EXHIBIT 10.5
INSTALLMENT NOTE (SECURED)
$500,000.00 CHICAGO, ILLINOIS OCTOBER 1, 1998
DUE: MARCH 31, 2004
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 FIVE HUNDRED THOUSAND AND NO/100 DOLLARS,
which sum shall be due on March 31, 2004, and shall be payable in successive
monthly installments of principal and interest in the aggregate amount of
$9,841.73; with the final installment equal to the balance of all amounts due
hereunder. The first installment shall be due on the last day of October,
1998, ant successive installments shall be paid on the same day of each
month, thereafter until paid.
This Note restates and replaces a Promissory Note (Secured) in the
principal amount of $350,000.00, dated July 15, 1998 executed by Xxxxxxxx in
favor of Bank (the "Prior Note") and is not a replacement or novation of the
Prior Note.
Borrower's obligations ant liabilities to Bank under this Note, and all
other obligations and liabilities of Borrower to Bank (including without
limitation all debts, claims and indebtedness) whether primary, secondary,
direct, contingent, fixed or otherwise, including those evidenced in rate
hedging agreements designed to protect the Borrower from the fluctuation of
interest rates, 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 Note, any agreement, instrument or
document heretofore, now or from time to time hereafter executed and
delivered to Bank by or on behalf of Borrower, or by oral agreement or
operation of law or otherwise shall be defined ant referred to herein as
"Borrower's Liabilities."
The unpaid principal balance of Xxxxxxxx's Liabilities due hereunder
shall bear interest from the date of disbursement until paid, computed at a
daily rate equal to the daily rate equivalent of 6.75% per annum (computed on
the basis of a 360-day year and actual days elapsed); PROVIDED, HOWEVER, that
in the event that any of Borrower's Liabilities are not paid when due, the
unpaid amount of Borrower's Liabilities shall bear interest after the due
date until paid at a rate equal to the sum of the rate that would otherwise
be in effect plus 3%.
Borrower warrants and represents to Bank that Borrower shall use the
proceeds represented by this Note solely for proper business purposes and
consistently with all applicable laws and statutes.
Page 1 of 5
To secure the prompt payment to Bank of Borrowers Liabilities and the
prompt, full and faithful performance by Borrower of all of the provision. to
be kept, observed or performed by Borrower under this Note and/or any other
agreement, instrument or document heretofore, now and/or from time to time
hereafter delivered by or on behalf of Borrower to Bank, Borrower grants to
Bank a security interest in and to the following property: (a) all of
Borrower's now existing and/or owned and hereafter arising or acquired
monies, reserves, deposits, deposit accounts and interest dividends thereon,
securities , cash, cash equivalent and other property now or at any time or
times hereafter in the possession or under the control of Bank or its bailed
for any purpose; (b) ALL BUSINESS ASSETS OF BORROWER, PURSUANT TO LOAN AND
SECURITY AGREEMENT DATED JULY 15, 1998. AS AMENDED FROM TIME TO TIME, BY AND
BETWEEN XXXXXXXX AND BANK; and (c) all substitutions, renewals, improvements,
accessions or additions therein, replacements, offspring, rents, issues,
profits, returns, products and proceeds thereof, including without limitation
proceeds of insurance policies insuring the foregoing collateral (all of the
foregoing property is referred to herein individually and collectively as
"Collateral").
Regardless of the adequacy of the Collateral, any deposits or other sums
at any time credited by or payable or duo from Bank to Borrower, or any
monies, cash, cash equivalents, securities, instruments, documents or over
assess of Borrower in the possession or control of Bank or its Bailee for any
purpose, may be reduced to cash and applied by Bank to or setoff by Bank
against Borrower's Liabilities.
Borrower agrees to deliver to Bank immediately upon Bank's demand, such
additional collateral as Bank may request from time to time should the value
of the Collateral (in Bank's sole and exclusive opinion) decline,
deteriorate, depreciate or become impaired, or should Bank deem itself
insecure for any reason whatsoever, including without limitation a change in
the financial condition of Borrower or any party liable with respect to
Xxxxxxxx's Liabilities, and does hereby grant to Bank a continuing security
interest in such other collateral, which shall be deemed to be a part of the
Collateral. Borrower shall execute and deliver to Bank, at any time upon
Bank's demand therefor, all agreements, instruments, documents and other
written matter that Bank may request, in form and substance acceptable to
Bank, to perfect and maintain perfected Bank's security interest in the
Collateral or any additional collateral. Xxxxxxxx agrees that a carbon,
photographic or photostatic copy, or other reproduction, of this Note or of
any financing statement, shall be sufficient as a financing statement.
Bank may take, and Borrower hereby waives notice of, any action from
time to time that Bank may deem necessary or appropriate to maintain or
protect the Collateral, and Bank's security interest therein, and in
particular Bank; may at any time (1) transfer the whole or any part of the
Collateral into the name of the Bank or its nominee, (ii) collect any amounts
due on Collateral directly from persons obligated thereon, (iii) take control
of any proceeds and products of Collateral, and/or (iv) sue or make any
compromise or settlement with respect to any Collateral. Borrower hereby
releases Bank from any and all cause of action or claims which Borrower may
now or hereafter have for any asserted lose or damage to Borrower claimed to
be caused by or arising from: (a) Bank's taking any action permitted by this
paragraph; (b) any failure of Bank to protect, enforce or collect in whole or
in part any of the Collateral; and/or (c) any other act or omission to act on
the part of the Bank, its officers, agents or employees, except for willful
misconduct.
Page 2 of 5
The occurrence of any one of the following events shall constitute a
default by the Borrower ("Event of Default") under this Note: (a) if Borrower
fails to pay any of Borrower's Liabilities when due and payable or declared
due and payable (whether by scheduled maturity, required payment,
acceleration, demand or otherwise); (b) if Borrower or any guarantor of any
of Borrower's Liabilities fails or neglects to perform, keep or observe any
term, provision, condition, covenant, warranty or representation contained in
this Note; (c) occurrence of a default or an event of default under any
agreement, instrument or document heretofore, now or at any time hereafter
delivered by or on behalf of Borrower to Bank, (d) occurrence of a default or
an event of default under any agreement, instrument or document heretofore,
now or at any time hereafter delivered to Bank by any guarantor of Borrower's
Liabilities or by any person or entity which has granted to Bank a security
interest or lien in and to some or all of such person's or entity's real or
personal proper to secure the payment of Borrower's Liabilities; (e) if the
Collateral or any other of Borrower's assets are attached, seized, subjected
to a writ, 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; (f) if a notice of lien, levy or assessment is filed of
record or given to Borrower with respect to all or any of Borrower's assets
by any federal, state or local department or agency; (g) if Borrower or any
guarantor of Borrower's Liabilities becomes insolvent or generally fails to
pay or admits in writing its inability to pay debts as they become due, if a
petition under Title 11 of the United States Code or any similar law or
regulation is filed by or against Borrower or any such guarantor, if Borrower
or any such guarantor shall make an assignment for the benefit of creditors,
if any case or proceeding is filed by or against Borrower or any such
guarantor for its dissolution or liquidation, or if Borrower or any such
guarantor is enjoined, restrained or in any way prevented by court order from
conducting all or any material part of its business affairs; (h) the death or
incompetency of Borrower or any guarantor of Borrower's Liabilities, or the
appointment of a conservator for all or any portion of Borrower's assets or
the Collateral; (i) the revocation, nomination or cancellation of any
guaranty of Borrower's Liabilities without written consent of Bank; (j) if a
contribution failure occurs with respect to any pension plan maintained by
Borrower or any corporation, trade or business that is, along with Borrower,
a member of a controlled group of corporations or a controlled group of
trades or businesses (as described in Sections 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; (k) if Borrower or any guarantor of Borrower's
Liabilities is in default in the payment of any obligations, indebtedness or
other liabilities to any third party and such default is declared and is not
cured within the time, if any, specified therefor in any agreement governing
the same; (l) if any material statement, report or certificate made or
delivered by Borrower, any of Borrower's partners, officers, employees or
agents or any guarantor of Borrower's Liabilities is not true and correct; or
(m) if Bank is reasonably insecure.
Upon the occurrence of an Event of Default, at Bank's option, without
notice by Bank to or demand by Bank of Borrower: (i) all of Borrower's
Liabilities shall be immediately due and payable, (ii) Bank may exercise any
one or more of the rights and remedies accruing to a secured party under the
Uniform Commercial Code of the relevant jurisdiction and any other applicable
law upon default by a debtor, (iii) Bank may enter, with or without process
of law and without breach of the peace, any premises where the Collateral is
or may be located, and may seize or remove the Collateral from said premises
and/or remain upon said premises and use the same for the purpose of
collecting, preparing and disposing of the Col1ateral; and/or (iv) Bank may
sell or
Page 3 of 5
otherwise dispose of the Collateral at public or private sale for cash or
credit, provided, however, that Borrower shall be credited with the net
proceeds of any such sale only when the same are actually received by Bank.
Upon an Event of Default, Borrower, immediately upon demand by Bank,
shall assemble the Collateral and make it available to Bank at a place or
places to be designated by Bank which is reasonably convenient to Bank and
Borrower.
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 Xxxxxxxx's Liabilities become due and payable will
not establish a custom or waive any rights of Bank to enforce prompt payment
hereof. 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 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 Borrower might be
entitled with respect to this Note by virtue of any applicable statute or law
(to the extent permitted by law).
Borrower agrees to pay, immediately upon demand by Bank, any and all
costs, fees and expenses (including reasonable attorneys' fees, costs and
expenses) incurred by Bank (i) in enforcing any of Bank's rights hereunder,
and (ii) in representing Bank in any litigation, contest, suit or dispute, or
to commence, defend or intervene or to take any action with respect to any
litigation, contest, suit or dispute (whether instituted by Bank, Borrower or
any other person) in any way relating to this Note, Xxxxxxxx's Liabilities or
the Collateral, and to the extent not paid the same shall become part of
Borrower's Liabilities hereunder.
This Note shall be deemed to have been submitted by Borrower to Bank ant
to have been made at Bank's principal place of business. This Note shall be
governed and controlled by the internal laws of the State of Illinois and not
the law of conflicts.
TO INDUCE BANK TO ACCEPT THIS NOTE, XXXXXXXX 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 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 VENUE OF ANY
LITIGATION BROUGHT AGAINST BORROWER BY BANK IN ACCORDANCE WITH THIS PARAGRAPH.
BORROWER IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, COUNTERCLAIM OR PROCEEDING (I) 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
Page 4 of 5
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.
"BORROWER"
Total Control Products, Inc.,
an Illinois corporation
BY: Xxxxxxxx X. Xxxx
Xxxxxxxx X. Xxxx, President
2001 N. Janice
Melrose Park, IL 60163
FEIN: 00-0000000
Page 5 of 5
