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Exhibit 10.28
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement (the "Agreement") is entered into this 1
day of September, 2000 at Cincinnati, Hamilton County, Ohio, by and between THE
HUNTINGTON NATIONAL BANK, a national banking association (the "Bank") and FIRST
CINCINNATI LEASING 2000 LLC, an Ohio limited liability company (the "Borrower").
WITNESSETH:
WHEREAS, Borrower desires to borrow certain funds from Bank for the purpose
of refinancing the acquisition of certain real estate and improvements located
in various jurisdictions (collectively referred to as the "Property" and
individually as "Model Home"); and
WHEREAS, subject to the provisions hereof, Bank has agreed to make a loan
to Borrower for such purposes in an amount not to exceed Five Million Four
Hundred Thirty Three Thousand Dollars ($5,433,000.00) in the lawful currency of
the United States of America (the "Loan").
NOW, THEREFORE, in consideration of the foregoing premises, the covenants
and conditions contained herein and other good and valuable consideration, the
receipt, sufficiency and adequacy of which is hereby acknowledged, the parties
agree as follows:
1. LOAN DOCUMENTS. The Loan is evidenced by Borrower's Promissory Note of
even date herewith (the "Note") in the amount of Five Million Four Hundred
Thirty Three Thousand Dollars ($5,433,000.00), payable to the Bank, bearing
interest and as provided therein. The Note is secured by a first lien Open-End
Mortgage, Assignment of Rents and Leases and Security Agreement or first lien
Deed of Trust, Assignment of Rents and Leases and Security Agreement on each
Model Home of even date herewith as applicable (collectively the "Mortgage")
encumbering the Property. In addition, Borrower has executed and delivered UCC
Financing Statements (the "UCC Financing Statements") evidencing Bank's first
and best lien security interest in all of Borrower's assets, including, without
limitation, the Leases and all personal property located in, or about the
Property, whether existing now or after acquired. Allen G. Zaring, III
("Zaring") (the "Guarantor") has executed an Unconditional Guaranty of Payment
and Performance of even date herewith (the "Guaranty") wherein the Guarantor has
guaranteed repayment of the indebtedness evidenced by the Note and the
performance of any and all obligations of the Borrower to Bank. The Note,
Mortgage, UCC Financing Statements, Guaranty, this Agreement and any and all
other documents executed in connection with the Loan are sometimes hereinafter
collectively referred to as the "Loan Documents".
2. INTENTIONALLY DELETED.
3. INTENTIONALLY DELETED.
4. TERMS OF LOAN.
4.1 REPAYMENT. The Borrower agrees to pay Bank monthly, the interest
on the unpaid balance of the Loan at a rate of interest set forth in the
Note evidencing the Loan, the terms and conditions of which are
incorporated by reference herein. Repayment of the Loan shall be made in
accordance with the terms of the Note. The Borrower agrees to pay all of
Bank's out of pocket expenses and all costs and expenses incidental to or
in connection with (a) the Loan, (b) the enforcement of Bank's rights in
connection therewith, (c) any amendment or modification of this Agreement,
the Loan Documents or any other documents related thereto, (d) any
litigation, contest, dispute, proceeding or action in any way relating to
the Property or to this Agreement or the Loan Documents, whether any of the
foregoing are incurred prior to or after maturity, the occurrence of any
Event of Default or the rendering of a judgment. Such costs shall include,
but not be limited to, reasonable fees and out of pocket expenses of Bank's
counsel, recording fees, inspection fees, revenue stamps and note and
mortgage taxes.
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4.2 DISBURSEMENTS REQUIREMENTS.
4.2.1 The Bank will disburse the loan proceeds to the Borrower on the
date hereof upon satisfaction of the following conditions:
1) The Borrower and/or Borrower's counsel will provide the Bank
with a mortgage and assignment of the lease between Zaring
Homes Inc., Zaring Homes Kentucky LLC or Zaring Homes of
Indiana L.L.C. for each Model Home;
2) Within thirty (30) days of the date hereof, for each Model
Home, a title exam or an opinion letter from the Borrower's
counsel indicating that the Bank has a first and best lien
on each Model Home;
3) The Borrower provides the Bank with a certificate of fair
market value or appraisal in form and substance satisfactory
to the Bank; and
4) Within thirty (30) days of the date hereof, an Opinion
Letter from the Borrower's counsel that each mortgage for
each Model Home is enforceable in accordance with the laws
of the state in which the Model Home is situated, and
secures the full amount of the Loan.
4.2.2 If it is determined at any time after a disbursement is made by
the Bank pursuant to Subsection 4.2.1 above, that the Bank does not have a
first and best lien on any Model Home or that any Model Home is not titled
in the name of the Borrower or the necessary Opinion Letters as set forth
in 4.2.1 (4) above is not timely received, the Borrower with regards to
such Model Home, shall within thirty (30) days of such determinations
perform the following:
1) Take such steps deemed necessary by the Bank in its absolute
discretion to insure the Bank that it has a first and best
lien as to such Model Home; or
2) Substitute such Model Home with a like Model Home on which
the Bank has a first and best lien; or
3) Pay down the amount of the Note by the amount advanced
against such Model Home.
5.1 GRANT OF SECURITY INTEREST. The Borrower hereby grants, pledges
and assigns to Bank a security interest in the following property, whether
the Borrower's interest therein as owner, co-owner, lessor, lessee,
consignee, secured party or otherwise, be now owned or existing or
hereafter arising or acquired, and wherever located, together with all
substitutions, replacements, additions and accessions therefor or thereto,
all documents, negotiable documents, documents of title, warehouse
receipts, storage receipts, dock warrants, express bills, freight bills,
airbills, bills of lading, and other documents relating thereto, all
products thereof and all cash and non-cash proceeds thereof including, but
not limited to, notes, drafts, checks, instruments, insurance proceeds,
indemnity proceeds, warranty and guaranty proceeds: (a) all of Borrower's
inventory including, but not limited to, all improved real property, all
goods, merchandise and other personal property furnished under any contract
of service or intended for sale or lease, all parties, supplies, raw
materials, work in process, finished goods, homes, materials used or
consumed in Borrower's business, and repossessed and returned goods or
homes (herein the "Inventory"); (b) all of the Borrower's accounts,
accounts receivable, contract rights, chattel paper, general intangibles,
income tax refunds, preference recoveries or other claims in respect of any
transfers of any kind, instruments, negotiable documents, notes, drafts,
acceptances and other forms of obligations, all books, records, ledger
cards, computer programs, and other documents or property at any time
evidencing or relating to the Borrower's accounts, including, but not
limited to, those arising from or in connection with the Borrower's sale,
lease or other disposition of Inventory (herein the "Accounts"); (c) all of
the Borrower's machinery, equipment, tools, furniture, furnishings and
fixtures including, but not limited to, all manufacturing, fabricating,
processing, transporting and packaging equipment, power systems, heating,
cooling and ventilating systems, lighting and communications systems,
electric, gas and water distribution systems, food service systems, fire
prevention, alarm and security systems, laundry systems and computing and
data processing systems (herein the "Equipment"); (d) all of the Borrower's
trade names, trademarks, trade secrets, service marks, data bases, software
and
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software systems, information systems, discs, tapes, goodwill, patents,
patent applications, copyrights, licenses and franchises (herein the
"Intellectual Property"); and (e) all deposit accounts, whether general,
special, time, demand, provisional, final, all cash or monies wherever
located, any and all deposits or other sums at any time credited by or due
from Bank to the Borrower, any and all policies, certificates of insurance,
securities, goods, chooses in action, cash and property owned by the
Borrower or in which the Borrower has an interest, which now or hereafter
are at any time in the possession or control of Bank or in transit by mail
or carrier to or from Bank, or in the possession of any third party acting
in Bank's behalf, without regard to whether Bank received the same in
pledge for safekeeping, as agent for collection or transmission or
otherwise, or whether Bank has conditionally released the same (herein the
"Deposits") (all of the Accounts, the Inventory, the Equipment, the
Intellectual Property and the Deposits herein are collectively termed the
"Collateral").
The security interest hereby granted is to secure the prompt and full
payment whether at stated or accelerated maturity or otherwise, of any and
all principal, interest, damages, losses, costs, charges, expenses and
liabilities, whether fixed or contingent (collectively the "Indebtedness")
and the complete, faithful and punctual performance of any and all
Obligations of the Borrower to Bank. The word "Obligations" is used in its
most comprehensive sense and includes, without limitation, all
Indebtedness, debts and liabilities (including principal, interest, late
charges, collection costs, attorneys' fees and the like) of the Borrower to
Bank, including, without limitation, the Five Million Four Hundred Thirty
Three Dollars ($5,433,000.00) of even date herewith Promissory Note,
whether now existing or hereafter arising, either created by the Borrower
alone or together with another or others, primary or secondary, secured or
unsecured, absolute or contingent, liquidated or unliquidated, direct or
indirect, whether evidenced by note, draft, application for letter of
credit or otherwise, and any and all renewals of or substitutes therefor,
including all Indebtedness owed by the Borrower to Bank in connection with
the Loan.
It is the Borrower's express intention that the continuing security
interest granted hereby, shall extend to all present and future Obligations
of the Borrower to Bank, whether or not such Obligations are reduced or
extinguished and thereafter increased or reincurred, whether or not such
Obligations are related to the Indebtedness identified above by class, type
or kind and whether or not such Obligations are specifically contemplated
as of the date hereof. The absence of any reference to this Agreement in
any documents, instruments or agreements evidencing or relating to any
Obligation secured hereby shall not limit or be construed to limit the
scope or applicability of this Agreement.
Upon receipt of payment from the Borrower in the amount of the
original amount advanced on any Model Homes, said Model Home shall be
released from the Mortgage and the security interest provided herein to the
Bank.
5.2 REPRESENTATIONS AND COVENANTS REGARDING THE PROPERTY AND THE
COLLATERAL. The Borrower represents, warrants and covenants as follows: (a)
Except for the security interest granted hereby and any liens set forth in
EXHIBIT A, the Borrower is, or as to Property or Collateral arising or to
be acquired after the date hereof, shall be, the sole and exclusive owner
of the Property and the Collateral, and the Property and the Collateral is
and shall remain free from any and all liens, security interests,
encumbrances, claims and interests, and no security agreement, mortgage or
deed of trust or similar instrument, financing statement, equivalent
security or lien instrument or continuation statement covering any of the
Property or the Collateral is on file or of record in any public office;
(b) the Borrower shall not create, permit or suffer to exist, and shall
take such action as is necessary to remove, any claim to or interest in or
lien or encumbrance upon the Property or the Collateral except the security
interest granted hereby and any liens or encumbrances set forth in EXHIBIT
A, and shall defend the right, title and interest of Bank in and to the
Property and the Collateral against all claims and demands of all persons
and entities at any time claiming the same or any interest therein; (c) the
Borrower's principal place of business and chief executive office is
located at the address set forth in paragraph 10.1 of this Agreement; the
records concerning the Property and the Collateral shall be kept at that
address unless Bank shall give its prior written consent otherwise; and the
Borrower has no other place of business or place where Property or the
Collateral is located, except as shown in EXHIBIT B attached hereto; (d) at
least thirty (30) days prior to the occurrence of any of the following
events, the Borrower shall deliver to the loan officer who is handling the
Borrower's Obligations on behalf of Bank, written notice of such impending
events: (i) a change in the Borrower's principal place of business or chief
executive office; (ii) the opening or closing
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of any place of business; or (iii) a change in the Borrower's name,
identity or corporate structure; (e) each Model Home is based on an actual
bona fide, and genuine rendering or performance of services in the ordinary
course of the Borrower's business, documents to be given to Bank by the
Borrower with respect to the Property will be genuine and accurate; and (f)
any and all taxes and fees relating to the Borrower's business shall be the
Borrower's sole responsibility, and none of said taxes and fees represent a
lien on or claim against any of the Property except for the lien of real
estate taxes accrued but not yet due and payable.
5.3 APPLICATION OF PROCEEDS; SETOFF; GOVERNMENT ACCOUNTS; PERFECTION;
LIEN NOTATION. All amounts received by the Bank representing payment of
Accounts or proceeds from the sale of the Property, Inventory or of the
Collateral may be applied by the Bank to the payment of the Obligations in
such order of preference as the Bank may determine. The Borrower also
authorizes the Bank at any time, after default by Borrower or any of the
Guarantors, upon simultaneous notice to Borrower , to appropriate and apply
any balances, credits, deposits, accounts or money of the Borrower in the
Bank's possession, custody or control to the payment of any of the
Obligations whether or not the Obligations are due or matured. If any of
the Borrower's Accounts arise out of contracts with or orders from the
United States or any department, agency or instrumentality thereof, the
Borrower shall immediately (a) notify the Bank thereof in writing and (b)
execute any instrument and take any steps which the Bank deems necessary
pursuant to the Federal Assignment of Claims Act of 1940, as amended (41
USC Section 15) in order that all money due and to become due under such
contract or order shall be assigned to the Bank. The Borrower agrees to
execute, deliver, file and record all such notices, affidavits,
assignments, financing statements and other instruments as shall in the
judgment of the Bank be necessary or desirable to evidence, validate and
perfect the security interest of the Bank in the Accounts. If certificates
of title are issued or outstanding with respect to any Inventory or
Equipment, the Borrower will cause the interest of the Bank to be properly
noted thereon at the Borrower's expense.
5.4 COLLATERAL INSURANCE. The Borrower shall have and maintain
insurance at all times with respect to all Property, Inventory and
Equipment insuring against risks of fire (including so-called extended
coverage), explosion, theft, sprinkler leakage and such other casualties as
the Bank may designate, containing such terms, in such form, for such
amounts, for such periods and written by such companies as may be
satisfactory to the Bank, and each such policy shall contain a clause or
endorsement satisfactory to the Bank that names the Bank as additional
insured and loss payee, as its interests may appear, and that provides that
no act, default or breach of warranty or condition of the Borrower or any
other person shall affect the right of the Bank to recover under such
policy or policies of insurance or to pay any premium in whole or in part
relating thereto. All policies of insurance shall provide for thirty (30)
days prior written minimum notice of cancellation or alteration to the
Bank. The Borrower shall deliver to the Bank certified copies of all
policies of insurance and evidence of the payment of all premiums therefor.
The Borrower hereby irrevocably appoints the Bank (and any of the Bank's
officers, employees or agents designated by the Bank) as attorney for the
Borrower in obtaining and canceling such insurance and in making, settling
and adjusting all claims under such policies of insurance, endorsing the
name of the Borrower on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect to such policies of insurance;
provided however, the Borrower shall have the right to settle claims of
less than $5,000.00 in total. In the event of failure to provide insurance
as herein provided, the Bank may, at its option, provide such insurance,
and the Borrower shall pay to the Bank, upon demand, the cost thereof.
Should the Borrower fail to pay said sum to the Bank upon demand, interest
shall accrue thereon from the date of demand until paid in full at the
highest rate set forth in any document or instrument evidencing any of the
Obligations.
5.5 BOOKS AND RECORDS. The Borrower shall at all times keep accurate
and complete records of the Property and the Collateral, including without
limitation an inventory and complete and accurate records, and at all
reasonable times and from time to time, shall allow the Bank, by or through
any of its officers, agents, attorneys or accountants, to examine, inspect
and make extracts from the Borrower's books and records and to arrange for
verification of the Property and the Collateral and to examine and inspect
the Property and the Collateral wherever located. In addition, upon request
of the Bank, the Borrower shall provide the Bank with copies of agreements
with, from, and invoices to, the Borrower's customers, and supplier's and
copies of all documents, delivery receipts, and such other documentation
and information relating to the
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Property and the Collateral as the Bank may require. The Borrower shall
also place a notation on its books of account to disclose the Bank's lien
therein.
5.6 COLLATERAL ADMINISTRATION. (a) The Borrower shall promptly
perform, on request of the Bank, such acts as the Bank may determine to be
necessary or advisable to create, perfect, maintain, preserve, protect and
continue the perfection of any mortgage, lien and security interest
provided for in this Agreement or otherwise to carry out the intent of this
Agreement, including, without limitation, obtaining waivers or other
similar documents reasonably necessary to permit the enforcement of the
remedies of the Bank hereunder, (b) further, the Borrower shall not (i)
extend, amend or otherwise modify the terms of any Account, (ii) amend,
modify or waive any term or condition of any contractual obligation related
thereto or (iii) redate any invoice or sale or make sales on extended
dating beyond that customary in the Borrower's industry.
5.7 PRESERVATION AND DISPOSITION OF COLLATERAL. (a) Prior to the
placement of any Collateral in or upon any real property which the Borrower
has leased or mortgaged, the Borrower shall have obtained a waiver from the
lessee, with respect to the rights (whether present or future) of the
lessee or mortgagee with respect to that Collateral. The Borrower shall
advise the Bank promptly, in writing and in reasonable detail, (i) of any
material encumbrance or claim asserted against any of the Collateral; (ii)
of any material change in the composition of the Collateral; and (iii) of
the occurrence of any other event that would have a material adverse effect
upon the aggregate value of the Collateral or upon the security interest of
the Bank; (b) the Borrower shall not sell or otherwise dispose of the
Collateral, except that the Borrower may sell or otherwise dispose of the
Inventory in the ordinary course of its business; (c) the Borrower shall
keep the Collateral in good condition and shall not misuse, abuse, secrete,
waste or destroy any of the same; (d) the Borrower shall not use the
Collateral in violation of any statute, ordinance, regulation, rule, decree
or order; (e) the Borrower shall not permit to become liens or encumbrances
any taxes, assessments, charges or levies upon the Collateral or in respect
to the income or profits therefrom; and (f) at its option, the Bank may
discharge taxes, liens, security interests or other encumbrances at any
time levied or placed on the Collateral and may pay for the maintenance and
preservation of the Collateral. The Borrower agrees to reimburse the Bank
upon demand for any payment made or any expense incurred (including without
limitation, reasonable attorneys fees) by the Bank pursuant to the
foregoing authorization. Should the Borrower fail to pay said sum to the
Bank upon demand, interest shall accrue thereon, from the date of demand
until paid in full, at the highest rate set forth in any document or
instrument evidencing any of the Obligations.
5.8 EXTENSIONS AND COMPROMISES. With respect to any Property or
Collateral, the Borrower assents to all extensions or postponements of the
time of payment thereof or any other indulgence in connection therewith, to
each substitution, exchange or release of Property or Collateral, to the
addition or release of any party primarily or secondarily liable, to the
acceptance of partial payments thereon and to the settlement, compromise or
adjustment thereof, all in such manner and at such time or times as the
Bank may deem advisable. The Bank shall have no duty as to the collection
or protection of Property or Collateral or any income therefrom, nor as to
the preservation of rights against prior parties, nor as to the
preservation of any right pertaining thereto, beyond the safe custody of
Property or Collateral in the possession of the Bank.
5.9 FINANCING STATEMENTS. At the request of the Bank, the Borrower
shall join with the Bank in executing, delivering and filing one or more
financing statements in a form and content satisfactory to the Bank and
shall pay the cost of filing the same in all public offices wherever filing
is deemed by the Bank to be necessary or desirable. A carbon, photographic
or other reproduction of this Agreement or of a financing statement shall
be sufficient as a financing statement.
5.10 BANK'S APPOINTMENT AS ATTORNEY-IN-FACT. The Borrower hereby
irrevocably constitutes and appoints the Bank and any officer or agent
thereof, with full power of substitution, as the Borrower's true and lawful
attorney-in-fact with full irrevocable power and authority in its place and
stead and in its name or in the Bank's own name, from time to time in the
Bank's discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and
all documents and instruments that may be necessary or desirable to
accomplish the purposes of this Agreement and, without limiting the
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generality of the foregoing, hereby grants to the Bank the power and right,
on behalf of the Borrower, without notice to or assent: (a) to execute,
file and record all such financing statements, deeds, closing statements,
certifications, affidavits, certificates of title and other certificates of
registration and operation and similar documents and instruments as the
Bank may deem necessary or desirable to protect, perfect and validate the
Bank's security interest in the Property or the Collateral; (b) to receive,
collect, take, indorse, sign, compromise, assign and deliver in the
Borrower's or the Bank's name, any and all checks, notes, drafts, or other
documents or instruments relating to the Property or the Collateral; and
(c) upon the occurrence of an Event of Default, (i) to notify postal
authorities to change the address for delivery of the Borrower's mail to an
address designated by the Bank, (ii) to open such mail delivered to the
designated address, (iii) to sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in connection with
accounts and other documents relating to the Property or the Collateral;
(iv) to commence and prosecute any suits, actions or proceedings at law or
in equity in any court of competent jurisdiction to collect the Property
and the Collateral or any part thereof and to enforce any other right in
respect of any Property or the Collateral; (v) to defend any suit, action
or proceeding brought with respect to any Property or the Collateral; (vi)
to negotiate, settle, compromise or adjust any account, suit, action or
proceeding described above and, in connection therewith, to give such
discharges or releases as the Bank may deem appropriate; and (vii)
generally, to sell, transfer, convey, pledge, make any agreement with
respect to or otherwise deal with any of the Property or the Collateral as
fully and completely as though the Bank were the absolute owner thereof for
all purposes, and to do, at the Bank's option and the Borrower's expense,
at any time or from time to time, all acts and things which the Bank deems
necessary to protect, preserve or realize upon the Property or the
Collateral and the Bank's security interest therein, in order to effect the
intent of this Agreement.
The Borrower hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable. The powers conferred
upon the Bank hereunder are solely to protect its interests in the Property
and the Collateral and shall not impose any duty upon the Bank to exercise
any such powers. The Bank shall be accountable only for amounts that the
Bank actually receives as a result of the exercise of such powers and
neither the Bank nor any of its officers, directors, employees or agents
shall be responsible to the Borrower for any act or failure to act, except
for the Bank's own gross negligence or willful misconduct.
5.11 NO CONSEQUENTIAL DAMAGES. No claim may be made by the Borrower,
any of its officers, directors, or agents against the Bank or its
affiliates, directors, officers, employees, attorneys or agents for any
special, direct, indirect, or consequential damages in respect of any
breach or wrongful conduct (whether the claim therefor is based on
contract, tort or duty imposed by law) in connection with, arising out of
or in any way related to the transactions contemplated and relationship
established by this Agreement, or any act, omission or event occurring in
connection therewith, and the Borrower hereby waives, releases and agrees
not to sue upon any such claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
5.12 REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default
(as defined herein); (i) the Bank shall have the rights and remedies of a
secured party under this Agreement, under any other instrument or agreement
securing, evidencing or relating to the Obligations and under the law of
the State of Ohio or any other applicable state law; and (ii) the Bank
shall have the right to foreclose any or all Mortgage on the Property in
accordance with the terms of each Mortgage. Without limiting the generality
of the foregoing, the Bank shall have the right to take possession of the
Collateral and all books and records relating to the Collateral and for
that purpose the Bank may enter upon any premises on which the Collateral
or books and records relating to the Collateral or any part thereof may be
situated and remove the same therefrom. The Borrower expressly agrees that
the Bank, without demand of performance or other demand, advertisement or
notice of any kind (except the notices specified below of time and place of
public sale or disposition or time after which a private sale or
disposition is to occur) to or upon the Borrower or any other person or
entity (all and each of which demands, advertisements and/or notices are
hereby expressly waived), may forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, assign, give option or options to purchase or sell or
otherwise dispose of and deliver the Collateral (or contract to do so), or
any part thereof, in one or more parcels at public or private
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sale or sales, at any of the Bank's offices or elsewhere at such prices as
the Bank may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Bank shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption. The Borrower
further agrees, at the Bank's request, to assemble the Collateral and to
make it available to the Bank at such places as the Bank may reasonably
select. The Borrower further agrees to allow the Bank to use or occupy the
Borrower's premises, without charge, for the purpose of effecting the
Bank's remedies in respect of the Collateral. The Bank shall apply the net
proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred in connection therewith or incidental to the care or
safekeeping of any or all of the Collateral or in any way relating to the
rights of the Bank hereunder, including without limitation, reasonable
attorneys fees and legal expenses, to the payment in whole or in part of
the Obligations, in such order as the Bank may elect, and only after so
paying over such net proceeds and after the payment by the Bank of any
other amount required by any provision of law, need the Bank account for
the surplus, if any. To the extent permitted by applicable law, the
Borrower waives all claims, damages and demands against the Bank arising
out of the repossession, retention, sale or disposition of the Collateral.
The Borrower agrees that the Bank need not give more than seven days'
notice (which notification shall be deemed given when mailed, postage
prepaid, addressed to the Borrower at its address set forth in this
Agreement, or when telecopied or telegraphed to that address or when
telephoned or otherwise communicated orally to the Borrower or any of its
agents at that address) of the time and place of any public sale or of the
time after which a private sale may take place and that such notice is
reasonable notification of such matters. The Borrower shall remain liable
for any deficiency if the proceeds of any sale or disposition of the
Collateral are insufficient to pay all amounts to which the Bank is
entitled. The Borrower shall also be liable for the costs of collecting any
of the Obligations or otherwise enforcing the terms thereof or of this
Agreement, including without limitation, reasonable attorneys fees.
6. WARRANTIES AND REPRESENTATIONS. The Borrower warrants and represents to
the Bank:
6.1 ORGANIZATION AND AUTHORITY. The Borrower (a) is a limited
liability company duly organized, validly existing and in good standing
under the laws of the State of Ohio; (b) has all requisite power and
authority and all necessary licenses and permits to own and operate and to
carry on its business as now conducted and as presently proposed to be
conducted; and (c) is not doing business or conducting any activity in any
jurisdiction in which it has not duly qualified and become authorized to do
business.
6.2 BORROWING IS LEGAL AND AUTHORIZED. (a) The sole Member and the
sole Manager of the Borrower have duly authorized the execution and
delivery of this Agreement and of the Loan Documents and other related
documents contemplated herein; this Agreement, the Loan Documents and other
documents executed in connection with this Agreement will constitute valid
and binding obligations of the Borrower enforceable in accordance with
their respective terms; (b) the execution of this Agreement and Loan
Documents and documents and the compliance by the Borrower with all the
provisions of this Agreement (i) are within the powers of the Borrower; and
(ii) are legal and will not conflict with, result in any breach in any of
the provisions of, constitute a default under, or result in the creation of
any lien or encumbrance upon any property of the Borrower under the
provisions of any agreement, charter instrument, article of organization,
operating agreement, bylaw, or other instrument to which the Borrower is a
party or by which it may be bound; (c) there are no limitations in any
indenture, contract, agreement, mortgage, deed of trust or other agreement
or instrument to which the Borrower is now a party or by which the Borrower
may be bound with respect to the payment of principal or interest on any
indebtedness, or the Borrower's ability to incur indebtedness including the
Loan Documents and other documents to be executed in connection with this
Agreement.
6.3 TAXES. All tax returns required to be filed by the Borrower in any
jurisdiction have in fact been filed, and all taxes, assessments, fees and
other governmental charges upon the Borrower, or upon any of its
properties, which are due and payable have been paid. The Borrower does not
know of any proposed additional tax assessment against it. The accruals for
taxes on the books of the Borrower for its current fiscal period are
adequate.
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6.4 COMPLIANCE WITH LAW. The Borrower (a) is not in violation of any
laws, ordinances, governmental rules or regulations to which it is subject,
including without limitation any laws, rulings or regulations relating to
the Employee Retirement Income Security Act of 1974 or Section 4975 of the
Internal Revenue Code and (b) has not failed to obtain any licenses,
permits, franchises or other governmental or environmental authorizations
necessary to the ownership of its properties or to the conduct of its
business, which violation or failure might adversely affect the business,
prospects, profits, properties or condition (financial or otherwise) of the
Borrower.
6.5 FULL DISCLOSURE. The Borrower has disclosed to the Bank in writing
all facts, including, without limitation, all threatened or pending
litigation, administrative proceedings, and arbitration proceedings which
materially affect the properties, business, prospects, profits or condition
(financial or otherwise) of the Borrower or the ability of the Borrower to
perform this Agreement.
6.6 NO INSOLVENCY. On the date of the Borrower's entering into the
Loan and after giving effect to all indebtedness of the Borrower (including
the Loan), (a) the Borrower will be able to pay its obligations as they
become due and payable; (b) the present fair saleable value of the
Borrower's assets exceeds the amount that will be required to pay its
probable liability on its obligations as the same become absolute and
matured; (c) the sum of the Borrower's property at a fair valuation exceeds
the Borrower's indebtedness; and (d) the Borrower will have sufficient
capital to engage in the Borrower's business. The Borrower's grant of
collateral for the Loan constitutes fair consideration and reasonably
equivalent value because of the receipt of the proceeds of the Loan.
6.7 GOVERNMENT CONSENT. Neither the nature of the Borrower or of its
business or properties, nor any relationship between the Borrower and any
other entity or person, nor any circumstance in connection with the
execution of this Agreement, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
governmental or other authority on the part of the Borrower as a condition
to the execution and delivery of this Agreement and the Loan Documents and
the other documents contemplated herein.
6.8 TITLE TO PROPERTIES. The Borrower has good and marketable title to
all the Property and other assets in which it has a property interest, free
from any liens and encumbrances, except as set forth on Exhibit A attached
to this Agreement and incorporated by reference herein. The Borrower has
not agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of the Property or its other
assets whether now owned or hereafter acquired to be subject to a lien or
encumbrance.
6.9 NO DEFAULTS. No event has occurred and no condition exists which
would constitute an Event of Default pursuant to this Agreement. The
Borrower is not in violation in any material respect of any term of any
agreement, articles of organization, operating agreement, charter
instrument, bylaw or other instrument to which it is a party or by which it
may be bound.
6.10 ENVIRONMENTAL PROTECTION. The Borrower (a) has no actual
knowledge of the permanent placement, burial or disposal of any Hazardous
Substances (as hereinafter defined) on any real property owned, leased, or
used by the Borrower, of any spills, releases, discharges, leaks, or
disposal of Hazardous Substances that have occurred or are presently
occurring on, under, or onto any Model Home, or of any spills, releases,
discharges, leaks or disposal of Hazardous Substances that have occurred or
are occurring off the location of any Model Home as a result of the
Borrower's improvement, operation, or use of the Property which would
result in non-compliance with any of the Environmental Laws (as hereinafter
defined); (b) is and has been in compliance with all applicable
Environmental Laws; (c) knows of no pending or threatened environmental
civil, criminal or administrative proceedings against the Borrower relating
to Hazardous Substances; (d) knows of no facts or circumstances that would
give rise to any future civil, criminal or administrative proceeding
against the Borrower relating to Hazardous Substances; and (e) will not
permit any of its employees, agents, contractors, subcontractors, or any
other person occupying or present on the Property to generate, manufacture,
store, dispose or release on, about or under the Property any Hazardous
Substances
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which would result in the Property or any other of its assets not complying
with the Environmental Laws.
As used herein, "Hazardous Substances" shall mean and include all
hazardous and toxic substances, wastes, materials, compounds, pollutants
and contaminants (including, without limitation, asbestos, polychlorinated
biphenyls, and petroleum products) which are included under or regulated by
the Comprehensive Environmental Response, Compensation and Liability Act,
as amended, 42 U.S.C. ss.9601, ET SEQ., the Toxic Substances Control Act,
15 U.S.C. ss.2601, ET SEQ., the Resource Conservation and Recovery Act, 42
U.S.C. ss.6901, ET SEQ., the Water Quality Act of 1987, 33 U.S.C. ss.1251,
ET SEQ., and the Clean Air Act, 42 U.S.C. ss.7401, ET SEQ., and any state
or local statute ordinance, law, code, rule, regulation or order regulating
or imposing liability (including strict liability) or standards of conduct
regarding Hazardous Substances (hereinafter the "Environmental Laws"), but
does not include such substances as are permanently incorporated into a
structure or any part thereof in such a way as to preclude their subsequent
release into the environment, or the permanent or temporary storage or
disposal of household hazardous substances by tenants, and which are
thereby exempt from or do not give rise to any violation of the
forementioned Environmental Laws.
6.11 CAPITAL STRUCTURE. The certified member list of the Borrower set
forth in EXHIBIT C attached hereto and incorporated by reference herein
accurately represents to the Bank the following: (a) the classes of
membership of the Borrower and value of each such class, all as authorized
by the Borrower's Articles of Organization and the number of units of each
such class of membership issued and outstanding, the registered owner or
holder (legally or beneficially) thereof, and the certificate numbers, if
any, evidencing the foregoing. The Borrower does not have outstanding any
other member, debt or other equity security, or any other instrument
convertible to an equity security of the Borrower, or any commitment,
understanding, agreement or arrangement to issue, sell or have outstanding
any of the foregoing.
6.12 WARRANTIES AND REPRESENTATIONS. On the date hereof, the
warranties and representations set forth in Section 6 hereof shall be true
and correct on and as of such date with the same effect as though such
warranties and representations had been made on and as of such date, except
to the extent that such warranties and representations expressly relate to
an earlier date.
7. BORROWER BUSINESS COVENANTS. The Borrower covenants that on and after
the date of this Agreement until terminated pursuant to the terms of this
Agreement, or so long as any of the Indebtedness provided for herein remains
unpaid:
7.1 PAYMENT OF TAXES AND CLAIMS. The Borrower will pay before they
become delinquent (a) all taxes, assessments and governmental charges or
levies imposed upon it, the Property or any other of its property; and (b)
all claims or demands of materialmen, laborers, supplies, mechanics,
carriers, warehousemen, landlords, bailees and other like persons, any of
the foregoing which, if unpaid, might result in the creation of a lien or
encumbrance upon its property.
7.2 MAINTENANCE OF PROPERTIES AND EXISTENCE. The Borrower shall (a)
maintain its Property and all other assets in good condition and make all
renewals, replacements, additions, betterments and improvements thereto
which are deemed necessary by the Borrower; (b) maintain, with financially
sound and reputable insurers, insurance with respect to the Property and
all other assets and business against such casualties and contingencies, of
such types (including but not limited to fire and casualty, public
liability, products liability, larceny, embezzlement or other criminal
misappropriation insurance) and in such amounts as is customary in the case
of entities of established reputations engaged in the same or a similar
business and similarly situated, with each such policy of insurance
containing a clause or endorsement satisfactory to the Bank that names the
Bank as additional insured and loss payee, as its interests may appear, and
that provides that no act, default or breach of warranty or condition of
the Borrower or any other person shall affect the right of the Bank to
recover under such policy or policies of insurance or to pay any premium in
whole or in part relating thereto, (c) keep true books of records and
accounts in which full and correct entries will be made of all its business
transactions, and reflect in its financial statements adequate accruals and
appropriations to reserves; (d) do or cause to be done all things necessary
(i) to preserve and keep in full force and effect its existence, rights and
franchises, and (ii) to maintain its status as a
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limited liability company duly organized and existing and in good standing
under the laws of the State of Ohio; and (e) not be in violation of any
laws, ordinances, or governmental rules and regulations or fail to obtain
any licenses, permits, franchises or other governmental authorizations
necessary to the ownership of the Property, its other assets or to the
conduct of its business, which violation or failure to obtain might
materially and adversely affect the business, prospects, profits,
properties or condition (financial or otherwise) of the Borrower.
7.3 SALE OF ASSETS; MERGER; SUBSIDIARIES; TRADENAMES. The Borrower
will not, except in the ordinary course of business, sell, lease, transfer
or otherwise dispose of, any of its assets. The Borrower will not without
the prior written consent of the Bank, consolidate with, merge into, or
make investments in any other entity, or permit any other entity to
consolidate with or merge into it. The Borrower shall not acquire all or
substantially all of the assets or business of any other Borrower, person
or entity. The Borrower has no subsidiaries and conducts business only in
the name of the Borrower. The Borrower will not create or acquire any
subsidiaries or conduct business under any other tradenames without the
prior written consent of the Bank.
7.4 NEGATIVE PLEDGE. The Borrower will not cause or permit or agree or
consent to cause or permit in the future (upon the happening of a
contingency or otherwise), any of the Property or any of its real or
personal property, whether now owned or hereafter acquired, to become
subject to a mortgage, deed of trust, lien or encumbrance, of any type
except: liens for real estate taxes accrued but not yet due and payable.
Zaring will not cause or permit or agree or consent to cause or permit in
the future upon the happening of any contingency or otherwise, any of his
personal assets, except for mortgages on his personal residence, whether
now owned or hereafter acquired, to become subject to a mortgage, deed of
trust, lien, encumbrance or negative pledge of any type.
7.5 OTHER BORROWINGS AND CONTINGENT LIABILITIES. Except for the Loan,
the Borrower will not, without the prior written consent of the Bank in its
absolute discretion (a) create or incur any indebtedness for borrowed money
or advances, including through the execution of capitalized lease
agreements, or (b) guarantee, indorse or otherwise become surety for or
upon the obligations of others, except by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
Zaring, except for his personal guarantee to the Provident Bank, shall
limit his additional personal financial obligations, direct or indirect, as
maker, co-maker, guarantor or co-guarantor, or in any other capacity , at
all times prior to the Indebtedness being paid in full and all Obligations
having been performed in full so that it does not exceed a Debt to Net
Worth ratio of 1.0 to 1.0. "Debt" and "Net Worth" shall, for purposes of
this Agreement, have the same meanings as in the Guaranty of even date
herewith.
7.6 SALE OF ACCOUNTS; NO CONSIGNMENT. The Borrower shall not sell,
assign, or encumber, except to the Bank, any of its Accounts or notes
receivable. The Borrower shall not acquire or possess any of its Property
or Inventory on consignment.
7.7 OWNERSHIP AND MANAGEMENT. The Borrower shall not permit any change
in its ownership or management.
7.8 TANGIBLE NET WORTH. The Borrower shall maintain at all times a
tangible net worth, as determined on the date hereof and quarterly
thereafter of not less than Five Hundred Forty Three Thousand Dollars
($543,000.00).
7.9 TRANSACTIONS WITH AFFILIATES. The Borrower shall not directly or
indirectly enter into or permit to exist any transactions (including,
without limitation, the purchase, sale, lease or exchange of any property
or the rendering of any service) with any of its affiliates, relatives of
members, members, or any affiliates of either of the foregoing, on terms
that are less favorable to the Borrower than those which might be obtained
at the time from persons or entities who are not affiliated with the
Borrower or its shareholders, except for the transactions outlined in the
lease documents and purchase agreement between the Borrower and Zaring
Homes, Inc., Zaring Homes Kentucky LLC or Zaring Homes of Indiana L.L.C.
"Affiliate" shall mean any individual, partnership, corporation, or other
entity which, directly or indirectly, is in control of, is controlled by,
or is under common control with Borrower. For the purposes of this
definition, control of such entity shall mean the power, direct or
indirect, to vote
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five percent or more of the securities, units or other measures having
ordinary voting power for the election of directors, management committees,
or similar committees of such entity, or the power to direct or cause the
direction of the management and policies of such entity, whether by
contract or otherwise.
7.10 INTEREST COVERAGE RATIO. The Borrower shall maintain an Interest
Coverage Ratio of not less than 1.1 to 1.0. "Interest Coverage Ratio" shall
mean for any quarter, determined on a year to date basis, a ratio of EBIT
for that period to "Cash Interest Expense". "EBIT" of the Borrower shall
mean (i) the net income (or deficit) of the Borrower for such period,
which, in accordance with GAAP (as defined in Section 10.6) would be
included as net income on the statements of income of the Borrower plus
(ii) the aggregate amounts deducted in determining such net income in
respect of (a) all amounts paid (without duplication) as interest on all
indebtedness and obligations of the Borrower for such period, all as
determined in conformity with GAAP and (b) income taxes for such period,
each determined in accordance with GAAP. "Cash Interest Expense" shall mean
all amounts paid (without duplication) as interest on all obligations and
indebtedness of the Borrower for the preceding, quarter, determined on a
year to date basis, less (i) interest paid other than in cash and (ii)
amortization of financing fees and debt discount directly related to this
Agreement.
7.11 COMPLIANCE CERTIFICATE. Borrower shall deliver to the Bank within
15 days after the end of each quarter a Compliance Certificate (as
hereinafter defined) stating that Zaring National Corp. and affiliates is
in full compliance with the terms, covenants, and conditions of its Third
Amended and Restated Credit Agreement dated as of April 13, 2000. For
purposes of this Agreement "Compliance Certificate" shall mean an agreement
in the form and content satisfactory to the Bank.
7.12 LOANS AND ADVANCES. The Borrower will not make any loans or
advances to any person, corporation or entity.
7.13 ENVIRONMENTAL COMPLIANCE AND INDEMNIFICATION. The Borrower hereby
agrees to indemnify the Bank and hold the Bank harmless from and against
any and all loss, damage, cost, expense or liability (including strict
liability) directly or indirectly arising from or attributable to the
generation, storage, release, threatened release, discharge, disposal or
presence (whether prior to or during the term of the Loans) of Hazardous
Substances on, under or about the Property or any other asset of the
Borrower (whether by the Borrower or any employees, agents, contractor or
subcontractors of the Borrower or any predecessor in title or any third
persons occupying or present on the Property or any other asset of the
Borrower), or the breach of any of the representations and warranties
regarding the Property or any other asset of the Borrower, including,
without limitation: (a) those damages or expenses arising under the
Environmental Laws; (b) the costs of any repair, cleanup or detoxification
of the Property or any other asset of the Borrower, including the soil and
ground water thereof, and the preparation and implementation of any
closure, remedial or other required plans; (c) damage to any natural
resources; and (d) all reasonable costs and expenses incurred by the Bank
in connection with clauses (a), (b) and (c) including, but not limited to
reasonable attorneys', experts and consultant's fees.
7.14 MAINTENANCE OF ACCOUNTS. The Borrower shall maintain its sole and
exclusive banking relationship with the Bank, including, without
limitation, all of its operating, daily deposit and cash management
accounts at the Bank. All profits and excess cash shall be invested with
the Bank.
7.15 NO DEBT. Borrower shall not, at any time during the term of this
Loan Agreement without the prior written consent of the Bank in its
absolute discretion, create or incur any indebtedness for borrowed money,
lease obligations or advances.
7.16 OTHER COVENANTS. The Borrower will perform, observe and comply
with such other covenants as the Bank may from time to time reasonably
require of the Borrower to assure the repayment in full of all of the
Obligations and the complete and timely performance by the Borrower of all
the covenants of the Borrower hereunder.
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8. FINANCIAL INFORMATION AND REPORTING FOR BORROWER.
8.1 BORROWER. The Borrower shall deliver the following to the Bank:
(a) monthly reports as to model inventory covered under this Agreement; (b)
within 30 days after the end of each fiscal quarter, financial statements
in form and content satisfactory to Bank, including a balance sheet and
statements of income and expenses comparing the information for the current
period with the information for the same period of the preceding year,
certified by the sole member or sole manager of the Borrower as fairly
representing the Borrower's financial condition as of the end of such
period; (c) within 90 days of the end of each fiscal year, reviewed
financial statements in form and content satisfactory to Bank prepared in
accordance with GAAP (as defined in Section 10.6) consistently applied and
certified by independent public accountants satisfactory to the Bank,
containing a balance sheet, statements of income and surplus, statements of
cash flows and reconciliation of capital accounts, along with any
management letters written by such accountants; (d) immediately upon
becoming aware of the existence of any set of facts or circumstances which,
by themselves, upon the giving of notice, the lapse of time, or any one or
more of the foregoing, would constitute a breach of any of the terms or
conditions of this Agreement or an Event of Default under this Agreement, a
written notice specifying the nature and period of existence thereof and
what action the Borrower is taking or proposes to take with respect
thereto; and (e) at the request of the Bank, such other information as the
Bank may from time to time reasonably require.
8.2 ZARING NATIONAL CORPORATION. Zaring National Corporation, an Ohio
corporation, shall deliver to the Bank within forty-five (45) days after
the end of each fiscal quarter, financial statements in form and content
satisfactory to Bank, including a balance sheet and statements of income
and expenses comparing the information for the current period with the
information for the same period of the preceding year or a form 10Q
quarterly report, except for the fiscal year end in which case Zaring
National Corporation shall provide annual audited financial statements. All
financial statements shall be certified by the President of Zaring National
Corporation as fairly representing Zaring National Corporation's financial
condition as of the end of such period, and prepared in accordance with
generally accepted accounting principles or otherwise in form acceptable to
Bank.
8.3 ZARING. Zaring shall deliver to the Bank within ninety (90) days
of the end of each fiscal year, his current personal financial statement in
form and content satisfactory to Bank, includng a balance sheet and
statements of income and expenses and such other financial information as
Bank may require, within ninety (90) days after the end of each calendar
year of Zaring and annual tax returns, within thirty (30) days after the
last date that the same can be filed without imposition of a penalty for
late filing. All financial statements shall be prepared in accordance with
generally accepted accounting principles or otherwise in form acceptable to
Hungington.
9. DEFAULT.
9.1 EVENTS OF DEFAULT. An "Event of Default" shall exist if any of the
following occurs and is continuing: (a) the Borrower fails to make any
payment of principal or interest on the Note executed in connection with
this Agreement on or before the date such payment is due or within ten (10)
days of when it is due; (b) the Borrower fails to perform or observe any
covenant contained in Sections 3, 4, 5, 6, 7 or 8 of this Agreement and
such failure remains uncured for a period of thirty (30) days from the date
of such failure to perform; (c) the Borrower fails to comply with any other
provision of this Agreement, and such failure continues for more than ten
(10) days after such failure shall first become known to the sole Manager
or the sole Member of the Borrower; (d) any warranty, representation or
other statement by or on behalf of the Borrower contained in this Agreement
or in any instrument furnished in compliance with or in reference to this
Agreement is false or misleading in any material respect, or the Borrower
or any of the Guarantors fails to perform or observe any covenant contained
in the Note, Loan Documents or other agreement in favor of the Bank; (e)
the Borrower becomes insolvent or makes an assignment for the benefit of
creditors, or consents to the appointment of a trustee, receiver or
liquidator; (f) bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings are instituted by or against the Borrower; (g) a
final judgment or judgments for the payment of money aggregating in excess
of $100,000.00 is or are outstanding against the Borrower and any such
judgment or judgments have not been discharged in full or
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stayed; (h) the occurrence of any event which allows the acceleration of
the maturity of any indebtedness of the Borrower to the Bank, any of the
Bank's affiliates, or any other person, corporation or entity under any
indenture, agreement or undertaking; (i) the default by, dissolution of, or
death of any of the Guarantors, any insurer or other surety for the
Borrower with respect to any obligation or liability to the Bank; (j) the
occurrence of any event which allows the acceleration of the maturity of
any personal indebtedness of Zaring in excess of $50,000.00; (k) the
aggregate value of the Property furnished as security declines in value,
and the Borrower does not immediately, upon demand, furnish additional
security satisfactory to the Bank.
9.2 ADDITIONAL EVENT OF DEFAULT. In the event the Borrower fails to
provide the Bank with evidence satisfactory to the Bank in its sole and
absolute discretion that a mortgage or deed of trust on any particular
Model Home(s) is not a first and best lien, subject only to (i) covenants,
conditions and restrictions and easements that do not impair the intended
use of the Model Home(s) in question, and (ii) real estate taxes and
assessments, if any, that are accrued, but not yet due and payable, then
the Borrower may (a) repay the principal of the Note lent against the Model
Home(s) in question, with accrued interest, or (b) propose to substitute
other property in lieu of the Model Home(s) in question, said other
property being property that is acceptable to the Bank in its sole and
absolute discretion, or (c) have the existence of said defect(s) constitute
an Event of Default if not cured to the sole and absolute discretion of the
Bank within thirty (30) days of the sending of notice of the defect.
9.3 DEFAULT REMEDIES. If an Event of Default exists, the Bank may
immediately exercise any right, power or remedy permitted to the Bank by
law, equity or any provision of this Agreement, and shall have, in
particular, without limiting the generality of the foregoing, the right to
declare the entire principal and all interest accrued on the Note then
outstanding pursuant to this Agreement to be forthwith due and payable,
without any presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Borrower.
10. MISCELLANEOUS.
10.1 NOTICES. (a) All communications under this Agreement, the Note,
the Loan Documents or any other document executed in conjunction herewith
shall be in writing and shall be mailed by certified, return receipt
requested mail, postage prepaid, (1) if to the Bank, at the following
address, or at such other address as may have been furnished in writing to
the Borrower by the Bank:
The Huntington National Bank
105 E. Fourth Street, Suite 200A
Cincinnati, Ohio 45202-5800
Attn: Martha Riedmatter
(2) if to the Borrower, at the following address, or at such other address
as may have been furnished in writing to the Bank by the Borrower:
First Cincinnati Leasing 2000 LLC
C/O 11300 Cornell Park Drive
Cincinnati, Ohio 45242
Attn: Allen G. Zaring, III
(b) any notice so addressed and mailed by certified mail shall be deemed to
be given when so mailed.
10.2 ACCESS TO ACCOUNTANTS. The Borrower hereby irrevocably authorizes
its certified public accountants to provide to the Bank any and all
information that the Bank requests from time to time with regard to the
Borrower, and to discuss with the Bank from time to time any and all
matters relating to the Borrower. In furtherance of the foregoing, the
Borrower hereby waives any privilege or claim of confidentiality to the
extent such might otherwise prevent the Borrower's accountants from
providing such information to the Bank or discussing such matters with the
Bank.
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10.3 REPRODUCTION OF DOCUMENTS. This Agreement, the Loan Documents and
all documents relating hereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by the Bank at the closing or otherwise, and (c) financial
statements, certificates and other information previously or hereafter
furnished to the Bank, may be reproduced by the Bank by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process and the Bank may destroy any original document so reproduced. The
Borrower agrees and stipulates that any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Bank in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
10.4 SURVIVAL, SUCCESSORS AND ASSIGNS. All warranties,
representations, and covenants made by the Borrower herein or on any
certificate or other instrument delivered by it or on its behalf under this
Agreement shall be considered to have been relied upon by the Bank and
shall survive the closing of the Loan and disbursement of funds regardless
of any investigation made by the Bank on its behalf. All statements in any
such certificate or other instrument shall constitute warranties and
representations by the Borrower. This Agreement shall inure to the benefit
of and be binding upon the heirs, successors and assigns of each of the
parties.
10.5 AMENDMENT AND WAIVER, DUPLICATE ORIGINALS. This Agreement may be
amended, and the observance of any term of this Agreement may be waived,
with (and only with) the written consent of the Borrower and the Bank;
PROVIDED HOWEVER THAT nothing herein shall change the Bank's sole
discretion (as set forth elsewhere in this Agreement) to make draws,
advances, determinations, decisions or to take or refrain from taking other
actions. No delay or failure or other course of conduct by the Bank in the
exercise of any power or right shall operate as a waiver thereof; nor shall
any single or partial exercise of the same preclude any other or further
exercise thereof, or the exercise of any other power or right. Two or more
duplicate originals of this Agreement may be signed by the parties, each of
which shall be an original but all of which together shall constitute one
and the same instrument.
10.6 UNIFORM COMMERCIAL CODE AND GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES. Unless the context otherwise requires, all terms used herein
which are defined in the Uniform Commercial Code as enacted in the State of
Ohio shall have the meaning stated therein. All accounting terms not
defined herein shall be determined in accordance with generally accepted
accounting principles, consistently applied, as set forth in the opinions
and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and in statements and
pronouncements of the Financial Accounting Standards Board ("GAAP"). The
Borrower's fiscal year begins on January 1, and ends on December 31, and
the Borrower will not change its fiscal year without the prior written
consent of the Bank.
10.7 ENFORCEABILITY AND GOVERNING LAW. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction, as to such
jurisdiction, shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. No delay or omission on the part of the Bank in exercising
any right shall operate as a waiver of such right or any other right. All
of the Bank's rights and remedies, whether evidenced hereby or by any other
agreement or instrument, shall be cumulative and may be exercised
singularly or concurrently. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio. The Borrower
agrees that any legal suit, action or proceeding arising out of or relating
to this Agreement may be instituted in a state or federal court of
appropriate subject matter jurisdiction in the State of Ohio; waives any
objection which it may have now or hereafter to the venue of any suit,
action or proceeding; and irrevocably submits to the jurisdiction of any
such court in any such suit, action or proceeding.
14
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly
executed by their respective duly authorized officers as of the day and year
first above written.
Signed and acknowledged FIRST CINCINNATI LEASING 2000 LLC,
in the presence of: an Ohio limited liability company
/s/ Darlene M. Hartmann By: /s/ Allen G. Zaring, III
--------------------------------- -----------------------------
Printed Name: DARLENE M. HARTMANN Allen G. Zaring, III
/s/ Terri L. Bowman Its: Sole Member and Manager
---------------------------------
Printed Name: TERRI L. BOWMAN
THE HUNTINGTON NATIONAL BANK
/s/ Darlene M. Hartmann By: /s/ Marth Riedmatter
--------------------------------- -----------------------------
Printed Name: DARLENE M. HARTMANN Martha Riedmatter
/s/ Terri L. Bowman Its: Vice President
---------------------------------
Printed Name: TERRI L. BOWMAN
STATE OF OHIO
HAMILTON COUNTY SS:
On this 1st day of September, 2000, before me, a Notary Public in and for
said County and State, personally appeared Allen G. Zaring, III, sole Member and
sole Manager of First Cincinnati Leasing 2000 LLC, a limited liability company,
in his capacity as the duly authorized Member and Manager of First Cincinnati
Leasing 2000 LLC, the company which executed the foregoing instrument, and
acknowledged that he did so sign the foregoing instrument as such Member and
Manager and that such signing is his free act and deed as such Member and
Manager, and the free act and deed of said company for the uses and purposes
therein mentioned.
In Witness Whereof, I have hereunto set my hand and official seal.
{Seal} /s/ Darlene M. Hartmann
------------------------------
Notary Public
My Commission Expires:
DARLENE M. HARTMANN
NOTARY PUBLIC, STATE OF OHIO
MY COMMISSION EXPIRES JAN. 19 2003
15
<PAGE> 16
STATE OF OHIO
HAMILTON COUNTY SS:
On this day 1 day September, 2000, before me, a Notary Public in and for
said County and State, personally appeared Martha Riedmatter, Vice President of
The Huntington National Bank, a national banking association which executed the
foregoing instrument, signed the same, and acknowledged to me that she did so
sign said instrument in the name and upon behalf of said association as such
officer, and by authority of a resolution of its Board of Directors; and that
such signing is her free act and deed as such officer, and the free act and deed
of said association.
IN WITNESS WHEREOF, I have hereunto set my name and official seal.
/s/ Glenda R. Parrott
GLENDA R. PARROTT ----------------------------
{Seal} NOTARY PUBLIC, STATE OF OHIO Notary Public
MY COMMISSION EXPIRES 08-01-05 My Commission Expires:
This Instrument Prepared By:
Michael G. Reed, Esq.
PORTER, WRIGHT, MORRIS & ARTHUR
250 East Fifth Street, Suite 2200
Cincinnati, OH 45202
(513) 381-4700
16
<PAGE> 17
EXHIBIT A
PERMITTED LIENS
NONE
17
<PAGE> 18
EXHIBIT B
PLACE OF BUSINESS AND LOCATION OF COLLATERAL
NONE
18
<PAGE> 19
EXHIBIT C
CERTIFIED MEMBER LIST
Sole Member - Allen G. Zaring, III
19
