Amendment to LOAN AGREEMENT
This Amendment to the Loan Agreement dated May 5, 1994 is
made this 15th day of February, 1995, by and between Best Lock
Corporation (the "Corporation") and Russell C. Best, a resident
of Zionsville, Indiana (the "Executive").
WHEREAS, the Parties entered into the Loan Agreement dated
May 5, 1994 which, in recognition of Employee's major
contribution to the profitability, growth, and financial strength
of the Corporation during present and future employment with the
Corporation, provided for a loan of a certain amount of funds to
the Executive;
WHEREAS, Executive pledged to the Corporation all of the
shares of Frank E. Best, Inc., a Washington corporation, ("FEB")
he purchased with the proceeds of the loan as collateral to
guarantee repayment of the loan to the Corporation;
WHEREAS, the formation of Best Lock Partnership, an Indiana
general partnership formed by Walter E. Best Company, Inc., an
Indiana corporation ("WEBCO") and Executive (the "Partnership"),
will require the contribution by Executive of 2,500 shares of FEB
common stock to the Partnership; and,
WHEREAS, by this Amendment, the parties desire to amend the
Loan Agreement to allow Executive to contribute such FEB shares
to the Partnership by permitting Executive to substitute 451
unencumbered shares of Best Universal Lock Corporation, a
Washington Corporation ("BUL"), currently owned by Executive, in
place of 1,014 FEB shares, which are equal in value to the FEB
shares for which the substitution is to be made.
NOW, THEREFORE, the Loan Agreement is amended as follows:
Section 1. Incorporation and Recitals. The Recitals set
forth above are incorporated in and made a part of this
Amendment.
Section 2. Nature and Effect of Amendment. Except as
otherwise provided hereunder, the terms of the Loan Agreement
shall remain unchanged.
Section 3. New Section 4. Section 4 of the Loan Agreement
is amended and restated as follows:
Section 4. Collateral Security. The Executive
shall deliver to the Corporation stock certificate(s)
representing 113,311 shares of capital stock of Frank
E. Best, Inc., a Washington corporation, ("FEB") which
the Executive purchased with the proceeds of the loan
contemplated hereunder, and 451 shares of Best
Universal Lock Corporation, a Washington Corporation
("BUL") to secure full payment by the Executive of
amounts owing under the terms of this Agreement and the
Promissory Note. So long as the Executive is not in
default under the terms of this Agreement and the
Promissory Note, all voting and dividend rights in any
such FEB or BUL shares so pledged shall belong to the
Executive. As payments of principal are made under the
terms of the Promissory Note, the Corporation shall
first release stock certificates representing ownership
of FEB shares and then, after all FEB shares are
released, the Corporation shall release BUL shares, in
such amounts so that the Corporation will never hold
stock certificates as security hereunder representing
FEB and/or BUL shares having an aggregate value greater
than the aggregate amount of principal and accrued
interest owing under the terms of the Promissory Note.
Upon the full payment of the total amount of principal
and accrued interest owing under the terms of the
Promissory Note, the Corporation shall deliver to the
Executive all stock certificates and other collateral
security which it may hold under the terms of this
Agreement and shall release all such security into the
possession of and to the account of the Executive.
Wherefore, the Parties hereby amend the Loan Agreement dated
May 5, 1994 as set forth above as of this 15th day of February,
1995.
BEST LOCK CORPORATION
By: /s/ Walter E. Best
------------------------
Walter E. Best, President
Attest:
By: /s/ Mark G. Ahearn
-----------------------
Mark G. Ahearn
Its: Associate Counsel
/s/ Russell C. Best
------------------------------
Russell C. Best
LOAN AGREEMENT
This Loan Agreement (the "Agreement"), entered into this 5th
day of May, 1994, by and between Best Lock Corporation, a
Delaware corporation, (the "Corporation") and Russell C. Best, a
resident of Zionsville, Indiana, (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive has been for several years, and is now,
employed as an executive officer of the Corporation and has made,
and is expected to make, a major contribution to the
profitability, growth, and financial strength of the Corporation;
WHEREAS, the Corporation considers the continued services of
the Executive to be in the best interests of the Corporation and
its shareholders and desires to assure the continued services of
the Executive on behalf of the Corporation on an objective and
impartial basis and without distraction or conflict of interest
in the event of an attempt to obtain control of the Corporation;
WHEREAS, the Executive is willing to remain in the employ of
the Corporation upon the understanding that the Corporation will
provide him with certain economic benefits;
WHEREAS, the Corporation and the Executive have entered into
an Employment Agreement dated May 5th, 1994 (the "Employment
Agreement"), pursuant to which the Corporation and the Executive
have agreed that the Executive will continue to be employed as an
executive officer of the Corporation and will provide certain
services in return for the Corporation providing certain economic
benefits to Executive, including the loaning of funds to
Executive;
WHEREAS, the Executive desires to borrow funds from the
Corporation and the Corporation is willing to loan funds to the
Executive pursuant to the terms of the Employment Agreement; and
WHEREAS, the Corporation and the Executive wish to record the
terms of their agreement in writing in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises made
hereunder and consistent with the terms of the Employment
Agreement, the parties agree as follows:
Section 1. Loan of Funds. The Corporation will loan the
Executive at such time as the Executive requests within the next
Ninety (90) days of the date of this Agreement an amount not to
exceed Three Million Four Hundred Thousand Dollars ($3,400,000)
at an interest rate of seven and two-tenths percent (7.2%) per
annum and on such other terms pursuant to the provisions of a
Promissory Note substantially in the form attached hereto as
Exhibit 1. The Executive will repay the principal amount and all
interest accrued on the principal amount in accordance with the
terms of the Promissory Note and not later than April 30, 2024.
The Executive may prepay without penalty any or all of the
principal and accrued interest owing under the terms of this
Agreement and the Promissory Note.
Section 2. Execution of Promissory Note by the Executive. On
the date of this Agreement, the Executive will execute a
Promissory Note substantially in the form attached hereto as
Exhibit 1.
Section 3. Executive's Use of Funds. The Executive may use
the funds loaned to him by the Corporation for such purpose or
purposes as the Executive desires.
Section 4. Collateral Security. Within ten (10) days after
the loan transaction contemplated hereunder is closed, the
Executive shall deliver to the Corporation stock certificates
representing any shares of capital stock of Frank E. Best, Inc.,
a Washington corporation, ("FEB") which the Executive shall have
purchased with the proceeds of the loan contemplated hereunder,
to secure full payment by the Executive of amounts owing under
the terms of this Agreement and the Promissory Note. So long as
the Executive is not in default under the terms of this Agreement
and the Promissory Note, all voting and dividend rights in any
such FEB shares so pledged shall belong to the Executive. As
payments of principal are made under the terms of the Promissory
Note, the Corporation shall release stock certificates
representing ownership of FEB shares in such amounts so that the
Corporation will never hold stock certificates as security
hereunder representing FEB shares having an aggregate value
greater than the aggregate amount of principal and accrued
interest owing under the terms of the Promissory Note. Upon the
full payment of the total amount of principal and accrued
interest owing under the terms of the Promissory Note, the
Corporation shall deliver to the Executive all stock certificates
and other collateral security which it may hold under the terms
of this Agreement and shall release all such security into the
possession of and to the account of the Executive.
Section 5. Event of Default. The occurrence of any of the
following shall constitute a default under the Promissory Note
and under this Agreement: (i) the failure of the Executive to
make timely payment of principal or interest under the terms of
the Promissory Note; (ii) the admission by the Executive in
writing of an inability to pay his debts as they become due;
(iii) the appointment of a receiver or trustee for any part of
the Executive's property; or (iv) an assignment for the benefit
of the Executor's creditors.
Upon any default, the Corporation, at its option and without
notice or demand, may declare all amounts owing to it by the
Executive secured hereby immediately to be due and payable, and
shall have all the remedies of a secured party available under
Indiana law. These remedies include, without limitation, the
right to take permanent possession of all collateral, including
stock certificates, held at such time hereunder and to succeed to
all voting and dividend rights related thereto.
Section 6. Amendment of Agreement. This Agreement may be
amended in any or all of its provisions only if the amendment is
reduced to writing and signed by the Corporation and either the
Executive or, if he is legally incompetent, his personal
representative.
Section 7. Successors. All of the terms or provisions of
this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, their heirs, administrators,
executors, successors, and permitted assigns.
Section 8. Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be
deemed to have been given if placed in the United States mail,
registered or certified, return receipt requested, postage
prepaid, or if personally delivered, addressed as follows:
To the Corporation: Best Lock Corporation
6161 East 75th Street
Indianapolis, Indiana 46250
To the Executive: Russell C. Best
755 Eagle Creek Drive
Zionsville, Indiana 46077
Section 9. Governing Law. This Agreement shall be construed
and interpreted in accordance with, and shall be governed by, the
laws of the State of Indiana.
IN WITNESS WHEREOF, the Corporation and the Executive have
caused this Agreement to be executed on the day and year first
above written.
"CORPORATION"
/s/ Walter E. Best
-----------------------------
Walter E. Best, President
Attest: /s/ Roger E. Beaverson
----------------------
Roger E. Beaverson, Secretary
"EXECUTIVE"
/s/ Russell C. Best
-----------------------------
Russell C. Best
EXHIBIT 1
INSTALLMENT PROMISSORY NOTE
$3,400,000 Final Installment Due Date: April 30, 2024
For value received, the undersigned promises to pay to the
order of Best Lock Corporation, a Delaware corporation, the sum
of Three Million Four Hundred Thousand Dollars ($3,400,000), at
6161 East 75th Street, Indianapolis, Indiana, or at such other
place as the holder hereof may direct in writing, with interest
upon the unpaid principal balance at the rate of seven and two-
tenths percent (7.2%) per annum from the date of this instrument
until maturity, and nine and two-tenths percent (9.2%) per annum
after maturity until paid, with attorneys' fees and costs of
collection and without relief from valuation and appraisement
laws, payment of principal and interest to be made as follows:
Principal and interest shall be paid in equal annual
installments (each installment including both principal and
interest) in the amount of $______________. Each annual
installment shall be paid on April 30. The first annual
installment shall be paid on April 30, 1995, with additional
installments to be paid on April 30 each year thereafter.
The final annual installment shall be paid on April 30, 2024
and shall be in the amount of $_______________.
This note may be prepaid in full or in part at any time.
In the event of default in payment of any of said installments
when due, the entire unpaid balance of principal and interest
shall become due and payable immediately, without notice, at the
election of the holder hereof.
The maker and any indorser(s) jointly and severally waive
demand, presentment, protest, notice of protest, and notice of
nonpayment or dishonor of this note, and each of them consents to
extensions of the time of payment of this note.
No delay or omission on the part of the holder hereof in the
exercise of any right or remedy shall operate as a waiver
thereof, and no single or partial exercise by the holder hereof
of any right or remedy shall preclude other or further exercise
thereof or of any other right or remedy.
This note, and any extensions or renewals hereof, is secured
by a Loan Agreement dated May ____, 1994 and executed in favor of
and delivered to the payee hereof by the undersigned, to which
reference is made for other rights as to prepayment and
acceleration.
Signed and delivered at Indianapolis, Indiana, this ______ day
of May, 1994.
Signature
______________________________
Russell C. Best
755 Eagle Creek Drive
Zionsville, Indiana 46077