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AMENDMENT TO LOAN AGREEMENT
This Amendment to Loan Agreement (the "Amendment") is made and entered
into between Zions First National Bank ("Zions"), The First National Bank of
Chicago ("FNBC") (assignee of NBD Bank) (Zions and FNBC are hereinafter
referred to collectively as "Lenders"), Zions First National Bank, not in its
individual capacity but solely as agent pursuant to an Intercreditor Agreement
dated October 16, 1996 between Zions, NBD Bank and Agent (herein, in such
capacity, "Agent"), and Franklin Quest Co., a Utah corporation ("Borrower").
Recitals
1. Zions, NBD Bank, Agent and Borrower have entered into a Loan
Agreement dated October 16, 1996 (the "Loan Agreement").
2. Pursuant to an Assignment Agreement dated as of February 3,
1997, NBD Bank sold and assigned its rights and obligations under the Loan
Agreement and related documents, and instruments to FNBC.
3. Zions, FNBC, Agent and Borrower desire to modify and amend the
Loan Agreement to increase the amount of the loan to $90,000,000 and to modify
the Loan Agreement as provided herein.
Amendment
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Zions, FNBC, Agent and Borrower hereby agree and
amend and modify the Loan Agreement as follows:
1. Definitions. Except as otherwise expressly provided herein,
terms assigned defined meanings in the Loan Agreement shall have the same
defined meanings in this Amendment.
2. FNBC as Assignee of NBD Bank. All references in the Loan
Agreement to NBD Bank are amended to refer to FNBC. It is acknowledged and
agreed that FNBC has succeeded to all rights, benefits, duties, and obligations
of NBD Bank under the Loan Agreement, Promissory Notes, and Intercreditor
Agreement.
3. Promissory Notes. Exhibits A and B to the Loan Agreement are
deleted and replaced with Exhibits A and B to this Amendment. All references
in the Loan Agreement to Exhibits A and B thereto shall refer to Exhibits A and
B to this Amendment. All references in the Loan Agreement to the Promissory
Notes shall refer to the Amended Promissory Notes attached as Exhibits A and B
to this Amendment.
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4. Amount of Loan. Section 2.1 Amount of Loan of the Loan
Agreement is deleted and replaced with the following:
Section 2.1. Amount of Loan
Upon fulfillment of all conditions precedent set forth in this
Loan Agreement, and so long as no Event of Default exists, and no
other breach has occurred under this Loan Agreement, Lenders, through
Agent, agree to loan Borrower ninety million dollars ($90,000,000.00).
5. Financial Covenants. Section 5.7 Financial Covenants of the
Loan Agreement is amended as follows:
a. The first paragraph of Subsection a Consolidated Tangible Net
Worth, is deleted and replaced with the following:
Borrower will maintain a consolidated tangible net worth of not less
than eighty million dollars ($80,000,000.00) at all times through
Borrower's fiscal year ending August 31, 1997, and thereafter not
less than such amount plus an annual increase of five million dollars
($5,000,000.00) for each subsequent fiscal year.
b. By adding the following new subsection c:
c. Total Liabilities to Tangible Net Worth. Borrower will
maintain a ratio of total liabilities to tangible net worth of not
greater than one and twenty-five hundredths to one (1.25:1) on a
fiscal quarter basis until Borrower's fiscal year ending August 31,
1998, and a ratio of not greater than one and one-tenth to one (1.1:1)
as of the fiscal quarter ending August 31, 1998 and thereafter. Total
liabilities are to be determined in accordance with generally accepted
accounting principles consistent with those applied in the preparation
of the financial statements previously submitted by Borrower to
Lenders. Tangible net, worth means the excess of total assets over
total liabilities, total assets and total liabilities each to be
determined in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial
statements previously submitted by Borrower to Lenders excluding,
however, from the determination of total assets all assets which would
be classified as intangible assets under generally accepted accounting
principles, including, without limitation, goodwill, licenses,
patents, trademarks, trade names, copyrights, and franchises.
6. Notices. Section 8.15 Notices is amended by deleting the
notice address for NBD Bank and replacing it with:
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The First National Bank of Chicago
West Coast Regional Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
7. Waiver and Release of Claims. Borrower (i) represents that it
has no defenses to or setoffs against any indebtedness or other obligations
owing to Lenders or their affiliates (the "Obligations"), nor claims against
Lenders or their affiliates for any matter whatsoever, related or unrelated to
the Obligations, and (ii) releases Lenders and their affiliates from all
claims, causes of action, and costs, in law or equity, existing as of the date
of this Amendment to Loan Agreement, which Borrower has or may have by reason
of any matter of any conceivable kind or character whatsoever, related or
unrelated to the Obligations, including the subject matter of the Loan
Agreement. This provision shall not apply to claims for performance or express
contractual obligations owing to Borrower by Lenders or their affiliates.
8. Representations and Warranties. Borrower hereby affirms and
again makes the representations and warranties set forth in Article 4
Representations and Warranties of the Loan Agreement as of the date of this
Amendment.
9. Authorization. Borrower represents and warrants that the
execution, delivery, and performance by Borrower of this Amendment, the Amended
Promissory Notes, and all agreements, documents, obligations, and transactions
herein contemplated have been duly authorized by all necessary corporate action
on the part of Borrower and are not inconsistent with Borrower's Articles of
Incorporation, By-Laws or any resolution of the Board of Directors of Borrower,
do not and will not contravene any provision of, or constitute a default under,
any indenture, mortgage, contract, or other instrument to which Borrower is a
party or by which it is bound, and that upon execution and delivery hereof and
thereof, this Amendment and the Amended Promissory Notes will constitute legal,
valid, and binding agreements and obligations of Borrower, enforceable in
accordance with their respective terms.
10. Payment of Expenses and Attorney's Fees. Borrower shall pay
all reasonable expenses of Lender relating to the negotiation, drafting of
documents, and documentation of this Amendment, including, without limitation,
reasonable attorney's fees and legal expenses. If such expenses are not
promptly paid, Lender is authorized and directed, upon execution of this
Amendment and fulfillment of all conditions precedent hereunder, to disburse a
sufficient amount of the Loan proceeds to pay in full these expenses.
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11. Agreement Remains in Full Force and Effect. Except as
expressly amended or modified by this Amendment, the Loan Agreement remains in
full force and effect.
12. Integrated Agreement: Amendment. This Amendment, together
with the Loan Agreement, Amended Promissory Notes, Intercreditor Agreement, and
Amendment to Intercreditor Agreement constitute the entire agreements and
understandings between the parties and supersede all other prior and
contemporaneous agreements and may not be altered or amended except by written
agreement signed by the parties. This Amendment and the Loan Agreement shall
be read and interpreted together as one agreement. PURSUANT TO UTAH CODE
SECTION 25-5-4, BORROWER IS NOTIFIED THAT THESE AGREEMENTS ARE A FINAL
EXPRESSION OF THE AGREEMENT BETWEEN LENDER AND BORROWER AND THESE AGREEMENTS
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED ORAL AGREEMENT. All other
prior and contemporaneous agreements, arrangements and understandings between
the parties hereto as to the subject matter hereof are, except as otherwise
expressly provided herein, terminated.
Dated: May 12, 1997
Zions First National Bank
By: /s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
Vice President
The First National Bank of Chicago
By: /s/ [SIG]
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Title: First Vice President
Zions First National Bank, not in its
individual capacity but solely as agent
pursuant to an Intercreditor Agreement
dated October 16, 1996, between Zions
First National Bank, The First Chicago
National Bank, and Agent
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxx
Vice President
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Franklin Quest Co.
By: /s/ [SIG]
--------------------------------
Title: Chief Financial Officer
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EXHIBIT A
PROMISSORY NOTE
(ZIONS FIRST NATIONAL BANK)
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AMENDED PROMISSORY NOTE
Revolving Line of Credit
October 16, 1996
Borrower: Franklin Quest Co.
Lender: Zions First National Bank
Agent: Zions First National Bank, not in its individual capacity but
solely as agent pursuant to an Intercreditor Agreement dated
October 16, 1996 between Zions First National Bank ("Zions"),
The First National Bank of Chicago, and Agent, as amended
Amount: $30,000,000.00
Maturity: October 1, 2001
For value received, Borrower promises to pay to the order of Agent, at
Zions First National Bank's Commercial Banking Department in Salt Lake City,
Utah, the sum of thirty million dollars ($30,000,000.00) or such other
principal balance as may be outstanding hereunder in lawful money of the United
States with interest thereon calculated and payable as provided herein.
This Promissory Note shall be a revolving line of credit under which
Borrower may repeatedly draw and repay funds, so long as no default has
occurred hereunder or under the Loan Agreement dated October 16, 1996, between
Zions, The First National Bank of Chicago, Agent and Borrower, as amended (the
"Loan Agreement") and so long as the aggregate, outstanding principal balance
at any time does not exceed the principal amount of this Promissory Note.
Disbursements under this Promissory Note shall be made in accordance with the
Loan Agreement. Agent shall have no obligation to make any disbursements
except to the extent funds have been provided by Zions.
In connection with each request for an advance under this Promissory
Note, Borrower shall specify whether the advance shall bear interest based on
the Prime Rate or the LIBOR Rate and, if the LIBOR Rate is selected, the
applicable Interest Period. The specification made by Borrower may not be
changed without consent of Agent. If no specification is made by Borrower, the
advance shall bear interest based on the Prime Rate.
Interest on advances based on the Prime Rate shall be calculated and
payable as follows:
1. Interest shall be at a variable rate computed on the basis of
a three hundred sixty (360) day year as follows:
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The Prime Rate Performance Percent (hereinafter defined) per
annum below the Prime Rate (hereinafter defined) of Zions from
time to time in effect, adjusted as of the date of any change
in the Prime Rate. Interest accrued is to be paid monthly
commencing November 2, 1996, and on the same day of each month
thereafter. All principal and unpaid interest shall be paid
in full on October 1, 2001.
2. The Prime Rate Performance Percent shall be determined as
follows:
(a) If the ratio determined by the following
formula is greater than seven (7), the Prime Rate Performance
Percent will be five-tenths (.5). If such ratio is seven (7)
or less, the Prime Rate Performance Percent will then be
determined in accordance with subsections (b), (c) and (d),
below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the Prime
Rate Performance Percent will be five-tenths (.5).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the Prime Rate Performance
Percent will be seventy-five hundredths (.75).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the Prime Rate Performance Percent will be one (1.0).
For purposes of subparagraphs (b), (c) and (d),
above, total liabilities shall be determined in
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accordance with generally accepted accounting principles
consistent with those applied in the preparation of the
financial statements previously submitted by Borrower to
Lender. Tangible net worth means the excess of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation,
goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises.
The Prime Rate Performance Percent shall be
determined based upon the most recent Securities and Exchange
Commission Form 10Q or 10K of Borrower and be adjusted as of
the first day of the month following the month in which
Borrower is required to deliver such report to Lender pursuant
to the Loan Agreement.
3. Prime Rate means an index which is determined daily by the
published commercial loan variable rate index held by any two
of the following banks: Chase Manhattan Bank, Xxxxx Fargo Bank
N. A., and Bank of America N. T. & S. A. In the event no two
of the above banks have the same published rate, the bank
having the median rate will establish Zions' Prime Rate. If,
for any reason beyond the control of Zions, any of the
aforementioned banks becomes unacceptable as a reference for
the purpose of determining the Prime Rate used herein, Zions
may, five days after posting notice in the Zions' bank
offices, substitute another comparable bank for the one
determined unacceptable. As used in this paragraph,
"comparable bank" shall mean one of the ten largest commercial
banks headquartered in the United States of America. This
definition of Prime Rate is to be strictly interpreted and is
not intended to serve any purpose other than providing an
index to determine the variable interest rate used herein. It
is not the lowest rate at which Zions may make loans to any of
its customers, either now or in the future.
Interest on advances based on the LIBOR Rate shall be calculated and
payable as follows:
1. Interest shall be at a rate computed on the basis of a three
hundred sixty (360) day year equal to the LIBOR Rate
(hereinafter defined) of Zions for the applicable Interest
Period (hereinafter defined) plus the LIBOR
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Performance Percent (hereinafter defined). Interest accrued
is to be paid monthly commencing November 2, 1996, on the same
day of each month thereafter, and on the last day of each
applicable Interest Period.
2. The LIBOR Performance Percent shall be determined as follows:
(a) If the ratio determined by the following
formula is greater than seven (7), the LIBOR Performance
Percent will be one and twenty-five hundredths (1.25). If such
ratio is seven (7) or less, the LIBOR Performance Percent will
then be determined in accordance with subsections (b), (c) and
(d), below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the LIBOR
Performance Percent will be one and twenty-five hundredths
(1.25).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the LIBOR Performance Percent
will be one (1).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the LIBOR Performance Percent will be seventy-five hundredths
(.75).
For purposes of subparagraphs (b), (c) and (d),
above, total liabilities shall be determined in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
previously submitted by Borrower to
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Lender. Tangible net worth means the excess of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation,
goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises.
The LIBOR Performance Percent shall be determined
based upon the most recent Securities and Exchange Commission
Form 10Q or 10K of Borrower and be adjusted as of the first
day of the month following the month in which Borrower is
required to deliver such report to Lender pursuant to the Loan
Agreement.
3. The LIBOR Rate applicable to any Interest Period means the
rate per annum quoted by Zions as its LIBOR Rate. The LIBOR
Rate shall be related to quotes for the London Interbank
Offered Rate from the British Bankers Association Interest
Settlement Rates, Xxxxxx Xxxxxxxx Inc., or other comparable
services for the applicable Interest Period. This definition
of LIBOR Rate is to be strictly interpreted and is not
intended to serve any purpose other than providing an index to
determine the interest rate used herein. The LIBOR Rate of
Zions may not necessarily be the same as the quoted London
Interbank Offered Rate quoted by any particular institution or
service applicable to any Interest Period.
4. Banking Business Day means any day other than a Saturday,
Sunday or other day on which commercial banks in the State of
Utah are authorized or required to close and a day on which
dealings in dollar deposits are also carried on in the London
Interbank market and banks are open for business in London.
5. Dollars and the sign "$" mean lawful money of the United
States.
6. Interest Period means, with respect to any LIBOR Rate advance,
the period commencing on the date such advance is made and
ending, as the Borrower may select, on the numerically
corresponding day in the first, second, third, sixth, or
twelfth calendar month thereafter, except that each such
Interest Period that commences on the last Banking Business
Day of a calendar month (or an any day for which there is no
numerically corresponding
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day in the appropriate subsequent calendar month) shall end on
the last Banking Business Day of the appropriate subsequent
calendar month; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
a. No Interest Period may extend beyond the termination
of the Loan Agreement;
b. No Interest Period may extend beyond the aforesaid
Maturity Date or such later date to which it is
extended; and
c. If an Interest Period would end on a day that is not
a Banking Business Day, such Interest Period shall be
extended to the next Banking Business Day unless such
Banking Business Day would fall in the next calendar
month, in which event such interest Period shall end
on the immediately preceding Banking Business Day.
7. Notwithstanding any other provision in this Promissory Note,
if the adoption of any applicable law, rule, or regulation, 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 Lender 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 Lender to maintain or
fund advances based on the LIBOR Rate, then upon notice to
Borrower by Agent the outstanding principal amount of the
advances based on the LIBOR Rate,, together with interest
accrued thereon, shall, at the election of Agent, be (1)
immediately converted to an advance based on Prime Rate; (2)
repaid immediately upon demand of Agent if such change or
compliance with such request, in the judgment of Agent,
requires immediate repayment; or (3) repaid at the expiration
of the last Interest Period to expire before the effective
date of any such change or request.
8. Notwithstanding anything to the contrary herein, if Agent
determines (which determination shall be conclusive) that:
a. Quotations of interest rates for the relevant
deposits referred to in the definition of LIBOR Rate
are not being provided in the relevant amounts or for
the relative maturities for purposes of determining
the LIBOR Rate; or
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b. The LIBOR Rate does not accurately cover the cost to
Lender of making or maintaining advances based on the
LIBOR Rate, then Agent may give notice thereof to
Borrower, whereupon until Agent notifies Borrower
that the circumstances giving rise to such suspension
no longer exist, (1) the obligation of Agent to make
advances based On the LIBOR Rate shall be suspended;
and (2) Borrower shall repay in full the then
outstanding principal amount of each advance based on
LIBOR Rate together with accrued interest thereon, on
the last day of the then current Interest Period
applicable to such advance, or, at Borrower's option,
convert the advancer, based on LIBOR Rate to advances
based on Prime Rate on the last day of the then
current Interest Period applicable to such advance.
All principal advances for which interest is based upon LIBOR Rate
shall be due and payable in full on the last day of the applicable Interest
Period.
As to all advances, whether based on the Prime Rate or the LIBOR Rate:
1. Interest shall accrue from the date of disbursement of the
principal amount or portion thereof until paid, both before
and after judgment, in accordance with the terms set forth
herein.
2. All payments shall be applied first to accrued interest and
the remainder, if any, to principal.
3. Notwithstanding anything to the contrary herein, all principal
and unpaid interest shall be paid in full on the aforesaid
Maturity Date.
4. Upon default in payment of any principal or interest when due,
whether due at stated maturity, by acceleration, or otherwise,
all outstanding principal shall bear interest at a default
rate from. the date when due until paid, both before and after
judgment, which default rate shall be three percent (3.0%) per
annum above the Prime Rate.
If, at any time prior to the maturity of this Promissory Note, this
Promissory Note shall have a zero balance owing, this Promissory Note shall not
be deemed satisfied or terminated but shall remain in full force and effect for
future draws unless terminated upon other grounds.
Borrower may prepay all or any portion of any advance based upon Prime
Rate at any time without penalty. As to any advance based upon LIBOR Rate,
Borrower may prepay up to five percent (5%)
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of the original principal amount of this Promissory Note annually without a
prepayment fee. Any additional prepayment shall be subject to a prepayment fee
if the "Original LIBOR Rate" is greater than the "Current LIBOR Rate" on the
prepayment date. The prepayment fee shall be an amount equal to the prepaid
principal amount multiplied by the product of the "Original LIBOR Rate" less
the "Current LIBOR Rate", multiplied by the number of years and fractional
portion of a year remaining in the current Interest Period.
"Current LIBOR Rate" means the LIBOR Rate in effect on the date the
prepayment is made for the interest period from that prepayment date to the end
of the current Interest Period.
"Original LIBOR Rate" means the LIBOR Rate in effect for the current
Interest Period.
This Promissory Note is made in accordance with the Loan Agreement.
This Promissory Note modifies and replaces a Promissory Note dated
October 16, 1996, executed by Borrower in favor of Zions First National Bank in
the original principal amount of twenty-five million dollars ($25,000,000.00).
If default occurs in the payment of any principal or interest when
due, or if any Event of Default (as defined in the Loan Agreement) occurs under
the Loan Agreement, time being the essence hereof, then the entire unpaid
balance, with interest as aforesaid, shall, at the election of the holder
hereof and without notice of such election, become immediately due and payable
in full.
If this Promissory Note becomes in default or payment is accelerated,
Borrower agrees to pay to the holder hereof all collection costs, including
reasonable attorney fees and legal expenses, in addition to all other sums due
hereunder.
Borrower and all endorsers, sureties and guarantors hereof hereby
jointly and severally waive presentment for payment, demand, protest, notice of
protest, notice of protest and of non-payment and of dishonor, and consent to
extensions of time, renewal, waivers or modifications without notice and
further consent to the release of any collateral or any part thereof with or
without substitution.
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EXHIBIT B
PROMISSORY NOTE
(The First National Bank of Chicago)
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AMENDED PROMISSORY NOTE
Revolving Line of Credit
October 16, 1996
Borrower: Franklin Quest Co.
Lender: The First National Bank of Chicago
Agent: Zions First National Bank, not in its individual capacity but
solely as agent pursuant to an Intercreditor Agreement dated
October 16, 1996 between Zions First National Bank ("Zions"),
The First National Bank of Chicago, and Agent, as amended
Amount: $60,000,000.00
Maturity: October 1, 2001
For value received, Borrower promises to pay to the order of Agent, at
Zions First National Bank's Commercial Banking Department in Salt Lake City,
Utah, the sum of sixty million dollars ($60,000,000.00) or such other principal
balance as may be outstanding hereunder in lawful money of the United States
with interest thereon calculated and payable as provided herein.
This Promissory Note shall be a revolving line of credit under which
Borrower may repeatedly draw and repay funds, so long as no default has
occurred hereunder or under the Loan Agreement dated October 16, 1996, between
Zions, The First National Bank of Chicago and Borrower, as amended (the "Loan
Agreement") and so long as the aggregate, outstanding principal balance at any
time does not exceed the principal amount of this Promissory Note.
Disbursements under this Promissory Note shall be made in accordance with the
Loan Agreement. Agent shall have no obligation to make any disbursements
except to the extent funds have been provided by The First National Bank of
Chicago.
In connection with each request for an advance under this Promissory
Note, Borrower shall specify whether the advance shall bear interest based on
the Prime Rate or the LIBOR Rate and, if the LIBOR Rate is selected, the
applicable Interest Period., The specification made by Borrower may not be
changed without consent of Agent. If no specification is made by Borrower, the
advance shall bear interest based on the Prime Rate.
Interest on advances based on the Prime Rate shall be calculated and
payable as follows:
1. Interest shall be at a variable rate computed on the basis of
a three hundred sixty (360) day year as follows:
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The Prime Rate Performance Percent (hereinafter defined) per
annum below the Prime Rate (hereinafter defined) of Zions from
time to time in effect, adjusted as of the date of any change
in the Prime Rate. Interest accrued is to be paid monthly
commencing November 2, 1996, and on the same day of each month
thereafter. All principal and unpaid interest shall be paid
in full on October 1, 2001.
2. The Prime Rate Performance Percent shall be determined as
follows:
(a) If the ratio determined by the following
formula is greater than seven (7) the Prime Rate Performance
Percent will be five-tenths (.5). If such ratio is seven (7)
or less, the Prime Rate Performance Percent will then be
determined in accordance with subsections (b), (c) and (d),
below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the Prime
Rate Performance Percent will be five-tenths (.5).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the Prime Rate Performance
Percent will be seventy-five hundredths (.75).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the Prime Rate Performance Percent will be one (1.0).
For purposes of subparagraphs (b) (c) and (d), above,
total liabilities shall be determined in
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accordance with generally accepted accounting principles
consistent with those applied in the preparation of the
financial statements previously submitted by Borrower to
Lender. Tangible net worth means the excess Of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation, goodwill
licenses, patents, trademarks, trade names, copyrights, and
franchises.
The Prime Rate Performance Percent shall be
determined based upon the most recent Securities and Exchange
Commission Form 10Q or 10K of Borrower and be adjusted as of
the first day of the month following the month in which
Borrower is required to deliver such report to Lender pursuant
to the Loan Agreement.
3. Prime Rate means an index which is determined daily by the
published commercial loan variable rate index held by any two
of the following banks: Chase Manhattan Bank, Xxxxx Fargo Bank
K. A., and Bank of America K. T. & S. A. In the event no two
of the above banks have the same published rate, the bank
having the median rate will establish Zions' Prime Rate. If,
for any reason beyond the control of Zions, any of the
aforementioned banks becomes unacceptable as a reference for
the purpose of determining the Prime Rate used herein, Zions
may, five days after posting notice in the Zions' bank
offices, substitute another comparable bank for the one
determined unacceptable. As used in this paragraph,
"comparable bank" shall mean one of the ten largest commercial
banks headquartered in the 'United States of America. This
definition of Prime Rate is to be strictly interpreted and is
not intended to serve any purpose other than providing an
index to determine the variable interest rate used herein. It
is not the lowest rate at which Zions may make loans to any of
its customers, either now or in the future.
Interest on advances based on the LIBOR Rate shall be calculated and
payable as follows:
1. Interest shall be at a rate computed on the basis of a three
hundred sixty (360) day year equal to the LIBOR Rate
(hereinafter defined) of Zions for the applicable Interest
Period (hereinafter defined) plus the LIBOR
3
19
Performance Percent (hereinafter defined). Interest accrued
is to be paid monthly commencing November 2, 1996, on the same
day of each month thereafter, and on the last day of each
applicable Interest Period.
2. The LIBOR Performance Percent shall be determined as follows:
(a) If the ratio determined by the following formula
is greater than seven (7), the LIBOR Performance Percent will
be one and twenty-five hundredths (1.25). If such ratio is
seven (7) or less, the LIBOR Performance Percent will then be
determined in accordance with subsections (b), (c) and (d),
below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the LIBOR
Performance Percent will be one and twenty-five hundredths
(1.25).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the LIBOR Performance Percent
will be one (1).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the LIBOR Performance Percent will be seventy-five hundredths
(.75).
For purposes of subparagraphs, (b) (c) and (d),
above, total liabilities shall be determined in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
previously submitted by Borrower to
4
20
Lender. Tangible net worth means the excess of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation,
goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises.
The LIBOR Performance Percent shall be determined
based upon the most recent Securities and Exchange Commission
Form 10Q or 10K of Borrower and be adjusted as of the first
day of the month following the month in which Borrower is
required to deliver such report to Lender pursuant to the Loan
Agreement.
3. The LIBOR Rate applicable to any Interest Period means the
rate per annum quoted by Zions as its LIBOR Rate. The LIBOR
Rate shall be related to quotes for the London Interbank
Offered Rate from the British Bankers Association Interest
Settlement Rates, Xxxxxx Xxxxxxxx Inc., or other comparable
services for the applicable Interest Period. This definition
of LIBOR Rate is to be strictly interpreted and is not
intended to serve any purpose other than providing an index to
determine the interest rate used herein. The LIBOR Rate of
Zions may not necessarily be the same as the quoted London
Interbank Offered Rate quoted by any particular institution or
service applicable to any Interest Period.
4. Banking Business Day means any day other than a Saturday,
Sunday or other day on which commercial banks in the State of
Utah are authorized or required to close and a day on which
dealings in dollar deposits are also carried on in the London
Interbank market and banks are open for business in London.
5. Dollars and the sign "$" mean lawful money of the United
States.
6. Interest Period means, with respect to any LIBOR Rate advance,
the period commencing on the date such advance is made and
ending, as the Borrower may select, on the numerically
corresponding day in the first, second, third, sixth, or
twelfth calendar month thereafter, except that each such
Interest Period that commences on the last Banking Business
Day of a calendar month (or on any day for which there is no
numerically corresponding
5
21
day in the appropriate subsequent calendar month) shall end on
the last Banking Business Day of the appropriate subsequent
calendar month; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
a. No Interest Period may extend beyond the termination
of the Loan Agreement;
b. No Interest Period may extend beyond the aforesaid
Maturity Date or such later date to which it is
extended; and
c. If an Interest Period would end on a day that is not
a Banking Business Day, such Interest Period shall be
extended to the next Banking Business Day unless such
Banking Business Day would fall in the next calendar
month, in which event such Interest Period shall end
on the immediately preceding Banking Business Day.
7. Notwithstanding any other provision in this Promissory Note,
if the adoption of any applicable law, rule, or regulation, 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 Lender 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 Lender to maintain or
fund advances based on the LIBOR Rate, then upon notice to
Borrower by Agent the outstanding principal amount of the
advances based on the LIBOR Rate, together with interest
accrued thereon, shall, at the election of Agent, be (1)
immediately converted to an advance based an Prime Rate; (2)
repaid immediately upon demand of Agent if such change or
compliance with such request, in the judgment of Agent,
requires immediate repayment; or (3) repaid at the expiration
of the last Interest Period to expire before the effective
date of any such change or request.
8. Notwithstanding anything to the contrary herein, if Agent
determines (which determination shall be conclusive) that:
a. Quotations of interest rates for the relevant
deposits referred to in the definition of LIBOR Rate
are not being provided in the relevant amounts or for
the relative maturities for purposes of determining
the LIBOR Rate; or
6
22
b. The LIBOR Rate does not accurately cover the cost to
Lender of making or maintaining advances based on the
LIBOR Rate, then Agent may give notice thereof to
Borrower, whereupon until Agent notifies Borrower
that the circumstances giving rise to such suspension
no longer exist, (1) the obligation of Agent to make
advances based on the LIBOR Rate shall be suspended;
and (2) Borrower shall repay in full the then
outstanding principal amount of each advance based on
LIBOR Rate together with accrued interest thereon, on
the last day of the then current Interest Period
applicable to such advance, or, at Borrower's option,
convert the advances based on LIBOR Rate to advances
based on Prime Rate on the last day of the then
current Interest Period applicable to such advance.
All principal advances for which interest is based upon LIBOR Rate
shall be due and payable in full on the last day of the applicable Interest
Period.
As to all advances, whether based on the Prime Rate or the LIBOR Rate:
1. Interest shall accrue from the date of disbursement of the
principal amount or portion thereof until paid, both before
and after judgment, in accordance with the terms set forth
herein.
2. All payments shall be applied first to accrued interest and
the remainder, if any, to principal.
3. Notwithstanding anything to the contrary herein, all principal
and unpaid interest shall be paid in full on the aforesaid
Maturity Date.
4. Upon default in payment of any principal or interest when due,
whether due at stated maturity, by acceleration, or otherwise,
all outstanding principal shall bear interest at a default
rate from the date when due until paid, both before and after
judgment, which default rate shall be three percent (3.0%) per
annum above the Prime Rate.
If, at any time prior to the maturity of this Promissory Note, this
Promissory Note shall have a zero balance owing, this Promissory Note shall not
be deemed satisfied or terminated but shall remain in full force and effect for
future draws unless terminated upon other grounds.
Borrower may prepay all or any portion of any advance based upon Prime
Rate at any time without penalty. As to any advance based upon LIBOR Rate,
Borrower may prepay up to five percent (5%)
7
23
of the original principal amount of this Promissory Note annually without a
prepayment fee. Any additional prepayment shall be subject to a prepayment fee
if the "Original LIBOR Rate" is greater than the "Current LIBOR Rate" on the
prepayment date. The prepayment fee shall be an amount equal to the prepaid
principal amount multiplied by the product of the "Original LIBOR Rate" less
the "Current LIBOR Rate" multiplied by the number of years and fractional
portion of a year remaining in the current Interest Period.
"Current LIBOR Rate" means the LIBOR Rate in effect on the date the
prepayment is made for the interest period from that prepayment date to the end
of the current Interest Period.
"Original LIBOR Rate" means the LIBOR Rate in effect for the current
Interest Period.
This Promissory Note is made in accordance with the Loan Agreement.
This Promissory Note modifies and replaces a Promissory Note dated
October 16, 1996, executed by Borrower in favor of NBD Bank in the original
principal amount of twenty-five million dollars ($25,000,000.00).
If default occurs in the payment of any principal or interest when
due, or if any Event of Default (as defined in the Loan Agreement) occurs under
the Loan Agreement, time being the essence hereof, then the entire unpaid
balance, with interest as aforesaid, shall, at the election of the holder
hereof and without notice of such election, become immediately due and payable
in full.
If this Promissory Note becomes in default or payment is accelerated,
Borrower agrees to pay to the holder hereof all collection costs, including
reasonable attorney fees and legal expenses, in addition to all other sums due
hereunder.
Borrower and all endorsers, sureties and guarantors hereof hereby
jointly and severally waive presentment for payment, demand, protest, notice of
protest, notice of protest and of non-payment and of dishonor, and consent to
extensions of time, renewal, waivers or modifications without notice and
further consent to the release of any collateral or any part thereof with or
without substitution.
8
24
Borrower:
Franklin Quest Co.
By:_______________________
Title:____________________
9
25
AMENDED PROMISSORY NOTE
Revolving Line of Credit
October 16, 1996
Borrower: Franklin Quest Co.
Lender: Zions First National Bank
Agent: Zions First National Bank, not in its individual capacity but
solely as agent pursuant to an Intercreditor Agreement dated
October 16, 1996 between Zions First National Bank ("Zions"),
The First National Bank of Chicago, and Agent, as amended
Amount: $30,000,000.00
Maturity: October 1, 2001
For value received, Borrower promises to pay to the order of Agent, at
Zions First National Bank's Commercial Banking Department in Salt Lake City,
Utah, the sum of thirty million dollars ($30,000,000.00) or such other
principal balance as may be outstanding hereunder in lawful money of the United
States with interest thereon calculated and payable as provided herein.
This Promissory Note shall be a revolving line of credit under which
Borrower may repeatedly draw and repay funds, so long as no default has
occurred hereunder or under the Loan Agreement dated October 16, 1996, between
Zions, The First National Bank of Chicago, Agent and Borrower, as amended (the
"Loan Agreement") and so long as the aggregate, outstanding principal balance
at any time does not exceed the principal amount of this Promissory Note.
Disbursements under this Promissory Note shall be made in accordance with the
Loan Agreement. Agent shall have no obligation to make any disbursements
except to the extent funds have been provided by Zions.
In connection with each request for an advance under this Promissory
Note, Borrower shall specify whether the advance shall bear interest based on
the Prime Rate or the LIBOR Rate and, if the LIBOR Rate is selected, the
applicable Interest Period. The specification made by Borrower may not be
changed without consent of Agent. If no specification is made by Borrower, the
advance shall bear interest based on the Prime Rate.
Interest on advances based on the Prime Rate shall be calculated and
payable as follows:
1. Interest shall be at a variable rate computed on the basis of
a three hundred sixty (360) day year as follows:
26
The Prime Rate Performance Percent (hereinafter defined) per
annum below the Prime Rate (hereinafter defined) of Zions
from time to time in effect, adjusted as of the date of any
change in the Prime Rate. Interest accrued is to be paid
monthly commencing November 2, 1996, and on the same day of
each month thereafter. All principal and unpaid interest
shall be paid in full on October 1, 2001.
2. The Prime Rate Performance Percent shall be determined as
follows:
(a) If the ratio determined by the following formula
is greater than seven (7), the Prime Rate Performance Percent
will be five-tenths (.5). If such ratio is seven (7) or less,
the Prime Rate Performance Percent will then be determined in
accordance with subsections (b), (c) and (d), below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the Prime
Rate Performance Percent will be five-tenths (.5).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the Prime Rate Performance
Percent will be seventy-five hundredths (.75).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the Prime Rate Performance Percent will be one (1.0).
For purposes of subparagraphs, (b) (c) and (d) above,
total liabilities shall be determined in
2
27
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the
financial statements previously submitted by Borrower to
Lender. Tangible net worth means the excess of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation,
goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises.
The Prime Rate Performance Percent shall be
determined based upon the most recent Securities and Exchange
Commission Form 10Q or 10K of Borrower and be adjusted as of
the first day of the month following the month in which
Borrower is required to deliver such report to Lender pursuant
to the Loan Agreement.
3. Prime Rate means an index which is determined daily by the
published commercial loan variable rate index held by any two
of the following banks: Chase Manhattan Bank, Xxxxx Fargo Bank
N. A., and Bank of America N. T. & S. A. In the event no two
of the above banks have the same published rate, the bank
having the median rate will establish Zions' Prime Rate. If,
for any reason beyond the control of Zions, any of the
aforementioned banks becomes unacceptable as a reference for
the purpose of determining the Prime Rate used herein, Zions
may, five days after posting notice in the Zions' bank
offices, substitute another comparable bank for the one
determined unacceptable. As used in this paragraph,
"comparable bank" shall mean one of the ten largest commercial
banks headquartered in the United States of America. This
definition of Prime Rate is to be strictly interpreted and is
not intended to serve any purpose other than providing an
index to determine the variable interest rate used herein. It
is not the lowest rate at which Zions may make loans to any of
its customers, either now or in the future.
Interest on advances based on the LIBOR Rate shall be calculated and
payable as follows:
1. Interest shall be at a rate computed on the basis of a three
hundred sixty (360) day year equal to the LIBOR Rate
(hereinafter defined) of Zions for the applicable Interest
Period (hereinafter defined) plus the LIBOR
3
28
Performance Percent (hereinafter defined). Interest accrued is
to be paid monthly commencing November 2, 1996, on the same
day of each month thereafter, and on the last day of each
applicable Interest Period.
2. The LIBOR Performance Percent shall be determined as follows:
(a) If the ratio determined by the following
formula is greater than seven (7), the LIBOR Performance
Percent will be one and twenty-five hundredths (1.25). If such
ratio is seven (7) or less, the LIBOR Performance Percent will
then be determined in accordance with subsections (b), (c) and
(d), below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the LIBOR
Performance Percent will be one and twenty-five hundredths
(1.25).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the LIBOR Performance Percent
will be one (1).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the LIBOR Performance Percent will be seventy-five hundredths
(.75).
For purposes of subparagraphs (b), (c) and (d),
above, total liabilities shall be determined in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
previously submitted by Borrower to
4
29
Lender. Tangible net worth means the excess of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation,
goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises.
The LIBOR Performance Percent shall be determined
based upon the most recent Securities and Exchange Commission
Form 10Q or 10K of Borrower and be adjusted as of the first
day of the month following the month in which Borrower is
required to deliver such report to Lender pursuant to the Loan
Agreement.
3. The LIBOR Rate applicable to any Interest Period means the
rate per annum quoted by Zions as its LIBOR Rate. The LIBOR
Rate shall be related to quotes for the London Interbank
Offered Rate from the British Bankers Association Interest
Settlement Rates, Xxxxxx Xxxxxxxx Inc., or other comparable
services for the applicable Interest Period. This definition
of LIBOR Rate is to be strictly interpreted and is not
intended to serve any purpose other than providing an index to
determine the interest rate used herein. The LIBOR Rate of
Zions may not necessarily be the same as the quoted London
Interbank Offered Rate quoted by any particular institution or
service applicable to any Interest Period.
4. Banking Business Day means any day other than a Saturday,
Sunday or other day on which commercial banks in the State of
Utah are authorized or required to close and a day on which
dealings in dollar deposits are also carried on in the London
Interbank market and banks are open for business in London.
5. Dollars and the sign "$" mean lawful money of the United
States.
6. Interest Period means, with respect to any LIBOR Rate advance,
the period commencing on the date such advance is made and
ending, as the Borrower may select, on the numerically
corresponding day in the first, second, third, sixth, or
twelfth calendar month thereafter, except that each such
Interest Period that commences on the last Banking Business
Day of a calendar month (or on any day for which there is no
numerically corresponding
5
30
day in the appropriate subsequent calendar month) shall end on
the last Banking Business Day of the appropriate subsequent
calendar month; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
a. No Interest Period may extend beyond the termination
of the Loan Agreement;
b. No Interest Period may extend beyond the aforesaid
Maturity Date or such later date to which it is
extended; and
c. If an Interest Period would end on a day that is not
a Banking Business Day, such Interest Period shall be
extended to the next Banking Business Day unless such
Banking Business Day would fall in the next calendar
month, in which event such Interest Period shall end
on the immediately preceding Banking Business Day.
7. Notwithstanding any other provision in this Promissory Note,
if the adoption of any applicable law, rule, or regulation, 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 Lender 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 Lender to maintain or
fund advances based on the LIBOR Rate, then upon notice to
Borrower by Agent the outstanding principal amount of the
advances based on the LIBOR Rate, together with interest
accrued thereon, shall, at the election of Agent, be (1)
immediately converted to an advance based on Prime Rate; (2)
repaid immediately upon demand of Agent if such change or
compliance with such request, in the judgment of Agent,
requires immediate repayment; or (3) repaid at the expiration
of the last Interest Period to expire before the effective
date of any such change or request.
8. Notwithstanding anything to the contrary herein, if Agent
determines (which determination shall be conclusive) that:
a. Quotations of interest rates for the relevant
deposits referred to in the definition of LIBOR Rate
are not being provided in the relevant amounts or for
the relative maturities for purposes of determining
the LIBOR Rate; or
6
31
b. The LIBOR Rate does not accurately cover the cost to
Lender of making or maintaining advances based on the
LIBOR Rate, then Agent may give notice thereof to
Borrower, whereupon until Agent notifies Borrower
that the circumstances giving rise to such suspension
no longer exist, (1) the obligation of Agent to make
advances based on the LIBOR Rate shall be suspended;
and (2) Borrower shall repay in full the then
outstanding principal amount of each advance based on
LIBOR Rate together with accrued interest thereon, on
the last day of the then current Interest Period
applicable to such advance, or, at Borrower's option,
convert the advances based on LIBOR Rate to advances
based on Prime Rate on the last day of the then
current Interest Period applicable to such advance.
All principal advances for which interest is based upon LIBOR Rate
shall be due and payable in full on the last day of the applicable Interest
Period.
As to all advances, whether based on the Prime Rate or the LIBOR Rate:
1. Interest shall accrue from the date of disbursement of the
principal amount or portion thereof until paid, both before
and after judgment, in accordance with the terms set forth
herein.
2. All payments shall be applied first to accrued interest and
the remainder, if any, to principal.
3. Notwithstanding anything to the contrary herein, all principal
and unpaid interest shall be paid in full on the aforesaid
Maturity Date.
4. Upon default in payment of any principal or interest when due,
whether due at stated maturity, by acceleration, or otherwise,
all outstanding principal shall bear interest at a default
rate from the date when due until paid, both before and after
judgment, which default rate shall be three percent (3.0%) per
annum above the Prime Rate.
If, at any time prior to the maturity of this Promissory Note, this
Promissory Note shall have a zero balance owing, this Promissory Note shall
not be deemed satisfied or terminated but shall remain in full force and effect
for future draws unless terminated upon other grounds.
Borrower may prepay all or any portion of any advance based upon Prime
Rate at any time without penalty. As to any advance based upon LIBOR Rate,
Borrower may prepay up to five percent (5%)
7
32
of the original principal amount of this Promissory Note annually without a
prepayment fee. Any additional prepayment shall be subject to a prepayment fee
if the "Original LIBOR Rate" is greater than the "Current LIBOR Rate" on the
prepayment date. The prepayment fee shall be an amount equal to the prepaid
principal amount multiplied by the product of the "Original LIBOR Rate" less
the "Current LIBOR Rate" multiplied by the number of years and fractional
portion of a year remaining in the current Interest Period.
"Current LIBOR Rate" means the LIBOR Rate in effect on the date the
prepayment is made for the interest period from that prepayment date to the end
of the current Interest Period.
"Original LIBOR Rate" means the LIBOR Rate in effect for the current
Interest Period.
This Promissory Note is made in accordance with the Loan Agreement.
This Promissory Note modifies and replaces a Promissory Note dated
October 16, 1996, executed by Borrower in favor of Zions First National Bank in
the original principal amount of twenty-five million dollars ($25,000,000.00).
If default occurs in the payment of any principal or interest when
due, or if any Event of Default (as defined in the Loan Agreement) occurs under
the Loan Agreement, time being the essence hereof, then the entire unpaid
balance, with interest as aforesaid, shall, at the election of the holder
hereof and without notice of such election, become immediately due and payable
in full.
If this Promissory Note becomes in default or payment is accelerated,
Borrower agrees to pay to the holder hereof all collection costs, including
reasonable attorney fees and legal expenses, in addition to all other sums due
hereunder.
Borrower and all endorsers, sureties and guarantors hereof hereby
jointly and severally waive presentment for payment, demand, protest, notice of
protest, notice of protest and of non-payment and of dishonor, and consent to
extensions of time, renewal, waivers or modifications without notice and
further consent to the release of any collateral or any part thereof with or
without substitution.
8
33
Borrower:
Franklin Quest Co.
By: /s/ [SIG]
--------------------------
Title: Chief Financial Officer
-----------------------
9
34
AMENDED PROMISSORY NOTE
Revolving Line of Credit
October 16, 1996
Borrower: Franklin Quest Co.
Lender: The First National Bank of Chicago
Agent: Zions First National Bank, not in its individual capacity but
solely as agent pursuant to an Intercreditor Agreement dated
October 16, 1996 between Zions First National Bank ("Zions"),
The First National Bank of Chicago, and Agent, as amended
Amount: $60,000,000.00
Maturity: October 1, 2001
For value received, Borrower promises to pay to the order of Agent, at
Zions First National Bank's Commercial Banking Department in Salt Lake City,
Utah, the sum of sixty million dollars ($60,000,000.00) or such other principal
balance as may be outstanding hereunder in lawful money of the United States
with interest thereon calculated and payable as provided herein.
This Promissory Note shall be a revolving line of credit under which
Borrower may repeatedly draw and repay funds, so long as no default has
occurred hereunder or under the Loan Agreement dated October 16, 1996, between
Zions, The First National Bank of Chicago and Borrower, as amended (the "Loan
Agreement") and so long as the aggregate, outstanding principal balance at any
time does not exceed the principal amount of this Promissory Note.
Disbursements under this Promissory Note shall be made in accordance with the
Loan Agreement. Agent shall have no obligation to make any disbursements
except to the extent funds have been provided by The First National Bank of
Chicago.
In connection with each request for an advance under this Promissory
Note, Borrower shall specify whether the advance shall bear interest based on
the Prime Rate or the LIBOR Rate and, if the LIBOR Rate is selected, the
applicable Interest Period. The specification made by Borrower may not be
changed without consent of Agent. If no specification is made by Borrower, the
advance shall bear interest based on the Prime Rate.
Interest on advances based on the Prime Rate shall be calculated and
payable as follows:
1. Interest shall be at a variable rate computed on the basis of
a three hundred sixty (360) day year as follows:
35
The Prime Rate Performance Percent (hereinafter defined) per
annum below the Prime Rate (hereinafter defined) of Zions from
time to time in effect, adjusted as of the date of any change
in the Prime Rate. Interest accrued is to be paid monthly
commencing November 2, 1996, and on the same day of each month
thereafter. All principal and unpaid interest shall be paid
in full on October 1, 2001.
2. The Prime Rate Performance Percent shall be determined as
follows:
(a) If the ratio determined by the following
formula is greater than seven (7), the Prime Rate Performance
Percent will be five-tenths (.5). If such ratio is seven (7)
or less, the Prime Rate Performance Percent will then be
determined in accordance with subsections (b), (c) and (d),
below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the Prime
Rate Performance Percent will be five-tenths (.5).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the Prime Rate Performance
Percent will be seventy-five hundredths (.75).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the Prime Rate Performance Percent will be one (1.0).
For purposes of subparagraphs (b), (c) and (d) above,
total liabilities shall be determined in
2
36
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the
financial statements previously submitted by Borrower to
Lender. Tangible net worth means the excess of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation,
goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises.
The Prime Rate Performance Percent shall be
determined based upon the most recent Securities and Exchange
Commission Form 10Q or 10K of Borrower and be adjusted as of
the first day of the month following the month in which
Borrower is required to deliver such report to Lender pursuant
to the Loan Agreement.
3. Prime Rate means an index which is determined daily by the
published commercial loan variable rate index held by any two
of the following banks: Chase Manhattan Bank, Xxxxx Fargo Bank
N. A., and Bank of America N. T. & S. A. In the event no two
of the above banks have the same published rate, the bank
having the median rate will establish Zions' Prime Rate. If,
for any reason beyond the control of Zions, any of the
aforementioned banks becomes unacceptable as a reference for
the purpose of determining the Prime Rate used herein, Zions
may, five days after posting notice in the Zions' bank
offices, substitute another comparable bank for the one
determined unacceptable. As used in this paragraph,
"comparable bank" shall mean one of the ten largest commercial
banks headquartered in the United States of America. This
definition of Prime Rate is to be strictly interpreted and is
not intended to serve any purpose other than providing an
index to determine the variable interest rate used herein. It
is not the lowest rate at which Zions may make loans to any of
its customers, either now or in the future.
Interest on advances based on the LIBOR Rate shall be calculated and
payable as follows:
1. Interest shall be at a rate computed on the basis of a three
hundred sixty (360) day year equal to the LIBOR Rate
(hereinafter defined) of Zions for the applicable Interest
Period (hereinafter defined) plus the LIBOR
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37
Performance Percent (hereinafter defined). Interest accrued
is to be paid monthly commencing November 2, 1996, on the same
day of each month thereafter, and on the last day of each
applicable Interest Period.
2. The LIBOR Performance Percent shall be determined as follows:
(a) If the ratio determined by the following
formula is greater than seven (7), the LIBOR Performance
Percent will be one and twenty-five hundredths (1.25). If such
ratio is seven (7) or less, the LIBOR Performance Percent will
then be determined in accordance with subsections (b), (c) and
(d), below.
Formula:
EBITDA divided by (Total Interest plus CMLTD)
For purposes of this formula, EBITDA means Borrower's
earnings before interest, taxes, depreciation, and
amortization; Total Interest means all interest paid by
Borrower and accrued but unpaid by Borrower; CMLTD means
current maturities on long term debt of Borrower; for the most
recent four (4) fiscal quarters of Borrower.
Each of the foregoing terms shall have the meanings
used in accordance with generally accepted accounting
principles consistent with those used in preparation of the
financial statements previously submitted to Lender by
Borrower.
(b) If the ratio of total liabilities divided by
tangible net worth of Borrower is above one (1.0), the LIBOR
Performance Percent will be one and twenty-five hundredths
(1.25).
(c) If the ratio of total liabilities divided by
tangible net worth of Borrower is four-tenths (.4) or greater
but not more than one (1.0), the LIBOR Performance Percent
will be one (1).
(d) If the ratio of total liabilities divided by
tangible net worth of Borrower is less than four-tenths (.4),
the LIBOR Performance Percent will be seventy-five hundredths
(.75).
For purposes of subparagraphs (b), (c) and (d),
above, total liabilities shall be determined in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
previously submitted by Borrower to
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38
Lender. Tangible net worth means the excess of total assets
over total liabilities, total assets and total liabilities
each to be determined in accordance with generally accepted
accounting principles consistent with those applied in the
preparation of the financial statements previously submitted
by Borrower to Lender, excluding, however, from the
determination of total assets all assets which would be
classified as intangible assets under generally accepted
accounting principles, including, without limitation,
goodwill, licenses, patents, trademarks, trade names,
copyrights, and franchises.
The LIBOR Performance Percent shall be determined
based upon the most recent Securities and Exchange Commission
Form 10Q or 10K of Borrower and be adjusted as of the first
day of the month following the month in which Borrower is
required to deliver such report to Lender pursuant to the Loan
Agreement.
3. The LIBOR Rate applicable to any Interest Period means the
rate per annum quoted by Zions as its LIBOR Rate. The LIBOR
Rate shall be related to quotes for the London Interbank
Offered Rate from the British Bankers Association Interest
Settlement Rates, Xxxxxx Xxxxxxxx Inc., or other comparable
services for the applicable Interest Period. This definition
of LIBOR Rate is to be strictly interpreted and is not
intended to serve any purpose other than providing an index to
determine the interest rate used herein. The LIBOR Rate of
Zions may not necessarily be the same as the quoted London
Interbank Offered Rate quoted by any particular institution or
service applicable to any Interest Period.
4. Banking Business Day means any day other than a Saturday,
Sunday or other day on which commercial banks in the State of
Utah are authorized or required to close and a day on which
dealings in dollar deposits are also carried on in the London
Interbank market and banks are open for business in London.
5. Dollars and the sign "$" mean lawful money of the United
States.
6. Interest Period means, with respect to any LIBOR Rate advance,
the period commencing on the date such advance is made and
ending, as the Borrower may select, on the numerically
corresponding day in the first, second, third, sixth, or
twelfth calendar month thereafter, except that each such
Interest Period that commences on the last Banking Business
Day of a calendar month (or on any day for which there is no
numerically corresponding
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(Leave page)
6
40
b. The LIBOR Rate does not accurately cover the cost to
Lender of making or maintaining advances based on the
LIBOR Rate, then Agent may give notice thereof to
Borrower, whereupon until Agent notifies Borrower
that the circumstances giving rise to such suspension
no longer exist, (1) the obligation of Agent to make
advances based on the LIBOR Rate shall be suspended;
and (2) Borrower shall repay in full the then
outstanding principal amount of each advance based on
LIBOR Rate together with accrued interest thereon, on
the last day of the then current Interest Period
applicable to such advance, or, at Borrower's option,
convert the advances based on LIBOR Rate to advances
based on Prime Rate on the last day of the then
current Interest Period applicable to such advance.
All principal advances for which interest is based upon LIBOR Rate
shall be due and payable in full on the last day of the applicable Interest
Period.
As to all advances, whether based on the Prime Rate or the LIBOR Rate:
1. Interest shall accrue from the date of disbursement of the
principal amount or portion thereof until paid, both before
and after judgment, in accordance with the terms set forth
herein.
2. All payments shall be applied first to accrued interest and
the remainder, if any, to principal.
3. Notwithstanding anything to the contrary herein, all principal
and unpaid interest shall be paid in full on the aforesaid
Maturity Date.
4. Upon default in payment of any principal or interest when due,
whether due at stated maturity, by acceleration, or otherwise,
all outstanding principal shall bear interest at a default
rate from the date when due until paid, both before and after
judgment, which default rate shall be three percent (3.0%) per
annum above the Prime Rate.
If, at any time prior to the maturity of this Promissory Note, this
Promissory Note shall have a zero balance owing, this Promissory Note shall not
be deemed satisfied or terminated but shall remain in full force and effect for
future draws unless terminated upon other grounds.
Borrower may prepay all or any portion of any advance based upon Prime
Rate at any time without penalty. As to any advance based upon LIBOR Rate,
Borrower may prepay up to five percent (5%)
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41
of the original principal amount of this Promissory Note annually without a
prepayment fee. Any additional prepayment shall be subject to a prepayment fee
if the "Original LIBOR Rate" is greater than the "Current LIBOR Rate" on the
prepayment date. The prepayment fee shall be an amount equal to the prepaid
principal amount multiplied by the product of the "Original LIBOR Rate" less
the "Current LIBOR Rate" multiplied by the number of years and fractional
portion of a year remaining in the current Interest Period.
"Current LIBOR Rate" means the LIBOR Rate in effect on the date the
prepayment is made for the interest period from that prepayment date to the end
of the current Interest Period.
"Original. LIBOR Rate" means the LIBOR Rate in effect for the current
Interest Period.
This Promissory Note is made in accordance with the Loan Agreement.
This Promissory Note modifies and replaces a Promissory Note dated
October 16, 1996, executed by Borrower in favor of NBD Bank in the original
principal amount of twenty-five million dollars ($25,000,000.00).
If default occurs in the payment of any principal or interest when
due, or if any Event of Default (as defined in the Loan Agreement) occurs under
the Loan Agreement, time being the essence hereof, then the entire unpaid
balance, with interest as aforesaid, shall, at the election of the holder
hereof and without notice of such election, become immediately due and payable
in full.
If this Promissory Note becomes in default or payment is accelerated,
Borrower agrees to pay to the holder hereof all collection costs, including
reasonable attorney fees and legal expenses, in addition to all other sums due
hereunder.
Borrower and all endorsers, sureties and guarantors hereof hereby
jointly and severally waive presentment for payment, demand, protest, notice of
protest, notice of protest and of non-payment and of dishonor, and consent to
extensions of time, renewal, waivers or modifications without notice and
further consent to the release of any collateral or any part thereof with or
without substitution.
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Borrower:
Franklin Quest Co.
By: /s/ [SIG]
-------------------------------
Title: Chief Financial Officer
---------------------------
9
43
RECEIPT FOR AMENDED PROMISSORY NOTE
(Zions First National Bank)
Zions First National Bank, not in its individual capacity but solely
as agent pursuant to an Intercreditor Agreement dated October 16, 1996, between
Zions First National Bank, The First National Bank of Chicago, and Agent, as
amended, acknowledges receipt of an Amended Promissory Note dated October 16,
1996 executed by Franklin Quest Co. in favor of Zions First National Bank in
the original principal amount of thirty million dollars ($30,000,000.00).
Dated: May 12, 1997.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as agent
pursuant to an Intercreditor Agreement dated
October 16, 1996, between Zions First
National Bank, The First National Bank of
Chicago, and Agent, as amended
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Title: Vice President
-------------------------------
44
RECEIPT FOR AMENDED PROMISSORY NOTE
(The First National Bank of Chicago)
Zions First National Bank, not in its individual capacity but solely
as agent pursuant to an Intercreditor Agreement dated October 16, 1996, between
Zions First National Bank, The First National Bank of Chicago, and Agent, as
amended, acknowledges receipt of an Amended Promissory Note dated October 16,
1996 executed by Franklin Quest Co. in favor of The First National Bank of
Chicago in the original principal amount of sixty million dollars
($60,000,000.00).
Dated: May 12, 1997.
ZIONS FIRST NATIONAL BANK, not in its
individual capacity but solely as agent
pursuant to an Intercreditor Agreement dated
October 16, 1996, between Zions First
National Bank, The First National Bank of
Chicago, and Agent, as amended
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Title: Vice President
-------------------------------
45
CERTIFICATE OF CORPORATE AUTHORIZATION
The undersigned, being President and Secretary, respectively, of
Franklin Quest Co., a corporation organized under the laws of the State of
Utah, certify that the following is a true and correct copy of the resolution
adopted by the Board of Directors of this corporation at a lawful meeting of
the Board held on the 17th day of 1997, and duly recorded in the minutes of
that meeting, and further certify that this resolution has not been rescinded,
modified, or amended and is presently in full force and effect:
Resolved, that this corporation borrow the sum of ninety
million dollars ($90,000,000.00) from Zions First National Bank and
The First National Bank of Chicago.
The officers of this corporation are authorized and directed
to complete negotiations of the terms and conditions of this loan.
Any officer of this corporation is authorized to execute and
deliver a loan agreement, promissory notes, and such other instruments
and documents as are required or needed to obtain this loan.
Dated: May 12, 1997
Franklin Quest Co.
/s/ [SIG]
----------------------------
President
/s/ [SIG]
----------------------------
Secretary
46
AMENDMENT TO INTERCREDITOR AGREEMENT
This Amendment to Intercreditor Agreement (the "Amendment") is made
and entered into between Zions First National Bank ("Zions"), The First
National Bank of Chicago ("FNBC") (assignee of NBD Bank) (Zions and FNBC are
hereinafter referred to collectively as "Lenders"), and Zions First National
Bank, not in its individual capacity but solely as agent (herein, in such
capacity, "Agent").
Recitals
1. Zions, NBD Bank, Agent and Franklin Quest Co. ("Borrower")
have entered into a Loan Agreement dated October 16, 1996 (the "Loan
Agreement") whereby a $50,000,000 revolving line of credit was extended to
Borrower evidenced by a $25,000,000 Promissory Note to Zions and a $25,000,000
Promissory Note to NBD Bank.
2. Zions, NBD Bank, and Agent also entered into an Intercreditor
Agreement dated October 16, 1996 to provide for Zions to act as agent to
coordinate the activities and relationships with Borrower concerning this loan.
3. Pursuant to an Assignment Agreement dated as of February 3,
1997, NBD Bank sold and assigned its rights and obligations under the Loan
Agreement and related documents and instruments to FNBC.
4. Zions, FNBC, Agent and Borrower have agreed to amend the Loan
Agreement to increase the amount of the loan to $90,000,000 to be evidenced
by a $30,000,000 Promissory Note to Zions and a $60,000,000 Promissory Note to
FNBC.
5. Zions, FNBC, Agent and Borrower desire to modify and amend the
Intercreditor Agreement consistent with the amendments to the Loan Agreement.
Amendment
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Zions, FNBC, and Agent hereby agree and amend
and modify the Intercreditor Agreement as follows:
1. Definitions. Except as otherwise expressly provided herein,
terms assigned defined meanings in the Intercreditor Agreement shall have the
same defined meanings in this Amendment.
The defined terms "Lenders", "Lenders' Pro Rata Shares", and "Loan
Agreement" in Section 1.1 Definitions of the Intercreditor Agreement are
deleted and replaced with the following:
47
"Lenders" means Zions and FNBC.
"Lenders' Pro Rata Shares" shall mean the following
allocation: Zions - thirty-three and thirty-three hundredths percent
(33.33%), FCNB - sixty-six and sixty-seven hundredths percent
(66.67%).
"Loan Agreement" shall mean that certain Loan Agreement
between Lenders and Borrower dated October 16, 1996 concerning a
$50,000,000 revolving line of credit, as amended by an Amendment to
Loan Agreement dated on or about the date of this Amendment to
Intercreditor Agreement which increased the revolving line of credit
to $90,000,000.
2. FNBC as Assignee of NBD Bank. All references in the
Intercreditor Agreement to NBD Bank are amended to refer to FNBC. It is
acknowledged and agreed that FNBC has succeeded to all rights, benefits,
duties, and obligations of NBD Bank under the Loan Agreement, Promissory Notes,
and Intercreditor Agreement.
3. Consent to Amendment of Loan Documents. Pursuant to Section
2.1 Amendment of Loan Documents, Lenders and Agent hereby consent to amendment
and modification of the Loan Agreement and Promissory Notes as provided in the
Amendment to Loan Agreement dated on or about the date of this Amendment to
Intercreditor Agreement.
4. Notices. Section 6.10 Notices is amended by deleting the
notice address for NBD Bank and replacing it with:
The First National Bank of Chicago
West Coast Regional Xxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
5. Agreement Remains in Full Force and Effect. Except as expressly
amended or modified by this Amendment, the Intercreditor Agreement remains in
full force and effect.
6. Integrated Agreement; Amendment. This Amendment, together
with the Intercreditor Agreement, Amended Promissory Notes, Loan Agreement, and
Amendment to Loan Agreement, constitute the entire agreements and
understandings between the parties and supersede all other prior and
contemporaneous agreements and may not be altered or amended except by written
agreement signed by the parties. This Amendment and the Intercreditor
Agreement shall be read and interpreted together as one agreement. PURSUANT TO
UTAH CODE SECTION 25-5-4, LENDERS AND AGENT ARE NOTIFIED THAT THESE AGREEMENTS
ARE A FINAL EXPRESSION OF THE AGREEMENT BETWEEN LENDERS AND AGENT AND THESE
AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE
2
48
OF ANY ALLEGED ORAL AGREEMENT. All other prior and contemporaneous agreements,
arrangements and understandings between the parties hereto as to the subject
matter hereof are, except as otherwise expressly provided herein, terminated.
Dated: May 12, 1997
Zions First National Bank
By: /s/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X.Xxxxxxxx
Vice President
The First National Bank of Chicago
By: /s/ [SIG]
------------------------------------
Title: First Vice President
---------------------------------
Zions First National Bank, not in its
individual capacity but solely as agent
pursuant to an Intercreditor Agreement
dated October 16, 1996, between Zions
First National Bank, The First Chicago
National Bank, and Agent
By: /s/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X.Xxxxxxxx
Vice President
The foregoing Amendment to Intercreditor Agreement is authorized and
consented to this 12th day of May, 1997.
Franklin Quest Co.
By: /s/ [SIG]
------------------------------------
Title: Chief Financial Officer
--------------------------------
3
