LOAN AGREEMENT
This Loan Agreement ("Agreement") is entered into this 13th day of
October., 1997 ("Effective Date"), by and between XXXX X. XXXXXXX, TRUSTEE OF
THE XXXXXXX FAMILY TRUST, UDT 10/31/89, XXXXXXX X. XXXXXX, XX., and those other
persons who become lenders under this Agreement by adopting this Agreement
(individually, "Lender" and collectively, "Lenders"), XXXXXXX X. XXXXXX, XX. as
the initial agent for Lenders ("Agent") and RCP ENTERPRISES GROUP, L.L.C., an
Ohio limited liability company ("Borrower").
RECITALS
A. The Xxxxxxx Family Trust UDT 10/.31/89 has previously advanced
Forty Thousand Dollars ($40,000) ro Borrower;
B. Borrower has requested that Lenders advance funds to Borrower in
the maximum sum of Four Hundred Thousand Dollars ($400,000)
secured by Borrower's accounts receivable; and
C. Lenders have agreed to advance up to Four Hundred Thousand
Dollars ($400,000) to Borrower on the terms and conditions
hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged and confessed, the parties do hereby agree as follows:
1. Definitions. All terms used herein which are defined in Article 1 or
Article 9 of the Uniform Commercial Code shall have themeanings given therein
unless otherwise defined in this Agreement. Any accounting term used herein
unless otherwise defined or set forth in this Agreement shall have the meanings
customarily given to such term in accordance with generally accepted accounting
principles. For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:
1.1 "Accounts" shall mean all present and future rights of Borrower to
payment for goods sold or leased or for services rendered, whether or not earned
by performance.
1.2 "Collateral" shall mean all the property in which Borrower grants or is
required to grant to Lenders a security interest or lien, as described in
Section 5 hereof.
1.3 "Eligible Accounts" of Borrower shall mean Accounts created by Borrower
which are and continue to be acceptable to Lenders based on the criteria set
forth below. In general, Accounts shall be Eligible Accounts if:
1.3.1 such Accounts arise from the actual and bona fide sale and delivery
of goods by Borrower or rendition of services by Borrower in the ordinary course
of Borrower's business, which transactions are completed in accordance with the
terms and provisions contained in any documents related thereto;
1.3.2 such Accounts are not unpaid more than ninety (90) days after the
date of the original invoice thereto;
1.3.3 the chief executive office of the account debtor with respect to such
Accounts is located in the United States of America, or such Account is
otherwise acceptable in all respects to Lenders (subject to such lending formula
with respect thereto as Lenders may determine);
1.3.4 such Accounts do not consist of progress xxxxxxxx, xxxx and hold
invoices or retainage invoices;
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1.3.5 the account debtor with respect to such Accounts has not asserted a
counterclaim, defense or dispute and does not have, and does not engage in
transactions which may give rise to, any right of setoff against such Accounts;
1.3.6 there are no facts, events or occurrences which would impair the
validity, enforceability or collectability of such Accounts or reduce the amount
payable or delay payment thereunder;
1.3.7 such Accounts are subject to the first priority, valid and perfected
security interest of Lenders and any good giving rise thereto are not, and were
not at the time of the sale thereof, subject to any liens except those permitted
in this Agreement.
1.3.8 neither the account debtor nor any officer, employee or agent of the
account debtor with respect to such Accounts is an officer, employee or agent of
or affiliated with Borrower directly or indirectly by virtue of family
membership, ownership, control, management or otherwise;
1.3.9 the account debtors with respect to such Accounts are not any foreign
government, the United States of America or any political subdivision.,
department, agency or instrumentality thereof;
1.3.10 there are no proceedings or actions which are threatened or pending
against any account debtor with respect to such Accounts from such account
debtor which might result in any material adverse change in any such account
debtor's financial condition;
1.3.11 such Accounts of a single account debtor or its affiliates do not
constitute more than twenty-five percent (25%) of all otherwise Eligible
Accounts (but the portion of the Accounts not in excess of such percentage may
be deemed Eligible Accounts); and
1.3.12 such Accounts are not owed by any account debtor who has Accounts
unpaid more than ninety (90) days after the date of the original invoice
therefor and which constitute more than twenty-five percent (25%) of the total
Accounts from such account debtor.
General criteria for Eligible Accounts may be established and revised from
time to time by Lenders in good faith. Any Accounts which are not Eligible
Accounts shall nevertheless be part of the Collateral.
1.4 "Event of Default" shall mean the occurrence or existence of any event
or condition described in the Notes or the Security Agreement.
1.5 "Loan Documents" shall mean, collectively, this Agreement and all
notes, security agreements, and other agreements, documents and instruments now
or at any time hereafter executed and/or delivered by Borrower in connection
with this Agreement, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.6 "Loans" to Borrower shall mean advances made by Lenders to Borrower as
set forth in Section 2 hereof.
1.7 "Notes" shall have the meaning set forth in Section 3 hereof.
1.8 "Records" of Borrower shall mean all of Borrower's present and future
books of account of every kind or nature, purchase and sale agreements,
invoices, ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other date relating to the
Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers
in or on which the foregoing are stored (including any rights of Borrower with
respect to the foregoing maintained with or by any other person).
1.9 "Rights to Payment" of Borrower shall mean all Accounts, contract
rights, chattel paper, documents, instruments, letters of credit, bankers
acceptances and guaranties, and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect of
Accounts and other Collateral, and shall include without limitation, (a) rights
and remedies under or relating to guaranties, contracts of suretyship, letters
of credit and credit and other insurance related to the Collateral and (b)
deposits by and property of account debtors or other persons securing the
obligations of account debtors, monies, securities, credit balances, deposits,
deposit accounts and other property of Borrower now or hereafter held or
received by or in transit to Lenders or any of their affiliates or at any other
depository or other institution from or for the account of Borrower, whether for
safekeeping, pledge, custody, transmission, collection or otherwise.
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2. Line of Credit. Subject to and upon the terms and conditions of this
Agreement, Lenders hereby agree to make Loans to Borrower from time to time in
amounts requested by Borrower up to an aggregate outstanding principal amount
equal to the lesser of (i) Four Hundred Thousand Dollars ($400,000), or (ii)
thirty percent (30%) of Borrower's Eligible Accounts, The funds previously
advanced by the Xxxxxxx Family Trust UDT 10/31/89 shall be deemed to have been
an initial advance of $40,000 pursuant to this Loan Agreement. In the event that
the outstanding amount of the Loans to Borrower exceeds the amount available
under the above lending formula, such event shall not limit, waive or otherwise
affect any rights of Lenders in that circumstance or on any future occasions,
and Borrower shall, upon demand by Lenders, which may be made at any time or
from time to time, immediately repay to Lenders the entire amount of any such
excess(s) for which payment is demanded.
3. Line of Credit Notes. Borrower's obligation to repay advances under the
Loans shall be evidenced by promissory notes exected by Borrower in favor of
each Lender substantially in the form of Exhibit "A" attached hereto ("Notes"),
the terms of which are incorporated herein by this reference.
4. Pro Rata Treatment.
4.1 Each payment and prepayment to Lenders under this Agreement shall be
made according to each Lender's percentage of the principal amount of the Loan.
4.2 Each Lender's percentage of all payments and prepayments delivered to
Agent or received by Agent for the account of Lenders under this Agreement shall
be promptly delivered by Agent to each Lender at such Lender's address specified
below such Lender's signature to this Agreement.
5. Grant of Security Interest. As security for all indebtedness of Borrower
to Lenders pursuant to this Agreement, Borrower grants to Lenders security
interests of first priority in the following property and interests in property,
whether now owned or hereafter acquired or existing, and whether located: all
Accounts, Rights to Payment and Records, and all products and proceeds of any of
the foregoing, in any form, including without limitation, insurance proceeds and
all claims against third parties for loss or damage to or destruction of any or
all of the foregoing. All of the foregoing shall be evidenced by and subject to
the terms of a Security Agreement substantially in the form of Exhibit "B"
attached hereto and such other documents as Lenders shall reasonably require,
all in form and substance satisfactory to Lenders. Borrower shall reimburse
Lenders, immediately upon demand, for all costs and expenses incurred by Lenders
in connection with any of the foregoing security, including without limitation
filing and recording fees.
6. Conditions of Lending. Lenders shall not be obligated to make any
advances under the Loans. Lenders shall not make any advances under the Loans
unless all the following conditions relating to the Loans shall have been
satisfied. All documents to be executed or delivered pursuant to Sections 6.1
ands 6.2 shall be dated, or certified as, the Effective Date or the date of the
advance, as the case may be.
6.1 Effective Date. On the Effective Date, Agent shall have received:
6.1.1 This Agreement, or counterparts thereof, duly executed by Borrower,
Lenders and Agent.
6.1.2 Notes in favor of Xxxx X. Xxxxxxx, Trustee of the Xxxxxxx Family
Trust UDT 10/31/89 in the amount of $50,000 for the initial advance of $40,000
and $10,000 to be advanced on the Effective Date and in favor of Xxxxxxx X.
Xxxxxx, Xx., in the amount of $40,000 for $40,000 to be advanced on the
Effective Date.
6.1.3 The Security Agreement and Form UCC-1 Financing Statement inthe form
of Exhibit "B" hereto, duly executed by Borrower, Lenders and Agent.
6.1.4 Such other documents as any Lenders may reasonably request.
All legal matters incident to the execution and delivery of this Agreement
and the documents contemplated hereby shall be satisfactory to Lenders.
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6.2 Additional Advances. Additional advances may be made from time to time
in the sole discretion of Lenders not to exceed the Loan amount of Four Hundred
Thousand Dollars ($400,000). On each additional Loans advance date, Agent shall
have received:
6.2.1 A Note payable to each Lender who is loaning funds for the additional
Loans advance.
6.2.2 Such other documents as any Lender may reasonably request.
6.2.3 The representations, warranties and covenants contained herein and in
the Security Agreement shall be true in all material respects on and as of the
date of the signing of this Agreement and on the date of each such extension of
credit by Lenders pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and on
each such date, no default hereunder or in the Notes or the Security Agreement,
and no condition, event or act which with the giving of notice or the passage of
time or both would constitute such a default, shall have occurred and be
continuing or shall exist. Borrower shall deliver a certificate evidencing
compliance with this Section 6.2.3.
6.2.4 All legal matters, incident to the execution and delivery of the
Agreement and the documents contemplated hereby shall be satisfactory to
Lenders.
7. Representations and Warranties. Borrower makes the following
representations and warranties to Lenders, which representations and warranties
shall survive the execution of this Agreement and shall continue in full force
and effect until the full and final payment, and satisfaction and discharge, of
all obligations of Borrower to Lenders subject to this Agreement.
7.1 Legal status. Borrower is a limited liability company duly organized
and existing and in good standing under the laws of the State of Ohio and is
qualified or licensed to do business, and is in good standing as a foreign
corporation, if applicable, in all jurisdictions in which the failure to so
qualify or to be so licensed could have a material adverse effect on Borrower.
7.2 Authorization and Validity. The Loan Documents have been duly
authorized, and upon their execution-and delivery in accordance with the
provisions hereof will constitute legal, valid and binding agreements and
obligations of Borrower enforceable in accordance with their respective terms.
7.3 No Violation. The execution, delivery and performance by Borrower of
each of the Loan Documents do not violate any provision of any law or
regulation, or contravene any provision of the Articles of Incorporation or
Bylaws of Borrower, or result in a breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.
7.4 No Subordination. There is no agreement, indenture, contract or
instrument to which Borrower is a party or by which Borrower may be bound that
requires the subordination in right of payment of any of Borrower's obligations
subject to this Agreement to any other obligation of Borrower.
7.5 Other Obligations. Borrower is not in default on and obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
8. Covenants. Borrower covenants that so long as Lenders remain committed
to extend credit to Borrower pursuant to the terms of this Agreement or any
liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Lender under any of the Loan Documents remain outstanding, and until
payment in full of all obligations of Borrower subject hereto, Borrower shall:
8.1 Punctual Payments. Punctually pay all principal, interest, fees or
other liabilities due under any of the Loan Documents to which it is a party at
the times and place and in the manner specified therein, and immediately upon
demand by Lenders, the amount by which the outstanding principal balance of the
Loans to Borrower at any time exceeds any limitation applicable thereto.
Page 254
8.2 Records and Premises. Maintain proper books and records in which true
and complete entries shall be made of all dealings or transactions of or in
relation to Collateral and the business of Borrower in accordance with generally
acceptable accounting principles. From time to time as requested by Lender, at
the cost and expense of Borrower, allow Lenders, Agent or other designee
complete access to all of Borrower's premises during normal business hours and
after notice to Borrower, or at any time and without notice to Borrower if an
Event of Default exists or has occurred and is continuing, for the purposes of
inspecting, verifying and auditing the Collateral and all of Borrower's books
and records, including, without limitation, the Records, and promptly furnish to
Lenders such copies of such books and records or extracts therefrom as Lenders
may request, and allow Lenders during normal business hours to use such of
Borrower's personnel, equipment, supplies and premises as may be reasonably
necessary for the foregoing, and if an Event of Default exists or has occurred
and is continuing, for the collection fo Accounts and realization of other
Collateral.
8.3 Collateral Reporting. Borrower shall provide Agent with the following
documents in a form satisfactory to Agent:
8.3.1 on a regular basis as required by Agent, a schedule of Accounts,
including without limitation, daily sales, credit and adjustment journals and
cash receipts;
8.3.2 upon Agent's request, (i) copies of customer statements and credit
memos, remittance advices and reports, and copies of deposit slips and bank
statements and (ii) copies of shipping and delivery documents;
8.3.3 within fourteen (14) calendar days after and as of the end of each
month (or more frequently as Agent may request), (i) agings of accounts
receivable and (ii) agings of accounts payable;
8.3.4 such other reports as to the Collateral as Agent shall request from
time to time, including without limitation daily borrowing base certificates. If
any of Borrower's records of the Collateral are prepared or maintained by an
accounting service, contractor, shipper or other agent, Borrower hereby
irrevocably authorizes such service, contractor, shipper or agent to deliver
such records, reports, and related documents to Agent and to follow Agent's
instructions with respect to further services at any time that an Event of
Default exists or has occurred and is continuing.
8.4 Notices to Lenders. Promptly (but in no event more than five (5) days
after the occurrence of each such event or matter) give written notice to
Lenders in reasonable detail of the occurrence of any Event of Default, or any
condition, event or act which with the giving of notice or the passage of time
or both would constitute such an Event of Default. Provide not less than ten
(10) days prior written notice to Lenders of any change in the name or the
organizational structure of Borrower.
8.5 Further Assurances At the request of Lenders at any time and from time
to time, duly execute and deliver, or cause to be duly executed and delivered,
such further agreements, documents and instruments, and do or cause to be done
such further acts as may be necessary or proper to evidence, perfect, maintain
and enforce the security interests and the priority thereof in the Collateral
and to otherwise effectuate the provisions or purposes of this Agreement or any
of the other Loan Documents, at Borrower's expense. Lenders may ay any time and
from time to time request a certificate from an officer of Borrower representing
that all conditions precedent tot he making of Loans contained herein are
satisfied. In the event of such request by Lenders, Lenders may, at their
option, cease to make any further advances on the Loans until Lenders have
received such certificate and, in addition, Lenders have determined that such
conditions are satisfied. Where permitted by law, Borrower hereby authorizes
Lenders to execute and file one or more UCC financing statements signed only by
Agent.
8.6 No Pledge of Assets. Not mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, any of its assets of any kind, now owned or
hereafter acquired, except any of the foregoing in favor of Lenders.
9. Agent
9.1 Appointment. Xxxxxxx X. Xxxxxx, Xx., is hereby appointed Agent of
Lenders under the Loan Documents, and each Lender irrevocably authorizes Agent
to act as the agent of such Lender. Agent agrees to act as such upon the express
conditions contained in this Section 9.
9.2 Powers. Agent shall have and may exercise such powers as are
specifically delegated to Agent by the terms of the Loan Documents, together
with such powers as are reasonably incidental thereto, all as the case may be.
Agent shall have no implied duties to Lenders, or any obligation to Lenders to
take any action under the Loan Documents except any action specifically provided
by the Loan Documents to be taken by Agent.
Page 255
9.3 General Immunity. Neither Agent nor any of his agents or employees
shall be liable to Lenders or any Lender for any action taken or omitted to be
taken by him or then under the Loan Documents or in connection therewith, as the
case may be, except for his or their own gross negligence or wilful misconduct.
9.4 No Responsibility for Loans and Recitals. Agent shall not be
responsible to Lenders or any Lender for any recitals, reports, representations,
statements or warranties contained in, or made in connection with, the Loan
Documents or the Loans, as the case may be, or be bound to ascertain or inquire
as to the performance or observance of any of the terms of the Loan Documents.
9.5 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any default or potential default under any Loan
Document, unless Agent has received notice from a Lender or Borrower, referring
to such Loan Document describing such default or potential default and starting
that such notice is a "Notice of Default." In the event that Agent receives such
a notice, Agent shall give prompt notice thereof to Lenders. Agent shall take
action with respect to such default or potential default as shall be reasonably
directed by Lenders holding in the aggregate at least sixty-six percent (66%) of
the aggregate unpaid principal amount of the Notes ("Required Lenders");
provided that, unless and until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such default or potential default as he shall deem
advisable in the best interest of Lenders.
9.6 Indemnification. Agent shall be fully justified in failing or refusing
to take any action under the Loan Documents unless he shall first be indemnified
to his satisfaction by Lenders or Required Lenders, as the case may be, against
any and all liabilities and expenses which may be incurred by Agent by reason of
taking or continuing to take any such action. Lenders agree to indemnify Agent
in his capacity as such (to the extent not reimbursed by Borrower and without
limiting the obligation of Borrower to do so), according to their respective
percentages, from and against any and all actions, costs, damages,
disbursements, expenses, judgements, liabilities, losses, obligations,
penalties, and suits of any kind whatsoever which may at any time (including
without limitation, at any time following the payment of the Notes), be imposed
on, incurred by or asserted against Agent in any way relating to or arising out
of any Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted to be taken by Agent under or in connection with any of the
foregoing, all as the case may be, provided that no Lender shall be liable for
the payment ofany portion of such actions, costs, damages, disbursements,
expenses, judgements, liabilities, losses, obligations, penalties, and suits
resulting solely from Agent's gross negligence or willful misconduct. The
agreements contained in this 9.6 shall survive the termination of the Agreement,
the payment of the Notes and all other amounts payable under any of the
foregoing agreements.
9.7 Loan Documents. Agent shall not be responsible to Lenders for the
effectiveness, enforcement, genuineness, or validity of any of the Loan
Documents.
9.8 Action of Instructions of Lenders. Agent shall in all cases by fully
protected in acting, or in refraining from acting, under the Loan Documents in
accordance with written instructions signed by Required Lenders or Lenders, as
the case may be, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all Lenders and on all holders of the
Notes.
9.9 Employment of Agents and Counsel. Agent may execute any of his duties
as Agent under the Loan Documents by or through employees, agents, and
attorney-in-fact and shall not be answerable to Lenders, except as to money or
securities received by him or his authorized agents and for the default or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care. Agent shall be entitled to advice of counsel concerning all
matters pertaining to the Agency hereby crated and his duties hereunder.
9.10 Reliance on Documents and Counsel. Agent shall be entitled to rely
upon any affidavit, certificate, cablegram, consent, instrument, letter, notice,
Note, order, paper, statement, telecopy, telegram, telex, or teletype message
and writing believed by him to be genuine and correct and to have been signed,
sent or made by the proper person or persons, and any telephonic or oral
statement made by the proper person or persons, and, in respect to legal
matters, upon the opinions of counsel selected by Agent and counsel for
Borrower, as the case may be.
Page 256
9.11 May Treat Payee as Owner,. Agent may deem and treat the payee of any
Notes as the owner thereof for all purposes hereof, unless and until a written
notice of the assignment or transfer thereof shall have been filed with Agent,
which such notice shall reasonably identify the assignee of transferee of such
Notes. Any request, authority or consent of any person who at the time of making
such request or giving such authority or consent is the holder of any Note shall
be conclusive and binding on any subsequent holder, assignee, or transferee of
such Note or of any Note or Notes issued in exchange therefor.
9.12 Agent's Reimbursement. Each Lender agrees to reimburse Agent in the
amount of such Lender's percentage for any expenses not reimbursed by Borrower:
(a) for which Agent is entitled to reimbursement by Borrower, and (b) after the
occurrence of a default, for any other expenses incurred by Agent on behalf of
Lenders in connection with the enforcement of the Loan Documents.
9.13 Rights as Lender. With respect to the Loan made by him and the Notes
issued to him, Agent shall have the same rights and powers hereunder as any
Lender and may exercise the same as though it were not Agent, and the term
"Lender" or "Lenders," shall, unless the context otherwise specifies, include
Agent in his individual capacity as a Lender. Agent may lend money to and
generally engage in any kind of business with Borrower as if he were not Agent.
9.14 Successor Agent. Agent may resign as Agent upon ten (10) days' prior
notice to Lenders. If Agent shall resign as Agent, then Required Lenders shall
appoint from among Lenders a successor agent for Lenders, whereupon such
successor agent shall succeed to the rights, powers, and duties of Agent, and
the term "Agent" shall mean such successor agent effective upon his or its
appointment, and the former Agent's rights, powers, and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the other parties to this Agreement or any holders of the Notes.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 9 shall inure to his benefit as to any actions taken or omitted to
be taken by him while he was Agent.
9.15 Number of Documents. All certificates, documents, notices, reports,
requests, and statements furnished Agent under the Loan Documents shall be
furnished in sufficient counterparts so that Agent may furnish one to each of
Lenders.
10. General Provisions.
10.1 Nature of Lenders' Obligations. The respective obligations of Lenders
under the Loan Documen6ts, including, without limitation, the making of the
Loans by Lenders, are several and not joint and no Lender shall be deemed to be
the partner or agent of another, except to the extent to which Agent is
authorized to act as such.
10.2 Independent Credit Decision. Each Lender acknowledges and represents
to Agent and each other Lender that Lender has, independently and without
reliance upon Agent or any other Lender and based on the information furnished
by Borrower and such other documents and information as Lender has deemed
appropriate, made Lender's own independent credit analysis and decision to enter
into this Agreement and the transactions contemplated hereby. Each Lender also
acknowledges and represents to Agent and each other Lender that Lender will,
independently and without reliance upon Agent or any other Lender and based on
such documents and information as Lender shall deem appropriate at the time,
continue to make Lender's own independent credit decisions in taking or not
taking action under this Agreement and the transaction contemplated hereby.
10.3 Amendments and Waivers. Required Lenders, or Agent with the consent in
writing of Required Lenders, and Borrower may, subject to the provisions of this
10.3, from time to time enter into written supplemental agreements to the Loan
Documents, as the case may be, for the purpose of adding or deleting any
provisions to or from any Loan Document or otherwise changing or varying in any
manner the rights of Lenders or Borrower thereunder or the conditions,
provisions or terms thereof for waiving any default thereunder, but only to the
extent specified in such written agreements; provided, however, that no such
supplemental agreement shall, without the consent of all of Lenders:
10.3.1 Change the maturity of any Notes or the principal amount thereof, or
change the rate or the time of payment of interest thereon or any fee payable by
Borrower to Lenders of Agent, as the case may be, pursuant to this Agreement.
10.3.2 Alter, amend, modify, or waive any term inthe Loan Documents which
would result in any alteration, amendment, change, modification or reduction
requiring the consent of all Lenders.
10.3.3 Alter, amend or modify this 10.3.
10.3.4 Consent to the assignment or transfer by Borrower ofany of its
rights and obligations under any Loan Document.
Page 257
10.3.5 Change the rights and duties of Agent, provided Agent shall have
given his prior written consent thereto.
Any such supplement agreements to the Loan Documents shall apply equally to
each of Lenders and shall be binding upon Borrower, Lenders and Agent and all
future holders of the Notes. No waiver by Lenders or Agent of any right or of
any default by Borrower under the Loan Documents shall be binding upon Lenders
unless in writing executed by Lenders or Agent. In the case of any waiver,
Borrower, Lenders, and Agent shall be restored to their former position and
rights under the relevant Loan Document and any default waived shall be deemed
to be cured and not continuing, but no such waiver shall extend to any
subsequent or other default, or impair any right consequent thereon.
10.4 Remedies. No course of dealing among Borrower, Lenders, Required
Lenders, and Agent, as the case may be, and no delay or omission of Lenders,
Required Lenders or Agent, as the case may be, to exercise any right under the
Loan Documents shall impair such right to be construed to be a waiver of any
default or an acquiescence therein, and any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to Lenders and Required
Lenders, as the case may be, until the Notes and other payment obligations in
the Loan Documents have been paid in full. Lenders and Required Lenders, as the
case may be, may exercise such remedies in any order of priority.
10.5 Benefit of Agreement. Each Lender will accept its Note as evidence of
loans made in the ordinary course of its business and will acquire its Note for
its own account without any present intention of making any sale or distribution
of its Note in any manner, provided that the disposition of each Lender's Note
shall be in the control of such Lender. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and Lenders
and their respective successors and assigns, including, without limitation, all
future holders of the Notes, except Borrower shall not have any right to assign
its rights or obligations under the Loan Documents or any interest therein,
without the prior written consent of Required Lenders.
10.6 Survival of Representations. All representations and warranties of
Borrower contained in the Loan Documents shall survive delivery of the Notes and
the making of the Loan.
10.7 Choice of Law and Construction. The Loan Documents shall be construed
in accordance with the laws of the State of Illinois applicable to contracts
made and performed in Illinois by an Illinois borrower and a lender located in
Illinois. Whenever possible, each provision of the Loan Documents shall be
interpreted in such manner as to be effective and valid under such applicable
law, but, if any provisions of any Loan Document shall be held to be prohibited
or invalid under such applicable law, such provisions shall be ineffectively
only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of any such loan
Document.
10.8 Attorneys' Fees. Should any litigation be commenced between the
parties hereto concerning, this Agreement, or the rights and duties of the
parties in relation hereto, the prevailing party in any such litigation shall be
entitled to such reasonable attorneys' fees as the court may award.
10.9 Severability. The unenforceability of any provision of this Agreement
shall not affect the enforceability or validity of any other provision hereof.
10.10 Section Headings and References. Section headings in the Loan
Documents are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents. All references to
sections in the Loan Documents are to the section of the Loan Document in which
such section reference appears, unless a different Loan Document is expressly
specified.
10.11 Exhibits. All exhibits referred to in the Loan Documents are hereby
incorporated into each other Loan Documents by this reference and all terms as
defined in the Loan Documents shall have the same meanings in such exhibits,
unless otherwise defined in such exhibits. All references to exhibits in the
Loan Documents are to those attached to the Loan Document in which such
reference appears, unless a different Loan Document is expressly specified.
Page 258
10.12 Notices
10.12.1 All notices, requests and demands to or upon the parties to any
Loan Document required or permitted to be given under such Loan Document shall
be deemed given: (a) three (3) days following deposit in the United States mail,
postage prepaid; (b) upon delivery to the telegraph company for transmission,
charges prepaid; (c) in the case of a telecopies notice, when sent, and receipt
is confirmed by telephone; or (d) when physically delivered by hand to the
addressee of such notice by or on behalf of the person initiating such notice;
in each case addressed to the address or telecopier number of Borrower, Lenders
and Agent, as the case may be, appearing below their respective signatures to
this Agreement. Borrower, Lenders and Agent may each change the address or
telecopier number for service of notice upon it by a notice in writing to the
others.
10.12.2 Borrower hereby authorizes Lenders and Agent to set Loan closing
dates, extend Loans advances and accept payments and prepayments under this
Agreement and the Notes based on oral or telephonic notices made by any person
or persons, Lenders, and Agent, as the case may be, in good faith believe to be
acting on behalf of Borrower. Borrower agrees to promptly confirm to Agent any
oral or telephonic notice in writing signed by Borrower on the date such oral or
telephonic notice is made. If such written confirmation differs in any material
respect from the action taken by Agent and Lenders pursuant to any such oral or
telephonic notice, the records of Agent and Lenders shall govern, absent
manifest error, all as the case may be.
10.13 Lawful Money. Each reference in the Loan Documents to payment of any
amount of money is to lawful money of the United States of America.
10.14 Entire Agreement. The Loan Documents and the documents referred to
therein embody the entire agreements and understandings among Borrower, Lenders,
and Agent, and supersede all prior agreements and understandings among Borrower,
Lenders and Agent relating to the subject matter thereof, as the as may be.
10.15 Term of Agreement. The Loan Documents shall become effective of the
Effective Date and terminate only when all the Notes, all interest thereon and
all other payment obligations under the Loan Documents have been paid in full.
10.16 Further Assurance. Borrower hereby further agrees with Lenders to
execute, acknowledge and delivery any and all such further assurances and other
agreements or instruments, and to take or cause to be taken all such other
actions, as shall be reasonably requested by any Lender or Agent from time to
time in order to give full effect to this Agreement and to maintain, preserve,
safeguard and continue at all times the rights, remedies, powers and privileges
of Lenders under this Agreement, all without any cost or expense to Lenders or
Agent.
10.17 Counterparts. The Loan Documents (other than the Notes) may be
executed by the parties hereto and thereto individually or, in any combinations
of the parties hereto, in several separate counterparts, each of which shall be
an original and all of which taken together shall constitute one and the same
agreement.
10.18 Legal Representation. Xxxxx & Xxxxx, A Professional Corporation, has
acted as counsel to Borrower in connection with the Loan and Loan Documents.
Lenders and Agent acknowledge that Xxxxx & Perry, A Professional Corporation,
have not represented Lenders or Agent in connection with the Loan and Loan
Documents and Lenders and Agent have not relied on Xxxxx & Xxxxx, A Professional
Corporation.
IN WITNESS WHEREOF, Borrower, Lenders and Agent have executed this
Agreement as of the date first above written.
"Borrower"
RCP ENTERPRISES GROUP, L.L.C.
an Ohio limited liability company
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx., Manager
00000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Xx.
Facsimile No.: (000) 000-0000
Page 259
"Lenders"
XXXXXXX FAMILY TRUST UDT 10/31/89
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, Trustee
0000 Xxxxx Xxxxxxx Xxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsmilie No.: (000) 000-0000
/s/ Xxxxxxx X. Xxxxxx, Xx.
00000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Facsimilie No.: (000) 000-0000
"Agent"
/s/ Xxxxxxx X. Xxxxxx, Xx.
XXXXXXX X. XXXXXX, XX.
00000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Facsimile No.: (000) 000-0000
Page 260
EXHIBIT B
NOTE
$50,000.00 October 13, 1997
1. Obligation. For value received, RCP ENTERPRISES< L.L.C., and Ohio
limited liability company (the "Company"), promises to pay to XXXX X. XXXXXXX AS
TRUSTEE OF THE XXXXXXX FAMILY TRUST UDT 10/31/89 or order ("Holder") the
Principal Amount, or so much thereof as may be advanced and be outstanding, and
Interest (both as defined below) in the manner and upon the terms and
condition\s set forth herein (the "Obligation").
2. Amount and Payment of Principal Amount and Interest. The principal
amount ("Principal Amount) of this Note is Fifty Thousand and no/100 Dollars
($50,000.00). The outstanding principal balance of this Note shall bear interest
("Interest"() at the rate of thirty percent (30%) per annum; provided, however,
in no event shall the Company be obligated to pay a rate of interest which
exceeds the maximum rate permissible under applicable usury law. This Note shall
be payable in equal monthly installments of principal and interest in the amount
of Two Thousand Eight Hundred Four Dollars and Ninety-Six Cents ($2,804.96)
which shall be due on the 17th day o each month commencing November 17, 1997.
The entire unpaid Principal Amount and any unpaid Interest shall be due and
payable on October 17, 1999. The entire amount of this Note may be prepaid on
not less than thirty (30) days notice on or after April 17, 1997.
3. Application of Payments. Each payment made on this Note shall be
credited first to any interest then due and second, to the outstanding principal
balance hereof.
4. Manner and Place of Payment. Payments of the Principal Amount and
Interest shall be made in lawful money of the United States of America.
Principal and Interest are payable to the Holder but shall be delivered to
Xxxxxxx X. Xxxxxx, St., as agent for the Holder in accordance with the
provisions of the Revolving Loan Agreement dated October 13, 1997 by and among
the Xxxxxxx Family Trust UDT 10.31.89, Xxxxxxx X. Xxxxxx, St., and the
additional lenders who become parties to the Revolving Loan Agreement, the
Company and Xxxxxxx X. Xxxxxx, Xx. ("Agent") at the principal office of Agent,
00000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000. At the option of the Company, payments
may be made by check mailed to Agent.
5. Security. The Obligation shall be secured by a security interest in
favor of Holder as set forth in that certain Security Agreement dated October
13, 1997 by and among the Xxxxxxx Family Trust UDT 10/31/89, Xxxxxxx X. Xxxxxx,
Xx., and the additional lenders who become parties to the Security Agreement
("Secured Parties"), the Company as debtor and Xxxxxxx X. Xxxxxx, Xx., as agent
for the Secured Parties ("Security Agreement").
Page 261
6. Events of Default. The following shall each constitute an "Event of
Default" under this Note: (i) default in the payment when due of an installment
of Principal Amount or interest under this Note and such default shall continue
for a period of ten (10) days; (ii) any default under the Revolving Loan
Agreement or the Security Agreement; and (iii) any of the following events of
bankruptcy or insolvency: (A) the Company shall file a voluntary bankruptcy or
reorganization petition under the provisions of the Federal Bankruptcy Act, any
other bankruptcy or insolvency law or any other similar statute applicable to
the Company ("Bankruptcy Laws"), (B) the Company shall consent to the filing of
any bankruptcy or reorganization petition against it under any Bankruptcy Law,
(C) the Company shall file a petition or answer or consent seeking relief or
assisting in seeking relief for the Company in a proceeding under any Bankruptcy
Law or any answer admitting the material allegations of a petition filed against
it in such a proceeding, (D) the Company or its members shall take action
looking tot he dissolution or liquidation of the Company, (E) the Company shall
make an assignment for the benefit of its creditors, (F) the Company shall admit
in writing its inability to pay its debts generally as they become due, (G) the
Company shall consent to the appointment of a receiver, trustee, or liquidator
of it or of any substantial part of its property, (H) by the order of a court of
competent jurisdiction, a received, liquidator or trustee of the Company or of
any substantial part of its property shall be appointed and such receiver,
liquidation or trustee shall not have been discharged within a period of thirty
(30) days, (I) by decree of such a court, the Company shall be adjudicated
bankrupt or insolvent or any substantial part of the property of the Company
shall have been sequestered and such decree shall have continued undischarged
and unstayed for a period of thirty (30) days after the entry thereof, or (J) an
involuntary bankruptcy reorganization petition pursuant to any Bankruptcy Law
shall be filed against the Company (and, in the case of any such petition filed
pursuant to any provision of a statue which required the approval of such
petition by a court, shall be approved by such a court) and shall not be
dismissed within thirty (30) days after such filing.
7. Demand Upon Event of Default. Upon the occurrence of an Event of Default
specified in Section 6 above, all Interest and the unpaid Principal Amount of
this Note shall become immediately due and payable, without further presentment,
notice or demand for payment.
8. Expenses of Enforcement. The Company agrees to pay all reasonable costs
and expenses, INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES, AS A
COURT OF COMPETENT JURISDICTION SHALL AWARD, WHICH Holder shall incur in
connection with any legal action or legal proceeding commenced for the
collection of this Note or the exercise, preservation or enforcement of Holder's
rights and remedies thereunder.
9. Cumulative Rights and Remedies. All rights and remedies of Holder under
this Note shall be cumulative and not alternative and shall be in addition to
all rights and remedies available to Holder under applicable Law.
10. Governing Law. This Note shall be governed by and interpreted and
construed in accordance with the laws of the State of Illinois. Any action or
proceeding arising under or pursuant to this Note shall be brought in Xxxx
County, Illinois.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered at Westlake, Ohio by its duly authorized officers as if the da and
year first above written.
RCP ENTERPRISES GROUP, L.L.C.
an Ohio limited liability company
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx., Manager
Page 262
10-10-97
Xxxxxxx
Loan Amount: $50,000.00 Load Date: 10-13-1997
Term of Loan: 24 Annual Interest Rate: 30.000%
Amortization Method: Normal, 360 D/Y Interest Compounded: Monthly
PMT Due Date Payment Amount Interest Principal Balance
1 11-17-97 2,804.96 1,420.83 1,384.13 48,615.87
2 12-17-97 2,804.96 1,215.40 1,589.56 47,026.31
-------- -------- --------
1997 totals 5,609.92 2,636.23 2,973.69
3 01-17-98 2,804.96 1,175.66 1,629.30 45,397.01
4 02-17-98 2,804.96 1,134.93 1,670.03 43,726.96
5 03-17-98 2,804.96 1,093.17 1,711.79 42,015.19
6 04-17-98 2,804.96 1,050,38 1,754.56 40,260.61
7 05-17-98 2,804.96 1,006.52 1,798.44 38,462.17
8 06-17-98 2,804.96 961.55 1,843.41 36,618.76
9 07-17-98 2,804.96 915.47 1,889.49 34,729.27
10 08-17-98 2,804.96 868.23 1,936.73 32,792.54
11 09-17-98 2,804.96 819.81 1,985.15 30,807.39
12 10-17-98 2,804.96 770.18 2,034.78 28,772.61
13 11-17-98 2,804.96 719.32 2,085.64 26,686.97
14 12-17-98 2,804.96 667.17 2,137.79 24,549.18
-------- --------- --------
1998 totals 33,659. 11,182.39 22,477.13
15 01-17-99 2,804.96 613.73 2,191.23 22,357.95
16 02-17-99 2,804.96 558.95 2,246.01 20,111.94
17 03-17-99 2,804.96 502.80 2,302.16 17,809.78
18 04-17-99 2,804.96 445.24 2,359.72 15,450.06
19 05-17-99 2,804.96 386.25 2,418.71 13,031.35
20 06-17-99 2,804.96 325.76 2,479.18 10,552.17
21 07-17-99 2,804.96 263.80 2,541.16 8,011.01
22 08-17-99 2,804.96 200.28 2,604.68 5,406.33
23 09-17-99 2,804.96 135.18 2,669.80 2,736.53
24 10-17-99 2,804.96 68.41 2,736.53 0.00
-------- ---------- --------
1999 totals 28,049.58 3,500.40 24,549.18
Grand totals 67,319. 17,319.02 50,000.00
Page 263
EXHIBIT C
GUARANTY
This Guaranty is executed in connection with a Loan Agreement dated October
13, 1997 by and between the XXXX X. XXXXXXX AS TRUSTEE OF THE XXXXXXX FAMILY
TRUST UDT 10/31/89, XXXXXXX X. XXXXXX, XX. and those other persons who become
lenders under the Term Loan Agreement by adopting the Term Loan Agreement
(collectively, "Lenders"), XXXXXXX X. XXXXXX, XX., as the initial agent for
Lenders (Agent") and RCP ENTERPRISES GROUP, L.L.C., an Ohio limited liability
company ("Borrower").
The undersigned ("Guarantor") hereby requests Lenders to make all or part
of the Loan to Borrower as contemplated by the Loan Agreement and to accept the
Notes issued by Borrower to Lenders pursuant to the Loan Agreement ("Notes")
from Borrower.
1. Guarantor hereby unconditionally guarantees and promises to pay to
Lenders any and all indebtedness of Borrower to Lenders as evidenced by the
Notes.
2. Either before or after revocation hereof and in such manner, upon such
terms and at such times as they considers best and with or without notice to
Guarantor, Lenders may alter, compromise, accelerate, extend or change the time
or manner for the payment or performance of any indebtedness hereby guaranteed,
release or add any one or more guarantors or endorsers, accept additional or
substituted security thereof, or release or subordinate any security therefor.
No exercise or nonexercise by Lenders of any right hereby given them, no dealing
by Lenders with Borrower or any other person, and no change, impairment or
suspension of any right or remedy of Lenders shall in any way affect any of the
obligations of Guarantor hereunder or any security furnished by Guarantor or
give Guarantor any recourse against Lenders.
3. Guarantor waives and agrees not to assert or take advantage of: (a) any
right to require Lenders to proceed against Borrower or any other person, firm
or corporation or to proceed against or exhaust any security held by them at any
time or to pursue any other remedy in their power; (b) the defense of the
statute of limitations in any action hereunder or for the collection of any
indebtedness or the performance of any obligation guaranteed hereby; (c) any
defense that may arise by reason of the incapacity, lack of authority, death or
disability of, or revocation hereof by, any other or others or the failure of
Lenders to file or enforce a claim against the estate (either in administration,
bankruptcy, or other proceeding) of any others; (d) demand, protest and notice
of any kind including, without limiting the generality of the foregoing, notice
of the existence, creation or incurring of new or additional indebtedness or of
any action or non-action on the part of Borrower, Lenders, any endorser,
creditor of Borrower or Guarantor under this or any other instrument, or any
other person whomsoever, in connection with any obligation or evidence of
indebtedness held by Lenders as collateral or in connection with any
indebtedness or obligation hereby guaranteed; (e) any defense based upon an
election of remedies by Lenders, including without limitation, an election to
proceed by nonjudicial rather then judicial foreclosure, which election destroys
or otherwise impairs subrogation rights of Guarantor or the right of Guarantor
proceed against Borrower for reimbursement, or both, if any, including, without
limitation, the impairment of subrogation rights arising by virtue of statute;
(f) any defense or right based upon the fair value deficiency protections and
provisions of applicable law; and (g) any suretyship defenses available to
Guarantor under applicable law.
4. Guarantor, by execution hereof, represents to Lenders that the
relationship between Guarantor and Borrower is such that Guarantor has access to
all relevant facts and information concerning the indebtedness and Borrower and
that Lenders can rely upon Guarantor's having such access. Guarantor waives and
agrees not to assert any duty on the part of Lenders to disclose to Guarantor
any facts that Lenders may now or hereafter know about Borrower, regardless of
whether Lenders have reason to believe that any such facts materially increase
the risk beyond that which Guarantor intends to assume, or has reason to believe
that such facts are unknown to Guarantor, or has a reasonable opportunity to
communicate such facts to Guarantor. Guarantor is fully responsible for being
and keeping informed of the financial condition of Borrower and all
circumstances bearing on the final risk of non-payment of the indebtedness
guaranteed hereby.
Page 264
5. Until the Notes have been paid in full, Guarantor shall have no right of
subrogation and waives any right to enforce any remedy which Lenders now has or
may hereafter have against Borrower and any benefit of and any right to
participate in, any security now or hereafter held by Lenders.
6. The amount of Guarantor's liability and all rights, powers and remedies
of Lenders hereunder and under any other agreement now or at any time hereafter
in force between Lenders and Guarantor shall be cumulative and not alternative,
and such rights, powers and remedies shall be in addition to all rights, powers
and remedies given to Lenders by law.
7. Guarantor's obligations hereunder are independent of the obligations of
Borrower and in the event of any default hereunder, a separate action or actions
may be brought and prosecuted against Guarantor whether action is brought
against Borrower or whether Borrower is joined in any such action or actions.
Lenders may maintain successive actions for other defaults. Lender's rights
hereunder shall not be exhausted by their exercise to any of their rights or
remedies or by any such action or by any number of successive actions until and
unless all indebtedness and obligations hereby guaranteed have been paid and
fully performed.
8. Guarantor agrees to pay to Lenders without demand reasonable attorneys'
fees and all costs and other expenses which Lenders expends or incurs in
collecting or compromising any indebtedness of Borrower or in enforcing this
guaranty against Guarantor including, without limitation, reasonable attorneys'
fees, costs and other such expenses incurred in any bankruptcy proceeding.
Guarantor warrants represents that it is fully empowered to execute this
guaranty.
9. This guaranty shall bind Guarantor's successors and assigns. No
delegation or assignment of this guaranty by Guarantor shall be of any force or
effect or release Guarantor from any obligation hereunder.
10. No provision of this guaranty or right of Lenders hereunder can be
waived nor can Guarantor be released from his obligations hereunder except by a
writing duly executed by Lenders. Should any one or more provisions of this
Guaranty be determined to be invalid or unenforceable, the remaining provisions
hereof shall be deemed severable therefrom and shall remain in full force and
effect.
11. This Guaranty shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Illinois. All actions or
proceedings with respect to this guaranty may be instituted in the courts of the
State of Illinois or a United States District Court located in Illinois. Each
party consents to the jurisdiction of such courts.
12. Except as provided in any other written agreement now or at any time
hereafter in force between Lenders and Guarantor, this guaranty shall constitute
the entire agreement of Guarantor with Lenders with respect to the subject
matter hereof and no representation, understanding, promise or condition
concerning the subject matter hereof shall be binding upon Lenders unless
expressed herein or therein. Any notice to Guarantor shall be deemed to have
been duly given when delivered personally or five (5) days after being mailed,
postage prepaid, to 00000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 or to such other
address(s) as Guarantor may from time to time designate by giving written notice
to Lenders.
Executed by Guarantor on October 13, 1997.
/s/ Xxxxxxx X. Xxxxxx, Xx.
XXXXXXX X. XXXXXX, XX.
Page 265
