EXHIBIT 10.1
LOAN AND SECURITY AGREEMENT
Dated as of March 15, 1996
between
CMC HEARTLAND PARTNERS
as Borrower,
and
LASALLE NATIONAL BANK
as Bank
TABLE OF CONTENTS
1. DEFINITIONS AND TERMS....................................................................................... 1
1.1 Certain Definitions......................................................................... 1
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1.2 Certain UCC and Accounting Terms............................................................ 8
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2. REVOLVING LOANS: BANK'S COMMITMENT AND BORROWING PROCEDURES................................................ 9
2.1 Revolving Credit Commitment................................................................. 9
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2.2 Borrowing Procedures........................................................................ 9
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2.3 All Revolving Loans to Constitute One Obligation............................................ 9
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3. REVOLVING LOANS: NOTE EVIDENCING REVOLVING LOANS........................................................... 10
3.1 Revolving Note.............................................................................. 10
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3.2 Recordation................................................................................. 10
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4. REVOLVING LOANS: AMOUNTS; INTEREST; BALANCES; ............................................................. 10
4.1 Interest Rate; Applicable Borrowing Amounts................................................. 10
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4.2 Computation of Interest..................................................................... 11
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4.3 Interest Laws............................................................................... 11
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4.4 Unused Portion Fee.......................................................................... 11
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4.5 Revolving Loan Clean-Up Period.............................................................. 12
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5. REVOLVING LOANS: GENERAL TERMS............................................................................. 12
5.1 Payments to Bank............................................................................ 12
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5.2 Conditions Precedent Events................................................................. 12
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5.3 Offset...................................................................................... 12
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5.4 Discretionary Disbursements................................................................. 13
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5.5 Credit Termination Date; Continuance of Obligations, Etc.................................... 13
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5.6 Revolving Loan Evidence..................................................................... 13
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6. REVOLVING LOANS: CONDITIONS TO LENDING..................................................................... 13
6.1 Initial Revolving Loan Conditions Precedent................................................. 13
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6.2 Accountant's Letter......................................................................... 15
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7. COLLATERAL: GENERAL TERMS.................................................................................. 15
7.1 Grant of Security Interest.................................................................. 15
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7.2 Perfection of Security Interests............................................................ 15
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7.3 Inspection of Collateral.................................................................... 16
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7.4 First Lien and Locations of Collateral...................................................... 16
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7.5 Constructive Trust.......................................................................... 16
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7.6 Application of Proceeds of Collateral....................................................... 16
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7.7 Third Party Collateral Claims............................................................... 17
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7.8 Additional Collateral....................................................................... 17
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7.9 No Custom or Waiver......................................................................... 17
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8. REPRESENTATIONS AND WARRANTIES; COVENANTS;
INDEMNIFICATION; CONTINUING OBLIGATION.................................... 17
8.1 Representations and Warranties of Borrower.................................................. 17
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8.2 Affirmative Covenants....................................................................... 22
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8.3 Negative Covenants.......................................................................... 27
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8.4 Maintenance of Accounts..................................................................... 29
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9. DEFAULT..................................................................................................... 29
9.1 Events of Default........................................................................... 29
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9.2 Cumulative Remedies......................................................................... 30
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9.3 Acceleration and Termination of Revolving Loans............................................. 30
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9.4 Rights of Secured Creditor.................................................................. 31
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10. GENERAL.................................................................................................... 31
10.1 Payment Application Date.................................................................... 31
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10.2 Statement of Account........................................................................ 31
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10.3 Manner of Application; Waiver of Setoff Prohibition......................................... 31
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10.4 Survival of Representations and Warranties.................................................. 32
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10.5 Integration; Amendment...................................................................... 32
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10.6 No Waiver................................................................................... 32
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10.7 Severability................................................................................ 32
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10.8 Successors and Assigns...................................................................... 32
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10.9 Conflict with Other Agreements.............................................................. 32
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10.10 No Impairment by Termination............................................................... 33
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10.11 Waivers......................................................................................... 33
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10.12 Costs, Fees and Expenses Related to Agreement and Other Agreements.............................. 33
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10.13 Environmental Indemnity......................................................................... 33
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10.14 Governing Law.............................................................................. 34
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10.15 Notices.................................................................................... 35
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10.16 FORUM; BANK ; VENUE; JURY TRIAL WAIVER..................................................... 35
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10.17 Other Costs, Fees and Expenses............................................................. 35
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10.18 Revival.................................................................................... 36
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10.19 Acknowledgments............................................................................ 36
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10.20 Section Headings........................................................................... 36
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10.21 Counterparts............................................................................... 36
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10.22 Effectiveness.............................................................................. 37
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Exhibits
Schedules
LOAN AND SECURITY AGREEMENT
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THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made as of the 15th
day of March, 1996, by and between CMC HEARTLAND PARTNERS, a Delaware general
partnership ("Borrower"), and LASALLE NATIONAL BANK, a national banking
association (the "Bank").
W I T N E S S E T H:
WHEREAS, Borrower desires to borrow funds and obtain other financial
accommodation from Bank to fund Borrower's periodic working capital needs; and
WHEREAS, pursuant to Borrower's request, Bank is willing to lend to
Borrower pursuant hereto.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, Borrower agrees to borrow from Bank, and Bank
agrees to lend to Borrower, subject to and upon the following terms and
conditions:
1. DEFINITIONS AND TERMS
1.1 Certain Definitions. The following words, terms and/or phrases shall
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have the meanings set forth thereafter and such meanings shall be applicable to
the singular and plural form thereof, giving effect to the numerical difference.
"Affiliate" means, with respect to any Person, any other Person
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directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to
control another Person if such first Person possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of such other Person, whether through ownership of voting
securities, by contract or otherwise.
"Assignment of Rents" means the Assignment of Rents and Leases of
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even date herewith among Borrower and Bank.
"Authorized Agent" means Xxxxxxx X. Xxxxxxxxxxxx, the Authorized
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Agent of the Borrower.
"Borrower's Liabilities" means all obligations and liabilities of
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Borrower in the aggregate to Bank (including, without limitation, all
debts, claims and indebtedness) whether primary, secondary, direct,
contingent, fixed or otherwise, 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, or by oral agreement or operation of law or otherwise.
"Business Day" means any day on which Bank is open for the
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transaction of commercial banking business in Chicago, Illinois other than
a Saturday or Sunday.
"Charges" means all national, federal, state, county, city,
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municipal and/or other governmental (or any instrumentality, division,
agency, body or department thereof, including, without limitation, the
PBGC) taxes, levies, assessments, charges, liens, claims or encumbrances
upon and/or relating to Borrower's Liabilities, Borrower's business,
Borrower's ownership and/or use of the Collateral, income and/or gross
receipts.
"Closing Date" means March 15, 1996.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Collateral" shall have the meaning assigned to such term in
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Paragraph 7.1 hereof.
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"Debt" means all of a Person's liabilities, obligations and
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indebtedness to any Person of any and every kind and nature, whether
primary, secondary, direct, indirect, absolute, contingent, fixed or
otherwise, 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 written or oral agreement, by operation of
law or otherwise. Without in any way limiting the generality of the
foregoing, Debt specifically includes (i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations to pay the deferred purchase price
of property or services, (iv) obligations as lessee under leases which
shall have been or should be, in accordance with generally accepted
accounting principles, recorded as capital leases, (v) 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) through (iv) above, and (vi)
liabilities in respect of unfunded vested benefits under Plans and
Multiemployer Plans covered by Title IV of ERISA.
"Default Rate" shall have the meaning assigned to such term in
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Paragraph 4.1(c) hereof.
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"Disclosure Schedule" means a schedule, in form and substance
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satisfactory to Bank, which (i) has been certified as true and correct by
an Authorized Agent, (ii) has been delivered to Bank prior to the date
hereof, (iii) describes in reasonable detail, all exceptions to the
representations, warranties and covenants of Borrower herein, and (iv) is
clearly identified on its face as the Disclosure Schedule for purposes
hereof. Any reference herein to a "Schedule" shall be deemed to refer to a
part of the Disclosure Schedule.
"Early Termination Date" means the date, pursuant to Paragraph
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9.3, upon which, whether by notice or by right hereunder, Bank's obligation
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to extend credit hereunder is terminated.
"Environmental Claim" means the following:
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(i) any notice of violation, complaint, claim, citation, demand,
inquiry, report, action, assertion of potential responsibility, lien,
encumbrance or proceeding regarding any Mortgaged Property or any use
thereof, whether formal or informal, absolute or contingent, matured or
unmatured, brought or issued by any governmental unit, agency or body, or
any person or entity respecting:
(A) Environmental Laws; or
(B) the environmental condition of a Mortgaged Property, or any
portion thereof, or any property near such Mortgaged Property, including,
without limitation, actual or alleged damage or injury to humans, public
health, wildlife, biota, air, surface or subsurface soil, minerals or
water, or other natural resources; or
(C) the use, exposure, release, emission, discharge,generation,
manufacture, sale, transport, handling, storage, treatment, reuse,
presence, disposal or recycling of Hazardous Material either on a Mortgaged
Property or off-site;
(ii) any lien for damages caused by, or the recovery of any costs
incurred by any person or governmental entity relating to the
investigation, remediation or cleanup of, any release or threatened release
of Hazardous Material at a Mortgaged Property; and
(iii) the destruction or loss of use of property, or the injury,
illness or death of any officer, director, employee, agent, representative,
tenant or invitee of Borrower or any other person directly caused by the
environmental condition of a Mortgaged Property or the release, emission or
discharge of Hazardous Materials from a Mortgaged Property.
"Environmental Laws" means all statutes, ordinances, orders,
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rules, regulations, plans, policies, or decrees and the like relating to
(i) environmental matters, including, without limitation, those relating to
fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the release (as such term
is defined in Paragraph 8.1(n)(ii)) or threatened release of Hazardous
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Materials, (ii) the generation, use, handling, transportation, storage,
treatment or disposal of Hazardous Materials or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant
or animal health or welfare related to Hazardous Materials, in any manner
applicable to Borrower and any of its Mortgaged Properties, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. (S)9601 et seq.), the Hazardous Materials
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Transportation Act (49 U.S.C. (S)1801 et seq.), the Resource Conservation
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and Recovery Act (42 U.S.C. (S)6901 et seq.), the Federal Water Pollution
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Control Act (33 U.S.C. (S)1251 et seq.), the Clean Air Act (42 U.S.C.
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(S)7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S)2601 et
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seq.), the Occupational Safety and Health Act (29 U.S.C. (S)651 et seq.)
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and the Emergency Planning and Community Right-To-Know Act (42 U.S.C.
(S)11001 et seq.), each as amended
or supplemented, and any analogous present or future local, state and
federal statutes and regulations promulgated pursuant thereto, each as in
effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of
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1974, as the same may be amended from time to time and, unless the context
otherwise requires, the regulations promulgated thereunder and any
successor statute.
"ERISA Affiliate" means each trade or business (whether or not
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incorporated) which together with Borrower or an Affiliate would be deemed
to be a "single employer" within the meaning of Section 4001(b) of ERISA
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or, where applicable, would be treated as a "single employer" under Section
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412(c)(11) of the Code.
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"ERISA Termination Event" means (i) a "Reportable Event"
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described in Section 4043 of ERISA (other than a "Reportable Event" not
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subject to the provision for 30-day notice to the PBGC under such
regulations), (ii) the withdrawal of Borrower or any Affiliate from a Plan
during a plan year in which it was a "substantial employer," as defined in
Section 4001(a) of ERISA, including a cessation of operations that is
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treated as a withdrawal by a "substantial employer" under Section 4062(e)
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of ERISA, (iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA,
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(iv) the institution of proceedings to terminate a Plan by the PBGC, (v)
any other event or condition which in the reasonable judgment of Borrower
is likely to constitute grounds under Section 4042 of ERISA for the
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termination of, or the appointment of a trustee to or any ERISA
administrator, any Plan, or (vi) the partial or complete withdrawal of
Borrower or any ERISA Affiliate from a Multiemployer Plan.
"Event of Default" shall have the meaning assigned to such term
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in Paragraph 9.1 hereof.
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"Excess Interest" shall have the meaning assigned to such term in
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Paragraph 4.3 hereof.
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"Financials" means those financial statements of Borrower
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heretofore or concurrently herewith delivered by or on behalf of Borrower
to Bank.
"GAAP" shall mean generally accepted accounting principles as in
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effect from time to time.
"General Intangibles" means all choses in action, causes of
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action and all other intangible property of Borrower of every kind and
nature now owned or hereafter acquired by Borrower, including, without
limitation, corporate and other business records, deposit accounts,
inventions, designs, patents, patent and trademark registrations and
applications, trademarks, trade names, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, deferred tax benefits, tax refund
claims, prepaid expenses, computer programs, covenants not to compete,
customer lists and mailing lists, contract rights, indemnification rights,
causes of action and any letters of credit, guarantee claims, security
interests or other security held by or granted to Borrower.
"Governmental Authorization" means any permit, license,
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authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court having
jurisdiction over Borrower or any Mortgaged Property.
"Hazardous Materials" means (i) any chemical, material or
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substance defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely
hazardous waste," "restricted hazardous waste," "infectious waste," "toxic
substances" or any other formulations intended to define, list or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity,
"TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws or publications promulgated pursuant thereto,
(ii) any oil, petroleum or petroleum derived substance, (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources, (iv) any flammable substances or explosives, (v) any radioactive
materials, (vi) asbestos in any form (which is or could become friable),
(vii) urea formaldehyde foam insulation, (viii) electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million, (ix) pesticides or (x) any
other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority or which may or could
pose a hazard to health or safety.
"Lien" means, with respect to the Collateral or any asset of
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Borrower, any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, any lease in the
nature thereof and the filing of or agreement to give any financing
statement under the Uniform Commercial Code in effect in any jurisdiction).
"Liquid Assets" means cash on hand or cash equivalents, including
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certificates of deposits with a maturity less than 180 days, money market
deposits, U.S. treasury bills and readily-marketable securities.
"Maximum Rate" shall have the meaning assigned to such term in
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Paragraph 4.3 hereof.
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"MLC" means Milwaukee Land Company, a Delaware corporation,
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formerly an Iowa corporation, and an authorized general partner of
Borrower.
"Mortgage" means that certain Mortgage and Security Agreement of
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even date herewith made by Borrower in favor of Bank with respect to the
Mortgaged Properties.
"Mortgaged Properties" means certain parcels of vacant land
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located in Chicago, Illinois serving as Collateral hereunder and legally
described on Schedule 1.0 attached hereto and made a part hereof.
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"Multiemployer Plan" means a plan defined as such in Section
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4001(a)(3) of ERISA to which contributions have been made by Borrower or an
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ERISA Affiliate.
"Operating Account" shall have the meaning assigned to such term
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in Paragraph 8.4 hereof.
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"Other Agreements" means all agreements, instruments and
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documents, including, without limitation, guaranties, mortgages, deeds of
trust, pledges, powers of attorney, consents, assignments, contracts,
notices, security agreements, leases, financing statements and all other
written matter heretofore, now and/or from time to time hereafter executed
by and/or on behalf of Borrower in favor of Bank including, without
limitation, the Revolving Note, the Pledge Agreement, the Mortgage and the
Assignment of Rents.
"Partnership Agreement" means that certain Amended and Restated
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Partnership Agreement of Borrower, dated as of June 27, 1990, by and
between MLC and Heartland Partners, L.P., a Delaware limited partnership.
"PBGC" means the Pension Benefit Guaranty Corporation and any
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entity succeeding to any or all of its functions under ERISA.
"Permitted Investments" shall have the meaning assigned to such
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term in Paragraph 8.3(e) hereof.
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"Permitted Liens" shall have the meaning assigned to such term in
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Paragraph 8.3(a) hereof.
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"Person" means and includes an individual, a partnership, a joint
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venture, a corporation (whether or not for profit), a trust, an
unincorporated organization, a government or any department or agency
thereof or any other entity or organization.
"Plan" means, at any time, any single-employer plan, as defined
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in Section 4001(a) and subject to Title IV of ERISA, which is maintained,
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or at any time during the five calendar years preceding the time in
question was maintained, for employees of Borrower or an Affiliate.
"Pledge Agreement" means that certain Pledge Agreement of even
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date herewith made by Borrower in favor of the Bank pledging $300,000 in
cash or cash equivalents as an interest reserve pursuant to a certificate
of deposit having a rolling maturity of 180 days or less.
"Prime Rate" means the rate of interest (expressed as a
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percentage per annum) most recently announced or published publicly from
time to time by Bank as its Prime Rate of interest, which is not
necessarily the lowest or most favorable rate of interest charged by Bank
on commercial loans at any one time. The rate of interest shall change
automatically and immediately as and when the Prime Rate shall change,
without notice to Borrower, and any
notice to which it may be entitled is hereby waived, and any such change in
Bank's Prime Rate shall not affect any of the terms and conditions of this
Agreement, all of which shall remain in full force and effect.
"Revolving Credit Commitment" shall have the meaning assigned to
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such term in Paragraph 2.1 hereof.
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"Revolving Credit Maturity Date" means March 15, 1997.
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"Revolving Credit Termination Date" means the earliest to occur
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of (i) the Revolving Credit Maturity Date or (ii) the Early Termination
Date.
"Revolving Loan" means and includes all Revolving Loans made
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under the Revolving Credit Commitment, unless the context in which such
term is used shall otherwise require.
"Revolving Margin" means one percent (1%).
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"Revolving Note" means that certain Revolving Note of even date
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herewith in the original maximum principal amount available of $3,000,000
as the same may be amended, modified or supplemented from time to time, and
together with any renewals thereof or exchanges or substitutes therefor.
"Stock" means all shares, interests, participation or other
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equivalents, however designated, of or in a corporation, whether or not
voting, including but not limited to common stock, warrants, preferred
stock, convertible debentures, and all agreements, instruments and
documents convertible, in whole or in part, into any one or more or all of
the foregoing.
"Subsidiary" means any corporation of which a Person owns,
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directly or indirectly through one or more intermediaries, more than 50% of
the voting stock at the time of determination.
"Tangible Net Worth" means, at any time, Borrower's net worth
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after subtracting therefrom the amount of any General Intangibles, amounts
due from Affiliates and the amount of other assets classified as intangible
by Bank in the exercise of its reasonable discretion.
1.2 Certain UCC and Accounting Terms. Except as otherwise defined in this
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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 Uniform Commercial Code as adopted by the State of Illinois.
Notwithstanding the foregoing, any accounting terms used in this Agreement which
are not specifically defined herein shall have the meaning customarily given to
them in accordance with GAAP. All financing computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
as consistently applied. No Accounting Changes (as defined below) shall affect
financial covenants, standards or terms in this Agreement; provided, that
Borrower shall prepare footnotes to the financial statements required to be
delivered hereunder that show the differences between the financial statements
delivered (which reflect such Accounting Changes) and the basis for calculating
financial covenant compliance (without reflecting such Accounting Changes).
"Accounting Changes" means changes in accounting principles required by GAAP and
implemented by Borrower.
2. REVOLVING LOANS: BANK'S COMMITMENT AND BORROWING PROCEDURES
2.1 Revolving Credit Commitment. On the terms and subject to the
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conditions set forth in this Agreement, Bank agrees to make revolving credit
available to Borrower from time to time prior to the Revolving Credit
Termination Date in such aggregate amounts as Borrower may from time to time
request but in no event exceeding Three Million Dollars ($3,000,000) in the
aggregate (the "Revolving Credit Commitment"). The Revolving Credit Commitment
shall be available to Borrower by means of Revolving Loans, it being understood
that the Revolving Loans may be repaid and used again during the period from the
date hereof to and including the Revolving Credit Termination Date, at which
time the Revolving Credit Commitment shall expire.
2.2 Borrowing Procedures. Borrower shall give Bank irrevocable telephonic
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notice (which notice shall be promptly confirmed in writing) no later than 2:00
p.m., Chicago time, one (1) Business Day prior to the date that Borrower desires
disbursement of a Revolving Loan. Each such notice shall be effective upon
receipt by Bank and shall specify the date
of the Revolving Loan (which shall be a Business Day) and the amount of such
Revolving Loan. Borrower agrees that Bank may rely on any notice given by
persons it reasonably believes to be the Authorized Agent of Borrower and either
Xxxxx Xxxxxxxx, President and Chief Executive Officer of Borrower, or Xxxxxx X.
Xxxxxx, Assistant Secretary and Assistant Treasurer of MLC, without the
necessity of independent investigation. Subject to the terms and conditions of
this Agreement, the Revolving Loan shall be made available to Borrower by
depositing the same, in immediately available funds, in an account of Borrower
maintained with Bank.
2.3 All Revolving Loans to Constitute One Obligation. The Revolving Loans
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shall constitute one general obligation of Borrower, and shall be secured by
Bank's security interest in and Lien upon all of the Collateral and by all other
security interests, Liens, claims and encumbrances heretofore, now or at any
time or times hereafter granted by Borrower to Bank.
3. REVOLVING LOANS: NOTE EVIDENCING REVOLVING LOANS
3.1 Revolving Note. The Revolving Loans made by Bank under the Revolving
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Credit Commitment shall be evidenced by the Revolving Note substantially in the
form set forth in Exhibit 3.1, with appropriate insertions, dated the date
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hereof (or such other date prior thereto as shall be satisfactory to Bank),
payable to the order of the Bank. The unpaid principal amount of the Revolving
Loan shall bear interest and be due and payable as provided in this Agreement
and the Revolving Note. Payments to be made by Borrower under the Revolving
Note shall be made at the time, in the amounts and upon the terms set forth
herein and therein.
3.2 Recordation. The type, date and amount of each Revolving Loan made by
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Bank, the interest rate, and the date and amount of each repayment of principal
received by Bank shall be recorded by Bank in its records. The aggregate unpaid
principal amount so recorded shall be prima facie evidence of the principal
amount owing and unpaid on the Revolving Note. The failure to so record any
such amount or any error in so recording any such amount shall not limit or
otherwise affect the obligations of Borrower hereunder or under the Revolving
Note to repay the principal amount of the Revolving Loans together with all
interest accrued thereon.
4. REVOLVING LOANS: AMOUNTS; INTEREST; BALANCES; FACILITY AMOUNT FEE
4.1 Interest Rate; Applicable Borrowing Amounts.
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(a) Borrower's Liabilities arising under Paragraph 2.1 hereof in
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respect of each Revolving Loan shall bear interest at the fluctuating rate per
annum equal to the sum of the Prime Rate plus the Revolving Margin from time to
time in effect for the period commencing on the date of such Revolving Loan
until such Revolving Loan is paid in full.
(b) Accrued interest on the outstanding principal amount of Revolving
Loans shall be payable monthly in arrears on the first Business Day of each
calendar month commencing with the first Business Day of April, 1996. To the
extent funds are available, accrued interest shall be paid by automatic
withdrawals made by Bank from the Operating Account on or about the first
Business Day of each calendar month. Bank shall deliver to Borrower a monthly
statement with respect to the Operating Account, which statement shall show the
interest rate payable with respect to the Revolving Loan during the prior month,
the amount of interest accrued on the Revolving Loan during the prior month, and
the date of, and the amount of, each automatic withdrawal of accrued interest by
the Bank from the Operating Account during the prior month. After the Revolving
Credit Termination Date, accrued interest on such Revolving Loans shall be
payable on demand. Each Revolving Loan shall be in an aggregate minimum amount
of $10,000 and integral multiples of $25,000 in excess of that amount.
(c) If any payment of principal on any Revolving Loan is not made
when due, such Revolving Loan shall bear interest from the date such payment was
due until paid in full, payable on demand, at a rate per annum (the "Default
Rate") equal to the sum of 3% plus the applicable rate set forth in Paragraph
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4.1(a) from time to time in effect.
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4.2 Computation of Interest. Interest on each Revolving Loan shall be
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computed for the actual number of days elapsed on the basis of a 360-day year.
The interest rate applicable to each Revolving Loan shall change simultaneously
with each change in the Prime Rate. In computing interest on any Revolving
Loan, (i) the date of funding of the Revolving Loan shall be included and (ii)
the date of payment of such Revolving Loan shall be excluded; provided that if a
Revolving Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Revolving Loan.
4.3 Interest Laws. Notwithstanding any provision to the contrary
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contained in this Agreement or the Other Agreements, Borrower shall not be
required to pay, and Bank shall not be permitted to collect, any amount of
interest in excess
of the maximum amount of interest permitted by law ("Excess Interest"). If any
Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Agreement or in any of the Other
Agreements, then in such event: (a) the provisions of this Paragraph shall
govern and control; (b) Borrower shall not be obligated to pay any Excess
Interest; (c) any Excess Interest that Bank may have received hereunder shall
be, at Bank's option, (i) applied as a credit against the outstanding principal
balance of Borrower's Liabilities or accrued and unpaid interest (not to exceed
the maximum amount permitted by law), (ii) refunded to the payor thereof, or
(iii) any combination of the foregoing; (d) the interest rate(s) provided for
herein shall be automatically reduced to the maximum lawful rate allowed from
time to time under applicable law (the "Maximum Rate"), and this Agreement and
the Other Agreements shall be deemed to have been and shall be reformed and
modified to reflect such reduction; and (e) Borrower shall not have any action
against Bank for any damages arising out of the payment or collection of any
Excess Interest. Notwithstanding the foregoing, if for any period of time
interest on any Borrower's Liabilities is calculated at the Maximum Rate rather
than the applicable rate under this Agreement, and thereafter such applicable
rate becomes less than the Maximum Rate, the rate of interest payable on such
Borrower's Liabilities shall remain at the Maximum Rate until Bank shall have
received the amount of interest which Bank would have received during such
period on such Borrower's Liabilities had the rate of interest not been limited
to the Maximum Rate during such period.
4.4 Unused Portion Fee. As additional consideration for issuing, or
------------------
causing to be issued, Revolving Loans for Borrower at Borrower's request
pursuant to Paragraph 2.1 hereof, from and after the Closing Date, Borrower
-------------
shall pay to Bank a fee in an amount equal to the Revolving Credit Commitment
less the average daily balance of the Revolving Loans during the preceding
quarter, multiplied by one-quarter of one percent (.25%) per annum, such fee to
be calculated on the basis of a 360-day year for the actual number of days
elapsed and to be payable quarterly in arrears on the first Business Day of
April 1996 and on the first Business Day of each calendar quarter thereafter.
4.5 Revolving Loan Clean-Up Period. Borrower agrees during each twelve-
------------------------------
month period during the effectiveness of this Agreement to reduce the principal
balance of the Revolving Loans outstanding hereunder and under the Revolving
Note to zero dollars ($0) for a period of at least thirty (30) consecutive days.
5. REVOLVING LOANS: GENERAL TERMS
5.1 Payments to Bank. That portion of Borrower's Liabilities consisting
----------------
of: (a) principal payable on account of the Revolving Loans made by Bank to
Borrower pursuant to this Agreement shall be payable by Borrower to Bank, as
provided in the Revolving Note or applicable instrument or document in respect
of the Revolving Loans; (b) costs, fees and expenses payable pursuant to this
Agreement shall be payable by Borrower to Bank, on demand (other than the unused
portion fee described in Paragraph 4.4 above, which shall be paid in accordance
-------------
with such paragraph); (c) interest payable pursuant to this Agreement shall be
payable by Borrower to Bank as provided in Paragraph 4.1; and (d) the balance of
-------------
Borrower's Liabilities, if any, shall be payable by Borrower to Bank as and when
provided in this Agreement or the Other Agreements.
5.2 Conditions Precedent Events. Each Revolving Loan made by Bank to
---------------------------
Borrower at the request of Borrower pursuant to this Agreement or the Other
Agreements shall in any event be subject to the following conditions precedent:
(a) there shall 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 Revolving Loan would constitute an Event of Default; (b) the
representations, warranties and covenants of Borrower contained in this
Agreement shall be true and correct as of the date of such Revolving Loan with
the same effect as though made on such date; (c) all of the covenants and
agreements of Borrower in this Agreement, and all of the requirements of this
Agreement with respect to such Revolving Loan, shall have been complied with;
and (d) there shall not have occurred, since the date of this Agreement, any
material adverse change in the financial condition, results of operations or
business of Borrower. Each borrowing by Borrower hereunder shall be deemed a
representation and warranty by Borrower that the foregoing conditions have been
fulfilled as of the date of such borrowing. Bank shall have received upon
request a certificate signed by the Authorized Agent of Borrower and either
Xxxxx Xxxxxxxx, the president and chief executive officer of Borrower, or Xxxxxx
Xxxxxx, the assistant treasurer and assistant secretary of MLC, dated the date
of such requested Revolving Loan certifying satisfaction of the conditions
specified in clauses (a)-(d) of this Paragraph 5.2.
-------------
5.3 Offset. Borrower agrees that, in addition to (and without limitation
-------
of) any right of set-off, bankers' lien or counterclaim Bank may otherwise have,
Bank shall be entitled, at its option, to offset balances held by it for account
of Borrower at any of its offices, in United States Dollars or in any other
currency, against any principal of or interest on any of Bank's Revolving Loans,
or any other amount payable to Bank hereunder, which is not paid when due
(regardless of whether such balances are then due to Borrower), in which case it
shall promptly notify Borrower thereof, provided that Bank's failure to give
such notice shall not affect the validity thereof.
5.4 Discretionary Disbursements. Bank, in its sole and absolute
---------------------------
discretion, may immediately upon notice to Borrower, disburse any or all
proceeds of Revolving Loans made or available to Borrower pursuant to this
Agreement and/or the Other Agreements to pay any fees, costs, expenses or other
amounts required to be paid by Borrower hereunder and not so paid. All monies
so disbursed shall be a part of Borrower's Liabilities, payable by Borrower on
demand.
5.5 Revolving Credit Termination Date; Continuance of Obligations, Etc.
-------------------------------------------------------------------
This Agreement, Bank's obligation to loan monies to Borrower, and Borrower's
ability to borrow monies from Bank shall be in effect until the Revolving Credit
Termination Date. Notwithstanding the foregoing and until such date when
Borrower's Liabilities shall be paid in full, Borrower's obligations hereunder
and under the Other Agreements shall continue, interest shall continue to be
paid in accordance with the foregoing, Bank shall be entitled to retain its
security interest in the Collateral and Bank shall retain all of its rights and
remedies under this Agreement.
5.6 Revolving Loan Evidence. Revolving Loans made by Bank to Borrower
-----------------------
pursuant to this Agreement may or may not (at Bank's sole and absolute
discretion) be evidenced by notes or other instruments issued or made by
Borrower to Bank. Where such loans are not so evidenced, such loans shall be
evidenced solely by entries upon the ledgers, books, records and/or computer
records of each Bank maintained for that purpose, which entries shall be
rebuttably presumptive evidence of such loans in the absence of manifest error.
6. REVOLVING LOANS: CONDITIONS TO LENDING
6.1 Initial Revolving Loan Conditions Precedent. In addition to those
-------------------------------------------
conditions set forth in Paragraph 5.2 above with respect to all Revolving Loans
-------------
and advances hereunder, prior to or contemporaneously with the making of the
initial advance of funds, Bank's obligation to make any Revolving Loan is
subject to the satisfaction of the following conditions precedent:
(a) Fees and Expenses. Borrower shall have paid all fees owed to
-----------------
Bank and reimbursed Bank for all expenses due and payable hereunder on or before
the date hereof including, but not limited to, counsel fees provided for in
Paragraph 10.12 hereof.
---------------
(b) Documents. Bank shall have received the following documents, in
---------
form and substance satisfactory to Bank, and all of the transactions
contemplated by each such document shall have been consummated or each condition
contemplated by each such document shall have been satisfied:
(i) Related Documents. Copies of this Agreement and each Other
-----------------
Agreement as required by Bank, including one copy of the Revolving Note
payable to Bank conforming to the requirements hereof duly executed by
Borrower and copies of the Mortgage, Assignment of Rents and Pledge
Agreement duly executed by Borrower and satisfactory to Bank. The
applicable Forms UCC-1 and UCC-2 financing statements related to the
Collateral (as herein defined) shall have been filed in all jurisdictions
that Bank deems necessary or advisable.
(ii) Legal Opinion. The legal opinion of Borrower's in-house
-------------
counsel.
(iii) Authorized Agent's Certificate. A certificate executed by
------------------------------
the Authorized Agent of Borrower stating that (A) no default or Event of
Default has occurred and is continuing, (B) no material adverse change in
the financial condition or operations of the business of Borrower has
occurred since December 31, 1995, and (C) each condition precedent to the
consummation of the Revolving Loans contemplated hereby has been met or
satisfied.
(iv) Insurance Policies. Certificates from Borrower's insurance
------------------
carriers evidencing that all insurance policies and coverage required by
Paragraph 8.2(h) below is in effect.
----------------
(v) Partnership Agreement. A copy of Borrower's Partnership
---------------------
Agreement certified by the Authorized Agent of Borrower.
(vi) Borrower Resolutions. Certified copies of resolutions of
--------------------
the Borrower, its partners and authorized agents, as applicable,
authorizing the execution and delivery and the consummation of the
transactions contemplated by this Agreement and the Other Agreements and
all other documents or instruments to be executed and delivered in
conjunction herewith and therewith by Borrower.
(vii) Incumbency Certificate. A certificate of a partner of
-----------------------
Borrower certifying the name of the Authorized Agent of Borrower authorized
to sign this Agreement and the Other Agreements together with a sample of
the true signature of the Authorized Agent.
(viii) Disclosure Schedule. The Disclosure Schedule executed by
-------------------
the Authorized Agent of the Borrower.
(ix) Title Policy. A loan policy issued by a title insurance
------------
company acceptable to Bank in the amount of $3,000,000, which policy shall
be in form and substance acceptable to Bank.
(x) Survey. Surveys for the Mortgaged Properties in form and
------
substance acceptable to Bank.
(xi) Environmental Reports. Appraisals and Phase One
---------------------
Environmental Report covering the Mortgaged Properties, satisfactory in
each case to Bank.
(c) Bank's Review. Bank's review of and satisfaction with the
-------------
ownership, capital, corporate, organizational and legal structure of Borrower
and its Affiliates.
6.2 Accountant's Letter. On or prior to the date hereof, Borrower agrees
-------------------
that it will deliver to Ernst & Young LLP, a letter (in form and substance
acceptable to Bank) authorizing such accountants to communicate with Bank and
acknowledging Bank's reliance on future financial statements audited by such
accountants, and Borrower shall use its best efforts to cause such accountants
to accept and agree to such letter.
7. COLLATERAL: GENERAL TERMS
7.1 Grant of Security Interest. To secure the prompt payment 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 does hereby pledge, assign,
transfer and deliver to Bank, for the benefit of Bank, and grant to Bank, for
the benefit of Bank, a security interest in and to and a first mortgage on the
Mortgaged Properties pursuant to the Mortgage and Assignment of Rents.
Additionally, Borrower will pledge $300,000 in cash or cash equivalents as an
interest reserve pursuant to the Pledge Agreement. (All of the foregoing
personal property and real property securing Borrower's Liabilities hereunder,
in addition to all rents and proceeds thereof including, without limitation,
proceeds of insurance policies insuring the same, is hereinafter sometimes
individually and sometimes collectively referred to as "Collateral"). Borrower
shall make appropriate entries upon its financial statements and books and
records disclosing Bank's security interest in the Collateral.
7.2 Perfection of Security Interests. Borrower shall execute and/or
--------------------------------
deliver to Bank, at any time and from time to time hereafter at the request of
Bank, all agreements, instruments, financing statements, documents and other
written matter (sometimes hereinafter individually and collectively referred to
as "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. After an Event of Default,
Borrower, irrevocably, hereby makes, constitutes and appoints Bank (and all
Persons designated by Bank for that purpose) as Borrower's true and lawful
attorney and agent-in-fact to sign the names of Borrower on the Supplemental
Documentation and to deliver the Supplemental Documentation to such Persons as
Bank may reasonably elect. Borrower agrees that a carbon, photographic or
photostatic copy or other reproduction of this Agreement or of any financing
statement shall be sufficient as a financing statement.
7.3 Inspection of Collateral. Bank (by any of its officers, employees
------------------------
and/or agents) shall have the right 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. After an Event of
Default, all costs, fees and expenses incurred by Bank, or for which Bank has
become obligated, in connection with such inspection and/or verification shall
constitute part of Borrower's Liabilities, payable by Borrower to Bank on
demand. Notwithstanding any other provision hereof, the provisions of this
Paragraph 7.3 shall govern and control with respect to matters concerning
-------------
inspection and verification of the Collateral.
7.4 First Lien and Locations of Collateral. Borrower warrants and
--------------------------------------
represents to and covenants with Bank that: (a) as of the Closing Date, Bank's
security interest in the Collateral is and at all times hereafter shall be
perfected and have a first priority; (b) the offices and/or locations where
Borrower keeps the Collateral consisting of personal property, and the books and
records concerning the Collateral, consisting of books and records with respect
to both real and personal property, are at the
locations specified on Schedule 7.4 and Borrower shall not remove such books and
------------
records and/or the Collateral therefrom and shall not keep any of such books and
records and/or the Collateral at any other office or location without the prior
written consent of Bank; and (c) the addresses specified on Schedule 7.4 include
------------
and designate Borrower's executive offices, chief place of business and other
offices and places of business and are Borrower's 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 continental United
States of America. There are no liens on the Collateral other than the lien of
Bank pursuant hereto and Permitted Liens.
7.5 Constructive Trust. Borrower shall receive, as the sole and exclusive
------------------
property of Bank, and as trustee for Bank, all monies, checks, notes, drafts and
all other payment for and/or proceeds of Collateral which come into the
possession or under the control of Borrower (or any of its partners, officers,
employees, agents or those Persons acting for or in concert with Borrower) and
immediately upon receipt thereof, Borrower shall remit the same (or cause the
same to be remitted), in kind, to Bank at the address described in Paragraph
---------
10.16 below.
-----
7.6 Application of Proceeds of Collateral. Bank, at any time or times in
-------------------------------------
its sole and absolute discretion, may take control of, in any manner, and may
endorse Borrower's name, as appropriate, to any of the items of payment or
proceeds described in Paragraph 7.5 above and, pursuant to the provisions of
-------------
this Agreement, Bank may, in its sole and absolute discretion, apply the same to
and on account of Borrower's Liabilities. For the purposes of this Paragraph,
Borrower, irrevocably, hereby makes, constitutes and appoints Bank (and all
persons designated by Bank for that purpose) as Borrower's true and lawful
attorney and agent-in-fact with power, without notice to Borrower, to take any
such actions.
7.7 Third Party Collateral Claims. Bank, in its sole and absolute
-----------------------------
discretion, without waiving or releasing any Event of Default or obligation,
liability, or duty of any Borrower under this Agreement or the Other Agreements,
may 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. All sums paid by Bank in
respect thereof and all costs, fees and expenses, including reasonable
attorney's fees, court costs, expenses and other charges relating thereto that
are incurred by Bank on account thereof shall be part of Borrower's Liabilities
payable by Borrower to Bank on demand.
7.8 Additional Collateral. Bank may, in its sole and absolute discretion,
---------------------
retain as additional Collateral or release to Borrower, from time to time, such
portion of the monies, reserves and/or proceeds received by Bank with respect to
the Collateral as Bank may determine. All such monies, reserves, proceeds and
other property of Borrower in the possession of Bank at any time or times
hereafter are hereby pledged by Borrower to Bank as additional Collateral
hereunder and must be applied by Bank on account of Borrower's Liabilities.
7.9 No Custom or Waiver. No authorization given by Bank pursuant to this
-------------------
Agreement or the Other Agreements to sell any specified portion of Collateral or
any items thereof, and no waiver by Bank in connection therewith shall establish
a custom or constitute a waiver of the limitation contained in this Agreement
against such sales, with respect to any portion of the Collateral or any item
thereof not covered by said authorization.
8. REPRESENTATIONS AND WARRANTIES; COVENANTS;
INDEMNIFICATION; CONTINUING OBLIGATION
8.1 Representations and Warranties of Borrower. Borrower hereby
------------------------------------------
represents and warrants to Bank as of the date hereof and with respect to
subsections (a) through (d) and subsections (f) through (aa) below, the date of
disbursement of each Revolving Loan or advance hereunder, as follows:
(a) Partnership Existence and Authority. Borrower is a general
-----------------------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware and is duly qualified to do business and is in good
standing under the laws of each state in which the ownership of its properties
and the nature and extent of the activities transacted by it makes such
qualification necessary. Borrower has all requisite partnership power and
authority to conduct its activities as presently conducted, to own its
properties and to perform its obligations under this Agreement.
(b) Authorization; No Conflict. The execution, delivery and
--------------------------
performance by Borrower of this Agreement and the Other Agreements to which it
is a party are within Borrower's partnership powers, have been duly authorized
by all necessary partnership action and do not contravene (i) Borrower's
Partnership Agreement or (ii) any law or any contractual restriction binding on
or affecting Borrower or its properties, and do not result in or require the
creation of any Lien (except as
may be created under this Agreement or the Other Agreements) upon or with
respect to any of its properties. The partners of Borrower are authorized to
enter into this Agreement and the Other Agreements on behalf of Borrower and the
persons entering into this Agreement and the other Agreements on behalf of said
partners are so authorized to do so on behalf of said partners.
(c) No Approval. No authorization or approval or other action by, and
-----------
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by Borrower of this
Agreement or any Other Agreement to which Borrower is a party.
(d) Validity and Binding Nature. This Agreement is, and the Other
---------------------------
Agreements to which Borrower is a party when delivered hereunder will be, legal,
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms.
(e) Financial Statements and Condition. The financial statements and
----------------------------------
balance sheet (including the notes thereto) of Borrower as at December 31, 1995,
and the related statements of income and equity and statements of cash flows of
Borrower for the fiscal year then ended, audited by independent certified public
accountants, are complete and correct and fairly present the financial condition
of Borrower as at such date and the results of the operations of Borrower for
the period ended on such date, in accordance with GAAP, and since December 31,
1995, there has been no material adverse change in Borrower's financial
condition, business, properties or operations. Except as set forth on Schedule
--------
8.1(e) hereto, Borrower has not on the date hereof, nor will have on the date of
------
any Revolving Loan or advance made by Bank hereunder, any material contingent
obligations, long-term leases or material forward or long-term commitments,
which are not reflected in the foregoing statements (and the related notes
thereto).
(f) Litigation. Except as disclosed in Schedule 8.1(f) hereto, there
---------- ---------------
is no pending or, to the best knowledge of Borrower, threatened action, suit,
inquiry, investigation, or proceeding affecting, directly or indirectly,
Borrower before any court, governmental agency or arbitrator, which, in any
case, may (i) materially and adversely affect the financial condition or
operation of Borrower, (ii) which seeks to restrain or would otherwise have a
material adverse effect on the transactions contemplated herein, or (iii) which
would affect the validity or enforceability of this Agreement or the Other
Agreements.
(g) Securities Transaction. No proceeds of any Revolving Loan or
----------------------
advance made by Bank to Borrower hereunder will be used to acquire any security
in any transaction which is subject to Section 13 or 14 of the Securities
Exchange Act of 1934, as amended.
(h) Regulation U. Borrower is not engaged in the business of
------------
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Revolving Loan or advance made by Bank
to Borrower hereunder will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
(i) ERISA Termination Event and Funding. No ERISA Termination Event
-----------------------------------
has occurred or is expected to occur with respect to any Plan and all Plans, to
the extent governed by ERISA, meet the minimum funding standards of Section 302
-----------
of ERISA.
(j) Withdrawal Liability and Reportable Events. Neither Borrower nor
------------------------------------------
any ERISA Affiliate has incurred, or expects to incur, any withdrawal liability
under Section 4201 of ERISA to any Multiemployer Plan. No Reportable Event (as
------------
defined in ERISA) has occurred with respect to any Plan.
(k) Taxes. Borrower and its partners have filed all tax returns
-----
(Federal, state and local) required to be filed and paid all taxes shown thereon
to be due, including interest and penalties, other than such taxes that Borrower
is contesting in good faith by appropriate legal proceedings and proper reserves
therefor have been established on the books of Borrower.
(l) Liens. There are no Liens upon or with respect to any of the
-----
Mortgaged Properties of Borrower or Collateral or any right to receive revenues
of Borrower or Collateral other than (i) Liens arising under this Agreement, and
(ii) other Liens permitted pursuant to Paragraph 8.3(a) hereof.
----------------
(m) Conflicts. Neither Borrower nor any Affiliate is a party to any
---------
indenture, loan or credit agreement or any lease or other agreement or
instrument (including corporate charters) which is likely to have a material
adverse effect on the ability of Borrower to perform its obligations under this
Agreement or the Other Agreements or which would restrict or otherwise limit the
incurring of the Debt represented by this Agreement and the Other Agreements.
(n) Environmental Matters.
---------------------
(i) Compliance. Except as disclosed in Schedule 8.1(n) hereto,
---------- ---------------
to the best of Borrower's knowledge, no Mortgaged Property is listed on any
local, state and/or federal lists of potentially contaminated sites,
including, without limitation, the National Priorities List, CERCLIS or any
state or federal hazardous waste site or leaking underground storage tank
lists, and each Mortgaged Property and Borrower (with respect to each
Mortgaged Property) has been and is currently in compliance with all
applicable Environmental Laws. There have been no past, and there are no,
to the best of Borrower's knowledge, pending or threatened, Environmental
Actions to which Borrower is a party which relate to any Mortgaged
Property. All required governmental permits and licenses are in effect,
and Borrower is in compliance therewith. Borrower has not received any
notice of any Environmental Action respecting Borrower, any Mortgaged
Property or any off-site facility to which any Hazardous Material has been
sent for off-site treatment, recycling, reclamation, reuse, handling,
storage, sale or disposal.
(ii) Absence of Hazardous Material. Except as disclosed in
-----------------------------
Schedule 8.1(n) hereto, to the best of Borrower's knowledge, no use,
----------------
exposure, release, emission, discharge, generation, manufacture, sale,
handling, reuse, presence, storage, treatment, transport, recycling or
disposal of Hazardous Material has occurred or is occurring on or from any
Mortgaged Property which is in violation of any Environmental Laws. The
term "release" shall include, without limitation, any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, or disposing into the environment (including, without
limitation, the abandonment or discarding of barrels, containers and other
receptacles containing any Hazardous Material). To the best of Borrower's
knowledge, all Hazardous Materials used, treated, stored, transported to or
from, generated or handled on any Mortgaged Property have been disposed of
on or off such Mortgaged Property in a lawful manner. To the best of
Borrower's knowledge, no environmental, public health or safety hazards
currently exist with respect to any Mortgaged Property. To the best of
Borrower's knowledge, except as disclosed in Schedule 8.1(n) hereto, no
---------------
storage tanks (including, without limitation, petroleum or heating oil
storage tanks), underground or above-ground, are present on or under any
Mortgaged Property, or have been on or under any Mortgaged Property.
(iii) Waters of the United States. To the best of Borrower's
---------------------------
knowledge, no part of any Mortgaged Property contains "waters of the United
States", as defined in 33 CFR 328. Borrower shall not discharge dredged or
fill material into waters of the United States as such activity is
described and regulated by Section 404 of the Clean Water Act, 33 U.S.C.
1344.
(iv) Illinois Responsible Property Transfer Act. Neither any
------------------------------------------
portion of the Mortgaged Property nor the Revolving Loan is subject to the
Illinois Responsible Property Transfer Act.
(o) Investment Company Act. Borrower is not an "investment company"
----------------------
or a company "controlled by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(p) Compliance with Laws. Borrower is in compliance with all laws,
--------------------
orders, regulations and ordinances of all federal, foreign, state and local
governmental authorities binding upon or affecting the business, operation or
assets of Borrower including, without limitation, zoning or other ordinances
relating to permissive non-conforming uses of property, except where the failure
to be in compliance would not have a material adverse effect on the business,
financial condition or operations of Borrower.
(q) Other Agreements. Borrower makes each of the representations and
----------------
warranties contained in the Other Agreements to which Borrower is a party
operative and applicable for the benefit of Bank as if the same were set forth
at length herein.
(r) True and Correct Nature of Other Representations and Warranties.
---------------------------------------------------------------
The representations and warranties of Borrower in the Other Agreements to which
Borrower is a party are true and correct.
(s) Affiliates. Except as disclosed on Schedule 8.1(s), Borrower has
---------- ---------------
no Affiliates.
(t) Subsidiaries. Borrower has no Subsidiaries, other than CMC
------------
Heartland Partners I, Limited Partnership, a Delaware limited partnership.
(u) Solvency. Borrower has capital sufficient to carry on its
--------
business and transactions and all businesses and transactions in which it is
about to engage and is solvent and able to pay its debts as they mature and
Borrower owns property the fair saleable value of which is greater than the
amount required to pay Borrower's Debt. No transfer of property is being made
and no Debt is being incurred in connection with the transactions contemplated
by this Agreement with the intent to hinder, delay or defraud either present or
future creditors of Borrower or any Affiliate.
(v) Title. Borrower has good, indefeasible and merchantable title to
-----
and ownership of the Collateral, free and clear of all Liens, claims, security
interests and other encumbrances except for the Liens of Bank granted hereunder
and as permitted by Paragraph 8.3(a) hereof.
----------------
(w) Organizational Structure and Related Matters. The partnership
--------------------------------------------
structure of Borrower as of the Closing Date is described on Schedule 8.1(s).
---------------
(x) Options. No person, corporation, partnership, association or
-------
other entity has any option to acquire ownership of the Collateral or any
portion thereof.
(y) Debt. As of the date of this Agreement, Borrower has no Debt
----
except for the permitted Debt set forth in Schedule 8.3(d) hereof.
---------------
(z) Insurance. Schedule 8.1(z) sets forth a complete and accurate
--------- ---------------
description of all policies of insurance that will be in effect as of the
Closing Date for Borrower. Borrower is adequately insured under such policies,
no notice of cancellation has been received with respect to such policies and
Borrower is in compliance with all conditions contained in such policies.
(aa) Accuracy of Information. All factual information heretofore or
-----------------------
contemporaneously furnished by or on behalf of Borrower to Bank for purposes of
or in connection with this Agreement or any transaction contemplated hereby
(excluding projections referred to below in this Paragraph and factual
information superseded or replaced prior to the date hereof) is, and all other
factual information (taken as a whole) hereafter furnished by or on behalf of
Borrower to Bank will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and Borrower has not
omitted and will not omit any material fact necessary to prevent such
information from being false or misleading.
8.2 Affirmative Covenants. At all times prior to the Revolving Credit
---------------------
Termination Date and thereafter for so long as any amounts are due or owing to
Bank hereunder, Borrower hereby covenants that it will, unless Bank otherwise
consents in writing:
(a) Existence, Etc. Do or cause to be done all things necessary to
--------------
preserve and keep in full force and effect Borrower's partnership existence in
good standing.
(b) Compliance with Laws, Etc. Comply with all applicable present and
-------------------------
future laws, rules, ordinances, regulations and orders including, without
limitation, laws, rules, ordinances, regulations and orders regarding the
operation and maintenance of Borrower's business.
(c) Payment of Taxes and Other Claims. Pay or discharge or cause to
---------------------------------
be paid or discharged, before the same shall become delinquent, (i) all Charges
levied or imposed upon Borrower or upon the income, profits or property of
Borrower, and (ii) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a Lien upon the property of Borrower; provided,
--------
however, that Borrower shall not be required to pay or discharge or cause to be
-------
paid or discharged any such Charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings to the
extent adequate reserves have been established on the books of Borrower.
(d) Reporting Requirements. Keep true books of record and account in
----------------------
which full, true and correct entries in accordance with GAAP consistently
applied will be made of all dealings or transactions in relation to its business
and activities, and shall furnish to Bank:
(i) as soon as possible and in any event within ten (10) days
after the occurrence of an Event of Default or any event which, with the
giving of notice, lapse of time, or both, would constitute an Event of
Default,
the statement of an Authorized Agent setting forth details of such Event of
Default or event and the action which Borrower has taken or proposes to
take to cure the same;
(ii) as soon as available and in any event within thirty (30)
days after the end of each fiscal quarter beginning with the quarter ending
March 31, 1996, an internally prepared balance sheet of Borrower as at the
end of such quarter and the related statements of net earnings and
statements of cash flows of Borrower for such quarter and for the portion
of the fiscal year ended at the end of such quarter, setting forth in each
case in comparative form the figures for the corresponding quarter and the
corresponding portion of the previous fiscal year, all in reasonable detail
and certified (subject to normal year-end adjustments) as to fairness of
presentation, in accordance with GAAP, by the Authorized Agent;
(iii) as soon as available and in any event within ninety (90)
days after the close of each fiscal year of Borrower, a balance sheet and
the related consolidated statements of net earnings and partners' equity
and statements of cash flows of Borrower as of the end of such fiscal year,
fairly and accurately presenting the financial condition of Borrower and
its Affiliates as at such date and the results of operations of Borrower
and its Affiliates for such fiscal year and setting forth in each case in
comparative form the corresponding figures for the corresponding period of
the preceding fiscal year, all in reasonable detail, prepared in accordance
with GAAP consistently applied, and audited by Ernst & Young LLP or such
other independent certified public accountants acceptable to Bank;
(iv) together with each delivery of financial statements
required by subsection (iii) above, Borrower shall deliver to Bank (x) a
certificate of the accountants who performed the audit in connection with
such statements (A) containing or accompanied by an acknowledgement of such
accountant that Bank will be relying on the opinion of such accountants
stated in such audited financial statements and (B) stating that in making
the audit necessary to the issuance of a report on such financial
statements, they have obtained no knowledge that any Event of Default or
event which, with notice or a lapse of time or both, would constitute an
Event of Default, as it relates to accounting matters, has occurred and is
continuing or, if such accountants have obtained knowledge of an Event of
Default or such event, specifying the nature and period of existence
thereof and (y) a certificate of Borrower executed by the Authorized Agent
stating whether any Event of Default, or event which, with the passage of
time or giving of notice or both, would constitute, mature into or become
such an Event of Default, currently exists and is continuing and what
activities, if any, Borrower is taking or proposing to take with respect
thereto;
(v) (A) as soon as possible and in any event (i) within
thirty (30) days after Borrower or any ERISA Affiliate knows or has reason
to know that any ERISA Termination Event described in clause (i) of the
definition of ERISA Termination Event with respect to any Plan has occurred
and (ii) within ten (10) days after Borrower or any ERISA Affiliate knows
or has reason to know that any other ERISA Termination Event with respect
to any Plan has occurred, a statement of the Authorized Agent (or designee)
of Borrower describing such ERISA Termination Event and the action, if any,
which Borrower, or any such ERISA Affiliate proposes to take with respect
thereto;
(B) promptly and in any event within two (2) Business
Days after receipt thereof by Borrower or any ERISA Affiliate from the
PBGC, copies of each notice received of the PBGC's intention to terminate
any Plan or to have a trustee appointed to administer any Plan; and
(C) promptly and in any event within ten (10) Business
Days after receipt thereof by Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor, a copy of each notice received concerning the
imposition or amount of withdrawal liability pursuant to Section 4202 of
------------
ERISA;
(vi) immediately after notice to Borrower of the commencement
thereof, notice, in writing, of any action, suit, arbitration or other
proceeding instituted, commenced or threatened against or affecting
Borrower with an amount in controversy in excess of $25,000;
(vii) if requested by Bank , Borrower's federal, state and local
tax returns as soon as said returns are completed in the form said returns
will be filed with the Internal Revenue Service and any state or local
department of revenue or taxing authority; and
(viii) such other information respecting the condition or
operations, financial or otherwise, of Borrower or any Affiliate as Bank
may from time to time reasonably request.
(e) Visitation Rights. At any time or times, permit Bank or any
-----------------
agents or representatives thereof, to examine and make copies of and abstracts
from the records and books of account of and visit the Mortgaged Properties of
Borrower and its offices, all as Bank shall reasonably request, and to discuss
the affairs and finances and Mortgaged Properties of Borrower with Borrower's
representatives. In furtherance and not in limitation of the foregoing,
Borrower agrees to bear all expenses of any visitation made by Bank for the
purposes set forth in this Paragraph 8.2(e).
----------------
(f) Environmental Matters.
---------------------
(i) Compliance. The Mortgaged Properties, the use thereof, and
----------
Borrower, with respect to the Mortgaged Properties, shall comply with all
Environmental Laws. All required governmental permits and licenses shall be
obtained and maintained, and Borrower shall comply therewith. All Hazardous
Material on the Mortgaged Properties will be disposed of in a lawful manner
without giving rise to liability under any Environmental Laws. Borrower
shall satisfy all requirements of applicable Environmental Laws for the
registration, operation, maintenance, closure and removal of all
underground and other storage tanks on the Mortgaged Properties, if any.
Without limiting the foregoing, all Hazardous Material shall be handled in
compliance with all applicable Environmental Laws.
(ii) Absence of Hazardous Material. No Hazardous Material shall
-----------------------------
be introduced to or used, exposed, released, emitted, discharged,
generated, manufactured, sold, transported, handled, stored, treated,
reused, presented, disposed of or recycled on the Mortgaged Properties,
except in compliance with Environmental Laws.
(iii) Environmental Actions and Right to Consent. Borrower shall
------------------------------------------
immediately notify Bank of all Environmental Claims and deliver to Bank
copies of all written notices, complaints, correspondence and other
documents relating thereto within five (5) Business Days after receipt, and
Borrower shall keep Bank immediately informed of all responses thereto.
Borrower shall promptly cure and have dismissed with prejudice all
Environmental Claims in a manner reasonably satisfactory to Bank, and
Borrower shall keep the Mortgaged Properties free of any encumbrance
arising from any judgment, liability or lien imposed pursuant to any
Environmental Claims. Notwithstanding the foregoing sentence, Borrower may,
diligently, in good faith and by appropriate legal proceedings, contest
such proceedings provided (i) Borrower first furnish to Bank such deposits
or other collateral as Bank, in its reasonable determination, deems
sufficient to adequately protect Bank's interests, (ii) such contest shall
have the effect of preventing any threatened or pending sale or forfeiture
of all or any portion of the Mortgaged Properties or the loss or impairment
of Bank's lien and security interests in and to the Mortgaged Properties,
and (iii) the matters that are subject of such contest will not cause Bank
to incur any liability, in Bank's sole judgment reasonably exercised. After
the occurrence and during the continuance of an Event of Default, Borrower
shall permit Bank, at Bank's option, to appear in and to be represented in
any such contest and shall pay upon demand all expenses incurred by Bank in
so doing, including, without limitation, reasonable attorneys' fees and
expenses.
(iv) Future Environmental Audits. Borrower shall provide such
---------------------------
information and certifications which Bank may reasonably request from time
to time to monitor Borrower's compliance with this Paragraph for the sole
purpose of protecting Bank's security interest. To protect its security
interest, Bank shall have the right, but not the obligation, at any time
after three (3) days' advance written notice to enter upon the Mortgaged
Properties, take samples, review Borrower's books and records, interview
Borrower's employees and officers, and conduct such other similar
activities as Bank, in its sole discretion, deems appropriate. Borrower
shall cooperate fully in the conduct of such an audit. If Bank decides to
conduct such an audit because of (i) an Environmental Claim, (ii) after an
Event of Default, the possibility that Bank may take possession of or title
to the Mortgaged Properties which, in Bank's sole judgment, increases the
risk to its security interest, or (iii) the introduction of Hazardous
Material other than disclosed material as set forth on Schedule 8.1(n), to
---------------
the Mortgaged Properties or in the ordinary course of business in
compliance with Environmental Laws, then Borrower shall pay upon written
demand all reasonable costs and expenses connected with such audit, which,
until paid, shall become part of Borrower's Liabilities, secured by this
Agreement and the Other Agreements, and shall bear interest at the Default
Rate.
(g) Financial Covenants.
-------------------
(i) Borrower must maintain, at all times, Tangible Net Worth in
excess of $17,000,000.
(ii) Borrower must maintain, at all times, Liquid Assets in
excess of $1,000,000.
(h) Insurance.
---------
(i) At its sole cost and expense, keep and maintain public
liability insurance relating to its ownership and use of the Collateral.
All such policies of insurance shall be carried with companies with a
Best's rating of A-/XI or better or otherwise be approved in writing by
Bank and all such policies shall be in amounts no less than such policies
set forth on Schedule 8.1(z). All policies of insurance shall comply with
---------------
the requirements set forth in the Mortgage. Authorized Agent shall deliver
to Bank the original (or certified) copy of each policy of insurance for
Borrower or a certificate of insurance, and evidence of payment of all
premiums for each such policy on or prior to the date of this Agreement.
Such policies shall: (A) contain a lender's loss payable clause naming
Bank, for the benefit of Bank, as loss payee and additional insured as its
interest may appear; and (B) provide that the insurance companies will give
Bank written notice before any such policy or policies of insurance shall
be altered or cancelled.
(ii) In the event Borrower at any time or times hereafter shall
fail to obtain or maintain any of the policies of insurance required above
or to pay any premium in whole or in part relating thereto, then Bank after
giving five (5) days' prior written notice to Borrower, without waiving or
releasing any obligation or Event of Default by Borrower hereunder, may at
any time or times thereafter (but shall be under no obligation to) obtain
and maintain such policies of insurance and pay such premium and take any
other action with respect to thereto which Bank deems advisable. All sums
so disbursed by Bank, including reasonable attorneys fees, court costs,
expenses and other charges relating thereto, shall be part of Borrower's
Liabilities, payable by Borrower to Bank on demand. Borrower authorizes
Bank, in Bank's sole discretion, to cause such sums to be paid by making an
advance in the amount thereof to Borrower and paying the proceeds thereof
to Bank.
(i) Leases. Borrower shall maintain and comply with all leases
------
covering any Collateral used by Borrower in accordance with their terms so as to
prevent any default thereunder which may result in the exercise or enforcement
of any landlord's or other lien against Borrower.
8.3 Negative Covenants. Prior to the Revolving Credit Termination Date
------------------
and thereafter for so long as any amount is due or owing to Bank hereunder,
unless Bank shall otherwise consent in writing, Borrower shall not:
(a) Liens, Etc. Create or suffer to exist, any Lien, other charge or
-----------
encumbrance, or any other type of preferential arrangement, upon or with respect
to any of the Mortgaged Properties, or assign any right to receive income, in
each case to secure or provide for the payment of any Debt of any Person, except
for the permitted Liens set forth on Schedule 8.3(a) ("Permitted Liens").
---------------
(b) Maintain Existence, Merger, Etc. Except as disclosed on Schedule
-------------------------------- --------
8.3(b), (i) dissolve or amend or modify its Partnership Agreement; or (ii)
------
except as specifically permitted by this Agreement, convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
any Collateral (whether now owned or hereafter acquired) to any Person; or (iii)
together with one or more Affiliates convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of the assets of Borrower and such Affiliates (whether now
owned or hereafter acquired) to any Person; or (iv) purchase, lease or otherwise
acquire all or substantially all of the assets or properties of, or acquire any
capital stock, equity interests, debt or other securities of any Person, or
enter into any joint venture or become a partner in any partnership; or (v)
engage in any transaction out of the ordinary course of business; or (vi) merge
or consolidate with any Person.
(c) Sale and Lease-Back. Enter into any arrangement with any Person
-------------------
or to which such Person is a party providing for the leasing by Borrower of any
principal asset which has been or is to be sold or transferred by Borrower to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of
Borrower, other than sales or transfers between Borrower and any Affiliate or a
lease for a temporary period not to exceed 12 months.
(d) Debt. Incur, create, assume, become or be liable in any manner
----
with respect to or permit to exist, any Debt, obligations or indebtedness,
except for the permitted Debt set forth on Schedule 8.3(d).
---------------
(e) Investments or Revolving Loans. Make or permit to exist
------------------------------
investments or loans in or to any other Person, except for (i) salaries and
reasonable advances of money to its employees in payment of reasonable expenses
incurred by such employees in the ordinary course of business; (ii) investments
in certificates of deposits of a banking institution having a net worth in
excess of $100,000,000 or in securities of the United States of America or
commercial paper with a P1 rating (all of the foregoing maturing within one
year); or (iii) investments already under consideration as of the Closing Date
as set forth on Schedule 8.3(e) ("Permitted Investments").
---------------
(f) Guaranties. Guaranty, endorse or otherwise in any way directly,
----------
indirectly or contingently become liable for the obligations or liabilities of
any other Person, except endorsements of negotiable instruments for collection
in the ordinary course of business.
(g) Partnership Interests. Redeem, retire, purchase or otherwise
---------------------
acquire, directly or indirectly, any partnership interests of Borrower or other
evidence of ownership interest, or declare or pay any capital distributions from
Borrower or make any distribution of Borrower's property or assets.
(h) Transactions with Affiliates or Insiders. Except for the
----------------------------------------
management agreement by and among Borrower, Heartland Partners, L.P. and
Milwaukee Land Company as in effect on the date hereof, enter into, or be a
party to, any transaction with any Affiliate or partner of Borrower, except in
the ordinary course of and pursuant to the reasonable requirements of Borrower's
business and upon fair and reasonable terms which are fully disclosed to Bank
and are no less favorable to Borrower than would obtain in a comparable arm's
length transaction with a Person not an Affiliate or partner of Borrower.
(i) Capital Structure and Line of Business. Make any change in its
--------------------------------------
capital structure or engage in any line of business materially different from
that previously engaged in by Borrower.
(j) Change of Control. Make or permit any sale or issuance of any
-----------------
partnership interests of Borrower immediately after which Heartland Partners,
L.P. no longer holds record and beneficial ownership of at least 50.1% of all of
the partnership interest of Borrower.
8.4 Maintenance of Accounts. Borrower agrees to maintain its primary
-----------------------
operational accounts with Bank and shall maintain at all times a balance of
collected, available funds in a non-interest bearing demand deposit account with
Bank (the "Operating Account") in an amount at least equal to that amount
required to compensate Bank for its services in maintaining such account.
Borrower acknowledges that Bank will charge Borrower standard service charges in
effect from time to time for various services performed by Bank in connection
with any aspect of the relationship between Borrower and Bank, and Borrower
hereby agrees that if such service charges exceed the credit to Borrower arising
from earnings attributable to funds on deposit with Bank in the applicable
Operating Account, such service charge deficiency shall be deducted by Bank from
the Borrower's Operating Account, monthly, in arrears, within ten (10) days
following the end of each month. Bank may cause interest and other amounts
payable on the obligations of Borrower to Bank hereunder to be paid by making a
direct charge to the applicable Operating Account in accordance with the terms
hereof.
9. DEFAULT
9.1 Events of Default. The occurrence of any one of the following events
-----------------
shall constitute a default ("Event of Default") by Borrower under this
Agreement: (a) if Borrower fails or neglects to perform, keep or observe any
covenant or agreement contained in this Agreement or in the Other Agreements
which is required to be performed, kept or observed by Borrower and, in the
event of such failure or neglect under Paragraphs 8.2 (b), (f), (h) and (i) and
Paragraphs 8.3(a) and (c), the same is not cured within thirty (30) days after
notice thereof from the Bank; (b) any representation or warranty made by
Borrower herein or in any Other Agreement is breached or is false or misleading
in any material respect, or any exhibit, schedule, certificate, financial
statement, report, notice or other writing furnished by Borrower or any of its
partners, officers, employees, or agents to Bank or any Bank is false or
misleading in any material respect on the date as of which the facts therein set
forth are stated or certified and same shall not be cured or corrected within
thirty (30) days following notice of such breach; (c) if Borrower fails to pay
Borrower's Liabilities when due and payable or declared due and payable; (d) if
any of the Collateral is attached, seized, subjected to a writ or distress
warrant or is levied upon, or comes within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors and the same is not
terminated or dismissed within twenty (20) days thereafter; (e) if a petition
under any section or chapter of Bankruptcy Reform Act of 1978, as amended, or
any similar law or regulation shall be filed by Borrower or if Borrower shall
make an assignment for the benefit of its creditors or if any case or proceeding
is filed by Borrower for its dissolution or liquidation; (f) if Borrower is
enjoined, restrained or in any way prevented by court order from conducting all
or any material part of its business affairs or if a petition under any section
or chapter of Bankruptcy Reform Act of 1978, as amended, or any similar law or
regulation is filed against Borrower or if any case or proceeding is filed
against Borrower for its dissolution or liquidation and such injunction,
restraint or petition is not dismissed or stayed within ninety (90) days after
the entry or filing thereof; (g) if an application is made by Borrower for the
appointment of a receiver, trustee or custodian for any of Borrower's assets;
(h) if an application is made by any Person other than Borrower for the
appointment of a receiver, trustee or custodian for the Collateral of Borrower
and the same is not dismissed within thirty (30) days after the application
therefor; (i) if a notice of lien, levy, or assessment is filed of record with
respect to all or any of the Collateral of
Borrower by the United States or any department, agency or instrumentality
thereof or by any state, county, municipal or other governmental agency,
including without limitation the PBGC, or if any taxes or debts owing at any
time or times thereafter to any one of them becomes a lien or encumbrance upon
any of the Collateral of Borrower and the same is not released within thirty
(30) days after the same becomes a lien or encumbrance; (j) if Borrower becomes
insolvent or is unable generally to pay its debts as they become due; (k) if
Borrower is in default in the payment of Debt in an amount in excess of
$100,000; (l) the appointment of a conservator for all or any portion of the
Collateral; (m) the occurrence of a default or Event of Default under any
agreement, instrument and/or document executed and delivered by any Person to
Bank or Bank pursuant to which such Person has guaranteed to Bank the payment or
collection of Borrower's Liabilities and/or has granted to Bank a security
interest or lien in and to some or all of such Person's real and/or personal
property to secure the payment of Borrower's Liabilities; and (n) the occurrence
of a material breach, a default or an event of default by Borrower under any of
the Other Agreements after any cure period applicable to any such default or
event of default has expired.
9.2 Cumulative Remedies. All of Bank's rights and remedies under this
-------------------
Agreement and the Other Agreements are cumulative and non-exclusive.
9.3 Acceleration and Termination of Revolving Loans. Upon the occurrence
-----------------------------------------------
and during the continuance of an Event of Default, (a) upon notice by Bank to
Borrower, Borrower's Liabilities shall be immediately due and payable, unless
there shall have occurred an Event of Default under subparagraphs 9.1(d), (e),
(f), (g), (h), (i) or (j), in which case Borrower's Liabilities shall
automatically become due and payable without notice or demand, and (b) 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.
9.4 Rights of Secured Creditor. Upon an Event of Default, Bank, in its
--------------------------
sole and absolute discretion, may: (a) exercise any one or more of the rights
and remedies accruing to a secured party under the Uniform Commercial Code of
the relevant state or states and any other applicable law upon default by a
debtor; and (b) exercise any one or more of the rights and remedies available to
it under the Mortgage, Assignment of Rents and Pledge Agreement.
10. GENERAL
10.1 Payment Application Date. Any check, draft, or similar item of
------------------------
payment by or for the account of Borrower delivered to Bank on account of
Borrower's Liabilities shall be applied by Bank on account of Borrower's
Liabilities on the date final settlement thereof is reflected by irrevocable
credit to Bank.
10.2 Statement of Account. Each statement of account by Bank delivered to
--------------------
Borrower relating to Borrower's Liabilities shall be presumed correct and
accurate, absent manifest error, and shall constitute an account stated between
Borrower and Bank unless, within ninety (90) days after Borrower's receipt of
said statement, Borrower delivers to Bank, by registered or certified mail
addressed to Bank at its Address for Notices specified on the signature pages
hereto, written objection thereto specifying the error or errors, if any,
contained in any such statement.
10.3 Manner of Application; Waiver of Setoff Prohibition. 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 right, in its absolute and sole discretion, to
apply and re-apply any and all such payments in such manner as Bank or such Bank
may deem advisable, notwithstanding any entry by Bank upon any of its books and
records. Borrower further waives any right under or benefit of any law that
would restrict or limit the right or ability of Bank to obtain payment of
Borrower's Liabilities, including any law that would restrict or limit Bank in
the exercise of its right to appropriate any indebtedness owing from Bank to
Borrower and any deposits or other property of Borrower in the possession or
control of Bank and apply the same toward or setoff the same against the payment
of Borrower's Liabilities.
10.4 Survival of Representations and Warranties. 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 at
the time of Borrower's execution of this Agreement and the Other Agreements and
shall survive the execution, delivery and acceptance thereof by the parties
thereto and the closing of the transactions described therein or related
thereto.
10.5 Integration; Amendment. This Agreement and the Other Agreements
----------------------
constitute the entire agreement and understanding between the parties relating
to the subject matter hereof and supersede all prior agreements, whether oral or
written, including without limitation, that certain Commitment Letter of Bank
dated January 29, 1996. This Agreement and the Other Agreements may not be
modified, altered or amended except by an agreement in writing signed by
Borrower and Bank.
10.6 No Waiver. Bank's failure at any time or times hereafter 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 or 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 Bank specifying such suspension or waiver.
10.7 Severability. 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.
10.8 Successors and Assigns. This Agreement and the Other Agreements shall
----------------------
be binding upon and inure to the benefit of the permitted successors and assigns
of Borrower and Bank.
10.9 Conflict with Other Agreements. The provisions of the Other
------------------------------
Agreements are incorporated in this Agreement by this reference thereto. Except
as otherwise provided in the Other Agreements by specific reference to the
applicable provision of this Agreement, 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.
10.10 No Impairment by Termination. Except to the extent provided to the
----------------------------
contrary in this Agreement and in the Other Agreements, no termination or
cancellation (regardless of cause or procedure) of this Agreement or the Other
Agreements shall in any way affect or impair the powers, obligations, duties,
rights and liabilities of Borrower or Bank in any way or respect relating to (a)
any transaction or event occurring prior to such termination or cancellation,
(b) the Collateral and/or (c) any of the undertakings, agreements, covenants,
warranties and representations of Borrower contained in this Agreement or the
Other Agreements. All such undertakings, agreements, covenants, warranties and
representations shall survive such termination or cancellation.
10.11 Waivers. Except as otherwise specifically provided in this
-------
Agreement, Borrower waives any and all notice or demand which Borrower might be
entitled to receive with respect to this Agreement or the Other Agreements 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 or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Bank on which Borrower may in any way
be liable and hereby ratifies and confirms whatever Bank may do in this regard.
10.12 Costs, Fees and Expenses Related to Agreement and Other Agreements.
------------------------------------------------------------------
In accordance with this Agreement on or prior to the date hereof and thereafter
upon demand by Bank or any Bank therefor, Borrower shall pay or reimburse Bank
for all costs, fees and expenses incurred by Bank or for which Bank becomes
obligated, in connection with the negotiation, preparation and consummation of
this Agreement and the Other Agreements, including but not limited to,
attorneys' fees, plus costs and expenses of such attorneys or Bank; search fees,
costs and expenses; appraisal fees, costs and expenses; environmental fees,
costs and expenses; and all taxes payable in connection with this Agreement or
the Other Agreements. That portion of Borrower's Liabilities consisting of
costs, expenses or advances to be reimbursed by Borrower to Bank pursuant to
this Agreement or the Other Agreements which are not paid on or prior to the
date hereof shall be payable by Borrower to Bank on demand.
10.13 Environmental Indemnity. Borrower shall indemnify, defend and hold
-----------------------
Bank and its Affiliates (as hereinafter defined) harmless from and against any
and all losses, liabilities, obligations, penalties, claims, fines, lost
profits, demands, litigation, defenses, costs, judgments, suits, proceedings,
damages, disbursements or expense of any kind or nature whatsoever (including,
without limitation, reasonable attorneys' fees and expenses), consequential or
otherwise, which may at any time be
either directly or indirectly imposed upon, incurred by or asserted or awarded
against Bank or any of Bank's parent and subsidiary corporations, and their
respective affiliates, shareholders, directors, officers, employees, and agents
(collectively, Bank's "Affiliate"), in connection with, arising from or relating
to (except in each instance due to gross negligence or willful misconduct of
Bank or any of Bank's Affiliates):
(i) any Hazardous Material located, used, exposed, emitted,
released, discharged, generated, manufactured, sold, transported, handled,
stored, treated, reused, presented, disposed of or recycled on, in or under
all or any portion of the Mortgaged Properties; or
(ii) any material misrepresentation, inaccuracy or breach of
any warranty, covenant or agreement contained or referred to in Paragraphs
----------
8.1(n) and 8.2(f); or
-----------------
(iii) any violation, liability or claim of violation or
liability, under any Environmental Laws with respect to all or any portion
of the Mortgaged Properties; or
(iv) the imposition of any lien for damages caused by, or the
recovery of any costs incurred for the cleanup of, any release or
threatened release of Hazardous Material with respect to all or any portion
of the Mortgaged Properties; or
(v) any Environment Claims with respect to all or any portion
of the Mortgaged Properties.
Borrower's foregoing indemnification obligations shall survive for any
applicable statute of limitations. Borrower's obligation to Bank under this
indemnity shall be without regard to fault on the part of Borrower or Bank with
respect to the violation or condition which results in liability to Bank, except
in each instance due to gross negligence or willful misconduct of Bank.
10.14 Governing Law. This Agreement and the Other Agreements are
-------------
submitted by Borrower to Bank (for Bank's acceptance or rejection thereof) at
Bank's principal place of business as an offer by Borrower to borrow monies from
Bank now and from time to time hereafter and shall not be binding upon Bank or
become effective until and unless accepted by Bank, in writing, at Bank's place
of business. If so accepted by Bank, this Agreement and the Other Agreements
shall be deemed to have been made at Bank's principal place of business. This
Agreement and the Other Agreements shall be governed and controlled by the laws
of the State of Illinois as to interpretation, enforcement, validity,
construction, effect, choice of law, and in all other respects including, but
not limited to, the legality of the interest rate and other charges.
10.15 Notices. All notices, consents, requests, demands and other
-------
communications hereunder shall be in writing and shall be deemed duly given to
any party or parties (a) upon delivery to the address of the party or parties as
specified in the "Address for Notices" below such party's or parties' name on
the signature pages hereof if delivered in person or by courier or if sent by
certified or registered mail (return receipt requested), or (b) upon dispatch if
transmitted by telecopy or other means of facsimile transmission, in any case to
the party or parties at the telecopy numbers specified on the same, or to such
other address or telecopy number as any party may hereafter designate by written
notice in the aforesaid manner.
10.16 FORUM; BANK ; VENUE; JURY TRIAL WAIVER. TO INDUCE BANK TO ACCEPT
--------------------------------------
THIS AGREEMENT AND THE OTHER AGREEMENTS, 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 AGREEMENT OR
THE OTHER AGREEMENTS SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS WITHIN
CHICAGO, ILLINOIS. BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF
ANY LOCAL, STATE, OR FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE. BORROWER
HEREBY IRREVOCABLY APPOINTS AND DESIGNATES THE AUTHORIZED AGENT OF BORROWER,
WHOSE ADDRESS IS 000 XXXX XXXXXXX XXXXXXXXX, XXXXX 0000, XXXXXXX, XXXXXXXX
00000, OR ANY OTHER PERSON HAVING AND MAINTAINING A PLACE OF BUSINESS IN SUCH
STATE, WHOM BORROWER MAY FROM TIME TO TIME HEREAFTER DESIGNATE (HAVING GIVEN
FIVE (5) DAYS' WRITTEN NOTICE THEREOF TO BANK) AS BORROWER'S TRUE AND LAWFUL
ATTORNEY AND DULY AUTHORIZED BANK FOR ACCEPTANCE OF SERVICE OF LEGAL PROCESS.
BORROWER AGREES THAT SERVICE OF SUCH PROCESS UPON SUCH PERSON SHALL CONSTITUTE
PERSONAL SERVICE OF SUCH PROCESS UPON BORROWER. 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 HEREBY IRREVOCABLY
WAIVES THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH BORROWER
IS A PARTY.
10.17 Other Costs, Fees and Expenses. If at any time or times hereafter
------------------------------
Bank: (a) employs counsel for advice or other representation (i) with respect to
this Agreement or the Other Agreements including, without limitation, regarding
amendments or supplements hereto or thereto, (ii) to represent Bank in any
litigation, contest, dispute, suit or proceeding or to commence, defend, or
intervene or to take any other action in or with respect to any litigation,
contest, dispute, suit, or proceeding (whether instituted by Bank, Borrower, or
any other Person) in any way or respect relating to this Agreement, the Other
Agreements or Borrower's affairs, or (iii) to enforce any rights of such Bank
against Borrower or any other Person which may be obligated to such Bank by
virtue of this Agreement or the Other Agreements; (b) takes any action to
protect, collect, sell, liquidate, or otherwise dispose of any of the
Collateral; and/or (c) attempts to or enforces Bank's rights or remedies under
the Agreement or the Other Agreements, 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. Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
include: (i) attorneys' fees, costs and expenses; (ii) accountants' fees, costs
and expenses; (iii) court costs and expenses; (iv) court reporter fees, costs
and expenses; (v) long distance telephone charges; (vi) telegram charges; (vii)
expenses for travel, lodging and food; and (viii) costs and expenses incurred
with respect to exercise or enforcement of Bank's rights in or against Accounts
and/or any Obligor, including expenses incurred in fulfilling, in whole or in
part, any order of any Obligor from which an Account has arisen or will arise.
10.18 Revival. To the extent Bank receives any payment on account of
-------
Borrower's Liabilities, or any proceeds of Collateral are applied on account of
Borrower's Liabilities and any such payment(s) and/or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, subordinated and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy act, state or federal law, common law or
equitable cause, then, to the extent of such payment(s) and/or proceeds
received, Borrower's Liabilities or part thereof intended to be satisfied shall
be revived and continue in full force and effect, as if such payment(s) and/or
proceeds had not been received by Bank and applied on account of Borrower's
Liabilities.
10.19 Acknowledgments. Borrower acknowledges that (i) it has been advised
---------------
by counsel of its choice with respect to this Agreement and the transactions
contemplated hereby, (ii) each of the waivers set forth herein was knowingly and
voluntarily made; and (iii) the obligations of Bank hereunder, including the
obligation to advance and lend funds to Borrower in accordance herewith, shall
be strictly construed and shall be expressly subject to Borrower's compliance in
all respects with the terms and conditions herein set forth.
10.20 Section Headings. Section headings used in this Agreement are for
----------------
convenience only and shall not effect the construction or interpretation of this
Agreement.
10.21 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute one and the same instrument.
10.22 Effectiveness. This Agreement shall become effective upon the
-------------
execution and delivery to Bank of counterparts of this Agreement by Borrower and
Bank.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year specified at the beginning hereof.
CMC HEARTLAND PARTNERS,
a Delaware general partnership
By: MILWAUKEE LAND COMPANY,
a Delaware corporation and an
authorized general partner
ATTEST: By:_________________________________________
Its:________________________________________
_____________________________
_____________________________
By: HEARTLAND PARTNERS, L.P.,
a Delaware limited partnership and an
authorized general partner
By: Milwaukee Land Company
Its: General Partner
ATTEST: By:_________________________________________
Its:________________________________________
_____________________________
_____________________________
Address for Notices:
CMC Heartland Partners
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxxxx
Vice President-Finance
Secretary and Treasurer
With a copy to:
CMC Heartland Partners
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
LASALLE NATIONAL BANK
By:_________________________________________
Title:____________________________________
Address for Notices:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Xx.
Vice President
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
LIST OF EXHIBITS
----------------
Exhibit 3.1 Form of Revolving Note
Exhibit 6.1(b)(ii) Legal Opinion of Borrower's Counsel
DISCLOSURE SCHEDULE
TO THE
LOAN AND SECURITY AGREEMENT
DATED AS OF MARCH 15, 1996
BETWEEN
CMC HEARTLAND PARTNERS
AND
LASALLE NATIONAL BANK
MARCH 15, 1996
LIST OF
DISCLOSURE SCHEDULES
--------------------
Schedule 1.0 Legal Description of Mortgaged Properties
Schedule 7.4 Locations
Schedule 8.1(e) Certain Other Obligations
Schedule 8.1(f) Litigation
Schedule 8.1(n) Environmental Matters
Schedule 8.1(s) Affiliates
Schedule 8.1(y) Debt
Schedule 8.1(z) Insurance
Schedule 8.3(a) Permitted Liens
Schedule 8.3(b) Permitted Transactions
Schedule 8.3(d) Permitted Debt
Schedule 8.3(e) Investments Under Consideration
CERTIFICATION
-------------
CMC Heartland Partners does hereby certify that the Disclosure Schedules
attached hereto have been delivered to LaSalle National Bank in connection with
that certain Loan and Security Agreement of even date herewith between CMC
Heartland Partners and LaSalle National Bank, and the information contained
thereon is true and correct.
Dated: March 15, 1996
CMC HEARTLAND PARTNERS,
a Delaware general partnership
By: MILWAUKEE LAND COMPANY,
a Delaware corporation and an
authorized general partner
By:_________________________________________
Its:________________________________________
By: HEARTLAND PARTNERS, L.P.,
a Delaware limited partnership and an
authorized general partner
By: Milwaukee Land Company
Its: General Partner
By:_________________________________________
Its:________________________________________
EXHIBIT 3.1
-----------
to
--
Loan and Security Agreement
---------------------------
REVOLVING NOTE
--------------
$3,000,000 Chicago, Illinois
March __, 1996
FOR VALUE RECEIVED, on March __, 1997 (or, if such day is not a Business
Day, on the next following Business Day), the undersigned, CMC HEARTLAND
PARTNERS, a Delaware general partnership (herein, together with its successors
and assigns, called the "Borrower"), promises to pay to the order of LASALLE
NATIONAL BANK, a national banking association (herein, together with its
successors and assigns, called the "Bank"), the maximum principal sum of THREE
MILLION DOLLARS ($3,000,000.00) or, if less, the aggregate unpaid principal
amount of all Revolving Loans made by Bank to the undersigned pursuant to that
certain Revolving Loan and Security Agreement of even date herewith between the
Borrower and Bank (herein, as the same may be amended, modified or supplemented
from time to time, called the "Loan Agreement") as shown in Bank's records.
The Borrower further promises to pay to the order of Bank interest on the
aggregate unpaid principal amount hereof from time to time outstanding from the
date hereof until paid in full at such rates and at such times as shall be
determined in accordance with the provisions of the Loan Agreement. Accrued
interest shall be payable on the dates specified in the Loan Agreement.
Payments of both principal and interest are to be made in the lawful money
of the United States of America in immediately available funds at Bank's
principal office at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at
such other place as may be designated by Bank to the Borrower in writing.
This Note is the Revolving Note referred to in, evidences indebtedness
incurred under, and is subject to the terms and provisions of, the Loan
Agreement. The Loan Agreement, to which reference is hereby made, sets forth
said terms and provisions, including those under which this Note may or must be
paid prior to its due date or may have its due date accelerated. Terms used but
not otherwise defined herein are used herein as defined in the Loan Agreement.
This Note is secured by the property described in and pursuant to the Loan
Agreement and various Other Agreements referred to therein, and reference is
made thereto for a statement of terms and provisions of such Collateral
security, a description of Collateral and the rights of Bank in respect thereof.
In addition to, and not in limitation of, the foregoing and the provisions
of the Loan Agreement hereinabove referred to, the Borrower further agrees,
subject only to any limitation imposed by applicable law, to pay all expenses,
including attorneys' fees and expenses, incurred by the holder of this Note in
seeking to collect any amounts payable hereunder which are not paid when due,
whether by acceleration or otherwise.
The Borrower shall have the right to prepay the outstanding principal and
interest on this Note at any time without penalty or notice to Bank.
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Note.
This Note is binding upon the undersigned and its successors and assigns,
and shall inure to the benefit of Bank and its successors and assigns. This Note
is made under and governed by the laws of the State of Illinois without regard
to conflict of laws principles.
CMC HEARTLAND PARTNERS,
a Delaware general partnership
By: MILWAUKEE LAND COMPANY,
a Delaware corporation and an
authorized general partner
ATTEST: By:________________________________
Its:_______________________________
_________________________
_________________________
By: HEARTLAND PARTNERS, L.P.,
a Delaware limited
partnership and an
authorized general partner
By: Milwaukee Land Company
Its: General Partner
ATTEST: By:________________________________
Its:_______________________________
_________________________
_________________________
Borrower's Address:
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
