EX-10
2
rev-credit-agree-1st-xxxxxxx.htm
EXHIBIT 10.1 FIRST XXXXXXX
REVOLVING CREDIT AGREEMENT
EXHIBIT 10.1
REVOLVING
CREDIT AGREEMENT
THIS REVOLVING
CREDIT AGREEMENT (the “Agreement”) is made by and between the
Company
and the Lender (each as herein defined). This Agreement acknowledges
the
existence of the contemplated Merger of Federal Hose Manufacturing, LLC
with a
subsidiary of the Company as described in Proxy Statement dated May 9,
2016.
In consideration of the covenants and agreements
contained herein, the Company and the Lender hereby mutually agree as
follows:
ARTICLE I. DEFINITIONS
Section l.l. General. Any accounting term used but not specifically
defined herein shall be construed in accordance with GAAP. The definition of each agreement, document,
and instrument set forth in Section 1.2 hereof shall be deemed to mean
and
include such agreement, document, or instrument as amended, restated,
or
modified from time to time.
Section 1.2. Defined
Terms. As used in this
Agreement:
“Business Day” means a day of the year on which banks are not required or authorized
to close
in Cleveland, Ohio.
“Company” shall
mean Xxxxxx
Incorporated, with its principal office located at 00000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000 and its successors.
“Environmental
Law” means any federal, state, or local statute, law,
ordinance, code,
rule, regulation, order or decree currently in effect regulating,
relating to,
or imposing liability upon a Person in connection with the use, release
or
disposal of any hazardous toxic or dangerous substance, waste or
material.
“Event of
Default” shall mean any one or more of the occurrences
described in
ARTICLE VII hereof.
“GAAP” shall mean generally accepted accounting principles as then in effect,
which
shall include the official interpretations thereof by the Financial
Accounting
Standards Board, consistently applied.
“Indebtedness” shall mean for any Person (i) all obligations to repay borrowed money,
direct
or indirect, incurred, assumed, or guaranteed, (ii) all obligations for
the
deferred purchase price of capital assets excluding trade payables,
(iii) all
obligations under conditional sales or other title retention
agreements, and
(iv) and all lease obligations which have been or should be capitalized
on the
books of such Person.
“Interest Period” means with respect to each Revolver Advance, the period
commencing
on the date of such borrowing and ending 30 days thereafter. For any Revolver Advance outstanding for more
than 30 days, a new Interest Period shall be deemed to commence every
30 days
during which such Revolver Advance remains outstanding.
“Lender” shall
mean First Xxxxxxx Company Inc. whose business address is 0000 Xxxxxxxx
Xxxx.
Xxxxxxxxx, XX 00000
“Lien” shall mean any mortgage, security interest, lien, charge, encumbrance
on,
pledge or deposit of, or conditional sale or other title retention
agreement
with respect to any property or asset of the Company.
“Loan” or
“Loans” shall mean the credit to the Company extended by the
Lender in
accordance with Section 2.1 hereof.
“Loan Documents” shall mean this Agreement, the Note, and any other documents relating
thereto.
“Note” shall mean, collectively, the promissory note, in the form of Exhibit A
attached hereto, signed and delivered by the Company to evidence its
Indebtedness to the Lender in accordance with Section 2.1 hereof.
“Person” shall mean any natural person, corporation (which shall be deemed to
include
business trust), association, limited liability company, partnership,
joint
venture, political entity, or political subdivision thereof.
“Potential
Default” shall mean any condition, action, or failure to act,
which,
with the passage of time, service of notice, or both, will constitute
an Event
of Default under this Agreement.
“Revolver
Advance” shall have the meaning ascribed to it in Section 2.1
hereof.
“Subordinated Debt” shall mean Indebtedness of a Person that is subordinated, in a manner
satisfactory to the Lender, to all Indebtedness owing to the Lender.
“Subsidiary” shall mean any Person of which more than fifty percent (50%) of (i) the
voting
stock entitling the holders thereof to elect a majority of the Board of
Directors, managers, or trustees thereof, or (ii) the interest in the
capital
or profits of such Person, which at the time is owned or controlled,
directly
or indirectly, by the Company or one or more other Subsidiaries.
“Termination
Date” shall mean May 31, 2017, or such earlier date on which
the
commitment of the Lender to make Loans pursuant to Section 2.1 hereof
shall
have been terminated pursuant to ARTICLE VIII of this Agreement.
The foregoing definitions shall be applicable to the
singulars and plurals of the foregoing defined terms.
ARTICLE II. CREDIT FACILITY
Section 2.1. Revolver Advances. The Lender
hereby agrees, subject to the
terms and conditions of this Agreement, to extend the following
revolving
credit facility to the Company (“Revolver Advance(s)”):
The Lender will, at the
request of the Company, make one or more Revolver Advances to the
Company from
time to time on and after the date of this Agreement through and
including the
Termination Date, in an aggregate principal amount (outstanding at any
one
time) not to exceed Two Hundred Fifty Thousand Dollars
($ 250,000.00) or
not more than an amount equal to 80% of the Company’s qualifying
Accounts
Receivables whichever is lower. The
Company
may borrow, repay, and reborrow the maximum amount of such credit
subject to
the limitation of Section 2.5.
Each Revolver Advance may be
made on any Business Day with 1 weeks notice to the lender in such
amount
(subject to the limitations set forth herein) as the Company shall
request by
notice to the Lender received on the date at least 1 week prior to the
disbursement of the requested Revolver Advance hereunder. All Revolver Advances shall be evidenced by
the Revolving Credit Promissory Note dated the date hereof in the form
of, and
substantially similar to Exhibit A attached hereto. The Company may request a Revolver Advance in
an amount no less than Ten Thousand Dollars ($ 10,000.00) and shall
repay a
Revolver Advance in an amount no less than Ten Thousand Dollars ($
10,000.00). The Revolving Credit
Promissory Note shall be a master note, and the principal amount of all
Revolver Advances outstanding shall be evidenced by the Revolving
Credit
Promissory Note or any ledger or other record of the Lender, which
shall be
presumptive evidence of the principal owing and unpaid on such Note. The Company may from time to time on any
Business Day, voluntarily reduce the amount of the Revolver Advance
facility;
provided that all such reductions shall require prior written notice to
the
Lender and shall be permanent, and any partial reduction shall be in an
amount
no less than Ten Thousand Dollars ($10,000.00) or any intergral
multiple thereof.
At the discretion of the
Company to deny the following provision because it would have a
negative effect
on the solvency of the Company the following term will take effect June
6, 2016
for the remainder of the loan agreement. The lender may terminate the
credit
facility at any time with 45 days written notice to the Company. Upon
receipt
of the Termination Notice the Company may only request additional loan
amounts
to the extent that additional cash demands incurred in the normal
course of
business would come due prior to the expiration of the Credit Facility.
Section 2.2. Qualifying
Accounts Receivables
Eligible accounts will
exclude receivables over 90 days old, receivables where more than 25%
of
receivables of that account debtor are more than 90 days old and
receivables
due from related entities; foreign accounts receivable will be eligible
if
covered by credit insurance acceptable the lender.
Section
2.3. Interest Rate.
(a) The
Loan shall bear interest prior to maturity at a rate per annum
equal to Four Percent (4%).
(b) After
the maturity of any Loan (whether by acceleration or otherwise) the
unpaid
principal amount of the Loan, and accrued interest thereon, or any fees
or any
and other sum payable hereunder, shall thereafter until paid in full
bear
interest at a rate per annum equal to eight percent (8.00%).
Section 2.4. Interest
Payments. The Company shall pay to
the Lender interest
on the unpaid principal balance of each Revolver Advance on the last
day of
each calendar month or at the lender’s discretion be required to add
the
accrued interest to the outstanding revolver loan amount on any given
month.
Section 2.5. Prepayment. The Company may prepay any Revolver Advance
in whole, or in part, in the principal amount of $ 10,000 or any
integral
multiple thereof, at any time or times upon not less than one (1)
Business
Days’ prior notice to the Lender unless the Company’s cash flow
projections
indicate that the Company would need to request Revolver funds within
the
following 30 day period. In that event the Company may not repay that
amount
projected to be required within the 30 day period.
Section 2.6. Use
of Proceeds. The Loans shall be
used solely to finance the working capital and capital expenditure
requirements
of the Company.
Section 2.7. Expenses
and Late Fees. The Company shall
pay to the Lender its’
out-of-pocket expenses, if any, determined in accordance with Section
9.2 (a)
hereof, payable on the date of execution of this Agreement. Prior to maturity, for each payment of
principal or interest not paid when due (subject to applicable grace
period), a
late fee equal to the greater of one percent (1.00%) of the amount of
such
payment or twenty five dollars ($25).
Section 2.8. Computation
of Interest and Fees. Interest
on Loans shall be computed on the basis of a year of 360 days and paid
for the
actual number of days elapsed. Interest
on unpaid fees, if any, hereunder shall be computed on the basis of a
year of
360 days and paid for the actual number of days elapsed.
ARTICLE
III. WARRANTIES
The Company represents and warrants to the Lender (which
representations and warranties will survive the delivery of the Note
and all
extensions of credit under this Agreement) that:
Section 3.l. Organization;
Power.
(a) The
Company is a corporation duly organized, validly existing and in good
standing
under the laws of the state of Ohio;
(b) The
Company has the power and authority to own its properties and assets
and to
carry on its business as now being conducted;
(c) The
Company is qualified to do business in every jurisdiction in which the
ownership or leasing of its property or the doing of business requires
such
qualification and where the failure to so qualify would have a material
adverse
effect on the Company or its business, assets, operations, or financial
condition;
(d) The
Company has the power to execute, deliver, and perform its Loan
Documents and
to borrow hereunder.
Section 3.2. Authorization
of Borrowing. The execution,
delivery, and performance of
the Loan Documents and the Loans by the Company have been duly
authorized by
all requisite action.
Section 3.3. No
Conflict. The execution, delivery,
and performance of
the Loan Documents will not (a) violate any provision of law or the
Articles of
Incorporation or Code of Regulations of the Company, (b) violate any
order of
any court or other agency of any federal or state government or any
provision
of any indenture, agreement, or other instrument to which the Company
is a
party or by which it or any of its properties or assets are bound, (c)
conflict
with, result in a breach of, or constitute (with passage of time or
delivery of
notice, or both), a default under any such indenture, agreement, or
other
instrument, or (d) result in the creation or imposition of any Lien or
other
encumbrance of any nature whatsoever upon any of the properties or
assets of
the Company except in favor of the Lender.
Section 3.4. Execution
of Loan Documents. The Loan
Documents, when executed, have been
duly executed and are valid and binding obligations of the Company
fully enforceable
in accordance with their respective terms.
Section 3.5. Financial
Condition. The Company
has provided Lender with its
audited financial statements for the fiscal year ended September 30,
2015 and
its unaudited financial statements for the six months ended March 31,
2016 (the
“Company Financial Statements”). Each
of the balance sheets included in the Company Financial Statements
(including
the related notes and schedules) presents fairly, or will present
fairly, in
all material respects, the financial position of the Company and its
consolidated Subsidiaries as of its date and each of the statements of
income
and of cash flows included in the Company Financial Statements
(including any
related notes and schedules) presents fairly, or will present fairly,
in all
material respects, the results of operations, retained earnings and
changes in
financial position, as the case may be, of the Company and its
Subsidiaries for
the periods set forth therein (except as otherwise noted therein and
subject, in
the case of unaudited statements, to notes and normal year-end audit
adjustments that will not be material in amount or effect), in each
case in
accordance with United States generally accepted accounting principles
(“GAAP”)
consistently applied during the periods involved, except, in the case
of
unaudited financial statements, as permitted by SEC Form 10-Q, and
except as
may be noted therein.
Section 3.6. Liabilities;
Liens. The Company has made no
investment in,
advance to, or guarantee of, the obligations of any Person nor are the
Company’s assets and properties subject to any claims, liabilities,
Liens, or
other encumbrances, except as disclosed in the Company Financial
Statements.
Section 3.7. Litigation. There is no action, suit, examination,
review, or proceeding by or before any governmental instrumentality or
agency
now pending or, to the knowledge of the Company, threatened against the
Company
or against any property or rights of the Company, which, if adversely
determined, would materially impair the right of the Company to carry
on
business as now being conducted or which would materially adversely
affect the
financial condition of the Company, except for the litigation, if any,
described in the Company Financial Statements.
Section 3.8. Payment
of Taxes. The Company has filed,
or caused to be filed,
all Federal, state, local, and foreign tax returns required to be filed
by the
Company, and has paid, or caused to be paid, all taxes as are shown on
such
returns to be owing by the Company, or on any assessment received by
the
Company, to the extent that such taxes are due, except as otherwise
contested
in good faith. The Company has set aside
proper amounts on their books, determined in accordance with GAAP, for
the
payment of all taxes for the years that have not been audited by the
respective
tax authorities or for taxes being contested by the Company.
Section 3.9. Agreements. The Company is not in default in the
performance, observance, or fulfillment of any of the obligations,
covenants,
or conditions contained in any agreement or instrument to which it is a
party,
which default materially and adversely affects the business,
properties,
assets, or financial condition of the Company.
Section 3.10. Regulatory
Status. Neither the making nor the
performance of
this Agreement, nor any extension of credit hereunder, requires the
consent or
approval of any governmental instrumentality or political subdivision
thereof,
any other regulatory or administrative agency, or any court of
competent
jurisdiction.
Section 3.11. Subsidiaries. The Company has no Subsidiaries except those
listed on Exhibit 21 to its Annual Report on Form 10-K and Federal Hose
Merger Sub, Inc.
Section 3.l2. Licenses. The Company has all licenses, franchises,
consents, approvals, or authorizations required in connection with the
conduct
of the business of the Company, the absence of which would have a
material
adverse effect on the conduct of their respective business, and all
such
licenses, franchises, consents, approvals, and authorizations are in
full force
and effect.
Section 3.13. Compliance
with Laws. The Company is in
compliance with all
applicable federal, state and local laws, regulations, ordinances or
rules,
except to the extent that any non-compliance will not, in the
aggregate, have a
materially adverse effect on the Company or the ability of the Company
to
fulfill its obligations under this Agreement or the Note.
Section 3.14. Solvency. The
Company has received
consideration, which is the reasonable equivalent value of the
obligations, and
liabilities that the Company has incurred to the Lender. The Company is
not
insolvent as defined in any applicable state or federal statute, nor
will the
Company be rendered insolvent by the execution and delivery of this
Agreement
or the Note to the Lender. The Company is not engaged or about to
engage in any
business or transaction for which the assets retained by it shall be an
unreasonably small capital, taking into consideration the obligations
to Lender
incurred hereunder. The Company does not intend to, nor does it believe
that it
will, incur debts beyond its ability to pay them as they mature.
ARTICLE IV. CONDITIONS
OF LENDING
Section 4.l. Each
Loan. The obligation of the Lender
to make any Loan
shall be subject to the following conditions: (i) the Lender has
received the
Note with all blanks appropriately completed, executed by an authorized
signer
of the Company; (ii) no Event of Default or Potential Default has
occurred or
be continuing, and (ii) each representation and warranty set forth in
ARTICLE III above is true and correct in all material respects as
if then
made.
ARTICLE V. AFFIRMATIVE COVENANTS
As long as credit is available hereunder or until all
principal of and interest on the Note have been paid in full:
Section 5.l. Financial
and Accounting Matters. The
Company will maintain a standard system
of accounting, established and administered in accordance with GAAP
consistently followed throughout the periods involved, and will set
aside on its
books for each fiscal quarter the proper amounts or accruals for
depreciation,
obsolescence, amortization, bad debts, current and deferred taxes,
prepaid
expenses, and for other purposes as shall be required by GAAP.
Section 5.2. Insurance;
Maintenance of Properties. The
Company will maintain with financially
sound and reputable insurers, insurance with coverage and limits as may
be
required by law. The Company will
maintain, in good repair, working order, and condition, all properties
used or
useful in the business of the Company.
Section 5.3. Existence;
Business. The Company will cause
to be done all things
necessary to preserve and keep in full force and effect its existence
and
rights, to conduct its business in a prudent manner, to maintain in
full force
and effect, and renew from time to time, its franchises, permits,
licenses,
patents, and trademarks that are necessary to operate its business.
Section 5.4. Compliance
with Laws. The Company will
comply, in all material
respects with all valid laws and regulations now in effect or hereafter
promulgated by any properly constituted governmental authority having
jurisdiction; provided, however, the Company shall not be required to
comply
with any law or regulation which it is contesting in good faith by
appropriate
proceedings as long as either the effect of such law or regulation is
stayed
pending the resolution of such proceedings or the effect of not
complying with
such law or regulation is not to jeopardize any franchise, license,
permit
patent, or trademark necessary to conduct the business of the Company.
Section 5.5. Payment
of Taxes. The Company will pay all
taxes, assessments,
and other governmental charges levied upon the Company with respect to
any of
its properties or assets or in respect of its franchises, business,
income, or
profits before the same become delinquent, except that no such taxes,
assessments, or other charges need be paid if contested by the Company in good faith and by appropriate proceedings
promptly initiated and diligently conducted and if the Company has set
aside
proper amounts, determined in accordance with GAAP, for the payment of
all such
taxes, changes, and assessments.
Section 5.6. Litigation;
Adverse Changes. The Company will
promptly notify the Lender
of (a) any future event which, if it had existed on the date of this
Agreement,
would have required qualification of the representations and warranties
set
forth in ARTICLE III hereof and (b) any material adverse change in the
condition, business, or prospects, financial or otherwise, of the
Company.
Section 5.7. Notice
of Default. The Company will
promptly notify, the Lender
of any Event of Default or Potential Default hereunder and any demands
made
upon the Company by any Person for the acceleration and immediate
payment of
any Indebtedness owed to such Person.
ARTICLE VI. NEGATIVE COVENANTS
As long as credit is available hereunder or until all
principal of and interest on the Note have been paid in full:
Section 6.1. Liens. The Company will not, directly or indirectly,
create, incur, assume, or permit to exist any Lien with respect to any
property
or asset of the Company other than:
(a) Liens for taxes or
governmental assessments, charges, or levies the payment of which is
not at the
time required by Section 5.5 hereof;
(b) Liens imposed by law,
such as Liens of landlords, carriers, warehousemen, mechanics, and
materialmen
arising in the ordinary course of business for sums not yet due or
being
contested by appropriate proceedings promptly initiated and diligently
conducted, provided the Company has set aside proper amounts,
determined in
accordance with GAAP, for the payment of all such Liens;
(c) Liens incurred or
deposits made in the ordinary course of business in connection with
worker’s
compensation, unemployment insurance, and other types of social
security, or to
secure the performance of tenders, statutory obligations, and surety
and appeal
bonds, or to secure the performance and return of money bonds and other
similar
obligations, but excluding Indebtedness;
(d) Liens in respect of
judgments or awards with respect to which the Company shall, in good
faith, be
prosecuting an appeal or proceeding for review and with respect to
which a stay
of execution upon such appeal or proceeding for review shall have been
obtained;
(e) Liens that secure the
Indebtedness of the Company for the purchase price of any real or
personal
property and that only encumber the property purchased;
(f) Liens in favor of the
Lender;
(g) Easements, rights-of-way,
covenants, reservations, exceptions, encroachments, zoning and similar
restrictions, and other similar encumbrances or title defects incurred
in the
ordinary course of business which, in the aggregate, are not material
in
amount, and which do not in any case materially detract from the value
of the
property subject thereto or materially interfere with the ordinary
conduct of
the business of the Company taken as a whole;
(h) Bankers’ liens arising
by operation of law;
(i) Liens arising pursuant
to any order of attachment, distraint, or similar legal process arising
in
connection with any court proceeding being contested in good faith by
appropriate proceedings or the payment of which is covered in full
(subject to
customary deductibles) by insurance;
(j) Rights
of lessees or sublessees in assets leased by the Company;
(k) Liens arising from the
extension, renewal, or replacement of any indebtedness secured by any
of the
foregoing liens covered by paragraphs (a) through (k) above as long as
the
aggregate principal amount thereof and the security therefore is not
thereby
increased.
Section 6.2. Indebtedness. The Company will not, directly or indirectly,
create, incur, or assume Indebtedness, or otherwise become liable with
respect
to, any Indebtedness other than:
(a) Indebtedness now or
hereafter payable, directly or indirectly, by the Company to the Lender;
(b) Subordinated Debt of
the Company;
(c) To the extent permitted
by this Agreement, Indebtedness for the purchase price of any real or
personal
property, which is secured only by a Lien on the property purchased;
(d) Unsecured current Indebtedness and
deferred
liabilities (other than for borrowed money or represented
by bonds, notes, or
other securities) incurred in the ordinary course of business;
(e) Indebtedness for taxes,
assessments, governmental charges, liens, or similar claims to the
extent not
yet due and payable;
(f) Convertible Loans
contemplated by the Company at the time of this document; and
(g) The indebtedness
contemplated by the Merger of Federal Hose Manufacturing, LLC into a
subsidiary
of the Company. See the Company Proxy Statement dated May 9, 2016.
Section 6.3. Investments;
Loans. The Company will not,
directly or indirectly,
(a) Except in connection with the merger of Federal Hose Manufacturing,
LLC
into a subsidiary of the Company, otherwise form or acquire a
Subsidiary or
otherwise purchase or otherwise acquire or own any stock or other
securities of
any other Person or (b) make or permit to be outstanding any loan or
advance
(other than trade advances in the ordinary course of business) or enter
into
any arrangement to provide credit, to any other Person, except that the
Company
may purchase or otherwise acquire and own marketable U.S. Treasury and
Agency
obligations, and certificates of deposit and bankers’ acceptances
issued or
created by any domestic commercial bank or Loans associated with the
contemplated Convertible Debenture and Loan Agreement with Roundball,
LLC at
the time of this document is signed.
Section 6.4. Guaranties. The Company will not, directly or indirectly,
guarantee or otherwise become surety (including, without limitation,
liability
by way of agreement, contingent or otherwise, to purchase, to provide
funds for
payment, to supply funds to, or otherwise invest in, any Person, or
enter into
any working capital maintenance or similar agreement) in respect of any
obligation or Indebtedness of any other Person, except guaranties by
endorsement of negotiable instruments for deposit, collection, or
similar
transactions in the ordinary course of business.
Section 6.5. Subordinated
Debt. The Company will not make
any payment upon
any outstanding Subordinated Debt, except in such manner and amounts as
may be
expressly authorized in any subordination agreement presently or
hereafter held
by the Lender.
ARTICLE VII. EVENTS OF DEFAULT
The occurrence of any one or more of the following events
shall constitute an Event of Default under this Agreement:
Section 7.l. Principal
or Interest. If the Company fails
to pay any installment
of principal of or interest on the Note or any other sums of money when
due and
payable under this Agreement; or
Section 7.2. Misrepresentation. If any representation or warranty made herein
by the Company or in any written statement, certificate, report, or
financial
statement at any time furnished by, or on behalf of, the Company in
connection
herewith, is incorrect or misleading in any material respect when made;
or
Section 7.3. Failure
of Performance of this Agreement. If
the Company fails to perform or observe
any covenant or agreement contained in this Agreement, other than the
payment
of any sums of money payable hereunder, and such failure remains
unremedied for
thirty (30) calendar days after the Lender shall have given written
notice
thereof to the Company; or
Section 7.4. Insolvency. If the Company shall discontinue business or
the Company (a) is adjudicated a bankrupt or insolvent under any law of
any
existing jurisdiction, domestic or foreign, or ceases, is unable, or
admits in
writing its inability, to pay its debts generally as they mature, or
makes a
general assignment for the benefit of creditors, (b) applies for, or
consents
to, the appointment of any receiver, trustee, or similar officer for it
or for
any substantial part of its property, or any such receiver, trustee, or
similar
officer is appointed without the application or consent of the Company,
and
such appointment continues thereafter undischarged for a period of
sixty (60)
days, (c) institutes, or consents to the institution of any bankruptcy,
insolvency, reorganization, arrangement, readjustment or debt,
dissolution,
liquidation, or similar proceeding relating to it under the laws of any
jurisdiction, (d) any such proceeding is instituted against the Company
and
remains thereafter undismissed for a period of sixty (60) days, or (e)
any
judgment, writ, warrant of attachment or execution, or similar process
is
issued or levied against a substantial part of the property of the
Company and
such judgment, writ, or similar process is not effectively stayed
within sixty
(60) days after its issue or levy, or any Guarantor becomes deceased.
ARTICLE VIII. REMEDIES UPON DEFAULT
Section 8.l. Optional
Acceleration. In the event that
one or more of the Events
of Default set forth in Sections 7.1 through 7.3 above occurs and
continues and
is not waived by the Lender, then, in any such event, and at any time
thereafter, the Lender may, at its option, terminate its commitment to
make any
Loan and declare the unpaid principal of, all accrued interest on, in
respect
of, the Note, and any other liabilities hereunder, and all other
Indebtedness
of the Company to the Lender forthwith due and payable, whereupon the
same will
forthwith become due and payable without presentment, demand, protest,
or other
notice of any kind, all of which the Company hereby expressly waives,
anything
contained herein or in the Note to the contrary notwithstanding.
Section 8.2. Automatic
Acceleration. Upon the happening
of an Event of Default
referred to in Section 7.4 above, the unpaid principal of, all accrued
interest
on the Note, and all other Indebtedness of the Company to the Lender
then
existing will thereupon become immediately due and payable in full and
the
commitment, if any, of the Lender to make any Loan, if not previously
terminated, will thereupon immediately terminate without presentment,
demand,
protest, or notice of any kind, all of which are hereby expressly
waived by the
Company, anything contained herein or in the Note to the contrary
notwithstanding.
Section 8.3. Right
of Set Off. Upon the occurrence
and continuation of an
Event of Default, the Lender has the right, in addition to all other
rights and
remedies available to it, to set off the unpaid balance of the Note and
any
other Indebtedness payable to the Lender held by it against any debt
owing to
the Company by the Lender.
Section 8.4. No
Waiver. The remedies in this
ARTICLE VIII are in
addition to, not in limitation of, any other right, power, privilege,
or
remedy, either in law, in equity, or otherwise, to which the Lender may
be
entitled. No failure or delay on the
part of the Lender in exercising any right, power, or remedy will
operate as a
waiver thereof, nor will any single or partial exercise thereof
preclude any
other or further exercise thereof or the exercise of any other right
hereunder.
ARTICLE IX. MISCELLANEOUS
Section 9.l. Amendments. No waiver of any provision of this Agreement
or the Note, or consent to departure therefrom, is effective unless in
writing
and signed by the Lender. No such
consent or waiver extends beyond the particular case and purpose
involved. No amendment to this Agreement
is effective
unless in writing and signed by the Company and the Lender.
Section 9.2. Expenses. The Company shall pay (a) all reasonable
out-of-pocket expenses of the Lender incurred in connection with the
preparation of this Agreement, any waiver or consent hereunder or any
amendment
hereof or any Event of Default hereunder and (b) if an Event of Default
or
Potential Default occurs, all out-of-pocket expenses incurred by the
Lender,
including reasonable fees and disbursements of counsel, in connection
with such
Event of Default or Potential Default and collection and other
enforcement
proceedings resulting therefrom. The
Company shall reimburse the Lender for its payment of all transfer
taxes,
documentary taxes, assessments, or charges made by any governmental
authority
by reason of the execution and delivery of this Agreement or the Note.
Section 9.3. Indemnification. The Company shall indemnify and hold the
Lender harmless against any and all liabilities, losses, damages,
costs, and
expenses of any kind (including, without limitation, the reasonable
fees and
disbursements of counsel in connection with any investigative,
administrative
or judicial proceeding, whether or not the Lender shall be designated a
party
thereto) which may be incurred by the Lender relating to or arising out
of this
Agreement or any actual or proposed use of proceeds of any loan
hereunder;
provided, that the Lender shall have no right to be indemnified
hereunder for
its own gross negligence, bad faith or willful misconduct as determined
by a
court of competent jurisdiction. The
Company further agrees to indemnify the Lender against any loss or
expense
which the Lender may sustain or incur as a consequence of any default
by the
Company in payment when due of any amount due hereunder.
Section 9.4. Construction. This Agreement and the Note will be governed
by and construed in accordance with the laws of the State of Ohio,
without
regard to principles of conflict of laws. The several captions to different Sections of this Agreement are
inserted for convenience only and shall be ignored in interpreting the
provisions hereof.
Section 9.5. Extension
of Time. Whenever any payment
hereunder or under the
Note becomes due on a date which is not a Business Day, such payment
will be
due on the next succeeding Business Day and such extension of time will
be
included in computing interest in connection with such payment.
Section 9.6. Notices. All written notices, requests, or other
communications herein provided for must be addressed to the Company or
to the
Lender at the addresses set forth in Article I above, or at such other
address
as either party may designate to the other in writing. Such communication will be effective (i) if
given by mail, 72 hours after such communication is deposited in the
U.S. mail
certified mail return receipt requested, or (ii) if given by other
means, when
delivered at the address specified in this Section 9.6.
Section 9.7. Survival
of Agreements; Relationship. All
agreements, representations, and
warranties made in this Agreement will survive the making of the
extension of
credit hereunder, and will bind and inure to the benefit of the Company
and the
Lender, and their respective heirs, successors and assigns; provided,
that no subsequent holder of the Note shall by reason of acquiring that
Note
become obligated to make any Loan hereunder and no successor to or
assignee of
the Company may borrow hereunder without the Lender’s written assent. The relationship between the Company and the
Lender with respect to this Agreement, the Note and any other Loan
Document is
and shall be solely that of debtor and creditor, respectively, and the
Lender
has no fiduciary obligation toward the Company with respect to any such
document or the transactions contemplated thereby.
Section 9.8. Severability. If any provision of this Agreement or the
Note, or any action taken hereunder, or any application thereof, is for
any
reason held to be illegal or invalid, such illegality or invalidity
shall not
affect any other provision of this Agreement or the Note, each of which
shall
be construed and enforced without reference to such illegal or invalid
portion
and shall be deemed to be effective or taken in the manner and to the
full
extent permitted by law.
Section 9.9. Entire
Agreement. This Agreement, the
Note, and the other Loan
Documents integrate all the terms and conditions mentioned herein or
incidental
hereto and supersede all oral representations and negotiations and
prior
writings with respect to the subject matter hereof.
Section 9.10. JURY
TRIAL WAIVER. THE COMPANY AND THE LENDER EACH WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN
CONTRACT, TORT OR OTHERWISE, BETWEEN LENDER AND COMPANY ARISING OUT OF,
IN
CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER
INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR
THE
TRANSACTIONS RELATED THERETO. THIS
WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY
LENDER’S
ABILITY TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR
COGNOVIT
PROVISION CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT
BETWEEN THE LENDER AND THE COMPANY.
IN WITNESS WHEREOF, the Company
and the Lender have
each caused this Agreement to be executed by their duly authorized
officers as
of the 3rd day of June 2016.
COMPANY: XXXXXX
INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X Xxxxxx
Title:
President and CEO
LENDER: /s/ Xxxxxx X. Xxxxxxxx
First
Xxxxxxx Company Inc.