maintain the Inventory in all material respects in good and
salable condition and will handle, maintain and store the Inventory in a safe
and careful manner in accordance with all applicable laws, rules, regulations,
ordinances and governmental orders;
6.7 Insurance. Insure the Collateral in accordance with the terms of
the Financing Agreement;
6.8 Removal of Collateral. Not remove its books and records concerning the
Collateral from the locations set forth in Exhibit 5.1 of this Agreement or keep
any of such books and records or the Collateral at any other office or location
without giving Bank at least 30 days prior notice of such action and complying
with the other terms of this Agreement; provided that such location is in the
continental United States; and
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6.9 No Liens. Not create or permit to be created or to exist any Lien on
any of the Collateral except to the extent, if any, of the Permitted Liens.
7. TERM. Subject to Section 11.6 below, this Agreement will terminate on
the later to occur of (i) the full performance, payment and satisfaction of
the Obligations and (ii) the termination the Financing Agreement.
8. BANK'S RIGHTS AND REMEDIES.
8.1 Remedies. (i) On the occurrence of an Event of Default and immediately
on and after the lapse of any applicable period of cure, Bank may, at any time,
take any one or more of the following actions, without notice, demand or legal
process of any kind (except as may be required by law), all of which each
Borrower waives to the fullest extent permitted by law:
(a) proceed to enforce payment of the Obligations and to exercise
all of the rights and remedies afforded to Bank by the UCC, under the terms of
the Loan Documents and by law and in equity provided;
(b) take possession of the Collateral and maintain such possession
on each Borrower's premises at no cost to Bank, or remove the Collateral, or any
part thereof, to such other place(s) as Bank may desire;
(c) enter on any premises on which the Collateral, or any part or
records thereof, may be situated and remove the same therefrom, for which action
Borrowers will not assert against Bank any claim for trespass, breach of the
peace or similar claim and Borrowers will not hinder Bank's efforts to effect
such removal;
(d) require Borrowers, at their cost, to assemble the Collateral and
make it available at a place designated by Bank;
(e) collect, compromise, sell or otherwise deal with the Collateral
or proceeds thereof in its own name or in the name of either or both of
Borrowers and bring suit on the Receivables, in the name of either or both of
Borrowers or Bank, and exercise all such other rights respecting the
Receivables, including the right to accelerate or extend the time of payment,
settle, release in whole or in part any amounts owing on any Receivables and
issue credits in the name of either or both of Borrowers or Bank;
(f) sell part or all of the Collateral at public or private sale(s),
for cash, upon credit or otherwise, at such prices and upon such terms as Bank
deems advisable, at Bank's discretion, and Bank may, if Bank deems it
reasonable, postpone or adjourn any sale of the Collateral from time to time by
an announcement at the time and place of sale or by announcement at the time and
place of such postponed or adjourned sale, without being required to give a new
notice of sale;
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(g) to the extent Bank has not so acted or is currently so acting
pursuant to the other terms of this Agreement, notify each Borrower's account
debtors that the Receivables have been assigned to Bank and that payments should
be made directly to Bank;
(h) require each Borrower, using such form as Bank may approve, to
notify such account debtors, and to indicate on all of each Borrower's ▇▇▇▇▇▇▇▇
to such account debtors, that their Receivables must be paid to Bank directly;
(i) sign any indorsements, assignments or other instruments of
conveyance or transfer in connection with any disposition of the Collateral;
(j) sell, assign, transfer or otherwise dispose of all or any part
of the Collateral in any manner permitted by law and do any other thing and
exercise any other right or remedy which Bank may, with or without judicial
process, do or exercise under applicable law; and
(k) apply for and have a receiver appointed under state or federal
law by a court of competent jurisdiction in any action taken by Bank to enforce
its rights and remedies under this Agreement and, as applicable, the other Loan
Documents in order to manage, protect, preserve, and sell and otherwise dispose
of all or any portion of the Collateral and continue the operation of the
businesses of either or both of Borrowers, and to collect all revenues and
profits thereof and apply the same to the payment of all expenses and other
charges of such receivership, including the compensation of the receiver, and to
the payment of the Obligations until a sale or other disposition of such
Collateral is finally made and consummated.
(ii) Borrowers acknowledge that portions of the Collateral could be
difficult to preserve and dispose of and be further subject to complex
maintenance and management. Accordingly, Bank, in exercising its rights under
this Section 8.1, shall have the widest possible latitude to preserve and
protect the Collateral and Bank's security interest therein.
8.2 Notice of Disposition; Allocations. If any notice is required by law
to effectuate any sale or other disposition of the Collateral, (i) Bank will
give the applicable Borrower(s) written notice of the time and place of any
public sale or of the time after which any private sale or other intended
disposition thereof will be made, and at any such public or private sale, Bank
may purchase all or any of the Collateral; and (ii) Bank and Borrowers agree
that such notice will not be unreasonable as to time if given in compliance with
this Agreement five days prior to any sale or other disposition. The proceeds of
the sale will be applied first to all costs and expenses of such sale including
Attorneys' Fees and other costs and expenses, and second to the payment of all
Obligations in the manner and order determined by Bank in its discretion.
Borrowers shall remain liable to Bank for any deficiency. Unless otherwise
directed by law, Bank will return any excess to the applicable Borrower(s).
8.3 Payment of Expenses. Borrowers shall pay to Bank, on its demand, all
costs and expenses, including court costs, Attorneys' Fees and costs of sale,
incurred by Bank in exercising
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any of its rights or remedies hereunder, all of which constitute part of the
Obligations and are secured by the Collateral.
9. INDEMNIFICATION. In consideration of the execution and delivery of the
Financing Agreement and the making of any Loan to Borrowers, Borrowers will
indemnify and hold Bank, and Bank's directors, Affiliates, and agents (for the
purposes of this Section 9 each is an "Indemnified Party") harmless from and
against any and all claims, losses, obligations and liabilities arising out of
or resulting from any or all of (i) this Agreement and (ii) the transactions
contemplated by this Agreement (including enforcement of this Agreement), except
for claims, losses or liabilities resulting from an Indemnified Party's bad
faith or willful misconduct. The indemnification provided for in this Section 9
is in addition to, and not in limitation of, any other indemnification or
insurance provided by Borrowers to Bank.
10. NOTICE. Any notice, certificate, request, notification and other
communication required, permitted or contemplated hereunder must be in
writing and given in accordance with Section 15.9 of the Financing Agreement.
11. GENERAL.
11.1 Severability. If any term of this Agreement is found invalid under
Ohio law or other laws of mandatory application by a court of competent
jurisdiction, the invalid term will be considered excluded from this Agreement
and will not invalidate the remaining terms of this Agreement.
11.2 GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED AND ACCEPTED AT AND
SHALL BE DEEMED TO HAVE BEEN MADE AT CINCINNATI, OHIO. THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF OHIO (WITHOUT REFERENCE TO OHIO CONFLICTS OF LAW PRINCIPLES).
11.3 WAIVER OF JURISDICTION. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
BANK TO ENTER INTO THIS AGREEMENT AND EXTEND CREDIT TO BORROWERS, EACH BORROWER
AGREES THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS
AGREEMENT, ITS VALIDITY OR PERFORMANCE, AT THE SOLE OPTION OF BANK, ITS
SUCCESSORS AND ASSIGNS, AND WITHOUT LIMITATION ON THE ABILITY OF BANK, ITS
SUCCESSORS AND ASSIGNS, TO EXERCISE ALL RIGHTS AS TO THE COLLATERAL OR INITIATE
AND PROSECUTE IN ANY APPLICABLE JURISDICTION ACTIONS RELATED TO REPAYMENT OF THE
OBLIGATIONS, SHALL BE INITIATED AND PROSECUTED AS TO ALL PARTIES AND THEIR
SUCCESSORS AND ASSIGNS AT CINCINNATI, OHIO. BANK AND EACH BORROWER EACH CONSENTS
TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER ITS PERSON BY ANY COURT
SITUATED AT CINCINNATI, OHIO HAVING JURISDICTION OVER THE SUBJECT MATTER, AND
CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO
BORROWERS AND BANK AT THEIR RESPECTIVE
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ADDRESSES SET FORTH IN SECTION 15.9 OF THE FINANCING AGREEMENT OR AS OTHERWISE
PROVIDED UNDER THE LAWS OF THE STATE OF OHIO. EACH BORROWER WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
11.4 Survival and Continuation of Representations and Warranties. All of
each Borrower's representations and warranties contained in this Agreement shall
(i) survive the execution, delivery and acceptance hereof by the parties hereto
and the closing of the transactions described herein or related hereto and (ii)
remain true until the Obligations are fully performed, paid and satisfied, made
by Borrowers with the same effect as though the representations and warranties
had been made again on, and as of, each day of the term of this Agreement,
subject to such changes as may not be prohibited hereby, do not constitute
Events of Default, and have been consented to by Bank in writing.
11.5 Bank's Additional Rights Regarding Collateral. All of the Obligations
shall constitute one loan secured by all of the Collateral. In addition to any
other rights or remedies under the Loan Documents, Bank may, in its discretion,
(i) exchange, enforce, waive or release any such security or portion thereof,
(ii) apply such security and direct the order or manner of sale thereof as Bank
may, from time to time, determine, and (iii) settle, compromise, collect or
otherwise liquidate any such security in any manner without affecting or
impairing its right to take any other further action with respect to any
security or any part thereof.
11.6 Application of Payments; Revival of Obligations. Bank shall have the
continuing right, but not the obligation, to apply or reverse and reapply any
payments to any portion of the Obligations. To the extent either or both of
Borrowers make a payment or payments to Bank or Bank receives any payment or
proceeds of the Collateral or any other security for either or both of
Borrower's benefit, which payment(s) or proceeds or any part thereof are
subsequently voided, invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy act, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds received, the Obligations or part
thereof intended to be satisfied shall be revived and shall continue in full
force and effect, as if such payment or proceeds had not been received by Bank.
11.7 Equitable Relief. Borrowers recognize that, in the event either
Borrower fails to perform, observe or discharge any of their obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to Bank; therefore, Borrowers agree that Bank, if Bank so requests, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
11.8 Entire Agreement. This Agreement and the other Loan Documents set
forth the entire agreement of the parties with respect to its subject matter and
supersede all previous understandings, written or oral, in respect thereof.
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11.9 Headings. Section headings in this Agreement are included for
convenience of reference only and shall not relate to the interpretation or
construction of this Agreement.
11.10 Cumulative Remedies. The remedies provided in this Agreement and the
other Loan Documents are cumulative and not exclusive of any remedies provided
by law. Exercise of one or more remedy(ies) by Bank does not require that all or
any other remedy(ies) be exercised and does not preclude later exercise of the
same remedy.
11.11 Waivers and Amendments in Writing. Failure by Bank to exercise any
right, remedy or option under this Agreement or in any Loan Document or delay by
Bank in exercising the same shall not operate as a waiver by Bank of its right
to exercise any such right, remedy or option. No waiver by Bank shall be
effective unless it is in writing and then only to the extent specifically
stated. This Agreement cannot be changed or terminated orally.
11.12 Assignment. Bank shall have the right to assign this Agreement and
the other Loan Documents. Neither Borrower may assign, transfer or otherwise
dispose of any of its rights or obligations hereunder, by operation of law or
otherwise, and any such assignment, transfer or other disposition without Bank's
written consent shall be void. All of the rights, privileges, remedies and
options given to Bank under the Loan Documents shall inure to the benefit of
Bank's successors and assigns, and all the terms, conditions, covenants,
provisions and warranties herein shall inure to the benefit of and bind the
permitted successors and assigns of each Borrower and Bank, respectively.
11.13 Joint and Several Obligations. The obligations of Borrowers
under this Agreement are joint, several and primary.
11.14 Conflict. If there is any conflict, ambiguity, or inconsistency, in
Bank's judgment, between the terms of this Agreement and the Financing
Agreement, then the applicable terms and provisions, in Bank's judgment,
providing Bank with greater rights, remedies, powers, privileges, or benefits
will control.
11.15 WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
BANK TO ENTER INTO THIS AGREEMENT AND EXTEND CREDIT TO BORROWERS, EACH BORROWER
AND BANK EACH WAIVE TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR
PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS AGREEMENT OR THE CONDUCT OF THE
RELATIONSHIP BETWEEN BANK AND BORROWERS.
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IN WITNESS WHEREOF, this Agreement has been duly executed by each Borrower
as of May 31, 1996.
FM PRECISION GOLF
MANUFACTURING CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Vice President
FM PRECISION GOLF SALES CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Vice President
Accepted at Cincinnati, Ohio, as of May 31, 1996.
STAR BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
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