<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ____________________
Commission file number 0-12808
Cade Industries, Inc.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1371038
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5640 Enterprise Drive, Lansing, Michigan 48911
(Address of principal executive offices)
(Zip Code)
(517) 394-1333
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common stock, $0.001 Par Value -- 21,710,291 shares as of
August 12, 1996
<PAGE> 2
INDEX
CADE INDUSTRIES, INC.
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of
Operations for the three months ended
June 30, 1996 and 1995 3
Condensed Consolidated Statements of
Operations for the six months ended
June 30, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1996
and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote
of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE> 3
PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
CADE INDUSTRIES, INC.
<TABLE>
<CAPTION>
June 30,
1996 December 31,
(Unaudited) 1995*
----------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 71,003 $ 187,485
Trade accounts receivable 5,213,194 4,670,698
Inventories:
Finished goods and work in progress 6,399,189 5,176,320
Materials and supplies 3,597,050 2,741,815
----------- -----------
9,996,239 7,918,135
Refundable federal income taxes 294,500 362,000
Deferred income taxes 379,000 379,000
Prepaid expenses and other current assets 269,272 136,105
----------- -----------
TOTAL CURRENT ASSETS 16,223,208 13,653,423
PROPERTY, PLANT AND EQUIPMENT
Land and improvements 500,864 500,864
Buildings 4,351,696 4,330,657
Machinery and equipment 9,462,360 9,116,644
Tooling 11,020,741 10,512,553
----------- -----------
25,335,661 24,460,718
Less accumulated depreciation 9,755,994 8,701,719
----------- -----------
15,579,667 15,758,999
INTANGIBLE AND OTHER ASSETS
Goodwill 3,068,336 3,123,220
Other assets 136,898 148,863
----------- -----------
3,205,234 3,272,083
----------- -----------
$35,008,109 $32,684,505
=========== ===========
</TABLE>
1
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
CADE INDUSTRIES, INC.
<TABLE>
<CAPTION>
June 30,
1996 December 31,
(Unaudited) 1995*
----------- ------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable to bank $ 2,825,000 $ 1,300,000
Trade accounts payable 2,937,813 1,685,313
Employee compensation and amounts withheld 645,694 614,739
Accrued expenses 608,501 963,747
Accrued income taxes 218,164 262,800
Current portion of long-term debt 1,561,545 1,765,171
----------- -----------
TOTAL CURRENT LIABILITIES 8,796,717 6,591,770
LONG-TERM DEBT 5,690,045 5,955,935
DEFERRED INCOME TAXES 477,000 477,000
SHAREHOLDERS' EQUITY
Preferred Stock, 10% cumulative, non-voting,
stated value $300 per share; authorized 500
shares, none issued
Common Stock, par value $.001 per share;
authorized 100,000,000 shares, issued
21,936,409 shares; outstanding 21,697,841
shares 21,936 21,886
Additional paid-in capital 8,862,877 8,828,552
Retained earnings 11,453,612 11,063,804
----------- -----------
20,338,425 19,914,242
Less cost of Common Stock in treasury 294,078 254,442
----------- -----------
20,044,347 19,659,800
----------- -----------
$35,008,109 $32,684,505
=========== ===========
</TABLE>
* The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date.
See notes to condensed consolidated financial statements.
2
<PAGE> 5
PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
CADE INDUSTRIES, INC.
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
Sales $ 7,618,176 $ 8,638,869
Operating expenses:
Cost of sales 5,672,530 7,888,244
Selling, general and administrative expenses 1,503,155 1,441,773
------------ ------------
7,175,685 9,330,017
------------ ------------
INCOME (LOSS) FROM OPERATIONS 442,491 (691,148)
Interest expense - net 185,594 185,814
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES 256,897 (876,962)
Income taxes (credit) 53,000 (335,761)
------------ ------------
NET INCOME (LOSS) $ 203,897 $ (541,201)
============ ============
NET INCOME (LOSS) PER SHARE $ 0.01 $ (0.02)
============ ============
Weighted average number of shares of
common stock outstanding 21,689,094 21,681,593
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
CADE INDUSTRIES, INC.
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1996 1995
------------ ------------
<S> <C> <C>
Sales $ 14,782,454 $ 15,988,730
Operating expenses:
Cost of sales 10,935,773 13,663,884
Selling, general and administrative expenses 3,006,709 2,678,069
------------ ------------
13,942,482 16,341,953
------------ ------------
INCOME (LOSS) FROM OPERATIONS 839,972 (353,223)
Interest expense - net 350,645 355,732
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES 489,327 (708,955)
Income taxes (credit) 99,000 (293,000)
------------ ------------
NET INCOME (LOSS) $ 390,327 $ (415,955)
============ ============
NET INCOME (LOSS) PER SHARE $ 0.02 $ (0.02)
============ ============
Weighted average number of shares of
common stock outstanding 21,687,717 21,681,512
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
PART I, ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
CADE INDUSTRIES, INC.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------
1996 1995
------------ ------------
<S> <C> <C>
NET CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES $ (287,825) $ 700,175
INVESTING ACTIVITIES
Additions to property, plant and equipment (878,880) (837,230)
Increase in other assets (89,683)
----------- -----------
(878,880) (926,913)
FINANCING ACTIVITIES
Increase in note payable to bank 1,525,000 600,000
Payments of long-term debt (469,516) (396,110)
Exercise of stock options 34,375
Purchase of common stock for treasury (39,636)
Other 3,683
----------- -----------
1,050,223 207,573
----------- -----------
DECREASE IN CASH AND CASH
EQUIVALENTS (116,482) (19,165)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 187,485 71,537
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 71,003 $ 52,372
=========== ===========
</TABLE>
See notes to condensed financial statements.
5
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CADE INDUSTRIES, INC.
JUNE 30, 1996
NOTE A - BASIS OF PRESENTATION
The condensed consolidated financial statements as of and for the three and six
month periods ended June 30, 1996 and 1995, have been prepared by the Company
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, such condensed consolidated
financial statements reflect all adjustments necessary (consisting only of
normal recurring accruals) for a fair presentation. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's annual report on Form 10-K for the year ended December 31, 1995.
NOTE B - DEBT AGREEMENT
During June 1996 the Company amended its line of credit arrangement with a bank
increasing the amount of credit available under the line to $5,000,000 from
$4,000,000. The terms and conditions of the amended credit arrangement remain
substantially unchanged from the previous agreement.
NOTE C - PRIOR YEAR SPECIAL CHARGE TO OPERATIONS
1995 second quarter operations includes a special pre-tax charge of $1,130,000
to write-off certain costs at the Company's Cade Composites, Inc. subsidiary
associated with work-in-progress, non-recurring engineering charges, contract
termination costs, tooling investments, prototype development costs and accounts
receivable charges. The provision was based on the Company's review of
development costs and related project investments and its best estimate of
matching such costs against future revenue.
6
<PAGE> 9
PART I, ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CADE INDUSTRIES, INC.
RESULTS OF OPERATIONS
SALES
The Company's net sales of $7,618,000 in the second quarter of 1996 decreased
11.8% or $1,021,000 from the same quarter of 1995, while net sales of
$14,782,000 for the six months ended June 30, 1996 decreased $1,207,000 or 7.5%
compared to the same six month period of the prior year. The lower sales for the
second quarter primarily reflect timing differences in delivery requirements for
test nacelle products. In addition, sales of military components were lower due
to the completion of a government contract in 1995 and customer delays in
product approvals in 1996. These decreases were partially offset by higher sales
of gas turbine engine components, primarily engine cases, and increased sales of
repair and overhaul services.
Sales for 1996 are expected to increase over those of the prior year as a result
of higher gas turbine engine and airframe component sales as well as increased
test nacelle shipments and sales of repair and overhaul services in the second
half of the year. Period-to-period comparisons can be significantly impacted by
the timing of shipments of test equipment and other ground support equipment
which typically have selling prices ranging from $500,000 to $1.5 million. At
June 30, 1996, the Company's backlog of orders was $28.7 million which included
$11.9 million of scheduled orders under long-term agreements.
COST OF SALES
Cost of sales for the second quarter of 1996 decreased $2,215,000 or 28.1% from
the same quarter of 1995 and for the six months ended June 30, 1996 decreased
$2,728,000 or 20.0% from the comparable period in 1995. The decreases for both
the three and six month periods were due in large part to: the decrease in sales
levels in the 1996 periods of 11.8% and 7.5%, respectively; increased sales of
products with higher profit margins, mainly gas turbine engine components and
commercial overhaul and repair services; certain reduced overhead costs, and the
inclusion in the 1995 cost of sales for the three and six month periods of a
$960,000 special charge. The 1995 special charge resulted from the write-off of
certain costs at the Company's Cade Composites subsidiary associated with work
in progress, non-recurring engineering charges, contract termination costs,
tooling investments, and prototype development costs. Excluding the 1995 special
charge, cost of sales for the 1996 second quarter decreased $1,255,000 or 18.1%
and for the 1996 year-to-date period decreased $1,768,000 or 13.9%.
Cost of sales as a percentage of sales was 74.5% and 91.3% for the 1996 and 1995
second quarters, respectively, and for the six months ended June 30, 1996 and
1995 was 74.0% and 85.5%, respectively. Excluding the effect of the 1995 special
charge, cost of sales as a percentage of sales was 80.2% and 79.5% for the 1995
three and six month periods, respectively. The increased sales of gas turbine
engine components and commercial overhaul and repair services combined with
decreased sales of certain military
7
<PAGE> 10
aircraft components resulted in significantly lower material, but slightly
higher labor costs. In addition, manufacturing overhead expenses for the 1996
periods were favorably impacted by decreases in certain labor related insurance
costs, overtime costs and indirect material expenses, as well as lower tooling
amortization costs as a result of the change in mix of product deliveries.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses ("administrative expenses") as a
percent of net sales were 19.7% and 16.7% for the second quarter of 1996 and
1995, respectively, and 20.3% and 16.7% for the six month periods ended June 30,
1996 and 1995, respectively. Actual amounts expended increased by $61,000 from
the second quarter of 1995 to the same quarter of 1996 and by $329,000 from the
six month period ended June 30, 1995 to the same period in 1996.
Factors contributing to the higher administrative expenditures in both 1996
periods were increased marketing costs, professional and consulting fees,
administrative staff, and travel related costs incurred to support the expected
sales increases for the second half of 1996. Sales commissions were $31,000
lower in the 1996 second quarter as compared to the same quarter in 1995 and
$76,000 higher for the six month period ended June 30, 1996 compared to the same
period in 1995. Sales commission expenditures are directly related to the sales
mix of products and/or customers involved in the periods presented. The
increased sales commissions for the 1996 six month period result primarily from
greater repair and overhaul sales subject to commission payments.
NET INTEREST EXPENSE
Net interest expense as a percent of sales was 2.4% and 2.2% for the 1996 and
1995 second quarters, respectively, and was 2.4% and 2.3% of sales for the six
month periods ended June 30, 1996 and 1995, respectively. Actual net interest
expense remained essentially unchanged for both the three and six month periods.
INCOME TAX EXPENSE
Income taxes were $53,000 or 0.7% of sales in the 1996 second quarter compared
to a negative expense of ($336,000) or (3.9%) of sales (positive expense of
$48,000 or 0.6% of sales excluding the special charge) for the same quarter of
1995. Income taxes were $99,000 or 0.7% of sales for the six months ended June
30, 1996 compared to a negative expense of ($293,000) or (1.8%) of sales
(positive expense of $91,000 or 0.5% of sales excluding the special charge) for
the comparable period of 1995.
8
<PAGE> 11
NET INCOME
Net income of $204,000 in the 1996 second quarter represents an increase in
after-tax earnings of $745,000 (decrease of $2,000 excluding the special charge)
from the 1995 second quarter. Net income of $390,000 for the first six months of
1996 represents an increase in after-tax earnings of $806,000 ($59,000 excluding
the special charge) from the comparable period of 1995. Factors contributing to
these changes were discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company has met its working capital and longer term capital needs through
short and long-term bank debt, a tax-exempt bond issue and leasing arrangements
on certain items of capital equipment.
Capital has principally been used to fund the Company's inventory, accounts
receivable, business development and capital expenditure programs. Management
presently expects to increase its investment in inventory in the near term to
support the higher sales volume expected in the second half of 1996. Investments
in production technology, tooling and equipment for improved manufacturing
efficiency and quality enhancement are expected to continue, but at reduced
levels. The Company will also continue to seek acquisition opportunities to
expand and/or diversify its markets.
The Company maintains a $5,000,000 unsecured credit line with a bank, $2,175,000
of which was available at June 30, 1996. The Company also has outstanding
approximately $4,043,000 of secured term debt, $348,000 of tax-exempt bonds and
$2,861,000 of subordinated notes.
Management believes that expected increased revenues and continued emphasis on
working capital management will lead to improved cash flow from operations. As a
result, the Company's cash flow from operations and its current credit
facilities are felt to be adequate to finance its current operations and capital
expenditure requirements at present and forecasted levels.
9
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Shareholders on May 8, 1996, shareholders
elected the seven nominees for the Board of Directors. There was no solicitation
in opposition to the nominees proposed in the Proxy Statement and there were no
abstentions or broker nonvotes. The votes with respect to the nominees was as
follows:
<TABLE>
<CAPTION>
DIRECTOR NAME VOTES FOR VOTES WITHHELD
- ------------- --------- --------------
<S> <C> <C>
Molly F. Cade 19,142,381 349,576
Conrad G. Goodkind 19,176,531 315,426
William T. Gross 19,177,131 314,826
Richard A. Lund 19,173,640 318,317
Terrell L. Ruhlman 19,171,531 320,426
John W. Sandford 19,181,031 310,926
Steven M. Tadler 19,176,781 315,176
</TABLE>
ITEM 5. OTHER INFORMATION
The Company's officers may, when appropriate make public statements that contain
forward looking information as to the Company's sales and earnings. Forward
looking information is subject to risks and uncertainties that may significantly
impact expected results. The Company's outlook is based largely on its
interpretation of current order levels and trends and assumption as to trends in
the air transport and aircraft industries. Certain of the Company's backlog of
orders are subject to cancellation, reduction or extended delivery. The air
transport and aircraft industries have historically been subject to significant
cyclical fluctuations and are influenced by factors such as the general state of
the economy, fuel prices, governmental regulation, competition, and the level of
military spending. In addition, the Company's results are subject to pricing
competition, the willingness of the airlines and aircraft manufacturers to out
source work for their composite components and repairs, foreign currency
fluctuations with respect of international sales, and the Company's success in
the development, manufacture and marketing of composites products for other
industries and uses.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) The following exhibit is filed herewith:
Exhibit 4.1. Fourth Amendment to Amended and Restated Revolving Credit and
Term Loan Agreement dated September 29, 1995 by and between
Cade Industries, Inc. and Comerica Bank.
Exhibit 27. Financial Data Schedule
10
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CADE INDUSTRIES, INC.
August 12, 1996
By /s/ Edward B. Stephens
-------------------------------
Edward B. Stephens
Vice President, Treasurer and
Chief Financial Officer
<PAGE> 14
CADE INDUSTRIES, INC.
* * *
EXHIBIT INDEX
TO
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED
JUNE 30, 1996
<TABLE>
<CAPTION>
EXHIBIT INCORPORATED HEREIN FILED
NUMBER DESCRIPTION BY REFERENCE TO: HEREWITH
- ------ ----------- ---------------- --------
<S> <C> <C> <C>
4.1 Fourth Amendment to
Amended and Restated
Revolving Credit and
Term Loan Agreement
Dated September 29,
1995 by and between
Cade Industries, Inc.
and Comerica Bank X
27 Financial Data
Schedule X
</TABLE>
<PAGE> 1
FOURTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT
This Amendment made and delivered as of June 20, 1996, by and between
CADE INDUSTRIES, INC., ("Borrower") and COMERICA BANK ("Bank").
WITNESSETH:
WHEREAS, the Borrower and the Bank are parties to that certain Amended
and Restated Revolving Credit and Term Loan Agreement dated January 30, 1995, as
amended as of March 3, 1995, June 1, 1995 and September 29, 1995 (the
"Agreement"); and
WHEREAS, the Bank and the Borrower desire to amend the Agreement as set
forth below;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, the Borrower and the Bank agree as follows:
1. The phrase "Four Million Dollars ($4,000,000)" in Section 1.A.1 is
replaced by "Five Million Dollars (5,000,000)."
2. Section 4.13 is replaced in its entirety by the following:
Maintain Cash Flow Coverage Ratio. On consolidated and non-consolidated
basis, maintain a Cash Flow Coverage Ratio of not greater than 3.5 to
1.0.
"CASH FLOW COVERAGE RATIO" of any person shall mean, for any applicable
period of determination, the ratio of (a) the sum of net income for
such period before interest and taxes, plus depreciation, amortization
and other non-cash charges and expenses for such period, to (b)
principal payments on all Debt (including, without limitation, the
indebtedness) which were due and payable during such period, whether or
not such payments were actually made, plus interest paid during such
period. The Cash Flow Coverage Ratio shall be calculated as of the end
of each of Borrower's fiscal quarters, and shall be based upon the four
(4) immediately preceding fiscal quarters of Borrower then ending.
3. Exhibit "A" is replaced with the Exhibit "A" attached hereto.
4. Exhibit "B" is replaced with the Exhibit "B" attached hereto.
5. Exhibit "D" is amended by replacing paragraph 2.1(d) with the phrase
"September 29, 1995 in the principal amount of Four Million Dollars
($4,000,000)" with "May 1, 1996 in the principal amount of Five Million Dollars
($5,000,000)."
6. Borrower is responsible for all costs incurred by Bank, including
reasonable attorney fees, with regard to the preparation and execution of this
Agreement.
7. The execution of this Amendment shall not be, nor deemed to be, a
waiver of any Default or Event of Default.
8. All the terms used herein which are defined in the Agreement shall
have the same meanings as used therein, unless the context clearly requires
otherwise.
9. Borrower hereby waives, discharges and forever releases Bank, Bank's
employees, officers, directors, attorneys, stockholders and successors and
assigns, from and of any and all claims, causes of action, allegations or
assertions that Borrower has or may have had at any time up through and
including the date of this Amendment, against any or all of the foregoing,
regardless of whether any such claims, causes of action, allegations or
assertions are known to borrower or whether any such claims, causes of action,
allegations or assertions arose as a result of Bank's actions or omissions in
connection with the Agreement, or any amendments, extensions or modifications
thereto, or Bank's administration of debt evidenced by the Agreement or
otherwise.
<PAGE> 2
10. Borrower expressly acknowledges and agrees that except as expressly
amended herein, the Agreement, as amended, shall remain in full force and effect
and is hereby ratified, confirmed and restated.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the day and year first set forth above.
CADE INDUSTRIES, INC.
By /s/ Edward B. Stephens
------------------------------------
Its Treasurer
------------------------------------
COMERICA BANK
By /s/ Lori M. Fisher
------------------------------------
Its Vice President
------------------------------------
2
<PAGE> 3
TAX I.D. NO. 39-1371038
EXHIBIT "A"
PROMISSORY NOTE
$5,000,000.00 Lansing, Michigan
May 1, 1996
On or before April 1, 1997 (herein called the "Maturity Date"), FOR
VALUE RECEIVED, the undersigned CADE INDUSTRIES, INC. (herein called
"Borrower"), promises to pay the order of COMERICA BANK (herein called "Bank"),
in lawful currency of the United States of America, the sum of FIVE MILLION
DOLLARS ($5,000,000.00) 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 Advance or
re-Advances hereunder (notwithstanding anything expressed or implied herein or
elsewhere to the contrary).
Each of the Advances made here under 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 June
30, 1996, and on the last Business Day of each succeeding quarter thereafter.
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 Prime-based
Rate as a result of any change in the Prime-based Rate on the date of each such
change.
Accrued and unpaid interest on each Eurodollar-based Advance shall be
payable on the last day of the Interest Period applicable thereto. 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.
From and after the occurrence of any Default hereunder, and so long as
any such Default remains unremedied or uncured thereafter, the Indebtedness
outstanding under this Note shall bear interest at 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, provide, however, any failure by Bank to make any such notation,
or any error in a ny 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 and 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,
3
<PAGE> 4
(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. (Lansing, 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. (Lansing,
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 ($500,000.00).
(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
(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 ($500,000.00), 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 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,
4
<PAGE> 5
any such loss, cost 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
included, 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
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
5
<PAGE> 6
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 requirement 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 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 for 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 the 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 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 Borrower 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
6
<PAGE> 7
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 Bank deems itself insecure, believing in good faith that the prospect
of payment or performance of this Note or any of the Indebtedness is impaired or
shall fear deterioration, removal or waste of any of the Collateral; or (h) if
there is filled 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 any agreement with Borrower o 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 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. Borrower
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 attorney's 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.
Borrower 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 Borrower's respective successors and
assigns.
For the purposes of this Note, the following terms have the following
meanings:
"Advance" means a borrowing requested by Borrower 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.
7
<PAGE> 8
"Applicable Interest Rate" means the Eurodollar-based Rate or the
Prime-based Rate, as selected by Borrower from time to time or 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-base 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 from 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 succeeding Business Day
falls in another calendar month, the Interest Period shall end
on the next preceding Business Day, and when an Interest
Period beings 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 (1/2%) percent.
8
<PAGE> 9
"Request of Advance" means a Request for Advance issued by Borrower
under this Note in the form annexed to this Note as Exhibit "A".
Borrower 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 Comerica Tower at Detroit Center, 500 Woodward Avenue,
Detroit, Michigan 48226, 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.
This Note amends and restates that certain Promissory Note dated
September 29, 1995, in the original principal amount of $4,000,000.00 by
Borrower to Bank.
BORROWER AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS NOTE OR INDEBTEDNESS HEREUNDER.
CADE INDUSTRIES, INC.
By: /s/ Edward B. Stephens
------------------------------------
Its: Treasurer
------------------------------------
9
<PAGE> 10
EXHIBIT "A" NOTE
REQUEST FOR ADVANCE
The undersigned hereby requests COMERICA BANK ("Bank") to make a(an)
_____________________* Advance to the undersigned on _________________, 19____,
in the amount of _____________________________________________ Dollars
($________________) under the Promissory Note dated as of May 1, 1996, issued by
the undersigned to said Bank in the face amount of Five Million Dollars
($5,000,000.00) (herein called the "Note"). The Interest Period for the
requested Advance, if applicable, shall be ________________**. In the event that
any part of the Advance requested hereby constitutes the refunding or conversion
of an outstanding Advance, the amount to be refunded or converted is
________________ Dollars ($______________), and the last day of the Interest
Period for the amounts being converted or refunded hereunder, if applicable, is
_____________, 19__.
The undersigned represents, warrants and certifies that no Default, or
any condition or event which, with the giving of notice or the running of time,
or both, would constitute a Default, has occurred and is continuing under the
Note, and none will exist upon the making of the Advance requested hereunder.
The undersigned further certifies that upon advancing the sum requested
hereunder, the aggregate principal amount outstanding under the Note will not
exceed the face amount thereof. If the amount advanced to the undersigned under
the Note shall at any time exceed the face amount thereof, the undersigned will
immediately pay such excess amount, without any necessity of notice or demand.
The undersigned hereby authorizes Bank to disburse the proceeds of this
Request for Advance by crediting the account of the undersigned with Bank
separately designated by the undersigned or as the undersigned may otherwise
direct, unless this Request for Advance is being submitted for a conversion or
refunding of all or any part of any outstanding Advance(s), in which case, such
process be deemed to be utilized, to the extent necessary. to refund or convert
that portion stated above of existing outstandings under such Advance(s).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings given to them in the Note.
Dated this ____ day of ____________, 19__.
CADE INDUSTRIES, INC.
By:_________________________
Its:________________________
* Insert, as applicable, "Eurodollar-based" or "Prime-based"
** For a Eurodollar-based Advance insert, as applicable, any Interest Period
from one (1) day through ninety (90) days.
10
<PAGE> 11
EXHIBIT "B"
REQUEST FOR ADVANCE
The undersigned hereby requests COMERICA BANK ("Bank") to make a(an)
_____________________* Advance to the undersigned on _________________, 19____,
in the amount of _____________________________________________ Dollars
($________________) under the Promissory Note dated as of May 1, 1996, issued by
the undersigned to said Bank in the face amount of Five Million Dollars
($5,000,000.00) (herein called the "Note"). The Interest Period for the
requested Advance, if applicable, shall be ________________**. In the event that
any part of the Advance requested hereby constitutes the refunding or conversion
of an outstanding Advance, the amount to be refunded or converted is
________________ Dollars ($______________), and the last day of the Interest
Period for the amounts being converted or refunded hereunder, if applicable, is
_____________, 19__.
The undersigned represents, warrants and certifies that no Default, or
any condition or event which, with the giving of notice or the running of time,
or both, would constitute a Default, has occurred and is continuing under the
Note, and none will exist upon the making of the Advance requested hereunder.
The undersigned further certifies that upon advancing the sum requested
hereunder, the aggregate principal amount outstanding under the Note will not
exceed the face amount thereof. If the amount advanced to the undersigned under
the Note shall at any time exceed the face amount thereof, the undersigned will
immediately pay such excess amount, without any necessity of notice or demand.
The undersigned hereby authorizes Bank to disburse the proceeds of this
Request for Advance by crediting the account of the undersigned with Bank
separately designated by the undersigned or as the undersigned may otherwise
direct, unless this Request for Advance is being submitted for a conversion or
refunding of all or any part of any outstanding Advance(s), in which case, such
process be deemed to be utilized, to the extent necessary, to refund or convert
that portion stated above of existing outstandings under such Advance(s).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings given to them in the Note.
Dated this ____ day of ____________, 19__.
CADE INDUSTRIES, INC.
By:_________________________
Its:________________________
* Insert, as applicable, "Eurodollar-based" or "Prime-based"
** For a Eurodollar-based Advance insert, as applicable, any Interest Period
from one (1) day through ninety (90) days.
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CADE
INDUSTRIES, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE
30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 71,003
<SECURITIES> 0
<RECEIVABLES> 5,213,194
<ALLOWANCES> 0
<INVENTORY> 9,996,239
<CURRENT-ASSETS> 16,223,208
<PP&E> 25,335,661
<DEPRECIATION> 9,755,994
<TOTAL-ASSETS> 35,008,109
<CURRENT-LIABILITIES> 8,796,717
<BONDS> 5,690,045
0
0
<COMMON> 21,936
<OTHER-SE> 20,022,411
<TOTAL-LIABILITY-AND-EQUITY> 35,008,109
<SALES> 14,782,454
<TOTAL-REVENUES> 14,782,454
<CGS> 10,935,773
<TOTAL-COSTS> 10,935,773
<OTHER-EXPENSES> 3,006,709
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 350,645
<INCOME-PRETAX> 489,327
<INCOME-TAX> 99,000
<INCOME-CONTINUING> 390,327
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 390,327
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
