FIFTH AMENDMENT
TO
DEBT ASSUMPTION, LOAN AND STOCK PLEDGE AGREEMENT
(FREEDOM HOLDING, INC.)
This is a Fifth Amendment to Debt Assumption, Loan and Stock
Pledge Agreement (this "Fifth Amendment") dated as of June 30,
1997, among FREEDOM HOLDING, INC. ("Holding"), X. XXXXXXX XXXXXXX
and XXXXX X. XXXXXXX (collectively, the "Colletts"), and PNC
BANK, KENTUCKY, INC. f/k/a Citizens Fidelity Bank and Trust
Company (the "Lender").
Recitals
A. Holding, the Colletts and Lender are parties to a Debt
Assumption, Loan and Stock Pledge Agreement (the "Debt Assumption
Agreement") dated as of January 1, 1993, and certain other
documents referred to therein, whereby the Lender agreed to
permit the Colletts to transfer the Freedom Shares to Holding and
Holding to assume the Term Loan, and the Colletts agreed to (i)
cause Holding to assume the Term Loan and pledge the Freedom
Shares to the Lender to secure repayment of the Assumed Term
Loan, and (ii) jointly and severally personally guarantee
Holding's repayment of the Assumed Term Loan (as those terms are
defined in the Debt Assumption Agreement).
B. On June 30, 1993, the maturity date of the Assumed Term
Loan, with the understanding that the parties would later agree
to a formal modification and extension of the Debt Assumption
Agreement and the Assumed Term Loan, Holding executed and
delivered to Lender a promissory note (the "Interim Note") in the
original principal amount of $1,700,000.00 replacing in all
respects the Term Note (as defined in the Debt Assumption
Agreement), and the Colletts executed and delivered to the Lender
Continuing Guaranty Agreements dated June 30, 1993, personally
guaranteeing the payment in full of the Interim Note and any
other indebtedness of Holding to the Lender.
C. On June 30, 1993, the parties executed a First
Amendment to Debt Assumption, Loan and Stock Pledge Agreement
(the "First Amendment"), which, among other things, provided for
the extension of the Assumed Term Loan through June 30, 1994 and
the addition of an additional financial covenant, and replaced
the Interim Note with a replacement note in the principal amount
of $1,700,000 (the "Renewal Note"), subject to the terms and
conditions of the First Amendment.
D. On June 30, 1994, the parties further amended the Debt
Assumption Agreement, which among other things, provided for the
extension of the Assumed Term Loan through June 30, 1995 and the
amendment of several terms, and replaced the Renewal Note with a
First Amended and Restated Secured Promissory Note in the
principal amount of $1,500,000 (the "Amended and Restated Note"),
subject to the terms and conditions of the Second Amendment.
E. On June 30, 1995, the parties executed an Extension
Agreement by which the Bank extended the maturity of the Term
Note to and including August 31, 1995.
F. On September 30, 1995, the parties executed a Third
Amendment to Debt Assumption, Loan and Stock Pledge Agreement
(the "Third Amendment"), which, among other things, provided for
the extension of the Assumed Term Loan through September 30, 1996
and the amendment of several terms, and replaced the First
Amended and Restated Secured Promissory Note with a Second
Amended and Restated Secured Promissory Note in the principal
amount of $1,250,000, subject to the terms and conditions of the
Third Amendment.
G. On September 30, 1996, the parties executed a Fourth
Amendment to Debt Assumption, Loan and Stock Pledge Agreement
(the "Fourth Amendment"), which , among other things, provided
for the extension of the Assumed Term Loan through September 30,
1996 and the amendment of several terms, and replaced the Second
Amended and Restated Secured Promissory Note with a Third Amended
and Restated Secured Promissory Note in the principal amount of
$1,050,000, subject to the terms and conditions of the Fourth
Amendment.
H. The parties now desire to further amend the Debt
Assumption Agreement to, among other things, provide for the
extension of the Assumed Term Loan through June 30, 1998 and the
replacement of the Third Amended and Restated Secured Promissory
Note in the principal amount of $1,050,000.00 with the Fourth
Amended and Restated Secured Promissory Note in the form attached
hereto as Annex A (the "Fourth Amended and Restated Note"),
subject to the terms and conditions of this Fifth Amendment.
Terms and Conditions
1. Definitions. Unless otherwise defined herein, all
capitalized terms used in this Fifth Amendment shall have the
meanings given them in the Debt Assumption Agreement.
2. Amendments to Debt Assumption Agreement. The Debt
Assumption Agreement as amended by the First Amendment (the
"Amended Debt Assumption Agreement") is hereby further
modified and amended as follows:
a. The second sentence of Section 1(a) of the Debt
Assumption Agreement is hereby amended and restated so
that it shall read in its entirety as follows:
The unpaid principal balance of the Assumed Term
Loan shall bear interest at an annual rate equal to
the "Prime Rate" plus three-quarters of one percent
( %), as that Prime Rate may change from time to
time, from the date of the Fourth Amended and
Restated Secured Promissory Note dated June 30,
1997, by Holding in the face principal amount of
$900,000 delivered in extension and renewal of the
Amended and Restated Note (as defined below) and
substantially in the form attached hereto as Annex
A, and any note or other instrument delivered in
renewal, replacement, substitution, extension and/or
novation thereof (the "Term Note"), until the entire
principal balance of the Assumed Term Loan has been
repaid.
b. Section 1(c) of the Amended Debt Assumption
Agreement is hereby amended and restated so that it
shall read in its entirety as follows:
(c) Cancellation of the Renewal Note. Upon (i)
the delivery to Lender by Holding of the Term Note,
(ii) the delivery to Lender by the Colletts and the
Company of their personal guaranties of Holding's
Obligations under the Term Note and this Agreement,
and (iii) Holding's compliance with Section 3 of
this Agreement, the Lender will xxxx the promissory
note dated June 30, 1996, by Holding in the original
principal amount of $1,050,000 (the "Third "Amended
and Restated Note") "paid by renewal." The Third
Amended and Restated Note replaced in all respects
the promissory note dated June 30, 1995, by Holding
in the original principal amount of $1,250,000.(the
"Second Amended and Restated Note")
c. Section 2(a) of the Amended Debt Assumption
Agreement is hereby amended and restated so that it
shall read in its entirety as follows:
(a) Term Loan Principal and Interest Payments.
On September 30, 1997, December 31, 1997, March 31,
1998, Holding shall pay to the Lender a principal
payment in an amount equal to $50,000.00, plus all
accrued but unpaid interest on the outstanding
principal balance of the Assumed Term Loan. On June
30, 1998, Holding shall pay to the Lender the entire
outstanding principal balance of, and all accrued
but unpaid interest on, the Assumed Term Loan.
3. Execution of Amended and Restated Note and Guaranty
Agreement. Concurrently with the execution and delivery of
this Fifth Amendment, (a) Holding shall execute and deliver
to the Lender the Third Amended and Restated Note, (b) Xxxxx
X. Xxxxxxx and Lender shall enter into a new Continuing
Guaranty Agreement of even date herewith, substantially in
the form attached hereto as Annex B, to replace the
Continuing Guaranty Agreement dated June 30, 1995 between
Xxxxx X. Xxxxxxx and the Lender, (c) X. Xxxxxxx Xxxxxxx and
the Lender shall enter into a Continuing Guaranty Agreement
of even date herewith, substantially in the form attached
hereto as Annex C, to replace the Continuing Guaranty
Agreement dated September 30, 1996, between X. Xxxxxxx
Xxxxxxx and the Lender, and (d) the Company and the Lender
shall enter into a New Continuing Guaranty Agreement (the
"FFC Guaranty") of even date herewith, substantially in the
form attached hereto as Annex D, to replace the Continuing
Guaranty Agreement dated September 30, 1996, between the
Company and the Lender.
4. Conditions Precedent. The Lender's obligation to enter
into this Fifth Amendment shall be conditioned upon the
fulfillment of all the following conditions:
(a) Resolutions. Holding shall have furnished the
Lender with certified copies of the resolutions of (i) Holding's
Board of Directors (A) authorizing the execution and delivery of
this Fifth Amendment and the Third Amended and Restated Note, (B)
ratifying and reaffirming the Debt Assumption Agreement, as
modified by the First Amendment, the Second Amendment, the Third
Amendment, the Fourth Amendment, and this Fifth Amendment and (C)
authorizing consummation of the actions contemplated by this
Fifth Amendment; and (ii) the Company's Board of Directors
authorizing the execution and delivery of the FFC Guaranty.
(b) Representations and Warranties. Except as set
forth on Schedule 1 attached to and made a part of this Fifth
Amendment, each and every representation and warranty made by or
on behalf of Holding relating to the Debt Assumption Agreement
and the transactions contemplated thereby, as modified and
amended by the First Amendment, the Second Amendment, the Third
Amendment, the Fourth Amendment and this Fifth Amendment are
hereby restated and reaffirmed, and shall be true, complete and
correct on or as of the date of this Fifth Amendment.
5. Further Assurances. Holding and the Colletts shall
execute and deliver such other documents or other instruments
as the Lender may request from time to time more fully to
create, perfect, continue, maintain or terminate the rights
and security interests intended to be granted or created
pursuant to this Fifth Amendment and the Amended Debt
Assumption Agreement.
6. Benefit. This Fifth Amendment shall inure to the benefit
of the Lender, its successors and assigns, and all
obligations of Holding and/or the Colletts shall bind, as
appropriate, its or their successors, heirs, personal
representatives, administrators and, if and to the extent
assignment is otherwise permitted by the Amended Debt
Assumption Agreement, its or their assigns.
7. Entire Agreement. This Fifth Amendment and all schedules,
agreements and instruments referred to herein, constitute the
entire agreement among the parties with respect to the
subject matter hereof, supersede all prior understandings
with respect to the subject matter thereof and hereof, and no
other oral or written representations shall apply. No
additional change, modification, addition or termination of
the Amended Debt Assumption Agreement, the other documents
referred to therein or this Fifth Amendment shall be
enforceable unless in writing and signed by the party against
whom enforcement is sought.
8. Ratification/Conflict. Except as specifically amended by
this Fifth Amendment, all of the terms and conditions of the
Amended Debt Assumption Agreement shall remain in full force
and effect. If there is any term or provision of the Amended
Debt Assumption Agreement that conflicts with this Fifth
Amendment, the term or provision of this Fifth Amendment
shall govern and prevail.
9. Governing Law. This Fifth Amendment shall be governed and
construed in accordance with the laws (without reference to
the conflict of laws rules) of the Commonwealth of Kentucky.
10. Counterparts. This Fifth Amendment shall be executed
in any number of counterparts, each of which so executed
shall be deemed an original, and such counterparts
together shall constitute but one and the same contract,
which shall be sufficiently evidenced by any such original
counterpart.
IN WITNESS WHEREOF, the parties have signed this Fifth
Amendment as of the date set forth above, but actually on the
dates set forth below.
PNC BANK, KENTUCKY, INC.
By
Xxxxx X. Xxxxxxxx, Vice President
Date:
FREEDOM HOLDING, INC.
By
X. Xxxxxxx Xxxxxxx, President
Date:
X. Xxxxxxx Xxxxxxx
Date:
Xxxxx X. Xxxxxxx
Date:
STATE OF _______________ )
)
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me on
______________, 1997, by Xxxxx X. Xxxxxxx, on her own behalf.
___________________________________
Notary Public
Commission Expires:________________
STATE OF _______________ )
)
COUNTY OF ______________ )
The foregoing instrument was sworn to and acknowledged before
me on ________________, 1997, by X. Xxxxxxx Xxxxxxx, on his own
behalf and as President of Freedom Holding, Inc.
___________________________________
Notary Public
Commission Expires:________________
SCHEDULE 1
No changes.
ANNEX A
Amended and Restated Note
ANNEX B
Continuing Guaranty Agreement -- Xxxxx X. Xxxxxxx
ANNEX C
Continuing Guaranty Agreement--X. Xxxxxxx Xxxxxxx
ANNEX D
Continuing Guaranty Agreement--Freedom Financial Corporation
