First Tennessee Bank National Association REVOLVING CREDIT NOTE
First Tennessee Bank
National Association
$5,000,000.00
December 8, 2006
Memphis, Tennessee
FOR VALUE RECEIVED,
UTG, Inc., a Delaware Corporation, (“Borrower”),
promises to pay to the order of FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
Memphis, Tennessee (“Lender”; Lender and any subsequent holder[s] hereof
are hereinafter collectively referred to as “Holder”), the principal sum
of Five Million and 00/100 DOLLARS ($5,000,000.00), together with interest
thereon, on so much thereof as shall remain outstanding from time to time,
at
the rates hereinafter provided.
Borrower will pay this
loan in one payment of all outstanding principal plus all
accrued interest on December 7, 2007. In addition, Borrower will pay
regular quarterly payments of all accrued interest due as of each payment
date,
beginning March 8, 2007, with all subsequent interest payments to be due
on the
same day of each quarter after that. Unless otherwise agreed or required
by applicable law, payments will be applied first to accrued unpaid interest,
then to principal, and any remaining amount to any unpaid collection
costs.
The interest rate on
the Note is subject to change from time to time based on
changes in an independent index which is the LIBOR Rate (as hereinafter
defined), adjusted and determined as of the opening of business on the first
date of the month in which the Note is dated (the “Initial Pricing Date”) and on
the 1st day of every third month hereafter (the “Interest Rate Change
Date”). The “LIBOR RATE” shall mean the London Interbank Offered Rate of
interest for an interest period of three (3) months, as reported in the Wall
Street Journal published on each Interest Rate Change Date. Each change in
the Index which results from a change in the LIBOR Rate shall become effective,
without notice to the Borrower, on each Interest Rate Change Date following
any
change in the LIBOR Rate; provided, however, that if The Wall Street Journal
is
not published on such date, the LIBOR Rate shall be determined by reference
to
The Wall Street Journal last published immediately preceding such date (the
“Index”). The Index is not necessarily the lowest rate charged by Lender
on its Loans. If the Index becomes unavailable during the term of this
loan, Lender may designate a substitute index after notice to Borrower.
Lender will tell Borrower the current Index upon Xxxxxxxx’s request. The
interest rate change will not occur more often than every third month.
Borrower understands the Lender may make loans based on other rates as
well. The Index is currently 5.35% per annum. The interest
rate to be applied to the unpaid principal balance of this Note will be at
a rate of 1.80 percentage points over the Index, resulting in an initial
rate of
7.15% per annum. Notwithstanding anything else in this instrument
to the contrary, in no event shall the maximum rate of interest payable in
respect to the indebtedness evidenced hereby exceed the maximum rate of interest
allowed to be charged by applicable law.
Place of Payment. All payments
in respect of the indebtedness
evidenced by this Note shall be payable in lawful money of the United States
of
America, at the office of Lender, 000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxx, 00000 or such other place as the Holder of this Note may designate
in
writing. Interest shall be calculated on a 365/365 basis; that is,
by applying the ratio of the annual interest rate over a year of 365 days,
multiplied by the outstanding principal balance, multiplied by the actual
number
of days the principal balance is outstanding.
Late Charge. Borrower shall
pay a “late charge” equal to the lesser
of (i) One Hundred Dollars ($100.00) or (ii) five percent (5%) of any payments
of principal and/or interest due when paid more than ten (10) days after
the due
date thereof (provided that in no event shall said “late charge” result in the
payment of interest in excess of the maximum interest permitted by law) to
cover
the extra expenses involved in handling delinquent payments.
Prepayments.
The
indebtedness evidenced hereby may be
prepaid, in whole or in part, at any time without penalty. Any prepayment
shall be applied first to accrued and unpaid interest on the outstanding
principal balance, and the remainder, if any, shall be applied to reduce
the
outstanding principal balance of this Note in the sequential order of its
maturity.
Security. This Note is
secured by, among other things, the lien and
provisions of a certain Commercial Pledge Agreement, dated of even date
herewith, executed and delivered by Xxxxxxxx to Lender, covering certain
Collateral as described therein.
Loan
Agreement. The proceeds of this Note are being
advanced pursuant to the terms of that certain Loan Agreement (“the Loan
Agreement”) of even date herewith by and between Borrower and Lender. Any
default under the terms of said Loan Agreement shall constitute a default
hereunder.
In the event that any
one
or more of the Events of Default specified in the Loan Agreement shall have
happened, the Holder of this Note may proceed to protect and enforce its
rights
either by suit in equity and/or by action at law, or by other appropriate
proceedings, whether for the specific performance of any covenant or agreement
contained in this Note, the Loan Agreement, the Negative Pledge
Agreement, or the Commercial Pledge Agreement or in aid of the exercise of
any
power or right granted by this Note, the Loan Agreement, the
Negative Pledge Agreement, or the Commercial Pledge Agreement or proceed
to enforce the payment of this Note or to enforce any other legal or equitable
right of the Holder of this Note.
Upon the occurrence
of any
Event of Default as set forth herein, at the option of Holder and without
notice
to Borrower, all accrued and unpaid interest, if any, shall be added to the
outstanding principal balance hereof, and the entire outstanding principal
balance, as so adjusted, shall bear interest thereafter until paid at the
lesser
of (a) fourteen percent (14%) per annum or (b) the maximum effective contract
rate which it is lawful for the holder hereof to charge. (the “Default
Rate”) regardless of whether there has been an acceleration of the payment
of principal as set forth herein. All such interest shall be paid at the
time of and as a condition precedent to the curing of any such default (to
the
extent that any such cure is otherwise expressly permitted under the terms
of
this Note).
Limitation of Interest. Notwithstanding
any provision herein to the
contrary, it is the intent of the Lender and the Borrower that neither the
Lender nor any subsequent Holder shall be entitled to receive, collect, reserve
or apply, as interest, any amount in excess of the maximum lawful rate of
interest permitted to be charged by applicable law or regulations, as amended
or
enacted from time to time. In the event the Note calls for any interest
payment that exceeds the maximum lawful rate of interest then applicable,
such
interest shall not be received, collected, charged, or reserved until such
time
as the interest, together with all other interest then payable, falls within
the
then applicable maximum lawful rate of interest. In the event Lender, or
any subsequent Holder, receives any such interest in excess of the then maximum
lawful rate of interest, such amount which would be excessive interest shall
be
deemed a partial prepayment of principal and treated hereunder as such, or,
if
the principal indebtedness evidenced hereby is paid in full, any remaining
excess funds shall immediately be paid to Borrower.
Cumulative Rights. No delay on
the part of the Holder of this Note
in the exercise of any power or right under this Note, or any other instrument
executed pursuant hereto shall operate as a waiver thereof, nor shall a single
or partial exercise of any power or right preclude other or further exercise
thereof or in the exercise of any other power or right. Enforcement by the
Holder of this Note of any security for the payment hereof shall not constitute
any election by it or remedies so as to preclude the exercise of any other
remedy available to it.
Waiver. Presentment
for payment, demand, protest and notice of
demand, protest and nonpayment are hereby waived by Xxxxxxxx and all other
parties hereto. No failure to accelerate the indebtedness evidenced hereby
by reason of default hereunder, acceptance of a past-due installment or other
indulgences granted from time to time, shall be construed as a novation of
this
Note or as a waiver of such right of acceleration or of the right of Holder
thereafter to insist upon strict compliance with the terms of this Note or
to
prevent the exercise of such right of acceleration or any other right granted
hereunder or by applicable laws. Unless otherwise specifically agreed by
Holder in writing, the liability of Borrower and all other persons now or
hereafter liable for payment of the indebtedness evidenced hereby, or any
portion thereof, shall not be affected by (1) any renewal hereof or other
extension of the time for payment of the indebtedness evidenced hereby or
any
amount due in respect thereof, (2) the release of all or any part of any
collateral now or hereafter securing the payment of the indebtedness evidenced
hereby or any portion thereof, or (3) the release of or resort to any person
now
or hereafter liable for payment of the indebtedness evidenced hereby or any
portion thereof. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any
waiver,
change, modification or discharge is sought. To the extent permitted by
applicable law, Borrower hereby waives and renounces for itself, its heirs,
successors and assigns, all rights to the benefits of any appraisement,
exception and homestead now provided, or that may hereafter be provided by
the
Constitution and laws of the United States of America and of any state thereof
in and to all of its property, real and personal, against the enforcement
and
collection of the obligations evidenced by this Note.
Attorney’s Fees and Costs. In the event
one or more Events of
Default shall occur, and in the event that thereafter this Note is placed
in the
hands of an attorney for collection, or in the event this Note is collected
in
whole or in part through legal proceedings of any nature, then, and in any
such
case, there shall be added to the unpaid principal balance hereof all costs
of
collection, including, but not limited to, reasonable attorneys’ fees and all
expenses incurred in connection with the exercise of any rights under the
Note
incurred by the Holder hereof on account of such collection, whether or not
suit
is filed.
Revolving Line of
Credit. This Note evidences a revolving line of
credit. Advances under this Note, as well as directions for payment from
Xxxxxxxx’s accounts, may be requested orally or in writing by Borrower or by an
authorized person. Until the Maturity Date, Borrower may reborrow funds
available under the Loan. Xxxxxxxx agrees to be liable for all sums
either: (a) advanced in accordance with the instructions of an authorized
person
or (b) credited to any of Borrower’s accounts with Xxxxxx in accordance with the
Loan Agreement.
Governing Law. This Note has
been negotiated, executed and
delivered in the State of Tennessee and shall be construed in accordance
with
the laws of the State of Tennessee, except to the extent that Federal law
may be
applicable to the determination of the Default Rate.
Headings. The headings
of the Sections of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.
Successors and Assigns. As used herein,
the terms “Borrower”
and “Holder” shall be deemed to include their respective successors,
legal representatives and assigns, whether by voluntary action of the parties
or
by operation of law. In the event that more than one person, firm or
entity is a Borrower hereunder, then all references to “Borrower” shall be
deemed to refer equally to each of said persons, firms and/or entities, all
of
whom shall be jointly and severally liable for all of the obligations of
Borrower hereunder.
IN WITNESS WHEREOF,
the undersigned has caused this Note to be executed as of
the date first set forth above.
BORROWER:
UTG, INC.
By:_/s/ Xxxxxxxx X. Xxxxxx______
Title:_Sr. Vice
President________
