EXHIBIT 10.96
SECURED RECOURSE NOTE
$13,500,220.00
Chicago, Illinois
May 1, 1997
FOR VALUE the undersigned DULUTH MASTER TRUST, an Ohio business trust
(-Borrower'), and DULUTH LEASE, INC., a Delaware corporation ("Co-Borrower"),
promise to pay to the order of AIM FINANCIAL CORPORATION (together with any
other holder hereof, "Lender") at its office at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000-0000 or at such other place as Lender may from dm
to time d te in writing, without grace, the principal sum of Thirteen Million
Five Hundred Thousand Two Hundred Twenty and 00/100 Dollars ($13,500,220.00),
together with interest on the unpaid balance of the principal from time to time
outstanding at rate equal to seventeen and seven hundred twenty-three hundredths
percent (17.723 %) per annum (the 'Loan Rate-).
After the earlier of (i) the Maturity Date (as hereafter defined), whether
by acceleration or otherwise, or (d) the occurrence of any Event of Default (as
hereafter defined) the total unpaid indebtedness hereunder shall bear interest
at the rate of eighteen percent (I 8 %) per annum (the "Default Rate").
Commencing on September 1, 1997, and semi-annually thereafter through and
including March 1, 2001 (the 'Maturity Date'), Borrower, and when applicable
Co-Borrower, shall make successive semi-annual installment payments of principal
and interest in an amount as set forth in Exhibit A hereto ("Debt Amortization
Schedule")
The entire balance of this Note than outstanding, plus any accrued and
unpaid interest thereon shall be due and payable on March 1, 2001, or such
earlier date on which said amount shall become due and payable on account of
acceleration by Lender or otherwise pursuant to the terms hereof of the Loan and
Security Agreement defined below. Borrower and Co-Borrower promise to pay to
Lender principal and interest in the amounts and at the times provided above.
This Note is referred to in the DULUTH MASTER TRUST and DULUTH LEASE, INC.
Loan and Security Agreement attached hereto as Exhibit 1. (hereinafter the 'Loan
and Security Agreement') and evidences that portion of the Indebtedness made by
Xxxxxx to Borrower and Co-Borrower thereunder. This Note is entitled to the
benefits provided for in the Loan and Security Agreement and is secured by all
rights, title and interest in and to all chattel paper, the Equipment and/or
assets more particularly described in the Facility Lease and Lease Supplement
No. I attached hereto as Exhibit 2, as well as all rights and remedies accruing
under the Loan and Security Agreement including, but not limited to, all monies
due or will become due. The Loan and Security Agreement provides for the
acceleration of the maturity of this Note upon the occurrence of certain events
and other pertinent terms. All payments made hereunder shall.-be applied first
to interest, second to late charges or other charges as provided in the Loan and
Security Agreement and third to principal. All amounts owing under this Note
shall be payable in lawful money of the United States of America which, as at
the time of payment, shall be legal tender for the payment of public and private
debts and shall be payable without relief or benefit of any valuation, stay,
appraisement, extension or redemption laws now or hereafter existing. Unless
otherwise defined herein, capitalized terms used herein shall have the same
meanings to such terms in the Loan and Security Agreement.
Borrower and Co-Borrower agree to pay all amounts due, or to become due,
under this Note, without regard to whether Borrower and Co-Borrower have
received payments from the Lessee identified in the Facility Lease and Lease
Supplement No. 1 which secure this Note
In the event any payment of principal and interest due hereunder is not
paid within five (5) Business Days after its originally scheduled due date then
Borrower and Co-Borrower agree that the Note shall be in default and further
agree that the term of the Note shall be accelerated causing the entire amount
set forth in the Note to become due and payable. In addition, the Borrower and
Co-Borrower agree to pay interest on the unpaid accelerated balance at the
Default Rate as defined in the Loan and security Agreement, with said interest
beginning to accrue on the scheduled due date and continuing until the date
payment of such amount is made.
Borrower and Co-Borrower agree that following the transfer of Xxxx Xxxxx
Finance Corporation's interest in Papermill Leasing, Inc. f/k/a/ Xxxx Leasing,
Inc. to Duluth Master Trust, should a third party assume Borrower's and
Co-Bormwer's obligations due under this Note, purchase Duluth Leasing, Inc.'s
interest in Duluth Master-.Trust, or in any other way become obligated to make
the payments set forth in Exhibit A of this Note with the intention of making
the payments as set forth in Exhibit A, said third party, prior to -forwarding
funds required pursuant to the payment or payments then due, shall pay
$1,000,000.00 to AIM Financial Corporation. Borrower and Co-Borrower agree that
they have not anticipated payment of this Note in a manner consistent with
Exhibit A, and that Exhibit A has been drafted merely to facilitate the logical
depreciation of the Equipment and/or assets which secure the Note. The Borrower
and Co-Borrower further understand and agree that Xxxxxx has provided the funds
required by Borrower and Co-Borrower through short-term financing arrangements
with Xxxxxx's financial institution and that extending the pay-out of this Note,
under terms similar to those set forth in Exhibit A, will require Lender to
alter its arrangement with its financial institution and will increase Lender's
costs by $1,000,000.00.
Borrower and Co-Borrower waive presentment and demand for payment,
dishonor, notice of dishonor, protest and notice of protest of this Note. The
provisions of this Note shall be binding upon Borrower and Co-Borrower and their
successors and assigns and shall inure to the benefit of Lender and its
successors and assigns.
THE LOAN EVIDENCED HEREBY. HAS BEEN MADE, AND THIS NOTE HAS BEEN DELIVERED AT
CHICAGO, ILLINOIS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS AND THE VALIDITY, INTERPRETATION, ENFORCEMENT-AND
EFFECT OF THEREOF SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS.
BORROWER AND CO-BORROWER HEREBY KNOWINGLY, WILLINGLY AND VOLUNTARILY CONSENT TO
THE JURISDICTION AND VENUE OF ALL -STATE AND FFDERAL COURTS IN SAID STATE
LOCATED IN COOK COUNTY, ILLINOIS. XXXXXXXX AND CO-BORROWER HEREBY KNOWINGLY AND,
VOLUNTARILY WAIVE ANY RIGHT TO PERSONAL SERVICE OF PROCESS IN ANY ACTION BROUGHT
IN CONNECTION WITH OR ARISING OUT OF THIS NOTE AND CONSENT TO,-SERVICE OF
PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
THE LAST KNOWN ADDRESS OF THE BORROWER AND CO-BORROWER WHICH SERVICE SHALL BE
DEEMED TO HAVE OCCURRED 'TEN (10) DAYS FROM THE DATE OF MAILING. THE BORROWER
AND CO-BORROWER KNOWINGLY WILLINGLY AND VOLUNTARELY WAIVE ANY RIGHT TO ASSERT
THAT ANY ACTION BROUGHT IN CONNECTION WITH OR ARLSING.,OUT.-OF THIS NOTE IN SUCH
COURT IS IN AN IMPROPER VENUE.
If this Note is not dated when executed by Xxxxxxxx and Co-Borrower,
Lender is hereby authorized, without notice to Borrower and Co-Borrower to date
this Note as of the date when the loan evidenced hereby is made. Wherever
possible each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Note
shall be prohibited by or invalid under such 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
Note.
DULUTH MASTER TRUST
DULUTH LEASE, INC.
ASSIGNMENT AGREEMENT
Duluth Master Trust, an Ohio business trust, ('Assignor'), with its
principal place of business located at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
Xxxx 00000, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and provided by AIM Financial Corporation,
('Assignee'), with its principal place of business at 00 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, hereby and pursuant to the Duluth
Master Trust and Duluth Lease, Inc. Low and Security Agreement (hereinafter
referred to as the Lease and Security Agreement") (as defined below) assigns,
transfers, and sets over to Assignee, its successors and assigns, all of
Assignor's rights, title and interest in and to all chattel paper, the Facility
Lease dated December 31, 1987 and the Lease Supplement No. I dated May 5, 1995,
both entered into by and between Lake Superior Paper Industries, as Lessee, and
First Bank National Association f/ka First National Bank of Minneapolis, acting
in its capacity as Owner Trustee, as Owner, as well as all rights and remedies
accruing under said Facility Lease and Lease Supplement, including, but not
limited to, all monies due or to become due under and all Equipment and/or
assets more particularly described in the Facility Lease and Lease Supplement
No. 1, of which Assignor is lessor, assignee or secured party. A copy of the
Loan and Security Agreement is attached hereto as Exhibit 1. A copy of the
Facility Lease and Supplement No. 1 is attached hereto Exhibit 2.
This Assignment is made pursuant to the provisions of the Master Trust and
Duluth Lease, Inc. Lease and Security Agreement, dated as of May 1, 1997,
between Assignor and Assignee. Unless otherwise defined herein, capitalized
terms used herein shall have the same meanings herein ascribed to such terms in
the Loan and Security Agreement. Subject to the terms and conditions of the Loan
and Security Agreement, this Assignment shall be irrevocable with respect to the
Facility Lease and Lease Supplement No. I assigned hereunder until such time as
all obligations of Assignor to Assignee under the Note have been satisfied in
full. With respect to the Facility Lease and Lease Supplement No. 1, Assignor
shall not have, in whole or in part, any right of abatement, reduction, setoff,
defense, counterclaim, interruption, deferment or recoupment for any claim
against Assignee or the holder of any Note. This Assignment shall not relieve
Assignor from any of its duties and obligations under the Facility and Lease
Supplement No. I attached hereto as Exhibit 2.
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed in
its name by its duly authorized representative on the 1st day of May1997.
DULUTH MASTER TRUST
DULUTH LEASE, INC.
ASSIGNMENT AGREEMIENT
Duluth Master Trust, an Ohio business trust, ("Assignor') with its
principal place of business located at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
Xxxx 00000, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and provided by AIM Financial Corporation,
('Assignee'), with its principal place of business at 00 Xxxxx XxXxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, hereby and pursuant to the Duluth
Master Trust and Duluth Leasing, Inc. Loan and Security Agreement (as denoted
below) assigns, transfers, and sets over to Assignee, its successors and
assigns, all of Assignor's rights, title and interest in and to the proceeds,
any insurance policies including, but not limited to, any commercial property
coverage insurance policy now in effect as to the Equipment and/or assets more
particularly described in Facility . Lease and Lease Supplement No. 1. A copy of
the Loan and Security Agreement is attached hereto as Exhibit 1. Copies of the
above-referenced Facility Lease and Lease Supplement No. I as well as the
effective insurance policy are attached hereto and collectively as Exhibit 1.
This Assignment is made pursuant to the provisions of the Duluth Master
Trust and Duluth Lease, Inc. Loan and Security Agreement, dated as of May 1,
1997. Unless otherwise defined herein, capitalized terms used herein shall have
the same meanings herein ascribed to such terms in the Loan and Security
Agreement. Subject to the terms and conditions of the above-referenced Loan and
Security Agreement, this Assignment shall be irrevocable with respect to the
insurance policies now in effect with regard to the Equipment more particularly
described in the Facility Lease and Lease Supplement No. 1, assigned hereunder,
until such time as all obligations of Assignor to Assignee under the Note have
been paid in full. With respect to the insurance policies now in effect with
regard to the Equipment more particularly described in the Facility Lease and
Lease Supplement No. 1, Assignor shall not have, in whole or in part, any right
of abatement, reduction, setoff, defense, counterclaim, interruption, deferment
or recoupment for any claim against Assignee or the holder of any note(s). This
Assignment shall not relieve Assignor from any of its duties and obligations
under the Facility Lease and Lease Supplement No. 1 attached hereto as Exhibit
2.
IN WITNESS WHEREOF, Assignor has caused, this Assignment to be executed in
its name by its duly authorized representative on the 1st day of May, 1997.
DULUTH MASTER TRUST
