EXHIBIT 4.32
LOAN AGREEMENT
BY AND BETWEEN
STARCRAFT CORPORATION
AND
COMERICA BANK
LOAN AGREEMENT
THIS LOAN AGREEMENT, made this 28th day of June, 2002 by and between
Starcraft Corporation, an Indiana corporation, of Goshen, Indiana (herein called
"Company"), and COMERICA BANK, a Michigan banking corporation, of Detroit,
Michigan (herein called "Bank");
WITNESSETH:
1. THE INDEBTEDNESS: Line of Credit
1.1 Subject to the terms of this Agreement, Bank agrees to lend to Company
at any time and from time to time from the effective date hereof until April 1,
2004 sums not to exceed under the line of credit Two Million Dollars
($2,000,000) (the "Commitment Amount") in aggregate principal amount at any one
time outstanding. Company shall execute and deliver to Bank a Line of Credit
Note (herein called "Line Note") in form similar to that annexed hereto as
Exhibit "A" to evidence advances, repayments and readvances made from time to
time, subject to the terms and conditions of this Agreement. Company may from
time to time request that the stated amount of the Collateral L/C (as defined
herein) be reduced. Provided no event of default (or event which with the giving
of notice or the passage of time would become an event of default) has occurred
or is continuing, the Bank shall give notice to the issuer of the Collateral L/C
that Bank agrees to the reduction. At the time of each reduction in the stated
amount of the Collateral L/C, the Commitment Amount shall be reduced on a dollar
for dollar basis with the amount of the reduction in the stated amount of the
Collateral L/C. The aggregate reduction in the stated amount shall not exceed
$1,000,000. Prior to Bank giving any notice of consent to a reduction, the
Company shall prepay advances so that the aggregate amount of outstanding
advances and the outstanding amount of Letters of Credit is less than or equal
to the amount of the reduced Commitment Amount.
1.2 The Line Note shall mature on April 1, 2004, and the balance from time
to time outstanding shall bear interest at a per annum rate equal to one percent
(1%) above the Bank's Prime Rate. Upon the occurrence of any event of default
hereunder, interest shall accrue on the unpaid principal balance at the per
annum rate of three percent (3%) above the rate otherwise in effect. Interest
shall be payable monthly commencing on August 1, 2002 and on the first business
day of each month thereafter. Interest shall be computed on a daily basis using
a year of 360 days, assessed for the actual number of days elapsed, and in such
computation effect shall be given to any change in the interest rate resulting
from a change in the Prime Rate on the date of such change in the Prime Rate.
"Prime Rate" shall mean the rate of interest established by Bank and publicly
announced as its prime rate for its borrowers as the same may be changed from
time to time, which may not necessarily be Bank's lowest rate for loans.
A late installment charge equal to five percent (5%) of each late
installment may be charged on any installment payment not received by Bank
within ten (10) calendar days after the installment due date but acceptance of
this charge shall not waive any default or event of default under this
Agreement.
1.3 Bank shall not make any advances under the Line Note unless Company
shall have first filed with Bank a Request for Draw and Certificate of
Compliance (as of the date of the borrowing) in form similar to that annexed
hereto as Exhibit "B", executed by an authorized officer of Company. Bank may,
at its option, lend under the Line Note upon the telephone request of an
authorized officer or agent of Company and, in the event Bank makes any such
advance upon a telephone request, the requesting officer shall send by telecopy
to Bank, on the same day as such telephone request, a Request for Draw and
Certificate of Compliance in the form attached as Exhibit "B". Company hereby
authorizes Bank to disburse advances under the Line Note pursuant to the
telephone instructions of any person purporting to be an authorized officer of
Company and Company shall bear all risk of loss resulting from disbursements
made upon any telephone request. Each time Company requests an advance under the
Line Note by telephone it shall be deemed to have represented that no condition
exists or event has occurred which constitutes or, with the giving of notice or
the passage of time would constitute, a default under this Agreement.
1.4 Company shall pay to Bank an unused fee equal to one quarter of one
percent (1/4%) per annum multiplied by the average daily amount by which the
Commitment Amount exceeds the aggregate amount of outstanding advances under the
Line Note. The unused fee shall be payable quarterly in arrears on the first day
of each calendar quarter (commencing on July 1, 2002) and on the maturity date
of the Line Note. Such fee shall be calculated in the same manner as interest is
calculated hereunder.
1.5 In addition to advances under the Line Note to be provided to Company
by Bank under and pursuant to Section 1.1 of this Agreement, Bank may issue, or
commit to issue, from time to time, standby letters of credit for the account of
Company (herein individually called a "Letter of Credit" and collectively
"Letters of Credit") in aggregate undrawn amounts not to exceed Two Hundred
Fifty Thousand Dollars ($250,000) at any one time outstanding; provided, however
that the sum of the aggregate amount of advances outstanding under the Line Note
plus the undrawn amounts of all Letters of Credit shall not exceed the
Commitment Amount at any one time; and provided further that no Letter of Credit
shall, by its terms, have an expiration date which extends beyond the maturity
date of the Line Note. In addition to the terms and conditions of this
Agreement, the issuance of any Letters of Credit shall also be subject to the
terms and conditions of any letter of credit applications and agreements
executed and delivered by Company unto Bank with respect thereto. The commission
rate and payment of the commission for each Letter of Credit shall be
established by Bank at the time of issuance of each Letter of Credit.
1.6 Company may prepay the Line Note in whole or in part without premium or
penalty.
1.7 Advances under the Line Note shall be used for working capital, for
general corporate purposes and to repay existing indebtedness owed to Foothill
Financial Corporation.
2. CONDITIONS AND SECURITY.
2.1 Company agrees to furnish Bank, prior to the borrowing hereunder, in
form to be satisfactory to Bank, with (i) an opinion of Company's legal counsel;
(ii) certified copies of resolutions of the Board of Directors of Company
evidencing approval of the borrowings hereunder, (iii) certified copies of
Company's Articles of Incorporation and Bylaws, and (iv) certificates of good
standing from the State of Company's incorporation and from each jurisdiction in
which it is required to be qualified to do business.
2.2 As security for all indebtedness of Company to Bank hereunder and under
the Line Note as herein provided, Company agrees to furnish, execute and deliver
to Bank or cause to be furnished, executed and delivered to Bank prior to or
simultaneously with the borrowing hereunder, in form to be satisfactory to Bank
and supported by appropriate resolution in certified form authorizing same, the
following (all of which is herein collectively called the "Collateral"):
(a) Security Agreement granting to Bank a first priority security
interests in and covering all of Company's tangible and intangible
personal property, whether now owned or hereafter acquired (subject to
Permitted Liens);
(b) The Collateral L/C (as defined below);
(c) A subordination agreement ("Subordination Agreement") from Xxxxxx
Xxxxxx and Xxxxx Xxxx ("Subordinate Creditors") subordinating all
indebtedness of Company to them to Company's indebtedness to Bank;
(d) A first priority security interest in Company's membership interest in
Tecstar LLC;
(e) A first priority continuing collateral mortgage on the real property
located at 0000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000 and an assignment
of all leases and rentals;
(f) Financing Statements required or requested by Bank to perfect all
security interests to be conferred upon Bank under this Agreement and
to accord Bank a perfected first priority security position under the
Uniform Commercial Code;
(g) Such documents or certificates as may be requested by Bank and/or are
required under the terms of any and every Security Agreement; and
(h) Such other documents or agreements of security and appropriate
assurances of validity and perfected first priority of lien or
security interest as Bank may request at any time (subject to
Permitted Liens).
"Collateral L/C" shall mean a letter of credit issued to Bank as
beneficiary by a financial institution which is acceptable to Bank in the
exercise of its sole discretion in the form attached hereto as Exhibit "C" in an
amount not less than $1,500,000 and having an expiry date not earlier than May
1, 2004.
2.3 On the date of execution of this Agreement, Company shall pay to Bank a
$10,000 non-refundable closing fee, which fee shall be deemed fully earned upon
execution of this Agreement.
3. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and warranties
shall be deemed to be continuing representations and warranties during the
entire life of this Agreement:
3.1 Company is a corporation duly organized and existing in good standing
under the laws of the State of Indiana; Company is in good standing in each
jurisdiction in which it is required to be qualified to do business in which
failure to so qualify would materially impair Company' s financial condition or
the ability of Company to carry on its business; execution, delivery and
performance of this Agreement and other documents and instruments required under
this Agreement, and the issuance of the Line Note by Company are within its
corporate powers, have been duly authorized, are not in contravention of law or
the terms of Company's Articles of Incorporation or Bylaws, and do not require
the consent or approval of any governmental body, agency or authority; and this
Agreement and other documents and instruments required under this Agreement and
Line Note, when issued and delivered and appropriate financing statements are
properly filed, will be valid and binding in accordance with their terms
(subject to limitation or enforcement, if any, by equitable principles, or by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors rights generally).
3.2 The execution, delivery and performance of this Agreement and any other
documents and instruments required under this Agreement, and the issuance of the
Line Note by Company are not in contravention of the unwaived terms of any
indenture, agreement or undertaking to which Company is a party or by which it
is bound.
3.3 Except as set forth in attached Schedule 3.3, no litigation or other
proceeding before any court or administrative agency is pending, or to the
knowledge of the officers of Company is threatened against Company, the outcome
of which could materially impair the Company's financial condition or the
ability of Company to carry on its business.
3.4 There are no security interests in, liens, mortgages, or other
encumbrances on any of Company's assets, except to Bank or as otherwise
permitted by this Agreement as Permitted Liens set forth in Schedule 3.4.
3.5 Company does not maintain or contribute to any employee pension benefit
plan subject to title IV of the "Employee Retirement Income Security Act of
1974" (herein called "ERISA"), except those set forth in attached Schedule 3.5.
There was no unfunded past service liability of any pension plan maintained by
the Company as of December 31, 2001, and there is no accumulated funding
deficiency within the meaning of ERISA, or any existing material liability with
respect to any pension plan owed to the Pension Benefit Guaranty Corporation
("PBGC") or any successor thereto.
3.6 The financial statements of Company dated December 31, 2001, previously
furnished Bank, are complete and correct and fairly present the financial
condition of Company; to the best of the Company's knowledge, since said date
there has been no material adverse change in the financial condition of Company;
to the best of the knowledge of Company's officers, Company does not have any
material contingent obligations (including any liability for taxes) not
disclosed by or reserved against in said financial statements and at the present
time there are no material unrealized or anticipated losses from any present
commitment of Company.
3.7 All tax returns and tax reports of Company required by law to be filed
have been duly filed or extensions obtained, and all taxes, assessments and
other governmental charges or levies (other than those presently payable without
penalty and those currently being contested in good faith for which adequate
reserves have been established) upon Company (or any of its properties) which
are due and payable have been paid. The charges, accruals and reserves on the
books of Company in respect of the Federal income tax for all periods are
adequate in the opinion of Company.
3.8 Except as set forth in attached Schedule 3.8, there are no subsidiaries
of Company.
3.9 Except as set forth in attached Schedule 3.9, Company is, in the
conduct of its business, in compliance in all material respects with all
federal, state or local laws, statutes, ordinances and regulations applicable to
it, the enforcement of which, if Company were not in compliance, would
materially adversely affect its business or the value of its property or assets.
Company has all approvals, authorizations, consents, licenses, orders and other
permits of all governmental agencies and authorities, whether federal, state or
local, required to permit the operation of its business as presently conducted,
except such approvals, authorizations, consents, licenses, orders and other
permits with respect to which the failure to have can be cured without having a
material adverse effect on the operation of such business.
3.10 No representation or warranty by Company in this Agreement, nor any
statement or certificate (including financial statements) furnished or to be
furnished to Bank pursuant hereto contains or will contain any materially untrue
statement of any material fact or omits or will omit to state a material fact
necessary to make such representation, warranty, statement or certificate not
misleading; provided, however, as to any financial statements of the Sellers,
this representation and warranty is made based solely on the best knowledge of
Company.
3.11 Except as disclosed in attached Schedule 3.11, Company is not a party
to any litigation or administrative proceeding, nor so far as is known by
Company is any litigation or administrative proceeding threatened against
Company, which in either case (A) asserts or alleges that Company violated
Environmental Laws (as defined in Section 6.1), (B) asserts or alleges that
Company is required to clean up, remove, or take remedial or other response
action due to the disposal, depositing, discharge, leaking or other release of
any hazardous substances or materials, (C) asserts or alleges that Company is
required to pay all or a portion of the cost of any past, present, or future
cleanup, removal or remedial or other response action which arises out of or is
related to the disposal, depositing, discharge, leaking or other release of any
hazardous substances or materials by Company.
3.12 Except as disclosed in attached Schedule 3.11, to the best knowledge
of Company, there are no conditions existing currently which would subject
Company to damages, penalties, injunction relief or cleanup costs under any
applicable Environmental Laws or which require or are likely to require cleanup,
removal, remedial action or other response pursuant to applicable Environmental
Laws by Company.
3.13 Except as disclosed in attached Schedule 3.11, Company is not subject
to any judgment, decree, order or citation related to or arising out of
applicable Environmental Laws and to the best knowledge of the Company, Company
has not been named or listed as a potentially responsible party by any
governmental body or agency in a matter arising under any applicable
Environmental Laws.
3.14 Company has all material permits, licenses and approvals required
under applicable Environmental Laws.
4. AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, so long as any indebtedness
remains outstanding under this Agreement:
4.1 Furnish Bank:
(a) within ninety (90) days after and as of the end of each fiscal year of
Company, a balance sheet and statement of profit and loss and changes
in cash flow of Company prepared on an audited basis by independent
certified public accountants reasonably satisfactory to Bank;
(b) within thirty (30) days after and as of the end of each month, balance
sheet and statement of profit and loss of Company each prepared in
accordance with generally accepted accounting principles consistently
applied and certified (subject to year end audit adjustments) by an
officer of Company;
(c) within twenty (20) days after and as of the end of each month, agings
of accounts receivable and accounts payable in form satisfactory to
Bank;
(d) such information as required by the terms and conditions of any
security agreements referred to in this Agreement;
(e) promptly, and in form to be satisfactory to Bank, such other
information as Bank may reasonably request from time to time.
4.2 Pay and discharge all taxes and other governmental charges, and all
material contractual obligations calling for the payment of money, before the
same shall become overdue, unless and to the extent only that such payment is
being contested in good faith.
4.3 Maintain insurance coverage on its physical assets and against other
business risks in such amounts and of such types as are customarily carried by
companies similar in size and nature, and in the event of acquisition of
additional property, real or personal, or of incurrence of additional risks of
any nature, increase such insurance coverage in such manner and to such extent
as prudent business judgment and present practice would dictate; and in the case
of all policies covering property mortgaged or pledged to Bank or property in
which Bank shall have a security interest of any kind whatsoever, other than
those policies protecting against casualty liabilities to strangers, all such
insurance policies shall provide that the loss payable thereunder shall be
payable to Company and Bank as their respective interests may appear, and, upon
request from Bank, all said policies or copies thereof, including all
endorsements thereon and those required hereunder, shall be deposited with Bank.
4.4 Permit Bank, through its authorized attorneys, accountants and
representatives, to examine Company's books, accounts, records, ledgers and
assets of every kind and description at all reasonable times upon oral or
written request of Bank, which shall include but shall not be limited to
collateral audits of Company conducted by Bank, at Company's own cost and
expense.
4.5 Promptly notify Bank of any condition or event of which Company becomes
aware which constitutes or with the running of time and/or the giving of notice
would likely constitute an event of default under this Agreement, and promptly
inform Bank of the existence or occurrence of any condition or event which could
have a material adverse effect upon Company's financial condition.
4.6 Maintain in good standing all licenses required by the State of Indiana
or any agency thereof, or other governmental authority that may be necessary or
required for Company to carry on its general business objects and purposes
unless the failure to so maintain such licenses would not have a material
adverse effect on the financial condition or operations of Company.
4.7 Furnish Bank, upon Bank's request, in form satisfactory to Bank with
pledges, assignments, lien instruments or other security instruments covering
any or all of Company's real and personal property, of every nature and
description, whether now owned or hereafter acquired, to the extent that Bank
may in its sole discretion require.
4.8 Comply with all material requirements imposed by ERISA as presently in
effect or hereafter promulgated, including but not limited to, the minimum
funding requirements of any Pension Plan.
4.9 Promptly notify Bank after the occurrence thereof in writing of any of
the following events:
(a) the termination of a pension plan subject to Title IV of ERISA (a
"Pension Plan");
(b) the appointment of a trustee by a United States District Court to
administer a Pension Plan;
(c) the commencement by the Pension Benefit Guaranty Corporation, or any
successor thereto of any proceeding to terminate a Pension Plan;
(d) the failure of a Pension Plan to satisfy the minimum funding
requirements for any plan year as established in Section 412 of the
Internal Revenue Code of 1954, as amended or any similar provision
under the Internal Revenue Code of 1986, as amended;
(e) the withdrawal of Company from a Pension Plan; or
(f) a reportable event, within the meaning of Title IV of ERISA.
4.10 Furnish to the Bank concurrently with the delivery of each of the
financial statements required by Section 4.1(a) and (b) hereof, a statement in
the form of attached Exhibit "D" prepared and certified by the chief financial
officer of Company (or in such officer' s absence, a responsible senior officer
of Company) (a) setting forth all computations necessary to show compliance by
Company with the financial covenants set forth in Sections 4.12 and 4.13 as of
the date of such financial statements, (b) stating that as of the date thereof,
no condition or event which constitutes an event of default hereunder or which
with the running of time and/or the giving of notice would constitute an event
of default hereunder has occurred and is continuing, or if any such event or
condition has occurred and is continuing or exists, specifying in detail the
nature and period of existence thereof and any action taken with respect thereto
taken or contemplated to be taken by Company and (c) stating that the signer has
personally reviewed this Agreement and that such certificate is based on an
examination sufficient to assure that such certificate is accurate.
4.11 Maintain its principal bank accounts with Bank.
4.12 Maintain at all times, Tangible Net Worth of not less than the Base
Tangible Net Worth.
"Base Tangible Net Worth" shall initially mean ($1,000,000). On the
last day of each fiscal quarter of Company (commencing June 30, 2002), Base
Tangible Net Worth shall increase by $250,000.
"Tangible Net Worth" shall mean the excess of (i) the net book value
of the assets of Company (excluding from assets however, amounts due, if
any, from affiliated corporations, and patents, patent rights, trademarks,
trade names, franchises, copyrights, licenses, good will and similar
intangible assets) after all appropriate deductions determined in
accordance with generally accepted accounting principles, consistently
applied (including, without limitation, reserves for doubtful receivables,
obsolescence, etc.), over (ii) all Debt of Company.
"Debt" shall mean, as of any applicable date of determination, all
items of indebtedness, obligation or liability of Company, whether matured
or unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, that should be classified as liabilities in
accordance with generally accepting accounting principles consistently
applied.
4.13 Maintain at all times, Working Capital of not less than the Base
Working Capital.
"Current Assets" shall mean, as of any applicable date of
determination, all cash, non-affiliated customer receivables and unbilled
receivables, United States government securities, income tax refunds,
tooling and inventories.
"Current Liabilities" shall mean, as of any applicable date of
determination, all items of indebtedness, obligation or liability of
Company, whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, joint or several, that should be
classified as liabilities in accordance with generally accepting accounting
principles consistently applied.
"Working Capital" shall mean, as of any applicable date of
determination, Current Assets less Current Liabilities.
"Base Working Capital" shall initially mean ($3,500,000). On the last
day of each fiscal quarter of Company (commencing June 30, 2002), Base
Working Capital shall increase by $250,000.
4.14 Promptly give Bank notice if any subsidiary of Company becomes a
Material Subsidiary and within fifteen (15) days after a subsidiary becomes a
Material Subsidiary cause such subsidiary to execute and deliver to Bank a
Guaranty in the form attached hereto as Exhibit "D" and to grant to Bank a first
priority security interest in its assets and to execute a Security Agreement in
the form attached hereto as Exhibit "E". "Material Subsidiary" shall mean any
subsidiary of Company which has assets with a market value in excess of $500,000
or gross revenues in excess of $500,000 per year.
5. NEGATIVE COVENANTS
Company covenants and agrees that, so long as any indebtedness to Bank
remains outstanding under this Agreement, it will not, without the prior written
consent of Bank:
5.1 Purchase, acquire or redeem any of its stock or make any material
change in its capital structure or general business objects or purpose.
5.2 Enter into any merger or consolidation or sell, lease, transfer, or
dispose of all, substantially all, or any part of its assets, except sales of
inventory in the ordinary course of its business and sales or other dispositions
of machinery and equipment to the extent not exceeding a market value of $50,000
during any single fiscal year.
5.3 Guarantee, endorse, or otherwise become secondarily liable for or upon
the obligations of others, except by endorsement for deposit in the ordinary
course of business and except for Company's reimbursement obligation in favor of
the Subordinate Creditors so long as the Subordination Agreement is in effect.
5.4 Become or remain obligated for any indebtedness for borrowed money, or
for any indebtedness incurred in connection with the acquisition of any
property, real or personal, tangible or intangible, except:
(a) indebtedness to Bank;
(b) current unsecured trade, utility or non-extraordinary accounts payable
arising in the ordinary course of Company's business;
(c) purchase money indebtedness and capital lease obligations for the
acquisition of fixed assets in an amount not to exceed $250,000 in the
aggregate; and
(d) existing indebtedness described in Schedule 5.4.
5.5 Purchase or otherwise acquire or become obligated for the purchase of
all or substantially all of the assets or business interests of any person, firm
or corporation or any shares of stock of any corporation, trusteeship or
association or in any other manner effectuate or attempt to effectuate an
expansion of present business by acquisition.
5.6 Except for existing investments disclosed in attached Schedule 5.6,
make or allow to remain outstanding any investment (whether such investment
shall be of the character of investment in shares of stock, evidences of
indebtedness or other securities or otherwise) in, or any loans or advances to,
any person, firm, corporation or other entity or association.
5.7 Affirmatively pledge or mortgage any of its assets, whether now owned
or hereafter acquired, or create, suffer or permit to exist any lien, security
interest in, or encumbrance thereon, except:
(a) to Bank;
(b) purchase money security interests in fixed assets to secure the
indebtedness permitted in Section 5.4(c) above to the extent created
substantially contemporaneously with the acquisition of such fixed
assets and the extent encumbering only the fixed assets so acquired;
(c) existing security interests described in Schedule 3.4 attached hereto
and renewals, extensions and substitutions thereof (including the
subordinate lien in the Company's membership interests in Tecstar LLC
in favor of the Subordinate Creditors and together with the liens
permitted under (b) above, the "Permitted Liens").
5.8 Sell, assign, transfer or confer a security interest in any account,
contract, note, trade acceptance or other receivable, except to Bank or as
otherwise permitted pursuant to the provisions of Section 5.7.
5.9 Make loans, advances of credit or extensions of credit to any officer,
director or shareholder of Company or any member of their immediate families or
entity controlled by any of the foregoing or to any other person, except for
sales on open account or in the ordinary course of business.
5.10 Materially alter the character of its business from that conducted as
of the date of this Agreement.
5.11 Declare or pay any dividends if at the time declared or paid or if
after giving effect thereto an event of default under this Agreement shall have
occurred and be continiung.
5.12 Enter into any transaction or series of transactions with any
affiliate other than on terms and conditions as favorable to Company as would be
obtainable in a comparable arms-length transaction with a person other than an
affiliate.
5.13 Enter into or become subject to any agreement (other than this
Agreement) (i) prohibiting the creation or assumption of any lien or encumbrance
upon the properties or assets of Company or (ii) requiring an obligation to
become secured (or further secured) if another obligation is secured or further
secured.
6. ENVIRONMENTAL PROVISIONS
6.1 For the purposes of this Agreement the term "Environmental Laws" shall
mean all federal, state and local laws including statutes, regulations,
ordinances, codes, rules, and other governmental restrictions and requirements,
relating to environmental pollution, contamination or other impairment of any
nature, any hazardous or other toxic substances of any nature, whether liquid,
solid and/or gaseous, including smoke, vapor, fumes, soot, acids, alkalis,
chemicals, wastes, by-products, and recycled materials. These Environmental Laws
shall include but not be limited to the Federal Solid Waste Disposal Act, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976, the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Federal Superfund
Amendments and Reauthorization Act of 1986, regulations of the Environmental
Protection Agency, regulations of the Nuclear Regulatory Agency, regulations of
any state department of natural resources or state environmental protection
agency now or at any time hereafter in effect and local health department
ordinances.
6.2 Company shall comply in all material respects with all applicable
Environmental Laws.
6.3 Company shall provide to Bank, immediately upon receipt, copies of any
correspondence, notice, pleading, citation, indictment, complaint, order,
decree, or other document from any source asserting or alleging a circumstance
or condition which requires or may require a financial contribution by Company
or a cleanup, removal, remedial action, or other response by or on the part of
Company under applicable Environmental Laws or which seeks damages or civil,
criminal or punitive penalties from Company for an alleged violation of
Environmental Laws.
6.4 Company shall promptly notify Bank in writing as soon as Company
becomes aware of any condition or circumstance which makes the environmental
warranties contained in this Agreement incomplete or inaccurate in any material
respect as of any date.
6.5 In the event of any condition or circumstance that makes any
environmental warranty, representation and/or agreement contained herein
incomplete or inaccurate in any material respect as of any date, Company shall,
at the reasonable request of Bank, at its sole expense, retain an environmental
professional consultant, reasonably acceptable to Bank, to conduct a thorough
and complete environmental audit regarding the changed condition and/or
circumstance and any environmental concerns arising from that changed condition
and/or circumstance. A copy of the environmental consultant's report will be
promptly delivered to both Bank and Company upon completion.
6.6 At any time Company, directly or indirectly through any professional
consultant or other representative, determines to undertake an environmental
audit, assessment or investigation, Company shall promptly provide Bank with
written notice of the initiation of the environmental audit, fully describing
the purpose and intended scope of the environmental audit. Upon receipt, Company
will promptly provide to Bank copies of all final findings and conclusions of
any such environmental investigation. Preliminary findings and conclusions shall
be provided if final reports have not been completed and delivered to Bank
within 60 days following completion of the preliminary findings and conclusions.
6.7 Company shall maintain all material permits, licenses and approvals
required under applicable Environmental Laws.
7. EVENTS OF DEFAULT
7.1 Upon non-payment of any installment of the principal or interest on the
Line Note when due in accordance with the terms thereof, or upon non-payment of
any other outstanding indebtedness of Company to Bank hereunder or under any
other instrument or evidence of indebtedness when due in accordance with the
terms thereof, the Line Note shall automatically become immediately due and
payable and Bank shall not have any obligation to make any additional advances
hereunder.
7.2 Upon occurrence of any of the following events of default:
(a) default in the observance or performance of any of the conditions,
covenants or agreements of Company set forth in Sections 4.1(c), (d),
4.3, 4.4, 4.5, 4.11, 4.12, 4.13, 4.14 or Section 5;
(b) default in the observance or performance of any of the conditions,
covenants or agreements of Company set forth in Section 4.1(a) or (b)
or 4.10 and continuance for ten (10) days;
(c) default in observance or performance of any of the other conditions,
covenants or agreements of Company herein set forth, and continuance
thereof for thirty (30) days after notice to Company by Bank;
(d) any representation or warranty made by Company herein or in any
instrument submitted pursuant hereto proves untrue in any material
respect when made;
(e) default in the observance or performance of any of the conditions,
covenants or agreements of Company or any other person set forth in
any collateral document of security which may be given to secure the
indebtedness hereunder or in any other collateral document related to
or connected with this Agreement or the indebtedness hereunder, and
continuation of such default beyond any period of grace specified in
any such document;
(f) default (i) in the payment of any other obligation of Company for
borrowed money (other than to Bank) in an aggregate amount in excess
of Twenty Five Thousand Dollars ($25,000), or (ii) in the observance
or performance of any conditions, covenants or agreements related or
given with respect thereto, and, in the case of clause (ii)
continuance thereof for a period of time sufficient to permit the
holder of the applicable indebtedness to accelerate such indebtedness;
(g) judgments for the payment of money in excess of the sum of Twenty Five
Thousand Dollars ($25,000) in the aggregate shall be rendered against
Company and such judgments shall remain unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period of thirty (30)
consecutive days from the date of its entry;
(h) the occurrence of any "reportable event", as defined in the Employee
Retirement Income Security Act of 1974 and any amendments thereto,
which is determined to constitute grounds for termination by the
Pension Benefit Guaranty Corporation of any employee pension benefit
plan maintained by or on behalf of Company for the benefit of any of
its employees or for the appointment by the appropriate United States
District Court of a trustee to administer such plan and such
reportable event is not corrected and such determination is not
revoked within thirty (30) days after notice thereof has been given to
the plan administrator or Company; or the institution of proceedings
by the Pension Benefit Guaranty Corporation to terminate any such
employee benefit pension plan or to appoint a trustee to administer
such plan; or the appointment of a trustee by the appropriate United
States District Court to administer any such employee benefit pension
plan;
(i) if there shall occur any change in the management, ownership or
control of Company which in the sole judgment of Bank is reasonably
likely to have a material adverse effect on the Company;
(j) if Bank shall for any reason deem itself insecure;
(k) if the rating of the issuer of the Collateral L/C (the "L/C Issuer) by
Standard & Poor's Rating Agency shall be less than "A" or if Standard
& Poor's Rating Agency shall no longer maintain a rating for the L/C
Issuer; provided, however, no such occurrence shall constitute an
event of default hereunder unless Company, within 20 days of written
notice by Bank to Company of such occurrence shall fail to provide to
Bank an alternate letter of credit which is in all respects
satisfactory to Bank issued by a financial institution acceptable to
Bank and which has terms the same in all material respects as the
Collateral L/C;
(l) if there shall occur an Act of Bankruptcy of the L/C Issuer or if the
Collateral L/C shall become unavailable to the Bank for any reason or
if the L/C Issuer shall wrongfully dishonor any drawing on the
Collateral L/C;
(m) the revocation of the Subordination Agreement or any guaranty given
pursuant to the provisions of Section 4.14;
then,or at any time thereafter, unless such default is remedied, Bank may give
notice to Company declaring all outstanding indebtedness hereunder and under the
Line Note to be due and payable, whereupon all indebtedness then outstanding
hereunder and under the Line Note shall immediately become due and payable
without further notice and demand and Bank shall not have any obligation to make
any additional advances hereunder.
"Act of Bankruptcy of the L/C Issuer" shall mean that the L/C Issuer has
become insolvent or bankrupt or has failed to pay its debts generally as such
debts become due or has admitted in writing its inability to pay any of its
indebtedness or has consented to or petitioned for or applied to any authority
for the appointment of a receiver, liquidator or trustee or similar official for
itself or for all or any substantial part of its properties or assets or any
such trustee, receiver, liquidator or similar official has been otherwise
appointed or bankruptcy, insolvency, reorganization, arrangement or liquidation
proceedings or similar proceedings have been instituted by or against the L/C
Issuer.
7.3 If a creditors' committee shall have been appointed for the business of
Company; or if Company shall have made a general assignment for the benefit of
creditors or shall have been adjudicated bankrupt, or shall have filed a
voluntary petition in bankruptcy or for reorganization or to effect a plan or
arrangement with creditors; or shall file an answer to a creditor's petition or
other petition filed against it, admitting the material allegations thereof for
an adjudication in bankruptcy or for reorganization; or shall have applied for
or permitted the appointment of a receiver, or trustee or custodian for any of
its property or assets; or such receiver, trustee or custodian shall have been
appointed for any of its property or assets (otherwise than upon application or
consent of Company) and such receiver, trustee or custodian so appointed shall
not have been discharged within sixty (60) days after the date of his
appointment or if an order shall be entered and shall not be dismissed or stayed
within sixty (60) days from its entry, approving any petition for reorganization
of Company, then the Line Note and all indebtedness then outstanding hereunder
shall automatically become immediately due and payable and Bank shall not have
any obligation to make any additional advances hereunder.
7.4 Upon the occurrence and during the continuance of any event of default,
Company shall immediately upon demand by Bank deposit with Bank cash collateral
in the amount equal to the maximum amount available to be drawn at any time
under any Letter of Credit then outstanding.
7.5 Upon the occurrence and during the continuation of any event of
default, Bank shall be entitled to draw on the Collateral L/C.
8. MISCELLANEOUS
8.1 This Agreement shall be binding upon and shall inure to the benefit of
Company and Bank and their respective successors and assigns. 8.2 No delay or
failure of Bank in exercising any right, power or privilege hereunder shall
affect such right, power or privilege, nor shall any single or partial exercise
thereof preclude any further exercise thereof, or the exercise of any other
power, right or privilege. The rights of Bank under this Agreement are
cumulative and not exclusive of any right or remedies which Bank would otherwise
have.
8.3 Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidated or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with generally accepted accounting
principles consistently applied.
8.4 Except as expressly provided otherwise in this Agreement, all notices
and other communications provided to any party hereto under this Agreement shall
be in writing and shall be given by personal delivery, by mail, by reputable
overnight courier or by facsimile and addressed or delivered to it at its
address set forth below or at such other address as may be designated by such
party in a notice to the other parties that complies as to delivery with the
terms of this Section 8.4. Any notice, if personally delivered or if mailed and
properly addressed with postage prepaid and sent by registered or certified
mail, shall be deemed given when received; any notice, if given to a reputable
overnight courier and properly addressed, shall be deemed given one (1) Business
Day after the date on which it was sent, unless it is actually received sooner
by the named addressee; and any notice, if transmitted by telex or facsimile,
shall be deemed given when received (receipt confirmed in the case of
telecopies). Bank may, but shall not be required to, take any action on the
basis of any notice given to it by telephone, but Company shall promptly confirm
such notice in writing or by facsimile, and such notice will not be deemed to
have been received until such confirmation is deemed received in accordance with
the provisions of this Section set forth above. If such telephonic notice
conflicts with any such confirmation, the terms of such telephonic notice shall
control.
To Company:
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Fax No.: (000) 000-0000
To Bank:
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Metropolitan Banking Division-D-Xxxxxxx X. Xxxxx
Fax No.: (000) 000-0000
8.5 Company shall pay all closing costs and expenses, including, by way of
description and not limitation, reasonable outside attorney fees and lien search
fees incurred by Bank in connection with the commitment, consummation and
closing of this Agreement. All of said amounts required to be paid by Company
may, at Bank's option, be charged by Bank as an advance against the proceeds of
the Line Note. All costs, including reasonable attorney fees and reasonable
auditor fees, incurred by Bank in reviewing, revising, protecting or enforcing
any of its rights against Company or defending Bank from any claims or
liabilities by any party or otherwise incurred by Bank in connection with an
event of default or the enforcement of this Agreement or the related documents
shall also be paid by Company.
8.6 On any default as defined in this Agreement or any default in payment
of any liability above mentioned, Bank may, except as otherwise provided herein,
without notice to anyone, declare the Note due forthwith, take all action,
remedial and otherwise, as provided herein or in any Security Agreement or other
document, instrument, or agreement of security or of collateral, and collect,
deal with and dispose of all or any part of any security without notice in any
manner permitted or authorized by the Michigan Uniform Commercial Code or other
applicable law (including public or private sale) and after deducting expenses
(including reasonable attorneys' fees and expenses) Bank may apply the proceeds
and any deposits or credits in part or full payment of any of said liabilities,
whether due or not, in any manner or order Bank elects.
8.7 This Agreement shall become effective upon the execution hereof by Bank
and Company.
8.8 No amendments or waiver of any provision of this Agreement nor consent
to any departure by Company therefrom shall in any event be effective unless the
same shall be in writing and signed by the Bank, and then such amendment, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, waiver or consent with respect to any
provision of this Agreement shall affect any other provision of this Agreement.
8.9 THIS AGREEMENT AND THE NOTE HAVE BEEN DELIVERED AT DETROIT, MICHIGAN,
AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF MICHIGAN. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
8.10 COMPANY AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED, EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN
THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT, THE INDEBTEDNESS EVIDENCED BY THE NOTE OR THE
NOTE.
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK STARCRAFT CORPORATION
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------ --------------------------------------
Its: Vice President Its: Chief Financial Officer and Secretary
EXHIBIT "A"
LINE NOTE
$2,000,000
Detroit, Michigan
June ___, 2002
On or before April 1, 2004, FOR VALUE RECEIVED, the undersigned, Starcraft
Corporation, an Indiana corporation (herein called "Company") promises to pay to
the order of COMERICA BANK, a Michigan banking corporation (herein called
"Bank") at its Main Office at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, the
indebtedness or so much of the sum of Two Million Dollars ($2,000,000) as may
from time to time have been advanced and then be outstanding hereunder and under
a certain Loan Agreement by and between Company and Bank dated June __, 2002
(herein called "Loan Agreement").
The indebtedness outstanding under this Note from time to time shall bear
interest at a per annum rate equal to one percent (1%) above the Bank's Prime
Rate. Upon the occurrence of any event of default hereunder or under the Loan
Agreement, interest shall accrue on the unpaid balance hereunder at a per annum
rate equal to three percent (3%) above the rate otherwise in effect. Interest
shall be payable monthly on the unpaid principal balance from time to time
outstanding commencing on August 1, 2002 and on the first business day of each
month thereafter until April 1, 2004 when the entire unpaid balance of principal
and interest shall be due and payable. Interest shall be computed on a daily
basis using a year of 360 days for the actual number of days elapsed, and, in
such computation, effect shall be given to any change in the interest rate
resulting from a change in the Prime Rate on the date of such change in the
Prime Rate. "Prime Rate" shall mean the rate of interest established by Bank and
publicly announced as its prime rate as the same may be changed from time to
time, which may not necessarily be Bank's lowest rate for loans. This Note may
be prepaid at any time without premium or penalty.
This Note evidences borrowing under, is subject to, is secured pursuant to,
shall be prepaid in accordance with, and may be matured under the terms of the
Loan Agreement, to which reference is hereby made. As additional security, Bank
is granted a lien on all personal property and assets (including deposits and
other credits) of Company at any time in possession or control of (or owing by)
Bank for any purpose.
All agreements between Company and Bank pertaining to the indebtedness
described herein are expressly limited so that in no event whatsoever shall the
amount of interest paid or agreed to be paid to Bank exceed the highest rate of
interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of the Loan Agreement, this Note or any
other instrument securing this Note or all or any part of the indebtedness
secured thereby, at the time performance of such provision shall be due, shall
involve exceeding the interest limitation validly prescribed by law which a
court of competent jurisdiction may deem applicable hereto, then, the obligation
to be fulfilled shall be reduced to an amount computed at the highest rate of
interest permissible under such applicable law, and if, for any reason
whatsoever, Bank shall ever receive as interest an amount which would be deemed
unlawful under such applicable law, such interest shall be automatically applied
to the payment of the principal amount described herein or otherwise owed by
Company to Bank, (whether or not then due and payable) and not to the payment of
interest.
Company hereby waives presentment for payment, demand, protest and notice
of dishonor and nonpayment of this Note and agrees that no obligation hereunder
shall be discharged by reason of any extension, indulgence, release, or
forbearance granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any property, real or
personal, which is now or hereafter security for this Note. Any transferees of,
or endorser, guarantor or surety paying this Note in full shall succeed to all
rights of Bank, and Bank shall be under no further responsibility for the
exercise thereof or the loan evidenced hereby. Nothing herein shall limit any
right granted Bank by other instrument or by law.
If the interest and principal hereof are not fully paid at maturity hereof
(whether by acceleration or otherwise), Company shall pay the holder hereof all
its reasonable costs of collection of said principal and interest including, but
not limited to, reasonable attorney fees.
THE UNDERSIGNED AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS
A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
(OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO THIS NOTE.
Notwithstanding anything herein to the contrary, nothing shall limit any
rights granted Bank by other instruments or by law.
STARCRAFT CORPORATION
By:
--------------------------------------
Its:
-------------------------------------
EXHIBIT "B"
REQUEST FOR ADVANCE
TO: COMERICA BANK (the "Bank")
The undersigned hereby request(s) an advance in the amount of DOLLARS ($ )
against the Line of Credit Note dated June ___, 2002, of undersigned to the Bank
in the face amount of Two - Million Dollars ($2,000,000).
The proceeds of this advance shall be deposited to the Account No. of the
undersigned with the Bank or as follows: . The proceeds of this advance shall be
used for working capital purposes and other general corporate purposes.
Undersigned warrants that no condition exists or event has occurred which
constitutes or, with the running of time would constitute a default under that
certain Loan Agreement dated June __, 2002, by and between undersigned and the
Bank.
Dated this _____ day of __________________, 200__.
STARCRAFT CORPORATION
By:
-----------------------------------
Its:
----------------------------------
EXHIBIT "D"
COVENANT COMPLIANCE REPORT
To: Comerica Bank
Re: Loan Agreement dated as of June ___, 2002 (the "Agreement")
This Covenant Compliance Report ("Report") is furnished pursuant to Section
4.10 of the Agreement and sets forth various information as of , ____ (the
"Computation Date").
1. Working Capital. On the Computation Date, Working Capital, which is
required to be not less than $______________, was $________________ as computed
in the supporting documents attached hereto as Schedule 1.
2. Tangible Net Worth. On the Computation Date, Tangible Net Worth, which
is required to be not less than $_______, was $_______ as computed in the
supporting documents attached hereto as Schedule 2.
The undersigned officer of Company hereby certifies that:
A. To the best of the undersigned officer's knowledge, all of the
information set forth in this Report (and in any Schedule attached hereto) is
true and correct in all material respects.
B. To the best of the undersigned officer's knowledge, as of the
Computation Date, the Company has observed and performed all of their respective
covenants and other agreements contained in the Agreement and in the Note and
any other Loan Documents to be observed, performed and satisfied by it.
C. To the best of the undersigned's knowledge, this Report is based on an
examination sufficient to assure that this Report is accurate.
D. To the best of the undersigned officer's knowledge, except as stated in
Schedule 3 hereto (which shall describe any existing Event of Default and the
notice and period of existence thereof and any action taken with respect thereto
or contemplated to be taken by Company), no Event of Default has occurred and is
continuing on the date of this Report.
Capitalized terms used in this Report and in the schedules hereto, unless
specifically defined to the contrary, have the meanings given to them in the
Agreement.
IN WITNESS WHEREOF, Company has caused this Report to be executed and
delivered by its duly authorized officer this ______ day of __________________,
____.
STARCRAFT CORPORATION
By:
-----------------------------------
Its:
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