102
Exhibit 10.13
of Form 10KSB
CHANGE IN TERMS AGREEMENT
PrincipalLoan DateMaturityLoan No. Call CollateralAccount
Officer Initials
$1,000,000 26 019 355 874185533311267
Borrower: SYNTHETECH, INC. Lender: United
States National Bank Of Oregon
0000 XXXXXXXXXX XXX Xxxxx Business Banking Center
XXXXXX, XX 00000 PL-7 Oregon Corporate Loan
Servicing
000 X. X. Xxx
Xxxxxxxx, XX 00000
Principal Amount: $1,000,000.00 Date of Agreement:
September 12, 1996
DESCRIPTION OF EXISTING INDEBTEDNESS. A PROMISSORY NOTE IN THE
ORIGINAL AMOUNT OF $1,000,000.00 DATED SEPTEMBER 8, 1995, WITH
INTEREST AT THE RATE OF THE LENDER'S PRIME PLUS .750 PERCENTAGE
POINTS, DUE ON DEMAND.
DESCRIPTION OF CHANGE IN TERMS. FOR VALUABLE CONSIDERATION, THE
BORROWER AND LENDER HEREBY AGREE THAT THE TERMS OF THE NOTE ARE
CHANGED AS FOLLOWS: EFFECTIVE SEPTEMBER 12, 1996 THE INTEREST RATE IS
CHANGED IN ACCORDANCE WITH THE TERMS AS SHOWN BELOW IN THE "VARIABLE
INTERST RATE" SECTION OF THIS NOTE.
PROMISE TO PAY. SYNTHETECH, INC. ("Borrower") promises to pay to
UNITED STATES NATIONAL BANK OF OREGON ("Lender"), or order, in lawful
money of the United States of America, on demand, the principal amount
of One Million & 00/100 Dollars ($1,000,000.00) or so much as may be
outstanding, together with interest on the unpaid outstanding
principal balance of each advance. Interest shall be calculated from
the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan immediately upon Lender's
demand. In addition, Borrower will pay regular monthly payments of
all accrued unpaid interest due as of each payment date, beginning
September 30, 1996, with all subsequent interest payments to be due on
the last day of each month after that. Interest on this Agreement is
computed on a 365/360 simple interest basis; that is, by applying the
ratio of the annual interest rate over a year of 360 days, multiplied
by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay
Lender at Lender's address shown above or at such other place as
Lender may designate in writing. 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 and late charges.
VARIABLE INTEREST RATE. The interest rate on this Agreement is
subject to change from time to time based on changes in an index which
is the Lender's Prime Rate. This is the rate of interest which Lender
from time to time establishes as its Prime Rate and is not, for
example, the lowest rate of interest which Lender collects from any
borrower or class of borrowers (the "Index'). The interest rate shall
be adjusted without notice effective on the day Bank's prime rate
changes. Lender will tell Borrower the current Index rate upon
Borrower's request. Borrower understands that Lender may make loans
based on other rates as well. The interest rate change will not occur
more often than each Day. The Index currently is 8.250% per annum.
The interest rate to be applied to the unpaid principal balance of
this Agreement will be at a rate equal to the Index, resulting in an
initial rate of 8.250% per annum.
103
PREPAYMENT. Except for the foregoing, Borrower may pay without penalty
all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments of
accrued unpaid interest. Rather, they will reduce the principal
balance due.
DEFAULT. Borrower will be in default if any of the following happens:
(a) Borrower falls to make any payment when due. (b) Borrower breaks
any promise Borrower has made to Lender, or Borrower fails to comply
with or to perform when due any other term, obligation, covenant, or
condition contained in this Agreement or any agreement related to this
Agreement, or in any other agreement or loan Borrower has with Lender.
(c) Any representation or statement made or furnished to Lender by
Borrower or on Borrower's behalf is false or misleading in any
material respect either now or at the time made or furnished. (d)
Borrower becomes insolvent, a receiver is appointed for any part of
Borrower's property, Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (e) Any
creditor tries to take any of Borrower's property on or in which
Lender has a lien or security interest. This includes a garnishment
of any of Borrower's accounts with Lender. (f) Any guarantor dies or
any of the other events described in this default section occurs with
respect to any guarantor of this Agreement. (g) A material adverse
change in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the indebtedness is impaired.
(h) Lender in good xxxxx xxxxx itself insecure.
If any default, other than a default in payment, is curable and if
Borrower has not been given a notice of a breach of the same provision
of this Agreement within the preceding twelve (12) months, it may be
cured (and no event of default will have occurred) if Borrower, after
receiving written notice from Lender demanding cure of such default:
(a) cures the default within fifteen (15) days; or (b) if the cure
requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender's sole discretion to be sufficient to
cure the default and thereafter continues and completes all reasonable
and necessary steps sufficient to produce compliance as soon as
reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Agreement and all accrued unpaid interest
immediately due, without notice, and then Borrower will pay that
amount. Upon default, including failure to pay upon final maturity,
Lender, at its option, may also, if permitted under applicable law,
increase the variable interest rate on this Agreement to 5.000
percentage points over the Index. The interest rate will not exceed
the maximum rate permitted by applicable law. Lender may hire or pay
someone else to help collect this Agreement if Borrower does not pay.
Borrower also will pay Lender that amount. This includes, subject to
any limits under applicable law, Lender's attorneys' fees and Lender's
legal expenses whether or not there is a lawsuit, including attorneys'
fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgment collection services. If not prohibited
by applicable law, Borrower also will pay any court costs, in addition
to all other sums provided by law. This Agreement has been delivered
to Lender and accepted by Lender in the State of Oregon. If there is
a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of Multnomah County, the State of Oregon.
Subject to the provisions on arbitration, this Agreement shall be
governed by and construed in accordance with the laws of the State of
Oregon.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, convoys, delivers, pledges,
and transfers to Lender all Borrower's right, title and interest in
and to, Borrower's accounts with Lender (whether checking, savings, or
some other account), including without limitation all accounts held
jointly with someone else and all accounts Borrower may open in the
future, excluding however all XXX and Xxxxx accounts, and all trust
accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing on
this Agreement against any and all such accounts.
LINE OF CREDIT. This Agreement evidences a revolving line of credit.
Advances under this Agreement, as well as directions for payment from
Borrower's accounts, may be requested orally or in writing by Borrower
or by an authorized person. Lender may, but need not, require that
all oral requests be confirmed in writing. Borrower agrees to be
104
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 Lender, regardless of the fact that persons
other than those authorized to borrow have authority to draw against
the accounts. The unpaid principal balance owing on this Agreement at
any time may be evidenced by endorsements on this Agreement or by
Lender's internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Agreement
if: (a) Borrower or any guarantor is in default under the terms of
this Agreement or any agreement that Borrower or any guarantor has
with Lender, including any agreement made in connection with the
signing of this Agreement; (b) Borrower or any guarantor ceases doing
business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this
Agreement or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Agreement for purposes other than
those authorized by Lender; or (e) Lender in good xxxxx xxxxx itself
insecure under this Agreement or any other agreement between Lender
and Borrower.
ARBITRATION. Lender and Borrower agree that all disputes, claims and
controversies between them, whether individual, joint, or class in
nature, arising from this Agreement or otherwise, including without
limitation contract and tort disputes, shall be arbitrated pursuant to
the Rules of the American Arbitration Association, upon request of
either party. No act to take or dispose of any collateral securing
this Agreement shall constitute a waiver of this arbitration agreement
or be prohibited by this arbitration agreement. This includes,
without limitation, obtaining injunctive relief or a temporary
restraining order; foreclosing by notice and sale under any deed of
trust or mortgage; obtaining a writ of attachment or imposition of a
receiver; or exercising any rights relating to personal property,
including taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial Code.
Any disputes, claims, or controversies concerning the lawfulness or
reasonableness of any act, or exercise of any right, concerning any
collateral securing this Agreement, including any claim to rescind,
reform, or otherwise modify any agreement relating to the collateral
securing this Agreement, shall also be arbitrated, provided however
that no arbitrator shall have the right or the power to enjoin or
restrain any act of any party. Judgment upon any award rendered by
any arbitrator may be entered in any court having jurisdiction.
Nothing in this Agreement shall preclude any party from seeking
equitable relief from a court of competent jurisdiction. The statute
of limitations, estoppel, waiver, laches, and similar doctrines which
would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an action
for these purposes. The Federal Arbitration Act shall apply to the
construction, interpretation, and enforcement of this arbitration
provision.
CONTINUING VALIDITY. Except as expressly changed by this Agreement,
the terms of the original obligation or obligations, including all
agreements evidenced or securing the obligation(s), remain unchanged
and in full force and effect. Consent by Lender to this Agreement
does not waive Lender's right to strict performance of the
obligation(s) as changed, nor obligate Lender to make any future
change in terms. Nothing in this Agreement will constitute a
satisfaction of the obligation(s). It is the intention of Lender to
retain as liable parties all makers and endorsers of the original
obligation(s), including accommodation parties. Unless a party is
expressly released by Lender in writing. Any maker or endorser,
including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not
sign this Agreement below, then all parties signing below acknowledge
that this Agreement is given conditionally, based on the
representation to Lender that the non-signing party consents to the
changes and provisions of this Agreement or otherwise will not be
released by it. This waiver applies not only to any initial
extension, modification or release, but also to all such subsequent
actions.
LATE CHARGE. If a payment is 19 days or more past due, Borrower will
be charged a late charge of 5% of the delinquent payment.
PERIODIC REVIEW. Lender will review the loan periodically. At the
time of the review, Borrower will furnish Lender with any additional
information regarding Borrower's financial condition and business
operations that Lender requests. This information may include, but is
not limited to, financial statements, tax returns, lists of assets and
105
liabilities, agings of receivables and payables, inventory schedules,
budgets and forecasts. If upon review, Lender, in its sole
discretion, determines that there has been a material adverse change
in Borrower's financial condition, Borrower will be in default. Upon
default, Lender shall have all rights specified herein.
DEMAND NOTE. BORROWER ACKNOWLEDGES AND AGREES THAT (A) THIS NOTE IS A
DEMAND NOTE, AND LENDER IS ENTITLED TO DEMAND BORROWER'S IMMEDIATE
PAYMENT IN FULL OF ALL AMOUNTS OWING HEREUNDER, (B) NEITHER ANYTHING
TO THE CONTRARY CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENTS
(INCLUDING BUT NOT LIMITED TO, PROVISIONS RELATING TO DEFAULTS, RIGHTS
OF CURE, DEFAULT RATE OF INTEREST, INSTALLMENT PAYMENTS, LATE CHARGES,
PERIODIC REVIEW OF BORROWER'S FINANCIAL CONDITION, AND COVENANTS) NOR
ANY ACT OF LENDER PURSUANT TO ANY SUCH PROVISIONS SHALL LIMIT OR
IMPAIR LENDER'S RIGHT OR ABILITY TO REQUIRE BORROWER'S PAYMENT IN FULL
OF ALL AMOUNTS OWING HEREUNDER IMMEDIATELY UPON LENDER'S DEMAND, AND
(C) UPON LENDER MAKING ANY SUCH DEMAND, LENDER SHALL HAVE NO
OBLIGATION TO MAKE ANY ADVANCE UNDER THIS NOTE OR UNDER THE LOAN
DOCUMENTS.
CREDIT ACT - CHECKING ACCOUNT NUMBER 000-0000-000 LOCATED AT THE
ALBANY COMMUNITY BRANCH. Borrower has requested and been granted
Lender's Commercial Line of Credit Automatic Cash Transfer Service
("Credit ACT"). So long as this Note is in place, Borrower authorizes
Lender to draw from Borrower's available line of credit and transfer
funds automatically to Borrower's commercial checking account
described in the heading of this paragraph ("Checking Account") in
accordance with this section. So long as this agreement is in place,
Lender agrees to make an automatic cash transfer from Borrower's line
of credit to its Checking Account in increments of $500.00, to pay
checks that would otherwise overdraw Borrower's Checking Account by
$100.00 or more, up to Borrower's available credit limit. The amount
of each Credit ACT transfer will be an advance under the terms of this
Note. There is no charge for using Credit ACT. Borrower agrees to
pay prevailing overdraft or other applicable checking account charges
then in effect if an overdraft may not be paid because an ACT in the
required increment of $500.00 to pay the full amount of the overdraft
would exceed Borrower's credit limit. If Borrower's credit limit has
been exceeded, and no other ACT privileges are available to Borrower,
any check presented for payment from Checking Account will, at the
sole option of Lender, either be paid, thus overdrawing Checking
Account, or dishonored. Lender may change the terms of Credit ACT at
any time by giving Borrower written notice, sent to the Borrower's
address as shown in Lender's records, prior to the effective date of
the change.
Lender reserves the right to discontinue this service upon giving
written notice to the Borrower, at Borrower's address shown in
Lender's records, under the following circumstances: (1) Lender
reasonably believes that Borrower will be unable to fulfill its
repayment obligations because of a material adverse change in
Borrower's financial circumstances. (2) Borrower fails to promptly
provide financial information that Lender has requested. (3) Borrower
is in default of a material provision of any promissory Agreement or
loan agreement with Lender.
If Lender discontinues further Credit ACT services due to any of these
circumstances, Lender will mail Borrower written notice of the
discontinuation and the reasons therefor. After such notice is given,
Borrower must request in writing that its Credit ACT be reinstated.
Before Credit ACT privileges are reinstated, Lender may ask Borrower
to provide new information, at Borrower's expense. If Borrower shows
Lender that the circumstances that caused cancellation of Credit ACT
services have ceased to exist, Credit ACT will be reinstated at
Lender's sole option and discretion upon written notice to Borrower.
MISCELLANEOUS PROVISIONS. This Agreement is payable on demand. The
inclusion of specific default provisions or rights of Lender shall not
preclude Lender's right to declare payment of this Agreement on its
demand. Lender may delay or forgo enforcing any of its rights or
remedies under this Agreement without losing them. Borrower and any
other person who signs, guarantees or endorses this Agreement, to the
extent allowed by law, waive presentment, demand for payment, protest
and notice of dishonor. Upon any change in the terms of this
Agreement, and unless otherwise expressly stated in writing, no party
who signs this Agreement, whether as maker, guarantor, accommodation
maker or endorser, shall be released from liability. All such parties
agree that Lender may re-new or extend (repeatedly and for any length
106
of time) this loan, or release any party or guarantor or collateral;
or impair, fail to realize upon or perfect Lender's security interest
in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is
made.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US
(LENDER) AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION AND BE SIGNED BY US TO BE ENFORCEABLE.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.
SYNTHETECH, INC.
X \s\ X. Xxxxxxxxxxx, President/CEO X \s\
Xxxxxxx X. Xxxxxxxx, VP
Authorized Officer Authorized Officer
LENDER:
United States National Bank of Oregon
By \s\
Authorized Officer
