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EXHIBIT 10.21
SECOND AMENDMENT TO LOAN AGREEMENT AND
OTHER LOAN DOCUMENTS
THIS SECOND AMENDMENT TO LOAN AGREEMENT AND OTHER LOAN DOCUMENTS
(herein called the "Second Amendment"), dated as of December , 1996, by and
among XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION, successor by merger to
First Interstate Bank of Texas, N.A. (the "Bank"), the ORC MANAGEMENT
CORPORATION, a Delaware corporation, XXXXXX XXXXX GROUP, L.P., a Delaware
Limited Partnership ("TFGG") and BEC GROUP, INC., a Delaware corporation
("Guarantor").
WITNESSETH
WHEREAS, Bank, TFGG and Xxxxxx Eyecare Corporation are parties to that
certain Loan Agreement, dated as of March 31, 1995, as amended by that certain
First Amendment to Loan Agreement and Other Loan Documents dated May 3, 1996 by
and among Bank, TFGG and Guarantor (the "Loan Agreement");
WHEREAS, in connection with and according to the terms of the Loan
Agreement, (a) Bank and TFGG entered into various agreements, documents,
instruments and certificates, including that certain (i) $4,000,000
Commercial/Real Estate Note, dated March 31, 1995, executed by TFGG in favor of
Bank (the "Note"), and (ii) Deed of Trust, Security Agreement and Financing
Statement, dated March 31, 1995, executed by TFGG in favor of Collateral
Services, Inc., as trust, for the use and benefit of Bank and recorded with the
office of the County Clerk of Dallas County, Texas at Volume 95064, Page 05483
of the Deed of Trust Records of such office (the "Deed of Trust"), pursuant to
which Deed of Trust TFGG granted to Bank a first lien security interest in
certain real estate located in Dallas County, Texas, more particularly
described on Exhibit A attached to the Deed of Trust (the "Premises"), and (b)
Guarantor and Bank entered into various agreements, documents and instruments,
including that certain (i) Guaranty Agreement (herein so called), dated May 3,
1996, executed by Guarantor in favor of Bank, and (ii) Indemnity Agreement
(herein so called), dated May 3, 1996, executed by Guarantor in favor of Bank;
WHEREAS, the indebtness evidenced by the Note is secured by, among
other things, the Deed of Trust;
WHEREAS, TFGG desires to transfer the Premises to ORC, and TFGG has
requested that Bank consent to such transfer (the "Transfer");
WHEREAS, ORC desires to take title to the Premises and, in connection
therewith, assume all obligations of TFGG to Bank- contained in the Loan
Agreement, the Note and the other Loan Documents (as defined in the Loan
Agreement);
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WHEREAS, Bank is willing to consent to the Transfer provided that ORC
takes title to the Premises and, in connection therewith, assumes all
obligations of TFGG to Bank contained in the Loan Agreement, the Note and the
other Loan Documents;
WHEREAS, the parties hereto desire to (i) modify the Loan Agreement,
the Note, the Deed of Trust, that certain Indemnity Agreement, dated as of May
3, 1996, from TFGG and Guarantor to Bank (the "Indemnity Agreement") and the
other Loan Documents as hereinafter set forth to allow and provide for the
Transfer. and (ii) allow and provide for certain other matters as hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Capitalized terms used in this Second Amendment are defined in the
Loan Agreement, as modified hereby, unless otherwise stated.
ARTICLE II
Modifications to the Loan Agreement
2.1 Amendments to Section 5(a) of the Loan Agreement. Effective as
of,the date hereof, Section 5(a) of the Loan Agreement is hereby modified such
that (i) each reference therein to "limited partnership" shall be deemed to be
a reference to "corporation" and (ii) each reference therein to "Amended and
Restated Agreement of Limited Partnership shall be deemed to be a reference to
"Certificate of Incorporation."
2.2 Addition of Section 8(l) to the Loan Agreement. Effective as of
the date hereof, a new Section 8(l) is hereby added to the Loan Agreement as
follows:
"(l) Financial Statements of Xxxxxx Xxxxx Group). L.P. Furnish
the Bank, within forty-five (45) days after the end of each calendar
quarter (or, with respect to each calendar quarter ending on the last
day of each fiscal year of Borrower, within ninety (90) days after the
end of each such calendar quarter) during the term hereof, a copy of
Xxxxxx Xxxxx Group, L.P.'s (or their successor or assign) unaudited
consolidated financial statements for such fiscal quarter, consisting
of at least a consolidated balance sheet and related consolidated
statement of income."
2.3 Addition of Section 8(m) to the Loan Agreement. Effective as of
the date hereof, a new Section 8(m) is hereby added to the Loan Agreement as
follows:
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"(m) Maintenance of Dominion Accounts. On or before December
31, 1996, establish and maintain a special payment account at the Bank
(the "Central Dominion Account"). Upon the request of the Bank at its
sole discretion upon and after the occurrence of an Event of Default,
the Company shall cause all rents and other sums chargeable pursuant to
that certain Standard Net Commercial Lease dated as of December 11,
1996 by and between Borrower and Xxxxxx Xxxxx Group, L.P. (as amended,
the "Lease") to be paid directly to the Central Dominion Account for
application on account of (i) the outstanding principal balance of, and
any accrued interest then due and owing on, the Term Note, and (ii) all
fees and expenses of the Bank that are payable or reimbursable by the
Company whether pursuant to the terms of this Agreement or otherwise.
All funds deposited in the Central Dominion Account shall immediately
become the property of Bank. The Bank assumes no responsibility for
such dominion account arrangements, including, without limitation, any
claim of accord and satisfaction or release with respect to deposits
accepted by any bank thereunder."
2.4 Amendments to Section 9(a) of the Loan Agreement
(a) Effective as of the date hereof, Section 9(a)(1) is hereby
deleted in its entirety and the following is inserted in lieu thereof:
"(a)(1) Consolidated Fixed Charge Ratio. Maintain, on
a rolling four quarter basis (i.e. as of the end of each
calendar quarter for the twelve-month period ended as of the
end of each quarter for which any determination is being made)
a Consolidated Fixed Charge Ratio of not less than 2.75 to
1.00."
(b) Effective as of the date hereof, Section 9(a)(2) is hereby
deleted in its entirety and the following is inserted in lieu thereof.
"(a)(2) Consolidated Funded Indebtedness to
Consolidated EBITDA. Maintain, on a rolling four quarter basis
(i.e. as of the end of each calendar quarter for the
twelve-month period ended as of the end of each quarter for
which any determination is being made) a ratio of Consolidated
Funded Indebtedness at the end of such rolling four quarters
to Consolidated EBITDA for such rolling four quarters of less
than 2.50 to 1.00."
(c) Effective as of the date hereof, Section 9(a)(3) is hereby
deleted in its entirety and the following is inserted in lieu thereof:
"(a)(3) Consolidated Net Worth. Maintain at all times
Consolidated Net Worth not less than (i) $5,000,000 from
October 31, 1996 until the earlier of November 14, 1996 and
the date on which the financial statements of the Guarantor and
its subsidiaries for the fiscal quarter ending September 30,
1996 are delivered to Bank in accordance with Section 8(b)
(such earlier date being the "Third Quarter Net Worth Date"),
and (ii) at all times on and after the Third Quarter Net Worth
Date, the greater of (A) $5,000,000 and (B) the difference of
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Consolidated Net Worth as reported in the consolidated balance
sheet of the Guarantor and its subsidiaries delivered on the
Third Quarter Net Worth Date less $5,000,000."
(d) Effective as of the date hereof Section 9(a)(4) is hereby
deleted in its entirety and the following is inserted in lieu thereof.
"(a)(4) Capital Expenditures. Not make or become
committed to make Capital Expenditures with respect to any
asset which exceed $5,000,000 in the aggregate in any Fiscal
Year of the Guarantor (all on a noncumulative basis, with the
effect that amounts not expended in any Fiscal Year may not be
carried forward to a subsequent period); provided, however,
that the calculation of Capital Expenditures in the Fiscal
Year in which the FGG Disposition is effective, shall be
determined as if the FGG Disposition had occurred immediately
prior to such Fiscal Year."
(e) Effective as of the date hereof, a new defined term "FGG
Disposition" is hereby inserted in alphabetical position in Section
9(a) of the Loan Agreement and shall read as follows:
"FGG Disposition" means the sale of all of the issued
and outstanding capital stock of The Xxxxxxx Company,
Opti-Ray, Inc. and Asian Buying Source, Inc., upon terms and
conditions acceptable to Bank, resulting in net proceeds to
the Guarantor of at least $31,000,000."
(f) Effective as of the date hereof, the definition of
"Consolidated EBITDA" in Section 9(a) of the Loan Agreement is hereby
amended by inserting after the words "applied on a Consistent Basis"
in the last line thereof the following:
"provided, however, for any four-quarter period during which
the FGG Disposition was effective, the Guarantor's
Consolidated EBITDA shall be determined on a pro forma basis
as if the FGG Disposition had occurred immediately prior to
such four-quarter period."
(g) Effective as of the date hereof, the definition of
"Consolidated Fixed Charge Ratio" in Section 9(a) of the Loan
Agreement is hereby amended by inserting after the words "for such
period" in the last line thereof the following:
"provided, however, for any four-quarter period during which
the FGG Disposition was effective, the Guarantor's
Consolidated Fixed Charge Coverage Ratio shall be determined
on a pro forma basis as if the FGG Disposition had occurred
immediately prior to such four-quarter period."
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(h) Effective as of the date hereof, the definition of
"Consolidated Funded Indebtedness" is hereby amended by inserting
after the words "for such period" in the last line thereof the
following:
"provided, however, for any four-quarter period during which
the FGG Disposition was effective, the Guarantor's Consolidated
Funded Indebtedness shall be determined on a pro forma basis
as if the FGG Disposition had occurred immediately prior to
such four-quarter period."
2.5 Amendment to Section 9(b) of the Loan Agreement. Effective as of
the date hereof, Section 9(b) of the Loan Agreement is hereby modified in its
entirety and the following is substituted in lieu thereof:
"(b) Other Covenants. Comply in all respects with each
covenant set forth in any agreement evidencing Indebtedness for Money
Borrowed including, without limitation, the covenants set forth in that
certain Credit Agreement dated as of April 3, 1996, by and among the
Guarantor, its subsidiaries named therein and the financial
institutions from time to time a party thereto (as amended from time to
time, the "Credit Agreement"), as such covenants are in effect on
October 31, 1996, and, if consented to by Bank, as such covenants are
amended from time to time."
2.6 Amendments to all references to "Company" in the Loan Agreement.
Effective as of the date hereof, the Loan Agreement is hereby modified such
that every reference therein to, and every indebtedness, liability and
obligation therein of, the "Company" shall be deemed to be a reference to, and
an indebtedness, liability and obligation of ORC.
2.7 Amendments to all references to "First Interstate Bank of Texas,
N.A." in the Loan Agreement and the other Loan Documents. Effective as of the
date hereof, the Loan Agreement and the other Loan Documents are hereby
modified such that each and every reference therein to "First Interstate Bank
of Texas, N.A." shall be deemed to be a reference to "Xxxxx Fargo Bank (Texas),
National Association."
2.8 Schedule 5(d) - Litigation. Effective as of the date hereof, all
references in the Loan Agreement to Schedule 5(d), which is entitled
"Litigation", shall be deemed references to the Schedule 5(d) which is attached
hereto as Annex A.
2.9 Schedule 5(f) - Liens. Effective as of the date hereof, all
references in the Loan Agreement to Schedule 5(f), which is entitled "Liens",
shall be deemed references to the Schedule 5(f) which is attached hereto as
Annex B.
2.10 Schedule 5(j) - Subsidiaries. Effective as of the date hereof,
all references in the Loan Agreement to Schedule 5(S), which is entitled
"Subsidiaries", shall be deemed references to the schedule 5(S), which is
attached hereto as Annex C.
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ARTICLE III
Modification to the Deed of Trust
3.1 Amendments to all references to "Grantor" in the Deed of
Trust. Effective as of the date hereof, the Deed of Trust is hereby modified
such that every reference therein to, and every indebtedness, liability and
obligation therein of, the "Grantor" shall be deemed to be a reference to, and
an indebtedness, liability and obligation of ORC.
3.2 Amendment to Section 1.01.A. of the Deed of Trust. Effective
as of the date hereof, Section 1.01.A. is hereby amended by adding thereto the
words "as amended from time to time" immediately prior to the words "herein
called the 'Note'".
3.3 Amendment to Section 2.01(K) of the Deed of Trust. Effective
as of the date hereof, Section 2.01(K) of the Deed of Trust is hereby deleted
in its entirety and the following is substituted in lieu thereof:
(K)(1) Assignment: Grantor hereby grants, assigns, transfers
and sets over unto Beneficiary, its successors and assigns, all of
Grantor's right, title and interest in and to the Rents (as hereafter
defined) and Leases (as hereafter defined) together with (a) all
rights, remedies, benefits and advantages to be derived therefrom, (b)
after the occurrence of an Event of Default, all of the right, power
and authority of Grantor to alter, modify or change the terms of the
Leases, or to surrender, cancel or terminate the same and (c) all
Rents, arising from the Leases and renewals thereof, if any.
Notwithstanding any other provision herein contained, the assignment
of Rents and Leases contained herein is intended by Grantor and
Beneficiary to be an absolute and unconditional assignment.
(2) Modification and Termination: Grantor shall not modify or
terminate any existing Lease or enter into any new Lease without the
prior written consent of Beneficiary.
(3) Collection of Rents: Grantor shall have a license (which
license may, at the option of Beneficiary, be terminated upon the
occurrence of an Event of Default) to collect, upon but not prior to
accrual, all Rents from the Mortgaged Property; provided, however, that
all such Rents that are ever received by Grantor shall be applied
first to pay the sums due and to be due upon the Indebtedness and
otherwise to discharge the remaining items referred to in subparts
(a), (b) and (c) of Section 2.01(K)4 below, and Grantor covenants and
agrees, and represents and warrants to Beneficiary that upon the
occurrence of an Event of Default, a constructive trust is hereby
imposed upon such Rents for the benefit of Beneficiary for the uses
and purposes set forth in such subparts (a), (b) and (c).
Notwithstanding anything contained herein or otherwise to the
contrary, possession of the Mortgaged Property by Beneficiary shall
not be a prerequisite to Beneficiary's right to collect Rents upon the
occurrence of an Event of Default, it being hereby declared that the
Assignment of Rents and Leases set forth herein is absolute and
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unconditional and, subject only to the license hereinabove granted,
shall entitle Beneficiary to collect all Rents.
(4) Default: Upon or at any time after the occurrence of an
Event of Default, Beneficiary, without in any way waiving such default,
may at its option take possession of the Mortgaged Property and have,
hold, manage, lease and operate the same, on such terms and for such
period of time as Beneficiary may deem proper, and may collect and
receive all Rents of the Mortgaged Property, with full power to make
from time to time all alterations, renovations, repairs or
replacements thereto as may seem proper to Beneficiary, and to apply
such Rents to the payment of (a) the cost of all such alterations,
renovations, repairs and replacements, and expenses incident to taking
and retaining possession of the Mortgaged Property, and the management
and operation thereof, and keeping the same properly insured, and (b)
all taxes, charges, claims, assessments, water rents, and any other
liens which may be prior in lien or payment to the mortgage debt, and
premiums for said insurance, with interest on all such items and (c)
the Indebtedness, together with all costs and attorney's fees, in such
order of priority as to any of such items as Beneficiary in its sole
discretion may determine.
(5) Possession: Grantor hereby authorizes Beneficiary, at
Beneficiary's option, upon any taking by Beneficiary of possession of
the Mortgaged Property hereunder, to let or relet the Mortgaged
Property or any part thereof, to cancel and modify leases, evict
tenants, bring or defend any suits in connection with the possession
of the Mortgaged Property in its own name or Grantor's name, make
repairs as Beneficiary deems appropriate, and perform such other acts
in connection with the management and operation of the Mortgaged
Property as Beneficiary, in its discretion, may deem proper. The
receipt by Beneficiary of any rents, issues or profits pursuant to
this assignment after the institution of foreclosure proceedings under
this Deed of Trust shall not cure any default nor affect such
proceedings or sale pursuant thereto.
(6) Grantor's Obligations: Beneficiary shall not be obligated
to perform or discharge, nor does it hereby undertake to perform or
discharge, any obligation, duty or liability under the Leases or under
or by reason of this assignment; and Grantor shall and does hereby
agree to perform and discharge any and all obligations, duties and
liabilities of Grantor under the terms of any of the Leases and to
indemnify Beneficiary for and to hold Beneficiary harmless of and from
any and all liability, loss or damage which it may or might incur
under the Leases or under or by reason of this assignment, and of and
from any and all claims and demands whatsoever which may be asserted
against it by reason of any alleged obligations or undertakings on its
part to perform or discharge any of the terms, covenants or agreements
contained in the Leases, except for matters caused by Beneficiary's
gross negligence or willful acts. Should Beneficiary incur any
liability, loss or damage under the Leases or under or by reason of
this assignment, or in the defense of any such claims or demands, the
amounts thereof, including costs, expenses and reasonable attorney's
fees, shall be secured by this Deed of Trust; and Grantor shall
reimburse Beneficiary therefor immediately upon demand, and upon
failure of Grantor so
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to do Beneficiary may declare all sums secured by this Deed of Trust
immediately due and payable.
(7) Payment of Indebtedness: Upon payment in full of all
Indebtedness secured hereby, this assignment shall become and be void
and of no effect; but the affidavit, certificate, letter or statement
of any officer, supervisor or attorney of Beneficiary, showing any
part of said Indebtedness to remain unpaid, shall be and constitute
conclusive evidence of the validity, effectiveness and continuing
force of this assignment, and any person may be and is hereby
authorized to rely thereon. A demand on the tenants by Beneficiary for
the payment of the rents on any default claimed by Beneficiary shall
be sufficient notice to said tenants to make future payments of rents
to Beneficiary, without the necessity of further consent by said
Grantor.
(8) Release: Beneficiary may take or release other security,
may release any party primarily or secondarily liable for any
Indebtedness secured hereby, may grant extensions, renewals or
indulgences with respect to such Indebtedness, and may apply any other
security therefor held by it to the satisfaction of such indebtedness,
without prejudice to any of its rights hereunder.
(9) Waiver: Nothing herein contained and no act done or
omitted by Beneficiary pursuant to the powers and rights granted it
herein shall be deemed to be a waiver by Beneficiary of its rights and
remedies under the Note, the Loan Agreement or any of the other Loan
Documents (as defined in the Loan Agreement), but this assignment is
made and accepted without prejudice to any of the rights and remedies
possessed by Beneficiary under the terms thereof. The right of
Beneficiary to collect said Indebtedness and to enforce any other
security therefor owned by it may be exercised by Beneficiary either
prior to, simultaneously with, or subsequent to any action taken by it
under this assignment. This assignment and the powers and rights
granted are separate and independent from any obligation contained
elsewhere in this Deed of Trust and may be enforced without regard to
whether Beneficiary institutes foreclosure proceedings under this Deed
of Trust.
For purposes of this Section 2.01(K), (i) the term "Rents" shall mean
all of the rents, revenues, income, proceeds, royalties, issues,
profits and other benefits paid or payable for using, leasing,
licensing, possessing, operating from or in, residing in, selling,
mining, extracting or otherwise enjoying or using the Mortgaged
Property; and (ii) the term "Leases" shall mean any and all leases,
subleases, licenses, concessions or other agreements (written or
verbal, now or hereafter in effect) which grant a possessory interest
in and to, or the right to extract, mine, reside in, sell or use the
Mortgaged Property, and all other agreements, including, but not
limited to, utility contracts, maintenance agreements and service
contracts, which in any way relate to the use, occupancy, operation,
maintenance, enjoyment or ownership of the Mortgaged Property, save
and except any and all leases, subleases or other agreements pursuant
to which Grantor is granted a possessory interest in the Land."
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3.3 Amendment to Section 2.01(S) of the Deed of Trust. Effective as of
the date hereof, Section 2.01(S) of the Deed of Trust is hereby amended by
adding the words "Except for that second priority lien on the Mortgaged
Property in favor of NationsBank, N.A.," to the beginning of such paragraph.
3.4 Amendment to "Address of Grantor" in the Deed of Trust. Effective
as of the date hereof, the "Address of GRANTOR" ON the signature page of the
Deed of trust is hereby deleted in its entirety and the following is
substituted in lieu thereof.
"Address of GRANTOR: 000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx X-000
Xxx, Xxx Xxxx 00000"
ARTICLE IV
MODIFICATIONS TO THE NOTE
Effective as of the date hereof, the Note is hereby modified such that
every reference therein to, and every indebtedness, liability and obligation
therein of, TFGG shall be deemed to be a reference to, and an indebtedness,
liability and obligation therein of ORC.
ARTICLE V
MODIFICATIONS TO THE GUARANTY
5.1 Amendment to the preamble of the Guaranty. Effective as of the
date hereof, the Guaranty is hereby amended by deleting the preamble thereto
and substituting in lieu thereof the following:
"Borrower (give name and address) Bank (give name and address)
ORC Management Corporation Xxxxx Fargo Bank (Texas), National
555 Xxxxxxxx Xxxxx Avenue Association
Suite B-302 1445 Xxxx Avenue
Rye, New York 10580 Xxxxxx Xxxxx 00000
(herein called "Borrower") (herein called "Bank")"
whether one or more
5.1 Amendment to the paragraph 1 of the Guaranty. Effective as of the
date hereof, the Guaranty is hereby amended by deleting paragraph 1 thereof and
substituting in lieu thereof the following:
"1. FOR VALUE RECEIVED, and in consideration of credit and
financial accommodations extended, to be extended, or continued to or
for the account of
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Borrower, and for other good and valuable considerations, the
undersigned (the "Guarantor"), absolutely and unconditionally
guarantees the prompt and punctual payment and performance when due
(whether at its stated maturity, by acceleration or otherwise in
accordance with the loan documents) of the Guaranteed Obligations of
Borrower to Bank, as provided herein. This is a specific guaranty
applicable to and guaranteeing any and all amounts of principal,
interest, attorneys' fees, costs of collection and other amounts owing
or which hereafter become owing on or in connection with certain
indebtedness, obligations or liabilities of Borrower to Bank arising
under that certain Loan Agreement dated as of March 31, 1995 by and
among Xxxxxx Xxxxx Group, L.P., Xxxxxx Eyecare Corporation and Bank, as
amended by that certain First Amendment to Loan Agreement and other
Loan Documents dated as of May 3, 1996 by and among Xxxxxx Xxxxx Group,
L.P., Guarantor and Bank, as further amended by that certain Second
Amendment to Loan Agreement and other Loan Documents (the "Second
Amendment") dated as of December __, 1996 by and among Borrower,
Guarantor and Bank (as amended, the "Loan Agreement"), (ii) that
certain Commercial/Real Estate Note dated as of March 31, 1995 in the
original principal amount of $4,000,000 executed by Xxxxxx Xxxxx Group,
L.P. in favor of Bank (as amended by the Second Amendment, the "Note"),
and (iii) that certain Deed of Trust, Security Agreement and Financing
Statement dated as of March 31, 1995, executed by Xxxxxx Xxxxx Group,
L.P. in favor of Bank, as amended by the Second Amendment, in each
case, together with all renewals and extensions thereof, even though
represented by new instruments (hereinafter called the "Guaranteed
Obligations").
ARTICLE VI
Modifications to the Indemnity Agreement
6.1 Amendment to the first paragraph of the Indemnity Agreement.
Effective as of the date hereof, the Indemnity Agreement is hereby amended by
deleting the first paragraph thereof and substituting in lieu thereof the
following:
"INDEMNITY AGREEMENT made as of May 3, 1996, from ORC
Management Corporation, a Delaware limited partnership, having an
office at 000 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx X-000, Xxx, Xxx Xxxx 00000
("Company"), BEC Group, Inc., a Delaware corporation, having an office
at 555 Xxxxxxxx Xxxxx Avenue, Suite B-302, Rye, New York 10580 (the
"Indemnitor"), to Xxxxx Fargo Bank (Texas), National Association, a
national banking association ("Lender").
6.2 Amendment to the third paragraph of the Indemnity Agreement.
Effective as of the date hereof, the Indemnity Agreement is hereby amended by
deleting the third paragraph thereof and substituting in lieu thereof the
following:
"WHEREAS, Lender has lent to Company the sum of $4,000,000.00
(the "Loan"), of which $________ is currently outstanding, which Loan
is evidenced by that certain Commercial/Real Estate Note executed by
Xxxxxx Xxxxx Group, L.P. in favor
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of Lender, dated as of March 31, 1995, in the amount of the Loan (as
amended by that certain Second Amendment to Loan Agreement and other
Loan Documents dated of even date herewith by and among the Company,
Indemnitor and Bank, the "Note"), and secured by, among other things, a
mortgage or deed of trust from Company to Lender which will encumber
the Property (said mortgage or deed of trust, together with all
amendments, modifications, consolidations, increases, supplements and
spreaders thereof being herein collectively called the "Mortgage ");"
ARTICLE VII
Other Agreements
7.1. Transfer of the Premises. TFGG has concurrently herewith conveyed
title to the Premises to ORC. ORC hereby acknowledges and agrees that title to
the Premises and its interest therein, is encumbered by and subject to the
liens, security interests, assignments and other terms, covenants, restrictions
and provisions of the Deed of Trust.
7.2. Assumption of Liability by ORC: Effect of Existing- Defaults.
(a) ORC hereby and agrees, effective immediately upon the
transfer of the Premises to ORC, to perform, observe and confirm all and
singular the covenants, agreements, terms, conditions, obligations, duties and
liabilities of TFGG under the Loan Agreement, the Note, the Deed of Trust and
all of the other Loan Documents to which TFGG was a party prior to giving
effect to this Second Amendment, and agrees to pay the outstanding principal
balance of the Term Loan, with interest thereon, in accordance with the
provisions of the Loan Agreement and Note. For purposes of this Second
Amendment, the transfer of the Premises shall be deemed to which title to the
Premises is conveyed by TFGG to ORC.
(b) Any Event of Default which exists or arises out of or
comes into being as a result of conditions, acts or omissions occurring prior
to the transfer of the Premises shall continue as a default subsequent to such
transfer, such that Bank shall have the right to exercise the rights and
remedies set forth in the Loan Agreement and Other Loan Documents against ORC.
Bank represents to ORC that, as of the date hereof, (i) it has no knowledge of
any present default under the Loan Agreement or Other Loan Documents and (ii)
to the best of Bank's knowledge based solely upon Bank's review of the
documents provided to Bank by the Company none of the transactions contemplated
by this Amendment or in connection with the Transfer constitute or with the
passage of time will constitute an Event of Default-
(c) Each of ORC and Guarantor represents, warrants and agrees
that upon the consummation of the Transfer (i) ORC shall thereby have assumed,
and hereby expressly assumes and agrees to perform, observe and confirm, all
and singular, the covenants, agreements, terms, conditions, obligations,
appointments, duties and liabilities of TFGG under the Loan Agreement, the
Note, the Deed of Trust, and any other document or instrument executed and
delivered or furnished by TFGG in connection therewith, and (ii) ORC shall
thereby succeed to all of the estate, rights, privileges, powers and franchises
of TFGG in the Premises and is the lawful record owner of good and marketable
title to the Premises. By virtue of the foregoing
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ORC hereby accepts and assumes any liability of TFGG related to any
representation or warranty made by TFGG therein and confirms and restates all
such representations and wan-antics as though made by ORC as of the date
hereof. ORC also confirms and acknowledges that it is a " assignee" to TFGG to
the Loan Agreement, the Note, the Deed of Trust and the other Loan Documents,
and as a "assignee" it is obligated to and hereby agrees to perform and observe
all the conditions, agreements, terms, conditions, obligations, appointments,
duties and liabilities of ORC under the Loan Agreement, the Note, the Deed of
Trust and the other Loan Documents as if it were a signatory thereto.
ARTICLE VII
Conditions Precedent
Each of the following conditions precedent shall be fulfilled to the
satisfaction of Bank prior to this Second Amendment becoming effective against
Bank:
(a) ORC shall have furnished to Bank, in form, content and
amounts and with companies satisfactory to Bank casualty insurance
policies endorsed in favor of Bank as loss payee and as mortgagee
under a standard mortgage clause relating to the Premises;
(b) This Second Amendment, duly executed by the Company and
Guarantor.
(c) Bank shall have approved the deed conveying title to the
Premises and any other documents transferring the Premises and the
assets associated therewith from TFGG to ORC;
(d) Bank shall have received a copy of any surveys,
environmental study and other studies or reports commissioned by ORC
with respect to the physical condition of the Premises;
(e) Bank shall have received an endorsement to Lawyers Title
Insurance Corporation Policy No- 91-00- 518957 (i) extending the
effective date of such policy to the date and time of the recording of
the deed conveying title to the Premises to ORC, (ii) with Schedule A
of such policy reflecting that title to the Premises is vested in ORC
and reflecting that the name of insured is Xxxxx Fargo Bank (Texas),
National Association, and (iii) reflecting the recordation of this
Agreement and the deed transferring ownership of the Premises from
TFGG to ORC;
(f) The representations and warranties contained herein shall
be true and correct as of the date hereof as if made on the date
hereof;
(g) No Event of Default shall have occurred and be continuing
and no event or condition shall have occurred that with the giving of
notice or lapse of time or both would be an Event of Default unless
such Event of Default has been specifically waived in writing by Bank;
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(h) Bank shall have received true, correct and complete copies
of all documents and instruments relating to the Transfer;
(i) Effective with the consummation of the Transfer, ORC will
be legally responsible for and will assume, pay, perform and discharge
all the obligations, duties and liabilities of TFGG under the Loan
Agreement, the Note, the Deed of Trust and the other Loan Documents,
and by execution below of this Second Amendment by ORC, ORC agrees
that (i) ORC will be legally responsible for, and hereby assumes, and
agrees to pay, perform and discharge, all the obligations, duties and
liabilities of TFGG under the Loan Agreement, the Note, the Deed of
Trust and the other Loan Documents, and (ii) that ORC will execute
such documentation, as shall be required by Bank, in its sole
discretion, in connection with the Transfer;
(j) Bank shall have received each of the following, in form
and substance acceptable to Bank:
(i) copies, certified by each of TFGG and ORC, of all
consents, authorizations, filings, licenses and approvals, if
any, required in connection with the execution, delivery and
performance by TFGG and ORC, and the validity and
enforceability, of this Second Amendment, the Loan Agreement,
the Note, the Deed of Trust, the Indemnity Agreement and the
other Loan Documents, each as modified hereby, and each of the
agreements, documents and instruments executed in connection
herewith and therewith;
(ii) a Company General Certificate of ORC, in form
and substance satisfactory to Bank, together with:
(A) the Certificate of Incorporation,
including all amendments thereto, certified by the Secretary
of State of the state of Delaware and dated within 30 days
prior to the date hereof,
(B) the Bylaws of ORC, including all
amendments thereto;
(C) the unanimous consent of the directors of
ORC authorizing the execution, delivery and performance by ORC
of this Second Amendment and each of the agreements, documents
and instruments executed in connection herewith;
(D) certificates of the appropriate
government officials of the state of incorporation of ORC as
to its existence and good standing, and certificates of the
appropriate government officials in each state where ORC is
required by the nature of the business it conducts within such
state to qualify as a foreign corporation and where failure to
be so qualified would have a material adverse effect on ORC,
as to its good standing and
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due qualification to do business in such state, each
dated within 30 days prior to the date hereof;
(iii) such other information, documents, agreements,
commitments and undertakings relating to ORC, TFGG as Bank
shall reasonably request; and
(k) Bank shall have received the Subordination Agreement,
duly executed by NationsBank, N.A., in form and substance satisfactory
to Bank;
(l) Bank shall have received in form and substance
satisfactory to Bank, a duly executed copy of that certain Deed of
Trust, Assignment and Security Agreement, dated as of December 12,
1996, executed by ORC in favor of NationsBank, N.A.;
(m) Bank shall have received in form and substance
satisfactory to Bank, a duly executed copy of that certain Standard Net
Commercial Lease, dated as of December 11, 1996, executed by TFGG and
ORC;
(n) Bank shall have received in form and substance
satisfactory to Bank, a duly executed copy of that certain
Subordination, Non-Disturbance and Attornment Agreement, executed by
TFGG, ORC and Bank;
(o) All partnership and corporate proceedings taken in
connection with the transactions contemplated by this Second Amendment
and all documents, instruments and other legal matters incident thereto
shall be satisfactory to Bank and its legal counsel, Xxxxxx & Xxxx,
L.L.P; and
(p) The Company shall have paid the Bank an amendment fee
of $25,000, which fee shall be fully earned and nonrefundable upon the
effectiveness of this Amendment, and shall have paid Bank's legal
counsel for reasonable costs, fees and expenses incurred in connection
with the preparation and negotiation of this Amendment.
ARTICLE IX
RATIFICATIONS, REPRESENTATIONS, AND WARRANTIES AND COVENANTS
SECTION 9.01. RATIFICATIONS. The terms and provisions set forth in this
Second Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Loan Agreement, the Note, the Deed of Trust, the
Indemnity Agreement and the Other Loan Documents, and except as expressly
modified and superseded by this Second Amendment, the terms and provisions of
the Loan Agreement, the Note, the Deed of Trust, the Indemnity Agreement and
the other Loan Documents are ratified and confirmed and shall continue in full
force and effect. Each of the parties hereto hereby agrees that the Loan
Agreement, the Note, the Deed of Trust, the Indemnity Agreement, and the other
Loan Documents, as modified hereby, and each of the agreements, documents and
instruments executed in connection therewith shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms.
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Section 9.02. Representations and Warranties of ORC, TFGG and
Guarantor. ORC, TFGG and Guarantor hereby jointly and severally represent and
warrant to Bank that:
(a) the execution, delivery and performance of this Second
Amendment and any and all documents, agreements, instruments and
certificates executed and/or delivered in connection herewith have
been authorized by all requisite corporate and partnership action, as
the case may be, on the part of each of ORC, TFGG and Guarantor and
will not violate the Certificate of Limited Partnership or the Amended
and Restated Agreement of Limited Partnership of TFGG, the Articles
and/or Certificate of Incorporation or Bylaws of ORC or the Articles
and/or Certificate of Incorporation or Bylaws of Guarantor;
(b) the representations and warranties contained in the Loan
Agreement, as modified hereby, and any documents, agreements,
instruments and certificates executed and/or delivered in connection
herewith are true and correct on and as of the date hereof as though
made on and as of the date hereof;
(c) no Event of Default under the Loan Agreement has occurred
and is continuing and no event or condition has occurred and is
continuing that with the giving of notice or lapse of time or both
would be an Event of Default, unless such Event of Default has been
specifically waived in writing by Bank, and
Section 9.03. Representations and Warranties of ORC. In addition to
the representations and warranties made by ORC under the Loan Agreement, the
Note, and the Deed of Trust, ORC hereby represents and warrants to Bank that,
except as otherwise contemplated by this Amendment:
(a) ORC (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, (ii) has
all requisite corporate power and authority to own its property and
assets and the property it will acquire upon consummation of the
Transfer and to carry on its business as now conducted and as proposed
to be conducted by it and as proposed to be conducted by it upon
consummation of the Transfer and the other transactions contemplated
by the Loan Agreement as modified by this Second Amendment, (iii) Is
duly qualified to do business in every jurisdiction where such
qualification is necessary or will be so qualified as of the date of
this Second Amendment, (iv) has the partnership power and authority to
execute, deliver and perform this Second Amendment and each other Loan
Document to which it is or will be a party, and (v) has taken all
corporate action necessary to authorize the execution, delivery and
performance of this Second Amendment and each other the Loan Document
to which it is or will be a party.
(b) ORC has no subsidiaries and has no equity or other
interest in any Person;
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(c) Upon consummation of the Transfer, ORC will possess all
franchises, certificates, licenses, permits and other authorizations
from governmental political subdivisions or regulatory authorities,
free from burdensome restrictions, that are necessary in any material
respect for the ownership, maintenance and operation of its properties
and assets and for the conduct of the businesses currently conducted
by ORC will not be in violation of any thereof in any material
respect;
(d) Upon consummation of the Transfer, ORC will be legally
responsible for, and will have assumed all of the obligations, duties
and liabilities under the Loan Agreement, the Note, the Deed of Trust
and the other Loan Documents;
(e) ORC is in full compliance with all covenants and
agreements contained in the Loan Agreement, as modified hereby;
(i) ORC is paying ORC's debts as such debts become due;
(j) ORC is not "insolvent" as that term is defined in Section
10 1 (3 1) of Title II of the United States Code (11 U.S.C. Section
101, et.seq.) (the "Bankruptcy Code"); and
(k) ORC has not filed a petition with the bankruptcy court
under the Bankruptcy Code, nor commenced any proceeding relating to
ORC under any bankruptcy or reorganization statute or under any
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction.
ARTICLE X
Limited Waiver
By execution of this Second Amendment and upon satisfaction of the
conditions set forth in Article IX of this Second Amendment, Bank hereby (i)
consents to the Transfer and waives any Default or Event of Default which would
otherwise arise under the Loan Agreement or other Loan Documents solely by
reason of the consummation of the Transfer, (ii) waives any Default or Event of
Default which would otherwise arise under Section 10(d) of the Loan Agreement
solely by reason of that certain Standard Net Commercial Lease dated as of
December 11, 1996 entered into by and between TFGG and ORC, (iii) waives any
Default or Event of Default which would otherwise arise under Section 11(g) of
the Loan Agreement solely by reason of the incurrence of certain Indebtedness
for Money Borrowed by Guarantor pursuant to the Credit Agreement as of the date
hereof by and among Guarantor, NationsBank, N.A. and the other financial
institutions a party thereto, and (iv) represents and warrants that the unpaid
principal balance of the Term Loan is $.... Except as specifically provided in
this Article X, nothing contained in this Second Amendment shall be construed
as a waiver by Bank of any covenant or provision of the Loan Agreement, the
other Loan Documents, this Second Amendment, or of any other contract or
instrument between Bank and TFGG, ORC and/or Guarantor, and the failure of
Bank at any time or times hereafter to require strict performance by the
Guarantor, TFGG and/or ORC of any provision thereof shall not waive, affect
or diminish
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any right of Bank to thereafter demand strict compliance therewith. Bank hereby
reserves all rights granted under the Loan Agreement, the other Loan Documents,
this Second Amendment and any other contract or instrument between the Bank and
the Guarantor, TFGG and/or ORC.
ARTICLE XI
Miscellaneous
Section 11.01. Survival of Representations and Warranties. All
representations and warranties made in the Loan Agreement or any other
documents, agreements, instruments and certificates relating thereto, shall
survive the execution and delivery of this Second Amendment and such document,
agreement, instrument or certificate, and no investigation by Bank or any
closing shall affect the representations and warranties or the right of Bank to
rely upon them.
Section 11.02. Reference to Loan Agreement. For purposes of clarity,
as used herein, the term "Loan Agreement" and the "Note", and the "Deed of
Trust" shall specifically include all addendums, attachments, riders and
exhibits thereto, each being herein referred to by the name or title of each as
used therein. The Loan Agreement, the Note, and the Deed of Trust and any and
all other agreements, documents, instruments or certificates now or hereafter
executed and delivered pursuant to the terms hereof or pursuant to the terms
thereof as modified hereby, are hereby modified so that any reference in such
agreement, document instrument or certificate thereto shall mean a reference
thereto.
Section 11.03. Expenses of Bank. As provided in the Loan Agreement, as
modified hereby, TFGG, ORC and Guarantor, jointly and severally, agree to pay
on demand all costs and expenses incurred by Bank in connection with the
preparation, negotiation and execution of this Second Amendment and the
agreements, documents, instruments and certificates executed pursuant hereto
and any and all amendments, modifications, and supplements thereto, including,
without limitation, the costs and fees of Bank's legal counsel, and all costs
and expenses incurred by Bank in connection with the enforcement or
preservation of any rights under the Loan Agreement, as modified hereby, and
any and all other agreement, documents, instruments or certificates, including,
without limitation, the costs and fees of Bank's legal counsel.
Section 11.04. Severability. Any provision of this Second Amendment
held by a court of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this Second Amendment and the effect
thereof shall be confined to the provision so held to be invalid or
unenforceable.
Section 11.05. APPLICABLE LAW. THIS SECOND AMENDMENT AND ALL OTHER
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS.
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Section 11.06. Successors and Assigns. This Second Amendment is
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
Section 11.07. Counterparts, This Second Amendment may be executed in
one or more counterparts, each of which when so executed shall be deemed to be
an original, but all of which when taken together shall constitute one and the
same instrument.
Section 11.08. Amendment; Effect of Waiver. No modification of or
amendment to this Second Amendment shall be effective unless the same is in
writing and signed by ORC, Guarantor and Bank. No consent or waiver, express or
implied, by Bank to or for any breach of or deviation from any covenant or
condition by ORC or Guarantor shall be deemed a consent to or waiver of any
other breach of the same or any other covenant, condition or duty.
Section 11.09. Headings. The headings, captions, and arrangements used
in this Second Amendment are for convenience only and shall not affect the
interpretation of this Second Amendment.
Section 11.10. Renewal and Extension of Security Interests and
Assignments. The security interests and assignments referenced in this Second
Amendment shall, to the maximum extent applicable, be deemed to be renewals and
extensions of the security interests and assignments in favor of Bank
previously existing, which prior security interests and assignments shall in no
manner be waived, impaired or otherwise adversely affected hereby, the purpose
of this Second Amendment being, in part, to carry forward all preexisting
security interests and assignments securing the obligations which are
acknowledged by ORC or Guarantor to be valid and subsisting.
Section 11.11. FINAL AGREEMENT. THE LOAN AGREEMENT, AS MODIFIED HEREBY
AND THE OTHER LOAN DOCUMENTS 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 UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
Section 11.12. RELEASE. EACH OF ORC AND GUARANTOR HEREBY ACKNOWLEDGES
THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND
OF ANY KIND OR NATURE, WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE
ALL OR ANY PART OF ITS LIABILITY TO REPAY THE "INDEBTEDNESS" OR TO SEEK
AFFIRMATIVE, RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM BANK. EACH OF ORC
AND GUARANTOR HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES
BANK, ITS PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES,
COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
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CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN
PART ON OR BEFORE THE DATE THIS SECOND AMENDMENT IS EXECUTED, WHICH ORC AND
GUARANTOR MAY NOW OR HEREAFTER HAVE AGAINST BANK, ITS PREDECESSORS, AGENTS,
OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY "LOANS", INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR
THE OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS SECOND
AMENDMENT.
Section 11.13. Release of TFGG. By execution of this Second Amendment,
Bank does hereby release and forever discharge TFGG from any obligations it had
to the Bank under the Loan Agreement or the other Loan Documents; provided,
however, that in the event that TFGG shall have committed any fraud or made any
other intentional misrepresentation to the Bank which has a Material Adverse
Effect, it shall be deemed that TFGG shall not have been released or discharged
pursuant to this Section 11.13, and all of TFGG's obligations under the Loan
Agreement and Other Loan Documents shall be in full force and effect
notwithstanding anything to the contrary contained herein.
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IN WITNESS WHEREOF, this Second Amendment has been executed and is
effective as of the date first above-written.
TFGG:
XXXXXX XXXXX GROUP, L.P.
By: Xxxxxxx General, Inc.
its General Partner
By:/s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------
Title: Secretary
------------------------------
COMPANY:
ORC MANAGEMENT CORPORATION
By:/s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------
Title: Secretary
------------------------------
GUARANTOR:
BEC GROUP, INC.
By: /s/ XXX XXXXXX
---------------------------------
Name: Xxx Xxxxxx
-------------------------------
Title:
------------------------------
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By:
---------------------------------
Xxxxxxx X.X. Xxxx,
Vice President
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STATE OF TEXAS )
)
COUNTY OF DALLAS )
This instrument was acknowledged before me on December .., 1996, by
Xxxxxxx X. X. Xxxx, Vice President of Xxxxx Fargo Bank (Texas), National
Association, on behalf of said banking association.
-------------------------------------------
Notary Public in and for the State of Texas
Print Name:
---------------------------------
Commission Expires:
-----------------------------
STATE OF RHODE ISLAND )
)
COUNTY OF PROVIDENCE )
This instrument was acknowledged before me on December .., 1996, by
Xxxxx X. Xxxxxxxx, Secretary of ORC Management Corporation, on behalf of said
corporation.
XXXXXX X. XXXXXXX
-------------------------------------------
Notary Public
Print Name
---------------------------------
Xxxxxx X. Xxxxxxx, Notary Public
State of Rhode Island and
Providence Plantations
My Commission Expires: 6/25/97
Commission Expires:
-----------------------------
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STATE OF RHODE ISLAND )
)
COUNTY OF PROVIDENCE )
This instrument was acknowledged before me on December 12, 1996 by
Xxxxx X. Frembath, the Secretary of Xxxxxxx General, Inc., the general partner
of Xxxxxx Xxxxx Group, L.P., on behalf of said corporation and partnership.
/s/ XXXXXX X. XXXXXXX
-------------------------------------------
Notary Public
Print Name
---------------------------------
Xxxxxx X. Xxxxxxx, Notary Public
State of Rhode Island and
Providence Plantations
Commission Expires:
June 25, 1997
-----------------------------
STATE OF RHODE ISLAND )
)
COUNTY OF PROVIDENCE )
This instrument was acknowledged before me on December 12, 1996, by
Ian X. X. Xxxxxx, the CFO of BEC Group, a Delaware corporation on behalf of
said corporation.
s/s XXXXXX X. XXXXXXX
-------------------------------------------
Notary Public
Print Name
---------------------------------
Xxxxxx X. Xxxxxxx, Notary Public
State of Rhode Island and
Providence Plantations
Commission Expires:
June 25, 1997
-----------------------------
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