1
EXHIBIT 10.41
Note No.
----------------------
STANDARD FEDERAL BANK
PROMISSORY NOTE
(Line of Credit)
{ } New
{X} Renewal
$35,000,000.00 Troy, Michigan
- ---------------------- -------------------------------
Due Date: May 1, 2001 Dated:
- ---------------------- -------------------------------
FOR VALUE RECEIVED, on the Due Date unless accelerated earlier as provided
herein, the undersigned, jointly and severally (collectively, "Borrower"),
promise to pay to the order of Standard Federal Bank, a federal savings bank
("Standard Federal"), at its office set forth below, or at such other place as
Standard Federal may designate in writing, the principal sum of Thirty Five
Million and 00/100 Dollars ($35,000,000.00) or such lesser amount as may from
time to time be outstanding by reason of having been advanced hereunder in
accordance with the provisions of an Amended and Restated Loan Agreement, dated,
between the Borrower and Standard Federal (the "Loan
Agreement"), plus interest as hereinafter provided on all amounts from time to
time outstanding hereunder, all in lawful money of the United States of America.
Capitalized terms not otherwise defined herein shall have the meanings given
such terms in the Loan Agreement.
The principal outstanding under this Note from time to time shall bear
interest ("Effective Interest Rate"), on a basis of a year of 360 days for the
actual number of days amounts are outstanding hereunder, at Borrower's option,
to be exercised in accordance with the procedures outlined in the Loan
Agreement, at the Prime-Based Rate or the Line of Credit LIBOR Rate.
Accrued interest shall be payable on the first day of each month beginning
on August 1, 1999.
This Note is given as evidence of any and all indebtedness of the Borrower
to Standard Federal arising as a result of advances or other credit which may be
made under this Note from time to time in accordance with the provisions of the
Loan Agreement. Any and all indebtedness may be repaid by the Borrower in whole
or in part from time to time prior to the Due Date. Standard Federal shall, from
time to time prior to the Due Date, make advances to Borrower hereunder upon
request therefor by Borrower, provided that, upon giving effect to such advance:
(a) no Event of Default (as hereinafter defined) and no event which with notice
and/or the passage of time would become an Event of Default shall exist at the
time the advance is to be made; (b) all representations and warranties of
Borrower theretofore made are true and correct; (c) Standard Federal shall not
have previously or concurrently declared all amounts owing hereunder to be
immediately due and payable; (d) the amount requested shall not cause the total
amount outstanding hereunder to exceed the Line of Credit Limit, as defined in
the Loan Agreement; and (e) all other requirements for the making of advances
provided for in the Loan Agreement have been satisfied. The principal amount of
indebtedness owing pursuant to this Note shall change from time to time,
decreasing in an amount equal to any and all payments of principal made by the
Borrower and increasing by an amount equal to any and all advances made by
Standard Federal to the Borrower pursuant to the terms hereof, and the books and
records of Standard Federal shall be conclusive evidence of the amount of
principal and
1
2
interest owing hereunder at any time. All payments made hereunder shall be
applied first against costs and expenses required to be paid hereunder, then
against accrued interest to the extent thereof and the balance shall be applied
against the outstanding principal amount hereof.
Nothing herein contained, nor any transaction relating thereto, or hereto,
shall be construed or so operate as to require the Borrower to pay, or charge,
interest at a greater rate than the maximum allowed by the applicable law
relating to this Note. Should any interest, or other charges, charged, paid or
payable by the Borrower in connection with this Note, or any other document
delivered in connection herewith, result in the charging, compensation, payment
or earning of interest in excess of the maximum allowed by applicable law, then
any and all such excess shall be and the same is hereby waived by Standard
Federal, and any and all such excess paid shall be automatically credited
against and in reduction of the principal due under this Note. If Standard
Federal shall reasonably determine that the Effective Interest Rate (together
with all other charges or payments related hereto that may be deemed interest)
stipulated under this Note is, or may be, usurious or otherwise limited by law,
the unpaid balance of this Note, with accrued interest at the highest rate
permitted to be charged by stipulation in writing between Standard Federal and
Borrower, at the option of Standard Federal, shall immediately become due and
payable.
The Borrower represents and warrants that it is duly organized, validly
existing and in good standing and is duly authorized to make and perform this
Note, which constitutes its valid and binding legal obligation enforceable in
accordance with its terms. All financial data furnished to Standard Federal in
connection with this Note fairly present the financial condition of the Borrower
and its subsidiaries, if any, as of the dates thereof and there has been no
material adverse change in the condition (financial or otherwise) of the
Borrower since such dates.
An Event of Default shall be deemed to have occurred hereunder if any
indebtedness of the Borrower to Standard Federal hereunder is not paid when due,
regardless of whether such indebtedness has arisen pursuant to the terms of this
Note, the Loan Agreement or any mortgage, security agreement, guaranty,
instrument or other agreement executed in conjunction herewith, or if an Event
of Default shall otherwise occur under the Loan Agreement.
Upon the occurrence of any Event of Default, after the giving of any notice
and the expiration of any grace, cure or notice period provided for in the Loan
Agreement, if any, and if no such notice or grace, cure or notice period is so
provided for in the Loan Agreement, then immediately, Standard Federal may
declare the entire unpaid and outstanding principal balance hereunder and all
accrued interest to be due and payable in full forthwith, without presentment,
demand or notice of any kind and may exercise any one or more of the rights and
remedies provided herein or in the Loan Agreement or in any mortgage, guaranty,
security agreement or other document relating hereto or by applicable law. The
remedies provided for hereunder are cumulative to the remedies for collection of
the amounts owing hereunder as provided by law or by the Loan Agreement, or by
any mortgage, guaranty, security agreement or other document relating hereto.
Nothing herein is intended, nor should it be construed, to preclude Standard
Federal from pursuing any other remedy for the recovery of any other sum to
which Standard Federal may be or become entitled for breach of the terms of this
Note or the Loan Agreement, or any mortgage, guaranty, security agreement or
other instrument relating hereto.
Borrower agrees, in case of an Event of Default under the terms of this
Note or under any loan agreement, security or other agreement executed in
connection herewith, to pay all costs of Standard Federal for collection of the
Note and all other liabilities of Borrower to Standard Federal and enforcement
of rights hereunder, including reasonable attorney fees and legal expenses
including participation in Bankruptcy
2
3
proceedings. During any period(s) this Note is in default, or after the Due
Date, or after acceleration of maturity, the outstanding principal amount hereof
shall bear interest at a rate equal to two percent (2.0%) per annum greater than
the interest rate otherwise charged hereunder. If any required payment is not
made within ten (10) days after the date it is due, then, at the option of
Standard Federal, a late charge of not more than four cents ($.04) for each
dollar of the payment so overdue may be charged. In addition to any other
security interests granted to Standard Federal, Borrower hereby grants Standard
Federal a security interest in all of Borrower's bank deposits, instruments,
negotiable documents, and chattel paper which at any time are in the possession
or control of Standard Federal. After the occurrence of an Event of Default
hereunder, Standard Federal may hold and apply at any time its own indebtedness
or liability to Borrower in payment of any indebtedness hereunder.
Acceptance by Standard Federal of any payment in an amount less than the
amount then due shall be deemed an acceptance on account only, and the failure
to pay the entire amount then due shall be and continue to be an Event of
Default. Upon any Event of Default, neither the failure of Standard Federal
promptly to exercise its right to declare the outstanding principal and accrued
unpaid interest hereunder to be immediately due and payable, nor the failure of
Standard Federal to demand strict performance of any other obligation of the
Borrower or any other person who may be liable hereunder shall constitute a
waiver of any such rights, nor a waiver of such rights in connection with any
future default on the part of the Borrower or any other person who may be liable
hereunder.
Borrower and all endorsers and guarantors hereof, hereby jointly and
severally waive presentment for payment, demand, notice of non-payment, notice
of protest or protest of this Note, diligence in collection or bringing suit,
and hereby consent to any and all extensions of time, renewals, waivers, or
modifications that may be granted by Standard Federal with respect to payment or
any other provisions of this Note, and to the release of any collateral or any
part thereof, with or without substitution. The liability of the Borrower shall
be absolute and unconditional, without regard to the liability of any other
party hereto.
This Note is executed pursuant to the Loan Agreement and is secured by a
Security Agreement, dated September 15, 1994, and by a Security Agreement, dated
July 19, 1995, and by a Security Agreement, dated September 15, 1994, and by a
Security Agreement, dated June 22, 1995, and by a Commercial Mortgage, dated
September 26, 1988, covering property located in River Rouge, Michigan, as
amended of even date herewith, and by a Real Estate Mortgage with Power of Sale,
dated October 13, 1988, covering property located in Cleveland County, Oklahoma,
as amended of even date herewith, and by a Commercial Mortgage, Assignment of
Lease and Rents, Security Agreement and Financing Statement, dated February 6,
1995, covering property located in Sterling Heights, Michigan, as amended of
even date herewith, and by a Commercial Mortgage, Assignment of Lease and Rents,
Security Agreement and Financing Statement, dated February 6, 1995, covering
property located in Comstock Township, Michigan, as amended of even date
herewith, and by an Open-End Commercial Mortgage and Assignment of Lease and
Rents, dated June 29, 1993, as amended, covering property located in Winesburg,
Ohio, as amended of even date herewith, and by an Open-End Commercial Mortgage
and Assignment of Lease and Rents, dated June 29, 1993, as amended, covering
property located in Galion, Ohio, as amended of even date herewith. Reference is
hereby made to such documents for additional terms relating to the transaction
giving rise to this Note, the security given for this Note and additional terms
and conditions under which this Note matures, may be accelerated or prepaid.
Advances hereunder may be requested by telephone, in writing or in any
other manner acceptable to Standard Federal. Borrower understands and agrees
that any telephone conversation with Standard Federal may be recorded for
accuracy.
3
4
BORROWER:
MCCLAIN INDUSTRIES, INC.,
a Michigan corporation
By:
- ------------------------ ------------------------------------------
Mark S. Mikelait
Its: Treasurer
------------------------------
38-1867649
---------------------------------------------
Taxpayer Identification Number
MCCLAIN E-Z PACK INC., a Michigan corporation
By:
- ------------------------ -------------------------------------------
Mark S. Mikelait
Its: Treasurer
--------------------------------
38-3060202
----------------------------------------------
Taxpayer Identification Number
MCCLAIN GALION, INC., a Michigan corporation
By:
- ------------------------ -------------------------------------------
Mark S. Mikelait
Its: Treasurer
-------------------------------
38-3060260
----------------------------------------------
Taxpayer Identification Number
SHELBY STEEL PROCESSING COMPANY, a Michigan
corporation
By:
- ------------------------ -------------------------------------------
Mark S. Mikelait
Its: Treasurer
-------------------------------
38-2205216
----------------------------------------------
Taxpayer Identification Number
4
5
MCCLAIN TUBE COMPANY d/b/a QUALITY TUBE, a Michigan
corporation
By:
- ------------------------ ------------------------------------------------
Mark S. Mikelait
Its: Treasurer
------------------------------------
38-3191647
---------------------------------------------------
Taxpayer Identification Number
MCCLAIN INTERNATIONAL FSC, a U.S. Virgin Islands
corporation
By:
- ------------------------ ------------------------------------------------
Kenneth D. McClain
Its: President
------------------------------------
---------------------------------------------------
Taxpayer Identification Number
MCCLAIN SOUTHLAND CO, INC., a Florida corporation
By:
- ------------------------ ------------------------------------------------
Mark S. Mikelait
Its: Treasurer
------------------------------------
59-3241829
---------------------------------------------------
Taxpayer Identification Number
Standard Federal Bank, a
federal savings bank
2600 West Big Beaver Road
Troy, Michigan 48084
5