Exhibit 10.21
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
This Amended and Restated Credit and Security Agreement dated as of
November 30, 1996 (the "Restated Agreement") is by and between the following
identified parties:
Featherlite Mfg., Inc., a corporation duly organized and validly
existing under the laws of the State of Minnesota, with its principal
place of business at Xxxxxxx 00 & 0, Xxxxxx, Xxxx 00000 ("Borrower");
Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, residents of Iowa, and
Xxxxx Xxxxxxx and Xxxxx Xxxxxxx, residents of Minnesota (each a
"Guarantor" and collectively the "Guarantors"); and
Firstar Bank Iowa, N.A., a national banking institution ("Bank"),
(successor in interest through merger of Firstar Bank Cedar Rapids,
N.A.);
RECITALS
A. Borrower, Guarantors and the predecessor to Bank entered into a Credit
and Security Agreement dated July 19, 1991 (the "Credit Agreement"). A First
Amendment to Credit and Security Agreement was entered into by the parties on
November 14, 1991; a Second Amendment to Credit and Security Agreement was
entered into by the parties on July 20, 1992; a Third Amendment to Credit and
Security Agreement was entered into by the parties on February 5, 1993; a Fourth
Amendment to Credit and Security Agreement was entered into by the parties on
August 20, 1993; a Fifth Amendment to Credit and Security Agreement was entered
into by the parties on December 17, 1993; a Sixth Amendment to Credit and
Security Agreement was entered into by the parties on July 20, 1994; a Seventh
Amendment to Credit and Security Agreement was entered into by the parties on
December 1, 1994; an Eighth Amendment to Credit and Security Agreement was
entered into by the parties on July 20, 1995; a Ninth Amendment to Credit and
Security Agreement was entered into by the parties on September 30, 1995; and a
Tenth Amendment to Credit and Security Agreement was entered into by the parties
on January 11, 1996. This Restated Agreement supersedes and replaces the Credit
Agreement, as amended.
B. Guarantors own stock of the Borrower and each Guarantor individually
perceives substantial business advantage from the transaction outlined herein,
including those transactions from which the individual Guarantors will not
receive any direct economic benefit.
C. Borrower and Guarantors have requested that Bank renew the $12,000,000
Revolving Line of Credit and amend certain terms and conditions. Guarantors have
requested that their guarantees be released if Borrower achieves certain targets
by June 30, 1997.
D. Bank is willing to grant the requests subject to the terms of this
Restated Agreement.
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Therefore, the parties agree that the Credit Agreement, as amended by the
First through Tenth Amendments, is amended and restated in its entirety as
follows:
1. DEFINITIONS AND ACCOUNTING. As used in this Restated Agreement, and
unless otherwise expressly indicated, or unless the context clearly
requires otherwise, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined:
"Accounts Receivable and Loan Reconciliation Certificate" means a
certificate in substantially the form of Exhibit A, attached hereto, which will
contain a loan covenant compliance calculation certified by an executive officer
of the Borrower.
"Accounts Payable" means trade payables under GAAP.
"Bank" means Firstar Bank Iowa, N.A., a national banking institution.
"Borrower" means Featherlite Mfg., Inc., a Minnesota corporation.
"Borrowing Base" means an amount equal to the sum of 80 percent of Eligible
Receivables of Borrower outstanding from time to time applicable thereto plus 65
percent of the Eligible Inventory of Borrower as Bank shall deem acceptable.
Such Borrowing Base shall be determined by submission of a monthly Accounts
Receivable and Loan Reconciliation Certificate by the end of each month,
accurate to the first of such month.
"Business Day" means a day other than a Saturday, Sunday or a day on which
commercial banks are authorized or permitted to close in Cedar Rapids.
"Collateral" shall have the meaning of the collateral described Section 3.
"Customer" means a party indebted or obligated to Borrower or a party
against which Borrower has a claim on a Receivable.
"Eligible Inventory" means inventory valued at the lower of cost or market
value on a "first in - first out" basis which is acceptable to Bank, in its sole
discretion, and excludes inventory that is slow moving or obsolete (as
determined by the Bank in its sole discretion), or on display, or on
consignment.
"Eligible Receivable" means a Receivable which is acceptable to Bank in its
sole discretion, but at least is continuously in compliance with all of the
following:
(1) The Receivable is an account which arose in the ordinary course of
the business of Borrower from or in connection with a bonafide sale of
goods or rendition of services, performed in accordance with an order
or contract, oral or written, wherein all obligations of Borrower
regarding the shipment or delivery of such goods to Customer have been
satisfied or the services have been performed for Customer or which
are Receivables in accordance with GAAP;
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(2) The rights of a Borrower in and to the Receivable and the proceeds
thereof are not subject to any assignment, claim, lien, security
interest, or other encumbrance;
(3) The Receivable is not disputed nor subject to offset, credit
allowance, contra account or adjustment by Customer, except discounts
for prompt payment disclosed to Bank;
(4) The Receivable has been due and payable for less than ninety (90)
days from the invoice date;
(5) The Customer is not a governmental agency, foreign company or
controlled by, in control of, or under common control with, the
Borrower.
"Environmental Law" means any federal, state or local environmental
statute, regulation, ordinance, law or decree presently in effect or that may be
promulgated in the future, as such statutes, regulations, and ordinances may be
amended from time to time, including without limitation, the Comprehensive
Environmental Response Compensation Liability Act, as amended, 42 U.S.C. ss.9601
et seq., ("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss.6901 ("RCRA"), and the common law.
"Event of Default" means each and every event specified in Section 12 of
this Restated Agreement.
"GAAP" means generally accepted accounting principles consistently applied.
"Guarantors" mean Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx
Xxxxxxx and Xxxxx Xxxxxxx (each a "Guarantor").
"Guaranty" means a guaranty given by a Guarantor pursuant to Section 4 of
this Restated Agreement and substantially in the form attached as Exhibit B.
"Hazardous Substance" means any substance or material defined or designated
as hazardous or toxic waste, hazardous or toxic material, a hazardous or toxic
substance, or infectious material, substance or waste, or other similar term, by
any Environmental Law or including, without limitation, asbestos, petroleum
products, mining wastes, fly ash and agricultural chemical products.
"Interest and Charges" means interest, charges, expenses and other items
incurred by the Bank under the Loan Documents which are chargeable to the
Borrower and which shall be billed directly to the Borrower.
"Loan" means all loans from Bank to Borrower including all revolving credit
facilities and all term facilities.
"Notes" means all notes executed by Borrower in favor of Bank including but
not limited to the Revolving Line of Credit Promissory Note and all term notes.
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"Obligations" means any and all indebtedness, obligations, and liabilities
of Borrower to Bank of every kind and description, direct or indirect, secured
or unsecured, joint or several, absolute or contingent, due or to become due,
whether for payment or performance, now existing or hereafter arising,
regardless of how the same arise or by what instrument, agreement, or book
account they may be evidenced, or whether evidenced by any instrument,
agreement, or book account, including, without limitation: all loans (including
any loan by renewal or extension); all indebtedness, all undertakings to take or
refrain from taking any action; all indebtedness, liabilities or obligations
owing from Borrower to others which Bank may have obtained by purchase,
negotiation, discount, assignment, or otherwise; and all interest, taxes, fees,
charges, expenses, and attorney's fees chargeable to Borrower or incurred by
Bank under this Restated Agreement or in any other document or instrument
delivered hereunder or as a supplement hereto.
"Operating Cash Flow" means net income plus income taxes, interest expense,
depreciation, amortization, and other non-cash items, adjusted to eliminate
extraordinary items and adjusted on a consistent basis to reflect increases or
decreases that result from acquisition sales, or exchanges of property and
gains/losses on the sale of property.
"Person" means an individual, a corporation, a voluntary association, a
partnership, a trust, a limited liability company, an unincorporated
organization or a governmental agency, instrumentality or political subdivision
thereof.
"Receivable" means all accounts and general intangibles, each as defined in
the Uniform Commercial Code, of Borrower, constituting any right to the payment
of money, including (but not limited to) all monies due and to become due to the
Borrower in respect of any loans or advances for Inventory or Equipment or other
goods sold by Borrower and all tax refunds.
"Revolving Line of Credit" means the credit referred to in Section 5.
"Revolving Line of Credit Borrowing Limit" means an amount equal to the
lesser of:
(1) $12,000,000
(2) the Borrowing Base.
"Revolving Line of Credit Promissory Note" means the promissory note, in
substantially the form of Exhibit C attached, to be delivered by Borrower to the
Bank.
"Revolving Line of Credit Termination Date" means the maturity date on the
Revolving Line of Credit Promissory Note as it may be extended, amended or
renewed from time to time at the sole discretion of Bank, or earlier accelerated
upon the occurrence of an Event of Default or otherwise as provided herein.
"Revolving Loans" means the credit referred to in Section 5.
"Subsidiary" means, with respect to any Person (the "Parent"), any
corporation or other business organization of which at least a majority of the
outstanding shares of stock or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the
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Board of Directors or comparable positions (irrespective of whether or not at
the time any other class or classes of such stock or ownership interests of such
corporation or other business organization shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by the Parent or one or more of the Subsidiaries
of the Parent.
"Tangible Net Worth" means the excess of total assets over total
liabilities, total assets and total liabilities each to be determined in
accordance with GAAP, excluding, however, from the determination of total
assets, (i) all assets which would be classified as intangible assets under
GAAP, including, without limitation, organization fees and expenses, goodwill,
patents, trademarks, trade names, copyrights, and franchises, and (ii) all
indebtedness to Borrower from any shareholder, director, officer or employee of
Borrower or from any relative of such party (but net of any corresponding,
offsetting indebtedness from Borrower to such individual).
"Term Loans" means the credits referred to in Section 6.
"Term Notes" means the notes evidencing the Term Loans.
"Total Debt Service" means, during any period, all interest on and
principal due of, all indebtedness which is due and payable during such period.
"Total Expenditures" means all cash expenses (including debt service) and
capital expenditures actually made.
2. REPRESENTATIONS AND WARRANTIES.
As a material inducement to Bank to make loans to the Borrower under this
Restated Agreement, Borrower represents and warrants to Bank, and such
representations and warranties shall survive during the term of this Restated
Agreement and so long thereafter as any Obligations shall remain outstanding, as
follows:
a. Corporate Standing and Power: The Borrower has been duly incorporated
and organized and is existing as a corporation in good standing under the laws
of Minnesota and is duly qualified and in good standing as a foreign corporation
in those jurisdictions where the conduct of its business or the ownership of its
properties requires qualification. The Borrower has the power and authority to
own its properties and assets, to conduct its business, to enter into and
perform this Restated Agreement, and any other document or instrument delivered
in connection herewith, and to incur the Obligations.
b. Trade Names, Business Changes: Except as may be set forth on Exhibit D
attached, Borrower has utilized no trade names in the conduct of its business;
has not changed its name, been the surviving entity in a merger, acquired any
business, or changed the location of their chief place of business or chief
executive office or the location of their records or the location of any of the
Collateral.
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c. No Defaults: Borrower is not in default with respect to any agreement to
which it is a party or by which it is bound. The execution and performance of
this Restated Agreement and any other document or instrument to be delivered
hereunder or as a supplement hereto will not violate any law or the terms of the
incorporation documents or bylaws of Borrower, nor will it violate or result in
a default or in the creation or imposition of any lien or encumbrance upon any
of the assets of Borrower (immediately, with the passage of time, or with the
giving of notice and the passage of time) under any other contract, agreement or
instrument to which Borrower is a party or by which Borrower is bound, nor will
it result in the acceleration of any obligation under any mortgage, lien, lease,
franchise, license, permit, agreement, instrument, order, arbitration award,
judgment, or decree, or in the termination of any license, franchise, lease, or
permit, to which Borrower is a party or by which it is bound; and it will not
violate or conflict with any other restriction of any kind or character to which
Borrower is subject.
d. Authorization, Binding Effect: This Restated Agreement and any document
or instrument to be delivered hereunder or as a supplement hereto and the
transaction contemplated hereby or thereby have been duly authorized and/or
executed and delivered, as appropriate, and constitute valid and legally binding
obligations of the Borrower and are enforceable against the Borrower in
accordance with their respective terms.
e. No Claims: There is no claim, loss contingency, litigation, or
proceeding whether or not pending, threatened, or imminent against or otherwise
affecting the Borrower which involves the possibility of any judgment or
liability not fully covered by insurance or which may result in a material
adverse change in the business, properties, or condition, financial or
otherwise, of the Borrower.
f. Properties: The Borrower is the owner of its properties, free and clear
of all security interests, encumbrances, or liens, except real estate or special
improvement assessment liens which arise by operation of law with respect to
obligations of the Borrower which are not yet due and payable and except such
liens as may be listed in Exhibit E attached hereto; Borrower will defend its
properties against all claims and demands of all persons at any time claiming an
interest therein. Inventory is and shall at all times be of good and
merchantable quality, free from all defects, encumbrances and liens except the
lien granted to the Bank hereunder.
g. Financial Statements: The financial statements of the Borrower for the
fiscal year ended December 31, 1995 furnished to Bank by Borrower are complete
and accurate representations of the financial condition of Borrower as of the
respective dates thereof, and have been prepared in accordance with GAAP. Since
the December 31, 1995 financial statements, there has been no material adverse
change in the financial condition of Borrower and there has been no transaction
other than in the ordinary course of the business of Borrower, except for the
purchase of the Vantare assets in Florida. The financial statements furnished to
Bank by the Guarantors are complete and accurate representations of the
financial condition of the Guarantors as of their respective dates.
h. Offices: The address of the chief executive office and chief place of
business of Borrower is Xxxxxxx 00 & 0, Xxxxxx, Xxxx 00000. All records
pertaining to the Inventory and Receivables (including computer records) are
kept at Borrower's chief place of business.
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i. Taxes: The Borrower and Guarantors have filed all federal, state, and
local tax returns and other reports they are required to file and have paid or
made adequate provision for payment of all such taxes, assessments, and other
governmental charges.
j. Compliance: To the best of its knowledge after due inquiry, the Borrower
has complied with all applicable statutes, regulations, ordinances, court
decrees, or other directives of the United States of America, and all states,
counties, municipalities, and agencies with respect to the manufacture and sale
of its goods, the rendition of its services, and/or the conduct of its business.
k. Consents, Approvals: No consent or approval of any person, no waiver of
any lien or other similar right, and no consent, license, approval,
authorization, or declaration of any governmental authority, bureau, or agency
is or will be required in connection with the execution, delivery, performance,
validity or enforcement or priority of this Restated Agreement or any other
agreement, instrument or document to be executed or delivered in connection
herewith.
l. GAAP: Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and reports as to
financial matters required to be delivered hereunder shall be prepared, in
accordance with GAAP.
m. Use of Property. None of the property of any Borrower has been used as a
Hazardous Substance disposal site, as a landfill or as a dump.
n. Hazardous Substances. To the best of its knowledge after due inquiry, no
Hazard Substance or toxic substance has been stored, used, or disposed of on any
property in which Borrower holds a real estate interest except as listed on the
Hazardous Substance Certificate attached as Exhibit F.
o. Subsidiaries. Borrower has only one Subsidiary; Featherlite Aviation
Company.
p. Federal Reserve Regulations. Borrower does not own any margin stock or
intend to carry or purchase any margin stock or security within the meaning of
Regulation U or the Securities Exchange Act of 1934, as amended. The Borrower is
not engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, as amended. None of the transactions contemplated by this
Restated Agreement including, without limitation, the use of proceeds of any
loan advance, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations pursuant
thereto, including, without limitation, Regulations G, U or X of the Board of
Governors of Federal Reserve System, as amended. None of the proceeds of any
loan will be used to carry or purchase (or refinance any borrowing the proceeds
of which were used to purchase or carry) any margin stock or any security within
the meaning of the Securities Exchange Act of 1934, as amended.
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q. Free Disclosure. This Restated Agreement and the other documents or
instruments to be delivered hereunder or as a supplement hereto do not contain
any known untrue statement of a material fact or omits to state a known material
fact necessary in order to make the statements contained therein not misleading.
There is no known material fact (other than general economic conditions or facts
or information available to the public generally) that has not been disclosed in
writing to the Bank that materially adversely affects, or as far as the Borrower
can now reasonably foresee, may materially adversely affect, the business,
operations, prospects, properties or assets of the Borrower or any Guarantor, or
the ability of the Borrower or any Guarantor to perform its/their obligations
under any document.
3. COLLATERAL.
As security for the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, Borrower pledges and
grants to Bank a security interest in the following property, whether now owned
by Borrower or hereafter acquired and whether now existing or hereafter coming
into existence (all being collectively referred to herein as "Collateral"):
a. Receivables: All accounts and general intangibles (each as defined in
the Uniform Commercial Code) of Borrower constituting any right to the payment
of money, including (but not limited to) all moneys due and to become due to the
Borrower in respect of any loans or advances for Inventory or Equipment or other
goods sold by Borrower and all tax refunds (collectively "Receivables");
b. Instruments: All instruments, chattel paper or letters of credit (each
as defined in the Uniform Commercial Code) evidencing, representing, arising
from or existing in respect of, relating to, securing or otherwise supporting
the payment of, any of the Receivables, including (but not limited to)
promissory notes, drafts, bills of exchange and trade acceptances (collectively
"Instruments"),
c. Inventory: All inventory (as defined in the Uniform Commercial Code) of
Borrower, including all goods obtained by Borrower in exchange for such
inventory, and any products made or processed from such inventory including all
substances, if any, commingled herewith or added thereto (collectively
"Inventory");
d. General Intangibles: All licenses, franchises, patents, trademarks,
copyrights, trade names, goodwill and any and all items of Borrower which would
be classified as general intangibles under the Uniform Commercial Code
(collectively "General Intangibles").
e. Equipment: All equipment (as defined in the Uniform Commercial Code) of
Borrower, including (but not limited to) all furniture, fixtures, trade
fixtures, displays, counters, cash registers, motor vehicles, trucks and
trailers (collectively "Equipment");
f. Contracts: Each contract and other agreement relating to the sale or
other disposition of Inventory or Equipment;
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g. Documents: All documents of title (as defined in the Uniform Commercial
Code) or other receipts covering, evidencing or representing Inventory or
Equipment (collectively "Documents");
h. Real Estate: All real estate in which the Borrower has an ownership
interest (except homestead property) and all of the Borrower's right, title and
interest in and to the buildings, improvements, ways, streets, alleys, passages,
rights of way, waters, water courses, rights, liberties, privileges, tenements,
hereditaments, and appurtenances now or hereafter hereunto appertaining to said
real estate together with the rents, issues and profits thereof and the proceeds
of the conversion therefore (collectively "Real Estate");
i. Fixtures: All fixtures (as defined in the Uniform Commercial Code) of
the Borrower (collectively "Fixtures"). The security interest from Borrower to
Bank in the Real Estate and Fixtures will, at the request of the Bank, in
addition to other documentation which may be requested by Bank, be evidenced by
Mortgage and Security Agreements, in a form requested by the Bank.
j. Claims: All rights, claims and benefits of Borrower against any person
arising out of, relating to or in connection with Inventory or Equipment
purchased by Borrower, including, without limitation, any such rights, claims or
benefits against any Person storing or transporting such Inventory or Equipment;
and,
k. Leaseholds: All leasehold interests in real estate leases to which the
Borrower is a party. The security interest from Borrower to Bank in the
leasehold interest of Borrower will, in addition to the additions to the
documents which may be requested by Bank, be evidenced by a collateral
assignment of real estate leases.
l. Proceeds: All proceeds, products and accessions of and to any of the
property described in clauses (a) through (k) above in this Section 3
(including, without limitation, any proceeds of insurance thereon), and to the
extent related to any property described in said clauses or in this clause, all
books, correspondence, credit files, records, invoices and other papers,
including without limitation all tapes, cards, computer runs and other papers
and documents in the possession or under the control of Borrower or any computer
bureau or service company from time to time acting for Borrower.
4. GUARANTORS. Banks have required the participation of the Guarantors as a
precondition to the availability of the credit arrangements established herein.
The Guarantors, by their executions hereof, acknowledge that the obligations of
the Borrower hereunder are enforceable in accordance with their terms, that such
are obligations of the Guarantors under the personal guarantees and that the
guarantees are in full force and effect, without amendment or defense of any
description. Banks agree to release the guarantees if Borrower is in compliance
with all loan and financial covenants and has a year to date actual cash flow to
debt service ratio of 1.5:1 as of June 30, 1997.
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5. REVOLVING LINE OF CREDIT LOAN AND PAYMENT PROVISIONS. The Bank establishes
the Revolving Line of Credit for the benefit of the Borrower for the purpose of
supplying working capital as may reasonably be required from time to time by the
Borrower. The Line of Credit is extended pursuant to the following provisions:
a. Borrowing. Subject to the terms and conditions of this Restated Agreement,
the Bank shall, in its sole discretion, make loans (each a "Revolving
Loan") to the Borrower in such amounts as the Borrower may from time to
time require in increments of at least $50,000 and at such intervals as the
Bank may from time to time determine, provided that the aggregate principal
amount of Revolving Loans outstanding hereunder, together with the
principal amount of such Revolving Loan requested, shall not exceed the
Borrowing Limit.
(1) Oral Requests. Revolving Loan requests may be either written or oral,
including a request made by telephone. In the case of an oral request,
the Bank is authorized to make such requested advance and to rely upon
the authority of the person making the request, unless the Borrower
directs the Bank, in writing, not to honor oral requests except from
certain identified persons. The authority of the person requesting the
advance shall be conclusively deemed authorized by the Borrower. Oral
requests must be received by the Bank prior to noon on the day of the
requested advance.
(2) Deposit of Loan Advances. All Revolving Loan advances shall be
credited to an account of the Borrower at the Bank.
(b) Promissory Note: The Borrower shall execute and deliver to the Bank the
Revolving Line of Credit Promissory Note with this Restated Agreement. The
Revolving Line of Credit Promissory Note, together with this Restated
Agreement and other documents referred to herein, shall evidence the
Borrower's indebtedness to the Bank in respect of the Revolving Loans and
the Term Notes and the other documents referred to herein shall evidence
the Borrower's indebtedness to the Bank in respect of the Term Loans.
(c) Interest: In accordance with the Revolving Line of Credit Promissory Note,
the Borrower shall pay interest to the Bank upon the outstanding daily
principal balance of the Loan Account, which interest shall be computed at
the close of each day, on the basis of actual days elapsed in the year of
360 days, at the interest rate specified in the Revolving Line of Credit
Promissory Note. Until the Revolving Line of Credit Termination Date, such
interest shall be paid monthly in arrears, commencing on the first day of
the next succeeding month following the month in which this Restated
Agreement is executed, and continuing on the first day of each successive
month thereafter. At the Revolving Line of Credit Termination Date, all
sums due hereunder shall be due and payable. All payments shall be made to
the Bank on or before the required due dates in immediately available
funds.
(d) Debits: The Bank shall enter as debits to the Loan Account all loans and/or
advances made pursuant to the Loan Documents, and Interest and Charges in
accordance with the Loan Documents. The Bank shall enter as credits to the
Loan Account all payments
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made by the Borrower on account of indebtedness evidenced by the Loan
Account, all net proceeds of Collateral which are finally paid to Bank
in cash or solvent credits, and other appropriate credits. The debit
balance of the Loan Account shall reflect the amount of indebtedness of
the Borrower to the Bank from time to time by reason of loans and other
appropriate charges under this Restated Agreement.
(e) Line of Credit Account Imbalance: If at any time that portion of the
debit balance of the Loan Account allocable to the Revolving Line of
Credit Promissory Note exceeds the Borrowing Limit, at the option of
the Bank, the Borrower shall (i) pledge, assign, and transfer to the
Bank such additional collateral as the Bank shall request or (ii) pay
cash to the Bank to be credited against the Revolving Line of Credit
Promissory Note, in an amount sufficient to eliminate the excess.
(f) Repayment: The Borrower promises to pay the debit balances of the Loan
Account and accrued Interest and Charges to the Bank in accordance with
the terms of the Notes and the other Loan Documents.
(g) Application of Credits: All payments and/or proceeds of Collateral
received by the Bank shall be applied to the payment of Interest and
Charges, if any, to principal on the Revolving Line of Credit
Promissory Note or any Term Loans in the Bank's discretion. The
Borrower authorizes the Bank to charge the Interest and Charges to the
Loan Account or to any deposit account maintained by the Borrower with
the Bank.
(h) Determination of Balances: The records of the Bank shall be prima facie
evidence as to the amounts of advances, outstanding principal balance,
and accrued Interest and Charges.
6. CONFIRMATION OF TERM LOANS AND PAYMENT PROVISIONS.
a. Borrower is obligated to pay Bank under various agreements and notes
(each a "Term Note") identified as:
(i) a term loan in the original principal amount of $300,000
pursuant to a note dated February 2, 1993, maturing on July 1, 2008,
payable to Firstar;
(ii) a term loan in the original principal amount of
$1,835,000 pursuant to a note dated July 20, 1994, maturing on July
20,1999, payable to Firstar; and
(iii) a term loan in the original principal amount of
$1,400,000 pursuant to a note dated September 30, 1995, maturing on
September 20, 1999, payable to Firstar.
b. Borrower and Guarantors acknowledge and agree that the notes referred to
in Section 6(a) are Obligations of Borrower to the Bank and are
cross-collateralized by the Collateral, and in the event of default under the
terms of any Obligation of the Borrower or any obligation of any Guarantor, that
such a default shall be deemed a default under any or all of
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the Borrower's Obligations and under any or all of the obligations of Guarantors
at the option of the Bank.
7. REPAYMENT TERMS. Interest and charges shall be paid to the Bank in accordance
with the terms of this Restated Agreement, the notes and other loan documents.
If any term of this Restated Agreement is in conflict with a term in any note
regarding payment of principal, interest, fees or charges, the term of the
applicable note shall apply. All payments shall be made timely in immediately
available funds. The Bank shall account for loan advances and payments in
accordance with its standard practices. The records of the Bank shall be prime
face evidence as to the amount of advances, outstanding principal balances, and
accrued interest and charges. Bank may make recourse against any security in any
order or grouping it desires and apply the proceeds to any of Borrower'
Obligations in its sole discretion. All payments by the Borrower shall be made
without setoff, counterclaim or deduction of any kind. Payments received by Bank
after 3:00 p.m. on any Business Day shall be deemed to be received on the next
succeeding Business Day for the purpose of calculation of interest.
8. CONDITIONS PRECEDENT TO INITIAL AND SUBSEQUENT LOANS. Borrower shall satisfy
each of the following conditions prior to the making of the initial loan and/or
each subsequent loan by Bank hereunder, as follows:
A. Initial Loan.
(1) All of the representations and warranties of Borrower set forth in
Section 2 hereof shall be true and correct as of the date of the initial loan.
(2) Borrower shall be in full compliance with the terms and conditions
hereof and no Event of Default shall have occurred and be continuing.
(3) Borrower shall have delivered to Bank, all in form and substance
satisfactory to Bank:
a. A duly executed Accounts Receivable and Loan Reconciliation Certificate
to be delivered and dated as of the date of the initial loan;
b. A certificate of the Secretary or other like officer of Borrower
containing copies of resolutions of the Board of Directors and, if applicable,
Stockholders of Borrower authorizing the execution, delivery and performance of
this Restated Agreement, any document or instrument to be delivered pursuant
hereto or in connection herewith and the transactions contemplated herein and
therein, and identifying the officer or officers authorized to execute this
Restated Agreement and such other documents and to make requests for Loans
hereunder;
c. A certificate of reasonably recent date of the Secretary of State of the
State of Iowa and a certificate of the Secretary of State of each state in which
Borrower is
- 12 -
qualified to do business as a foreign corporation, certifying that Borrower is
in good standing in each such jurisdiction;
d. Financing statements necessary to perfect the security interest of Bank
in the Collateral;
e. Releases of all other security interests in the equipment of Borrower;
f. Revolving Line of Credit Promissory Note;
g. Execution and delivery of mortgage on property in Shenadoah, Iowa;
h. Delivery of all original notes receivables from officers and employees;
i. Delivery of an opinion letter of counsel for Borrower regarding
authority, enforceability of documents and priority of liens;
j. Evidence of all required insurance being in place;
k. Such other documents or instruments as Bank shall reasonably request.
B. Subsequent Loans and/or Advances.
(1) All of the representations and warranties of Borrower set forth in
Section 2 hereof shall be true and correct as of the date of each
subsequent loan and/or advance.
(2) Borrower shall be in full compliance with the terms and conditions
hereof and no Event of Default shall have occurred and be continuing.
(3) Borrower may request the making of any subsequent Revolving Loan,
which amount in addition to the then outstanding balance of Revolving
Loans shall not exceed the Borrowing Limit. Borrower's request may be
either written or oral, including a request made by telephone. If an
oral request, Bank is authorized to make such requested Loan and rely
upon the authority of the person making the request, unless Borrower
directs the Bank, in writing, not to honor a Loan request except from
certain identified persons. The authority of the person requesting the
Loan shall be conclusively deemed authorized by Borrower. Loan advances
shall be credited to an account of the Borrower at the Bank.
(4) Borrower shall have delivered to Bank, all in form and substance
satisfactory to Bank, any documents or instruments as Bank shall
request.
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9. NEGATIVE COVENANTS.
Borrower and Guarantors agree that during the term of this Restated
Agreement and so long thereafter as any Obligations remain outstanding, they
will not, nor will they allow any subsidiary to, without the prior written
consent of Bank:
a. Corporate Changes: Enter into any merger or consolidation or effect any
reorganization or recapitalization or create or fund any Subsidiary.
b. Liens: Mortgage, pledge, grant or permit to exist a security interest
in, or lien or encumbrance upon, any of their assets or property, real or
personal, tangible or intangible, now owned or hereafter acquired in excess of
$3,000,000 except: (i) liens in favor of Bank, (ii) liens arising by operation
of law with respect to obligations of Borrower not yet due and payable; (iii)
liens for aircraft financing obtained by a subsidiary; and (iv) $3,500,000 in
floor plan financing for the Vantare division.
c. Third Party Liabilities: Assume, endorse, guarantee, or otherwise become
liable for or upon the obligations of any person, partnership, corporation or
other entity (other than endorsements for deposit in the ordinary course of
business) in excess of $7,500,000.
d. Borrower Liabilities: Incur, create, assume, or permit to exist any
indebtedness or liability for borrowed money in excess of $3,000,000 except: (i)
indebtedness to Bank; (ii) financing for aircraft purchases by a subsidiary; and
(iii) $3,500,000 in floor plan financing for Vantare division.
e. Stock, Dividends: Redeem, purchase, or retire any of the capital stock
of Borrower or declare or pay any dividends (other than stock dividends), or
make any other payment or distribution upon any of the capital stock of
Borrower.
f. Investments: Make any investment in, or make any loan or advance to, any
person, partnership, or corporation, including officers, stockholders, or
directors of Borrower.
g. Securities: Purchase of or otherwise invest in or hold securities,
nonoperating real estate, or other non-operating assets, except direct
obligations of the United States of America or certificates of deposit or
equivalent securities issued by Bank.
h. Disposal of Assets: Enter into any sale-leaseback transaction, or sell,
lease, transfer, or otherwise dispose of all or any substantial portion of its
assets, except that Borrower may sell inventory in the ordinary course of
business, except a sale and lease back of the Vantare expansion project.
i. Regulation U: Directly or indirectly use or apply all or any portion of
the proceeds of any loans made hereunder to purchase or carry any "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System, or any regulations, interpretations or rulings thereunder, as
amended.
- 14 -
j. Change in Business: Make or permit any substantial change in, or cease
in whole or in part, the present business of Borrower, or engage in any other
activities apart from its present business.
k. Transfer of Inventory: Authorize, cause or permit the issuance or
execution of any negotiable warehouse receipt or xxxx of lading representing any
right, title, or interest in and to any Inventory, unless same are forthwith
turned over to Bank so that Bank shall continue to have a perfected security
interest in such inventory.
l. Ownership: Make any change for any reason whatsoever in the majority
ownership, or control of Borrower without the prior written consent of Bank.
m. Payments on Indebtedness: Borrower will not make any payments in respect
of principal or interest on any of its indebtedness to any Person (other than
payments made on indebtedness required or permitted hereunder) prior to the
stated maturity or other due date thereof or the scheduled payment date of any
principal installment in respect of any of its indebtedness, except that
Borrower may make (i) early payments on trade accounts in order to receive trade
discounts offered in the ordinary course of business, and (ii) such other early
payments for which the Bank gives their prior written consent. Borrower will not
modify or enter into any agreement as a result of which the terms of payment or
any such indebtedness to any Person are waived or modified, except that the
Borrower may enter into refinancing of existing indebtedness if no more than
$50,000 in additional liability is incurred by the Borrower.
n. Amendment to Certificate of Incorporation: Borrower will not amend its
certificate of incorporation, articles of incorporation or bylaws if any such
amendment alone or in conjunction with any other amendment or amendments would
have a material adverse affect on the ability of Borrower or the Guarantors to
discharge their obligations to the Bank or on the ability of the Bank to
collect, realize upon, or enforce payment of any obligation of any Borrower or
any Guarantor to the Bank. Borrower shall furnish to the Bank a copy of any
amendment to the certificate of incorporation, articles of incorporation or
bylaws.
o. Transactions with Affiliates: Borrower will not (nor will it permit any
Subsidiary to) enter into or permit to remain in effect or outstanding any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property, the rendering of any service, or the making of any loan or
advance) with or to any affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the business of Borrower or such
Subsidiary and such affiliate and upon terms found by the Board of Directors of
the Borrower to be fair and reasonable and no less favorable to the Borrower or
any such subsidiary than it would obtain in a comparable arms-length transaction
with a person not affiliated or related or connected to the Borrower or any such
Subsidiary.
p. Aircraft Investment. Allow a subsidiary to incur or maintain any
investment in aircraft in excess of $7,000,000.
- 15 -
10. AFFIRMATIVE COVENANTS.
Borrower and Guarantors covenant and agree with Bank that they will, during
the term of this Restated Agreement and so long thereafter as any Obligations
remain outstanding.
a. Submissions to Bank: Furnish Bank:
(1) Within 90 days after the last day of each fiscal year of
Borrower, a balance sheet and related statements of income,
retained earnings, and changes in financial position, each
prepared in reasonable detail and in accordance with GAAP
audited by an independent certified public accountant
satisfactory to Bank and bearing an unqualified Opinion;
(2) Within 30 days after the end of each month (except the
last month of each fiscal year for which the time shall be 60
days), of each fiscal year of Borrower, a balance sheet as of
the end of such month and statements of income and retained
earnings for the period from the beginning of the fiscal year
to the end of such month;
(3) Within thirty days after the end of each calendar month,
an Accounts Receivable and Loan Reconciliation Certificate;
(4) A balance sheet and other statement of financial position
as to each Guarantor, which statement shall be in form and
substance satisfactory to Bank within sixty days after the
last day of Borrower's fiscal year;
(5) All public filings with the Securities & Exchange
Commission and all shareholders communications at the same
time they are filed or mailed; and
(6) Promptly, and in form satisfactory to Bank, such other
information as Bank may reasonably request from time to time.
b. Insurance: Maintain casualty insurance coverage on its physical assets
and other insurance against other risks, including public liability and product
liability insurance in such amounts and of such types and, in any event, not
less than as are ordinarily carried by similar businesses. In the case of all
policies insuring property in which Bank shall have a security interest of any
kind whatsoever, all such insurance policies shall provide that the proceeds
thereof shall be payable to Borrower and Bank, as their respective interests may
appear. All said policies or certificates thereof, including all endorsements
thereof and those required hereunder, shall be deposited with Bank; and such
policies shall contain provisions that no such insurance may be canceled or
decreased without thirty (30) days prior written notice to Bank. In the event of
acquisition of additional property, real or personal, or of incurrence of
additional risks of any nature, Borrower shall cause such insurance coverage to
be increased or amended in such manner and to such extent as prudent business
judgment would dictate. If Borrower shall at any time or times hereafter fail to
obtain and maintain any of the policies of insurance required herein, or fail to
pay any premium in whole or in part relating to any such policies, Bank may, but
shall not be obligated to, obtain and/or cause to be maintained insurance
- 16 -
coverage with respect to the assets of Borrower, including, at Bank's option,
the coverage provided by all or any of the policies of Borrower and pay all or
any part of the premium thereunder, without waiving any Event of Default by
Borrower, and any sums disbursed by Bank shall be additional Obligations of
Borrower to Bank payable on demand. Bank shall have the right to settle and
compromise any and all claims under any of the policies required to be
maintained by Borrower hereunder; to demand, receive, and receipt for all monies
payable thereunder; and to execute in the name of Borrower or Bank or both any
proof of loss, notice, or other instruments in connection with such policies or
any loss thereunder.
c. Collateral: Maintain Collateral which is tangible property in good
condition and repair, defend at Borrower expense all Collateral from all adverse
claims and shall not use any of the Collateral for any illegal purpose.
d. Examinations: Permit Bank, through its authorized attorneys,
accountants, and representatives, to examine the Inventory and the books,
accounts, records, ledgers, and assets of every kind and description of Borrower
at all reasonable times.
e. Notice of Defaults: Promptly notify Bank of any condition or event which
constitutes, or would constitute with the passage of time or giving of notice or
both, a default under this Restated Agreement, and promptly inform Bank of any
events or changes in the Business, properties, or condition, financial or
otherwise, of Borrower, which individually or cumulatively when viewed in light
of prior financial statements, may result in a material adverse change in the
financial condition of Borrower.
f. Corporate Status: Maintain in good standing its corporate existence in
the State of Iowa and its status as a foreign corporation qualified to do
business in those jurisdictions where it is required to be qualified.
g. Accounts: Maintain their principal checking and business accounts at
Bank and use Bank as their principal depository.
h. ERISA: If Borrower shall now or hereafter maintain an employee benefit
plan covered by 4021(a) of the Employee Retirement Income Security Act of 1974,
as amended (ERISA), relating to plan termination insurance, it shall:
(1) furnish Bank a copy of each annual report, together with
any schedules or other attachments thereto, required to be filed with
the Secretary of Labor or any other governmental official pursuant to
ERISA;
(2) furnish Bank a copy of any notice of a reportable event
required to be furnished to the Pension Benefit Guaranty Corporation
(PBGC) or other governmental agency;
(3) notify Bank of the filing of a notice with PBGC pursuant
to 4041 of ERISA that the plan is to be terminated; and
- 17 -
(4) notify Bank of the institution of any proceedings by the
PBGC under 4042 of ERISA promptly after the filing of such reports or
notices or institution of such proceedings.
i. Corporate Changes: Notify Bank not less than 30 days prior to (i) the
change of its name or use of any trade names or (ii) any change in the address
of the chief executive office and/or chief place of business of Borrower, the
location of any records pertaining to the Receivables, and the address where any
Inventory is or may be stored.
j. Receivables: Promptly notify Bank of any disputes which shall arise in
connection with a Receivable or if a Receivable is not paid when due, or if any
petition in bankruptcy or under any other insolvency act for the relief of
debtors with respect to a Customer is filed, or if a Customer makes an
assignment for the benefit of creditors, becomes insolvent, ceases to carry on
its business, or if a Borrower has notice of any facts or circumstances which
could reasonably be expected to have a material adverse effect upon the ability
of Customer to pay the Receivable.
k. Confirmation: Upon the creation of a Receivable, or at such other
intervals as Bank may hereafter determine, Borrower shall provide Bank, at its
request, with confirmatory assignment schedules; copies of all invoices relating
to the Receivable; evidence of shipment or delivery of Inventory; and such
further information and/or schedules as Bank may reasonably require, all in a
form satisfactory to Bank.
l. Books and Records: Keep complete and accurate books and records with
respect to the business of the Borrower and the Collateral consistent with good
business practice including current stock, cost, and sales records of Inventory,
accurately itemizing and describing the kinds, types, and quantities of
Inventory, and the cost and selling price thereof.
m. Instruments: At any time and from time to time upon request of Bank,
execute and deliver to Bank, in form and substance satisfactory to Bank,
negotiable promissory notes for any or all of the Obligations and/or such
documents in respect of the Obligations as Bank shall deem necessary or
desirable to evidence the Obligations or perfect or maintain perfected the
security interest of Bank in the Collateral or which may be necessary to comply
with the provisions of the law of the State of Iowa or the law of any other
jurisdiction in which Borrower may then be conducting business or in which any
of the Collateral may be located.
n. Subsidiaries: Without limitation of any provision of this Restated
Agreement which prohibits any person from becoming a subsidiary, forthwith upon
any Person becoming a Subsidiary of any of the Borrower after the date hereof,
such Borrower will cause such Person
(1) to become a co-maker by executing and delivery to the Bank of such
documents as the Bank may require,
(2) to secure said Obligation with a first lien upon the types of
Collateral described in Section 3. owned by the Subsidiary.
- 18 -
(3) to deliver to Bank executed filings of financing statements
necessary to perfect said security interest, and,
(4) to provide Bank with such other documents or instruments as Bank
shall reasonably request, including obligating itself to all of the
terms and conditions of this Restated Agreement.
o. Compliance with Environmental Laws. Borrower will comply and cause each
Subsidiary to comply with all applicable environmental, hazardous waste or
substance, toxic substance and underground storage laws and regulations and will
obtain any permits, licenses, or buildings, improvements, fixtures, equipment or
property required by reason of any applicable environmental, hazardous waste or
substance, toxic substance or underground storage laws or regulations. Borrower
shall exercise due diligence in determining the applicability of the above laws
and regulations and shall take the necessary steps to comply with such laws and
regulations within a reasonable period of time after discovering any violations
of such laws and statutes.
p. Strategic Plans. Within sixty days after its fiscal year, Borrower will
provide Bank annually a three-year business and financial plan which includes
financial projections and capital expenditure budgets.
11. FINANCIAL COVENANTS OF BORROWER.
So long as the Obligations shall remain unpaid or the Bank shall have any
commitment under this Restated Agreement, Borrower will maintain the following:
a. Minimum Working Capital: Maintain at all times an excess of current
assets over current liabilities of not less than $8,000,000.
b. Minimum Tangible Net Worth: Maintain at all times a Tangible Net Worth
of not less than $16,500,000.
c. Capital Expenditures: Refrain from making expenditures for fixed or
capital assets which would cause the aggregate of all such expenditures made by
Borrower to exceed $1,500,000 for fiscal 1996 or $2,000,000 during any
subsequent fiscal year.
d. Current Ratio: Maintain at all times a ratio of current assets to
current liabilities of not less than 1.5 to 1.
e. Leverage Ratio: Maintain at all times a ratio of total liabilities to
Tangible Net Worth of not greater than 2.25 to 1 until March 31, 1997, and
thereafter not greater than 2.0 to 1.
f. Cash Flow/Debt: Beginning on December 31, 1996, maintain a ratio
measured quarterly on a year to date actual basis, of Operating Cash Flow to
Total Debt Service of not less than 1.25 to 1. As of June 30, 1997, maintain a
ratio of 1.5 to 1 measured the same way.
- 19 -
As of September 30, 1997, and quarterly thereafter, maintain a ratio of 1.5 to 1
measured on a trailing four-quarter average basis.
12. EVENTS OF DEFAULT AND ACCELERATION.
The occurrence of any one or more of the following events shall constitute
an Event of Default hereunder (each an "Event of Default"):
a. Payments: Default in the payment of any principal, interest, or other
charges in respect of any of the Obligations as and when due; or default in
payment of any principal, interest or other charges by any Guarantor with
respect to any of their obligations.
b. Covenants: Default in the observance or performance of any covenant or
agreement of any Borrower or Guarantor herein set forth or set forth in any
agreement, note, or instrument heretofore, now or hereafter executed by Borrower
or Guarantor in favor of Bank;
c. Representations: If any representation, warranty, certificate, schedule,
or other information made or furnished by any Borrower or Guarantor herein or
pursuant hereto is or shall be untrue or misleading in any material respect;
d. Third Party Obligations: Default in the performance of any material
obligation of Borrower or Guarantor to any third party in excess of $250,000;
e. Losses: Loss, theft, damage, or destruction of any substantial portion
of the property of Borrower for which there is either no insurance coverage or
for which, in the opinion of Bank, there is insufficient insurance coverage, or
the making of any levy, seizure, or attachment upon the Collateral or upon any
substantial portion of other property of Borrower by any third party;
f. Insolvency: Insolvency of any Borrower or Guarantor or if a creditors
committee is appointed for the business of any Borrower or Guarantor; or if any
Borrower or Guarantor makes an assignment for the benefit of creditors, or is
adjudicated bankrupt, or if a petition in bankruptcy or for reorganization or to
effect a plan of arrangement with creditors is filed by or against any Borrower
or Guarantor; or if any Borrower or Guarantor applies for or permits the
appointment of a receiver or trustee for any of its property or assets, or if
any such receiver or trustee is appointed for any of its property or assets; or
if any of the above actions or proceedings whatsoever are commenced by or
against any Borrower or any Guarantor of or any other party liable for any of
the obligations;
g. Dissolution: If a proceeding is filed or commenced by or against
Borrower for its dissolution or liquidation; or if Borrower voluntarily or
involuntarily dissolves or is dissolved, terminates or is terminated;
h. Prohibition on Business: If Borrower is permanently enjoined,
restrained, or in any way prevented by court order from conducting all or any
material part of its business affairs; or
- 20 -
i. Termination of Guaranty: Termination for any reason of any guaranty of,
or contract of surety for, the Obligations, or termination of any subordination
agreement for the benefit of Banks.
If any Event of Default shall occur, then or at any time thereafter, while
such Event of Default shall continue, Bank may declare all Obligations to be due
and payable, without notice, protest, presentment, or demand, all of which are
hereby expressly waived by the Borrower.
13. RIGHTS AND REMEDIES.
Bank shall have, by way of example and not of limitation, the rights and
remedies set forth in Section 13 at all times prior to and/or after the
occurrences of an Event of Default and shall have all of the rights and remedies
enumerated herein after the occurrence of an Event of Default;
a. Attorney in Fact: Without limiting any rights or powers granted by this
Restated Agreement to the Bank while no Event of Default has occurred and is
continuing, upon the occurrence and during the continuance of any Event of
Default the Bank is hereby appointed the attorney-in-fact of the Borrower for
the purpose of carrying out the provisions of this Restated Agreement and taking
any action and executing any instruments which the Bank may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Bank shall be entitled under
this Restated Agreement to make collections in respect of the Collateral, the
Bank shall have the right and power to receive, endorse, and collect all checks
made payable to the order of the Borrower representing any dividend, payment, or
other distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.
b. Premises: Bank shall have the right to enter and/or remain upon the
premises of any Borrower without any obligation to pay rent to such Borrower or
others, or any other place or places where any of the Collateral is located and
kept and: (i) remove Collateral therefrom to the premises of Bank or any agent
of Bank, for such time as Bank may desire, in order to maintain, collect, sell
and/or liquidate the Collateral or; (ii) use such premises, together with
materials, supplies, books and records of Borrower, to maintain possession
and/or the condition of the Collateral, and to prepare the Collateral for sale,
liquidation, or collection. Bank may require Borrower to assemble the Collateral
and make it available to Bank at a place to be designated by Bank which is
reasonably convenient to both parties.
c. Setoff: Bank shall have a right to set-off, without notice to the
Borrower, any and all deposits or other sums at any time or times credited by or
due from Bank to any of the Borrower, whether in a special account or other
account or represented by a certificate of deposit (whether or not matured),
which deposits and other sums shall at all times constitute additional security
for the Obligations and may be set-off at any time against all or any part of
the Obligations on which any of the Borrower is an obliger whether or not they
are then due and whether other security held by Bank is deemed by it to be
adequate.
- 21 -
d. Uniform Commercial Code Rights: Bank shall have, in addition to any
other rights and remedies contained in this Restated Agreement, the Notes and
any other agreements, guarantees, notes, instruments, and documents heretofore,
now, or at any time or times hereafter executed by any of the Borrower and
delivered to Bank, all of the rights and remedies of a secured party under the
Uniform Commercial Code in force in the State of Iowa as of the date of this
Restated Agreement, all of which rights and remedies shall be cumulative, and
nonexclusive, to the extent permitted by law.
e. Notice of Sale: Any notice required to be given by Bank of a sale or
other disposition or other intended action by Bank with respect to any of the
Collateral, or otherwise, made in accordance with the terms of this Restated
Agreement at least fourteen (14) days prior to such proposed action, shall
constitute fair and reasonable notice to Borrower of any such action. The net
proceeds realized by Bank upon any such sale or other disposition, after
deduction of the expenses of retaking, holding, preparing for sale, selling, or
the like and reasonable attorneys' fees and other expenses incurred by Bank,
shall be applied toward satisfaction of the Obligations hereunder. Bank shall
account to Borrower for any surplus realized upon such sale or other disposition
and the Borrower shall remain liable for any deficiency. The commencement of any
action, legal or equitable, shall not affect the security interest of Bank in
the Collateral until the Obligations hereunder or any judgment therefor are
fully paid.
f. Appointment: The Borrower hereby irrevocably appoints Bank its true and
lawful attorney, with full power of substitution, in Bank's name or otherwise,
for Bank's sole use and benefit, but at Borrower cost and expense, to exercise,
if Bank shall elect after an event of default has occurred (whether or not Bank
then elects to exercise any other of its rights arising upon default), all or
any of the following powers with respect to all or any Accounts which are
Collateral:
1. To execute on Borrower's behalf assignments of any or all Accounts
which are Collateral to Bank, and to notify account debtors thereunder
to make payments directly to Bank;
2. To demand, xxx for, collect, receive and give acquittance for any
and all moneys due or to become due upon or by virtue thereof;
3. To receive, take, endorse, assign and deliver any and all checks,
notes, drafts, documents and other negotiable and non-negotiable
instruments and chattel paper taken or received by Bank in connection
therewith;
4. To settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto;
5. To sell, transfer, assign or otherwise deal in or with the same or
the proceeds thereof or the relative goods, as fully and effectually
as if Bank were the absolute owner thereof; and
- 22 -
6. To extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto.
Any funds collected pursuant to such powers shall be applied to the payment
of the Obligations. The exercise by Bank of, or failure to so exercise, any of
the foregoing authority, shall in no manner affect Borrower's liability to Bank
on any of the Obligations. Bank shall be under no obligation or duty to exercise
any of the powers hereby conferred upon it and it shall be without liability for
any act or failure to act in connection with the collection of or the
preservation of any rights under such accounts. Bank shall not be bound to take
any steps necessary to preserve rights in any instrument or chattel paper
against prior parties.
14. TERM OF AGREEMENT.
The term of this Restated Agreement shall commence on the Date of Agreement
and shall continue in full force and effect until all Obligations shall have
been fully paid and satisfied. No termination shall affect in any way the duties
of the Borrower hereunder or the security interest of Bank in the Collateral so
long as any Obligations are outstanding; and, notwithstanding such termination,
Borrower shall continue to assign Receivables to Bank and turn over all
collections to Bank as herein provided, and Bank shall retain the security
interest, lien and rights granted to it hereunder until all the Obligations are
paid in full and satisfied.
15. GENERAL PROVISIONS.
a. No Waiver: The failure of Bank at any time or times hereafter to require
strict performance by any Borrower of any of the provisions, warranties, terms,
and conditions in this Restated Agreement or in any other agreement, guaranty,
note, instrument, or document now or at any time or times hereafter executed by
such Borrower and delivered to Bank shall not waive, affect, or diminish any
right of Bank at any time or times hereafter to demand strict performance
thereof. No rights of Bank hereunder shall be deemed to have been waived by any
act or knowledge of Bank, its agents, officers or employees, unless such waiver
is contained in an instrument in writing signed by an officer of Bank. No waiver
by Bank of any of its rights shall operate as a waiver of any other of its
rights or any of its rights on a future occasion.
b. Notice: Any demand or notice required or permitted to be given hereunder
shall be deemed effective when deposited in the United States mail, addressed to
Bank at Bank or to Borrower at the address shown in 2(h), or to such other
address as may be provided in writing prior to the giving of such notice by the
party to be notified.
c. Entire Understanding: This Restated Agreement contains the entire
understanding between the parties hereto with respect to the transactions
contemplated herein and such understanding shall not be modified except in
writing signed by or on behalf of the parties hereto. This Restated Agreement
supersedes and replaces the 1991 Credit Agreement and all amendments thereto but
does not in any way impair any previously executed promissory notes which are
still outstanding nor discontinue or impair any previously granted Collateral.
- 23 -
d. Invalidity: Wherever possible, each provision of this Restated Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. Should any portion of this Restated Agreement be declared
invalid for any reason in any jurisdiction, such declaration shall have no
effect upon the remaining portions of this Restated Agreement, and the entirety
of this Restated Agreement shall continue in full force and effect in all other
jurisdictions and said remaining portions of this Restated Agreement shall
continue in full force and effect in the subject jurisdiction as if this
Restated Agreement had been executed with the invalid portions thereof deleted.
e. Waiver of Bond: If Bank seeks to take possession of any or all of the
Collateral by court process, the Borrower hereby irrevocably waive any bonds and
any surety or security relating thereto required by any statute, court rule or
otherwise as an incident to such possession, and waives any demand for
possession prior to the commencement of any suit or action to recover with
respect thereto.
f. Successors and Assigns: The provisions of this Restated Agreement shall
be binding upon and shall inure to the benefit of the successors and assigns of
Bank and the Borrower; provided, however, the Borrower may not assign any of
their rights or delegate any of their obligations hereunder without the prior
written consent of Bank.
g. Choice of Law, Forum: This Restated Agreement is and shall be deemed to
be a contract entered into and made pursuant to the laws of the State of Iowa
and shall in all respects be governed, construed, applied, and enforced in
accordance with the laws of said state and any action to enforce, construe,
invalidate or modify this Restated Agreement shall be brought in a court of
competent jurisdiction in Linn County, Iowa. Borrower waives the right to demand
a trial by jury in any action hereunder.
h. Fees: If, prior hereto and/or at any time or times hereafter, Bank shall
employ counsel in connection with the execution and consummation of the
transactions contemplated by this Restated Agreement or to commence, defend or
intervene, file a petition, complaint, answer, motion or other pleadings, or to
take any other action in or with respect to any suit or proceeding (bankruptcy
or otherwise) relating to this Restated Agreement, the Collateral, or any other
agreement, guaranty, note, instrument, or document heretofore, now or at any
time or times hereafter executed by any Borrower and delivered to Bank, or to
protect, collect, lease, sell, take possession of or liquidate any of the
Collateral, or to attempt to enforce or to enforce any security interest in any
of the Collateral, or to enforce any rights of Bank hereunder, whether before or
after the occurrence of any Event of Default, or to collect any of the
Obligations, then in any of such events, all of the reasonable attorneys' fees
arising from such services, and any expenses, costs and charges relating
thereto, shall be part of the Obligations, payable on demand and secured by the
Collateral.
i. Counterparts: This Restated Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
j. References: Each reference herein to Bank shall be deemed to include its
successors and assigns, and each reference to the Borrower and any pronouns
referring thereto
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as used herein shall be construed in the masculine, feminine, neuter, singular
or plural, as the context may require, and shall be deemed to include the legal
representatives, successors and assigns of the Borrower, all of whom shall be
bound by the provisions hereof.
k. Joint and Several: The term "Borrower" as used herein shall, if this
Restated Agreement is signed by more than one borrower, means unless this
Restated Agreement otherwise provides or unless the context otherwise requires,
the "Borrower and each of them" and each and every representation, promise,
agreement and undertaking shall be joint and several except that the granting of
the security interest, right of set-off and lien, shall be by each Borrower in
its respective properties. If there is more than one Borrower, any loan or
advance hereunder shall be deemed to be made at the request of and for the
benefit of each Borrower (since Borrower are affiliates and/or their respective
businesses are closely integrated and interrelated).
l. Headings: The section headings herein are included for convenience only
and shall not be deemed to be a part of this Restated Agreement.
m. Participations: Bank may, at its option, sell participations in or
assign all or part of the Revolving Line of Credit or the Term Loans to another
Bank or other entity. Bank may furnish any information concerning Borrower or
any subsidiary of Borrower in the possession of Bank from time to time to such
assignee or participant. Borrower shall not assign any rights or obligations
hereunder without the prior written consent of Bank.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AMENDMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN AGREEMENT (EXCEPT THE CREDIT
AGREEMENT AS PREVIOUSLY AMENDED AND DOCUMENTS REFERRED TO IN THE CREDIT
AGREEMENT AS PREVIOUSLY AMENDED) MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE
TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
FEATHERLITE MFG., INC.
BY:/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, President
BY:/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Executive Vice President
/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, individually
(Signatures continue)
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/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, individually
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, individually
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, individually
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, individually
FIRSTAR BANK IOWA, N.A.
BY:/s/ Xxxxx XxXxxxx
Xxxxx XxXxxxx, Vice President
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Exhibit A Accounts Receivable and Loan Reconciliation Certificate
Exhibit B Guaranty
Exhibit C Revolving Line of Credit Promissory Note
Exhibit D Trade Names, Business Changes
Exhibit E Liens
Exhibit F Hazardous Substance Certificate
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EXHIBIT "A"
a. Receivables. All accounts and general intangibles (each as defined in the
UCC) of the Borrower constituting any right to the payment of money,
including (but not limited to) all moneys due and to become due to the
Borrower in connection with any loans or advances or for inventory or
equipment or other goods sold by the Borrower and all tax refunds
(collectively, "Receivables");
b. Instruments. All instruments, chattel paper or letters of credit (each as
defined in the UCC) evidencing, representing, arising from or existing in
respect of, relating to, securing or otherwise supporting the payment of,
any of the Receivables, including (but not limited to) promissory notes,
drafts, bills of exchange and trade acceptances (collectively,
"Instruments");
c. Inventory. All inventory (as defined in the UCC) of the Borrowers,
including all goods obtained by the Borrower in exchange for such
inventory, and any products made or processed from such inventory including
all substances, if any, commingled therewith or added thereto
(collectively, "Inventory");
d. General Intangibles. All franchises, patents, trademarks, goodwill and any
and all items of the Borrower which would be classified as general
intangibles under the UCC (collectively, "General Intangibles").
e. Documents. All documents of title (as defined in the UCC) or other receipts
covering, evidencing or representing Inventory or Equipment (collectively,
"Documents");
f. Real Estate and Fixtures. All Borrower's right, title and interest in and
to the buildings, improvements, ways, streets, alleys, passages, rights of
way, waters, water courses, rights, liberties, privileges, tenements,
hereditaments, and appurtenances now or hereafter hereunto appertaining to
(Describe Real Estate) (collectively, "Real Estate and Fixtures") (as
defined in the UCC). The building is known as the Featherlite Rework and
Delivery Building. See attached Exhibit F;
h. Claims. All rights, claims and benefits of the Borrower against any Person
arising out of, relating to or in connection with Inventory purchased by
the Borrower, including, without limitation, any such rights, claims or
benefits against any Person storing or transporting such Inventory or
Equipment;
j. Proceeds. All proceeds, products and accessions of and to any of the
property described in clauses (a) through (i) above in this section
(including, without limitation, any proceeds of insurance thereon), and to
the extent related to any property described in said clauses or in this
clause all books, correspondence, credit files, records, invoices and other
papers, including without limitation all tapes, cards, computer runs and
other papers and documents in the possession or under the control of the
Borrower or any computer bureau or service company from time to time acting
for the Borrower.
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And as additional collateral, all additions to and replacements of the
collateral, and all accessories, accessions, parts and equipment now or
hereafter affixed thereto or used in connection therewith and the proceeds and
products from all such collateral.
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