SECURED LOAN AGREEMENT
This Secured Loan Agreement is made and entered into this 25th day of
March, 1999, by and between Bankers Trust Company of Des Moines, Iowa,
(hereinafter referred to as the "Bank"), TransFinancial Holdings, Inc.
(hereinafter referred to as "TransFinancial") and Crouse Cartage Company
(hereinafter referred to as "Crouse"), (TransFinancial and Crouse hereinafter
collectively referred to as the "Borrowers" and individually as a "Borrower").
WITNESSETH
WHEREAS, Borrowers desire to borrow monies from Bank in the amounts
described below; and
WHEREAS, Bank is willing to loan monies to Borrowers subject to the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
1. DEFINITIONS
For purpose of this Agreement, the following terms shall have the following
meanings:
"AFFILIATE" shall mean: (i) any natural person who is a controlling
shareholder of either Borrower, or who is an officer, director or managing agent
of either Borrower; (ii) any corporation, partnership or entity that is a
controlling shareholder of either Borrower; and (iii) any person who directly or
indirectly controls, is controlled by or is under common control or ownership
with either Borrower or any controlling shareholder of either Borrower. For
this the purposes of this definition, the term "Control" shall mean the
ownership of ten percent (10%) or more of the beneficial interest in the entity
being referred to.
"AGREEMENT" shall mean this Secured Loan Agreement, as amended or modified
from time to time, together with all exhibits or schedules attached hereto or
hereafter.
"BANK'S PRIME RATE" shall mean the fluctuating interest rate per annum from
time to time designated by Bank as its prime rate. The Bank's Prime Rate shall
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not be deemed the lowest rate or most favored rate charged by Bank to its
customers. Changes in the Bank's Prime Rate shall be effective without notice
to Borrowers on the date of each change.
"BORROWING BASE" shall mean an amount equal to eighty-five percent (85%) of
Crouse's Eligible Accounts Receivable owned by Crouse as of the date of each
Borrowing Base Certificate.
"BORROWING BASE CERTIFICATE" shall mean a document duly certified by an
authorized officer of Crouse in the form attached hereto as Exhibit A.
"COLLATERAL" shall mean without limitation Crouse's assets pledged to Bank
as security for the Note, now or in the future, as more particularly described
in Section 4 of this Agreement.
"CURRENT ASSETS" shall mean TransFinancial's current assets which shall be
determined in accordance with GAAP.
"CURRENT LIABILITIES" shall mean TransFinancial's current liabilities which
shall be determined in accordance with GAAP.
"CURRENT RATIO" shall be calculated by dividing TransFinancial's Current
Assets by its Current Liabilities.
"DEBT TO TANGIBLE NET WORTH RATIO" shall mean that number calculated by
dividing TransFinancial's total liabilities in accordance with GAAP by its
Tangible Net Worth.
"DEFAULT" OR "EVENT OF DEFAULT" shall have the meaning delineated in
Section 9 of this Agreement.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean those accounts receivable owing
to Crouse which are free and clear of any security interest, lien or encumbrance
except that granted to Bank herein, and which are not more than ninety (90) days
past due from date of original invoice or with respect to which there exists no
dispute with Crouse. Further, to be an Eligible Accounts Receivable, the
receivable must not be subject to any dispute, counterclaim or defense asserted
by the account debtor thereunder and the account debtor must not be insolvent or
be the subject of any bankruptcy or reorganization proceedings or other
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proceedings for relief of debtors. An account receivable shall be deemed to
exist when the invoice giving rise to such account receivable is mailed or when
debt to Crouse from its customers arises, whichever shall first occur.
Receivables due Crouse from any Affiliate shall not be included in calculating
Eligible Accounts Receivable.
"GAAP" shall mean those Generally Accepted Accounting Principles and
Practices that are recognized as such by the American Institute of Certified
Public Accountants and by the Financial Accounting Standards Board.
"HAZARDOUS SUBSTANCES." The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. section
9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 49
U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules
or regulations adopted pursuant to any of the foregoing.
"INDEBTEDNESS" shall mean and include without limitation all Loans,
together with all other obligations, debts and liabilities of Borrowers to Bank
as well as all claims by Bank against Borrowers, whether now or hereafter
existing, voluntary or involuntary, due or not due, absolute or contingent,
liquidated or unliquidated; whether Borrowers may be liable individually or
jointly with others; whether Borrowers may be obligated as a guarantor, surety,
or otherwise; whether recovery upon such indebtedness may be or hereafter may
become barred by any statute of limitations; and whether such indebtedness may
be or hereafter may become otherwise unenforceable.
"LOAN" OR "LOANS" means and includes any and all extensions of credit and
financial accommodations from Bank to Borrowers, whether now or hereafter
existing, and however evidenced, including without limitation those loans and
financial accommodations described herein or described on any exhibit or
schedule attached to this Agreement from time to time.
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"LOAN DOCUMENTS" shall mean this Agreement, the Note, the Security
Agreement and any other instrument executed in connection with or evidencing the
Indebtedness.
"MAXIMUM CREDIT" shall mean the lesser of Fifteen Million Dollars
($15,000,000.00) or the Borrowing Base.
"NOTE" shall refer to the promissory note more particularly described in
Section 2 of this Agreement executed by Borrowers in favor of Bank, together
with any and all extensions, modifications, substitutions or renewals thereof.
"REVENUE EQUIPMENT" shall mean and include all of Crouse's (i) commercial
and highway trucks, (ii) commercial and highway tractors and trailers, (iii)
automobiles and (iv) pickup and delivery vehicles, all for which titles have
been issued in the name of Crouse and which titles are in the possession of
Bank, or in possession of another party acting as agent for Bank; and (v) all
mechanical refrigeration units attached to, or held for use upon, such trucks,
tractors and trailers.
"SECURITY AGREEMENT" shall mean the Commercial Security Agreement executed
by Crouse in favor of Bank of even date herewith granting Bank a first lien on
Crouse's Eligible Accounts Receivable and a Second Lien on Crouse's Revenue
Equipment.
"TANGIBLE NET WORTH" shall be determined in accordance with GAAP and shall
mean that number calculated by subtracting from the sum of TransFinancial's
equity, all sums relating to goodwill, patents, copyrights, trademarks,
licenses, franchises, or other assets normally considered an intangible asset
under GAAP.
2. LOAN
Subject to the terms and conditions of this Agreement and the other Loan
Documents, the Bank agrees to lend to Borrowers the amount as provided in the
following described Loan:
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A. Loan. A term loan in the principal amount not to exceed the lesser
of Fifteen Million Dollars ($15,000,000.00) or the Borrowing Base, and
Borrowers shall execute and deliver to Bank a promissory note ("Note")
for $15,000,000.00 dated as of the date of this Agreement. Such funds
shall be used to purchase certain outstanding stock of TransFinancial.
Interest and principal payments shall be payable on the dates and in
the manner set forth in the Note. Interest shall accrue at a floating
rate which shall at all times equal the Bank's Prime Rate, as adjusted
to the date of change. In the event at any time the Borrowing Base is
less than the unpaid principal balance of the Note, Borrowers will
immediately pay that amount necessary to reduce the unpaid principal
balance to an amount equal to the Borrowing Base. The Note shall
mature and be due and payable in full on September 30, 2000. Bank's
determination as to the outstanding principal balance owed by
Borrowers shall be presumed to be correct and binding on all parties
whomsoever and Bank's documentation to support said outstanding
balance will be sufficient to establish and sustain Borrowers'
obligations under the Note, unless Borrowers are able to provide
documentation to the contrary satisfactory to Bank which is sufficient
to rebut the aforesaid presumption.
3. ADVANCES
A. Any checks or other charges presented against the regular checking
account of Borrowers in excess of the balance of said regular checking
account may be treated by the Bank as a request for an advance under
the Note, and payment by the Bank of any check may at its option
constitute a loan to the Borrowers pursuant to this Agreement of the
amounts so paid. However, the amounts debited to the Note and
credited to the checking account shall at no time exceed the unused
portion of the Maximum Credit available under the Note.
B. In the event Borrowers shall fail to provide adequate insurance, pay
taxes, or pay any other charges which may affect the assets
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collateralized to Bank, Bank may, at its option, without notice, but
without any obligation or liability to do so, procure insurance, pay
taxes or pay any other charges and add said sum to the balance of the
Note.
C. Although it is contemplated that at no time during the term of this
Agreement shall the outstanding principal amount of the Note exceed
the Maximum Credit thereunder, it is understood and agreed that the
contemplated Maximum Credit may be exceeded at any time, in Bank's
sole discretion, and Borrowers shall nevertheless remain liable for
the repayment in full of all sums advanced by or to Borrowers by Bank,
together with interest, late charges, attorneys' fees and costs, if
any, as more fully set forth herein.
4. COLLATERAL
A. Eligible Accounts Receivable and Revenue Equipment. As security for
the Note and all advances made pursuant to this Agreement, and any
renewals, modifications, substitutions or extensions thereof, Crouse
herein grants to Bank a first lien on all of its Eligible Accounts
Receivable and a second lien (behind the first lien previously granted
by Crouse to Bank) on its Revenue Equipment, together with all
proceeds therefrom. The titles to the vehicles included within the
Revenue Equipment shall be physically delivered by Crouse to the
Commercial Savings Bank in Carroll, Iowa as agent for Bank, or such
other party as designated by Bank, and Bank (and/or its designated
agent) is herein granted a power of attorney to affix Bank's lien on
all such titles and file such liens of record in the event Borrowers
commit an Event of Default hereunder. Bank acknowledges that Crouse
will, in the ordinary course of its business, buy, sell or trade items
of Revenue Equipment and thus will be allowed access to such titles.
B. Bank Deposits, Bank shall at all times have a perfected first
security interest in and right of setoff against any and all deposit
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balances of Borrowers whether now existing or hereafter established,
and may at any time, after an Event of Default hereunder, without
notice, apply the same against payment of any obligations of Borrowers
to Bank, whether or not due regardless of the existence or amount of
any other security held by the Bank.
5. BORROWERS' REPRESENTATIONS AND WARRANTIES
To induce Bank to make Loans and advances hereunder, Borrowers represent
and warrant to Bank from the date of this Agreement and thereafter until all
Indebtedness of the Borrowers to Bank is paid in full that:
A. Borrowers' Authority. (1) Borrowers have full power, right, and
authority to make and execute this Agreement, and to borrow the funds
provided for in this Agreement; (2) the execution of this Agreement,
the Note, the Security Agreement and all other Loan Documents will not
conflict with any provision of law of Borrowers' articles of
incorporation or bylaws or any other organizational requirement, or
under any agreement or instrument to which Borrowers are a party or by
which Borrowers or any of their property may be bound or affected; (3)
the individual who, on behalf of each Borrower, executes and delivers
this Agreement, Note, Security Agreement and other Loan Documents is
authorized to do so and has provided to the Bank the appropriate
authorization evidencing same.
B. No Litigation. No material litigation or governmental proceedings are
pending or threatened against Borrowers and Borrowers have no material
liabilities, actual or contingent, not previously disclosed to Bank.
C. Lien For Bank. The lien of the Bank on the Eligible Accounts
Receivable shall be a first lien at all times during the term of this
Agreement and the lien of the Bank on the Revenue Equipment shall be a
second lien at all times during the term of this Agreement.
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D. No Other Liens. None of Borrowers' assets are subject to any
mortgage, pledge, encumbrance, or other lien, except as otherwise
disclosed to the Bank in writing.
E. Tax Returns. Borrowers have filed all federal and state income tax
returns which are required to be filed and has paid all taxes and
assessments which are due.
F. Financial Statements. All financial statements previously
delivered to Bank by Borrowers fairly present in all material respects
and accurately represent the financial condition of Borrowers as of
the respective dates thereof.
G. Year 2000 Compliance. Borrowers represent and warrant that they
will take all measures reasonably necessary to make their computer
hardware and software compliant with the year 2000. Borrowers
acknowledge that the failure to take such measures may seriously
impair or damage Borrowers' businesses.
H. Ownership of Collateral. Borrowers warrant that they own the entire
legal and beneficial ownership in all assets set forth in their
financial statements and in all Collateral Borrowers are furnishing to
Bank as security for the Loans hereunder, except as otherwise
disclosed to the Bank.
I. No Violation of Occupational Safety and Environmental Protection.
Borrowers are not in violation in any material manner of any federal,
state, county or city statutes, orders, rules or regulations
pertaining to occupational safety or environmental protection, nor do
Borrowers presently anticipate that future expenditures needed to meet
the provisions of existing federal, state, county or city statutes,
orders, rules or regulations will be so burdensome as to affect or
impair in a materially adverse manner Borrowers' financial conditions.
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J. Indemnification and Hold Harmless Obligation. Borrowers represent and
warrant that neither the Collateral given to Bank as security for the
Note, nor any other assets owned by Borrowers have been, or ever will
be, so long as the Note remains unpaid, used for the generation,
manufacture, storage, treatment, disposal, release or threatened
release of any Hazardous Substances, provided however, it is
understood that Crouse, in the ordinary course of its business, does
transport items which may be deemed Hazardous Substances. The
representations and warranties contained herein are based on
Borrowers' due diligence in investigating the collateralized
properties for Hazardous Substances. Borrowers hereby (i) releases
and waives any future claims against Bank for indemnity or
contribution in the event Borrowers become liable for cleanup or other
costs under any such laws; (ii) agrees that Bank may recover against
Borrowers to the full extent of any damages, claims or other
liabilities suffered by Bank as a result of the violation of any such
environmental laws, whether or not such violation occurred while the
Collateral was owned by a predecessor or successor in interest to
Crouse; and (iii) agrees to indemnify and hold Bank harmless against
any and all claims and losses resulting from a breach of this
provision of this Agreement, including reasonable attorney's fees and
expenses. This obligation to indemnify and hold Bank harmless shall
survive the payment of the Note.
K. Address of Borrowers. The addresses appearing on the signatory page
of this Agreement represent the chief executive offices of the
Borrowers.
L. No Material Damage To Collateral. The Collateral is not now
materially damaged or injured as a result of any uninsured fire,
explosion, accident, flood or other casualty.
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M. Collateral Not In Flood Zone. None of the Collateral is situated in
any federal or state designated flood zone.
6. AFFIRMATIVE COVENANTS
From the date of this Agreement and thereafter until all Indebtedness is
paid in full, Borrowers, will:
A. Accounting. Maintain a modern system of accounting in accordance with
GAAP.
B. Financial Statements. Furnish to Bank (i) within one hundred-twenty
(120) days of each fiscal year end, consolidated and unqualified
financial statements of Borrowers audited by an independent certified
public accountant acceptable to Bank in reasonable detail and dated as
of the immediately preceding fiscal year end, and prepared in
accordance with GAAP; (ii) within forty-five (45) days following the
end of each calendar quarter, a consolidated unaudited financial
statement of Borrowers which shall contain a balance sheet, statement
of income and retained earnings, and cash flow, each as of the end of
such calendar quarter; (iii) within forty-five (45) days following the
end of each calendar quarter, the 10-Q Report filed by TransFinancial
with the Securities and Exchange Commission; (iv) within thirty (30)
days following the end of each calendar quarter, a duly completed
Borrowing Base Certificate as of the end of such calendar quarter; and
(v) at such times as requested by Bank, a list of Crouse's inventory
and equipment, cash flow projections and such other information as the
Bank may reasonably request .
C. Access To Books and Collateral. At all times, keep proper books of
account in a manner satisfactory to Bank, and permit the Bank and its
agents access to the books, records, premises, assets and operations
of the Borrowers at all reasonable times.
D. Notification of Legal Proceedings. Notify the Bank promptly of any
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material litigation or legal proceedings involving the Collateral.
E. Insurance. Obtain such insurance or evidence of insurance as Bank may
reasonably require, including but not limited to, an all-risk policy
of casualty insurance, and such other hazard insurance in such amount,
form and substance as Bank may require with Bank named as loss payee
thereunder as it pertains to the Collateral and with standard waiver
of subrogation clauses, it being understood by Bank that Crouse self-
insures the first $100,000.00 of casualty damages. This insurance
shall be issued by such companies as shall be approved by Bank, and
the originals of such policies (together with appropriate endorsements
thereto, evidence of payment of premiums thereon and written agreement
by the insurers therein to give Bank 30 days prior written notice of
intention to cancel) shall be promptly delivered to Bank. This
insurance shall be kept in full force and effect at all times
hereafter until the Note has been paid in full.
F. Maintenance and Preservation of Collateral. At all times maintain,
preserve and protect the Collateral and keep the same in good repair,
working order and condition.
G. Payment of Obligations. Except as otherwise disclosed to and approved
by the Bank, Borrowers will at times during the term hereof pay all
obligations relating to the Collateral as they come due in the
ordinary course of business.
H. Collected Funds. At all times maintain in Borrowers' accounts at the
Bank collected funds sufficient to pay all items presented for payment
from such accounts and sufficient to pay service charges imposed by
the Bank. Borrowers agree to pay to Bank interest on any overdraft or
deficit balance in any such account at the rate set forth in the Note.
I. Submission of Environmental Reports. Promptly upon receipt thereof,
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Borrowers shall submit to Bank copies of any reports, inspections or
examinations conducted by the Iowa Department of Natural Resources or
the Federal Environmental Protection Agency, or any similar agency,
with respect to the assets of Borrowers.
J. Operating Accounts at Bank. Crouse shall maintain its primary cash
concentration accounts with Bank.
K. Tangible Net Worth. TransFinancial shall maintain at all times a
Tangible Net Worth of no less than $35,000,000.00.
L. Debt To Tangible Net Worth Ratio. TransFinancial shall maintain at
all times a Debt to Tangible Net Worth Ratio no greater than
1.00:1.00.
M. Current Ratio. TransFinancial shall maintain at all times a Current
Ratio of not less than 1.25:1.00.
N. New Entities. Borrowers shall not make any material sales or
transfers of their assets to any new or existing entities without
prior written approval from the Bank.
O. ERISA Compliance. Borrowers shall meet their minimum funding
requirements under the Employee Retirement Income Security Act of 1974
(ERISA), as amended, with respect to any employee benefit plan or
other class of benefit plan, which the Pension Benefit Guaranty
Corporation, established under ERISA (PBGC) has elected to insure, in
either case, whether now in existence or hereafter instituted by
Borrowers.
7. NEGATIVE COVENANTS
From the date of this Agreement and thereafter until all Indebtedness is
paid in full, Borrowers will not, without the prior written consent of the Bank:
A. Grant Liens. Pledge, mortgage, lease or otherwise encumber, or permit
any lien to exist on the Collateral, except as may exist and be
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reflected on the financial statements provided at the time of this
Agreement.
B. Sell Assets Out of Ordinary Course. Sell, lease or otherwise dispose
of any part of Borrowers' real or personal property other than in the
ordinary course of Borrowers' business.
C. Dividends. Declare and/or distribute in cash or other assets any
dividends on Crouse's outstanding stock, or redeem any of Crouse's
outstanding stock, without Bank's prior approval.
D. Sale, Change In Control, Merger, Etc. Suffer or permit majority
control of Borrowers to be sold, assigned or otherwise transferred, or
allow a material change in the executive officers of Borrowers, or
merge or consolidate with any entity or enterprise.
E. No Other Guaranties. Grant guarantees to any other financial
institutions or entities without the Bank's prior approval, which
shall not be unreasonably withheld, except that those guarantees which
TransFinancial is required to make on behalf of its subsidiary,
Universal Premium Acceptance Corporation, to Bank Boston, and except
for any other guarantees which collectively do not exceed
$1,000,000.00, shall not require the Bank's prior approval.
8. CONDITIONS OF BANK'S OBLIGATIONS
Bank's obligations to perform hereunder shall be subject to satisfaction of
the following conditions on or before closing:
A. No Breach of Covenants. Borrowers shall have substantially performed
all agreements required to be performed, and shall not be in any
material breach of any covenant, agreement, representation or warranty
made herein or in any other Loan Document.
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B. No Default. No Event of Default and no event or condition which, with
notice or the lapse of time, or both, would constitute an Event of
Default, shall exist.
C. No Material Change in Financial Condition. Borrowers shall not have
incurred any material liabilities, direct or contingent, other than in
the ordinary course of business, since the date of the last financial
statement given to Bank by Borrowers.
D. Insurance. Crouse shall have obtained hazard or fire and extended
coverage insurance (and flood insurance if the Collateral is located
in a flood zone) on the Collateral, issued by a company or companies
approved by Bank and in amounts acceptable to Bank which policy or
policies shall name Bank as loss payee as it pertains to the
Collateral under a standard loss payee clause, and Bank shall also
have been provided with such additional policies of insurance as Bank
may reasonably require insuring against such risks and in such amounts
as are customarily carried by like businesses operating in the same
vicinity.
E. Reimbursement of Bank's Expense. The payment by Borrowers of all out-
of-pocket expenses incurred by Bank and any participants in making and
administering this Loan, including, without limitation, all costs of
appraisals, attorneys' fees and expenses, filings and recordings.
F. Authorized Action. Receipt by Bank of a duly executed certificate
from Borrowers authorizing the borrowings and the execution of the
various Loan Documents contemplated by this Agreement.
G. Legal Opinion. Receipt by Bank of an opinion from Borrowers' legal
counsel to the effect that (i) Borrowers each are corporations duly
organized, validly existing and in good standing under the laws of the
state of their incorporation and to the best of such counsel's
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knowledge and belief, are duly qualified and in good standing as a
foreign corporation authorized to do business in Iowa (if not
incorporated in Iowa) and in each state where, because of the nature
of its activities or properties, such qualification is required; (ii)
Borrowers have full power to execute and deliver the Note and other
Loan Documents, and to perform their obligations under this Agreement
and such Loan Documents; (iii) such actions have been duly authorized
by all necessary corporate action, and are not in conflict with any
provision of the law or of the articles of incorporation or bylaws of
Borrowers, nor in conflict with any agreement binding upon Borrowers
of which such counsel has knowledge; and (iv) this Agreement and the
other Loan Documents are the legal and binding obligations of
Borrowers, enforceable in accordance with their terms.
H. Loan Documents. Receipt by Bank of the Note, Security Agreement and
other Loan Documents duly executed by an authorized officer of
Borrowers.
I. Borrowing Base Certificate. Crouse shall have delivered to Bank a
duly completed Borrowing Base Certificate.
9. EVENTS OF DEFAULT
If any of the following events occur, the Bank may, at its option, without
notice or demand, except as otherwise specifically provided, declare the entire
Indebtedness of Borrowers to Bank immediately due and payable.
A. Late Payment. Any payment of principal or interest due under the
terms of any Note is not made on the due date and such default
continues unremedied for five (5) days after written notice thereof
shall have been given to Borrowers by Bank.
B. Misrepresentation. Any representation or warranty made by Borrowers
in this Agreement shall prove to be materially incorrect or untrue, or
any statement, report or writing furnished by Borrowers to the Bank is
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untrue in any material aspect.
C. Breach of Covenants. Borrowers materially fail to perform or observe
any term, covenant or condition of this Agreement and such failure is
not remedied or corrected within ten (10) days after written notice
thereof shall have been given to Borrowers by Bank.
D. Breach Under Other Loan Documents. Any breach of any provisions
contained in the Note or any other Loan Documents and such breach is
not remedied within ten (10) days after written notice thereof shall
have been sent to Borrowers by Bank.
E. Bankruptcy, Etc. If either Borrower becomes insolvent or bankrupt or
makes an assignment for the benefit of creditors, or is petitioned
into bankruptcy, either voluntarily or involuntarily.
F. Adverse Impairment in Collateral. Bank's interest in the Collateral
is adversely impaired in any manner, and Crouse is unable to remedy,
to the Bank's satisfaction, such adverse impairment within 30 days
after written notice from the Bank.
10. REMEDIES
Upon the occurrence of a Default (it being understood that a Default under
any Note shall constitute a Default under all Notes), the Bank may, after
expiration of any notice period referenced above (it being understood that in
regard to the Events of Default described in Paragraphs 9 (C), 9 (D) or 9 (F),
if any such default cannot reasonably be cured within such grace period, as
solely determined by Bank, the period of time within which to cure such default
shall be extended for such reasonable time as is necessary to cure such default,
as long as Borrowers promptly, diligently and continuously act to cure such
default), (it being further understood that Borrowers shall not be entitled to
any grace period or notice prior to acceleration if the Bank reasonably and in
good faith believes that the granting of such grace period or notice would
jeopardize Bank's lien position) declare the unpaid principal balance and
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interest on the Note(s) immediately due and payable, together with any other
debt owed by Borrowers to Bank, and all such principal, interest and other debt
shall thereupon be immediately due and payable in full. The Bank shall
thereupon have all remedies set forth herein and in the Note and any other Loan
Documents, and all remedies otherwise available to a secured creditor under the
Uniform Commercial Code of Iowa.
11. MISCELLANEOUS
A. The Bank As Attorney-In-Fact. In the event of a Default, Borrowers
hereby appoint Bank to be Borrowers' attorney-in-fact, without
requiring the Bank to act as such, for the purpose of carrying out the
provisions hereof and taking any action and executing any document or
instrument which the Bank may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact
is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, Bank shall, as attorney-in-fact of
Crouse, have the right to receive, collect and endorse all vehicle
titles, checks, drafts or other remittance made payable to Course, or
Crouse's order, representing any payment on account of any of the
Collateral and to give full discharge therefor.
B. Waiver Not Binding. Any waiver of any default by Bank is not a waiver
of any subsequent default. Further, no delay on the part of the Bank
in the exercise of any power or right shall constitute a waiver
thereof, nor shall any single or partial exercise of any power or
right preclude other or further exercise thereof.
C. Notice. Any notice hereunder to Borrowers shall be in writing, and
shall be deemed to be given on the date delivered, personally, or on
the date when mailed by ordinary mail, postage prepaid, or by
facsimile and addressed to the Borrowers as appearing on the signature
page of this Agreement, or at such other address as the Borrowers may,
by written notice received by the Bank, designate as the Borrowers'
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addresses for purposes of notice hereunder.
D. Governing Law. This Agreement, the Note, the Security Agreement and
all other Loan Documents shall be covered in all respects by the laws
of the State of Iowa. A determination that any provision of this
Agreement is unenforceable or invalid shall not affect the validity or
enforceability of any other provision.
E. Enforcement in Iowa. Borrowers acknowledges that this Agreement is
being entered into by the Bank in partial consideration of Bank's
right to enforce in Iowa the terms and provisions of this Agreement
and the Loan Documents. Borrowers consents to jurisdiction in Iowa
and construction of this Agreement under the laws of the State of
Iowa. Borrowers waives any right to commence any action against the
Bank except in Iowa.
F. Term of Agreement. The term of this Agreement shall coincide with the
terms of the Note executed by Borrowers in favor of the Bank, as
modified, extended, substituted, renewed or until all Indebtedness is
paid in full and any commitment to extend credit has terminated.
G. Incorporation of Commitment Letter. The terms and conditions of the
Commitment Letter are incorporated herein. If any inconsistency
exists between the Commitment Letter and this Agreement, this
Agreement shall control.
H. Assignment. This Agreement shall not be assigned by Borrowers without
the written consent of the Bank.
I. Participation. The Bank may enter into participation agreements with
other financial institutions with regard to any Indebtedness of
Borrowers, provided, however, Bank shall remain the lead bank in any
such participations.
J. Successors and Assigns. This Agreement shall be binding upon
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Borrowers' successors and assigns.
K. Additional Documents. Borrowers agrees to execute and cause to be
executed such additional documents as the Bank may require in order to
effectuate the terms of this Agreement. All documents shall be on the
Bank's standard forms for the same or forms otherwise acceptable to
Bank.
L. Conflict in Documents. In the event of a conflict between the terms
and conditions of this Agreement and those of any other documents
pertaining to Borrowers' Indebtedness to Bank, the terms of this
Agreement shall be controlling.
M. Survival of Representations and Warranties. All representations,
warranties, covenants, and agreements of Borrowers herein shall
survive the execution and delivery of this Agreement and shall be
deemed continuing until the Indebtedness is paid in full to the Bank
and any commitment to extend credit has terminated.
N. Release of Bank. Borrowers hereby release and forever discharge Bank
and any participants, their officers, directors, employees,
shareholders, agents and representatives from all claims or causes of
actions of every kind or character, known or unknown, without limit,
which Borrowers allegedly may have as of the date of this Agreement.
O. Collection Costs. If Bank hires an attorney to assist in
collecting any amount due or enforcing any right or remedy under this
Agreement, the Note, the Security Agreement or any other Loan
Document, Borrowers agree to pay the reasonable attorney fees and
expenses incurred by Bank.
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IMPORTANT - READ BEFORE SIGNING, THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS
OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
Borrowers warrant that they have received a copy of this Agreement and
further state that they understand fully the terms and conditions described
herein.
BANKERS TRUST COMPANY
Steven D. Simon, Vice President
P.O. Box 897
665 Locust Street
Des Moines, Iowa 50304-9987
"BANK"
TRANSFINANCIAL HOLDINGS, INC.
Timothy P. O'Neil, Chief Executive Officer
"TRANSFINANCIAL"
CROUSE CARTAGE COMPANY
By:
Mark A. Foltz, Secretary
"CROUSE"
"BORROWERS"
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