LOAN AGREEMENT
Exhibit
10.2
AGREEMENT
entered into on May 23, 2005, between Xxxxxxx X. Xxxxxxx and Xxxxxxxx X.
Xxxxxxx
(herein-after referred to collectively as the “Lenders”), and Xxxxx Caribe,
Inc., a corporation organized and existing under the laws of the Commonwealth
of
Puerto Rico (hereinafter referred to as the “Borrower”). This Agreement covers
the terms and conditions upon which the Lenders may make a loan to the Borrower.
Such terms and conditions are the following:
| 1. |
Purpose
of Loan.
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1.1 Subject
to the terms and conditions contained herein, the Lenders agree to make a
loan
to the Borrower in the amount of THREE MILLION DOLLARS ($3,000,000) to be
used
by the Borrower to repay outstanding obligations to the Borrowers under one
or
more outstanding promissory notes.
| 2. |
Commitment;
Making of Loan, Interest and Repayment and Fees.
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2.1 Commitment. The
Lenders agree, on the terms and conditions hereinafter set forth, to make
one
advance to the Borrower (the “Loan”) in an aggregate principal amount of THREE
MILLION DOLLARS ($3,000,000) (the “Commitment”) for the purpose set forth in
Section 1.1 hereof. The Lenders shall make the amounts available under the
Commitment on one single borrowing on the date hereof. Amounts borrowed
hereunder will not be available for reborrowing by the Borrower.
2.2 Loan;
Interest and Repayment. The
Loan from the Lenders to the Borrower shall be evidenced by a promissory
note of
the Borrower payable to the order of the Lenders in the form of Exhibit A
hereto
(the “Note”). The Loan evidenced by the Note shall bear interest from its date
until full payment of the unpaid principal balance thereof at an annual rate
equal to the rate of interest announced publicly by Citibank, N.A. in New
York,
New York, from time to time, as Citibank’s base or prime rate. Interest due on
the Note shall be payable monthly in arrears on the first day of each month,
commencing on June 1, 2005 and on the date on which such Note is paid in
full.
1
The Note shall have a maturity of May 1, 2010. The aggregate principal amount
of
the Note shall be payable in sixty (60) consecutive monthly installments
on the
first day of each month, with fifty-nine (59) equal consecutive monthly
installments of EIGHT
THOUSAND THREE THIRTY-THREE DOLLARS WITH THIRTY-THREE CENTS
($8,333.33) each, commencing on June 1, 2005, and a balloon payment on the
sixtieth (60th)
and
final installment of TWO
MILLIONS FIVE HUNDRED DOLLARS WITH TWENTY CENTS
($2,500,000.20); provided,
however,
that
the last such principal repayment installment shall be in the amount necessary
to repay in full the unpaid principal amount of the Loan and all amounts
outstanding hereunder, unless otherwise agreed to in writing by the parties.
2.3 Payments
and Computations. The
Borrower shall make each payment hereunder, under the Note not later than
12:00
noon (San Xxxx, Puerto Rico time) on the day when due in lawful money of
the
United States of America to the Lenders at the address referred to in
Section 5.4 in immediately available funds. All computations of interest
under the Note and fees payable hereunder shall be made by the Lenders on
the
basis of a year of 360 days, for the actual number of days occurring in the
period for which such interest is payable.
2.4 Payments
on Non-Business Days. Whenever
any payment to be made hereunder or under the Note shall be stated to be
due on
a day other than a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in
the
computation of payment of interest or fees, as the case may be. The term
“Business Day” means any day of the year that is not a Saturday, Sunday or other
day on which commercial banks in Puerto Rico are authorized or required by
law
to remain closed.
2
| 3. |
Prepayment.
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3.1 At
its
option, the Borrower may at any time and from time to time prepay the Note
in
whole or in part upon at least five (5) Business Days’ written notice to the
Lenders specifying the date of the proposed prepayment and the amount thereof.
3.2 At
the
time of making each such prepayment pursuant to the provisions of this Section
3, the Borrower shall pay to the Lenders accrued interest thereon to the
date of
such prepayment. Prepayment shall be made without premium or
penalty.
3.3 Prepayments
described in this Section shall be applied as follows: (A) first, to all
accrued
and unpaid interest due under the Note to the date of such prepayment and
(B)
second, to the principal installments set forth in Section 2.2, in inverse
order
of their maturities.
| 4. |
Events
of Default.
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4.1 The
following occurrences shall be considered events of default (each an “Event of
Default”) hereunder:
4.1.1 The
Borrower or any Loan Party shall fail to pay, when due, any principal of
or
interest on the Loan or any other amount payable by the Borrower under this
Agreement, or the Note; or
4.1.2 The
Borrower or any other Loan Party shall become insolvent or unable to pay
its
debts as they mature, or shall file a voluntary petition in bankruptcy, or
a
voluntary petition seeking reorganization, or to effect a plan or other
arrangement with creditors, or shall file an answer consenting to, or take
any
other action indicating acquiescence in, an involuntary petition pursuant
to, or
purporting to be pursuant to, any bankruptcy, reorganization or insolvency
law
of any jurisdic-tion, or shall be adjudged a bankrupt or insolvent by any
court
of competent jurisdiction, or shall make an assignment for the benefit of
creditors or to an agent authorized to liquidate any substantial amount of
its
assets, or shall apply for, or consent to the appointment of any receiver
or
trustee for it or for a substantial part of its property; or
3
4.1.3 An
order
shall be entered and shall not be dis-missed or stayed within thirty (30)
days
from its entry pursuant to, or purporting to be pursuant to, any bankruptcy,
reorgani-zation or insolvency law of any jurisdiction, approving an involuntary
petition seeking reorganization, or to affect a plan or other arrangement
with
creditors of the Borrower or any other Loan Party, or appointing any receiver
or
trustee for the Borrower or any other Loan Party or for a substantial part
of
the property of the Borrower or any other Loan Party; or
4.2 Upon
the
occurrence of an Event of Default, the Lenders may, by notice to the Borrower
(i) declare the Note, all interest thereon and all other amounts payable
under the Note and this Agreement and all other obligations of the Borrower
under this Agreement to be forthwith due and payable, whereupon the Note,
all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind,
all
of which are hereby expressly waived by the Borrower, and (ii) exercise any
or
all other rights and remedies existing at law or equity or by statute under
the
laws of Puerto Rico, including, without limitation, the right to seek specific
performance and the rights and remedies of a secured creditor; provided,
however,
that in
the event of an actual or deemed entry of an order for relief with respect
to
any Loan Party under the Federal Bankruptcy Code as described in
Sections 4.1.2 and 4.1.3, the Note, all such interest and all such
amounts
shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by
the Borrower.
| 5. |
Miscellaneous.
|
5.1 No
Waiver.
No
delay or failure of the Lenders, or of any holder of the Note in the exercise
of
any right, power or privilege hereunder, or under the terms of the Note,
shall
affect such right, power or privilege; nor shall any single or partial exercise
thereof, nor any event, abandonment or discontinuance of steps to enforce
such
right, power or privilege, preclude any further exercise thereof, or of any
other right, power or privilege.
4
5.2 Remedies.
The
rights and remedies of the Lenders hereunder are cumulative and not exclusive
of
any right or remedy which it would otherwise have.
5.3 Amendments,
Etc.
Any
waiver, permit, consent or approval of any kind or character on the part
of the
Bank of any breach or default under this Agreement, or of any provision or
condition of this Agreement must be in writing, and shall be effective only
to
the extent in such writing specifically set forth.
5.4 Notices.
All
notices, statements, requests and demands given to or made upon the Borrower
in
accordance with the provisions of this Agreement shall be deemed to have
been
given or made when delivered in person or deposited in the mails addressed
as
follows:
If
to
Borrower at:
Xxxxx
Caribe, Inc.
Xxxx
000,
Xxxxxxxxx 5.8
Xxxx
Xxxx, Puerto Rico 00692
Attention:
Xxxx X. Xxxxxx
If
to the
Lenders at:
Mr.
and
Xxx. Xxxxxxx X. Xxxxxxx
Call
Box
1370
Dorado,
P.R. 00646-1370
5.5 Governing
Law; Successors and Assigns.
This
agreement and the rights and obligations of the parties hereunder and thereunder
shall be construed in accordance with and be governed by the law of the
Commonwealth of Puerto Rico. This Agreement shall be binding upon and shall
inure to the benefit of the Borrower and the Lenders and their respective
successors and assigns, provided, however, that this Agreement shall not
be
assigned by the Borrower without the prior written consent of the
Lenders.
5
5.6 Counterparts.
This
Agreement may be executed in any number of counterparts and by different
parties
hereto in separate counterparts, each of which when so executed shall be
deemed
to be an original and all of which taken together shall constitute one and
the
same agreement.
[Signature
Page Follows]
6
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be executed, as of the date
first
above written.
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XXXXX
CARIBE, INC
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By:
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/s/
Xxxx X.
Xxxxxx
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Name: Xxxx
X. Xxxxxx
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Title: President
& COO
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By:
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/s/
Xxxxxxx X.
Xxxxxxx
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Name: Xxxxxxx
X. Xxxxxxx
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By:
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/s/
Xxxxxxxx X.
Xxxxxxx
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Name:
Xxxxxxxx
X. Xxxxxxx
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7
EXHIBIT
A
PROMISSORY
NOTE
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$3,000,000
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Due
Date: May 1, 2010
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Xxxx
Xxxx, Puerto Rico
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FOR
VALUE RECEIVED,
XXXXX
CARIBE, INC., a corporation organized and existing under the laws of the
Commonwealth of Puerto Rico (the “Maker”), hereby unconditionally promises to
pay to the order of Xxxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx (collectively
the
“Holders”), at the principal office of the maker located at Road 690, K.M. 5.8,
Xxxx Xxxx, Puerto Rico, or at such other place as the holder hereof may from
time to time designate in writing, the principal sum of THREE MILLION DOLLARS
($3,000,000), in lawful money of the United States of America with in
immediately available funds, on the dates and in the principal amounts provided
in the Loan Agreement dated May 23, 2005, between the Maker and the Holders
(the
“Loan Agreement”) interest thereon to be computed from the date of this Note
until satisfaction thereof at a fluctuating rate of interest equal to the
Prime
Rate. The entire principal balance of this Note shall be due and payable
on May
1, 2010 (the “Maturity Date”). Interest shall be paid on a monthly basis on the
first day of each month commencing on June 1, 2005. For purposes of this
Note,
“Prime Rate” shall mean at any time the fluctuating rate of interest announced
publicly from time to time by Citibank, N.A., in New York as its “Prime”, “Base”
or “Reference” Rate.
The
principal balance of this Note may be prepaid in whole or in part prior to
the
Maturity Date without premium or penalty.
The
Maker
shall pay all reasonable costs and expenses incurred by or on behalf of the
Holders in connection with the Holders’ exercise of any or all of their rights
and remedies under this Note, including reasonable attorneys’ fees and
expenses.
This
Note
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of the Maker
or
the Holders, but only by an agreement in writing signed by the party against
whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.
The
Maker
(and the undersigned representative of the Maker) represents that it has
full
power, authority and legal right to execute and deliver this Note and that
this
Note constitutes the valid and binding obligations of the Maker.
This
Note
is subject to and shall be construed under the laws of the Commonwealth of
Puerto Rico. The undersigned acknowledges receipt of a true and exact copy
of
this Note.
In
Xxxx
Xxxx, Puerto Rico, on this 23 day of May, 2005.
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XXXXX
CARIBE, INC
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By:
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/s/
Xxxx X.
Xxxxxx
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Name:
Xxxx
X. Xxxxxx
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Title:
President
& COO
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