1
EXHIBIT 10.27
NOTE
$15,000,000 Fort Worth, Texas September 16, 1998
For value received, TANDY BRANDS ACCESSORIES, INC., a Delaware
Corporation (the "Borrower"), promises to pay to the order of NATIONSBANK, N.A.
(the "Bank") the unpaid principal amount of each advance made by the Bank to the
Borrower pursuant to the Letter Agreement referred to below ON DEMAND or, if not
theretofore demanded, on the maturity date therefor determined in accordance
with the Letter Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such advance ON DEMAND or, if not theretofore demanded,
on such maturity date and at the rate determined in accordance with the Letter
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of the Bank, 000 Xxxx Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000-0000.
All advances made by the Bank, the respective interest rates
applicable thereto and maturities thereof and all repayments of the principal
thereof shall be recorded by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made apart hereof, provided that
the inaccuracy of, or the failure of the Bank to make, any such recordation
shall not affect the obligations of the Borrower hereunder.
This note is the Note referred to in the Letter Agreement dated as
of September 16, 1998 between the Borrower and the Bank (as the same may be
amended from time to time, the "Letter Agreement"). Reference is made to the
Letter Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
TANDY BRANDS ACCESSORIES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Title: CFO
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[NATIONSBANK LETTERHEAD]
September 16, 1998
Tandy Brands Accessories, Inc.
Arlington, Texas
Re: Uncommitted Line of Credit
Gentlemen:
NationsBank, N.A. ("NationsBank") is pleased to provide an uncommitted
$15,000,000 Money Market Line to Tandy Brands Accessories, Inc. ("TBA") upon the
following terms and conditions:
Money Market Line: An uncommitted $15,000,000 Money Market
Line (the "Line") which shall be on an "as
available" basis. NationsBank shall have no
obligation to make any advance under the
Line. TBA may also request under the Line
that NationsBank (a) issue standby letters of
credit and documentary letters of credit
("Letters of Credit") and (b) create banker's
acceptances ("Acceptances"). The aggregate
amount of (y) all undrawn amounts, and all
amounts drawn and not reimbursed under
any Letters of Credit, and (z) all outstanding
Acceptances, shall be reserved under the Line
and shall not be available for advances
thereunder.
Minimum Advance: $100,000, or any integral multiple of $25,000
in excess of such amount.
Terms of Advances: TBA may request an advance under the Line
not later than 11:30 a.m. (i) on the business
day such advance is requested to be made if
the maturity date of such advance is for no
more than 29 days, or (ii) at least 2 business
days prior to the business day such advance is
requested to be made if the maturity date of
such advance is for more than 29 days. The
amount, interest rate (which shall be
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Tandy Brands Accessories, Inc.
September 16, 1998
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computed on the basis of actual days elapsed
over a 360 day year) and maturity date of each
advance (which may not be more than 90 days
after the date of such advance) will be agreed
upon by NationsBank and TBA on or before such
advance is made (failing which such advance
will not be made) and such agreement shall be
promptly confirmed in writing from NationsBank
to TBA, which confirmation shall be conclusive
in the absence of manifest error.
Availability Period: Advances may be requested from the date of
acceptance of this letter by TBA to the date
either NationsBank or TBA, in its sole
discretion, terminates the Line in writing. In
the event NationsBank elects to terminate the
Line, NationsBank may, in its sole discretion,
demand that any outstanding advances be
repaid, with accrued interest, on the effective
date of termination.
Promissory Note: Advances will be evidenced by a master
revolving promissory note (the "Note") in the
form of Exhibit A attached hereto. The terms
of each advance will be recorded by
NationsBank on the grid attached to the Note,
but the inaccuracy, or the failure of
NationsBank to make any such recordation
shall not affect the obligations of TBA under
the Note.
Payments Prior to Maturity: If TBA elects or is required (other than upon
demand by NationsBank made at a time that
no default otherwise exists) to repay all or
any part of any advance prior to its agreed
upon maturity, TBA shall, at the request of
NationsBank, pay to NationsBank such
amount as NationsBank determines is
necessary to compensate NationsBank for any
breakage costs.
Default: Advances under the Line are payable on
demand, but if no demand is made, on the
maturity date of the particular advance. A
default shall be deemed to exist under the
Note and NationsBank shall be entitled to
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Tandy Brands Accessories, Inc.
September 16, 1998
Page 3
accelerate the indebtedness evidenced by the
Note and exercise its other available remedies
in the event TBA fails to repay any advance, or
accrued interest thereon, on demand or when due
or upon the occurrence of a default or event
of default, at maturity or permitting
acceleration, under any agreement for money
borrowed or for the deferred purchase price of
property under which TBA is liable in an amount
of $1,000,000 or more. In addition, the Line
will be automatically terminated and the
indebtedness evidenced by the Note will be
automatically accelerated upon the insolvency
of TBA or the commencement by or against (if
not dismissed within 60 days) TBA of any
bankruptcy, insolvency, moratorium or other
debtor relief proceeding.
Additional Requirements: TBA shall provide NationsBank the following
information.
1. Copy of the audited consolidated FYE
financial statement of Borrower as soon as
available or within one hundred twenty (120)
days after the close of each fiscal year.
2. Copy of the consolidated quarterly
financial statements of Borrower as soon as
available or within forty-five (45) days after
the close of each fiscal quarter.
3. With each financial statement, a copy
of TBA's compliance certificate required
under its financial agreements with
Texas Commerce Bank (Chase) and
NationsBank.
Notification: TBA shall notify NationsBank in writing
within five (5) business days regarding any
modifications, amendments, waivers, etc. to
its existing credit agreement with Texas
Commerce Bank (Chase).
Governing Law: Texas
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Tandy Brands Accessories, Inc.
September 16, 1998
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THIS WRITTEN AGREEMENT, TOGETHER WITH THE NOTE, REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL
AGREEMENTS BETWEEN THE PARTIES.
Very truly yours,
NATIONSBANK, N.A.
By: Xxxxx Xxxxxxx
Title: Senior Vice President
Accepted and Agreed To:
By: /s/ XXXXXXX X. XXXXXXXX
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Title: CFO
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Exhibit "A"
NOTE
$15,000,000 Fort Worth, Texas September 16, 1998
For value received, TANDY BRANDS ACCESSORIES, INC., a Delaware
Corporation (the "Borrower"), promises to pay to the order of NATIONSBANK, N.A.
(the "Bank") the unpaid principal amount of each advance made by the Bank to the
Borrower pursuant to the Letter Agreement referred to below ON DEMAND or, if not
theretofore demanded, on the maturity date therefor determined in accordance
with the Letter Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such advance ON DEMAND or, if not theretofore demanded,
on such maturity date and at the rate determined in accordance with the Letter
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of the Bank, 000 Xxxx Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000-0000.
All advances made by the Bank, the respective interest rates
applicable thereto and maturities thereof and all repayments of the principal
thereof shall be recorded by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made apart hereof, provided that
the inaccuracy of, or the failure of the Bank to make, any such recordation
shall not affect the obligations of the Borrower hereunder.
This note is the Note referred to in the Letter Agreement dated as
of September 16, 1998 between the Borrower and the Bank (as the same may be
amended from time to time, the "Letter Agreement"). Reference is made to the
Letter Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
TANDY BRANDS ACCESSORIES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
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Title: CFO
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