EX-10.3 4 ex103.htm FGI NOTE ex103
 
 
 
 
 
1
 
 
PROMISSORY NOTE
 
October 20, 2020
FOR VALUE
 
RECEIVED,
Core Molding Technologies, Inc.
, a corporation existing
 
under the laws of the
State of Delaware,
 
with principal offices located at 800
 
Manor Park Drive, Columbus, OH 43228, United
States of America (“
Maker
”) promises, jointly and severally if
 
more than one, to pay to
 
the order of FGI
Equipment Finance LLC at its
 
office located at 777
 
Yamato Road,
 
Office 135, Boca Raton,
 
FL 33431 or
any subsequent holder hereof (each, a “
Payee
”) or at such other place as Payee may designate as follows:
 
(a)
 
the principal sum of
Thirteen Million Two Hundred Thousand and 00/100
 
United States Dollars
 
($13,200,000.00), and
(b)
 
interest on the unpaid principal balance from November
 
1
st
, 2020 through and including the dates
of payme
 
nt, at
 
a fixed
 
interest rate
 
of eight
 
and one
 
-quarter percen
 
t
 
(8.25%) per
 
annum (the
“
Contract Rate
”) in seventy-two (72)
 
consecutive monthly installments of principal
 
and interest
as follows:
 
Periodic Installment
Amount
12 (twelve)
59 (Fifty-Nine)
 
01 (one)
 
@
@
@
$116,607.75
$246,431.33
$1,446,431.33
(each, a “
Periodic Installment
”) plus any
 
outstanding and unpaid
 
accrued interest and
 
any and all
 
other
amounts due
 
hereunder and
 
under the
 
other Debt
 
Documents (as
 
defined below).
 
For the
 
period from
October 27, 2020
 
(the “
Funding Date
”), through but not
 
including the date
 
of the first Periodic
 
Installment,
Maker shall pay Payee interests on
 
the unpaid principal balance in the
 
amount of
 
Twelve Thousand One
Hundred and
 
00/100 United
 
States Dollars
 
($12,100.00)
; such
 
payment shall
 
be due
 
and payable
 
on
November 1
st
, 2020.
 
The first Periodic
 
Installment, plus (as
 
applicable) interest accrued
 
at the Contract
Rate on the
 
unpaid principal balance
 
hereunder for the
 
period from November
 
1
st
, 2020 through
 
but not
including the starting
 
date covered by
 
such first Periodic
 
Installment, shall be
 
due and payable
 
on December
1
st
, 2020
 
and the following Periodic
 
Installments including the final
 
installment shall be due
 
and payable
on the first
 
day of each
 
succeeding month (each,
 
a “
Payment Date
”), with the
 
last Payment Date
 
being
November 1, 2026.
 
All payments shall be applied:
 
first, to interest due
 
and unpaid hereunder and under
the other Debt
 
Documents; second, to
 
all other amounts (other
 
than principal) due and
 
unpaid hereunder
and under
 
the other
 
Debt Documents,
 
and then
 
to principal
 
due hereunder
 
and under
 
the other
 
Debt
Documents.
 
The acceptance by Payee
 
of any payment
 
which is less
 
than payment in full
 
of all amounts
due and owing at such time shall not constitute a waiver
 
of Payee’s right to receive payment in full at such
time or at
 
any prior or
 
subsequent time.
 
Interest shall be
 
calculated on the
 
basis of a
 
365-day year (or
 
a
366-day leap year, as applicable) and will be charged
 
at the Contract Rate for each calendar day on which
any principal is
 
outstanding.
 
The payment of
 
any Periodic Installment
 
after its due
 
date shall result
 
in a
corresponding decrease in
 
the portion of the
 
Periodic Installment credited
 
to the remaining
 
unpaid principal
balance.
 
The payment
 
of any
 
Periodic Installment
 
prior to
 
its due
 
date shall
 
result in
 
a corresponding
increase in the portion of the Periodic Installment credited to the remaining
 
unpaid principal balance.
 
 
2
All amounts due hereunder and under the other Debt Documents are payable in the lawful
 
currency of the
United States of
 
America.
 
Maker hereby expressly
 
authorizes Payee to
 
insert the date
 
value is actually
given in the blank space on the face hereof and on all related documents
 
pertaining hereto.
 
This Note is secured
 
by (i) that certain
 
Master Security Agreement
 
dated as of this date,
 
entered into by and
among Payee,
 
Maker, Core
 
Composites Corporation
 
and CC
 
HPM, S.
 
de R.L.
 
de C.V.
 
(the “
Master
Agreement
”), and its Collateral
 
Schedule (the “
Collateral Schedule
”), (ii) that certain
 
Non-Possessory
Pledge Agreement
 
under Mexican laws (
Contrato de Prenda Sin Transmisión
 
de Posesión
, as defined in
the Spanish language) dated
 
as of October
 
13, 2020 to
 
be effective on
 
October 20, 2020, entered
 
into by
and among Maker,
 
CC HPM, S.
 
de R.L. de
 
C.V.
 
and Payee (the
 
“
Pledge Agreement
”), (iii) that
 
certain
Irrevocable Unilateral Declaration Granting a
 
Second Priority Real Estate
 
Mortgage under Mexican laws
(
Declaración Unilateral de la Voluntad
 
Irrevocable Sobre Constitución
 
de Hipoteca en Segundo Lugar y
Grado
, as defined
 
in the Spanish
 
language) dated as
 
of this date,
 
to be granted
 
by Corecomposites
 
de México,
S. de R.L. de C.V. in favor of Payee (the “
Real Estate Mortgage
”), and may also be secured by a
 
security
agreement, chattel mortgage,
 
pledge agreement or
 
like instrument (each
 
of which is
 
hereinafter called a
“
Security Agreement
”, and collectively
 
with this Note,
 
the Master Agreement,
 
the Collateral Schedule,
the Pledge Agreement, the Real
 
Estate Mortgage and any other
 
document or agreement related thereto
 
or
to this Note, the
 
“
Debt Documents
”), in each case
 
signed by Maker or
 
one of its subsidiaries in
 
favor of
Payee.
 
 
3
Conditions Precedent to
 
Funding
.
 
Payee’s obligation
 
to make the
 
loan evidenced by
 
this Note on
 
the
Funding Date is subject
 
to the satisfaction of
 
all the following conditions precedent
 
no later than the
 
date
hereof, each in form
 
and substance satisfactory
 
to Payee at its sole
 
discretion:
 
(i) Payee shall have
 
received
an executed
 
original of
 
the Collateral
 
Schedule describing
 
the Collateral
 
that secures
 
this Note
 
(the
“
Collateral Schedule Collateral
”), duly executed by Core Composites Corporation; (ii) Payee shall have
a first
 
priority perfected
 
security interest
 
in the
 
Collateral Schedule
 
Collateral; (iii)
 
Payee shall
 
have
received, to
 
Payee’s complete
 
satisfaction, an
 
executed original
 
of the
 
public deed
 
issued by
 
Mexican
Notary Public containing
 
the granting of
 
the Real Estate
 
Mortgage granted as
 
of this date
 
by Corecomposites
de México, S. de R.L. de C.V.
 
in favor of Payee, in connection with the
 
real estate located in Matamoros,
Tamaulipas, Mexico that is
 
described in the
 
Real Estate Mortgage;
 
(iv) Payee shall
 
have received, to
 
Payee’s
complete satisfaction,
 
a copy
 
of the
 
Preemptive Notice
 
(
Aviso Preventivo
, as
 
defined in
 
the Spanish
language) corresponding to the granting of such Real Estate Mortgage, duly filed in the Public Registry of
Property and Commerce of Matamoros, Tamaulipas,
 
Mexico, by the Mexican Notary Public who
 
attested
the Real
 
Estate Mortgage; (v)
 
Payee shall
 
have received, to
 
Payee’s complete
 
satisfaction, an executed
original of the Pledge
 
Agreement, duly executed
 
by all parties
 
thereto, with their
 
representatives’ signatures
duly ratified
 
by Mexican
 
or United
 
States Notary
 
Public and
 
with the
 
Apostille affixed
 
(only for
 
such
signatures ratified by United
 
States Notary Publics)
 
;
 
(vi) Payee shall
 
have received, to
 
Payee’s complete
satisfaction, an executed
 
copy of
 
a pay
 
-off letter
 
issued by
KeyBank National Association
, as
administrative agent (“
Lien Holder
”), to Maker confirming (a) the amount that is owed by Maker to Lien
Holder computed as
 
of the Funding
 
Date (the “
Pay-off Amount
”), (b) the
 
wire transfer instructions (the
“Wire Instructions”) in
 
order for the Pay
 
-off Amount to be
 
paid to Lien Holder,
 
and (c) that immediately
after Lien Holder
 
has received the
 
Pay-off Amount in
 
accordance with the
 
Wire Instructions, it
 
shall proceed
to execute and release
 
the corresponding lien release documents
 
as required under Mexican laws
 
in order
to release any and
 
all liens set on
 
the Collateral Schedule Collateral,
 
on the assets that
 
are pledged under
the Pledge Agreement and
 
on the Real Estate Mortgage
 
(the “
Release Documents
”); (vii) Payee shall have
received, to Payee’s complete satisfaction,
 
written evidence confirming that,
 
Wells Fargo
 
Bank, National
Association (“Wells Fargo”)
 
will, upon receipt from Payee of the proceeds of the loan documented in this
Note, pay,
 
for the
 
benefit of
 
Maker, the
 
Pay-Off Amount
 
to Lien
 
Holder in
 
accordance with
 
the Wire
Instructions;
 
(viii) no
 
Event of Default
 
(as defined in
 
the Security Agreement)
 
or event
 
which with the
passage of time or
 
the giving of notice
 
would become an Event
 
of Default (a “
Default
”) has occurred under
the Debt Documents;
 
(ix) Maker shall
 
have paid to
 
Payee: (a) an
 
opening fee in
 
the amount of
One Hundred
Sixty Five Thousand and 00/100
 
United States Dollars
 
($165,000.00), and (b) a closing
 
fee in the amount
of
Ten Thousand and 00/100
 
United States Dollars
 
($10,000.00), both fees payable on or before October
23, 2020; and (x) as of the date hereof, there will have been no material adverse change (as determined by
Payee in its sole discretion) in the business prospects or
 
projections, operations, management, financial or
other conditions of the Maker or any Guarantor or
 
any Obligor (as defined in the Master Agreement)
 
since
the date of
 
the Master Agreement.
 
If any such condition
 
precedent is not so
 
satisfied by the date
 
hereof,
Payee shall have
 
no obligation to
 
make the loan
 
contemplated under this
 
Note or any
 
other Debt Documents
related to this Note.
 
 
4
Time is
 
of the
 
essence hereof.
 
If Payee
 
does not
 
receive from
 
Maker payment
 
in full
 
of any
 
Periodic
Installment or any other
 
sum due under this
 
Note or any other
 
Debt Document is not
 
received within ten
(10) days after
 
its due date: (i)
 
Maker agrees to
 
pay a late
 
fee equal to
 
four percent (4.00%) on
 
such late
Periodic Installment or other sum, but not exceeding any lawful maximum, plus such other costs, fees and
expenses that Maker
 
may owe as
 
a result of
 
such late payment;
 
and (ii) interests
 
on the due
 
and unpaid
Periodic Installment, together with all accrued interest thereon and any other
 
due and unpaid sum payable
under this Note or any other Debt Document, shall
 
accrue penalty interests payable at demand at the
 
lesser
of 12.50%
 
per annum or the highest rate
 
not prohibited by applicable law until all
 
such amounts are paid.
 
Additionally, if
 
an Event of Default
 
(as defined in the
 
Master Agreement) occurs and
 
is continuing, then
the entire principal
 
sum remaining unpaid,
 
together with all
 
accrued interest thereon
 
and any other
 
sum
payable under this Note or
 
any other Debt Document, at
 
the election of Payee, shall
 
immediately become
due and payable with interest thereon at the lesser
 
of 12.25% per annum or the highest rate not
 
prohibited
by applicable law
 
from the date
 
of such accelerated
 
maturity until paid
 
(both before and
 
after any judgment).
 
The application of such 12.
 
25% interest rate shall not
 
be interpreted or deemed to
 
extend any cure period
set forth
 
in this
 
Note or any
 
other Debt
 
Document, cure any
 
default or
 
otherwise limit Payee’s
 
right or
remedies hereunder or under any Debt Document.
 
Maker may prepay in
 
full or in part
 
(but not less than
 
the amount equal to
 
20% of the original
 
principal
 
amount of this Note) outstanding amounts hereunder before
 
they are due on any scheduled
 
Payment Date
upon at least thirty (30) days’ prior
 
written notice to Payee.
 
Payee is authorized and entitled to apply any
amounts paid by Maker
 
as a prepayment of
 
indebtedness to delinquent
 
interest or other amounts
 
(other than
principal) due
 
and owing from
 
Maker to
 
Payee hereunder
 
and under
 
any other Debt
 
Documents before
application of such funds to principal outstanding hereunder.
 
If Maker makes a prepayment of this
 
Note for any reason, Maker shall pay
 
irrevocably and in full to Payee
(i) the principal
 
amount to be prepaid, (ii) all accrued interest thereon,
 
(iii) the Prepayment Fee (as defined
below) and
 
(iv) any
 
and all
 
other amounts
 
due hereunder
 
or under
 
the other
 
Debt Documents.
 
Maker
specifically acknowledges that,
 
to the
 
fullest extent allowed
 
by applicable law,
 
it shall
 
be liable
 
for the
Prepayment Fee
 
on any
 
acceleration hereof
 
or under
 
the other
 
Debt Documents.
 
In the
 
event of
 
an
acceleration hereof or under
 
the other Debt Documents,
 
the Prepayment Fee shall
 
be determined as if
 
(a)
Maker prepaid this
 
Note in full
 
immediately before such
 
acceleration and (b)
 
the prepayment notice
 
referred
to above was received by Payee thirty (30) days prior to such date.
 
For purposes hereof, the term “
Prepayment Fee
” shall be an amount
 
equal to an additional
 
sum equal to
the following percentage of the principal amount to be prepaid for prepayments occurring in the
 
indicated
period:
 
four percent (4.0%) (for
 
prepayments occurring prior to
 
the first anniversary of
 
the date hereof);
three percent (3.0%) (for
 
prepayments occurring on and
 
thereafter and prior to
 
the second anniversary of
the date hereof);
 
two percent (2.0%)
 
(for prepayments occurring
 
on and thereafter
 
and prior to
 
the third
anniversary of the date hereof); and one percent (1.0%) (for prepayments
 
occurring any time thereafter).
 
Maker hereby consents
 
to any and
 
all extensions of
 
time, renewals, waivers
 
or modifications of,
 
and all
substitutions or releases of,
 
security or of any
 
party primarily or secondarily
 
liable on this Note
 
or any other
Debt Document or any
 
term and provision of
 
either, which may be
 
made, granted or consented
 
to by Payee,
and agrees that suit
 
may be brought and
 
maintained against Maker and/or any
 
and all sureties, endorsers,
guarantors or any others
 
who may at any
 
time become liable for
 
payments and performance
 
under this Note
and any other Debt Documents,
 
at the election of Payee without
 
joinder of any other as a
 
party thereto, and
that Payee shall not be required
 
first to foreclose, proceed against, or exhaust
 
any security hereof in order
to enforce
 
payment of
 
this Note.
 
Maker hereby
 
waives presentment,
 
demand for
 
payment, notice
 
of
nonpayment, protest, notice
 
of protest, notice
 
of dishonor,
 
and all other
 
notices in connection
 
herewith,
except for such notices as are expressly provided for herein or in the Master Agreement,
 
and agrees to pay
(if permitted by law) all expenses incurred in collection, including Payee’s actual attorneys’ fees.
 
 
 
5
The consent to jurisdiction, jury trial
 
waiver and usury provisions contained in
 
the Master Agreement are
hereby incorporated by
 
reference as if
 
fully set forth
 
herein.
 
The laws of
 
the State of
 
New York shall govern
all matters
 
arising out
 
of, in
 
connection with
 
or relating to
 
this Note
 
and any
 
related Debt
 
Documents,
without limitation, validity, interpretation,
 
construction, performance and enforcement thereof (including,
without limitation, any claims sounding in contract or tort law arising out of the
 
subject matter hereof and
any determinations with respect to post-judgment interest).
 
This Note and the other Debt Documents constitute the entire agreement of Maker and Payee with respect
to the subject
 
matter hereof and
 
supersede all prior
 
understandings, agreements and
 
representations, express
or implied.
 
No variation or modification
 
of this Note,
 
or any waiver
 
of any of its
 
provisions or conditions,
 
shall be valid
unless in writing
 
and signed by
 
an authorized representative
 
of Maker and
 
Payee.
 
Any such waiver,
 
consent,
modification or change shall be effective only in the specific instance and for the specific
 
purpose given.
 
Payment Authorization.
Payee is hereby irrevocably directed and authorized by Maker to advance
and/or apply the proceeds of the loan as evidenced by this Note following
 
the instructions set forth below:
 
Amount to be advanced:
Twelve Million and 00/100
 
United States Dollars
 
($12,000,000.00), to be
disbursed directly to Wells Fargo to be applied by it for payment of the Pay-off Amount, to the following
bank account:
 
Bank Information
:
 
Bank Name:
 
Wells Fargo Bank, National Association
Bank Address:
 
420 Montgomery Street, San Francisco, CA.
ABA:
 
XXX-XXX-XXX
 
Beneficiary Information:
Account Name:
 
Wells Fargo Bank, National Association
Account Number:
 
XXXXXXXXXXXXXX
Reference:
 
CORE MOLDING TECHNOLOGIES
Address:
 
2450 Colorado Avenue.
 
 
Suite 3000W, Santa Monica, CA 90404.
 
Payee is
 
hereby irrevocably
 
authorized and
 
directed by
 
Maker to
 
apply from
 
the proceeds
 
of the
 
loan
evidenced by this
 
Note, the sum
 
of
One Million
 
Two Hundred
 
Thousand and 00/100
 
United States
Dollars) ($1,200,000.00
), to constitute and deliver to
 
Payee the Security Deposit pursuant to
 
the terms of
Collateral Schedule No. 1 that is part of the Debt Documents.
 
 
Any provision in this Note or
 
any of the other Debt
 
Documents which is in conflict
 
with any statute, law or
 
applicable rule shall be deemed omitted, modified or altered to conform
 
thereto.
 
 
 
6
Core Molding Technologies,
 
Inc.
By:
 
/s/ John P.
 
Zimmer
 
Name:
 
John P.
 
Zimmer
Title:
 
Chief Financial Officer
Federal Tax ID Number:
 
31-1481870
Address:
 
800 Manor Park Drive
 
Columbus, OH
 
43228