EXHIBIT 10.9
RENEWAL AND EXTENSION AGREEMENT
THIS RENEWAL AND EXTENSION AGREEMENT ("Agreement") is entered into this
31st day of March, 2005, by and between THE FROST NATIONAL BANK, a national
banking association ("Lender"), and CRAFTMADE INTERNATIONAL, INC., a Delaware
corporation ("Borrower").
RECITALS:
A. Lender is the sole owner and holder of that one certain Promissory Note
(the "Note") dated February 25, 2005, executed by Borrower and payable to the
order of Lender in the original principal amount of Three Million and No/100
Dollars ($3,000,000.00).
B. The Note is secured by a Security Agreement dated November 6, 2001,
between Borrower and Lender, covering certain collateral as more particularly
described therein; a Security Agreement dated November 6, 2001, between Trade
Source International, Inc., a Delaware corporation, and Lender, covering certain
collateral as more particularly described therein; a Security Agreement dated
November 6, 2001, between Durocraft International, Inc., a Texas corporation,
and Lender, covering certain collateral as more particularly described therein;
and a Security Agreement dated November 6,2001, between Design Trends, LLC, a
Delaware limited liability company, and Lender, covering certain collateral as
more particularly described therein (collectively, the "Security Agreements").
The Note, Security Agreements and all modifications, renewals and extensions
described below are hereafter collectively referred to as the "Loan Documents."
C. The Note matured in accordance with its terms on March 31, 2005.
D. Borrower has requested that Lender modify certain provisions of the
Note, all as hereinafter provided, and in consideration thereof Borrower has
made certain agreements with Lender as hereinafter more fully set forth.
E. Lender has agreed to such requests, subject to the terms and conditions
set forth herein.
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and agreed, Borrower and Lender hereby agree as follows:
1. Acknowledgment of Outstanding Balance. The parties hereto acknowledge
that the outstanding principal balance of the Note as of the date hereof is
THREE MILLION AND NO/100 DOLLARS ($3,000,000.00).
2. Renewal and Extension of Maturity. The Note is hereby renewed and the
maturity of the Note is hereby extended to May 31, 2005 (the "Revised Maturity
Date").
RENEWAL AND EXTENSION AGREEMENT
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3. Required Payments. From and after the effective date of this Agreement,
principal and interest under the Note shall be due and payable as follows:
Interest only on amounts outstanding hereunder shall be due and payable
monthly as it accrues, on the last day of each and every calendar month,
beginning April 30, 2005, and May 31, 2005, when the entire amount hereof,
principal and interest then remaining unpaid, shall be then due and
payable; interest being calculated on the unpaid principal each day
principal is outstanding and all payments made credited to any collection
costs and late charges, to the discharge of the interest accrued and to
the reduction of the principal, in such order as Lender shall determine.
4. Interest Rate. The annual interest rate provided for in the Note shall
continue to be charged from and after the effective date of this Agreement in
accordance with the Note.
5. Usury. No provisions of this Agreement or the Loan Documents shall
require the payment or permit the collection, application or receipt of interest
in excess of the maximum permitted by applicable state or federal law. If any
excess of interest in such respect is herein or in any such other instrument
provided for, or shall be adjudicated to be so provided for herein or in any
such instrument, the provisions of this paragraph shall govern, and neither
Borrower nor any endorsers of the Note nor their respective successors, assigns
or personal representatives shall be obligated to pay the amount of such
interest to the extent it is in excess of the amount permitted by applicable
law. It is expressly stipulated and agreed to be the intent of Borrower and
Lender to at all times comply with the usury and other laws relating to the Loan
Documents and any subsequent revisions, repeals or judicial interpretations
thereof, to the extent applicable thereto. In the event Lender or other holder
of the Note ever receives, collects or applies as interest any such excess, such
amount which would be excessive interest shall be applied to the reduction of
the unpaid principal balance of the Note and, if upon such application the
principal balance of the Note is paid in full, any remaining excess shall be
forthwith paid to Borrower and the provisions of the Loan Documents shall
immediately be deemed reformed and the amounts thereafter collectible thereunder
reduced, without the necessity of execution of any new document, so as to comply
with the then applicable law, but so as to permit the recovery of the fullest
amount otherwise called for thereunder. In determining whether or not the
interest paid or payable under any specific contingency exceeds the maximum
interest allowed to be charged by applicable law, Borrower and Lender or other
holder hereof shall, to the maximum extent permitted under applicable law,
amortize, prorate, allocate and spread the total amount of interest throughout
the entire term of the Note so that the amount or rate of interest charged for
any and all periods of time during the term of the Note is to the greatest
extent possible less than the maximum amount or rate of interest allowed to be
charged by law during the relevant period of time. Notwithstanding any of the
foregoing, if at any time applicable laws shall be changed so as to permit a
higher rate or amount of interest to be charged than that permitted prior to
such change, then unless prohibited by law, references in the Note to
"applicable law" for purposes of determining the maximum interest or rate of
interest that can be charged shall be deemed to refer to such applicable law as
so amended to allow the greater amount or rate of interest.
RENEWAL AND EXTENSION AGREEMENT
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6. RELEASE AND WAIVER OF CLAIMS. IN CONSIDERATION OF (i) THE MODIFICATION
OF CERTAIN PROVISIONS OF THE NOTE, AS HEREIN PROVIDED, AND (ii) THE OTHER
BENEFITS RECEIVED BY BORROWER HEREUNDER, BORROWER HEREBY RELEASES, RELINQUISHES
AND FOREVER DISCHARGES LENDER, AS WELL AS ITS PREDECESSORS, SUCCESSORS, ASSIGNS,
AGENTS, OFFICERS, DIRECTORS, EMPLOYEES AND REPRESENTATIVES, OF AND FROM ANY AND
ALL CLAIMS, DEMANDS, ACTIONS AND CAUSES OF ACTION OF ANY AND EVERY KIND OR
CHARACTER, PAST OR PRESENT, WHICH BORROWER MAY HAVE AGAINST LENDER AND ITS
PREDECESSORS, SUCCESSORS, ASSIGNS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES AND
REPRESENTATIVES ARISING OUT OF OR WITH RESPECT TO (a) ANY RIGHT OR POWER TO
BRING ANY CLAIM AGAINST LENDER FOR USURY OR TO PURSUE ANY CAUSE OF ACTION
AGAINST LENDER BASED ON ANY CLAIM OF USURY, AND (b) ANY AND ALL TRANSACTIONS
RELATING TO THE LOAN DOCUMENTS OCCURRING PRIOR TO THE DATE HEREOF, INCLUDING ANY
LOSS, COST OR DAMAGE, OF ANY KIND OR CHARACTER, ARISING OUT OF OR IN ANY WAY
CONNECTED WITH OR IN ANY WAY RESULTING FROM THE ACTS, ACTIONS OR OMISSIONS OF
LENDER, AND ITS PREDECESSORS, SUCCESSORS, ASSIGNS, AGENTS, OFFICERS, DIRECTORS,
EMPLOYEES AND REPRESENTATIVES, INCLUDING ANY BREACH OF FIDUCIARY DUTY, BREACH OF
ANY DUTY OF FAIR DEALING, BREACH OF CONFIDENCE, BREACH OF FUNDING COMMITMENT,
UNDUE INFLUENCE, DURESS, ECONOMIC COERCION, CONFLICT OF INTEREST, NEGLIGENCE,
BAD FAITH, MALPRACTICE, INTENTIONAL OR NEGLIGENT INFLICTION OF MENTAL DISTRESS,
TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS, TORTIOUS INTERFERENCE WITH
CORPORATE GOVERNANCE OR PROSPECTIVE BUSINESS ADVANTAGE, BREACH OF CONTRACT,
DECEPTIVE TRADE PRACTICES, LIBEL, SLANDER OR CONSPIRACY, BUT IN EACH CASE ONLY
TO THE EXTENT PERMITTED BY APPLICABLE LAW.
7. Reaffirmation of Representations, Etc. Borrower hereby reaffirms to
Lender each of the representations, warranties, covenants and agreements of
Borrower set forth in the Loan Documents.
8. Enforceable Obligations. Borrower hereby ratifies, affirms, reaffirms,
acknowledges, confirms and agrees that the Loan Documents represent valid and
enforceable obligations of Borrower, and Borrower further acknowledges that
there are no existing claims, defenses, personal or otherwise, or rights of
setoff whatsoever with respect to the Note, and Borrower further acknowledges
and represents that no event has occurred and no condition exists which would
constitute a default under the Loan Documents or this Agreement, either with or
without notice or lapse of time, or both.
9. No Release of Liens. This Agreement in no way acts as a release or
relinquishment of the liens, security interests and rights (the "Liens") created
or evidenced by the Security Agreements. The Liens are hereby ratified and
confirmed by Borrower in all respects and are extended to secure (i) the
principal amount of the Note, (ii) all interest, charges and other sums payable
with respect thereto, and (iii) the performance of all other obligations under
the Security Agreements.
16. Additional Renewals and Extensions. Notwithstanding anything to the
contrary contained herein or inferred hereby or in any other instrument executed
by Borrower or in any other action or conduct undertaken by Borrower on or
before the date hereof, the agreements, covenants and provisions contained
herein shall constitute the only evidence of Lender's consent to extend the
terms and provisions of the Loan Documents in the manner set forth herein. No
express or implied
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consent to any further extensions and/or modifications involving any of the
matters set forth in this Agreement or otherwise, shall be inferred or implied
from Lender's execution of this Agreement. Further, Lender's execution of this
Agreement shall not constitute a waiver (either express or implied) of the
requirement that any further extensions and/or modifications of the Loan
Documents shall require the express written approval of Lender, no such approval
(either express or implied) having been given as of the date hereof.
17. Miscellaneous. (a) As modified hereby, the provisions of the Note and
the Security Agreements shall continue in full force and effect, and the
Borrower acknowledges and reaffirms its liability to Lender thereunder. In the
event of any inconsistency between this Agreement and the terms of the Loan
Documents, this Agreement shall govern.
(b) Borrower hereby agrees to pay all costs and expenses incurred by
Lender in connection with the execution and administration of this Agreement and
the modification of the Loan Documents including, but not limited to, all
appraisal costs, title insurance costs, legal fees incurred by Lender and filing
fees.
(c) Any default by Borrower in the performance of its obligations herein
contained shall constitute a default under the Loan Documents and shall allow
Lender to exercise all of its remedies set forth in the Loan Documents.
(d) Lender does not, by its execution of this Agreement, waive any rights
it may have against any person not a party to this Agreement.
(e) In case any of the provisions of this Agreement shall for any reason
be held to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
(f) This Agreement and the Loan Documents shall be governed and construed
according to the laws of the State of Texas (without regard to any conflict of
laws principles) and the applicable laws of the United States.
(g) This Agreement shall be binding upon and inure to the benefit of
Lender, Borrower and their respective successors, assigns and legal
representatives.
(h) Borrower hereby acknowledges and agrees that it has entered into this
Agreement of its own free will and accord and in accordance with its own
judgment after advice of its own legal counsel, and states that it has not been
induced to enter into this Agreement by any statement, act or representation of
any kind or character on the part of the parties hereto, except as expressly set
forth in this Agreement.
(i) This Agreement may be executed in multiple counterparts, each of which
shall constitute an original instrument, but all of which shall constitute one
and the same agreement.
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(j) Except as modified herein, all other terms, conditions and provisions
of Loan Documents shall remain in full force and effect as of the date thereof
and Borrower acknowledges and reaffirms its liability to Lender thereunder.
EXECUTED as of the day and year first above written.
BORROWER:
CRAFTMADE INTERNATIONAL, INC.,
a Delaware corporation
By:
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Xxxxx X. Xxxxxxx, President
LENDER:
THE FROST NATIONAL BANK,
a national banking association
By:
-----------------------------------------
D. Xxxxxxx Xxxxxxx, Senior Vice President
Guarantor Ratification of Agreement
By executing this Agreement, DUROCRAFT INTERNATIONAL, INC., a Texas
corporation; TRADE SOURCE INTERNATIONAL, INC., a Delaware corporation; DESIGN
TRENDS, LLC, a Delaware limited liability company; and C/D/R INCORPORATED, a
Delaware Corporation as Guarantors of the indebtedness evidenced by the Note, as
set forth in Guaranty Agreements (collectively, the "Guarantys") dated November
6, 2001, hereby expressly agree (a) to all of the terms and provisions of this
Agreement, (b) to the continuing validity of the Guarantys and all duties and
obligations thereunder, (c) that their liability under the Guarantys shall not
be reduced, altered, limited, lessened or in any way affected by the execution
and delivery of this Agreement by the parties hereto, and (d) that the Guarantys
shall remain in full force and effect and enforceable in accordance with their
terms.
DUROCRAFT INTERNATIONAL, INC.,
a Texas corporation
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Secretary
RENEWAL AND EXTENSION AGREEMENT
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TRADE SOURCE INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Secretary
DESIGN TRENDS, LLC,
a Delaware limited liability company
By: Craftmade International, Inc.,
a Delaware corporation, Manager
By:
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Xxxxx X. Xxxxxxx, President
C/D/R INCORPORATED,
a Delaware corporation
By: /s/ Xxxxxxxx Xxxxxxxxx
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Xxxxxxxx Xxxxxxxxx, V.P. Marketing
RENEWAL AND EXTENSION AGREEMENT
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