AMERICAN NATIONAL BANK
AND TRUST COMPANY OF CHICAGO
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LOAN AND SECURITY AGREEMENT
(All ASSETS WITH ADVANCE RATE)
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THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), made as of the 17th
day of July, 1996, by and between AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO ("Bank"), a national banking association with its principal place of
business at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, and TOTAL CONTROL
PRODUCTS, INC., an Illinois corporation and XXXX PRODUCTS, INC., an Illinois
corporation (collectively referred to as "Borrower"), with their principal place
of business at 0000 X. Xxxxxx Xxxxxx, Xxxxxxx Xxxx, XX 00000 has reference to
the following facts and circumstances:
A. Pursuant to Borrower's request, Rank heretofore, now and from time to time
hereafter, has and/or may loan or advance monies, extend credit, and/or extend
other financial accommodations to or for the benefit of Borrower.
B. To secure repayment of the same and all of "Borrower's Liabilities" (as
hereinafter defined), Borrower wishes to provide Bank with a security interest
in and/or collateral assignment of Borrower's assets.
NOW, THEREFORE, in consideration of terms and conditions set forth herein
and of any loans or extensions of credit heretofore, now or hereafter made to or
for the benefit of Borrower by Bank, the parties hereto agree as follows:
1. DEFINITIONS AND TERMS
1.1 When used herein, the words, terms and/or phrases set forth below
shall have the following meanings:
A. "ACCOUNTS": all present and future rights of Borrower to payment for
goods sold or leased or for services rendered, which are not evidenced
by instruments or chattel paper, and whether or not they have been
earned by performance.
B. "BORROWER'S LIABILITIES": all obligations and liabilities of Borrower
to Bank (including without limitation all debts, claims, indebtedness
and attorneys' fees and expenses as provided for in Paragraph 8.13)
whether primary, secondary, direct, contingent, fixed or otherwise,
including Rate Hedging Obligations (as defined in subparagraph L
herein), heretofore, now and/or from time to time hereafter owing, due
or payable, however evidenced, created, incurred, acquired or owing
and however arising, whether under this Agreement or the "Other
Agreements" (hereinafter defined) or by operation of law or otherwise.
C. "CHARGES", all national, federal, state, county, city, municipal
and/or other governmental (or any instrumentality, division, agency,
body or department thereof,
including without limitation the Pension Benefit Guaranty Corporation)
taxes, levies, assessments, charges, liens, claims or encumbrances
upon and/or relating to the "Collateral" (as hereinafter defined),
Borrower's Liabilities, Borrower's business, Borrower's ownership
and/or use of any of its assets, and/or Borrower's income and/or gross
receipts.
D. "COLLATERAL": shall have the meaning set forth in Paragraph 3.2.
E. "INDEBTEDNESS": (i) indebtedness for borrowed money or for the
deferred purchase price of property or services; (ii) obligations as
lessee under leases which shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital
leases: (iii) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds
referred to in clauses (i) or (ii) above; and (iv) liabilities with
respect to unfunded vested benefits under plans covered by Title IV of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and in effect from time to time.
F. "LETTER OF CREDIT OBLIGATIONS": shall mean any and all existing and
future indebtedness, obligations and liabilities of every kind, nature
and character, direct or indirect, absolute or contingent, of the
Borrower to Bank, arising under, pursuant to or in connection with any
letter of credit issued under the Maximum Revolving Facility.
G. "LOANS": shall mean collectively any Revolving Loans as defined in
Paragraph 2.5 and Term Loans as defined in Paragraph 2.6.
H. "MAXIMUM REVOLVING FACILITY": shall mean the maximum amount of the
Revolving Loans as evidenced by a revolving note(s) which amount Bank
has agreed to consider as a ceiling on the outstanding principal
balance of Revolving Loans (other than Term Loans) to be made by Bank
pursuant to this Agreement.
I. "OBLIGOR": any Person who is and/or may become obligated to Borrower
under or on account of "Accounts."
J. "OTHER AGREEMENTS": all agreements, instruments and documents,
including without limitation, guaranties, mortgages, deeds of trust,
notes, pledges, powers of attorney, consents, assignments, contracts,
notices, security agreements, leases, subordination agreements,
financing statements and all other written matter heretofore, now
and/or from time to time hereafter executed by and/or on behalf of
Borrower and delivered to Bank.
K. "PERSONS": any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, entity, party or government
(whether national, federal, state, county, city,
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municipal or otherwise, including without limitation, any
instrumentality, division, agency, body or department thereof).
L. "RATE HEDGING OBLIGATIONS": shall mean any and all obligations of the
Borrower, whether absolute or contingent and howsoever and whenever
created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor),
under (i) any and all agreements designed to protect the Borrower from
the fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to: interest rate swap
agreements, dollar-denominated or cross-currency interest rate
exchange agreements, forward currency exchange agreements, interest
rate cap, floor or collar agreements, forward rate currency agreements
or agreements relating to interest rate options, puts and warrants,
and (ii) any and all agreements relating to cancellations, buy backs,
reversals, terminations or assignments of any of the foregoing.
1.2 Except as otherwise defined in this Agreement or the Other
Agreements, all words, terms and/or phrases used herein and therein shall be
defined by the applicable definition therefor (if any) in the Illinois
Uniform Commercial Code.
2. LOANS
2.1 Loans made by Bank to Borrower pursuant to this Agreement shall be
evidenced by notes or other instruments issued or made by Borrower to Bank.
Except as otherwise provided in this Agreement or in any notes executed and
delivered by Borrower to Bank in connection herewith, the principal portion of
Borrower's Liabilities shall be payable by Borrower to Bank on the maturity
date(s) described in any such note(s) or other instruments evidencing Borrower's
Liabilities (as the same may be amended, renewed or replaced) and all costs,
fees and expenses payable hereunder or under the Other Agreements, shall be
payable by Borrower to the Bank on demand, in either case at Bank's principal
place of business or such other place as Bank shall specify in writing to
Borrower.
2.2 All of Borrower's Liabilities shall constitute one obligation secured
by Bank's security interest in the Collateral and by all other security
interests, liens, claims and encumbrances heretofore, now and/or from time to
time hereafter granted by Borrower to Bank.
2.3 Each loan made by Bank to Borrower pursuant to this Agreement or the
Other Agreements shall constitute an automatic warranty and representation by
Borrower to Bank that there does not then exist an "Event of Default" (as
hereinafter defined) or any event or condition, which with notice, lapse of time
and/or the making of such loan would constitute an Event of Default.
2. This Agreement shall be in effect until all of Borrower's Liabilities
have been paid in full and any and all commitments of Bank to make loans have
terminated.
2.5 Provided that an Event of Default does not then exist or would not
then be created or any event which with notice or lapse of time or both would
constitute an Event of Default does not then exist, Bank shall advance to
Borrower on a revolving credit basis (the "Revolving Loans") up to the lesser of
(i) the Maximum Revolving Facility minus any Letter of Credit Obligations, or
(ii) the
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"Borrowing Base" minus any Letter of Credit Obligations. As used herein,
"Borrowing Base" shall mean up to 85% ("Advance Rate") of the face amount (less
maximum discounts, credits or allowances which may be taken by or granted to
Obligor in connection therewith) of all then existing "Eligible Accounts" (as
hereinafter defined) that are scheduled on the most recent schedule of accounts
delivered to Bank. If applicable, any amount calculated pursuant to Paragraph
2.9, shall be included in the Borrowing Base. Notwithstanding any contrary
provision contained herein, Bank may elect at its option to at any time and upon
sixty (60) days prior written notice to Borrower change the foregoing method of
calculating the Borrowing Base by reducing the advances against Eligible
Accounts, or to deduct reserves from the Borrowing Base.
2.6 Bank may from time to time advance Borrower term loans ("Term Loans")
in such amounts and on such terms and conditions as the Bank and Borrower from
time to time may agree in writing.
2.7 Notwithstanding anything contained in this Agreement or the Other
Agreements to the contrary, the principal portion of Borrower's outstanding
liabilities due at any one time under the Revolving Loans shall not exceed the
lesser of: (i) the Maximum Revolving Facility minus the amount of all Letter of
Credit Obligations, or (ii) the Borrowing Base minus the amount of all Letter of
Credit Obligations.
2.8 Bank's commitment to loan shall expire on the earlier of: (i) the date
on which Borrower's Liabilities mature under the terms of any note given by
Borrower to Bank, or (ii) the occurrence of an Event of Default pursuant to
Section 7 hereof.
2.9 The Borrowing Base shall also include the lessor of: (i)
$4,500,000.00; or (ii) up to 50% of the "Value" of "Eligible Inventory" (each
term as hereinafter defined) set forth in the Designation of Inventory then most
recently delivered by Borrower to Bank, which amount shall be reduced by 100% of
the Value of any reductions in such Eligible Inventory made since the date of
such Designation of Inventory. "Value" shall mean the lesser of Borrower's cost
thereof calculated on a first-in, first-out basis or the wholesale market value
thereof. "Eligible Inventory" shall mean any "Inventory" (as hereinafter
defined) which meets each of the following requirements: (a) it is in condition
to be sold in the ordinary course of Borrower's business; (b) in case of goods
held for sale or lease, it is (except as Bank may otherwise consent in writing)
new and unused; (c) it is subject to a first priority, fully perfected security
interest in favor of Bank; (d) it is owned by Borrower and is not subject to any
other lien or security interest whatsoever except for: (i) the security interest
in favor of Bank, (ii) tax liens for taxes not past due, and (iii) warehouse
liens for warehouse charges not past due; and (e) Bank has reasonably
determined, it is not unacceptable for any reason, including, but without
limitation, due to age, type, category and/or quantity. Any Inventory which is
at any time Eligible Inventory, but which subsequently fails to meet any of the
foregoing requirements shall forthwith cease to be Eligible Inventory.
"Inventory" shall mean all goods held by Borrower for sale or lease, or
furnished by Borrower under contract of service, or held by Borrower as raw
materials, work in progress or materials used or consumed in a business.
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3. COLLATERAL: GENERAL TERMS
3.1 To secure the prompt payment to Bank of Borrower's Liabilities and the
prompt, full and faithful performance by Borrower of all of the provisions to be
kept, observed or performed by Borrower under this Agreement and/or the Other
Agreements, Borrower grants to Bank a security interest in and to, and
collaterally assigns to Bank, all of Borrower's property, wherever located,
whether now or hereafter existing, owned, licensed, leased (to the extent of
Borrower's leasehold interest therein), consigned (to the extent of Borrower's
ownership therein), consigned (to the extent of Borrower's ownership
therein), arising and/or acquired, including without limitation all of
Borrower's: (a) Accounts, chattel paper, tax refunds, contract rights,
leases, leasehold interests, letters of credit, instruments, documents,
documents of title, patents, copyrights, trademarks, tradenames, licenses,
goodwill, beneficial interests and general intangibles; (b) all goods whose
sale, lease or other disposition by Borrower have given rise to Accounts and
have been returned to or repossessed or stopped in transit by Borrower; (c)
certificated and uncertificated securities; (d) goods, including without
limitation all its consumer goods, machinery, equipment, farm products,
fixtures and inventory; (e) liens, guaranties and other rights and privileges
pertaining to any of the Collateral; (f) monies, reserves, deposits, deposit
accounts and interest or dividends thereon, cash or cash equivalents; (g) all
property now or at any time or times hereafter in the possession or under the
control of Bank or its bailee; (h) all accessions to the foregoing, all
litigation proceeds pertaining to the foregoing and all substitutions,
renewals, improvements and replacements of and additions to the foregoing;
and (i) all books, records and computer records in any way relating to the
Collateral herein described.
3.2 All of the aforesaid property and products and proceeds of the
foregoing in Paragraph 3.1 above, including without limitation, proceeds of
insurance policies insuring the foregoing are herein individually and
collectively called the "Collateral", The terms used herein to identify the
Collateral shall have the same meaning as are assigned to such terms as of the
date hereof in the Illinois Uniform Commercial Code.
3.3 Borrower shall make appropriate entries upon its financial statements
and its books and records disclosing Bank's security interest in the Collateral.
3.4 Borrower shall execute and deliver to Bank, at the request of Bank,
all agreements, instruments and documents ("Supplemental Documentation") that
Bank reasonably may request, in form and substance acceptable to Bank, to
perfect and maintain perfected Bank's security interest in the Collateral and to
consummate the transactions contemplated in or by this Agreement and the Other
Agreements. Borrower agrees that a carbon, photographic or photostatic copy, or
other reproduction of this Agreement or of any financing statement, shall be
sufficient to evidence Bank's security interest.
3.5 Bank shall have the right, at any time during Borrower's usual
business hours, to inspect the Collateral and all related records (and the
premises upon which it is located) and to verify the amount and condition of or
any other matter relating to the Collateral.
3.6 Borrower warrants and represents to and covenants with Bank that: (a)
Bank's security interest in the Collateral is now and at all times hereafter
shall be perfected and have a first priority except as expressly agreed to in
writing by the Bank; (b) the offices and/or locations where Borrower keeps the
Collateral are specified at the end of this Paragraph and Borrower shall not
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remove such Collateral therefrom except as may occur in the ordinary course of
business, and shall not keep any of such Collateral at any other offices or
locations unless Borrower gives Bank written notice thereof at least thirty (30)
days prior thereto and the same is within the United States of America; and (c)
the addresses specified at the end of this Paragraph include and designate
Borrower's principal executive office, principal place of business and other
offices and places of business and are Borrower' sole offices and places of
business. Borrower, by written notice delivered to Bank at least thirty (30)
days prior thereto, shall advise Bank of Borrower's opening of any new office or
place of business or its closing of any existing office or place of business and
any new office or place of business shall be within the United States of
America. Borrower has places of business at the address shown at the beginning
of this Agreement and at the locations listed below:
1) 000 Xxxxxxxxxxxx Xxxxx, Xxxxx X, Xxxxxxxx, XX 00000
2) 000 Xxxxxxxx Xx., Xxx. 000, Xxx Xxxxx, XX.00000
3) 0000 Xxxxxxxx Xxxx., Xxx. 000, Xxxxxxx, XX. 00000
All of the Collateral currently owned by Borrower and all of the Collateral
hereafter acquired is, or will be held or stored at the locations listed below:
1) The address of the Borrower shown at the beginning of this Agreement;
2) 000 Xxxxxxxxxxxx Xxxxx, Xxxxx X, Xxxxxxxx, XX 00000
3) 000 Xxxxxxxx Xx., Xxx. 000, Xxx Xxxxx, XX. 00000
4) 0000 Xxxxxxxx Xxxx., Xxx. 000, Xxxxxxx, Xx. 00000
3.7 At the request of Bank, Borrower shall receive, as the sole and
exclusive property of Bank and as trustee for Bank, all monies, checks, notes,
drafts and all other payments for and/or proceeds of Collateral which come into
the possession or under the control of Borrower and immediately upon receipt
thereof, Borrower shall remit the same (or cause the same to be remitted), in
kind, to Bank or at Bank's direction.
3.8 Upon demand or upon an Event of Default, Bank may take control of, in
any manner, and may endorse Borrower's name to any of the items of payment or
proceeds described in Paragraph 3.7 above and, pursuant to the provisions of
this Agreement, Bank shall apply tile same to and on account of Borrower's
Liabilities.
3.9 Bank may, at its option, at any time or times hereafter, but shall
be under no obligation to pay, acquire and/or accept an assignment of any
security interest, lien, encumbrance or claim asserted by any Person against
the Collateral.
3.10 Immediately upon Borrower's receipt of that portion of the Collateral
evidenced by an agreement, instrument and/or document ("Special Collateral"),
Borrower shall xxxx the same to show that such Special Collateral is subject to
a security interest in favor of Bank and shall deliver the original thereof to
Bank, together with appropriate endorsement and/or specific evidence of
assignment (in form and substance acceptable to Bank) thereof to Bank.
3.11 Regardless of the adequacy of any Collateral securing Borrower's
Liabilities hereunder, any deposits or other sums at any time credited by or
payable or due from Bank to Borrower, or any monies, cash, cash equivalents,
securities, instruments, documents or other assets of Borrower in possession or
control of Bank or its bailee for any purpose may, upon demand or an Event of
Default or event or condition which with notice or lapse of time would
constitute an Event of Default, be reduced to cash and applied by Bank to or
setoff by Bank against Borrower's Liabilities hereunder.
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3.12 At the request of Bank, Borrower shall instruct the Obligor of its
Accounts to make payments directly to a lockbox or cash collateral account
maintained by Bank in Borrower's name. All such collections shall be Bank's
property to be applied against Borrower's Liabilities, and not Borrower's
property. Bank may endorse Borrower's name to any of the items of payment or
proceeds described herein.
4. COLLATERAL: ACCOUNTS
4.1 An "Eligible Account" is an Account of Borrower which meets each of
the following requirements: (a) it arises from the sale or lease of goods,
such goods having been shipped or delivered to the Obligor thereof, or from
services rendered to the Obligor; (b) it is a valid, legally enforceable
obligation of the Obligor thereunder, and is not subject to any offset,
counterclaim or other defense on the part of such Obligor denying liability
thereunder in whole or in part; (c) it is subject to a perfected security
interest in favor of Bank and is not subject to any other lien or security
interest whatsoever, except those of Bank; (d) it is evidenced by an invoice
(dated not later than the date of shipment to the Obligor or performance and
having a due date not more than thirty (30) days after the date of invoice)
with exception to dated terms as indicated in "I" rendered to such Obligor,
and is not evidenced by any instrument or chattel paper; (e) it is payable in
United States dollars; (f) it is not owing by any Obligor residing, located
or having its principal activities or place of business outside the United
States of America or who is not subject to service of process in the United
States of America; (g) it is not owing by any Obligor involved in any
bankruptcy or insolvency proceeding; (h) it is not owing by dated terms
within 30 days past due, any affiliate of Borrower; (i) it is not unpaid more
than ninety (90) days after the date of such invoice; (j) it is but owing by
an Obligor which shall have failed to pay in full any invoice evidencing any
account within ninety (90) days after the date of such invoice, unless the
total invoice amounts of such Obligor which have not been paid within ninety
(90) days of the date represents less than 25% of the total invoice amounts
then outstanding of such Obligor; and (k) it is not an Account as to which
Bank, at any time or times hereafter, determines, in good faith, that the
prospect of payment or performance by the Obligor thereof is or will be
impaired. Notwithstanding the foregoing, Accounts with respect to which the
Account Debtor is the United States of America or any department, agency or
instrumentality thereof, shall not be included as an Eligible Account unless,
with respect to any such Account, Borrower has complied to Bank's
satisfaction with the provisions of the Federal Assignment of Claims Act of
1940, including, without limitation, executing and delivering to Bank all
statements of assignment and/or notification which are in form and substance
acceptable to Bank and which are deemed necessary by Bank to effectuate the
assignment to Bank of such Accounts. An Account which is at any time an
Eligible Account, but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Account. Bank may in
its sole discretion upon an event of default reduce the percentage set forth
in clause (j) above upon seven (7) days prior notice to Borrower. Borrower,
immediately upon demand from Bank, shall pay to Bank an amount of money equal
to the monies advanced by Bank to Borrower upon an Account that is no longer
an Eligible Account. Borrower warrants and represents to and covenants with
Bank that the principal portion of Borrower's Liabilities represented by
Revolving Loans made by Bank to Borrower, pursuant to Paragraph 2.5 above,
shall not exceed the total of the then outstanding amounts (less maximum
discounts, credits and allowances which may be taken by or granted to Obligor
in connection therewith) then existing Eligible Accounts multiplied by the
Advance Rate.
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4.2 With respect to Accounts, except as otherwise disclosed by Borrower to
Bank in writing, Borrower warrants and represents to Bank that: (a) they are
genuine, are in all respects what they purport to be and are not evidenced by a
judgment; (b) they represent undisputed, bona fide transactions completed in
accordance with the terms and provisions contained in the invoices and other
documents delivered to Bank With respect thereto; (c) the amounts shown on any
Schedule of Accounts and/or all invoices and statements delivered to Bank with
respect thereto are actually and absolutely owing to Borrower and are not in any
way contingent; (d) no payments have been made or shall be made thereon except
payments immediately delivered to Bank pursuant to this Agreement; (e) there are
no setoffs, counterclaims or disputes existing or asserted with respect thereto
and Borrower has not made any agreement with any Obligor thereof for any
deduction therefrom except a regular discount allowed by Borrower in the
ordinary course of its business for prompt payment; (f) there are no facts,
events or occurrences which in any way impair the validity or enforcement
thereof or tend to reduce the amount payable thereunder, which may be shown on
any schedule of accounts and on all invoices, and statements delivered to Bank
with respect thereto; (g) to the best of Borrower's knowledge, all Obligors have
the capacity to contract and are solvent; (h) the services furnished and/or
goods sold or leased giving rise thereto are not subject to any lien, claim,
encumbrance or security interest except that of bank; (i) Borrower has no
knowledge of any fact or circumstance which would impair the validity or
collectibility thereof; (j) to the best of Borrower's knowledge, there are no
proceedings or actions which are threatened or pending against any Obligor which
might result in any material adverse change in its financial condition; and (k)
Borrower has filed a Notice of Business Activities Report or a Certificate of
Authority or similar report with the appropriate office or department in states
where Account Obligors are located and where such reports are required as a
condition to commencing or maintaining an action in the courts of such states,
or Borrower has demonstrated to Bank's satisfaction that it is exempt from any
such requirements under such state's law.
4.3 Any of Bank's officers, employees or agents shall have the right, at
any time or times hereafter, in Banks name or in the name of a nominee of Bank,
to verify the validity, amount or any other matter relating to any Accounts by
mail, telephone, facsimile or otherwise and to sign Borrower's name on any
verification of Accounts and notices thereof to Obligors. All costs, fees and
expenses relating thereto incurred by Bank (or for which Bank becomes obligated)
shall be part of Borrower's Liabilities, payable by Borrower to Bank on
demand.
4.4 Unless Bank notifies Borrower in writing that Bank suspends any one
or more of the following requirements, Borrower shall: (a) promptly upon
Borrower's learning thereof, inform Bank, in writing, of any material delay in
Borrower's performance of any of its obligations to any Obligor and of any
assertion of any claims, offsets or counterclaims by any Obligor and of any
allowances, credits and/or other monies granted by Borrower to any Obligor; (b)
not permit or a agree to any extension, compromise or settlement with respect to
Accounts which constitute, in the aggregate, more than 5% of all Accounts then
owing to Borrower; and (c) keep all goods returned by any Obligor and all goods
repossessed or stopped in transit by Borrower from any Obligor segregated from
other property of Borrower, immediately notify Bank, of Borrower's possession
of such goods, and hold the same as trustee for Bank until otherwise directed in
writing by Bank.
4.5 Bank shall have the right, now and at any time or time hereafter, at
its option, without notice thereof to Borrower (a) to notify any or all Obligor
that the Accounts and Special Collateral
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have been assigned to Bank and the Bank has a security interest therein; (b) to
direct such Obligors to make all payments due from them to Borrower upon the
Accounts and Special Collateral directly to Bank; and (c) to enforce payment of
and collect, by legal proceedings or otherwise, the Accounts and Special
Collateral in the name of Bank and Borrower.
4.6 Borrower, irrevocably, hereby designates, makes, constitutes and
appoints Bank (and all Persons designated by Bank) as Borrower's true and lawful
attorney (and agent-in-fact), with power, upon an Event of Default, or an event
or condition which with notice or lapse of time would constitute an Event of
Default, without notice to Borrower and in Borrower's or Bank's name: (a) to
demand payment of Accounts; (b) to enforce payment of the Accounts by legal
proceedings or otherwise; (c) to exercise all of Borrower's rights and remedies
with respect to the collection of the Accounts; (d) to settle, adjust,
compromise, discharge, release, extend or renew the Accounts; (e) to settle,
adjust or compromise any legal proceedings brought to collect the Accounts;
(f) to sell or assign the Accounts upon such terms, for such amounts and at such
time or times as Bank deems advisable; (g) to prepare, file and sign Borrower's
name on any Notice of Lien, Assignment or Satisfaction of Lien or similar
document in connection with the Accounts and Special Collateral; or (h) to
prepare, file and sign Borrower's name on any Proof of Claim in Bankruptcy or
similar document against any Obligor.
5. WARRANTIES, REPRESENTATIONS AND COVENANTS:
INSURANCE AND TAXES
5.1 Borrower, at its sole cost and expense. shall keep and maintain: (a)
the Collateral insured for the full insurable value against all hazards and
risks ordinarily insured against by other owners or users of such properties in
similar businesses; and (b) business interruption insurance and public liability
and property damage insurance relating to Borrower's ownership and use of its
assets. All such policies of insurance shall be in a form with insurers and in
such amounts as may be satisfactory to Bank. Borrower shall deliver To Bank the
original (or certified) copy of each policy of insurance, or a certificate of
insurance, and evidence of payment of all premiums for each such policy. Such
policies of insurance (except those of public liability) shall contain a
standard form lender's loss payable clause, in form and substance acceptable To
Bank, showing loss payable to Bank, and shall provide that; (i) the insurance
companies will give Bank at least thirty (30) days written notice before any
such policy or policies of insurance shall be altered or canceled; and (ii) no
act or default of Borrower or any other Person shall effect the right of Bank to
recover under such policy or policies of insurance in case of loss or damage.
Borrower hereby directs all insurers under such policies of insurance (except
those of public liability) to pay all proceeds payable thereunder directly to
Bank and hereby authorizes Bank to make, settle, and adjust claims under such
policies of insurance and endorse the name of Borrower on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance.
5.2 Borrower shall pay promptly, when due, all Charges, and shall not
permit any Charges to arise, or to remain and will promptly discharge the same.
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6. WARRANTIES, REPRESENTATIONS AND COVENANTS:
GENERAL
6.1 Borrower warrants and represents to and covenants with Bank that: (a)
Borrower has the right, power and capacity and is duly authorized and empowered
to enter into, execute, deliver and perform this Agreement and Other Agreements;
(b) the execution, delivery and/or performance by Borrower of this Agreement and
Other Agreements shall not, by the lapse of time, the giving of notice or
otherwise, constitute a violation of any applicable law or a breach of any
provision contained in Borrower's Articles of incorporation, By-Laws, Articles
of Partnership, Articles of Organization, Operating Agreement or similar
document, or contained in any agreement, instrument or document to which
Borrower is now or hereafter a party or by which it is or may be bound; (c)
Borrower has and at all times hereafter shall have good, indefeasible and
merchantable title to and ownership of the Collateral, free and clear of all
liens, claims, security interests and encumbrances except those of Bank, (d)
Borrower is now and at a times hereafter, shall be solvent and generally paying
its debts as they mature and Borrower now owns and shall at all times hereafter
own property which, at a fair valuation, is greater than the sum of its debts;
(e) Borrower is not and will not be during the term hereof in violation of any
applicable federal, state or local statute, regulation or ordinance that, in any
respect materially and adversely affects its business, property, assets,
operations or condition, financial or otherwise; and (f) Borrower is not in
default with respect to any indenture, loan agreement, mortgage, deed or other
similar agreement relating to the borrowing of monies to which it is a party or
by which it is bound.
6.2 Borrower warrants and represents to and covenants with Bank that
Borrower shall not, without Bank's prior written consent thereto: (a) grant a
security interest in or assign any of the Collateral to any Person or permit,
grant, or suffer a lien, claim or encumbrance upon any of the Collateral, (b)
sell or transfer any of the Collateral not in the ordinary course of business;
(c) enter into any transaction not in the ordinary course of business which
materially and adversely affects the Collateral or Borrower's ability to repay
Borrower's Liabilities or Indebtedness; (d) other than as specifically permitted
in or contemplated by this Agreement, encumber, pledge, mortgage, sell, lease or
otherwise dispose of or transfer, whether by sale, merger, consolidation or
otherwise, any of Borrower's assets; and (e) incur Indebtedness except: (i)
unsecured trade debt in the ordinary course of business; (ii) renewals or
extensions of existing Indebtedness and interest thereon; and (iii) Indebtedness
that is unsecured and is to Persons who execute and deliver to Bank in form and
substance acceptable to Bank and its counsel subordination agreements
subordinating their claims against Borrower therefor to the payment of
Borrower's Liabilities.
6.3 Borrower warrants and represents to and covenants with Bank that
Borrower shall furnish to Bank: (a) as soon as available but not later than
ninety (90) days after the close of each fiscal year of Borrower, financial
statements, which shall include, but not be limited to, balance sheets, income
statements and statements of cash flow of Borrower prepared in accordance with
generally accepted accounting principles, consistently applied, audited by a
firm of independent certified public accountants selected by Borrower and
acceptable to Bank, (b) as soon as available but not later than forty-five (45)
days after the end of each month hereafter, financial statements of Borrower
certified by Borrower to be prepared in accordance with generally accepted
accounting principles fairly present the financial position and results of
operations of Borrower for such period; (c) schedule of accounts
10
payable and accounts receivable by the 15th of every month or otherwise as Bank
may direct; and (d) such other data and information (financial and otherwise) as
Bank, from time to time, may request.
6.4 Borrower warrants and represents to and covenants with Bank that
Borrower shall not permit its "Tangible Net Worth" (as hereinafter defined)
to be less than $3,000,000.00 measured on a quarterly basis. Tangible Net
Worth shall mean the value of the tangible assets of Borrower as determined
in accordance with the generally accepted accounting principles after
subtracting therefrom the aggregate amount of any intangible assets of
Borrower as determined in accordance with generally accepted accounting
principles, including without limitation, other (related employee) accounts
receivable, goodwill, franchises, licenses, patents, trademarks, tradenames,
copyrights and brand names, minus the aggregate of all contingent and
non-contingent liabilities of Borrower plus subordinated debt. Specifically
investment in joint ventures will be considered tangible provided acceptable
financial statements are provided and their strength is deemed appropriate.
6.5 Borrower warrants and represents to and covenants with Bank that
Borrower shall not permit its Debt (total Liabilities minus subordinated debt)
to Tangible Net Worth Ratio to exceed 4.0:1, to be measured on a quarterly
basis. As of March 31, 1997, and thereafter, Borrower shall not permit its Debt
to Tangible Net Worth Ratio to exceed 3.0:1, to be measured on a quarterly
basis.
6.6 Borrower warrants and represents to and covenants with Bank that
Borrower shall not permit its Cash Flow (as hereinafter defined) to be less than
125% of current maturities of long term debt exclusive of $9,000,000 promissory
note severed. Cash Flow shall mean the net income of Borrower plus depreciation
and amortization less less increases in "Due froms".
6.7 Borrower warrants and represents to and covenants with Bank that
Borrower shall not permit aggregate acquisitions in excess of $1,000,000.00
without Bank concurrence.
7. DEFAULT
7.1 The occurrence of any one of the following events shall constitute a
default by the Borrower ("Event of Default") under this Agreement: (a) if
Borrower fails to pay any of Borrower's Liabilities when due and payable or
declared due and payable (whether by scheduled maturity, required payment,
acceleration, demand or otherwise); (b) if Borrower fails or neglects to
perform, keep or observe any term, provision, condition, covenant, warranty or
representation contained in this Agreement or any of the Other Agreements; (c)
occurrence of a default or Event of Default under any of the Other Agreements
heretofore, now or at any time hereafter delivered by or an behalf of Borrower
to Bank; (d) occurrence of a default or an Event of Default under any agreement,
instrument or document heretofore, now or at any time hereafter delivered to
Bank by any guarantor of Borrower's Liabilities or by any Person which has
granted to Bank a security interest or lien in such Person's real or personal
property to secure the payment of Borrower's Liabilities; (e) if the Collateral
or any other of Borrower's assets are attached, seized, subjected to a writ, or
are levied upon or become subject to any lien or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors; (f)
if a notice of lien, levy or assessment is filed of record or given to Borrower
with respect to all or any of Borrower's assets by any federal, state, local
department or agency; (g) if Borrower or any guarantor of Borrower's Liabilities
becomes insolvent or generally fails to pay or admits in writing its inability
to pay debts as they become due, if a petition under Title 11 of the United
States Code or any similar law or regulation is filed by or against Borrower or
any such
11
guarantor, if Borrower or any such guarantor shall make an assignment for the
benefit of creditors, if any case or proceeding is filed by or against
Borrower or any such guarantor for its dissolution or liquidation, if
Borrower or any such guarantor is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business affairs; (h) the death or incompetency of Borrower or any guarantor
of Borrower's Liabilities, or the appointment of a conservator for all or any
portion of Borrower's assets or the Collateral; (i) the revocation,
termination, or cancellation of any guaranty of Borrower's Liabilities
without written consent of Bank; (j) if a contribution failure occurs with
respect to any pension plan maintained by Borrower or any corporation, trade
or business that is, along with Borrower, a member of a controlled group of
corporations or controlled group of trades or businesses (as described in
Sections 414(b) and (c) of the Internal Revenue Code of 1986 or Section 4001
of ERISA) sufficient to give rise to a lien under Section 302(f) of ERISA;
(k) if Borrower or any guarantor of Borrower's Liabilities is in default in
the payment of any obligations, indebtedness or other liabilities to any
third party and such default is declared and is not cured within the time, if
any, specified therefor in any agreement governing the same; (l) if any
material statement, report or certificate made or delivered by Borrower, any
of Borrower's partners, officers, employees or agents or any guarantor of
Borrower's Liabilities is not true and correct; or (m) if Bank is reasonably
insecure.
7.2 All of Bank's nights and remedies under this Agreement and the Other
Agreements are cumulative and non-exclusive.
7.3 Upon an Event of Default or the occurrence of any one of the events
described in Paragraph 7.1, without notice by Bank to or demand by Bank of
Borrower, Bank shall have no further obligation to and may then forthwith cease
advancing monies or extending credit to or for the benefit of Borrower under
this Agreement and the Other Agreements. Upon an Event of Default, without
notice by Bank to or demand by Bank of Borrower, Borrower's Liabilities shall be
immediately due and payable.
7.4 Upon an Event of Default, Bank, in its sole and absolute discretion,
may exercise any one or more of the rights and remedies accruing to a secured
party under the Uniform Commercial Code of the relevant state and any other
applicable law upon default by a debtor.
7.5 Upon an Event of Default, Borrower, immediately upon demand by Bank,
shall assemble the Collateral and make it available to Bank at a place or places
to be designated by Bank which is reasonably convenient to Bank and Borrower.
Borrower recognizes that in the event Borrower fails to perform, observe or
discharge any of its obligations or liabilities under this Agreement or the
Other Agreements, no remedy of law will provide adequate relief to Bank, and
agrees that Bank shall be entitled to temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages.
7.6 Upon an Event of Default, without notice, demand or legal process of
any kind, Bank may take possession of any or all of the Collateral (in addition
to Collateral of which it already has possession), wherever it may be found, and
for that purpose may pursue the same wherever it may be found, and may enter
into any of Borrower's premises where any of the Collateral may be or is
supposed to be, and search for, take possession of, remove, keep and store any
of the Collateral until the same shall be sold or otherwise disposed of, and
Bank shall have the right to store the same in any of Borrower's premises
without cost to Bank.
12
7.7 Any notice required to be given by Bank of a sale, lease, or other
disposition of the Collateral or any other intended action by Bank,
(i) deposited in the United States mail, postage prepaid and duly addressed to
Borrower at the address specified at the beginning of this Agreement, or
(ii) sent via certified mail, return receipt requested, or (iii) sent via
facsimile, or (iv) delivered personally, not less than ten (10) days prior to
such proposed action, shall constitute commercially reasonable and fair
notice to Borrower.
7.8 Upon an Event of Default, Borrower agrees that Bank may, if Bank deems
it reasonable, postpone or adjourn any such sale of the Collateral from time to
time by an announcement at the time and place of sale or by announcement at the
time and place of such postponed or adjourned sale, without being required to
give a new notice of sale. Borrower agrees that Bank has no obligation to
preserve rights against prior parties to the Collateral. Further, to the extent
permitted by law, Borrower waives and releases any cause of action and claim
against Bank as a result of Bank's possession, collection or sale of the
Collateral, any liability or penalty for failure of Bank to comply with any
requirement imposed on Bank relating to notice of sale, holding of sale or
reporting of sale of the Collateral, and any right of redemption from such sale.
8. GENERAL
8.1 Borrower waives the right to direct the application of any and all
payments at any time or times hereafter received by Bank on account of
Borrower's Liabilities and Borrower agrees that Bank shall have the continuing
exclusive right to apply and re-apply any and all such payments in such manner
as Bank may deem advisable, notwithstanding any entry by Bank upon any of its
books and records.
8.2 Borrower covenants, warrants and represents to Bank that all
representations and warranties of Borrower contained in this Agreement and the
Other Agreements shall be true from the time of Borrower's execution of this
Agreement to the end of the original term and each renewal term hereof. All of
Borrower's warranties, representations, undertakings. and covenants contained in
this Agreement or the Other Agreements shall survive the termination or
cancellation of the same.
8.3 The terms and provisions of this Agreement and the Other Agreements
shall supersede any prior agreement or understanding of the parties hereto, and
contain the entire agreement of the parties hereto with respect to the matters
covered herein. This Agreement and the Other Agreements may not be modified,
altered or amended except by an agreement in writing signed by Borrower and
Bank. Except for the provisions of Section 2 hereof which shall terminate as
provided in paragraph 2.8, this Agreement shall continue in full force and
effect so long as any portion or component of Borrower's Liabilities shall be
outstanding. Should a claim ("Recovery Claim") be made upon the Bank at any
time for recovery of any amount received by the Bank in payment of Borrower's
Liabilities (whether received from Borrower or otherwise) and should the Bank
repay all or part of said amount by reason of (1) any judgment, decree or order
of any court or administrative body having jurisdiction over Bank or any of its
property, or (2) any settlement or compromise of any such Recovery Claim
effected by the Bank with the claimant (including Borrower), this Agreement and
the security interests granted Bank hereunder shall continue in effect with
respect to the amount so repaid to the same extent as if such amount had never
originally been received by the Bank, notwithstanding any prior
13
termination of this Agreement, the return of this Agreement to Borrower, or the
cancellation of any note or other instrument evidencing Borrower's Liabilities.
Borrower may not sell, assign or transfer this Agreement, or the Other
Agreements or any portion thereof.
8.4 Bank's failure to require strict performance by Borrower of any
provision of this Agreement shall not waive, affect or diminish any right of
Bank thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by Bank of an Event of Default by Borrower under this
Agreement or the Other Agreements shall not suspend, waive or affect any other
Event of Default by Borrower under this Agreement or the Other Agreements,
whether the same is prior or subsequent thereto and whether of the same or of a
different type. None of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or the Other Agreements
and no Event of Default by Borrower under this Agreement or the Other Agreements
shall be deemed to have been suspended or waived by Bank unless such suspension
or waiver is by an instrument in writing signed by an officer of Bank and
directed to Borrower specifying such suspension or waiver.
8.5 If any provision of this Agreement or the Other Agreements or the
application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the Other Agreements and the
application of such provision to other Persons or circumstances will not be
affected thereby and the provisions of this Agreement and the Other Agreements
shall be severable in any such instance.
8.6 This Agreement and the Other Agreements shall be binding upon and
inure to the benefit of the successors and assigns of Borrower and Bank. This
provision, however, shall not be deemed to modify Paragraph 8.3 hereof.
8.7 Borrower hereby appoints Bank as Borrower's agent and attorney-in-fact
for the purpose of carrying out the provisions of this Agreement and taking any
action and executing any agreement, instrument or document which Bank may
reasonably deem necessary or advisable to accomplish the purposes hereof which
appointment is irrevocable and coupled with an interest. All monies paid for
the purposes herein, and all costs, fees and expenses paid or incurred in
connection therewith, shall be part of Borrower's Liabilities, payable by
Borrower to Bank on demand.
8.8 This Agreement, or a carbon, photographic or other reproduction of
this Agreement or of any Uniform Commercial Code financing statement covering
the Collateral or any portion thereof shall be sufficient as a Uniform
Commercial Code financing statement and may be filed as such.
8.9 Except as otherwise provided in the Other Agreements, if any provision
contained in this Agreement is in conflict with, or inconsistent with, any
provision in the Other Agreements, the provision contained in this Agreement
shall govern and control.
8.10 Except as otherwise specifically provided in this Agreement, Borrower
waives any and all notice or demand which Borrower might be entitled to receive
by virtue of any applicable statute or law, and waives presentment, demand and
protest and notice of presentment, protest, default, dishonor, non-payment,
maturity, release, compromise, settlement, extension or renewal of any and all
14
agreements, instruments or documents at any time held by Bank on which Borrower
may in any way be liable.
8.11 Until Bank is notified by Borrower to the contrary in writing by
registered or certified mail directed to Bank's principal place of business, the
signature upon this Agreement or upon any of the Other Agreements of any
partner, manager, employee or agent of the Borrower, or of any other Person
designated in writing to Bank by any of the foregoing, shall bind Borrower and
be deemed to be the duly authorized act of Borrower.
8.12 This Agreement and the Other Agreements shall be governed and
controlled by the internal laws of the State of Illinois; and not the law of
conflicts.
8.13 If at anytime or times hereafter, whether or not Borrower's
Liabilities are outstanding at such time, Bank: (a) employs counsel for advice
or other representation, (i) with respect to the Collateral, this Agreement, the
Other Agreements or the administration of Borrower's Liabilities, (ii) to
represent Bank in any litigation, arbitration, contest, dispute, suit or
proceeding or to commence, defend or intervene or to take any other action in or
with respect to any litigation, arbitration, contest, dispute, suit or
proceeding (whether instituted by Bank, Borrower or any other Person) in any way
or respect relating to the Collateral, this Agreement, the Other Agreements, or
Borrower's affairs, or (iii) to enforce any rights of Bank against Borrower or
any other Person which may be obligated to Bank by virtue of this Agreement or
the Other Agreements, including, without limitation, any Obligor; (b) takes any
action with respect to administration of Borrower's Liabilities or to protect,
collect, sell, liquidate or otherwise dispose of the Collateral, and/or (c)
attempts to or enforces any of Banks rights or remedies under this Agreement or
the Other Agreements, including, without limitation, Bank's rights or remedies
with respect to the Collateral, the reasonable costs and expenses incurred by
Bank in any manner or way with respect to the foregoing, shall be part of
Borrower's Liabilities, payable by Borrower to Bank on demand.
8.14 BORROWER IRREVOCABLY AGREES THAT, SUBJECT TO BANKS SOLE AND ABSOLUTE
ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT
OF OR FROM OR RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS OR THE COLLATERAL
SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE
OF ILLINOIS. BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE. BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION BROUGHT AGAINST BORROWER BY BANK IN ACCORDANCE WITH THIS
PARAGRAPH.
8.15 BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, COUNTERCLAIM OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE OTHER AGREEMENTS, OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR (II) ARISING FROM
ANY DISPUTE OR CONTROVERSY ARISING IN CONNECTION WITH OR RELATED TO THIS
AGREEMENT,
15
THE OTHER AGREEMENTS, OR ANY SUCH AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT,
AND AGREES THAT ANY SUCH ACTION, SUIT, COUNTERCLAIM OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year specified at the beginning hereof.
BORROWER:
TOTAL CONTROL PRODUCTS, INC., an
Illinois corporation
By: /s/Xxxxxxxx Xxxx
-------------------------------
Xxxxxxxx Xxxx, President
XXXX PRODUCTS, INC., an
Illinois corporation
By: /s/Xxxxxxxx Xxxx
--------------------------------
Xxxxxxxx Xxxx, Secretary
Accepted this 17th day of July, 1996, at Bank's principal place of business
in the City of Chicago, State of Illinois.
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By: /s/Xxxxxxx Xxxxxxxxx
---------------------------
Print or Type Name: Xxxxxxx Xxxxxxxxx
-------------------
Its: V.P.
----------------------------------
16
AMERICAN NATIONAL BANK
AND TRUST COMPANY OF CHICAGO
==============================================================================
PROMISSORY NOTE (SECURED)
==============================================================================
$9,000,000.00 CHICAGO, ILLINOIS JULY 17, 1996
DUE JULY 17, 1998
FOR VALUE RECEIVED, the undersigned jointly and severally if more than one)
("Borrower"), promises to pay to the order of AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO ("Bank"), at its principal place of business in Chicago,
Illinois or such other place as Bank may designate from time to time hereafter,
the principal sum of NINE MILLION AND NO/100 DOLLARS, or such lesser principal
sum as may then be owed by Borrower to Bank hereunder, which sum shall be due
and payable on July 17, 1998.
Borrower's obligations and liabilities to Bank under this Note, and all
other obligations and liabilities of Borrower to Bank (including without
limitations, debts, claims and indebtedness) whether primary, secondary,
direct, contingent, fixed or otherwise, including those evidenced in rate
hedging agreements designed to protect the Borrower from the fluctuation of
interest rates. heretofore, now and/or from time to time hereafter owing, due
or payable, however evidenced, created, incurred, acquired or owing and
however arising, whether under this Note, any agreement, instrument or
document heretofore, now or from time to time hereafter executed and
delivered to Bank by or on behalf of Borrower, or by oral agreement or
operation of law or otherwise shall be defined and referred to herein as
"Borrower's Liabilities."
The unpaid principal balance of Borrower's Liabilities due hereunder shall
bear interest from the date of disbursement until paid, computed as follows: AT
A DAILY RATE EQUAL TO THE DAILY RATE EQUIVALENT OF 0.0% PER ANNUM (computed on
the basis of a 360-day year and actual days elapsed) in excess of the rate of
interest announced or published publicly from time to time by Bank as its prime
or base rate of interest (THE "BASE RATE"); OR THE LIBOR RATE + 200 BASIS POINTS
as set north in the London Interbank Offered Rate Borrowing Agreement or even
date herewith PROVIDED, HOWEVER, that in the event that any of Borrower's
Liabilities are not paid when due, the unpaid amount of Borrower's Liabilities
shall bear interest after the due date until paid at a rate equal to the sum of
the rate that would otherwise be in effect plus 3%.
The rate of interest to be charged by Bank to Borrower shall fluctuate
hereafter from time to time concurrently with, and in an amount equal to, each
increase or decrease in the Base Rate, whichever is applicable.
Accrued interest shall be payable by Borrower to Bank on the same day of
each month, and at maturity, commencing with the last day of July, 1996, or as
billed by Bank to Borrower, at Bank's principal place of business, or at such
other place as Bank may designate from time to time hereafter. After maturity,
accrued interest on all of Borrower's Liabilities shall be payable on demand.
Borrower warrants and represents to Bank that Borrower shall use the
proceeds represented by this Note solely for proper business purposes and
consistently with all applicable laws and statutes.
To secure the prompt payment to Bank of Borrower's Liabilities and the
prompt, fill and faithful performance by Borrower of all of the provisions to
be kept, observed or performed by Borrower under this Note and/or any other
agreement, instrument or document heretofore, now and/or from time to time
hereafter delivered by or on behalf of Borrower to Bank, Borrower grants to Bank
a security interest in and to the following property: (a) all of Borrower's now
existing and/or owned and hereafter arising or acquired monies, reserves,
deposits, deposit accounts and interest or dividends thereon, securities, cash,
cash equivalents and other property now or at any time or times hereafter in the
possession or under the control of Bank or its bailee for any purpose; (b) All
business assets of Total Control Products, Inc., an Illinois corporation and
Xxxx Products, Inc., an Illinois corporation, pursuant to Loan and Security
Agreement of even date herewith as amended from time to time by and between
Borrower and Bank; and (c) all substitutions, renewals, improvements, accessions
or additions thereto, replacements, offspring, rents, issues, profits, returns,
products and proceeds thereof, including without limitation
proceeds of insurance policies insuring the foregoing collateral (all of the
foregoing property is referred to herein individually and collectively as
"Collateral").
Regardless of the adequacy of the Collateral, any deposits or other sums at
any time credited by or payable or due from Bank to Borrower, or any monies,
cash, cash equivalents, securities, instruments, documents or other assets of
Borrower in the possession or control of Bank or its bailee for any purpose, may
be reduced to cash and applied by Bank to or setoff by Bank against Borrower's
Liabilities.
Borrower agrees to deliver to Bank immediately upon Bank's demand, such
additional collateral as Bank may request from time to time should the value
of the Collateral (in Bank's sole and exclusive opinion) decline,
deteriorate, depreciate or become impaired, or should Bank deem itself
insecure for any reason whatsoever, including without limitation a change in
the financial condition of Borrower or any party liable with respect to
Borrower's Liabilities, and does hereby grant to Bank a continuing security
interest in such other collateral, which shall be deemed to be a part of the
Collateral. Borrower shall execute and deliver to bank, at any time upon
Bank's demand, all agreements, instruments, documents and other written
matter that Bank may request, in form and substance acceptable to Bank, to
perfect and maintain perfected Bank's security interest in the Collateral or
any additional collateral. Borrower agrees that a carbon, photographic or
photostatic copy, or other reproduction, of this Note or of any financing
statement shall be sufficient as a financing statement.
Bank may take, and Borrower hereby waives notice of, any action from time
to time that Bank may deem necessary or appropriate to maintain or protect the
Collateral, and Bank's security interest therein, and in particular Bank may at
any time (i) transfer the whole or any part of the collateral into the name of
the Bank or its nominee, (ii) collect any amounts due on Collateral directly
from persons obligated thereon, (iii) take control of any proceeds and products
of Collateral, and/or (iv) xxx or make any compromise or settlement with respect
to any Collateral. Borrower hereby releases Bank from any and all causes of
action or claims which Borrower may now or hereafter have for any asserted loss
or damage to borrower claimed to be caused by or arising from: (a) Bank's taking
any action permitted by this paragraph; (b) any failure of Bank to protect,
enforce or collect in whole or in part any of the collateral; and/or (C) any
other act or omission to act on the part of Bank, its officers, agents or
employees, except for willful misconduct.
The occurrence of any one of the following events shall constitute a
default by the Borrower ("Event of Default") under this Note: (a) if Borrower
fails to pay any of Borrower's Liabilities when due and payable or declared
due and payable (whether by scheduled maturity, required payment,
acceleration, demand or otherwise); (b) if Borrower or any guarantor of any
of Borrower's Liabilities fails or neglects to perform, keep or observe any
term, provision, condition, covenant, warranty or representation contained in
this Note; (c) occurrence of a default or event of default under any
agreement, instrument or document heretofore, now or at any time hereafter
delivered by or on behalf of Borrower to Bank; (d) occurrence of a default or
an event of default under any agreement, instrument or document heretofore,
now or at any time hereafter delivered to Bank by any guarantor of Borrower's
Liabilities or by any person or entity which has granted to Bank a security
interest or lien in and to some or all of such person's or entity's real or
personal property to secure the payment of Borrower's Liabilities; (e) if the
Collateral or any other of Borrower's assets are attached, seized, subjected
to a writ, or are levied upon or become subject to any lien or come within
the possession of any receiver, trustee, custodian or assignee for the
benefit of creditors; (f) if a notice of lien, levy or assessment is filed of
record or given to Borrower with respect to all or any of Borrower's assets
by any federal, state or local department or agency; (g) if Borrower or any
guarantor of Borrower's Liabilities becomes insolvent or generally fails to
pay or admits in writing its inability to pay debts as they become due, if a
petition under Title II of the United States Code or any similar law or
regulation is filed by or against Borrower or any such Guarantor, if Borrower
or any such guarantor shall make an assignment for the benefit of creditors,
if any case or proceeding is filed by or against Borrower or any such
guarantor for its dissolution or liquidation, or if Borrower or any such
guarantor is enjoined, restrained or in any way prevented by court order from
conducting all or any material part of its business affairs; (h) the death or
incompetency of Borrower or any guarantor of Borrower's Liabilities, or the
appointment of a conservator for all or any portion of Borrower's assets or
the Collateral; (i) the revocation, termination or cancellation of any
guaranty of Borrower's Liabilities without written consent of Bank; (j) if a
contribution failure occurs with respect to any pension plan maintained by
Borrower or any corporation, trade or business that is, along with Borrower,
a member of a controlled group of corporations or a controlled group of
trades or businesses (as described in Sections 414(b) and (c) of the Internal
Revenue Code of 1986 or Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended, "ERISA") sufficient to give rise to a lien
under Section 302(f) of ERISA; (k) if Borrower or any
guarantor of Borrower's Liabilities is in default in the payment of any
obligations, indebtedness or other liabilities to any third party and such
default is declared and is not cured within the time, if any, specified therefor
in any agreement governing the same; (l) if any material statement, report or
certificate made or delivered by Borrower, any of Borrower's partners, officers,
employees or agents or any guarantor of Borrower's Liabilities is not true and
correct; or (m) if Bank is reasonably insecure.
Upon the occurrence of an Event of Default, at Bank's option, without
notice by Bank to or demand by Bank of Borrower: (i) all of Borrower's
Liabilities shall be immediately due and payable; (ii) Bank may exercise any
one or more of the rights and remedies accruing to a secured party under the
Uniform Commercial Code of the relevant jurisdiction and any other applicable
law upon default by a debtor; (iii) Bank may enter, with or without process of
law and without breach of the peace, any premises where the Collateral is or
may be located, and may seize or remove the Collateral from said premises and/or
remain upon said premises and use the same for the purpose of collecting,
preparing and disposing of the Collateral; and/or (iv) Bank may sell or
otherwise dispose of the Collateral at public or private sale for cash or
credit, provided, however, that Borrower shall be credited with the net proceeds
of any such sale only when the same are actually received by Bank.
Upon an Event of Default, Borrower, immediately upon demand by Bank, shall
assemble the Collateral and make it available to Bank at a place or places to be
designated by Bank which is reasonably convenient to Bank and Borrower.
All of Bank's rights and remedies under this Note are cumulative and
non-exclusive. The acceptance by Bank of any partial payment made hereunder
after the time when any of Borrower's Liabilities become due and payable will
not establish a custom or waive any rights of Bank to enforce prompt payment
hereof. Bank's failure to require strict performance by Borrower of any
provision of this Note shall not waive, affect or diminish any right of Bank
thereafter to demand strict compliance and performance therewith. Any waiver
of an Event of Default hereunder shall not suspend, waive or affect any other
Event of Default hereunder. Borrower and every endorser waive presentment,
demand and protest and notice of presentment, protest, default, non-payment,
maturity, release, compromise, settlement, extension or renewal of this Note,
and hereby ratify and confirm whatever Bank may do in this regard. Borrower
further waives any and all notice or demand to which Borrower might be
entitled with respect to this Note by virtue of any applicable statute or law
(to the extent permitted by law).
Borrower agrees to pay, immediately upon demand by Bank, any and all
costs, fees and expenses (including reasonable attorneys' fees, costs and
expenses) incurred by Bank (i) in enforcing any of Bank's rights hereunder,
and (ii) in representing Bank in any litigation, contest, suit or dispute, or
to commence, defend or intervene or to take any action with respect to any
litigation, contest, suit or dispute (whether instituted by Bank, Borrower or
any other person) in any way relating to this Note, Borrower's Liabilities or
the Collateral, and to the extent not paid the same shall become part of
Borrower's Liabilities.
This Note shall be deemed to have been submitted by Borrower to Bank and
to have been made at Bank's principal place of business. This Note shall be
governed and controlled by the internal laws of the State of Illinois and not
the law of conflicts.
Advances under this Note may be made by Bank upon oral or written request
of any person authorized to make such requests on behalf of Borrower
("Authorized Person"). Borrower agrees that Bank may act on requests which
Bank in good faith believes to be made by an Authorized Person, regardless of
whether such requests are in fact made by an Authorized Person. Any such
advance shall be conclusively presumed to have been made by Bank to or for
the benefit of Borrower. Borrower does hereby irrevocably confirm, ratify
and approve all such advances by Bank and agrees to indemnify Bank against
any and all losses and expenses (including reasonable attorneys' fees) and
shall hold Bank harmless with respect thereto.
TO INDUCE BANK TO ACCEPT THIS NOTE, BORROWER IRREVOCABLY AGREES THAT,
SUBJECT TO BANK'S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY
WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS NOTE SHALL BE
LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS.
BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE. BORROWER HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT
AGAINST BORROWER BY BANK IN ACCORDANCE WITH THIS PARAGRAPH.
BORROWER IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
COUNTERCLAIM OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR
RELATED TO THIS NOTE OR ANY SUCH AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT,
AND AGREES THAT ANY SUCH ACTION, SUIT, COUNTERCLAIM OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
TOTAL CONTROL PRODUCTS, INC., an
0000 X. Xxxxxx Xxxxxx Xxxxxxxx corporation
------------------------------
Xxxxxxx Xxxx, XX 00000 /s/ Xxxxxxxx Xxxx
------------------------------ ------------------------------
Xxxxxxxx Xxxx, President
------------------------------
FEIN OR SSN
XXXX PRODUCTS, INC., an Illinois
corporation
0000 X. Xxxxxx Xxxxxx
------------------------------
Xxxxxxx Xxxx, XX 00000 /s/ Xxxxxxxx Xxxx
------------------------------ ------------------------------
Xxxxxxxx Xxxx, Secretary
------------------------------
FEIN OR SSN
