PROMISSORY NOTE
Borrower: Engineered Wire Products, Inc. Lender: Bank One, N A with its main office at Columbus, Ohio
1200 N. Warpole Street Lima Business Banking LPO
Upper Sandusky, OH 43351 121 W High Street. 2nd Floor
Lima, OH 45801
Principal Amount: $7,000,000.00 Date of Note: January 5, 2004
PROMISE TO PAY. Engineered Wire Products. Inc. (' Borrower") promises to pay to
Bank One, N.A. with its main office at Columbus, Ohio ("Lander"), or order, In
lawful money of the United States of America, the principal amount of Seven
Million & 00/100 Dollars ($7,000.000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance Interest shell be calculated from the date of each advance until
repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on June 30, 2004 In addition. Borrower will pay
regular monthly payments of ail accrued unpaid interest due as of each payment
data, beginning January 30, 2004, with all subsequent Interest payments to be
due on the same day of each month after that. Payments and any other credits
shall be allocated among principal, interest and fees at the discretion of
Lender unless otherwise required by applicable law. The annual interest rate for
this Note is computed on a 3651360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance
to outstanding. Borrower will pay Lender at Lender's address shown on loan
account statements sent to the Borrower, Lender's address shown in any payment
coupon book provided to the Borrower, or at such other place as Lander may
designate in writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is the LIBOR Rate (the "Index").
"LIBOR Rate" shall mean the offered rate for U.S. Dollar deposits of not lass
than $1,000,000 00 for a period of time equal to each Interest Period as of
11:00 A.M. City of London, England time two London Business Days prior to the
first date of each Interest Period of this Note as shown on the display
designated as "British Bankers Assoc Interest Settlement Rates' on the Telerate
System ("Telerate"), Page 3760 or Page 3740, or such other page or pages as may
replace such pages on Telerate for the purpose of displaying such rate Provided,
however, that if such rate is not available on Telerate then such offered rate
shall be otherwise independently determined by Lender from an alternate,
substantially similar independent source available to Lender or shall be
calculated by Lander by a substantially similar methodology as that theretofore
used to determine such offered rate in Telerate "London Business Day" means any
day other than a Saturday, Sunday or a day on which banking institutions are
generally authorized or obligated by law or executive order to close in the City
of London, England. Each change in the rate to be charged on this Note will
become effective without notice on the commencement of each Interest Period
based upon the Index then in effect. "Interest Period' means each consecutive
one month period (the first of which shall commence on the date of this Note)
effective as of the first day of each Interest Period and ending on the lest day
of each Interest Period, provided that if any Interest Period is scheduled to
end on a date for which there is no numerical equivalent to the date on which
the Interest Period commenced, then it shall end instead on the last day of such
calendar month Borrower may prepay all or any portion of the principal amount of
this Note bearing interest at a LIBOR Rate, provided that if Borrower makes any
such prepayment other than on the last day of an Interest Period, Borrower shall
pay all accrued interest on the principal amount prepaid with such prepayment
and, on demand, shall reimburse Lender and hold Lender harmless from all losses
and expenses incurred by Lender as a result of such prepayment, including,
without limitation, any losses and expenses arising from the liquidation or
reemployment of deposits acquired to fund or maintain the principal amount
prepaid. Such reimbursement shall be calculated as though Lender funded the
principal amount prepaid through the purchase of U.S. Dollar deposits in the
London, England interbank market having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the LIBOR Rate for such
interest Period, whether in fact that is the case or not. Lender's determination
of the amount of such reimbursement shall be conclusive in the absence of
manifest error. The interest rate to be applied to the unpaid principal balance
of this Note will be at a rate of 2 450 percentage points over the Index.
NOTICE: Under no circumstances will the interest rate on this Note be more than
the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without fee all or a portion of the principal
amount owed hereunder earlier than it is due. All prepayments shall be applied
to the Indebtedness In such order and manner as Lender may from time to time
determine in its sole discretion. Borrower agrees not to send Lender payments
marked "paid in full', "without recourse", or similar language. If Borrower
sends such a payment, Lender may accept it without losing any of Lender's rights
under this Note, and Borrower will remain obligated to pay any further amount
owed to Lender All written communications concerning disputed amounts, including
any check or other payment instrument that indicates that the payment
constitutes "payment in full" of the amount owed or that is tendered with other
conditions or limitations or as full satisfaction of a disputed amount must be
mailed or delivered to: Bank One Business Banking Loan Servicing Disputed
Accounts Department, P 0 Box 901094 Fort Worth, TX 76101.2094
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $25 00, whichever is greater.
INTEREST AFTER DEFAULT. Upon the occurrence of any Event of Default, including
failure to pay upon final maturity, at Lender's option, and if permitted by
applicable law, Lender may add any unpaid accrued interest to principal and such
sum will bear interest therefrom until paid at the rate provided in this Note
(including any increased rate). Upon the occurrence of any Event of Default,
Lander, at its option, may, if permitted under applicable law, increase the
variable interest rate on this Note to 6 450 percentage points over the Index.
The interest rate will not exceed the maximum rate permitted by applicable law.
DEFAULT Each of the following shall constitute en event of default ("Event of
Default") under this Note.
Payment Default. Borrower fails to make any payment when due under this
Note.
Other Defaults. Borrower fails to comply with or to pay or perform any
other term, obligation, covenant or condition contained In this Note or in
any of the Related Documents or to comply with or to pay or perform any
term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower or between Borrower and any affiliate of BANK
ONE CORPORATION
Transfer of Assets. Borrower leases, sells, or otherwise convoys, or agrees
to lease, sell, or otherwise convey, a material part of its assets or
business outside of the ordinary course of business.
Defaults with Respect to Third Parties Borrower fails to make any payment
when due or fails to comply with or to perform any term, obligation,
covenant or condition contained in any agreement between any other person
and Borrower
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this Note or
the Related Documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter
Judgments or Decrees. One or more judgments or decrees shall be entered
against the Borrower and such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal
Insolvency. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower
Creditor or Forfeiture Proceedings. Commencement of foreclosure, replevin,
repossession, attachment, levy, execution, or forfeiture proceedings,
whether by judicial proceeding, self-help, or any other method, by any
creditor of Borrower, or by any governmental agency against the Collateral
or any other assets of Borrower. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding,
in en amount determined by Lander, in its sole discretion, as being an
adequate reserve or bond for the dispute
Failure to Comply with Laws, Borrower fails to comply with all applicable
statutes, laws, ordinances and governmental rules, regulations and orders
to which it is subject or which are applicable to its business, property
and assets
Change In Ownership. Any change in ownership of twenty-five percent (25%)
or more of the common stock of Borrower
Adverse Change A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of
this Note is impaired
Events Affecting Guarantor. Any of the preceding Events of Default occurs
with respect to any guarantor of the Indebtedness as if the word
"guarantor" were substituted for the word "Borrower" in such Event of
Default, or any guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty
Insecurity. Lender in good faith believes Itself insecure.
LENDER'S RIGHTS. Upon the occurrence of any Event of Default, Lender may declare
the entire unpaid principal balance on this Note and the Indebtedness and all
accrued unpaid interest immediately due, without notice (except that in the case
of any Event of Default of the type described in the DEFAULT - Insolvency
section herein, such acceleration shall be automatic and not at Lender's
option), and then Borrower will pay that amount Borrower shall be liable for any
deficiency remaining after disposition of any collateral which Lender may choose
to realize upon
ATTORNEYS' FEES; EXPENSES Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount This
Includes, subject to any limits under applicable low, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, including
attorneys' fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable low. Borrower also will pay any court coats, in
addition to all other sums provided by law
GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and tie laws of the State of Ohio. This Note has
been accepted by Lender in the State of Ohio.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of Allen County, State of Ohio.
CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any
attorney-at-low, including an attorney hired by Lender, to appear in any court
of record and to confess judgment against Borrower for the unpaid amount of this
Note as evidenced by an affidavit signed by an officer of Lender setting forth
the amount then due, attorneys' fees plus costs of suit, and to release all
errors, and waive all rights of appeal. If a copy of this Note, verified by an
affidavit, shall have been filed in the proceeding, it will not be necessary to
file the original as a warrant of attorney Borrower waives the right to any stay
of execution and the benefit of all exemption taws now or hereafter in effect No
single exercise of the foregoing warrant and power to confess judgment will be
deemed to exhaust the power, whether or not any such exercise shell be held by
any court to be invalid, voidable, or void; but the power will continue
undiminished end may be exercised from time to time as Lender may elect until
all amounts owing on this Note have been paid in full Borrower waives any
conflict of interest that an attorney hired by Lender may have in acting on
behalf of Borrower in confessing judgment against Borrower while such attorney
is retained by Lender Borrower expressly consents to such attorney acting for
Borrower in confessing judgment
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored
RIGHT OF SETOFF Borrower grants to Lender a security interest in, as well as a
right of setoff against, and hereby assigns, conveys, delivers, pledges and
transfers to Lender, as security for repayment of the Indebtedness, all
Borrower's right, title and interest in and to all Borrower's accounts (whether
checking, savings, or some other account) with Lender or any subsidiary or
affiliate of BANK ONE CORPORATION (each hereinafter referred to as a "Lender
Affiliate") and all other obligations at any time owing by Lender or any Lender
Affiliate to Borrower This includes all accounts Borrower holds jointly with
someone else and all accounts Borrower may open in the future However, this does
not Include any IRA or Keogh accounts, or any trust accounts for which the grant
of a security interest would be prohibited by law. Borrower authorizes Lender,
without prior notice to Borrower and irrespective of U) whether or not Lender
has made any demand under this Note or the Related Documents or (ii) whether
such Indebtedness is contingent, matured or unmatured, to the extent permitted
by law, to collect, charge and/or setoff all sums owing on the Indebtedness
against any and all such accounts and other obligations, and, at Lender's
option, to administratively freeze or direct a Lender Affiliate to
administratively freeze all such accounts and other obligations to allow Lender
to protect Lender's security interest, collection, charge and setoff rights
provided in this paragraph.
COLLATERAL. Borrower acknowledges this Note Is secured by security interest in
and lien upon all collateral described in any Related Document
LINE OF CREDIT. This Note evidences a revolving Iine of credit The unpaid
principal balance of this Note shell increase and decrease with each new advance
and payment hereunder, as the case may be. Subject to the terms hereof, Borrower
may borrow, repay and reborrow hereunder Advances under this Note, as well as
directions for payment from Borrower's accounts, may be requested orally or in
writing by Borrower or by an authorized person Lender may, but need not, require
that all oral requests be confirmed in writing Borrower agrees to be liable for
all sums either' (A) advanced in accordance with the instructions of an
authorized person or (B) credited to any of Borrower's accounts with Lender.
Lender will have no obligation to advance funds under this Note If: (A) Borrower
or any guarantor is in default under the terms of this Note or any agreement
that Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note, (B) Borrower or any guarantor ceases
doing business or is insolvent-, (C) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender, (D) Borrower has applied funds provided pursuant to
this Note for purposes other than those authorized by Lender, or (E) Lender in
good faith believes itself insecure
LATE CHARGES. In the "Late Charge" provision set forth above, the following
language is hereby added after the word "greater", 'up to the maximum amount of
Two Hundred Fifty Dollars ($250 00) per late charge"
FINANCIAL STATEMENTS Borrower shall furnish Lender with such financial
statements and other related information at such frequencies and in such detail
as Lender may reasonably request.
ENFORCEABILITY AND ORGANIZATION. Borrower is duly authorized to transact
business in all states in which Borrower is doing business, having obtained all
necessary filings, governmental licenses end approvals for each state in which
Borrower is doing business. Borrower's execution, delivery end performance of
this Note end all the Related Documents have been duty authorized by all
necessary action by Borrower. This Note and all the Related Documents constitute
legal, valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms if applicable, Borrower is an entity
which is, and at all times shall be, duly organized, validly existing, and in
good standing under and by virtue of the laws of the state of its organization.
INFORMATION WAIVER Lender may provide, without any limitation whatsoever, to any
one or more purchasers, potential purchasers, or affiliates of BANK ONE
CORPORATION, any information or knowledge Lender may have about the undersigned
or about any matter relating to this document and the Related Documents, and the
undersigned hereby waives any right to privacy the undersigned may have with
respect to such matters
INDEBTEDNESS. The word "Indebtedness" means as principal, interest, end other
amounts, costs and expenses payable under the Note or Related Documents,
together with all renewals of, extensions of, modifications of, consolidations
of and substitutions for the Note Or Related Documents, together with interest
on such amounts as provided in this Note, and all obligations, debts and
liabilities, plus interest thereon, of Borrower or any one or more of them to
Lender, as well as all claims by Lender against Borrower or any one or more of
them, whether now existing or hereafter arising, whether related or unrelated to
the purpose of this Note, whether voluntary or otherwise, whether due or not
due. direct or indirect, absolute or contingent, liquidated or unliquidated end
whether Borrower may be liable individually or jointly with others, whether
obligated as guarantor, surety, accommodation party or otherwise and whether
recovery upon such amounts may be or hereafter become barred by any statute of
limitations, and whether the obligation to repay such amounts may be or
hereafter become otherwise unenforceable; and further includes, without
limitation, all principal, interest, and other amounts, costs and expenses
payable under the Related Documents, whether executed by the Borrower or by any
other person or entity, together with all renewals of, extensions of,
modifications of, consolidations of and substitutions for the Related Documents,
together with interest thereon as provided in the Related Documents
RELATED DOCUMENTS The words "Related Documents" mean all promissory notes.
credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now
existing or hereafter arising, executed in connection with the Indebtedness
LIABILITIES FOR OBLIGATIONS UNDER RELATED DOCUMENTS. Borrower also promises to
pay to Lender all of the Indebtedness Borrower acknowledges that some of the
Related Documents, pursuant to which Indebtedness may arise, may be executed
only by persons or entities other than the Borrower.
PURPOSE. Borrower agrees that no advances under this Note shall be used for
personal, family or household purposes and that all advances hereunder shall be
used solely for business, commercial, agricultural or other similar purposes
ARBITRATION Undersigned and Lender agree that all disputes, claims and
controversies between them whether individual, joint, or class in nature,
arising from this document or otherwise, including without limitation contract
and tort disputes, shall be arbitrated pursuant to the Rules of the American
Arbitration Association in effect at the time the claim /s filed, upon request
of either party. No act to take or dispose of any Collateral or Property (as
defined herein or in any Related Document) securing this document shall
constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement This includes, without limitation, obtaining injunctive
relief or a temporary restraining order, invoking a power of sale under any deed
of trust or mortgage, obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property, including
taking or disposing of such property with or without judicial process pursuant
to applicable law Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of any act, or exercise of any right, concerning
any Collateral or Property securing this document, including any claim to
rescind, reform, or otherwise modify any agreement relating to the Collateral or
Property securing this document, shall also be arbitrated, provided however that
no arbitrator shall have the right or the power to enjoin or restrain any act of
any party Judgment upon any award rendered by any arbitrator may be entered in
any court having jurisdiction. Nothing in this document shall preclude any party
from seeking equitable relief from a court of competent jurisdiction The statute
of limitations, estoppel, waiver, )aches, and similar doctrines which would
otherwise be applicable In an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of an action for these purposes The Federal
Arbitration Act shall apply to the construction, interpretation, and enforcement
of this arbitration provision
JURY WAIVER THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN
ANY WAY RELATED TO THIS DOCUMENT, THE RELATED DOCUMENTS, OR ANY RELATIONSHIP
BETWEEN OR AMONG THE UNDERSIGNED AND LENDER THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING EVIDENCED BY THIS DOCUMENT AND THE
RELATED DOCUMENTS
BORROWER'S ACKNOWLEDGEMENT AND AGREEMENT REGARDING AFFILIATE BANKS Borrower may
now or in the future have a borrowing relationship with Bank One, NA with its
main office in Columbus, Ohio (the 'Bank Affiliate-) Lender and Borrower intend
that the terms, covenants, conditions, warranties and obligations of Borrower in
only one agreement in the nature of a loan or credit agreement )"Loan
Agreement') be applicable to the borrowing relationship of Borrower end Lender
and of Borrower and the Bank Affiliate Therefore, if Borrower executes a Loan
Agreement with the Bank Affiliate, the Borrower agrees that the terms,
covenants, conditions, warranties and obligations of Borrower contained in that
Loan Agreement between Borrower and the Bank Affiliate shall also apply to this
Note.
RENEWAL AND EXTENSION. This Note is given in replacement, renewal and/or
extension of, but not extinguishing the indebtedness evidenced by, the
promissory note dated March 10, 1995, executed by Borrower to NBD Bank, N.A ,
predecessor in interest to Lender, in the original principal amount of
67,000,000 00, including previous renewals or modifications thereof, if any (the
'Prior Note"), and is not a novation thereof All interest evidenced by the Prior
Note being replaced, renewed, and/or extended by this Note shall continue to be
due and payable until paid All Related Documents executed in relation to or as
security for the Prior Note remain in full force and effect
GENERAL PROVISIONS If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Borrower does not agree or intend to pay, and
Lender does not agree or intend to contract for, charge. collect, take, reserve
or receive (collectively referred to herein as "charge or collect"), any amount
in the nature of interest or in the nature of a fee for this loan, which would
in any way or event (including demand, prepayment, or acceleration) cause Lender
to charge or collect more for this loan then the maximum Lender would be
permitted to charge or collect by federal law or the law of the State of Ohio
(as applicable). Any such excess interest or unauthorized fee shall, instead of
anything stated to the contrary, be applied first to reduce the principal
balance of this loan, and when the principal has been paid in full, be refunded
to Borrower. If any part of this Note cannot be enforced, this fact will not
affect the rest of this Note. It Is agreed that any payment which would
otherwise for any reason be deemed unlawful interest under applicable law shall
be deemed to have been applied to the unpaid principal balance of this Note, or
to other Indebtedness The unpaid balance owing on this Note at any time may be
evidenced by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them. Borrower and any
other person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral, or impair, fail
to realize upon or perfect Lender's security interest in the collateral, and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made Unless specifically permitted otherwise by the terms and
conditions of this Note, no alteration of or amendment to this Note shall be
effective unless given in writing and signed by the party or parties sought to
be charged or bound by the alteration or amendment, Borrower agrees and consents
to Lender's sale or transfer, whether now or later, of this Note, or the Related
Documents or of any participation interest In this Note or Related Documents to
one or more purchasers, whether related or unrelated to Lender Borrower waives
any and all notices of sale of this Note, the Related Documents or of any
participation interests, as well as any notices of any repurchases of this Note,
the Related Documents, or of any participation interests. The obligations under
this Note are joint and several
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
NOTICE. FOR THIS NOTICE "YOU" MEANS THE BORROWER AND "CREDITOR" AND "HIS" MEANS
LENDER
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
BORROWER:
ENGINEERED WIRE PRODUCTS. INC.
Bert E. Downing. Jr., Vice President/Treasurer of Engineered Wire Products, Inc.