Exhibit 4(a)
TERMINATION OF
1992 CREDIT FACILITY LOAN AGREEMENT
TERMINATION AGREEMENT made this 2 day of July, 1997 between Xxxxxx
Xxxxxx and Xxxxxxx X. Xxxxxxx, as Executors of the Estate of Xxxxxxx X.
Xxxxxxxx, c/o Rosen & Xxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Xxxxxxxx Estate"), on behalf of the Phoenix Chemical
Company/Fairmount Fund (the "Fairmount Fund"), and Fairmount Chemical
Co., Inc., with offices at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx
00000 ("Fairmount").
WITNESSETH:
WHEREAS, the Fairmount Fund entered into an agreement entitled
"1992 Credit Facility Loan Agreement" dated as of March 20, 1992 (the
"Credit Facility") with Fairmount and Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx")
pursuant to which the Fairmount Fund agreed to make available to
Fairmount, under certain terms and conditions, a credit facility in an
amount not to exceed $2,494,000;
WHEREAS, Xxxxxxxx contributed 60% of the Fairmount Fund and the
Estate of Xxxx X. Xxxxxxx (the "Xxxxxxx Estate"), pursuant to a commitment
incurred by Xxxx X. Xxxxxxx prior to her death on October 27, 1991,
contributed 40% of the Fairmount Fund;
WHEREAS, pursuant to an agreement dated March 20, 1992, between
Xxxxxxxx and the Xxxxxxx Estate (the "Side Agreement"), it was agreed
that Xxxxxxxx would have full authority to execute, deliver and perform
the Credit Facility, and to take other actions, without the consent of
the Xxxxxxx Estate, for and on behalf of the Fairmount Fund;
WHEREAS, the Side Agreement further provides that upon the
Fairmount Fund's receipt of any repayments of principal and/or interest
from Fairmount, Xxxxxxxx would cause the Fairmount Fund to pay 40% of
such proceeds to the Xxxxxxx Estate and 60% of such proceeds to
Xxxxxxxx;
WHEREAS, Xxxxxxxx died on September 19, 1993 and his estate (the
"Xxxxxxxx Estate") succeeded to his interest in 60% of the Fairmount
Fund;
WHEREAS, the Xxxxxxx Estate has been fully distributed and Xxxx xx
Xxxx, Xxxx xx Xxxx and the xx Xxxx Family Partnership (collectively, the
"Xxxxxxx Beneficiaries") have succeeded to the 40% interest of the
Xxxxxxx Estate in the Fairmount Fund;
WHEREAS, the principal amount presently outstanding under the
Credit Facility is $1,080,000 (the "Principal Amount");
WHEREAS, the Executors of the Xxxxxxxx Estate and Fairmount desire
to terminate the Credit Facility;
WHEREAS, the date on which the Principal Amount is due and payable
to the Fairmount Fund was extended until April 1, 1998;
WHEREAS, the parties hereto desire to further extend until January
1, 2005, the date on which the Principal Amount is due and payable by
Fairmount and, accordingly, to increase the rate of interest payable by
Fairmount with respect to the Principal Amount;
WHEREAS, Fairmount presently owes to the Xxxxxxxx Estate $491,600
(the "Xxxxxxxx Debt") which, pursuant to the terms of the Credit
Facility and the Side Agreement, is subordinate in right of payment to
the Principal Amount and the interest thereon;
WHEREAS, the date on which the Xxxxxxxx Debt is due and payable by
Fairmount to the Xxxxxxxx Estate was extended until April 1, 1998; and
WHEREAS, the Xxxxxxxx Estate and Fairmount desire to further extend
until January 1, 2005 the date on which the Xxxxxxxx Debt is due and
payable by Fairmount and, accordingly, to increase the rate of interest
payable with respect thereto.
NOW THEREFORE, the parties hereto agree as follows:
1. Termination of Credit Facility. The parties agree that the
Credit Facility is hereby terminated and, except as otherwise provided
herein, neither Fairmount nor the Fairmount Fund shall have any further
rights or obligations with respect to the other.
2. Extension of Due Date and Increased Rate of Interest. The
parties agree that the date on which the Principal Amount shall be due
and payable is January 1, 2005 and that interest on the unpaid Principal
Amount shall be payable monthly by Fairmount at the following rates:
(a) Effective January 1, 1997 through December 31, 1997 - 6% per
annum;
(b) From January 1, 1998 through December 31, 1998 - 7% per
annum; and
(c) For each calendar year commencing on or after January 1,
1999, at the corporate base rate posted by Citibank, N.A. (or
its successor) on the last banking day of the previous
calender year.
3. Promissory Notes. The Fairmount Fund is being terminated and
dissolved and its assets distributed, pro rata, to the Xxxxxxxx Estate
and the Xxxxxxx Beneficiaries. Accordingly, the Executors of the
Xxxxxxxx Estate hereby direct Fairmount to issue to the order of the
Executors of the Xxxxxxxx Estate a promissory note for $648,000,
representing 60% of the Principal Amount, and to the Xxxxxxx
Beneficiaries promissory notes for an aggregate of $432,000,
representing 40% of the Principal Amount, with such 40% to be in the
form of three separate promissory notes as follows:
(a) Payable to the order of Xxxx xx Xxxx $142,560
(b) Payable to the order of Xxxx xx Xxxx $64,800
(c) Payable to the order of the xx Xxxx Family
Partnership $224,640
The Executors of the Xxxxxxxx Estate hereby approve the
promissory notes in the form annexed hereto as Exhibits A, B, C and D,
and accept such notes as full consideration for any and all obligations
owed to the Fairmount Fund under the Credit Facility. Fairmount agrees
to exchange and reissue the notes payable to the order of the Xxxxxxx
Beneficiaries, in different proportions, if so directed by the Executors
of the Xxxxxxxx Estate. The Executors of the Xxxxxxxx Estate agree and
acknowledge that the promissory notes referred to above supersede any
and all previous notes and evidences of indebtedness with respect to the
Principal Amount.
4. Xxxxxxxx Debt. The Executors of the Xxxxxxxx Estate and
Fairmount agree that the date on which the Xxxxxxxx Debt shall be due
and payable is January 1, 2005, and that the Xxxxxxxx Debt shall bear
interest at the rates set forth in Paragraph 2 hereof. The Executors of
the Xxxxxxxx Estate hereby approve the promissory note in the form
annexed hereto as Exhibit E and accept such note in full consideration
of all obligations of Fairmount to Xxxxxxxx with respect to the Xxxxxxxx
Debt. The Executors of the Xxxxxxxx Estate agree and acknowledge that
the promissory note referred to in this Paragraph 4 supersedes any and
all previous notes and evidences of indebtness with respect to the
Xxxxxxxx Debt.
5. Entire Agreement: Amendments. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof and supersedes any and all prior agreements and
understandings, whether oral or written, with respect thereto. No
amendment or modification of this Agreement, including, without
limitation, any relating to this Paragraph 5, shall be effective unless
in writing signed by all of the parties hereto.
6. Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon all the parties hereto and their respective
administrators, executors, heirs, personal representatives, successors
and assigns.
7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement
as of the date first above written.
FAIRMOUNT FUND
By: ESTATE OF XXXXXXX X. XXXXXXXX
By: /S/XXXXXX XXXXXX
XXXXXX XXXXXX
AND: /S/XXXXXXX XXXXXXX
XXXXXXX XXXXXXX, EXECUTORS
FAIRMOUNT CHEMICAL CO., INC.
By: /S/ XXXX X. XXXXXX
XXXX X. XXXXXX
President
