Exhibit 10.21
SECOND AMENDMENT TO
LOAN DOCUMENTS
THIS SECOND AMENDMENT TO LOAN DOCUMENTS (this "Amendment") is
entered into to be effective as of the 30th day of June, 1995 by
and among TEMTEX INDUSTRIES, INC., a Delaware corporation, with its
principal office at 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000 ("Borrower"), TEMCO FIREPLACE PRODUCTS, INC., a Texas
corporation (formerly known as Temtex Products, Inc.) with its
principal office at 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000 ("Guarantor") and NATIONSBANK OF TEXAS, N.A., a national
banking association, with offices at 000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxxxxx, Xxxxx 00000 ("Lender").
R E C I T A L S
A. Borrower and Lender entered into that certain Loan
Agreement, dated as of May 3, 1994, as amended by that certain
First Amendment to Loan Documents, dated as of September 29, 1994,
by and among Borrower, Guarantor and Lender (the "First Amendment")
(as amended, the "Loan Agreement"), pursuant to which Lender agreed
to make loans and advances to Borrower in accordance with the terms
thereof. The loans and advances to BolTower under the Loan
Agreement are guaranteed by Guarantor pursuant to the terms of that
certain Continuing and Unconditional Guaranty, dated May 3, 1994,
by and between Guarantor and Bank, as amended by the First
Amendment (as amended, the "Guaranty").
B. Borrower and Guarantor have requested Lender to increase
the loans made to Borrower and to make certain other amendments to
the Loan Agreement, and Lender at the request of Borrower and
Guarantor, for good and valuable consideration, is willing to enter
into this Amendment upon the terms and conditions as hereinafter
set forth.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises herein
contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, agree as follows:
ARTICLE 1
Definitions
1.1 Capitalized terms used in this Amendment are defined in
the Loan Agreement, as amended hereby, unless otherwise stated.
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ARTICLE 2
Amendments to Loan Agreement
2.1 Amendment to Section 2(A). Section 2(A) of the Loan
Agreement is hereby amended by deleting such Section in its
entirety and inserting the following in lieu thereof:
"A. Loan. Bank hereby agrees to make loans to
Borrower in the aggregate principal amount of $4,084,000. The
obligation to repay the loans is evidenced by (i) a promissory
note dated May 3, 1994 in the principal amount of $3,000,000
(the "Revolving Note"), having a maturity date, repayment
terms and interest rates as set forth therein, and (ii) an
amended and restated promissory note dated June 30, 1995 in
the principal amount of $1,084,000 (the "Term Note"), having
a maturity date, repayment terms and interest rates as set
forth therein (the Revolving Note and the Term Note, together
with any other promissory notes heretofore or hereafter
executed pursuant to this Agreement by Borrower in favor of
Bank and any and all renewals, extensions or rearrangements
thereof being hereafter collectively referred to as the
"Note")."
2.2 Amendment to Section 8. Section 8 of the Loan Agreement
is hereby amended by deleting the reference to "Xx. Xxxx X. Xxxxxx"
therein in its entirety and inserting "Xx. Xxxx Xxxxxx" in lieu
thereof.
ARTICLE 3
Amendments to Borrowing Base Agreement
3.11 Amendments to Borrowing Base Agreement. Section (ii) of
the Borrowing Base Agreement, which is attached to the Loan
Agreement as Exhibit "A", is hereby amended by deleting such
Section in its entirety and inserting the following in lieu
thereof:
"(ii) Borrowing Base Certificate. Not later than 30 days
after and as of the end of each month, a completed Borrowing
Base Certificate in the form of Exhibit 1 attached hereto."
ARTICLE 4
Conditions Precedent
4.1 Conditions Precedent. The effectiveness of this
Amendment is subject to the satisfaction of the following
conditions precedent, unless specifically waived in writing by
Lender:
(a) Lender shall have received (i) this Amendment, duly
executed by Borrower and Guarantor, (ii) the Term Note, duly
executed by Borrower, (iii) such additional documents, instruments
and information as Lender or its legal counsel may request, and
(iv) a closing fee for the Term Loan equal to $3,500 in immediately
available funds, which fee shall be deemed fully earned and
nonrefundable upon execution of the Term Note;
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(b) The representations and warranties contained herein
and in the Loan Agreement, as amended hereby, and the other Loan
Documents, shall be true and correct as of the date hereof, as if
made on the date hereof;
(c) No default or event of default under the Loan
Agreement or other Loan Documents shall have occurred and be
continuing, unless such default or event of default has been
specifically waived in writing by Lender; and
(d) All corporate proceedings taken in connection with
the transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to Lender and its legal counsel.
ARTICLE 5
No Waiver
5.1 Nothing contained herein shall be construed as a waiver
by Lender of any covenant or provision of the Loan Agreement, this
Amendment or any other Loan Document or of any other contract or
instrument between Borrower and/or Guarantor and Lender, and
Lender's failure at any time or times hereafter to require strict
performance by Borrower or Guarantor of any provision thereof shall
not waive, affect or diminish any right of Lender to thereafter
demand strict compliance therewith. Lender hereby reserves all
rights granted under the Loan Agreement, the Guaranty, the other
Loan Documents, this Amendment and any other contract or instrument
between Borrower and/or Guarantor and Lender.
ARTICLE 6
Ratifications, Representations and Warranties
6.1 Ratifications. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms
and provisions set forth in the Loan Agreement, the Guaranty and
the other Loan Documents, and, except as expressly modified and
superseded by this Amendment, the terms and provisions of the Loan
Agreement, the Guaranty and the other Loan Documents are ratified
and confirmed and shall continue in full force and effect.
Borrower, Guarantor and Lender agree that the Loan Agreement, as
amended hereby, and the other Loan Documents shall continue to be
legal, valid, binding and enforceable in accordance with their
respective terms. Guarantor hereby ratifies and confirms that the
indebtedness and obligations evidenced by the Term Note are
"Liabilities" as defined in the Guaranty.
6.2 Representations and Warranties of Borrower. Borrower
hereby represents and warrants to Lender that (a) the execution,
delivery and performance of this Amendment, the Term Note and any
and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate
action on the part of Borrower and will not violate the Certificate
of Incorporation or the Bylaws of Borrower; (b) attached hereto as
Exhibit A is a true, correct and complete copy of presently
effective resolutions of Borrower's board of directors authorizing
the execution, delivery and performance of this Amendment, the Term
Note and any and all other Loan Documents executed and/or delivered
by Borrower in
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connection herewith, certified by the Secretary of Borrower; (c)
the representations and warranties contained in the Loan Agreement,
as amended hereby, and any other Loan Documents are true and
correct on and as of the date hereof and on and as of the date of
execution hereof as though made on and as of each such date; (d) no
default or event of default under the Loan Agreement, as amended
hereby, or any other Loan Document has occurred and is continuing,
unless such default or event of default has been specifically
waived in writing by Lender; (e) Borrower is in full compliance
with all covenants and agreements contained in the Loan Agreement
and the other Loan Documents; and (f) Borrower has not amended its
Certificate of Incorporation or its Bylaws since September 29,
1994, except for such amendments, if any, which are attached hereto
as Exhibit B.
6.3 Representations and Warranties of Guarantor. Guarantor
hereby represents and warrants to Lender that (a) the execution,
delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith
have been authorized by all requisite corporate action on the part
of Guarantor and will not violate the Articles of Incorporation or
the Bylaws of Guarantor; (b) attached hereto as Exhibit C is a
true, correct and complete copy of presently effective resolutions
of Guarantor's board of directors authorizing the execution,
delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered by Guarantor in connection
herewith, certified by the Secretary of Guarantor; (c) Guarantor is
in full compliance with all covenants and agreements contained in
the Guaranty and the other Loan Documents to which it is a party;
and (d) Guarantor has not amended its Articles of Incorporation or
its Bylaws since September 29, 1994, except for such amendments
which are attached hereto as Exhibit D.
ARTICLE 7
Miscellaneous Provisions
7.1 Survival of Representations and Warranties. All
representations and warranties made in the Loan Agreement or any
other Loan Document, including, without limitation, any document
furnished in connection with this Amendment, shall survive the
execution and delivery of this Amendment and the Term Note, and no
investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon
them.
7.2 References. Each of the Loan Agreement, the Guaranty and
the other Loan Documents, and any and all other agreements,
documents or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Loan
Agreement, as amended hereby, are hereby amended so that (a) any
reference in the Loan Agreement, the Guaranty and such other Loan
Documents to the Loan Agreement shall mean a reference to the Loan
Agreement as amended hereby, and (b) any reference in the Loan
Agreement, the Guaranty and such other Loan Documents to the
Borrowing Base Agreement shall mean a reference to the Borrowing
Base Agreement as amended hereby.
7.3 Expenses of Lender. As provided in Section 9 of the Loan
Agreement, Borrower agrees to pay on demand all costs and expenses
incurred by Lender in connection with the
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preparation, negotiation and execution of this Amendment, the Term
Note and the other Loan Documents executed pursuant hereto and any
and all amendments, modifications, and supplements thereto,
including, without limitation, the costs and fees of Lender's legal
counsel, and all costs and expenses incurred by Lender in
connection with the enforcement or preservation of any rights under
the Loan Agreement, as amended hereby, or any other Loan Documents,
including, without limitation, the costs and fees of Lender's legal
counsel.
7.4 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable
shall not impair or invalidate the remainder of this Amendment and
the effect thereof shall be confined to the provision so held to be
invalid or unenforceable.
7.5 Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Lender, Borrower, Guarantor and
their respective successors and assigns, except neither Borrower
nor Guarantor may assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.
7.6 Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed
to be an original, but all of which when taken together shall
constitute one and the same instrument.
7.7 Effect of Waiver. No consent or waiver, express or
implied, by Lender to or for any breach of or deviation from any
covenant or condition by Borrower or Guarantor shall be deemed a
consent to or waiver of any other breach of the same or any other
covenant, condition or duty.
7.8 Headings. The headings, captions, and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
7.9 Applicable Law. This Amendment and all other Loan
Documents executed pursuant hereto shall be deemed to have been
made and to be performable in and shall be governed by and
construed in accordance with the laws of the State of Texas.
7.10 Final Agreement. THE LOAN AGREEMENT, THE BORROWING BASE
AGREEMENT, EACH AS AMENDED HEREBY, AND THE OTHER LOAN DOCUMENTS
REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
LOAN AGREEMENT, THE BORROWING BASE AGREEMENT, EACH AS AMENDED
HEREBY, AND THE OTHER LOAN DOCUMENTS MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT
OF ANY PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A
WRITTEN AGREEMENT SIGNED BY BORROWER, GUARANTOR AND LENDER.
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7.11 Release. EACH OF BORROWER AND GUARANTOR HEREBY
ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET,
CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER
THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY ANY AMOUNTS DUE AND OWING UNDER THE LOAN
DOCUMENTS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR
NATURE FROM LENDER. EACH OF BORROWER AND GUARANTOR HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER,
ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM
ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES,
COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN
WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED,
WHICH THE BORROWER AND/OR GUARANTOR MAY NOW OR HEREAFTER HAVE
AGAINST LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE
OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY LOANS, INCLUDING, WITHOUT
LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL
RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
LOAN AGREEMENT OR OTHER AGREEMENTS, AND NEGOTIATION FOR AND
EXECUTION OF THIS AMENDMENT.
IN WITNESS WHEREOF, the parties have executed this Second
Amendment to Loan Documents to be effective as of the date first
written above.
BORROWER:
TEMTEX INDUSTRIES INC.
By: ___________________________________
Name: X. X. Xxxxxxx
Title: Vice President
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GUARANTOR:
TEMCO FIREPLACE PRODUCTS, INC.
By: ___________________________________
Name: X. X. Xxxxxxx
Title: Vice President
LENDER:
NATIONSBANK OF TEXAS, N.A.
By: ___________________________________
Name: Xxxx Xxxxxx
Title: Vice President
EXHIBITS:
A - Certified Resolutions of Borrower's Board of Directors
B - Amendments to Certificate of Incorporation and/or Bylaws of
Borrower
C - Certified Resolutions of Guarantor's Board of Directors
D - Amendments to Articles of Incorporation and/or Bylaws of
Guarantor
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EXHIBIT "A"
Certified Resolutions
of
Temtex Industries, Inc.'s Board of Directors
RESOLVED: That any officer of Temtex Industries, Inc., a
Delaware corporation (the "Corporation"), acting alone, by his
signature be, and the same hereby is, authorized and directed, in
the name of and on behalf of the Corporation (a) to amend the
Corporation's existing Loan Agreement with NationsBank of Texas,
N.A. ("Lender"), (b) to execute and deliver to Lender, with such
changes in the terms and provisions thereof as the officer
executing same shall, in his sole discretion, deem advisable, (i)
a certain proposed Second Amendment to Loan Documents, a draft of
which has been reviewed and discussed by the Board of Directors of
the Corporation, (ii) a certain proposed amended and restated
promissory note in the amount of $1,084,000 in favor of Lender, a
draft of which has been reviewed and discussed by the Board of
Directors of the Corporation, and (iii) such other agreements,
instruments, statements and writings as the officer or officers
executing the same may deem desirable or necessary in connection
therewith, and (c) to perform such other acts as the officer or
officers performing such acts on behalf of the Corporation may deem
desirable or necessary in connection therewith; and be it
FURTHER RESOLVED: That said promissory notes and agreements
will benefit the Corporation, both directly and indirectly, and are
in the best interests of the Corporation; and be it
FURTHER RESOLVED: That said agreements, promissory notes and
other statements in writing executed in the name and on behalf of
the Corporation by any officer of the Corporation shall be presumed
conclusively to be the instruments, the execution of which is
authorized by these resolutions; and be it
FURTHER RESOLVED: That the officers of the Corporation be,
and the same hereby are, authorized and directed to execute, in the
name of and on behalf of the Corporation, promissory notes,
security agreements, financing statements, assignments, collateral
reports, loan statements, confirmations of delivery, lien
statements, pledge certificates, release certificates, removal
reports, guaranties, cross-collateralization agreements and such
other writings and to take such other actions as are necessary in
their dealings with Lender, and any such papers executed and any
such actions taken by any of them prior to this time are approved,
ratified and confirmed; and be it
FURTHER RESOLVED: That the Secretary of the Corporation, by
his signature, is, and hereby is, authorized and directed to attest
the execution by the Corporation of the papers signed pursuant to
these resolutions, to affix the seal of the Corporation thereto, if
required by Lender, and to certify to Lender the adoption of these
resolutions.
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CERTIFICATION
The undersigned hereby certifies that the within and foregoing
resolutions are in effect as of the date hereof, without
modification, and that the person signing the within and foregoing
amendment and promissory note on behalf of the Corporation is the
duly elected officer stated below his name, that he is authorized
to sign such amendment and promissory note, and that his signature
thereon is genuine.
DATED: June 30, 1995.
________________________________________
X. X. Xxxxxxx, Secretary
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EXHIBIT "B"
Amendments to Certificate of
Incorporation and/or Bylaws
If"none", so state
EXHIBIT "C"
Certified Resolutions
of
Temco Fireplace Products, Inc.'s Board of Directors
RESOLVED: That any officer of Temco Fireplace Products, Inc.,
a Texas corporation (the "Corporation"), acting alone, by his
signature be, and the same hereby is, authorized and directed, in
the name of and on behalf of the Corporation (a) to execute and
deliver to Lender, with such changes in the terms and provisions
thereof as the officer executing same shall, in his sole
discretion, deem advisable, (i) a certain proposed Second Amendment
to Loan Documents, a draft of each of which has been reviewed and
discussed by the Board of Directors of the Corporation, and (ii)
such other agreements, instruments, statements and writings as the
officer of officers executing the same may deem desirable or
necessary in connection therewith, and (b) to perform such other
acts as the officer or officers performing such acts on behalf of
the Corporation may deem desirable or necessary in connection
therewith; and be it
FURTHER RESOLVED: That said agreements will benefit the
Corporation, both directly and indirectly, and are in the best
interests of the Corporation; and be it
FURTHER RESOLVED: That said agreements and other statements
in writing executed in the name and on behalf of the Corporation by
any officer of the Corporation shall be presumed conclusively to be
the instruments, the execution of which is authorized by these
resolutions; and be it
FURTHER RESOLVED: That the officers of the Corporation be,
and the same hereby are, authorized and directed to execute, in the
name of and on behalf of the Corporation, security agreements,
financing statements, assignments, collateral reports, loan
statements, confirmations of delivery, lien statements, pledge
certificates, release certificates, removal reports, guaranties,
cross-collateralization agreements and such other writings and to
take such other actions as are necessary in their dealings with
Lender, and any such papers executed and any such actions taken by
any of them prior to this time are approved, ratified and
confirmed; and be it
FURTHER RESOLVED: That the Secretary of the Corporation, by
his signature, is, and hereby is, authorized and directed to attest
the execution by the Corporation of the papers signed pursuant to
these resolutions, to affix the seal of the Corporation thereto, if
required by Lender, and to certify to Lender the adoption of these
resolutions.
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CERTIFICATION
The undersigned hereby certifies that the within and foregoing
resolutions are in effect as of the date hereof, without
modification, and that the person signing the within and foregoing
amendment on behalf of the Corporation is the duly elected officer
stated below his name, that he is authorized to sign such
amendment, and that his signature thereon is genuine.
DATED: June 30, 1995.
________________________________________
X. X. Xxxxxxx, Secretary
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EXHIBIT "D"
Amendments to Articles of
Incorporation and/or Bylaws
ADDENDUM TO AMENDED AND RESTATED PROMISSORY NOTE
A. LIBOR Borrowing Provisions.
1. The following terms shall have the following meanings for
purposes of this Amended and Restated Promissory Note:
"Business Day" means a dav on which the commercial banks
in the State of Texas are open for business and not required by law
to be closed.
"Highest Lawful Rate" means the maximum rate allowed by
law.
"Interest Notice" means the written or verbal notice
given by Borrower to Bank of the interest options selected
hereunder. Each Interest Notice shall specify the amount of the
principal to bear interest at the rate selected and the length of
the Interest Period, if applicable.
"Interest Period" means, with respect to any LIBOR Loan,
a period commencing: (i) on any date upon which, pursuant to an
Interest Notice or otherwise pursuant to the provisions of this
Note, the principal amount of such LIBOR Loan begins to accrue
interest at the LIBOR Rate, or (ii) on the last day of the
immediately preceding Interest Period, in the case of a Readvance
to a successive Interest Period, and ending thirty (30) days, sixty
(60) days, ninety (90) days, one hundred twenty (120) days, one
hundred eighty (180) days or three hundred sixty (360) days
thereafter as Borrower shall elect in accordance with the
provisions of Section 2 below; provided, that any Interest Period
which would otherwise end on a day which is not a LIBOR Business
Day shall be extended to the next succeeding LIBOR Business Day.
"LIBOR Business Day" means a Business Day on which
dealings in United States currency are carried out in the London
Inter-Bank Eurocurrency market.
"LIBOR Loan" means a Loan bearing interest at the LIBOR
Rate.
"LIBOR Rate" as applied to any Loan made by Bank
hereunder, shall mean the sum of two percent (2.00%), plus the
quotient of (i) the "London Interbank Offered Rate" for the
applicable Interest Period offered to Bank on the Business Day
immediately preceding the date of advance or as otherwise
determined by Bank divided by (ii) the remainder of (A) 1.00 minus
(B) the LIBOR Reserve Percentage applicable to such Loan. The
determination by Bank of the LIBOR Rate shall, in the absence of
manifest error, be conclusive.
"LIBOR Reserve Percentage" means, with respect to each
Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentages in
effect on each day of such Interest Period, as prescribed by; the
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Board of Governors of the Federal Reserve System (or any
successor), for determining reserve requirements applicable to
"eurocurrency liabilities" pursuant to Regulation D or any other
then applicable regulation of the Board of Governors (or any
successor) which prescribes reserve requirements applicable to
"eurocurrency liabilities," as presently defined in Regulation D,
or any eurocurrency funding.
"Loan" means a designated portion of the unpaid principal
balance of amounts loaned by Bank to Borrower under this Amended
and Restated Promissory Note.
"Maturity Date" means March 31, 1998.
"Prime Rate Loan" means a Loan bearing interest at the
Prime Rate.
"Readvance" means a LIBOR Loan, the proceeds of which are
used to repay any then existing LIBOR Loan upon the expiration of
the Interest Period with respect to such then existing LIBOR Loan.
2. (a) Interest Rate Options.
(i) General. Subject to the provisions of
this Section 2(a)(1), Borrower shall have the option to have any
Loan bear interest at the LIBOR Rate; provided, however, that there
shall not exist, at any time during the term of this Amended and
Restated Promissory Note, more than five (5) LIBOR Loans in the
aggregate. Each change in a LIBOR Loan made pursuant to this
Section 2(a) shall be deemed a Readvance (notwithstanding that the
aggregate unpaid principal amount of the LIBOR Loan is not thereby
changed) of a LIBOR Loan made on the date of such change. The
LIBOR Rate interest options shall be selected in the manner
provided in Subsections 2(a)(2) and (3) below. Unless otherwise
directed by Borrower pursuant to the terms hereof, all Loans shall
be Prime Rate Loans.
(1) At Expiration of Interest Periods. Prior to
the termination of each Interest Period, Borrower shall give Bank
an Interest Notice specifying the interest option which shall be
applicable to such LIBOR Loan upon the expiration of such Interest
Period. The Interest Notice shall be given to Bank at least two
(2) LIBOR Business Days prior to the termination of such Interest
Period. Such Interest Notice shall also specify the length of the
succeeding Interest Period (subject to the provisions of the
definitions of such terms) selected by Borrower with respect to
such LIBOR Loan; provided, however, no Interest Period shall be
selected that terminates after the Maturity Date and no Interest
Period may be selected that extends beyond a date on which Borrower
is required to make a scheduled payment of principal under this
Amended and Restated Promissory Note, unless the sum of Prime Rate
Loans equals or exceeds the principal amount required to be paid on
such date. Each Interest Notice shall be irrevocable and effective
upon notification thereof to Bank. Notwithstanding the foregoing,
if the Interest Notice is not given by Borrower or if the required
Interest Notice is not
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timely received by Bank. Borrower shall be deemed automatically to
have requested that the Bank make a Prime Rate Loan on the last day
of the Interest Period applicable to any LIBOR Loan in an amount
necessary to pay the principal of the LIBOR Loan maturing on such
date.
(2) Upon Notice that it is Unlawful or Impossible
for Bank to make or Maintain a Loan. If the adoption of any
applicable laws or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank
with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for Bank to make or maintain a LIBOR
Loan, Bank shall so notify Borrower. Upon receipt of such notice,
such LIBOR Loan shall convert (i.e., the entirety of such LIBOR
Loan) to a Prime Rate Loan on either (i) the last day of the then
current Interest Period applicable to such LIBOR Loan if Bank may
lawfully continue to maintain and fund such LIBOR Loan to such day,
or (ii) immediately, if Bank may not lawfully continue to maintain
such LIBOR Loan to such day.
(b) Procedure for Loans.
(1) Loans to be made on Date Hereof. Subject to
the terms and conditions of this Amended and Restated Promissory
Note and the other Loan Documents, the Bank will make a Loan on the
date hereof in the principal amount of $1,084,000. If Borrower
desires such Loan, or a part thereof, to be a LIBOR Loan, Borrower
shall give proper timely notice that such Loan, or part thereof,
shall bear interest at the LIBOR Rate (which notice must also
specify the length of the Interest Period, subject to the
provisions of the definitions of such terms contained in this
Agreement).
(2) Notice of New Loan. Thereafter, Borrower shall
give Bank prior written notice of each new Loan hereunder by
delivery to Bank of an Interest Notice specifying (i) the amount of
such Loan, and (ii) the requested date of such Loan. Such Interest
Notice shall also specify the length of the Interest Period
selected by Borrower for such LIBOR Loan; provided, however, no
Interest Period shall end after the Maturity Date, and no Interest
Period shall extend beyond a date on which Borrower is required to
make a scheduled payment of principal hereunder, unless the sum of
Prime Rate Loans equals or exceeds the principal amount required to
be paid hereunder on such date. The Borrower shall give Bank the
Interest Notice no later than 10:30 a.m. (Central Standard Time) at
least two (2) LIBOR Business Days prior to the requested date of
the making of any LIBOR Loan and no later than 10:30 a.m. (Central
Standard Time) at least one ( l) Business Day prior to the making
of any Prime Rate Loan.
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(3) Notice Irrevocable. An Interest Notice shall
be irrevocable and binding on Borrower and Borrower shall indemnify
the Bank against any loss or expense incurred by the Bank as a
result of any failure by Borrower to fulfill, on or before the date
specified in such Interest Notice, the applicable conditions
precedent set forth in this Note or the Loan Documents including,
without limitation, the conditions precedent with respect to the
initial Loan hereunder and with respect to subsequent LIBOR Loans
and Readvances, and including, without limitation, any loss due to
sums paid or payable to fund the LIBOR Loan when such LIBOR Loan,
as a result of such failure or otherwise, is not made on such date.
(4) Readvances. Borrower may, pursuant to the
proper giving of the appropriate Interest Notice pursuant to and
otherwise in accordance with the provisions of Section 2(a)(2)
hereof, request that the Bank, upon the last day of the Interest
Period applicable to any LIBOR Loan, make a Readvance on such day
in the amount necessary to pay the principal of such LIBOR Loan,
such Readvance to bear interest according to the interest option
specified in such Interest Notice, whereupon, assuming Borrower is
in compliance with the terms and provisions of this Amended and
Restated Promissor,v Note and the Loan Documents, Bank shall make
such requested Readvance, the proceeds of which shall be applied to
the payment of principal of the LIBOR Loan to be repaid.
Notwithstanding the foregoing, Borrower hereby agrees that if Bank
has not timely received, pursuant to Section 2(a)(2) hereof, the
relevant Interest Notice regarding a LIBOR Loan, as of the last day
of the Interest Period applicable to such LIBOR Loan Borrower shall
be deemed automatically to have requested that the Bank make a
Prime Rate Loan in the principal amount necessary to pay the
principal of the LIBOR Loan maturing on such day, whereupon,
assuming Borrower is in compliance with the terms and provisions of
this Amended and Restated Promissory Note and the Loan Documents,
Bank shall make such requested Loan in the form of a Prime Rate
Loan, the proceeds of such Loan to be applied to the payment of
principal of the LIBOR Loan to be repaid.
(c) Payments of Principal and Interest.
(1) Principal. Borrower shall pay the outstanding
principal amount under this Amended and Restated Promissory Note in
quarterly installments of $98,545.46 each, commencing on September
30, 1995 and continuing on the last day of each successive calendar
quarter thereafter, with a final payment of all unpaid principal
due on the Maturity Date.
(2) Interest.
(i) Each LIBOR Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum which shall from day to day
outstanding be equal to the lesser of (i) the Highest Lawful Rate
or (ii) the LIBOR Rate applicable to such LIBOR Loan. Interest
shall be due and payable by Borrower to the Bank on the last day
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of each thirty (30), sixty (60), ninety (90), one hundred twenty
(120), one hundred eighty (180) and three hundred sixty (360) day
Interest Period (commencing with the day that is the first day of
such Interest Period), and interest shall additionally be due and
payable quarterly in arrears, commencing on September 30, 1995 and
continuing regularly and quarterly on the last day of each calendar
quarter, and on the Maturity Date. Any overdue principal of any
LIBOR Loan and, to the extent permitted by law, overdue interest
thereon, shall bear interest, payable on demand, for each day from
and including the date payment thereof was due to, but excluding,
the date of actual payment, at a rate per annum equal to the
Highest Lawful Rate.
(ii) Each Prime Rate Loan shall bear interest
on the outstanding principal amount thereof at a rate per annum
which shall from day to day outstanding be equal to the lesser of
(i) the Highest Lawful Rate or (ii) the Prime Rate in effect on
such day. Interest shall be due and payable by Borrower to the
Bank on the last day of each quarter, in arrears, commencing on
September 30, 1995 and continuing regularly and quarterly on the
last day of each calendar quarter, and on the Maturity Date. Any
overdue principal of any Prime Rate Loan and, to the extent
permitted by law, overdue interest thereon, shall bear interest,
payable on demand, for each day from and including the date payment
thereof was due to, but excluding, the date of actual payment, at
a rate per annum equal to the Highest Lawful Rate.
(3) Computation of Interest and Fees. Interest
based on the LIBOR Rate and the Prime Rate and fees shall be
calculated on the basis of actual days elapsed, but computed as if
each calendar month consisted of thirty (30) days, each calendar
quarter consisted of ninety (90) days and each calendar year
consisted of three hundred sixty (360) days, subject to limitations
of the Highest Lawful Rate. Each determination by Bank of the
LIBOR Rate or Prime Rate, as the case may be, shall, in the absence
of manifest error, be conclusive and binding.
(4) Recapture of Interest Lost as a Result of
Interest Limitations. If at any time the rate of interest
applicable to any Loan exceeds the Highest Lawful Rate, the rate of
interest which such Loan bears shall be limited to the Highest
Lawful Rate, but, notwithstanding any subsequent reductions in the
applicable rate of interest, the rate of interest which such Loan
bears shall not thereafter be reduced below the Highest Lawful Rate
until such time as the total amount of interest accrued on such
Loan equals the amount of interest which would have accrued if the
applicable rate had at all times been in effect.
(d) Prepayments of Loans. Borrower shall not have the
right to repay any portion of any LIBOR Loan, for any reason, on a
date which is prior to the maturity (last day of a respective
Interest Period) of such LIBOR Loan. The Bank, however, has the
right to demand repayment of any portion of any LIBOR Loan, in
accordance with
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Section 4 below if an event of default occurs, and Section 2(a)(3)
above on a date which is prior to the maturity of such LIBOR Loan,
and Borrower shall indemnify the Bank against, and will pay
directly to Bank. Any loss or expense suffered by Bank as a result
of such early repayment, including, without limitation, (i) any
loss or expense suffered by Bank during the period from the date of
receipt of such early repayment to the maturity of such LIBOR Loan,
if the rate of interest obtainable by Bank upon the redeployment of
an amount of funds so repaid early is less than the LIBOR Rate or
(ii) any loss or expense suffered by Bank in liquidating prior to
maturity Eurodollar Deposits which correspond to the LIBOR Loan.
For the purposes of calculating the amounts owed only, it shall be
assumed that Bank actually funded or committed to fund the LIBOR
Loan through the purchase of an underlying deposit in an amount and
for a term comparable to the LIBOR Loan, and such determination by
Bank shall be conclusive, absent a manifest error in computation.
Prepayments may be made in whole or in part at any
time on any Prime Rate Loan. All prepayments of principal shall be
applied in the inverse order of maturity, or in such other order as
Bank shall determine in its sole discretion.
(1) Indemnity as to LIBOR Loans. If, at any time,
Bank shall determine in good faith that any law, treaty, regulation
or guideline or any change in any existing law, treaty, regulation
or guideline or the interpretation thereof by any governmental
authority charged with the administration thereof or any central
bank or other fiscal, monetary or other authority having
jurisdiction over Bank or any LIBOR Loan contemplated to be made by
Bank pursuant to this Agreement (whether or not having the force of
law) shall:
(i) impose, modify or deem applicable any
reserve or special deposit requirement against or in respect of
assets held by, or deposits with or for the account of, or credit
advances by, Bank; or
(ii) subject Bank to any tax (including without
limitation any United States interest equalization or similar tax,
however named, but excluding United States federal and state income
taxes imposed on the overall net income of the Bank), duty, charge,
fee, deduction or withholding with respect to this Agreement or
such Loan;
and the result of the foregoing is to increase the cost (whether by
incurring a cost or adding to a cost) to Bank of making or
maintaining hereunder such LIBOR Loan or to reduce the amount of
the LIBOR Loan taken or interest received or receivable by Bank
with respect to such LIBOR Loan, then Bank shall give Borrower
written notice thereof in a reasonably prompt fashion and, upon
demand by Bank to Borrower, Borrower shall pay to Bank, from time
to time, as specified by Bank, additional amounts which shall
compensate and indemnify Bank for such increased cost or reduced
amount from the date of such notice. A certificate as to the
increased cost or reduced amount as a result of any event mentioned
in this Section 2(e) shall be promptly (after any demand by Bank)
submitted by Bank to Borrower and shall be rebuttably presumptive
evidence of the
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amount thereof. After any such demand for compensation or
indemnity by Bank (or if Borrower shall be subject to any
withholding tax by reason of any payment on account of such LIBOR
Loan), Borrower may, upon at least three Business Days' prior
written notice to Bank, prepay such LIBOR Loan in full subject to
Section 2(d) hereof. Notwithstanding anything to the contrary
contained in this Section above, Borrower shall not be obligated to
indemnify Bank for any such increased costs to Bank (i) accruing
prior to Bank's notifying Borrower of the nature of such costs or
(ii) relating to any LIBOR Loan in existence on the date of such
notification.
Bank agrees that it will use reasonable efforts in order to
avoid or to minimize, as the case may be, the payment by Borrower
of any additional amount under this Section and that it will, as
promptly as practicable, notify Borrower of the existence of any
event which will require the payment by Borrower of any such
additional amount, provided that the foregoing shall not in any way
affect the rights of Bank or the Banks or the obligations of
Borrower under this Section 2(e).
Borrower shall indemnify the Bank against any loss or expense
which Bank may incur as a consequence of Borrower s failure to make
a payment of any of the LIBOR Loans or interest on the due dates
thereof. A certificate of Bank as to the amount of any such loss
or expense and specifying the basis upon which such loss or expense
is computed shall be rebuttably presumed to be correct.
B. Amendment and Restatement. This Amended and Restated
Promissory Note is given in renewal and extension (and not in
extinguishment or novation) of that certain Promissory Note, dated
September 29, 1994, in the stated principal amount of $512,000
executed by Borrower and payable to the order of Bank.
