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EXHIBIT 10.1
COMMERCIAL LOAN
NOTE NO. 8
PROMISSORY NOTE
$8,000,000.00 Cincinnati, Ohio December 31, 1995
The undersigned, for value received, promises to pay to the order of The
Provident Bank, at any of its offices, the sum of EIGHT MILLION AND NO/100
DOLLARS ($8,000,000.00), (the "Maximum Credit") or so much thereof as is loaned
by the holder pursuant to the provisions hereof, together with interest until
demand or maturity AT A RATE OF BORROWER'S OPTION OF PROVIDENT BANK'S PRIME RATE
OR LIBOR + 1 per year computed on the basis of a year of 360 days for the actual
number of days elapsed, and after default hereunder, demand or maturity, whether
at stated maturity or by acceleration, at a rate four (4) percentage points
greater than the stated rate (the "Default Rate"). Interest on any prime rate
borrowing shall be due and payable MONTHLY BEGINNING JANUARY 31, 1996, and at
maturity. Interest on any LIBOR borrowings shall be due and payable upon it
respective maturity.
Principal shall be due and payable AT MATURITY, DECEMBER 30, 1996.
The undersigned hereby state(s) that the purpose of the loan evidenced by this
Note is WORKING CAPITAL.
/X/ REVOLVING CREDIT: If this box is checked, this Note is a revolving credit
subject to the terms of this paragraph. Subject to the conditions hereof and of
any other agreements between the parties relating hereto and until demand, if
the principal is payable on demand, or maturity (whether at scheduled or
accelerated maturity), if the principal is payable other than on demand, the
undersigned may borrow and reborrow from the holder and the holder may, in its
sole discretion, lend and relend to the undersigned such amounts not to exceed
the Maximum Credit as the undersigned may at any time and from time to time
request upon satisfactory notice to the holder.
Notwithstanding anything to the contrary contained herein or in any
other agreement between the undersigned and the holder, if this Note provides
that the principal hereof is payable on demand, then this Note is a demand Note
due and owing immediately, without prior demand of the holder and immediate
action to enforce its payment may be taken at any time, without notice and
without reason. If any payment of principal or interest is not paid when due, or
if the holder deems itself insecure for any reason, including but not limited
to, the insolvency, bankruptcy, business failure, death, default in the payment
of other obligations or receivership of or concerning any maker, guarantor or
indorser hereof, this Note shall, if payable other than on demand, at the option
of its holder, become immediately due and payable, without demand or notice. The
undersigned shall promptly provide such financial information as the holder
shall reasonably request from time to time.
Upon this Note becoming due under any of its terms and provisions, and
not being fully paid and satisfied, the total sum then due hereunder may, at any
time and from time to time, be charged against any account or accounts
maintained with the holder hereof by any of the undersigned or any indorser,
without notice to or further consent from any of them, and the undersigned and
all indorsers agree to be and remain jointly and severally liable for all
remaining indebtedness represented by this Note in excess of the amount or
amounts so applied.
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Prime rate is that annual percentage rate of interest which is
established by The Provident Bank from time to time as its prime rate, whether
or not such rate is publicly announced, and which provides a base to which loan
rates may be referenced. Prime rate is not necessarily the lowest lending rate
of The Provident Bank. A rate based on the prime rate will change each time and
as of the date that the prime rate changes. If any payment of principal or
interest is not paid when due or if the undersigned shall otherwise default in
the performance of its obligations hereunder or under any other note or
agreement with the holder, the holder at its option, may charge and collect, or
add to the unpaid balance hereof, a late charge up to the greater of $250 or .1%
of the unpaid balance of this Note at the time of such delinquency for each such
delinquency to cover the extra expense incident to handling delinquent accounts,
and/or increase the interest rate on the unpaid balance to the Default Rate. The
holder may charge interest at the rate provided herein on all interest and other
amounts owing hereunder which are not paid when due.
The undersigned, all indorsers hereof, any other party hereto, and any
guarantor hereof (collectively "Obligors") each (i) waive(s) presentment,
demand, notice of demand, protest, notice of protest and notice of dishonor and
any other notice required to be given by law in connection with the delivery,
acceptance, performance, default or enforcement of this Note, of any indorsement
or guaranty of this Note or of any document or instrument evidencing any
security for payment of this Note; and (ii) consent(s) to any and all delays,
extensions, renewals or other modifications of this Note or waivers of any term
hereof or release or discharge by the holder of any of Obligors or release,
substitution or exchange of any security for the payment hereof or the failure
to act on the part of the holder or any indulgence shown by the holder, from
time to time and in one or more instances, (without notice to or further assent
from any of Obligors) and agree(s) that no such action, failure to act or
failure to exercise any right or remedy, on the part of the holder shall in any
way affect or impair the obligations of any Obligors or be construed as a waiver
by the holder of, or otherwise affect, any of the holder's rights under this
Note, under any indorsement or guaranty of this Note or under any document or
instrument evidencing any security for payment of this Note. The undersigned and
all indorsers further agree to reimburse the holder for all advances, charges,
costs and expenses, including reasonable attorneys' fees, incurred or paid in
exercising any right, power or remedy conferred by this Note, or in the
enforcement thereof. If the undersigned are more than one (1), the liability of
the undersigned hereon is joint and several, and the term "undersigned", as used
herein, means any one or more of them.
The undersigned and all indorsers authorize any attorney at law,
including an attorney engaged by the holder, to appear in any court of record in
the State of Ohio or any other State or Territory of the United States, after
the indebtedness evidenced hereby, or any part thereof, becomes due and waive
the issuance and service of process and confess judgment against any one or more
than one of the undersigned and all indorsers in favor of the holder, for the
amount then appearing due, together with costs of suit and, thereupon, to
release all errors and waive all rights of appeal and stay of execution, but no
such judgment or judgments against any one of the undersigned shall be a bar to
a subsequent judgment or judgments against any one or more than one of such
persons against whom judgment has not been obtained hereon. This warrant of
attorney to confess judgment is a joint and several warrant of attorney. The
foregoing warrant of attorney shall survive any judgment; and if any judgment be
vacated for any reason, the holder hereof nevertheless may hereafter use the
foregoing warrant of attorney to obtain an additional judgment or judgments
against the undersigned and all indorsers or any one or more of them. The
undersigned and all indorsers hereby expressly waive any conflict of interest
that the holder's attorney may have in confessing such judgment against such
parties and expressly consent to the confessing attorney receiving a legal fee
from the holder for confessing such judgment against such parties.
THE PROVISIONS OF THIS NOTE SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF OHIO. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR THE HOLDER TO
EXTEND CREDIT TO BORROWER, AND AFTER HAVING THE OPPORTUNITY TO CONSULT COUNSEL,
THE UNDERSIGNED AND ALL INDORSERS HEREBY EXPRESSLY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY LAWSUIT OR PROCEEDING RELATED TO THIS NOTE OR ARISING IN ANY
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WAY FROM ANY INDEBTEDNESS OR OTHER TRANSACTIONS INVOLVING THE HOLDER AND THE
UNDERSIGNED. THE UNDERSIGNED HEREBY DESIGNATE(S) ALL COURTS OF RECORD SITTING IN
CINCINNATI, OHIO AND HAVING JURISDICTION OVER THE SUBJECT MATTER, STATE AND
FEDERAL, AS FORUMS WHERE ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING
FROM OR OUT OF THIS NOTE, ITS MAKING, VALIDITY OR PERFORMANCE, MAY BE PROSECUTED
AS TO ALL PARTIES, THEIR SUCCESSORS AND ASSIGNS, AND BY THE FOREGOING
DESIGNATION THE UNDERSIGNED CONSENT(S) TO THE JURISDICTION AND VENUE OF SUCH
COURTS.
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.
LSI INDUSTRIES INC.
By:
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Ronald S. Stowell
Chief Financial Officer & Treasurer
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Address 10000 Alliance Road
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Cincinnati, OH 45242
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LETTER AGREEMENT
This agreement made this 31st day of December, 1995, by and between LSI
INDUSTRIES INC., 10000 Alliance Road, Cincinnati, OH 45242 (hereinafter referred
to as "LSI") and THE PROVIDENT BANK, a Banking Corporation located at One East
Fourth Street, Cincinnati, OH 45202 (hereinafter referred to as "Provident"),
WITNESSETH
WHEREAS, Provident intends to extend an $8,000,000.00 unsecured line of
credit to LSI for the purposes of funding working capital and other general
corporate needs, said line of credit issued pursuant to a note of even date
herewith;
WHEREAS, in exchange for Provident's issuance of said line of credit,
LSI has agreed to maintain certain covenants as noted below, covenants which
shall remain in effect for as long as such line of credit may exist including
all renewals or alterations thereof.
NOW THEREFORE, in consideration of the premises, the mutual covenants
and agreements made herein, the parties hereto do agree as follows:
1. LSI shall at all times maintain a minimum net worth (per GAAP) of
$20,000,000.
2. LSI shall at all times maintain a minimum level of trailing four
quarter profitability of $1,000,000.
3. LSI shall not permit any liens for funded debt to exist against
any of its properties other than:
(a) liens limited in the aggregate principal amount of $8,000,000
in favor of Fifth Third Bank on the real estate located at
10000 and 10170 Alliance Road, Cincinnati, OH and selected
items of personal property located therein.
(b) liens limited in the aggregate principal amount of $2,000,000
in favor of the trustee of any industrial revenue bonds or
various governmental authorities, liens encumbering the real
and personal property existing now or acquired in the future
located at LSI Metal Fabrication.
(c) liens on specific inventory limited in the aggregate
principal amount of $750,000 to secure certain trade vendors
who have advanced progress payment or deposits to LSI.
(d) LSI will maintain Provident as LSI's principal bank
purchasing all such banking services required by LSI provided
Provident's pricing remains competitive.
This agreement shall inure to and bind the parties hereto, their successors and
assigns.
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THE PROVIDENT BANK LSI INDUSTRIES INC.
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Donald U. Luthman Ronald S. Stowell
Senior Vice President Chief Financial Officer & Treasurer
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