Exhibit 10(viii)
Bank of America
LOAN AND NOTE MODIFICATION AGREEMENT No. 2
This Loan and Note Modification Agreement No. 2 ("Agreement"), effective as of
October 8, 2000, is made by and among Sunset Productions, Inc. (whether one or
many, 'Borrower"), Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx (whether one or many,
"Guarantor"), and Bank of America, N.A. ("Bank").
RECITALS
A. Borrower is indebted to Bank under a loan evidenced by the Loan Agreement and
Promissory Note more specifically identified in.Exhibit A attached hereto and
incorporated herein by this reference, as the same may have been previously
renewed, modified and/or extended (collectively, the "Loan").
B. As of October 8, 2000, Borrower was indebted to Bank pursuant to the Loan in
the total principal amount of Two Hundred Thirty Eight Hundred Sixty Seven
Dollars and 54/ 1 00 Dollars ($230,867.54) together with all accrued and unpaid
interest thereon.
C. The Loan is secured by a deed of trust, security agreement or other
instrument as may be specifically identified in Exhibit A attached hereto and
incorporated herein by this reference, as the same may have been previously
modified and/or extended (together with all other documents and instruments
evidencing, securing or guarantying the Loan, the "Loan Documents").
D. Guarantor has guaranteed Borrower's obligations to Bank in accordance With
one or more guaranty agreements (whether one or many, the "Guaranty"), More
specifically described in Exhibit A attached hereto and incorporated herein by
this reference. The Guaranty is included in the definition of "Loan Documents".
E. The Loan matured on October 8, 2000 (hereafter, the 'Identified Default").
F. Borrower and Guarantor have requested, and Bank, although under no obligation
to do so, is extend the Maturity Date of the Loan on the terms and conditions
set forth herein.
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AGREEMENT
For and in consideration of the mutual covenants herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, Guarantor and Bank agree as follows:
1. Reaffirmation. Borrower and Guarantor reaffirm all obligations under
the Loan and the Loan Documents (including without limitation that certain Loan
and Note Modification Agreement dated effective May 8, 2000). Except as
specifically hereby amended, the Loan Documents shall each remain in full force
and effect. Borrower's and Guarantor's payment and performance obligations
pursuant to the Loan Documents, including all extensions, amendments, renewals
or replacements thereof, shall continue to be secured by the security interests
and liens arising under the Loan Documents.
2. Modifications. The Loan Documents are hereby modified and amended as
described below. In the event of a conflict between terms of the Loan Documents
and the terms of this Agreement, this Agreement shall control.
2.1 Maturity Date. The maturity date of the Loan is hereby extended
to March 8, 2001 ('Maturity Date"). All sums owing under the Loan shall be due
and payable no later than this extended Maturity Date.
2.2 Interest Rate. The annual rate of interest to be applied to the
unpaid principal balance of the Note shall be a variable rate of interest
consisting of the Prime Rate in effect from time to time plus a percentage, as
follows: From and after October 8, 2000, the percentage above the Prime Rate
shall be three percent (3%). From and after December 8, 2000, the percentage
above the Prime rate shall be four percent (4%) (the "Interest Rate").
2.3 Payment. Beginning October 8, 2000, and continuing on the same
date each month thereafter until the Maturity Date, Borrower shall pay to Bank
all accrued interest on the then outstanding principal balance at the rate
described in the paragraph above as the "Interest Rate". On the Maturity Date
(as defined above in Paragraph 2. 1), Borrower shall pay to Bank the entire
outstanding principal balance plus any interest due thereon. Borrower may prepay
the Loan in full or in part at any time with penalty as set forth in the Loan
Documents.
2.4 Address of Bank. All addresses of Bank in the Loan Documents are
amended to read: Bank of America, 000 Xxxx Xxxxxxxxxx Xxxxxx, Mail Code
AZ1-200-19-1 1, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X.
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Strong. Any notices to the Bank under the Loan Documents shall be sent to this
address or any other address later specified by Bank via certified 'mail, return
receipt requested.
3. Conditions Precedent. Before this Agreement becomes effective and any
party becomes obligated under it, all of the following conditions shall have
been satisfied at Borrower's sole cost and expense in a manner acceptable to
Bank in the exercise of Bank's sole judgment and discretion:
3.1 Receipt of Documents. Bank shall have received fully executed,
and where appropriate, acknowledged originals of the following:
(a) this Agreement; and
(b) any other documents Bank may require or request in
accordance with this Agreement or the other Loan Documents.
3.2 Payment of Interest Current. Bank shall have received payment in
immediately available funds of all accrued and unpaid interest through and
including January 8, 2001 in the amount of $7,273.9 1.
3.2 Extension Fee. Bank shall have received a fully earned and
non-refundable extension fee in the amount of Two Thousand Dollars ($2,000.00),
payable in immediately available funds.
3.3 Reimbursement of Bank's Costs and Expenses. Bank shall have
received reimbursement, in immediately available funds, of all costs and
expenses incurred by Bank in connection with this Agreement, including charges
for recording, filing and legal fees, costs and expenses of Bank's counsel. Such
costs and expenses may include the allocated costs for services for Bank's
in-house legal staff as allowed by law.
4. Representations, Warranties and Acknowledgements. Borrower and
Guarantor jointly and severally represent, warrant and acknowledge to Bank as
follows:
4.1 Recitals. The recitals set forth above are true, complete,
accurate and correct, and such recitals are incorporated herein by this
reference.
4.2 Loan Documents. All representations and warranties made and
given by Borrower and Guarantor in the Loan Documents are true,
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complete, accurate and correct, as if given on the effective date of, this
Agreement.
4.3 Enforceable Loan Documents. There are no defaults other than the
Identified Default, and the Loan Documents, including this Agreement, to which
Borrower and Guarantor, respectively, are a party are legal, valid and binding
agreements of Borrower and Guarantor, respectively, enforceable in accordance
with their respective terms, and any instrument or agreement required hereunder
or thereunder, when executed and delivered, will be similarly legal, valid,
binding and enforceable.
4.4 Financial Information. All financial and other information that
has been or will be supplied to Bank is: (a) sufficiently complete to give Bank
accurate knowledge of Borrower's and Guarantor's financial condition; (b) in
form and content required by Bank; and (c) in compliance with all applicable
government regulations. No material adverse change has occurred in the business
assets, or financial condition of Borrower . or Guarantor since Borrower and
Guarantor last supplied financial statements or information to Bank.
4.5 No Claims or Defenses. But for the extension of the maturity
date granted herein, the Loan is presently due and payable to Bank, and Borrower
and Guarantor have no claims, offsets, counterclaims or defenses with respect
to: (a) the payment of the Loan; (b) the payment of any other sums due under the
Loan Documents; (c) the performance of Borrower's or Guarantor's obligations
under the Loan Documents; or (d) any liability under any of the Loan Documents.
4.6 No Breach by Bank. Bank (including all of its predecessors) has
not breached any duty to Borrower or Guarantor in connection with the Loan, and
Bank (including all of its predecessors) has fully performed all obligations it
may have had or now has to Borrower and Guarantor.
4.7 Interest and Other Charges. All interest or other fees or
charges which have been imposed, accrued or collected by Bank (including all of
its predecessors) under the Loan Documents or in connection with the Loan
through the date of this Agreement, and the method of computing the same, were
and are proper and agreed to by Borrower and Guarantor and were properly
computed and collected.
4.8 Claims, Disputes, Impairments. Except as has been disclosed to
Bank in writing prior to the date of execution hereof,
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Borrower and/or Guarantor, respectively do not have any pending litigation, tax
claims, proceedings or disputes that may adversely affect Borrower's or
Guarantor's financial condition or impair Borrower's or Guarantor's ability to
perform under the Loan Documents.
4.9 Authorized Entity. Borrower is a corporation which is duly
organized, validly existing and in good standing under the laws of --he State of
New Mexico. There have been no changes in the organization, composition,
ownership, structure or formation of documents of Borrower since the inception
of the Loan. In each state in which Borrower does business, it is properly
licensed and in good standing. This Agreement, and any instrument of agreement
required hereunder are within Borrower's powers, have been duly authorized, and
do not conflict with any of Borrower's organizational papers.
4.10 Property. Borrower lawfully possesses and holds a 100%
ownership interest in all of the property securing the Loan as shown on Exhibit
A, free and clear of any defects, reservations of title or conditional sales
contracts, and also free and clear of any security interest or liens other than
those in favor of Bank.
5. No Waiver. Except as specifically provided herein, by entering into
this Agreement, Bank does not waive any previous or existing default or any
default hereafter occurring, or become obligated to waive any condition or
obligation in any agreement between or among any of the parties hereto.
6. No Future Obligations. Bank has no obligation to make any additional
loan or extension of credit to or for the benefit of Borrower or Guarantor, and
Bank has no obligation to further extend the maturity date of any credit
extended to Borrower or Guarantor.
7. No Third Party Beneficiaries. This Agreement is not intended for, and
shall not be construed to be for, the benefit of any person not a signatory
thereto.
8. Release of Bank. In consideration of the agreements of Bank set forth
in this Agreement, Borrower and Guarantor, and all of their respective heirs,
personal representatives, predecessors, successors and assigns (individually and
collectively, the "Releasors"), hereby fully release, remise, and forever
discharge Bank, the parent of Bank and all other affiliates and predecessors of
Bank, and all past and present officers, directors, agents, employees, servants,
partners, shareholders, attorneys and managers of Bank, the parent of Bank, and
all other affiliates, and predecessors of Bank and all of their respective
heirs, personal representatives, predecessors, successors and
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assigns, for, from, and against any and all claims, liens, demands, causes of
action, controversies, offsets, obligations, losses, damages and liabilities of
every kind and character whatsoever, including, without limitation, any action,
omission, misrepresentation or other basis of liability founded either in tort
or contract and the duties arising thereunder, that the Releasors, or any one of
more of them, has had in the past, or now has, whether known or unknown, whether
asserted or unasserted, by reason of any matter, cause or thing set forth in,
relating to or arising out of, or in any way connected with or resulting from
the Loan or the Loan Documents.
9. Incorporation. This Agreement shall form a part of each of the Loan
Documents, and all references to one of the Loan Documents shall mean that
document as hereby modified. This Agreement shall not prejudice any rights or
remedies of Bank under the Loan Documents.
10. Purpose and Effect of Bank's Approval. Bank's approval of any matter
in connection with the Loan shall before the sole purpose of protecting Bank's
security and rights. No such approval shall result in a waiver of any default of
Borrower or Guarantor. In no event shall Bank's approval be a representation of
any kind with regard to the matter being approved.
11. Integration. The Loan Documents, including this Agreement, constitute
the entire agreement and final expression between the parties with respect to
the terms and conditions set forth in the Loan Documents, including this
Agreement. No supplement, modification or amendment of this Agreement or the
other Loan Documents shall be effective unless in writing and signed by Bank and
Borrower.
12. Counter-parts/Construction/Time of Essence. This Agreement may be
executed in any number of counterparts, each of which, when so executed, shall
be deemed and original, but all of which shall constitute one and the same
agreement. Section headings and paragraph titles used in this Agreement are for
reference only and shall not affect or limit the interpretation of meaning of
any provisions of this Agreement. As used in this Agreement, the work
"include(s)" means "include(s), without limitation", and the work "including"
means "including, but not limited to". Time is of the essence of this Agreement
and the other Loan Documents.
13. Governing Law/Invalidity. This Agreement shall be governed by and
construed according to the laws of the State of New Mexico. If any provision of
this Agreement or any provision in any of the other Loan Documents to be
invalid, illegal or unenforceable, that portion shall be deemed severed from the
rest, which shall remain in full force and effect.
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14. Attorneys' Fees. In any lawsuit or arbitration proceeding between Bank
and Borrower and/or Guarantor, which relates to, arises out of, or involves in
any way this Agreement or any of the other Loan Documents, if Bank prevails, in
whole or in part, in such action, Bank shall be entitled to recover all of its
attorneys' fees (including any allocated fees of in-house counsel as allowed by
law) and costs (including but not limited to "taxable costs" as defined by
statute) associated with such suit or arbitration.
15. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns; provided, however, Borrower and
Guarantor may not transfer their rights under the Loan Documents without the
prior written consent of Bank. Bank may transfer its rights under the Loan
Documents to any successor in interest.
16. No Waiver/Cumulative Remedies/Survival. No failure to exercise or no
delay in exercising any right, power or remedy hereunder or under any of the
Loan Documents shall impair any right, power or remedy that Bank may have, nor
shall such delay be construed to be a waiver of any of such rights, powers or
remedies. Bank shall not be deemed to have waived any right, power or remedy
except in writing signed by an authorized officer of Bank expressly stating that
it is a waiver of same right, power or remedy. The rights, powers and remedies
of Bank under the Loan Documents are cumulative and not exclusive of any rights,
powers or remedies that Bank would otherwise have, and may be pursued at any
time and from time to time and in such order as Bank shall determine in its sole
discretion. The representations, warranties, acknowledgments and agreements set
forth herein shall survive the date of this Agreement.
17. Mutual Agreement. The parties hereto agree that the terms and
provisions of this Agreement embody their mutual intent and that such terms and
provisions are not to be construed more liberally in favor, nor more strictly
against, any party. This Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if it had been prepared by all of
the parties.
18. Rights in the Event of Bankruptcy. If there shall be filed by or
against Borrower a petition (whether voluntary or involuntary) under any chapter
of the United States Bankruptcy Code (the "Code") on or after the date of this
Agreement, it is the intention of Borrower and Bank that the terms and
conditions of this Agreement with respect to Borrower shall be incorporated into
a plan of reorganization under Section 1129 of Code (a "Plan"). Borrower
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agrees that under any potential Plan which may be filed in the future (i),, this
Agreement shall represent a necessary element of such Plan, (ii) Borrower will
not seek to alter or amend any of terms and conditions of this Agreement, (iii)
such terms and conditions are necessary for Bank's adequate protection, and (iv)
such terms and conditions will remain binding upon Borrower in any such Plan. If
Borrower fails to obtain confirmation of a plan of reorganization incorporating
the terms of this Agreement within one hundred twenty (12) days after a petition
is filed, Bank is entitled to the automatic and absolute lifting of any
automatic stay as to the enforcement of any of the Loan Documents against the
collateral, including specifically, but not limited to, the stay imposed by
Section 362 of the Code. Borrower hereby consents to the immediate lifting of
any such automatic stay, and will not contest any motion by Bank to lift such
stay. Borrower acknowledges that Bank's interest in the collateral can be
adequately protected only if a plan of reorganization incorporating the terms of
this Agreement is confirmed within one hundred twenty (12) days after the
petition is filed. Bank reserves its right to seek all remedies available to
credits under the Code, including, but not limited to, the right to move for
relief from the automatic stay at any time.
19. Cross Default. Any default under this Agreement or an Event of Default
under any of the Loan Documents (as described therein) shall be an Event of
Default under each and every of the other Loan Documents.
20. Guarantor's Agreement. Guarantor has guaranteed the prompt and full
payment of the obligations of Borrower under the Loan pursuant to the Guaranty.
Guarantor believes it is in Guarantor's best interest for Borrower to enter into
this Agreement. Guarantor hereby reaffirms the Guaranty and agrees that the
Guaranty shall remain in full force' and effect. Guarantor acknowledges that its
obligations under the Guaranty are separate and distinct from those of Borrower
on the Loan. Guarantor agrees that the Guaranty shall also guarantee Borrower's
obligation under this Agreement. Guarantor represents, warrants and agrees that
this Agreement is of substantial economic benefit to Guarantor and that
Guarantor's reaffirmation and consent is an essential part of the consideration
to Bank to enter into this Agreement. Guarantor hereby consents to the terms,
conditions and provisions of the Loan Documents as modified hereby, and agrees
that the Guaranty continues to cover the Loan, and all amounts disbursed, paid
or incurred by Bank in connection with the Loan as such are modified hereunder,
including but not limited to any additional advances contemplated hereunder and
attorneys' fees (including allocated costs of in-house counsel as allowed by
law) and other costs of Bank. Any property or rights to or interest in property
granted as security for the Guaranty or any of the other Loan Documents shall
remain as security for the Guaranty and the obligations of Guarantor pursuant to
the
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Guaranty. Regardless of whether Guarantor may have made any payments to Bank,
Guarantor forever waives: (a) all rights of subrogation, all rights of
indemnity, and any other rights to collect reimbursement from Borrower for any
sums paid to Bank, whether contractual or arising by operation of law (including
the United States Bankruptcy Code or any successor or similar statute) or
otherwise; (b) all rights to enforce any remedy that Bank may have against
Borrower; and (c) all rights to participate in any security now or later to be
held by Bank for the Loan.
21. Hazardous Waste Indemnification. Borrower will indemnify, protect,
defend and hold harmless Bank for, from and against any loss or liability
directly or indirectly arising out of the use, generation, manufacture,
production, storage, release, threatened release, discharge, disposal or
presence of a hazardous substance. This indemnity will apply whether the
hazardous substance is on, under or about Borrower's property or operations or
property leased to Borrower. This indemnity includes, but is not limited to,
attorneys' fees (including the reasonable estimate of the allocated cost of
in-house counsel and staff. This indemnity extends to Bank, its parent,
subsidiaries and all of their directors, officers, employees, agents,
successors, attorneys and assigns. The term "hazardous substances" ("Hazardous
Substances") means any substance which is or becomes designated as "hazardous"
or "toxic" under any federal, state or local law, or any petroleum products,
including crude oil and any produce derived directly or indirectly form, or any
fractions or distillate of, crude oil. This indemnity will survive repayment of
the Borrower's obligations to Bank.
22. Hazardous Substance Inspection. Borrower shall allow Bank access to
the property securing the Loan at any reasonable time for the purposes of
performing an appraisal, inspecting the property, taking soil or groundwater
samples and conducting tests, among other things, to investigate for the
presence of Hazardous Substances. Borrower shall also allow Bank to examine,
copy and audit its books or records. Bank is under no duty to visit or observe
the property, or to examine any books or records. Any site visit, observation or
examination by Bank shall be solely for the purpose of protecting Bank's
security and preserving Bank's rights under the Loan Documents. Bank owes no
duty of care to protect Borrower or any other party against, or to inform
Borrower or any other party of, any adverse condition affecting the property,
including any defects in the design or construction of any improvements on the
property or the presence of any Hazardous Substances on the property.
23. Notice of final agreement This written agreement and the other Loan
Documents (as defined herein) represent the final agreement
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between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral, agreements of the parties. There are no
unwritten oral agreements between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the dates set forth below to be effective as of the day and year set forth
above.
BANK:
BANK OF AMERICA, N. A.
Executed:__________________,2001 By: ____________________________________
Xxxxx X. Xxxxxx
Vice President
BORROWER:
Sunset Productions, Inc.
Executed:__________________,2001 By: ____________________________________
Xxxxxx Xxxx Xxxxxxx
President
GUARANTOR:
Dated:_____________________,2001 ________________________________________
Xxxxxx X. Xxxxxx
Dated:_____________________,2001 ________________________________________
Xxxxxx X. Xxxxxxx
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