SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
THE SIRENA APPAREL GROUP, INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
82966Q102
(CUSIP Number)
American Industries, Inc.
1750 N.W. Front Avenue
Suite 106
Portland, Oregon 97209
(503) 222-0060
(Name, Address and Telephone Number)
of Person Authorized to Receive
Notices and Communications)
With a copy to:
Kenneth D. Stephens, Esq.
Tonkon, Torp, Galen, Marmaduke & Booth
1600 Pioneer Tower
888 S.W. Fifth Avenue
Portland, Oregon 97204
(503) 221-1440
May 2, 1997
(Date of Event Which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
<PAGE>
CUSIP No. 82966Q102
1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above
Person
American Industries, Inc.
IRS Identification Number: 93-0331722
2. Check the appropriate box if a member of a group (a) / /
(b) /x/
3. SEC USE ONLY
4. Source of Funds
WC,00,BK
5. Check box if disclosure of legal proceedings is required pursuant to
Items 2(d) or 2(E) / /
6. Citizenship or place of organization
Oregon
7. Sole Voting Power
1,530,000*
8. Shared Voting Power
-0-
9. Sole Dispositive Power
1,530,000*
- ----------------------------
* Does not include 20,000 shares of the issuer's Common Stock held by
Juanita Hedinger, the wife of the reporting person's Chairman and
President. The reporting person disclaims beneficial ownership of such
shares.
<PAGE>
10. Shared Dispositive Power
-0-
11. Aggregate amount beneficially owned by each reporting person
1,530,000*
12. Check box if the aggregate amount in row (11) excludes certain shares
/x/
13. Percent of class represented by amount in row (11)
32.9 percent*
14. Type of Reporting Person
CO
- ----------------------------
* Does not include 20,000 shares of the issuer's Common Stock held by
Juanita Hedinger, the wife of the reporting person's Chairman and
President. The reporting person disclaims beneficial ownership of such
shares.
<PAGE>
ITEM 1. SECURITY AND ISSUER
Title of Class:
Common Stock, par value $.01 per share.
Name and Address of Principal Executive Offices of Issuer:
The Sirena Apparel Group, Inc.
10333 Vacco Street
South El Monte, California 91733
ITEM 2. IDENTITY AND BACKGROUND
Reporting Person:
The reporting person is American Industries, Inc., a
corporation organized under the laws of the state of Oregon
("American").
The principal business of American has historically been steel
fabrication and operation of steel service centers. At the
present time, its principal business is investments. Its
principal business address and its principal executive offices
are located at:
1750 N.W. Front Avenue
Suite 106
Portland, OR 97209
Persons enumerated pursuant to General Instruction C:
The following information is provided with respect to the
executive officers and directors of American and each person
controlling American:
Name and Business Principal Occupation
Address Citizenship or Employment
- ----------------- ----------- --------------------
Howard H. Hedinger USA Chairman and President
American Industries, Inc.
1750 N.W. Front Avenue
Suite 106
Portland, OR 97209
Robert M. Johnson USA Investor
917 S.W. Oak, #333
Portland, OR 97205
<PAGE>
Ellison C. Morgan USA Investor
11510 S.W. Summerville
Portland, OR 97219
M.J. Lampros USA President
Lampros Steel
8524 N. Crawford
Portland, OR 97203
During the last five years, neither the reporting person, nor any of the persons
enumerated above pursuant to General Instruction C has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
has been a party to any civil proceeding of a judicial or administrative body of
competent jurisdiction and, as a result of such proceeding, been subjected to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The funds used by American to purchase the shares held by it pursuant
to transactions consummated by a registered broker/dealer on the Nasdaq National
Market and pursuant to the agreement between American and Signal Capital
Corporation ("Signal") more fully discussed in Item 5 below (the "Agreement")
("Exhibit A") were provided by the general working capital funds of American, by
funds advanced through a margin account with Black and Company, Inc., One
Southwest Columbia Street, Portland, Oregon 97258 and by a loan secured by real
property ("Exhibit B") provided to American by United States National Bank of
Oregon. As of the date of this report, funds invested in the subject security by
American aggregated $5,780,918.
ITEM 4. PURPOSE OF TRANSACTION
American purchased and holds the shares for investment purposes. It
has no immediate plans to either acquire more shares or to dispose of shares. It
is possible that American may acquire additional shares, or dispose of shares,
either through brokerage firms or in privately negotiated transactions. Its
decision to do so will be influenced by, among other considerations, investment
characteristics of the securities, as well as both fundamental and technical
analyses of the issuer and the securities markets generally.
<PAGE>
Pursuant to the May 7, 1997 consummation of the Agreement, three
directors of the issuer are expected to resign and American expects to seek
representation on the issuer's Board of Directors. However, American has no
present plans to make any proposals which would result in the issuer engaging in
any extraordinary corporate transactions or to change management.
ITEM 5. INTERESTS IN SECURITIES OF ISSUER
American has acquired an aggregate of 1,530,000* shares of the
issuer's Common Stock, representing, in the aggregate, approximately 32.9%* of
the issuer's outstanding Common Stock. 433,815 such shares were acquired by
American in transactions by a registered broker/dealer on the Nasdaq National
Market as follows:
DATE NUMBER OF SHARES PRICE PER SHARE AGGREGATE PRICE
- ---- ---------------- --------------- ---------------
11/10/95 100,000 $6.50 $ 650,000.00
12/19/95 20,000 $5.81 $ 116,200.00
12/27/95 60,000 $5.75 $ 345,000.00
1/04/96 40,000 $6.63 $ 265,200.00
1/05/96 10,000 $6.63 $ 66,300.00
1/11/96 5,000 $6.50 $ 32,500.00
1/12/96 10,000 $6.38 $ 63,750.00
1/22/96 10,000 $6.38 $ 63,750.00
1/29/96 5,000 $6.00 $ 30,000.00
2/02/96 20,000 $5.94 $ 118,750.00
2/05/96 5,000 $5.88 $ 29,375.00
2/06/96 5,000 $5.88 $ 29,375.00
2/08/96 20,000 $5.88 $ 117,500.00
4/10/96 10,000 $4.88 $ 48,750.00
4/11/96 5,000 $4.88 $ 24,375.00
4/12/96 5,000 $4.75 $ 23,750.00
4/18/96 40,000 $4.75 $ 190,000.00
6/12/96 5,000 $4.13 $ 20,628.00
4/24/97 30,000 $3.16 $ 94,687.50
- ----------------------------
* Does not include 20,000 shares of the issuer's Common Stock held by
Juanita Hedinger, the wife of the reporting person's Chairman and
President. The reporting person disclaims beneficial ownership of such
shares.
<PAGE>
DATE NUMBER OF SHARES PRICE PER SHARE AGGREGATE PRICE
- ---- ---------------- --------------- ---------------
4/29/97 5,000 $3.25 $ 16,253.00
5/2/97 5,000 $3.25 $ 16,253.00
5/5/97 10,000 $3.28 $ 32,803.00
5/6/97 8,815 $3.25 $ 28,651,75
-------------
TOTAL $2,423,851.25
In addition, on May 2, 1997, American reached an agreement with Signal
pursuant to which, on May 7, 1997, it acquired from Signal 1,096,185 shares of
the issuer's Common Stock at a price per share of $3 1/16 and a total purchase
price of $3,357,067. Such purchase brings American's holdings of the issuer's
Common Stock to 1,530,000* shares, representing, in the aggregate, approximately
32.9%* of the issuer's outstanding Common Stock.
In each case, American has or will have the power to vote, or direct
the vote, of the securities and to dispose, or direct disposal, of the
securities.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
None.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
A May 2, 1997 Stock Purchase Agreement between American Industries, Inc.
and Signal Capital Corporation.
B Promissory Note between United States National Bank of Oregon and
American Industries, Inc. executed in connection with Stock Purchase
Agreement filed herewith as Exhibit A.
- --------------------------
* Does not include 20,000 shares of the issuer's Common Stock held by
Juanita Hedinger, the wife of the reporting person's Chairman and
President. The reporting person disclaims beneficial ownership of such
shares.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATED: May 8, 1997 AMERICAN INDUSTRIES, INC.
By: /s/ Howard H. Hedinger
----------------------------
Howard H. Hedinger, Chairman
<PAGE>
EXHIBIT INDEX
-------------
Page
----
99.A May 2, 1997 Stock Purchase Agreement between American
Industries, Inc. and Signal Capital Corporation.
99.B Promissory Note between United States National Bank of
Oregon and American Industries, Inc. executed in connection
with Stock Purchase Agreement filed herewith as Exhibit A.
EXHIBIT A
[LETTERHEAD
OF
AMERICAN INDUSTRIES, INC.]
May 2, 1997
Mr. Eben S. Moulton
President
Signal Capital Corporation
55 Ferncroft Road
Danvers, Massachusetts 01923
Re: Purchase of Shares of Common Stock of The Sirena Apparel Group, Inc., held
by Signal Capital Corporation and Affiliates
Dear Eben:
This letter sets forth the terms of the agreement by which American Industries,
Inc., an Oregon corporation ("Buyer"), agrees to purchase from Signal Capital
Corporation ("Seller") all shares of the Common Stock (the "Shares") of The
Sirena Apparel Group, Inc., a Delaware corporation ("Sirena"), held by Seller or
Seller's affiliates ("Agreement"). We understand that there are not less than
1,096,185 Shares.
1. PURCHASE PRICE. The purchase price per Share for the Shares will be the
Closing Interdealer Bid Price as reported on Nasdaq for April 30, 1997,
VIZ. $3 1/16 per Share. Thus, the aggregate purchase price for the Shares
which are the subject of this Agreement (assuming the purchase of exactly
1,096,185 Shares) would be $3,357,067 (the "Purchase Price").
2. DELIVERY OF SHARES. At closing, Seller will deliver to Buyer
certificates representing the Shares, duly endorsed in blank for transfer,
with signatures guaranteed, together with any documents necessary or
reasonably requested by Buyer to transfer to Buyer good and indefeasible
title to the Shares. Seller shall pay any documentary or transfer tax
applicable to the transfer of the Shares. If Seller is unable to deliver
certificates evidencing the Shares to Buyer at the Closing, Seller will
take all steps that may be necessary to deliver, or cause the transfer
agent for Sirena to deliver to Buyer, as soon as reasonably possible after
the Closing, one or more certificates evidencing the Shares. Such steps may
include the execution and delivery by Seller of one or more lost stock
certificate affidavits and indemnity agreements. Seller will indemnify
Buyer and hold Buyer harmless from any losses, costs and expenses incurred
by Buyer as a result of Seller's failure to deliver certificates evidencing
the Shares as soon as reasonably possible after the Closing. Payment of the
purchase price shall be conditioned upon delivery of the Shares.
<PAGE>
3. RESIGNATIONS. Seller has three designees on Sirena's Board of Directors:
Eben S. Moulton, Jeffrey J. Holland and Nicholas Binkley. Seller will cause
such designees to submit their resignations as directors of Sirena no later
than 5:00 p.m., California time, on Friday, May 9, 1997.
4. OWNERSHIP OF SHARES. Seller is the legal and beneficial owner of, and
has legal and valid title to, the Shares free and clear of all liens,
claims and encumbrances whatsoever, and the Shares are legally issued,
fully paid and nonassessable. Delivery of the Shares to Buyer will transfer
to Buyer good and indefeasible title to the Shares, free and clear of all
liens, charges and encumbrances whatsoever.
5. AUTHORIZATION. Seller has the full right, power, legal capacity and
authority to enter into this Agreement and to sell and deliver to Buyer the
Shares.
6. INVESTMENT REPRESENTATIONS. Buyer is purchasing the Shares from Seller
in accordance with the terms hereof for Buyer's own account without a view
to any distribution of the Shares in violation of federal or state
securities laws. Buyer has been informed and understands that none of the
Shares have been registered under federal or state securities laws and must
be held indefinitely unless the Shares are subsequently registered or an
exemption from such registration is available. Buyer has had access to all
information concerning Sirena as Buyer has deemed necessary or appropriate
in order to enable Buyer to make an informed investment decision with
respect to the acquisition of the Shares. Buyer has such knowledge and
experience in financial matters that Buyer is capable of evaluating the
merits and risks of Buyer's investment in the Shares. Buyer expressly
acknowledges that Seller has not made any representations or warranties to
it (except as expressly set forth herein) regarding Sirena or its business
or affairs, and that Buyer has, independently and without reliance upon
Seller, based on its own due diligence investigation, made its own
investment decision with respect to its acquisition of the Shares.
<PAGE>
7. EXPENSES. Each party will pay its own expenses in this transaction,
including any attorney and accountant fees and finders' fees.
8. BROKER. Seller does not owe any fee to any broker or finder in
connection with the purchase and sale of the Shares.
9. CLOSING. The parties will close this transaction on May 7, 1997, unless
the parties otherwise agree in writing to a different closing date. Buyer
will pay the Purchase Price to Seller by wire transfer at closing. All
deliveries at the closing will be conditional upon the happening of all of
the events of the closing. Closing may take place by facsimile, electronic
and/or telephone communication. Buyer is prepared to disburse funds on the
morning of May 5, 1997.
10. FACSIMILE SIGNATURES. The parties may execute this Agreement by
facsimile signature. Any such facsimile signature will be as valid and
binding upon the parties as a manually signed original signature.
11. TIME OF ESSENCE. Time is of the essence of this Agreement.
12. GOVERNING LAW. This Agreement is executed and will be governed by the
substantive law of the State of Oregon.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
14. EXPIRATION OF OFFER. This offer will automatically expire unless it has
been accepted on or prior to five PM Pacific Daylight Time on Friday May 2,
1997.
If the terms set forth in this Agreement are acceptable, please sign and date
the enclosed copy of this letter and return it to me.
Very truly yours,
/s/ Howard H. Hedinger
Howard H. Hedinger
President
American Industries, Inc.
Agreed to and accepted:
Dated: May 2, 1997.
SIGNAL CAPITAL CORPORATION
/s/ Eben S. Moulton
--------------------------
Eben S. Moulton
President
EXHIBIT B
ALTERNATIVE RATE OPTIONS
PROMISSORY NOTE
(PRIME RATE, IBOR)
$4,000,000.00 Date: May 7, 1997
- ------------- -----------
AMERICAN INDUSTRIES, INC. ("Borrower")
UNITED STATES NATIONAL BANK OF OREGON ("Lender")
- -------------------------------------------------------------------------------
1. TYPE OF CREDIT. This note is given to evidence Borrower's obligation to repay
all sums which Lender may from time to time advance to Borrower ("Advances")
under a:
| | single disbursement loan. Amounts loaned to Borrower hereunder will be
disbursed in a single Advance in the amount shown in Section 2.
|X| revolving line of credit. No Advances shall be made which create a
maximum amount outstanding at any one time which exceeds the maximum
amount shown in Section 2. However, Advances hereunder may be borrowed,
repaid and reborrowed, and the aggregate Advances loaned hereunder from
time to time may exceed such maximum amount.
| | non-revolving line of credit. Each Advance made from time to time
hereunder shall reduce the maximum amount available shown in Section 2.
Advances loaned hereunder which are repaid may not be reborrowed.
2. PRINCIPAL BALANCE. The unpaid principal balance of all Advances outstanding
under this note ("Principal Balance") at one time shall not exceed Four Million
and No/100.
3. PROMISE TO PAY. For value received Borrower promises to pay to Lender on
order at Oregon Commercial Loan Servicing, the Principal Balance of this note,
with interest thereon at the rate(s) specified in Sections 4 and 11 below.
4. INTEREST RATE. The interest rate on the Principal Balance outstanding may
vary from time to time pursuant to the provisions of this note. Subject to the
provisions of this note, Borrower shall have the option from time to time of
choosing to pay interest at the rate or rates and for the applicable periods of
time based on the rate options provided herein; provided, however, that once
Borrower notifies Lender of the rate option chosen in accordance with the
provisions of this note, such notice shall constitute Borrower's irrevocable
request for an Advance hereunder at the rate option specified in such notice.
The rate options are the Prime Borrowing Rate and the IBOR Borrowing Rate, each
as defined herein.
<PAGE>
(a) The Prime Borrowing Rate.
(i) The Prime Borrowing Rate is a per annum rate equal to Lender's prime
rate plus 0.00% per annum.
(ii) Whenever Borrower desires to use the Prime Borrowing Rate option,
Borrower shall give Lender notice orally or in writing in accordance with
Section 15 of this note, which notice shall specify the requested disbursement
date and principal amount of the Advance, and that Borrower has chosen the Prime
Borrowing Rate option.
(iii) Prepayments of all or any part of the Principal Balance bearing
interest at the Prime Borrowing Rate may be made at any time without penalty.
Upon prepayment of any such principal amount, Borrower also must pay all accrued
interest thereon to the date of prepayment.
(iv) Subject to Section 11 of this note, interest shall accrue on the
unpaid Principal Balance at the Prime Borrowing Rate unless and except to the
extent that the IBOR Borrowing Rate is in effect.
(b) The IBOR Borrowing Rate.
(i) The following terms shall have the following meanings:
"Business Day" means any day other than a Saturday, Sunday, or other
day that commercial banks in Portland, Oregon or New York City are authorized or
required by law to close.
"IBOR Amount" means each principal amount for which Borrower chooses
to have the IBOR Borrowing Rate apply for any specified IBOR Interest Period.
"IBOR Interest Period" means as to any IBOR Amount, a period of one,
two or three months commencing on the date the IBOR Borrowing Rate becomes
applicable thereto; provided, however, that: (A) no IBOR Interest Period shall
be selected which would extend beyond expiry; (B) no IBOR Interest Period shall
extend beyond the date of any principal payment required under Section 5 of this
note, unless the sum of the principal amounts bearing interest at the Prime
Borrowing Rate, plus IBOR Amounts with IBOR Interest Periods ending on or before
the scheduled date of such principal payment, plus principal amounts remaining
unborrowed under a line of credit, equals or exceeds the amount of such
principal payment; (C) any IBOR Interest Period which would otherwise expire on
a day which is not a Business Day, shall be extended to the next succeeding
Business Day, unless the result of such extension would be to extend such IBOR
Interest Period into another calendar month, in which event the IBOR Interest
Period shall end on the immediately preceding Business Day; and (D) any IBOR
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such IBOR Interest Period) shall end on the last Business Day of a
calendar month.
<PAGE>
(ii) The IBOR Borrowing Rate is Lender's IBOR Rate plus 1.50% per annum.
Lender's IBOR Rate for any IBOR Interest Period is the rate per annum (computed
on the basis of a 350-day year and the actual number of days elapsed) equal to
the arithmetic average (rounded upward to the nearest 1/16 of 1%) of the rates
per annum determined by Lender as of the times specified in Section 4(b)(iii) on
the date two (2) Business Days prior to the first day of such IBOR Interest
Period as the rates offered to Lender by three Eurodollar money market dealers
in such Eurodollar market as may be selected by Lender for U.S. dollar deposits
to be delivered on the first day of such IBOR Interest Period for the number of
months therein, provided, however, that Lender's IBOR Rate shall be adjusted to
take into account the maximum reserves required to be maintained for
Eurocurrency liabilities by banks during each such IBOR Interest Period as
specified in Regulation D of the Board of Governors of the Federal Reserve
System or any successor regulation.
(iii) Borrower may obtain IBOR Borrowing Rate quotes from Lender between
8:00 a.m. and 12:00 noon (Portland, Oregon time) on any Business Day. Any IBOR
Borrowing Rate quoted (A) before 10:00 a.m. shall be based on Lender's IBOR Rate
determined as of approximately 8:00 a.m. on such day, and Borrower may request
an Advance at such rate only by giving Lender notice in accordance with Section
4(b)(iv) before 10:00 a.m. on such day; and (B) between 10:00 a.m. and 12:00
noon shall be based on Lender's IBOR Rate determined as of approximately 10:00
a.m. on such day, and Borrower may request an Advance at such rate only by
giving Lender notice in accordance with Section 4(b)(iv) not later than 12:00
noon on such day.
(iv) Whenever Borrower desires to use the IBOR Borrowing Rate option,
Borrower shall give Lender irrevocable notice (either in writing or orally and
promptly confirmed in writing) between 8:00 a.m. and 12:00 noon (Portland,
Oregon time) two (2) Business Days in advance of the desired effective date of
such rate. Any oral notice shall be given by, and any written notice or
confirmation of an oral notice shall be signed by, the person(s) authorized in
Section 15 of this note, and shall specify the requested effective date of the
rate, IBOR Interest Period and IBOR Amount, and whether Borrower is requesting a
new Advance at the IBOR Borrowing Rate under a line of credit, conversion of any
portion of the Principal Balance bearing interest at the Prime Borrowing Rate to
an IBOR Amount, or a new IBOR Interest Period for an outstanding IBOR Amount.
Notwithstanding any other term of this note, Borrower may elect the IBOR
Borrowing Rate in the minimum principal amount of $500,000.00 and in integral
multiples of $100,000.00; provided, however, that no more than n/a separate IBOR
Interest Periods may be in effect at any one time.
<PAGE>
(v) Borrower may not prepay all or any part of any IBOR Amount(s).
(vi) If at any time Lender's IBOR Rate is unascertainable or unavailable to
Lender or if IBOR Rate loans become unlawful, the option to select the IBOR
Borrowing Rate shall terminate immediately. If the IBOR Borrowing Rate is then
in effect, (A) it shall terminate automatically with respect to all IBOR Amounts
(i) on the last day of each then applicable IBOR Interest Period, if Lender may
lawfully continue to maintain such loans, or (ii) immediately if Lender may not
lawfully continue to maintain such loans through such day, and (B) subject to
Section 11, the Prime Borrowing Rate automatically shall become effective as to
such amounts upon such termination.
(vii) If at any time after the date hereof (A) any revision in or adoption
of any applicable law, rule, or regulation or in the interpretation or
administration thereof (i) shall subject Lender or its Eurodollar lending office
to any tax, duty, or other charge, or change the basis of taxation of payments
to Lender with respect to any loans bearing interest based on Lender's IBOR
Rate, or (ii) shall impose or modify any reserve, insurance, special deposit, or
similar requirements against assets of, deposits with or for the account of, or
credit extended by Lender or its Eurodollar lending office, or impose on Lender
or its Eurodollar lending office any other condition affecting any such loans,
and (B) the result of any of the foregoing is (i) to increase the cost to Lender
of making or maintaining any such loans or (ii) to reduce the amount of any sum
receivable under this note by Lender or its Eurodollar lending office, Borrower
shall pay Lender within 15 days after demand by Lender such additional amount as
will compensate Lender for such increased cost or reduction. The determination
hereunder by Lender of such additional amount shall be conclusive in the absence
of manifest error. If Lender demands compensation under this Section 4(b)(vii),
Borrower may upon three (3) Business Days' notice to Lender pay the accrued
interest on all IBOR Amounts, together with any additional amounts payable under
Section 4(B)(viii) . Subject to Section 11, upon Borrower's paying such accrued
interest and additional costs, the Prime Borrowing Rate immediately shall be
effective with respect to the unpaid principal balance of such IBOR Amounts.
(viii) Upon any termination of any IBOR Borrowing Rate (including but not
limited to conversion to another rate) or payment of all or any portion of any
IBOR Amount on a date other than the last day of the then applicable IBOR
Interest Period, including without limitation (A) acceleration under Section 11
or (B) repayment in response to a notice under Section 4(b)(vii), Borrower shall
pay to Lender on demand such amount as Lender reasonably determines (determined
as though 100% of the applicable IBOR Amount had been funded in the applicable
Eurodollar market) is equivalent to all direct or indirect losses, expenses,
liabilities, or reductions in yield to Lender resulting therefrom, whether
incurred in connection with liquidation or reemployment of funds or otherwise.
<PAGE>
(ix) If Borrower chooses the IBOR Borrowing Rate, Borrower shall pay
interest based on such rate, plus any other applicable taxes or charges
hereunder, even though Lender may have obtained the funds loaned to Borrower
from sources other than the applicable Eurodollar market. Lender's determination
of the IBOR Borrowing Rate and any such taxes or charges shall be conclusive in
the absence of manifest error.
(x) Notwithstanding any other term of this note, Borrower may not select
the IBOR Borrowing Rate if an event of default hereunder has occurred and is
continuing.
(xi) Nothing contained in this note, including without limitation the
determination of any IBOR Interest Period or Lender's quotation of any IBOR
Borrowing Rate, shall be construed to prejudice Lender's right, if any, to
decline to make any requested Advance or to require payment on demand.
5. COMPUTATION OF INTEREST. All interest under Section 4 and Section 11 will be
computed at the applicable rate based on a 360-day year and applied to the
actual number of days elapsed.
6. PAYMENT SCHEDULE.
(a) Principal. Principal shall be paid.
|X| on demand.
| | on demand, or if no demand, on ______________.
| | on _________________________.
| | subject to Section 7, in installments of | | ____________________each,
plus accrued interest | | each including accrued interest beginning on
_________________ and on the same day of each _____________ thereafter
until ________________ when the entire Principal Balance plus interest
thereon shall be due and payable.
| | _________________________________
_________________________________
<PAGE>
(b) Interest
(i) Interest on all amounts bearing interest at the Prime Borrowing Rate
shall be paid:
|X| on the 1st day of June and on the same day of each month thereafter
prior to maturity and at maturity.
| | at maturity
| | at the time each principal installment is due and at maturity
| |
(ii) Interest on all IBOR Borrowing Rate Amounts shall be paid:
|X| on the last day of the applicable IBOR Interest Period, and if such
IBOR Interest Period is longer than three months, on the last day of
each three month period occurring during such IBOR Interest Period,
and at maturity.
| | on the ________ day of __________________ and on the same day of each
_________________ thereafter prior to maturity and at maturity.
| | at maturity
| | at the time each principal installment is due and at maturity
| |
7. CHANGE IN PAYMENT AMOUNT. If the interest rate on this note is subject to
change in accordance with Section 4, the holder of this note may, from time to
time, in holder's sole discretion, increase or decrease the amount of each of
the installments remaining unpaid at the time of each change in rate to an
amount holder in its sole discretion deems necessary to continue amortizing the
Principal Balance at the same rate established by the installment
_________________________________________ "balloon" payment may also be due upon
maturity of this note. Holder shall notify the undersigned of each
___________________ to an amount holder in its sole discretion deems necessary
to continue amortizing the Principal Balance at the same rate established by the
________________ amounts specified in Section 6(a), whether or not a "balloon"
payment may also be due upon maturity of this note. Holder shall notify the
undersigned of each such change in writing. Whether or not the installment
amount is increased under this Section 7, Borrower understands that, as a result
of increases in the rate of interest in accordance with Section 4, the final
payment due, whether or not a "balloon" payment, shall include the entire
Principal Balance and interest thereon then outstanding, and may be
substantially more than the installment specified in Section 6.
<PAGE>
8. ALTERNATE PAYMENT DATE. Notwithstanding any other term of this note, if in
any month there is no day on which a scheduled payment would otherwise be due
(e.g., February 31), such payment shall be paid on the last banking day of that
month.
9. PAYMENT BY AUTOMATIC CHARGE.
| | Please automatically deduct the amount of all principal and interest
payments from account number n/a . If there are insufficient funds in the
account to pay the automatic deduction in full, Lender may allow the account to
become overdrawn, or Lender may reverse the automatic deduction. Borrower will
pay all the fees on the account which result from the automatic deductions,
including any overdraft/NSF charges. If for any reason Lender does not charge
the account for a payment, or if an automatic payment is reversed, the payment
is still due according to this note. If the account is a Money Market Account,
the number of withdrawals from that account is limited as set out in the
agreement. Lender may cancel the automatic deduction at any time in its
discretion. Provided, however, if no account number is entered above, Borrower
does not want to make payments by automatic charge.
10. LENDER'S PRIME RATE. Lender's prime rate is the rate of interest which
Lender from time to time establishes as its prime rate and is not, for example,
the lowest rate of interest which Lender collects from any borrower or class of
borrowers. When Lender's prime rate is applicable under Section 4(a) or 11(b),
the interest rate hereunder shall be adjusted without notice effective on the
day Lender's prime rate changes, but in no event shall the rate of interest be
higher than allowed by law.
11. DEFAULT
(a) Without prejudice to any right of Lender to require payment on demand or to
decline to make any requested Advance, each of the following shall be an event
of default: (i) Borrower fails to make any payment when due. (ii) Borrower fails
to perform or comply with any term, covenant or obligation in this note or any
agreement related to this note, or in any other agreement or loan Borrower has
with Lendor. (iii) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of Borrower
(i) property or Borrower's abili( Any representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf is false or misleading
in any material respect. (v) Borrower becomes insolvent, a receiver is appointed
for any part of Borrower's property, Borrower makes an assignment for the
benefit of creditors, or any proceeding is commenced either by Borrower or
against borrower under any bankruptcy or insolvency laws. (vi) Any creditor
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (vii) Any of the events described in this default section occurs
with respect to any guarantor of this note or any guaranty of Borrower's
indebtedness to Lender ceases to be, or is asserted not to be, in full force and
effect. (viii) Lender in good faith deems itself insecure. If this note is
payable on demand, the inclusion of specific events of default shall not
prejudice Lender's right to require payment on demand or to decline to make any
request Advance.
<PAGE>
(b) Without prejudice to any right of Lender to require payment on demand, upon
the occurrence of an event of default, Lender may declare the entire unpaid
Principal Balance on this note and all accrued unpaid interest immediately due
and payable, without notice. Upon default, including failure to pay upon final
maturity, Lender, at its option, may also, if permitted under applicable law,
increase the interest rate on this note to a rate equal to the Prime Borrowing
Rate plus 5%. The interest rate will not exceed the maximum rate permitted by
applicable law. In addition, if any payment of principal or interest is 19 or
more days past due, Borrower will be charged a late charge of 5% of the
delinquent payment.
12. EVIDENCE OF PRINCIPAL BALANCE; PAYMENT ON DEMAND. Holder's records shall, at
any time, be conclusive evidence of the unpaid Principal Balance and interest
owing on this note. Notwithstanding any other provisions of this note, in the
event holder makes Advances hereunder which result in an unpaid Principal
Balance on this note which at any time exceeds the maximum amount specified in
Section 2, Borrower agrees that all such Advances, with interest, shall be
payable on demand.
13. LINE OF CREDIT PROVISIONS. If the type of credit indicated in Section 1 is a
revolving line of credit or a non-revolving line of credit, Borrower agrees that
Lender is under no obligation and has not committed to make any Advances
hereunder. Each Advance hereunder shall be made at the sole option of Lender.
14. DEMAND NOTE. If this note is payable on demand, Borrower acknowledges and
agrees that (a) Lender is entitled to demand Borrower's immediate payment in
full of all amounts owing hereunder and (b) neither anything to the contrary
contained herein or in any other loan documents (including but not limited to,
provisions relating to defaults, rights of cure, default rate of interest,
installment payments, late charges, periodic review of Borrower's financial
condition, and covenants) nor any act of Lender pursuant to any such provisions
shall limit or impair Lender's right or ability to require Borrower's payment in
full of all amounts owing hereunder immediately upon Lender's demand.
<PAGE>
15. REQUESTS FOR ADVANCES.
(a) Any Advance may be made or interest rate option selected upon the request of
Borrower (if an individual), any of the undersigned (if Borrower consists of
more than one individual), any person or persons authorized in subsection (b) of
this Section 15, and any person or persons otherwise authorized to execute and
deliver promissory notes to Lender on behalf of Borrower.
(b) Borrower hereby authorizes any n/a of the following individuals to request
Advances and to select interest rate options.
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unless Lender is otherwise instructed in writing.
(c) Borrower agrees that Lender shall have no obligation to verify the identity
of any person making any request pursuant to Section 15, and Borrower assumes
all risks of the validity and authorization of such requests. In consideration
of Lender agreeing, at its sole discretion, to make Advances upon such requests,
Borrower promises to pay holder, in accordance with the provisions of this note,
the Principal Balance together with interest thereon and other sums due
hereunder, although any Advances may have been requested by a person or persons
not authorized to do so.
16. PERIODIC REVIEW. Lender will review Borrower's credit accommodations
periodically. At the time of the review, Borrower will furnish Lender with any
additional information regarding Borrower's financial condition and business
operations that Lender requests. This information may include but it not limited
to, financial statements, tax returns, lists of assets and liabilities, agings
of receivables and payable, inventory schedules, budgets and forecasts. If upon
review, Lender in its sole discretion, determines that there has been a material
adverse change in Borrower's financial condition, Borrower will be in default.
Upon default, Lender shall have all rights specified herein.
17. NOTICES. Any notice hereunder may be given by ordinary mail, postage paid
and addressed to Borrower at the last known address of Borrower as shown on
holder's records. If Borrower consists of more than one person, notification of
any of said persons shall be complete notification of all. Notice may be given
either before or reasonably soon after the effective date of the change.
<PAGE>
18. ATTORNEY FEES. Whether or not litigation or arbitration is commenced,
Borrower promises to pay all costs of collecting overdue amounts. Without
limiting the foregoing, in the event that holder consults an attorney regarding
the enforcement of any of its rights under this note or any document securing
the same, or if this note is placed in the hands of an attorney for collection
or if suit or litigation is brought to enforce this note or any document
securing the same, Borrower promises to pay all costs thereof including such
additional sums as the court or arbitrator(s) may adjudge reasonable as attorney
fees, including without limitation, costs and attorney fees incurred in any
appellate court, in any proceeding under the bankruptcy code, or in any
receivership and post-judgment attorney fees incurred in enforcing any judgment.
19. WAIVERS; CONSENT. Each party hereto, whether maker, co-maker, guarantor or
otherwise, waives diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest and waives all defenses based on
suretyship or impairmnent of collateral. Without notice to Borrower and without
diminishing or affecting Lender's rights or Borrower's obligations hereunder,
Lender may deal in any manner with any person who at any time is liable for, or
provides any real or personal property collateral for, any indebtedness of
Borrower to Lender, including the indebtedness evidenced by this note. Without
limiting the foregoing, Lender may, in its sole discretion, (a) make secured or
unsecured loans to Borrower and agree to any number of waivers, modifications,
extensions and renewals of any length of such loans, including the loan
evidenced by this note; (b) impair, release (with or without substitution of new
collateral), fail to perfect a security interest in, fail to preserve the value
of, fail to dispose of in accordance with applicable law, any collateral
provided by any person; (c) sue, fail to sue, agree not to sue, release, and
settle or compromise with, any person.
20. JOINT AND SEVERAL LIABILITY. All undertakings of the undersigned Borrowers
are joint and several and are binding upon any marital community of which any of
the undersigned are members. Holder's rights and remedies under this not shall
be cumulative.
21. ARBITRATION.
(a) Either Lender or Borrower may require that all disputes, claims,
counterclaims and defenses, including those based on or arising from any alleged
tort ("Claims") relating in any way to this note or any transaction of which
this note is a part (the "Loan"), be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and Title 9 of the U.S. Code. All Claims will be subject to the
statutes of limitation applicable if they were litigated. This provision is void
if the Loan, at the time of the proposed submission to arbitration, is secured
by real property located outside of Oregon or Washington, or if the effect of
the arbitration procedure (as opposed to any Claims of Borrower) would be to
materially impair Lender's ability to realize on any collateral securing the
Loan.
<PAGE>
(b) If arbitration occurs and each party's Claim is less than $100,000, one
neutral arbitrator will decide all issues; if any party's Claim is $100,000 or
more, three neutral arbitrators will decide all issues. All arbitrators will be
active Oregon State Bar members in good standing. All arbitration hearings will
be held in Portland, Oregon. In addition to all other powers, the arbitrator(s)
shall have the exclusive right to determine all issues of arbitrability.
Judgment on any arbitration award may be entered in any court with jurisdiction.
(c) If either party institutes any judicial proceeding relating to the Loan,
such action shall not be a waiver of the right to submit any Claim to
arbitration. In addition, each has the right before, during and after any
arbitration to exercise any number of the following remedies, in any order
concurrently: (i) setoff; (ii) self-help repossession; (iii) judicial or
non-judicial foreclosure against real or personal property collateral; and (iv)
provisional remedies, including injunction, appointment of receiver, attachment,
claim and delivery and replevin.
22. GOVERNING LAW.
This note shall be governed by and construed and enforced in accordance with the
laws of the State of Oregon without regard to conflicts of law principles,
provided, however, that to the extent that Lender has greater rights or remedies
under Federal law, this provision shall not be deemed to deprive Lender of such
rights and remedies as may be available under Federal law.
23. DISCLOSURE.
BY OREGON STATUTE (ORS 41.580), THE FOLLOWING DISCLOSURE IS REQUIRED:
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UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDERS
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY THE LENDER
TO BE ENFORCEABLE.
EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
DOCUMENT.
AMERICAN INDUSTRIES, INC. -----------------------------------
Borrower Name (Corporation, Signature of Individual
Partnership or other Entity) Borrower
/s/ Howard H. Hedinger, Chairman
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By Title Signature of Individual
Borrower
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By Title Signature of Individual
Borrower
For valuable consideration, Lender agrees to the terms of the arbitration
provision set forth in this note.
Lender Name: UNITED STATES NATIONAL BANK OF OREGON
/s/ Richard Ferguson
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By:
Title: Vice President
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Date: May 7, 1997
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