EXHIBIT
10.1
Charter One
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT (this
"Agreement") entered into at Providence, Rhode Island, as of
June 12. 2008 , between AMC Troy, Inc., a Michigan
corporation, with its chief executive office located at
21751 W. Eleven Mila Road, Southfield, Michigan 48076
(the "Borrower") and Charter One, a division or RBS Citizens,
N.A., a national banking association, with an address or One
Citizens Plaza, Providence, Rhode Island 02903 (the "Bank").
FOR VALUE RECEIVED, and in consideration of the
granting by the Bank of financial accommodations to or for the
benefit of the Borrower, including without limitation respecting
the Obligations (as hereinafter defined), the Borrower
represents and agrees with the Bank, as of the date hereof and
as of the date of each loan, credit and/or other financial
accommodation, as follows:
1. THE LOAN
1.1.
Loan . Subject to the terms and
conditions of this Agreement, the Bank hereby agrees to make a
loan to Borrower in the original principal amount of
$1,013,270.00 (the “Loan”). The Loan shall be
evidenced by that certain Term Note, of even date herewith (the
“Note”) by AMC Troy, Inc. in favor of the Bank in
the original principal amount of $1,013,270.00. This
Agreement, the Note, and any and all other documents, amendments
or renewals executed and delivered in connection with any of the
foregoing are collectively hereinafter referred to as the
“Loan Documents”.
2. GRANT OF SECURITY INTEREST
2.1
Grant of Security Interest . In
consideration of the Bank’s extending credit and other
financial accommodations to or for the benefit of the Borrower,
the Borrower hereby grants to the Bank a security interest in, a
lien on and pledge and assignment of the Collateral (as
hereinafter defined). The security interest granted by
this Agreement is given to and shall be held by the Bank as
security for the payment and performance of all Obligations,
including, without limitation, all amounts outstanding pursuant
to the Loan Documents.
2.2
Definitions . The following
definitions shall apply:
(a)
“Bank Affiliate” shall mean
“Affiliate of the Bank or any lender acting as a
participant under any loan arrangement between the Bank and the
Borrower(s). The term “Affiliate” shall mean
with respect to any person, (a) any person which, directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such person, or
(b) any person who is a director or officer (i) of such person,
(ii) of any subsidiary of such person, or (iii) any person
described in clause (a) above. For purposes of this
definition, control of a person shall mean the power, direct of
indirect, (x) to vote 5% or more of the Capital Stock having
ordinary voting power for the election of directors (or
comparable equivalent) of such person, or (y) to direct of cause
the direction of the management and policies of such person
whether by contract or otherwise. Control may be by
ownership, contract, or otherwise.
(b)
“Code” shall mean the Michigan
Uniform Commercial Code, MCL 440.1101 et seq. as amended from
time to time.
(c)
“Collateral” shall mean all of the
Borrower’s present and future right, title and interest in
and to any and all of the personal property of the Borrower
whether such property is now existing or hereafter created,
acquired or arising and wherever located from time to time,
including without limitation:
(i)
accounts;
(ii)
chattel paper;
(iii)
goods;
{A0046662.DOC}
(iv)
Inventory (specifically excluding alcoholic
beverage Inventory, now existing or later acquired);
(v)
equipment;
(vi)
fixtures;
(vii)
farm products;
(viii)
instruments;
(ix)
investment property;
(x)
documents;
(xi)
commercial tort claims;
(xii)
deposit accounts;
(xiii)
letter-of-credit rights;
(xiv)
general intangibles;
(xv)
supporting obligations; and
(xvi)
proceeds and products of the foregoing.
(d)
"Debtors" shall mean the Borrower's customers
who are indebted to the Borrower.
(e)
“Obligation(s)” shall mean, without
limitation, all loans, advances, indebtedness, notes,
liabilities, rate swap transactions, basis swaps, forward rate
transactions, commodity swaps, commodity options, equity or
equity index swaps, equity or equity index options, bond
options, interest rate options, foreign exchange transactions,
cap transactions, floor transactions, collar transactions,
forward transactions, currency swap transactions, cross-currency
rate swap transactions, currency options and amounts, liquidated
or unliquidated, owing by the Borrower to the Bank or any Bank
Affiliate at any time, or each and every kind, nature and
description, whether arising under this Agreement or otherwise,
and whether secured or unsecured, direct or indirect (that is,
whether the same are due directly by the Borrower to the Bank or
any Bank Affiliate; or are due indirectly by the Borrower to the
Bank or any Bank Affiliate as endorser, guarantor or other
surety, or as borrower of obligations due third persons which
have been endorsed or assigned to the Bank or any Bank
Affiliate, or otherwise), absolute or contingent, due or to
become due, now existing or hereafter arising or contracted,
including, without limitation, payment when due of all amounts
outstanding respecting any of the Loan Documents. Said
term shall also include all interest and other charges
chargeable to the Borrower or due from the Borrower to the Bank
or any Bank Affiliate from time to time and all costs and
expenses referred to in this Agreement. Borrower or
due from the Borrower to the Bank or any Bank Affiliate from
time to time and all costs and expenses referred to in this
Agreement.
(f)
“Person” or “party shall mean
individuals, partnerships, corporations, limited liability
companies and all other entities.
All words and terms used in this Agreement other
than those specifically defined herein shall have the meanings
accorded to them in the Code.
2.3
Ordinary Course of Business . The
Bank hereby authorizes and permits the Borrower to hold,
process, sell, use or consume in the manufacture or processing
of finished goods, or otherwise dispose of inventory for fair
consideration, all in the ordinary course of the
Borrower’s business, excluding, without limitation, sales
to creditors or in bulk or sales or other dispositions occurring
under circumstances which would or could create any lien or
interest adverse to the Bank’s security interest or other
right hereunder in the proceeds resulting therefrom. The
Bank also hereby authorizes and permits the Borrower to receive
from the Debtors all amounts due as proceeds of the Collateral
at the Borrower’s own cost and expense, and also
liability, if any, subject to the direction and control of thee
Bank at all times; and the Bank may at any time, without cause
or notice, and whether or not an Event of Default has occurred
or demand has been made, terminate all or any part of the
authority and permission herein or elsewhere in this Agreement
granted to the Borrower with reference to the Collateral, and
notify Debtors to make all payments due as proceeds of the
Collateral to the Bank. Until bank shall otherwise notify
Borrower, all proceeds of and collections of Collateral shall be
retained by Borrower and used solely for the ordinary and usual
operation of Borrower’s business. From and after
notice by Bank to Borrower, all proceeds of and collections of
the Collateral shall be held in trust by Borrower for Bank and
shall not be commingled with Borrower’s other funds or
deposited in any Bank account of Borrower; and Borrower agrees
to deliver to Bank on the dates of receipt
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thereof by Borrower, duly
endorsed to Bank or to bearer, or assigned to Bank, as may be
appropriate, all proceeds of the Collateral in the identical form
received by Borrower.
2.4
Allowances . Absent an Event of
Default the Borrower may grant such allowances or other
adjustments to Debtors (exclusive of extending the time for
payment of any item which shall not be done without first
obtaining the Bank’s written consent in each instance) as
the Borrower may reasonably deem to accord with sound business
practice, including, without limiting the generality of the
foregoing, accepting the return of all or any part of the
inventory (subject to the provisions set forth in this Agreement
with reference to returned inventory).
2.5
Records. The Borrower shall hold
its books and records relating to the Collateral segregated from
all the Borrower’s other books and records in a manner
satisfactory to the Bank; and shall deliver to the Bank from
time to time promptly at its request all invoices, original
documents of title, contracts, chattel paper, instruments and
any other writings relating thereto, and other evidence of
performance of contract, or evidence of shipment or delivery of
the merchandise or of the rendering of services; and the
Borrower will deliver to the Bank promptly at the Bank’s
request from time to time additional copies of any or all such
papers or writings, and such other information with respect to
any of the Collateral and such schedules of inventory, schedules
or accounts and such other writings as the bank may in its sole
discretion deem to be necessary or effectual to evidence any
loan hereunder or the Bank’s security interest in the
Collateral.
2.6
Legends. The Borrower shall
promptly make, stamp or record such entries or legends on the
Borrower’s books and records or on any of the Collateral
(including, without limitation, chattel paper) as Bank shall
request from time to time, to indicate and disclose that Bank
has a security interest in such Collateral.
2.7
Inspection . The Bank, or its
representatives, at any time from time to time, shall have the
right at the sole cost and expense of Borrower, and the Borrower
will permit the Bank and/or its representatives: (a) to examine,
check make copies of or extracts from any of the
Borrower’s books, records and files (including, without
limitation, orders and original correspondence); (b) to perform
field exams or otherwise inspect and examine the Collateral and
to check, test or appraise the same as to quality, quantity,
value and condition; and (c) to verify the Collateral or any
portion or portions thereof or the Borrower’s compliance
with the provisions of this Agreement.
2.8
Purchase Money Security Interests.
To the extent the Borrower uses proceeds of any loans to
purchase Collateral, the repayment of such loans shall be on the
“first-in-first-out” basis so that the portion of
the loan used to purchase a particular item of Collateral shall
be repaid in the order in which Borrower purchased such item of
Collateral.
2.9
Search Reports . Bank shall receive
prior to the date of this Agreement UCC search results under all
names used by the Borrower during the Prior five (5) years, from
each jurisdiction where any Collateral is located, from the
State, if any, where the Borrower is organized and registered
(as such terms are used in the Cod), and the State where the
Borrower’s chief executive office is located. The
Search results shall confirm that the security interest in the
Collateral granted Bank hereunder is prior to all other security
interests in favor of any other Person.
3. REPRESENTATIONS AND WARRANTIES
3.1
Organization and Qualification.
Borrower is a duly organized and validly existing
corporation under the laws of the State of its Incorporation
with the exact legal name set forth in the first paragraph of
this Agreement. Borrower is in good standing under the
laws of said State, has the power to own its property and
conduct its business as now conducted and as currently proposed
to be conducted, and is duly qualified to do business under the
laws of each state where the nature of the business done or
property owned requires such qualification.
3.2
Subsidiaries. Borrower has no
subsidiaries other than as previously specifically consented to
in writing by the Bank, if any, and the Borrower has never
consolidated, merged or acquired substantially all of the assets
of any other entity or person other than as previously
specifically consented to in writing by the Bank, if any.
3.3
Corporate Records. Borrower’s
corporate charter, articles or certificate of organization or
incorporation and all amendments thereto have been duly filed
and are in proper order. All outstanding capital stock
issued by the Borrower was and is properly issued and all books
and records of the Borrower, including but not limited to its
minute books, bylaws and books of account, are accurate and up
to date and will be so maintained.
3.4
Title to Properties; Absence of Liens.
Borrower has rights in or the power to transfer the
Collateral and it has good and clear record and marketable title
to all of its properties and assets, and all of its properties
and assets including the Collateral are free and clear of all
mortgages, liens, pledges, charges, encumbrances and setoffs,
other than the security interest therein granted to the Bank and
those mortgages, deeds of trust, leases of personal property and
security interests previously specifically consented to in
writing by the Bank.
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3.5
Places of Business.
Borrower’s chief executive office is correctly
stated in the preamble to this Agreement, and Borrower shall,
during the term of this Agreement, keep the Bank currently and
accurately informed in writing of each of its other places of
business, and shall not change the location of such chief
executive office or open or close, move or change any existing
or new place of business without giving the Bank at least thirty
(30) days prior written notice thereof.
3.6
Valid Obligations. The execution,
delivery and performance of the Loan Documents have been duly
authorized by all necessary corporate action and each represents
a legal, valid and binding obligation of Borrower and is fully
enforceable according to its terms, except as limited by laws
relating to the enforcement of creditors’ rights.
3.7
Conflicts. There is no provision in
Borrower’s organizational or charter documents, if any, or
in any indenture, contract of agreement to which Borrower is a
party which prohibits, limits or restricts the execution,
deliver or performance of the Loan Documents.
3.8
Governmental Approvals. The
execution, delivery and performance of the Loan Documents does
not require any approval of or filing with any governmental
agency or authority.
3.9
Litigation, etc. There are no
actions, claims or proceedings pending or to the knowledge of
Borrower threatened against Borrower which might materially
adversely affect the ability of Borrower to conduct its business
or to pay or perform the Obligations.
3.10
Accounts and Contract Rights. All
accounts arise out of legally enforceable and existing contract,
and represent unconditional and undisputed bona fide
indebtedness by a Debtor, and are not and will not be subject to
any discount (except such case or trade discount as may be shown
on any invoice, contract or other writing delivered to the
Bank). No contract right, account general intangible or
chattel paper is or will be represented by any note or other
instrument, and no contract right, account or general intangible
is, or will be represented by any conditional or installment
sales obligation or other chattel paper, except such instruments
or chattel paper as have been or immediately upon receipt by the
Borrower will be delivered to the Bank (duly endorsed or
assigned), such deliver, in the case of chattel paper, to
include all executed copies except those in the possession of
the installment buyer and any security for or guaranty of any of
the Collateral shall be delivered to the Bank immediately upon
receipt thereof by the Borrower, with such assignments and
endorsements thereof as the Bank may request.
3.11
Title to Collateral. At the date
hereof the Borrower is (and as to Collateral that the Borrower
may acquire after the date here of, will be) the lawful owner of
the Collateral, and the Collateral and each item thereof is,
will be and shall continue to be free of all restrictions,
liens, encumbrances or other rights, title or interests (other
than the security interest therein granted to the Bank),
credits, defenses, recoupments, set-offs or counterclaims
whatsoever. The Borrower has and will have full power and
authority to grant to the Bank a security interest in the
Collateral and the Borrower has not transferred, transfer,
assign, sold, pledged, encumbered, subjected to lien or granted
any security interest in, and will not transfer, assign, sell
(except sales or other dispositions in the ordinary course of
business in respect to security interest in any of the
Collateral (or any of the Borrower’s right, title or
interest therein), to any person other than the Bank. The
Collateral is and will be valid and genuine in all respects.
The Borrower will warrant and defend the Bank’s
right to and interest in the Collateral against all claims and
demands of all persons whatsoever.
3.12
Location of Collateral. Except for
sale, processing, use, consumption or other disposition in the
ordinary course of business, the Borrower will keep all
inventory and equipment only at locations specified in this
Agreement or specified to the Bank in writing. The
Borrower shall, during the term of this Agreement, keep the Bank
currently and accurately informed in writing of each location
where the Borrower’s records relating to its accounts and
contract rights, respectively, are kept, and shall not remove
such records or any of them to another location without giving
the Bank at least thirty (30) days prior written notice thereof.
3.13
Third Parties. The Bank shall not
be deemed to have assumed any liability or responsibility to the
Borrower or any third person for the correctness, validity or
genuineness of any instruments or documents that may be released
or endorsed to the Borrower by the Bank (which shall
automatically be deemed to be without recourse to the Bank in
any event) or for the existence, character, quantity, quality,
condition, value or delivery of any goods purporting to be
represented by any such documents; and the Bank, by accepting
such security interest in the Collateral, or by releasing any
Collateral to the Borrower, shall not be deemed to have assumed
any obligation or liability to any supplier or Debtor or to any
other third party, and the Borrower agrees to indemnify and
defend the Bank and hold it harmless in respect to any claim or
proceeding arising out of any mater referred to in this
paragraph.
3.14
Payment of Accounts. Each account
or other item of Collateral, other than inventory and equipment,
will be paid in full on or before the date shown as its due date
in the schedule of Collateral, in the copy of the invoice(s)
relating to the account or other Collateral or in contracts,
relating thereto. Upon any suspension of business,
assignment or trust mortgage for the benefit of creditors,
dissolution, petition in receivership or under any chapter of
the Bankruptcy Code as amended form time to time by
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or against any Debtor, any
Debtor becoming insolvent or unable to pay its debts as they mature
or any other act of the same or different nature amounting to a
business failure, the Borrower will immediately notify the Bank
thereof.
3.15
Taxes. The Borrower has filed all
Federal, state and other tax returns required to be filed
(except for such returns for which current and valid extensions
have been filed), and all taxes, assessments and other
governmental charges due from the Borrower have been fully paid.
The Borrower has established on its books reserves
adequate for the payment of all Federal, state and other tax
liability (if any).
3.16
Use of Proceeds. No portion of any
loan is to be used for (i) the purpose of purchasing or carrying
any “margin security” or “margin stock”
as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. 221 and 224
or (ii) primarily personal, family or household purposes.
The Collateral is not used or acquired primarily for
personal, family or household purposes.
3.17
Environmental. As of the date
hereof neither the Borrower nor any of Borrower’s agents,
employees or independent contractors (1) have causes or are
aware of a release or threat of release of Hazardous Materials
(as defined herein) on any of the premises or personal property
owned or controlled by Borrower (“Controlled
Property”) or any property abutting Controlled Property
(“Abutting Property”), which could give rise to
liability under any Environmental Law (as defined here) or any
other Federal, state or local law, rule or regulation; (2) have
arranged for the transport of or transported any Hazardous
Materials in a manner as to violate, or result in potential
liabilities under, any Environmental Law; (3) have received any
notice, order or demand from the Environmental Protection Agency
or any other Federal, state or local agency under any
Environmental Law; (4) have incurred any liability under any
Environmental Law in connection with the mismanagement, improper
disposal or release of Hazardous Materials; or (5) are aware of
any inspection or investigation of any Controlled Property or
Abutting Property by an Federal, state or local agency for
possible violations of any Environmental Law.
To the best of Borrower’s knowledge,
neither Borrower, not any prior owner or tenant of any
Controlled Property, committed or omitted any act which caused
the release of Hazardous Materials on such Controlled Property
which could give rise to a lien thereon by any Federal, state or
local government. No notice or statement of claim or lien
affecting any Controlled Property has been recorded or filed in
any public records by any Federal, state or local government for
costs, penalties, fines or other charges as to such property.
All notices, permits, licenses or similar authorizations,
if any, required to be obtained or filed in connection with the
ownership, operation, or use of the Controlled Property,
including without limitation, the past or present generation,
treatment, storage, disposal or release of any Hazardous
Materials into the environment, have been duly obtained or
filed.
Borrower agrees to indemnify and hold the Bank
and any Bank Affiliate harmless from all liability, loss, cost,
damage and expense, including attorney fees and costs of
litigation, arising from any and all its violations of any
Environmental Law (including those arising from any lien by and
Federal, state or local government arising form the presence of
Hazardous Materials) or from the presence of Hazardous Materials
located on or emanating from any Controlled Property or Abutting
Property whether existing or not existing and whether known or
unknown at the time of the execution hereof and regardless of
whether or not caused by, or within the control of Borrower.
Borrower further agrees to reimburse Bank upon demand for
any costs incurred by Bank in connection with the foregoing.
Borrower agrees that its obligations hereunder shall be
continuous and shall survive the repayment of all debts to Bank
and shall continue so long as a valid claim may be lawfully
asserted against the Bank.
The term “Hazardous Materials”
includes but is not limited to any and all substances (whether
solid, liquid or gas) defined, listed, or otherwise classified
as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar
meaning or regulatory effect under any present or future
Environmental Law or that may have a negative impact on human
health or the environment, including but not limited to
petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead,
radon, radioactive materials, flammables and explosives.
The term “Environmental Law” means
any present and future Federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common
law, relating to protecting of human health or the environment,
relating to Hazardous Materials, relating to liability for or
costs or remediation or prevention of releases of Hazardous
Materials or relating to liability for or costs of other actual
or threatened danger to human health or the environment.
The term “Environmental Law” includes, but is
not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability
Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Materials Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to
Subtitle I relating to underground storage tanks); the Solid
Waste Disposal; the Clean Water Act; the Clean Air Act, the
Toxic Substances Control Act; the Safe Drinking Water Act; the
Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the
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Endangered Species Act; the
National Environmental Policy Act; the River and Harbors
Appropriation Act; and the Natural Resources and Environmental
Protection Act, MCL, Chapter 324.
4. AFFIRMATIVE COVENANTS
4.1
Payments and Performance. Borrower
will duly and punctually pay all Obligations becoming due to the
Bank and will duly and punctually perform all Obligations on its
part to be done or performed under this Agreement.
4.2
Books and Records; Inspection.
Borrower will at all times keep proper books of account in
which full, true and correct entries will be made of its
transactions in accordance with generally accepted accounting
principles, consistently applied and which are, in the opinion
of a Certified Public Accountant acceptable to Bank, adequate to
determine fairly the financial condition and the results of
operations of Borrower. Borrower will at all reasonable
times make its books and records available in its offices for
inspection, examination and duplication by the Bank and the
Bank’s representative and will permit inspection of the
Collateral and all of its properties by the Bank and all the
Bank’s representatives. Borrower will from time to
time furnish the Bank with such information and statements as
the
