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EXHIBIT 4.2
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LINE OF CREDIT NOTE
(Eurodollar Rate)
$9,000,000 Detroit, Michigan
October 31, 1997
On or before April 1, 1999 (herein called the "Maturity Date"), FOR VALUE
RECEIVED, the undersigned, Xxxx Industries, Inc., a Wisconsin corporation
(herein called "Borrower"), promises to pay to the order of __________ BANK, a
Michigan banking corporation (herein called "Bank"), in lawful currency of the
United States of America, the principal sum of NINE MILLION DOLLARS
($9,000,000), or so much of said sum as has been advanced and is then
outstanding under this Note, together with interest thereon as hereinafter set
forth.
This Note is a note under which Advances, repayments and re-Advances may
be made from time to time, subject to the terms and conditions of this Note;
provided, however, in no event shall Bank be obligated to make any Advances or
re-Advances hereunder (notwithstanding anything expressed or implied herein or
elsewhere to the contrary).
Each of the Advances made hereunder shall bear interest at the
Eurodollar-based Rate or the Prime-based Rate, as elected by Borrower or as
otherwise determined under this Note.
Accrued and unpaid interest on the unpaid balance of each outstanding
Prime-based Advance shall be payable quarterly, in arrears, commencing on
January 1, 1998, and on the first Business Day of each succeeding quarter
thereafter, until maturity (whether as stated herein, by acceleration, or
otherwise). Interest accruing at the Prime-based Rate shall be computed on the
basis of a year of 360 days, and shall be assessed for the actual number of
days elapsed, and in such computation, effect shall be given to any change in
the Applicable Interest Rate as a result of any change in the Prime-based Rate
on the date of each such change in the Prime-based Rate.
Accrued and unpaid interest on each Eurodollar-based Advance shall be
payable on the last day of the Interest Period applicable thereto (unless
sooner accelerated in accordance with the terms of this Note). Interest
accruing at the Eurodollar-based Rate shall be computed on the basis of a 360
day year and shall be assessed for the actual number of days elapsed from the
first day of the Interest period applicable thereto but not including the last
day thereof.
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From and after the occurrence of any Default hereunder, and so long as any
such Default remains unremedied or unaccrued thereafter, the Indebtedness
outstanding under this Note shall bear interest a per annum rate of three
percent (3%) above the otherwise Applicable Interest Rate, which interest shall
be payable upon demand.
The amount and date of each Advance, its Applicable Interest Rate, its
Interest Period, if any, and the amount and date of any repayment shall be
noted on Bank's records, which records shall be conclusive evidence thereof,
absent manifest error; provided, however, any failure by Bank to make any such
notation, or any error in any such notation, shall not relieve Borrower of its
obligations to repay Bank all amounts payable by Borrower to Bank under or
pursuant to this Note, when due in accordance with the terms hereof.
Borrower may request an Advance hereunder, including the refunding of an
outstanding Advance as the same type of Advance or the conversion of an
outstanding Advance as the same type of Advance, upon the delivery to Bank of a
Request for Advance executed by an authorized officer of Borrower, subject to
the following:
(a) no Default, and no condition or event which, with the giving
of notice or the running of time, or both, would constitute a
Default, shall have occurred and be continuing or exist under this
Note;
(b) each such Request for Advance shall set forth the information
required on the Request for Advance form annexed hereto as Exhibit
"A";
(c) each such Request for Advance shall be delivered to Bank by
11:00 a.m. (Detroit, Michigan time) one (1) Business Day prior to
the proposed date of Advance in the case of Eurodollar-based
Advances, and by 11:00 a.m. (Detroit, Michigan time) on the proposed
date of Advance in the case of Prime-based Advances;
(d) the principal amount of each Eurodollar-based Advance shall
be at least Five Hundred Thousand Dollars ($500,000);
(e) the proposed date of any refunding of any outstanding
Eurodollar-based Advance as another Eurodollar-based Advance or the
conversion of any outstanding Eurodollar-based Advance to a
Prime-based Advance shall only be on the last day of the Interest
Period applicable to such outstanding Eurodollar-based Advance; and
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(f) a Request for Advance, once delivered to Bank, shall not be
revocable by Borrower; provided, however, as aforesaid, Bank shall
not be obligated to make any Advance under this Note.
If, as to any outstanding Eurodollar-based Advance, Bank shall not receive
a timely Request for Advance in accordance with the foregoing requesting the
refunding of such Advance as a Eurodollar-based Advance, the principal amount
of such Advance which is not then repaid shall be automatically converted to a
Prime-based Advance on the last day of the Interest Period applicable thereto,
subject in all respects to the terms and conditions of this Note. The
foregoing shall not in any way whatsoever limit or otherwise affect any of
Bank's rights or remedies under this Note upon the occurrence of any Default
hereunder, or any condition or event which, with the giving of notice or the
running of time, or both, would constitute a Default.
Borrower may prepay all or part of the outstanding balance of any
Prime-based Advance under this Note at any time. Borrower may prepay all or
part of any Eurodollar-based Advance on the last day of the Interest Period
applicable thereto, provided that the aggregate balance of Eurodollar-based
Advances outstanding after such prepayment shall be at least Five Hundred
Thousand Dollars ($500,000), and the unpaid portion of such Eurodollar-based
Advance which is then refunded or converted shall be subject to the limitations
set forth in this Note. Any prepayment made in accordance with this paragraph
shall be without premium or penalty. Any other prepayment shall be otherwise
restricted by and subject to the terms of this Note.
Subject to the definition of an "Interest Period" hereunder, in the event
that any payment under this Note becomes due and payable on any day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day, and, to the extent applicable, interest shall continue
to accrue and be payable thereon during such extension at the rates set forth
in this Note.
All payments to be made by Borrower to Bank under or pursuant to this Note
shall be in immediately available funds, without setoff or counterclaim, and in
the event that any payments submitted hereunder are in funds not available
until collected, said payments shall continue to bear interest until collected.
Borrower hereby authorizes Bank to charge any account of Borrower with Bank
for all sums due hereunder when due in accordance with the terms hereof.
If Borrower makes any payment of principal with respect to any
Eurodollar-based Advance on any day other than the last day of the Interest
Period applicable thereto (whether voluntarily, by acceleration, or otherwise),
or if Borrower fails to borrow any
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Eurodollar-based Advance after notice has been given by Borrower to
Bank in accordance with the terms of this Note requesting such Advance, or if
Borrower fails to make any payment of principal or interest in respect of a
Eurodollar-based Advance when due, Borrower shall reimburse Bank, on demand,
for any resulting loss, cost or expense incurred by Bank as a result thereof,
including, without limitation, any such loss, or expense incurred in obtaining,
liquidating, employing or redeploying deposits from third parties, whether or
not Bank shall have funded or committed to fund such Advance. Such amount
payable by Borrower to Bank may include, without limitation, an amount equal to
the excess, if any, of (a) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, refunded or converted, for the
period from the date of such prepayment or of such failure to borrow, refund,
or convert, through the last day of the relevant Interest Period, at the
applicable rate of interest for said Advance(s) provided under this Note, over
(b) the amount of interest (as reasonably determined by Bank) which would have
accrued to Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to Bank under this paragraph shall be made
as though Bank shall have actually funded or committed to fund the relevant
Eurodollar-based Advance through the purchase of an underlying deposit in an
amount equal to the amount of such Advance and having a maturity comparable to
the relevant Interest Period; provided, however, that Bank may fund any
Eurodollar-based Advance in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of
amounts payable under this paragraph. Upon the written request of Borrower,
Bank shall deliver to Borrower a certificate setting forth the basis for
determining such losses, costs and expenses, which certificate shall be
conclusively presumed correct, absent manifest error.
For any Eurodollar-based Advance, if Bank shall designate a Eurodollar
Lending Office which maintains books separate from those of the rest of Bank,
Bank shall have the option of maintaining and carrying such Advance on the
books of such Eurodollar Lending Office.
If, with respect to any Interest Period, Bank determines that, (a) by
reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in Eurodollars in the applicable amounts or for the
relative maturities are not being offered to Bank for such Interest Period, or
(b) if the rate of interest referred to in the definition of "Eurodollar-based
Rate" upon the basis of which the rate of interest for a Eurodollar-based
Advance is to be determined does not accurately or fairly cover or reflect the
cost to Bank of making or maintaining a Eurodollar-based Advance hereunder,
then Bank shall forthwith give notice thereof to the Borrower. Thereafter,
until Bank notifies Borrower that such conditions or circumstances no longer
exist, the right of
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Borrower to request a Eurodollar-based Advance and to convert an Advance to or
refund an Advance as a Eurodollar-based Advance shall be suspended.
If, after the date hereof, the introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by Bank (or its Eurodollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, shall make it unlawful or impossible for the Bank (or
its Eurodollar Lending Office) to make or maintain any Advance with interest at
the Eurodollar-based Rate, Bank shall forthwith give notice thereof to
Borrower. Thereafter, (a) until Bank notifies Borrower that such conditions or
circumstances no longer exist, the right of Borrower to request a
Eurodollar-based Advance and to convert an Advance to or refund an Advance as a
Eurodollar-based Advance shall be suspended, and thereafter, Borrower may
select only the Prime-based Rate as the Applicable Interest Rate hereunder, and
(b) if Bank may not lawfully continue to maintain an outstanding Advance to the
end of the then current Interest Period applicable thereto, the Prime-based
Rate shall be the Applicable Interest Rate for the remainder of such Interest
Period with respect to such outstanding Advance.
If the adoption after the date hereof, or any change after the date hereof
in, any applicable law, rule or regulation of any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Bank (or its Eurodollar Lending
Office) with any request or directive (whether or not having the force of law)
made by any such authority, central bank or comparable agency after the date
hereof:
(a) shall subject Bank (or its Eurodollar Lending Office) to any
tax, duty or other charge with respect to this Note or any Advance
hereunder or shall change the basis of taxation of payments to Bank
(or its Eurodollar Lending Office) of the principal of or interest
on any Advance or any other amounts due under this Note in respect
thereof (except for changes in the rate of tax on the overall net
income of Bank or its Eurodollar Lending Office imposed by the
jurisdiction in which Bank's principal executive office or
Eurodollar Lending Office is located); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special deposit or similar
requirements against assets of, deposits with or for the account of,
or credit extended by Bank (or its Eurodollar Lending Office) or
shall impose on Bank (or its Eurodollar Lending Office) or the
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foreign exchange and interbank markets any other condition
affecting any Advance under this Note;
and the result of any of the foregoing is to increase the cost to Bank of
maintaining any part of the indebtedness hereunder or to reduce the amount of
any sum received or receivable by Bank under this Note by an amount deemed by
the Bank to be material, then Borrower shall pay to Bank, within fifteen (15)
days of Borrower's receipt of written notice from Bank demanding such
compensation, such additional amount or amounts as will compensate Bank for
such increased cost or reduction. A certificate of Bank, prepared in good
faith and in reasonable detail by Bank and submitted by Bank to Borrower
setting forth the basis for determining such additional amount or amounts
necessary to compensate Bank shall be conclusive and binding for all purposes,
absent manifest error in computation.
In the event that any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to Bank, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by Bank with any guideline, request or directive of any
such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
required or expected to be maintained by Bank (or any corporation controlling
Bank), and Bank determines that the amount of such capital is increased by or
based upon the existence of any obligations of Bank hereunder or the making or
maintaining any Advances hereunder, and such increase has the effect of
reducing the rate of return on Bank's (or such controlling corporation's)
capital as a consequence of such obligations or the making or maintaining of
such Advances hereunder to a level below that which Bank (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy), then Borrower
shall pay to Bank, within fifteen (15) days of Borrower's receipt of written
notice from Bank demanding such compensation, additional amounts as are
sufficient to compensate Bank (or such controlling corporation) for any
increase in the amount of capital and reduced rate of return which Bank
reasonably determines to be allocable to the existence of any obligations of
the Bank hereunder or to be making or maintaining any Advances hereunder. A
certificate of Bank as to the amount of such compensation, prepared in good
faith and in reasonable detail by the Bank and submitted by Bank to Borrower,
shall be conclusive and binding for all purposes absent manifest error in
computation.
This Note and any other indebtedness and liabilities of any kind of
Borrower to Bank, and any and all modifications, renewals or extensions
thereof, whether joint or several, contingent or absolute, direct or indirect,
now existing or later arising, and however evidenced (collectively the
"Indebtedness"), are secured by
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and Bank is granted a security interest in all items at any time deposited in
any account of Borrower with Bank and by all proceeds of these items (cash or
otherwise,) all account balances of Borrower from time to time with Bank, by
all property of Borrower from time to time in the possession of Bank, and by
any other collateral, rights and properties described in each and every
mortgage, security agreement, pledge, assignment and other security or
collateral agreement which has been or will at any time(s) later be, executed
by Xxxxxxxx or others to or for the benefit of Bank (collectively the
"Collateral").
If Borrower or any guarantor under a guaranty of all or part of the
Indebtedness ("guarantor") (a) fail(s) to pay this Note, or any part thereof,
or any of the Indebtedness when due, by maturity, acceleration or otherwise, or
fail(s) to pay any Indebtedness owing on a demand basis upon demand; or (b)
fail(s) to comply with any of the terms or provisions of any agreement between
Borrower or any guarantor and Bank; or (c) become(s) insolvent or the subject
of a voluntary or involuntary proceeding in bankruptcy, or a reorganization,
arrangement or creditor composition proceeding, (if a business entity) cease(s)
doing business as a going concern, (if a natural person) die(s) or become(s)
incompetent, (if a partnership) dissolve(s) or any general partner of it dies,
becomes incompetent or becomes the subject of a bankruptcy proceeding, or (if a
corporation) is the subject of a dissolution, merger or consolidation; or (d)
if any warranty or representation made by Borrower or any guarantor in
connection with this Note or any of the Indebtedness shall be discovered to be
untrue or incomplete in any material respect; (e) or if there is any
termination, notice of termination, or breach of any guaranty, pledge,
collateral assignment or subordination agreement relating to all or any part of
the Indebtedness; or (f) if there is any failure by Borrower or any guarantor
to pay, when due, any of its indebtedness (other than to the Bank) or in the
observance or performance of any term, covenant or condition in any document
evidencing, securing or relating to such indebtedness; or (g) if there is filed
or issued a levy or writ of attachment or garnishment or other like judicial
process upon Borrower or any guarantor or any of the Collateral, including,
without limit, any accounts of Borrower or any guarantor with Bank, then Bank,
upon the occurrence and at any time during the continuance or existence of any
of these conditions or events (each a "Default"), may at its option and without
prior notice to Borrower, declare any or all of the Indebtedness to be
immediately due and payable (notwithstanding any provisions contained in the
evidence of it to the contrary), sell or liquidate all or any portion of the
Collateral, set off against the Indebtedness any amounts owing by Bank to
Borrower, and exercise any one or more of the rights and remedies granted to
Bank by an agreement with Borrower given to it under applicable law, or
otherwise.
Borrower waives presentment, demand, protest, notice of dishonor, notice
of demand or intent to demand, notice of
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acceleration or intent to accelerate, and all other notices, and agrees that no
extension or indulgence to Borrower, or release, substitution or nonenforcement
of any security, or release or substitution of any guarantor or any other
party, whether with or without notice, shall affect the obligations of
Borrower. Borrower waives all defenses or right to discharge available under
Section 3-605 of the Uniform Commercial Code and waives all other suretyship
defenses or right to discharge. Xxxxxxxx agrees that Bank has the right to
sell, assign, or grant participations, or any interest, in any or all of the
Indebtedness, and that, in connection with such right, but without limiting its
ability to make other disclosures to the full extent allowable, Bank may
disclose all documents and information which the Bank now or later has relating
to Borrower and the Indebtedness.
Borrower agrees to reimburse Bank, or any other holder or owner of this
Note, for any and all costs and expenses (including, without limit, court
costs, legal expenses and reasonable attorneys' fees, whether inside or outside
counsel is used, whether or not suit is instituted, and, if suit is instituted,
whether at the trial court level, appellate level, in a bankruptcy, probate or
administrative proceeding or otherwise) incurred in collecting or attempting to
collect this Note or the Indebtedness or incurred in any other matter or
proceeding relating to this Note or the Indebtedness.
Xxxxxxxx acknowledges and agrees that there are no contrary agreements,
oral or written, establishing a term of this Note and agrees that the terms and
conditions of this Note may not be amended, waived or modified except in a
writing signed by a duly authorized officer of Bank expressly stating that the
writing constitutes an amendment, waiver or modification of the terms of this
Note. If any provision of this Note is unenforceable in whole or part for any
reason, the remaining provisions shall continue to be effective. THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MICHIGAN.
This Note shall bind Borrower and Xxxxxxxx's respective successors and
assigns.
For the purposes of this Note, the following terms have the following
meanings:
"Advance" means a borrowing requested by Xxxxxxxx and made by Bank under
this Note, including any refunding of an outstanding Advance as the same type
of Advance or the conversion of any such outstanding Advance to another type of
Advance, and shall include a Eurodollar-based Advance and a Prime-based
Advance.
"Applicable Interest Rate" means the Eurodollar-based Rate or the
Prime-based Rate, as selected by Borrower from time to time or
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as otherwise determined in accordance with the terms and conditions of this
Note.
"Business Day" means any day, other than a Saturday, Sunday or holiday, on
which Bank is open for all or substantially all of its domestic and
international business (including dealings in foreign exchange) in Detroit,
Michigan.
"Eurodollar-based Advance" means an Advance which bears interest at the
Eurodollar-based Rate.
"Eurodollar-based Rate" means a per annum interest rate which is equal to
the sum of two and ten-hundredths percent (2.10%), plus the quotient of:
(a) the per annum interest rate at which Bank's Eurodollar
Lending Office offers deposits to prime banks in the eurodollar
market in an amount comparable to the relevant Eurodollar-based
Advance and for a period equal to the relevant Interest Period at or
about 11:00 a.m. (Detroit, Michigan time) (or as soon thereafter as
practical) one (1) Business Day prior to the first day of such
Interest Period;
divided by
(b) a percentage equal to 100% minus the maximum rate during such
Interest Period at which Bank is required to maintain reserves on
"Euro-currency Liabilities" as defined in and pursuant to Regulation
D of the Board of Governors of the Federal Reserve System or, if
such regulation or definition is modified, and as long as Bank is
required to maintain reserves against a category of liabilities
which includes eurodollar deposits or includes a category of assets
which includes eurodollar loans, the rate at which such reserves are
required to be maintained on such category.
"Eurodollar Lending Office" means Bank's office located in the Cayman
Islands, British West Indies, or such other branch of Bank, domestic or
foreign, as it may hereafter designate as its Eurodollar Lending Office by
notice to Borrower.
"Interest Period" means a period of one (1) to ninety (90) days, as
selected by Borrower pursuant to the terms of this Note, commencing on the day
a Eurodollar-based Advance is made, provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding
Business Day, except that if the next
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succeeding Business Day falls in another calendar month, the
Interest Period shall end on the next preceding Business Day, and
when an Interest Period begins on a day which has no numerically
corresponding day in the calendar month during which such Interest
Period is to end, it shall end on the last Business Day of such
calendar month, and
(b) no Interest Period shall extend beyond the Maturity Date.
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime Rate" means the per annum interest rate established by Bank as its
prime rate for its borrowers, as such rate may vary from time to time, which
rate is not necessarily the lowest rate on loans made by Bank at any such time.
"Prime-based Rate" shall mean a per annum interest rate which is equal to
the Prime Rate minus one-half of one percent (1/2%).
"Request for Advance" means a Request for Advance issued by Borrower under
this Note in the form annexed to this Note as Exhibit "A".
Xxxxxxxx agrees to make all payments to Bank of any and all amounts due
and owing by Borrower to Bank hereunder, including, without limitation, the
payment of principal and interest on any Advance, on the date provided for such
payment, in United States Dollars in immediately available funds, at the office
of Bank located at Detroit Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, or such other address as Bank may notify Borrower in writing.
No delay or failure of Bank in exercising any right, power or privilege
hereunder shall affect such right, power or privilege, nor shall any single or
partial exercise thereof preclude any further exercise thereof, or the exercise
of any other power, right or privilege. The rights of Bank under this
Agreement are cumulative and not exclusive of any right or remedies which Bank
would otherwise have, whether by other instruments or by law.
XXXXXXXX AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
(OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE OR THE INDEBTEDNESS
HEREUNDER.
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This Note replaces a Note dated September 29, 1995, as amended, by
Borrower payable to Bank.
XXXX INDUSTRIES, INC.
By:_____________________________
Its:____________________________
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