EXHIBIT 10.9
------------
FIRST AMENDMENT OF SECURITY AGREEMENT
PARTIES:
XXXX MEDIA CORPORATION, an Oregon corporation (Grantor)
UNITED STATES NATIONAL BANK OF OREGON (Lender)
RECITAL:
On October 31, 1996, the parties entered into a certain Commercial Security
Agreement in which Grantor granted to Lender a security interest in
substantially all of the assets of Grantor, to secure all Indebtedness of
Grantor to Lender (the Security Agreement). Except as otherwise defined in this
amendment, all capitalized terms have the meanings assigned in the Security
Agreement.
AGREEMENTS:
1. REMOVAL OF COLLATERAL. The last sentence of Paragraph 4.e. of the
Security Agreement is modified to read as follows:
"To the extent that the Collateral consists of vehicles, or other
titled property, Grantor shall not take or permit any action which
would require application for certificates of title for the vehicles
outside the states of Oregon, Washington or California, without the
prior written consent of Lender."
2. HAZARDOUS SUBSTANCES. The first sentence of Paragraph 4.l. of the
Security Agreement is modified to read as follows:
"Grantor represents and warrants that, to the best of Grantor's
knowledge, the Collateral never has been, and never will be, so long as
this Agreement remains a lien on the Collateral, used for the
generation, manufacture, improper storage, transportation, treatment,
disposal, release or threatened release of any Hazardous Substance."
3. COUNTERPARTS; EXECUTION BY FACSIMILE. This amendment may be executed in
several counterparts, each of which will be deemed to be an original and all of
which together constitute one and the same instrument. Delivery of an executed
copy of this amendment by telecopy, telex or other means of electronic
communication producing a printed copy will be deemed to be an execution and
delivery of this amendment on the date of such communication by the parties so
delivering such a copy. The party so delivering such a
Page 1--FIRST AMENDMENT OF SECURITY AGREEMENT
copy via electronic communication shall deliver an executed original of this
amendment to the other party within one (1) week of the date of delivery of the
copy sent via electronic communication.
4. EFFECT. Except as specifically modified by this amendment, the Security
Agreement remains in full force and effect.
DATED as of the 31st day of December, 1996.
XXXX MEDIA CORPORATION UNITED STATES NATIONAL BANK
OF OREGON
By:/s/Xxxxx Xxxx By:/s/Xxxxxxx Xxxxxx
----------------------- --------------------------
Xxxxx Xxxx, President Xxxxxxx Xxxxxx, Assistant
Vice President
Page 2--FIRST AMENDMENT OF SECURITY AGREEMENT
FIRST AMENDMENT OF LOAN AGREEMENT
PARTIES:
XXXX MEDIA CORPORATION, an Oregon corporation formerly known as Xxxx
Outdoor Advertising Inc. (Borrower)
XXXX INDUSTRIES INCORPORATED, an Oregon corporation (Indus- tries)
XXXXX XXXX (Xxxxx)
UNITED STATES NATIONAL BANK OF OREGON (Bank)
RECITALS:
A. On October 31, 1996, the parties entered into a certain Loan Agreement
pursuant to which Bank made available to Borrower a Revolving Loan in the
maximum amount of One Million Five Hundred Thousand Dollars ($1,500,000), a
Bridge Loan in the amount of Twelve Million Dollars ($12,000,000), and a
Construction Loan in the maximum amount of Eight Hundred Thousand Dollars
($800,000) (the Loan Agreement). Except as specifically set forth in this
amendment, all capitalized terms have the meaning assigned in the Loan
Agreement.
B. The Reorganization and IPO have been completed. The net capital raised
by Borrower from the IPO exceeded Five Million Dollars ($5,000,000). Portions of
the proceeds from the IPO have been applied to reduce the Principal Balance of
the Bridge Loan to Seven Million Dollars ($7,000,000), and to pay the
Construction Loan in full.
C. Pursuant to Paragraph 2.e. of the Loan Agreement, the Principal Balance
of the Bridge Loan is currently due and payable. Certain of the conditions
precedent to Bank's obligations to make Term Loan A to Borrower have been
satisfied, but others have not. Because the net capital raised by Borrower from
the IPO exceeded Five Million Dollars ($5,000,000), the conditions precedent to
Bank's obligation to make Term Loan B cannot be satisfied.
D. Bank is prepared to extend the maturity of the Bridge Loan to February
3, 1997 to allow additional time for Borrower to satisfy all conditions
precedent to Bank's obligation to make Term Loan A. In addition, the parties
desire to make various additional changes to the Loan Agreement, as set forth in
this amendment.
Page 1--FIRST AMENDMENT OF LOAN AGREEMENT
AGREEMENTS:
1. DEFINITIONS. In Paragraph 1.n., the definition of Eligible Account,
subparagraph (xiv) is amended to read as follows:
"(xiv) payment is due from the United States government or any agency
thereof; or"
2. BRIDGE LOAN. The Principal Balance of the Bridge Loan is currently a
Prime Borrowing Rate Amount of Seven Million Dollars ($7,000,000). In
modification of Paragraph 2.e. of the Loan Agreement, promptly following
execution of this amendment:
a. Sixty Thousand Dollars ($60,000) of that Principal Balance shall be
continued as a Prime Borrowing Rate Amount, and shall be due and payable on
January 15, 1997.
b. Six Million Nine Hundred Forty Thousand Dollars ($6,940,000) of
that Principal Balance shall be converted to an IBOR Borrowing Rate Amount with
a one (1) month IBOR Interest Period expiring not later than February 3, 1997,
and shall be due and payable on February 3, 1997. If that IBOR Interest Period
expires prior to February 3, 1997, then upon expiration that portion of the
Principal Balance shall be converted to a Prime Borrowing Rate Amount.
3. CONSTRUCTION LOAN. The Construction Loan was paid in full with the
proceeds of the IPO, and no amounts are currently outstanding. The Construction
Loan is terminated, effective immediately.
4. TERM LOAN A.
a. MAXIMUM AMOUNT. Paragraph 6.a. of the Loan Agreement is amended to
read as follows:
"a. AMOUNT. If the conditions precedent to Bank's obligation to make
Term Loan A are satisfied or waived by Bank on or before February 3, 1997,
then subject to the terms and conditions of this Agreement, on February 3,
1997 Bank shall make Term Loan A to Borrower in a principal amount of Six
Million Nine Hundred Forty Thousand Dollars ($6,940,000)."
b. SPECIAL CONDITIONS. Bank's obligation to close Term Loan A remains
subject to the special conditions set forth in Paragraph 6.b. of the Loan
Agreement, except:
Page 2--FIRST AMENDMENT OF LOAN AGREEMENT
(1) Bank acknowledges that the condition set forth in Paragraph
6.b.(1) has been satisfied.
(2) The condition set forth in Paragraph 6.b.(2) is modified to
read as follows:
"(2) Term Loan A shall close on February 3, 1997."
(3) Paragraph 6.b.(8) is amended to read as follows:
"(8) Except for the effect of the Reorganization on Industries, no
material adverse change shall have occurred in the financial condition of
any Borrower or Guarantor since the date of this Agreement."
c. FIXED RATE - REPAYMENT OF PRINCIPAL AND INTEREST. Paragraph 6.e.(4)
of the Loan Agreement is amended to read as follows:
"(4) REPAYMENT OF PRINCIPAL AND INTEREST. Term Loan A shall be due and
payable in eighty-three monthly installments of principal and interest. The
first monthly installment shall be due and payable on February 15, 1997,
and an additional monthly installment shall be due and payable on the
fifteenth (15th) day of each calendar month thereafter, to and including
Decem- ber 15, 2003, when the unpaid balance of Term Loan A, principal and
interest, shall be paid in full. The first fifty-nine (59) monthly
installments shall be the amount necessary to amortize Six Million Nine
Hundred Forty Thousand Dollars ($6,940,000), together with interest at the
Initial Fixed Rate, over a term of eighty-three (83) months. The final
twenty-four (24) monthly installments shall be in the amount necessary to
amortize the greater of (i) the Principal Balance of Term Loan A
immediately following the fifty-ninth (59th) monthly installment or (ii)
the Principal Balance of Term Loan A that would exist immediately following
the fifty-ninth (59th) monthly installment if all the payments were made
precisely when due, together with interest at the Adjusted Fixed Rate, over
a term of twenty-four (24) months."
d. PRIME AND/OR IBOR BORROWING RATE - REPAYMENT OF PRINCIPAL.
Paragraph 6.f.(5) of the Loan Agreement is amended to read as follows:
Page 3--FIRST AMENDMENT OF LOAN AGREEMENT
"(5) REPAYMENT OF PRINCIPAL. The Principal Balance of Term Loan A
shall be paid in eighty-three (83) monthly installments. The first monthly
installment shall be due and payable on February 15, 1997, and an
additional monthly installment shall be due and payable on the fifteenth
(15th) day of each calendar month therafter, to and including December 15,
2003, when the unpaid balance of Term Loan A, principal and interest, shall
be paid in full. The first eleven (11) monthly installments shall be in the
amount of Sixty Thousand Dollars ($60,000) each. The next twelve (12)
monthly installments shall be in the amount of Sixty-five Thousand Dollars
($65,000) each. The next fifty-nine (59) monthly installments shall be in
the amount of Ninety-one Thousand Six Hundred Sixty-seven Dollars ($91,667)
each. The final monthly installment shall be in the amount of Ninety-one
Thousand Six Hundred Forty-seven Dollars ($91,647)."
e. FEE. Paragraph 6.i. of the Loan Agreement is amended to read as
follows:
"i. FEE. At the time of closing of Term Loan A, Borrower shall pay to
Bank a fee of Thirty-five Thousand Dollars ($35,000)."
5. TERM LOAN B. The conditions precedent to Bank's obligation to make Term
Loan B cannot be satisfied. Accordingly, Term Loan B is terminated, effective
immediately.
6. FEE. Contemporaneously with the execution of this amendment, Borrower
shall pay to Bank a fee in the amount of Twenty-five Thousand Dollars ($25,000).
7. RELEASE OF STOCK. Bank hereby releases from the Collateral all stock in
Borrower and all stock in Industries. All continuing obligations of the parties
under the Stock Pledge Agreements executed contemporaneously with the Loan
Agreement are terminated. Contemporaneously with the execution of this
amendment, Bank shall return the following documents, which were delivered to
Bank at the time of execution of those Stock Pledge Agreements:
a. To Xxxxx, Certificate No. 10 of Industries and the original Stock
Power with respect to that certificate; and
b. To Industries, the original Stock Power with respect to Certificate
No. 2 of Borrower.
Page 4--FIRST AMENDMENT OF LOAN AGREEMENT
Borrower and Guarantor acknowledge that neither Certificate No. 2 nor any other
certificate representing shares of Borrower was ever delivered to Bank, and
accordingly Bank has no obligation to return any such certificate.
8. RELEASE OF GUARANTORS. Paragraph 9.d.(2) of the Loan Agreement is
amended to read as follows:
"(2) RELEASE OF GUARANTORS. Effective upon any closing of Term Loan A:
(a) Industries and Xxxxx shall be released from any further
liability under their Guaranties, and Bank shall return those original
Guaranties to them.
(b) Except as provided in the following subparagraph (d),
Industries and Xxxxx shall be released from all obligations as parties to
this Agreement.
(c) Industries and Xxxxx shall not be neces- sary parties to any
future amendments of the Loan Documents.
(d) Industries and Xxxxx shall remain fully liable to Bank under
this Agreement to the extent that any warranty, representation or statement
made or furnished to Bank by or on behalf of Borrower or Guarantor at or
prior to closing of Term Loan A proves to have been false or misleading in
any material respect when made or furnished."
9. REPRESENTATIONS.
a. ADVERTISING BUSINESS. Bank acknowledges that MO Partners is the
owner of the Billboards and Billboard Site Leases listed on the attached Exhibit
A, and O.B. Walls is the owner of the Billboards and Billboard Site Leases
listed on the attached Exhibit B. The representation of Borrower and Guarantor
in Paragraph 11.d. of the Loan Agreement is amended to include a disclosure of
those ownership interests.
b. COMPLIANCE WITH LAWS. The first sentence of Paragraph 11.l. of the
Loan Agreement is amended to read as follows:
"Each of Borrower, Guarantor and their Affiliates is in material compliance
with all applicable Laws."
Page 5--FIRST AMENDMENT OF LOAN AGREEMENT
Subsection (c) of the second sentence of Paragraph 11.l. is amended
to read as follows:
"(c) to the best of their actual knowledge, no Hazardous Substance has
been released or discharged from any of those premises or is otherwise
present in the soil or water of, or improperly stored at, any of those
premises, and"
10. AFFIRMATIVE COVENANTS.
a. FINANCIAL INFORMATION. In Paragraph 12.g.(3) of the Loan Agreement,
"thirty (30) days" is amended to "forty-five (45) days."
11. NEGATIVE COVENANTS.
a. GUARANTIES. As an exception to the covenant in Paragraph 13.b.(1)
of the Loan Agreement, Borrower and Guarantor may guarantee that certain loan
made on June 1, 1988 by Oregon Laborers-Employers Pension Trust Fund to MO
Partners in the principal amount of Four Hundred Fifty Thousand Dollars
($450,000). As an exception to the covenant in Paragraph 13.b.(2) of the Loan
Agreement, Borrower and Guarantor may make loans in an aggregate principal
amount not to exceed at any one time outstanding the amount of Fifty Thousand
Dollars ($50,000).
12. ADDITIONAL DOCUMENTS. Contemporaneously with the execution of this
amendment, Borrower and Guarantor shall deliver to Bank, in form and substance
satisfactory to Bank, the following:
a. A modification of the Bridge Note evidencing the change in the
Maturity of the Bridge Loan.
b. A modification of the Commercial Security Agreement between
Borrower and Bank.
c. The written opinion of Gleaves, Swearingen, Larsen, Potter, Xxxxx &
Xxxxx and/or Tonkon, Xxxx, Xxxxx, Marmaduke and Booth, the counsel for Borrower
and Guarantor, dated as of the date of this amendment and addressed to Bank, in
form and substance satisfactory to Bank.
d. Any other documents that Bank may reasonable request.
13. REPRESENTATIONS AND WARRANTIES. To induce Bank to enter into this
amendment, Borrower and Guarantor represent and warrant to Bank that, except as
otherwise disclosed in this amendment:
Page 6--FIRST AMENDMENT OF LOAN AGREEMENT
a. All representations and warranties of Borrower and Guarantor
contained in the Loan Agreement continue to be true and complete as of the date
of this amendment.
b. No Event of Default has occurred or is continuing, and no event has
occurred and is continuing that, with the giving of notice or the passage of
time, or both, would be an Event of Default under the Loan Agreement.
c. Except for the effect of the Reorganization on Industries, no
material adverse change has occurred in the financial condition of any Borrower
or Guarantor since the date of the Loan Agreement.
d. Each of Borrower's and Guarantor's execution, delivery and
performance of this amendment and all documents executed pursuant to this
amendment have been duly authorized by all necessary action, do not contravene
any Law binding on it or its organizational documents, and do not contravene the
provisions of or constitute a default under any agreement or instrument to which
it is a party or by which it may be bound or affected.
e. This amendment and all documents executed pursuant to this
amendment are, and when delivered will be, valid, binding and enforceable in
accordance with their respective terms.
14. CONSENT. Borrower and Guarantor specifically consent to the execution
and delivery of this amendment, and acknowledges that this amendment does not
prejudice or diminish any guaranty or other obligation of Borrower or any
Guarantor in any manner. This amendment shall not be construed as having created
a custom in any way contrary to the specific provisions of any agreement between
Bank and Borrower or any Guarantor, or as having in any way modified or waived
the same. Specifically, but without limitation, Bank's right to deal with
Borrower in any manner in which Bank sees fit in connection with any obligations
to Bank, now or hereafter created, without any further consent or authorization
from any Guarantor being necessary, remains in full force and effect.
15. COUNTERPARTS; EXECUTION BY FACSIMILE. This amendment may be executed in
several counterparts, each of which will be deemed to be an original and all of
which together constitute one and the same instrument. Delivery of an executed
copy of this amendment by telecopy, telex or other means of electronic
communication producing a printed copy will be deemed to be an execution and
delivery of this amendment on the date of such communication by the parties so
delivering such a copy. The party so delivering such a copy via electronic
communication shall deliver an executed original of this amendment to the other
party within one (1) week
Page 7--FIRST AMENDMENT OF LOAN AGREEMENT
of the date of delivery of the copy sent via electronic communica-
tion.
16. EFFECT. Except as specifically modified by this amendment, or any
document executed pursuant to this amendment, the Loan Documents remain in full
force and effect.
17. DISCLOSURE. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY A BANK AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED
SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND
BE SIGNED BY THE BANK TO BE ENFORCEABLE.
Dated as of December 31, 1996.
XXXX MEDIA CORPORATION UNITED STATES NATIONAL BANK
OF OREGON
By:/s/Xxxxx Xxxx By:/s/Xxxxxxx Xxxxxx
---------------------- -------------------------
Xxxxx Xxxx, President Xxxxxxx Xxxxxx, Assistant
Vice President
XXXX INDUSTRIES INCORPORATED
By:/s/Xxxxx Xxxx
----------------------
Xxxxx Xxxx, President
/s/Xxxxx Xxxx
-------------------------
Xxxxx Xxxx, An Individual
Page 8--FIRST AMENDMENT OF LOAN AGREEMENT
SECOND AMENDMENT OF LOAN AGREEMENT
PARTIES:
XXXX MEDIA CORPORATION, an Oregon corporation formerly known
as Xxxx Outdoor Advertising Inc. (Borrower)
XXXX INDUSTRIES INCORPORATED, an Oregon corporation (Indus-
tries)
XXXXX XXXX (Xxxxx)
UNITED STATES NATIONAL BANK OF OREGON (Bank)
RECITALS:
A. On October 31, 1996, the parties entered into a certain Loan
Agreement (the Original Loan Agreement). On December 31, 1996, the parties
entered into a certain First Amendment of Loan Agreement (the First Amendment).
The Original Loan Agreement, as modified by the First Amendment is referred to
in this amendment as the Loan Agreement. Except as specifically set forth in
this amendment, all capitalized terms have the meanings assigned in the Loan
Agreement.
B. Contemporaneously with the execution of this amendment, the parties are
closing Term Loan A.
AGREEMENTS:
1. TERM LOAN A.
a. INTEREST RATE ELECTION. Pursuant to Paragraph 6.d. of the Loan
Agreement, Borrower elects to have Term Loan A bear interest at Prime and/or
IBOR Borrowing Rates.
b. APPLICATION OF PROCEEDS. The proceeds of Term Loan A shall be
applied first to pay the Bridge Loan in full, principal and interest, next to
the fee described in the following subpara- graph c., and any excess proceeds
shall be disbursed to Borrower.
c. FEE. Contemporaneously with the execution of this amendment,
Borrower shall pay to Bank a fee of Thirty-five Thousand Dollars ($35,000).
Page 1--SECOND AMENDMENT OF LOAN AGREEMENT
2. RELEASE OF GUARANTORS. Effective upon execution of this amendment:
a. Industries and Xxxxx are released from any further liability under
their Guaranties, and Bank shall return those original Guaranties to them.
b. Except as provided in the following subparagraph d., Industries and
Xxxxx are released from all obligations as parties to the Loan Agreement.
c. Industries and Xxxxx are not necessary parties to any future
amendments of the Loan Documents.
d. Industries and Xxxxx shall remain fully liable to Bank under the
Loan Agreement to the extent that any warranty, representation or statement made
or furnished to Bank, by or on behalf of Borrower or Guarantor, at or prior to
the execution of this amendment, proves to have been false or misleading in any
material respect when made or furnished.
3. FINANCIAL COVENANTS. Until payment in full of all payment obligations
of, and performance of all other obligations of, Borrower under the Loan
Documents, Borrower agrees that:
a. CURRENT RATIO. Borrower shall maintain a ratio of Current Assets to
Current Liabilities of not less than 1 to 1 as of the end of each fiscal quarter
of Borrower, commencing February 28, 1997. For purposes of this paragraph:
(1) "Current Assets" means the assets of Borrower that may be
properly classified as current assets in accordance with GAAP, but excluding all
loans to, and notes and receivables from, any Affiliate of Borrower, or from
officers, employees, directors, shareholders, partners or members of Borrower or
any Affiliate of Borrower; and
(2) "Current Liabilities" means the liabilities of Borrower that
may be properly classified as current liabilities in accordance with GAAP.
b. CASH FLOW COVERAGE RATIO. Borrower shall maintain a ratio of Cash
Flow to Cash Requirements of:
(1) Not less than 1 to 1 for the twelve (12) month periods ending
on November 30, 1997 and February 28, 1998;
Page 2--SECOND AMENDMENT OF LOAN AGREEMENT
(2) Not less than 1.1 to 1 for the twelve (12) month periods
ending on May 31, 1998 and August 31, 1998; and
(3) Not less than 1.25 to 1 for the twelve (12) month period
ending on November 30, 1998, and, thereafter, for each twelve (12) month period
ending on the last day of each fiscal quarter of Borrower.
For purposes of this paragraph:
(1) "Cash Flow" means, for the applicable period, (a) Borrower's
net income after taxes; plus (b) amortization, depreciation and other non-cash
expenses deducted in calculating that net income; minus (c) any amounts paid by
Borrower for the purchase or capital lease of tangible or intangible assets that
are not funded by long-term debt (but not less than zero); all as reasonably
determined by Bank in accordance with GAAP.
(2) "Cash Requirements" means, for the applicable period, (a) the
regularly scheduled payments of principal by Borrower upon long-term debt
(including the Loan); plus (b) any prepayments of principal by Borrower upon
long-term debt (excluding the Loan); plus (c) any dividends or other
distributions paid by Borrower to its shareholders; all as reasonably determined
by Bank in accordance with GAAP.
4. NEGATIVE COVENANTS. Paragraph 13.c. of the Loan Agreement is amended to
read as follows:
"LIENS. Borrower shall not, at any time, grant a security interest or
other encumbrance on all or any of its presently owned or hereafter
acquired Collateral, except to Bank; provided, however, that Borrower may
grant purchase money security interests to secure purchase money
indebtedness that does not exceed Sixty Thousand Dollars ($60,000) in the
aggregate in any fiscal year of Borrower."
5. ADDITIONAL DOCUMENTS. Contemporaneously with the execution of this
amendment, Borrower shall deliver to Bank, in form and substance satisfactory to
Bank, the following:
a. Term Note A.
b. Any other documents that Bank may reasonable request.
Page 3--SECOND AMENDMENT OF LOAN AGREEMENT
6. REPRESENTATIONS AND WARRANTIES. To induce Bank to enter into this
amendment, Borrower and Guarantor represent and warrant to Bank that:
a. All representations and warranties of Borrower and Guarantor
contained in the Loan Agreement continue to be true and complete as of the date
of this amendment.
b. No Event of Default has occurred or is continuing, and no event has
occurred and is continuing that, with the giving of notice or the passage of
time, or both, would be an Event of Default under the Loan Agreement.
c. No material adverse change has occurred in the financial condition
of Borrower since the date of the First Amendment.
d. Each of Borrower's and Guarantor's execution, delivery and
performance of this amendment and all documents executed pursuant to this
amendment have been duly authorized by all necessary action, do not contravene
any Law binding on it or its organizational documents, and do not contravene the
provisions of or constitute a default under any agreement or instrument to which
it is a party or by which it may be bound or affected.
e. This amendment and all documents executed pursuant to this
amendment are, and when delivered will be, valid, binding and enforceable in
accordance with their respective terms.
7. COUNTERPARTS; EXECUTION BY FACSIMILE. This amendment may be executed in
several counterparts, each of which will be deemed to be an original and all of
which together constitute one and the same instrument. Delivery of an executed
copy of this amendment by telecopy, telex or other means of electronic
communication producing a printed copy will be deemed to be an execution and
delivery of this amendment on the date of such communication by the parties so
delivering such a copy. The party so delivering such a copy via electronic
communication shall deliver an executed original of this amendment to the other
party within one (1) week of the date of delivery of the copy sent via
electronic communication.
8. EFFECT. Except as specifically modified by this amendment, or any
document executed pursuant to this amendment, the Loan Documents remain in full
force and effect.
Page 4--SECOND AMENDMENT OF LOAN AGREEMENT
9. DISCLOSURE. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY A BANK AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED
SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND
BE SIGNED BY THE BANK TO BE ENFORCEABLE.
Dated as of February 12, 1997.
XXXX MEDIA CORPORATION UNITED STATES NATIONAL BANK
OF OREGON
By:/s/Xxxxx Xxxx By:/s/Xxxxx Xxxxxxx
---------------------- -----------------------------
Xxxxx Xxxx, President Xxxxx Xxxxxxx, Vice President
XXXX INDUSTRIES INCORPORATED
By:/s/Xxxxx Xxxx
----------------------
Xxxxx Xxxx, President
/s/Xxxxx Xxxx
-------------------------
Xxxxx Xxxx, An Individual
Page 5--SECOND AMENDMENT OF LOAN AGREEMENT
FIRST AMENDMENT OF PROMISSORY NOTE
PARTIES:
XXXX MEDIA CORPORATION, an Oregon corporation (Borrower)
UNITED STATES NATIONAL BANK OF OREGON (Bank)
RECITAL:
A. On October 31, 1996, Borrower executed and delivered to Bank a
Promissory Note in the face amount of Twelve Million Dollars ($12,000,000) (the
Bridge Note). Except as otherwise defined in this amendment, all capitalized
terms have the meanings assigned in the Bridge Note.
B. On the date of this amendment, the Principal Balance of the Bridge Note
is Seven Million Dollars ($7,000,000).
AGREEMENTS:
1. Paragraph 2. of the Bridge Note is modified to read as follows:
"2. PAYMENT OF PRINCIPAL. The Principal Balance of this note shall be
paid as follows:
a. The Principal Balance shall be reduced to Six Million Nine
Hundred Forty Thousand Dollars ($6,940,000) on January 15, 1997.
b. The entire remaining Principal Balance of this note shall be
due and payable on February 3, 1997."
2. COUNTERPARTS; EXECUTION BY FACSIMILE. This amendment may be executed in
several counterparts, each of which will be deemed to be an original and all of
which together constitute one and the same instrument. Delivery of an executed
copy of this amendment by telecopy, telex or other means of electronic
communication producing a printed copy will be deemed to be an execution and
delivery of this amendment on the date of such communication by the parties so
delivering such a copy. The party so delivering such a copy via electronic
communication shall deliver an executed original of this amendment to the other
party within one (1) week of the date of delivery of the copy sent via
electronic communication.
3. EFFECT. Except as specifically modified by this amendment, the Bridge
Note remains in full force and effect.
Page 1--FIRST AMENDMENT OF PROMISSORY NOTE
4. DISCLOSURE. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY A BANK AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED
SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND
BE SIGNED BY THE BANK TO BE ENFORCEABLE.
DATED as of the 31st day of December, 1996.
XXXX MEDIA CORPORATION UNITED STATES NATIONAL BANK
OF OREGON
By:/s/Xxxxx Xxxx By:/s/Xxxxxxx Xxxxxx
----------------------- --------------------------
Xxxxx Xxxx, President Xxxxxxx Xxxxxx, Assistant
Vice President
Page 2--FIRST AMENDMENT OF PROMISSORY NOTE
PROMISSORY NOTE
(Term Note A)
$6,940,000 Eugene, Oregon February 12, 1997
PARTIES:
XXXX MEDIA CORPORATION, an Oregon corporation (Borrower)
UNITED STATES NATIONAL BANK OF OREGON (Bank)
AGREEMENTS:
1. PROMISE TO PAY. For value received, Borrower promises to pay to Bank, or
its order, the principal amount of Six Million Nine Hundred Forty United States
Dollars ($6,940,000), together with interest thereon at the rates specified in
this note.
2. PAYMENT OF PRINCIPAL. The Principal Balance of this note shall be paid
in eighty-three (83) monthly installments. The first (1st) monthly installment
shall be due and payable on February 15, 1997, and an additional monthly
installment shall be due and payable on the fifteenth (15th) day of each
calendar month thereafter, to and including December 15, 2003, when the unpaid
balance of this note, principal and interest, shall be paid in full. The first
eleven (11) monthly installments shall be in the amount of Sixty Thousand
Dollars ($60,000) each. The next twelve (12) monthly installments shall be in
the amount of Sixty-five Thousand Dollars ($65,000) each. The next fifty-nine
(59) monthly installments shall be in the amount of Ninety-one Thousand Six
Hundred Sixty-seven Dollars ($91,697) each. The final monthly installment shall
be in the amount of Ninety-one Thousand Sixty Hundred Forty-seven Dollars
($91,647). All regularly scheduled payments of principal shall be applied:
a. First to any Prime Rate Borrowing Amounts, in such order as
Borrower may designate, or in the absence of such designation, in such order as
Bank may determine in Bank's absolute discretion; and
b. Second, to any IBOR Borrowing Rate Amounts, in such order as
Borrower may designate, or in the absence of such designation, in such order as
Bank may determine in Bank's absolute discretion.
Page 1--PROMISSORY NOTE
3. INTEREST RATES AND PAYMENT OF INTEREST.
a. DEFINITIONS. As used in this note, the following terms have the
following meanings:
(1) "Business Day" means any day other than a Saturday, Sunday or
other day that commercial banks in Portland, Oregon, or New York, New York, are
authorized or required by law to close.
(2) "IBOR Borrowing Rate" means the IBOR Rate plus two percent
(2%). The IBOR Borrowing Rate for each IBOR Borrowing Rate Amount shall be
determined pursuant to Paragraph 3.c., as of the beginning of the applicable
IBOR Interest Period, based on the then current IBOR Rate, and, except as
provided in Paragraph 3.d., shall remain fixed during that IBOR Interest Period.
(3) "IBOR Borrowing Rate Amount(s)" means those portions of the
Principal Balance that, at any time, are accruing interest at an IBOR Borrowing
Rate.
(4) "IBOR Interest Period" means, as to any IBOR Borrowing Rate
Amount, a period of one, two, three or six months commencing on the date the
IBOR Borrowing Rate becomes applicable; provided, however, that (1) no IBOR
Interest Period shall be selected which would extend beyond Maturity; (2) any
IBOR Interest Period which would otherwise expire on a day which is not a
Business Day, shall be extended to the next succeeding Business Day, unless the
results of such extension would be to extend such IBOR Interest Period into
another calendar month, in which event the IBOR Interest Period shall end on the
immediately preceding Business Day; and (3) any IBOR Interest Period that begins
on the last Business Day of a calendar month (or a day for which there is no
numerically corresponding day in the calendar month at the end of such IBOR
Interest Period) shall end on the last Business Day of a calendar month.
(5) "IBOR Rate," means, for any IBOR Interest Period, the rate
per annum (computed on the basis of a 360 day year and the actual number of days
elapsed) equal to the arithmetic average (rounded upward to the nearest 1/16 of
1%) of the rates per annum determined by Bank, as of the time Borrower obtains
an IBOR Borrowing Rate quote from Bank on the date two (2) Business Days prior
to the first date of an IBOR Interest Period, as the rates offered to Bank by
three Eurodollar money market dealers in such Eurodollar markets as may be
selected by Bank for U.S. dollar deposits to be delivered on the first day of
such IBOR Interest Period for the number of months therein; provided, however,
that Bank's IBOR Rate shall be adjusted to take into account the maximum
reserves required to be maintained for Eurocurrency liabilities by banks during
each such IBOR Interest Period as specified in
Page 2--PROMISSORY NOTE
Regulation D of the Board of Governors of the Federal Reserve
System or any successor regulation.
(6) "Maturity" means the time when the entire unpaid Principal
Balance becomes due and payable, whether by agreement, acceleration or
otherwise.
(7) "Prime Borrowing Rate" means the Prime Rate plus one-half of
one percent (0.50%). The Prime Borrowing Rate shall be adjusted without notice
effective on each date the Prime Rate changes.
(8) "Prime Rate" means the rate identified and publicly announced
by the Bank from time to time as its prime rate and does not necessarily mean,
for example, the lowest rate of interest which the Bank collects for any
borrower or group of borrowers.
(9) "Prime Borrowing Rate Amount" means that portion of the
Principal Balance that, at any time, is accruing interest at the Prime Borrowing
Rate.
(10) "Principal Balance" means, at any time, the unpaid principal
balance of this note.
(11) "Related Documents" means, without limitation, all loan
agreements, mortgages, deeds of trust, security agree- ments, guaranties, and
all other instruments, agreements and documents, whether now or hereafter
existing, relating to the indebtedness evidenced by this note.
b. PRIME BORROWING RATE. Except for portions of the Principal Balance
that are accruing interest at an IBOR Borrowing Rate, Borrower shall pay
interest on the Principal Balance at the Prime Borrowing Rate. The Prime
Borrowing Rate shall be adjusted without notice effective on each day the Prime
Rate changes.
c. IBOR BORROWING RATE.
(1) Borrower may obtain IBOR Borrowing Rate quotes from Bank
between 8:00 a.m. and 11:00 a.m. (Portland, Oregon, time) on any Business Day.
Borrower may request conversion of a portion of the Principal Balance to an IBOR
Borrowing Rate Amount only by giving Bank notice in accordance with Paragraph
3.c.(2). not later than 11:00 a.m. on such date.
(2) Whenever Borrower desires to use the IBOR Borrowing Rate
option, Borrower shall give Bank irrevocable notice (either in writing or
orally) between 8:00 a.m. and 11:00 a.m. (Portland, Oregon, time) two (2)
Business Days in advance of the desired effective date of such rate. Any oral
notice shall be
Page 3--PROMISSORY NOTE
given by, and any written notice or confirmation of an oral notice shall be
signed by, a person authorized to execute and deliver promissory notes to Bank
on behalf of Borrower, and shall specify the effective date of the rate, the
IBOR Interest Period, and whether Borrower is requesting conversion of a portion
of the Principal Balance bearing interest at the Prime Borrowing Rate to an IBOR
Borrowing Rate Amount or a new IBOR Interest Period for an IBOR Borrowing Rate
Amount whose IBOR Interest Period is expiring. Bank may, but need not, require
that all oral notices be confirmed in writing. Notwithstanding any other term of
this note, Borrower may elect an IBOR Borrowing Rate Amount only in the minimum
principal amount of Five Hundred Thousand Dollars ($500,000) and in larger
integral multiples of One Hundred Thousand Dollars ($100,000). Except as
provided in Paragraph 3.d., the IBOR Borrowing Rate for each IBOR Borrowing Rate
Amount shall remain fixed for the applicable IBOR Interest Period.
(3) If at any time Bank's IBOR Rate is unascertain- able or
unavailable to Bank or if IBOR Rate loans become unlawful, the option to select
the IBOR Borrowing Rate shall terminate immediately. If any IBOR Borrowing Rates
are then in effect (i) each shall terminate automatically with respect to the
applicable IBOR Borrowing Rate Amount (a) on the last day of the applicable IBOR
Interest Period, if Bank may lawfully continue to maintain such loans, or (b)
immediately if Bank may not lawfully continue to maintain such loans through
such day, and (ii) the Prime Borrowing Rate automatically shall become effective
as to such amounts upon termination.
(4) If at any time after the date of this note (i) any revision
in or adoption of any applicable law, rule or regulation or in the
interpretation or administration thereof (a) shall subject Bank or its
Eurodollar lending office to any tax, duty or other charge, or change the basis
of taxation of payments to Bank with respect to any loans bearing interest based
on Bank's IBOR Rate or (b) shall impose or modify any reserve, insurance,
special deposit or similar requirements against assets of, deposits with or for
the account of, or credit extended by Bank or its Eurodollar lending office, or
impose on Bank or its Eurodollar lending office any other condition affecting
any such loans, and (ii) the result of the foregoing is (x) to increase the cost
to Bank of making or maintaining any such loans or (y) to reduce the amount of
any sum receivable under this note by Bank or its Eurodollar lending office,
Borrower shall pay Bank within fifteen (15) days after demand by Bank such
additional amount as will compensate Bank for such increased cost or reduction.
The determination hereunder by Bank of such additional amounts shall be
conclusive in the absence of manifest error. If Bank demands compensation under
this paragraph, Borrower may, upon three (3) Business Days notice to Bank, pay
the accrued interest on all IBOR Borrowing Rate Amounts as may be affected,
together with any
Page 4--PROMISSORY NOTE
additional amounts payable under Paragraph 3.c.(5). Upon Borrower's paying such
accrued interest and additional costs, the Prime Borrowing Rate immediately
shall be effective with respect to the unpaid principal balance of such IBOR
Borrowing Rate Amounts.
(5) Upon any termination of any IBOR Borrowing Rate (including
but not limited to conversion to another rate) or payment of all or any portion
of any IBOR Borrowing Rate Amount on a date other than the last day of the then
applicable IBOR Interest Period, as the case may be, including, without
limitation, (i) payment under Paragraph 2., (ii) prepayment under Paragraph 4.,
(iii) acceleration under Paragraph 7. or (iv) repayment in response to a notice
under Paragraph 3.c.(4), Borrower shall pay to Bank on demand a yield
maintenance charge calculated pursuant to the attached Exhibit A.
(6) If Borrower chooses the IBOR Borrowing Rate, Borrower shall
pay interest based on such rate, plus any other applicable taxes or charges
hereunder, even though Bank may have obtained the funds loaned to Borrower from
sources other than the applicable Eurodollar market. Bank's determination of the
IBOR Borrowing Rate and any such taxes or charges shall be conclusive in the
absence of manifest error.
(7) Notwithstanding any other term of this note, Borrower may not
select the IBOR Borrowing Rate if an event has occurred that constitutes an
Event of Default or that, with the giving of notice or the passage of time or
both, would constitute an Event of Default.
d. DEFAULT INTEREST RATE. Notwithstanding anything in this note to the
contrary, upon the occurrence of an Event of Default, the Prime Borrowing Rate
Amount shall thereafter accrue interest at a Prime Borrowing Rate equal to the
Prime Rate plus five and one-half percent (5.50%), and each outstanding IBOR
Borrowing Rate Amount shall accrue interest at an IBOR Borrowing Rate equal to
the IBOR Rate previously determined by Bank for that IBOR Borrowing Rate Amount
plus seven percent (7.00%).
e. PAYMENTS OF INTEREST. Borrower shall pay accrued interest on the
fifteenth (15th) day of February, 1997 and on the fifteenth (15th) day of every
calendar month thereafter. In addition, with respect to all IBOR Borrowing Rate
Amounts, accrued interest shall be paid on the last day of the applicable IBOR
Interest Period.
f. COMPUTATION OF INTEREST. All interest will be computed at the
applicable rate based on a 360 day year and applied to the actual number of days
elapsed.
Page 5--PROMISSORY NOTE
g. USURY. Notwithstanding anything in this note to the contrary, at no
time shall the Prime Borrowing Rate or any IBOR Borrowing Rate exceed the
maximum rate permitted by applicable law.
4. PREPAYMENT. Prepayment may be made in whole or in part at any time. All
prepayments shall be applied:
a. First to any Prime Rate Borrowing Amounts, in such order as
Borrower may designate, or in the absence of such designation, in such order as
Bank may determine in Bank's absolute discretion;
b. Second, to any IBOR Borrowing Rate Amounts, in such order as
Borrower may designate, or in the absence of such designation, in such order as
Bank may determine in Bank's absolute discretion; and
c. Then to accrued interest.
Prepayments of principal shall be applied to the remaining
installments of principal in the inverse order of maturity.
5. LATE CHARGE. If a payment is nineteen (19) or more days past due,
Borrower will pay a late charge of five percent (5%) of the delinquent payment,
but not more than the maximum amount authorized by law.
6. DEFAULT. Each of the following shall constitute an Event of Default
under this note:
a. Borrower fails to make any payment within ten (10) days after it is
due.
b. Any default under any Related Document or under any other agreement
between Bank and Borrower.
7. ACCELERATION. Upon any Event of Default, Bank may, without notice,
declare the entire Principal Balance and all accrued interest immediately due
and payable.
8. NOTICES. Any notices required or permitted to be given under the terms
of this note shall be in writing and may be given by personal delivery; first
class mail; certified mail, return receipt requested; or nationally recognized
overnight courier; directed to the parties at the following addresses, or such
other address as any party may designate in writing prior to the time of the
giving of such notice, or in any other manner authorized by law:
Borrower: 0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Page 6--PROMISSORY NOTE
Bank: Oregon Corporate Banking
000 X.X. Xxx
XX-0 Corporate Loan Servicing Center
Xxxxxxxx, XX 00000
With a copy to: Attn: Xxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxx, XX 00000
Any notice given shall be effective when actually received; or if given by
certified mail, then forty-eight (48) hours after deposit of such notice in the
United States mail with postage prepaid; or if given by overnight courier, then
twenty-four (24) hours after the deposit of such notice with the overnight
courier with delivery charges prepaid.
9. ARBITRATION.
a. Either Bank or Borrower may require that all disputes, claims,
counterclaims, and defenses, including those based on or arising from any
alleged tort ("Claims") relating in any way to this note, be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and Title 9 of the U.S. Code. All Claims will be subject
to the statutes of limitation applicable if they were litigated. This provision
is void if the note, at the time of the proposed submission to arbitration, is
secured by real property located outside of Oregon or Washington, or if the
effect of the arbitration procedure (as opposed to any Claims of Borrower) would
be to materially impair Bank's ability to realize on any collateral securing
this note.
b. If arbitration occurs and each party's Claim is less than $100,000,
one neutral arbitrator will decide all issues; if any party's Claim is $100,000
or more, three neutral arbitrators will decide all issues. All arbitrators will
be active Oregon State Bar members in good standing. All arbitration hearings
will be held in Eugene, Oregon. In addition to all other powers, the arbitra-
tor(s) shall have the exclusive right to determine all issues of arbitrability.
Judgment on any arbitration award may be entered in any court with jurisdiction.
c. If either party institutes any judicial proceeding relating to this
note, such action shall not be a waiver of the right to submit any Claim to
arbitration. In addition, each has the right before, during, and after any
arbitration to exercise any number of the following remedies, in any order or
concurrently: (i) setoff; (ii) self-help repossession; (iii) judicial or
non-judicial foreclosure against real or personal property collateral; (iv)
provisional remedies, including injunction, appointment of receiver, attachment,
claim and delivery and replevin.
Page 7--PROMISSORY NOTE
10. COLLECTION COSTS AND ATTORNEY FEES. Borrower agrees to pay upon demand
all of Bank's reasonable costs and expenses, including attorneys' fees and
Bank's legal expenses, incurred in connection with the enforcement of this note.
Costs and expenses include Bank's attorneys' fees and legal expenses whether or
not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (and including efforts to modify or vacate any automatic
stay or injunction), appeals, and any anticipated post-judgment collection
services. Borrower also shall pay all court costs and such additional fees as
may be directed by the court.
11. WAIVERS. Each maker, co-maker, endorser or guarantor of this note,
waives diligence, demand, presentment for payment, notice of non-payment,
protest and notice of protest and consents to all extensions of time and
renewals hereof, whether or not the extensions or renewals are longer than the
original period of the note, to any exchange or release of any security for the
indebted- ness evidenced by this note, and to any release of any party liable on
this note or any Related Document.
12. GENERAL PROVISIONS. Time is of the essence of this note. All
obligations of any maker, co-maker, endorser or guarantor of this note are joint
and several. This note shall be governed by and construed and enforced in
accordance with the laws of the State of Oregon without regard to conflicts of
law principles. Bank's rights and remedies under this note and under any Related
Documents are cumulative.
13. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMIT- MENTS MADE BY
BANK AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH
ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY
BANK TO BE ENFORCEABLE.
XXXX MEDIA CORPORATION
By:/s/Xxxxx Xxxx
-----------------------------
Xxxxx Xxxx, President
UNITED STATES NATIONAL BANK OF
OREGON
By:/s/Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx, Vice President
Page 8--PROMISSORY NOTE
