LOAN AGREEMENT
EXHIBIT
10(ci)
The
parties to this Loan Agreement ("Agreement") are XXXXX NATIONAL BANK, a national banking
association, of Galveston, Galveston County, Texas (hereinafter called
"Bank"), and NATIONAL WESTERN
LIFE INSURANCE COMPANY, a Colorado insurance
corporation (hereinafter called "Borrower").
This Loan
Agreement has reference to that one certain revolving credit loan ("Loan") in
the maximum principal amount of $40,000,000.00 or so much thereof as advanced,
of even date herewith from Bank to Borrower.
WHEREAS,
Borrower has made and delivered a $40,000,000.00 or so much thereof as may be
advanced Revolving Credit Promissory Note (the "Note") to Bank; and
WHEREAS,
the making of such loan is based on various additional agreements of the parties
hereto as provided in this Agreement and in that certain security
agreement-pledge-collateral assignment of even date herewith between Borrower as
Pledgor and Bank as Secured Party ("Security Agreement") which is incorporated
herein by this reference; and
WHEREAS,
the parties to this Agreement wish to set forth herein the following additional
agreements.
NOW,
THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS
FOLLOWS:
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1.
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Advances:
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(a) Use of
Proceeds. The proceeds of each advance of funds under
the Note ("Advance") requested by the Borrower and made by the Bank shall
be used by the Borrower solely for working capital purposes, including
repayment of outstanding advances, but specifically excluding capital
expenditures. Each request by the Borrower for an Advance shall
be deemed to be a representation by the Borrower that the proceeds of the
Advance will be used solely for the purposes required by this
Section. As a condition precedent to the obligation of the Bank
to make any such Advance, the Borrower shall furnish to the Bank such
schedules, certificates, invoices, affidavits, and other documents as the
Bank may require to satisfy itself with respect to the requirements
hereof.
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(b) Procedures for
Advance. Subject to the terms and provisions of the Note
and Security Agreement, and to other provisions contained herein, and
provided that no breach or event of default has then occurred under the
Note, Security Agreement, this Agreement, or any other document executed
in connection with the Loan (collectively, "Loan
Documents"), advances under the Note may be requested by Borrower
from and after the date of the Note ("Closing Date") up to the date which
is the Third (3rd)
Anniversary of the Note ("Maturity Date"). Advances shall be in
minimum amounts of $1,000,000.00 and in increments thereof, but in no
event greater than the lesser of (i) $40,000,000.00, or (ii) an amount
equal to 95% of the then-current market value of all "Qualified Assets"
(as defined in the Security Agreement) then securing the Note ("Revolving
Credit Amount"), when aggregated with all amounts then outstanding under
the Note. All such requests shall be required to be requested
by written request on behalf of Borrower, signed by any one of the
following listed individuals, specimens of whose signatures Borrower
agrees to tender to Bank upon request, containing the amount requested to
be advanced and the instructions for disbursement of the funds the advance
of which is so being requested:
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1. Xxxxx
X. Xxxxxx
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2. Xxxxxxx
X. Xxxx
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Bank
shall have two (2) full business days after the date of its receipt of
such a request for advance, within which to either make such advance or to
notify Borrower in writing that Bank has determined that one or more
conditions for such advance are not met or that such advance would
otherwise be improper under the terms of the Note, the Security Agreement,
or hereof. All notices and requests hereunder shall be required
to be in writing and delivered to the party to receive same as
follows:
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If
to Bank:
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(a) Fax
to:
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Xxxxx
National Bank
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Fax
No.: (000)000-0000
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Attn: Xxxx
Xxxxxx
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(b) E-mail
to:
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XXxxxxx@xxxxxxxxx.xxx
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If
to Borrower:
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(a) Hand
delivery to:
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Xxxxx
X. Xxxxxx
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000
Xxxx Xxxxxxxx Xxx
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Xxxxxx,
Xxxxx 00000
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(b) Fax
to
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(000)000-0000
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Attn: Xxxxx
X. Xxxxxx
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(c) E-mail
to:
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xxxxxxx@xxxxxxxxxxxxxxxxxxx.xxx
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Any
of the above-referenced addresses, fax numbers, or names of persons to
whom notices and/or requests are to be directed or who have authority to
sign a request, may be modified or changed by written notice as provided
above.
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(b) No Margin
Stock. Under no circumstances shall any proceeds of the
Loan be used (i) for the purpose, whether immediate, incidental or
ultimate, of buying "Margin Stock" (as defined in the Security Agreement)
or (ii) to enable Borrower to maintain, reduce or retire indebtedness
originally incurred to purchase a security that is currently a Margin
Stock or (c) for any other application that could cause the Loan to be
deemed a "Purpose Credit" (as defined in the Security
Agreement).
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(c) Additional
Conditions. The making of each Advance shall be subject
to the following conditions, in addition to those stated in other
provisions of this Agreement, which shall each have been and remain at the
time satisfied by the Borrower or waived by the Bank:
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(i) The
Borrower shall have executed and delivered to the Bank and shall have
caused to be filed, recorded or registered all documents necessary, and
shall have taken all actions necessary, to perfect and register the Bank a
first and prior security interest in and pledge of the Pledged
Securities.
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(ii) There
shall have been no material, adverse change in the financial condition of
the Borrower from that shown in any prior financial statements of Borrower
or in the business prospects of the Borrower, as determined by the
Bank.
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(#230487v3-nwl-loan
agmt)
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2
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(iii) No
event shall have occurred and then be continuing (or would occur after
giving effect to the requested Advance) which constitutes (or would
constitute after giving effect to the Advance) an event of default or
potential default under this Agreement or any other Loan Documents and a
certificate to such effect and speaking as of the date thereof (and not as
of some future date) and signed by the President or a Vice President of
the Borrower shall be delivered to the Bank.
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(iv) Each
and all of the representations and warranties of the Borrower in this
Agreement and the other Loan Documents shall be true, correct and accurate
as of the Closing Date and as of the date any Advance of the Revolving
Credit under the Note is requested and a certificate to such effect signed
by the President or a Vice President of the Borrower shall be delivered to
the Bank.
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(v) The
Borrower shall have duly and timely performed each and all of its
agreements and undertakings contained in this Agreement and all other Loan
Documents.
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(vi) The
Bank shall have received evidence satisfactory to it that the Pledged
Securities are all owned by the Borrower free and clear of any
impediments; and the Bank's security interest in and pledge of the Pledged
Securities is fully perfected and registered.
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(d) Sole Benefit of
Bank. All conditions precedent to the obligation of the
Bank to make the Advances are imposed hereby solely for the benefit of the
Bank and no other party may require satisfaction of any such condition
precedent or be entitled to assume that the Bank will refuse to make the
Advances in the absence of strict compliance with such conditions
precedent. Any requirement of this Agreement may be waived by
the Bank, in whole or in part, at any time. Any requirement
herein of submission of evidence of the existence or non-existence of a
fact shall be deemed, also, to be a requirement that the fact shall exist
or not exist, as the case may be, and without waiving any condition or
obligation of the Borrower, the Bank may at all times independently
establish to its satisfaction such existence or
non-existence.
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(e) No Obligation to Make
Advance. No Advances need be made by the Bank if such
advance should cause the Bank to be, in the sole opinion of Bank, in
violation of any law, rule, regulation or interpretation of a governmental
body applicable to the Bank. Borrower shall receive a refund on
a pro rata basis for the Commitment Fee, as that term is defined in this
Loan Agreement, in the event and to the extent Bank is unable to make an
advance or Borrower is required to make a principal reduction, by reason
of the foregoing sentence.
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(#230487v3-nwl-loan
agmt)
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(f) Role of
Bank. Any term or condition hereof, or of any of the
other Loan Documents to the contrary notwithstanding, the Bank shall not
have, and by its execution and acceptance of this Agreement hereby
expressly disclaim, any obligation or responsibility for the management,
conduct or operation of the business and affairs of the
Borrower. Any term or condition hereof, or of any of the other
Loan Documents, permitting the Bank to disburse funds, whether from the
proceeds of the Note, or otherwise, or to take or refrain from taking any
action with respect to the Borrower, the Collateral or any other security
for repayment of the Loan, shall be deemed to be solely to permit the Bank
to audit and review the management, operation and conduct of the business
and affairs of the Borrower, and to maintain and preserve the security
given by the Borrower to the Bank for the Loan and may not be relied upon
by any other person. Further, the Bank shall not have, has not
assumed and, by its execution and acceptance of this Agreement, hereby
expressly disclaims any liability or obligation of the Borrower, and no
condition hereof, or of any of the other Loan Documents, shall be
construed so as to deem the relationship between the Borrower and the Bank
to be other than that of borrower and lender, and the Borrower shall at
all times represent that the relationship between the Borrower and the
Bank is solely that of borrower and lender. The Borrower hereby indemnifies
and agrees to hold the Bank harmless from and against any costs, expenses
and liabilities incurred or suffered by the Bank as a result of any
assertion or claim of any obligation or responsibility of the Bank for the
management, operation and conduct of the business and affairs of the
Borrower, or as a result of any assertion or claim of any liability or
responsibility of the Bank for the payment or performances of any
indebtedness or obligation of the Borrower, except to the extent any such
assertion or claim results from the negligence or willful misconduct of
Bank.
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2.
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(a) Commitment
Fee. Borrower shall pay to the Bank a commitment fee for
making available the Revolving Credit Amount at the rate of one-tenth of
one percent (.1%) per annum of the daily average unfunded portion of the
Revolving Credit Amount from the Closing Date to the Maturity
Date. The commitment fee shall be non-refundable and shall be
paid in
arrears
on the last day of each March, June, September and December, and on the
Maturity Date.
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3.
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(a) From
time to time upon request of Bank, but in any event by October 31 of end
of each calendar year, Borrower shall submit to Bank (a) the then-current
annual financial statement of Borrower for the immediately preceding year,
and (b) the federal income tax return of Borrower for such preceding
year.
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(b) Each
such statement shall be certified by Borrower as being true, complete and
correct, and shall be in a form acceptable to Bank, in conformity with
generally accepted accounting principles.
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4.
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Without
Bank's prior written consent, which shall not be unreasonably withheld,
Borrower will not create, assume or suffer to exist with respect to the
securities pledged to the Bank under the Loan Documents, any indebtedness
or other liability, direct or indirect, whether by note, guaranty,
endorsement, agreement to purchase or repurchase, agreement to lease,
agreement to supply or advance funds or otherwise, except, (i) as
permitted hereunder and (ii) for endorsements of instruments for
collection in the ordinary course of business and except in favor of the
Bank.
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DGJ/sh;08/26/09
(#230487v3-nwl-loan
agmt)
Page
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5.
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The
Borrower will not create, assume or suffer to exist any lien upon any of
the properties or assets pledged to Bank under the Loan Documents, whether
now owned or hereafter acquired, except (i) liens in favor of Bank; or
(ii) liens for taxes, assessments and other governmental charges not yet
payable, or the validity of which are being contested in good faith by
appropriate proceedings and as to which adequate reserves have been set
aside on the books of the Borrower; (iii) surety or appeal bonds or other
obligations of a like general nature incurred in the ordinary course of
business.
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6.
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The
Borrower will not convert to any other type of entity nor enter into any
transaction of merger or consolidation, or liquidate or dissolve itself
(or suffer any liquidation or dissolution).
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7.
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The
Borrower will (i) continue to engage in the businesses presently being
operated by Borrower as represented to Bank, (ii) maintain its corporate
existence and good standing in each jurisdiction in which Borrower is
required to be qualified, (iii) keep and maintain all franchises, licenses
and properties useful and necessary in the conduct of its business in good
order and condition, (iv) duly observe and conform to all requirements of
any governmental authorities relative to the conduct of its business or
the operation of its properties or assets, (v) not change its place of
business without Bank's prior written consent which will not be
unreasonably withheld, and (vi) not merge its existence into any other
entity without Bank's prior written consent which will not be unreasonably
withheld.
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8.
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The
Borrower will, at any time and from time to time, execute and deliver such
further instruments and take such further action as may reasonably be
requested by the Bank, in order to cure any defects in the execution and
delivery of, or to comply with or accomplish the covenants and agreements
contained in this Agreement, the Note or any instrument(s) securing
same.
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9.
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In
case any one or more of the provisions contained in this Agreement or in
the Note, Security Agreement or any other instrument securing the Note
(the "Security Instruments") or any other documents executed in connection
therewith or herewith should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected
thereby.
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10.
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The
Borrower will pay when due all its taxes, assessments and other
liabilities, except those being contested in good faith and against which
the Borrower has set up adequate reserves in accordance with generally
accepted accounting principles.
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11.
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The
Borrower will pay its accounts payable and will maintain its accounts
receivable in a manner consistent with normal business practices,
including normal terms and conditions for payment, for entities engaged in
similar operations in similar jurisdictions.
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12.
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Except
for any materials, records of documents known which are privileged, the
Borrower will permit the Bank (and any person appointed by the Bank to act
for it and on its behalf) to examine and take copies and excerpts of its
financial books and records and other records, books and properties and to
discuss its affairs, finances and accounts with their respective agents,
attorneys, employees, officers and independent certified public
accountants at all reasonable times and as often as may be reasonably
requested by the Bank.
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DGJ/sh;08/26/09
(#230487v3-nwl-loan
agmt)
Page
5
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13.
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The
undersigned expressly recognize and agree that the Bank has the right at
any time at Bank's sole discretion to sell the Note and/or grant
participations in the Note to other financial institutions and/or other
third parties as determined by Bank at any time in Bank’s sole discretion,
and, that, Bank shall have the right to provide any and all potential
participants and potential purchasers of the Note, and all participants
and purchasers of the Note, any and all information concerning Borrower,
the collateral for obligations of the Borrower to the Bank, the Note, the
security instruments and any other obligation of the Borrower to the Bank,
whether now existing or hereafter arising.
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14.
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In
case any one or more of the provisions contained in this Agreement or in
the Note, any instrument securing the Note (the "Security Instruments") or
any other documents executed in connection therewith or herewith should be
invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected thereby.
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15.
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Notwithstanding
any provision to the contrary in any Loan Document, Bank agrees that,
except as otherwise provided herein, it shall not exercise its remedies by
reason of any Event of Default under any such document unless Bank shall
first have given Borrower notice of and an opportunity to cure such Event
of Default in accordance with this paragraph, and such Event of Default
continues past the cure period therefor provided herein: (a) as to any
Event of Default exclusively involving the payment of any sum of money by
Borrower to Bank ("Monetary Default"), Borrower shall have ten (10) days
from notice thereof from Bank within which to cure such default; (b) as to
all other Events of Default other than Monetary Defaults ("Non-Monetary
Defaults"), Borrower shall have twenty (20) days from Bank's notice
thereof within which to cure such Non-Monetary Defaults. All
notices of default from Bank to Borrower required hereby shall be in
writing and shall be sent at Bank's option either by telecopy or fax
machine to Borrower at (000)000-0000 or by hand delivery or certified mail
to Borrower at 000 Xxxx Xxxxxxxx Xxx, Xxxxxx, Xxxxx 00000,
Attn: Xxxxx X. Xxxxxx, provided that Borrower shall have the
right to change such fax number or address upon not less than ten (10)
days prior written notice sent to Bank by certified mail addressed to
Xxxxx National Bank, Attn: Xxxxxxx Xxxxxx at 0000 Xxxxxxxxxx Xx.,
Xxxxxxxxx, Xxxxx 00000. Nothing contained herein shall in any
way impair or delay any action deemed by Bank to be necessary to protect
Bank's interests in any collateral securing the
Note.
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DGJ/sh;08/26/09
(#230487v3-nwl-loan
agmt)
Page
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EXECUTED
as of the 31 day of August, 2009
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XXXXX
NATIONAL BANK
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By: /S/Xxxxxxx
X Xxxxxx
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Name: Xxxxxxx
X Xxxxxx
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Title: Executive
Vice President
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"BANK"
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NATIONAL
WESTERN LIFE INSURANCE
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COMPANY,
a Colorado insurance corporation
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By: /S/Xxxx
Xxxxx
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Xxxx
Xxxxx ,President
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"BORROWER"
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DGJ/sh;08/26/09
(#230487v3-nwl-loan
agmt)
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