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EXHIBIT C
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XXXXX, XXXXXXX & CO., INC.
LOAN AGREEMENT
DATED AS OF JUNE 24, 1997
$4,000,000
COMERICA BANK-TEXAS
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TABLE OF CONTENTS
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ARTICLE I - Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . . 4
ARTICLE II - Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Commitment. . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 The Note. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.3 Repayment of Principal of Advances. . . . . . . . . . . . 5
Section 2.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.5 Borrowing Procedure . . . . . . . . . . . . . . . . . . . 5
Section 2.6 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III - Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.1 Method of Payment . . . . . . . . . . . . . . . . . . . . 6
Section 3.2 Prepayment. . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.3 Computation of Interest . . . . . . . . . . . . . . . . . 6
ARTICLE IV - Yield Protection. . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1 Capital Adequacy. . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V - Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.1 Collateral. . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.2 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VI - Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . 8
Section 6.1 Initial Advance . . . . . . . . . . . . . . . . . . . . . 8
Section 6.2 All Advances. . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VII - Representations and Warranties . . . . . . . . . . . . . . . . 10
Section 7.1 Financial Statements. . . . . . . . . . . . . . . . . . . 10
Section 7.2 No Breach . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.3 Litigation and Judgments. . . . . . . . . . . . . . . . . 11
Section 7.4 Rights in Properties. . . . . . . . . . . . . . . . . . . 11
Section 7.5 Enforceability. . . . . . . . . . . . . . . . . . . . . . 11
Section 7.6 Approvals . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.8 Use of Proceeds; Margin Securities. . . . . . . . . . . . 11
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Section 7.9 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.10 Agreements. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7.11 Compliance with Laws. . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII - Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.1 Reporting Requirements. . . . . . . . . . . . . . . . . . 12
Section 8.2 Maintenance of Collateral Value . . . . . . . . . . . . . 13
Section 8.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.4 Compliance with Laws. . . . . . . . . . . . . . . . . . . 14
Section 8.5 Compliance with Agreements. . . . . . . . . . . . . . . . 14
Section 8.6 Further Assurances. . . . . . . . . . . . . . . . . . . . 14
Section 8.7 Limitation on Liens . . . . . . . . . . . . . . . . . . . 14
Section 8.8 Limitation on Debt. . . . . . . . . . . . . . . . . . . . 15
Section 8.9 Maintenance of Existence; Conduct of Business . . . . . . 15
Section 8.10 Maintenance of Properties . . . . . . . . . . . . . . . . 15
Section 8.11 Taxes and Claims. . . . . . . . . . . . . . . . . . . . . 15
Section 8.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 8.13 Inspection Rights . . . . . . . . . . . . . . . . . . . . 16
Section 8.14 Keeping Books and Records . . . . . . . . . . . . . . . . 16
Section 8.15 Xxxxxxx, Etc. . . . . . . . . . . . . . . . . . . . . . . 16
Section 8.16 Restricted Payments . . . . . . . . . . . . . . . . . . . 16
Section 8.17 Loans and Investments . . . . . . . . . . . . . . . . . . 16
Section 8.18 Limitation on Issuance of Capital Stock . . . . . . . . . 16
Section 8.19 Transactions With Affiliates . . . . . . . . . . . . . . 17
Section 8.20 Disposition of Assets . . . . . . . . . . . . . . . . 17
ARTICLE IX - Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 9.1 Events of Default . . . . . . . . . . . . . . . . . . . . 17
Section 9.2 Remedies Upon Default . . . . . . . . . . . . . . . . . . 18
Section 9.3 Performance by the Lender . . . . . . . . . . . . . . . . 19
ARTICLE X - Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10.2 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 19
Section 10.3 Limitation of Liability . . . . . . . . . . . . . . . . . 20
Section 10.4 No Duty . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 10.5 Lender Not Fiduciary. . . . . . . . . . . . . . . . . . . 20
Section 10.6 Equitable Relief. . . . . . . . . . . . . . . . . . . . . 21
Section 10.7 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . 21
Section 10.8 Successors and Assigns. . . . . . . . . . . . . . . . . . 21
Section 10.9 Survival. . . . . . . . . . . . . . . . . . . . . . . . . 21
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Section 10.10 ENTIRE AGREEMENT; AMENDMENT . . . . . . . . . . . . . . 21
Section 10.11 Maximum Interest Rate . . . . . . . . . . . . . . . . . . 22
Section 10.12 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.14 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.15 Severability. . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.16 Headings. . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.17 Non-Application of Chapter 15 of Texas Credit Code. . . . 23
Section 10.18 Participations. . . . . . . . . . . . . . . . . . . . . . 23
Section 10.19 Construction. . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.20 Independence of Covenants . . . . . . . . . . . . . . . . 23
Section 10.21 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . 23
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of June 24, 1997, is between XXXXX, XXXXXXX
& CO., INC., a Texas corporation (the "Borrower"), and COMERICA BANK-TEXAS, a
Texas state banking association (the "Lender").
R E C I T A L S :
The Borrower has requested the Lender to make a loan to the Borrower with
advances thereunder not to exceed an aggregate principal amount of Four
Million Dollars ($4,000,000) outstanding at any time. The Lender is willing
to make such loan to the Borrower upon the terms and conditions hereinafter
set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms have the following meanings:
"ADVANCE" means an advance of funds by the Lender to the Borrower
pursuant to Article II.
"ADVANCE REQUEST FORM" means a certificate, in substantially the form
of Exhibit "A" hereto, properly completed and signed by the Borrower
requesting an Advance.
"BASLE ACCORD" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended,
supplemented and otherwise modified and in effect from time to time, or any
replacement thereof.
"BUSINESS DAY" means any day on which commercial banks are authorized
to conduct business or are not required to close in Dallas, Texas.
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"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"COLLATERAL" has the meaning specified in Section 5.1.
"COMMITMENT" means the obligation of the Lender to make Advances
hereunder in an aggregate principal amount at any one time outstanding up
to but not exceeding Four Million Dollars ($4,000,000), as such obligation
may be terminated pursuant to Section 9.2.
"DEBT" means as to any Person at any time (without duplication): (a)
all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, notes, debentures, or other similar
instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable of
such Person arising in the ordinary course of business that are not past
due by more than ninety (90) days, (d) all Debt or other obligations of
others Guaranteed by such Person, (e) all obligations secured by a Lien
existing on property owned by such Person, whether or not the obligations
secured thereby have been assumed by such Person or are non-recourse to the
credit of such Person, and (f) all reimbursement obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds and similar instruments.
"DEFAULT" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event
of Default.
"DEFAULT RATE" means the lesser of (a) the Maximum Rate, or (b) the
sum of the Prime Rate in effect from day to day plus five percent (5%).
"DOLLARS" and "$" mean lawful money of the United States of America.
"EFFECTIVE DATE" means June 24, 1997.
"EVENT OF DEFAULT" has the meaning specified in Section 9.1.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of
the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles applied in a current period are
comparable in all material respects to those accounting principles applied
in a preceding period.
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"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or
pertaining to government.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person to directly or indirectly guarantee any Debt or
other obligation of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(b) entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"GUARANTIES" has the meaning specified in Section 5.1.
"GUARANTORS" means Xxxxxxx X. Xxxxx and Xxx X. Xxxxxxx, III.
"LIEN" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment, preference,
priority, or other encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or title retention agreement),
whether arising by contract, operation of law, or otherwise.
"LOAN DOCUMENTS" means this Agreement and all promissory notes,
security agreements, deeds of trust, assignments, guaranties, and other
instruments, documents, and agreements executed and delivered pursuant to
or in connection with this Agreement, as such instruments, documents, and
agreements may be amended, modified, renewed, extended, or supplemented
from time to time.
"MAXIMUM RATE" means, at any time, the maximum rate of interest under
applicable law that the Lender may charge the Borrower. The Maximum Rate
shall be calculated in a manner that takes into account any and all fees,
payments, and other charges in respect of the Loan Documents that
constitute interest under applicable law. Each change in any interest rate
provided for herein based upon the Maximum Rate resulting from a change in
the Maximum Rate shall take effect without notice to the Borrower at the
time of such change in the Maximum Rate. For purposes of determining the
Maximum Rate under Texas law, the applicable rate ceiling shall be the
indicated rate
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ceiling described in, and computed in accordance with, Article 5069-1.04,
Xxxxxx's Texas Civil Statutes.
"NOTE" means the promissory note of even date herewith of the Borrower
payable to the order of the Lender, in the original principal amount of
$4,000,000, and all extensions, renewals, and modifications thereof.
"OBLIGATED PARTY" means any Person who is or becomes party to any
agreement that guarantees or secures payment and performance of the
Obligations or any part thereof.
"OBLIGATIONS" means all obligations, indebtedness, and liabilities of
the Borrower to the Lender, now existing or hereafter arising, whether
direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including, without
limitation, the obligations, indebtedness, and liabilities of the Borrower
under this Agreement and the other Loan Documents, and all interest
accruing thereon and all attorneys' fees and other expenses incurred in the
enforcement or collection thereof.
"PAYMENT DATE" means the 5th day each month, the first of which shall
be the first such day after the date of this Agreement.
"PERSON" means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental Authority,
or other entity.
"PLEDGE AGREEMENT" means the Pledge Agreement of the Borrower in favor
of the Lender of even date herewith, as the same may be amended,
supplemented, or modified.
"PRIME RATE" means, at any time, the rate of interest per annum then
most recently established by the Lender as its prime rate, which rate may
not be the lowest rate of interest charged by the Lender to its borrowers.
Each change in any interest rate provided for herein based upon the Prime
Rate resulting from a change in the Prime Rate shall take effect without
notice to the Borrower at the time of such change in the Prime Rate.
"PRINCIPAL OFFICE" means the principal office of the Lender, presently
located at 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx.
"TERMINATION DATE" means 11:00 a.m. Dallas, Texas time on June 24,
1999, or such earlier date and time on which the Commitment terminates as
provided in this Agreement.
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas.
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Section 1.2 OTHER DEFINITIONAL PROVISIONS. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of
the terms defined. The words "hereof", "herein", and "hereunder" and words
of similar import referring to this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless
otherwise specified, all Article and Section references pertain to this
Agreement. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. Terms used herein that are defined in the
UCC, unless otherwise defined herein, shall have the meanings specified in
the UCC.
ARTICLE II
ADVANCES
Section 2.1 COMMITMENT. Subject to the terms and conditions of this
Agreement, if at the time of the Borrower's request therefor Lender so elects
in its sole discretion upon its review of the financial condition of the
Borrower, the Guarantors, and the Collateral, the Lender shall make one or
more Advances to the Borrower from time to time from the date hereof to and
including the Termination Date, provided that the aggregate amount of all
Advances at any time outstanding shall not exceed the amount of the
Commitment. Subject to the foregoing limitations, and the other terms and
provisions of this Agreement, the Borrower may borrow, repay, and reborrow
hereunder until the Termination Date.
Section 2.2 THE NOTE. The obligation of the Borrower to repay the
Advances and interest thereon shall be evidenced by the Note executed by the
Borrower, payable to the order of the Lender, in the principal amount of the
Commitment as originally in effect and dated the date hereof.
Section 2.3 REPAYMENT OF PRINCIPAL OF ADVANCES. The Borrower shall
repay the unpaid principal amount of all Advances on the Termination Date.
Section 2.4 INTEREST. The unpaid principal amount of the Advances
shall bear interest prior to maturity at a varying rate per annum equal from
day to day to the lesser of (a) the Maximum Rate, or (b) the sum of the Prime
Rate plus one-half percent (1/2%). If at any time the Prime Rate shall
exceed the Maximum Rate, thereby causing the interest accruing on the
Advances to be limited to the Maximum Rate, then any subsequent reduction in
the Prime Rate shall not reduce the rate of interest below the Maximum Rate
until the aggregate amount of interest accrued equals the aggregate amount of
interest which would have accrued if the Prime Rate had at all times been in
effect. Accrued and unpaid interest on the Advances shall be due and payable
on each Payment Date and on the Termination Date. Notwithstanding the
foregoing, any outstanding principal and (to the fullest extent permitted by
law) any other amount payable by the Borrower under this Agreement or any
other Loan Document that is not paid in full when due (whether at
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stated maturity, by acceleration, or otherwise) shall bear interest at the
Default Rate for the period from and including the due date thereof to but
excluding the date the same is paid in full. Interest payable at the Default
Rate shall be payable from time to time on demand.
Section 2.5 BORROWING PROCEDURE. The Borrower shall give the Lender
notice by means of an Advance Request Form of each requested Advance, at
least one (1) Business Day before the requested date of each Advance,
specifying: (a) the requested date of such Advance (which shall be a Business
Day), (b) the amount of such Advance, and (c) the purpose of such Advance.
The Lender at its option may accept telephonic requests for Advances,
provided that such acceptance shall not constitute a waiver of the Lender's
right to delivery of an Advance Request Form in connection with subsequent
Advances. Any telephonic request for an Advance by the Borrower shall be
promptly confirmed by submission of a properly completed Advance Request Form
to the Lender. Each Advance shall be in a minimum principal amount of
$10,000 or an integral multiple thereof. Subject to the terms and conditions
of this Agreement, each Advance shall be made available to the Borrower by
depositing the same, in immediately available funds, in an account of the
Borrower maintained with the Lender at the Principal Office designated by the
Borrower. All notices under this Section shall be irrevocable and shall be
given not later than 11:00 a.m. Dallas, Texas, time on the day which is not
less than the number of Business Days specified above for such notice.
Section 2.6 USE OF PROCEEDS. The proceeds of Advances shall be used
by the Borrower to refinance Debt owed to Lender by the Guarantors, for
investments, and other corporate and working capital purposes (excluding
investments in margin stock).
ARTICLE III
PAYMENTS
Section 3.1 METHOD OF PAYMENT. All payments of principal, interest,
and other amounts to be made by the Borrower under this Agreement and the
other Loan Documents shall be made to the Lender at the Principal Office in
Dollars and immediately available funds, without setoff, deduction, or
counterclaim, not later than 11:00 a.m., Dallas, Texas, time on the date on
which such payment shall become due (each such payment made after such time
on such due date to be deemed to have been made on the next succeeding
Business Day). The Borrower shall, at the time of making each such payment,
specify to the Lender the sums payable by the Borrower under this Agreement
and the other Loan Documents to which such payment is to be applied (and in
the event the Borrower fails to so specify, or if an Event of Default has
occurred and is continuing, the Lender may apply such payment to the
Obligations in such order and manner as it may elect in its sole discretion).
Whenever any payment under this Agreement or any other Loan Document shall
be stated to be due on a day that is not a Business Day, such payment shall
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be made on the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of the payment of interest and
commitment fee, as the case may be.
Section 3.2 PREPAYMENT. The Borrower may prepay the Advances in whole
at any time or from time to time in part without premium or penalty but with
accrued interest to the date of prepayment on the amount so prepaid.
Section 3.3 COMPUTATION OF INTEREST. Interest on the Advances and all
other amounts payable by the Borrower hereunder shall be computed on the
basis of a year of 360 days and the actual number of days elapsed (including
the first day but excluding the last day) unless such calculation would
result in a usurious rate, in which case interest shall be calculated on the
basis of a year of 365 or 366 days, as the case may be.
ARTICLE IV
YIELD PROTECTION
Section 4.1 CAPITAL ADEQUACY. If after the date hereof, the Lender
shall have determined that the adoption or implementation of any applicable
law, rule, or regulation regarding capital adequacy (including, without
limitation, any law, rule, or regulation implementing the Basle Accord), or
any change therein, or any change in the interpretation or administration
thereof by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or compliance by the Lender (or its
parent) with any guideline, request, or directive regarding capital adequacy
(whether or not having the force of law) of any such central bank or other
Governmental Authority (including, without limitation, any guideline or other
requirement implementing the Basle Accord), has or would have the effect of
reducing the rate of return on the Lender's (or its parent's) capital as a
consequence of its obligations hereunder or the transactions contemplated
hereby to a level below that which the Lender (or its parent) could have
achieved but for such adoption, implementation, change, or compliance (taking
into consideration the Lender's policies with respect to capital adequacy) by
an amount deemed by the Lender to be material, then the Lender will provide
the Borrower written notice thereof, and commencing sixty (60) days after
such notice is sent such amounts shall begin to accrue and from time to time,
within ten (10) Business Days after demand by the Lender, the Borrower shall
pay to the Lender (or its parent) such additional amount or amounts as will
compensate the Lender for such reduction. A certificate of the Lender
claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive, provided
that the determination thereof is made on a reasonable basis. In determining
such amount or amounts, the Lender may use any reasonable averaging and
attribution methods.
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ARTICLE V
SECURITY
Section 5.1 COLLATERAL. To secure full and complete payment and
performance of the Obligations, the Borrower shall execute and deliver or cause
to be executed and delivered the documents described below covering the property
and collateral described in this Section 5.1 (which, together with any other
property and collateral which may now or hereafter secure the Obligations or any
part thereof, is sometimes herein called the "Collateral"):
(a) The Borrower shall grant to the Lender a first priority perfected
security interest in shares of common capital stock of Spinnaker
Industries, Inc., a Delaware corporation, in an amount sufficient to cause
compliance with Section 8.2 hereof, whether now owned or hereafter
acquired, and all dividends thereon and all products and proceeds thereof,
pursuant to the Pledge Agreement.
(b) The Borrower shall execute and cause to be executed such further
documents and instruments, including without limitation, Uniform Commercial
Code financing statements, as the Lender, in its sole discretion, deems
necessary or desirable to create, preserve, evidence, and perfect its liens
and security interests in the Collateral.
(c) The Guarantors shall jointly and severally guarantee the payment
and performance of the Obligations by execution of Guaranty Agreements (the
"Guaranties") in form and substance satisfactory to Lender.
Section 5.2 SETOFF. If an Event of Default shall have occurred and be
continuing, Lender shall have the right to set off and apply against the
Obligations in such manner as the Lender may determine, at any time and without
notice to the Borrower, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from the Lender to the Borrower whether or not the Obligations are then due. As
further security for the Obligations, the Borrower hereby grants to the Lender a
security interest in all money, instruments, and other property of the Borrower
now or hereafter held by the Lender, excluding, however, property held in any
trust capacity. In addition to the Lender's right of setoff and as further
security for the Obligations, the Borrower hereby grants to the Lender a
security interest in all deposits (general or special, time or demand,
provisional or final) and other accounts of the Borrower now or hereafter on
deposit with or held by the Lender and all other sums at any time credited by or
owing from the Lender to the Borrower, excluding any deposits or accounts of the
Borrower acting in any trust capacity. The rights and remedies of the Lender
hereunder are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Lender may have.
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ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 INITIAL ADVANCE. The obligation of the Lender to make the
initial Advance is within the reasonable discretion of Xxxxxx and is subject to
the condition precedent that the Lender shall have received on or before the day
of such Advance all of the following, each dated (unless otherwise indicated)
the date hereof, in form and substance satisfactory to the Lender:
(a) RESOLUTIONS. Resolutions of the Board of Directors of the
Borrower certified by the Secretary or an Assistant Secretary of the
Borrower which authorize the execution, delivery, and performance by the
Borrower of this Agreement and the other Loan Documents to which the
Borrower is or is to be a party;
(b) INCUMBENCY CERTIFICATE. A certificate of incumbency certified by
the Secretary or an Assistant Secretary of the Borrower certifying the
names of the officers of the Borrower authorized to sign this Agreement and
each of the other Loan Documents to which the Borrower is or is to be a
party (including the certificates contemplated herein) together with
specimen signatures of such officers;
(c) CERTIFICATE OF INCORPORATION. The certificate of incorporation
of the Borrower certified by the Secretary of State of state of
incorporation of the Borrower and dated within ten (10) days prior to the
date of the Advance;
(d) BYLAWS. The bylaws of the Borrower certified by the Secretary or
an Assistant Secretary of the Borrower;
(e) GOVERNMENTAL CERTIFICATES. Certificates of the appropriate
government officials of the State of Texas as to the existence and good
standing of the Borrower and its authority to conduct business in such
state, each dated within ten (10) days prior to the date of the Advance;
(f) NOTE. The Note executed by the Borrower;
(g) PLEDGE AGREEMENT. The Pledge Agreement executed by the Borrower;
(h) FINANCING STATEMENTS. Uniform Commercial Code financing
statements executed by the Borrower and covering such Collateral as the
Lender may request;
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(i) PLEDGED STOCK. Certificates evidencing the shares of stock of
Spinnaker Industries, Inc., which are the subject of the Pledge Agreement,
together with stock powers duly executed in blank;
(j) GUARANTIES. The Guaranties executed by the Guarantors;
(k) UCC SEARCH. The results of a Uniform Commercial Code search
showing all financing statements and other documents or instruments on file
against the Borrower in the office of the Secretary of State of Texas, such
search to be as of a date no more than ten (10) days prior to the date of
the initial Advance; and
(l) ATTORNEYS' FEES AND EXPENSES. Evidence that the costs and
expenses (including reasonable attorneys' fees) referred to in Section
10.1, to the extent incurred, shall have been paid in full by the Borrower.
Section 6.2 ALL ADVANCES. The obligation of the Lender to make any
Advance (including the initial Advance) is within the sole and absolute
discretion of Lender and is subject to the following additional conditions
precedent:
(a) ADVANCE REQUEST FORM. Lender shall have received, in accordance
with Section 2.5, an Advance Request Form, dated the date of such Advance,
executed by the Borrower;
(b) NO DEFAULT. No Default shall have occurred and be continuing,
or would result from such Advance;
(c) NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, operations, or condition (financial or otherwise) of the
Borrower, either Guarantor, or Spinnaker Industries, Inc., shall have
occurred in the determination of Lender;
(d) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties contained in Article VII hereof and in the other Loan
Documents shall be true and correct on and as of the date of such Advance
with the same force and effect as if such representations and warranties
had been made on and as of such date; and
(e) ADDITIONAL DOCUMENTATION. Lender shall have received such
additional approvals, opinions, or documents as the Lender or its legal
counsel, Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., may reasonably request.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement, the Borrower
represents and warrants to the Lender that:
Section 7.1 FINANCIAL STATEMENTS. The Borrower has delivered to the
Lender financial statements of the Borrower for the year ended December 31,
1996. Such financial statements are true and correct, and fairly and
accurately present, the financial condition of the Borrower as of the
respective dates indicated therein. The Borrower does not have any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments, or unrealized or anticipated losses from any unfavorable
commitments except as referred to or reflected in such financial statements.
There has been no material adverse change in the business, condition
(financial or otherwise), operations, prospects, or properties of the
Borrower since the effective date of the most recent financial statements
referred to in this Section.
Section 7.2 NO BREACH; CORPORATE EXISTENCE. The execution, delivery,
and performance by the Borrower of this Agreement and the other Loan
Documents to which the Borrower is or may become a party and compliance with
the terms and provisions hereof and thereof do not and will not (a) violate
or conflict with, or result in a breach of, or require any consent under (i)
any applicable law, rule, or regulation or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (ii) the Borrower's
certificate of incorporation or bylaws or any agreement or instrument to
which the Borrower is a party or by which his property is bound or subject,
or (b) constitute a default under any such agreement or instrument, or result
in the creation or imposition of any Lien (except as provided in Article V)
upon any of the revenues or assets of the Borrower. The Borrower (a) is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation; (b) has all requisite
corporate power and authority to own its assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do business
in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a material
adverse effect on its business, condition (financial or otherwise),
operations, prospects, or properties. The Borrower has the corporate power
and authority to execute, deliver, and perform its obligations under this
Agreement and the other Loan Documents to which it is or may become a party.
Section 7.3 LITIGATION AND JUDGMENTS. There is no action, suit,
investigation, or proceeding before or by any Governmental Authority or
arbitrator pending, or to the knowledge of the Borrower, threatened against
or affecting the Borrower.
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Section 7.4 RIGHTS IN PROPERTIES. The Borrower has good and
indefeasible title to or valid leasehold interests in its respective
properties and assets, real and personal, including the properties, assets,
and leasehold interests reflected in the financial statements described in
Section 7.1, except as otherwise indicated on said financial statements. The
Borrower has no subsidiaries.
Section 7.5 ENFORCEABILITY. This Agreement constitutes, and the other
Loan Documents to which the Borrower is party, when delivered, shall
constitute legal, valid, and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms, except as
limited by bankruptcy, insolvency, or other laws of general application
relating to the enforcement of creditors' rights.
Section 7.6 APPROVALS. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is
or will be necessary for the execution, delivery, or performance by the
Borrower of this Agreement and the other Loan Documents to which the Borrower
is or may become a party or the validity or enforceability thereof.
Section 7.7 TAXES. The Borrower has filed all tax returns (federal,
state, and local) required to be filed, including all income, property, and
sales tax returns, or has received valid extensions relating to said filings,
and have paid all of his liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable. The Borrower knows of no
pending investigation of the Borrower by any taxing authority or of any
pending but unassessed tax liability of the Borrower.
Section 7.8 USE OF PROCEEDS; MARGIN SECURITIES. No part of the
proceeds of any Advance will be used to purchase or carry any margin stock
(within the meaning of Regulations G, T, U, or X of the Board of Governors of
the Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying margin stock.
Section 7.9 DISCLOSURE. No statement, information, report,
representation, or warranty made by the Borrower in this Agreement or in any
other Loan Document or furnished to the Lender in connection with this
Agreement or any of the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading. There is no fact known
to the Borrower which has a material adverse effect, or which could
reasonably be expected to have a material adverse effect, on the business,
condition (financial or otherwise), operations, prospects, or properties of
the Borrower that has not been disclosed in writing to the Lender.
Section 7.10 AGREEMENTS. The Borrower is not a party to any indenture,
loan, or credit agreement, or to any lease or other agreement or instrument,
or subject to any charter or corporate restriction which could reasonably be
expected to have a material adverse effect on the business,
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condition (financial or otherwise), operations, prospects, or properties of
the Borrower, or the ability of the Borrower to pay and perform its
obligations under the Loan Documents. The Borrower is not in default in any
respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or
instrument material to its business to which it is a party.
Section 7.11 COMPLIANCE WITH LAWS. The Borrower is not in violation in
any material respect of any law, rule, regulation, order, or decree of any
Governmental Authority or arbitrator.
ARTICLE VIII
COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or the Lender has any Commitment hereunder, the
Borrower will perform and observe the following covenants, unless the Lender
shall otherwise consent in writing:
Section 8.1 REPORTING REQUIREMENTS. The Borrower will furnish or
cause to be furnished to the Lender:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in any
event within ninety (90) days after the end of each fiscal year of the
Borrower, beginning with the fiscal year ending December 31, 1997, (i) a
copy of the annual report of the Borrower for such fiscal year containing
balance sheets and statements of income, retained earnings, and cash flow
as at the end of such fiscal year and for the 12-month period then ended,
in each case setting forth in comparative form the figures for the
preceding fiscal year, all in reasonable detail and certified by the
chief financial officer of Xxxxxxxx, to the effect that such report has
been prepared in accordance with GAAP; and (ii) a certificate of the
chief financial officer of Borrower to the Lender stating that to his
knowledge no Default has occurred and is continuing, or if in his opinion
a Default has occurred and is continuing, a statement as to the nature
thereof;
(b) SEMIANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within forty-five (45) days after each June 30 and December 31,
a copy of an unaudited financial report of the Borrower as of the end of
such fiscal quarter and for the portion of the fiscal year then ended,
containing balance sheets and statements of income, retained earnings,
and cash flow, in each case setting forth in comparative form the figures
for the corresponding period of the preceding fiscal year, all in
reasonable detail certified by the chief financial officer of the
Borrower to have been prepared in accordance with GAAP and to fairly and
accurately present (subject to year-end audit adjustments) the financial
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condition and results of operations of the Borrower at the date and for the
periods indicated therein;
(c) ANNUAL TAX RETURN. As soon as available, and in any event
within ten (10) days after the filing thereof with the Internal Revenue
Service, a copy of the Borrower's annual federal income tax return as
filed with the Internal Revenue Service;
(d) NOTICE OF DEFAULT. As soon as possible and in any event within
five (5) days after the occurrence of each Default, a written notice
setting forth the details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto;
(e) NOTICE OF MATERIAL ADVERSE CHANGE. As soon as possible and in
any event within five (5) days after the occurrence thereof, written
notice of any matter that could reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise),
operations, prospects, or properties of the Borrower;
(f) SEMIANNUAL AND ANNUAL SEC REPORTS, PROXY STATEMENTS, ETC. As
soon as available, one copy of each financial statement, report, notice
or proxy statement sent by Spinnaker Industries, Inc. to its stockholders
generally and one copy of each regular, periodic or special report,
registration statement, or prospectus filed by Spinnaker Industries, Inc.
with any securities exchange or the Securities and Exchange Commission or
any successor agency, including without limitation its Forms 10Q and 10K;
and
(g) GENERAL INFORMATION. Promptly, such other information
concerning the Borrower, either Guarantor, or Spinnaker Industries, Inc.
as the Lender may from time to time reasonably request, subject to
fiduciary obligations of the Guarantors as directors of Spinnaker
Industries, Inc., and the restrictions imposed upon them by federal and
state securities laws.
Section 8.2 MAINTENANCE OF COLLATERAL VALUE. Borrower shall cause to
be subject to a first priority perfected security interest in favor of Lender
pursuant to the terms of the Pledge Agreement, shares of the Class A common
and common capital stock of Spinnaker Industries, Inc., which at all times
have an aggregate fair market value (determined on the basis of the closing
bid and/or last closing (as applicable) price thereof as of the date of
computation) of not less than two hundred percent (200%) of the outstanding
principal balance of the Obligations.
Section 8.3 INSURANCE. The Borrower will maintain insurance with
financially sound and reputable insurance companies in such amounts and
covering such risks as is usually carried
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by Persons engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower operates.
Section 8.4 COMPLIANCE WITH LAWS. The Borrower will comply in all
material respects with all applicable laws, rules, regulations, orders, and
decrees of any Governmental Authority or arbitrator.
Section 8.5 COMPLIANCE WITH AGREEMENTS. The Borrower will comply with
all agreements, contracts, and instruments binding on him or affecting his
properties or business for which the Borrower's failure to comply could
reasonably be expected to have a material adverse effect on the financial
condition of the Borrower.
Section 8.6 FURTHER ASSURANCES. The Borrower will execute and deliver
such further agreements and instruments and take such further action as may
be reasonably requested by the Lender to carry out the provisions and
purposes of this Agreement and the other Loan Documents and to create,
preserve, and perfect the Liens of the Lender in the Collateral.
Section 8.7 LIMITATION ON LIENS. The Borrower will not incur, create,
assume, or permit to exist any Lien upon any of its property, assets, or
revenues, whether now owned or hereafter acquired, except:
(a) Liens heretofore disclosed to Lender in writing;
(b) Liens in favor of the Lender;
(c) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that do
not (individually or in the aggregate) materially affect the value of the
assets encumbered thereby or materially impair the ability of the
Borrower to use such assets in its businesses, and none of which is
violated in any material respect by existing or proposed structures or
land use;
(d) Liens for taxes, assessments, or other governmental charges
which are not delinquent or which are being contested in good faith and
for which adequate reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen, carriers, or
other similar statutory Liens securing obligations that are not yet due
and are incurred in the ordinary course of business;
(f) Liens resulting from good faith deposits to secure payments of
workmen's compensation or other social security programs or to secure the
performance of tenders,
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statutory obligations, surety and appeal bonds, bids, or contracts (other
than for payment of Debt), or leases made in the ordinary course of
business; and
(g) Liens to secure the Debt permitted by Section 8.8(b) upon
assets which do not constitute Collateral.
Section 8.8 LIMITATION ON DEBT. The Borrower will not incur, create,
assume, or permit to exist any Debt except (a) Debt to Lender, (b) other Debt
in the aggregate not to exceed $5,000,000 at any time outstanding and
incurred when no Default exists or will result therefrom, and (c) existing
Debt.
Section 8.9 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. The
Borrower will preserve and maintain its corporate existence and all of its
leases, privileges, licenses, permits, franchises, qualifications, and rights
that are necessary or desirable in the ordinary conduct of its business. The
Borrower will conduct its business in an orderly and efficient manner in
accordance with good business practices.
Section 8.10 MAINTENANCE OF PROPERTIES. The Borrower will maintain,
keep, and preserve all of its properties (tangible and intangible) necessary
or useful in the proper conduct of its business in good working order and
condition.
Section 8.11 TAXES AND CLAIMS. The Borrower will pay or discharge, and
will cause each Subsidiary to pay or discharge, at or before maturity or
before becoming delinquent (a) all taxes, levies, assessments, and
governmental charges imposed on it or its income or profits or any of its
property, and (b) all lawful claims for labor, material, and supplies, which,
if unpaid, might become a Lien upon any of its property; PROVIDED, however,
that the Borrower shall not be required to pay or discharge any tax, levy,
assessment, or governmental charge which is being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate reserves
have been established.
Section 8.12 INSURANCE. The Borrower will maintain insurance with
financially sound and reputable insurance companies in such amounts and
covering such risks as is usually carried by corporations engaged in similar
businesses and owning similar properties in the same general areas in which
the Borrower operates, provided that in any event the Borrower will maintain
workmen's compensation insurance, property insurance, comprehensive general
liability insurance, products liability insurance, and business interruption
insurance reasonably satisfactory to the Lender.
Section 8.13 INSPECTION RIGHTS. At any reasonable time and from time
to time, the Borrower will permit representatives of the Lender to examine,
copy, and make extracts from its
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books and records, to visit and inspect its properties, and to discuss its
business, operations, and financial condition with its officers, employees,
and independent certified public accountants.
Section 8.14 KEEPING BOOKS AND RECORDS. The Borrower will maintain
proper books of record and account in which full, true, and correct entries
in conformity with GAAP shall be made of all dealings and transactions in
relation to its business and activities.
Section 8.15 MERGERS, ETC. The Borrower will not become a party to a
merger or consolidation, or purchase or otherwise acquire all or any part of
the assets of any Person or any shares or other evidence of beneficial
ownership of any Person, or wind-up, dissolve, or liquidate. The Borrower
will not create or permit to exist any subsidiaries of the Borrower.
Section 8.16 RESTRICTED PAYMENTS. The Borrower will not declare or pay
any dividends or make any other payment or distribution (in cash, property,
or obligations) on account of its capital stock, or redeem, purchase, retire,
or otherwise acquire any of its capital stock or set apart any money for a
sinking or other analogous fund for any dividend or other distribution on its
capital stock or for any redemption, purchase, retirement, or other
acquisition of any of its capital stock. Notwithstanding the foregoing, when
no Default exists or would result therefrom, the Borrower may redeem shares
of its capital stock issued to its employees, partners, or agents (other than
Guarantors) in the ordinary course of business.
Section 8.17 LOANS AND INVESTMENTS. The Borrower will not make any
advance, loan, extension of credit, or capital contribution to or investment
in, or purchase, any stock, bonds, notes, debentures, or other securities of
any Person, except the Collateral and:
(a) readily marketable direct obligations of the United States of
America;
(b) fully insured certificates of deposit with maturities of one year
or less from the date of acquisition of any commercial bank operating in the
United States having capital and surplus in excess of $50,000,000.00;
(c) commercial paper of a domestic issuer if at the time of purchase
such paper is rated in one of the two highest rating categories of Standard
and Poor's Corporation or Xxxxx'x Investors Service;
(d) existing investments; and
(e) investments made in the ordinary course of its business.
Section 8.18 LIMITATION ON ISSUANCE OF CAPITAL STOCK. The Borrower
will not at any time issue, sell, assign, or otherwise dispose of (a) any of
its capital stock, (b) any securities
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exchangeable for or convertible into or carrying any rights to acquire any of
its capital stock, or (c) any option, warrant, or other right to acquire any
of its capital stock. Notwithstanding the foregoing, when no Default exists
or would result therefrom, the Borrower may issue additional shares of its
capital stock, or rights to acquire such shares, so long as at all times
Guarantors own and control at least eighty percent (80%) of the Borrower's
outstanding capital stock on a fully diluted basis.
Section 8.19 TRANSACTIONS WITH AFFILIATES. The Borrower will not enter
into any transaction, including, without limitation, the purchase, sale, or
exchange of property or the rendering of any service, with any affiliate of
the Borrower, except in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's business and upon fair and reasonable terms no
less favorable to the Borrower than would be obtained in a comparable
arm's-length transaction with a Person not an affiliate of the Borrower.
Section 8.20 DISPOSITION OF ASSETS. The Borrower will not sell, lease,
assign, transfer, or otherwise dispose of any of its assets, except
dispositions of investments in the ordinary course of business.
ARTICLE IX
DEFAULT
Section 9.1 EVENTS OF DEFAULT. Each of the following shall be deemed
an "Event of Default":
(a) The Borrower shall fail to pay when due the Obligations or any
part thereof.
(b) Any representation or warranty made by the Borrower in any Loan
Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with this Agreement shall be false,
misleading, or erroneous in any material respect when made.
(c) The Borrower shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in this Agreement or any other
Loan Document and such failure shall continue for 10 days after the
earlier of (i) the Borrower has knowledge of such failure, or (ii) the
Lender sends the Borrower written notice of such failure.
(d) The Borrower, either Guarantor, or Spinnaker Industries, Inc.
shall commence a voluntary proceeding seeking liquidation, reorganization,
or other relief with
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respect to itself or its debts under any bankruptcy, insolvency, or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian, or other similar official of it
or a substantial part of its property or shall consent to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it or shall make a
general assignment for the benefit of creditors or shall generally fail
to pay its debts as they become due or shall take any corporate action to
authorize any of the foregoing.
(e) An involuntary proceeding shall be commenced against the
Borrower, either Guarantor, or Spinnaker Industries, Inc. seeking
liquidation, reorganization, or other relief with respect to it or its
debts under any bankruptcy, insolvency, or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official for it or a substantial
part of its property, and such involuntary proceeding shall remain
undismissed and unstayed for a period of thirty (30) days.
(f) The Borrower shall fail to pay when due any principal of or
interest on any Debt with a then-current outstanding principal balance in
excess of $100,000 (other than the Obligations) and such failure shall
continue beyond expiration of any cure period therefor, if any, or the
maturity of any such Debt shall have been accelerated, or any such Debt
shall have been required to be prepaid prior to the stated maturity
thereof, or any event shall have occurred that permits (or, with the
giving of notice or lapse of time or both, would permit) any holder or
holders of such Debt or any Person acting on behalf of such holder or
holders to accelerate the maturity thereof or require any such
prepayment, except in the event that the Borrower is diligently
contesting any such event by proper proceedings and has made appropriate
reserves therefor, or taken such other action, reasonably acceptable to
the Lender.
(g) This Agreement or any other Loan Document shall cease to be in
full force and effect or shall be declared null and void or the validity
or enforceability thereof shall be contested or challenged by the
Borrower, or the Borrower shall deny that it has any further liability or
obligation under any of the Loan Documents, or any lien or security
interest created by the Loan Documents shall for any reason cease to be a
valid, first priority perfected security interest in and lien upon any of
the Collateral purported to be covered thereby.
(h) Either Guarantor shall cease to be active in the management of
Borrower and Spinnaker Industries, Inc.
(i) The common capital stock or Class A common stock of Spinnaker
Industries, Inc. shall cease to be traded on NASDAQ or a national
securities exchange.
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Section 9.2 REMEDIES UPON DEFAULT. If any Event of Default shall
occur and be continuing, the Lender may without notice terminate the
Commitment and declare the Obligations or any part thereof to be immediately
due and payable, and the same shall thereupon become immediately due and
payable, without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that upon the occurrence of an
Event of Default under Section 9.1(d) or Section 9.1(e), the Commitment shall
automatically terminate, and the Obligations shall become immediately due and
payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by the Borrower. If any Event of Default shall occur and be
continuing, the Lender may exercise all rights and remedies available to it
in law or in equity, under the Loan Documents, or otherwise.
Section 9.3 PERFORMANCE BY THE LENDER. If the Borrower shall fail to
perform any covenant or agreement contained in any of the Loan Documents, the
Lender may perform or attempt to perform such covenant or agreement on behalf
of the Borrower. In such event, the Borrower shall, at the request of the
Lender, promptly pay any amount reasonably expended by the Lender in
connection with such performance or attempted performance to the Lender,
together with interest thereon at the Default Rate from and including the
date of such expenditure to but excluding the date such expenditure is paid
in full. Notwithstanding the foregoing, it is expressly agreed that the
Lender shall not have any liability or responsibility for the performance of
any obligation of the Borrower under this Agreement or any other Loan
Document.
ARTICLE X
MISCELLANEOUS
Section 10.1 EXPENSES. The Borrower hereby agrees to pay on demand:
(a) all costs and expenses of the Lender in connection with the preparation,
negotiation, execution, and delivery of this Agreement and the other Loan
Documents and any and all amendments, modifications, renewals, extensions,
and supplements thereof and thereto, including, without limitation, the
reasonable fees and expenses of legal counsel for the Lender, (b) all costs
and expenses of the Lender in connection with any Default and the enforcement
of this Agreement or any other Loan Document, including, without limitation,
the reasonable fees and expenses of legal counsel for the Lender, (c) all
transfer, stamp, documentary, or other similar taxes, assessments, or charges
levied by any Governmental Authority in respect of this Agreement or any of
the other Loan Documents, (d) all costs, expenses, assessments, and other
charges incurred in connection with any filing, registration, recording, or
perfection of any security interest or Lien contemplated by this Agreement or
any other Loan Document, and (e) all other costs and expenses incurred by the
Lender in connection with this Agreement or any other Loan Document,
including, without
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limitation, all costs, expenses, and other charges incurred in connection
with obtaining any audit or appraisal in respect of the Collateral.
Section 10.2 INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE LENDER
AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS
AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) TO
WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM
OR RELATE TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE,
ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY THE
BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED
RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER,
OR (E) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
RELATING TO ANY OF THE FOREGOING; BUT EXCLUDING ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING AS A RESULT OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LENDER. Without limiting any
provision of this Agreement or of any other Loan Document, it is the express
intention of the parties hereto that each Person to be indemnified under this
Section shall be indemnified from and held harmless against any and all
losses, liabilities, claims, damages, penalties, judgments, disbursements,
costs, and expenses (including attorneys' fees) arising out of or resulting
from the sole or contributory negligence of such Person.
Section 10.3 LIMITATION OF LIABILITY. Neither the Lender nor any
Affiliate, officer, director, employee, attorney, or agent of the Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, or consequential damages suffered or incurred by the
Borrower in connection with, arising out of, or in any way related to, this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. The
Borrower hereby waives, releases, and agrees not to sue the Lender or any of
the Lender's Affiliates, officers, directors, employees, attorneys, or agents
for punitive damages in respect of any claim in connection with, arising out
of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any
of the other Loan Documents. Nothing in this Section shall impair or
restrict the
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Xxxxxxxx's right to sue the Lender for actual damages arising as a result of
the gross negligence or willful misconduct of the Lender.
Section 10.4 NO DUTY. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by the Lender shall have
the right to act exclusively in the interest of the Lender and shall have no
duty of disclosure, duty of loyalty, duty of care, or other duty or
obligation of any type or nature whatsoever to the Borrower or any of the
Borrower's shareholders or any other Person.
Section 10.5 LENDER NOT FIDUCIARY. The relationship between the
Borrower and the Lender is solely that of debtor and creditor, and the Lender
has no fiduciary or other special relationship with the Borrower, and no term
or condition of any of the Loan Documents shall be construed so as to deem
the relationship between the Borrower and the Lender to be other than that of
debtor and creditor.
Section 10.6 EQUITABLE RELIEF. The Borrower recognizes that in the
event the Borrower fails to pay, perform, observe, or discharge any or all of
the Obligations, any remedy at law may prove to be inadequate relief to the
Lender. The Borrower therefore agrees that the Lender, if the Lender so
requests, shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
Section 10.7 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
the Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege.
The rights and remedies provided for in this Agreement and the other Loan
Documents are cumulative and not exclusive of any rights and remedies
provided by law.
Section 10.8 SUCCESSORS AND ASSIGNS. This Agreement is binding upon
and shall inure to the benefit of the Lender and the Borrower and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Lender.
Section 10.9 SURVIVAL. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by the Lender or any closing shall affect the representations
and warranties or the right of the Lender to rely upon them. Without
prejudice to the survival of any other obligation of the Borrower hereunder,
the obligations of the Borrower under Sections 10.1 and 10.2 shall survive
repayment of the Note and termination of the Commitment.
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Section 10.10 ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT, THE NOTE,
AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN
OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO. The provisions of this Agreement and the other Loan
Documents to which the Borrower is a party may be amended or waived only by
an instrument in writing signed by the parties hereto.
Section 10.11 MAXIMUM INTEREST RATE. No provision of this Agreement or
any other Loan Document shall require the payment or the collection of
interest in excess of the maximum amount permitted by applicable law. If any
excess of interest in such respect is hereby provided for, or shall be
adjudicated to be so provided, in any Loan Document or otherwise in
connection with this loan transaction, the provisions of this Section shall
govern and prevail and neither the Borrower nor the sureties, guarantors,
successors, or assigns of the Borrower shall be obligated to pay the excess
amount of such interest or any other excess sum paid for the use,
forbearance, or detention of sums loaned pursuant hereto. In the event the
Lender ever receives, collects, or applies as interest any such sum, such
amount which would be in excess of the maximum amount permitted by applicable
law shall be applied as a payment and reduction of the principal of the
indebtedness evidenced by the Note; and, if the principal of the Note has
been paid in full, any remaining excess shall forthwith be paid to the
Borrower. In determining whether or not the interest paid or payable exceeds
the Maximum Rate, the Borrower and the Lender shall, to the extent permitted
by applicable law, (a) characterize any non-principal payment as an expense,
fee, or premium rather than as interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the entire
contemplated term of the indebtedness evidenced by the Note so that interest
for the entire term does not exceed the Maximum Rate.
Section 10.12 NOTICES. All notices and other communications provided
for in this Agreement and the other Loan Documents to which the Borrower is a
party shall be given or made by telex, telegraph, telecopy, cable, or in
writing and telexed, telecopied, telegraphed, cabled, mailed by certified
mail return receipt requested, or delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages hereof;
or, as to any party at such other address as shall be designated by such
party in a notice to the other party given in accordance with this Section.
Except as otherwise provided in this Agreement, all such communications shall
be deemed to have been duly given when transmitted by telex or telecopy,
subject to telephone confirmation of receipt, or delivered to the telegraph
or cable office, subject to telephone confirmation of receipt, or when
personally delivered or, in the case of a mailed
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notice, three (3) days after being duly deposited in the mails, in each case
given or addressed as aforesaid; PROVIDED, however, notices to the Lender
pursuant to Article II shall not be effective until received by the Lender.
Section 10.13 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas and the
applicable laws of the United States of America. This Agreement has been
entered into in Dallas County, Texas, and it shall be performable for all
purposes in Dallas County, Texas.
Section 10.14 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Telecopies of
signatures shall be binding and effective as originals.
Section 10.15 SEVERABILITY. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Agreement and the effect thereof
shall be confined to the provision held to be invalid or illegal.
Section 10.16 HEADINGS. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 10.17 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The
provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil
Statutes, Article 5069-15) are specifically declared by the parties hereto
not to be applicable to this Agreement or any of the other Loan Documents or
to the transactions contemplated hereby.
Section 10.18 PARTICIPATIONS. The Lender shall have the right at any
time and from time to time to grant participations in the Note and any other
Loan Documents. Each actual or proposed participant shall be entitled to
receive all information received by the Lender regarding the Borrower and its
Subsidiaries, including, without limitation, information required to be
disclosed to a participant pursuant to Banking Circular 181 (Rev., August 2,
1984), issued by the Comptroller of the Currency (whether the actual or
proposed participant is subject to the circular or not).
Section 10.19 CONSTRUCTION. The Borrower and the Lender acknowledge
that each of them has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by the Borrower and the
Lender.
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Section 10.20 INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken
or such condition exists.
Section 10.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF
LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
XXXXX, XXXXXXX & CO., INC.
By: /s/ Xxx X. Xxxxxxx XXX
------------------------------
Title:
Address for Notices:
000 X. XXXXX XXXXXX, XXXXX 0000
XXXXXX, XX 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
LENDER:
COMERICA BANK-TEXAS
By: /s/ Xxx X. Xxxxxxxx
-----------------------------------
Xxx X. Xxxxxxxx
Senior Vice President
Address for Notices:
Mail Code 6594
P.O. Box 650282
Dallas, TX 75265-0282
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxx X. Xxxxxxxx
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EXHIBIT "A"
TO
LOAN AGREEMENT
Advance Request Form
--------------------
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TO: Comerica Bank-Texas
0000 XxxxxXxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx X. Xxxxxxxx
Ladies and Gentlemen:
The undersigned (the "Borrower") make and deliver this certificate pursuant
to that certain Loan Agreement dated as of June 24, 1997, between the Borrower
and Comerica Bank-Texas (the "Lender") (as the same has been amended,
supplemented or modified from to time, the "Loan Agreement"). Capitalized terms
used and not otherwise defined herein shall have the same meanings as set forth
in the Loan Agreement. In accordance with the Loan Agreement, the Borrowers
hereby request that the Lender make an Advance in the amount set forth in item
(d) below.
In connection with the foregoing and pursuant to the terms and provisions
of the Loan Agreement, the undersigned hereby certify to Lender that the
following statements are true and correct:
(i) The representations and warranties contained in Article VI of the
Loan Agreement and in each of the other Loan Documents are true and
correct on and as of the date hereof with the same force and effect as
if made on and as of such date.
(ii) No default has occurred and is continuing nor would any Default
result from the Advance requested hereunder.
(iii) The amount of the Advance requested hereunder, when added to
all outstanding Advances, will not exceed the Commitment.
(iv) All information supplied below is true, correct, and complete as
of the date hereof.
(v) The proceeds of the Advance shall be used for the following
purpose:
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LOAN REQUEST INFORMATION
------------------------
(a) Total Commitment ........................................ $4,000,000
(b) Outstanding principal amount of Advances ................ $_________
(c) Net Availability [line (a) minus line (b)] .............. $_________
(d) Amount of Requested Advance (minimum $10,000) ........... $_________
(e) Date of Requested Advance (must be a Business Day)....... _________, 19__
(f) Market Value of Collateral .............................. $_________
(g) Ratio of Collateral Value to Obligations (at least 2:1).. $_________
BORROWER:
XXXXX, XXXXXXX & CO., INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated as of: _______________________
[insert date of requested
Advance]
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FIRST AMENDMENT TO LOAN AGREEMENT AND GUARANTIES
THIS FIRST AMENDMENT TO LOAN AGREEMENT AND GUARANTIES (the "Amendment"),
dated as of August 29, 1997, is among XXXXX, XXXXXXX & CO., INC., a Texas
corporation ("Borrower"), COMERICA BANK-TEXAS ("Lender"), XXXXXXX X. XXXXX
and XXX X. XXXXXXX, III.
RECITALS:
X. Xxxxxxxx and Xxxxxx have entered into that certain Loan Agreement (the
"Agreement") dated as of June 24, 1997.
X. Xxxxxxxx to the Agreement, each of Xxxxxxx X. Xxxxx and Xxx X.
Xxxxxxx, III executed those certain Guaranty Agreements dated as of
June 24, 1997 which guaranteed to Lender the payment and performance
of the Obligations (as defined in the Agreement).
X. Xxxxxxxx and Xxxxxx now desire to increase the principal amount of the
loans which may be made from time to time to $8,000,000 and amend the
Agreement as herein set forth, and Guarantors and Lender now desire to
amend the Guaranties (as defined in the Agreement) as set forth
herein.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
1.1 DEFINITIONS. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE II
Amendments
2.1 AMENDMENT TO CERTAIN DEFINITIONS. Effective as of the date hereof,
the definitions of Commitment, Note and Termination Date set forth in Section
1.1 of the Agreement are hereby amended in their entirety to read as follows:
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"Commitment" means the obligation of the Lender to make Advances
hereunder in an aggregate principal amount at any one time outstanding
up to but not exceeding $8,000,000, as such obligation may be
terminated pursuant to Section 9.2.
"Note" means the Promissory Note dated as of August 29, 1997, of
the Borrower payable to the order of the Lender in the original
principal amount of $8,000,000, and all extensions, renewals, and
modifications thereof.
"Termination Date" means 11:00 a.m. Dallas, Texas time on
February 26, 1999, or such earlier date and time on which the
Commitment terminates as provided in this Agreement.
2.2 AMENDMENT TO MAINTENANCE OF COLLATERAL VALUE. Effective as of the
date hereof, Section 8.2 of the Agreement is hereby amended in its entirety
to read as follows:
Section 8.2 MAINTENANCE OF COLLATERAL VALUE. Borrower shall
cause to be subject to a first priority perfected security interest in
favor of Lender pursuant to the terms of a Pledge Agreement, shares of
the Class A common and common capital stock of Spinnaker Industries,
Inc., which at all times have an aggregate fair market value
(determined on the basis of the closing bid and/or last closing (as
applicable) price thereof as of the date of computation) of not less
than the percent set forth on Schedule 1 hereto during the applicable
periods based on the outstanding principal amount of the Obligations
as set forth on Schedule 1 hereto; provided that at such time as
Spinnaker Industries, Inc. shall have received net cash proceeds in an
amount not less than $25,000,000 from a firmly underwritten registered
public offering of its common stock, a material portion of which
proceeds are received from sales of such common stock in broad
distribution to noninstitutional investors, then such percent shall at
all times thereafter be equal to two hundred percent (200%).
2.3 AMENDMENT TO LIMITATION ON DEBT. Effective as of the date hereof,
Section 8.8 of the Agreement is hereby amended in its entirety to read as
follows:
Section 8.8 LIMITATION ON DEBT. The Borrower will not incur,
create, assume, or permit to exist any Debt except (a) Debt to Lender,
(b) other Debt in the aggregate not to exceed $2,500,000 at any time
outstanding and incurred when no Default exists or will result
therefrom, and (c) existing Debt.
2.4 AMENDMENT TO ARTICLE VIII. Effective as of the date hereof, Article
VIII is hereby amended to add thereto the following Section 8.21:
Section 8.21 MINIMUM TANGIBLE NET WORTH. The Borrower will at
all times maintain Tangible Net Worth in an amount not less than one
hundred twenty-five percent (125%) of the outstanding principal amount
of the Obligations. As used herein, "Tangible
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Net Worth" means, at any time, all amounts which, in conformity with
GAAP, would be included as stockholders' equity on a consolidated
balance sheet of the Borrower; provided, however, there shall be
excluded therefrom (a) any amount at which shares of capital stock of
the Borrower appear as an asset on the Borrower's balance sheet, (b)
goodwill, including any amounts, however designated, that represent the
excess of the purchase price paid for assets or stock over the value
assigned thereto, (c) patents, trademarks, trade names, and copyrights,
(d) deferred expenses, (e) loans and advances to any stockholder,
director, officer, or employee of the Borrower or any affiliate of the
Borrower, and (f) all other assets which are properly classified as
intangible assets.
2.5 AMENDMENT TO REPORTING REQUIREMENTS. Effective as of the date
hereof, Section 8.1 of the Agreement is hereby amended to add thereto the
following subsection (h):
(h) COMPLIANCE CERTIFICATE. In connection with the annual
financial statements and semiannual financial statements required to
be delivered by subsections (a) and (b) above, the certificate of the
Chief Financial Officer of the Borrower required to be delivered in
connection with all such financial statements shall include a
statement showing in reasonable detail the calculations demonstrating
compliance with Section 8.21 of this Agreement.
2.6 AMENDMENT TO GUARANTY OF XXXXXXX X. XXXXX. Effective as of the date
hereof, Section 7(f) of the Guaranty of Xxxxxxx X. Xxxxx is hereby amended in
its entirety to read as follows:
(f) Guarantor and Xxx X. Xxxxxxx, III will at all times maintain
on hand cash and cash equivalent investments, exclusive of investments
in Spinnaker Industries, Inc., in an aggregate amount not less than
the minimum liquidity amount required as set forth on Schedule 1 to
the Loan Agreement as determined in accordance with the outstanding
principal amount of the Obligations from time to time.
2.7 AMENDMENT TO GUARANTY OF XXX X. XXXXXXX, III. Effective as of the
date hereof, Section 7(f) of the Guaranty of Xxx X. Xxxxxxx, III is hereby
amended in its entirety to read as follows:
(f) Guarantor and Xxxxxxx X. Xxxxx will at all times maintain on
hand cash and cash equivalent investments, exclusive of investments in
Spinnaker Industries, Inc., in an aggregate amount not less than the
minimum liquidity amount required as set forth on Schedule 1 to the
Loan Agreement as determined in accordance with the outstanding
principal amount of the Obligations from time to time.
2.8 AMENDMENT TO GUARANTIES. Effective as of the date hereof, all
references in the Guaranties to the loan made by the Lender to the Borrower
in the aggregate principal amount of up to $4,000,000 are hereby amended to
mean references to the loan made by the Lender to the Borrower in the
aggregate principal amount of up to $8,000,000. The Guaranties are hereby
ratified and confirmed. Each Guarantor hereby consents and agrees to this
Amendment and agrees that his respective Guaranty shall remain in full
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force and effect and shall continue to be the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms. The Guaranteed Indebtedness under and as defined in each
Guaranty shall include, without limitation, the loan made by the Lender to
the Borrower pursuant to the Agreement, as amended hereby, and as increased
hereby to the aggregate principal amount of up to $8,000,000.
2.9 AMENDMENT TO AGREEMENT. Effective as of the date hereof, the
Agreement is hereby amended to add thereto a Schedule 1, which Schedule 1
shall read in the form of Schedule 1 attached hereto.
ARTICLE III
CONDITIONS PRECEDENT
3.1 CONDITIONS. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent:
(a) Lender shall have received all of the following, each dated
(unless otherwise indicated) the date of this Amendment, in form
and substance satisfactory to Lender:
(1) RESOLUTIONS. Resolutions of the Board of Directors of
Borrower certified by its Secretary or an Assistant
Secretary which authorize the execution, delivery, and
performance by Borrower of this Amendment and the other Loan
Documents to which Xxxxxxxx is or is to be a party
hereunder;
(2) INCUMBENCY CERTIFICATE. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of
Borrower certifying the names of the officers of Xxxxxxxx
authorized to sign this Amendment and each of the other Loan
Documents to which Xxxxxxxx is or is to be a party hereunder
(including the certificates contemplated herein) together
with specimen signatures of such officers;
(3) ARTICLES OF INCORPORATION. Any amendments to the articles
of incorporation of Borrower adopted between June 24, 1997,
and the date of this Amendment and certified by the
Secretary or an Assistant Secretary of Xxxxxxxx;
(4) BYLAWS. Any amendments to the bylaws of Borrower adopted
between June 24, 1997, and the date of this Amendment and
certified by the Secretary or an Assistant Secretary of
Xxxxxxxx; and
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(5) ADDITIONAL INFORMATION. Lender shall have received such
additional documents, instruments and information as Lender
or its legal counsel, Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., may
request.
(b) Borrower shall have executed and delivered to Lender the Note and
a Form U-1 duly completed.
(c) Borrower shall have paid to Lender the commitment fee and
facility fee due to Lender as a condition of Xxxxxx's obligations
hereunder.
(d) The representations and warranties contained herein and in all
other Loan Documents, as amended hereby, shall be true and
correct as of the date hereof as if made on the date hereof.
(e) No Event of Default shall have occurred and be continuing and no
event or condition shall have occurred that with the giving of
notice or lapse of time or both would be an Event of Default.
(f) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments, and other legal matters incident thereto shall be
satisfactory to Lender and its legal counsel, Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C.
ARTICLE IV
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
4.1 RATIFICATIONS. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Agreement and the Guaranties and except as expressly modified and
superseded by this Amendment, the terms and provisions of the Agreement and
the Guaranties are ratified and confirmed and shall continue in full force
and effect. Borrower and Lender agree that the Agreement as amended hereby
shall continue to be legal, valid, binding and enforceable in accordance with
its terms. Borrower hereby ratifies and confirms the Pledge Agreement and
acknowledges and agrees that the Collateral secures the Obligations as
increased and modified by this Amendment.
4.2 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender that (i) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the articles of incorporation or
bylaws of Borrower, (ii) the representations and warranties contained in the
Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the date
hereof, (iii) no Event of Default has occurred and is continuing and no event
or condition has occurred that with
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the giving of notice or lapse of time or both would be an Event of Default,
and (iv) Borrower and Guarantors are in full compliance with all covenants
and agreements contained in the Agreement and the Guaranties as amended
hereby.
ARTICLE V
MISCELLANEOUS
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Amendment or any other Loan Document including any
Loan Document furnished in connection with this Amendment shall survive the
execution and delivery of this Amendment and the other Loan Documents, and no
investigation by Lender or any closing shall affect the representations and
warranties or the right of Lender to rely upon them.
5.2 REFERENCE TO AGREEMENT. Each of the Loan Documents, including the
Agreement and any and all other agreements, documents, or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to
the terms of the Agreement as amended hereby, are hereby amended so that any
reference in such Loan Documents to the Agreement shall mean a reference to
the Agreement as amended hereby.
5.3 EXPENSES OF LENDER. As provided in the Agreement, Xxxxxxxx agrees
to pay on demand all costs and expenses incurred by Lender in connection with
the preparation, negotiation, and execution of this Amendment and the other
Loan Documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including without limitation the
costs and fees of Lender's legal counsel, and all costs and expenses incurred
by Lender in connection with the enforcement or preservation of any rights
under the Agreement, as amended hereby, or any other Loan Document, including
without limitation the costs and fees of Xxxxxx's legal counsel.
5.4 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
5.5 APPLICABLE LAW. This Amendment and all other Loan Documents
executed pursuant hereto shall be deemed to have been made and to be
performable in Dallas, Dallas County, Texas and shall be governed by and
construed in accordance with the laws of the State of Texas.
5.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Lender, Xxxxxxxx, and Guarantors and their respective
successors and assigns, except none of Borrower and Guarantors may assign or
transfer any of their respective rights or obligations hereunder without the
prior written consent of Xxxxxx.
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5.7 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the
same instrument. Telecopies of signatures shall be binding and effective as
originals.
5.8 EFFECT OF WAIVER. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant, condition or
duty by Borrower or either Guarantor shall be deemed a consent or waiver to
or of any other breach of the same or any other covenant, condition or duty.
5.9 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
5.10 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The provisions
of Chapter 15 of the Texas Credit Code (Xxxxxx's Annotated Texas Statutes,
Article 5069-15) are specifically declared by the parties not to be
applicable to this Amendment or any of the Loan Documents or the transactions
contemplated hereby.
5.11 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS,
DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY
NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE
NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Executed as of the date first written above.
BORROWER:
XXXXX, XXXXXXX & CO., INC.
By: /s/ Xxx X. Xxxxxxx XXX
------------------------------------
Name: Xxx X. Xxxxxxx, III
----------------------------------
Title: President
---------------------------------
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LENDER:
COMERICA BANK-TEXAS
By: /s/ Xxx X. Xxxxxxx
---------------------------------------
Xxx X. Xxxxxxxx, Senior Vice President
GUARANTORS:
/s/ Xxxxxxx X. Xxxxx
--------------------------------------------
XXXXXXX X. XXXXX
/s/ Xxx X. Xxxxxxx XXX
--------------------------------------------
XXX X. XXXXXXX, III
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SCHEDULE 1
OUTSTANDING PRINCIPAL SECTION 8.2 REQUIRED GUARANTY MINIMUM LIQUIDITY
AMOUNT OF OBLIGATIONS MINIMUM REQUIREMENT
PERCENTAGE
LESS THAN OR EQUAL TO $4,000,000 200% $2,000,000
GREATER THAN $4,000,000 but
LESS THAN OR EQUAL TO $4,100,000 203% $2,050,000
GREATER THAN $4,100,000 but
LESS THAN OR EQUAL TO $4,200,000 205% $2,100,000
GREATER THAN $4,200,000 but
LESS THAN OR EQUAL TO $4,300,000 208% $2,150,000
GREATER THAN $4,300,000 but
LESS THAN OR EQUAL TO $4,400,000 210% $2,200,000
GREATER THAN $4,400,000 but
LESS THAN OR EQUAL TO $4,500,000 213% $2,250,000
GREATER THAN $4,500,000 but
LESS THAN OR EQUAL TO $4,600,000 215% $2,300,000
GREATER THAN $4,600,000 but
LESS THAN OR EQUAL TO $4,700,000 218% $2,350,000
GREATER THAN $4,700,000 but
LESS THAN OR EQUAL TO $4,800,000 220% $2,400,000
GREATER THAN $4,800,000 but
LESS THAN OR EQUAL TO $4,900,000 223% $2,450,000
GREATER THAN $4,900,000 but
LESS THAN OR EQUAL TO $5,000,000 225% $2,500,000
GREATER THAN $5,000,000 but
LESS THAN OR EQUAL TO $5,100,000 228% $2,550,000
GREATER THAN $5,100,000 but
LESS THAN OR EQUAL TO $5,200,000 230% $2,600,000
GREATER THAN $5,200,000 but
LESS THAN OR EQUAL TO $5,300,000 233% $2,650,000
GREATER THAN $5,300,000 but
LESS THAN OR EQUAL TO $5,400,000 235% $2,700,000
GREATER THAN $5,400,000 but
LESS THAN OR EQUAL TO $5,500,000 238% $2,750,000
GREATER THAN $5,500,000 but
LESS THAN OR EQUAL TO $5,600,000 240% $2,800,000
GREATER THAN $5,600,000 but
LESS THAN OR EQUAL TO $5,700,000 243% $2,850,000
GREATER THAN $5,700,000 but
LESS THAN OR EQUAL TO $5,800,000 245% $2,900,000
GREATER THAN $5,800,000 but
LESS THAN OR EQUAL TO $5,900,000 248% $2,950,000
GREATER THAN $5,900,000 but
LESS THAN OR EQUAL TO $6,000,000 250% $3,000,000
GREATER THAN $6,000,000 but
LESS THAN OR EQUAL TO $6,100,000 253% $3,025,000
GREATER THAN $6,100,000 but
LESS THAN OR EQUAL TO $6,200,000 255% $3,050,000
CUSIP Nos.: 000000000 Page 53 of 86
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OUTSTANDING PRINCIPAL SECTION 8.2 REQUIRED GUARANTY MINIMUM LIQUIDITY
AMOUNT OF OBLIGATIONS MINIMUM REQUIREMENT
PERCENTAGE
GREATER THAN $6,200,000 but
LESS THAN OR EQUAL TO $6,300,000 258% $3,075,000
GREATER THAN $6,300,000 but
LESS THAN OR EQUAL TO $6,400,000 260% $3,100,000
GREATER THAN $6,400,000 but
LESS THAN OR EQUAL TO $6,500,000 263% $3,125,000
GREATER THAN $6,500,000 but
LESS THAN OR EQUAL TO $6,600,000 265% $3,150,000
GREATER THAN $6,600,000 but
LESS THAN OR EQUAL TO $6,700,000 268% $3,175,000
GREATER THAN $6,700,000 but
LESS THAN OR EQUAL TO $6,800,000 268% $3,175,000
GREATER THAN $6,800,000 but
LESS THAN OR EQUAL TO $6,900,000 273% $3,225,000
GREATER THAN $6,900,000 but
LESS THAN OR EQUAL TO $7,000,000 275% $3,250,000
GREATER THAN $7,000,000 but
LESS THAN OR EQUAL TO $7,100,000 278% $3,275,000
GREATER THAN $7,100,000 but
LESS THAN OR EQUAL TO $7,200,000 280% $3,300,000
GREATER THAN $7,200,000 but
LESS THAN OR EQUAL TO $7,300,000 283% $3,325,000
GREATER THAN $7,300,000 but
LESS THAN OR EQUAL TO $7,400,000 285% $3,350,000
GREATER THAN $7,400,000 but
LESS THAN OR EQUAL TO $7,500,000 288% $3,375,000
GREATER THAN $7,500,000 but
LESS THAN OR EQUAL TO $7,600,000 290% $3,400,000
GREATER THAN $7,600,000 but
LESS THAN OR EQUAL TO $7,700,000 293% $3,425,000
GREATER THAN $7,700,000 but
LESS THAN OR EQUAL TO $7,800,000 295% $3,450,000
GREATER THAN $7,800,000 but
LESS THAN OR EQUAL TO $7,900,000 298% $3,475,000
GREATER THAN $7,900,000 but
LESS THAN OR EQUAL TO $8,000,000 300% $3,500,000
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